Bonfire of the Equities

Like I was saying yesterday morning, except a huge DCB (dead cat bounce, in case you missed Friday's dissertation).  And, it was a dandy!  Intraday, the market rallied from the previous 12,159.21 close to as high as 12,341.54 - a 181-point lovefest.  And reality bit.

Like most dead cats, the bounce was pretty short-lived, and by the end of the session, the Dow was down about 60 points and the phone wires were burning up around here.  As far as most folks were able to tell, the $146-billion "economic stimulus" package was a poorly contrived 'same-old' that wasn't going to a) make it through CONgress and b) wouldn't make much difference, even if it did.  As one reader wrote in "They think $800 bucks is going to solve the problems of being in debt to the neck in bank cards and on the verge of foreclosure?  What are these people on?"

Without going into an answer to that, which would likely land me on someone's hit list, we'll stick to the simple facts of the matter: Tax cuts are about as likely to bail us out as space aliens coming down and handing out Starbucks coupons (which won't happen till later in the year, in any regards.)

So we're left to sort out the economic future from a curious perspective.

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One of the phone calls yesterday was from my attorney, who proudly announced "I'm off to visit the 'other' gamblers' this weekend!  You know, the honest ones!"  This means, being mid 50's and single, he was headed to Lost Wages, NV to bet the payroll at the blackjack tables.  About an even bet with equities - maybe even a tad better this week.

Before leaving though, he shared an interesting point:  "This may be one of those rare periods when the individual investor really does have a leg up on Big Money. "

Wondering what he meant, I prompted him to continue.

"You see, you and I can do the back-of-the-envelope kinds of calculations on the futility of trying to buck the tide here - but with equities about to crash [even more - G] the Big Money players have to work all weekend burning the midnight oil so they can get together with their 'investment committees' and work out their go-forward strategy.  You and I don't have to mess around with that - we can just pull the trigger and that's that."

OK, I got it.  What does it mean?

"What it means is that investment committees of some of the big players won't even meet until next week and that means late next week, or the week after, before they will be able to do much of anything in the markets.  So you see what I mean?  This may be one of those rare moments when small individual players may have a head start over the institutional players in heading to the exits."

The Big Players will no doubt pimp up the markets to sell at higher levels, but I get it.

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When they finally do get around to meeting (next week and the week after), the investment committees will have plenty to ponder.  Not the least of which is that "Peak-To-Crash" chart that I update every week for Peoplenomics.com subscribers and post around here once in a while.

A few other headlines that will likely weigh:

• "Earnings won't bail out Market this time"

• "Collapsing housing market clouds Nevada caucuses"

• "Oil prices back above $90 a barrel"

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A couple of other phone calls came in while I was working out the eight orbital parameters of the dead cat bounce in mid session.  (If you don't know the 8-elements of orbital calculations, you're a Keplerian dunce and you need to click here).

Just as I was penciling out the right ascension of ascending node (for the dead cat bounce take-off early in the session) the time monks called "This weekend, we've got a bead on what happens to 401-k's this summer in the latest run...may get it posted on Saturday afternoon" 

Oh damn, that report won't be good, and it just means more work for me because instead of a nice simple report on how to retool higher education system in America, Peoplenomics will be addressing where to park money while the developing  401-K disaster blows over.  Still, nice to know what's coming.  Having a time machine is sometimes useful and this may be one of them.

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Another call came from some well  a connected source that reported that gold, trading in US dollars inside China, is already well over $1,100 (US paper)  per ounce and going nowhere but up.  Sure enough, the story is getting legs now with headlines coming out of Chinese sources that "Gold Rush grabs Chinese as prices hit new high.

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Then someone else called to report that Jim Sinclair was expecting a couple of thousand point drop days in the Dow just ahead.  His timing would be coincident with those investment committees getting their act together.  Jim's posting last night "The end of a powerful week in finance" is a must-read, but with a caveat.

The caveat is this:  You know how some people will turn their head from a horrific accident, while other folks will watch?  Well, if you're the kind of person who turns your head and feels a bit squeamish, you might want to skip Sinclair's column.  The rest of us (those who would will stare into the cow-catcher of an oncoming train as it arrives ) will just go ahead and read it.

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Meantime, elsewhere, God may save the Queen (or not) but He's certainly not doing much for British markets.  They dropped below 6,000 as measured by the FTSE.

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So, to wrap up before pouring another double spilt shot Americano tall with a shake of chocolate powder and two biscotti's, let's just wrap up with the week with another chorus of "I told you so!" Oh, and this being way-rural East Texas, there's no baristas in sight so I'll get by with watered-down Folgers and a biscuit.  But I'll be six bucks ahead and out here that makes more sense than biscotti's.  Until those aliens show up with the coupons.

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Did I mention Venture capital funding is at a 6-year peak and despite a looming recession?  I thought these people were smart.  I've been wrong before.

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Note from our Houston Bureau:

"The Houston Bureau thought you would be interested in the following article:

"All signs point to U.S. consumers hunkering down in recession bunkers" ''I'm walking down Fifth Avenue the other day, and all the stores have big signs saying 50 to 70 per cent off everything, and the only people in there doing any actual buying are, like, from Canada or Europe.''

Note from the Bureau Chief:  "Don't look now... "

Say, if that's a cow catcher, then this must be a train wreck, right?

"How Cool is That?" Department

Well, minus 67 Fahrenheit is a might chilly, but that's what's coming to Siberia shortly say the Russians.  Where is Global Warming when you need it?

Geniuses Department

The headline "Britain to target al Qaida-linked web sites" has us wondering how long it took the Brits to figure this out.  Wonder if they needed help?  Wouldn't that have been obvious, say a week after 9/11?

Language Has Meaning Department

I noticed the phrase "former supermodel" applied to someone today, and wonder if people just wake up ugly some morning to deserve such a label as 'former'...or if hanging out with the president of France has some under-reported medical side effect?

I would have thought a term like 'supermodel' would be more enduring - kind of like great wines can age well sort of thing.

Arizona On Speed

The $1.3 billion Arizona state budget is becoming a salesman dream for those peddlers of photo-radar machines.  Turns out that - and a lottery - are among AZ's tools to fix its budget.

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Virginia is simply raising the gas tax.

The Runs:  4Th Party?

With the Good Doctor still being written off by MainStreamMedia, we notice how without even running NY Mayor Michael Bloomberg's just chatting with Ross Perot's ex-campaign manager makes headlines.

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Coping: Taming Feral Cats

Lots of ideas here:

"Hi George!

Finally a subject I'm an expert on ;).

1. There's NO "speeding-up" of the process. On the contrary, any attempt to speed up will result in a setback.

2. When befriending a semi-feral cat, a long period will seem like nothing much happens (that's the time the cat is getting to trust you), and then bam!, one day perhaps the cat comes and dares to sniff your fingers, or perhaps lets you pet her: that's when the trust is acquired, and the rest will be very easy.

3. How to proceed: - Feed her at regular times (around dawn and dusk). Call her when you put her dish down, and sit at a comfortable distance the whole time she feeds. Do not talk much, do not move much, move slowly, do not leave before she does. If you look at her, close your eyes very slowly --- this is a way to tell her you're relaxed and there's nothing to fear.

- Move a little closer each day. Anytime you see her retreating, retreat as well. You can talk to her from time to time. If she comes closer, do not move. You can try to extend your hand a bit to see if she would sniff you (that would be a big step!). After that, it is easy to graduate to scratching the cheek lightly. Then the taming is done.

- What I did with a feral was to put the bowl of food closer and closer to the bench where I was sitting while he was feeding (several days), then I put the bowl on the bench (several attempts, had to put the bowl back down some days), then finally on the bench close to me, then on my knees. All this time I did not try to pet the cat. When he was eating from the bowl on my knees, then I started petting him lightly. After the first purr --- and what a rush of joy that is --- the rest was very easy.

- It takes a lot of self-control not to reach to the cat. We humans want so much to grab --- the old predator instinct in us. That's a very hard part. So stay still, and consider it your "Cat Zen Practice". :) Remember, THE CAT HAS TO COME TO YOU.

Good luck George, I'm sure you'll do great."

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"Approach as close as you can, s-l-o-w-l-y, place the food down, and back away, s-l-o-w-l-y to a distance where the kitty will approach and eat the food. Sit. All the time talk in a low tone in a high pitched female type voice. Anything is appropriate- baby talk, economics- whatever. The important thing is the higher pitched female like tones. Try to avoid a sound that sounds like a growl( mostly "r" sounds). Sit until kitty is finished and walks away. Approach s-l-o-w-l-y again to get the now empty food plate. It the kitty looks at you , at your face, give a slow blink with both eyes and stick your tongue through your closed lips. Blinky eyes and a tongue through lips are both non-aggressive affectionate moves for kittys. Repeat process and get closer each time. Always be ready to stop or back away if kitty shows signs of distress. Put as much food in the plate each time as the kitty will eat. It might take awhile, but eventually kitty will be family. Tinuviel took a couple of weeks, Mittens took 42 days, Cuddles took 20 months. Depends on the kitty. Hope this helps. "

And about alternative uses for the dishwasher - cleaning up old ham radio gear:

"George, about your HAM parts in the DW, most motorcyclists say that one of the best wifely traits is not going ballistic at finding motorcycle parts in the DW . . . sounds awfully similar."

To me, the dirtiest Heathkit is likely cleaner than a Harley (Hibbly Diblitzen), but I suppose that depends to some extent on which club you ride with....

"re: dishwashers/electronics

Alternative:

Spray the unit with Fantastic let it sit for 3 minutes or so, hose off all the crap with hot water in the bathtub. (hand held shower works well) 455 IF transformers should be plugged, the tacky stuff you use to put up posters works well.

Go easy on the varnished paper under the power transformer. Let dry for at least a day. Over the years I've noticed the gear gets cleaner. Early broadcast stuff was brown with nicotine, those days are gone."

Send snip & save items to george@ure.net

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Friday January 18, 2008

D.C.B.  Friday:  Headlines & Reactions

OK, I know, "What is a D.C.B. and why are you taxing my brain at this hour when all I want is to know what the market will do?"  It means "Dead Cat Bounce" and describes what I expect after this great stimulus package is unveiled today. Fear on the Street is it will be nothing more than a new collection of old gimmicks.  The hope is enough folks will fall for it to postpone the inevitable.

First, let me advise you that if you've been paying the scantest amount of attention around here, worrying about the market should be completely off the table because we're in 'catch the falling knives mode' - and likely will be for most of the year.  Or, to put it less subtly, "Catch falling guillotines" is more like it. 

If you don't have what you want for retirement paid for and out of harms way (e.g. unencumbered) by now, you may never get there, given how past long waves in the economy have worked out.

My friend Robin Landry up in Shawnee, OK summed it up pretty good yesterday while we were talking about 'next lines in the sand' on Thursday (Low: 12,000 & then 11,500 or on the up side 12,411 then 12,600).

"George, I tell my clients it's like this:  Every 16-years or so, you get a good-sized recession. Remember 1990? And then every 60-70 years, you get a depression.  And then every couple of hundred years, you get a revolution in investing."

---

My great, great, grandfather (Andrew Ure) was kicked around by Karl Marx often enough  in the 1840's for being an apologist for factory labor exploitation by the British ruling class during the Industrial Revolution, so my family has had plenty of time to reflect on Marx.  Watching the antics of the elite is something akin to genetic for me.

One of the few things Marx got right had to do with owning of the means of production.  But, not by some proletariat mob, mind you.  In a sort of Marx-Ure middle ground, I figure the means of production should be in the hands of 'average folks' who could then put these means to best use, depending on their ambition and sweat.

My suspicion is that if we're going to have any kind of 'revolution' in the financial conduct of folks lives, there's only a couple of ways that things can work out in a Big Picture way: 

Either the currency systems will fail, since there is effectively no discipline to the creation of money any more, OR we will accept that as the 'new paradigm' and go on about building an all-digital currency controlled by the same elite/power structure which will just add zeroes while the middle class is pushed closer to indentured servitude. 

This neatly explains why all the put up candidates look the same - they all suckle at the same corporate trough.  So we get the same old corporate answers, time after time...

There's actually evidence for both outcomes (collapse and digidollars / Ameros) as banks are imposing more restrictions on the withdrawal of cash.  $2,.000-$2,500 is a typical threshold for banks to file a suspicious activity report [SAR] with banking regulators) while the banker-promoted bankruptcy 'reform' and banker unwillingness to get out from under 'real estate owned' [REO] has prevented the housing bubble from deflating more quickly to rational levels, while at the same time, screwing people over with usurious 33% (and higher) APR's on credit card debt.

Plenty of grist for a financial revolution in there and reason why the linguistics keep building future imagery of hunting down the bankers in the future to dish out a little consumer/mob justice at the closest light pole..

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While Ben Bernanke was busy calling for "quick action" (talking instead of doing, I note), the markets lost their patience yesterday and dropped almost 2 1/2% on the Dow with global echoes that continue this morning. As a result...

Asia is worried that the US may enter a recession.  (Geniuses!)

The London market was down.  (Extraordinary thinkers!)

And even oil dropped to near $90 a barrel on the expectation that "Gee, if people don't have jobs [or houses] maybe they won't be able to spend so much on energy..."  Yah think?

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So this morning, I was able to calmly sleep in an extra few minutes, knowing from yesterday's close that a) the market would likely rally today as GW and the PPT announce their 'stimulus' plans. 

But the real test will come in the closing hour of the market this afternoon.  People who are willing to a) play with paper assets and b) are willing to hold them over a three-day weekend  for the Martin Luther King Birthday (*see other market hours) are much braver folks than me.

Or, maybe just a lot more stupid.

The Runs: Roving Reporters

Once puppet master to the CiC, Karl Rove is talking about how the republicorp can prevail over what's-her-name and O'him.

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Elsewhere if you care, the silliness continues.

Fischer Gone

Bobby Fischer has died in Iceland at 64.

Hot LIC

Yes, that ongoing 'low intensity conflict' along the US (pseudo) Border with Mexico continues to heat up.  Latest: Mexican forces clash with drug cartel gunmen in Tijuana."  bet me the cartel's boyz weren't there for roll & tuck interior work?  More like the other kind of tuck & roll...see definition 2.

Wrong Way Chertoff

Meantime, DHS Sec Chertoff's plans to tighten up regulations at the Canadian border are under fire. 

"Quick, Mr. Secretary.  Turn around!  Hear that gunfire from down on the California/Mexico border?  See those bodies laying about (see previous story if your attention is really lousy today)?  Where the hell's our fence, sir?"

With the Canadian buck near parity I'd expect a decrease in Canadian cross border traffic.

Terra Intrudes: Flooding in the UK

yUK (sic)- more rains and flooding shows up.  Remember our flood meme?

Fukuda'd Up

Well, lookie here: Japanese PM Yasuo Fukuda is forming a Consumer protection agency. The American experience with such things ought to be instructive:  Hard on little crimes, soft or non-existent on big ones.  Like naked shorting, as a for instance.

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The US Comptroller General continues to be about the only one who is telling it like it is in these troubled times - why hasn't the FTC gone after the Federal Reserve for debasing the country's money supply and stealing folks' savings with inflation?  The US dollar continues its slow-motion swan song and Nero fiddles down on Pennsylvania Ave.

You'd think the normally astute Japanese would catch on.  Or, maybe they are just as Fukuda'd up as we are...or headed there shortly.  (I wonder if they use electronic voting machines with no paper trails... Hmmm...)

Foreign Commitments

"Iraq may need military help for years, officials say."  Gee, you don't suppose they could pay us with oil do, do you?

Markets M&A

The NYSE Euronext is planning to buy the AMEX, which means the resulting market will take all day to type its name.  Let me put on my marketing consultant hat: NEA is already taken by the teachers... Nope: They need a new word for it. GLOBEX was good - something like that - maybe the PSM Planetary Stock Market...or, how about a single word that captures the true heart-felt motivations of investors.

Wait...wait...something is coming to me.... yes, yes.....here it comes:

The GREEDEX!

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Coping: Moats

OK, so you thought the only purpose of a moat was to keep out bad guys, right?  Well, here's an incredibly interesting bit of knowledge from a reader (also Texans I might add, which would explain their depth of knowledge on such esoteric arts):

"Concerning the discussion on Plumb and Level. The castles in Europe had the moats dug around them to determine level (as in water level).

A simple water level that relies on Pascal's law was not mentioned in the discussion. Pascal's law which, in its simplest terms, states that water always seeks its own level. The water level is still often used on foundations but also by carpenters, landscapers, plumbers, and other tradesmen. It will level around a corner for you without the fuss of a second setup. Lining up footings for a deck (or the decking itself) is another task often tackled more easily using a water level than with a carpenter's level or even a line level. Some contractors actually check their new laser levels against a water level for a field calibration check. A water level is considered accurate to approximately one-sixteenth on an inch over whatever distance, providing you have all the bubbles out of your water hose.

www.watrlevel.com/waterlevels.htm  will give an overview of several brands and links to several plans so you can build your own.

A hose, some water, a string, an old plumb bob and you can get your projects plumb level without a lot of expensive equipment and expensive help.

My wife takes great pleasure in reading your daily update aloud each morning in her best newscast voice. The dog and I are her rapt audience. Thanks for brightening our day, here on the farm."

Yeah - I write for broadcast.  I tell this to readers who send in complaints about my spelling.  I tell them to read it aloud and it usually makes sense.  And Mister, you got a smart dog.

send snip & save ideas to george@ure.net

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Around the Ranch: Cat Training

A while back, Tom, Tom, the cat outside, passed on to the big mouse field in the sky from his FIP - and knock on wood, his sister Pusscilla has shown no signs and is just healthy as the Dickens.

The other day, this pure black short hair cat showed up on the property, and what an animal!  Slinks around looking like a junior jaguar...very feline, slow to the group, crouching/ready to run.

I've been slowly enticing it toward the house and getting it used to humans (like I qualify?) by putting out a little cream (just enough for a taste, not an OD) and some cat food.  I can get within about 25-feet of the new cat now.

Here's what I'm looking for:  Ideas on how to speed up the process.  What's the quickest way to get a semi-feral cat to warm up to humans a bit?  Click here to send ideas.

Save the silly ones: Putting out an HD with Disney mouse related content on it 24/7 (Musketeers, Mickey cartons, Ratatouille, etc...).  I've thought about spray myself with catnip and approaching from upwind, but this cat has been living on its own in the backwoods of Texas, and I don't want to look too much like lunch.

Pusscilla, meantime, reports spring has come early.  She brought a bird to the back deck as her contribution to dinner earlier this week.  We politely declined and told her to bring back something a little bigger.  Like an Angus.

Last time I saw her, she was sitting on the Cheaper than Dirt catalog.  Maybe she thinks I was serious.

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Enterprising Son:  Rather than ask the National Bank of Dad for help, my son who just had knee surgery is trying to sell off a nicely framed newspaper front page of the moon landing... I told him a $100 starting bid would be more rational, but it's his deal...

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On the ham radio front, While Elaine was at the store Thursday (and between consulting chores) I was able to sneak into the house and rip the top rack out of the dishwasher so I could clean the cabinet of the SB-221 linear amplifier I'm rebuilding.  I've actually heard of people that put whole radios into the dishwater (less obvious water-susceptible parts like meters and power transformers) and then blast 'em dry with compressed air.

If you have any information on this technique, please pass it along - I've thought about putting a small eBook together on how to restore an antique radio.  The tr0oubleshooting part is easy - that's just the electronics.  But where to go to find parts, and tricks like the dishwater deal, well, there's an art form that stuff.  Even though it's working fine, my old SR-150 may be headed to the dishwasher next.  The SB-221 cabinet came out looking almost like new.

No, E wasn't too happy about it, but since she's a ham too (KG4YHV), she took it in stride.  Besides, my favorite ham radio saying (and it applies to most things in life) is:

"It's easier to ask forgiveness than permission."

Thursday January 17, 2008

New & Improved Cold War

Russia and Britain and not playing nicely with one another as Cold War II tensions build.  Curiously, the Russian take on this is that the Brits are trying to 'colonize' Russia.  Maybe if they came out and said Crass Consumption Consumer Commercialism it would be clearer, but you get the idea. 

Behind the scene (*with the strings) Western bankers, having hamstrung the rest of us into no disposable income are obviously looking for new people to tie up in debt.  Under the guise of "freedom" and "culture exchange" ostensibly. 

And then we have growing tensions over Kosovo where Russia is drawing another line in the sand.

But that's not stopping the West - which continues buying up Russian companies, such as the Kellogg's acquisition of a baking group in Russia.  The story has a very interesting spin to it which is worth pointing out.  "Kellogg Co. said Thursday it purchased Russian biscuit and cereal maker United Bakers Group to help expand its operations."

Sounds are good, holy, and humanitarian, doesn't it.  But, lket me ask you - especially if you're a shareholder - do you really think Kellogg is going around doing things to "help [companies in foreign lands] expand operations?  Or, are they doing this to make money off the Russian outfit?  Seems pretty obvious to me, but you see how when the West does an acquisition it's to "help"?

Not that the Russians are choirboys. We read that a "Japanese official faces charges for selling secrets to Russia."  Not anything like how to build a good car, or defense secrets - just political position papers from the sound of it - but it has ticked off the Japanese.  Welcome to globalism's answer to market research,

Russian interests are looking for increased influence in pipeline talks, too.  This would make the West [ern Europe area] more dependent on Russia to keep the lights on.

One other footnote - with American retailers going through a sucky period, one of Russians largest retailers says says in 20097 were up 38%.  No doubt the Kellogg's board sees a bright growth spot and they're willing to 'help expand' it.

So it goes, the corpgov love/hate battles with Russia.  Longer terms it's really quite simple:  If we can make more money exploiting them (and visa versa) we will have a trade/economic growth outcome.  If, however, the defense lobbies in both capitols can make more money (spend more on influence peddling) than trade/investment, then we get a cold war.  Or both.

Right now, the defense interests are pushing on both sides, as are the investment types, so it will be interesting over time to see which faction gets traction, so to speak.  No doubt the US defense lobby will read something into Syria repaying some of its debt to Russia in Euros.  Such fine times in the kingdom of spin.  That the US Dollar is dying won't be admitted to in the US MainStreamMedia until March/April, but if you pat attention now, behind the headlines you can see what's coming. 

And speaking of liberated lands...

Promises, Promises

Defense Secretary Gates says there's no plan to send more US Forces to Afghanistan.  Write this one down as a promise and let's see if it's not broken really soon.  We've heard from multiple sources that a 'surge' like thing is planned there - and the numbers that are being planned are about twice the 'offishul' claims.

Oh Really?

The FDA is again warning about the dangers of giving OTC medicines to kids under 2.  Except that it would be too much government, you gotta wonder if licensing parenthood isn't such a bad idea.

Imagine that!

White House emails may have been 'accidentally erased'.  Gee, gosh, we're so shocked.

Astute Local Government Department

Headline: "San Jose mayor says 'spending problem' in $137M deficit".  Let me see: A masters from Princeton  and a stint at Stanford Law School to figure this out? OK...

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All kidding aside, California's fiscal condition will be very difficult to manage even for smart guys like  San Jose's Mayor.  Reason: Collapsing housing values.  My deflationist Pal Jas Jain has been flooding my mailbox with bad news reports about the Golden State housing bust, and I'm seeing headlines about how "SoCal median house price plummets"

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Not just there:  Home Construction Plunged last year is a headline this morning.

But wait!  How can that be?  The Labor Department says lots of Constructions Jobs were created in 2007!!!  Could it be someone doesn't have their facts right - (A nice way of sasking "Who's lying?").

Damn Time Monks

OK, lots of people were wondering what out predictive linguistic pals (essential a language based time machine, if you will) meant last year when they pointed to Nov 22.  Here's an email that should clear something up for skeptics of that prediction:

"George, I remember reading in your blog that the Time Monks were predicting a release event for Nov. 22 and that we may not realize what happened until a later date. I think I may have figured out what they were talking about. Below is part of Richard Russell’s daily commentary:

"Remember that insignificant "little" bear market signal of November 21? It made hardly any stir at all. At the time, I wrote that "According to Dow Theory, the primary trend of the market is now confirmed as bearish."

Yeah, I noted that too, just keep forgetting to mention it.  A lot of times with the linguistic reads of the future, you don't see things until they're well past/passed.

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Coping: Feeling Dislocated?

A friend/reader/subscriber in New Mexico reports 2008 is off to a dandy start:  Without so much as moving his car, the Post Office has given him a new PO Box, the telephone company has given him a new area code, and FedEx and UPS are both demanding he use a slightly different street address.

In more normal times, he would have actually have had to move somewhere.  I don't have the heart to tell him that the physical world is becoming more like DHCP IP address assignments all the time. All you can do is roll with it...

North America Union?

A reader wants to know:

"Hey George! I really enjoy your honesty and am glad I found out about you since watching the Discovery 2012 program. I was just wondering if you will agree that perhaps all of what has been happening with the housing and the economy and especially the falling dollar and it's inflation is a controlled precursor for what is to come in the near future. In other words, are the powers that be setting everyone up for the North American Union and the Amero...are they making it so bad that the American people will actually really want to have the North American Union, as a means to improve their situation? "

A couple of things to consider here.  First, do any of us really have an answer to this (that is, who wouldn't be hunted down by some team of MIB's) if we talked?  Likely not.

As to whether it's a plan - yes - a CFR plan at that - which I equate to a rule from the top by the elite type of thing -  which would effectively create a North American Super Government (an unelected layer) to rule over the elected (sic) (corporate-bought) layers we have now.  So, the CFR has a plan and now we have www.spp.gov.  All very cozy.  Too cozy for my tastes.

Whenever I see groups like this, I ask "How many members (if any) do that have with household incomes of less than $100K a year?

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As best I can reckon, the reason for this attempt to form another layer of governance is 1) there isn't one now, and so we have all these legislators and presidents who have climbed as far up the existing power structure as they can with nowhere else to go - no further mountains to climb.  Look at former Fed Boss Sir Alan - joining a hedge fund, for heaven's sake!  Nearly a financial Deity (despite building the Housing Bubble) wouldn't an unelected Super Government job be a better place for him?

Besides, there's economic benefit for those in power, which is why the NAFTA/SPP Highways are being built and Mexican trucks are running on American roads.

---

Being hardy mountain climbers as some of the elites are, what's their next mountain?  I mean, except for promoting your wife as the best possible candidate (causing me no end of astonishment) what does an over-achiever do after being President, for instance? 

But, what can be done about it?  Personally, if a candidate for the presidency (or any other office) has ever been part of (or member) of the CFR, I won't vote for them. Simple as that.

In fact, I would argue that by supporting extra-Constitutional governance in any form, they ought to qualify as a terrorist organization as much as any other group that wants to 'work around' or supersede our perfectly workable Constitution.  There is no higher layer of governance in America and there's no "except" clause that I've ever found. 

But, that doesn't stop the pretenders in Washington from somehow inferring that there are restrictions or limits in the Constitution that just aren't there when the document is simply read. 

Some examples are the attempts to limit on handguns -  and the attempts to disarm any veteran who has even had the letters PTSD entered in their service record.  Never had a shooting in a university by a PTSD vet that I can think of - wasn't it a student on drugs?  That's how spin works.  You don't have to be very foxy to figure that "spin has been spun" too.

Yes, I'm aghast at all of it, but I also know the limitations of "The Game."  Linguistically, we got bigger problems ahead than the Club House Plans.  So, I keep a low profile, believe the Universe will serve up just deserts for the power trippers over time, and will reward thrift, self reliance, honesty thinking, meditation, and a pure heart in the end.

Obviously there's a super-government/unelected government group of power trippers that is trying to promote an unelected layer of government. 

It's the same layer that takes care of it's own and circumvents the will of the American people even when expressed by and funded by CONgress.  Two examples?  Sure:  Why is bounced World Bank president Paul Wolfowitz offered (and likely taking) a gig at the State Department?  Why is DHS (and whoever) unable to build that fence between the US and Mexico.  Could  Israel give us a few pointers on Border Security?

It's all hard evidence that there really is an informal "club" of the elites - and they take care of their own and they have several club-houses including the CFR, the Bonesmen, Bilders, and so forth, where you and I aren't welcome.  We haven't been anointed by the elite that pretend to "lead".

----

My opt-out solution is to get a little money together on my own, share a little common sense with other Constitutionally literate Americans, pay my taxes, and not worry about the goings on in smoke-filled backrooms in the District of Corruption, or in the valleys of Midtown.

A consulting client asked me just yesterday "If things are as dire as you write, is it worth my efforts to double my business next year?"  Why, of course!  As long as it's done with an eye toward service (as opposed to a lust for power) and you're working on ways to better serve then hell yes, it's a fine thing to do.

Where capitalism fails is when companies start making conscious decisions to build inferior products in order to profit.  And, when those in (or pretending to) power build artificial layers of government that would over-ride (or rule by 'harmonizing') what America does with other countries, we can all blow the whistle and write to our elected representatives.  They may feign deafness (for some corporate price) but as long as we can keep paper trails of votes, there's hope.

So I'll just raise my goats, eschew the trappings of power, drive a paid-for 10-year old car, reporting on finance as I see it, and renew my vow to protect and defend the Constitution. 

That's something the supporters of the New Layer Nonsense seem incapable of understanding.

If it comes to a vote on a North American Union - well, they better not try to pull off the vote without a paper trail.

Send snip & save  / coping thoughts to george@ure.net.  Thanks

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Wednesday January 16, 2008

Markets: Global Bloodletting

Normally on a morning like this - not a Wednesday, I mean when the CPI numbers are coming out - I would start off with a long diatribe about how packaging has become misleading and wondering if the BLS unit in charge looking at grocery store prices are using unit costs - not just looking at the size of boxes and bags themselves - when they go shopping on our behalf?

Instead, this morning, we need to focus on one itsy-bitsy little problem of even greater importance: The global bloodletting in the financial markets and the coming 'danger of high buildings' to certain people in the financial industries.

The U.S. dollar is up a bit today, and gold was taking a fair beat-down in the pre-open, and to be sure, a serious decline of maybe $50 very short term is possible for gold - and maybe more, but a spring back within a week or two also seems likely. Repatriated dollars are going to bring inflation first, then a mess. With the Dow futures down another hundred points today, we need to consider how global markets are doing.

Everything that traded in Asia overnight was in the red according to the Yahoo Finance chart here.  The biggest loser was the Hang Seng, down 5.37%.  That'd be like the Dow blowing off 671 points today.

---

If you were looking for some green in European markets, that'd be a waste, too. These charts are real time, so if you read this column in a few days, no doubt some green will have returned somewhere.  The point is that as we pound out recycled electrons today, the blood is flowing from the bourses.  Globally.

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The time monks report one of the data streams out scouring the web for current linguistic shift analysis came back with a couple of suspicious banker deaths in the European media (may not be translated yet) involving 'insurance'.  And a couple of weeks back, a "Second Suspicious Death at Russian Bank" was making a few headlines in Europe, although not the USA.

---

While we're reading reports how the California housing collapse is continuing, with sales down more than 45-percent compared with year ago figures, it's not just people in the USA who are being squished under the heavy-handed thumb of bankers.  Last month a tractor loan drove a farmer in India to suicide.  Big headline?  No, but the point is the pressure is being turned up on GlobalPop (as in the linguistic modelspace entity) and people are starting to break.

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With the futures down another 100-points on the Dow this morning, which if it happens would put us about smack on the third 'line in the sand' I outlined for Peoplenomics subscribers last weekend - John Crudele of the NY Post has been doing a little back of the envelope work earlier in the week.  His conclusion: The S&P 500 needed to move up more than 52-points from the Monday close or it will be a crumby year for stocks.

Not enough Wall Streeters read Crudele.  Otherwise, the markets might be making a more sincere effort to rally.  The open on January 2 of the S&P was 1,467.97 and the close Tuesday was 1,380.95 - so since the Crudele article was laid to bits, the spread is up to 87 points to be made up - and that's before we drop another who-knows-how-many today.

---

I'll save the really good stuff for subscribers this weekend (and it will depend if we can pull out of what's looking like a nose-dive into the 24th or so) and if you promise not to mess yourself, here's the Peak-To-Crash chart update:

Don't get picky with me on whether this is an A-B-C or 1-2-3 in Elliott terms  It could easily turn 1-2-3 (motive) if we take out 10,400 - in which case we take out the 2002 lows and head for a Dow of 4,000.  But, for now, let's call it corrective (ABC) and assume that banksters pouring gobs of bail out money on the situation will make the pain go away.

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Speaking of bailing, let's have a look at some of our keyword list this morning.

"Infusion"  Merrill,  Citi, Williams Companies, Legg Mason, Atlas Mining, and the list continues.

"Bail Out"  US banks, Citi, Japanese bankers ready to fund, NSW (Australia) power companies, and that list goes on...

I hope you are getting the idea here: What BLS has to say in the CPI report may be interesting, but there's enough bloodletting going on in global markets that at some point we pass the common sense/avalanche condition and events take on a life of their own, although it goes on largely behind the scenes; panic in the boardrooms, that kinda thing.

And our whipping boy for the drop expected at the open this morning is? (May I have the envelope please?)  "Stocks Set to Plunge on Intel Shortfall."  Of course, Intel is still a great company, it's just the world is past consumer debt saturation and the financial geniuses don't want to get on the same page with the folks who are having homes foreclosed on, cars repo'ed and the rest.  Give 'em a daily whipping boy!  Intel, you're it!  Chinese markets down more than 5%?  Hell no, couldn't be that.  Bailouts by foreign dollars keeping the US mess afloat, no, couldn't be that.

Must be Intel's fault!  Can't be the sleazy banksters and their liar's paper blowing up!

On the ,the rest of the Grimm economic fairytale now, shall we?

Wrong Numbers Department, I

Elaine went shopping yesterday and I was able to carry $150 worth of groceries in one triip up from the car.  On one arm.

Now, repeat after me:  Fed in a Box: Inflation Worst in 17-years says a headline:

The Runs: Romney & Clinton

Mitt Romney won the GOP nod in Michigan Tuesday.  Oh and what's-her-name, too, but without a paper trail and audit I'll admit nothing and make counter-accusations. 

Speaking of which: When I read headlines like "Clinton Shines in Vegas" I wonder why "What happens in Vegas, stays in Vegas" couldn't be applied to her...

Geniuses Department

There's a story in the Financial Times headlined "McKinsey warns U.S. may lose financial leadership".  Don'tcha think that ship has sailed?  We've been cleverly peddling  rotten debt disguised as financial instruments like bonds to finance living beyond America's means and the world is in the process of finding us out and now we may get burned by the blow back...

Ghost in the Machine Department

Sounding more like an urban legend than legit news, a headline says "Microsoft seeks patent for office 'spy' software."  No, not in any of the [beyond number] patches for Office/Vista.  The idea is that wireless sensors could be added by a [Gestapo-like] HR department to monitor worker metabolism and output. 

Say, how about skipping that and just putting workers in cages and sending lab rat techs by to draw blood samples and toss in occasional food if we type fast enough?

Want to go one-step beyond Microsoft?  How about a patent so buzz peddlers like Starbucks could install a breathalyzer in so if you need an extra shot of caffeine in your morning coffee (ad indicated by trace amount of too much partying the night before), it could be automatically scaled?

Has the world gone nuts?  Well, we know the answer to that but does it have to be so damn obvious?

New & Improved Cold War Department

Russia has arrested a British subject - stoking tensions. 

CDC Launching Morgellons Study

I've been keeping you updated periodically on Morgellons Disease, and in the process getting a lot of flack from reality-deniers who don't want to admit that yes, something new could be out and about in the bioviornment.  Whether it's a runaway nano-engineering nightmare, alien test bug, or just a morph of something already known (a worm or parasite of some kind) ought to become known down the road as the Centers for Disease Control will be announcing a study of the disease in a tele-conference later today.

Trading Hours

OK, Holiday weekend coming up for markets.  My commodities outfit sent me this:

Friday, January 18

CME Group Floor: 12:00 close: Foreign exchange and interest rate contracts Regular close: Equity, commodity, GSCI, metals, weather, and housing contracts

GLOBEX: 3:15 close: Foreign exchange and interest rate contracts Regular close: Equity, commodity, GSCI, metals, weather, and housing contracts

Nymex/Comex Floor: Regular close

CME Globex and Clearport: Regular close

NYBOT/ICE Regular close

OneChicago Regular close

NYSE Regular close

Sunday, January 20

CME Group Floor: Closed

GLOBEX: Regular opening: Excluding - GSCI, GSCI Excess Return, TRAKRS, ETFs, Weather, Live Cattle, Feeder Cattle, Lean Hogs, Pork Bellies, Cash-Settled Butter, Class III and IV Milk, Nonfat Dry Milk, Dry Whey, Wood Pulp, Ethanol, Corn, Soybeans, Soybean Oil, Soybean Meal, Wheat, Oats, Rough Rice, DJ AIG Excess Return, Gold and Silver, Mini Gold and Silver

Nymex/Comex Floor: Closed

CME Globex and Clearport: Regular evening open

NYBOT/ICE Closed

OneChicago Closed

NYSE Closed Monday, January 21

CME Group Floor: Closed

GLOBEX: Equity Indexes halt at 10:30 Foreign exchange, Real Estate and Interest Rates halt at 12:00 Regular Open for trade date of January 22, 2008

NYMEX/COMEX Floor: Closed

CME Globex and Clearport: Regular close

NYBOT/ICE NY Soft markets closed (Regular evening open) All other markets open

OneChicago Closed

NYSE Closed

*All times listed in East Texas Time

They added a  long disclaimer which we echo about how the sources are believed to be good, but no liability yada yada yada...

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Coping:  Snuggles and Naps

More from a reader on sleeping well:

Having grown up in the upper Midwest, I can relate to your children's coping with their Ohio winter nights. As an aged city-dwelling fogey (and some of us are forced to stay in communities where we have reliable neighbors and nearby medical facilities), I discovered early on, when I started assembling emergency gear, a method to keep anyone absolutely toasty on the coldest winter night! That is the zero degree flannel-lined sleeping bag that I purchased for a pittance from an Overstock close-out. For a fraction of the cost of multiple blankets, I slip under a down-filled comforter/bag that gets me warm in a very few seconds. Being somewhat claustrophobic, I tend to unzip the bag to about two feet from the bottom, giving me a guaranteed foot pocket that won't slide -- or be jerked-- off the tootsies. The rest of the bag gets tucked cozily around me to allow a luxurious feel and plenty of cover. I got one with an attached hood that can be pulled over the head or, in less frigid times, folded back to make a warm pillow cover. Pure bliss. And by turning down the whole-house decorative gas stove to 55 degrees, I still stay warm while cutting my heating bill by more than half. By the way, water bottles are a fine idea, but they do tend to cool off during the night and become a nuisance. My water bottle replacement always stays warm: my cat creeps into the bed and burrows under the sleeping bag to curl up next to my mid-section. Not only does he warm me, his purring is a wonderful soporific. Last but not least, good news for the bedmaker: instead of straightening and replacing piles of blankets, I stash the sleeping bag under the bed to be pulled out for the next night's sleep. Plump the pillows and you're done!

Just writing about my arrangement makes me want to go take a nap. First, George, I would respectfully request that you try to cut your urban readership some slack in your opinions -- after all, you should never judge us old city slickers by our (sorry; can't help myself) covers! Fair??

Well, as Mr. Duvet said, "I'm down with that..."

More thoughts:

"Hi, George.. Your site is the first one I read each morning. The discussion on keeping warm in bed with a low setting on the thermostat has been interesting. Both my husband & I grew up in houses without heated bedrooms, he in North Dakota, me in Michigan, so we're used to having a pile of covers on the bed (three quilts & a blanket at the moment). Up to 40% of body heat is lost when your head is uncovered [http://www.osha.gov/SLTC/emergencypreparedness/guides/cold.html ] so it makes sense to take a page from our ancestors and their night-caps. I knit caps for us out of sport weight yarn using a simple k1, p1 rib pattern. It's amazing how quickly even your feet warm up on a cold night if you're wearing a cap. Also, in a pinch, an empty bleach bottle can work as a hot water bottle. The caps are leak-proof and can't flip off in the middle of the night because of the child-proof design.

Along with the idea of scrounging for goodies at scrap yards, garage sales are great places to find things cheap. A sub-division sale is best because you can visit a number of sales without driving all over creation. This last summer, we found bamboo shades (2/$1) to hang over the front windows facing west to cut the late afternoon heat load, a like- new pressure cooker for $5, a Cuisinart and an electrical pasta maker for $2 each (the pasta maker lists at around $180), yarn for as little as 10¢ a skein, and a lot of other things that would have cost us much more had we bought them new. Many communities now have Free Cycle [http://www.freecycle.org/ ] mailing lists where items are offered for pick up. I recently gave away a double bed with box spring & mattress that we no longer needed and would have had to pay to have hauled away to a landfill. "

Addicted to Surplus Stores

I'm not the only8 Seattle-kid who remembers the surplus stores there circa the 1950's to early 1960's:

"When I was a kid, after the war, my dad took me to all the same places you mentioned. I got my ham license in high school, Franklin High (K7CXY) Left it expire after I got out of the Navy in 60 something .Still have ARC 5's and other stuff around. Sadly Boeing surplus store closed down Dec. 07. Now by Bid lots only. Myself and many other regulars will suffer withdraw symptoms. Thanks for the memories..."

And some pointers on scrapping:

"George

I recommend "The Junkman's Guide" by Richard N Farmer, originally published as "Farmer's Law". It's available used on Amazon. My copy is ISBN 0-8128-2469-5.

Farmer illustrates the point that you can tell a lot about an economy by what they throw out--the cost of labor determines what is repairable and what is not worth fooling with. This applies across the board regardless of standard of living or technology. Eg, when labor is cheap or plentiful and cars are not, cars get rebuilt again and again. At some point they are worth more for the individual nuts and bolts and finally get dismantled. Even the scrapped seats would get used for customers waiting for a haircut. A warning, quality control on third world rebuilt parts is poor to non-existent.

Some of the stuff is more than obvious when you think about it but the book is a quick and fun read and the examples are from all over the world."

Feed Prices

And then we have this:

George: Not being one to pick nits, I’ll declare, for our purposes, that your second ‘line in the sand’ of 12,500 was crossed today (ok, what’s 1.11 among friends??). Following your great planning flow chart on the subscribers only site, and trusting the ‘gut’ that has been quite active for going on 12 months now, we pretty near finished on the stock-up part of the plan which brings me to tonight’s comments. While laying in more feed for our quadrupeds/yard art (ex-working horses from the cattle days), I verified that grain prices are up right at 19% since July 2007 for the same 50# bag of feed we’ve been buying for nigh on 30 years. Increases from around $2.50/bag in the late 1970’s to over $12 and change today… oh well there’s only one thing dumber than a horse… the person who owns it.

But that’s not what chapped my chaps today. We normally stock up on 200# of Black Oil sunflower seeds to keep our feathered co-habitants happy for a full year. Either I was late in re-stocking or the little guys n gals were hungrier than usual but a trip to the feed store produced a sticker shock scene. $16 bucks a bag for the seeds (mid 2007) is now $24.95. Can you say “over 50% increase?? Being the cheap SOB that I am proud to be, I headed to the trusty Walton outlet (you know, with the smiley face commercials that tempt me to bring out ‘ol Betsy and use them for target practice. A little tough on the big-screen though.) and I found the true ‘bargain’. $12.95/bag… oh, the detail that it’s only a 25# bag nearly slipped my detection. (it was after happy hour, ya know).

Two lessons learned by this soirée; Loyalty to our long term feed store owner and personal friend would’ve eliminated the trip to Sam’s. Second, Sam doesn’t have all the bargains. When the times gits tougher, those relationships fostered through good and bad times will be invaluable. And when the ship hits the sand, those relationships may save our mutual bacon.

Great job you do for the paltry $40/yr, which brings the question of renewals, etc. Are they 1 year from date of subscription or do you have a set renewal date for all subscribers? I know, being the detailed guy you are, it’s probably in the site but I either skimmed too (No Vortex software on here yet) fast or the last living brain cell missed it.   {Answer: 1 full year (and usually a couple of week extra free - from date of sign up - G)

Thanks again. Keep your powder dry and the muskets loaded and near the door!

Ah...yeah...the musket that eats 7.62 ...LOL

Contributions to our 'snip & save' section should be sent to george@ure.net.  Make sure what you send is original material that you wrote - other than that, if you find something that gives you comfort, a full belly, or a profit, why not share it?"

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Tuesday January 15, 2008

Soft Pedaling: The PPI Disaster

Another Big Number for the market is out this morning - the Producer Price Index.  The way this works is pretty simple.  You've got three layers of goods - think of them as a pipeline starting at the raw materials level and then getting closer to the consumer. 

The first measurement is 'crude goods'.  Depending on commodity, that may be 90-days to as much as a few years out before it shows up, depending on how long manufacturing, transport, and inventory turns go.  The next closer to your local store component of the pipe is 'intermediate goods,'  And last, but not least, we have finished goods - the closest of all to going home with you.

Now, as you read the report, remember two things.  The first is that lots of 'finished goods' go into the manufacturing business.  "Finished" electric motors go into washing machines, for example. 

The other caveat is be wary of 'core PPI' - that's a myth promoted by economists who don't want to stampede the herd, which around here is bright enough to know that a) inflation is going up much faster than officially reported and 2) one of the ways that's done is by shrinking the amount of product, but not reducing packaging size, as we've reported on over the last week.

So plug your nose, because they may not smell entirely right, but here's the latest 'offishul' word on PPI:

"The Producer Price Index for Finished Goods declined 0.1 percent in December, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This decrease followed a 3.2-percent rise in November and a 0.1-percent advance in October. At the earlier stages of processing, prices received by producers of intermediate goods fell 0.2 percent in December after increasing 3.7 percent in the prior month, and the crude goods index moved up 1.0 percent following an 8.7-percent jump in November.

---

The downturn in prices for finished goods was led by the index for energy goods, which dropped 1.9 percent in December after climbing 14.1 percent in November. Prices for finished goods other than foods and energy rose 0.2 percent in December compared with a 0.4-percent advance in the preceding month. By contrast, partially offsetting the downturn in the finished goods index, prices for finished consumer foods increased 1.3 percent following no change in November.

Before seasonal adjustment, the Producer Price Index for Finished Goods declined 0.4 percent in December to 170.6 (1982 = 100). In 2007, finished goods prices moved up 6.3 percent compared with a 1.1-percent advance in 2006. This faster rate of increase in 2007 is attributable to food and energy prices. The index for finished energy goods surged 18.4 percent in 2007 after falling 2.0 percent a year earlier, and prices for finished consumer foods jumped 7.4 percent following a 1.7-percent rise in 2006. Alternatively, the index for finished goods other than foods and energy advanced 2.0 percent in 2007, the same as in the preceding year. At the earlier stages of processing, prices received by manufacturers of intermediate goods climbed 6.8 percent in 2007 after moving up 2.8 percent in the prior year, while the crude goods index jumped 20.6 percent following a 4.7-percent decrease in 2006."

Shock, Annualized

Now, the really shocking stuff is doesn't show up until you look at the "Seasonally adjust annual rate for the 3-months ended December 2007."  This is where you find why Gold is going through the roof and the dollar collapsing to within a few pennies of its all time lows.  Remember, these are 3-month annualize rates:

Finished Goods: +13.3%

Finished consumer foods +9.4%

Finished energy goods: +51.9%

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Intermediate materials supplies & components: +15.0%

Intermediate food & feeds: +19.2%

Intermediate energy goods: +55.3%

Materials for non-durables: +20.3%

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Think those are scary?  Look at the head of the supply chain!

Crude materials for further processing: +59.6%

Foodstuffs and feedstuffs  +19.2%

Crude energy materials   +129.5%

Remember this energy number because we'll get to GW's trip in a second.  These numbers also explain why I am long commodity call options in wheat and coffee, too, doesn't it?

Tomorrow's Grimm fairytale on the economy will be the Consumer Price Index.  Again, there will be plenty of understatement (don't want to spook markets, in the name of 'financial stability' of course, and then there's the never-ending babble about the core rates.  When you're talking about that in relation to the CPI, it excludes food and energy.  Which would be fine, if we didn't all use energy and eat food.

Looking at the rest of the week, we get Housing Starts on Thursday and then Leading Economic Indicators on Friday, unless you have some animal entrails or tea leaves, in which case you can make up your own LEI way ahead of time with about equally meaningful results.

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As of a Sunday interview, Lakshman Achuthan of the Economic Cycle Research Institute was telling CNN (in part) that "I don't think a recession is a done deal year."  I'll just note that they're not calling for a recession yet.

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Lots of economists subscribe to the idea that a recession is 'x' period of time when the GDP is declining - typically three quarters.  Around here, we hold a very much simpler view of things.  A recession is when the cost of living is going up faster than income.  Standard of living coming down means 'recession' to most families. 

Or, if you insist on recessions being dollar denominated, at least count it in either constant dollars or against the market basket of currencies..  Nothing ticks me off more than seeing someone claim that GDP went up (ergo, no recession) while failing to note that the dollar value sank faster, or the standard of living was in decline.

A functional recession is (to use a phrase) "getting behinder" - and we're doing more of that than "economists" (a pseudo-science at best) are willing to admit.  Most won't admit printing more money is ultimately inflationary, either. 

Ask the folks scrimping by on a 2.3% hike in Social Security or military retirement benefits if we're not already in a recession/decline in the standard of living.  Or, ask the million or so homeowners facing foreclosure.  But don't ask economists.  They focus on things like this morning's data - a month old - then pronounce through their rearview mirror something that is as obvious as sunrise to regular humans.  And for this, they expect respect?  Please!

It's like saying it's safe to play on the freeway until the semi hits you.  Right up to the last split second, the semi may swerve.  But as soon as it hits, playing in the freeway is not so safe.  The learned economists talk about how they predicted the possible arrival of the semi.  I guess I'm not learned, huh?

Around here, though, we listen for semi's way off in the distance and shun odds makers who are out of touch with weekly economic reality.  I expect few economists do their own grocery shopping.

Sir Alan is Back

Speaking of economist, foreclosures, and the like: Rather than be cast out from the financial establishment for setting the foundation of the Housing Bubble and failing to do something meaningful about it which would have cost the bankers some profits, Alan Greenspan reportedly is joining a New York hedge fund.  Announcement expected later today.

Other Econ Headlines

Citibank might write down more than $24-billion.  24-thou facing layoffs.

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As our predictive linguistics pals noted last summer, about in here the dollar should be collapsing (try to look surprised as you read about it) and by sometime [late march?][ Mainstream is likely to be reporting 'it's not coming back'.  Another chorus of "Bennie & the Bets" please...

Brotherly Email

Brotherly - as in Big Brotherly - plans are afoot to read still more of the private communications of Americans.  Oh, but we can trust government, right?

But wait!  It gets better - they want to know what you're searching too!  Yessir, couple your searches with your new 'thought crimes' bills and you've got instant reeducation candidates!

What happened to, oh, I don't know, Free Speech, the Right to Keep and Bear Arms...the Framers didn't see any reason to limit those, so why the current crop feels they can better the likes of Ben Franklin, George Washington, et al, is very, very presumptuous.  Especially through a CONgress which mostly didn't even read what they were passing!

Meantime, Back in Modelspace

OK, here's a UFO report worthy of note.  Why note it?  In predictive linguistic modelspace, along this spring we're supposed to see UFO's/energies from space making it big.  Also a new pogrom, and to be sure, stories in that direction are starting to crop up.

British Distractions

In our "secrets revealed" meme, we have to wonder how many years the Princess Diana story can be milked [by the mainstream media] as a public distraction from today's news?

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Coping: Scrapping

Ah, here's a line of thinking which is very appealing to me - let me give you a little personal history.  Being the son of a fire fighter, and with my dad having lots of odd times off, we used to go visit various scrap yards around Seattle.  Pacific Iron and Metal on 4th South was a good one, but even better was the old Black & Tan yard down west of George Town (the Seattle neighborhood).  Best of all: Aircraft Supply & Salvage.

We used to go into those places and wander around for hours.  When the ham radio bug bit me (age 13 was when I got my first license) the old surplus and scrap yards often came up with old WW II aircraft radios, including the old ARC-5 series so popular for conversion to ham use. Washington Liquidators on Airport Way had the widest selection for a time.

So, when I got this email, I decided that one of these mornings we would have to go 'scrapping". A woman in Georgia writes: 

"http://www.321energy.com/editorials/karn/karn011408.html 

Looks like money to be made in it in the future."

OK, so scrapping may be in our future.  Here's a really good report from another reader:

"Hi George

I wrote this as an inaugural post on a forum I was on, in '06. I build a lot of my own machines for my business, and have become pretty adept at optimizing this resource: scrap yards. It is turning out, they are pretty handy for setting up for the next stage of craziness we are expecting to encounter, as well. Perhaps this is appropriate fare for your snip 'n save section - you decide, of course - no excessive pride in authorship here. I sure enjoy your daily musings, and the contra-perspective they provide. Take care, down there. ( added: Always wear gloves when using T-post driver tubes - you'll know why someday, if you don't now. )

Scrap Yards as Prep Force Multiplier

A good relationship with your local scrap yard will help you accumulate things to use directly for preparation, and things to be able to use to adapt to changing situations, and materials to allow construction or repair to things you would otherwise not be able to afford. It is also an educational process, in that wandering around your scrap yard can spawn ideas, not only of how something that has been junked may be re-used, but also entirely new general ideas. The mental stimulation is astounding.

There are many considerations, however, to effect a good and profitable ( no, I'm not talking in terms of paper money ) scrap yard experience. Here are some:

1. Find a scrap yard where they will let you roam around. Sometimes, they are scared by liability considerations, and won't let anyone past the unloading zones.... I have tried using a personal office appeal to the yard owner, to assure him that I consider if I get hurt there, it is my own darn fault, and I will sign anything to that effect. That has both worked and not worked. Many times, there are smaller yards out in the country which will let you roam around, too, without limit. You always have to be very courteous in your approach, and let them know you understand foolish behavior and will stay away from such. Such dumb behaviour includes climbing piles, not using gloves and safety glasses, and not watching out for the crane operators, etc. Make it clear you know it is YOUR job to watch out for THEM, not the other way around. Keep an eye on cranes and handlers when they are loading or unloading - sometimes large pieces of steel get flipped or catapulted long distances when they are dropped or moved. It's like watching for foul balls at a game, only more important ! If you have a problem with relinquishing your "right to sue", then going to a scrap yard is not for you. Just be very careful;

2. Find an owner who doesn't smell money as soon as you walk in the area. Scrap dealers have no emotional attachment to the junk they take in. Yes, if they get something obviously resellable, like a Ford Truck that runs, they set it aside and want a set price for it. But, for nearly all materials and machines, they almost immediately cut it up and scoop it up into the pile, without prejudice. So, if you run across a dealer who starts pontificating about how valuable something is you just dragged out of the iron pile, forget the guy. He was going to smash it up, but since you WANTED it, he now senses he can make extra money from it. Maybe give him a couple more chances to see if he considers you're not swallowing his pitch, and backs off;

3. Along that line, find out ahead of time what the selling ( outgoing ) rate is per pound for stuff you are likely to buy: ferrous, aluminum, irony aluminum, #1 and #2 copper, batteries. For example, around here I pay about 20 cents per pound for stuff out of the iron pile, and $4.00 apiece for batteries. They're still making a large profit on what they paid for it, and an honest dealer will be content with that ( see point 2 );

4. You can't come in acting like a professional negotiator, and thinking you're calling the shots - if this is your model for personal and business relations, you also will not succeed. Have some humility ( i.e., genuine ), and realize this is his turf, and you are a guest with tenuous rights only. Many operators can sense when someone is overly self-interested, and they will shun them. If you can become a trusted customer, though, they will even start saving stuff back for you ! For an example of becoming a trusted customer, if you find some valuable nonferrous in the iron, why not casually bring it up to the scales area and tell them you found this. Don't look for a pat on the back, but they will file away that you are someone who has their interests at heart, too. Remember, they are providing a valuable resource accumulation point, and letting you in on it, so truly HAVE their best interests at heart. Many of these guys would like to trust you, unless you give them a reason or inkling not to;

5. If you find useful things, you make your buy/don't buy decision based on trying to mentally picture how this will now or later be worth more in usefulness than the per-pound cost you will pay for it. Just yesterday, I spent $175 at a local yard, buying a truckload of stuff, all of which could be very useful. For example, I found a 1 1/2" conduit bender with an easily-straightened handle ( already did it ), 1 1/2" conduit ( ! ) to bend up using the bender, for a Quonset-style building, 8 pcs. of 12' sheets of old metal roofing to finish the job, a material that can be used as a screen for the hammermill I bought a different time ( but which was missing a screen ), a bucket of "primo" iron filings ( don't ask ), a hammermill magnet ( ! ), a parts motor for my Kohler-engined portable welder ( also procured at scrap cost and new piston rings put in ), metal shelves, a bunch of 1/2" pipe fittings, 50 feet of industrial rubber garden hose ( free ), an immersion heater, an across-the-line motor starter, brand new trailer brakes including cylinder and backing plate, several pieces of long strap iron and box-beam steel. Just for perspective, the motor starter alone, would cost more than the $175 new. People and especially factories often get rid of stuff when they are tired of it lying around, or production lines change and they discard of spares inventory instead of carrying it on the books. Again, just make sure you're buying it by the pound - if the operator starts moralizing to you about its "extra" worth you should be willing to pay for, he's being disingenuous - find another yard. Just don't ever try to get one over on them, either - be scrupulously honest to a fault. Never hide or sneak stuff into your load;

6. Learn to fix and build things. Just about anybody can, to some extent. Don't listen to what others told you about having no mechanical ability - such summary judgments were always uncalled-for. Read up. Read up some more. Buy a few old Popular Mechanics magazines from the '40's and 50's on eBay to read in the bathroom ( aka, the Library ). Think. Find a mentor among the older generation. Use common sense. Develop a safety mindset. Learn to weld ( I am still learning ), find out how to discern between a salvageable lead-acid battery and a hopeless one, do simple electronics repairs and soldering, do simple engine and mechanical repairs, design and build stuff. Amaze yourself. Copy good ideas from others - even patented ideas are fair game if you don't sell them to others. A good and concise source for great ideas for all types of practical things to build, is the Farm Show magazine ( actually a tabloid format ), POB 1029, Lakeville, MN 55044 800-834-9665, $20/yr. Get a sample issue and you're hooked;

7. Get used to lots of junk around, but keep it out of plain sight, so your neighbors don't get annoyed. Also, they get less of an idea that you might be a resource for them for when it is painfully obvious they were asleep. Yeah, sorry, but this neatness need makes it tough on city dwellers. Maybe a friend in the country could be your repository site, especially if they already have a good start.

If you develop good salvage techniques, it is a force multiplier that will allow you to continue to renew and replenish your capabilities better than if you simply run out of things you have stored, with no means of producing and renewing your capital. You then have access to options way beyond what you probably could afford to buy in finished state, or at retail. And, by applying your general resource pile to different situations that develop, you get an almost unlimited degree of flexibility. God bless you all.

<< That's it, George. I updated the prices, which even since Nov '06 have gone up significantly, from about $0.12/lb and $2.00 apiece for batteries."

The local scrap yard here in East Texas a has been a really great source of material for my shop, too.  I recently needed some 4" (or better) diameter aluminum to turn for a project and found an ideal piece for $3 and change.  I could have ordered it online, but with shipping, it would have been north of $15.  Similarly, I picked up a 20 pound hunk of copper rod (1.5" diameter, about a foot long) for $10.  I don't care how good you are, you're not going to find that online unless it's under the 'free material' section of www.craigslist.org - another dandy spot to go looking for low cost material for projects.

Send your coping/snip & save contributions to george@ure.net

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Around the Ranch:  Goats

Elaine and I took a break from chores and work around here to go over next door and help the neighbors with a goat going through breach birth.  One kid made it, the other didn't.  Day in the life out here.

Monday January 14, 2008

Called $911:  Super Cut Coming?

In case you're fighting the weekend stupor (more coffee?) the economic system is in full-blown collapse around us today and the price of gold in the spot market has moved more than $11 up  in the early going.  Now, why do you suppose it would do that?

Here's an interesting notion:  What6 would happen (or be the market's reaction) to the Fed coming out with an unexpectedly large rate cut in advance of their planned announcement on January 30th at the FOMC meeting?  The guys from www.halfpasthuman.com, who come out with those remarkable predictive linguistics reports chatted with me over the weekend and there is some language building that supports the possibility that the central bankers may try a one-time, give it all they can shot to stem what looks like a building out-going tide of investment.

Big headlines all over Europe about how US banks are bracing for more write-downs.

I may not be the only one thinking this.  If we it were to happen, it could mean additional serious weakness for the US Dollar because we'd be paying a lot less on our paper debt than other countries.  But, the 'box canyon' I've described for several months now goes something like this:

• If the Fed holds rate4s steady, the erosion of the economy continues and the housing collapse becomes the commercial real estate collapse, and things go to hell in a hand basket.

• If the Fed raises rates, there would be massive suffering in the bankster class - although the integrity of the US dollar (e.g. its purchasing power) would be maintained.

• If the Fed cuts a measly 50-basis points (1/2%) there's likely to be no change in market direction.  The happy-talk/ trial ballooning of a "We're ready to cut" rap implying a half point didn't get them much of anything in last week's market action, so you pencil out and tell me: What's the last choice?

• Answer: Super Cut!

OK, how big would a Super Cut have to be? 

If it were 75-basis points (3/4%) if would maybe have the desired impact, but if you're trying to jump start a sick economy, would you stop there?  Nope.  I'd argue that there's plenty of reason for the Fed to haul out the major blasting powder to kick start things with a 100-basis point (full 1%) drop - and depending on how the market action goes early this week, maybe even announce it after the next 200-point decline day.

So if we see a 3/4 or even a full one percent "surprise" drop in rates this week (or next) don't be surprised.  Just turn, quietly nod your head to the silicon forest south of Seattle from whence our linguistic boys launch spiders (like search engines do) into cyberspace, and then look for language that seems to foretell the future.  If it pops over $1,500 by month end, nod twice.

This is not a complete 'slam dunk' but it's something to be increasingly considered, every time the Dow gets closer to breaking 12,518...

$100 Oil Barrier Next

OK, so IF the Fed were to drop the discount rate more than the expected 50-basis points, and the dollar then drop proportionately (or more so), what would be the next "unsurprising" headline to be ready for?

It could be the price of oil rising over $100 per barrel.  But, it may not comes too quickly, depending on how its thought the recessions (turning Depression) will work out. 

Today we've got the price of oil back over $93 a barrel, although that's being driven as much by hawk-talk in the Strait of Hormuz, as much as its being driven by the reality of the dying dollar.

It's been long enough since grad school that working out countervailing trends with massive multivariate studies is just not my cup on tea on Monday.  (More like a double shot Americano tall to even grasp those words at this hour.)  Still, I can line up some of the variables for you - and if you have nothing to do at the office today, send along your spread of the solution and I will be pleased to post it.  Here's the data:

• There's tension in the Persian Gulf and Strait of Hormuz,

• There's the demonization of Iran,

• There's a decline in US consumption as people pinch wallets and purses,

• There's the decline in the purchasing power of the US Buck,

• There's California's air pollution suit.

• There's the rate of the Fed rate drop cum recession depression. (Yeah, cum means something legit and proper.. see definition 1 here although I see it's definition #7 in the Urban Dictionary... hmmm....maybe the time monks are right about this slang stuff...)

• Oh, and don't forget the Peak Oil impact.

Just run that model out for Fed cuts of a half, three-quarters, and a full point,  and have it on my desk by 6 AM tomorrow so I can share it on here....Oh!  Make sure you highlight the va5riable inputs so we can tweak model weightings between the variables so we can play wild 'what if' games, OK?

The Runs:  The Shut Out Continues

I read the Forbes report "Post-New Hampshire, Campaigns Heat Up": and couldn't find a mention of the good doctor.  Didn't seem to be any mention of Ron Paul over at what I've ,taken to calling "The Daily Hillary", either.  Not in the CNN story I glanced at.  Not in this ABC story. Or this one in the LA Times. Or this one in the Boston Globe. Or, this one in the Wall Street Journal. Or this one in the Washington Post.  Or this one in USA Today.

With losers like Rudy Giuliani getting religion is somehow "news", I'd argue that this lack of attention to a genuine Constitutionalist by corpmedia blackout of Ron Paul couldn't be more obvious, could it?

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America, once a democratic Republic is now happily steered by a band of pretenders selling a corporate duopoly that doesn't want change any faster than the Powers That Be can profit from it. 

Three Queens

All the Queens were in NY Harbor this weekend.  Well, except for the one stuck to the dock in Long Beach, of course.  Three of a kind is almost as good as four of a kind, I guess...  I prefer the sub next door to the QM, thanks.

Perpetual War Department

GW is out drumming up "Unity against Iran."  Apparently, we're not going bankrupt fast enough with the wars we've already got going.

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Ever notice how it's OK for the United Arab Emirates to go nuclear?  Quick!  Spot the double-standard!  Sell us oil and you can have nukes, maybe?  Oh yeah, the UAE sells oil for dollars not Euros, lat time I looked. Bail out our banking mess and you can name your technology!

Perpetual War, II

MARV'ed and MIRV'ed and topped off with counter-measures galore, the Russians continue to deploy their new Topol -M ICBM's.  They figure to have 50 (or more) deployed by the end of this year.

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Help me understand why a massive ICBM program is more dangerous than Iran?  One might be a single-city threat in 5-years.  One is a 100-city threat 20-minutes flight time away right frigging now!

Whale Tales

Greenpeace is trying to keep Japanese whalers off prime whaling grounds.

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OK, so I lived on my sailboat for 10-years or so, and I think I understand sailing and such pretty well.  You tell me: Why do fishermen call it the 'fishing grounds' when there's no 'ground' around anywhere?

Sea Story

OK, so they get in these kayaks in Australia and get ashore in New Zealand...

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Coping: Hiding Inflation

In case you missed it this weekend, a sharp-eyed reader wrote in that he's noticed that instead of raising prices, a lot of consumer products companies are just reducing the amount of product in their bags or boxes.  He used the examples of charcoal, where a 20 or 10 pound bag is now an 18 or 9-pound bag.  There is the crime in the cereal aisle, too with boxes the same physical size, but holding a couple of ounces less.  And, I noticed on a few boxes in the pantry here, that the phrase "contents may have settled during shipping" seems more prominent.

All of which might be one reason why people are being short-changed on inflation adjustments, especially the retired military and folks on Social Security who need every adjusted dime they can get.  (I will spare you a further rant on this, seeing as we've been down that road often enough...)

But now comes a confirmatory note:

George, I had to chuckle about the reader that wrote in about the fertilizer bags not containing as much as when be bought them before. I've been telling my husband about this for months (bags of prepackaged salads, boxes of tea bags, bread slices thinner and numerous other things that I have noticed but forgot) and he always looked at me with that amused look that basically says "What's she ranting about now….?" Then, one day he came home and told me that the Kingsford (charcoal) bags were not the same weight as before. Same price but less of everything. I've noticed this trend for at least 8-9 months. It's sneaky!!"

So, if you have been wondering "Gee, how have the Powers That Be been screwing me?" Here's at least part of the answer.

Cocooning

If you think people are less friendly now than they used to be, you're not along.  A California reader sends this:

"hi George, I seem to notice, when out in public, that people in banks, medical facilities, grocery markets and other places where strangers interact, there is a kind of general, awkward suspicion. there often seems to be an unfriendly feeling, almost of hostility, sometimes. the same could be said of my neighborhood, people in gas stations and local restaurants.

I'm no paranoiac, but just keeping to myself, and avoiding voicing (non-mainstream) opinions seems to work best these days. there seems to be a shortage of good conversationalists, with informed, jovial, interesting things to say. nowadays, the people I encounter seem to be grimly focused and preoccupied. I wish them well..."

Well, I have really bad news for you.  The country is falling apart at the center - and we're being cleaved (or cleaving ourselves) into two camps of folks.  Those who see what is going on and those who are blinded to any subtle changes in their environment and as those become more pronounced, they take on a role of active denial.

In the process, they become more and more stressed.  I expect that what you're seeing in a lot more 'fear and loathing' out there.

Agitprop

I don't know if you caught it last week, but there was a very odd story reported to me by a reader who (alleged) that CBS/Katie Courec did a story on how the developing recession was causing people to change their lifestyles.

Reportedly, it focused on a California family that had really pulled in the belt:  Down to one Mercedes, and for the first time in memory, their kids were out of private school and going to (gulp!) public school.  Struggling to make the payments on their million dollar + home.

Now, to see my friend's point in relaying this story to me, you need to do a little background reading on agitprop.

He raised an interesting question:  Was this some kind of white agitprop, or could it be black agitprop?  The difference being that white agitprop is 'good' while black is 'bad' in a military/counter-insurgency sense.  And, if it was agitprop, who gains? 

Was this something to in a subtle way condition people not to be overly sympathetic to California families that lose their homes and cars?

I don't know - but it's an interesting question with three possible answers: white agitprop, black agitprop (to lynch banksters later, if you will) or just how in chaotic times editors and reporters work.  And a million dollar home in California is about a $300,000 home in more rural parts of Ohio.

Seems to me the odds of this just being news in a chaotic setting are highest, but I can see how an agitprop read could be made. 

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Send ideas you have on coping (ways to get along, live better) to george@ure.net

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Around The Ranch: Movies and Zener Diodes

Two lessons in rural life from Sunday worth sharing.

The first is that when you go to the theater in a small town to catch a movie (National Treasure, Book of Secrets) if you go on a Sunday night when there's school the next day, the crowds are not...well...there are not crowds.  In the theater with us last night were five people in the very back row and three in front of us.  Sit wherever you want for best surround and sight lines.

The second learning moment was after I picked up a used Heathkit SB-221 linear amplifier for my ham radio hobby,  to discover that there's no way to find a 1N3996A Zener diode in rural Texas on the weekend.  I know it just slipped your mind that a 1N3669A is a 5.1 volt 10 watt Zener used in the bias circuit of this linear, right?  I considered cobbling up 10 1Watt units from Radio Shack, but that would be a kluge....

In a month or so, once the mail order parts come in, I should be able to show off a completely rebuilt 2 KW SSB linear being retooled with a new black front panel (from W0AKG) and all the mods from Harbach Electronics that I'll be putting in.

I promised Elaine that I would unload some of my equipment, so if you're looking for ham gear, especially the older tube-type (EMP resistant) type, send me a note and I will send out the list of what I'm selling off when I get it together.    Click here to  Put Me On Ham Gear List