Crooked Casino Chronicles

Noticing that the present rally has not yet gone past my 'line in the sand' which marks where I could become a believer in the current 'rally', a reader asks:

'I am tempted to play some puts on the coming down turn, but two things are chasing me from the table at this point, and neither is "stomach" for a gamble.

1) If the FED inflates away the debt, a la Weimar, the stock prices (but not values) may continue upwards, killing the puts, OR

2) Jim Sinclair has suggested that derivative meltdown may take a number of brokerages out, leaving trading accounts as just bankruptcy fodder. Even "winners" will not be able to "collect", and will be no better off than a winner in a busted illegal craps game.

This makes me consider that trying to play either "extreme" may be illusory - perhaps that is what Cliff is also alluding to.

What are your thoughts on this? Am I missing some other scenarios?'

No, that's pretty much sums things up.  The economic indicators that a reasonable person would look at might include:

• Consumer debt, last reported almost a month ago, shows the annual rate of increase for September up a measly 1.8% annualized.  The three previous months, the annualized rate was 5.3%, 6.4%, and 7.5%.

• While the Consumer Confidence number has been tanking, there has also been a fair increase in Cyber Monday and Black Friday sales reported.  This seeming contradiction has also been noted by writer Janice Podsada at www.currant.com under the headline "Sales, Confidence Data Don't Seem to Add Up". I could whisper some possible solutions to the apparent contradiction, like "Oh, that's because inflation is way higher than reported and that bumps up the sales figures" but that would probably land me on some kind of economic terror list despite my constitutional Republican beliefs, which I guess puts me as a Libertarian now that the republicorp has trashed Constitutional Rights, help by the marketing straw man party, the democorps. All fighting to maintain the illusion that the people, not corpgov is really in...Oh yeah, maybe better that we skip to the next item...

• The fall in consumer confidence is not limited to US shores, either.  There are headlines about how confidence is tanking in the UK, lowest levels since 2003, and surprisingly, in the United Arab Emirates and Qatar. 

• Although this rally seems to be like manna from heaven, a check of my e-trade charts shows that a) the rally is just now touching the 50-day moving average, so I won't get excited till we're through that one, b) the relative strength indicator (RSI-14) is just at neutral, and c) both fast and slow stochastics are both overbought.  So no, I am not in favor of going long in here, nope.

• If you look at a 5-day chart (we'll use Yahoo, but remember this chart will expire Monday and won't make sense in retrospect), there are some serious gap-up's that need to be filled.  But while the chart picture screams "Gaps to fill!" when you look at the numeric data, over here, you're left with another conundrum:  The chart looks like Monday closed at around 12,750, and it looks like Tuesday opened at 12,800 or so, yet the numeric data says no, the Monday close was 12,743 and change (which is OK) but then the data says the Tuesday open was 12,744.78, which it sure doesn't look like on the chart.

Rather than devoting any more time to the study of such phenomena, I find myself quoting WOPR (the computer in the movie War Games) which offered some great advice on a military simulation called Global Thermonuclear War, which seems also to apply to playing the markets in here:

"A strange game. The only winning move is not to play."

And, just to make the worst of Saturday morning puns, if you believe some of the economic numbers out, you're believing some WOPR's.

The best I can think of is to offer some 'pappyisms'*  (*Things Pappy used to say, or nearly so:)

• "A soft landing is when your neighbor's portfolio loses 10% or more."

• "A hard landing is when your portfolio loses 10% or more."

• "A recession is when your neighbor is laid off."

• "A depression is when you're laid off."

See how common sense works? If you can afford to play 'catch falling knives" have at it.  We continue to be in cash on the sidelines except for a commodity  call option for March wheat.  Inflation of food prices seems a slam dunk, but even that is a flyer.

(With the new limits on wire transfers, not that we'd be able to get our money out of the bank in a hurry, mind you...)

The Runs

Campaign office take over? Pseudo-trama, I think it what I'd call it.

Retraction Sought

Here's an interesting one:  A group called Citizen's United is demanding a partial retraction by CNN of some of it's coverage.

---

CNN already finds itself being punished in headlines like "CNN Hit for planted questions" in the Wednesday republicorp debate.

Hijacking Porn Sites

Computer won't stop incessant pop-ups without buying a code to a porn site?  You been hijacked, maybe...

UrbanSurvival Radio

Say, if I were to land a daily radio show (9AM to 10 AM) on the Republic Broadcasting Network, would you listen?  It would be largely audience call-in with an occasional guest, and focused about things covered in the morning reports here.  Might even talk Cliff of www.halfpasthuman.com into dropping by with occasional updates on what's in the predictive linguistics...podcasts for later, too... talks continue...

Click to Vote:              Yes I'd Listen                     No interest

PowerPoint Wednesday Vote

You may recall earlier ;this week I asked if people liked the 'PowerPoint Wednesday style".  169 votes preferred the normal "finances after dark" kind of writing, while 134 liked the PowerPoint approach.

---

If I was going to be a one-man media empire builder, there's a great business model here for a daily news PowerPoint, but who's got time for another project?  Besides, more important for now, I think, to keep diversified: part in farming, part in consulting, part in wed media...  The goal being to minimize chance of total loss, not necessarily a get rich quick web-only life...

----- snip & save section -----

Coping:  The Case for More Skills

I don't mean to sound like a bore, but here's a letter from a reader which argues for learning real skills while you can afford to learn them:

"Dear George:

 

Here's some unbelievable news on the real employment picture in America.  And these are far from high-paying jobs.

 

Cleveland - 3,000 people apply for 300 jobs at new Wal-Mart store.  http://www.cleveland.com/news/plaindealer/index.ssf?/base/business-4/119606989156620.xml&coll=2&thispage=1

 

(Not the first time this has happened, see this from 2006- g) Chicago - 15,000 people apply for 400 jobs at new Wal-Mart store. http://www.walmartfacts.com/articles/4474.aspx

 

That giant sucking sound you're hearing isn't our jobs going to Mexico (as per Ross Perot) it's the American Dream being flushed down the toilet."

Obviously, we're not going to let that happen, but have you put any thought into what kind of small business you could open to help feed/clothe/shelter/teach people if the youi know what hits the fan?

And, here's more good advice:

"George,

I'm an old Eagle Scout and that means that I truly subscribe to the ideal of "Be Prepared". I have been reading your snip section and can't argue with much I have read. I would like to slip in one reminder to folks looking to gird themselves against shortage/hard times: Keep it simple. Yeah, I hear your reference to Captain Obvious, but hear me out.

Buy several good flint and steel kits. They can be found in any reputable camping store. The spark produced is actually hotter than the Sun and will almost always give you ample enough heat to start a fire with somewhat marginal tender. Remember, when the poo hits the fan, it won't take long before firewood becomes the next "oil". You don't have to burn wood only, there are many, many alternatives. Just be careful not to burn anything synthetic as the smoke may be very toxic.

Once you have fire, you can cook. If your plan does not include bugging out with backpacks strapped tight, you may want to look into cast iron cookware. This stuff is still the best and most healthy way to cook food. I recommend buying your cookware from the best, Lodge brand. These folks have been in business for a long time and make a true quality product that is affordable and will honestly last several lifetimes. These things are heirloom items in the truest sense of that phrase. Care is easy and the instructions are simple enough for Tenderfoots to understand. I have prepared a complete meal for 10 people with little fuss. The "camp" Dutch ovens have feet and can be stacked. The lid has a lip to hold embers and if you work out the timing, you can have pot-roast on the bottom, veggies in the middle, bread or a cobbler on top. Heck, I even made a lattice crust cherry pie in one. This type of cooking is almost fire and forget.

I do strongly advise that everyone get their hands on practical outdoor living books. Sure, survival books always have a great appeal, but often, they are more fluff than substance. Go buy a copy of The Boy Scout Field Book, a copy of Dutch Oven Cooking and a book on your local Flora and Fauna (one that tells you what is edible and what is not). Make sure that any book you pick up has decent illustrations for the step-by-step discussions.

Lastly, I would like to remind everyone that growing your own food sounds like a great idea and in "normal" times really is great. The thing is, if some sort of major disaster hits, growing conditions may not be suitable (radiation, dense cloud cover, volcanic ash, major climate shift, et al.). This means trouble. If you are still able to produce your own food, you will most likely be forced to defend it against raiders (both human and animal) and that becomes a seriously dangerous situation. Could you terminate a threat to your food? Would you shoot someone over a handful of produce? Hard thing to think about, but one that must be given attention. Your other option would be to forage. Knowing what to eat, where to find it and when it is in season is golden knowledge. There are several books on this subject and most of them are region specific. Do yourself a favor and pick up a copy or two for the area you plan to make your stand.

We all hope against hope that things will never get bad enough for these skills to be pressed into service, but like I said in the beginning, "Be Prepared".

Keep your powder dry!"

We keep a few hand saws around the ranch, and I've ordered some steel & flint kits for E and me for Christmas.

And here's the link for people who were asking what the address was of that neat kettle designed for cooking in rain/foul weather with the hole up the middle so as to use heat most effectively?

It's the Kelly Kettle:

 http://www.garrettwade.com/jump.jsp?itemID=106256&itemType=PRODUCT

-----end snip and save -----

Around the Ranch: Ham Radio Corner

Friday November 30, 2007

EPVS

A highly placed friend in the upper echelons of finance has come up with an acronym that describes where the investing public is now - and may be stuck through the 2009:

EPVS =- 'economically persistent vegetative state'

Conceptually, it ain't bad.  Almost as good at capturing the essence of things as MCHVE - which I know you'll recall is a 'massively correlated hyper-volatility event', or market crash for short. 

What I continue to observe is the rising number of foreclosures as a resu