---

Published Monday through Friday about 8 AM Central Time Except Holidays

 

This site is supported by subscription to Peoplenomics.  For additional content, please subscribe.

 

Politics, Data Mapping, and What Comes Next

Yeah, about the only thing that seems to be holding the stock market above the abyss of a larger degree than the horrific events of a 1930's style Crash continuing would seem to be the political events of next Tuesday.  You see, there's quite an incentive for the PowersThatBe to try and heap more cognitive dissonance on you - a member of the already confused public. 

 

I think it will go something like this:  If Obama wins, the market will decline and some pundit or other will pronounce that the renewal of the market decline will show America has 'no faith' in the Obamanation.  What you'll be expected to overlook  that if Obama wins, the American public will have just shown its confidence in O's ability in voting.  Think of it as scapegoat plan #1.

 

On the other hand, should McCain win, a different kind of scapegoat will be trotted out - the likely scapegoat will be abuses in lending to unqualified folks, contributing to the Housing Bubble Collapse.  Further, it will be held that the same folks that caused the problem can turn around and fix it.  Riiiight...

 

In this latter case, what will NOT be reported is that a) the entire cost of the sub-prime losses so far is less than $85-billion according to my well-placed friends in the fixed income markets, and further, what those 'pundits' (to b e generous) of the tax & oil party who are trying to dredge up the Clinton era Community Reinvestment Act (CRA) as an excuse, don't tell you is that virtually none of the CRA loans were securitized because they were (and are) zealously held onto by originating lenders because the whole purpose of the CRA was to prevent red-lining so banks with a presence in high minority areas hang onto those loans because they're evidence that a bank is not red-lining.

 

As long as the coffee holds out, I might as well mention one more 'great lie" by the tax, war & oil pundits - namely the CRA loans are performing better than sub-primes, LOL.   But, of course, you wouldn't suspect that, not having the names of people managing billions in your Outlook file....

 

OK, so it's a world of lies. What else is new?

 

But, as you can see on the following chart, Hank and Ben will have earned their keep by the TOP (Tax & Oil Party) brass because the market hasn't collapsed, at least yet.  I sure wouldn't put much stock in stocks, so to speak, once we get past next, oh, Wednesday, or so...

 

 

Elaine and I used to live in (Boca Raton) Florida, when I was working for an education management software outfit - and because of that, we voted in Florida back upon a time.  So far this week, the TOP there has called me no less than 5-times to remind me to vote in Florida - a state I haven't set foot in since the early days of January 2003, and more amazingly, I got to cards in the mail this week telling me that to 'save the economy' I should vote to the McPalin ticket. 

---

A number of folks have asked "With the time machine/predictive linguistics" don't you guys already know who's going to win the election, so why not just tell us?"  Well, t'wouldn't be right. So I'll just wink and say that a while back there was all this stuff about election being contested into January (and a flavor of something more controversial than Florida in 2000, but who cares about politics?  Yes, Phillip Berg is reportedly going to the Supreme Court for an emergency stay.  So yes, this could perk right along right into the mess that's been in the linguistics, especially if the decision by the SUPCO comes after Tuesday.

 

On both sides, there's a fair amount of worry / scare-peddling that if the McPalin  ticket wins, rather than JoeBama, that America will somehow slide into a period of social upheaval.  Not only have I received right-wing emails telling me 'If Obama wins, there'll be trouble" but also notes from left-wing supporters.

 

There's also (not unexpectedly around here)  'violence ahead'  media coverage that's using the "R" word.  Example? Sure: "Erica Jong tells Italians Obama loss 'Will Spark the Second American Civil War. Blood will run int he streets'".

 

What's curious, perhaps because I occasionally get a little more insight into the HalfPastHuman Reports ( www.halfpasthuman.com ) which start up with the 0909 ALTA sequence this weekend, is that what I'm seeing is the PowersThatBe are 'preloading' the public preconscious in order that when the real violence shows up in mid 2009, there will be someone to blame. 

 

What the PTB are scared to death of, is that the MainStreamMedia (MSM) won't be able to keep a lid on the real cause of the pending "Summer from Hell" next year, which will much more likely result from continuing/increasing foreclosures and tax increases in order to fund the bailout of the Bankster Class by the increasingly unemployed.

 

It will be headlines like New York "AG Cuomo seeks info on bank bonuses" amidst reports that "Bonus Backlash Brewing" shows up along with headlines that the m "Banking panel chairman says using bailout funds for bonuses against law."

 

Like The Bond Dude is fond of saying "Money doesn't know where it comes from".  And it's my experience that a good accountant can make it come from almost anywhere you want...

 

So is there trouble ahead in America's future?  Yeah - big time.  Will it likely be over the Presidential outcome?  Sure!  Courts need cases, right?  But notice that both sides are scare-mongering and then look behind the scenes aways to see the Hegelian Dialectic at work.  Ask yourself "Who would be trying to orchestrate such divisiveness to cover their tracks?"  FTM - follow the money, or at another level, follow the power/control. 

---

Oh!  That reminds me to pass on the coolest new site I've found in a hell of a long time - you have to click over to "www.theyrule.net" because you can do your own "power maps" of who has what interlocking directorships to what.

"A Brief Explanation They Rule allows you to create maps of the interlocking directories of the top companies in the US in 2004. The data was collected from their websites and SEC filings in early 2004, so it may not be completely accurate - companies merge and disappear and directors shift boards."

Wow!  Just for fun, you can take some key 'establishment' organization (like the Council on Foreign Relations, Yale University, etc...) and display its board of directors, and then map how that BOD has 'interlocking directors' with many of America's biggest corporations.  Find how interlocking directorships let companies 'communicate' at an organic level between boards of directors.

 

No, this is NOT conspiracy theory stuff. Scarier than that:  This is data mining is a serious way.  A sort of 'everyman's version of the social network analytics' that anti-terrorist outfits use to map personal contacts of anyone they feel like...to protect us, of course.  It's the kind of social mapping that could be generated by talking to someone on the phone...give's you a feel for how interactive social maps work, except you don't have access to the kind of drill downs (into phone company records, emails you've sent to who, and so forth) that the alphabet agencies have.  Nevertheless, it's pretty cool on this limited basis to seek how the PTB are 'hooked up' socially.

 

Seems to all be drawn from publicly available data.  And it may have some practical applications.  Say you are graduating from educational institution "Y" and you want to go to work for big pharmaceutical company J, or Bank C, who would be the 'right' person to be working your application who sits on both boards of directors?  Or, is there a person who is an intermediate step?  These are the folks you want talking about you over tennis down at 'the club'.  Got it?  This is the map to the 'one phone call and things happen' people.

 

Takes a few minutes to get used to the interface, but once you do?  Secrets revealed - the personal contact topology of what one could argue is at least the  more or less public layer of the PTB.  Massively fun.

---

Meantime, the "Evidence of a recession piles higher with new data" out Friday.  Denial, is strong as ever and the Tax and Oil Party's recent love affair with socialism  under the guise of 'saving the world from economic collapse' isn't universally decried.  The PTB are winning.  Like band investments shouldn't have penalties.

---

And, just to 'tie the knot' on a topic I told you about some weeks back: Remember the spin and rewriting of history as "bailout" was to be replaced in public thinking by "rescue plan."  When we first looked, the use of "rescue plan' was under 20% in news stories.

 

As of this morning, bailout in the Google news engine brings 118,529 hit, versus rescue plan with 83,321 hits for a total of 201,850.  And that means 'rescue plan' is up to 41.3% in use.    The language shift ex post facto rewrites history just so.  I reckon by the middle of November, or mid December at latest, the majority of written references will be to 'rescue plan' and the perps of the "bailout" scam will have pulled it off.

 

Might want to think about that Tuesday, if you haven't already voted.

---

One other note from 'around the ranch':  My Ron Paul sign was stolen!  At least I didn't see it down on the corner when I came back from a supply run to town this week.  Maybe it now has collector value.  Like the Constitution?

 

Pensions Going Poof Department

Mish's Global Economic Trend Analysis figures we about to se the "Pension Time Bomb Explodes in US and Canada." Think of it as 'retirement shrapnel'; from market implosions.

 

Hot Virus Alert

"Stealthy Trojan Swipes Bank Long-ins, Financial data from Thousands..." says e-Week.

 

Next War'n

Reports are that Syria is massing troops on the Lebanese border.

---

Hey!  Speaking of war and such, you did see the story "U.S. and Soviet spooks studied paranormal powers to find a Cold War advantage."

---

Say, who spent my portion of the peace dividend that was supposed to pop up at the end of the cold war?

---

Right wing has the lead in Israel's "early elections" going on.

 

--- snip and save section ---

 

Coping:  Reading China's Tea Leaves

This email was a nice way to start off the morning...

"Say there Ure, there is yet a third option for those of us Not living in US at this time, but still reading your daily learned ramblings. And that is........we fortunately do not have to change our clocks, something I wish could happen some day in the States. I have been reading your site now for about a year, and as it sounds with many of your other devoted readers, my day doesn't start until I do. Except now I read you between 9 and 10 pm in the evening of the day you are beginning.

Up until August, I had been your Juneau, Alaska reader, now I have relocated to Kunming, Yunnan, China with my daughter, adopted from there 9 years ago. I have had no problems accessing your site even during the Olympics period when extra scrutiny to sites seemed to be taking place. I, like some of your other readers, am happy to report my >$half a mill nest egg has been out of stocks since early summer due to the excellent information you share daily. Thank you Thank you Thank you. I worked with census, BLS and BEA data for AK for close to 30 years and occasionally share insights from your pages with those still producing it back there. You have a refreshing perspective and the day I first found out about your site, it was a huge AHA moment. I knew there were folk who thought the way I did, but you have reassured me they really do exist and are all across our country.

I wonder at times how some of the future events anticipated for Nov thru next summer will affect us in our current location. I feel amazingly safe here, and hope whatever is ahead that being out of the country will not cause us any harm. But having been brought up by strong hard working depression era parents, who THANKFULLY taught us how to think, use our common sense, and not be afraid to get out hands dirty, I rarely feel unable to figure out how or what to do in any circumstance.

Thanks again for your insights, great source links and comments from time monks. Collectively it is a great daily read."

Good to know that there is still access from China.  As to what's ahead there, no doubt there will be some fallout as the recession digs in an America slows its import of goods from there.  however, not sure which way the socail/economic impacts will play out.  There's a case one way that says there will be unemployment as factories being to slow and workers won't have as much to do.  But, on the other, the reduction in foreign demand may contain costs such that people in China could actually leapfrog into a very competitive standard of living.  That's assuming the whole planet isn't glassed over by Middle East 9and near-by) oil wars gone horribly wrong...but that doesn't seem to be in the cards.  Management problem for the Chinese government, for sure.  What are they going to do with container loads of US debt paper?

 

Must Read List

OK, Robert Felix is back on the list after this email about his new book:

"Darwin's theory of evolution was wrong, but not for the reason that you think.

Tunguska was NOT a result of a meteor impact and neither were most of the others that we think were.

The earth is in the process of moving to a magnetic reversal or excursion(short of a complete flip). We are past due for it. (Maybe that's what the Mayans knew and their calendar warns us that is about to happen in 2012)

Robert Felix is no flake.

Read his new book, MAGNETIC REVERSALS and EVOLUTIONARY LEAPS

It is incredible reading."

Order page is http://www.iceagenow.com/Order_Book_Magnetic_Reversals.htm   More book information here.

 

Oh yeah, be sure to put in your name if you're one of the first 500 and want an author autographed copy...

---

Send snip and save items to george@ure.net.  Or, drop me a note so I can give you directions where to have that Brinks truck loaded with money drop it off, LOL.

--- end snip and save section ---

 

Around the Ranch: Tet?

Once again, as I wrap up a Saturday morning report, it's sounding like the Tet Offensive getting underway as local  folks are out tuning up their long arms for the pending opening of deer season.

 

The time change tonight and my starting to work out around the property dressed like a highway worker has me wondering how come someone hasn't invested a strobe helmet for working in dusk hours.  I flashing light, producing some loom onto trees and haze around dusk, would seem to me to be a great safety aid.

 

I still don't have the balls to put up my sign "Incoming fire will be returned" down on the main road.  I doubt the local sheriff's office has the same sense of humor I do, and attorney bills are no laughing matter.  My UAV and rolling tape to get a license plate might be the only answer to the poachers...

 

Pass It Along

If you enjoy the content here on UrbanSurvival (or from the mirror site www.independencejournal.com)  please bookmark it for yourself and share it with others by clicking below:

 

Peoplenomics.com 

Nightmare on Wall Street Part Two:   The "Paradigm Collapse"

With apologies to "Nightmare on Elm Street" author Wes Craven, we take up this weekend the really scary part of "Nightmare on Wall Street Part Two: The Paradigm Shift" written in what I hope will be seen in a somewhat humorous light, unless of course you're reading this week's report in your car parked outside a Starbucks to surf their wifi because you no longer have a home.  In that case, you've already lived through "Nightmare on Wall Street Part One: Revenge of the Gambling Bankers."  If you think back, you'll remember that Part One dealt with the awesome rise of debt-ridden riches, the infinitely inflatable 'service society' and how Part Two began on October 7th, concurrent with Iceland's economy going down, marking the more or less official start of Global Economic Collapse.  Unfortunately, you ain't see nuthin yet because Part Two is just getting underway.  The main plot element, and despite the bribes and prayers of the Fed and Treasury is what?   The disappearance of money...  and you thought Wes Craven was scary?  I figure Craven or Stephen King would make a better Treasury Secretary - at least you'd know what to expect - a scary/bad/OMG ending. 

 

         More For Subscribers         Subscription Information

 

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."

     (Other Payment. Options)

"Live on $10,000" Updated

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.

----

Last week's report is here.    For back issues of this site, click here.  (Goes back to 1997!)

 

---

October 31, 2008

Two Important Phone Calls

I admit, I've had one heck of a busy week so far, nevertheless, I had two phone calls which I consider really key to my thinking about matters economic this week.  And, though the market looks to drop 150'ish at today's open, the real sparks are still a few days off looks like, and I think it's more important to have the 'learning' calls that give you a better 'sense' of things, than to try and pull down any specific trading targets.

 

The first call was from my friend "The Bond Dude".  If you're new to the site, TBD is a real fellow who manages real money for a living; in the billions.  So, when I get a message from him I take it with more seriousness than I take the combined comments of Hank Paulson, Printer Ben (who speaks this afternoon, by the way) and most all Federal econ statistics.  The message on voicemail when something like this:

"George, it's absolutely no mystery what happened to the $122.8-billion that went into AIG.  A large chunk of it was eaten up when they got their ratings downgrade. 
 

Here's the thing:  When AIG had its "AAA" rating, it was assumed, as it is with ,"AAA" rated companies that they had the money to cover their CDS positions.  But, when they were downgraded, they had to put up collateral - simple at that.  No mystery, got it?

 

Second thing is that I've got some people who have been adding up all the losses from the collapse of the Sub-prime paper and you know what?  Added all together, it's only $84-billion.

 

But, when we add up all the other paper that blowing up, the costs are heading for what, $-trillion?  So here's the point:  What we have - and this is important to keep in mind to grasp what's going on over here - this is a two trillion dollar problem hiding behind a problem that was less than $100-=billion, got it?"

Getting the message off the voicemail before cocktail hour, it made a whole lot of sense.  Big guys hiding between the little guys...why who would have thought?

---

The second important call was a chat with Dr. Jack Lessinger, retired U of W Business Prof who's got the best books out there for my money on the economy. 

 

You might be wondering "Why?"

 

For one thing, Lessinger's view is that 'suburbia" and the "consumer society" are both dead.  That sure dovetails with work by Jim Kunstler, who's written about 'right-sized' cities in "The Long Emergency" and elsewhere.  But, more important, Lessinger's new book helps to fill in the gap between conventional period-oriented conventional long wave economics which looks at relatively fixed cycle lengths and more generalized cycles which are based not only on periodicity of things like crops, but also on underlying social cycles. 

 

Right now, if you'd read Lessinger's Schizomania: Split society, perilous economy, 1990-2020 : an economics of the long run , you'd see that we're in a period of economic turbulence as the "Little Kings" era comes to an end.  Ahead, and seeming to fit in the with "R" word (as in revolution), Lessinger senses a real uptick in the green revolution as coming before we get to the 2020 to 2050 period of  'responsible capitalists'.

 

Chatting with him, Lessinger seems, as I am, somewhat disappointed in the current state of economic thought.  A feeling perhaps that we've all gone down Quant Road' (as in 'quantitative economics') only to learn that sans checks and balances, we can now crash the whole world with excessive speculation.  Thanks, quants!  Fine job there! Woo-hoo!

 

I also got a chance to bounce one of my radical "What it will take to really fix economics..." ideas off him; the notion that the planet could easily be saved by enacting what I propose to call "The Machine Tax."  Lessinger's thinking about the idea (I hope) and I'm researching it, but I think it would make a dandy book because it's such a viable concept.

 

Of course, the 'quants' (gnomes of long tail bond analysis and their ilk) will probably show up with 5-gallons of gas to burn be at the stake, because a Machine Tax is such a clean & almost math-free concept.  Who's gonna pay for all that software development down on The Street if things actually could be made more simple?

 

I'll get into it more a week from this weekend for Peoplenomics readers, but if you just twist it around in your head a bit, you'll see that  present tax structures  (as exemplified by 'depreciation of equipment, etc') really create a system which concentrates power in the hands of the few.  If machines were taxed for the general benefit of society, ,we could structure a world where all humans could reap some rewards of high productivity machines, rather than having machine owners reap all the benefits.

 

Yes, the problem gets worse with higher levels of productivity, but the allegedly 'deep thinkers' at the various government institutions doesn't give voice to the obvious in this arena because that's not the side their bread is buttered on.

 

Unlike other schemes, such as a global purchasing power parity (PPP) based system of incomes, this one is relatively easy to implement, is pro-human, and rewards the planet, not some high falutin group of elitists. 

 

In the meantime, and for the public domain, think about the concept:  Tax machines on their output and use the funds to feed people, educate them, and reclaim the planet.  Feels right.  And it's a hell of a lot more important than the day-to-day trivialities of 'noise trading' this market.

 

I'd argue that the recent taxpayer "rebates" in the US and the current rebate-like scheme in Japan ($150/per person worth) and the next US rebate yet-to-come, is simply the start of a 'machine tax' that conventional economists will be blind to for five years (or longer) if they hold to form. 

 

Tonight being Friday and all, I'll just have to pick up a case of Ozeki to celebrate Japan's rebate, How around we all get...um.....hai! 

 

(Arigato gozaimasu)  (rimshot) 

(Roughly: Is this vaudeville or economics? Be serious)

 

Personal Income (Pass the Nitrous Oxide Department)

Speaking of jokes...this from the Bureau of Economic Analysis has be wondering if the Ripley's Believe It or Not" people have taken over the bean counting there:

"Personal income increased $24.5 billion, or 0.2 percent, and disposable personal income (DPI) increased $25.7 billion, or 0.2 percent, in September, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $33.6 billion, or 0.3 percent. In August, personal income increased $44.8 billion, or 0.4 percent, DPI decreased $107.7 billion, or 1.0 percent, and PCE increased $4.5 billion, or less than 0.1 percent, based on revised estimates. Excluding the rebate payments under the Economic Stimulus Act of 2008, DPI increased $30.3 billion, or 0.3 percent in September, and increased $44.0 billion, or 0.4 percent in August.

Real DPI increased 0.1 percent in September, in contrast to a decrease of 1.0 percent in August. Real PCE decreased 0.4 percent, in contrast to an increase of less than 0.1 percent."

Shall we do a little math?  I mean, being Friday and all...  OK, here goes anyway:  Let's pretend that an increase in DPI (disposable personal income is really 0.2% monthly and that it were to continue for a whole year at present rates.  Go with me on this.

 

Compounding this, that's 2.43% per year. 

 

Next, let's flip over to the last (two week old) data on Consumer Prices from the Department of Labor.  They show that prices are going up 4.9% per year. 

 

Bottom line:  DPI is going up 2.43% while prices paid for what-have-you is going up at a 4.9% annual rate.  See why I am voting a straight "No incumbent ticket, with the exception of Representative Jeb Hensarling, who actually voted "No" both times to the bankster bailout).

 

"So George, tell us about savings..."

 

OK, sure.  But this may further tax BEA credibility, because they claim that personal savings are up...

"Personal saving -- DPI less personal outlays -- was $140.3 billion in September, compared with $82.5 billion in August. Personal saving as a percentage of disposable personal income was 1.3 percent in September, compared with 0.8 percent in August. Saving from current income may be near zero or negative when outlays are financed by borrowing (including borrowing financed through credit cards or home equity loans), by selling investments or other assets, or by using savings from previous periods. "

I can barely control my laughter at this one at this one, because compounded, that would suggest the present rate using the two month average of 1.05%, it would infer that we should be saving 12.18% of our incomes per yet.  I'm going to wet myself, I'm laughing so hard...  OK, serious up...LMAO/ ROFL

 

Deny Reality, Defend The Paradigm

Ahem.  (wiping away the tears of laughter) Against this broader view of economics, it was heartening to notice this morning that the NY Post (which has as good a business news operation as the WSJ in my view) wonders "What GDP Gap?  Dow Advances 189".  Flat amazing.

---

Elsewhere, the NY Post correctly notes that the "Treasury Billion$ Pay Banks' Dividends", something I've bemoaned here almost endlessly.  The folks in CONgress have already demonstrated they all need us taxpayers to buy them each a pair of "Miracle Ears" or we need to have a public interest lobby with a fatter checkbook than the bankster lobby.

---

Not that the Post is the only outfit hearing the financial 'edge of the world' out there just ahead.  Jim Willie, who's excellent "Hat Trick Letter' has a piece over on the www.gold-eagle.com site that goes to the idea that the now "Galloping Recession to For More Inflation."  Well, gosh, you think?  Willie's outlook - and a good one I think - is that a "Grand recession will soon be attempted, timed obviously after the election..." 

 

Yup, don't want to 'out' the tax, oil, and war party while they still have a 'ghost' of a chance (this being Halloween and all).

---

Meanwhile, no signs of life over in the Yen carry trade graveyard, despite the latest drop in money rates by Japan. 

---

But not only are things dimming in Asia, but that slowdown  in formerly free-flowing oil money is starting to reverberate around that region as well. Not to be overly harsh abouit it, but I think back to the $5/gallon gas (before we got into the 'almost free gas, it's US election time window) and think "What comes around, goes around, eh?" 

 

I didn't know karma worked on oil, but apparently it does.  And all this time I thought karmens/kalapas were tied to human souls... Oh?  They are?  As in human souls are tied to oil?  Check....  All makes sense now...

 

Defend the Paradigm, II

Meantime, speaking of karma, we note more details as Australia is getting into mandatory net censorship in a big way.  you watch:  It will start with kiddy porn (which could be prosecuted under other, existing laws) and will then spread to censoring anything that doesn't square with down Down Under neoCON 'group think".

 

Texas Quake?

Queue up "I feel the Earth Move under my feet..."

'Morning, George Ok, so I'm sitting here at my computer, about 11:45pm last night (Thurs. Oct. 30) and I hear this rumble for about a second, followed by the whole freakin' house shifting, not much, but plenty enough to know it wasn't squirrels in the attic. All I could think of for an explanation was that perhaps one of the local new Barnett Shale gas rigs that are popping up like bamboo shoots maybe went awry and exploded. I rushed outside to see if any neighbors were emerging with a similar experience. No one. So I thought nothing of it and went back inside. Every five minutes or so I would hear this uber-low frequency rumble, lasting only a second. Turned on the news. Nothing. Turned on the short wave. Nothing. Well, it turns out we had two earthquakes! 2.5 in Grand Prairie and a 3.0 in Irving. Not sure how that ties in with the HPH predlings, but its sure unnerving. Now, I know we have the New Madrid fault line a bit NE of us, but Irving, Texas (just west of Dallas)? Really weird and just a tad scary.

Anyway, thought I'd share that with you. I'm sure you'll get more emails about it.

Stay safe,

Well, down here in the Piney Woods, our taxes are high enough that Anderson County Government protects us from such, but yeah - a 3.0 up 13 miles west of Dallas...sho 'nuf.  Fortunately, a couple of shots of The Capt'n and we can sleep through most everything.  No quakey-wakey for us...nossir.

Policy Nightmare

Say, here's one for the State and Defense Departments to be pondering as a scary Halloween kinda thing:  Now that the deal to let US troops stay in Iraq past the end of this year is breaking down, what's the exit plan if they tell us "Get out!"? 

 

I mean, the odds are small - only 20-30% that it could actually happen, but at what point do people get serious and actually...what...but airplane tickets for all US forces to leave?  Turn them all into private contractors working for Black Water?  Yikes...what a messy possibility...and after all that purple ink.

 

Say, we could just tell them they're now a state, right?

 

--- snip and save items ---

Coping: Communications and Learning Preferences

I have been getting a whole heap of emails (which I will go over in more depth this weekend) in response to the question posed on Thursday about whether there would be any interest in an .MP3 of UrbanSurvival content on a daily basis for 'x' dollars...seems the price point favoed is in the $25/year range, which means I'll actually have to work up the bandwidth costs and so forth over the next few weeks and make a decision whether it's worth it.

 

Op Cits

Although I try to provide as much in the way of source material as I can, occasionally I will goof up and not source something - and it's a key oversight because in my mind, what separates Urban / Peoplenomics from a lot of just plain old blogs and wanksa out in cyberland is that I usually try to give at least enough souircing so you can think to yourself "Aha!  Yes, George is nuts, but there is a reason to think that way...."

"Hi George,

I liked the graph showing the exponential growth of bank borrowing from the Fed in the Nightmare on Wall Street piece. A pic is worth a thousand yada yada...

Could you see your way to citing sources for the data for those of us who like to do our own research?"

Sure!  That one was the result of graphing the data in ythe Federal Reserve's H.3 Aggregate Reserves of Depository Institutions (an out of date notion, about now, it seems...) and the Monetary Based with the most recent data out on Thursday of this week here.  Have fun charting.  When I do a number of the charts for Peoplenomics.com subscribers, I generally will try to share not only the chart but also the underlying spreadsheet (in compatible Excel 97-2003 files, so they will mostly fly in OpenOffice and so on).

 

Mr. Ure's "Dirt Simple Psychology Test"

How many ways can you say "Spring Ahead, "Fall back"?  This is one of those "twice yearly' news stories that used to make me crazy (it lingered, huh?) when I was chasing down the news.  I tried to think of every way possible to do the story straight including calling the 'time lady' and splicing here into saying things like "At the tone, Pacific Standard Time will be  time, time, time, time...beep" and so forth.

 

In the interests of journalistic creativity, I have therefore decided this morning to note this weekend's time change with something I call the "Dirt Simple Personality Test."  Read each of the following two choices before clicking your selection:

 

• "I look forward to this weekend's time change because I will get an extra hour of sleep."  Click here if this accurately describes you.

• "I look forward to this weekend's time change because I will get an extra hour to enjoy life and work on my own agenda items."  Click here if this accurately describes you.

 

Feel better now?

 

It's the last work day for some - get out there and wage something productive!

---

Send snip and save items to george@ure.net

--- end snip and save section ---

 

---

Thursday October 30, 2008

Hooked On Growth: Recession Yet?

In just a few seconds we'll get into the Q3 preliminary GDP numbers, which were generally forecast to come in around 0.6%, plus or minus weasel words, but at that rate would still keep the economy technically out of recession.  Conventional economists figure a 'recession' to be three months in a row of declining GDP, but as we say around here, "A recession is when you get laid off, while a depression is when I get laid off..."  That makes it much easier to comprehend.

---

"Thrive or die" capitalism has a problem - one that's pretty clear if you study 'long waves' in the economy - the K and more recently "L" waves are my particular penchant. 

Each is related to growth.  And, the policy tools of government are generally applied in just such a way that some economic growth occurs, but not too much because otherwise, things would overheat and go into a boom followed by bust mode.

 

A good example, besides Hank and Ben recent cobbling up the $1.5 trillion dollar printout/bailout here in the US is what's going on in Japan where a $275-billion 'stimulus package" has been approved.  Everybody is printing.

 

Prospects today are that markets will continue to bounce off recent declines, in part because the current mantra is that "It's going to work...it's going to work..." so when I stumble across headlines like "Asian shares surge, South Korea soars record 12%" forgive me if I take it all with a grain of salt.

---

Although it's not available widely (yet) Dr. Jack Lessinger's  latest book "Transformation" (available soon, I hear)  describes the period we're in from an historical perspective quite nicely:  We're seeing the death of the Consumer Economy, but it's an awkward moment because the rise of "Responsible Capitalism" is still some years off.  Between such periods, we get economic turmoil as the global econ models change over. There is evidence of the 'new' model in a few corners, but mostly, the old greed model has to implode first.  Doing a fine job of it, too, in case you haven't read your 401(k) report lately.

 

Lessinger's vision is pretty well summarized here, and I'm trying to get hold of Prof. Lessinger so that  a couple of us old-time longwave econ types (Like Jim Goulding, author of "Winter is Coming") can kick around some of the comparative points of Lessinger's "L" Wave with the more conventional "K" Wave.

 

The point I'm getting to here is simple and we don't need to get off into the weeds talking about boom and bust cyclicity to figure out that a) a recession or it's closest next of kin is here and b) things are not at the bottom yet.

---

Now let's talk about that GDP number out this morning from the Bureau of Economic Analysis.  They way they figure it, the GDP was UP if you use current dollars, but DOWN if you use "constant" dollars - the kind that don't show artificial impacts from monetary inflation.  That gives economists (and lackey apologists for the tax & oil party) enough weasel-wording room to drive something  big - like a Kenworth T2000 - through.

"Real gross domestic product -- the output of goods and services produced by labor and property located in the United States -- decreased at an annual rate of 0.3 percent in the third quarter of 2008, (that is, from the second quarter to the third quarter), according to advance estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.8 percent.

The Bureau emphasized that the third-quarter "advance" estimates are based on source data that are incomplete or subject to further revision by the source agency (see the box on page 3). The third- quarter "preliminary" estimates, based on more comprehensive data, will be released on November 25, 2008.

The decrease in real GDP in the third quarter primarily reflected negative contributions from personal consumption expenditures (PCE), residential fixed investment, and equipment and software that were largely offset by positive contributions from federal government spending, exports, private inventory investment, nonresidential structures, and state and local government spending. Imports, which are a subtraction in the calculation of GDP, decreased.

Most of the major components contributed to the downturn in real GDP growth in the third quarter. The largest contributors were a sharp downturn in PCE for nondurable goods, a smaller decrease in imports, a larger decrease in PCE for durable goods, and a deceleration in exports. Notable offsets were an upturn in inventory investment and an acceleration in federal government spending.

Final sales of computers contributed 0.06 percentage point to the third-quarter change in real GDP after contributing 0.17 percentage point to the second-quarter change. Motor vehicle output contributed 0.09 percentage point to the third-quarter change in real GDP after subtracting 1.01 percentage points from the second-quarter change."

While it should be obvious to anyone who has lost a job, house, car, spouse, or whatever due to the economic mess, there's a great debate in economic circles about just when this becomes an

"offishul" recession.  Among the choices:

• The Q3 current dollar growth rate remains above zero.

• The Q3 constant dollar growth rate is a minus

 

Credit to BEA for using the constant dollar number, which is the 'righter' of the two.

 

In order to be a "recession" we need nine months - 3 quarters of GDP contraction.  I'd argue we're there, but not officially so until it 'hits the books' - which is why economics is such a fun study - it's all about driving by looking in the rearview mirror.

 

Just a Yes or No, Please?

Also on the BEA web site this morning is the question "Dow do federal financial inventions, such as the Emergency Economic Stabilization Act of 2008 affect the GDP accounts?

"During 2008, the federal government has intervened several times in financial markets to restore confidence, to provide liquidity or capital, or to avoid the collapse of a bankrupt or nearly bankrupt corporation or other entity. Typically, a financial intervention involves transactions between an entity and the Department of the Treasury, the Federal Reserve, or another government agency. The federal assistance may involve direct payments, loans, loan guarantees, or the purchase of financial securities.

Direct payments: In the GDP accounts, a direct payment from a federal agency to a business to support current production or operations is classified as a subsidy, while a payment associated with the acquisition or disposal of an asset is classified as a capital transfer. Direct payments made to local governments are classified as grants or capital transfers.

Loans and purchases of financial securities: Loans and purchases of financial securities are not recorded in the GDP accounts, but are recorded in the Federal Reserve Board's flow of funds accounts. (If the transactions involve foreign residents, they also appear in BEA's international transactions accounts.) These financial transactions are not directly counted in GDP because they involve the exchange of financial claims and liabilities rather than current income and production. Financial transactions, however, may lead to subsequent income flows that are recorded in the GDP accounts. For example, the holding of financial securities may result in the federal government receiving interest and dividends, which would increase federal current receipts. Any associated capital gains or losses, however, are excluded from the GDP accounts because they represent a change in the value of an existing asset rather than income from current production.

Administrative costs: Administrative costs incurred by general government agencies associated with implementing financial interventions are included in GDP and are classified as federal consumption expenditures."

That's too long an answer for me to wrap my head around at this hour, so I sent a BEA user feedback note asking the question a little more directly:  "Does that $123-billion to AIG (for example) puff up the GDP?"  I'll share the answer if/when I get it...but I think it does because AIG is able to pay dividends etc at a higher rate with the bailout/printout  than they would without it. But who knows what they answer will be  (if ever).

 

AIG - Burning Cash

Mary Williams Walsh, writing in the NY Times biz-section has raised a really good damn question:  How could AIG be 'solvent' in September and in October turn into the Black Hole of finance and suck down nearly the $123-billion in bailout dough?  Inquiring minds want to know...

---

With elections next week, Congressional repeats have to be more worried about their lack of friends in the home districts that they've betrayed, not the financial industry they've cozied up to.  Most checks have already cleared, I figure.

 

"Bailout Lie Exposed"

Good article - as many are - at Global Research out of Canada... but by now I figure you'd already concluded the headline, or am I giving you too much credit?  (Here, have some more...)

 

Fascists Stealing The Net, Round 2

Sounds a little melodramatic, but that's what's happ'nin in Australia where right-wing newspapers and the 'usual suspects'  are supporting the government plan to impose mandatory 'net censorship.

---

In Reichstag fashion, supporters of this latest theft-of-rights move claim they will be going after genuine evil-doers - child porn, and things like that.  Got not argument with prosecuting kiddy porn - it's how it's being done that's wrong. 

 

Here's how theft of rights works:  First, those least able to defend rights have them stripped.  Kiddy porn types who should be prosecuted under other laws are marched out because corpgov knows you won't defend them.  So, next comes any group that questions the 'offishul' status quo.  In China - where the government already controls thought processes pretty well - citizens have virtually no access to stories about the Falun Gong, the Chinese occupation of Tibet, or the rioting that has happened in the provinces against local authority.

 

As is the case so often, rather than go after the people who would pedal kiddy porn directly (it's already against the law, after all) the laziness and agenda of corpgov comes through:  Why engage in good police work and prosecutions when the subject matter can be used to extend 'governance' by the PowersThatBe to keep you corralled into 'offishully approved' thought channels?

 

Where my hackles go up is when fascist control plans creeps into other areas and first thing you know, 'dissidents' (anyone who doesn't bow down [or is that suck up?] to the government suddenly finds their IP is blocked.

 

Lest you think it can't happen here, you're way late to the party:  There are hundreds of companies where readers have written in to advise that "UrbanSurvival" is not available because of corporate blocking.  So, it'll be sites like that one that will disappear over time.

 

It's called the Virtual Curtain - and every bit as dangerous as the Iron Curtain in my book.

 

If you don't 'get it' you slept through civics class and apparently don't understand that the best government is the least government.

---

Let's take a story that the corpgov types would just as soon people not think about - or know about, for that matter: "Anti-market protestors enter Frankfort bourse".  Got it?  A group[ of people banding together denouncing the manipulations of the financial markets showing up in a market-place to shout out their protests.  Was it on CNBC, Bloomberg, or Fox Business News?  I don't know.  Is the MSM telling you that there's a global questioning of the corporate globalist agenda arising?  Hell no.  Nor, do they want there to be.

 

What I'm pretty confident of is that as soon as the 'virtual curtain' descends, events like this that challenge the PowersThatBe's grip on your thinking will disappear.

 

Rights are always stripped FIRST from those least able to defend them.  Ask Black or Native Americans how that works.

 

India Bombs

At least 11 bombs have gone off in India today and more than 300 people have been injured with 50+ reported dead.  Islamic militants and/or separatist groups are blamed.

---

Suicide bombing in Afghanistan today, too.

 

--- snip and save section ---

Coping: Metal Shortages and Price

Although the price of gold seems to be in the $700-$800, some folks in the 'offishul' gold using businesses (like jewelry and dental work) insist that there is no shortage of the 'yellow dog'.  On the other hand, I continue to get emails from readers who insist that there's a gap between the prices and the actual deliveries.  Here's a sample:

"Hi George, You have always expressed interest in the availability of physical gold. Today I bought a 1 oz gold maple leaf from a coin dealer on Cook St., Richmond (suburb of Vancouver) BC for C$1000. Last week the dealer had none and when just before closing time I asked him if the expected shipment had arrived he told me that he got 50 of them in that morning and had already sold 40. "Quite the demand," he said."

You're welcome to think of these reports what you will.  All I can advise is that the price of gold is whatever you have to pay in order to get it on a timely basis.  In terms of 'spot', that infers right here & right now kind of delivery.  Yet, some of the metals dealers are reporting that while they will quote a 'spot' price, they really don't have anything in the back room for sale, and in order to get those prices, a person sometimes will have to wait a number of months - and then there's the matter of who are you going to trust to hold your dough that long in an econ climate like this one?

 

Many suppliers, such as www.kitco.com, have supply availability notes displayed and are not taking orders or certain kinds of specie until they have adequate levels.  But, this gets us to the next question:  "How many times have you seen a shortage of a so-called 'commodity' and it's been accompanied by collapsing prices?  Just a bit strange - and another one of those economic discontinuities that draws my attention.

 

No, don't ask if I have sold my silver coin or my gold one, because there's no what in hell - not when dealers can lay their hands of phsyica product and are selling what are represented to be 'paper equivalencies'.  One burns, tyhe other doesn't...and I hold to the investment fundamentalist view that if you don't have something in your hand, you don't 'own' it.

 

Letters We like...

This one is wonderful:

"Dear George,

Delighted!...that's what I am ..at being newly subscribed to your Peoplenomics.

Now, I can continue my growing addiction to your writings without heavy withdrawal over the weekends.

Geez, it's hard enough to read about all the problems ahead of us without having to endure the hardship of not being able to read about all the problems ahead of us.

And now, thanks to your prescription for D&G (Doom & Gloom), I now know how to cope.

For 2 helpings of D&G, take 1 shot of ED ( that's El Don, not erectile dysfunction...the implication of the later's initials to affect his performance, caused my friend Ed, chronobiotic researcher extraordinaire, to start all over with his own name by changing it to Atom).

Or maybe it's 2 shots for 1 D&G...

Anyway, I killed my beautiful bottle of Patron tonight, so will reward myself for the accomplishment by trying your brand next time. However, while you begin your day with blue agave, I, an appreciator of Solar Nutrition...where food choice is determined by the imprint of the angle of the rays of the sun on various plants and their coordinated affect on growth stimulus responders within our own (human) endochrine system...usually drink the cactus at night.

Unless, of course we are in full swing of the full moon, where anything goes.

I so appreciate you and George too and consider myself uniquely blessed to have stumbled upon the wit and the wonder of your world.

Aha, and I have just bridged the borderland between the timing for my medication and your own. Goodnight, and Goodmorning,"

Subject line on the email was "Breakfast of Champions..." Got a kick out of it...

 

Just so we're clear on something:  I may eye the bottle of Jack or El Don while I'm writing my morning missives, but the truth of the matter is that despite being 'semi-retired' I still end up working 14-16 hours a day and that isn't going to happen if I really pop a cork this early in the day.

 

From a literary standpoint,  "Pour me a shot o' Jack" or "Squeeze me some more cactus juice, wouldja?" is much more acceptable that something more direct like "Who are these *ssholes kidding?" which is the most common thought that comes to mind.  Just the memory of the impact of some self-medication juice is enough to remind me that "Oh yeah, I don't have to take their bullcrap seriously as long as I keep to my own course plotted through the financial wilderness out here..."  (FrontPage and Word don't have 'bullcrap' in their onboard dictionaries, BTW...)

---

And speaking of that, I'm working on a special report for Peoplenomics subscribers this weekend that is being written as a 'parent-to-the-kids' not on economics.  A short note, but one that you'll be able to print off and share with your own kids as well.  Been meaning to get to it for a while, and now that my eldest is starting to venture into 'thing land' with her SmartCar purchase, I thought a dual-purpose note -- telling them a few of dad's thoughts - and a look ahead at things economic to expect during their lifetimes - would be a good thing for subscribers to have.

 

And Another...

This one was good, too...

Hi George

enjoy your daily comments. I used to monitor the long wave group and we almost met when you were living in san francisco. I could not make the party.

[Elaine and I cooked dinner for the members of the Oyster Point Yacht Club one weekend  - If youi ever get an invite to an OPYC Monday Night Social, don't miss it.   People who are going each throw $7 in the kitty and the volunteer chefs brew up their special whatevers...had some fine eats there back when we had the boat there - really great fun and our spaghetti turned out grand...but no sailing stories in the midst of a crashing economy, focus, focus.... - G]

anyway, looking like a bottom in raw materials.

not because of demand (china is still at 9% growth) or that they were as oversold as the iraq war, but rather with the creation of 3 trillion dollars (in the US alone) in 90 days, all that money is going to be looking for a new home.

and not in t-notes paying less than the rate of real inflation.

by the way, did you see in the financial times article that the annual rate of output decline of oil from the major fields is at a 9 % rate. enjoy that 2.00 per gallon gas while it lasts.

see ya!

Yeah, I figure within a week or two of the election, the prices will start to rise again - and the people who voted for McPalin will be blaming the Obamanation for it.  I'm eyeing a used 911 because I figure with all those dollars being printed, this could be a window in which a person could buy a high end luxury car, drive it till the dollar gets some strength back (2015, maybe?) and in the meantime, have basically driven a 'free car'.  Either that or just a nice-sized addition onto the house, which with building materials reasonable, could also make sense.

 

.MP3 Question

Sometime in the next week or two, I will be getting my new firewire mixer set up on the 24-track here in my office.  How I get anything at all done is a miracle, because the number od distractions is mind-boggling:  ham radio, music creation/editing, eBay, the full-up electronics workbench, the library...you get the picture?).

 

It all led to an interesting question: Would there be a market for my morning reports, read as .MP3's, so you could load them and listen to them on the way to the squirrel cage in the morning?  To cover the bandwidth costs, I figure it would be around either $15 or $20...but for that you'd get the dailies as .MP3's and the Sunday Peoplenomics as well...just thinkin' out loud here...

Click here to say "Yes I'm interested" in the .MP3 idea...

 

Click here to say "I'm on the National Do Not Call List - lose that .MP3 idea.

Thanks - 'preciate the feedback.

 

Rockin' Pipes

Still more landscaping ideas based on the rock dust notes earlier this week:

"Hey George , This is the old Stephenville , Texas Luddite . Like always , I always look forward to reading your insights and musings as they are one of my absolute favorite things to check out on the Internet . I was reading your Snip & Save Items and this one caught my attention .

 

The e-mail items titled We Be Rockin' that were posted struck a chord with me , due to my background as a Biologist with some training in the Earth Sciences . ( Geology , Meteorology , Mineralogy , ect ... )

 

The book by Hamaker is the total package . A visionary work from a "meta-scientist" , not someone so specialized that they can't see the forest because of the trees . We would be so much better off if we could teach our kids to be well rounded young people mastering several subjects instead of putting on the blinders and only specializing in one or dumbing subjects down so much to find the lowest common denominator . ( stopping rant and taking a deep breath )

 

Now about 12 years ago my wife wanted to spruce up the old yard and she wanted something completely different from the run of the mill type of stuff offered at Home Depot / Lowes and seen on the Home and Garden Channel on TV . So I did my best not to let her down . Being a recycler kind of guy I was able to find for free ( read scrounge ) several various types, sizes and lengths of pipes . Typically from construction sites, city projects like fixin up sewers and having friends and a brother - in - law who are Kings among mortals ( plumbers ) .

 

I used everything from blue PVC water mains , 12 in. steel pipes , 6 in. old ceramic sewer lines , 4 in. concrete tubes I mean the works . I even used those hollow cinder blocks stacked about 3 high and anchored which work equally as well . Here in the " Cowboy Capital of the World " we don't get nearly as much rain fall as y'all in East Texas do . I figure about 30 inches per year . We also have a lot of limestone rock and not much top soil .

 

Anyway here's what I did . I cut all the pipes except the ceramic 5 foot lengths of sewer pipe ( wife said they were a pretty red/ brown color ) and 1 and 1/2 foot long 12 in. steel ( damm heavy )down to length of 20 , 25 and 30 inch lengths . Then I placed them all around the yard mostly along the property lines and accent areas in flower beds as well as lining my bio-heep .

 

After anchoring them I filled them full of leaf litter and yard clippings .On top of this I put a 3 - 4 inch layer of small sized road gravel / pea sized river rocks. ( lot of hauling , shoveling , digging my own ) A 2nd layer of leaf litter to fill all the pipes and blocks . A 2nd layer of road gravel / river rocks . Then I tamped them down really good . On top of this went a 3rd layer leaf litter and then filled up the remaining space with lime stone based caleeche type bar ditch " soil ". For my wife who happens to love cactus ( of all types ) I planted them in tubes along the property lines .

 

The back fence line has a crenellated look to it because of the ceramic sewer pipes , in which i transplanted from the bar ditch Mexican poppies . In the garden accent pipes , bar ditch mealy sage , prairie or sand verbena , and other bar ditch favorites .

 

Be sure to notice that by utilizing local native ( bar ditch friendly ) wild flowers and cacti , that after the initial work was done these flower pipes don't really need to much attention at all ( no weeding or watering ) except to thin them out ( every 2 to 3 years ) because of the incredible growth .

 

For the past 11 years the wife has been very happy with the color in the yard and her cacti bloom spectacularly every year . Now after your rockin' e - mails I think that I may have a go at vegetables . a little more work but in these uncertain times well worth the investment .

What can I say?  (I feel a bad pun coming on....grunt....grunt...)  "Rock on!"

-0--

Send snip and save items (or four suitcases full of $100 bills for that matter) - to george@ure.net

--- end snip and save section - I'll logon from the Bahamas as soon as those suitcases arrive... ---

 

---

Wednesday October 29, 2008

Special Update

Just as Predicted

Fed lowers its interest rate 50 basis points or 1/2 of 1%:

The Federal Open Market Committee decided today to lower its target for the federal funds rate 50 basis points to 1 percent.

The pace of economic activity appears to have slowed markedly, owing importantly to a decline in consumer expenditures. Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for U.S. exports. 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.

In light of the declines in the prices of energy and other commodities and the weaker prospects for economic activity, the Committee expects inflation to moderate in coming quarters to levels consistent with price stability.

Recent policy actions, including today’s rate reduction, coordinated interest rate cuts by central banks, extraordinary liquidity measures, and official steps to strengthen financial systems, should help over time to improve credit conditions and promote a return to moderate economic growth. Nevertheless, downside risks to growth remain. 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 1-1/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Cleveland, and San Francisco.

So far, the market hasn't been very happy with the movement, and frankly, for the kind of 'horsepower' these guys have, their statement is less than I crank into one of my morning updates - which may explain why they make the big dough and I don't.  They should've written something more straight-forward.  Like: "This sucks, we're giving a way money, so go lighten up on us..."

 

Anyway, with the cost of all this rapidly tracking toward $3-trillion globally, I expect my morning columns are gonna help you as much as reading the Fed tea leaves.  I'm just sayin'...you can't patch a dam with water, LOL.  Stand by for another 50 BP move next and then - woo hoo! - free money!  Except, of course, you won't get any 'cuz hey, you're not a banker.

 

Sorry.

---

I just got a call from the Florida GOP asking me to vote for their slate - cute because I've informed them no less than three times since I moved to Texas in 2003 that we don't vote there anymore.  They quite politely listened to my "I wouldn't vote for those banker-sucking twits if you paid me...but how much would it be worth, just hypothetically because to ask that for real would probably cross some kinda line...?"  You never know.

 

What Goes Up....

"...must come down"  could be updated by the incurable day trader to something more contemporary like: "What goes up completes Wave 4".  And Wave 4 may get some frosting on it this morning to the upside.

 

Talking to my friend Robin Landry after the close on Tuesday about his count, it seems the wild-eyed, screaming, nonsensical, move-the-Fed rally Tuesday was more than ample to finish up the Wave 4 count that he talked about in his client update for Monday. 

 

Does that mean the market goes straight to 'hell in a hand basket"?  No, seldom do things work out that smoothly.  Still, if I were making a wager, I'd expect the market put in a tradable top near yesterday's close, or will in the minutes around the Fed rate decision due out this afternoon.  (Yes, I will try to get a short update and a copy of the FOMC statement on within 10-minutes of the decision's announcement - so drop by around then - let's say 2:25 PM Eastern, 1:15 PM Central, and the big hand and little hand point up and just to the left of straight up if you're in California ;-) )

 

I think it was my friend Rick Ackerman  (Rick's Picks, Hidden Pivot Trading, etc) who made the observation that the market seems to often do a 1-2-3 move when the Fed announcements come out.  A sort of junior Elliott under a microscope.  First we're likely to see a real move in the direction the Dow's going to go (my guess would be down), then we should see the reversal so the professionals can drive things up, load up the weak hands for a good haircut, and then the real bigger move in the true direction of things.  Fine observation there.

 

It also speaks reams about the predictability/gullibility of people who think markets are somehow 'rational'.  They are, but only if your definition of 'rational' includes the kind of denial and paranoia that you're supposed to find more commonly in detox centers rather than the hallowed halls of financial greatness, but that's another story.

---

Overnight, the markets around the world turned in something of a mixed bag - rallying to this degree, or that.  Thanks to the US drug/Fed induced rally, the Nikkei bounced up, so much so that headlines like "Most Asian stock markets extend gains after Wall Street's Rally; Nikkei jumps 7.7%". 

 

While it sounds cool and all, remember that a look at a one-year chart shows the Nikkei was almost 16,700 a year ago, and even with the so-called rally, the close was 8,211.90, which pardon me for mentioning is down to less than half its year-ago level.

 

Tapping on the white board this morning and putting on my academic robe as "The People's Economist" I'd tap on the linear, not logarithmic display of the chart with a few technical indicators thrown in to spice things up and tell you something like "The reason most stock wonks use log charts is because they can then draw straighter lines which hide man of the non-linearity from your eyes.  Clearly,  a logarithmic display will look like an 'orderly' straight line many times, but the linear display slaps the eyes with "Say, things are going non-linear here..." and that should set off all kinds of warnings because non-leanr 'any things" can't last forever. 

 

(Pardon me while I get this stuffy robe of academia off...it's not that cold this morning that I need it and besides, the cat's have gotten fur all over it...)

 

Commodities are up you-know-what creek lately, too.  Oil is bouncing off 17-month lows around $64 and that's where the "Good news/bad news" part of the market comes into focus.

 

I mean it's good news when consumers are burning less gasoline, because that drives down demand.  But, it's also bad news because that means the 'sand castles' being built all over the Middle East's deserts (with borrowed money mostly) have to be paid for somehow.  All of which should be driving OPEC to consider further price hikes (a firmer screwing) at the pumps.

 

Lo and behold, Brethren!  "Falling Oil Prices: OPEC may consider another cut" says a report.  Some headlines insist that the "low oil prices risk investment" in things like improved oil production facilities.  But, coming from a crowd which has built megalithic scale homes on artificial beaches and ice rinks of incredible size in what were once sand dunes, I'll just take that with a lick of salt, a squeeze of lime, and a shot of El Don  (ultra premium blue agave sipping juice) that seems in order for breakfast today.  "You bet!  Uh-huh!" 

 

How Durable?

Newest government report on durable goods is out:

New Orders

New orders for manufactured durable goods in September increased $1.6 billion or 0.8 percent to $207.8 billion, the U.S. Census Bureau announced today. This was the fourth increase in the last five months and followed a 5.5 percent August decrease. Excluding transportation, new orders decreased 1.1 percent. Excluding defense, new orders decreased 0.6 percent.

Shipments Shipments of manufactured durable goods in September, up three of the last four months, increased $0.4 billion or 0.2 percent to $208.8 billion. This followed a 4.2 percent August decrease.

Unfilled Orders Unfilled orders for manufactured durable goods in September, up thirty-one of the last thirty-two months, increased $3.0 billion or 0.4 percent to $829.6 billion. This was at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.3 percent August increase.

Inventories

Inventories of manufactured durable goods in September, up fourteen of the last fifteen months, increased $1.2 billion or 0.4 percent to $340.2 billion. This was also at the highest level since the series was first stated on a NAICS basis in 1992 and followed a 0.8 percent August increase.

Capital Goods Industries

Nondefense

Nondefense new orders for capital goods in September increased $0.6 billion or 0.8 percent to $69.3 billion.

Defense

Defense new orders for capital goods in September increased $1.9 billion or 19.6 percent to $11.8 billion.

Say, there's a way to keep things rolling, don'tcha think: Roll with big defense spending increases and free money for the Street?  Woo hoo!

 

The War, Politics

The Red Cross says that "Dire" conditions persist in Iraq and they point to the 40% of the population that still doesn't have clean drinking water from mains yet.

---

That governments are not fighting wars for maximum effectiveness is continuously visible if you think about it.  There's not one world leader out there that couldn't be stopped for about $10 worth of and a Barrett 50 in the hands of a competent team.  Yeah, I know it's "not done" because there's a sort of 'gentlemen's agreement" that leaders won't off each other - they will use proxies, but you get my point about efficiency, right?

---

Then there's the matter of could we just have 'bought' Iraq.  One "war cost clock" is putting the cost of the war at  just under $595-billion dollars.

 

Come with me over to the CIA World Fact Book and you'll find there are 28,221,180 people in country based on a July 2008 estimate.

 

So, I get $595,000,000,000 divided up among the 28,221,180 people as $21,083.  In other words, a family of four could get an airplane ticket to America (business class), a $800 computer with a 'how to speak English" program, and still have $75-large to put down on a new home.  Then we'd just level the country and do what we want, which is going on in slow-motion anyway.  I just just saying, after six years why not tell someone to just 'git 'er done'? 

 

There's an old firehouse term called 'patty-caking' something.  It's ancient analog would go to the idea of grasping a thistle firmly.  Grasp it mightily and it hurts, crush the damn thing and you're done.  Patty-caking -  Indecisive and inefficient - just ain't American, but it sure leaves lot of opportunity for management consultants like me and the 'defense' industry. 

 

Me?  A smaller offense industry would be the way.  Screw with us, get your ass kicked.  Know what I'm saying? Slow to anger, but then look out and done in hours or a few days not years.

 

But then I'd appoint Jackie Chan as Secretary of Defense...and Clint Eastwood as Secretary of State in the Ure Administration.  "House" would be the head of CDC, Ron Paul would be Secretary of Treasury, and Boston Legal would take over the Department of Justice.  Yeah, William Shatner would be the AG.  Lee Iacocca would be my VP and Chuck Norris would head up Homeland Security along with Tommy Lee Jones.  I'd plug Jesse Ventura in to head up the SEC. 

 

Next I'd beef up CSPAN so that instead of carrying just those boring hearings, we'd see 16-channels streaming every lobbyist meeting or phone call with anyone who gets a federal dime. Mandatory voting in line with constituency calls and clicks.  That's how it runs, ok?  On really BIG votes, I'd have eBay run an auction for the various parties, with all the money raised going to offset income taxes of the public.

 

Sure, go ahead, write me in. Could I be any worse than the other possibilities?   I mean really?

 

The Runs: Internal What???

A sharp-eyed reader spotted this CNN story with a curious quote:

"In Pennsylvania, Obama leads by 10 percentage points, 52 percent to 42 percent, but McCain's campaign has said it is buoyed by internal numbers not showing up in public polling. "

"Are these internal numbers the preprogrammed voting machine numbers, or something?" wonders the reader...  Don't ask, don't tell, but just for fun, sport, and amusement, let's just watch the public versus real results in...er... Florivania...

 

Pipes

The story that "Russia, China sign landmark oil pipeline deal" is worthy of mention of two levels.  The first and obvious is energy for China.  But, the second level is look at who was doing the signing for Russia: Vlad Putin!  yeah, Russia's former #1 is still pretty much acting the part/pulling the strings.  Bet me he won't be back for another term sooner than later?

---

Still, if Mayor Mike can pull enough strings to get another term, Putin must not have as much horsepower if he couldn't get that one past the politburo or whatever they call it nowadays...

 

West Getting Trumped

The plans to use Georgia as a launch point against Iran are continuing to call apart as Russia has now signed "We're your buddy" treaties with Abkhazia and South Ossetia.  'Course that mean s Russia will have eyes near potential airfields...

 

Terra Intrudes

Long time to run before the double quakes which the HPH linguistics expect around December 10-12 area.  Nevertheless many dead from a 6.4 temblor overnight in Pakistan.

 

---snip and save section ---

Coping: Not Quite 'Perfect Storm'

The first Nor'easter of the season has pretty much blown itself out, but the Northeast will remain cold and wintry today. 

---

Did I ever mention how I can tell seasons?  Just by looking around inside the house? 

 

Two ways.  In the summer time, turning on the hot and cold water all the way for a shower results in water that is too hot.  In the winter, or when temps are below 32, it's just a tad too cool.  Spring and Fall weather that's 'normal' are just right.  So, taking a shower is one way.

 

A second way is to consider what's moved around in the liquor cabinet and the fridge.  In the summer time, the gin and tequila seem to move toward the front of the bar and consumption of Schweppes Tonic Water, limes, and frozen lemonade, all go up markedly.  Beer occupies a place of honor in the refrigerator, though usually not for long if measured individually, along with fresh shrimp for salads, and so forth.

 

In the winter, beer is banished from the fridge in favor of more important items like leftover spaghetti and hearty burgundy beef stew leftovers. Scotch makes a seasonal appearance in the liquor cabinet, and if it's going to be an especially cold winter, Yukon Jack will show up.  A liquor cabinet analog to the woolly caterpillar, I reckon.

 

Scary Week

Things just keep piling into late week.  Halloween on Friday night, Time changing on Saturday night/Sunday morning.  Just reprogramming the clocks (fall back) will blow off most of Sunday...I'll do them all, Elaine will do some, and then we'll end up

 

Dandy Electronic Library

A reader suggested we check out the Handy Devices and how to Make Them here.  Almost didn't get this morning's column done as a result...If you don't know how to use a brace rule on a steel square, this is your kinda page...

 

We Be Rockin'

Lots of email about rock dust as a soil additive.  All of it favorable.  Among the best notes shared, here's one out of Ashville NC where there for some reason seems to be a lot of US readers:

Mr Ure,

My coworker and I work for a geotechnical engineering unit for the State Dept. of Transportation. In this, we have access to spare large diameter pipe ends and rock dust from gravel testing and whatnot. He filled these pipe segments as large planters and mixed straight sandy rock dust with layers of bone and blood meal - that's it. Obviously a picture would be applicable here but regardless, unbelievable pepper, tomato, cabbage, onion production in about 15-20 square feet of area. Must be watered daily because of the instant drainage. If you look up Geotechnical testing labs of any sort, they will have this material in transportable bags and will love to get rid of it. These labs are somewhat common. Another note... Animals go for the blood and bone meal, so they will dig up the plants and eat the dirt. Some sort of protection is required, but what else is new?

And how to get the rock to free up its mineral content quicker?

Hi George;

You picked up on the book that foretold of the real estate crash back in 1978, but evidently missed Hamaker's "Survival of Civilization," circa 1981. His general premise was about global warming. His global findings relate to today's "micronutrient initiative," which has been co-opted by the IMF, et. all, and essentially guarantees that poor blacks in Africa will get enough iodine (and fluoride) with their salt.

There is a symbiotic reaction when you place basalt dust --"glacial till"--against the most fragile of those tiny root hairs of a plant.

And we can rapidly accelerate the decomposition of this rock by introducing bacillus, like feeding yogurt to a baby. Two products work great for this, "SmartTea," by www.SmartWP.com , and-- (most likely you'll really like this inventor) Wayne Blakely's "Living Earth Probiotics." Wayne's product replaced a much hyped product that was said to clear up scummy Texas ponds in a week, or so. Wayne's stuff cleans the same pond in 13 hours! ...1 Qt. conditions an acre. , while1.2Gal is required of SmartT, --and it takes 3 conditionings of either product per season to (loosely) double the volume and richness of your fruit.

Under any condition when there is some lively bio-activity in a typically rich humus soil, one can measure the doubling of copper, magnesium, etc. in the plants within 3-5 years. Knowing much of Texas, this book literally appears to hold the secret to the survival of THIS civilization.

All this talk about growing things reminds me of one of Pappy's fine musings, while chatting a neighbor fertilizing his lawn:  "So let me get this right:  You actually put fertilizer on your yard so you have to mow it more often?"  Pappy's other fine agricultural advise which always bears repeating: "Never plant a garden bigger than your wife can weed...."  Ooops...think I've run into that issue around here now and then, LOL

 

Unruly Rulers Department

Not that it should surprise you that the old adage "The rich get richer and the poor get you-know-whated" but word out of Washington is that "Congress grew 13 percent richer in 2007." 

---

Despite the fact our Representative from this part of Texas was among the handful with the balls to vote "No bailout", we'd be still recommend voting to foreclose on a lot of House members...those who don't represent The Will of the People honestly.

--

Meantime, the folks in Mississippi have a fathering reputation to deal with as the latest place to 'vote often'.  So bad is it that in Madison County Mississippi, there are reported to be 123% more registered voters than there are adults over 18.  Welcome to the New Chicago, huh?

 

More Content Ahead?

There's a story in the Financial Times today about how "Advertising agencies warn of tough year ahead" for the Madison Avenue types.  Yeah, sorry about that, but you know, welcome to the club.

 

Still, there may be a silver lining.  Does this mean there won't be as many ads?  Might we get something more than 167-minutes an hour of hype from some radio stations, more than 18 minutes of content per 1/2 our of TV news?  Is a decline in rabid "Call now and order your Amazing New XYZ for Just two easy payments of..."  (Sorry, Billy).  With any luck, huh?

 

Not As Important:
This was in one of the morning emails which I'll get aorund to answering after breakfast...

"ANNOUNCEMENT!

Due to recent economic reversals and the rising cost of electricity, gas and oil, the light at the end of the tunnel has been turned off.

We apologize for any inconvenience."

Also of note: The Urban Dictionary's word of the day:  Deja Moo - heard this bull before...

---

Send snip & save items to george@ure.net

--- end snip and save section ---

 

---

Tuesday October 28, 2008

All in Good Fun (or is it?) Department

Letter of the Day

A reader - we'll just call him Wild Bill in Tennessee" just cc'd me on a letter to his bank:

"Dear Sirs,

In view of what seems to be happening internationally with banks at the moment, I was wondering if you could advise me correctly…

You have marked my check "insufficient funds," How do I know whether that refers to me, or to you?"

Meantime, the lack of adequate drug and substance abuse testing on Wall Street is becoming perfectly clear - obviously they have been partying waaaay too much with that $1.5 trillion of our taxpayer goodness:  "Consumer Confidence Plunges to lowest on Record" pens the AP's Christopher Rugaber.  But wait:  His writing is waaaay better than the start's ability to read - the Dow persists up 100+ points. 

But wait:  It gets even better:  I heard from a backdoor source this morning that a couple of big name US companies have been told by the Chinese they need to have something a little more solid than LC's in place if they want product.  Oh-oh time:  China wising up the paper-hanging scam and this economy is going below even the 5,800 Landry's talking about.

And in the middle of nowhere, the USDA production report out this morning drops US crop forecasts dramatically for beans and corn.  Means less wampum for all that stuff made in Sinoland...and coupled with the Boeing strike the balance of trade should be thoroughly flushed by the time the Obamanation begins...

Peace out.

What If They're ALL Right?

I sometimes hate waking up because I have the coolest adventure story dreams in the world.  Full color, lots of tactile interaction, even sounds and taste...yup, really cool.  Like going to the movies;' except better in that they're free.  Even better?  Most would make great novels/adventure stories - which I guess I'd like to do sometime when I give up consulting and so forth and have time on my hands.

 

My point of all this isn't to tell you about the latest dream (although like I say, they are incredibly cool).  Nope:  It's the thought at the point of waking that bothers me.

 

I got to thinking back on all the fine work in the field of economics ( a pseudo-science where people run around with all manner of theories and try to find the right set of facts to fit the model to...) and in a flash, it came to me: "They're ALL right!"

 

First, who are some of the "theys" I'm referring to?  A few readers have asked for a reading list, in  order to put the current/coming changes into some kind of perspective...There's a zillion of them, but the list would have to include (just to name a few):

• U of W Business Professor Emeritus Dr. Jack Lessinger - among whose works are Schizomania: Split society, perilous economy, 1990-2020 : an economics of the long run .  One of the reasons we live in the 'Texas Outback' is his earlier book Penturbia Where Real Estate Will Boom After the Crash of Suburbia  (Guess what's happ'nin right now?)

• Jim Kunstler's The Long Emergency: Surviving the End of Oil, Climate Change, and Other Converging Catastrophes of the Twenty-First Century 

• "Surviving the Surviving the Coming Mutual Fund Crisis: How You Can Take Defensive Measures to Protect Your Money Last I heard from Don Christensen, the author of this worthwhile book, he was working on an update - I'll pass on if I hear anything new on it.

• And the ever-so-prescient The Coming Real Estate Crash which has been out since 1979 and it was back in my 'mainstream,' journalist days that I interviewed co-author Gray Cardiff.

• THE CREATURE FROM JEKYLL ISLAND - A Second Look at the Federal Reserve - 2008 Edition  by G. Edward Griffin.

• Robert Kaplan's The Coming Anarchy: Shattering the Dreams of the Post Cold War

• "Dmitry Orlov's Reinventing Collapse: The Soviet Example and American Prospects

• And, the best/longest view of all, Joseph Tainter's The Collapse of Complex Societies (New Studies in Archaeology)

 

Just as there's never been a "war coming' that didn't telegraph its approach, so too, if you've been reading just ever-so-slightly away from the mainstream, there's been a building case that the current set of events could turn into a crap-stew of the first order.

 

So, despite the likelihood that the market will rally today, as my friend Robin Landry pointed out in his update that I posted yesterday (and we chatted about by phone) the market hasn't yet completed the 'fourth wave' which means the 'fifth wave down' is still to come.

 

Translation?  I mean if you've been too lazy to learn about Elliott Wave Theory, boils down to an outlook that plays something like this - which fits with the linguistic outlook:

• Short term, the market completes a long '4'.  Now, in Elliott Waves, your got waves of three and five 'steps' (impulsive and corrective, too, just to make it a little harder to figure).  We could see a rally up to the 8,900 level before we turn back down again under this count.

• Then we get a bloody awful Wave 5 down to complete the first down of a larger degree.  In other words, the coming low (5,800 by Landry's work, February/March linguistically for the end of the hugely ugly economic crapstorm).

• Linguistically, we may enter into this decline almost any day with a stop/resting point around Nov. 14th, but that's not 'good news' because we could have complete market closures in there.

• Then we could get a bounce.  The bounce might take us back over 10,000 by some ways, maybe even 11,000.  But then, perhaps a year out, we collapse to Dow 770.

 

The key 'state-change' is that

• Lessinger has been right about rural real estate being the place to be for now.

• Kunstler's been right - government is playing a "Long Emergency" mindset to "protect us"

• Don Christensen was right about mutual funds (wait till you get your next statement after the declines start figuring into your net worth).

• Gray Cardiff's work (with John Wesley) about the Housing Bubble, apparent even in 1978 when  they were doing their research) has been prescient, even if it went beyond what seemed possible back then.

• The Fed is still a 'banker's club' looking out for bankers at the very tippy top, which is why banks are getting free money and just regular folks are still getting foreclosed and what little disposable discretionary spending is being stolen back via lowered credit card limits and stingy lenders..

• Robert Kaplan's anarchy is obvious around the fringes now; fringes being places like Darfur, Somalia, and of late, Nigeria and Sri Lanka.

• Orlov is right, the West is not even as well prepared for economic calamity as the Soviet Union was.

• And Tainter may be right - the once-humorous signs on cubicle walls "The harder I work, the behinder I get" is coming to life with heretofore unfathomable truth, pushing people to just say "Screw this..." and look for other "outs" than staying in the 'mainstream game."

 

Against this backdrop, the predictive linguistics work at www.halfpasthuman.com should be especially interesting as the new data run cranks up - with a first posting expected this weekend (subscription info here, $280 for the first 6-7 part run, and $70 for each subsequent run).  This run will give us the first 'better look' at what's likely to shape up on the 'other side' of the "Summer from Hell" which is due this coming summer as the impacts of higher tax burdens slam the middle class because of how it's been 'necessary' to spend on wars and bail out bankers in order to keep the economy 'working' such as it is.

 

The legendary "Report from Iron Mountain: On the accessibility and Desirability of Peace"  argued that at some point, when productivity was high enough, government loses its power over people and so in order to maintain authority to rule, governments need 'enemies'.  Just like in the olde English craft guild days, workers were paid on Thursday Friday so that when they'd go out and buy mead for the weekend, they'd be broke enough by Monday that they'd come back to work.  Sound familiar?

 

As luck would have it, we've got plenty of threats that enable society to surrender to 'authority' these days:  Bid flu, HIV, and a host of medical 'threats'.  Not to mention the wars, and the social issues and even a war between religious beliefs.  Oh, and all those disenfranchised folks who we can now make an industry out of saving.  Just like the War on Drugs was a huge growth industry - it was obviously a way to create an industry.  Retain power of the liquor/booze lobby by making all those 'free' plants illegal and you've got another rein on controlling the peeps/sheeps. Means and mead, updated.

---

This kind of thinking is dangerous as hell, but when you step back and try to think about things from a "How would I rule an unruly planet?" perspective, the generation and management of threats is really high art.  Thus, a collapse of the global economy that beggars billions who don't 'get' the bigger picture is fine in a sense, because it facilitates the PTB to ruling from behind the scenes and ensures their own platform from which to manage the seemingly 'spontaneous events' that make up the tapestry of common folks' awareness.

---

If you step back far enough, there's an outline of a grander game in play.  After all, since the pyramids were built, there has been a 'working class' that was given just enough to eat, and treated just well enough such they wouldn't rise up against their 'masters.'  Whether it's Pharos or Corporations makes not difference once you become aware of the 'design patterns' involved.

 

A design pattern becomes apparent when you look at history just so.  A 'design pattern' being described this way:

"In software engineering, a design pattern is a general reusable solution to a commonly occurring problem in software design. A design pattern is not a finished design that can be transformed directly into code. It is a description or template for how to solve a problem that can be used in many different situations. Object-oriented design patterns typically show relationships and interactions between classes or objects, without specifying the final application classes or objects that are involved. Algorithms are not thought of as design patterns, since they solve computational problems rather than design problems."

Got your handy 'best reference' on how design patterns work with you for this morning's column?  Hmmm...didn't think so...here, use mine: Design Patterns: Elements of Reusable Object-Oriented Software (Addison-Wesley Professional Computing Series) (Gamma, Helm, Johnson, and Vlissides).

 

Under the section "What is a design pattern?" we read:

"Christopher Alexander says "Each pattern describe a problem which occurs over and over again in our environment, and then describes the core of the solution to that problem, in such a way that you can use this solution a million times over, without every doing it the same way twice"

It's here that I have to put in a plug for my little 'secret sauce' -  something I call the 'substitution method of learning.'  Essentially (and there's more about this on the subscriber side of this site, www.peoplenomics.com ) I propose that there's a 'design pattern' behind even things as 'irreducible' as the genealogy of computers. 

 

For example, if you want to get a grip on how Windows 7, being unleashed by Microsoft this week, will play out, you can take a good book like Darwin's work on natural selection and just start unplugging biological terms and use the search & replace function in a word processor to replace terms and come up with a definitive look at how computers 'go forth and multiply - if you'll pardon the bad pun at this hour.

 

You see, Darwin's book - or any good textbook in electronic format that I can get to with a search & replace function - will reveal not only knowledge about a particular domain of knowledge, but going one better, it will reveal an underlying design pattern about life.

 

Back to my programming book, a design pattern is thought to have four essential elements: a Pattern name, a problem, a solution, and consequences.

---

Just to vex and trouble you for the rest of the week, try this thought on for size: 

• Design pattern name:  History

• Problem:  Control of humans

• Solution: Symbological Matrix involving 'threats and rewards' (Or major goals "We're going to the moon" yada yada yada

• Consequences: Concentration of Power among few.

 

It might be tempting to argue the point that society is controlled at a very deep level by symbology, but down at a core level, bespoke symbology is embedded in our language and thus acts as a corral to keep most folks well 'rounded-up' into a cohesive/manageable group of worker bees.  It covers everything from how churches organize their rituals to how the liquor lobby supports anti-drug legislation which would loosens its monopoly.

 

And this relates to this morning's outlook for a rally at the opening how?

 

Oh, that.  Damn, always comes back to money, doesn't it.  I mean so we can all buy into the same symbols.  Let me bend your eyes onto one more thought. 

 

You know the underlying symbology involved in cars, right?  Shiny!  That's right.  If a car is 'shiny' it somehow has more value than if it is not 'shiny.'  There's a symbol driven into your consciousness that says a 4-year old dirty BMW has lower value than a 'shiny' 1959 Edsel or '53 Corvette.   There's a zillion dollars to be made in figuring out how to differentiate 'shiny' and 'implied value'.  Alfred Sloan figured out how to market "newness" for General Motors:

"Sloan is credited with establishing annual styling changes, from which came the concept of planned obsolescence."

Sloan found a useable design pattern and figured out how to deploy it.  Just as Ford missed the 'shiny game' ("You can have any color Model T you want, as long as it's black...") Shiny and color has always worked down at the archetype level.

 

Manhattan was bought for a handful of brightly colored shiny what?

---

With the futures pointing at least a bit of a bounce, I have to sit back and laugh at the 'new shinies' that are being trotted out on the tell'em-vision.

 

Headlines that proclaim that "Stocks point higher as global shares Jump"  are a lot more profitable for brokers than headlines like "Whirlpool to cut work force by 5,000 by end of 2009".

---

For now, I'll watch and wait.  On rallies, gold, silver, and oil should advance.  And as the forces build for a bank holiday yet-to-come, I'll just sit back in a few minutes each day, trying to trip over more design patterns, revealing themselves by substitution of words.  Not that I'll be the first, mind you.  The rabbinical study of Torah, the scholars of the Vatican, even the Islamic clerics seem to share an overarching design pattern of studying a book looking for design patterns. 

 

Design patterns are layered like onions.  Turns out that most books do have two 'layers' to them: a literal layer and a more subtle design pattern layer. So, in great books of a non-religious nature, we should be able to find workable design patterns as well. 

 

Which is why Twain, Plato, and a bunch of 'writings of old dudes' are called 'classics' - because really good parts of books like Plato's Allegory of the Cave, communicate at both the literal as well as the design pattern level using archetypical symbology.

 

Once you see how 'symbology' is 'worked', you'll start to see how the archetypes (fire, shinies, and so on) are trotted out to entice you to act this way or that.  Shiny cars, sexual product associations, the whole gamut.

 

Sit back from the herd.  Figure out the design pattern and invest where it's heading.  I think it's just that simple.  Lessinger, Kunstler, Kaplan, Christensen, Cardiff, Orlov, and Tainter all caught design elements.  All I'm trying to do is make decisions that will preserve or build wealth in a world where 'they're all right.'  And it looks like they are - all at once.

 

The Runs: Over

Now that a newspaper is declaring that Obama has won, I guess there's no further point to coverage of the presidential wannabes.  The odds of anything meaningful/new coming out in the final week is not very good - so please, no more emails on the elections.  Odds are your mind is made up - and don't even bother trying to change mine, thanks.

 

Such Talk Department

South Korea should be turned into 'debris' says The North.  Damn un-neighborly. Say, you don't think they're borrowing Middle East-speak, do yah?

 

Taking it to the Street

The ACLU is looking into the first-time-in-history deployment of the US Army inside the US.

 

 

--- snip and save section ---

Coping: That "Time" Stuff

Chicago was right.  "Does anybody really know what time it is?"  Does anyone really care? 

 

With the fallback to 'normal' time - whatever the hell normal is anymore, Trader Jim Goulding sends this:

"London is on a 1-hour time difference until the US "falls-back" this weekend. Therefore, the Libor fixings, inside the assorted emails, are yesterday's fixings. They normally fix at about 5:45am CT. This week, due to the time change they set at 6:45am CT. Everything will be back to normal next Monday. --thanks, Jim"

Praise the Lord! Hallelujah, Brothers & Sisters.  Put your hands on your TradeStations!  Normal is coming back Monday./  Gee, I hope it covers more than clocks...yah think?

 

Surf & Turf Notes

A lobsterman (lobsterperson?) reader sends this:

Link to headline: "Low demand sinks lobster industry"

 

hi george,im a lobsterman/fisherman from ny. im not rich yet but atleast i can feed myself. lol.this is a great story showing the connectivity of all things financial.you should know that lobstering accounts for 60% of Maine's economy.that ain't good!

Not to be too shellfish about things, but I encourage everyone I know who has a concern about eating shellfish to send their lobster here... I love it!  So does Elaine.  Click here to send us Lobster tails and fresh Dungeness crab all you want... LOL

 

Ashes to Ashes, Dust to Carrots

Reader says we should all read up on rock dust as a soil additive.  Stuff kicks booty apparently.

---

Send snip and save items to george@ure.net

--- end snip and save section ---

 

 

---

Monday October 27, 2008

Special Update

Is a Bottom In?  No Way! - Landry

Yes, Robin Landry who got his managed accounts out of longs when the market was on the other side of 13,000 has another short-term update which bears passing along:

"Hi Everyone,

I was looking at the market structure over the weekend, and the best count I have for the Dow says the decline we are in right now is still a sideway's move (triangle) or what is a wave 4 before the wave 5 down to new lows occurs. But the most important thing I want to emphasize is that, if my wave count is correct, this will only be the end of wave 3 down with another wave 4, before the final wave 5 down, to complete the larger wave A down from the Oct 2007 top. I read all these reports that we are close to making bottom, or we are testing the bottom, and I hope they are correct, but my analysis and wave count says they are wrong and it is the blind leading the blind. I liken knowing the wave count as having a 2 watt bulb (nightlight) and it keeps you from stumping your toe or running into a wall at night. Without the knowledge of the EW count the result is, as I said, the blind leading the blind. The best wave count short term is that the current wave 4 of 3 is still in effect with the fifth wave down about to start. A normal decline from a triangle is the width of the largest part of the triangle which is about 1900 points. This puts the downside target to finish this wave 3 around 6600, depending on the level the wave 4 triangle actually ended. A rally for a week or so would then begin for a larger wave 4 then the final decline to the 5800 area. As always I will update as the wave structure dictates.

Robin   rlandry@allegiance.tv

Guess what?  This might line up nicely (or uglily if that's a word) with the predictive linguistics low in Feb/march '09.  That calls for late week or early next and dropping life the proverbial free-falling safe to mid November.  And you thought the turkey would come from the grocery store?  Oh well, you got out when I did, right?

 

Good-Bye 8000?  Gray Monday

I expect this morning the President's Working Group on Markets (a/k/a/ 'The Plunge Protection Team') has been up & at-'em early in order to hold the futures where they were when I looked as I started writing - holding a dozen , or so, points over the psychologically important 8,000 level.

 

It's pretty safe to assume that we won't copy the 22.68% drop of the Dow Industrials experienced then.  Oh, not that there's not plenty of fear and trepidation out there.  Nope.  Just that circuit breakers will click in and let everyone go out for beers long before that.

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.

So Black Monday?  Likely not.  On the other hand, the numbers piling in from around the world certainly argue for a nice dark Gray Monday.

 

Take Japan, please.  The market there crashed to a fresh 26-year low.  I want you to recall that at the end of the 1980's, Japan's Nikkei was up around 40,000.  Overnight it finished down a further 6.4%^ to close at 7,162.90.  Most of the G-7 countries are muttering things about the volatility of the Japanese Yen which has been plagued with unwinding of the Yen carry trade. 

 

How much of the pending blow-up of the world's economic system can be laid at the feet of the hedge trade will be a chapter or two in history book to come.  However, it was 'pie simple' to set up a hedge fund almost anywhere in the world, borrow money from Japan at next to zero percent interest and then turn around and deploy the money for a greater return elsewhere.  It was about as close to printing money for the Big Players as you'd find.  Until it stops working, of course, and then global markets go into a state described by a new word I shared with Peoplenomics readers Sunday: crediac arrest.  That's where your business pressure drops due to a system trade imbalance and credit dries up almost instantly.

 

What's not being addressed by the TV Talkies and Money Honeys is a question too obvious to be worthy of prime time (so we'll ask anyway):  "What happens when global interest rates go to zero?

 

Think about it.  Oil this morning is down under $62 a barrel.  The International Monetary Fund is turning on the printing presses for Ukraine and Hungary.  Not to be out printed,  South Korea's central banksters decided to lower their rates by a whopping 3/4's of a point. While their bank boss says no impact is expected on the won, I can only say "Won-na bet?"

 

What the bankers are universally missing is that we have globally passed the inflection point where People - regular humans like you and me...ok, you then... are looking for something more meaningful than the chance to work our asses off for 40+ years and then have collapsing paper steal our life savings before we can buy that big motor home and go collect a few dreams and scenes - which in the end is the best any of us get to exit Life with...

 

Then there's Ambrose Evans-Pritchard of the UK's Telegraph, who's been one of the better thinkers covering this mess.  he figures "Europe on the brink of currency meltdown".  Last one standing is the game maybe?

 

Pravda has a curious headline today: "China may save the world from crisis and minimize USA's financial supremacy."

---

Not that it matters to the so-called "leaders" we send to Washington:  Although they may bemoan the drops in Congressional retirement plans, fact of the matter is those plans are backed by the full faith and credit of 'Uncle' so unlike your plan, which may be run by a faceless pension board, they don't have to worry about having their life's work cremated in real-time on CNBC or Bloomberg like everyone else.  Are we in the wrong business?

---

Maybe I should set up an economic consultancy and stop working on marketing and P&L consulting...maybe that would qualify me to head up the not really "Federal" Reserve.  Did you see how John Crudele did a fine roast of Alan Green-spin's testimony in Washington last week?  Fine read...

---

So as I look at the Asian losses overnight where the biggest loser was the Hong Kong Hang Seng, down almost 12 3/4's percent, or the European markets where Vienna's ATX is down more than 8% at press time,

---

I go back to my late childhood/early adulthood when I worked as a transmitter engineer at a semi-famous R&B radio station and there's the old T-Bone Walker hit rolling n near the mental noise floor:   "They call it Stormy Monday (But Tuesday's just as bad...)" 

 

A much cooler ohrwurm than Mary Poppins' for sure...

---

Catching up with the predictive linguistics work out of Half Past Human, we noticed that market sage Nouriel Roubini says "I fear the worst is yet to come..." in a Times Online article. Quick: Feign a look of shock and anguish...but deep down inside, you knew it.

 

Not having a time machine, most media won't tell you that a) yes, the week long (or longer) shutdown of markets is possible before November 14th.  And, when it stops the purpose will probably be something like installing 'financial firewalls' so that those 'notional values' in Derivative Land' won't become real losses here in Human Land.  And that once started up again, things will go along seemingly OK and then meltdown again...Jan-March kinda timeframe for melt #2 as I read it.

 

But just pretend it's all a complete surprise when it comes along; look all flustered and go along with the crowd.  We don't want to draw too much attention to our activities here...even though there are no laws about hanging out with people who own time machines - yet.  And don't let on about your stored food and ammo...

 

We'll label this one  "Gray Monday!" and we should be good to go.  But, like the man said, don't be surprised none if "Tuesday's just as bad."

 

None Dare Call Them 'Bank Runs'

Seems as though in these heavily spun times, the art of direct speaking has been recalled.  Take for example the Bloomberg headline "Gulf Bank Customers Rush for Depositions After Currency Losses."  Why around this part of East Texas, a feller would say something like "Looks like they have a bank run going in in Kuwait..."  But, that wouldn't be PC, so forget I mentioned it.

---

Similar deal in Australia where  The Age reports that "PRESSURE on the Federal Government over its bank deposit guarantee has escalated after three big financial institutions hit with a spate of withdrawals by customers last night froze their accounts."    Help me here, but isn't a 'spate of withdrawals by customers' that 'froze their accounts' really a bank run?  Who the hell is writing this stuff in terms that hide the obvious truth from the global populace?  Why don't the Aussies have the balls to write it like it is?  Three banks hit by runs close doors temporarily."

---

I'll just put up my Mary Poppins' bumbershoot and go dancing off stage right singing "Just a spoon full of medicine makes the bank runs go down, the bank runs go down, bank runs go down.  Yes a spoonful of adjectives makes the bank runs go down, in a most delightful way........(fades off). 

 

Damn, the Poppins ohrwurm is back!  Pour me a shot of Jack.

 

"Ghost of Halloween Future"

Jim Kunstler's site has a fine Eyesore of the Month - it will take you back to times when Americans could afford a home and get a free Escalade in the right refi deal.  Just looking at his example, I'd say it should refi for about what....hmmm... $780,000?

---

The way I figure it, the most common feature of new homes these days is...four wheels.

 

The Runs:  MSM Sleeping

Why no one in MainStreamMedia isn't screaming about the obvious collusion between Big Oil and politics is just beyond me.  Gas prices are down nearly 53-cents in the past two weeks.  Tell me how gas prices aren't manipulated to get votes?

---

Hey!  If we could just delay the elections for right weeks, we'd all get free gas at this rate!  Yee hah!!!  All in favor say "Aye".   

 

Not that anyone in the District of Corruption would hear you.  How's about "All in favor wave a check!"  That'll work, fer sure.

 

"Oops!" (or Is It) Department

U.S. special forces launched an extremely rare attack inside of Syria this weekend - hot pursuit and all.  Syria's all worked up over it. 

---

I keep coming back to the idea that conferring statehood on nations with oil would make this all so much more practical.  But, no, we have to wrap American foreign policy up into a bazillion incomprehensible policy papers rather than saying what we mean:  "We're taking oil and that's how it works..." would be a lot more accurate, don'tcha think?

---

U.S. Drone kills 20 in Pakistan says the NY Times.  Which is next door to Afghanistan which is where....

---

The headlines that the US is making progress against opium in Afghanistan is interesting...production of opium poppy is down 20%.  But where's the other 80% going, and who's making money on it, hmmm?

 

"Early Election" Called

Yup...right meme, wrong country:  The early election turn out to be in Israel where 'snap' elections have been called by Tzipi Livni. 

 

The Weak Ahead

New Home Sale (sic) will be announced this morning at 10.  tomorrow will bring CONsumer CONfidence numbers, Durable (or not) Orders on Wednesday along with a Fed statement. Water cooler bets are for a 50 basis point/ 1/2% drop.  GDP Thursday and Personal Income such as it is will come 'Friday.  Busy numbers week.  Brace yourself.

 

--- snip and save section ---

Coping: Where to Hide

A reader sent in this:

"Hi George,

I've been a subscriber for almost a year and really appreciate your newsletter....its been an eye opening experience. Anyway, I've made some moves based on your suggestions but unfortunately have been reluctant to make sell all my equities. I\ve sold about half and the rest has been invested in dividend paying stocks and gold. I am now at the point where I think I really have to do something with the rest of these stock market investments. I've looked throughout your previous newsletters and I have not found anything other than Treasurys and gold as your recommended investments (outside of having properly prepared the house)

Can you point me to the page that can help me with what |I should do with:

1. Stock market investments including stocks and bonds. 2. Cash sitting in a bank savings account.

I already have about 10K cash at home plus some gold and enough food for 3 months. "

Try to envision a 'world without money' and then ask yourself "How would I live in that kind of world?"   In other words, at some point, you're going to have to convert financial assets into something useful:  Calories to eat, a roof over your head, and things like that.  So, do you have a piece of 'recreational property' that could be turned into a little 5-acre truck farm if you had to?  Do you have a 'safe zone' for your family where everyone knows that they could come stay with you if things got really bad?

 

I'm not a financial advisor - so I don't offer specific advice to individuals (if you have business questions, those I do...) because it's not what I am all about.  On the other hand, a little common sense:  Getting in touch with your own outlook for the future based on everything you read, hear, and see...is a fine starting point.

 

Once you have a clear personal vision of the future then it gets really easy to optimize your personal situation for that future.  Just make sure that to as large an extent possible, that when you start acting toward your visioned future that you strike for dual-use.

 

Around here, there are lots of things that can be 'dual use."  Take the goats.  In "normal" times (whatever that is anymore) they can provide a cash crop, an agricultural property tax benefit, and keep the land cleared off.  But, should times become bad, they can be herded on up the road producing milk products along the way.

 

No, I'm not saying "Go herd goats."  But, one of the things I'm looking at for next year is the possibility of building a new house somewhere on the property.  In 'good times' the existing house would be a guest house.  And, in bad times, it's the landing spot for the kids.  Or, we could put in a couple of smaller cabins and rent those out as vacation cabins until needed for something else.

 

Get creative!  A Reno reader lives in an apartment and has built a greenhouse with some friends on their land.  He's struck a deal with a local farmer to put hives on his land and now he's in the bee business.  See?  Creativity and initiative is all it takes.  That, and a vision of a future that involves something other than sitting around in front of the Cyclops in the living room.

 

Along the Same Lines...

Another reader email:

"Hi George

i throughly enjoy you column perhaps i read it too often. i think what drew me in was that you were articulating what my gut was feeling for several months. i'll never forget the episode in april of 07 ( i think) where china has some smallish but reportable economic event, like they sort of "coughed" and the dow plunged. then later all of a sudden china said something like, "oh our mistake we happen to find an extra trillion cash laying around." and they markets went back up.

at that time my "advisor" (what a joke) was going off into the buy and hold thing and i mentioned that i saw bear stern at something like 75 dollars a share and my gut told me that was freaking ridiculous and i told him, "you know one day they will just fall down so abruptly and those at the top will just say 'were sorry we feel bad' but they will still be rich and shmucks like me will be in the toilet." well i was right for sure on that. i am not an economist but a simple small business owner. anyway, excuse my rambling, but my question is . . .

when do you think the tide will turn for the dollar where the index/value ebbs so extremely and we have inflation like hell? i mean, with all that printed money now being infused, when would this even happen? would it be much later when the market starts to get better? or when we are still in the doldrums of market/economic world despair?

i know you are likely too busy to respond to me directly but i would love to see this somehow in your column sometime.

thanks,

Just a guess?  Low in February or March and then a bout of inflation which will fuel the Summer of Hell in 2009.  Just a guess.  Final low, though?  Nope.  Or, at least maybe no.

 

Here's why:  There has been so much fraud and abuse of paper finance that we may just wake up one morning to word that "All banks are being closed for a week" and after something like that happens, there will be no confidence left in the financial system.  At that point, what you'll have will be those things that you have already converted into long term storable calories, or the tools with which you can make calories.  Pretty simple, but that's my feeling.

 

Reaping What We Sow

Here's one:

Hey George, Just wanted to share this site with you. (Link to cool raised bed gardening plans) After much thought, I decided to use this design for my raised beds. I'm finding it very versatile...I can put plastic around it for the greenhouse effect and can also wrap fencing around it to keep critters out! I decided on treated wood that I will line with plastic.

Stick around a few years.  I think we're going to a Brave New World where 1 karat will get you about 24 carrots...

---

Send snip and save items to george@ure.net

---end snip and save section ---