Published Monday through Friday about 8 AM Central Time Except Holidays Depending on my mood...

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'Release Language" and Cyberchondria

In the www.halfpasthuman.com predictive linguistic work, we're in what's labeled an 'emotional release' period.  Generally, the whole world when you step back far enough most times is either 'building tension' or 'releasing tension'.  The 'building' periods are when you suck in your breath, watch with building expectation, knowing that something's going to come of whatever it is that holds attention, but not sure when it will begin.  "Release' on the other hand, runs from the moment of state-change to whenever 'release' has run its course.

 

A somewhat practical application on the concept comes from watching the activities of Somali pirates of late.  Today, they have released the Greek motor vessel (MV) Centauri after holding it more than two months.  She carries 17,000 tons of salt.

 

During their 'building period' the pirates have amassed about a dozen ships.  Since we're in a 'release period', among the news items I would not be surprised to read about would be more releases, especially since countries like Germany are going, in effect "WTF?" and are offering to send military forces to the region.

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George Bush is about to be 'released' from office, and on the way out, seems he wants to be seen by the writers of history as the 'liberator of millions.'  You know what they say about history, right?  It's written by the winners.

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Release figured into the events of Black Friday, too.  Shoppers, anxious for 'release' into a New York area Wal-Mart broke down doors and killed a Wal-Mart worker in the stampede to spend.

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At some level, I find myself asking "What's wrong with the world?"  In a sense, we have militant Islamic groups and Al Qaida's #2 threatening, to kill those who don't convert to their way of thinking, yet on the other The West doesn't seem to mind invading resource-critical areas and forcing whole populations to convert to Western consumerism (with a guestimated 90,000 deaths along the way) - and guarantee us oil (even if it is at $80-bucks a barrel) in the process. 

 

Against the background of these headlines, I find myself thinking back to that Rambo precursor, the 1971 movie  where "Billy Jack" was wondering "Where's that one place where I can go quietly about my life and live in peace?"  If you find it, let me know.

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Meantime, the 'rage' being released in the Mumbai siege has about come to an end, but with India looking at Pakistan as the source, I figure violence along that socioeconomic front is just starting to ramp up. 

 

It's left cities like NY worried about the possibility of that kind of attack on American soil.

 

The key thing from a tactic standpoint is the reference in one report that "...the terrorists arrived with only basic communications but had then seized mobile phones and Blackberries from their hostages and used them to contact each other and monitor world reaction."

 

The reason you'll want to pay close attention to the communications aspect of this is that 'terrorist' activity is continuing to increase global government's interest in more or less complete electronic surveillance.  I was talking to a reader in New Zealand this week who is in a position to know such things, and he tells me that the Kiwi government plans to have its 'total surveillance' plans operational by mid-summer of 2009.  It will be such that anything on a cell phone or email can be readily tracked.

 

Not that it comes as any surprise, especially if you read the Electronic Frontier Foundation's briefing on NSA spying done on American citizens.  Warrants?  Constitution?  Good police work?  Hello?

 

The recent - and widely publicized, death on the internet while being cheered on remotely, is just one example of headlines that might be trotted out to justify licensure of 'net use.  Terrorists using Blackberries, web-assisted suicide,  and now a "Microsoft study finds the internet can make you sicker: 'Cyberchondria' identified as cause of false illness..." And did I mention the headlines out of China that "Report: U.S. military networks under cyber attacks"?

 

Here comes The Nanny State to protect us, I can almost hear it now.  But, while there's still time, a reread of "The Sovereign Individual: Mastering the Transition to the Information Age " certainly seems in order - helps to keep the Big Picture in focus.

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And a couple of other data points to watch - since I'm not doing this Saturday update:  "The Fed released a report that says emergency loan activity has increased."  mercy for folks facing foreclosures?  LOL - What planet are you from? Nope - this is bankster money activity.

 

About us hapless bags of skin who own homes? The Mortgage Bankers Association reported this week that:

"The Mortgage Bankers Association (MBA) today released its Weekly Mortgage Applications Survey for the week ending November 21, 2008. The Market Composite Index, a measure of mortgage loan application volume, was 404.4, an increase of 1.5 percent on a seasonally adjusted basis from 398.6 one week earlier. On an unadjusted basis, the Index decreased 1.0 percent compared with the previous week and was down 21.9 percent compared with the same week one year earlier. "

Down 21.9%?  WTF? Mortgages collapsing while bailouts increase?  Gee, wonder what the outcome of that might be?

 

We're So Screwed Department

Just to cap off the week's events, here's a headline that should have been on front pages 35-years ago.  "Sex invariably spells trouble, says Dalai Lama."

 

He may be right, but it's much too late to change, I'm afraid.  Sex, like everything else that's a 'resource' has been monetized.  Whether it's prostitution, family law, or car ads that attempt to hoax you into thinking you'll somehow be 'sexier' if you buy this car or that, wear this brand, or that, and have three of these over here...

 

Why EPA hasn't gone after the advertising industry as the root cause of almost all pollution stumps me.

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If the world has lost its way, it's not because folks like me say 'screw the corporate bullsh*t and strike out trying to discover a sustainable personal course.  It's because global governments have failed to license not control of political ideology and free speech, but because advertising is the real runaway train that's driven us to excess consumption and definitely non-sustainable consumption.

 

Most of the public, and unfortunately most in government, don't realize that advertising is a form of 'mirror' that forms the narcissistic feedback loop the non-sovereign individual passes off as 'life.'

 

Own the money, the media, and in turn the imagery, and then you've got something.

 

The problem isn't people and the problem in a sense isn't even government.  It's the few elite which we call ThePowersThatBe that hold the mirrors which orchestrate the world circus behind the headlines.  But then you knew that.  It's just not proper to speak of such things.

 

Out in front of the mirror, the American duopoly makes sense.  A twin turbo makes sense.  High fashion makes sense.  Locking people up for growing the wrong plants makes sense.  Killing for money when done by government makes sense.  And even invasive 'surveillance' makes sense.

 

As long as folks look in 'the mirror' they're not free.  Here, go play with this hammer for a while. No shortage of mirrors about.  Especially at this time of year. 

 

Worth Sharing, I Hope.....

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Peoplenomics.com 

I don't venture into the realm of 'self improvement' often - but every so often, seems like a good thing to do: examining how a you're doing and figuring out how to do things better.  A sort of News Years resolution event, but without New Years and done when there's a long weekend, seems best. So this week I'll walk you through my "make yourself better" plan I've blocked time for over the T-Day weekend.  It's a relatively  'high payoff' area compared to most types of investment out there lately.  Especially when stacked up against the papery sort of those things that you can't take with you when the Grim Reaper drops by...

 

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"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 or, click one of the following button:

 

 

 

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.

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

 

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Friday November 28, 2008

Gone Beyond Kashmir

It's been something any rational person would have worried about since the first Pakistan atomic tests were run in late may of 1998:  A nuclear war, essential unmoderated by the West, and with hair-triggers on both sides because of the close proximity of the potential adversaries. India, of course, is the 'old timer' in nukes, having gotten their first boom in mid May of 1974.

 

Must be something about May that favors/attracts nuclear testing - the US dropped its first H-bomb from a plane on May 21st of 1956.  Curious, eh?

 

Back to current events: The imagery coming out of India is predominately 'military' in the wake of 119 people being killed by gunmen who Indian authorities link to Pakistani elements.  This morning the running battles between gunmen and Indian commandos continue.

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I don't think that Cliff and Igor of www.halfpasthuman.com would mind my sharing a bit of the predictive linguistics from last week because this gunfire in the streets of India seems to be just a warm-up act.

"As if the current rate of emotional tension release is not enough, there are indications from the movement of Populace/USofA entity through modelspace that [anger] and [rage], and [revenge] will be rising [visibility] within the [populace/usofa] from late in the day on December 1, and continuing to rise through to December 15th where it reaches a plateau that extends at the same level until late in January. The precipitating 'events' that will trigger the [onset of visible rage/anger] will themselves start to become [visible] just after midnight on the 26th of November. These events will continue at a low(ish) level through the last few days of November and then become much more dramatic in both [scope] and [presence] as we turn the calendar into December. The data sets indicate that the [financial calamity] of late September and early October *will* be revisited on a [scale/extent] that is both [broad] and [deep] within the USofA [financial structure(s)] over these 17/seventeen days (or thereabouts). The longer term data sets are indicating that the [manifesting circumstances] of this November 27th through to December 14th (more or less) will also be [echoed] again, only with more intensity, and at deeper levels of the [social economic order] from January 25th through February 14th."

Cliff was kind enough to cc me on a clarification requested by one of his subscribers who wanted to know in part: "Are there specific linguistics around the [midnight] referred to here, i.e. > are there explicit references to the midnight of local time, or is the > beginning of this 17-day period marked more by a general (i.e. > cumulative) change in the state of modelspace at that time point?"

 

The reader also said "you guys worry me..." - (as they do me more or less constantly) but they took time off from holiday pie making to clarify:

"just checked, and the midnight was 'local to the event time'. Sorry about that one should have put that in. The rage and anger will be both military and economic based. Hard to separate out at this coming point in time as some will be pissed about 1/one and others, t'other....make sense. So again. Sorry about that. Will attempt to be clearer in future.

Apple sounds good. I almost die each time I eat pecan pies, so I have sworn off them (for a while at least).

we worry ourselves all the time, and poor igor barely has any mustache left (he chews it when anxious)."

Although I've been more the Rolaids kind of fellow, I've grown my moustache and beard back for the winter, hoping Igor's onto something by gnawing on mustache.  Maybe something miraculous/medicinal about it - we shall see.

 

More linguistic 'hits' seem directly ahead, so plan accordingly.  Shopping is only a short-term therapy.

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Returning to this morning's cup-o-mud, not much doubt that this is another linguistic 'hit' but seems like every time I post one, I get flooded by emails from people who don't want to believe that the future leaks into the present via subtle changes in language.  I've posted plenty of those over the 7+ years we've had this project going.  While we can't get down to who's going to win the next Power Ball lotto (or what the numbers will be, not that it matters) that's not the focus.  Clarity of thought in fuzzy-think times is.

 

If you knew, or had even the sketchy preview of what was coming over the balance of 2009, you'd be out getting in shape, and even working on gardening and food preservation every waking moment. 

 

Alarmist? Apocalyptic?  No, not really.  Just looking at a long series of 'hits' and trying to keep my personal activities aligned with the most peeks into the future.  The longer term linguistics highlight 'summer of/from hell' and lots of other reasons to be acting now, so if you are not a subscriber to Cliff's work, or Peoplenomics which I write, pardon the deaf ear to chatty emails.  I read 'most everything, but can't answer most; especially argumentative notes from folks who 'ain't gettin' it'.

 

No time for idle chatter.  Not being rude, just looking at clocks, calendars, and ALTA reports. Not to be preachy - just worried.

 

Life In the Checkbook Republic

Not everyone is as fixed on increasing self-sufficiency and sustainability, however.  While Cliff's back into martial arts training, and I'm getting in shape by wrestling with building materials at the ranch, the balance of the country seems quite happy pursuing/continuing the sedentary - spendiary - lifestyle.  "Holiday sales begin before turkey grows cold" announced one headline, while on one of the money-honey channels, the fact that "Wal-Mart's website back up" was important enough to warrant the "Breaking News" banner.

 

Ain't defending paradigms fun? 

 

The San Francisco Chronicle's site has a handy-dandy chart so you can see how the government and non-governmental Fed have burned through $8.5-trillion dollars - so far. 

 

When I read reports like how Citigroup forecasts gold hitting $2000 in 2009, that was before the refocus on the global revolution got kicked up another notch with events in India.  I figure global revolution may tack $500 to $1500 on top of the $2000 forecast - but depends on how fast the dollar repudiation takes place.

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You're welcome to spend your money any way you want, but just for the heck of it, consider that if you give folks things that will be dual-use, it might be a wiser way to spend money than single paradigm gifts.

 

An example of an 'single paradigm gift' might be something like the latest video game.  No, I don't mean the latest copy of TurboTax (got mine already so we can model end-of-year spending).  Nope, I mean the kind where you pay for a computer, get more graphics and less utility, and have a 'dead box' once the power goes off because of the falling dollar and soaring energy prices at some point.

 

A selection of garden tools of decent quality, a can (or assortment) of heritage seeds, hiking boots, actual physical books on practical matters like carpentry, machining, first aid - those would be dual use.  In other words, useful now and also useful after the turn into whatever shows up in late 2009 as we careen through 'transformation' on many levels.  Ham radio?  Solar Panels?  Greenhouse?  Now you're talking...

 

It's your money though, so you can spend for today and yesterday if you want.  It's just not our cup of tea around here. 

 

Speaking of which, I have to get my tea bush seedlings going.  Transformation or not in 2009, I don't plan to miss caffeine, one way or the other.

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It'll be especially necessary as the world spins on toward a showdown over the forces of excess production/unsustainable economics on the one hand and too many people who collective 'aren't going to put up with it' on the other.  I have to wonder how many times the world would have blown itself up already if the US and former Soviet Union (FSU) were as close as India and Pakistan?  Those 20-minutes of flight time allow more reasoned responses than 5-minutes, or less.

 

Global Revolution, II

Events in India are overshadowing the situation in Thailand.  There, police and protesters are at least talking at airports, but even if progress is made, the spread of what I'd call global revolution looks to continue.

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If you want a 'poster child country' for irrational humans, how about the "Zimbabwe parties agree on power-sharing bill: MDC"  So in almost predictable fashion, the politicos/local PowersThatBe in Zimbabwe are worried about their own personal situation, more than the "Cholera crisis "tip of iceberg" for Zimbabwe: UN" report.  A fine metric of whether one's a politician, or not?

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Elsewhere in Africa, "Congo rebels take new town: UN" reports.

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In Sri Lanka, the government is trying to stop the Tamil Tigers - with little success so far, as the "Tamil Tiger chief dismisses Sri Lankan offensive."

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Sendero Luminoso ('shining path') rebels in Peru killed four police in an ambush.

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Islamic rebels in Russia's North Caucasus have killed a Russia-installed mayor.

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In the Philippines, it's the New People's Army (NPA) versus the government and most recently two on the government side were wounded.

 

Markets

Futures flat to down a tad when I looked.  Don't expect them to really press down until next week, and about the only economic number due out today should be the Chicago PMI number.

 

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Coping: A Word From Law Enforcement

Been a while (early 1970's, come to think of it, since I was a cub report (='newbie') back in Seattle.  Nevertheless, the days of having a cup of police HQ coffee and going through the overnight crime reports in the public information office is still clearly remembered.  Had a lot of friends there.

 

Consequently, when I get an email from law enforcement contractor in the Seattle area, I take it to heart.  If there's a class of folks you can trust in government, it's the local beat cop, fire fighter, paramedic, or health department worker.  These are the folks where the 'rubber meets the road'.  So pay attention:

"Just want to report on the growing economic situation here in the Seattle Area.

The past twenty years has brought terrible change to the region. Massive over-population, gridlock traffic, and, worst, every idiot who actually thinks more laws, cops, guards, and jails are the answers to a carefree life. Of course you have to keep that job at Micro-soft or some other method of gaining six figures of income, otherwise you could end up with a first hand sample of the police state these people have allowed our criminal leaders to construct. I can say this because I'm in my 50's and have been involved in law enforcement and security for over 30 years and I am horrified at what has become of our nation and it's values of greed and the surrender of liberty for security. Just horrified, but with that said, on to the employment situation.

Employment opportunities are excellent in my field of work; Armed Guard, but then that's true in most metro area's if your connected.

Just turned a gig the other night in Seattle for $25 per hour as simple nightclub security. That was un-armed of course. Armed Guards cost a lot more, and the cost depends on the needs and relative danger/profile of the client or cargo and your personal connections and job skills.

Speaking of "Criminal Leaders and Police States," I'm looking forward to the meltdown. Unlike the vast majority who have an absurd notion that these martial law measures will somehow safeguard them, myself and my associates are fully aware of the future enslavement of in-debt ed persons. The absorption of the Banking Institutions through the obfuscation of the Public Bail-out is, in reality, the consolidation of the monetary grip over the people by the fed. In either event, it would be good to understand that a debt to an absorbed institution is, in effect, a debt to the people of the U.S. Draw your own conclusions about the chance of defaulting on that debt while continuing to live in the United States. Can't pay your loan? No job? Too bad sucker, you have to work that off. That's a debt to the "People!" We have to get you a job at a government camp so you can repay your debt! Does this sound familiar? How about this one; You can't leave the country even with a passport if you have too much debt or suspicion of perhaps never returning. Yea, seems like the demand for my kind by the slave masters keeps increasing daily. Go ahead, charge that new whatever. Job security for me. Its going to be nice to be on the other side of that FEMA Camp with a machine gun in my hand. And yes they do exist. Go to the gsa elibrary and look up the armed guard contractors to get an idea how many companies are involved in the private interior army of the feds.

I'd also like to point out to any readers that observations of rail cars is important in that the type of car carriers on the rails also make excellent cages, and these are readily observable from time to time in main rail yards: Interestingly located, these train yards are the natural means of mass transport for undesirables. Got Debt? Got Guns? How about Bullets?

Well, other than my line of work your in for long search for a job that will pay any thing at all. Don't come to Seattle looking for work economic refugees! It isn't any better here and could be worse. I'd like to leave and go remote if I could. Better to get a crappy job or two in a more remote area if possible and get some food seeds and guns and bullets; obviously.

[portion related to how to react to potential gun confiscation at some future date deleted due to inflammatory nature - maybe not now, but in a year or two...] Thanks for reading this diatribe.

From [name withheld] : Economic Slave in Seattle.

 By the way, when I last looked into the 'prison cars' reports, they sure looked like cattle cars to me, but then again, government's pretty good at dual use/adapting to current conditions.  As long as we keep writing the checks.

 

Worth Reading

Here's one to read - if you have time today - I mean busy shopping day and all:

George, I don't know if you've heard about this guy but he wrote a program which uses game theory to predict the future. He is used by corporations and governmental agencies. Our intelligence agencies use him and say he is spot on most the time, 97% correct. I'm just wondering, so why didn't they listen to him about 9/11 or did that just happen to be one of his misses, and why did we go into Iraq based on flawed intelligence. He also co-wrote a book with Condi Rice.

Good read...fer sure...

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Send snip and save items to george@ure.net

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Thursday November 27, 2008

Thankful Most Ways

After staying up late last night, putting some of the finishing touches on the remodel of the kitchen (engineered floor, new stove, hood, and so on,) I was able to grab the first half cup out of the coffee maker and relax for a while - something I don't take time for most days.

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A number of people have asked "Why didn't your rickety time machine see the India attack coming?"  In those, 100+ have been killed and nearly 300 injured as teams of gunmen stormed luxury hotels and other gathering spots in Mumbai and wreaked havoc & death. 

 

This - and the 'running gun battles with authorities - should answer a different bag of emails which ask "Where's the military aspect heats up" that was supposed to present in this period?"

 

Remember, we specifically don't go looking for the 't' word for a couple of reasons, not the least of which is that linguistically when you've got 'running gun battles' its hard (linguistically) to separate whether that's military operations or terrorism, especially when the terrorism is on a different/new dimension than previous attacks. 

 

Meantime, the report that "Al Qaeda's Goal: Cripple Amtrak's N'east Corridor" means that we're getting some fill on the 'lockdown' linguistic that was expected around Turkey Day, although the way I had read the ALTA reports from www.halfpasthuman.com, I was expecting them to be more in the financial markets.  Nut, we have to keep in mind that overseas markets have indeed been 'locking up' or 'locking down' over the past month or two in places like Russia and Brazil, so I think there's still a good chance that we will see more from the 'markets' entity in modelspace - not just the 'military' aspect of things.

 

When you look at the media imagery in the wake of the attacks, it's mostly military and dead humans - and linguistically, best I can figure, the predictive linguistics pull archetypical imagery out of the future more than events per se.  So yeah, when something comes along which is 'thing' imaged after the fact it seems to come through in advance.  A good example was the "10-arrows toward America" that popped out prior to the terrorist plot out of Europe being foiled in 2006. 

 

The dominant imagery this time is 'military' and 'authorities' - some pictures of hotels, but these are not particularly distinguishing down at the archetype level:  One high rise looks pretty much like any other, even if one is a hotel and the one next door is full of hedge fund weasels, or banksters.  You just don't get much information out of looking at a tall people box.

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The stock market, which by the headlines put on 247 points yesterday, wasn't that big a deal for those of us who follow wave patterns and other forms of technical analysis.  Remember that the intraday high  on Tuesday was 8,682.09 while the intraday high on Wednesday was 8,760.46. 

 

To folks like me who look at more than just closing prices, it was a 78.37 point peak-to-peak move, and an even more modest 44.52 point gain from the Tuesday intraday high to the Wednesday close.

 

Not to put too fine a point on it, but from the intraday high on Tuesday to the Wednesday close, the S&P 500 was up (pour a shot of Jack, it's a holiday, right?)  18.74 points.

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If you passed on the double-shot of Jack in your double shot Americano tall (with room for additives), plenty of other ways to remain sober today.  Reading the headlines that "For stores, the holiday season may already be over..." is one way to start. 

 

Another way would be to read the headlines that "GM said to study shedding Saab, Saturn, Pontiac to Win US Aid..."   And you've seen the 'red tag' car deals on television?  One of them I noticed on Wednesday was for a Hummer H3 for under $27,000 - and I think with a little arm-twisting, you could get a pretty low interest rate, to boot.  Nissan is advertising one of its car for starting under $10,000 and zero percent interest rates are popping up all over.  A nicely equipped Caddie will set you back a mere $44,000.

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Reactions to bail out Citibank range from skepticism to the unprintable, depending on where you look.  In the interest of maintain my carefully developed veneer of civility, you could read "Citigroup bailout slammed by New Yorkers."  For the more raunchy, there's been a remarkable increase in immediate proximity of the "F"-word before the words Paulson, Bernanke, and most politician's names on blogs.  But you probably figured that.  More Jack?

 

Wally World

I've been fascinated, speaking of archetypes, about how 'walls' are bouncicating (bouncing, percolating, propagating) around so much down at the preconscious level.  Not something in Cliff's linguistics work -- just something I've become aware of, and more specifically, the geography of walls and wall building.

 

It seems to be OK for some countries to build walls, but not others.  What brings this up is the claim by Georgia's foreign minister that "Russia building 'Berlin Wall' in that part of the world.

 

So, let me get this straight:  When China builds a wall, it's Great.  When the US doesn't build a wall (along the southern border) that's bad.  And Israel can build a 12' high wall around the Palestinians. And the Palestinian protests at the walled border with Egypt get little notice outside Egyptian media.

 

Seems I'm not the only one 'touching the archetype" - a report in the Telegraph about Thomas M. Disch talks about a fictional wall between the US and Canada.

 

I have to laugh when I hear people talking about "Wally World" in reference to Wal-Mart.  I doubt one in a thousand - hell 10,000 - have considered that when something is bespoke it often has many layers of meaning that just haven't surfaced.  In this case, yes the world is getting 'wally.'

 

'So Screwed' Department

If you thought the phrase 'we're so screwed' was related to financial matters for the most part, you can relax with headlines like these that get back to original use:  "Couple has sex in bathroom as crowd cheered them on and their significant others watched Minnesota-Iowa game" reports TwinCities.com.  And in the Des Moines Register has the follow up report: "Update: Hawk fan says bathroom sex scandal "ruined my life."  Might I modestly propose a taking up different sporting interest?

 

But not in South Korea.  The government there is seeking jail time for an actress who admitted an affair.  Up to two years of jail time is possible under SK laws it seems. 

 

Here in the US with current behavior patterns we could not build enough jails for that kind of law...but nice to see application of 'we're so screwed' outside of the financial sector for a change.

 

Sure you don't want a shot of Jack?

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Have a great turkey - Wild (which in some SF circles is call 'loud mouth') or otherwise and ya'll come back tomorrow.  I'm going to step outside into the hail of bullets that means a few fellow East Texans haven't planned today's dinner far enough ahead and are still trying to bag din-din.  Oh, how hard Texans will work for a few bucks, so to speak.

 

Deer, dressing and Wild Turkey - might not be all that bad in the right proportions -- and enough ice.  But being transplants, we'll stick with the more traditional Butterball.

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If the predictive linguistics (or that Russian report forecasting America's pending collapse) are anywhere near right, next year at this time we'll all be looking back at this Thanksgiving as the 'last one' for real thanks. 

 

Like an R&B DJ named Paul Cutchlow (who I engineered for a few million years ago) used to say at the end of his show: "Make the most of what you yet may spend, before you to the dust descend."

 

Hand me the remote, wouldja?

 

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Wednesday November 26, 2008

Kill The Turkey (Rally)

There are two things really vexing me this morning one about economists and one about timing of economic predictions.  We'll start with this second point.  I received a rather accusatory email from a reader yesterday who was upset with me  - as he put it -

"I read your site every day so I know that last week you were predicting a crash in the markets this week after options expiration passed last friday. I guess you post it both ways though......so you can quote the prediction that worked and forget the one that didn't.

Is that it george?

Is that the U.S. (urban survival) spin doctor in action ? "

Well, let's back up a bit.  I laid out an expectation of market action a week or two back, played the Friday rally, and it carried further than I thought.  There is often a conflict between trading inputs which the individual speculator has to weigh.  In my case, it's the weighing between predictive linguistics on the one hand, and market cycles & wave counts on the other.

 

If that sometimes sounds contradictory, let me run you through the though process and see if I can explain the apparent contradiction.

 

Linguistic Inputs:  First in Cliff's linguistic modelspace, there is always a 'window' for events, not a specific day or hour.  The nature of predictive linguistics is such that sometimes it's spot on (October 7th was a damn fine call, in case you missed it), but on other occasions, things 'drift around' a bit.  So while his work expects the markets to decline, there are a million and one reasons why the linguistics can be 'off' from precisely what happens in the market.  The ALTA reports are not specific timing tools!  On the other hand are they great 'big picture, what's happening next?  Absolutely.  So that's minor point A.

 

Minor point B is that many people who pick up the bits and pieces that I'm allowed to post are  market-centric, American-centric, bounded range thinkers in their perspective.  So while yeah, the market has been in a little bounce here, I expect it will now resume downward action but as this site's disclaimer says, I do not offer financial advice - just my opinion, and that's what drives trading in my own account.

 

Wave Inputs: Now, in my own account, did I expect to see a short 'pop' - a snapback rally - despite the linguistics?  Yes.  The internal market wave structure, which we'll get to in a minute, and the predictive linguistics are often in conflict especially if you look only at US market action.

 

For example (from right here, right now) the linguistic outputs offer that we should be in a period of decline at the global macro level,  but the US market rally can most certainly rally lasted longer than I expected by a couple of days.  It did get to my targets, even if it cost me something.

 

On the other hand the linguistics point to Nov 20-ish as decline resuming (globally) is working out just fine.  I trust you noticed the rioting in Iceland was right (+/- 2 days) on schedule, which ain't bad for a month+ lead-time.  Not only that, but over the past couple of days, tension has been building (and rioting has broken out and now the International Airport has been taken over) in Thailand.  This might mean that Thailand will have a change of government, which in turn means trouble for the Thai Baht, which in turn is another currency implosion.  To sum up, the global collapse is still in play.

 

Reconciling and Trading: Anyone who reads this site and makes a trade and doesn't understand the multiplicity of factors involved should rethink their ideas about investing, IMHO. 

 

Investing in today's markets must, of necessity, be founded on multiple layers of information.  Which is how I can be watching a short-term counter-trend rally in the US markets while seeing at the global level that things are sliding again and not be concerned in the slighted by what someone might accuse me of 'putting out both sides' of expectations.

---

Now, if you want a chart of the US only and you're not looking at the broader context, here's an interesting note from a friend CS:

"The height of the rally has negated an Elliott wave pattern calling it a 2nd wave. However, it makes the drop from the Nov. 4th high into last weeks low a double zig zag pattern, which is a 3 wave structure. So, what does this mean? My friend***, here in Atlanta, whose chart you posted a few weeks ago, called me late [Monday] and walked me through the structure. The drop into Oct 10th was, obviously, wave 3:3, a pattern that is clearly 5 wave declines and 3 wave advances.

From the Oct 10 low, the market rallied into Oct 14th, a total of 204.51 SPX points. That rally appears to be wave a:A:4:3 The drop from that high at 1044.31 to the low on Oct. 28 at 845.27 was wave b:A:4:3 The rally into Nov 4th at the Election Day high of 1007.51 was wave c:A:4:3. this ENTIRE rally pattern was an a-b-c wave A of 4 of 3

The drop from Election Day into last week was the double zig zag as described above, wave B:4:3. This strikes some as odd because of the new low, but it’s common in Elliott wave analysis that a “B” wave exceeds the terminal point of the previous impulse wave, in this case wave 3:3.

The ensuing rally off last week’s low has unfolded as a 5 wave structure. Since the drop into last week’s low was 3 waves (the double zig zag), this must be wave C of 4 of 3, which will complete wave 4 when it terminates.

There is a very interesting part of this in the Fibonacci relationship of certain waves in the structure. The rally from Oct 10-14 was 204.51 points and the rally from Oct 28 – Nov 4 was 162.24 points, a nearly perfect .786 relationship. The rally from last week’s 741.02 to this mornings 868.94 missed a perfect .786 relationship to the 162.24 by only .40.

I have attached a chart showing the wave count, in which wave C of 4 of 3 probably ended this morning [Tuesday] , and now in wave 5 of 3.

Am I 'loading the boat' like I planned, in order to play the short side?  NO!

 

From a short-term trading standpoint, I will not be trading this one because I have chosen to get all my money onto the relative) safety of the sidelines.  The 'loading the boat' was predicated on a rally being shorter and sharper (and more timely) than its completion this week. 

 

The idea behind that trade was that I would buy call options, take the money from that trade and then go short.

 

I have been telling you for how many months that "You should ONLY play the paper assets game with money you CAN afford to lose nowadays!"

---

If you insist on playing the market, you might want to be watching CNBC this afternoon about 2:20 Eastern/ 11:20 Pacific (tentatively) because my old friend Peter Eliades was scheduled to be on.  Peter's one of the all-time greats at figuring out cycles - and you should look at his website www.stockmarketcycles.com.

---

Yes, crashes seem to happen in 5th waves.  Yes, I expect the market will work down from here.  Now, I don't think the bottom is in.  But am I going to play it?  I did buy a few call options in the double Dow tracking stock last week on my expectation that we'd see a rally.  Yeah, the market rallied at the end of last week.  But no, the market didn't get to a high enough level to put those options in the money and they expired worthless. 

 

Things didn't work out that way, but that was OK because I follow my own advice  - which was "Don't play markets with money you can't afford to lose!". 

 

I lost - couple of hundred bucks is all - because I knew it was a long shot.  The linguistics are saying (globally and in effect), "lookout below."  But even as the global collapse of Titanic proportions is underway, there will be be eddy currents, counter-trend rallies, and dead cat bounces. I set off to trade one in my own account, and had I picked December options instead of the higher (potential return) options expiring Friday, I would have done fine.  Oh well.

 

Since the timing didn't work out, I have gone to the sidelines to think a bit more.

 

Not to drag this out indefinitely:  Elaine's getting a new stove and hood for the kitchen, in part because we expect global trade to collapse and the dollar fail (or resume its downward movement which has been interrupted by a counter-trend rally - in  2009. 

 

So in 2008, we've bought a new water heater, new washer, new dryer, a good-sized solar panel set up, a water-well drilling rig, and some machine tools.  If I have the odd losing trade in options, it's way less than I've sent to the local food bank this year.

 

Write this down somewhere:  If you have money in paper assets, you may lose it ALL in the next year or two.  I think - and I am living - the idea that investing in self-sufficiency is THE best possible investment there is.  Is that 'spin'?  I don't think so.

 

I hope you saw the report that a Russian Analyst is predicting the break up of the US?

 

This gets me to the second point of this morning's note:  The issue of internal alignments.

 

I know a lot of really, really smart people. Many, as you might guess are either owners of companies, investors at the professional level (e.g. they get paid for it) or they are simply experts of some standing in the field of economics.

 

I got an email from one of these folks, which was CC'ed to a number of colleagues.  It outlined how they are now actively thinking that the country is presently in deflation  but that at some point, we may swing into hyperinflation.

 

Some of their thinking is obvious.  Evidence of deflation at a personal level is laid out in the latest Case-Shiller housing numbers that document how average home prices in the top 20 US cities are down 17.4% in the past year.

 

On the other hand, we know that the Bushbama Bailouts are going to cost somewhere between $7.4 and $8-trillion - although it could be more.

 

Stepping back, the personal strategic question is "when does the swing from deflation to inflation begin?"

 

What's gnawing on me this morning is that here are all my brightest of the bright friends and except for Robin Landry, I can't think of another who has actually figured out that if the real you-know-what hits the fan, how you gonna live?

 

In other words it's almost like there's a developing consensus that 'yeah, we may see that happen, alright...' but only Robin and I in this group of esteemed colleagues seem to have gotten to the hinterlands and actually done something about it.

 

That's the stuff cognitive dissonance is about:  It's one thing to see a possibility of something really bad coming down the economic pike, but it's an entirely different matter to actively prepare for it.  yet, curiously, 'smart' as all of my friends are, I don't know that any (except Landry) have looked at their own data and said "Oh-oh...maybe I oughta do something about it..."

---

A couple of readers have asked some great questions, however, about how to play this potential collapse that is common enough knowledge that even the Russians are writing about it, for goodness sakes.  Even if my smart friends are still trying to figure out how to keep up the six-figure lifestyle.

 

Except for the occasional wildly speculative trade, made with some level of awareness of the conflicting layers of data, I hold that the single best investment out there in today's world is investing in self-reliance.

 

"So should we take money out of our 401(k) and pay off our house?" asks one reader? 

 

I don't know the specifics of this person's economic situation, but the answer is simple.  Build a spreadsheet and put all the variables in:  Likely return on the 401(k) given a wide range of expectations (including going to zero, or near enough if this Russian fellow is right) and then paying off the mortgage so you can have a free & clear place to live.  Almost, that is, because government is always your silent partner via the confiscatory tax system.

 

"But that's so complicated"  came the answer after I explained about setting up the model to take into account paying off the house with 'cheaper dollars' once inflation kicks in (and I can think of 7.4 trillion reasons it might, along with a dollar repudiation that stubbornly appears in Cliff's work.

 

One way to get to the answer is to reduce everything to how many hours of work you'll have to do to pay off the house.  After all, time spent in this life is the ultimate currency, right?   The goal here is to get as much self-reliance as possible and my 2¢ is that if you're going to pay your house off, the sooner you stop paying the debt monster, the better off you'll be.

 

If you bought a $60,000 house in 1980, inflation alone would bring the house value to $158,990 says the Minneapolis Fed inflation calculator.  And, depending on your interest rates, you would pay about $180,000 for it.

 

If the average income over this period started from $10, you should now be making $26.17 per hour just to stay even with inflation.  Call it an average of $18.085 per hour.

 

If you had paid the house off when you bought it, you would have worked 6,000 hours to buy the house (not counting taxes, of course).  Given that most folks work 2,000 hours per year, then you'd put about three years labor into buying the house.

 

On the other hand, with an average of $18.085 per hour and principal plus interest of $180,000 (varies by interest rate, which I assume to be fixed), then you would work for 9,952 hours to pay off the house, or just under 5-years. Longer, actually, because of indexing of taxes which would be forcing you into higher and higher brackets.

 

Not saying this will be the case in the future, but a reader wanted to know, so that's how I look at damn near everything economic:  What gives me the most bang for the most buck?  "Oh don't worry about the payments because you'll just be paying the loan back with cheaper dollars.." is obviously nonsense, especially with the National Layoff Festival about to be sprung on us.

 

So, if you paid off your house with three years worth of labor in 1983, you would have 25-years of no house payment - just taxes.  yeah, no mortgage write off'  but counterbalancing that is the delicious ability to say 'Take this job and shove it" any time you wanted, because you weren't locked in to a house payment.

 

In the end, debt is a yoke of financial oppression which the ruling class seems to wield effectively to keep themselves living off the efforts of others.  Think of it this way:  The difference between the 6,000 hours to buy a house cash and 9,952 hours bought on credit didn't 'disappear'.  It went someplace.  And that place is into the ruling elite's pocket.

 

Run your own numbers - they may be different. 

---

Sorry to lay this on you the day before Turkey, but that rally's probably over, and the 'gravy' you've been making is feeding those who are already fattest.

 

Oh, and about that delayed decline in the market?  One of my smart friends says "Presuming wave 5 of 3 bottoms over the next 2-3 weeks, in a complete collapse to SPX 575 or even to the high 400’s, this would complete wave 3 from the May 19th high."

 

If you ignore the whole rest of the world, it can be argued the linguistics may have been off for a few days.  But look around and the signs are everywhere:  Social dynamics are about to "Kill the Turkey (Rally).

 

Personal Income

OK, as long as I've gotten started on the 'George View of Economics", this is an ideal time to point out that the government figures on personal income and expenditures (along with most other figures) are completely bewildering by design.

 

Here's why:  Assume you have a lifespan of 30,000 days (e.g. you will live to age 82).  What's the best 'trick' by people who 'rule you'? 

 

Answer:  Convince you that your well-being is ruled by 'money'.  Now, because you've been hypnotized that money is why people work, they get a 'free ride' of sorts, in that government and the ruling class can continuously and forever keep getting more and more work out of your hide in order to swell their own ranks and fatten their collective purse at your expense.

 

Is this cool, or what?  Just like not reporting how much work time it takes to buy a house, how much work time to get a house, meals, or whatever is hidden in plain sight!  If you had any idea how much harder you were working to stay even you might...gulp...revolt - or worse...demand real change and the ouster of the ruling class!  Can't have that now, can we?

---

So with that caveat - namely that honest government would report "how many hours you worked for a standard lifestyle" instead of reporting confusing/contradictory 'money' figures to keep you confused, we now get into this morning's Personal Income and Expenditure's report:

"Personal income increased $42.4 billion, or 0.3 percent, and disposable personal income (DPI) increased $45.1 billion, or 0.4 percent, in October, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $102.8 billion, or 1.0 percent. In September, personal income increased $8.0 billion, or 0.1 percent, DPI increased $11.6 billion, or 0.1 percent, and PCE decreased $33.7 billion, or 0.3 percent, based on revised estimates.

Real DPI increased 1.0 percent in October, compared with an increase of less than 0.1 percent in September. Real PCE decreased 0.5 percent, compared with a decrease of 0.4 percent."

About how much you got to keep?

"Personal saving -- DPI less personal outlays -- was $260.9 billion in October, compared with $110.8 billion in September. Personal saving as a percentage of disposable personal income was 2.4 percent in October, compared with 1.0 percent in September. 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."

So did things get better?  Maybe...but my memory and understanding (either or both of which may be flawed) is that the methodology of the personal savings number has been jiggered because it was running a couple of percent negative - so things like decline of housing values is not totally reflected.

 

Consumer spending was down one percent in October said the Commerce Department.  So that explains the first 1% of the increase in the PIE reported personal savings rate...

 

Remember where you heard it:  The currency of life is time...not dollars.

 

Travel Down

Yeah, we may be among the exceptions this year to have a fly-in relative for Turkey.  Travel overall is down despite (momentarily) cheap gas prices.

 

I will likely post a short report on Thursday morning to catch up on a lot of other items floating about...

 

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Coping: Global Revolution

(A short report in this section this morning because I got a little long-winded above)

Collectively, I've been hearing lots of reports of 'rioting' in China - where layoffs are starting to pop up because business with the West is falling so quickly.  That China should spend a half trillion on economic stimulus would have been almost unheard of in the past.  Reports filtering in have it that worker demonstration and riots/mini-riots are somewhat commonplace and as the global economy continues to erode, it looks to become a pan global trend.

 

The biggest challenge for the ruling elites is whether they can continue to keep up the illusion that money is worth working increasing hours for.  Working more hours for a lesser return is, as researcher Joseph Tainter points out, why civilizations just plain old collapse.  Ask the Anasazi.

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Send snip and save comments to george@ure.net

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Tuesday November 25, 2008

Rally Like Mad: You Thought I Was Kidding?

In Monday's report, I explained how one should not be taken aback by a substantial rise in the nominal indices that make up market-think.  Sure enough, not only did the Dow oblige by rising nearly 5%, but it was joined by major moves in other indices too, including the S&P and the NASDAQ Composite.  Yep, this is certainly the kind of snap-back rally that seems to be a good thing, but remember, all we 'need' to do is crest the 9700 range if we're looking at the market one way, or the 10,300 level (both of these Dow numbers, by the way) and we could see the fire of hell charring fresh bull again.  Medium well, at that, as the market still has the immediate prospect of 7,200 or 5,800 to deal with.  And that last decline before we get a longer term (more tradable) rally could go as low as perhaps Dow 4,000, as I mentioned a while back.

 

But, in the meantime, it's almost the 'season to be jolly' and the news Monday was sufficiently clear - as I explained in a special update for Peoplenomics.com subscribers, that I'm now making plans for a particular kind of longer-term workout.

 

With the futures looking upward this morning (but by less than 50-Dow points) the market looks to put a little frosting on the Monday smoker, but these past couple of sessions have been hum-dingers. If you check out the historical prices, you'll see that from the intraday low on Thursday of last week, the Dow has popped from 7,392 to Monday's close of 8,443 and change; better than a thousand points.  Turns out my Thursday morning call of last week "Save the Dow Day" was pretty good; however arguably I should have said "Save the Dow Week" and it would have been better.  Not enough coffee, I guess.

---

Gold has recovered a bit of its glitter, too, as has silver, although both were off a tad in the preopen today.  Reason for part of the metals move and the equities popping?  The dollar may be starting to roll over as we've been expecting because of Cliff's predictive linguistics meme 'death of the dollar' which will likely arrive soon enough, by the look of things.  The dollar basket chart over here a 2-3% currency drop in the past couple of sessions.

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Economics is a complex set of Rube Goldberg machine relationships that's kinda hard to visualize because everything is connected one way or the other, to everything else.  "Economists" - those foolish enough to claim insight into such matters preface a lot of their comments with a Latin phrase (which I won't bore you with) but it means "everything else being equal"...

 

So if the dollar is falling, it translates to  "It takes more dollars over the past few to buy things in the overseas markets".  Things like oil, for example.

 

Flip over to a Bloomberg report this morning that "Oil stead after rising 9.2% on Citigroup Rescue, weaker dollar" and we're somewhat reassured that the Goldberg lash-up that is markets is still ker-chunking along.

 

Ceteris paribus if the dollar goes down against the basket of currencies, imports of everything go up in price.  Say it three times to different acquaintances and you too can claim the mantle of 'economist'.  Non quam obliviscar.

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Most of the rest of the day's econ headlines fall into neat order, once you see that the Hank Prank may top $7.4-trillion (or is that $7.7-trillion?) dollars will bring you-know-what in spades. 

 

No wonder "Prince Alwaleed: 'Full Confidence' in Citi CEO Pandit" -- Citi's got a place near the front of the 'money for nothing' line that Ben and Hank have going.

 

What's more, with the Decider now the Defender of 'rescues' (OMG, there's that word again, huh?  spinsters been booking overtime on this!) and still almost 7-weeks to print before the throttle on the printing press is passed on to a crowd even more prone-to-print, how can anything go wrong?  I mean except for the twin-quakes to come in December which promise to be a fine temporal marker on our slide toward the....well...it won't be a bottom...not sure what to call it in the March-ish kinda period.  But, next year's summer from hell should fill out on schedule once gas is back over $5-6 a gallon.

 

Haven't these guys read Time Magazine's report "Left Out of the Bailout: The Poor"?

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Our hat is off to Ariel Nelson today.  "Who'zat?"  Well, Ariel has done a masterful job of figuring up (for CNBC) what it would be like to go "Holiday Shopping with Deflated Stocks."  Example: One share of Microsoft to buy a 10-poound Butterball turkey...one share of Berkshire A to buy a Porsche 911, useful tidbits like that.  Damn fine information.

---

Speaking of the Porsche family, "Volkswagen is planning a three-week shutdown at its biggest Plant" comes word this morning.  Not only as new car sales down, but used car prices are falling, and if things continue on my projected course, we ought to be buying a used 911 as really useful 'investment vehicle' sometime early in the new year.  Something with under 50,000 miles on it.  Then, as the dollar resumes its long-term decline, and foreign-made cars go up as a result, we should be able to drive a fun car for perhaps 3-4 years.  If there's anything left to drive with once oil hits $500 a gallon, the roads should be fairly empty.

 

"Damn, George - that'd be socially irresponsible!"  You're absolutely right.  But, what do you want us to do, buy a personal jet?  OK, so a Cessna 172 get's 20+ miles to the gallon (with a few dozen asterisks to take into account engine, rates of climb, ATC issues, deviations from STP, and so forth) - and yeah, we've thought about that, too.  But the lay of the land here doesn't permit us to put in a landing strip for anything more than an ultra light, and paying a monthly hanger bill...oh, you know... so...

---

The bottom line of today's first cup of coffee is this:  Yes, the market seems to be rallying - a thousand point move is noticeable, even by skeptical droolers like me.  Key thing to remember is that if nothing else was going on but a rollover in dollar valuation, we'd see some kind of rally because the financial ruling class holds to the notion that the stock price of a company represents an underlying asset.  Thus, with more money ($7.4 trillion more in round numbers) chasing assets around, which way will markets go?  Keep your eye on the underlying 'standard of living' issues and you should do OK.

 

And that gets us to this morning's big 'driver' number - GDP...time to take some money off the table and get short again?

 

GDP Dropping

First, we start with the 'offishul' stuff: GDP is dropping at a faster-than-expected rate...

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 0.5 percent in the third quarter of 2008, (that is, from the second quarter to the third quarter), according to preliminary estimates released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 2.8 percent.

The GDP estimates released today are based on more complete source data than were available for the advance estimates issued last month. In the advance estimates, the decrease in real GDP was 0.3 percent (see "Revisions" on page 3).

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 partly offset by positive contributions from federal government spending, private inventory investment, exports, 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, a deceleration in exports, a smaller decrease in imports, and decelerations in nonresidential structures and in state and local government spending. Notable offsets were an upturn in inventory investment and an acceleration in federal government spending.

Final sales of computers added 0.03 percentage point to the third-quarter change in real GDP after adding 0.17 percentage point to the second-quarter change. Motor vehicle output added 0.20 percentage point to the third-quarter change in real GDP after subtracting 1.01 percentage points from the second- quarter change.

The price index for gross domestic purchases, which measures prices paid by U.S. residents, increased 4.7 percent in the third quarter, 0.1 percentage point less than in the advance estimate; this index increased 4.2 percent in the second quarter. Excluding food and energy prices, the price index for gross domestic purchases increased 3.0 percent in the third quarter, compared with an increase of 2.2 percent in the second.

Real personal consumption expenditures decreased 3.7 percent in the third quarter, in contrast to an increase of 1.2 percent in the second. Real nonresidential fixed investment decreased 1.5 percent, in contrast to an increase of 2.5 percent. Nonresidential structures increased 6.6 percent, compared with an increase of 18.5 percent. Equipment and software decreased 5.7 percent, compared with a decrease of 5.0 percent. Real residential fixed investment decreased 17.6 percent, compared with a decrease of 13.3 percent.

Real exports of goods and services increased 3.4 percent in the third quarter, compared with an increase of 12.3 percent in the second. Real imports of goods and services decreased 3.2 percent, compared with a decrease of 7.3 percent.

Real federal government consumption expenditures and gross investment increased 13.6 percent in the third quarter, compared with an increase of 6.6 percent in the second. National defense increased 18.0 percent, compared with an increase of 7.3 percent. Nondefense increased 4.5 percent, compared with an increase of 5.0 percent. Real state and local government consumption expenditures and gross investment increased 0.8 percent, compared with an increase of 2.5 percent.

The real change in private inventories added 0.89 percentage point to the third-quarter change in real GDP, after subtracting 1.50 percentage points from the second-quarter change. Private businesses decreased inventories $29.1 billion in the third quarter, following a decrease of $50.6 billion in the second quarter and a decrease of $10.2 billion in the first.

Real final sales of domestic product -- GDP less change in private inventories -- decreased 1.4 percent in the third quarter, in contrast to an increase of 4.4 percent in the second.

That brings up the larger context of things...

 

Lammert's Latest

The Economic Fractalist was kind enough to send me an update on his thinking - and seems that despite the rabid paper-printing, there are larger forces at work.  I'll let his email explain the details...

"George, as the world sits on the crest of a further deflationary valuation implosion of equities, commodities, gold, and real estate - and as US Treasuries earn a nickel to a dime a year on a hundred dollar investment - the recent mega bailout of Citi is being often compared with the miserly refusal for a relatively minor bailout for GM. GM represents the microcosm business model, health benefit entitlement model, and pension model for the entire United States. Because of its great importance to the real economy, GM's long term viability likely parallels that of the republic. GM's corporate owners have been dependent upon the workers for a symbiotic but unsustainable long term business model. The money made and forwardly borrowed by GM to maintain wages and benefits was well plowed back into the real economy. GM's product was generally useful and essential to the economic growth of the United States over the last 60 years. Compared with the massive governmental hand outs in either the health care and or the pharmaceutical industries which produce little real value added in the global macroeconomy, GM arguably represents a lessor of the three poor business models. Compared with the larger picture of a debt driven forward economy the United States corporate and political 'owners and decision makers' are dependent upon the banks and financial industries as intermediaries to provide forward credit to continue and sustain the much larger scale and unsustainable bad business model. The implosion of the the financial industries' and Central Bank's created housing bubble has resulted in waning demand for GM worker dependent products paralleling waning larger scale demand for bank-abled credit. Workers can enable the production of vehicles but those products will sit on full lots without demand. Banks given massive injections of low interest credit by monetary potentates to enable debtors will have that credit sitting on their books if there is no credit demand based on declining jobs in the real economy from preexisting low interest rate induced and financial industry facilitated oversupply. With the loss of jobs, more foreclosures. and credit default - existing debt is becoming relatively greater each day. And the greater debt dependent US macroeconomic system - just like its proxy GM - will inevitably implode. This is the qualitative nature of the nonlinear ending of the United States' 150 year quantitative second fractal. While alternatives of doing nothing may be more immediately worse, all of these massive trillion dollar interventions - all theoretically based on the taxes of future wages of world citizens, represent a basic gross misunderstanding of how the self-balancing macroeconomy system works and the greatest historical futile act ever - of pushing on a string.

The present moment is indeed an interesting 'science project' -which most economists won't admit, but it really all comes down to this easy-to-understand concept:  Can a government print enough money and force it into circulation fast enough to prevent massive deflation? 

 

Like I said, it's nothing more than a junior high school 'economic science project' -- Yet those perpetrating it would have you believe otherwise.  Pardon me if I'm skeptical and can still see how it could blow up either way, so we'll just keep on our self-sufficiency path here until the science project is finished...which could be in 2009 by the look of it.  Hyperinflation or hyperdeflation, and soup lines either way.

 

Oh, and note Gary's use of 'second fractal' - ties in to the lack of new/innovation/gotta have it products for people to power 'growth'.  Once everyone has everything corporate capitalism has a little problem that no one is talking about:  Where's the plan for sustainable economics?  The present economic system handles growth just fine.  But when it comes to contractions, it fails...or more correctly, implodes as we are not witnessing.

 

Key thing about the second fractal - and the rush to fund the automakers - is that autos were one and are one of the biggest segments of the economy. As goes GM, so goes the world, claims one viewpoint.  "No new consumption = no economy" says my sticky note on the wall.

 

Pardon Us

George "Bush pardons 14 and commutes 2 prison sentences" we read.  But wait!  Why isn't Marty Armstrong on that list?  Seven years in jail without a trial?  Ooops...this is the Checkbook Republic nowadays, not the place the Founders set up...forgot myself for a minute.

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Wanna make a little side bet on whether is issues 'preemptive' pardons on war-crimes and maybe a blanket stay out of jail card to Dick Cheney and some key defense contractors?

 

Spying Claim

Although a linguist says that the US spied on Britain's Tony Blair, back in 2003-2004-ish, I have a hard time getting worked up about the report.  I've assumes that NSA spies on pretty much anyone they feel like.

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I assume you know that the 'seems to be legal' way to get around rules about spying on US civilians is to have foreign workers man monitoring stations in places like near Alice Springs, Australia and Menwith Hill, England, among others.  And I further assume you know that the soup d' jour in anti-terrorism efforts is figuring out social networks - who talks to who and when, and what about - that kinda thing?  Why of course...

 

Cost Per Click Department

High cost of spam - no not the stuff in the can, the stuff that plugs your inbox:  $873-million judgment for Facebook against a spammer says InformationWeek...

 

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Coping:  What is Cash?

Privateer Capt'n Bill Buckler's latest post over at 321-Gold "The Great Deflation"  has a good general overview of what's going on in the world today, prompting one reader to send this:

"So, sometimes "cash is king" actually means holding cash. The only question is: what is cash?

Fiat paper money, and if so, whose? (Beyond that necessary to pay bills, I mean - that has got to be in local currency, like it or not.) Old coinage (pre-65 90% coin silver) that meets Constitutional description of legal money? New gold and silver bullion? Beateth the heck out of me.

A while back I bought a beat up 3/4 ton pickup truck from a kid for an ounce of gold. We still have and use the truck - got a lot of work out of it, and probably still will. And when my learning to drive daughters drove it into stuff on the farm, so what? Truck still drives fine. But it's utility won't last forever. If he's kept the gold, he is ahead. And will continue to be, for a long, long time to come. Maybe some day (perhaps not too long from now) he can take that ounce and buy a nice sports car. Or, maybe more.

There's a story told about a kid who was a bellboy in a hotel in Germany in the early 20s. Got a tip of a gold franc one day. A few years later the kid bought the hotel - with the same gold franc. (One thing I've never heard is if the hotel survived the second world war...for some reason that part of the story never gets told. Maybe because the kid then flipped the hotel for a bunch more and got the heck out of Dodge!)

Presactly the problem we all face.  So what can you buy?  A new stove will provide value for 20-years (if there's something to power it) and my latest thinking runs less to sports cars (I dream about them on occasion) to more practical matters - like maybe investing in more farm implements to throw on the three-point hitch.  (If you don't know what a three-point hitch is, click here to get a little farm tractor schooling...).

 

When you get right down to it, 'cash' is just a 'storehouse of value'.  That could very well mean that anything stored - food, water, investment grade diesel around the ranch, could be looked at as alternate forms of 'cash'.  Heritage seeds seem a good deal, too. 

 

Increasingly, in a world where systemic global risk is afoot, seems to me that 'cash' is whatever you're comfortable holding, so long as it gets you more control over your daily physical inputs.  May sound a bit nuts, but holding investment-grade propane and investment-grade diesel, stored foods and such - along with blocks of 22-ammo may yet prove out to be every bit as valuable as the 'paper' that passes for cash at the stores.  Today, anyway...

 

Seed Pack

M y friends at Everlasting Seeds have a new offering:  Veggie-Max it's called.  More seeds and a little less variety than their Complete Garden in a Can offering.    I'm thinking about their 'Crops in a Can' which has thousands of grain seeds...might have to work up a big patch of dirt to plant it all, but looks tempting...  Here's the Vegi-Max order form if interested special for UrbanSurvival readers - $120 instead of $134.  Makes a good Christmas gift...

 

Reader Question Answered:

Here's a good question:

"george, is the elliottwave international add place there by you because you endorse their professional insights? i only inquire because i am looking for some financial guidance and there are way too many financial guru's with their must have newsletters out there to choose from. if i bought them all i would have to have another job just to support receiving their well kept money making secrets. anyway i thought i would ask because i have been reading your urban survival blog since i heard you and cliff on coast to coast and like what you have to say. if this is part of your blog and not an independent advertisement i would be interested. "

Well, couple of points here:  One is that yes, I like Bob Prechter's work on Elliott.  It's a fine way of looking at markets.  But, like anything else, once a view becomes widely held, its value diminishes.  Hence, when I make investment decisions, I try to use a number of inputs - Elliott counts (I do my own, look at Prechter's and Robin Landry's counts which are often different) and try to come to my own conclusions.

 

I'd suggest that if someone wants to get a good handle on investing that a two or three newsletters  like my www.peoplenomics.com letter, and perhaps Elliott and maybe learning about Dynamic Gann Lines...  Then I'd get out the library card and go read the classics - like Granville's work on on-balance volume (OBV). Jimmy Rogers' books on commodities.  Anything ever written by Buffett...those kind of things.

 

Then get online and start paper-trading for a while - learning from your mistakes.  It may not be quick, but that's why some people do very well and others don't.  Investing, like Life, will give you back a fair measure for what you put into it...sometimes.  The rest of the time it's a damn casino...and you may as well go play in the middle of a busy freeway.

 

The key thing to study constantly is the future.  That's why the predictive linguistics of www.halfpasthuman.com get mentioned so often around here.  If you own the future, making money is a cinch.  Get the vision of the future right, lay down a few small bets, and off you go.

 

I think if a personal has Peoplenomics, the HPH reports, Prechter's letter and a good understand of all those technical indicators available from online brokerage firms (especially MACD, RSI, and OBV) you may be able to do better than at least some fund managers.

 

Defining Self

Here's one from a reader with way too much time to burn:

"Dear Mr.Orr......The UrebanSurvival Unabashed Dictionary defines:

 

4. ure-sine [ure-sahyn, -sin]

 

 adjective

	1.of or pertaining to a bearish predictions.
2.		Geometry. (originally) a curved line drawn from one extremity of an arc of a circle to the diameter passing through to its other extremity forming an unhappy face.

 

verb

3. to accustom by practice the concept of long run macro economic price cycles.  ure-sign

homonym

4. Similar to Wormsign.  (i.e. Wormsign is tell-tale signals that a sandworm was approaching during spice mining on the planet Arrakis. It usually manifested itself as static charges on the surface of sand dunes.

The observation of wormsign usually meant that a sandworm's estimated time of arrival could be calculated.)

 

 You could be the Kwisatz Haderach!

I could also be the Easter Bunny or Huckleberry Finn.

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Peoplenomics Update

A new assessment of inflation probabilities is now available for Peoplenomics.com subscribers by clicking here.

 

The "Turkey Day" Rally

It's axiomatic on Wall Street that the Market rallies before major holidays, but there's a big questionmark hanging over today's session:  Will that 6½ percent rally on Friday carry over through the whole week or just today's session?  Opinions on this vary depending on whether you're an optimistic (delusional) bull and think the headline that the "Government unveils bold plan to rescue Citigroup" is anything more than another round of overtime for the public's printers and still further evidence of the spin value of the word 'rescue' again.

 

"You've got to be kidding me," you're thinking.  "Aren't these the same Citi guys that announced just last week they are laying off 53,000 workers?"  Yep, one and the same.

 

The boyz down on Wall Street, masquerading as investors, but in reality leveraged debt-slingers for the most part, have figured out that if you fire enough people and pump in enough dough, any company has to make money, including Citi, right?  Ergo, I would expect Citi shares to climb today, thanks to your unbounded taxpayer generosity.  Geniuses on the Street, huh?  You pay, they profit.  Yee haw!

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I'm not the only one watching the quality of today's rally.  The A.P.'s Joe Bel Bruno writes:

"The question analysts pondered over the weekend is whether investors can find a way to build on Friday's rally. The answer could come Monday afternoon when President-elect Barack Obama is scheduled to introduce his economic team. "

Meanwhile, the move I have been watching with some interest is the strength of gold over the past couple of trading sessions.  With the Obama administration planning on a half-trillion dollar economic stimulus plan (only about a quarter of what the Bush administration is handing out as fast as they can to the bankers and Street), the prospect of continued 'spend more than we make' thinking has reg'lar folks expecting that gold (and other inflation hedges) could begin to do better in the future.  Like printing up helium for the indices.

 

From the high over 14,000 a while back week's close paper assets like the Dow have lost roughly 43% of their value.  But from the $1,020 area high to this morning, the price of gold is only down about 20%.  While some headlines refer to 'safe-haven" buying, I'm thinking it's more a rational decision compared with buying more paper.

 

I trust you caught that the Perth "Mint suspends orders amid rush to buy bullion"?  Come back in a month or two...

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A little more cynically, as the coffee kicks in, with the pending Obama appointments of NY Fed boss Tim Geithner, Hillary Clinton, Larry Summers, and Bill Richardson, I must be dumb as a stick to expect 'change' will come from this 'same-o' crowd; they all had a hand in getting us here, I figure.  Hopefully we'll see some 'change' but pardon me if I sit back with a skeptical ponder now and then.

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A few readers have told me I'm being too harsh on Obama - and that I should at least 'give him a chance' to do some changing.  Hate to say this, but appointing Hillary to a key post tells me the 'new' administration doesn't hear the word "No" any better than the outgoing gang. 

 

We'll see if there's real change or just jawboning, but write this one down -- The new administration is thinking about a two-year moratorium on new taxes.  Bet me it won't happen?  May blunt some critics of the same-o's coming along with the nominal new leader, but real change?  Sound money? Reindustrialize America? Massive infrastructure rebuild?  Alternative energy development?  Ask me about the tax moratorium talk me when I fill out by 2011 and 2012 tax returns...talk's cheap - government spending isn't.

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Word of the Citi Bailout may have something to do with oil peaking back over the $50 mark...

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Brothel employment is surging, reports ABC... but we'll just wait for tomorrows consumer confidence numbers to see how screwed the rest of us are...

 

Shop Till You Stop Department

We may have to retool our use of 'shop till you drop' to something like 'shop then stop' if the story in the NY Post this morning "Retailers facing Black Friday Bloodbath."  Maybe Santa's elves could be turned into telemarketers or collection agents in the off season... 

 

The NY Times media and advertising section notes that "For luxury brands, less money to spend on ads."  Takes money to make money, though.

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I'll keep asking the fundamental question: "What's worth buying that folks really need?"  After the big screen, what's the big next engine of economic prosperity?  Without new 'gotta-have-its' the grow or die financial system implodes.  Toast, kaput, or hadn't you noticed?"

 

'Course no one wants to think that one through.  Why that'd be...er...un-corptriotic!  (Definition:  Failure to support the Checkbook Republic's owners.)

 

Meltdown In China?

Let me ask you:  How would you feel if you were employed at a factory in China and we reforced to make goods for export that you would never be able to afford in your own country.  Things like, oh, basic house wares, for example?

 

I'd suspise that you'd be inclined to take up a pro-labor, anti-corporatist stand after so many six-day, 12-14 hour shifts...then not being able to find work after getting fired as demand for products by the West has declined... at some point, internet or not, there might even be riots against government.

 

That seems to me the flavor of what's going on in China these days.  Several thousand people rioted in Gansu province.  The Windsor Star headlines that "Chinese riot as financial crisis comes home" - all of which goes to underscore the tightrope being walked by Chinese leadership.

 

An international strategist might argue the developing labor issues in China might 'chill' China's international adventurism.  Or, someone like me might remind you that President Hu's trip to South America might be setting the stage for a Chinese version of the Peace Corp.  Then again, maybe not: Venezuela's Hugo Chavez lost momentum  in regional elections there this weekend.

 

True, China has tread lightly in Africa, but they are developing huge economic interests there.

 

Whatever the outcome, the problems of China are deeper than banning downloads of the new Guns n' Roses tracks.

 

Twinned Quakes Foreplay

As we march toward what predictive linguistics tell us will be two large & impacting earthquakes in mid-December (Dec. 10-12 kinda range) we noticed the 7.0 off the Russian coast overnight.

 

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Coping: Famine in Our Future?

While the government seems largely preoccupied with bailing out those with the largest lobbying budgets, we notice that not much attention is being paid to the fate of American farmers.  Not a good thing, to be sure, as it is one area where America might have a shot at self-sufficiency.

 

For example, soaring feed costs will be forcing a coop to kill and freeze product and that ripples to a layoff of nearly 400 at a feed company, reports the Deseret News.

 

The Des Moines Register reports that the "Rich get $49 million in farm aid".  Hobby farmers finding loopholes.

 

While unemployment spirals upward, and more people are turning to food banks to eat, the American Farm Bureau Federation says Thanksgiving dinner is still affordable...

"WASHINGTON, D.C., November 13, 2008 – Menu items for a classic Thanksgiving dinner including turkey, stuffing, cranberries, pumpkin pie and all the basic trimmings will cost just a bit more this year, but remain affordable, according to the American Farm Bureau Federation.

AFBF’s 23rd annual informal price survey of classic items found on the Thanksgiving Day dinner table indicates the average cost of this year’s feast for 10 is $44.61, a $2.35 price increase from last year’s average of $42.26. "

Oh-oh.  Hand me the calculator:  5½% inflation.  But what about a meal with red meat?  The Farm Bureau folks are against the EPA idea being floated to charge a livestock tax...

 

You saw this weekend where a farmer up in Colorado opened his fields to gleaning and 40,000 people showed up?

 

Rising fertilizer and seed prices are leading up to a "2009: few good choices" for farmers.  Expect farm income to drop this year.  Floods, hurricanes and the rest, I figure we should enjoy Thanksgiving this year while we can.  I doubt that within a year or two things will be this bright.  The same forces that crush banks 'trickle down' to the farm, and then prices work their way back up through the system.  When that happens, 5½% inflation of T-Day feasting will likely seem modest.  I would not be surprised by a 15-20% increase by this time next year as bad money drives out good and inflation returns with a vengeance.

 

Chemtrailing

Every so often we get a good report on chemtrailing by the (whoever).

"This Sunday around 1 pm, returning home from Mass, I saw a new chem trail being laid down from S to N. I managed to get my Bushnell 10x50 out and focused on the plane for a few moments, above my property, before it disappeared behind the trees. The plane looked like a 707, But the FUSELAGE WAS A PINK COLOUR. The two large chemtrails appeared to come from the tip area of the small rear wings at the tail (I think these wings are called stabilizers and have flaps) The parallel trails were well clear of the plane body. I could plenty of blue sky between the plane body and inside of the trails. The plane was moving very fast and seemed lower than usual. It's path went under a previously laid trail that was perpendicular. This could be the 2000 ft(?) separation that the FAA requires between perpendicular paths.

As usual, the weather forecast last night was for rain to be here on Monday. I will post this on OCP"

Hmmm...pink could be grey under certain light and yeah, ain't it curious how MSM keeps dodging this one...

 

Radio Jamming Career...

Tired of ham radio ops tuning up on top of your contact with the that rare DX (distant) station on 20-meters?  I have just the career for you!  The Army has plans for a new electronics warfare career track "New EW career field to 'blind enemy' with science."

 

Antenna Challenge, II

Several hams have sent in ideas (but no computer files) suggesting this antenna or that - as I try to figure out how to get maximum signal out of my wire and real estate to spare situation here at the ranch.  So far, the best seems to be a 570-foot hunk of wire hung as high as I can - normally 20-40 feet and the pattern on 20-meters looks something like this:

 

 

Still tweaking with wire lengths to get the best mix of low standing wave ratio (SWR) and number of bands, but it's a start.  (Didn't know I could model antennas, did you?)

 

This antenna takes advantage of the fact that as the frequency is increases, the large loop antenna's pattern comes down toward the horizon, while on 160 and 80 meters, it's much more of an NVIS antenna -- near vertical incident skywave, if you haven't been reading antenna theory books in your spare time).

 

More ideas welcome, but those with EZNEC modeling files are most useful.

 

Peoplenomics Subscriber Follow-up Note

Sometimes the preoccupation with ham radio has a side benefit:  In this weekend's report I was looking for a timer that would go off everything 10-minutes or so, so I could remember to ask "Is what I'm doing right now on task, or have I been 'sidejacked' by one of the many distractions of the modern office: day trading, eBay auctions, spurious phone calls, etc...

 

So along comes a copy of HamTimer - which goes off every 10-minutes and I retooled it to use a ships bell sound from here...

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