Pre-Election Notes

This is the period when we see "last minute" items that could have an impact on the election next week.  A couple have caught my eye this morning.

• The head of the National Association of Evangelicals has resigned following accusations that he had sex for money with a man. This is potentially more trouble for the republicorps who have allied themselves with the religious right.  It also means there may be 29.999 million evangelicals who are rethinking their worldview. 

• Ohio republicorp Bob Ney resigned from CONgress on Friday over his corruption scandal.

• New York comptroller Alan Hevesi is under investigation in an ethics probe, not something the democorps will draw your attention to.

• A Boston talk show host has been fired for called a Massachusetts Green/Rainbow gubernatorial candidate a "fat lesbian."  

• Congressman Jim Gibbons, running for governor in Nevada seems off the hook after a surveillance tape failed to show him propositioning a woman - counter to her claims.

I expect we'll see a lot more "last minute news" on the talk shows Sunday and in Monday headlines.  A search of Google's news search engine shows 77,600 returns for the search "democrats" while there were 61,600 for "republicans" - which I take as a sign that the demos will make gains, voting machine reliability notwithstanding.

One thing which will be interesting to watch: the huge amount of early and absentee ballots out mean many races won't be decided for a week - maybe longer.  The "ownership of the house" may be in question for weeks.

The nonsense of it all is slow to sink in, but from where I sit (out in the middle of the East Texas Piney Woods) this doesn't even remotely begin to feel like what the Framers had in mind when they carefully crafted our beloved Constitution.  Surely they couldn't have mean huge "political action committees" and surely they couldn't have meant multimillion dollar campaign budgets. Nor could they have meant just two parties - both sucking up to the corporate money - as having some "right" to keep other views from making a serious run for office.

What happened to election reform?  It's gone the way of lobbying reform - disappeared. Where are our roots?  The bi-stable corporatocracy is not what America is about, but it is what we have become.  Your vote is for sale to whichever party will pay the most to persuade you by hook or by crook - and we've seen plenty of that.

When I go to the polls on Tuesday, I've distilled my politics down to a simple set of "rules":

• If someone is an incumbent, I will vote against them.

• If someone has held assortment of elective offices for more than 10-years, I will vote against them: They are "professional politicians" - and we don't need them around.

• If there is no incumbent to vote against, but one or the other candidate is a lawyer, I will vote for the civilian who has no interest in creating phonebook sized law books.  To my way of thinking, because lawyers are "officers of the Court" they should be barred from office anyway, because they are already working for the Judicial branch of government.

• And finally, if I can find a race where there are two non-incumbents running, I'll be voting for the one that looks most like an old-time Republican - not the current batch of pretenders.  That means:

  • Supports the Constitution

  • Supports small foreign entanglements

  • Supports a balanced budget

  • Is a State's Rights/small central government advocate

  • Believes all laws should simply and clearly written, including and especially the IRS Tax Code.

My only problem so far?  I haven't found the race without incumbents, professional political hacks, and lawyers.  Damn. I'd like to put my vote on eBay and see what it will fetch. I'm not getting much value for it under the present scheme of things.  But that's already been tried. And oh yeah, the bi-party system makes that illegal.  But it's legal to spend zillions as long as it transits an ad agency, apparently.  So much for being a "free"  free agent here in Big Brother's Lawyer Land.

Rummy to Go?

Usually, military newspapers line up four-square behind the Commander in Chief and his SecDef.  But times have changed.  There are reports that the Army Times and related publications will call for his removal when their Monday editions hit the street.  We've heard unconfirmed reports hear and there are DoD directives called "snowflakes" are being occasionally disregarded (things get lost in filing, you know)  by professionals in the Services.

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A new poll of people in Mexico (there are a few left!) Canada, and England finds that George Bush is the #3 threat to world peace - right after Osama bin Laden and Kim Jong Il.  Importantly: Less dangerous than Iran's president or the leader of Hezbollah.

The War in Mexico

No, it's not of the same scale as the civil war in Iraq, but the governor of Oaxaca says he will not resign, despite building pressures.  He's only the governor in name - as the for the past five months, the Popular Assembly of the People of Oaxaca have really been running things.

Peoplenomics: Investment Aspects of Climate Change

Whether you believe in climate change is only a matter of degree. Everyone will agree that climate is always changing, but there's a wide spectrum of beliefs about just how rapid the rate of change is now - and what it will be like in the future. One thing some preliminary research shows: The impact will be much larger than most investors expect, and it will result in some serious economic changes. Just this weekend, a new report says global warming in the relatively near term could cost countries 20% of their gross domestic product. While the report outlining the "Risk of Economic Catastrophe" will no doubt be ignored by the day-trading crowd, the thoughtful investor might want to consider deploying assets in ways that are at least partially "climate change resistant." That is, if there is such a thing.  

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Bookstore

"How to live on $10,000 a year or less" is our #1 seller at just $10 for the ebook.  Later this week, Michael Flagg's new ebook "Catastrophic Abundance" is schedule to debut.

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Friday November 3, 2006

"It's the Economy"

This morning we get a last bit of election data as the jobs report has been issued by the Bureau of Labor Statistics.  We'll reiterate, for those who haven't been paying attention, that the government's figures are misleading and can't be compared with earlier historical records because the basis of calculations is different.  In the "old days" when a person was unemployed, they were unemployed until they went back on a payroll someone.  But that's not how things work in newthink economics.  Now, the way it works is that when someone is unemployed, they are counted only so long as they are receiving benefits - and when those run out, the people fall off the back end of the counting.  The newthink goes something like this: "If a person hasn't found work in 26-weeks, either they weren't looking too hard, or, they found something to do under the table or whatever, and therefore are not really unemployed.  So yes, counting the number of unemployed this way makes political sense but it's misleading when comparing historical data from earlier periods, like the 1950's.  So with this in mind, the report on October jobs is just about fine and rosy:

Employment increased in October, and the unemployment rate declined to 4.4 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Nonfarm payroll employment grew by 92,000 in October follow- ing gains of 148,000 in September and 230,000 in August (as revised). In October, job growth continued in several service-providing industries, while employment declined in manufacturing and construction. Average hourly earn- ings rose by 6 cents over the month.

Unemployment (Household Survey Data)

The number of unemployed persons (6.7 million) edged down in October, and the unemployment rate declined to 4.4 percent. A year earlier, the number of unemployed persons was 7.4 million and the jobless rate was 4.9 percent.

Unemployment rates for most major worker groups--adult men (3.8 percent), teenagers (15.4 percent), whites (3.9 percent), and blacks (8.6 percent)-- showed little or no change over the month. The jobless rates for adult women (3.9 percent) and Hispanics (4.7 percent) fell in October. The unemployment rate for Asians was 2.7 percent, not seasonally adjusted. (See tables A-1, A-2, and A-3.)

The number of persons unemployed for 27 weeks or longer fell by 189,000 to 1.1 million in October. This group accounted for 16.0 percent of total unemployment, down from 18.2 percent in September. (See table A-9.)

Total Employment and the Labor Force (Household Survey Data)

In October, total employment increased by 437,000 to 145.3 million, and the employment-population ratio edged up to 63.3 percent. The civilian labor force, at 152.0 million, was about unchanged in October; the labor force participation rate has held at 66.2 percent since June. (See table A-1.)

Persons Not in the Labor Force (Household Survey Data)

About 1.5 million persons (not seasonally adjusted) were marginally attached to the labor force in October, about unchanged from a year earlier. These in- dividuals wanted and were available for work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 331,000 discouraged workers in October, down slightly from a year earlier. Discouraged workers were not currently looking for work specifi- cally because they believed no jobs were available for them. The other 1.1 mil- lion marginally attached had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Another measurement which I think is misleading is that a PhD in digital signal processing is counted as "employed" as long as he (or she) is doing something like flipping burgers under the golden arches or being a Wal-Mart greeter.  Nothing wrong with either job, by the way, provided that you haven't invested in 20-22 years of schooling to get there.  The underutilized people show up in table A-12 in the "U-6" category - and even that looks improved - at 7.6% (unchanged from last month -  in today's report --- but remember, there are still the outsourced IT people and whiz-bang DSP geniuses who fell of the back end of the report, having exhausted their benefits.

Oh yes, and about the "statically implied" CES Birth Death Model?  Well, you know the 92,000 non-manufacturing jobs created in October?  The CES Birth Death Model 73-thousand of them and since the start of the year has "created" 880-thousand jobs out of the statical primordial ooze.

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Those people who are lucky enough to have a full time job are putting on a bit to pressure to make a little more - so they can keep up with the rising cost of home mortgages and such - and as a result, the employment cost index has gone up a bit - and that, in turn, increases the chances of the Fed pulling a surprise rate hike in November or December, something which we take as an article of faith because a "hike in mortgage rates" is something the time monks at www.halfpasthuman.com have warned us about for December of this year.

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The stock market futures, prior to the jobs report, we up a bit, but that's to be expected.  As we explained previously, the "new game in town" on Wall Street is for banks to take nonperforming loans, bundle them up as "asset backed securities" (think of this as making a bond out of a pile of bad loans and then passing it off as a good bond).  The banks with the NPL's turned ABS's then offload these to hedgers, who then turn around as the the NPL/ABS as security to borrow morning money, which in turn gives the hedgers money to throw into the fire...I mean market.

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My friend (if I'm not in danger of placing myself on a no-fly list for admitting it) the Mogambo Guru has a slightly different view of it.  Writing in this week's Mogambo for The Daily Reckoning, he suggests this:

"So where, where, where is all the money coming from to finance the continuation of the rises in stocks and bonds and houses and government? Well, for one thing, the Treasury put us another $10 billion in debt last week, which is a nice piece of change, but foreign central banks only bought up $112 million ("Le chump change" in French, so I hear) in America government and agency debt. The answer must lay elsewhere.

Instead of just telling you, as a special treat we will take a short field trip, as part of the annual Mogambo Halloween Scare-A-Thon (MHSAT). Filing off the bus, we soon descend deep into the dark, dank, fetid bowels of the banking system to get a look at Required Reserves. Fearlessly we wade through stinking, slimy water, brushing aside vampires and zombies, but your blood suddenly congeals in your veins, like a big glop of half-melted cheese on a cold hamburger, when your own eyes behold that reserves are now down to a laughable $40 billion!

You roar "Hahahaha!" with the cold, hollow laugh of the damned. This is the denial stage. Next comes the fear stage, and, if you are lucky, you will taste the acidic Vomit of Fear (VOF) in your mouth. If you are not so lucky, you will feel the Bowel Evacuation of Fear (BEOF) in your bloomers.

But not even those social horrors can attenuate the shock of finding out that the banks are so massively over-leveraged that they have a measly $40 billion lousy bucks as reserves against $5.5 trillion in savings? Hahahaha! Again with that cold, hollow laugh of the damned!

My hands involuntarily clench and my eyes bug out in disbelief to think that a measly $40 billion as reserves against a whopping $5.5 trillion in depositor liability is a trifling $0.0073 per dollar! Two-thirds of one freaking cent!

And with a gigantic $6 trillion dollars in the loans and leases portfolio of the banks, these "assets" only have to decline by a trifling a 1% in price to wipe out their entire reserves! Hahaha! This is the level of absolute, ruinous insanity that reigns in the banks! "

But the Mogambo's column came out before the FDIC sobered up enough to figure out that "Ooops!  We don't have much cash around in cash of a (don't say this too loudly) run on banks, so they imposed an FDIC charge on banks.  I figure by the time the cost of administration is cranked in, this will increase the reserves plus insurance to maybe - a big maybe - a penny on the dollar.  But not to worry, government can just print money as needed, but then we get wild inflation, and oh yeah, the forecast "surprise rate hike" before the end of the year, just as we're going into a recession.  Hard landing, anyone?   Mix in a drought with the new recession and we might actually use the "D" word (depression) in 2007.  Seems a reasonable bet.

So with this economic stew simmering, my only advice to you is be sure and vote Tuesday (if we make it till then without a terrorist attack) and before you vote, look at your personal checking account - not the paper money report from your quarterly 401-K, but the real cash money and the prices you pay for things at the store.  Then, vote accordingly.

They're Fired

Not that it has anything to do with employment, but as a transition headline I'd give it a B-. Iran today has fired more missiles as they are doing their ritual saber dance as the Western navies look on, having done their dance last week on the same stage.

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With about a quarter of the world being Muslim, al Qaida is said to be provoking all-out war in Somalia. As I look at it, al Qaida is to Islam, what a machine gun waving, fire bomb throwing revival group would be to Christian churches in America.

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All of which doesn't make them any less fatal.  In fact, police report finding 57-dead in Baghdad in just the past 24-hours.  Now, al Qaida doesn't get credit/blame for all of this, as it's really a civil war.  But what a mess.

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Then again, there's a mess in the Gaza strip where Israel has been attacking Palestinian forces.  And in return, there's a report that Hamas is asking women and children be used to shield Palestinian gunmen.

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Meantime, thousands of Pakistanis are protesting the Pakistani bombing of a militant school this week, guided by US intel.

War on Oaxaca

The federals moved in today to attack a besieged university in troubled Mexico.  Expect to see the bloodshed soon on a TV channel near you.

Nuke Free Web

The federal government has shut down access to a government web site that apparently posted some sensitive WMD information.  The information was posted, we note, at the insistence of republicorp lawmakers who were trying to build their case.

Bot Hits

I have been remiss in noting the arrival of a web bot prediction that by December, we would be reading about the immediacy of a global fisheries collapse.  The prequel headlines are starting to cross now with reports that fisheries will be collapsing around 2048, but if the bots are right - and they seem to call the future way better than chance - we should read something in December about how that 2048 date is wrong and we're within years - or less. Subscribers to our Peoplenomics reports now know why a month or two back we devoted a column to the Coming Protein Shortage globally.  And yes, this has something to do with why Elaine and I now have three free ranging (Rhode Island Red) chickens.

Bird Flu

Not that having three good layers is any guarantee of protein, because we're now reading reports about how bird flu may have killed a dog in Asia - a sort of half-step toward human transmission. The good news is that migratory birds do not seem to play a large role in transmission of the disease. Nevertheless, pigeon races are being scrubbed in the UK over bird flu concerns.

Speaking of the Bird...

A bus driver who gave George Bush the bird has been fired.  Obscene gesture in front of students is the rap.

Thursday November 2, 2006

Leaders Prattle, Sabers Rattle

Seems our view strategic view of world hotspots is evolving much as a scatter chart evolving over time.  The main areas of the data seem to resolve as follows:

• Russiastan:  Russia is reportedly offering Georgia natural gas at double the old rates - to match gas-hungry European Union members. And while that's bound to stir up emotions Tbilisi, off in heavily Muslim Kyrgyzstan, there's a protest against the president. Kyrgyzstan is important to both Russia and the US which operate air bases there.  And yes, one of Russia's nightmares is a heavily Muslim southern tier encroaching on what was once dreams as collective lands.

• Oilstan: Then we wander down toward the Middle East and see that as the US led navies are playing war games in the Persian Gulf this week, Iran has announced plans for 10-days of war games of its own starting today.  And it's not just "war games" that are holding Western analyst attentions - it's that Iran is firing missiles as part of the process. Israel, meantime, is engaged in another Gaza offensive, which has killed seven people so far, and which as you might expect, doesn't play well in Islamic countries.

Although it might seem like such tensions would have investors running to buy oil and gold, such is not the case because the events of today as almost a sad "average" set of developments. Oil prices actually dropped a bit on rising US inventories, and gold is down a tad, but reports that the US might have a harder landing recession than most hope, are seen as supportive of the recent price break over $610.

Asia's Alpha 66?

OK, if you're not a worldly person, you might not remember that Alpha 66 is the group of Cubans who want to bounce Fidel and family from ruling Cuba. But after you read up on Alpha 66, then click over to the developing story about a group of Vietnamese-Americans being charged with promoting "terrorism" and supporting an uprising in Vietnam.  Got the parallel?

Shortages Propagating

As we have been watching the "shortage/encounters with scarcity meme slowly building since the late winter 2005/2006 web bot runs alerted us to the coming trend based on linguistic shift, we have been seeing "shortages" popping out all over the place.  Not a single big shortage, but a series of small ones.  A sampling:

• South African onion shortage

• Coca Cola shortage in Zimbabwe

• Shortage of skilled workers in China

• Shortage of some birth control pills in Canada  (No "we're screwed now" jokes, please).

• Shortage of AMD Athlon 64 X2 CPU chips

• Flu Vaccine shortage in Louisiana - but not just there, it's a global problem this year.

• Power shortages expected this winter in Bulgaria

Non of these - in isolation - is a big deal.  But, what is of obvious concern is that at some point shortages can "pile up" in such a way that they roll over and create more shortages.  A progression might be a shortage of flu vaccine which results in excessive absenteeism among power line crews during a storm, which in turn shuts down....well, you see how shortages can roll and expand.  It doesn't look like the threshold will be crossed for months yet, but it sure seems to be coming into view as there seems to be an increase in word frequency for "shortage".

Wintry Outlook

Although folks in England may get a warmer and wetter winter this year, some of us in Texas are bracing for a very cold one. Down in South Florida, the Miami Herald reports that El Nińo may bring erratic weather this year.  Not as wild as Iowa, where crews are using snow plow simulators to practice their skills. OK, maybe not as cool as the new Microsoft Flight Simulator, but cool (get it??? hahaha) nonetheless.

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OK, "Why are you going out and buying a wood stove for the shop today, George?"  Well, I have to blame it on my neighbor across the road.  When we had out timbering done on the property this year, he and his wife came over and chopped up a bunch of oak leftovers for their woodpile.  They have a fireplace insert, and we're more than willing to share. 

But then a day or two back, I heard geese - thousands of them flying south - huge formations - and the neighbor called up to inform me that yes, the geese are more than three weeks early this year.  "Gonna be a hard winter" he advised.  He also offered a visual data point - bushy squirrel tails.

Could it be he's right?  Here we are in the midst of more home and farm remodeling projects than downtown Beijing, and here comes another one...

More Expensive than a Sock

An Australian company says they've come up with a men's equivalent of the "Wonderbra".  This oughta just thrill the dickens out of Enzyte Bob.

Wednesday November 1, 2006

Gold: Glittering Again?

The price of gold has broken out of its recent trading range and is over $610 - at least in the early going today.  Readers have a number of suppositions about what's driving this, and I have a couple myself.  Armed with fresh coffee, here's the list:

• Word came out on the 24th that there has been a shakeup in the financial department of the New York Mercantile Exchange, and that the CFO has resigned, just as the Nymex IPO was going out on road show. then came a follow-on report that the CFO was getting a half million dollar payment as part of his termination agreement.  As one of our readers said in an email "Any time a CFO resigns, especially right before an IPO, you wonder 'What's going on?'"  Frankly, I don't read anything into it, but a few readers are.

• The more obvious candidate for gold starting to glitter a bit is that the US dollar is starting to show the strain of all the hype with the market. South Africa's Business Day headlines that "Gold up on weak dollar." That makes sense, especially when we consider the impact of the weak GDP numbers from last week.  This makes a lot of sense to me.

• Other headlines suggest that a monetary change of sea-state is at hand with one headline at Resource Investor headlining: "Gold Watch: Breaking the link with Crude?"  This headline goes hand-in-glove with the weakening outlook for the Buck.  Why?  [I drop into my imitation of the voice-over in a Japanese Samurai movie and gesture with my six sigma marketing sword:] "You see, gozo, mmm....when you have a recession, demand for oil declines markedly, however, monetary demand increases as governments try to spend their way out of the crisis.  And, gozo, when governments have already been spending at as you say crazy rates on the War on Terror, you risk hyperinflation of the money supply at the same moment that deflation is sweeping the world.  This we will call this hyper-stagflation.  Hai."

I called my friend Robin Landry at the Raymond James office in Shawnee, OK [(405) 275-6162] and asked him about the various Elliott counts.  Without going into massive detail, the broad brush is he's thinking the big break in the markets won't come until next March or April, when the Super Cycle fifth of the fifth of the fifth should wind up, but there is a lower probability count that I prefer, just based on the linguistics about declining markets coming through in the web bot runs lately, that has the market falling apart between now and the end of the year.  Robin's more pragmatic than me, when it comes to these things. I tend to be early.

The financial markets aside, his guess is that if gold's breakout from the recent triangle is confirmed, then the next target range will be somewhere between $745 and $865, and frankly, anything in that range will suit me just fine.  If the current ratio with silver holds up, that would sort of imply $16 range silver. However, if there's anything to Ted Butler's recent article "The Real Gold/Silver Ratio, Part III" silver may outperform gold.

Any outcome is fine with us because as one colleague suggested, even with a massive decline in purchasing power of the dollar (which may be starting now) would be halted by the government at some point by either shoring up the dollar with precious metal backing, or the introduction of a new "honest" currency with convertibility to an underlying precious metal.  Dropping back into my Samurai voiceover mode: "So you see, gozo, by voluntarily lowering our lifestyle now, we have built the foundation for a much better lifestyle later, as the dollar's purchasing power under the current "federal reserve" scheme approaches zero. As I have reminded you, what cost $1.00 in 1913 costs $20.45 today, such that the dollar's purchasing power has been more than 95% destroyed already. This dynamic cannot change because we're dealing with bankers whose only interest is interest.  Hai."

The International Crap

Frankly, the rest of the days headlines are pretty monotonous:

• North Korea says it will talk within weeks.  Blah, blah, blah...

• The US blockage of Sadr City is over after Iraqi protests.

• Israel is still gunning for Palestinians.

• But at the same time claims to be open to a Saudi peace plan.

Nothing market-moving there.

The Election Crap

Just as the international headlines aren't worth a hoot, the domestic pile is nearly as boring:

• "Could Democrat Turnout Swing Elections?" asks one headline writer doing the 8-millionth rewrite of that headline in the past 100 years.

• John Kerry is considering the taste of foot-in-mouth after his comments about dropping out of college could "land you in Iraq."  Can you say Back pedal?

• A sports agent has been charged with smuggling in ball players from Cuba.

No big trend setters in that pile, either.

Wiki Wars

We notice that Google has acquired JotSpot as the big internet players are buying up wiki makers. If you don't know what a wiki is, think of it as a customizable web page.  Or, you can wiki Wikipedia for the same answer long form.

The Digital Living Room

AT&T will be unveiling its plans today to tie everything electronic in your house together -0 television, internet, phone service, and such.  It will be marketed as "Homezone" and is centered around a set top box for your teevee which will act as a digital recorder as well.

The Plane!  The Plane!

All those folks in Houston who saw large numbers of planes flying earlier this week - I think the best explanation of the events was sent in by our friend the "Wandering Texan".  His best guess: It was probably end-of-fiscal year military spending.  The idea being that if a base commander doesn't use his fuel allocation for a year, then it is reduced in the next year.  So, fly it, or lose it, seems to be what was most likely going on.  But that doesn't explain the load of chemtrail reports we got.  I give up on that one.  Yeah, lots of reports of chemtrails, too.  Apparently what had been a break in the (alleged) spraying program is over.

Out of the Markets

A reader in Australia joins us in cash and on the sidelines with this summary of his recent investment experiences:

"hi george !!!!!!! well they got me .. i cant do it anymore .. this managed paulsen economy has farked me .. anyway no self pity .. you are a top bloke .. i pay for a few sites they are all crooks .. you mate, call it as it is .. thanks for your great work .. as for elliot waves , mate they dont work anymore !!!! thanks george and keep up the honest work .."

Yup.  Think cash, precious metals, get a place where you can raise your own protein, and remember life is a balancing act - and money is just paper lately.

Tuesday October 31, 2006

Strategic Thinking About Nukes

We don't usually pimp TV, but the episode of Jericho on CBS tomorrow night sounds like a nuclear attack training film. Hit the trailer.  The part on EMP is why we have a couple of tube type ham radios ands keep the generator unplugged.

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Thinking about the Bush family purchase of the 100,000 acres down in Paraguay which surfaced recently, it occurs to us that in a Neville Shute "On the Beach" sort of way, the Bush clan may be buying up land well south of the equator because it will take a fair amount of time for radiation to work its way south because the air current exchange between hemispheres is slow. Do they know something they're not sharing with the peeps? Like why the big secret and scrubbing of stories about the huge telescope being installed near the South Pole?

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So with the odd TV show and the Bush Ranch II deal, what's the "prequel" part?   Well, there's a lot of fancy "nuclear footwork" going on lately.  I mean besides the Iranians starting up a second centrifuge line that we reported last week, there's some "good" news out this morning that North Korea has decided to rejoin the six-nation nuclear talks in Asia.  Still, it's just talk.

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Another glowing follow-up point: Last week I told you that uranium prices would likely soar following the reported flooding in the Cameco Corporation mine in Canada.  Well, guess what?  Prices went up.  A no brainer - and the trick would have been to buy in at the first report of the flooding.

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Nuclear terror is the focus of a five-nation international working group that's watching developments, reports the Jerusalem Post.. Curiously, no mention of Israeli participation although we hear they have close to 300 warheads, while we read about Morocco and Kazakhstan's involvement - they have no known nukes.  Go figure..

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All the news about nuclear materials isn't bad.  The President of the European Commission says there should be wider use of nuclear power to fight greenhouse gasses and global warming. He must think there will be someone around in 2,000 years to keep people away from the dangerous leftovers of such plants. Frankly, that seems like a bad bet to make right now.

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Almost no coverage of a small fire at the Russellville Arkansas nuclear plant Monday - no radioactive materials involved is the reason.  Also, no big deal with the short circuits causing shutdowns of a nuclear plant in St. Petersburg, Russia, except the Russians have already shown the world their expertise with Chernobyl.

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While India and Pakistan continue their weapons development, we note that other countries are trying to get into the game.  Egypt, as one example is seeking nuclear power.

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With all this talk about nuclear materials, not to mention our recent Peoplenomics piece about shelter building, we spied a perfect home for the truly nuclear paranoid in England.  It's an early 1990's RAF communications base with meter thick walls and relatively blast resistant.  Price?  £50,000 - £75,000.  Let me see: over an acre of land, 6,456 square feet, call it US$142,250.  Hell, that's a WAAAY better deal than a house in California.  I'm still kicking myself for not buying one of those old Minuteman silos in Central Washington that were surplused a decade or two back.  Ain't it the way?

Terror School Attacked

Using some US supplied intelligence, Pakistan has attacked a "religious school" and killed 80 people. Islamic groups are ticked, but president Musharraf says those killed were all militants.

Election Spew

Dead people are voting in democorp stronghold New York. Republicorps are claiming early leads.  Even on tiny Guam, there are election issues.  Can we just fast forward to next Wednesday?

Just Eat It

New York City is pondering a ban on trans fats.  Kentucky Fried Chicken has already made the move. If you have been happily eating everything the fast food business puts out there, you need to go read the definitive piece on the dangers of Trans Fats in a piece titled: "The Oiling of America" - where the sorid (or is that rancid?) history of hydrogenation is laid out.

Plane Sight

A reader talking to his brother near Houston reported an interesting phenomena yesterday: Hundreds of large planes at high altitude.  "Just talked to my brother. As he was talking to me, he went outside and looked up. He saw a few planes going across the sky at about 30,000 feet. As we were talking, groups of 30 or more were going across and it was non-stop. After talking for 20 minutes, the planes were still going strong. He asked someone to confirm while we were talking, and they agreed. He mentioned this to co-workers today about this morning. Nobody believed him, and started calling him 'Pearl Harbor'."  If you did see large groups of planes yesterday ( early this morning, for that matter) please drop me a note.

Borderline

A large human trafficking operation has been broken up in Arizona - where a grand jury has indicted 55 people - nearly a dozen still at large, though.

New Media Winning

I was talking to a friend in Chicago, a successful doctor, yesterday and he made a very interesting observation. We were talking about global warming, the manipulation of markets, etc.  "It used to be that I didn't believe anything till it was in the paper - now I don't believe anything unless it's on the net.." or words to that effect.  No wonder.  newspaper readership is continuing to decline. 

Despite what publishers say, newspapers are a really bad business to be in now that the internet is here in force.  They consume trees, are inefficient as an advertising medium, and they are often 24-hours late on big stories.

Those are just a couple of reasons why we don't trust newspaper editorials on anything having to do with regulation of the internet, or other media issues - the owners of papers have axes to grind.  We fully expect corporations to restrict the internet - in much the same way that corporate/business interests stole the radio spectrum with the Communications Act in the last Depression..  I've always viewed it as an interesting "theft of air" - but then again, government does things like make Universe/Creator plants illegal, too.

The Mail Gets Through

Even though inmates can't access the internet from super-secure prisons, they can get mail - even if it's a 120-print out of a series of essays titled "Justice Denied."  Can't stop the mail, says a court.

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By the way, you might find some of the stories about wrongful incarceration over at Justice: Denied pretty interesting to read.

Monday October 30, 2006

Personal Consumption/Expenditures

The Bureau of Economic Analysis has issued its Personal Income and Outlays report.  no surprises:

Personal income increased $53.0 billion, or 0.5 percent, and disposable personal income (DPI) increased $49.3 billion, or 0.5 percent, in September, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $11.6 billion, or 0.1 percent. In August, personal income increased $47.2 billion, or 0.4 percent, DPI increased $46.4 billion, or 0.5 percent, and PCE increased $15.3 billion, or 0.2 percent, based on revised estimates.

The key thing to watch is the savings picture:

Personal saving -- DPI less personal outlays -- was a negative $15.0 billion in September, compared with a negative $49.0 billion in August. Personal saving as a percentage of disposable personal income was a negative 0.2 percent in September, compared with a negative 0.5 percent in August. Negative personal saving reflects personal outlays that exceed disposable personal income. Saving from current income may be near zero or negative when outlays are financed by borrowing (including borrowing financed through credit cards or home equity loans), by selling investments or other assets, or by using savings from previous periods.

There are a couple of ways I could argue the "improvement" in the savings rate.  On the one hand, people are still going into their savings (or home equity)_ to finance their lifestyle, but on the other, the pace of the withdrawals is slowing.  But then again, maybe we're just all tapped out!

Here's today's mantra: People not taking as much out of savings is bad news for the globalcorp types.  Look for a small drop in the markets as a result. A thrifty public is bad news and a dangerous thing for the debt pimps.

Mexico's Elections: Prototype for US?

As we have mentioned how many times, there's still serious trouble brewing in Mexico if you keep your head up from Mainstream Media here in the US.  In the past couple of days, police has seized the center of Oaxaca, but we expect the violence isn't over. And, in a sense recalling recent events in the Middle East, a NY City journalist was killed in local gunfire while covering events. 

While most of the Western headlines report that police are gaining the upper hand, if you read the reports carefully, you'll see that the area actually controlled by the police sounds like it's no more than the range of water cannon and rubber bullets.  Sort of reminiscent of the US "control" of Iraq.  yes we control it - but only out as far as the reach of a rifle round.

Not that the "elections" in Mexico had much to do with the emergent reality of the country.  Mexico at the top has become a major "power player" and the 300 families that run the country's economy have continued making significant gains in many ways. 

In the corporate world, we see the acquisition by Mexico's Cemex of Australia's Rinker concrete as just a minor corporate move to prepare for a huge road-building and construction frenzy that will accompany the merger of Mexico into the US (along with Canada) in what the republicorps have tried unsuccessfully to hide as "agreements." 

In fact, these "agreements" which are part of the US "Security and Prosperity Partnership of North America" are nothing more or less than treaties, entered without CONgressional approach, and entered into at the behest of groups like the Council on Foreign Relations, long time a promoter of the globalist agenda. We see the CFR's plan for "Building a North American Community" as a euphemism for "Let's build something like the European Union here and drag in Canada and Mexico!"

Stepping back a half step or so, I find myself wondering whether the Mexico election will turn into the prototype for the US with the requisite court fight and scattered pockets of resistance to follow our elections next week.  I can see the legal pressure already building.  Where?  Allow me to elucidate:.

Republicorp Back Fire

Let me start by laying out an important concept.  You know what a back fire is, right?  No, not the kind a car makes when the ignition or fuel system is out of adjustment.  The kind which is "A fire started ahead of a forest or prairie fire to burn only against the wind, so that when the two fires meet both must go out for lack of fuel."  Think of it as a little fire to stop a big fire. The kind used in California this weekend. Example: "Firefighters ignited a small backfire in Beaumont to protect a school with about 80 special needs children less than a mile away. "

Take the "back fire" concept now and let's apply it to dirty politics. This morning we are reading reports with headline suggesting that Venezuela's president Hugo Chavez has some ties to a California voting machine company and the question is being pimped around whether that could somehow give democorps an edge in next week's Constitutional crisis...I mean election.

"T'ain't so" say the firms involved in the report. Oops.  Too late!  The republicorps have successfully set this "back fire" to shield their own involvement with voting machine outfits.

The name of the republicorp game this year seems to be back fires and voter suppression. Is this a great country, or what?

Cimaron Not Simmering

Typhoon Cimaron is whipping the Philippines this morning - with 13 dead so far.

War Dead

100 US Servicepersons have been killed this month in Iraq.  The figure doesn't count those on life support who died out of the country after medevac. And a bomb in a Shiite slum in Iraq has killed 31.

Most Dangerous City

The most dangerous city in the US turns out to be St. Louis in 2005. Detroit, Flint, Michigan, and Compton (yo) are two, three, and four.  Safest place?  Brick New Jersey

"1930's Havoc"

My friend Robin Landry - who had the good sense to leave Wall Street and advise his investment clients from the relative safety of Shawnee, Oklahoma, recently made the point in one of our conversations that "The difference between a recession and a Depression is a drought."

I mention that because after the election and what we expect will be a Constitutional Crisis following (see above), there's almost no doubt that we will see a recession.  Now comes a report out of the UK that Global Warming could bring with it a kind of '1930's havoc."   Do we get recession plus drought equals Depression this year?  The pieces may be falling into place.

When its arrival becomes obvious - like next summer - we expect, there will be a heap-o-social trouble arriving with it.  For one thing, the widely disparaged victims of climate relocation during the last Depression - the Oakies and Arkies - are likely to be replaced by a new crop of forced  migrants; perhaps it will be the Mexi's and Arzi's - for the illegal Mexicans who will be jobless as housing collapses and what I see might soon lead to an abandonment of Arizona if infrastructure can't keep up with 130 degree temperatures following the massive overbuilding. 

Or, maybe Arizona's aquifers will just quit.  Why companies like Intel decide to put $3-billion dollar plants in environmentally challenged areas - when land is cheaper up in Wyoming, is just way beyond my comprehension.

We're already seeing the rumblings of water wars with headlines like "Nevada builder wants Arizona town's water" catching our attention. It all fits into a complex tapestry of events which will combine next year (absent another attention-shifting "terror" event) into a dawning realization that the lifework of the Baby Boom generation will really have not resulted in much "progress", unless it's narrowly defined as a massive paper asset shuffle...

And as if to underscore how sick and embedded the "paper asset" paradigm is, the UK treasury is suggesting more trading of pollution credits within the EU to curb global warming.  If I had a pumpkin pie I was willing to waste, I would throw it in these guys faces for not getting out of the "paper solves all problems paradigm." Not worth the waste of a pie, though.  There's an unbridgeable gap between those who "get it" and those who run the corporate/paper/quick buck/plundering pirate's worldview.

My advice to anyone who asks is simple:  Do anything you can to get yourself and your family into a sustainable setting which can operate on vastly reduced inputs of oil and which can under good conditions provide food and shelter without a mortgage.  That and a few gold and silver coins and a year's supply of food, well, you have heard that advice for years here. Others are picking up the chant, too.  Think it might mean something?

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Write when you get rich,

George Ure, The People's Economist