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Ahead:
Things
We Don't Like to Talk About
There's a quite a gap between Chief Time Monk Cliff and me.
He's the genius/recluse/SQL-guru and my role in all of this has
been mostly on the interp/big picture kind of stuff. On
major policy issues we bounce things around.
Come to think of it, most of how we approach life is pretty
'different' too. This weekend's Part Five of the ALTA
series from
www.halfpasthuman.com will be delayed until late today
because Cliff has a chance to do an all-day Aikido meditation
with visiting Masters from Japan. Martial arts and pie
being his forte. As a comparison, I took Elaine and
our house guests over to Nacogdoches, Texas on Friday - playing
hooky from work for a half day to observe the female species
wrestling with shopping disease in antique stores, watch a
little sheep judging at the
Nacogdoches Piney Woods County Fair, sample
a double order of
chicken fried steak at locally famous Butcher Boy's, and
discover an area near Neches, Texas called "Peckerwood Hill" in
our cruise about.
Despite these lifestyle differences, on most matters of 'policy'
related to the web bot project we agree. One example is
the conclusion that we haven't found anyone we'd trust the
technology to. Being able to see the future even vaguely
presents some serious moral and ethical problems. We
looked at the problems that the atomic bomb has brought with it
and wondered whether the technology, even in its fledgling
state, wouldn't be used for political/social-engineering
purposes, which was not the intent of the work.
I think that's where the 'time monk' moniker arose from:
If I count my commodity option wins and losses, plus the money
made in the past couple of weeks on the S&P decline buying puts,
I'm not back to even yet. Admittedly, after running the
commodity account up to nearly $40,000 (from a $1,000 stake) I
thought "How cool is this?" However, since this is all a
big science fair project for us, I was also able to fritter all
that away; no biggie though, after all it's only paper, right?
However, that gets us to one of the hardest/most 'rum for
George/Pies for Cliff & Igor kinds of issues: How would we
handle something very specific if it popped up in
modelspace? An example of the dilemma popped out of an
email from Cliff last Saturday (October 4). Since the
events bespoke in the email are now passing by in headlines,
disclosure here of just one sentence of in-house isn't a time
warping/future-jacking move:
"...the [***bank name deleted, event still pending - G*] and
the [world bank] are about to go down, and one of these two
will be [looted] not of money as it don't got none... "
Occasionally, things pop up in modelspace that are possible
interpretations and Cliff will go into one of his SQL fugues,
debating what's "right" to talk about in advance. Even
with a spotty record of success over the past eight years, the
reason why Nostradamus and other seers often couch their
language in metaphorical terms becomes clear. The main
danger from looking into the future is getting it all too right.
The borderline decisions are the hard ones. Deciding not
to mention a specific bank event is a pretty simple call.
News executives don't generally report bomb scares
because they can actually cause more bomb scares; in much the
same way the mere mention of bank runs sets people on edge and
logging into their accounts. We shy away from such huge
responsibilities.
The 'general public safety' calls are pretty easy, too: "Warning
- flee paper assets!" has been sound advice for quite some time.
December 10 - earthquake here. That kind of thing.
When the outcome makes headlines, but it's high profile and
everyone lives, no problem. Example here being the
3/4 day lead on the high profile motorcycle/traffic accident with the athletes at the Greece Olympics
back when.
It's the closer calls - where we ponder "right action". A
reference to something as vague/obscure as "10XCSN" may not make
sense now, but give it a month and if it's anything more than a
data bulge, I'll explain.
Promise.
Guesting Game
Don't spend too much time pondering that one...a much more
immediate set of values should be arriving this weekend as
outlined in yesterday's report. (Reference: "This
weekend: 3 Unwelcome Guests"). A sharp-eyed reader in
Germany is piecing it together this way:
"Hi George,
Cliff's accuracy is amazing! Not
only did he predict correctly the current financial crash,
but also his prediction of the three unwanted guests is on
the spot - at least for one "guest".
He spoke of "an ['accident'
(real or claimed)] which causes a [derailing]. This last may
be in the political realm."
Well, this morning we are told
that Jörg Haider, a controversial Austrian politician famous
far beyond Austria for his outspoken, right wing statements,
died last night in a car accident(?).
He was found by a driver he had
passed on his way home. Police says his car had derailed off
the street for unknown reasons, catapulted down a slope,
smashed into a low concrete wall, and turned once over. He
died from heavy injuries to his head and chest, in spite of
his safety belt.
He had again had considerable
success at the Austrian parliament elections in September,
and just two weeks ago had said in a widely broadcasted TV
interview that the banking mafia has to be abolished,
because they sell toxic financial products to the
unsuspecting people.
There are many (not right wing)
people here who don't believe this was an accident.
Linguistically, this is starting to look like a high probability
event, but here's the thing to be aware of: Apparently,
whatever the policy moves are, they have huge
unimagined/unintended consequences. If it happens, the
read would be "works for a short time, but fails on reopening,
and then a sequential start-up in tried, and that goes rather
poorly, too, making a messier mess of things.
---
Fears for Tiers? All of this gets me to thinking
back on the various stories we've run where the concept of a
two-tired U.S. currency has come up. Specifically, I'm still
intrigued with the "red backs" rumor that floated
around the 'net back in 2006. (Link
to story, scroll about halfway down)
Am I the only one to read about Jackson and the Second National
Bank? This is like a twisted sister screenplay/rewrite to fit
the times with banker's rhymes...hide the crimes inside the
dimes...clean wallets with inflation's tines.. and ignore the
People, these crooked slimes. I'm just saying...
Business Failures Loom
An interesting note was passed on by The Bond Dude while I was
out playing Friday. He said that there are about $365
billion in Lehman CDS settlement payments due next week.
While the industry figures no one will go broke making the
payment, there may be some back-end grief.
The reason? Companies are anteing up to pay their swaps,
OK, but that may push through the accounting departments and
mean things like rents, lease payments, and what have you
(accounts payable in general) could
be pushed back come month end. And that will ripple and
that rolls the big economic snowball faster down the slope
unrecognized yet in MSM.
At the same time, there's some indication in futures prices that
gold should be firming soon, -
with some talk of $1,200 by year end. No, we're not
selling any yellow dog or 'green monsters' yet.
Not that at least a more convincing illusion of choice
wouldn't have been nice. You know, like someone pushing
lower tax bites, smaller penalties on new business formation
such as foreclosure relief, no self-employment tax under $100,000, a meaningful
anti-war stance, fewer foreign entanglements, real borders...all
that stuff neither candidate has stated unequivocally.
But, that's how things are in the Checkbook Republic lately.
Sigh..
What
kind of election year horse crap is this? They still
selling missile parts to Tehran? As the Bankers Coup
spread to State? Does anyone know what "logical
consistency" means? Raise your hand....anyone?
Anyone?
--- snip and save section ---
Coping:
Right Mind
A number of long-time readers are finding that events seem to be
whizzing by them at dizzying speeds lately. Here's a
sample:
"George,
If you are anywhere near as
exhausted as I am in trying as a mere mortal to keep up with
what I have taken to calling the "bursting of the Johnstown
dam" and watching in fascinated horror at the onrushing
torrent of minute-by-minute, hourly, quarter-daily, and
daily news bulletins, and then the weekly summaries, of the
global financial meltdown and crisis that no one, save for
you a few other honest non-MSM folk call a spade what it is:
a spade: The unfolding of the Second Great Depression, then
(unless you consume illegal substances, and more power to
you, George, if you do!), you must be drinkin' one hell of a
lot of cup of joe to maintain the energy to both report for
readers such as me on your well presented evidence written
so often with wit, as well as run your forty acres and a
mule for you and the wife down there in the President's home
state deep in the heart. "
Another offers this:
"George,
Your website is to be credited
for helping people save their arses in this market, but it's
not time for congratulations yet. If people want to REALLY
save their arses they should be buying PHYSICAL Silver ( if
they can find it ) or Gold BEFORE the US follows Germany's
actions and quits selling to John Q Public. Otherwise the
"saved" people will soon find their paper including SLV and
GLD "going Weimar" ala A Greenspan's warning on Social
Security. Inflation, deflation, whatever the PMs will save
many arses when the dust finally settles and I think that
needs to be broadcast loud and clear. If things get as bad
as HPH sez I'd be surprised if Treasuries will be left
standing..."
Well, there is that. I am not a fan of money market
accounts that invest in treasuries (or their claimed
'equivalents') for the simple reason that putting some
nongovernmental business entity between me and the
government doesn't make sense when I can have a TreasuryDirect
account just doesn't add up.
---
Which gets me to an interesting point here: A number of
people have asked me "Which of the TreasuryDirect products would
you pick? Well, the first thing I selected was Regular
Savings Bonds. Why?
Follow my logic here: The government used to have a
$30,000 limit per year on how munch a regular human could have
in Savings bonds. But, last year I think it was, they
announced that the annual limit would be lowered to just $5,000
per year. So, I asked myself, why would they do that?
Whenever someone tells me I can't buy too much of this, or that,
I get to studying it really close.
FIRST thing I did was get the house limit on savings bond.
Further items will not be purchased so much on their yield
promises, but on something much more important to me (as I may
play some of this stuff right down to the wire: Look at
the sweep times from your bank account. In other words,
depending on the Treasury product, they will actually be pulled
from your bank account sooner, or later, depending on product
and auction date.
I HAVE NOT checked with any bankers of this, but I wonder if
even in event of a bank holiday whether banks would be able to
say "No!" to the Treasury if they have an ACH transfer from
a bank? Not that it matters, but definitely something
worth penciling out.
Curious
Correlation
A reader wonders:
"Ever notice how, when the U.S. financial guys want to
pressure China to do their economic bidding, and China
balks, we get a rash of stories about "unsafe" Chinese
products? IMHOP, the safety problems have always been there,
but only get focused on when the U.S. demands China adopt a
certain course financially.
(Elaine was not pleased with my use of the phrase 'bottom
picker' - "What a gross image that conjures up..." she
complained. Well maybe....OK...poor phrase... too
linguistically hot for some...but a fine
newsroom grade double entendre.)
We all know the unexplained/high profile disappearance verbiage
doesn't come along until about Spring 2009. Still, very
interesting to sit back and observe... Wonder if the early
arrivals will pop by the
Jersey City UFO festival next weekend?
---
In our part of East Texas, if a local says "Beam me up..." odds
are pretty good, they're waving toward an empty glass on the bar and
referring to the Beam with a Jim in front of it...
With 10XCSN maybe out there, Beaming up sounds reasonable to
me...maybe a tad early even if it is a weekend...although it's never to early for pie...
If you enjoy the content here on UrbanSurvival (or from the
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www.independencejournal.com) please bookmark it for
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Peoplenomics.com
What's a Depression Like?
Now that we have
arrived at the week which has been noted in the predictive
linguistic work of
www.halfpasthuman.com for a year (or arguably longer, if we count
the 'death of the dollar' meme to play out in a November which could be
this one), it's time to pencil out what the process of actually
living through a "Greater Depression" as my friend Jas Jain calls
this one, will be. I won't kid you - it's likely to be every bit
as bad as the 1930's - or even worse - since this is a Grand Super Cycle
event of a greater degree; than the last Depression - that 1930's event.
As I wrote on Saturday on the free
www.urbansurvival.com site, I
expect that European bank failures may be the 'triggering event' and
just like clockwork, the combination of our rickety time machine and
some pretty good sources informed us within a few hours that there'd not
only be "No
banks bailout fund for Europe" but by Sunday morning we had our
first report of a "German
bank at risk of collapse". Like my friend "The Bond Dude"
explained: This whole CDS market (all $55-60-trillion worth)
is like a fence with 10-million links. It only takes one of
them to break and things could cascade from there..."
Not a Subscriber yet? It's just $40/Year: (Allow
48-hours for processing)
Review of this week's report:
"Dear George, Inspired by today's bulletin, I looked at the
business section of the NY Times, and read on page 6 Why the
Bear Is Alive and Well. The writer, Paul J. Lim, talked
about P/E ratios, and I felt very smug, having been made hip
to them by your writing. The reporter seems to confirm what
you've been saying, which shouldn't come in as a surprise.
It's just interesting to see something about what I just
read from you."
What? You haven't ordered the ebook "How to Live on
$10,000 a year -- or less"? Suit yourself. We're
all going to live it shortly, anyway. I just thought you
might like a heads up by reading about how to do it before you
get pink-slipped. But, suit yourself OR visit
www.liveontenthousand.com. Yep - still possible.
I also took a bit of additional material that was pertinent from
recent issues of Peoplenomics and included them. The whole
thing runs about 65 pages, but it gives you a vision of how to
not only live on the aforementioned dollar amount, but also how
to migrate up the economic foodchain if you make a little more
than that and do some active savings...
Click here for the page with more details on it.
George Bush has been out pronouncing the same old solutions (the
modern analog to "We have nothing to fear but fear itself" and
"Good times are just ahead") thinking that will somehow stem the
flow of negative developments in the credit markets. Don't
look now Mr. President, but I think you're wrong.
The LIBOR market has continued at record high levels - and there
is some $360-trillion worth of debt tied to LIBOR...and
that in turn means that LIBOR is sucking off huge amounts of
money that would have otherwise served to keep the economic
wheels of commerce greased. They're now going the way of
old-style journal boxes on early freight cars - heating up and
catching flame will come soon enough as payrolls start tyo fail
and so on.
But, long before they start whacking millions out of jobs, we'll
likely see 7,400 or lower on the Dow. My friend Robin
Landry, who I think you'll recall got his managed account
clients out of the market around 13,500 or so when his
proprietary indicators turned negative, advises this as of 9:45
Central time - a few minutes after the Decider's latest happy
talk:
"That was just margin call selling this morning -- if it was
a turn, it would be the first time that my indicators were
wrong---on all of them, an acceleration to the downside is
indicated. Could this be a new kind of washout?
Of course! But is it likely? No. I would
love to be wrong George, but it ain't over..."
Meantime, with most of our money safely out of the way and
sitting on the sidelines, I can't help but take certain pleasure
in notes like this one:
"Thanks, George. I, too, saved
my 403b (plan for nonprofits) plan thanks to you. I
accidentally stumbled on your site—don’t remember how—and
took your advice to heart. I moved all my 403b money into
the Money Market. I preserved all but $10,000 of my funds;
I’m still holding at $325,000. It’s not growing, but it’s
not losing. Checking my funds compared to the day I sold and
what it continues at, losses are climbing into the -20%
range. I can’t thank you enough. I feel I have escaped most
of the gloom and doom of not being able to retire—which I’d
like to do in 5 years. Furthermore, I had a small
inheritance from my father which I invested in mutual funds.
I sold them all and moved them to a regular savings account.
Yesterday I moved them to a CD as I noticed the interest
rate went down. Again, I’ve been tracking the losses and
they are dramatic.
Thanks to you and your site, I
have preserved what little capital I have. Thank you!
I have to laugh at all the “ways
to save” stuff we’re starting to see. My husband and I were
raised by Depression Era parents. We wash out and reuse
baggies, save twist ties, grow a garden, can our own
vegetables (gasp!), pick wild fruit, fish and hunt. Our
basement shelves are lined with home grown canned goods.
We’ve lived this way our entire lives—we’re ready! We also
raised our children that way; they at least know what to
do."
Cool, huh? And thanks to the folks who subscribe to my
www.peoplenomics.com
newsletter for making this all happen. Tres cool!
There's a lot on my agenda today, but if you need the circuit
breakers today (duh!) click here for the
levels.
Global Economic Collapse Day 4
Solving the Wrong Problems, Part Deux
The global bloodletting in the financial markets is now pretty
obviously past the point of no easy return. Confidence is
shaky and getting more so almost by the hour.
Asia
overnight saw the Hang Seng drop more than 7%, Australia was
down more than 8% and Japan took a 9.62% decline, which is
particularly significant because they actually entered their own
Depression back in 1989 when the Nikkei bubble first collapsed.
For them, this kind of decline is déjà vu all over again as the
whole country is likely asking "Are
the lows of 2003 (7,972) going to hold?
---
There's much about the "Great Depression" which is misunderstood
by the American public, but understandably so, because history
is not written by the righteous; it's written by the winners.
The "Greater Depression" is not yet recognized by the MSM - that
will come a little slowly, because when it arrives, it will have
to be laid at the feet of the Tax & Oil Party. The
$700-billion(plus $150-billion of pork) squandered on
buying off bankers isn't helping much, at least so as I can see.
Didn't even get the crisis pushed past the election for McCain.
Universe is funny that way....moving finger writes and all.
---
Today, much of what this site has been dedicated to, namely
documenting the arrival of the
Kondratieff Long Wave Winter, is coming painfully into view.
What's interesting (at least to me) is that we're finally
getting the settlement of a long-running debate that has been
raging in (semi) academic circles since I first got involved
with long wave economic research in the late 1980s.
The central question boiled down to this, if I can be forgiven
for over-simplifying: Do periodic long wave depressions
such as have happened several times previously in America, occur
on a strict calendar basis, or are there drivers which
are human-referenced?
Many of my colleagues/friends from the old days on the
University of Colorado discussion group server at the Center for
a Sustainable Future project argued the mechanistic case.
"Ure's nuts," they'd proposed (and be partially correct BTW),
"Because any damn fool knows that cycles are of relatively
fixed duration."
But, there have been some including Trader Jim Goulding and
myself who have taken the more humanistic perspective,
encompassing Strauss & Howe's "Fourth
Turning" work and viewing increased cycle-length as a
function of human lifespan improvement. The concept of
a
saeculum-length cycle is easily evident. Jim
Goulding's book "Winter
is Coming" (which you can download here free), is a much
more thoughtful treatment of the topic than I could offer here.
Still, since what we've been warning of is now evidencing itself
with the global market collapse this week, (starting on what
date?) you might want to put some of this material on your
reading list for either this weekend, or at least before the end
of the year, while it's still readily available. It may
help you keep the magnitude of unfolding events in focus.
---
Didn't mean to get off on a preachy tone this morning, or to say
"Told you so!" (OK, maybe a bit)
but we're in events right now that will dwarf past
economic events. The coming months will be the basis for
grandchildren asking you "When did you wake up to the idea
that a Second/Greater Depression was unfolding? "
Most of America hasn't figured it out yet, because the "D" word
is probably on those 'be careful what you report' memos that
circulate in corpgov news operations. Too bad - it just
stretches out the decline. "When in doubt, tell the
truth," Pappy used to say. Stuff's hit the fan and it's
called a depression.
You know why? I call it "Sarah Palin Syndrome". If
you think back to her 'debate' with Joe Biden, you'll remember
she warned at the beginning that she'd sometimes not answer the
question asked, but instead, she'd answer the one she thought
should have been asked.
Offishul (sic) policy response to the developing financial
Armageddon so far is displaying "Palin Syndrome": The team
of Paulson and Bernanke has been answering what they want to
answer as a question, namely "If we save all the banks, then
everything will work out OK - at least till the election"
instead of the real issues which distill down to
"How do we help people keep their homes and and jobs and
thereby put a floor under this puppy?"
While it's nice to see that
Oil is down to $82 a barrel (42 gallons, not 55 in that
world), it's not going to help people stay in their homes much
longer. The issues are real human beings defaulting on
loans, losing their homes, and then losing even their cars to
live in.
---
Speaking of which: I caught what I thought was a Chrysler
ad for a mini-van yesterday as I was walking through the house
on some mission or other, and I had to stop and do a double
take. The scene in this ad was of a whole family
appearing to be living in their mini-van. The
flip-down TV screen was playing something, there were TV trays
popping out of the seats (think there was even a meal being
served, if my recollection is right). Pretty interesting,
huh?
Down at the archetype level, I gathered we were supposed to get
out of it that this was the van to live comfortably in,
although I'm not sure that was how it was intended. Maybe
the message was that Elaine and I should buy this new mini-van
and do more entertaining there rather than out on the deck or on
the screen porch. Curious, eh?
I've been watching for some of that $25-billion thrown to the
auto industry to trickle down at the local auto emporia, but so
far no sign of it. Until it appears, I'll take most of the
talk of "recovery" in the same vein as the 1930's "Good times
are just ahead" -- utter nonsense.
---
First, we have to fix the problem. The problem isn't
bankers. The problem is we have been watering down the
nation's money, we've built a service economy based on the
continuous expansion model of business, and debased the
so-called fraction reserve system to where there are no
reserves left.
This swings us around to the main topic which I'd bring to your
attention this morning: The continuing decline in the quality of
America's money, something that's been underway ever since the
Banker's absconded with Congress' Constitutional money function
in early 1913.
"The Board's H.3 statistical release, "Aggregate Reserves of
Depository Institutions and the Monetary Base," has been
modified to include credit extended to certain regulated
U.S. insurance subsidiaries of the American International
Group (AIG), which was announced by the Federal Reserve on
October 8, 2008. The funds extended to AIG under this
transaction are reported with other lending to AIG in the
category "Other credit extensions" in table 1a.
The so-called "Nonborrowed" reserves of depository institutions
is -363,136-million; e.g. 363-billion. Remembering
that we can simplify nonborrowed reserves -363-billion to
nonborrowed reserve of
-363-billion (surgically
removing the 'non and '-' sign) we see that's how much banks
have borrowed to balance their reserve books. And
over all borrowings are 543-billion.
All this borrowed money has to show up somewhere - and sure
enough, flip over to the Fed's H.6
That data got me to thinking about the relative performance
and relative strength between investing in gold (as we
have done) and investing in stock (which detractors have been
pimping to us) for years.
Let's roll back to March 17 because on that date, gold hit its
most recent high. On that day, gold was $10,12, or
thereabouts. And yesterday, Kitco was quoting $885 for the
'yellow dog'.
That's a decline of 12.54%.
Check this out: look at what the Dow was doing on March
17th by checking the Yahoo financial archives. Dow was
11,972 that day while yesterday's closing Dow was about 8,579.
Notice that I'm being charitable and not quoting the futures
price because the Dow looks to open down another couple of
hundred at today's open. Nevertheless, even with my
grandiose generosity toward the paper assets scam, the Dow is
still down 28.34%.
Will the Dow go down more? What kind of dumb question is
that?
Of course it will: If a fixed income return of 20% is
possible, that means that stocks must offer a similar return
- which would be a P/E of 5 in order to attract investors.
Given that the PE of the Dow is still up in the high teens even
after the small decline thus far, guess what's gonna follow like
day follows night?
---
The August balance of trade figures are out this
morning...here's how they came in $59.1 billion in the hole -
it'll be a few months before the 'benefit' - if I can call it
such - of decrease American consumption shows up in the rearview
numbers:
The U.S. Census Bureau and the U.S. Bureau of Economic
Analysis, through the Department of Commerce, announced
today that total August exports of $164.7 billion and
imports of $223.9 billion resulted in a goods and services
deficit of $59.1 billion, down from $61.3 billion in July,
revised. August exports were $3.4 billion less than July
exports of $168.1 billion. August imports were $5.5 billion
less than July imports of $229.4 billion.
In August, the goods deficit decreased $3.2 billion from
July to $70.9 billion, and the services surplus decreased
$1.0 billion to $11.8 billion. Exports of goods decreased
$3.2 billion to $117.6 billion, and imports of goods
decreased $6.4 billion to $188.5 billion.
Exports of services decreased $0.2 billion to $47.1 billion,
and imports of services increased $0.9 billion to $35.3
billion. In August 2008, the goods and services deficit
increased $3.8 billion from August 2007.
Exports were up $22.6 billion, or 15.9 percent, and imports
were up $26.4 billion, or 13.4 percent.
Goods
The July to August change in exports of goods reflected
decreases in automotive vehicles, parts, and engines ($1.7
billion); industrial supplies and materials ($1.2 billion);
consumer goods ($0.9 billion); and foods, feeds, and
beverages ($0.2 billion). Increases occurred in capital
goods ($0.8 billion) and other goods ($0.2 billion). The
July to August change in imports of goods reflected
decreases in industrial supplies and materials ($6.2
billion); automotive vehicles, parts, and engines ($1.2
billion); capital goods ($0.8 billion); and other goods
($0.3 billion). Increases occurred in consumer goods"
(Memorize this - there will be a test Monday...)
You know, there actually is some good news to global
economic collapse: It will get Americans back to being
thrifty. The days of the profligate consumer are toast.
Chief time monk Cliff was telling me yesterday that he spied the
end of consumer excess in a rather odd place this week. He
takes is own trash to the dump - saves money and keeps recycling
and consumption front and center when you have to move your own
trash. "Never seen such a lack of regular folks.
Just me and the rest were all commercial haulers..." he
observed.
No, we don't make conclusions based on a single observation, but
it's there. Less store traffic, lighter recreational
shopping. People in stores getting about their shopping in
a purposeful way. The Washington Post headlines it as the
"Economy
that Stole Christmas".
---
Of course, this is still but the leading edge of the economic
mess that will last till next March if the linguistics are
right. Already there's evidence of shortages/delays with
headlines like ":Grain
Shipments stalled in credit drought" popping out. But
once again, you can look at stories like this in MainStreamMedia
and miss the whole forest if you don't have some meaningful
context against which to place all them trees.
---
We only have two immediate problems to solve: LIBOR rates being
too high and families going banko. But, then again, we
don't grind political axes around here, or take money from
bankers like they do in Washington. Till we get focused on
the root causes and corrective actions, we're solving the wrong
problems and the crash will continue. Bet me?
Time Monk Advisory
This Weekend:
3 Unwelcome
Guests
A dispatch from the time monks at
www.halfpasthuman.com
issued Thursday offers this guidance for the weekend and into
next week:
"Salve Omnes,
sorry to intrude on your day...
just a quick note and an extract
from the Markets entity posting of this coming weekend. The
issue is that we have had a very noticeable bump up in
emotive release language within the immediacy value set
prompting an examination of these areas. The following
extract is from Part Five which will not be posted until
this weekend, and by then the forecast will be active and
in-the-now...so just a bit of a heads up. Best we can do at
this point. More if warranted later.
Extract follows: Markets entity:
The current state, which is to say, the current rate of
increase in [visible] release language within the global
mediastream as it relates to the [global financial meltdown,
aka 'death of the dollar'], is indicated as continuing *at
its current rates* until late in the day on October 22. This
will be very late indeed, but at that point a certain
'plateau' effect is reached when the [media/press] will have
used all but the most [dreaded] of language, and will be
[stuck/glued] to certain by-now-cliché's. The [emotional
release language plateau] is really (see chart below) more
of a slightly slower slide, and it is indicated to continue
within this gradient, or restriction in language until after
mid November. However, to get to the [restrictions in
language] period of October 23rd through November 20th (or
thereabouts), we must first transit the very rough rate of
increase of release language which arrives on October 10th,
and continues through to the 19th.
Within this area, several
sets of cross links highlight the potential for Terra
intrusion, most likely on the 10th. However, there are
several disconcerting 'bumps' in the immediacy values which
suggest that some [unexpected guest] who is not particularly
welcome, will be making an appearance within the [global
meltdown/death of the dollar] this coming weekend. This is
to say, on October 11th and 12th.
We have linguistics to support a
combination of 3/three kinds of [unexpected guests] this
weekend, and they are the following aspect/attribute sets:
[weather related incident involving a rescue], an
[assault/attack] which causes [communications (to) shred
(internationally)], and last, but not least, an ['accident'
(real or claimed)] which causes a [derailing]. This last may
be in the political realm. However, please note that all
3/three of these [unwelcome guests] will be having their
most impact at the [dying dollar party] currently involving
the global 'financial system', and further that each in
their own way, will contribute to the circumstances which
manifest in very late November, and into/through December.
Extract ends.
vale, and pies up, "
Not that these will be huge event - as they are just appearing
in modelspace with clarity now - likely be the size/magnitude of
that stuff just prior to the Greek Olympics where the athletes
were injured - popped out of modelspace only 3-4 days in
advance. Still, if you turn on the news channels by Sunday
night, it's the kind of thing which would fit/play-into the
unfolding circumstances.
This is Rich Department
Brown Condemns Iceland over banks. This from the guy
who sold huge quantities of England's gold at rock bottom prices
when he was Chancellor of the Exchequer? Economic genius!
GMAFB
"As of December 31, 2007, assets blocked pursuant to E.O.s
12947, 13099, and 13224 totaled $20,736,920.8 Total amounts
blocked will be subject to change for a number of reasons,
including application of the TRIA, which authorizes eligible
persons who hold judgments arising out of acts of terrorism
to attach certain blocked assets to satisfy their
compensatory damages awards.9 Additionally, fluctuation may
occur in the value of blocked assets due to the authorized
withdrawal of blocked funds under various circumstances
consistent with overall sanctions policy. The increase in
blocked terrorist organization assets in 2007 is due to new
or additional blockings, interest paid on blocked funds, and
increased share price on certain blocked securities."
As who who isn't getting money, thanks to this program:
There's more - much more - to cover, so again this week, we'll
have a Saturday edition -projects around here will just have to
wait...
---Snip and Save ---
Coping:
Ahead
of the Pack
Once in a while we get emails that just make us feel good.
Like this one:
'large number of readers have
come forward offering their views on how well the rickety
time machine did in picking out this period from a year in
advance. Some are openly skeptical that anything out of the
ordinary happened. One suggested his 'dog could do that
well'. I want to meet the dog..."
Sorry for sending this to both
email addresses BUT I wanted to make sure you got my comment
on the above: GIVE ME A F&*^ING BREAK!!!
Frankly George, I credit you
(and me for reading) and Urban Survival for keeping my
husbands and my 401K's 1.5 million (combined) because I had
moved our money from various mutuals and other holdings into
Interest Income Money Markets and we only lost about 2%
(money allocated as "play") out of all our accounts which
are 2 401Ks and 2 IRAs. People all around me here at work
are bemoaning their losses. If anything, I have been remiss
in thanking you and Cliff for giving the non-half past human
subscribers the message ... so thank you to you all!!!
Makes it all worth it.
By
the way, the fellow with the dog did send a picture of him (so
we could meet). turns out to be a clone of that little
Chihuahua that did the taco outfit TV commercials...I'd post the
picture, but the bandwidth bills around here are ridiculous...
Say, not to ruin the day, but I forgot to get the latest chart
from my friend Robin Landry up for you...kinda hard to see, but
you'll get the idea...
Robin's expectations are outlined this way:
"The Chart above is a long term chart that shows that my
target for 7400 may be too high. If we get a maximum
retracement of 68% then the 5800 range is quite possible.
I am confident that one of the targets will be met. The time
frame is the most difficult to determine. As always there
will be sharp counter trend rallies along the way but keep
your eye on the final larger degree target which is much
lower than we are today. I have said for several years the
idea of buy and hold will cause the greatest pain and loss
of confidence in the advisement business that this industry
has ever seen once we enter the larger degree correction
corresponding to the 1929-1934 decline. We are at that
timeframe and many people who rely on their saving in the
markets to retire will not be able to retire due to the lack
of discipline in the training of advisors toward capital
preservation. I believe the next two or three years will
prove me right. I hope I am wrong but doubt it. God help us
all. As always questions and comments are welcome."
rlandry@allegiance.tv
Talking a bit this morning, Landry says the web bot project's
October 7th date was pretty close. "You see, the thing
that happen was that we flipped over from the glass being
half full to the glass being half empty...and today
it's maybe 3/4's empty, but we have a long way to go..."
Indeed we do -especially if his 5,800 Dow low is anything near
right.
Bounce Thursday: A Larger Context
The whole economic world began to change this week - and it
started on Tuesday. Today, although the markets will
bounce, I think using Jim Cramer's '20% downside possible'
benchmark, we will see a pause and even possibly a decent
bounce. But is the crisis over? Uh...no.
"Bond Dude II" sent me this note about LIBOR:
"07:03 10/09 LIBOR/OIS: 3-month LIBOR/OIS sterling spreads
widened again Thursday to a record level of well over 200
basis points, but the move wider was less pronounced than in
other currencies. The sterling LIBOR/OIS widening may have
been curbed by the UK authorities' three pronged bank
support plan unveiled Wednesday. Continued concerns over
year end funding have been weighing on spreads, which remain
prohibitively wide despite the efforts of the authorities to
tackle the problems in the interbank market. "
Remember: Higher LIBOR number means tighten bank lending - this
is bad and sucks as we'll be experiencing when major companies
start missing payroll. Already one of the world's largest
chemical companies, I'm hearing, has frozen all capex projects.
Not good...this is how things start to steamroll down hill.
Ben Bernanke, long a student of the Great Depression, is
gambling the whole world essentially, that the right
combination of buying friends on Wall Street ($850-billion
worth), the direct loans to automakers, buying corporate paper
at the Fed window and all the rest - it's going to be a hefty
tab, but one that would avoid - if successful - the pain of an
AmRev2, that continue to be evidence in predictive linguistic
modelspace for next summer.
And I do mean slightly. Iceland's (small) economy
continues to teeter on collapse, and any large counterparty
default in a variety of credit markets could still easily bring
down the global House of Cards.
Being a simple-witted news follower, all I can get out of this
curious juxtaposition is an image of all these high falutin
economic powerhouses sitting around and talking about the
problems without cobbling up an umbrella. Maybe they will
just exchange phone numbers? Not sure how to read it.
---
A large number of readers have come forward offering their views
on how well the rickety time machine did in picking out this
period from a year in advance. Some are openly skeptical
that anything out of the ordinary happened. One suggested
his 'dog could do that well'. I want to meet the dog...
October 8th of last year, the Dow peaked intraday at 14,134.
If you happened to have a mutual fund that closely tracks the
Dow, the year on year performance of your portfolio would be
down 36% -- enough to put a few holes in almost anyone's dreams
of a rich retirement filled with luxuries you didn't have time
for while working.
Worse, if we get the Cramerian
downside here, and stock were to drop another 20% from
yesterday's intra-day lows, that would bring us to the 7,234
area, and that's close enough to losing half of a retirement
plan (if it happened to track the Dow) that you might be a
little disheartened when the nexct quarterly statement comes in.
Oh sure! You could
argue that "There goes George, being an old sourpuss again..."
and then throw in a caveat like "Look! He doesn't take
dividends into account...damn pessimist!" To which I'd ask
what's bigger? Fund management expenses or the dividend
income, especially on so-called 'growth stocks'.
---
One of the best emails about the
long lead-time work of the predictive linguistics was this one:
"Cliff's research was so spot on
--
It is interesting to note that
Bernanke officially acknowledged the officially unspoken on
Oct 8th. The economy, banks, financial markets and all in
deep trouble -AND HIS REMARKS WERE RECOGNIZED THROUGHOUT THE
WORLD.
That is the key take away. The
change from Greenspan's Fedspeak to Bernake's plain speak is
a watershed moment. Bernanke plainly and officially stated
we are far from coming through this crisis. This has opened
the gates for other officials to go into 'release language'
and talk openly that the crisis will not be fixed overnight.
As such official figures on over
estimate economic growth no longer need to be maintained and
the IMF downgraded official estimates for global economic
growth. Bernanke's speak symbolically gave world officials
permission to talk plainly and honestly about the financial
problems and to say it will be a while before it is
resolved.
It is amazing that Cliff's
research was so spot on for all these turning points. His
research has indicated these turning points and therefore is
a credible indicator of some future events."
Sorry we didn't catch a single
headline focusing event. Just a huge change in
sea-state for the global economy.
Appearing next should be some
discussion of whether the crisis is over (sorry to say but it's
not, expect it to return in spades around the 24th of the month
and continue to mid-November) and along with that, a discussion
of growing militancy within Main Street America. The
social contract, already very much frayed by the Housing bubble
Collapse and the Foreclosure Epidemic is showing what I'd call
'stress cracks' about what's in our future.
At it's heart, the economic crisis
unfolding now and only in its opening act will be about what I'd
have to call 'thingness & property'. Like Pappy used to
remember me, "Possession is 9/10ths of the law..." True
that. Get on the side with the most possessions and
'horsepower' and there's the side that will likely write
history.
What we're seeing bubble out of
Illinois is likely to become a nationwide phenomena in no
time at all. Especially since this year threatens to be
perhaps the worst Christmas since World War II; see "Owe,
owe, owe, More debt for the Poor".
Evidence that the Cook County
stance will be meaningful in the long term comes from the
newspapers that are picking up their own 'local angle' to it.
"Evictions must go on, say Fox Valley sheriffs", just as an
example.
---
To be sure, my late relative Andrew
N. Ure ("The Philosophie of Manufactures" 1841) did get a
few things right while being an apologist for the British
aristocracy and getting slammed by none other than Karl Marx for
his role. Still, he got some things right:
"But capital alone is not worth
of credit, unless associated with moral qualities in the
tradesman; for a prudent man of great industry, integrity,
and knowledge in his business is more worthy of credit
without capital, than a rich man ignorant in his business...
---
Persons who begin with large
capitals do not succeed, generally speaking, so well as
those who begin with small ones cautiously administered..."
As long as the little guys can
climb faster than the 'old rich' you've got a workable political
proposition. What the Framer's of America had in mind.
When you don't, you end up with an uberklassen and unterklassen
with a corrupt police layer between. If that's not clear
enough, go look at the downtrodden masses globally with no
upward migration path. When hard work doesn't pay off, you get
revolution and extremism.
This balancing act - between the
common good and the singular rights of property ownership - is
something of a global sticky wicket even now. The issue is
much larger than Cook County.
As long as there's a clear
migration path, which an industrious person can set themselves
about with a little initiative and have a good chance of
success, it's figured the
weft of the social fabric is good. When it becomes
frayed, the damage spreads out through the whole of the country
(or whole of the world when a longer view of corporatism is
engaged) and we start to see the reappearance of terms that
sound distinctly Marxist.
A search on "class warfare" in the Google news search engine
bears out my proposal. That phrase seems ascendant.
Not that the guillotines are being
oiled; don't get me wrong. But in heartland America,
there's a slowly dawning recognition that this New World
(Economic) Order feels like a 'meta layer' of social
power/control/indenture has been laid over the foundational
American framework and that this extra-Constitutional power
structure that doesn't follow the Will of the People (evidenced
by the Banker Bailout) is becoming evident on Main Street.
In order to successfully navigate
the times ahead (linguistically speaking) I figure one of my
main areas of focus/meditation will be getting this "rights of
ownership" versus "obligation to share" stuff sorted out.
Do I have a loyalty to nonhuman legal hypothecations, or, am I a
humans first & only kinda guy?
I had a long chat yesterday with a
documentary film maker and one of the questions she framed as I
went into one of my 'build a watch' explanations of how Long
Wave Economics works, all the way back to the 50th Jubilee Year
of debt forgiveness in the Book of Leviticus was "Why do we keep
doing the same cycle of three generations? Why does that
"summer of hell" in the web bot forecast look like we're about
to repeat the social upheaval of the 1930's?" I wish I
knew.
One thing's clear two cups into
Thursday: Headlines about Sheriffs and their eviction policies
should evoke far deeper thought than most people on the gerbil
wheel of corporate indenture are willing to invest.
You can think about it in advance,
or under stress later..
Next Problem, Please? LoC's
My 'simple country attorney' sent
me a briefing yesterday that deserves widespread thought:
"I have talked about this
elsewhere as a personal projection but the article linked
below is the first I have seen that confirms that it is
happening.
Letters of Credit are the
lifeblood of the import/export business. Without them trade
ceases to flow for all except buyers/sellers with a strong
personal trust relationship.
With banks going belly up left
and right those on the selling side of a trade deal can NO
longer be sure that even if they receive a Letter of Credit
that they will be paid.
If the international bank chaos
continues and worsens the effects on world trade could be
quite substantial due to an unwillingness of sellers to
allow their goods to be loaded upon a ship with "merely" a
Letter of Credit as payment.
Of course for the buyer
prepaying for goods before they are loaded onto a ship in a
foreign port means that they run a considerable risk that
the goods either will not be loaded at all or that they will
be non-conforming when they are inspected on the receiving
end.
This is an area that bears
watching since a couple of major bank failures leaving the
sellers holding worthless Letters of Credit for their
payment could quickly bring much of the world's ocean
shipped trade to a screeching halt."
No telling how many LoC's are on
hold right now, but if you see bare shelves, think back up the
JIT supply chain and think about what happens to it when bankers
and LoC's aren't moving...
What's a hotel worth then?
Like Pappy used to say: "Once you close your eyes and drift off,
they're all pretty much the same..." Take your savings of
$33,500 per night and mail 'em along.
I still think
the MIT OpenCourseWare project is the coolest thing in
higher ed, though. Just way cheaper....
Hog Notes
A buncha notes came in on my hog
problems in the neighborhood. Some samples:
"George, I sure would have more than a 7.62 x 39 beside me
when looking to find a 600 lb hog. You might just make him
mad."
---
The wild hogs in my part of East Texas (35 miles southwest
of Texarkana) are wild FERAL hogs. No tusks with which to
gore, but plenty of snout for rooting up pastures. More
likely to trample you trying to get out of the way if
something spooks them.
Reader Note: A little shorter than usual this morning, as
I slept in for an extra 30-minutes - a bit exhausted with the
workload this week - been in the chair 14-hours a day keeping up
with things.
Throughout the current financial
crisis, central banks have engaged in continuous close
consultation and have cooperated in unprecedented joint
actions such as the provision of liquidity to reduce strains
in financial markets.
Inflationary pressures have
started to moderate in a number of countries, partly
reflecting a marked decline in energy and other commodity
prices. Inflation expectations are diminishing and remain
anchored to price stability. The recent intensification of
the financial crisis has augmented the downside risks to
growth and thus has diminished further the upside risks to
price stability.
Some easing of global monetary
conditions is therefore warranted. Accordingly, the Bank of
Canada, the Bank of England, the European Central Bank, the
Federal Reserve, Sveriges Riksbank, and the Swiss National
Bank are today announcing reductions in policy interest
rates. The Bank of Japan expresses its strong support of
these policy actions.
Federal Reserve Actions The
Federal Open Market Committee has decided to lower its
target for the federal funds rate 50 basis points to 1-1/2
percent. The Committee took this action in light of evidence
pointing to a weakening of economic activity and a reduction
in inflationary pressures.
Incoming economic data suggest
that the pace of economic activity has slowed markedly in
recent months. Moreover, the intensification of financial
market turmoil is likely to exert additional restraint on
spending, partly by further reducing the ability of
households and businesses to obtain credit. Inflation has
been high, but the Committee believes that the decline in
energy and other commodity prices and the weaker prospects
for economic activity have reduced the upside risks to
inflation.
The Committee will monitor
economic and financial developments carefully and will act
as needed to promote sustainable economic growth and price
stability.
Voting for the FOMC monetary
policy action were: Ben S. Bernanke, Chairman; Timothy F.
Geithner, Vice Chairman; Elizabeth A. Duke; Richard W.
Fisher; Donald L. Kohn; Randall S. Kroszner; Sandra Pianalto;
Charles I. Plosser; Gary H. Stern; and Kevin M. Warsh.
In a related action, the Board
of Governors unanimously approved a 50-basis-point decrease
in the discount rate to 1-3/4 percent. In taking this
action, the Board approved the request submitted by the
Board of Directors of the Federal Reserve Bank of Boston.
Will a half point rate cut help?
Does it fix LIBOR rates? No? Bail out a homeowner? No.
Does it stop one foreclosure yet? No? Well, gee, do you
suppose that's your answer, then?
A reasonable student of business (which I pretend to be) might
then ask "So if we just print up more paper at a lower interest
rate, who's gonna buy it now that China is wising up?"
If you've been following this site very long, you ought to have
figured out that this will likely only be the first cut and that
another half will be in the works, probably within weeks, as the
core issues that have gotten the world into this condition have
not yet been addressed - we'll get to those in a minute - but
that gets us to the main point of today's report which is what?
What the time monks and I are busily pondering now is whether
the 'failure of the currency' which we've been eyeing in
modelspace for several years, along with an attendant failure of
a one or more central banks, could be the Euro dollar,
not the US of A kind. Not to worry though; we oughta know
by a month from now which one(s) it will be.
---
As a long-time major market radio news director, I continue to
be amazed at the genuine lack of media focus on what by the
end of the year will be the biggest story of the decade and
perhaps century. The stories that are the 'lead news
item' on most stations/channels/and sites are things like
the so-called debate between MoreOfTheSame Party A wannabe and
MoreOfTheSame Party B wannabe.
Not that he's got a lot of choice here, but I'm not holding my
breath: The corporate world is in the process of not
ending (yet), but probably having its importance whacked by a
half to a quarter, while the number of hungry and homeless is in
process of doubling, tripling or much worse (which sets up the
time machine's "Summer of Hell" in 2009). If a guy in
Washington State can figure out how time and language works and
if a similar nutjob in East Texas can figure out the easy
answers to have avoid all of this, somebody ought to be asking
the reasonable "How come they got it right and all of government
didn't?"
My friend "The Bond Dude" who manages 10-digits left of the
decimal point through all this (and is doing OK for now - thanks
to more foresight than most) explained to me a few days back
that there were plenty of better ways than bailing out crony
capitalists that could have avoided what's now becoming an
irrevocable outcome:
"Instead of a $700-billion bailout plus a $150-billion side
of pork, why didn't they just raise money going to Social
Security recipients? That would have helped to spur
spending - which is just what we need right now..." he
began.
"Or, they could have proposed a holiday on the
self-employment tax - and that would have put billions into
the hands of American small business - and they in turn
would have gotten to spending and would have kicked the
economy back into 'drive'..." he continued.
"Another thing they could have done would have been
to increase welfare dramatically. I don't want to
sound as cynical as you here (Hmmm....) but we all know
nothing spends faster than welfare, right?"
"Then they could have extended Unemployment Insurance from
26-weeks to 52-weeks - again, that would have increased the
general level of spending, which in turn would increase
confidence..."
My friend "The Bond Dude" was spot on, but then I guess that's
why his large/household name employer trusts him, and not me, to
manage their billions. I would have just bought gold and
farm land and done fine, but no excitement in that, and sure as
hell not enough to justify acres of cubicles. Still, not a
one of these easily seen/enacted moves was slipped into the
recent "Rescue Plan" which, in the interest of transparency,
we'll just refer to around here the BOMA (Bail-out my
*ass....)
Since you've got enough brain-cells yet uncooked by your cell
phone/electronic doggie leash to have found your way back here,
I'll just assume you have already figured out that "TARP" means
taxpayers are really pissed. Come by next year when
the squatter wars are going on, then you'll know what 'pissed'
is all about.
No, this is not 'inciting'. This is the kind of
reporting of facts that the MainStreamMedia (MSM)
doesn't dare put on the table for fear of losing their core ad
business. The dots they are a little slow connecting,
which we'll now set about doing here, however, show pretty
clearly that they are going to have their revenues collapse
anyway, but on the off chance the 'smiley faces on the money
honeys' will forestall the inevitable, they'll keep doing
what they've always done: Been the hucksters for the corpgov
aristocrats that bail themselves while pushing the women and
children away from the social lifeboats.
The villagers with the torches, rope, and pitchforks are not
being fooled, however. The FrankenCorps will slowly be
bought to heel because the mad scientists who high jacked the
Constitution and installed trickle up economics are in process
of getting their comeuppance. Free markets'll do that now and
then...
"Beginning on October 7, 2008 and running through March
2009, they foresee a calamitous period on an epic scale.
America will be beset by a variety of problems, which they
broke down as 45-48% related to the economy, 40% concerning
the military, and the rest associated with natural
disasters. Between 2 and 22 million lives could be lost or
seriously impacted, they estimated, possibly related to a
"global coastal event" in 2009. On Dec. 10-12th, 2008, a
large quake could hit the Pacific Northwest, they added. "
Anyway, that's looking backwards. Time to get focused on
the forward look, which is that if you thinks things are dicey
now, the period from October 24 to November 14th will make
present day look like an appetizer. You ain't seen fear
yet.
That does, however, bring up the prequels to fear which showed
up yesterday in a most unexpected place:
Death of the Consumer Economy
A note from my deflationist pal Jas ("It's the Greater
Depression") Jain Tuesday expressed shock that the media
(rim shot) was not headlining what can only be described as a
huge collapse in consumer spending in August of this year.
What the newest
Federal Reserve G.19 report shows is that total Consumer Debt
outstanding (which they, as products of the 'Me!" generation
- call Consumer Credit because they look at things as
your creditors) shows is that Consumer Debt for the month
dropped at what would annualize to a -3.7% rate. See line #1 of the
report. Maalox helps.
The next interesting number to ponder is Line #4 of the report
where the actual total consumer debt for August was down
to $2.577-trillion. The reason this one is so important
(as I put on my "People's Economist" hat and step up to
the white board) is that American business has incorrectly been
mostly built on a continuous expansion model that requires
growth - the Holy Grail - in order to just survive.
The thing to keep in mind is that this is rearview economics at
its finest - it's what was happening about 2-months back in
August. This is almost the middle of what month?
Regrettably, the Fed has taken it upon themselves (and without
any direct Constitutional authority I can see, since Congress is
supposed to run money, not the bankers because this is just what
happens)
to directly lend money to corporations.
I can't even begin to express my shock at this blatant
corporate socialism. Perhaps I'm so old-school I can
still remember when business run badly failed and that set the
stage for consolidation then growth to follow. What's
going on now is the financial version of hard-core denial.
No, I haven't heard anything about mandatory reductions of
corporate salaries and bonuses as a condition. Nor, do I
expect to hear any mandatory reductions in dividends as a
condition - nor any requirement that companies start hiring
USA-based humans. Nope. Best I can figure, a
corporation will to be able to yell "Uncle!" and along will
come a check, dividends will be saved for the Uber Rich enabling
them to
continue buying new expansive imported cars from Europe, that
will in turn save the Euro, and once the coordinated bailout of
banks there (announced this morning) kicks in, the birds will
all come out and sing.
I could retool my Global Index this morning, to underscore the
impact of the global synchronized financial collapse underway,
but just glance at it so as not to lose your appetite...we might
be having pie later. Or rum...
If you do have a job, I sincerely urge you to send $100 today to
the nearest human-to-human food bank operation. The
government can send money to the bankers just fine, but in the
end, its the people who count and they've got to be housed and
fed.
The District of Corruption has already demonstrated in the
Bailout Vote their contempt for grassroots America by passing a
pork & banker bill that doesn't solve the problems of us'n -
America's working class, so we need to take matters into our own
hands. So another check goes out to the East Texas Food
Bank from here today. Besides, contributions to food banks
are generally tax deductible and why would you want to pay more
taxes?
The other thing I'd urge you to do is vote out any incumbent who
supported the bankrupt America but save the bankers bill.
*** thank you ***
Personal Positioning
If you're new to the site (and traffic patterns on the logs
suggest there's a bunch of newcomers around here) let me offer a
tip on how to don a preparedness attitude without being
classified a threat to society: become a farmer.
Pass on trying to be a survivalist.
By becoming a farmer, you can have a pick up truck, an excuse to
keep a bottle of Old #7 (Jack Daniels) around the house, and
even (this is the cool part) own a bass boat and a firearm.
Even one that would be suspect in town.
While there are folks who've never been outside the city limits,
out here in the country something like a 'hunting carbine'
(conveniently built on an AK-47 receiver) with a 40-round clip,
actually has a business purpose.
We've got wild hogs around the property and judging by the
tracks there are somewhere between 15 & 25 of them. My
neighbor up the mountain from me reported his deer camera caught
22 of them with the largest looking to be about 600 pounds worth
and nearly waist high.
Let me ask you something straight up: If you were tromping
around in the East Texas Piney Woods, maybe 15-miles from the
nearest police station in an area where cell phone coverage is
spotty if at all, which would you rather have: The
aforementioned 'hunting carbine' and a Glock on your hip, or a
hot button on your cell phone which might or might not dial 9/11
before the first one gores you?
Something to think about - Most people forget that in America we
do have personal choice left - and that's something to be
cherished. Farming is a core American value. Want to
be one? You're welcome to. And the boys here in the
outback of the Republic haven't forgotten the stuff freedom is
made from: Choice.
SUMMARY: Declaration pursuant to
section 319F-3 of the Public Health Service Act (42 U.S.C.
247d-6d) to provide targeted liability protections for
anthrax countermeasures based on a credible risk that the
threat of exposure to Bacillus anthracis and the resulting
disease constitutes a public health emergency.
DATES: This notice and the
attached declaration are effective as of the date of
signature of the declaration.
FOR FURTHER INFORMATION CONTACT:
RADM W.C. Vanderwagen, Assistant Secretary for Preparedness
and Response, Office of the Secretary, Department of Health
and Human Services, 200 Independence Avenue, SW.,
Washington, DC 20201, Telephone (202) 205-2882 (this is not
a toll-free number).
HHS
Secretary's Declaration for Utilization of Public Readiness
and Emergency Preparedness Act for Anthrax Countermeasures
(emphasis added - G)
Whereas significant changes in
the nature, regularity and degree of threats to health posed
by the use of infectious agents as weapons of biological
warfare have generated increased concern for the safety of
the general American population particularly following the
deliberate exposure of citizens in the
[[Page 58240]]
United States to Bacillus
anthracis (B. anthracis) spores in 2001 that demonstrated
the ease of dissemination, infectivity, and mortality;
Whereas the Secretary of Homeland Security has determined
that B. anthracis and multi-drug-resistant B. anthracis
present a material threat against the United States
population, sufficient to affect national security; Whereas
there are covered countermeasures to treat, identify, or
prevent adverse health consequences or death from exposure
to B. anthracis; Whereas such countermeasures, including
vaccines, antimicrobials/ antibiotics, and antitoxins for
pre-exposure and post-exposure prevention and treatment,
diagnostics to identify such exposure, and additional
countermeasures for treatment of adverse events arising from
use of these countermeasures exist or may be the subject of
research and/or development; Whereas such countermeasures
may be used and administered in accordance with Federal
contracts, cooperative agreements, grants, interagency
agreements, and memoranda of understanding, and may also be
used and administered at the Regional, State, and local
level in accordance with the public health and medical
response of the Authority Having Jurisdiction; Whereas, the
possibility of governmental program planners obtaining
stockpiles from private sector entities except through
voluntary means such as commercial sale, donation, or
deployment would undermine national preparedness efforts and
should be discouraged as provided for in section
319F-3(b)(2)(E) of the Public Health Service Act (42 U.S.C.
247d-6d(b)) (``the Act''); Whereas, immunity under section
319F-3(a) of the Act should be available to governmental
program planners for distributions of Covered
Countermeasures obtained voluntarily, such as by (1)
Donation; (2) commercial sale; (3) deployment of Covered
Countermeasures from Federal stockpiles; or (4) deployment
of donated, purchased, or otherwise voluntarily obtained
Covered Countermeasures from State, local, or private
stockpiles; Whereas, the extent of immunity under section
319F-3(a) of the Act afforded to a governmental program
planner that obtains covered countermeasures except through
voluntary means is not intended to affect the extent of
immunity afforded other covered persons with respect to such
covered countermeasures. Whereas, in accordance with section
319F-3(b)(6) of the Act, I have considered the desirability
of encouraging the design, development, clinical testing or
investigation, manufacturing, labeling, distribution,
formulation, packaging, marketing, promotion, sale,
purchase, donation, dispensing, prescribing, administration,
licensing, and use of such countermeasures with respect to
the category of disease and population described in sections
II and IV below, and have found it desirable to encourage
such activities for the covered countermeasures; and
Whereas, to encourage the design, development, clinical
testing or investigation, manufacturing and product
formulation, labeling, distribution, packaging, marketing,
promotion, sale, purchase, donation, dispensing,
prescribing, administration, licensing, and use of medical
countermeasures with respect to the category of disease and
population described in sections II and IV below, it is
advisable, in accordance with section 319F-3(a) and (b) of
the Act, to provide immunity from liability for covered
persons, as that term is defined at section 319F-3(i)(2) of
the Act, and to include as such covered persons such other
qualified persons as I have identified in section VI of this
declaration; Therefore, pursuant to section 319F-3(b) of the
Act, I have
determined there is a credible risk that the threat of
exposure of B. anthracis and the resulting disease
constitutes a public health emergency.
We're not sure what to make of this, but the timing is odd, near
as we we can figure...
When's this a "Crash?"
I'm not sure how far down the Dow has to go in what period of
time to be considered a 'crash'. Is it the 4,000 point/30%
level? Is it a thousand point volatility in two trading
days? hardly seems to be a point to asking except to note
that as the Dow's short-term rally seems to be toast for the
moment, the Time Monks have sent ups this update to their
subscribers which we've been given exclusive permission to
post:"
Salve omnes,
Sorry this email is so late. It
was a trying night with very few hours of sleep. And since
then waaaay too many phone calls...
well, Igor informs me that we
shifted over into release language sometime around 6:15 am
UTC this morning.
We have 'pegged' several
circumstances which were ongoing at the time of the shift.
These are not necessarily proximate causes, but they do
provide the flavor of the moment, and may be guides for the
continuing release language that will wash over all of us
these next few month.
Russia Buys Iceland 1) the major
banks in Iceland had failed. The Icelandic government had
rather foolishly, but out of necessity, guarantee *ALL* bank
deposits. This had developed prior to this morning. What
occurred this morning was the announcement that the banks in
question had deposits that ran several times the Icelandic
GDP. 1.a) Subsequently, *after* being informed that the EU
will not/cannot help them, the Icelandic gov't has turned to
Russia for assistance. Russia has agreed to provide the
Icelandic gov't with necessary funds of sufficient amount to
help them out 'for a few days'. The language around the
Icelandic currency failure went from 'worry' into
expressions of 'dire' and 'calamitous' very rapidly early
this morning.
EU Splinters 2) a meeting in
France this morning of the EU official 'finance ministers'
was a dud. It was such a dud as to produce a sudden,
precipitous change in language around the whole of the EU as
a context within our modelspace. This single meeting may be
the actual pivotal point for the EU as an organization of
nation states. Basically what happened is that the EU
politicians in the meeting agreed to take actions which are
/were meaningless, such as a 'deposit guarantee' that is now
raised, but still is far less than any of the member
countries individual deposit guarantees. Thus effectively
taking no action at all. Further it is rumored that the
attendees of the meeting expressed agreement with the idea
of *not* coordinating rate cuts with the Federal Reserve
Bank of the USofA. This likely will be seen in the future as
*the* moment that the EU began to only crumble back into
Europe. (rather than the spectactular Irish vote to kick the
EU elite in the crotch). BBC reportedly saying that the "EU
is in the shitter...can someone please flush". Other reports
have the attendees of the meeting actually running with
their aides in tow to avoid having to face any press.
RBS Clearinghouse 'failing' 3)
The Royal Bank of Scotland reportedly, this morning, begun
seeking a 'recapitalization' so that they may continue their
clearinghouse functions. The story coming out via rumors is
that RBS is/has run into liquidity issues regarding their
ability to handle transactions from other banks. This is
also, according to rumor, affecting the currency trades
globally. There is now some small substantiation that
several of the governmental agencies approached have 'kicked
the problem upstairs' as being beyond their ability to
accept. The language within the articles and rumors of the
RBS capitalization issues is decidedly in the release
category.
France to guarantee deposits for
its citizens/banks 4) yet another country within the EU
collective has had to declare is own intention to guarantee
is own banking struture and its citizens deposits separate
from the EU. This is *potentially* another Iceland problem
as the total insured deposits are rumored to be several
times the GDP of France. Yet another nail in the EU coffin.
5) LIBOR rates are still
screwed, and banks are still failing, globally, and pretty
much any and all banks which got into the SIVs, CDOs or
other 'specialty vehicles'. Note such headlines... and the
timing...
http://www.marketoracle.co.uk/Article6666.html
6) various military components
are also expressing themselves. This includes Iran and
airplanes as well as Israeli TeeVee and their open
discussion of the 'attack on Iran' being 'vetoed' by TPTB
due to fears of huge losses of American soldiers and
mercenaries in Iraq should Iran retaliate.
7)...other economic details
piling up....
....so where from here.
Firstly there were many emails
from people who, in their minds, heard 9/11 and disregarded
what we are saying about the emotional tones. They were of
the opiniion that 9/11 meant some form of attack, probably
nuke-lar, and they were disappointed?!...
What we maintain, is that from
this point forward, the release language grows, daily, and
at intensity levels which are greater than 9/11. We are
already seeing this. Go read some of the icelandic media,
and the release language is clearly there to be seen. There
are several millions of people globally already affected by
the crumbling of the icelandic banking system/currency, and
that will grow as the currency disease spreads about the
planet over these next weeks and months.
We have shifted into release
language. It is dominant now (marginally) and as the days
progress, and bank after bank, country after country begin
to topple as the currency dies beneath their power
structure, the expressions of the release language will
grow. By the time that we (the planet) reaches February
19th, we will all be totally sick of the release form of
language.
Oh, and given our track record
of being a few days early, it would not surprise us to find
that this is another situation as in Pakistan and the
capitulation of Mussaref where in the 'negociations' were
done on the day we had chosen, but the announcement and the
implementation came the following day.
Our best guess as to scenario
goes to a continuing, inexorable, grinding down of the
global economy as a result of the dying of the usofa dollar.
We expect that each day brings more release language, and
more behavior alteration which begats even more release
langauge as it all piles on...day after day after day for
months. With a few exciting release gasps thrown in just as
seasoning on the mix.
Oh, and by the way, the military
component is now rising as the 'rumors' of a 'pending
biologic weapon/disease attack' are appearing. AND there are
some levels of confirmation that the officialdom of the US
is already responding to the 'information'. Hmmm.
So hopefully we can get a few
minutes away from the phones here to examine the data
streams. We do note that we have had a large, and continuing
increase in data since about 11pm last night.
Part Five will bring in the
first of the new data sets.
Vale, clif and a very tired igor.
"
Depending on how the rest of the week goes, this could either
turn into "crash week" or the week the "Euro busted" or any
number of other economic events.
"The
Federal Reserve Board on Tuesday
announced the creation of the
Commercial Paper Funding Facility (CPFF),
a facility that will complement the
Federal Reserve's existing credit
facilities to help provide liquidity
to term funding markets. The CPFF
will provide a liquidity backstop to
U.S. issuers of commercial paper
through a special purpose vehicle (SPV)
that will purchase three-month
unsecured and asset-backed
commercial paper directly from
eligible issuers. The Federal
Reserve will provide financing to
the SPV under the CPFF and will be
secured by all of the assets of the
SPV and, in the case of commercial
paper that is not asset-backed
commercial paper, by the retention
of up-front fees paid by the issuers
or by other forms of security
acceptable to the Federal Reserve in
consultation with market
participants. The Treasury believes
this facility is necessary to
prevent substantial disruptions to
the financial markets and the
economy and will make a special
deposit at the Federal Reserve Bank
of New York in support of this
facility.
The
commercial paper market has been
under considerable strain in recent
weeks as money market mutual funds
and other investors, themselves
often facing liquidity pressures,
have become increasingly reluctant
to purchase commercial paper,
especially at longer-dated
maturities. As a result, the volume
of outstanding commercial paper has
shrunk, interest rates on
longer-term commercial paper have
increased significantly, and an
increasingly high percentage of
outstanding paper must now be
refinanced each day. A large share
of outstanding commercial paper is
issued or sponsored by financial
intermediaries, and their
difficulties placing commercial
paper have made it more difficult
for those intermediaries to play
their vital role in meeting the
credit needs of businesses and
households.
By
eliminating much of the risk that
eligible issuers will not be able to
repay investors by rolling over
their maturing commercial paper
obligations, this facility should
encourage investors to once again
engage in term lending in the
commercial paper market. Added
investor demand should lower
commercial paper rates from their
current elevated levels and foster
issuance of longer-term commercial
paper. An improved commercial paper
market will enhance the ability of
financial intermediaries to
accommodate the credit needs of
businesses and households.
And just before that:
One way the present linguistic expectation set could be read is
that there's a coordinated release of money coming from
the various central banks in response to the global banking
crisis, as outlined in a Federal Reserve press release out this
morning at 08:15 AM...(which BTW is fairly close to our 'ideal'
07:10 UTC timeframe which we've been talking about for more than
a year...)
--- text of Federal Reserve press release follows ---
Central banks recently
announced coordinated actions to expand
the provision of U.S. dollar liquidity.
Today, the central banks are announcing
schedules for term and forward auctions
of U.S. dollar liquidity conducted
during the fourth quarter of this year.
These schedules include dates of any
28-day and 84-day term auctions and two
preliminary dates for any forward
auctions of U.S. dollar liquidity over
the year-end. Scheduling of the forward
auctions is still tentative and may be
adjusted in response to financial market
conditions.
Federal Reserve
Actions
As previously announced, the Federal
Reserve will conduct an auction of
28-day credit through its Term Auction
Facility (TAF) in October and another in
November. A third auction of 28-day
credit is now scheduled for
December. These auction dates are
October 20, November 17, and December
15, and $150 billion will be offered in
each auction.
As previously announced,
the Federal Reserve will also conduct
two auctions of three-month credit
through the TAF in October
and November. Two more auctions
of three-month funding are now scheduled
for December. These auction dates are
October 6, November 3, December 1, and
December 29, and $150 billion will be
offered in each auction.
Two forward TAF auctions,
designed to reassure market participants
that term funding will be available over
year-end, are now tentatively scheduled
for November 10 and
November 24. Settlement would occur on
December 22 and December 23,
respectively, and the funding would be
over corresponding terms of 17 days and
13 days, to bridge the turn of the
year. Each forward auction will offer
funding of $150 billion.
Schedule for
28-day and 84-day TAF Auctions
Fourth Quarter 2008
Information on
Related Actions Being Taken by Other
Central Banks
Information on the actions that will be
taken by other central banks is
available at the following websites:
Is this "IT"? I mean headlines like
http://biz.yahoo.com/ap/081007/financial_meltdown.html
" Fed to buy massive amounts of short-term debts" does get to
the idea of bailing out Main Street, but I don't think so... I'm
still...
Waiting for...Whatever Else...
Just because the Fed is 'releasing' in a coordinated manner and
it's October 7th doesn't mean we won't watch what else pops
out of the news over the next couple of days that will somehow
'change our lives forever' just as the events of 9/11 did -
another tipping point before-the-fact
that we caught in
mid 2001, well before 9/11.
Curiously, the predictive linguistics have only started to make
their turn toward 'release' language, although notice that on
Monday the story headlined "Knock
Out: CNBC confirms Lehman CEO punched at gym" came out.
That's the kind of stuff (at a very low level/small scale) that
characterizes an emotional release period ('striking out').
However, linguistically, it builds, so I will just sit here for
the next 24-48 and drink coffee and keep an eye on the markets.
The US market seems poised to complete a bounced, after being
down briefly 800 points in the Monday trading session. I
expect regardless of the precision of our timing, the question
of whether
a $1-trillion finger in the dike stops the water.
As events continue to unfold, despite the relative calm of Asia
overnight, the "British
banks lead Europe markets lower" and there's speculation as
to whether the Eurodollar will be able to survive what is
mounting pressures as evidenced by the failure of Iceland's
currency, now going 'Zimbabwe - a reference to hyperinflation in
Robert Mugabe's country - and the declaration of 100% government
backing of private bank deposits in Germany and Greece announced
over the past few days.
The intervention of banks with 100% guarantees is worth dwelling
on for a moment, as governments don't usually do much (other
than raise taxes) unless there is something seriously wrong.
Curiously, the words which are being used in extreme moderation
and caution the past week or two seem to be "bank run" although
you can find it in a few places. Obviously, the problems
in Greece and Germany which required the government backing of
personal accounts was indeed a direct reaction to the threat of
runs.
I expect the market (based on the futures reading in the wee
hours of morning darkness here) to open with a slight positive
bias. Rickety or not, the small trading account I keep to
test my belief in the output from the time machine has been
doing just fine. In to S&P 500 put option SXBPV at $670
per contract on September 18th and out in yesterday's jitters at
$2,100. Not that I offer financial advice for anyone else,
except my self, however.
Still, it will be tempting on any early morning rally today (a
carry through from yesterday's action is possible) to 'load the
boat' with another pile of short term options to the downside,
(my personal entry point would be about 10,352 by the look of it
but only for my personal account - this is NOT advice!)
realizing full well that there's a chance that the markets won't
be liquid enough to actual exit the positions and take money out
of the system later in the year...at least linguistically that's
how it reads.
In a way, my dinking around with options is a distraction,
although I suppose that a 3-times return in a couple of weeks is
better than most folks do in such markets. I lack the
essential purity of heart that chief time monk Cliff has
instilled in Igor. But then again, I'm only doing data
interpretation for me, not the
www.halfpasthuyman.com
clients.
---
Looking ahead, the one number that comes out today that will
point the direction ahead will be the Consumer Debt number this
afternoon from the so-called Federal Reserve. [They used
to be more honestly displayed on the net as
www.federalreserve.org,
BTW].
Although they call the reported number the "Consumer Credit",
what they really mean is 'credit' as in 'creditors coming after
you' if you don't pay what they're really reporting - namely
Consumer Debt. Like the Great Bank Card scam where the
Banksters labeled plastic indenture cards "credit cards" rather
than "debt cards", the term 'debit card' was used, far as I can
tell, to spin into people's heads that credit is better than
debt at some preconscious level. Don't get me started on
this one. I'll just let it go by asking where the hell was
the Federal Trade Commission with 'truth in advertising'
disclosures when people were 'given' 'credit'? More like
'sold' 'debt'...
One other thing to keep an eye on this morning: The
headline "UK
banks in gov't funding talks as crisis grips" will be
interesting because it goes to the idea of a series of global
competitive currency devaluations (that's what happen when
governments just print up more paper). It could be why
gold is showing some strength today and why oil, falling
recently, as rebounded a bit. More paper chasing the same
goods and services creates the illusion of higher prices.
But, as I'm so fond of pointing out, inflation is almost never
Galbraith's 'general level of prices going up' - it's usually
more correctly stated as 'the amount of money chasing things
increasing', or stated another way, money's purchasing power
being watered down.
You can make a lot of personal economic education progress by
reading a bit about purchasing power parity (the value of work
and things with the artificial currency exchange rates backed
out)
either on the Economist's web site or over
here at Wikipedia. Once you 'get' that currency
trading is the specific mechanism that allows continued
corporate exploitation between people, much of how the world
operates will become starkly apparent.
---
If you're looking for something more optimistic about the
economy than my view that a massive lifestyle erosion for Middle
America is being orchestrated, you could always go read how a "Global
recession can be avoid, says former IMF chief". I just
wouldn't put a lot of money in the stock market unless you know
precisely what you're doing and can afford to lose it -
Jim Cramer's got this one spot on.
---
To my way of looking, the fuse has been lit on a major
recession, shading toward - or possibly well into - Depression.
What's going on right now is the republicorps have given a
pork-laced bailout to the banksters, but the real name of the
game is postponing any economic 'Day of Reckoning' until after
the election. To the degree that it arrives early, all the
Palin winking at the teevee isn't going to convince people in
America's tent cities that the tax/war/and oil party is worth
yielding to again.
You can see the evidence of how the Bush agenda has been adapted
to purposes never envisioned by the Framers. Either in the
'free money for banksters', the collapsing real estate markets,
or the bailing out of foreign banks that will come part and
parcel of the bailout out. Already the sings are appearing
in collapsing auto sales, or as reported this morning, a major
drop in personal entertainment: "Economic
crisis hits new York dinging out: Zagat."
This is what an economic snowball looks like.
---
A strong, uniting female figure may be emergent about now
in modelspace - another expectation out of modelspace - Overseas
sites are giving more coverage than the US MainStreamMedia (MSM)
to the latest from Naomi Wolfe, such as this off a German news
site:
Dear World, Please Confront America --- Naomi Wolf, the
author, most recently, of The End of America: Letter of
Warning to a Young Patriot and the forthcoming Give me
Liberty: How to Become an American Revolutionary, is
co-founder of the American Freedom Campaign, a US democracy
movement.
As Cliff mentioned in our appearance on the Jeff Rense show last
night,
Wolfe's videos on YouTube could be about to go viral in ways
that we expect will set the standard for 'viral videos' going
forward.
My working hypothesis is that competitive bank cuts will cause a
new round of economic dislocations so we shouldn't have too long
to wait for them to become apparent.
(There are other stories which demand coverage, but this is
being posted now, so check back as the day wears on and the
coffee kicks in - I was up till midnight last night and didn't
get a nap prior to the radio show last night because of a line
of thunderstorms that went through our part of East Texas and
resulted in the Skywarn ham
net being activated...and
a report of a tornado within a couple of miles of our home...)
--- snip and save section ---
Coping:
Keeping Values Straight
A reader note about last week's Peoplenomics report is worth
sharing:
"In your latest Peoplenomics,
you write:
"No, you can't eat dollars. No,
you can't eat gold. Or silver. What you eat is food and the
best way I can think of to lower individual reliance on the
financial system is to ask "Can I get to what I want without
money? If not, what's the least expensive way to do it?""
THANK YOU! Your scenario of
where to invest $100 in order to be able to eat a year out
has considerable merit. I've got friends who constantly
scream "BUY GOLD! BUY SILVER!" When I reply that you can't
eat gold and silver, and only a fool trades their foodstocks
for pieces of shiny metal, I get called an idiot and worse.
I think I'll be standing for far longer with my canned food
stocks and seed stock than those with no food in the house
and sitting on a bag full of silver coins."
LOL, it never ceases to amaze me how people will complain about
something like the high cost of living and do nothing about it.
You know, you can pick up a 5-gallon can (like the kind drywall
mud comes in) just about anywhere free. And, if you're
clever around it, you can score tomato & brocolli seeds
cheap by shopping around a bit - that and some soil (borrowed
from wherever) and you can make your own broccoli in the winter
and tomatoes in the summer even if all you have is a small deck
with a bit of sun on it in an apartment or condo.
As simple as this may sound (not to mention obvious, huh?) most
people would rather sit around, watch reruns for the umpteenth
time on TV and complain. A key difference between people
who engage Life and those who'd prefer the victim
role, don'tcha think?
Boomers Busted
A letter from another reader worth sharing:
George,
As for all this financial wreck & ruin ... think about the
timing ... what demographic group has just begun to retire?
If you guess 'Baby Boomers' you got it right.
Just as they were all about to enjoy the luscious fruits of
their years of sending money to the angels of Wall Street,
right on cue they're cut off at the knees. Yes, they'll get
every dollar promised (via bailout rescues and fund
replenishments) ... and it will just buy a loaf of bread.
The other Baby Boomer phenomena is the fast-food "biggie
sizing" - it too isn't an accident. What better way to clean
the actuarial tables than to herd the Baby Boomers toward
accelerated diabetes and coronary disease?
This has been a one-two punch: what the cabal can't steal
from them in the markets, they'll clean out via
ultra-expensive medical care tending the health issues
induce by biggie-sizing.
As Gandalf tells Saruman: "There is only one Dark Lord
(TPTB) and he does not share power (tolerate wealthy
B-Boomers)". B-Boomers were never anything but a herd of
profitable cattle ... and now that they're aging and
unproductive - it's time to herd them up the ramp.
Their replacements - high birth-rate Central Americans via
illegal immigration - are the next Baby Boomer generation.
TPTB likely can't wait to start the cycle over again.
Say, you don't suppose that's why the fence along our border
with Mexico isn't built yet, do you? Naw...couldn't be
that, could it?? Could it?
NO! Today (although it was exciting enough, was NOT the
fulfillment of our October 7th 'hot date' linguistics.
That's still ahead and even after the market closed for the day
down under the 10,000 level for the first time in a good long
while.
Talking to my friend Robin Landry, he says looking at the (5
minute) chart, there's some resistance tomorrow at 9,376, then
8,983, and then switching to the 15-minute chart a pause around
8,049, and then the daily has a close range between 8,700 and
6,900 - with a center around 7,700 to 7,400 but that could be
+/- 200 points. All depending on how much the dollar is
holding its own while the Euro is having issues/confidence
issues.
But here's the really exciting part - I mean besides the market
being down about 800 as the pucker factors started building -
and the setting of all those records for the VIX, advance
decline, and so forth:
So relax and enjoy the show. We'll be having popcorn
tonight with Jeff Rense on what promises to be a continuing
build of the last of the emotional building period with a flip
over into release likely right on schedule tomorrow.
Oh goodie - we can hardly wait. A sweep of our bank
leftovers into US bonds pops off on the overnight, we'll sweep
our small online trading account when the put option sold for a
400% return in the past two weeks settles tomorrow so it seems
like we've beat the grim bank reaper so far. May be a
rickety garage-built little time machine, but I'm not about to
start griping....
Special Update
How Far is "Down"?
A couple of conversation this morning and some personal
checklist items completed to report. First, about the
linguistics. A check with Cliff, who has Igor watching
data streams from the spiders, shows that we have not yet
shifted into release language. In other words,
whatever it is that has been popping up on our radar
linguistically for a year plus has not yet occurred, which leads
me to the tentative conclusion that whatever "IT" is hasn't yet
happened.
As to how big IT might need to be? The 777 point decline
(last week, wasn't it?) only got 18% release language going, so
something MUCH bigger is still (linguistically) in the path
immediately ahead. As soon as the language flips to
'release language' we'll post an update, but that might not come
for a couple of days yet. So patience with the
rickety time machine and attendant time monks, please.
---
Second point is that as of 10 AM Monday, Robin Landry, my friend
who's a broker up in Shawnee, Oklahoma, said he's never seen the
advance decline line as bad as it is today - greater than 39 to
1 on the downside - and that's worse than even the Great
Depression as Landry has studied it. Also the volume
was only about 2.2 million to the upside versus 506-million to
the downside when we looked - again, Depression starting kind of
numbers.
But the scariest part of all is that it is not brining out a
high volume spike which would indicate capitulation and might
put in a near term bottom.
So, based on my conversation with Landry, here's what I expect
will happen in the next day or three:
The market will rally back over 10,000 today for a while.
Then a new decline will set in which might be greater than
the initial 550 point drop, which might take us under the
9700 first target that Landry has.
After that, there are some minor Fibonacci numbers on the
way (e.g. 9550, 8900) but the next 'floor' is something like
7,400 on the Dow and with any kind of push/event/panic we
might see that tomorrow and hit a thousand or 2,000 point
down day.
Next, we'd tee up an 'emergency' rate cut because the Fed
might figure that will ju8mp start banks into loaning
again...but...
Then there's the CDS repricing going on and only those
in Heaven know how big a money pit that will generate.
Following that, a decline to the middle of November will be
in the cards, depending on the size of unraveling events,
that could be 7,400 after a short intermediate rally, or it
could be (forbid) Dow under 5,000.
If that sounds kinda gloomy, relax - we're probably wrong.
Now, would you please let the market know we're wrong?
It's acting like we're right so far...
CDS's & The Showdown
at the Linguistic Corral
For more than a year, the linguistics work of
www.halfpasthuman.com
has been pointing with a high degree of specificity to October
7, 2008 at 07:10 UTC as a 'moment' on the timeline when the
whole world will stop its 'tension building language around
present events and will shift into what we call 'release
language'. To explain a bit further, the events we have
seen recently have been predominately the kind that cause us to
suck in breath, and hold it, very much like I'm watching the
U.S. futures markets which show the SPOO's down about 3% while
things in the UK are right on the verge of collapse. If
the language is right, 'you ain't seen nothing yet' and the
balance of this week should be the mother of all economic events
that will be referred to in future textbooks as the
(whatever-they-call-it) of 2008.
Not that we're alone, of course. I happened to be talking
with Arch Crawford [The Crawford Perspectives,
www.astromoney.com
whose September newsletter forecast for a 'crash window' of
October 10th - plus or minus 3 days - which uncomfortably
overlaps with Cliff and Igor's work which recently has been
right in the same kind of range - plus or minus two mostly.
I really, really don't like it when the
nontraditional/unconventional data points start to line up.
While we don't know precisely what to expect, in general
terms it should be 40% military, 20 percent natural disaster and
40% economic in nature. A sequence that would fit and be
relatively peaceful would be a simple collapse of the financial
markets around today's Fannie/Freddie trading deadlines, perhaps
coupled with a major global bank collapse, with looting of its
data to hide various criminal activities, perhaps up to and
including murder, which would lock things up and
necessitate an economic emergency being declared.
On the worst-case side, it could be something like a terrorist
attack, timed to take advantage of the momentary weakness of the
Western/capitalist system. That would explain the model
references to 2, 2.2, or 22 million people impacted.
Hopefully, the impacts won't be oif the cinder-making kind and
will be limited to a cancelled latte run, or something like
that. Nevertheless, the showdown date is here and we are
'in the window' for shift to release language this morning.
Cliff and Igor, the mad scientist and his understudy, besides
baking pies, have been keeping a sharp eye on the data streams
coming in from their spiders which are out and about sampling
the various forums/fora around the internet, because having a
T-1 open this is a remarkable opportunity for them to see
language shift right at the point of commencement. I
imagine that for the next month or two, our conversations will
be laced with heavy dosed of terms like 'change propagation' and
so forth.
As I outlined for Peoplenomics subscribers this weekend, a
sequence of events could be something like this: One major
player finds that they need to raise more cash than expected in
order to avo8id default, as in this particular asset class, it's
very much like the music stopped or someone sounded
the buzzer and now all the players have to find chairs.
The chair prices get set today and settlement comes over the
next couple of days. Bad as that may seem, trust me: It's
way preferable to
a potassium iodide kind of event, if you follow my drift
here. But, you know that's out there as a possible
Black
Swan. (If you haven't read
Nassim Nicholas Taleb's book on topic yet, it will make fine
Greater Depression reading material, since linguistically,
that's just ahead a few months as we do our unique Americanize
version of
the Argentinean collapse of 2000/2002, which your attention
was spun away from by the events of 9/11.)
The sequence that could be occur is if a Big Player has to sell
off so much other 'stuff' in their portfolio that it begins to
crashcade (sic) such that one things leads to another and the
financial system locks up. Things go into a momentary
meltodwn, but then it recovers briefly, or at least
stabilizes, and then most of the know world goes over the
financial edge between October 24th or so on into November 14.
And then two weeks later we get this double earthquake that's in
the work for the December 10-12 part of the timeline. So,
it promises to be interesting.
My tax attorney/CPA, who calls himself a simple 'country
attorney' sent in a much more learned description of the
situation for my review, with permission to share:
Bye Bye Ms. American
Pie Credit Default Swaps, part of that land of legalized
Gambling Market for the Big Boyz have in important day of
destiny today.
Today, Monday Oct 6, 2008 is the day that those swaps
written on Fannie and Freddie bonds are to be marked to a
make believe market determining the value of those swaps.
After today's value setting some will owe money and some
will be owed money, potentially LOTS of money. Final CASH
settlement (or delivery of bonds) on all of those positions
will be in just over a week.
By the end of today some of the more leveraged players in
that end of the Gambling Market for Big Boyz may (will?)
have "blown up" and have left craters in the landscape
called Derivatives.
Many of those who may (will?) blow up in the initial wave
already know they are going to "blow up" today, the reason
that for the last several days one allegorical song has been
repeatedly been going through my head. ...
"So Bye Bye Ms. American Pie
Drove my chevy to the levy
but the levy was dry
Them good ol boys drinkin whiskey and rye
Singin "This'll be the day that I die" Singin "This'll
be the day that I die"....
First how big is the Credit Default Swap market, a market
where people gamble on whether bonds will default or not
default?
It is a market that has grown very quickly with current
Notional Values estimated to be about $54 Trillion.
Of course that is not the amount really at risk, from the
outside that is hard to determine, but an estimate of $2 to
$5 Trillion may be in the ballpark (25:1 to 10:1 leverage).
One important thing to keep in mind about Credit Default
Swaps that few outside Wall Street understand ... no one who
bought or sold one ever needed to actually own the bond or
want to own the bond that the Swaps were being written
against.
Think of it like a side bet by everyday citizens, say Jack
and Mark, on a football game. They use the football game as
an event to bet against but neither one plays for the teams,
owns them etc..
Because these are side bets the value of the Credit Default
Swaps in the system can EXCEED the total debt that they are
written in reference to!! (although in many cases one of the
parties DID own the underlying security and was trying to
protect their investment).
In the case of today's price setting of the value of the
Fannie and Freddie Swaps how much CASH money is going to be
changing hands over the next week or so? From the news
reports there are between $400 to $600 Billion (net) of
Credit Default Swaps outstanding on these two entities,
probably towards the upper end of that range (I am going to
use the higher figure as I talk about these below).
If the bonds end up trading overall at 90% of their "bet"
value that would mean that $60 Billion in CASH would have to
be delivered to the those who bet the value of the bonds
would decline ... PRONTO!!
If the amount is less, say 70%, that amount owed would
skyrocket to $180 Billion in CASH.
Some of those guys on the "levy ... drinking whiskey and
rye" today, actually probably sitting in a private club in
London or New York drinking top shelf stuff, KNOW they are
about to be "blown up" today which of course is why they are
out drinking.
When they do officially blow up at the end of today and can
not fulfill their obligations those losses that they can not
pay off are then going to flow to someone else who may not
know that they have some swaps that are "...8 miles high and
falling fast..." and about to fall right into their lap as
they explode.
Voila, what an unwelcome surprise from out of the blue!!
If an entity that owes payment on one of these Credit
Default Swap contracts "blows up" and can not pay off their
obligations then the losses are going to go in one of two
directions. (first a little detour: many of those now
holding either the obligation to pay or the right to receive
payment were not the original swap parties. The current
obligor or obligee may have bought that swap contract second
hand from someone else. From the limited information
available to the public it appears that in fact there has
been a very active market in reselling these contracts)
If the an entity that "owes" bought that "Owes" swap from
someone and it was "With Recourse" then those losses could
flow back through the chain of ownership of previous owners
of that "Owing" swap and the last previous entity that
previously owned it now owes the amounts that final obligor
owed but could not pay. It is my understanding that this may
NOT be the case with most swap contracts.
On the other hand if an "Owes" swap contract that was sold
by it's previous owner such that there was "No Recourse"
then the previous owner is in the clear. Now however the
person who expects to be paid is NOT going to get the money
that they thought they were going to get!! (same result if
the "owing" party was the original party on the "Owe" side
of the swap)
One thing that is certain, someone WILL take it on the chin
if a Swap Obligor can not pay on their swap obligation once
final settlement occurs during the next week or so, possibly
creating an unanticipated shortfall for the entity who
either has to now pay or the entity who was expecting to be
paid.
Hopefully those who can not fulfill their payment
obligations will be few and the dollar amounts, if they do
occur, will be small.
Also, one can hope that if parties do go broke today as a
result of the setting of value of these Fannie/Freddie Swaps
and thus send some of their their losses to someone else it
doesn't start a cascade of failures through an entire group
of undercapitalized players. (It is difficult from the
outside to get a handle on who the parties are who trade/own
or owe/are owed money in the Swap market. From the little
bit of information available it appears that for this
particular Swap market about 1/3 of the trades are by Hedge
Funds, who as a group may well be the least capitalized
players in this particular game).
The risk for the markets is not just that the party who
"owes" may not have enough assets to pay off what they owe
but also the fact that those needing to pay out CASH money
over the next week may need to be selling OTHER assets in
order to raise the money needed to fulfill their CASH payout
obligations.
One of the big risks for today's Credit Swap Default value
setting is that it can lead to a wave of selling all sorts
of assets by the Big Boyz so that they can both raise cash
to meet their obligations AND to keep their portfolio
positions and risks balanced. (A lack of balance in a
portfolio raises risks so the Big Boyz players are always
buying and selling as things move up and down so that they
can remain within their risk parameters. Sometimes trying to
maintain steady risk parameter by the big players means that
selling begets selling, the most notable example of which
was the internal dynamics of the 1987 crash when to control
risk the big players had to sell into a declining market
which of course pushed the market down even further faster.)
The questions that those of us on the outside can only ask,
but probably will not know the answer to until after the
fact are: How much risk exists for the insolvency of some of
Big Boyz as they have the amounts as to what they owe set to
an amount greater than their assets?
How much more asset selling will need to be done to cover
the cash requirements for the CASH payments that will need
to be made over the next several days once the values are
set today? (one must assume that the ones who are going to
owe money have been liquidating assets in anticipation of
their payment day so this may actually be a relative
non-issue)
How much portfolio rebalancing and risk rebalancing is going
to be needed to be done by the Big Boyz over he next several
days in order to rebalance their positions as these
Fannie/Freddie Swaps are taken out of their portfolios and
how will that affect the markets?
How much will the banking system itself be affected by the
large money transfers that are going to need to be made. Are
some banks at risk due to loans to Hedge Funds, or through
third parties then to Hedge Funds, that suddenly do a belly
flop? (banks that may be affected are not just limited to US
banks but may include other banks around the world,
particularly European banks). [Linguistically, we'd be
watching the World Bank which has been a huge conduit for US
Treasury debt paper and the BIS which is a clearinghouse as
leading indicators of global systemic stability. - G]
How much were banks themselves playing in these markets?
Darnn, I am hearing that song again: ...
"So Bye Bye Ms. American Pie
Drove my Chevy to the levy but the levy was dry
Them good ol boys drinkin whiskey and rye
Singin "This'll be the day that I die"
Singin "This'll be the day that I die"....
Darnn, Lehman's value setting is coming up on Oct 10 and
Washington Mutual's on Oct 23.
This all could just be a Yawner ... or it could end up being
the ride of everyone's life.
Paulson and Bernanke though sure seemed to be in a major
league panic last week wanting to get LOTS of money approved
for unstated reasons before even a couple of more days
elapsed. Do they know something that those of us out in
fly-over country can only speculate about?
---
A Couple of Notes
First, a huge public "Thank you!" to both my tax attorney and
even more to "The Bond Dude" who have invested many patient
hours in trying to help me get this stuff reasonably close to
right.
Secondly, "The Bond Due" isn't too worried about the default
with recourse issue because, as he explains it, if you have a
good profit on a swap, and you want to lock in the profits, the
normal course of business is to go through a process which the
bond gnomes refer to as 'novation'.
Say you've got 3-years left on a contract: You find
someone who's willing to pay you for the remaining three years
of that revenue stream, so you contact your counter party and
get them to agree to the change in the new counter party from
you to the next greater fool. You're out, the obligation
has been novated (made anew) and you're in the clear.
Repeat at necessary to lock in profits and lay off paper.
Of course, if you can't find someone else to buy onto the full
obligation, it might be possible that there are some assignments
which could come back to haunt, but that's the kind of thing
that ought to come to light later today.
Historically there hadn't been a choice of delivering the bond
or cash, but since either Dana Corp or Delco a few years back.
cash can be be delivered so the broker dealers, hedge fund, and
other payers, are going through looking for the cheaper/most
heavily discounted paper to deliver. The whole
concept is 'cheapest to deliver' so that's what's been going on
recently. Today is almost analogous to commodity contract
delivery day.
Think of it this way, advises "The Bond Dude": Suppose you
had written insurance on a $100,000 Mercedes, but you had the
choice of delivering any Mercedes or cash. What's
going to happen to the price of even Junkers? That's sort
of how the process works, which is why even some really cheap
bonds could be bid up (like a '40' to a '60' depending on how
things go.
But, if you see the stock market collapsing in today's trading
(and over the balance of this week up through Friday) then you
might be able to assume that it might possibly be hedge funds
trying to raise cash by selling off other asset classes.
And, although it only looks like the Dow is down 250-ish as I
write, nevertheless, you may want to keep the Dow circuit
breaker press release at the ready today (and for the rest of
this week) and things unfold/unwind...
NEW YORK , September 30, 2008 --
The New York Stock Exchange will implement new
circuit-breaker collar trigger levels for fourth-quarter
2008 effective Wednesday, October 1, 2008. Circuit-breaker
points represent the thresholds at which trading is halted
marketwide for single-day declines in the Dow Jones
Industrial Average (DJIA). Circuit-breaker levels are set
quarterly as 10, 20 and 30-percent of the DJIA average
closing values of the previous month, rounded to the nearest
50 points.
In fourth-quarter 2008, the 10,
20 and 30-percent decline levels, respectively, in the DJIA
will be as follows:
Level 1 Halt A 1,100-point
drop in the DJIA before 2 p.m. will halt trading for
one hour; for 30 minutes if between 2 p.m. and 2:30 p.m.;
and have no effect if at 2:30 p.m. or later unless there is
a level 2 halt.
Level 2 Halt A 2,200-point
drop in the DJIA before 1:00 p.m. will halt trading
for two hours; for one hour if between 1:00 p.m. and 2:00
p.m.; and for the remainder of the day if at 2:00 p.m. or
later.
Level 3 Halt A 3,350-point
drop will halt trading for the remainder of the day
regardless of when the decline occurs.
Background:
Circuit-breakers are calculated quarterly. The percentage
levels were first implemented in April 1998 and are adjusted
on the first trading day of each quarter. In 2008, those
dates are Jan. 2, April 1, July 1 and Oct. 1.
--- end section to save and print ---
Think a picture tells a thousand words worth? Try this one
then...
Why do I keep calling it the Second/Greater Depression that's
unfolding? As I explained to Peoplenomics
subscribers this weekend:
"...when you go to the
Minneapolis Federal Reserve Bank's online inflation
calculator, you can put in the all time Dow high in 2000 and
then using the Fed's own inflation figures to ascertain that
the inflation adjusted Dow just to have kept up on a
purchasing power basis with 2000's high must be at 14,761.
Oh, it gets even better! Let's
go ahead and put a discount figure onto Friday's Dow to take
out the impacts of inflation. We'll simple divide the
inflation adjusted Dow necessary to have held purchasing
power (14,760) by the original Dow 2000 high (11,790) and
discover that inflation in the period is 25.2%!
Now, let's take the Friday close
of the Dow from this week (that 10,325 close) and multiply
it times 0.75 to get to ballpark the purchasing power
equivalent. You aren't gong to like the answer, but here it
is anyway: The purchasing power equivalent of the Dow is
about 7,743..."
But, Madison Avenue won't sell all them brokerage ads to Wall
Street to peddle day trading accounts to Main Street with that
kind of clarity - so the MainStreamMedia buries the inconvenient
truth that gains are illusory unless they translate to real
increases in purchasing power. But, that probably
has been beating you soundly about the head and wallet if you've
been shopping lately...
Oh, and if you see precious metals going up, that might be a
leading edge of people seeking something 'other-than-paper' to
store purchasing power - something I've been reminding you of
for how long?
From an economic standpoint, most everything else in today's
news is 'also rans' and 'distractions'.
If you're looking for a completely left field explanation, ask
yourself "Why would the Bombay Stock Exchange have a note about
"Change in market
timings due to Sun Outage". Maybe the problem is
bigger than I thought, LOL.
Should I cover more? Maybe. But the odds are good
that the next 48-hours could decide how much of the rest of our
lives plays out so thanks, we'll just keep our eye on the Big
Stuff. I'll leave
the 75-year old woman survives five days in a ditch story
for the teevee folks. We got other fish to fry.
--- snip and save section ---
Coping: First
Things First
1. Because of the potential for a major shift from
emotionally building language into release language, make sure
you have printed off your current bank and trading holdings so
you have a physical copy of things.
2. Do both magnetic (hard drive) and optical (cd/dvd)
backups of key data.
3. Don't panic.
Bushvilles and Shrubburbs Department
Although my article
Bush II as
Hoover II was way early - almost 8-years early in fact, we
can see the parallels to Hoover firming as readers are sending
in emails like this one:
SE GAS CRUNCH: The gas situation
here in charlotte has gotten much better since last week.
Most stations have gas, though the premium grades are still
missing. I was at Costco last night, and their tanks were
dry. Its funny how little people complain about price of gas
as long as they can get it. Chalk one up for TPTB.
Thanks for all you do. I will
you and yours the best of luck in these next few days. May
you live in interesting times ;-)
Yeah, tent cities are something that are real, but are being
largely swept under the rug by the silly politics of the
oil/war/corpgov/anti-human parties. But, since tent cities
are real and since a lot of people do live in them,
here's a particularly useful note from another reader:
"Hi George,
Thanks for all the good work
this weekend. I just read the bot report and reread last
week's PN. Time to sort out and organize since it's raining
here.
I did want to point out that
east of Dallas, it's probably OK to use blue tarps, but here
in the high plains of New Mexico, blue tarps have about a
one month lifespan in the direct sun. Silver tarps are a tad
more expensive but seem to hold up under UV much better.
Here at 6500' elevation, fresh wood can darken from the sun
in only one day! I always use silver.
I'm looking forward to today's
report, and then it's time to watch the Asian numbers. I
really hope it's not as bad as we think, but it probably
is."
As always, we're prepared for the
worst but hoping for the best...
(If you're wondering "What's a 'bucket list' George?"
Click
here.
If you can't think of something that really motivates you and
gets you all whipped up about working toward a Big Adventure in
Life - you're missing the whole point of it.
Some ideas of "Incredible Life Goals" are here.
If a dweeb like me can do broadcaster, airline exec, software
designer, college president, marketing whiz, and econ bloviater,
just think what someone like ya'll could do if'n you just get
serious about engaging Life, huh?
Once upon a time, a long while ago, I observed during my quest for
'truth' in economics, that the PowersThatBe, the talking heads on
the teeve, and the other information sources that actively engage in
the programming of humans not to think, had conveniently swept
several trillions of dollars that disappeared in the Internet
Bubble's bursting (since spring 2000) under the rug. Surely,
it wasn't unnoticed by the thousands of people who called brokers
and said "Where is my money?" "Gone, but hang in there as
you're a long term investor!" was about all they heard back.
But, the truth
of the matter is that this chart shows what your account would look
like if you have taken a few thousand dollars and invested equal
amounts in the Dow, the S&P 500, and the NASDAQ Composite in the
waning days of 1999. It's not a very pretty picture, and it
sort of gives away the other side of the story. You know, the
one that no one has an interest in telling, because it's a truth
which shows the amazing coincidence of the timing of 9/11, the
disappearance of naked shorting evidence and all, along with the
impact of The Wars which have managed to keep the economy out of an
earlier depression than the one expected by me by late 2008.
No, it's not a
perfect replay of 1929, but history doesn't repeat exactly,
it only rhymes. So think of this as the rhymes and the crimes
chart:
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·Bulletins are posted as our work schedule permits and
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(
