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Replaying 1929: Business, Financial, and Earth Change News
Updated: Saturday
December 6, 2008
07:55 CDT
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| Peoplenomics | Independence Journal | Site Disclaimer | Elliott Wave | View as Blog |
Published Monday through Friday about 8 AM Central Time Except Holidays Depending on my mood...
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Shortages, Fish & Chips & The Rationing Memes
(Glad I'm not getting up and doing these Saturday updates, ;-o)
With just about a week to go before we get to the "twin earthquakes" of mid December that are supposed to leave at least one of the two areas involved with isolation and substantial damage, we are also continuing to monitor the other memes that have been in recent www.halfpasthuman.com ALTA reports.
One that I find fascinating is the whole concept of rationing/shortages of this or that. And it's a mixed bag of news. Some sample first that may be 'food' news:
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"Oil prices tumble after jobs data" notes the Wall Street Journal. And that, in turn may lead to lower what kind of prices? Let me help you along - because you don't need to think too hard - it is the weekend, after all...
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"Return to $1 gas? Energy prices evaporate" says an AP report.
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"India cuts gasoline prices by 10% after oil slumps" - won't help you get to work, but it will sop up some of the excess inventory about, perhaps.
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Speaking of India, here's some fine spinning for you: "Excess nitrates in water could benefit crops" says a headline in The Hindu. Key part: "When you get more than 10 parts per million (ppm), it exceeds the... limit," Sij said. "Our water (at Chillicothe) is around 20 parts per million, so we don't give it to the babies, but adults can drink it"
Don't mention to these research types that there's some pretty good work in studies of the ocean dead zone off Scandinavia that suggests that excess nitrates are feeding the growing number and size of ocean dead zones in general. And to stay up on this one, you do did catch last month's report that "Tropical ocean dead zones could increase 50 percent by 2050"?
Close as I can figure, I'm part of the last generation that will be able to order fish & chips any time during lifetime. Youngest of our kids is 28 now, so assuming the methane hydrates don't off them and that there's enough O2 to breathe, a life expectancy of 90 would put them well past the 'last order of fish & chips" date.
Not to run this connectedness of everything into the ground at this ungodly hour, but you did catch in the Alaska Journal of Commerce the headline that "Halibut Industry braces for more limits on their catch"?
"Higher quotas will push Atlantic tuna closer to collapse", campaigners warn". And as the flounder fishing flounders, not to worry: The Maryland Department of Natural Resources is dumping streetcar wrecks into the ocean and they seem to foster flounder.
What missing? Perhaps they should be dumping that streetcar named "desire" - or the one next to it, the 'streetcar named consumers."
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Back on point, we have plenty of headlines that may be listed as bad if you're a pessimist, 'opportunity' if you're an optimist, or a "trading opportunity" if you're stuck in the 'paper means everything' mode.:
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"De-Icing fluid shortage worries FAA" reports CBS News.
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"Nursing homes wrestle with lack of nurses, aides" in a story out of Indianapolis.
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And, if you're thinking about where to counsel your kids to focus their careers, try this one on: "Large animal vet shortage may have serious impact..."
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Or, you might steer them into a teaching gig as we read how the "Mississippi teacher shortage could worsen."
Not all news of 'shortages' should send you scrambling to pour yourself a Bloody Mary for breakfast. "No shortage of morons in the sports world" reports the Toronto Star.
There, see? Life is not a train wreck - it's a blender! And speaking of which, didn't I tell you no need to slam down a bloody Mary? Instead, might I suggest a Bloody Caesar is a much better choice?
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BTW, this being Saturday and all, IF you opt for the Bloody Caesar for breakfast, make sure your significant other has one as well.
"Why's zat?" Aha! One of the best ways to ensure marital harmony I've discovered (write this one down) is my theory of "matching food, matching breath."
Here's my theory: Food breaks down similarly in people of all sorts. Organic chemistry works pretty much the same, most places on earth, right? So, if you want to have nearly the same breath as your partner, what do you do? Eat the same exact foods and drink the same exact fluids in similar ratios. In almost no time at all, you and your partner will start to 'synch up' and any breath issues disappear.
On the other hand, if you have a Bloody Caesar for breakfast, along with something equally yummy (fired red potatoes with fresh onions, and some hot links just fer instance) and you 'other' has just a piece of toast, guess who's going to be accuse of 'bad breath' for a good chunk of the day? You, Insinkerator breath!
No extra charge for this relationship-saving advice. Just remember: MFMB - matching food = matching breath and everything's cool, 'K?
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Now that I've saved you the million you would have lost in a divorce, be sure to subscribe to Peoplenomics.com, LOL. And enjoy those soccer games...their importance grows as you age.
Crack-headed Markets
Let me see: What could make the Dow pop up 259 points on Friday? Was it:
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Robin Landry's count coming true as we head to 9,200 or 9,700 before we collapse (likely) to his 5,800 Dow target thereafter?
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Or, maybe it was that 533,000 being axed by loving, supportive, and sympathetic employers (NOT!) last month?
Looks to me like the 'strong hands' will run 'er up to 9,200 or more, sucker in some 'weak hands' and then let gravity take over to clean the clock of 'average' investors yet again. Bet me?
Confused By Gold?
Me too. Things are looking stranger than strange here on the gold front. First, one of my buddies is trying to take delivery on some 'mini' contracts and seems like he's being stonewalled by the exchange (more on this if he doesn't get his gold). And, I hear that delivery requests are way up for December.
But, now check this out: The 'spot price" reported by Kitco when I last looked was $754.30 and Ino is showing $754.65.
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Doesn't it strike anyone besides me that both the buy and sell prices are on the high side of spot? Seems to me like the paper gold versus real gold market is in chaos if I read this correctly. Whenever I have looked in the past, I've seen what I'd consider a 'normal' situation where the buy side was a bit lower than spot. But not at the moment. Go figure...might mean something. I'm not the only one to notice things are strange in the gold markets, either.
Quake Dates Looming
With the 'window' for our 'twin quakes' with massive impacts due Dec 10 to 15th (roughly) we can't help but notice the 5.1 shaker in southern California last night. I figure maybe next weekend we will have our first BIG one. Belted in? Things nailed down?
"Hi George, Cliff!
Warm-up for the big ones in 5-10 days? Could be. Just felt a 5.5 Mag quake located at 34 degrees 49 minutes latitude. 8:20 PM Pacific time. I'm here in Van Nuys, in the San Fernando Valley, about 120 miles southwest of the epicenter which was between Barstow & Ludlow in the mountains on the road to Vegas. A 5.5 on the 5th of December. And well within your latitude range.
Funny how this morning I wrote to a friend up north about your site and mentioned that down here, it's "shake'n'bake" country. Well I told him we had enough baking with all the fires and that it was time for a shake, and I mentioned your upcoming twin quake window.
[name withheld] Van Nuys, CA
PS Actually, we had a much bigger rumble last Sunday. It was the sonic boom from the Space Shuttle which had to land out here at Edwards AFB. I thought a huge tree limb had fallen on our roof. (actually Ba-Boom! Two thunps, one for the front and the other for the rear of the craft) Well, then I guess we qualify now for "shake, rattle and roll." Got the shake and rattle, so the roll might be the twin quakes a comin' down the pike.
Please return your seat backs and tray tables to their upright and locked positions....
Runaway Taxocrats
While plenty of us farmers/.ranchers here in East Texas are about fed-up with the absurdity of EPA proposing a tax on methane from farm animals (See: "Proposed fee on smell cows, hogs, angers farmers"), it underscores the inadequacy of EPA's research: There's far more bullshit in Washington than all of the Heartland's farms and ranches combined so if there's a place to limit pollution of almost all sorts, seems to me the logical place to start is where?
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"New England border protection chief charged with hiring illegal immigrants" reports the Boston Globe.
From "News" to "History"
The Denver Post is reporting today ("Ad losses send industry into a tailspin") that more than 30 daily newspapers are for sale across the US.
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Don't know if anyone ever laid this out for you, real simple like, but in the "news" businesses, the name of the game is immediacy. So, if you want to map out which media is ascendant and which is descendant, all you need to do is look at one metric: Time to reach how big an audience.
Before the Communications Act set up radio stations in a formalized way (circa the last Depression) newspaper was all there was. Folks like Hearst got to build castles, so great were the profits. But then came radio, and later on, television.
But even these are facing increased competition from new media. A Google news alert will text you a message about something long before you see it on television because few folks are watching TV while driving. But if you get beeped? Oh hell yes you'll look at the texting.
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So here's the newspaper bottom line: Instead of using recycled electrons, the newspaper business cuts down trees, writes just enough content to suck in tons of ad dollars, and they somehow think that game can continue forever unchallenged. Hah! Get real!
And, instead of doing important "contexting" (like we try to provide to some degree on this site - placing items into an economic/sustainable living kind of context, ancient media has responded by loading up on loser-contexts like the right/left columnists who represent the 'same old way of running the paradigm'.
When ad sales fall, because who needs useless volumes about political this, or that, delivered typically 24-36-hours after a text message from Google, the newspaper industry is somehow 'surprised.' Welcome to the "Duh" Department.
Frankly, I expect that a newspaper that fills a thought leadership role and does contexting in a way meaningful to its market can still do very, very well. But most papers? More like recent history books, mostly. And run by folks that still cut down trees in order to transport ideas around.
Silly, isn't it? All these 'bright" journalists out there killing trees and persisting in the right/left - conservative/liberal paradigm. Yesterfolk pimping yesternews about the yesterdigm when they could have been hugging electrons.
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Let's watch 'em line up behind the WWW2 movement in order to 'steal back' a niche, LOL.
Secrets Revealed Department
Speaking of history: "In tapes, LBJ accuses Nixon of treason: Johnson thought meddling derailed planned Vietnam peace talks on eve of 1968 election, according to final recordings made public."
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How shocking? Imagine a republicorp subverting peace talks to win an election. My, how times don't change, eh?
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Coping: Those Missing Tax Bills, II
Ah - the emails keep pouring in over the question of why so many people haven't gotten their tax bills from their local counties in a timely manner this year. Here are a few more data points to add to our growing collection:
"Hi George, Thank you for reporting on the land tax issues throughout the country. I thought I was the only one with this issue, now after talking with my neighbors and reading your report with the info from other folks around the country, I am really wondering if there is some sort of a weird goverment thing going on. We recently had our taxes hiked up by a weird amount, after the assessor made a visit to our property this summer, their explaination for the massive tax increase so far is being questioned by us. I cannot understand what is going on, but I just can't believe that it is not a "planned" tax scam by the county/ and fed goverment to raise taxes somehow. I agree with you about the the stimulus check being a scam too. My turbo tax does the same thing when I input the numbers. Take Care and stay warm, your friend in NE."
No Knock Food Raid?
Here's an interesting story to read out of Ohio that may curl your hair.
Coup Check
How's this one:
"George,
Love reading your site. Keep up the great work. To further support your emphasis on rescue/bailout: interesting how this headline calls for the banksters a "rescue"...http://www.washingtonpost.com/wp-dyn/content/article/2008/12/05/AR2008120502533_pf.html
and this one for the automakers a "bailout"...http://apnews.myway.com/article/20081205/D94SGFO80.html
wall street vs main street Unbelievable how the banksters got a total pass from congress and billions thrown at them without question, and how the big 3 are totally grilled and must come up with so much before a dime is passed on to them. ( of course, I think neither should receive my tax dollars) Bloodless coup has taken place in DC"
Nice someone else has noticed...
Front Line Report
From a reader in Baghdad:
"George: Things in the states are harsh.. no doubt, but I’ve given you good intel from Kuwait (vis-à-vis the labor riots) and now I’ve gone back to Baghdad. Things here are actually looking up. Currently, gas and all fuels are running at 83 cents a gallon US, and the investments of other Middle Eastern countries is phenomenal. Kuwait not too long ago bought out IRAQNA, the Iraqi cell phone company and is now ZAIN-IRAQNA (ZAIN being one of the biggest conglomerates of Mid-East Cell Phone Providers.) There are 3 total companies for cell phone service as opposed to the one we had back in 04-05 when I was here before. The insurgents are DONE. The locals biggest fear is that we will leave too soon (per our new Overlord…er Presidents call,) and that they know our staying means stability and money. ‘Fake’ dollars or nor, between the surge and our spending cash to stimulate the local economy, (thusly encouraging growth) Iraq is on the fast track to become an economic powerhouse in the next ten years. The Kuwaitis wouldn’t be investing here unless they knew things were going to be good in the long term, and I’d have to say that going from ‘broken and destitute’ might have been what this place needed… maybe we can take a note from this? Who knows…"
Unemployed?
Might want to add this website to your resume list: http://change.gov/
Attitude Check
Feedback
"George,
I read you religiously every day. I’m not an investor (don’t have enough money) but was able to get my 401 dollars out of stocks and kept it intact.
I think that at this time in history, we need to make an effort to promote positive thinking. Your column almost gloats over the bad news and I feel like you take perverse pleasure in “being right”. It’s easy to feel smug and be happy at the current state of events when you’ve made the proper preparations. I think you should be proud that you saw this coming and also in how you’ve helped those of us with less financial savvy in saving what little we do have.
However, I think that you also need to take time to promote positive thinking and help those of us who aren’t hurting to help those less fortunate. One way I am doing this this year is to decorate my house with lights, have little holiday parties, cook for those less fortunate, give to food banks, pray for those who are hurting and pray for light to finally enter the hearts of those in this Country during this difficult time. Maybe save a small section of your article for some positive news in light of all the doom. I worry that by being a doomsday advocate, we are feeding into this dark period instead of lifting people up during this time.
Just a thought. Merry Christmas to you and your family."
I really do try to remain positive about things - which is why the new focus on 'bogslife' Not being smug, though. Don't want to come across that way. I try to walk the fine line between smug on the one hand and downright depressed about the lack or ability to change a slow motion train wreck in process. And Merry Christmas, to you, too...we're sending checks to the local food bank...
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Send snip and save items to george@ure.net.
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Fasten Your Seat Belt: Quake, Famine, and Anarchy
Most weeks, Peoplenomics will try to get into a single topic, sniff around a bit, and see if there's any 'logical' (such as humans pretend) outcome to be deduced from a pile of available facts. But, this week's report is more akin to stepping into an emergency services dispatch center: There are so many 'if-then' possibilities about that it nearly boggles the mind. Even when filtered down to some of the major areas coming from the predictive linguistics, it all looks more like 'news stew' firing off for the month of December and balance of winter. While we won't be extending the 10/Codes/MIR system ("We have a 10-482, all units be on the lookout for the earthquakes from 32-36 degrees December 10-15th...") we will see if we can get set some reasonable expectations about what seems ready to jump us from the dark alley called December.
More For Subscribers Subscription Information
"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!)
Friday December 5, 2008
Ruble Trouble & Where's Them Jobs?
Stirring the economic cauldron as we do, there is plenty of grist for the mill this morning, so rather than focus on just one aspect of things, we'll apply a leaf blower to the headlines this morning.
First up is word that the "Golden State" ain't really so golden. Seems that "California may pay vendors with IOU's for Second Time Since Depression."
OMG - there's that damn "D" word again. However, if you're still in "D" nial, how about the CNBC closing bell comments on CNBC last night. "You've got a (whispered) Depression"
Yup - a guest on CNBC saying pretty much what we've held around here - the market on an inflation-adjusted basis peaked in Q1 2000 and has been sliding ever since.
The currency mess threatens today on a couple of fronts: Not the least of which is the pending decline of the Russian Ruble. "Bankers posed for a weaker Ruble" says the Moscow News. What's driving it is the downward oil shock: Ruble to plunge like Mexican Peso on 'oil shock' says a Bloomberg story.
Not just 'ruble trouble' though. The hedge funds continue to implode. Although in fairness, 'restricting withdrawals' doesn't necessarily mean implosion...still it's often a precursor. "Hedge funds chalk up more losses, big names suffer" says Reuters. Oh wipe that feigned look of surprise off your mug.
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As the global demand for 'things' is being wheeled off to the morgue, we can't help but mention that Australian Iron ore miner Fortescue has suspended some ore shipping contracts. Unforeseen circumstances cited, but we don't see what those are, curiously.
We do know that China is not going to save Western banksters according to headlines out of the UK Telegraph.
Did I mention hedge funds in trouble? Like the report that Citadel out of Chicago has lost 47%?
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"Ponzi Scheme at CITI" headlines the NY Post this week. Lawsuits in Bankster Land - who would have thought?
Say: Did I mention hedge funds in trouble? "D.E. Shaw, Farallon Restrict Withdrawals as Fund Freeze Deepens" headlines a Bloomberg report.
But wait, there's got to be good news somewhere...
The Jobs Report: Half-Million+ Axed in November
Not going to find much joy in Mudville over this one:
"Nonfarm payroll employment fell sharply (-533,000) in November, and the unemployment rate rose from 6.5 to 6.7 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. November's drop in payroll employment followed declines of 403,000 in September and 320,000 in October, as revised. Job losses were large and widespread across the major industry sectors in November.
Unemployment (Household Survey Data)
Both the number of unemployed persons (10.3 million) and the unemploy- ment rate (6.7 percent) continued to increase in November. Since the start of the recession in December 2007, as recently announced by the National Bureau of Economic Research, the number of unemployed persons increased by 2.7 million, and the unemployment rate rose by 1.7 percentage points. (See table A-1.)
The unemployment rates for adult men (6.5 percent) and adult women (5.5 percent) continued to trend up in November. The unemployment rates for teenagers (20.4 percent), whites (6.1 percent), blacks (11.2 percent), and Hispanics (8.6 percent) showed little change over the month. The jobless rate for Asians was 4.8 percent in November, not seasonally adjusted. (See tables A-1, A-2, and A-3.)
Among the unemployed, the number of persons who lost their job and did not expect to be recalled to work increased by 298,000 to 4.7 million in November. Over the past 12 months, the size of this group has increased by 2.0 million. "
Since I want to grow up and write serious fiction some day (like Clive Cussler or Alistair McLean) my favorite part of the employment report is the "Alternative Measures of Labor Underutilization, Table-12, U-6"
Here we see that the "Total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers" was up a full 1.1% in the latest reporting month.
Another great place to look for content (as a fiction writer should) is the CES Birth-Death Model which asks us to believe that a total of 30-thosuand new jobs were 'created' on a statistical basis over the past month.
I wonder how long before such reports are available in suppository or ointment form?
Even more fictionesque? About 1.1 million jobs have been statistically created since February. Cool, huh? Wonder if Dirk Pitt is working at BLS?
Personally, I expect to see a major revision to the 'created via statistics' shock when the January numbers come out - just before the inauguration. Last January, 3-million jobs went poof from the created jobs model. Why not hand the new guys a real steamy lump of....er....stuff. I can hardly wait, huh?
Downer
The market futures have slipped a bit on news that there's sharp deterioration on the jobs front. Gee, 'magine that.
Greasy Mess
Oil's down, too. Four-year lows. Not surprising.
Auto-nomy Going?
With fewer people having jobs - that means car sales will crater. With car sales cratering, oil prices drop. And what do we need to fix all this? "Auto bailout could be tied to gov't-run overhaul" says an AP story.
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So let me get this one straight: The folks who can't let the military win wars, can't balance a budget, can't keep employment alive, and have mortgaged us to China are going to fix the auto industry against the likes of Honda, Nissan, and Toyota? I'm gonna need to switch from Jack to El Don to make it through the rest of the morning....
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Coping: Flip Side of Diversity
I think my friend Jas Jain (who you may remember as 'my deflationist pal' who moved into US Treasuries/bonds just before the all-time high in paper 'equities') has a much better sense of the real long-term impacts of the recent Mumbai attacks than most. No, it's not pretty to think about, but it has the ring of truth about it:
"During bad economic times Diversity IS Deadly, be it India or America, particularly so for democracies where Divide & Rule and cajoling the minorities is the winning game plan. It you hate a country or a group wish them a democracy, e.g., Iraq! The truly ugly side of mass democracy (it was NOT the case until after the WW II) would be seen in the coming decades. Democracies in the English speaking countries are among the worst due to greater diversity of imperial reach of Britain and later America. The best ones are to be found in more homogeneous populations. Democracy will be soundly discredited. "
He think excerpted a big from one of my favorite current affairs -projected forward - thinkers, Robert D. Kaplan, who discuses in a new Atlantic Monthly article some of the reasons:
"Behind Mumbai
(extract)
",,,It is clearly possible that the terror rampage had its origins outside India, aimed as they were at international rather than Hindu targets. But in a least one sense it doesn’t matter. For the attacks will aggravate a growing fault line between Hindus and Muslims within India itself...."
Kaplan's work hasn't dwelled on the financial aspects of 'life
just ahead' but if you'd bought a copy of his book The Coming Anarchy: Shattering the Dreams of the Post Cold War
Also on point - and worth the time to consider - is the Paul Craig Roberts article at Lew Rockwell's site titled "Washington Arrogance has fomented a Muslim Revolution". Who says we can't be our own worst enemies?
It would be redundant for me to point to the new Obama administration appointees as a brand new ticket to the same-old place, so I won't.
Seeing - Darkly
I wouldn't go so far as to call myself a connoisseur of tactical imaging technologies, but I've got about 15-years of history using these systems. My first unit was a small first-generation hand-held often useful back in the day when I was living on my sailboat. Darn handy at night to have something that would pump up starlight to something useful. And, on the many nights when there was no moonlight or starlight - common in the cruising grounds of the Pacific Northwest/B.C. Gulf Islands, the little built-in IR illuminator would do a fine job of letting me find things in what would otherwise have been close enough to darkroom quality 'dark' to make loading sheet film practical.
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Over the years, I've watched the technology evolve. In about '98, or so, I remember looking at the Gen-3 systems that were being displayed at the US Sailboat Show in Annapolis, when I was there for Cruising Equipment where we did battery and DC power system instrumentation and control. neat stuff. I went into a blacked out van which ITT had brought to the show promoting their Mariner series of gear and was amazed to see how much things had improved.
Ever since then I've been wonder, how does it get better than this?
Well, about 4 PM last night, one of the neighbor's boys dropped by - freshly deposited back on USA terra firma after another round of forward recon in the 'Stans with an SF team with the answer. After chatting about this and that along about dark he showed me his latest 'goodie'.
"It was about $28-grand," he explained. A little larger than a handheld Gen-3 IR system, this was the finest low light vision system I'v e ever seen. I mean right up there on the 'mind blowing' scale.
"What's the technology?" I asked.
"Thermal imaging. Cost me most of my re-up money - $28-thousand."
Ouch. Hope IRS lets him write if off as a business expense.
The optics were nothing short of remarkable. Handheld, camo, zoomed, stabilized - this this little gem was nothing short of incredible. And, since it was thermal, not IR, the amber display was very distinctive and crisp. No 'optical noise' if you're familiar with the IR Gen1/2 kinda gear.
Not that I'm going to run out and drop 28-large to snap one up - since hiking in the 'Stans to gather intel is not on my list of things to do - at least in the foreseeable future. But, wowzer! What a hot setup.
If you've got a spare $26,500 floating around, you might find
the Fluke thermal imager worth looking into: Fluke Ti55FT-20 Thermal Imager Flex-Cam,IR Fusion, 20MM
Oh sure, you can spend less and get some fine Gen-3 IR setups
like the
Night Optics USA ITT-NQ-PVS-14 Generation 3 US Advanced Multi-Purpose Night Vision Goggles
Bottom Line: I don't impress easily because I've seen a lot of different night vision set-ups. But the advanced thermal imaging systems? Nowhere to hide. I've put it on my "some day after I buy my twin turbo" list. Very useful tool if you're in the 'sand box'. Very.
Missing Tax Bills
Yup - lots of reports from all over the country from mfolks - like me and the neighbors here who didn't get their property tax statements in what must be a coincidence, right? Some extracts:
"I will not go into a deep thing with you but we experienced the same thing; as we didn't receive our tax statement due for 40 acres i have and then as the time drew near for foreclosure we were notified... Fortunately we were able to pay it and not lose it. I am trying to sell it to get to the mountains... I dwell in Florida. "
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"Dang! That's all I can say! Sometimes our mail lady goes crazy and throws mail beside the boxes (everyone's, not just mine), and I thought she might have done it again, as we never received ours. But, four different neighbors asked me if I had gotten mine back in August and I thought it was a fluke of sorts, but NOW you've got me to thinking about that missing bill.
Thanks for ruining my bill free holiday! "
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"It seems that Torrance county, NM, managed to lose access to their tax database and were unable to print the tax bills in time for mailing on November 1st this year. They finally sent the bills two weeks later, but will only give one extra week to pay without penalty. I am still missing one of my tax bills and will have to visit the county offices next week in order to locate it. The original deadline to pay the bills is December 10, and I intend to pay by then, regardless of the extra week of "grace". Quite bluntly, I don't trust them to not screw things up.
I will pay the bills in person by check, and get a validated receipt line on the tax bills too. Belt and suspenders.........
I'm also reorganizing my records, and creating a backup set of certified deeds, paid tax bills, etc. I don't know if these folks are just incredibly disorganized, or disorganized by design. Either way, they are a menace. Quite honestly, I don't have time for this nonsense, but it does seem to need attention.
I also don't have time to discuss the INCREASE in the bills....................
Anyway, that's the story from central NM."
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"We got ours several months late, here in Providence, RI. The bill looks O.K. but who knows? "
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"I live in Sacramento County, California. Our annual property tax bill arrives during the 1st week of November every year just as it did this year. The bill is set-up to make two equal payments, one due by 12/10/08 and the second due by 4/10/09. This is the first time in 24 years the bill arrived with just one pre-printed return envelope. Just wonder?"
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"In Las Vegas NV my tax bill comes in my monthly statement from Wells Fargo, we have both auto and home insurance policy through Allstate. We just got a notice stating that we owed about $1,000 dollars not sure of the amount exactly, so we could either pay it separate or have it added into our monthly house payment for $25.00 a month. Since my husband lost his 2 job in Nov 07, and his regular job as a travel agent he now only works 4 days a week, we opt for that. You have to look on your house bill monthly to see what they are taking out to pay your taxes, and if its not enough they bill you here. If a bunch of you in Texas didn't get there current tax bill, start a neighbor petition and have everyone sign and take it to City Hall, and notify the news medias and believe me something will be done about it. That's what folks here do..." [Texans are a little less polite and more direct - G]
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"I have not received my property tax statement (Lake County, FL), which leads me to this question: Since my property taxes are rolled into my mortgage & my mortgage company pays it every year, who would be responsible if it wasn't paid? Also, my mortgage is through Countrywide. Weren't they bought out by Bank of America at the end of last spring? And if I'm correct, when will I have to be writing checks to them instead? It just seems to be taking an awe-ful long time, especially for a company as wealthy as BoA. Thanks again for your time & energy, but one more thing, if I may ~ I had to laugh at the letter from the guy who destroyed his house. I'm sort of in the same situation, but if I could get a loan to remodel my house, I'd use it to add solar panels, a greenhouse, etc. & use their money to do what our country should've been using our money for in the 60s & 70s & escape the grid! "
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"Mine came about a month late here in Denver, CO. They acknowledged their mistake, don't recall the reason given, but they pushed back the due date of the first payment by a month. Mine was part of a larger group this had happened to. A test to see who would notice it hadn't come, and how long it would take for people to ask?"
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"My neighbors did not get their property tax bill last season. They just remodeled their home and it is one of the highest taxed in the Town of Diana, New York, which is saying a lot since it is now official that New York State pays the highest property taxes in the United States."
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"I received a duplicate this year. Same bill, they just sent it twice. I just hope I don’t owe them more than the one! That’s some high strangeness going on there! "
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"Oh I got my property tax bill alright, the first one I received was also a "final notice" with a threat to sell property to cover taxes."
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"About five years ago we refinanced our lake home in East Texas that at the time was our second home and is now our only home. With a chunk of cash down we reduced our payments to only $350 per month with a short 10 year mortgage. Our home and out buildings are actually on two lots. One thing that we did not understand and not mentioned in our agreement was that the payment of property tax was not included. We never got a tax bill until a few years went by and then got hit with a demand for payment or else from the tax office. Fortunately we managed to make payment arrangements with the tax folks. Now this year we got a tax bill of about 50% less than previous years and it turns out it shows only one of the lots on it where the bills previously showed both lots. We still haven't got this straightened out. Just thought you might like to have one more data point to consider. "
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"Your discussion of the possibility of county governments intentionally neglecting to send property tax bills to selective property owners sounded a chord of familiarity when I read it. My wife and I own property in two counties in California. The county in which we live the majority of the time has consistently sent out property tax bills for both the lot with the home on it and the empty lot next to it, and has always done so in a timely fashion. The other county where we have our other home has, for the past two years, neglected to send us a property tax bill, even though we have owned that property for ten years and there has been no change in our contact information. Each time I have telephoned around November 1st to ask what happened to my bill, and each time it has then appeared in the mail just a few days before it was due. Each time I paid it immediately and in full.
Regarding your statement that one should make sure that the property tax bill is complete: In my youth I once worked as a property tax examiner for a large corporation. This corporation contracted with banks and loan companies to provide information to those institutions regarding the properties on which they were lending money. As a tax examiner, it was my job to go out to various tax assessor's and recorder's offices in California counties with copies of the loan companies property descriptions, look up these properties in the map books on file in the county offices, and determine which assessment districts would have authority to make assessments against that property in addition to the county taxes. This was necessary because such districts were not always included in the sale or loan information, and the assessments from those districts might not always show up on the property tax bill. But if they weren't paid, then the property could be auctioned off by the state for unpaid back assessments, hence the loan companies' interest in having such information.
The point of this is that there is really no way for a property owner to be 100% certain that he or she is current in paying all of the assessments against his property. Assessment districts can spring into life with little announcement, such irrigation districts, mosquito abatement districts, etc., and the boundaries delineating these districts can often wander to include properties whose owners would never imagine their involvement in such beaurocratic idiocies. The assessments they levy against the properties are legal and binding, and ignorance of their existence is not a legal excuse for not paying. Hence the properties can be lost to foreclosures and sales for non-payment."
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"George we normally get ours in Jan-Feb with fiirst installment due in May and second installment due in Nov . This year we did not get our tax bills until Nov and it is due now . I like you got mine on a Monday and went down and paid it right away. The co Treasurer blamed it all on the state legislature . You know the drill . This is Floyd County Indiana "
I could go on and on with reports like these - lots of people find that either their mortgage servicer didn't get the paperwork, or they didn't - so the best course of action seems to be toi put a tickler file together and every three or four months check to see that all taxes and assessments have been paid.
Is it some vast national conspiracy? Doesn't seem so, but we'll keep an eye on it. Like one reader put it:
"Once is a mistake
Twice is suspicious.
Third time's enemy action..."
Two other "cutsie" things: We hear that assessors in many of the hardest hit areas of the country (Florida and California) are bumping up assessments (hence taxes) on foreclosed home so the next owners will have to pay higher back taxes to redeem them (cute, huh?) And, the premier of British Columbia is pledging to freeze property taxes there - but likely as no, what's really going on hidden from the financial impaired is that this may just 'lock-in' higher tax rates which should otherwise drift down as property prices fall in the lower B.C. mainland like everywhere else in North America seems to be tanking - except 'rich farm lands', of course.
Don'tcha love it?
Canadian Feedback, Eh?
Last - but not least, we have this:
"George darling,
Not sure what it is you don’t like about our Stephen Harper… I can only guess you’ve got lots of friends from Toronto. Unless you’re still sore about us Canucks being able to see Iraq was a quagmire and refusing to follow you guys in.
First off, our Conservatives are small c conservatives… not rabid, bible thumping, gun waving, abortion denying nutsos like you have in your Republican party in the US. K? (People in Toronto are like people in DC, they’re not on the same planet, they believe what they Cyclops in their living room tells them about the rest of Canada and they don’t get out of their own Province enough to see it ain’t so)
Secondly, you’re complaining about Bush and Co. bailing out (not ‘rescuing) banksters. Well, our Liberals and New Democrats who are trying to carry out their little coup are hell bent on bailing out banks (some of which bought the toxic waste, none of which are about to fold) and CEO friends, and giving loadsa money to your GM/Chrysler/Ford plants in Ontario.
Hey, why should you guys in the US have to bail out the auto industry when these twits are so hot to do it that they’re up here staging a coup over it?
Harper told them ‘no’ to bailing out the GM/Chrysler/Ford plants… he bluntly told them to let the free markets sort it out.
‘Harpo’ – regardless of how much you may hate him – apparently has more fiscal sense than your Bernanke, Paulson and Pelosi.
Unless of course, you’re taking the ‘misery loves company’ stance, and would like to see us bankrupted as well by jokers who can spend money even faster than you guys can. J
BTW
“Canadian dollar as long as they can get rid of Harpo and keep the US from invading to 'save them for democracy' as they have enough oil, water, and timber to make that worth pondering.”
Really wouldn’t suggest you guys coming up this way. War of 1812 and all. (we haven’t forgotten even if you guys have)
http://en.wikipedia.org/wiki/War_of_1812
Invasions of Upper and Lower Canada, 1812
America's leaders assumed that Canada could be easily overrun. Former President Jefferson optimistically referred to the conquest of Canada as "a matter of marching."
On July 4, 1813, Joshua Barney, a Revolutionary War naval hero, convinced the Navy Department to build the Chesapeake Bay Flotilla, a squadron of twenty barges to defend the Chesapeake Bay. Launched in April 1814, the squadron was quickly cornered in the Patuxent River, and while successful in harassing the Royal Navy, they were powerless to stop the British campaign that ultimately led to the "Burning of Washington". Having destroyed Washington's public buildings, including the President's Mansion and the Treasury, the British army next moved to capture Baltimore, a busy port and a key base for American privateers.
We see you rebuilt your White House. It looks very nice!
Cheekily yours," (female Canadian name withheld)
Say, does this mean that you're not going to bite when the US announces that Alberta is part of Montana and needs to be liberated? ROFL...Just kidding. Might want to keep an eye open for this, though: The PTB/globalists are slamming down oil prices and bringing on depression so they can buy Canada's resource base for 10¢ on the dollar when the hedge funds collapse worldwide. The way I figure - as goes Dubai, so goes Calgary...
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Thursday December 4, 2008
Rate Soup
Seems that interest rates globally are continuing their downward trend, and that's either good news, or bad, depending on where you sit.
This morning's NY Times says "The housing market may finally be getting some relief, with lower mortgage rates already encouraging refinancing and Treasury officials considering ways to entice new buyers." But, before you 'pop the bubbly' consider some of the other effects.
The first is that even with many auto companies offering zero percent interest financing over the past few months, the Merc out in San Jose is headlining that "Auto sales plunge; industry on ropes". While the automakers continue the knee pad tour on Capital (sic) Hill, the United Auto Workers are making some concessions.
If there's a distinguishing feature of the evolving Second Great Depression - which nearly everyone seems to be in denial about, despite a 1930's-like 40% decline in equities market which sure looks like more than a 'recession' to me, it's that unlike the 'front-end' of the Great Depression (#1 circa the 1930's), #2 is not being played out using competitive tariffs - thanks to those free trader zealots - it's being played with competitive currency and interest moves.
The headline that "Sweden slashes interest rate to 2 Percent" is therefore not surprising.
Elsewhere, the Bank of England this morning cut their rate to 2%, which is the lowest that's been since 1951. Indonesia's central bank has also cut its interest rates by 25-basis points (.25%).
Indonesia's 9.25% might sound a tad on the high side, but that country has been trying to support a 'go-go' economy which seems to be a hybridization between the depths of the Depression (1930's here) with lots of street vendors and home delivery services on the one hand, and a push to modern industrial production on the other, according to our SE Asia bureau chief (formerly our Houston bureau chief).
Elsewhere, New Zealand has cut its rate to 5%, joining the global rate cutting binge.
In our own back yard, while Chief Printer Ben Bernanke at the (not really) Federal Reserve has been telling the Washington Post that further rate cuts by the US Fed may be in the cards, the USA Today report also notes that interest rate cuts alone won't be enough.
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Now a little economics history lesson: Back in the late 1980's (around 1989 to help you narrow your research) the Japanese stock market stood well over 40,000 by the Nikkei index. Overnight, the Nikkei closed at 7,924.
I don't claim to be the brightest flashlight in research, but it seems to me that when an index drops from north of 40 to under 8 and goes through what's been a 19-year beat-down, that dropping rates is not the answer. Unless, of course, you want your economic to get a 20-year *ss-whipping.
The Japanese experience was to reduce their interest rates to essentially zero, which had the side effect of giving the global corporate money-gluttons the free money they needed for the yen-gold carry trade, and let their banks 'paper over' extreme real estate losses. I've heard of cases today where was were million dollar plus condos in Tokyo are rented/leased for a fraction of what their underlying values would imply, just so their banksters would not have to 'fess up' to the ugly reality of falling realty (so to speak).
Hold that thought, because we're about to go somewhere.
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I perhaps foolishly, hold to the idea that brain power is pretty evenly spread around the world. Sure, there are variances for education and psychological and sociological conditioning, but most humans fit somewhere around the middle of the Bell Curve.
China, being no exception, has been plotting a financial course designed, most likely, to build their middle class so that they can get in on some of the benefits of being a consumer-based economy like the US has enjoyed, albeit with Chinese labor and goods. They also have noticed the US dollar's value has been recently high, but in the longer term, as it becomes more and more saturated with debt, at some point its value will hit an inflection point, and the debt-logged buck will sag in values against other currencies.
China's got a little problem, though: They have been accepting US paper as payment for their goods for years and the problem on the horizon is what to do if the buck sours?
It's against the backdrop that we read how "China currency depreciation a 'political signal' before Paulson visit - JP Morgan" over at Forbes.
Curious.
The way I've got it figured, the US may have to go the way of Japan and push our rates down to near zero as things continue to implode (evidence of which abounds in the housing market, among other places).
China has tons of higher yield US debt paper, but we don't know (not being inner banksters) how much of that is floating and how much is fixed. But the Paulson visit promised to be a most interesting ballet (dancing around the competitive currency devaluations and competitive interest rate drops) to watch.
In the meantime, the Fed, Treasury, and taxocrats on the Hill are all trying to figure out new and creative ways to shove more money into the system. The game plan so far has been to print lots of money and hope it leads to lower rates and a renewal of consumption.
If they 'under-print' paper, then we get continued deflation and falling rates, which are already coming within spitting distance of zero. On the other hand, if they over-print then we get inflation which could easily pop into hyperinflation.
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To me, the best plan I can come up with is a sort of 'printing-neutral' investment plan. A little bit of precious metals to hedge against the hyperinflation possibility, and some owned outright means of productions (small farm, tools for my machine shop) on the other.
It's harder to do for a working couple in a big city, but it seems like having one family member in a recession-resistant job (fireman, policeman, undertaker, grocer, garbage collector, etc) on the one hand, and another in a position to benefit from a return to a growing economy (services, high tech) would not be a bad position, especially if lots of attention is paid to getting out of debt and deliberately under-spending ones income.
This last is hard to do: The Cyclops in the living room keeps promoting yesterday's paradigm. When I turn on the tube, most of what I see makes me sick - or think I am - as I feel like a junkie in training with all the medical products ads on the teevee. How many Grammy award nominees are pure acoustic, non-pimpin', genuine greenies? I mean SmartCars, not tour bus kind of green?
At some point, the media imagery may catch up (or would that be down?) to the changing global economic climate. But, like so many, seems Hollywood is watching the inflation/deflation battle - just as the Chinese are - and keeping their options open. So at the box office, to borrow a phrase from Firesign Theatre, we all just bring our tickets 'down to the new-old same place' and find it almost endlessly amusing.
Choreographed by crazy people, the absurdity of the competitive interest rate declines means the hyperdeflation/collapse and end-of-the-world is still on the table. Then again, that's where hyperinflation leads, too. Bogslife ahead, or alternatively, global systemic collapse. But at least, we'll have low interest rates for a few more weeks of the process and my, my, what an intricate dance it is. Or, is it soup?
Who needs the Smoot-Hawley Tariff Act when we have the global rate game?
Ax Time
For 12,000 AT&T workers - 4% of the workforce being pink-slipped.
Recession? What Recession?
Unemployment claims a little better than forecast in today's report. Market was expecting about 40-thousand more.
Neocon Playbook?
Looks like the prime minister of Canada is going the coup route: Stephen Harper set to suspend parliament in order not to lose his *ss...I mean seat.
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Rumors continue to fly about the 'net that Barack Obama's win will be taken away by the Supreme Court, at least that's what the buzz is. "Obama Birth Certificate: SCOTUS Conference Set for Tomorrow" says one report.
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Rampant speculation about whether Bush would stay or appoint someone (Hillary???) in the event of...but just wild speculation far as I can tell. So far, that is... But how about that quote in the Chicago Trib that "Internet-fueled conspiracy theories question whether Obama is a "natural-born citizen."
And people wonder why print is losing market share to the web? Hello?
Israel Going For It?
The J-Post this morning headlines that the Israeli IDF is preparing options for Iran strike. With, or without USA backing, seems.
Waiting for India's Response
While Condi Rice and others are trying to keep India from over-reacting to the killing of nearly 300 people, we find it interested that there a call to "Stop using the world 'Islam' in reports on terrorism, Islamic bloc says."
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Higher Ed, Higher Price
"Soaring Tuition Pushes College out of Reach" says a Bill Weir, ABC report. Not only pushes, but to the point where many college students are having to drop out, say the linguistics out of the www.halfpasthuman.com report. And more will drop out in coming quarters are wages, job security, and no-mo-refi's comes home to roost.
Behind the scenes: Government funding programs for education. Having done some time in higher ed I can tell you that college budgets have an almost 'magical' way of growing to meet available student loans and grants. But, of course, few in that industry will admit to it...
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Coping: A 'Missing Property Tax Bill Conspiracy?
Pull up another half-cup of coffee: Something really important to talk about today. I haven't mentioned it before, but time to do so now. My neighbor across the road (trail is more like it) mentioned to me a few weeks back that he didn't get his property tax bill this year. I thought to myself, "Hmmm...that's odd: We got the bills for the two pieces of raw acreage BUT we never did get the bill for the main lot with the house and most of the improvements on it...."
Being somewhat anxious about misbehavior by my 'silent partner' in this operation, I went down to the local tax office, asked them for copies of the current tax bill that I never received, and paid them on the spot. But neither my neighbor, nor I, ever got this year's property tax bill.
OK, fast forward to this curious email that popped into the 'inbox' and floated up to the top - pay particular attention to the part I highlighted:
"Dear George,
Something that wasn't factored into your assessment of costs on a foreclosed home is as follows: My wife and I went have been unemployed for about a year now, but we have been scraping enough to meet our mortgage payment. Then along comes the government. Seems that in 2006 they split up school districts and only sent us one of the tax bills, which we paid, now all of the sudden out it comes and they don't want to hear about the circumstances in what they call a court hearing, seemed like some kind of stacked deck arbitration to me. The lawyer fees and fines are quadruple the original tax bill, that we never got! It has effectively put us on the way to homelessness.
I decided this did not sit well for me, so I went down and got a permit to remodel, they are happy to issue these because that is what the country uses to upgrade what your house is worth. I promptly removed all the sheet rock, 1/2 the supporting timbers, all the wiring, the central air and heat, insulation (went when I took down the ceiling), and started digging up the back yard for new plumbing, I filled the existing pipes with concrete. I removed all fixtures, toilets, bathtubs etc, and darn if they didnt evict me before I could rebuild and finish my renovations. tsk tsk.
Turns out because I had a permit that insurance wont cover the losses either. So now the county is stuck with what will soon be an empty lot. I really didn't want to go this route, but it turns out I am not alone. This is becoming more frequent than what you might think. My formerly $200,000 house is now worth $5,000 for the lot, I dont even want to guess what the clean up costs will be.
A lot of people like me are tired of being robbed by the government and their buddies businesses, like the lawyers. If I were to go to jail they would not get one dime from me ever as far as I am concerned they can pay for my upkeep, I need some medical care that I cant afford and at least there I will get some care, but it turns out that I did not break any laws since I had every intention of rebuilding. : þ"
Now here's the point: If I didn't get the property tax statement on my main house/improvements, that would only be one data point. If my neighbor didn't get his, that's two. If my reader who we'll just call WM didn't get his - and is losing his property over it - that's three.
I don't know how many data points it takes before you start wondering whether there's a 'design pattern' going on, but here's the question to put out this morning: Did you get your property tax statements right on schedule this year, or did you experience the same kind of thing: Missing statements, or split statements - one of which went somehow 'missing'?
I've often figured that at some point, the PowersThatBe would not only force as many people as they could into bankruptcy, but that on top of that, they'd 'work' the system to screw as many honest (but occasionally forgetful) folks out of private property ownership as they could, because all that private property represents sovereign (e.g. non-governmental) wealth. How much of that can we afford, Comrade? We got bankster payments to make!
So, if you have noticed anything strange about property tax billings this year, please let me know by clicking here to send me a summary of your experiences. Not saying it's anything other than a fluke, but like I said, when I see too many cases it adds up to what? Go look up "design pattern".
May be nothing, may be something. Can't hurt asking the question. Oh, and if you did get a property tax bill, I assume you checked if for completeness? Especially if school districts haven't had their act together getting their levies into the local assessor?
Currency Affairs
A persistent reader (we'll teach him, right?) is still asking:
"George,
I love ya but you need to level the playing field. Twice you’ve shot me down for asking which currencies will emerge when the $ collapses. Most recently, you mentioned something about pounding my hand with a mallet. (the link was great!).
But, today you sing the praises of Mr. Landry who says:
"Yes. Right now, looking ahead, the only thing I can tell you is the shorter term treasury bills are where I'm at, but I will be looking to see which currency or currencies are starting to become stronger. That is where one must move for safety."
Are you sending Mr. Landry a mallet for Christmas?
Love ya man,"
I may buy Robin a bank for Christmas. They are going for cheap, I hear. Meantime, if I were guessing? Canadian dollar as long as they can get rid of Harpo and keep the US from invading to 'save them for democracy' as they have enough oil, water, and timber to make that worth pondering.
Otherwise, pick the country that has the least debt to resources cost and bet there. Better? English speaking and low population density and high enough to avoid 'global coastal event'.
Time to get hammered now, LOL
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Wednesday December 3, 2008
Cups: Half Full or Half Empty?
One of the really cool features about life-school/this-time-around is that we are each granted a high degree of autonomy of perspective. Which is to say, you can choose to look at things as 'glass half-full or glass half-empty.
Most folks go though life - looking at things by halves - without consciously challenging their 'personal perspective' on a subject. But a few have enough brain cells to look at the 'flip side' of most issues and then reframe their 'question of halves' based on either hard knowledge of a topic or, a good sense of the 'flow of events' such that their perspective on 'which half?' is usually more 'right' than most.
I'm watching four quite interesting 'life by halves' evolve around me right now and each over [time] will likely rotate into headlines in one form or another.
In the case of the market, the 'half-full' crowd is preaching every few hours it seems on the 'money honey' channels that "a bottom is in." This is an area where I think I've done enough serious study to be able to conclude (from my perspective) that if you think the bottom is in, ya'll oughta be buying bridges in NY and looking for other pots of gold. 'Blinded by optimism in the face of facts.
The second 'life by halves' revolves around when will the housing bottom be in? As I explain in further detail in today's "Coping" section, we're not even close to a bottom in housing.
In the third case, people are insisting in email after email that "George, you're dead wrong on having to 'pay back' your 'stimulus check' from the government. I same run of our tax return shows otherwise (also in today's Coping" section.
We're now roughly one week from the twin quakes window in Cliff's predictive linguistics work when the world seems likely, based on language shifts that have preceded similar events in the past, a pair of quakes, as least one of which is linguistically destined to isolate a bunch of people and cause severe socioeconomic impacts including offers of foreign aid. Here again, 'life by halves' features some folks will be ready because of their learning and experience which will allow them to see the possibilities in advance and prepare to meet them on their own terms, while the other side denies that language precedes change and that Cliff & I are just a couple of nutjobs.
No dispute about this last point from us, but as we've said in the past, "Just because we may be nuts doesn't make us wrong". Remember when we posted the last 'big quake' advisory a couple of days before the China 7.8 - 8.0 quake in May. Off by a day or two in the May 9 and May 10 warnings, but that's why I call the predictive linguistics project a "rickety time machine". When it takes a half linguist/ half SQL-guru and 200+ executables in four languages (dos, perl, c, & prolog) to weed though terabytes of data, no, this is not something you'll be seeing on Amazon any time soon with a slick Vista graphics front-end..
And first, but not least, there's the matter of how one looks at the 'economy'. From my perspective, after studying things since the 1970's, I've concluded that the glass may seem about 'half-full' now, but it's about to be 'mostly emptied'; at least that's how I read it.
Don't take my 'read' too seriously, though. I'm not a 'certified financial planner' although my personal portfolio has done way better than most, I suppose; at least if the tear (and loss) filled emails I get are any indication. Just because I've written about the virtue of 'cash' and the government's Treasury Direct program (www.savingsbonds.com) doesn't mean we'll stay [parked there forever. It has been a dandy 'hurricane hole' though as the first fronts of the financial storm blow over.
As we begin this morning's review of things, half a cup of coffee into the day (not half into our cups I hope), the magic tool to keep a firm grasp on is that of perspective. When you can hold both sides in mind and consciously decide how to look at something, life takes on extra dimensions. "When the Above is as the Below, then you have entered..."
Markets: Waving Good-bye?
The futures are pointing down a bit (1% or so) when I looked this morning, but that was before the new 'productivity' numbers came out. A couple of comments about it, but first the numbers:
"The Bureau of Labor Statistics of the U.S. Department of Labor today reported revised productivity data--as measured by output per hour of all persons--for the third quarter of 2008. The seasonally adjusted annual rates of productivity growth in the third quarter were:
1.5 percent in the business sector and 1.3 percent in the nonfarm business sector.
In both sectors, hours were revised down more than output, leading to productivity increases which are 0.2 percentage point higher than in preliminary estimates published November 6.
In manufacturing, revised productivity changes in the third quarter were:
-2.7 percent in manufacturing,
2.9 percent in durable goods manufacturing, and
-10.2 percent in nondurable goods manufacturing.
In the manufacturing sector, productivity fell 1.7 percentage points more than was reported on November 6, as a 2.0 percent downward revision to output was partially offset by a 0.4 percent downward revision to hours.
Output and hours in manufacturing, which includes about 12 percent of U.S. business sector employment, tend to vary more from quarter to quarter than data for the aggregate business and nonfarm business sectors."
This number is not a big deal except that it serves to point out one of the absurdities of (so-called) modern economics. Productivity is essentially 'how much work gets done by how many people'. Therefore, when fewer people get 'more done' it's considered a 'good thing.' But, when you think about it from the 'other side' (turning that view of the cup around) it means that as productivity goes up the flip side is that employment goes down, ceteris paribus (all else being equal, the economist's weasel words).
Should we rejoice when productivity goes up? Depends if you're part of the 'ownership class' or are a 'worker'. If you're an owner, the higher the productivity, the fewer of them bothersome humans you need. At 100% efficiency, goods are made automatically and no workers are needed. On the other hand, that points to 100% unemployment from the other side, so it's a Catch-22 situation which partisans on both sides dare not voice.
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OK, so what's the outlook over the next little while? I posited Tuesday that my friend CS in Atlanta might be right in his Elliott Wave count, but after the markets closed, a chat with Robin Landry (email: rlandry@allegiance.tv ) convinced me otherwise:
"The count your friend CS sent you can not be correct, according to my indicators. His count showing that we're still in the fourth wave and the fourth wave is trending down does not confirm with my count."
So what's Landry's count?
"The count best supported by my indicators is that low on 11/21/08 that hit 7,449.38 was the bottom of the third wave. While not ideal in its internal structure, the larger indicators say that we have done an A wave up, and we are currently in a B wave down, and then we will have a C wave up to complete Wave 4.
The target for the top of Wave 4 is between 9,200 (Dow) to 9,600. Then, the fifth wave down should start and at the end of that we will have completed Wave A of the Bear Market. That target is still the Dow 5,800 area.
Now, that's just Wave A from the all-time high. Then I expect a rally lasting approximately 3-5 months for the B wave up of the Bear Market. And that rally should have a minimum upside target of 50% of the decline from the October 2007 high to the low. During that rally, I think we will see a renewed interest in the stock market, some interest in the commodities, and also the gold and silver.
However, once that B Wave is finished, and the market starts down on the C Wave of the bear Market, it is at that point I believe deflation will begin to really dominate as people begin to realize we are not going to be able to inflate our way out of this thing.
It's at that point that the dollar begins to go down and whether it be the Japanese yen, the Swiss Franc, or the Euro, or whatever other currency may start to become predominate. We'll just have to wait and see.
During the C Wave down I believe if this is the Grand Super Cycle when we approach the low of the A Wave, whatever that turns out to be, and that low does not hold, then you will see a panic I believe the likes of which the world has never seen."
OK, how to act? When we see the end of the B wave coming, maybe next year, where do we hide? If what Landry is saying comes to the pass, hiding in US bonds becomes something of risk, if/as other countries repudiate the debt-logged dollar...
"Yes. Right now, looking ahead, the only thing I can tell you is the shorter term treasury bills are where I'm at, but I will be looking to see which currency or currencies are starting to become stronger. That is where one must move for safety."
And the ultimate low, Landry's expecting in terms of the Dow or S&P?
"So the Dow in Wave C? Do you really want to put that in your newsletter?"
"Sure, what the hell..."
"If this is truly a Grand Super cycle decline, the low will be in the Dow Jones Industrial Average, below 1,000."
"How soon?"
"I believe that it will take it approximately a year and a half from the high of the B wave, whenever that happens to be.
The problem is that what we will be in is like the last Grand Super Cycle in the 1700's which according to the records and charts I have seen lasted 68-years.
Now, that does not mean that there won't be investment opportunities, over this period of time. As there will still be new inventions and other areas of growth in the economy and around the world. It's just that the destruction of old technologies and areas of the economy will be offsetting the new technologies, so that for a period of time there will be overall - in the broad indicators - no real gain.
However, given the speed of technology and the dissemination of knowledge today, I suspect that the markets action at worst will be something on the order of 8-20 years, and not 68-years going sideways.
That's something to think about but there's not really any action one can do now; there's not much that can be done that far out. We need to live in the here and now and the best we can plan for is the next year or so.
However, remember, as the market events happen, each data point gives us a better picture of what is to come and hopefully hopefully the worst can be avoided. But if past history is any guide, the outcome doesn't appear to the most optimistic."
If I was playing the market, I guess I'd consider buying some of the double-Dow longs and picking up a couple of bucks on the advance Landry's expecting. On the other hand, I won't for the simple reason that there's too much 'news chop' in the market for my tastes. And speaking of which, I suppose we should venture into the headlines ab out now as it's the unlevel playing field we have to play on...
Car Tunes
Automakers were back in Washington yesterday trying to explain why throwing just a few bucks toward the automakers would make sense. "Auto sales hit new lows, GM sales plunge 41%" says one headline.
Given that 8.1-trillion is lined up for the bankster class, you might think a small $25-billion stimulus wouldn't be out of line for one of the biggest industries in America. Coffee hasn't kicked in, but I think that's 3-10ths of one perfect of what the financial 'industry' is sucking out of the taxpayers based on the $8.1 t figure in the SF Chronicle recently.
Nancy Pelosi things CONgress or the Bush administration will step in because 'bankruptcy is 'not an option'. But we've heard that tune before. The cup is looking half empty for the automakers.
There's that "Rescue" Word Again...
"Paulson: Feds to expand rescue" says a CNN Money headline.
Own the language, own the outcome, as we've said before. Americans love to rescue - and the very word conjures up archetypes of fire fighters getting kittens from trees, people out of accidents, and saving people from floods. "Bailouts" conjures up much darker imagery, so guess why the word-use changed? From under 18 percent to over 56% of the time now, 'rescue' is the phrase that pays for those who spin the news.
Financial
Quagmire
Just as the US didn't go into Iraq with a fixed exit strategy,
seems now the same kind of "Lost exit" issue is facing the
financial arena, as well. You can see it in headlines like
"FDIC
head: Gov't plan needs 'exit strategy".
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Wink, wink, nod, nod; around here we know the reason there are no exist strategies: consumers are at consumption limitations (how many TV's do we need? How many cars?) and we're at debt saturation, too. What the country needs is something to destroy capacity and stimulate new spending. Without that, the three biggest growth industries on the planet are 1) war, 2) Homeland Security and 3) financial bailouts. #3 is quickly moving up the ladder, though...
If Banks Say No Department
Word that mortgage applications surged by a record amount are something I'm taking with a grain or salt and a few grains of aspirin.
The way I have it figured is that people are having to put in a lot more applications in order to find a bank that will approve one.
So if more banks are saying "No!" applications would go which way?
Week To Quakes?
Since the predictive linguistics have these 'twin quakes' coming up (window opens in a week temporally) a great email from a well-versed reader on some of the things Californians might want to ponder:
"George, As you know California has had three great earthquakes in the last 150 years. Two have occurred on the San Andreas fault. Both were mammoth; 1906 San Francisco quake 7.7-8.2 and the 1857 Ft. Tejon quake 7.9-8.1. A major quake occurs on the San Andreas fault on average every 140 years......so we're overdue by 10 years.
I'll list 4 scenarios within the 32-36 N. Latitudes.
1. Colorado River/All American Canal: Western U.S. bread basket for winter vegetables is the Imperial valley/Mexicali. The San Andreas ends near the Salton Sea and the San Jacinto fault begins on the Westside of the Salton sea and extends southward to the Gulf of California. A larger quake here could rupture open the Gulf of California allowing a channel of water to move in through Mexico and merger with the Salton Sea. There is a 100 mile from Indio to the Mexican border that is below sea level. A smaller quake would disrupt waterways including the All American canal, the largest irrigation canal in the world creating significant damage to the crops. It would take a huge rupture to force water inland not likely but faintly possible.
Most of So Cal water is imported; LA aqueduct from Owens Valley, California aqueduct from the state water project and the Colorado River aqueduct. All three aqueducts cross the San Andreas fault. The great fear is not transpiration disruption but unavailable water.
2. The Colorado River aqueduct parallels the San Andreas fault separated by a distance of 1-5 miles from Coachella Valley west to Banning about 40 miles. After crossing the fault near Banning in Riverside County the water is deposited in Lake Mathews for distribution throughout LA, Orange and San Diego counties. A good size quake here would produce water disruptions and shutdowns.
3. Half of all Southern California water usages comes from the California aqueduct. The California aqueduct transports water 450 miles from Sacramento River delta to Los Angeles. The California aqueduct crosses the San Andreas fault through Cajon pass north of San Bernardino. The water is then distributed through all of So Cal. The San Andreas fault passes through Northern LA county on the north of the San Gabriel mountains. Unfortunately that is where the California aqueduct is located. The aqueduct is tucked in next to the San Andreas fault for about 35 miles. At this point the aqueduct heads Northwest to tie in with the Los Angeles aqueduct while the fault maintains a more westerly direction lifting to 4,000ft as the fault precedes through Ft. Tejon. A Ft.Tejon type quake with similar magnitude would more than likely result in equipment failure and cracks/leakage along miles of the canal.
4. San Luis Dam: The California aqueduct parallels the San Andreas fault along the Westside of the San Joaquin Valley for 170 miles......separated by 10/30 miles. The water is stored in the San Luis reservoir/lake. The reservoir is a huge man made lake supported by the San Luis Dam. The Dam is 25 miles east of the San Andreas fault. 20 miles west of San Luis Dam is the city of Hollister....."earthquake capital of the U.S." Southwest of Hollister only a few miles west of the San Andreas fault is the "salad capital of the world" the Salinas Valley. A major quake in this area could create major/minor agricultural shortages but a significant crack in the Dam could be a disaster..... the damage would be relative to the amount of water stored in the lake. Right now the dams in the Sierras are holding little water.
5. Bay area slips: A large bay area quake off the Hayward fault causes sea water to rush into the shipping channels of the Sacramento Delta flooding thousands of acres, busting levies and mixing seawater with fertile soil.
Again, we hope to be wrong on the quakes, or that they happen in areas where there's no impact, but we should know in about two weeks whether we're right or wrong...We don't know, for example if the 32-36 latitude band is north or south, and even if north, that could still cover the New Madrid region. Dramamine ready? Stand by to cue the 'dancing mountains'.
National Correct George Day
In yesterday's report I referred incorrectly to the Icelanders storming banks story as being in Icelandic. It was in Dutch from a Belgian source. Can't get everything perfect, eh?\.
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Coping: That Darn "Stimulus"
Several people have written to me calling me (more) names for pointing out how the so-called 'economic stimulus' foisted on the public was nothing more than a scam to get people to spend money they didn't have. Just to make one more go of explaining this, here's how it works:
A. Government sent out a "stimulus check" in summer 08.
B. If you got the stimulus check and cashed it, you have to report that on your 2008 return.
C. If you report it, it adds to your tax liability by (ta dah!) $1,200, compared with people who didn't take the stimulus.
Let me share with you the part of your (look for it soon) 2008 Recovery Rebate Credit Worksheet. Note how the word 'stimulus' is missing. Here's a print of a sample case with hypothetical numbers put into TurboTax:
Soooo...like I've been saying, if you did take the 'stimulus' you will likely pony up $1,200 more than people who saw it for what it was - an interest free loan which you now get dinged for. Or, to be perfectly clear, get a big fat goose egg on line 29.
That's all I've been pointing out. For us, the cup was half filled in July and it just got half-emptied when I modeled our 2008 taxes. If line 28 is 0, line 29 is a 'full cup'. If line 28 is $1,200 (or $600) then line 29 is completely empty.
Victims Rights
One of my 'friends' called me up snickering Tuesday afternoon to point out the photo showing a new all-time high in consideration for victims' rights in the UK. Look closely at the photo of the horse in the story "Man jailed for having sex with horse..." What PC lengths to protect the horse's identity! British humor is quite good, at times; often at the polls, too, we note...
Glocking Spiel
I was bemoaning in a recent column that my Glock tended to eject cartridges into my face on my pistol range. While several people sent in pleas that I 'get it looked at by a gunsmith right away', I got one email that I will have to follow-up on first:
"Subject line: Brass Forehead
George, Greetings from occupied Seattle. You mentioned that you get hit in the forehead by the ejected cartridges from your Glock. I believe that a Glock will do that if you are "limp wristing" the pistol. I'm not implying that you may have spent too much time in Seattle's Capitol Hill neighborhood. But, a firmer wrist has been known to cure that problem. Also, lightweight polymer framed pistols have a tendency to jam or stovepipe when limp wristed."
Ah...makes sense, as I consciously was letting the pistol rotation absorb some of the recoil. Off to the range today to see if my "Hollywood gun" and be retrained not to spit casings on me with a firmer grip.
Cool Investment Department: 18% Per Year for 10 Years?
On the 'bond' (CMO) I referenced Tuesday, a few people wanted clarification, so let me wind and slog through the details: The deal / AAA mezzanine CMO/bond started as $850-million 2.5 years ago,. That was 2,466 loans. Today the deal has just over $620-million among 1621 loans. These are pay option arms - so on day one they had just under 75% LTV values, and now they are just under 82% LTV loans as people chose to pay interest only in many cases (to keep the home).
If you just look at a single loan on a $500-thousand house, then that loan typically started out as a $375,000 loan on a $500,000-thousand house. And that borrower took the option of doing a minimum payment, so that over the last 2 1/2 years, that loans has gone up to $410,000. Still the same house. LTV sliding up.
Now comes the situation where that loan is foreclosed. So for the first few months, when the borrower isn't paying, the servicer is actually advancing the money. That because most borrowers get flaky once in a while, so that goes on for a few months.
Then it turns out that borrower is never going to spay. So the servicer starts the foreclosure process and along come a few thousand in legal fees. And the servicer continues to advance until the foreclosure is completed.. The servicer may be on the hook for half a year of payments plus fees for legal and the green pool guys.
Bottom line: Once this house hits the foreclosure bucket, and the people get moved out, it then moves into the 'real estate owned' (REO) bucket, that's what this deal had 21% of as it went to the wall on Tuesday. So that's how the $621-million slices and dices.
When we look at an individual loan, remember, these are going up, and there may have been $10-thousand in taxes, payments, insurance and such, so we did all that - so maybe $15,000 out of pocket.
Next the house goes on the market. Starts at $450 large but it quickly becomes obvious it won't move. Eventually, maybe it sells for $200-thousand. Major discount.
The 'deal' doesn't get the whole $200-thousand. Costs of servicers, pool guys, and such, after all the bills, it's about a 65% loss on the $410-thousand on a net of $144-thousand.
If we assume that 20% of the loans get foreclosed every year, then that ends up with 88% of the pool getting foreclosed with these kinds of horrible losses on each loan. Fortunately its a 3-year mess deal.
If we assume all of that, then this this bond which we offer 30-cents for each dollar of face value, then the yield will be 21% over the life of the bond.
Does the Bond Dude feel that 88% of the people with 700 credit scores in California going to lose their homes in the five 1/2 years between 2006 and whenever? No. Anything better than his worst case makes money for the company beyond his 21% forecast.
If only 83% get foreclosed, this bond yield pops to 28 1/2 percent. But, this begs the question, why would anyone buy conventional corporate or stocks? Not when these kinds of yields are out there. Believe me, the bond guys are hoping for low default rates - it means a higher yield.
Knowing this you might go looking for a good real estate bond game, but lotsa luck finding them. Big money can play, but much harder for us 'little guys.'
Oh, and if you dig up one of the super senior bonds that sit 'over' the mezz level offerings, you might get the chance - as they are out there - to lock up 18% for 10-years in a deeply discounted a senior subordinated CMO.
And that class, is why the rich keep getting richer and why at a certain level, a good wringing out is good for the fat cats ov er in fixed incomes. Gotta know people and have real dough.
Calamity Fiction
With the 'summer of/from hell' repeatedly popping out of the predictive linguistics for many months now, I've been keeping an eye open for what I'd call "calamity fiction'.
In the days of the Cold War, there were calamity stories like Nevil Shute's "On the Beach", George Orwell's "1984" and even calamity radio and movies if you count "War of the Worlds".
So, when someone sent me a link to "Operation SERF, Part 1" by Chris Sullins over at "of two minds..." I thought you'd find it interesting.
Also worth pondering I suppose, as long as we're considering 'calamity fiction' suggests another reader, is whether there was anything being programmed by the movie "Deep Impact" where a very bright black president, Tom Beck, (played by Morgan Freeman) led the USA through an ELE - extinction level event.
That email continued: "A few weeks ago, Big Lots began running it's holiday television commercial. It features a "Courier and Ives" style town. The mayor of the town is featured prominently. The Mayor's sash has the word "Mayor" on it. The M-A-Y is larger than the O-R...Maybe I'm just crazy...."
MAYbe...MAYbe not. But around here, we try not to pay too much attention to calamity fiction. Calamitous reality is quite scary enough lately. And that cup's at least half full.
But Seriously - Not!
A grand reversal from the days of Admen: In the 1960's it was common to see ads offering a toaster if you opened a new bank account.
Now making the rounds on the 'net:
"Buy a toaster: Get a bank..."
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Send snip and save items to george@ure.net
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Tuesday December 2, 2008
DCB Tuesday
Did I, or did I not, tell you to expect 'Smackdown Monday" about this here time yesterday? And while there was some flight to safety (like the Dow stocks are 'safe'? LOL), the real story was not in the Dow's performance on Monday, but in the broader indices such as the S&P 500 and the NASDAQ Composite which both lost a tuna sandwich less than 9%.
Although the futures seem to point to a bit of a 'bounce' at the open today, the linguistics about the first couple of weeks in December, leading up to the 'twin quakes' around December 12, is likely to be a really rough ride. And yes, that's why last weekend's Peoplenomics report was titled "Fasten your seat belt: Quake, Famine, and Anarchy". Just got to know where (and when) to be looking.
But before venturing off into the linguistic hinterlands, and while the coffee soaks in, let's first look at the little 'chart problem' the Fed's back office is no doubt pondering if the Dow were to close out the week about current levels:
While the market will no doubt rally early, at least based on the futures, and we have no clue how much of that is really puffed up money from the Plunge Protection Team pumped in through Channel Island, Turks, and GCM proxies to keep up the illusion that 'all's well...'
It ain't.
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The astute reader of this site, assuming they have ignored our previous dissing of paper 'assets' (ROFL), should keep in mind two simple background points about now.
Background Point #1:
The market seems to be in an 'e' wave crash mode at the moment. So, what do we expect? First, since most impulsive Elliott Wave moves are five-step affairs, the action on Monday was maybe step 1 down. If we bounce today (say 400 points) that could be viewed as a 50% retracement for wave 2. Putting a pencil to it, that would point to something like 8,500 on the Dow (plus or minus an order of linguini with clam sauce).
We all know that the third waves are often 1.5 to 2.5 times the decline of wave 1, so that would lead me to expect from 8,500 a drop to 7,400 on the Dow in short order - maybe even by the end of this week. Then a bounce, and then maybe a test of Robin Landry's 7,200.
Landry's also been kind enough to previously share the insight that 'crashes happen in the fifth wave' so could we collapse through 7,200 and visit the next major support area - 5,800 - on the Dow in coming weeks (before Christmas)? Oh sure - it's possible. Not saying it's going to happen - as I don't do 'investment advice' but the column a few weeks back "Dow 4,000 by Christmas" has just gone up two clicks on the 'possibility' scale.
We'll see how the market does today, because if we happen to get another major leg down - like a drop of several hundred points today, then I'd be getting very worried that the 4,000 range by Christmas could be delivered as the planetary lump of coal for bad little hedge fund managers.
My buddy CS in Atlanta sent this:
WAVE 5 of 3 has started, headed to 5800 Dow, 597 SPX at a minimum, by December 12th
ATCH @1565 x .382 = 1597 EW wave 5 of 3 = .618 x waves 1 through 3 @ 596.33
Background Point #2:
Things ain't gonna get better any time soon based on the latest conversation with The Bond Dude. You may recall his simple explanation of how the real money in the investment world works: It chases highest yields. If the yields in the fixed income markets are low, money is driven into the equities (stock) markets. When things are playing off like crazy in fixed incomes, who needs stocks? (Apparently, not many judging by the Monday action...).
"So what are you ,bidding?" I asked him - knowing that a 10% fixed income yield would support a Dow P/E ratio or 10, while a 25% fixed income ratio would imply a Dow P/E of about 4, etc.
Turns out he had just priced a 2-year old mortgage bond. For this particular bond, which started as a pool of about 500 mortgages in 2006, there are 410 mortgages left in it after foreclosures and such - or, to look at it from the homeowner perspective, 21% of the homes involved are in foreclosure or are already in the REO column (real estate owned - by bank repo departments).
The way he's looking at this bond, over the life of the bond 85% of the mortgages will be foreclosed or end up REO. No, this is not so-called 'toxic waste'. This is mezzanine AAA 69% California pay option ARM with an underlying 82% LTV which will likely go for somewhere between 25-35% on the dollar.
From the fixed income perspective, with 85% of the mortgages turning bad over the life of the bond, the discount has to be such that if the remaining homes are sold for $315,000, the 'after expenses' net would have to return money to the Bond Dudes (or Dudettes) that take the large risks now.
Of course there's just the one little fly in the ointment: If the yield on such (admittedly risky) deals pops up over 30% (and it is happenings) then that implies a stock market P/E ration of less than 4.
If we guesstimate - just for the purposes of discussion - that at current prices, the S&P P/E is 15 (go do your own research, this is a ballpark) then the S&P over the next year could decline to something like whatever one-third of Monday's closing 816 is. (S&P 270 - do I have to do everything around here???) And the Dow could fall to whatever a third of 8,149 is. (Dow 2,690 - sheesh...)
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Think this is a crazy outlook from some nutter in the East Texas outback, cowering due to the imminent breakdown on civility out there in six-figure corporate road warrior land? Probably.
But, if the deterioration is severe enough that the US Military is looking at deploying 20,000 troops in the USA over the next two years, seems I may not be the only 'nutter'. Sure, it wreck Posse Comitatus, but federal troops for security and appointment coupons to visit a bank - those kind of things would not surprise me the least - if we all make it to 2011, but that's another discussion.
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"Why would you talk about 'coupons to visit banks?" you're thinking?
How's your Icelandic? Mine's not really good...p*ss poor is closer to it, but even at this hour I can figure out what "IJslanders bestormen centrale bank in Reykjavik..." (Helps to have the predictive linguistic spiders reading a few terabytes of data daily, jah?)
When the Amerikanishers start to bestormen here you'll fer sure want to have 20,000 troops to keep things straight. Not that it will work mind you, but we're hearing the rumbles and from a policy perspective it makes sense.
Far as we can reckon, the winning hand to hold - and the one we'll be working on for the next couple of weekends for Peoplenomics.com subscribers is getting far, far ahead of events by voluntarily entering [bogslife].
Since statistically, the odds are very small that you subscribe to the www.halfpasthuman.com predictive linguistics runs, [bogslife] means (beyond organization/government systems).
Or, to put it more bluntly (as you may still be shaking off the effects of the overnight coma: If you missed being a hippy and living on a commune in the 60's or 70's - you may get your chance yet. Such self-organizing collectives may be your best chance to 'keep it together' over the next couple of years, although it may not become obvious u8ntil we get to the 'summer of hell' in 2009.
And yes, to bring things full circle, a Dow under 3,000 would sure fit the bill. Or, also a possibility, a Dow right where it is right now but with a 100% annual inflation rate would also do the trick.
Folks laughed when I bought $365 gold, too.
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Already, the predictive linguistics crowd is seeing bogslife behind increasing headlines - just most 'average' folks can't wrap their minds around the concept. That is what makes them average, though, I suppose. But from the 'gettin it' crowd:
"A few Predictive Linguistics matches ....
Bogslife signs:
New York Times: At a “cohousing” project planned for Fort Greene, Brooklyn, the residents will share all decisions and some meals.
CNN - Global Coastal event: Scientists have identified new rifts on an Antarctic ice shelf that could lead to it breaking away from the Antarctic Peninsula
Foxnews - Retasking of foreclosed properties: Miami Activist Moves Homeless Into Foreclosed Homes "
Dawn of life in the bogs.
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Not that the HPH team is the only group out there sniffing out words and concepts on the 'net. "Bailout," "change" crowned the words of 2008 as figured by the Merriam-Webster folks.
When the word 'rescue' started (absurdly) appearing around the word 'bailout', you might remember that in a www.news.google.com search, 'rescue' was being used only 18% of the time.
Since we haven't update this metric for a while, the current Google cache is 135,041 returns for bailout while rescue pops in with 164,129. Which is to say 'rescue' is now being used 54.86% of the time - a HUGE increase from first use tracking.
I understand that the 'word use' spin around network news center is not put in writing - it just comes as 'calls from upstairs.' And who's calling the folks 'upstairs' I'll leave it to you to figure out. But I've personally talked to folks who get those calls. Ain't no 'spin-free zone'. Without 'media control' even at a gross word-use level, the stability of the PowersThatBe could be threatened and we can't have that now, can we?
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So that's a 'big picture' look at how things are working behind the pabulum dished down from space to the Cyclops in the rec room. Dandy, huh?
Canada's Right to Be Left
(Oh, a delicious triple entendre...yum.) Seems as the neocons are upshifting in Washington to a new regime, the Canadians are going through something of a right wing boot, too, with prime minister Harpo headed oot...eh hoser?
Could It Happen Here? Department
"Court ruling brings down Thai government" for what? Electoral fraud. Say, you don't think.....naw.....
Constitution-Free Zone
Map on the ACLU web site - where government don't need no stinking warrants...
Future of Terrorism
"Panel: Bio attack likely in the next five years..." We're more worried about next week, frankly, but still...
Car Crash Goes Global
Reader in Oz tells us:
"Over here in Australia, there is a bonanza if you want a new car. GM Money and GMAC are pulling out of auto financing in this country on December 31 and dealers can't refinance floor stock. Volvo offered my wife free fuel, free servicing and free on roads for the next 3 years if she trades this month! Was told yesterday that 50 dealerships in Melbourne, Victoria are set to close New Years eve!"
While the auto brass are back on knee pads on Capitol (or is that capital?) Hill, the Auto workers are planning an emergency meetings on the bailout.
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Coping: Inflated Opinions
So, what is inflation...really...
"Hi George,
I check the site http://www.minneapolisfed.org/index.cfm daily to see the magical new inflated dollar when all these trillions are realized,. I just found today a few other sites that are showing an increase. They may be calculating differently. Can we verify which is correct?
on the fed site, one dollar in 1913 is worth 21.78 in 2008
on the other sites below it is now showing 21.88 in 2008
http://data.bls.gov/cgi-bin/cpicalc.pl
http://www.bls.gov/data/inflation_calculator.htm
http://www.usinflationcalculator.com/
Also, did you notice on the Minneapolis Web site Christine Roemer - recent Keynesian economics advisor appointment by Obama?
Enjoying your site daily, wish I had know about you before this year - "
Answer to the first question is easy: These different outfits likely use different time periods for their calculations. In the case of US government agencies, I would expect them to use fiscal year data, which means they would be into FY 2009, using FY 2008 in the mix. I expect the Fed (which is NOT federal, contrary to what they like to infer/mislead based on their web address, etc, and no they are not civil servants in either meaning of the word 'civil'...except maybe for the Fed Chairman - which is called in from the banksters on the sidelines, who goes through an 'approval' process but don't know anyone has ever been turned down (research question?) likely uses the calendar year, which means their calculator has (at least in past years) been updated in the February- March period in the new year.
As for Keynesian economics, don't get me started. If you start talking about long wave cycles in the economy, most economists get a clot in their Juglar if you venture beyond the 11-year cycle that has been more or less forced on them by data.
Speaking of economic genius, you saw the National Bureau of Economic Research just yesterday figured out that economic activity peaked in this country in December 2007 and things have been sliding ever since? Where were these people in, oh, say July of 2008 when the market was clawing its way to a last fake-out peak? But I digress...
Ceteris Paribas, the reason I hold folks like Peter Eliades in such high regard is that they have the good (and uncommon) sense to look at economics as something that doesn't necessarily fit inside an 11-year box. Any damn fool can see there are longer cycles in the economy:
And whether your longer wave of choice is Kondratiev, or the forthcoming L Cycle work from Jack Lessinger (on 'the consumption economy'), or even the 1930's description of the beginning of the automotive cycle ("Hard Times - the way in, the way out" by Robert Ely of Northwestern University), the point is that economists who are looking at the big picture don't generally see that they are almost always standing on a 'slippery slope'.
Thus, while we're standing on the front end of a major economic depression, the same mistakes of the early 1930's are being repeated in quadraphonic sound and high def: The economy is best I can tell, in non-linear mode. As such, old-fashioned, linearism thinking is not going to work.
That's something I have warned of for how long is it? 11 years now?
So what's the option? Assume that the 'best and brightest'
are gong to screw things up again. Then, make your own
plan. If you were a financial services worker in 1929,
getting a little paid for place in the country made perfect
sense. It's why Five Acres and Independence: A Handbook for Small Farm Management
It's a plan and it worked. And it's why I am writing 13-Acres and the Internet, a chapter at a time for www.peoplenomics.com subscribers.
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While I wish Ms Roemer all the luck in the world, if she's a typical Keynesian, we're all hopelessly screwed. As I've said before, if you need more than 3-4 formulas to explain economics, you're living the illusionary life in Quant Land, which is right between Frontier Land and Adventure Land in the economic Mickey Mouse cosmology of things.
Paper money always collapses. The only issue is how long it takes.
Meantime, we're building bogslife and updating our own version of 5-Acres and Independence.
TurboRant 2: The 'Free Lunch' Debate
Several readers have resumed the 'poison pen' emails because, as I reported yesterday, when I modeled my 2008 tax bill in TurboTax, I told you how the 'economic stimulus package which sent married folks a $1,200 check ($600 for single filers) was nothing more than a tax-free 9-month loan designed to snooker people into spending money they did not have. Here's a typical email:
"George,
You're wrong on the rebate. Turbotax asks you if your received a rebate so that it won't claim it again.
It was free printing press money, not an interest free loan.
I think you're conspiracy mind is so whacked out paranoid, you can't think straight anymore."
My reply?
"LOL… Good one! It was a loan because I have to pay it back as an increased liability on my 1040 long form! They're using me to flood newly 'invented' money into the system to cause systemic inflation. Criminees sakes!
Look: I put in my estimated numbers and claim zero rebate. I get one tax number due.
I put in the same info and admit that we got the $1,200 and guess what? The tax bill goes up $1,200
Semantically it can be argued:
A. George’s tax bill went UP compared because he already got (back) $1,200 in 2008 and is therefore paranoid for seeing it as an interest-free ‘loan’ from…himself! George describes himself as an ‘economic realist.” Or…
B. Your tax bill went UP because you already got (back) $1,200 in 2008 and is therefore brainwashed for believing anything OTHER than it was all a smoke & mirrors scam to get him to spend his own money in advance… You would be described as an ‘unquestioning American”. You'll pay it back cheerfully and without questioning the perps.
C. Bottom Line: Government never GAVE anything to anyone. It was a three-card-Monte calendar trick with our own money ROFL…if you ain't gettin' my point, too bad..."
Other readers see if this (more or less 'offishul' way:
"George,
Just wanted to point out what's actually going on with TurboTax and the rebate.
> Surprise, surprise: If you got the "rebate" - sure as I told you > would happen - they add $1,200 of tax liability onto your return.
Having purchased TurboTax over the weekend, I was confused by this and messed around with it quite a bit before I realized what was going on. Enter all of your information with the rebate set to $0 and go over the numbers. Now go back and enter a $1,200 rebate for last year. Your tax liability seems to increase by $1,200, but only because TurboTax eliminates the $1,200 credit it had been adding in (since you would still be eligible for that stimulus credit this year if you hadn't gotten it last year). Getting the credit last year doesn't add $1,200 of tax liability onto your return--you just lose the $1,200 credit that you would get this year had you not gotten it last year.
> It was a government interest-free LOAN designed to con you into > spending money you didn't have and now you get to pay it back when you > file your 2008 return.
I always read your updates with great interest and value your perspective and analysis, but with all due respect, that is simply not the case. Big-picture, you're absolutely right: the stimulus is anything but free money. I said then and I maintain now that it's fiscally irresponsible foolishness. But getting it last year does not increase your tax liability this year, other than in the sense that by getting it then you can't get it now.
Damn semantics! It does increase my tax liability - I HAVE TO PAY IT BACK! Pay a further liability! Anyone's a damn fool to take this kinda crap - including me.
I see a really simple line between 'economic stimulus' and 'con job'. In the former, you get some lasting benefit while in the latter, you get a tax-free loan and must pay it back.
However, since so many people think a 'tax-free loan' is a grand thing, Nancy Pelosi and the taxicrats/democorps and republicorp are already conniving how to do it again but this time with $500-billion. It will look, to simple-minded folks like "Gee, we're getting something from government.." except that come tax-time in 2010, if you take the bait, you'll have to pay it back to Uncle.
With friends like these who needs elections?
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Monday December 1, 2008
Smackdown Monday
The Dow looks to open down about 200 points today, but if that's the extent of losses by the end of the week, I'd count it as something of a miracle. Things are not going well in the world's financial markets and the end of year selling is ramping up, hedge funds are getting ready for end of quarter withdrawals, and in Russia, the communists are figuring to use the financial crisis deepening there, too, as a tool to regain power.
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Just to make a point about how crazy the world of debt is, look at the headline that "Hedge Fund Manager Hendry Bets on Deflation with U.K. War Loans." As you read into the story, you awaken to the idea that the debt involved is from World War One - that's how fine the Brits are at pushing paper about. But not just any paper:
"The gilts, known as perpetuals because they have no maturity date, have a coupon of 3.5 percent compared with the U.K.’s 4.5 percent inflation rate. Investors hold about 1.9 billion pounds ($2.9 billion) of the securities that still pay interest 90 years after the end of the Great War, according to the U.K.’s Debt Management Office."
In a grand way, the British are behind much of the world's inflation disease the way I've got it figured. At a minimum, they are certainly not gilt-free.
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Despite the world dropping into a global recession - not my conclusion, but that of a UN group - the Mid East Oilers are talking about holding oil in the $70-$90 range so a possible production cut looms for the December 17th OPEC meeting.
American consumer tightening is also starting to be felt in China, where manufacturing has declined by the most on record.
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While UN Secretary General Ban Ki Moon is saying that the 'recession must not lead to human crisis' it strikes me as much the same thing as arguing against gravity. This is one that won't be banished with a few trite calls for 'bold and effective efforts".
The facts are pretty simple: 6% of world population consumers 25% of resource and 'pays' for it with paper that has nothing tangible behind it other than a promise to convert to a new kind of paper at some point.
That's not a recipe for a 'recession' even if global in nature. Nor, may at stop at 'depression' although you will want to read "The Return of Depression Economics and the Crisis of 2008" by Paul Krugman reviewed by Brad DeLong in the L.A. Times.
Nope there's a word beyond depression on the economic scale that's not even being talked about yet. The word is 'die-off.' It's what happens when you have a global depression that takes out food and other necessities. People simply die-off.
While the first week of December promises more economic thrills, and then we get into the twin earthquakes of mid December, out at the longer view toward the horizon, there are these four horsemen...
Suddenly Tomorrow
As I told www.peoplenomics.com subscribers on Sunday, I anticipate that in the wake of the attacks in India that not only will India go with a DHS-styled internal security force, but this also sets/builds on the premise that there should be some kind of 'world police force" to fight "terrorism". This morning, I'm sad to report, that the traditional bar on deploying military forces on US soil seems now headed for the scrap heap of history as the Washington Post Headlines in this morning's editions that "Pentagon to Detail Troops to Bolster Domestic Security."
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While I don't claim to be a good student of American history, I do know the basic Constitutional guarantees and the right to keep and bear arms is one of them. In a world where there are plenty of threats, why owning a gun for defensive purposes should be considered 'dangerous' is absurd.
Once government is given an inch, they seem inclined to take a mile. Evidence of this is especially true when it comes to the Second Amendment rights as it's been revealed that Delaware's use of occasional 'superchecks' into gun owner histories may have been illegal. In effect, the state may have accessed supposedly confidential medical histories of folks, and in some cases apparently, confiscated firearms based on what amounted to an unauthorized intrusion into privacy.
The gun control issue is not going away. With a change of administrations in coming weeks, there has been (probably justified concern) that the new Obama administration will act to restrict or ban the ownership of guns of certain calibers. There's more to it, of course, and a read of what's available on the net - like " Why Gun Sales are Booming" - are good background.
The Brady Center has issued a report titled "Brady Background Checks: Fifteen years of saving lives" that should also be on your reading list, but seems to me that it hasn't stopped events like the Virginia Tech Massacre from occurring. In such a case, just one holder of a concealed weapon (and permit) could have scaled down the size of the tragedy.
Nevertheless, there seems likely to be - in the wake of recent events in India - another round of misinformation and 'legislating' on the horizon to 'deal with' guns, especially what are commonly called 'black guns' as many 'sport utility rifles' like my coyote gun (which happens to be black and shoots 7.62 X 39) are. Am I using an "assault weapon"? I imagine the local Coyote Protection Association might claim that, but as the National Shooting Sports Foundation says:
"Homicide statistics demonstrate that the miniscule use of so-called "assault weapons" in crime (less than 1 percent) continued to decrease after the ten-year ban expired in 2004 and their manufacturing and sales resumed.
Another study, commissioned by Congress, found "the banned weapons and magazines were never used in more than a modest fraction of all gun murders."
The report also noted that so-called "assault weapons" were "rarely used in gun crimes even before the ban."
Similarly, anti-gun folks seem to get worked up over certain calibers like the .50 BMG used in a few long range weapons. Most crime in America, hate to tell you, is committed by thugs who have no clue about long range shooting. I'll take 'missed by a .50' over 'hit with a .22' any time...
For that matter, street crime perps don't seem to have very good taste in weapons. My Glock, for example, tends to throw spent cartridges back into my face when using a standard double-handed shooting grip, where my Ruger P-85 doesn't. All I can figure is that my Ruger is not a "Hollywood gun". They both shoot snakes equally well, however, and both produce a nice 4" pattern from the 10-yard line on our pistol range.
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In addition to fear of certain calibers, anti-gun folks periodically trot out things like the "laser serial numbers" on bullets idea, as in a November 26 note from Right Side News. Again, best I can tell, this would be one of those well-intended but easily circumvented ideas. Catch shell casings, leave no evidence.
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The issue continues to crop up in big cities - and we expect to see lots of headlines around Seattle's upcoming discussion of whether guns should be banned from city property including parks and such.
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The attacks in India have exposed the vulnerabilities of luxury hotels. But they've done something else, too: They've set up a discussion about how much military presence should be allowed on American home soil and it has reignited debate over disarming the civilian population on the theory that government can provide all -- including adequate security.
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Stand by for the international police force to follow on the pretext of 'protecting' folks.
911 Minus 8
Can't help but notice that automaker Porsche is taking off 8-days, while Volkswagen is taking off three weeks. "This as US automakers take their knee pads back to Capitol Hill for another round of begging for mercy and money...
Quakes Minus 10
With the December 10 -15 date range for the twin quakes fast approaching, we are seeing a couple of areas to keep an eye on. One is the Arkansas quakes a week back which starts the words "New Madrid" welling up, and there's the central California action over the weekend...4.1 SE of Fresno and a 5.8 in the Pacific west of Eureka.
Wires +1
The Associated Press, the news coop that's been around nearly forever is about to get some competition from CNN which is promising a cheap wire service to newspapers.
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Hasn't anyone mentioned to these folks that papers which cut down trees are shortly to become dinosaurs? You mean they are already? Is there no one besides us who can spell 'paradigm shift'?
Being Mindful Department
"Disney accused by Catholic cleric of corrupting children's minds". Say, you don't think the Abbott of Worth would have some thoughts on what Wall Street and Fleet Street have done to the minds of adults, do you?
Hmmmm...Headline
"Research on mice links fast food to Alzheimer's" gets us to thinking: Seems a 'diet rich in fat, sugar, and cholesterol could increase the risk of the most common type of dementia.' So, how many cases could be eliminated by ending national holidays where most all of us hit the rich foods a bit hard?
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Coping: A Trust Government Lesson
Speaking of 'trust' in government, I fired up the new TurboTax 2008 to model what we need to do before the end of this tax year. One of the very first questions asked in the software was what?
"Did you get a rebate last year?"
There's a default that can be changed if it was something other than $1,200 for a couple or $600 for a single filer.
Surprise, surprise: If you got the "rebate" - sure as I told you would happen - they add $1,200 of tax liability onto your return.
I can't count the number of people who tried to convince me last year that I was wrong while covering rebates: "George, you've got it wrong...this is free money!" or words to that effect.
But, now that I've got the TurboTax 2008 program, I can tell you for sure that if you got the $1,200 "rebate" that it was not a 'rebate' at all. It was a government interest-free LOAN designed to con you into spending money you didn't have and now you get to pay it back when you file your 2008 return. If you got laid off, or the plans to refi the house are now a crack-dream, toughsky you-know-whatsky.
Like I've told you before: If you voted republicorp or democorp, you're part of the problem...
Wise Ben
Nice to see that the NY Times recently got around to asking in a Ben Stein column "What if a Slowdown is a Never-Ending Story?" Nice of them to ask. Look up www.dieoff.org for clues.
Global Coastal Start?
Although it doesn't show up in the predictive linguistics work of www.halfpasthuman.com until about mid-spring of 2009, we have to look at the headlines out of Venice that water is knee-deep in their worst flooding in 22-years and ask "Is this a precursor event?" Ask me next year at this time.
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Before the chart, a little background:
Once upon a time, a long while ago, I observed during my quest for 'truth' in economics, that the PowersThatBe, the talking heads on the teeve, and the other information sources that actively engage in the programming of humans not to think, had conveniently swept several trillions of dollars that disappeared in the Internet Bubble's bursting (since spring 2000) under the rug. Surely, it wasn't unnoticed by the thousands of people who called brokers and said "Where is my money?" "Gone, but hang in there as you're a long term investor!" was about all they heard back.
But, the truth of the matter is that this chart shows what your account would look like if you have taken a few thousand dollars and invested equal amounts in the Dow, the S&P 500, and the NASDAQ Composite in the waning days of 1999. It's not a very pretty picture, and it sort of gives away the other side of the story. You know, the one that no one has an interest in telling, because it's a truth which shows the amazing coincidence of the timing of 9/11, the disappearance of naked shorting evidence and all, along with the impact of The Wars which have managed to keep the economy out of an earlier depression than the one expected by me by late 2008.
No, it's not a perfect replay of 1929, but history doesn't repeat exactly, it only rhymes. So think of this as the rhymes and the crimes chart:
Write when you get rich,
George Ure, The People's Economist
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