This economy is a what?
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When you call the Iraq War a "nightmare with no end in sight" (as I've mentioned once or twice on this sight) there might be a temptation to whip out a convenient republicorp label programmed by mass media into your subconscious and blurt out jingoisms like "weak-willed sissy who doesn't get it" or "If you're not with us, you're against us!" But, when the outlook is supplied by a trainer of generals - ex Lt. General Ricardo Sanchez, as a cool assessment of the reality of Iraq, then it might give even the more conning of neocons pause to wonder. Or, at least should.
You'll also notice that it fits with Gywnne Dyer's book title for an equally steely-eyed assessment of political and military conditions in the Middle East "The Mess They Made". In a September 17 article, Dyer sums up the problem of set players who don't care to change their thinking this way:
As you read the reports this weekend about how Sanchez has "dropped a bomb" on the administration, try to remember that there've been verbal bombs going off all over the place. Neocons are frigging deaf. Reality is too harsh, so we get dreamland policy in response.
The Tragedy of Iraq, it turns out, is likely to be entered in the history books as the Tragedy of Corporate Governance: Being supra-human, bereft of feelings, and with their only sensory organs being P&L statements, the mass hypnosis of corporations and their proxies, advertising & politics, have cast on the world, continue to drive humanity further and further into the ditch.
Look! Here comes another ditch...
The Widening Mess
Meantime, the relations between the US and Turkey are sliding toward it. One because the US seems backing a move which would label Turkish slaughter of Armenians as genocide. Two, and more important to the otherwise unfeeling investor is that Turkey is in a position to move into northern Iraq - and that means they could move on what the neocons would have you thinking of by now, as "our oil."
So this does what? Pushes the price of oil to a record $83, of course. Got to love those futures.
103 Points in Seven and One Half Years
Although the market was able to post a closing Dow over 14,000 again, there's plenty of worry in the pipeline about third quarter earnings, which may be a little on the disappointing side, according to recent headlines.
Not surprisingly, corporate-controlled media hasn't yet unveiled the truth about the hollowness of the market's advance since former all-time highs in early 2000. When the market peaked that year around 11,723 (plus or minus a cheeseburger) it seemed only a minor feat compared to this week's close. But was it? Remember that using the Federal Reserves own calculator, the Dow would need to hit 13,989 and change just to hold onto the purchasing power represented by the Dow in 2000. Since this week's close is 103 points higher than that, forgive me if I seem just a tad on the skeptical side with all the ebullient headlines about.
As inflation marches on, the Dow needs to hit 14,548 by this coming March in order to just keep up with inflation since 2000, if we get 4% inflation this year...
Not that it will be reported when we do. With digidollars of M3 down approaching 15%, proving the Fed knew in advance it would need to bury those numbers, which is why they disappeared in March a year ago, we can see the hyperinflation in paper assets on the way. Nevertheless, it will be statically invisible in terms of the cost of living, because to admit to it would COLA the government out of declining deficit la-la land. Better they suck out your standard of living. So sorry.
Borrowing the Good Life
All of the little nits aside - Like real 8-9% inflation - an intractable war, and mania with paper profits - America has, nevertheless, managed to construct a form of perpetual motion machine. The way it works is through inflation pumping up the price of homes (lamed a bit recently by the departing housing bubble), then refinancing that to take money out, while the banks bundle and sell the collected new debt as "investments" to unsuspecting true believers who might be equally prone to buy the Brooklyn Bridge.
With all of this going on, it should come as no surprise that exports from China are going through the roof. In fact, reports the International Herald Tribune today, China's exports are up 27% this year compared with last.
Free Trade Isn't Free
While The Decider has been making pointed remarks in support of free trade, and while as much as 30% of Mexico's population is in the US illegally, I have to wonder if we really need more free trade deals with Central America. I mean if "we" means as people, then decidedly "No!" But if "we" means investors pimping minimal cost goods, regardless of the fact that it has the highest resource burn rates, then the answer sadly is "Hell yes!"
Depends where your core values are. Fortunately, a lot of investors aren't bothered by those triflings. If they did, the markets would be at lower, more sustainable levels...
Toll Road Honesty
I keep forgetting to mention this, but it's a key 'Big Picture" to watch. You've seen how State Governments are busily leasing off highways, paid for by taxpayers, in theft by conversion schemes that somehow has attained legal blessing by local governments who wish to feather their State Budget nest? A current example is in Pennsylvania.
Well, hats off today to Democratic Congressman Leonard Boswell and Republican Congressman Lee Terry: They've introduced the Toll Road Prohibition Act of 2007 and it says in effect, that if States want to sell off operating leases, so be it BUT the Federal government's stake in the highways must be paid back first because citizens shouldn't have to pay for the same road twice. Right on!
Food and Lipstick Administration
Seems the Feds are going to be looking at lead levels in lipstick. Even without lead, I have often wondered over the course of a lifetime, just how much lipstick does a woman eat?
Hmm.. let me slip out of the People's Economist lecture cape and into the Mr. Science lab coat: Women outlive men by on average more than 7 or 8 years. Therefore, doesn't it follow that I should go wolf down a couple of lip glosses once in a while! Yeah, dat's it....
As long as I have the lab coat on, I'm now scratching my head about the Banquet chicken pot pie recall over salmonella. Doesn't heat kill salmonella? Are people habitually undercooking their food, or something here?
Price of Justice
Three Way Street
Microsoft is launching an online 'event planner' site. This as competition heats up in the 'thin client' computing world. More on that next weekend on our Peoplenomics report for subscribers, but you can already see how the three-way fork in the road is coming along: Fat aps that live on your bloated operating system computer and have tons of corp DRM on them, the trimmer/faster/arguably safer open source movement, and then the online thin-client option with Google Docs & Spreadsheets and Microsoft Office Live coming along.
Peoplenomics: Decision Framing & Portfolio Balance
A strange and subtle thing will happen if Ray Kurzweil is right - over the coming few years, the world will move into a twilight zone where creation of new 'things' will become almost instantaneous. If you can think it, it can be built - in many cases right online with services and the whole new class of 3-D printers; devices that will output "things". While this outputting of things sounds really neat, there's a whole other class of possible investments which might make sense specifically because they can not be mass produced: things like land, fish, air, and for lack of a better term, 'natural resources.' The problem, which I didn't see addressed in Kurzweil's "The Singularity is Near" is that just like physics (of the classical sort) requires an object approaching the speed of light to be pushed by ever greater amounts of energy, so too, ever-faster computational powers and lightning bolt fast development, also call for exponential growth of capital for infrastructure - and what I call "Ure Corollary 13: Accelerated obsolescence which (you may not like this) translates to wasted resources.
To get your "No Incumbents in 2008" click here. They're just $5. And no, that would not keep Ron Paul from running for the White House - he is not an incumbent for that office - having never held that job before, you see.
Best of Cheap Living
Order our handy ebook "How to Live on $10,000 a year or less - and learn to live like a Third World person now. It's coming anyway, with big job layoffs this summer - and by ordering now, you can beat the rush...You may have more time to read this fall if the economy falls apart as I expect...
Friday October 12, 2007
Note: A somewhat shorter report than usual today because my Vista computer ate this morning's report again about 7:07 AM - after an hour of writing. And, since I can't seem to find an auto save every x minutes feature in FP 2003 (and Expression Web isn't playing nicely yet, we'll just have a little shorted report than usual today. Fuming? me? Oh yeah...) so this is what you get in 40-minutes of work...
Producer Prices Scream
OK, this is definitely not good news for people who were holding their breath and waiting for the Fed to lower rates one or two more times before year end. The Producer Price report is out today and it's a head-spinner:
Sort of gives you the idea that "Gee, maybe inflation isn't dead after all..." In fact, says the report, the price of finished goods from 12-months ago was up 4.4%.
But wait! Something isn't making sense here! How can finished goods (e.g. consumer goods and the things we buy) be up 4.4% year-on-year in this report, while the CPI reported year-on-year for a month earlier was only 2.0%. Obviously, the right hand is not talking to the left over aqt the Labor Department - that's just a little much to swallow...unless you want to believe that middlemen are giving away their margins. If you believe that, I'm sure you love the Easter Bunny...
Dollar up a bit, ergo gold down, and likely some pressure down on oil and commodities today. Yawn. That was before PPI though.
It's smaller than expected, so quite predictably, republicorps and The Decider himself are saying lower taxes are the reason. Others (more rationally) think the weaker dollar might have had something to do with it.
Around here, though, we know better. It's common knowledge that lower taxes cause global warming...OK, just seeing if you're awake yet.
The Nobel: Gore
Cold War II
The Russians are mighty ticked at the US for trying to put its missile shield into eastern European countries. Today, they are giving that message to SecState Condi Rice and crew who are holding talks with the Russians.
OK, so the US unilaterally abrogated the ABM Treaty in 2001...who would have thought Russia would bounce back this quickly from the Soviet collapse and make a big deal about it?
Once again this week, I was appalled to see the seditious talk from the promoters of a North American Union and the Amero currency as Vincente Fox visits on a PR tour. As USA Today headlines "Vincente Fox admits plans to form a North American Union and alludes to Regional Currency."
Last time I studied it, seemed to me that 'sedition' was talk that openly tries to subvert a Constitution...but maybe I'm just sensitive about being railroaded into a corporatist plan to hollow out the US dollar and shove the Amero down ouir throat - rather sooner than later.
The folks over at World Net Daily have been running a series ("Premeditated Merger") and they report "Amero plot real, says biz columnist".
Apparently, there are not enough people in America these days who remember the death and sacrifice paid by our Armed Forces in the past to preserve America's independence and freedom to take a stand on this. Just give 'em a refi and a new HDTV and it's all good. OMG...what's a Constitution?
And while this is going on, Hugo Chavez of Venezuela has just pulled off a massive banking coup which is bound to lead to a showdown with his government and the heavily bankster-influenced US: He's promoting a plan for a regional bank for South America and it would be a power just like the European Central Bank or our Fed is here. The question is simple here: Is there room for another gang of banksters, or does this kind of move set the stage for bullets to fly? He's got oil - and that in itself seems to make countries subject to gunpoint democracy by corpgov...
Road to Stepford
Says here that a "British scientist gets PhD for thesis predicting human-robot marriages" in the future. Shouldn't be too hard to teach them to say "yes dear..." on command. "Whatever you say, dear..." Gag me. Change my battery...
Since I'm in the goat-raising business, this is a big day on the calendar: Eid-al-Fitr. Big feast day for Muslims worldwide.
Thursday October 11, 2007
"The housing crisis is past...The subprime crisis over..." That's the kind of mindless crap that has spewed from the TV talkies lately. But, seems that may not be the case. In fact, I'd venture to guess that we're in this through at least the end of the year and into Q1 or Q2 '08 because foreclosures are still going strong. Take today's report from RealtyTrac: "Home foreclosures doubled in September compared with year-ago levels because of the fi, lie, and refi scams that were pulled on consumers by predatory banks, with only lip-service from obliging regulators who could have prevented the crisis early on.
I don't usually put press releases up here, but this one is important - the news isn't all bad, unless you're one of the nearly quarter million homeowners who is being foreclosed on for the month. Some highlights bolded and highlighted by me:
There's more - and a table of state rankings here, but you get the idea: Personally, with huge numbers of mortgages resetting this month and next, I don't see how we're even halfway through the fallout from this yet. If the old saying "markets climb a wall of worry" is true, there's plenty to climb on, huh?
As the price of gold continues to inches toward the $750 level,; and silver back toward $14, a shift of thinking about the future of the US dollar seems to be in the air. The headlines "Dollar falls against Euro" go to the idea that if the Fed drops rates (again) then that would be bad for the dollar.
Off in the background of the dollar, I'm reading how the administration is planning to rebuke China by giving the Dalai Lama a Congressional Gold Medal. Deserved award, it's cool, and all that, but China has us by the financial short-hairs when it comes to keeping the dollar afloat.
Rearview Economics - Balance of Trade
A slight drop in imports and a slight improvement in exports narrowed the balance of trade a tad in August. Which is why I call the balance of trade "rearview economics"
A little more contemporary are the retail sales figures for September, which - no surprise here - continued to be sluggish.
Remember I was talking a minute ago about how the market can climb a wall of worry? Or, more correctly, be revalued upward by the falling dollar? Seems the rally is set to make come back today after yesterday's little hiccup. The market is still up compared with last week's record close, so what do you want?
Looking for a growth business? How about moving to Burma and getting a piece of the action in the 30% growth in opium trade this year. Even better, diversify into meth! There's some disagreement over whether the Burma/Myanmar junta government is involved...nothing that a few well-placed bucks in a few palms couldn't fix, I suppose...
One of Russia's big sticks in Eastern Europe has been their control of much energy. But that's about to change with European countries putting in an oil pipeline which will bring Caspian energy into the region.
An Inconvenient Court Case
While saying the film was broadly correct, there are nine serious untruths in Al Gore's "Inconvenient Truth" a court has ruled.
Department of Redundancy Department
Ever wonder why nothing much seems to happen in the District of Corruption? I found myself thinking "Aha! It's clear now..." as I read the reports of how the democorps are holding meetings to schedule meetings.
Meantime, the democorps who went to DC talking about change in US Middle East policy are hiding behind the need to make "responsible decisions" about the war. And, with the democorps putting the whole debate about the war on hold, it's becoming more clear by the day that there's now only one political party in America - the corporate/PAC/special interest party. Will of the voters? Who dat?
Spying at Home
The Decider has apparently already decided: He won't sign the new foreign eavesdropping bill which would install a little more oversight of the process. Not that it matters, as the administration has been doing what it wants anyway, with signing statements that change Congressional intent and really amounts to a line item veto...but then you knew that, right? CONgress snoozes on, which is how I arrived at the "No Incumbents in 2008" idea...
I was asking yesterday "Where's Atlantic City's Mayor?" Well, turns out he has resigned over an investigation into his military record and he's in some kind of treatment program say reports. Makes me wonder about the political process in Atlantic City, a bit. Thanks to an Atlanta reader for pointing out it was Atlantic City - not Atlanta... ooops.
The Furry Goat Mother
Yes, our prized registered goat Dick Chinney is the proud father of a couple of new kids today. A little doe and a new buck. Dick Chinney, living over here, is playing the part of deadbeat dad - the mom had the kids across the road - she's with their flock.
Since America has been run over with a child-centric mindset, the folks across the road called this morning to invite us to a baby shower. I'm trying to think of something appropriate - hoof trimmers or something, lest they come after Dick Chinney for support. Dick, meantime, was sighted day before yesterday mating with another female (one in our flock) so five months from now, his support obligations could double again...
Wednesday October 10, 2007
Investor's Coloring Book
Yes, the world is still likely to come crashing down around our ears. And yes, I still think that market forces, or more likely the Powers That Be, are having a dandy time trying to avoid the obvious ending to this play with what I call serial economic bubbles (the Asian investment bubble, the internet bubble, and more recently, the late Housing Bubble). But, that doesn't mean I have to be 100% negative all the time.
OK, so the IMF, which warns that exchange rate interventions could result in a hard landing, and by doing so, they're sounding like they've been hanging around here. Still....
I'm a two month bull - Sept 18 to almost November 18. I find the markets to be positively biased toward the upside recently. Not that they represent any greater value than they did six months ago. But, because the US dollar has continued losing its purchasing power, it takes more dollars (reflected in a higher Dow in turn) to 'buy' that much consumer market niche.
The obviousness of the serial bubble phenomena is expected to escape your notice, however, and as an investor, you get things like the Fed's meeting notes to ponder. Here's an old reporter's secret: Most folks won't take the time to do this, but when I go through the statement, I color the bad parts red - meaning sounds bad for the economy - and the good parts green - the stuff that should be good for the economy. Black means no change.... Example:
Well, you get the idea: Next time you want to develop your own - independent - view of a news release or Fed statement, just whip out the highlighters and mark up the whole report and then stand back a foot or two and look at it all squinty-eyed: Notice which color seems to dominate and that's at least a starting point on interpretation. Works on those long memos from 'corporate' as well.
The next step might be to then 'x' out counter-balancing views - for each "this was down" but 'that was up', you can almost go through and cancel out terms - just like you can strike terms from both sides of an equation in algebra. What's left is often the real story.
It's a shame that news channels don't take the time to color-code breaking news: Seems like it's always on a yellow background with bold black lettering. Gag me. Why not put headlines the come in ahead of expectations in green and ones below forecast in red? Is this asking too much? At least the ticker is red & green.
"Universal peace and brotherhood breaks out planet-wide" might be on a green background. Or, "World War Four breaks out" might be in red. Although, since capitalism is completely backasswords, universal peace would kill the economy (red) and war is always good for the economy (green). But, you get the idea.
Color coding would make much sense - which is precisely why it won't happen.
This coming Monday, the new Fox Business Channel will launch - featuring a few high profile names (like Carly Fiorina) - I'll be waiting to see if they have any more unique look than Bloomberg and CNBC which seem to be cut of nearly the same graphics cloth of late.
Why people are so conditioned to the same thing - from channel to channel - is beyond me. Or is it? Maybe folks are just lazy, risk-averse, money-driven useless eaters after all. Including me. But if sex sells, and Reality shows are such a hit, why hasn't someone gotten really creative and launched from a beach location somewhere? I mean the really rich don't hang around the mahogany foxholes all the time, right? They go to casinos, yachts, and beaches. So, why aren't the business channels originating from there -eye candy land - now and then? Instead, we get occasional shows of COMDEX and the 'live from the NASDAQ market site..." Please, how trite.
Feed my eyes! Naked anchors - or something equally ballsy and outlandish. Trouble in auto sales? Anchor from the front seat of a car until it is sold (could be a long gig, right?).
What the media mavens often miss is this: If I have level 3 quotes on my machine, and my commodity broker calls me 6-times a day to bounce trading ideas around, what's my incentive to watch television? Another headache commercial? The latest Geico spots? What's the Travelocity gnome up to?
Jim Cramer is outlandish (and high energy enough, and possibly rabid ) enough to be worth watching CNBC for now and then, and Mike Schneider's Night Talk series on Bloomberg is usually good brain food. I guess we'll find out next week whether Fox 'gets it'. Smart like a fox, or Fox in a box? Your bets, please.
Free Million Dollar Idea: Here's what I'd do if I were looking to become "Must see" financial TV: I'd get a high profile host with a gambling bent (Trump Casino kind of thing) and then I'd invent a new hybrid investment game which people could play online from home or work - sort of a stock market-based Keno. People would lay down their bets on a roulette kind of table. 150 players a day, chosen at random from the player pool. ("Dow Green 45" - would mean the down will go up 45 points that day, and "Dow Red-60) would mean the Dow would go down 60 for the day).
Instead of spinning a roulette wheel though, the outcome would be based on the closing Dow for the day. People would place bets before the open - and after the close of the market, they'd collect if they won. I'd telephone interview some of the winners.
Add a buxom beauty for a hostess/eye strumpet and a bulked up male (to appeal to both sexes - now that would have all the elements: Investment, gambling, sex, predictable times, play along at home... Sell sponsorship to liquor companies - OMG you could have alcohol in their too. And Viagra or Cialis ads...now we're cooking. Just call the game UrbanSurvival, or send me a check for the idea. (Consider it copyrighted!)
OK, back in the box...
Speaking of "new looks", if you're conscious enough, you may notice the UrbanSurvival logo has changed. This is not so much a major graphics decision on my part, but rather a charitable graphics designer/reader who got tired of the same old look to the site and wanted to put it out of his misery. (Thanks - I was getting bored, too but thought it was just the wrong vitamins...)
With the dollar down (as I write this) and bouncing around the .7065...oops make that .the .7055 level vis-à-vis the Euro, we see the price of gold is going up, along with silver, and based on my priced like real estate model for now theory, I expect the Dow will climb again today - off to new records, although with a lower open being talked about, I expect there will be some breathing space before the rally continues. Thankfully, I don't do day-trading anymore.
World Series of Interest Rates
Ever see one of those pictures with the dogs sitting around a table playing poker? That's the picture that goes through my mind as the world's central bankers play their interest rate cards. And just like the ever so much more interesting World Series of Poker, there's no shortage of commentary and speculation about how the next hand will be played. Looks like the "Bank of Korea may keep interest rate as six-year high" informs one headline, while another suggests patience as the "Bank of Japan expected to bide time on interest rates." Wake me up when the commercials come on.
Like Chocolate for Money
Cadbury is also planning to spin off it's Dr. Pepper and 7-Up brands into a stand alone business unit. Wonder if they could get the stock symbol "7" just for fun...
There is No Inflation, Dammit
And since there isn't, those coming 11% increases in home heating expenses will just have to be massaged out of future CPI number, I'm sure. But at least the stats boyz have lead time to work it...
Waiting for the Big Earthquake
I read in some scientific paper, or other, that there's a slightly greater
chance of an earthquake around the period of the new moon. Getting
close to that with the moon about all dark last night. There was
a quake in
Australia overnight that didn't do much more than shake up the wheat a bit.
And the Philippines has
delayed their 3rd
annual earthquake drill a week to the 18th of the month.
I'm still betting on a double quake for the next one, based on the linguistics of it. Maybe within a week...
Latest Free Lunches
The National Fire Protection Association is focussing on Mississippi - as the state with the highest fire death rate on the country. How hard can an exit plan and a $10 smoke detector be, for crying out loud? (Pardon the overly cynical newsroom humor to the headline...)
More than 1,300 gang members and associates have been busted in the past three months by the feds, reports the LA Times.. Maybe MS-13 is down to MS-12?
Tuesday October 9, 2007
In yesterday's column I mentioned that I thought, based on how the US dollar was doing at the time, that the market ought to decline around 60 points during the sessions. Well, sure enough, it dropped more than 56-points during the session, only to come up for air toward the close.
A thoughtful reader sent me a comment:
Fair enough, but I trust no one in their right mind would base any financial decisions solely on my opinions about financial matters reported on this site - and please read the disclaimer. On the other hand, a reasonable investor will look at all kinds of data - weather reports, earthquake reports, and how much debt the consumer continues to pile on - all those things weigh on the direction of the market. So I agreed with the reader:
Like most intelligent folks, my reader is wondering "What comes next?"
We may get a little more insight into things when the Fed Minutes come out today around 2 PM Eastern time. If I am not buried in client work, I will try to post them, along with some basic interpretation of Fed Speak, this afternoon.
There's a really neat way to analyze written statements that Cliff up at www.halfpasthuman.com uses - it's called SKED - for 'subject knowledge elucidates domain' - A nice way to encapsulate the idea that what a person says often betrays a much deeper meaning - and through proper analysis, there are many hints available in how something is written.
There is one problem with SKED - it doesn't work well at all with statements that are written by a 'group'. In heavy-duty linguistics, when you have more than a single speaker's 'voice' in how something is written, the undercurrents are distorted and the emotion or telltale signs of what the speaker is really thinking, can be lost.
Still, the Fed minutes today, coupled with speculation that the EU will not take a hardliner's stance on the dollar, might move things this afternoon post Fed Speak.
When you think about it, there's little financial incentive for the EU-zone to do anything about the declining dollar. Why? One could argued that a declining Euro would be good for companies like Airbus which competes with Boeing. A decline of the US currency might actually help both remaining US manufacturing companies - the ones that haven't been fully outsourced to India and China.
But a strong Euro does have a silver lining for the Continent: Namely, the relative price of energy/oil for them will remain reasonable or declining, while a long term decline in the dollar, not to mention falling Middle East support for the dollar, bodes ill for the US. Smells inflationary.
In the very short term (today, for example)
we see the dollar showing momentary strength ahead of the Fed notes -
and this is likely to press gold, oil, and anything else purchased with
US paper, lower. The crap shoot is "For how long?"
Answer that one and you can make a few bucks.
In my personal account, I've been holding a fair position in December silver calls, and I'm shopping for some March grain calls as well. No, not trading advice: Every time I get a clear vision of where the market should go based on economic fundamentals, the Fed lowers rates - choosing to preserve economic stability (at my expense) versus maintaining a sound currency, in which case the market would be acting much differently.
I'd remind you again that where the 1930's were played with tariffs, the modern end-of-the-game is played with competing currency valuations - rotating devaluations being a manageable and profit concept.
Manufacturing to Swing?
In a word: "Maybe" or another "slowly". One thing I have been awaiting is a decline of the dollar sufficient to bring some manufacturing jobs back to the USA. There are some telltales around the edges starting to appear. The Philippine "Peso his new 7-year high against dollar in late trade" gently slows the rush to outsource there, while the Indian rupee last week set a 9 1/2 year high, although easing somewhat today.
No doubt, these are very, very long-term trends, and if you're planning to make a gazillion dollars, you might do better elsewhere. Still, my guts keep telling me "focus on resources - as the world fills up with people it'll be depleted resources which should show the best overall returns; after all, scarcity builds demand, and when demand increases relative to fixed or declining availability, price should go up.
An example of this comes from the energy minister of Qatar: "Qatar says oil prices should top 100 dollars." I can't tell you how much of that increase will come from (take your pick here) a) falling resource availability (see Simmons' Twilight in the Desert), b) the falling US dollar (chart above), of c) increased demand (see Fed's Consumer Debt charts, which are called G-19 Consumer Credit reports because they don't want to scare people with the truth - it's the consumer debt report; currently increasing at nearly 6% annualized).
Still, the Qatar remarks remind me that if you play the longer term "Let the trend be your friend" a strategy like investing in oil stocks based on cost per share of proven reserves, might be a simple enough thing to figure and play by. But, it's too slow a game for me. I'll take a physical commodity with the fast and slow stochastics arriving at oversold, and the MACD nearing a bottom any time...
I'm sorry, but we are in an emotional building period according to the linguistics reports, and despite a few 'release events' hanging out there (earthquake window till the 18th, for example) the rest of the headlines are pretty much 'business as usual' and I don't get too excited about them. For example:
I don't see much in this morning's headlines that gets me excited.
Law & Order Candidate
Anyone seen Atlantic City's Mayor? Missing...
Immigration and Food
Farmers are talking about rotting food thanks to the tightened security at borders (marginally, anyway) and the crack down on illegals. Food or laws enforced - your call. So the decision framers behind the scenes would have us think, huh?
That corporatist guy - ex presidente Vincente Fox says the US is letting racism dictate its immigration policies. What? 10% of his country (or more - some estimates place the number of illegals in the US at more than 38-million) is here already! If you pencil it out, that's about 35% of Mexico's population in the USA! The North American Union is way closer to done than you thought.
This is sooo predictable: The Democorps are warming up to the Republicorps to keep on spying on Americans (without a warrant).
Can you say "Chilling dissent"?
Sotheby's has sold a rare blue diamond ring for $7.98 million. While the rest of us buy carrots instead of karats.
"Oasis, Jamiroquai to follow Radiohead" reports a headline. Making their music free on the net.
I'm thinking there may only be six real musicians left in the world - everyone seems to be cross-sampling everyone else's work - what's original anymore?
Seriously. I sit in my little 24-track here at the UrbanSurvival studio sometimes and wonder: "Gee, if I make a song that is 99% samples of other people's work" can I claim copyright protection for the unique way I have arranged it? (Yes.) Amazing.
Monday October 8, 2007
Now That I'm Awake
"Elaine, what's up with the market? Looked a tad on the odd
Well, if the Post Office is closed, along with the banks, I guess I don't have to worry about a US bank run today. Say, being a consultant and all, I think maybe I will take the day off and work on organizing my shop....yeah, that sounds good... Slowly, caffeine is going to work...
With the futures down a bit, and with gold and silver down - and the whole commodity complex down, why would I wake up this morning and the first thought in my head was "double boiler"? Darned if I know, but I didn't watch any cooking shows in the last week featuring a double boiler. But, maybe it was subconscious telling me "The market is on simmer mode" in here - so just be patient and wait for the market to come to your targets."
The main feature of the morning seems to be that the US Dollar has taken a day off, so far, from its recent slide. And this is making a few headlines in the currency markets. For example, the "Dollar gains against yen in Asian trade" reports one headline. Another notes the Australian "$A at a 23-year high against the dollar."
It's not like I am talking up the dollar, mind you. There are more well-heeled folks than me doing that just fine. Among those, IMF Chief Rodrigo Rato: "IMF's Rato says dollar undervalued, risks grow..."
As a result, I expect early going this week, the dollar will do some 'slip-slidin' away, just long enough to have some predictable (and maybe even tradable) impacts.
I think I've already explains some of these to you, but to refresh, here's a short summary:
With all these indicators lining up just as I've expected, we might want to ask how far could the Dow drop early this week in order to fulfill what I'd reckon as a reasonable target based on the valuations of the USA dollar?
Relative to the Euro, as I write this (it's only 6:05 AM in East Texas at the moment, so a lot can change as the day wears on) the dollar has climbed from .707 versus the Euro to .710. That's a change of about 4-10th's of one percent.
Next, I take the closing Dow of Friday (14,066.01) and divide that by the dollar change, to arrive at my Dow target for the day: 14,006.57 - a drop of about 50 points in the Dow seems implied.
Of course, that's just a wild dart going into today's session - and no, this is not trading advice (go read this site's disclaimer). Still, it's as good as anything else you'll find on the net at this price point (free) so there you have it.
Given that I expect the dollar decline to resume, and given that enough caffeine is seeping into your cerebral cortex to form your first coherent question of the morning (besides the rote "What time is it?") you might be wondering "Why is George a bull, given that he thinks the dollar is bouncing, will eventually head lower, and the Dow, gold, oil, corn, and all those things are down this morning?
Glad you asked. It's all about buying with a bet that inflation will return and the Fed won't be able to keep their hands off the printing press (therefore the dollar slide would likely resume at some point) and so I'm bullish because lots of things are coming back into what I think (again this is not advice) buy zones.
When they get into my buy zones, I buy things - and when they appreciate some, I sell them. That's why on this particular Monday, I can almost smell a profitable couple of trading weeks coming and so on weakness I'm likely6 to do a little buying. Unless the playing field changes dramatically.
Already I'm making notes on how to form some longer term targets which I'll outline for Peoplenomics subscribers next weekend - but in the very short term, the market's coming to me.
The headlines out of the Middle East (and related to the quagmires) are more of the same today: The UK's Telegraph headlining that "Britain is 'on board' for US strikes on Iran" and former Secretary of State Madeleine Albright says "War on Iran cannot be ruled out."
If you're a betting person, you might raise the stakes on an Iran bombing mission sooner rather than later: Gold seller (as Chancellor of the Exchequer) turned Prime Minister Gordon Brown has decided not to call elections in the UK - so the corpgov powers that be, I can only assume, need him to back the Iran bombing and he doesn't want that going on while he's trying to hold onto power. Makes sense in a megalomanic sort of way.
The US in Iraq has stepped up claims that Iran is supplying weapons - now naming the Iranian ambassador as part of the Revolutionary Guards (of Iran) which means enemy combatant, as best I can tell.
And the US designating the Iranian Revolutionary Guards as a terrorist organization' ought to be just marvelous for the Department of Homeland Security budget. How so? Some Iranians say you can't separate the Guards from the Iranian people - which would mean 70-million terrorists...
The president of Iraq says 100,000 US troops could leave the country soon. If soon is the end of 2008...
Tit-for-tat: The Iranians have opened five border crossings with Kurdish run Northern Iraq. Betcha more than people come through those...
And, to show what kind of heart the government has (sic) we have to note the case of Minnesota National Guardsmen coming back to find their GI Bill education benefits are being denied. They were deployed 729 days instead of 730 - which would have qualified them for benefits. Is this crap, or what?
While I'm waiting for the flood meme to return in strength to the US later this year and early next, another 67 people have died - this time from flooding in Vietnam.
On the other hand, the unseasonably warm weather in the US heartland this weekend left one dead at the Chicago Marathon. Anyone seen fall?
I don't know if you have been following it, but in India, the urge to grow factories is not always met with open arms by people who value the agricultural lifestyle. "One killed as farmers, communists class over land takeover for factories in eastern India" headlines one report.
Balls on Immigration
As the US continues to trip over it's political correctness, the largest political party in Switzerland has made a firm stand on immigration: They're against it.
Fed minutes due out tomorrow, balance of trade on Thursday and Producer Prices on Friday. No, I don't expect much in the way of major emotionally impacting news in here - not till after Turkey Day, thanks. Just sit back, relax...
Jim Kunstler's site has a new look - more importantly, the Association for the Study of Peak Oil is having a conference in Houston Oct 17-20 and Jim will be there.
Don't know where it's gone, but www.mosnews.com seems to be down.
Elaine was watching one of the cats play with a black snake in the front yard last night when she caught a glimpse of another one near by. This one was red on yellow...so me and Mr. Mossberg have just bagged our first coral snake of the year. Easy way to remember if a coral snake is that or something else: "Red on yellow, kill a fellow." because this one was about 18" long, I have to assume he has company - so I might go snake hunting tonight again...can we get a freeze, please?
Write when you get rich,
George Ure, The People's Economist
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