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Updated:   Saturday February 21, 2009    07:55  CDT     

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Slices and Dices / Aspects and Attributes

While I was going to just title this morning's short (since it's Saturday) note "Land of Bad Decisions", it occurred to me that a bit of explanation of how I come up with such headlines and concepts might be useful.

 

It's really quite simple:  People think at a symbological level.  How we organize our internal symbols are part personal programming and part of the process of socialization.  Thus, when I write something that is emotionally or symbolically "hot" I can be pretty sure that the concept that I'm passing along will be a good approximation of the symbols I was processing when I was writing whatever.

 

Take, for instance, my writing about a "house on fire".  When you think about that concept there will no doubt be specific small differences in the minor attributes, but the main point ("house") and it's primary aspect ("on fire") will be carried along.  Minor differences in tertiary conditions ('attributes') such as  "Was yours a single story or two story house that was burning?" or "What were the colors of the flames?

 

Minor attributes properly managed, shouldn't get in the way of conveying information.  Thus, if you want to be a super-star writer, while spell-checkers and grammar cleaners are nice, they're really of secondary importance to the 'heat' of the message you're trying to convey. 

 

Ergo, when I used to teach young journalists how to write, it was always "Distill everything you write about down into a single picture and then focus on the primary and secondary conditions of the picture to distill what carries across as words. 

 

Teaching broadcast journalism was fun because not only was there the basics of condensation of concept into hot imagery, there was also the artful application of inflection.  Using just that tool, youi can color or shade the primary, secondary and tertiary imagery just so. 

 

One exercise on getting control of inflection was to read a simple sentence in such a way as to become an artful word-painter, involved reading the same sentence five different ways in order to put verbal emphasis on different words in order to word-paint different meanings:

• I went to the store.

• I went to the store.

• I went to the store.

• I went to the store.

• I went to the store.

 

When read aloud, with heavy emphasis on the bold/italicized word, the meaning shifts.  It's a good exercise not only for the speaker, but for the listener to be able to tune-in to different meanings.

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So that's aspects and attributes.  Then there's the matter of how we 'slice and dice' symbols in order to make sense of them.

 

An easy starting point here would be to slice for each of your five senses and then some major concepts.  A list of ways to 'slice' reality (or its distant cousin 'news' stories) might include slicing by:

• Touch

• Sight

• Taste

• Smell

• Sound

• Right/Wrong

• Up/Down (or other cardinals)

• Size

• Weight

• Ideology

• Money/Values

• Time (old/new)

• Location (here/wherever)

• etc...ad naseum.

 

So when I look for a nice, simple way to sum up today's news events, I  look at a much longer version of this list (my personal grimoire of how to slice and dice reality) and throw a dart at one that easily encapsulates a universal way of looking at things.

 

And that's how we get around to this morning's real headline using a combination of Right/Wrong as one axis of our discussion and Ideology (strictly Constitutional) along with Money/Values to give us three coordinates from which to launch our present-time discussion of contemporary events. 

imple, huh?  So let's call this morning's ultra-short reports...

 

A Week in the Land of Bad Decisions

George "Soros sees no bottom for world financial 'collapse".  Welcome to my mat.  I've been writing about/chronicling the Second Depression since 1995, or so, when it became obvious to me that there wasn't going to be a 'happy ending' to the Life of Leverage.  It's all been a matter of time and bad decisions along the way.  Lots, and lots, and lots of bad decisions.  Hell, we got 'bad decisions' coming out our ears.

 

An enterprising Associated Press writer, Tom Raum has been putting a pencil to some of the more recent bad decisions (bailing out the rich, etc.) and has conclude that the "Obama plans eclipsing New Deal spending."  Which is not surprising, given that earlier this week, I  shared one of the things most people don't really think about:  Government only has a couple of three things it can do and the easiest is write someone a check.

 

If you think there has been real change in Washington, one of the harsh ways to 'slice and dice the data' is to compare spending levels.  Bush was spending like a wild man before he left office and guess who is keeping up that fine tradition of "writing money" to stave off economic collapse?

 

"Obama tries to halt talk of bank nationalization" may seem to make sense, but only for a couple of minutes. If anything happens to Citi and Bank of America, we are going into a complete and total Second Depression because those are clearing banks for a huge fraction of the global economy.  Instead of firing all the paper-game trading desks and keeping the core business of the banks alive, it hasn't occurred to anyone yet that it was the removal of limits imposed by the Glass-Steagall Act that allowed banks to open on Saturdays, and then allowed them to get into the investment business that soiled the works.

 

If you want a point after which a Second Depression became inevitable, the guy holding the pen on that disastrous decision was who?

"The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (Republican of Texas) and in the House of Representatives by Jim Leach (R-Iowa) in 1999. The bills were passed by Republican majorities on party lines by a 54-44 vote in the Senate[11] and by a 343-86 vote in the House of Representatives[12]. After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bipartisan bill resolving the differences was passed in the Senate 90-8 (1 not voting) and in the House: 362-57 (15 not voting). Having majorities large enough to override any possible Presidential veto, the legislation was signed into law by President Bill Clinton on November 12, 1999."

Yeah, that's right....the same Phil Gramm who's wife had a hand in the Enron trading loophole that set up the rest of it.  Oh, what a fine bubble it's been, too.  And I suppose I should give appropriate credit to Bill Clinton for setting it all in motion.

 

While the AFL-CIO is correctly pointing out that "Buy American is about Building Jobs, Not Protectionism", the big bait and switch by most pseudo-liberal  formula-slinging "me-too" economists is that protection is what caused this depression we're now in.

 

That there has been virtually "No Walls" trading hasn't slowed the apologists for global pillaging from trying to start up their switcheroo to blame 'protectionism" as they did in the early 1930's when Smoot-Hawley was banished by the corpgov rewrite of history into a position of scorn and derision.  The real story is that well-financed (by banking interests) politicians removed Glass-Steagall and that set up all kinds of unintended consequences...or were they really 'unintended'?

 

While Mrs. Bill is still choreographing the globalist agenda as secretary of state, it's almost laughable to see headlines like "China and U.S. must have positive relationship."  Why of course!  Without the U.S. buying all that stuff from China, and without China sopping up our runaway monetary printing press outputs, how are all those ex-president's gonna make money on their business dealings in China?  It all fits with delicious precision; well-hidden from the public's awareness.

 

Tubed

"Man Shoots TV Over Converter Confusion."  Fortunately, since there's nothing on worth watching on the 2,000 channel wasteland, he didn't miss anything.

 

Global Whating?

"Arctic Sea Ice underestimated for weeks due to faulty sensor." So the size of the arctic ice is really 193,000 square miles larger than had been previously reported.  Don't b other calling Al Gore, these are just inconvenient facts.  No need bothering the folks who come up with conclusions and then go hunting for supporting evidence.  Besides, lots of money might still be made in the carbon trading scheme, which I've told you before is like trading wife-beating credits.  Sick.

 

Around the Ranch: Garden In?

A couple of high school kids will be over on Sunday working overs the garden which has been fallow since last year.  A bit of urgency to our gardening plans (and this should scare the hell out of you and get you off your butt to do something in the way of small-scale gardening this year):

 

"Drought to cut off federal water to California farms."

 

Just put on your thinking cap for about 20-seconds:  If farms have no water, they produce what?  No crops, maybe?  If there are no crops from many farms, what happens to the prices of crops that do survive?  What happens to any efforts to close or limit traffic into the US from Mexico?  File this all under using "Use of natural disasters/droughts and policy reinforcing agents."

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Well, off to work on Peoplenomics for subscribers...See you back here around 8 AM Central time Monday.  I've arranged for a modest bounced on Monday and then a further collapse to new lows by the end of next week.  You'll find it amusing, provided you've already fled paper assets.

 

Peoplenomics.com 

In one of those 'great minds tracking' kind of things, Cliff over at www.halfpasthuman.com and I have both been putting in time last week looking at prospects for 2012.  His approach is to use the telescope afforded by his proprietary predictive linguistics work, while mine is much more conventional, using trend forecasting techniques.  As you'd expect, our results are somewhat different, but there's enough 'buzz' coming off language shift, and enough in-your-face trends that could culminate in 2012, that it seems like a good investment of effort to sort out how the dénouement of the 2012 could work out and then develop at least a framework for personal action should coming events present a hedging opportunity.  So we being by defining...

 

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"Live on $10,000" Updated

What?  You haven't ordered the ebook "How to Live on $10,000 a year -- or less"?  Suit yourself.  We're all going to live it shortly, anyway.  I just thought you might like a heads up by reading about how to do it before you get pink-slipped.  But, suit yourself OR visit www.liveontenthousand.com or, click one of the following button:

 

 

 

Yep - still possible.  I also took a bit of additional material that was pertinent from recent issues of Peoplenomics and included them.  The whole thing runs about 65 pages, but it gives you a vision of how to not only live on the aforementioned dollar amount, but also how to migrate up the economic foodchain if you make a little more than that and do some active savings...  Click here for the page with more details on it.

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

 

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Friday February 20, 2009

Santelli Nails it, Panic Optional

Several readers were busy scolding me in the early going on Thursday for my pessimistic outlook on the market.  Their emails went to the idea that "Jeez, George, there's no way the market can have a significant decline in the middle of an also-ran options expiration...it's not even a triple witch..."  And the market promptly turned lower and while the lunch-hour event I was expecting Thursday didn't come anywhere near closing the markets, it was, nevertheless, a pretty interesting story - and it's bound to grow going forward:  USA Today headlines it as "IRS unlocks UBS vault hiding Americans evading taxes."  While the Washington Post's take on it is that "UBS Revealed Far Less than U.S. Sought in Tax Case" the mere allegation that there are 52,000 mostly US citizens hiding taxes from Uncle Sam should be enough to have shaken the markets.  It wasn't.

 

But, let's not overlook that Rick Santelli on CNBC Thursday did a major league rant about government subsidizing 'bad behavior' and asking how is it that those of us who have keep up our house payments (90-95%) are going to have to pick up the tab for people who lived beyond their means (5-10%)?  93% of those responding to the CNBC poll when I looked say they would join the Santelli "Chicago Tea Party."

 

Santelli's idea for a Chicago Tea Party certainly has some merit, especially when you consider how one of his colleagues on CNBC Thursday (Mark Haines) was trying to ask a slippery-wording CONgresswoman in effect "If the taxpayers bail out someone who is upside down in their home, and the home can later be sold for a large profit, is there any way the taxpayers can get their stake back?" 

 

The answer, which the member of CONgress was not able to give is simple: Of course the taxpayer's gonna get screwed.  But, she wasn't about to admit that in front of CNBC's audience.   But, at least Haines was trying to get someone from CONgress to admit it...five bonus points.

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So here are my top reasons why the market should drop at least 100 and maybe as many as a thousand points today:

• The UBS disclosures are only starting and as many as 52,000 tax cheats could have to raise dough.

• Between Santelli and Haines on CNBC there's revolutionary talk about how taxpayers are getting screwed; someone besides me has noticed there were only three reading copies of the latest panic-driven BOHICA bill available for all of CONgress to read.  Just like the 'Patriot' Act stampede.  Wonder how long this one was sitting in the wings ready to spring?

• It's my birthday, so trading should be stopped for an hour out of respect.

• Futures are down more than 100 points on the Dow and gold is up more than $10-bucks when I checked.

• And we're headed for hyper-stagflation which is where things you need go sky-high and things you don't need plummet in price such that the CPI looks like you should be living OK, but you'll be noticing that your standard of living which statistically should be unchanged is in reality deteriorating.  More on that in a sec.

• GM seems to have written off Saab and thrown it to the wolves/creditors.

• Yet another investor rip-off is coming to light as an offshore bank seems to have failed.  So is this the last of the rip-offs which will be surfacing?  LOL, you're joking, right?  This is the tip of the Ponzi-berg...

• Did I mention that world markets have been falling overnight?

• Or, how about this: "Gone in 60 days: Citi and Bank of America won't live to see May" says one posting out Thursday.

 

But all that's not the real reason for panic.  Nor is the revolutionary tone that will be leading into what the linguistics team figures to be the 'summer of hell' as the people who really do the work (and make things) try to figure out how 99.9% of everything has ended up in the hands of the banksters/PTB/uber klassen which are little more than the capitalistic equivalent of slave owners.

 

Nope:  The real problem is the the week which ended October 1, 2007...when the Dow hit 14,066.01 on a closing basis.

 

"Huh?"  (I can hear you asking that all the way out here in East Texas...)

 

Follow my logic here - I'll put it up as bullet points:

• October 2007 the Dow closed at 14,066.01

• Since it's now 2009 and the Minneapolis Fed's inflation calculator has been updated, we can see that in order to just stay even with inflation, the Dow would need to be at 14,820.13 today.

• Which means:  When we cross 7,410.065 this morning, on an inflation-adjusted basis the...

 

DOW WILL HAVE LOST HALF ITS VALUE FROM OCTOBER OF 2007!!!

 

Come on!  Do I have to do all the thinking about this stuff?  The way I got it figured is this:  At some point more than just ol' George is gonna figure out that half their retirement dream has collapsed in the past year and a half.  When that happens, people will be hopping mad.  Take to the streets, "Where's my torch and pitchfork?" mad.  Zero-out debt and end spending mad.

 

Fortunately, there are a lot of sane people who read this site daily who can see through the BS on the MSM (exceptions being Santelli and Haines, but I figure they'll get reined in at some point byt he folks upstairs...):

"If I hear one more talking head tell the TV listeners that we are going to miss a big move up, I will wet my pants laughing. These folks have been saying that for 6000 freaking points. Buy, Buy, Buy... They don't get it... They have killed their golden goose... What am I doing with my cash???

 

Two words Mrs. Robinson: Can Goods"

Yep.  Garden, gold, groceries. 

 

For folks who think ahead of the mob, panic is (as usual) optional.  Watch for a stampede over the next week or two as we test that Landry 6,500-4,400 area on the Dow.  Popcorn?

 

Thousand-Dollar Gold's Back?

Watch the chart at the top of the page over the next week:  Seems gold is close to popping back over $1,000 an ounce.  Related:  8:54 this morning (Eastern) Dennis Gartman is supposed to be on Bloomberg, I hear...and he's bullish on guess what?

 

Cost of Existing

So what else might drive markets today?  Howzzabout the Consumer Price Index report?

"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in January, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The January level of 211.143 (1982-84=100) was virtually unchanged from January 2008.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.4 percent in January, prior to seasonal adjustment. The January level of 205.700 (1982-84=100) was 0.5 percent lower than in January 2008.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.5 percent in January on a not seasonally adjusted basis. The January level of 121.208 (December 1999=100) was 0.5 percent lower than in January 2008. Please note that the indexes for the post-2007 period are subject to revision.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U increased 0.3 percent in January after declining in each of the three previous months. The energy index climbed 1.7 percent in January, its first increase in six months, but it was still 31.4 percent below its July 2008 peak level. Within energy, the gasoline index rose 6.0 percent in January after a 19.3 percent decline in December. However, some energy components continued to decline; the fuel oil index fell 3.7 percent in January and the index for natural gas declined 3.6 percent. The food index, which rose sharply during the summer and moderated through the fall, increased 0.1 percent in January after being virtually unchanged in December. The food index has risen 5.3 percent over the past year.

Can we have a sanity check, please?  I know this isn't popular but here goes:

 

The main reason the CPI is collapsing is that energy has gotten dirt cheap and as a result, so has transportation and cheap energy ripples and sloshed about.  Energy is down as a 65.4% annualized rate in today's report, which is 10% less than last month's number (-75%).  So guess what?  When energy stops dropping (on average) we're all screwed.

 

And that means indices like transportation, down more the previous month, and heading down at 43% annualized now, will also turn around.  That will shove up food prices...which are going up a modest 1.4% annualized now.. and look at education (+3.3%) and medical care (+3.9%) and tell me what happens when energy prices rebound this spring...  Is this so hard to figure out?  Sheesh!

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Want another bummer?  How about this one:  220-thousand retail stores are going to close in the US this year says Howard Davidowitz... Wanna bet on 800-thousand jobs being lost when next month's figures come out?

 

Screwing the Unemployed

Notice the AP Impact headline:  "Jobless hit with Bank Fees on Benefits."  There you have it! One more reason I want to see those over-leveraged, high-falutin banksters bailed out. NOT!  Here, let's write them another check...NOT!

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Putting on my marketing hat, how's this for a positioning statement for the money-center banks (soon to be nationalized)?  "We'll let no pooch go unscrewed!" 

 

Maybe a little too honest, perhaps?

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Happy birthday to me.....here, have a shot of el Don... Hey!  At 60, my IQ and age and freeway speed limits will cross in er....a decade or less...

 

Speaking of Banks

Nouriel Roubini is warning that a 'sovereign bank' could fail.  Wonder if he means all those Crown banks in trouble?  Would put some poetry behind the phrase 'royally screwed' wouldn't it?

 

Hype, Shuck, and Nukes

You know how you can tell when the financial markets are in a serious world of hurt?  Stories start popping up about how (just to pick a fer-instance here) "Iran holds enough uranium for bomb."

 

OMG...ramp up more defense spending!  Quick!  Stampede 'em again!  Yee Haw!

 

RFO: Texas Takes a Stand

Say: Speaking of yee haws: The State of Texas  may be about to put the Washingcrats on notice with H.C.R. 50 being circulated in Austin.  It says in part:

"WHEREAS, Today, in 2009, the states are demonstrably treated as agents of the federal government; and

WHEREAS, Many federal laws are directly in violation of the Tenth Amendment to the Constitution of the United States; and

WHEREAS, The Tenth Amendment assures that we, the people of the United States of America and each sovereign state in the Union of States, now have, and have always had, rights the federal government may not usurp; and

WHEREAS, Section 4, Article IV, of the Constitution says, "The United States shall guarantee to every State in this Union a Republican Form of Government," and the Ninth Amendment states that "The enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people"; and

WHEREAS, The United States Supreme Court has ruled in New York v. United States, 112 S. Ct. 2408 (1992), that congress may not simply commandeer the legislative and regulatory processes of the states; and

WHEREAS, A number of proposals from previous administrations and some now pending from the present administration and from congress may further violate the Constitution of the United States; now, therefore, be it

RESOLVED, That the 81st Legislature of the State of Texas hereby claim sovereignty under the Tenth Amendment to the Constitution of the United States over all powers not otherwise enumerated and granted to the federal government by the Constitution of the United States; and, be it further

RESOLVED, That this serve as notice and demand to the federal government, as our agent, to cease and desist, effective immediately, mandates that are beyond the scope of these constitutionally delegated powers; and, be it further

RESOLVED, That all compulsory federal legislation that directs states to comply under threat of civil or criminal penalties or sanctions or that requires states to pass legislation or lose federal funding be prohibited or repealed; and, be it further

RESOLVED, That the Texas secretary of state forward official copies of this resolution to the president of the United States, to the speaker of the house of representatives and the president of the senate of the United States Congress, and to all the members of the Texas delegation to the congress with the request that this resolution be officially entered in the Congressional Record as a memorial to the Congress of the United States of America."

Can I hear a chorus from the Hallelujah Choir, please?

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Meantime, with reports that drug cartels are arming with bazookas and such, not to mention the violence against the police in Ciudad Juarez (just a bridge walk from El Paso on the American side), there are lots of folks here in the Lone Star State who are wondering why we can defend Afghan and Iraqi citizens and not those here in the Republic...(Want me to ask why Gaza has tighter borders than we have with Mexico, while I'm at it?)

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If you're trying to figure out what texting "RFO" means, here's a hint:  "Right F____ On."  Fill in the missing as you will.  Need more coffee?

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Soft revolution meme elsewhere?  How about: "NYU Student protest takes violent turn overnight" - this as the students want some back and forth of financial transparency...

 

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Coping:  Housing Drops Hit Rentals

Good article in the latest BusinessWeek online reports:  "Metro areas with Biggest Rent Drops" sounds like it might be worth taking a look at.

 

But wait!  How can Salt Lake City have a larger rent drop than Las Vegas?  I have to go off and meditate on that one for a while.

 

Ammo Shortages

More on the disappearing ammo from sporting goods stores:

"George, Regarding ammo shortages, I have am aware that the shortage in popular rounds is quite severe. I heard a comment by a local gun shop owner that he might these days only receive one of four cases of a given caliber, which makes me think it is not just that the end consumer is buying fast, but that at the top of the distribution channel a certain amount may be being redirected away from the civilian market. Perhaps to the FEMA or military? And why do I not see local or internet dealers receiving their lot and then selling fast. It seems that they are not even getting any even for an hour. I think we need an investigation."

Aw, gosh, come on.  We need all kinds of investigations:  What happened to all that Iraq money that's missing?  How did those private security contractors get all that dough?  Why didn't the government just let some bad banks fail?  Why are the greedy being bailed by the needy?  No way it's gonna happen, sorry.  Congress abdicated during the Bush term and with Obama off talking about 'protectionism' and other nonsense in Canada, the only change in Washington is the rotation from Clintonistas to Obamanistas for a whole class of shadow government/ pol-appoint types.

 

And then when I read Chinese media promoting the same idea ("Trade protectionism no spur for world economic recovery") I have to wonder "Gee, you think a faltering communist government in China maybe has a vested interest in keeping its workers slaving away instead of questioning the shadow government within their government?  Shadow governments are everywhere, LOL.

 

Yeah, there's a need for investigations, alright.  But with most members of CONgress effectively neutered by lobbyists of this stripe or that, about the only way to get performance will be a huge number of recall elections for misfeasance/breach of the public trust by those who are supposed to be looking out for the rest of us...

 

Google This

Federal Computer Week has an interesting story about how the Department of Homeland Security is using a Google Earth application for 'infrastructure protection."

 

The reason I mention this is that there's been some talk that Google Earth was purportedly used by those armed terror squads in Mumbai a while back...and now I'm reading how the feds are using a Google Earth ap (part classified, part not).

 

I must be terribly dense on some of this stuff.  When I read that DHS Earth will allow "geospatial data to be exchanged in real time" I find myself asking "What geospatial data?" 

 

I can hear it now:  "SpecOps 3, this is control: That nuclear power plant hasn't moved yet and is still located at grid coordinates...."

 

While the alphabet agencies in Langley and under 'the Fort' have access to vastly better resolution that anything on Google Earth, I) mean like read large newspaper headlines on a good day better) I have to scratch my head and wonder "Whatzzup with the DHS Earth project that a little inter-agency cooperation couldn't save the taxpayers oodles and bundles on?"

 

I must be very dense.  But then again, it is my birthday... wonder if there will be anything left in Social Security when I get there?

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Send snip and save items to george@ure.net

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Thursday February 19, 2009

PPI:  Clues on Inflation

Before we get into the actual PPI numbers, a couple of notes on what's going on at the Big Picture level.  As I've explained many times, the US is in a period very much like the first Great Depression.  The key difference this time is that the Federal Reserve and Treasury are trying to print enough money to keep things from collapsing into a deflationary depression. 

 

So how do you pull off this economic Hallelujah?  Answer: Print up a lot of money.  Lots and lots, and lots more.

 

Which is why Ben Bernanke can get up in front of the National Press Club on Wednesday and say (straight-faced):

"Some observers have expressed the concern that, by expanding its balance sheet, the Federal Reserve will ultimately stoke inflation. The Fed's lending activities have indeed resulted in a large increase in the reserves held by banks and thus in the narrowest definition of the money supply, the monetary base. However, banks are choosing to leave the great bulk of their excess reserves idle, in most cases on deposit with the Fed. Consequently, the rates of growth of broader monetary aggregates, such as M1 and M2, have been much lower than that of the monetary base.2 At this point, with global economic activity weak and commodity prices at low levels, we see little risk of unacceptably high inflation in the near term; indeed, we expect inflation to be quite low for some time. "

The reason he holds that expectation is that as a student of the previous Depression, Bernanke is well aware of the powers of deflation.  The theory - and remember it's only that - a theory - is that if we can print enough money to counter-balance the powerful deflationary forces at work with inflation via watering down the purchasing power of money (wild-eyed printing) then maybe we can all get to Abilene.

 

As if to support that view, John Williams work at Shadow Stats (posted on Trader Bart's site here) shows that the broadest measure of the money supply is indeed falling.  And, over on Williams' site there's some evidence that the various ways of measuring the consumer price index are also collapsing.  Or, are they?

 

We'll get the NEW CPI data tomorrow morning, but as of last month, if you look at the few measures of consumer prices that matter most, you'll see that while the 3 most recent months, compounded out for an annual rate were dropping CPI at 12.7%, food was still going up (1.4% annualized.  So, where was the decline in consumer prices?  In transportation costs which were down 55.6% (annualized off the 3 most recent months) we get a hint.

 

And what was driving down the transportation costs?  Collapse of oil prices.  The special energy index in the CPI was headed down at an annual rate of 76.6%.  Just this side of free gas.

 

Now comes the part which is key to understanding the future:  Given that the CPI has been coming down mainly due to oil prices, which have gone from what?  $145 down to $35 plus or minus a cheeseburger?  Ask yourself what happens to the CPI when oil firms and heads back up!  We will have ourselves an inflation spectacle that will make those heady 18% days of the early 1980's look like child's play.  I think I kept a Whip Inflation Now (WIN) pin from the era...

 

I do hope you noticed that Venezuela said this week that the OPEC'ers are aiming for $70 oil?  I reckon that we'll be an annualized inflation rate back in the 20% range (or greater) by the time August figures come out in September, or September's in October.

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I point out that what Bernanke et all are trying is just a theory and that gold seems to be telegraphing that at least one of the major commodities will be going up thanks to the monetary inflation. 

 

This is really a titanic struggle - and many readers are confused by it.  Chatting with one fellow yesterday who said he was getting 4½ on a good quality CD.  If deflation takes hold any more, that will be a fine return.  But, if inflation flips up, then he's covered with some gold.  Somewhat my approach - not perfect, but a close approximation.  Remember, the whole deal here is that if you can just maintain your wealth through this period you'll be doing better than probably 90% of the public which is still enchanted with "buy and hold".

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I was talking about where the stock market seems to be right now with my friend Robin Landry (rlandry@allegiance.tv) because he's developed a very workable long-term investment tool.  "I think we're in 3 of 3 of 5 now..." he explained.

 

What's that mean?  Go read up on how Elliott Waves work and it will become clear.

 

Landry also had some good things to say about CNBC's Jim Cramer; giving him credit for telling people - in effect - that this was a trading market and no longer a buy and hold market.  Much like Landry's view.  Also thinks there's a chance we might have one more good price break in gold ($700 or lower?) before things really break out to the upside ($1,900 or $3,000 depending on what else goes wrong in the economy...)

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My latest polling of ex contributors/participants in the old University of Colorado Longwave Econ group from the mid through late 1990's) is that we drop from here down to around 5,800 on the Dow (maybe as low as 4,400, or only 6,800 and then we get a real strong pop up to the  Dow 10,000 region, but then by 2010 the Dow could be down testing under the 1,000 level. 

 

So that's the BIG PICTURE of how I'm looking at my meager investments today - and no, this is not trading or investment advice- you're on your own and I haven't been invited to be a network talking head and I'm not selling books and software for a living. 

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So back on today's headline: One way to get a sense of how things may play out in the future is to look at the Producer Price Index.  This is like looking at a factory production line.  At the very beginning of the line you have raw goods/ crude goods.  This is stuff like iron ore, oil, and whatever else you need to make things in this country. 

 

A little further along the production line, you have 'intermediate goods' which is sort of the half-way point of manufacturing.

 

Then you have 'finished goods' which are set to ship out the door to distribution/retailers.

 

Now, with that all in mind, we can pop over to the Producer Price Index report and make some sense of things.

"The Producer Price Index for Finished Goods rose 0.8 percent in January, seasonally adjusted, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. This increase followed declines of 1.9 percent in December and 2.5 percent in November. At the earlier stages of processing, the decrease in prices for intermediate materials slowed to 0.7 percent from 4.2 percent in the prior month, and the index for crude materials declined 2.9 percent after dropping 5.3 percent in December. (See table A.)

The upturn in the index for finished goods was led by the index for energy goods, which increased 3.7 percent after falling 9.1 percent in December. Price declines for finished consumer foods slowed to 0.4 percent in January from 1.4 percent in the preceding month. The index for finished goods less foods and energy increased 0.4 percent following a 0.2-percent rise a month earlier."

If I squint at the numbers just so, I can sense a rounding bottom in the PPI due to energy declines slowing down...and I think that the PPI will be up in a month or two as the energy prices slow their decline, stop, and then turn up.  That said, this morning's number was weaker (e.g. lower) than expected - and that might start pressuring precious metals. Assuming no left-field events today around lunchtime.

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Remember, this is all ghastly complicated because no two economists agree on where to look on the timeline in order to ascertain where things will be going.  Remember, the investment decisions of today will be based on earnings of companies in Q2 or Q3 and the MSM talking heads/economists are still looking at the very first month of Q1 and until fresher data comes out, a lot of old data from Q4. 

 

While this crop of economists try to drive by looking in the rear-view mirror, we'll just keep focused on news events that will impact fiture pricing of goods and services...figuring that the rearview guys will be content inventing formulaic excusifications why they miss every major corner when the economy isn't going in just exactly a straight line.  How they end up on the tube daily is mind-boggling.

 

There's gotta be a word for it:  Something between gibberish and formula.  gibberula or formuberish maybe.  But, you get the idea.  Most, if they were really good, I'd think would be filthy rich and not getting up early to pontificate.  When I get $50-mil ahead, I will be sleeping late.  Trust me.

 

Quick!  Look Surprised Department

The FT reports that "Greenspan backs bank nationalisation."  Why, isn't that amazing?  A central banker backing more power and bailout dough for central bankers.  Why, that's just astounding, isn't it?  Who would have thought?

 

Urge to Surge

I continue to ask the question: "What are we doing in Afghanistan?" without getting a palatable answer.  I mean besides the diamonds, the boxing of Iran, the hunt for Osama bi Laden who's likely been gone for years.  Now I read:  "US Commander: Troops 'stalemated' in Afghanistan."

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A well-read reader offered an interesting quote from some book, or other: Afghanistan is where empires go to die.  Worked for the Soviets, didn't it?

 

New Media Wars

As the internet continues to gobble up market share from old-line media, we note that "CBS slashes dividend as income falls 52%."

 

New Jerksey?

Another 2.3 earthquake in north-central New Jersey. 

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Wanna ponder a strange coinkydink?  "FAA: Falling (hot) metal did not come from airplane".

 

OK:  Quake was a mile outside Dover New Jersey.  The 'hot metal' falling from the sky was in Jersey City.  29.5 miles away.  Events about 8 hours apart...  just odd, huh?

 

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Coping: Survivalists and the Ammunition Shortages

Every so often, a reader will pop in a question like "George, why are you such a 'survivalist' - or words to that effect.  I usually sit back and ask "Who, me?"  And here's why:  Much of what I have done in life ever since being a young kid in Mrs. Brooks' Cub Scout troop has been about 'being prepared'.   Pappy, being a captain in the fire department, well, that was all about being ready for anything from a small brush fire to a fully involved industrial building.  Being a news director in a major market?  A course in all that life can (and does) throw at people.  Living on a sailboat for 10+ years with not so much as a mishap after 5-10-thousand miles under the keel...that too speaks to preparedness.

 

Yet curiously, when governments prepare for worst-case events, that's somehow not survivalism.  That becomes 'continuity of government' and that's somehow more 'acceptable' to the PowersThatBe than individuals preparing for whatever life can throw them and being as best prepared as they know how.  Which get's us to this week's cartoon from Rebecca Price:

 

 

So is having a little food stored, a gun, some seeds, and great outdoor gear...does that qualify a person as a 'survivalist'?  Or, is there meme/concept coming from somewhere else?  Next time you hear the word pop up, try to corner whoever you heard it from and ask them "Say, just what is a survivalist?"  The answers are surprising.  If you can goods out of your garden does that make you a 'survivalist'? 

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Speaking of which:  You may wish to keep an eye on House Resolution 45 - which seeks to ban any kind of gun that is magazine-fed & semi-automatic.  Yep...couldn't make this one up. 

 

"Naw, George, they'd never try to confiscate or criminalize gun ownership - guaranteed by the Founding Fathers, would they?"  Oh yeah - that and more if they can get away with it.

 

Locally, the Palestine Herald here in East Texas has a pretty good summary of this latest attempt to strip Americans of their Second Amendment rights.  This is apparently not an issue to Illinois Democrat Bobby Rush, who doesn't seem to have a problem naming a bill after a 16-year old hero and son of a Chicago police officer who was killed while shielding a female classmate during a gang-related shooting.  Like the gang-bangers are going to rush out and register their illegal weapons?  I'm become less impressed by the day with Illinois politcos.

 

Still, it's part of a growing and dangerous trend - to strip the civilian population of its right to bear arms.

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Even more insidious is the current ammunition shortage...which reads like an end-run around the efforts of the Gun Owners of America, the National Rifle Association, and the Second Amendment Foundation which are committed to maintaining the integrity of the Second Amendment.

 

If you're a long-time reader, you might recall that I started talking about the ammunition shortages two or three years ago.  I'd mentioned this at the time to the fellow across the road and remember he'd said he hasn't seen any shortages.

 

Yet on Wednesday he called and said, essentially, that he was trying to get some ammo and had just run head-on into my ammunition shortages.  He reported that several kinds of ammo that we was interested in were showing as "Out of stock" at Cheaper Than Dirt...and some that were showing as 'ion stock' resulted in emails later saying 'Sorry, out of stock on that, too.' 

 

Yep, when I first started covering ammunition shortages back in March of 2006 it looked like a leading edge of the larger "encounters with scarcity meme" but as things have evolved, it may be an end-run around outright gun control.  Guns are, after all, not much use without something to put in them.

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These developments, and more, have served to sharpen my focus on some very interesting trends underway:  The ammunition shortages, the attempts to subvert the Second Amendment, and I hear that tomorrow Texas may be joining the list of States that are lining up to tell the federal government that if a State doesn't specifically cede a power to the central government, then the central government may not seize unauthorized power and  impose rules/laws in those States.  One of the most interesting aspects of this emerging trend?  Calls into question how much powetr the feds have over State militias and 'guards'.

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More in this week's Peoplenomics report.  But as usual, the discussion will be on first causes - conflict management, tactics, and objectives.  Given a choice between a ghillie suit, cross bow, and night vision gear or five guns of any caliber (*without NV), care to guess which one I'd take?

 

Who Goes There?

New service will help you unmask those caller ID blocked calls.  It's called www.trapcall.com.

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Wednesday February 18, 2009

Limited Range of Motion

Yeah we'll get to this morning's string of numbers in a moment, but first things first: So there I was, 3:34 AM and wide awake.  Going through my head was a single thought: "Gee, government sure doesn't have much 'range of motion'.

 

I tried to think about what's really available to Congress as problem-solving tools and it always seemed to come back to just a handful of very constrained choices once they have exhausted jawboning something:

• They can write a check

• They can impose a tax

• They can impose jail time & fines

 

So, later today when president Obama goes to Phoenix to talk up the housing measures, it will be with a very small amount of actual money.  Oh sure, $50-billion may sound like a lot of money if you're just buying Cheerios with it.  But, when you've got a huge housing crisis going (with no end in sight and a continuing deterioration of conditions) it's not much.

 

Which is why I harbor an uneasy feeling about how the rest of the week could work out:

• Today:  Market may bounce.  My best dart (understand its early) would be a close up 94.45 points...but that's only a guess.

• Thursday: I would look for big fireworks.  Maybe a bit of downward pressure at the open and then WHAM! Around lunchtime a huge selling spree to catch everyone off guard or at lunch.  Maybe an 800 - 1000 point drop - possibly more.

• Friday: Markets open, and then close before noon (Central) due to extreme price action.

 

And what is going on that may cause such a seemingly unlikely set of circumstances?  Let me tick through the list for you:

• The talk about "change" in Washington is just that.  Talk.  President Obama has ordered 17,000 more US troops to Afghanistan.  Seems to me the change which people thought they were voting for wasn't to change countries involved in Operation Enduring Freedom but was for something else.  The way I've got it figured is that if Osama bin Laden hasn't been found in Afghanistan after what, 7½ years, the odds are pretty low he's going to be found this week - or any time soon.  CONgress is living up to its name on this one.  Meanwhile, the civilian death toll was up 40% in 2008 says the NY Times.

• Massive auto collapse.  Don't know if you noticed but GM is laying off another 47-thousand and Chrysler is dropping 3,000 and GM says it needs money next month in order to keep going.  That means somewhere between 10-days and 41-days, CONgress may be asked to write another check.  A BIG one.  Reports are circulating that Goodyear may cut almost 5,000 jobs.

• The foreclosures are continuing to ramp up despite the good intentions behind the housing bill.  But here's the really interesting part that may scare the hell out of people in the fixed income departments:  Seems homeowners who are facing foreclosure have come up with a new rallying cry: Produce the Note!  The way contract law works is pretty simple: No contract, nothing to enforce. And since there's so much of the housing mess that's now reduced to jumbled and misplaced paperwork, who know how many home loans are really valid anymore.  Without a copy of a contract, seems to me that liens against homes might be challenged and I'm just guessing that possibility is not heavily weighted in CMO pricing - yet.

• After reports recently that European banks need something like $16-trillion in bailouts, we notice that Germany is drafting legislation to nationalize their banks.  Repeat after me: Socialize losses, privatize profits.  You just weren't born with the silver spoon, if you're not getting a piece of it.

 

Meantime, some of the headlines are pretty interesting.  The Drudge Report, for example, headlined this morning that "Obama moves toward "Swedish Model" for Banks."  So being no fool, I went looking for Swedish models and yeah, I can see reasons to move toward any numbers of Swedish Models...LOL.  (Somehow, that may not be what he meant, but who can take Global Financial Collapse seriously all the time, right?)

 

But seriously, this is just more in the plan to take the losses of the fat cats, dump them on the taxpayers, and then let the same crowd buy back in after the public has paid the piper. 

 

Word from Happy Geithner's crew: "Top 20 banks receiving US aid are lending."  Why sure they are...just bring your 820 credit score and come along this way...  (You know your credit score drives you car insurance prices, too, eh?  Maybe they figure if your credit score is low you'll end up living in the car.... I dunno....)

 

So while it may sound a bit pessimistic of me to look at all the crap going on in financial markets, feel a tinge of sadness all the people who are losing their net worth - and being indentured to future taxes by an irresponsible CONgress, and even suggest that we could have a market closure late tomorrow or Friday, it's not really out of the realm of possibilities..

 

I hope you noticed that "Russian stocks tumble, trading suspended" already this week?  Think globally linked markets.

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I told you back in December what the track of things would be:  That the market would drift down through around the middle of February to early March and then we ought to see a rally from Robin Landry's Dow 6,500 to as low as 4,400 range with 5,800 a good middle-range guess.  Then we'll have us a screaming rally back up to the 9,600 kind of range - maybe even 10,000+ on the Dow by early summer.  Then we head for Dow 1,000 (or lower) in 2010.

 

So, I'm just going to shovel a couple of bucks into my commodity account and get ready to load the boat on oil call options...so I've been enjoying the weakness as "Oil trades near $35 on speculation U.S. stockpiles climb."  Oh yeah...let 'em climb...makes my call option plans all the greener.

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There's an old saying - might have been one of Pappy's firehouse expressions - "To a man with a hammer, every problem looks like a nail..."

 

To a Congress with a checkbook, everything looks like a bailout.

 

'Except for you & me, of course. 

 

Wednesday Morning Numbers Festival

Hmmm...my numbers first:

• Port of Tacoma reporting Year-On-Year container volumes down 15.9%

• Think I already mentioned Long Beach was down 15.8%?

• Waiting on the Ports of Seattle, Los Angeles, and Portland to report, but did you see the Port of Seattle was down 27.6% in December '08 versus December '07?

 

OK, that little summary of collapsing trade aside, let's see what else we can come up with in the number-crunching department:  Oh, how about the Census report on housing with highlights by your favorite East Texas whacko?

BUILDING PERMITS Privately-owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 521,000. This is 4.8 percent (±3.5%) below the revised December rate of 547,000 and is 50.5 percent (±2.2%) below the revised January 2008 estimate of 1,052,000. Single-family authorizations in January were at a rate of 335,000; this is 8.0 percent (±1.8%) below the December figure of 364,000. Authorizations of units in buildings with five units or more were at a rate of 166,000 in January.

HOUSING STARTS Privately-owned housing starts in January were at a seasonally adjusted annual rate of 466,000. This is 16.8 percent (±11.0%) below the revised December estimate of 560,000 and is 56.2 percent (±4.4%) below the revised January 2008 rate of 1,064,000. Single-family housing starts in January were at a rate of 347,000; this is 12.2 percent (±13.0%)* below the December figure of 395,000. The January rate for units in buildings with five units or more was 114,000. HOUSING COMPLETIONS Privately-owned housing completions in January were at a seasonally adjusted annual rate of 776,000. This is 24.2 percent (±5.9%) below the revised December estimate of 1,024,000 and is 41.7 percent (±6.9%) below the revised January 2008 rate of 1,331,000. Single-family housing completions in January were at a rate of 566,000; this is 17.5 percent (±7.2%) below the December figure of 686,000. The January rate for units in buildings with five units or more was 203,000.

Capacity Utilization due out at 9:15 Eastern, so check www.federalreserve.gov for those numbers.

 

Gold Glittering

I don't suppose I need to point out why gold has been climbing steadily?  Governments around the world are trying to 'paper over' the global economic mess.  Typical headline:  "BOE [Bank of England] Asks for Authority to Create Money."

 

One of George's simple axioms spring to mind:

"If government can create it, it ain't really money."

Which neatly explains headlines like this one:  "Gold tops $975 on Demand for Store of Value; Silver also climbs..."

 

And yes, I told you I was buying gold in 2001 at $265-273 and I told you in 2005 that I was buying silver at $6.94 - $7.05.

 

Global Revolution Notes

Who would have picked the French island of Guadeloupe in the Caribbean as a site for five weeks of strikes and now one dead in violence?

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You may not see much coverage in the MSM of the doings in Chicago last night where "3,000 union members rally for bill to make organizing easier."  And the reason you won't hear much about this is the MainStreamMedia is largely owned by folks who would just as soon workers not organize.  Well, duh...

 

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Coping:  Tears and Beers

You saw where Oregon is planning to raise its barrel tax on beer by something like 1,900%?

 

Ever crafty and creative UrbanSurvival readers are noticing this, too:

"An acquaintance went to the Blue Gray "Breweriana" Show in Fredericksburg Va last weekend (40 "guest beers" on tap all weekend!) Sez that one thing he learned is that the microbrewing industry rose 11% this past year.

I think I'll go clean out my 401K and buy brewing supplies. No, not stock in brewing supplies -- actual supplies. Malt, bottles & caps, more carboys. . . . I remember learning once that booze and life insurance are the two most depression-resistant products.

Gotta find a local guy who raises barley."

Not only is booze a good barter item, seems that like gold (of the non single malt type) it's got some upside potential.

 

More Readers Writes

Here's a good one:

"Amero Could Result from Crisis - story reported on 14 Feb in Lithuania (of all places). With the story about the necessity of bailing out the Eastern European banking system and everything on the verge of collapse ... when is the curtain going up on the Global Solution (cue the Hallelujah choir?) and ... I am a bit of a financial idiot, but is there a possibility that those crashing the global economy are in fact investing in an as yet unavailable currency?"

Well, yes, that's a possibility, alright.  Which is why Elaine and I have been focused on nonmonetary ways to use cash (while it still works).  So, if you've got a couple of years of seeds, some stored water and food, gardening tools, walking shoes, and the whole 4 (may be as high as 6) G's, then iot may not matter.

 

Not On OUR Ranch

Several readers  and Canadian editor Tim B - have asked if we're planning to bid on any of the blingaphenalia from Michael Jackson's Neverland Ranch.  Not 'no' but HELL NO.

 

Gotta Get Me One Department

Oh boy!  Here's a new goodie out of Germany which would be really cool to have along, oh, say the Inter-Coastal Waterway...

 

Just think, not only could you 'fly' along a canal, but you could also wash the car with it...

 

Cheap Is Good

Fox reports that a "New Hampshire family of four trying to live on $1,500 for the year."  I know you may be skeptical of whether a person can really live on $10,000 a year as I outline in my ebook (below) but yeah, it can be done very nicely.  And in the ebook, I didn't even put in a requirement for gardening...so you really could get by on $5,000...or less... if you needed to and as these folks are proving...

 

Street Level Economics

From inside the Beltway:

"George,

Quite anecdotal, but thought I would pass on a couple of tidbits from the Washington, DC area:

First, I went to fill a common pain killer prescription yesterday and my CVS pharmacist said they haven’t been able to get their orders filled by their supplier in three weeks. They said I’d find the same problem at Giant – same supplier. They called the Safeway nearby and they had to check to see if they had it. Safeway did have it, so I went over. I overheard a woman trying to find Prilosec. They were out of it, along with the several other stores she had already been.

Second, I’ve been noticing the quality of food has already gone down and many restaurants and/or the price has gone up an average of $3 to $4 per entrée in the past few months. Starbucks has replaced their line of delicious morning breakfast sandwiches with an Egg McMuffin wanna be. Thats’right, the Starbucks sandwich costs more then an Egg McMuffin at $3.95 (but tastes worse to me). Needless to say, I’m getting my morning caffeine and breakfast elsewhere now.

Lastly, I just received “Reinventing Collapse” from Amazon. The delivery box appears to be smaller than what was usual in the past with little or no “cushion” inside to protect it, just book. Well, at least they are saving on resources in a “green” sort of way, but we all know they are shaving a few cents off the cost of each box expecting the amount of a few damages books won’t offset the savings realized……

Keep up the good work!"

Say I should point something out:  If this was really "work" would I be doing it? 

 

Avast Me Hearties...

And I don't mean coronary care hearties...

"Hi George! :-)

.......I've ran aground and can't get up!

Thought you said only ONE ship would run aground. JEEZ!!! (You wouldn't perhaps have insurance on these things would ya? ;-) Cruise Ship Runs Aground in Antarctica

I thought it would be one but when a meme 'goes hot' in modelspace, sometimes it's like Universe just gets carried away with itself...weird, huh?  Who would have thought the Universe would decide to have a 'ship running aground festival in February'? 

Gee, maybe the market will close in honor of my birthday Friday...

Thursday is cartoon day, so drop by tomorrow...

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Tuesday February 17, 2009

Obama's Test Week?

The predictive linguistics work over at www.halfpasthuman.com has been saying for a fair spell that the Obama administration first big 'test' would come after we got something having to do with ships grounding, something about gold popping, and a few other items.

 

So, in the past couple of weeks we have been seeing all kinds of ship accidents/groundings - Just to mention a few, there were some fishing boat rescues, that tanker losing power off the Golden Gate, the tanker collision off Dubai, and then this weekend a couple of nuclear submarines colliding in the Atlantic.  And what about that guided missile cruiser grounding off Hawaii?  So that linguistic set is chock-a-block full and done.   If you wanted, you could throw in the collision of the Kosmos and the coincidentally numbered Iridium 33 satellites over Siberia, too, since they were a couple of space ships.  The fallout from that is still making headlines in Kentucky and Texas after fireballs were sighted.  Linguistically, things don't get much fuller than all that.

 

So what's this 'test' business all about?  Well, that is open to speculation.  One line of language hints goes to the idea that it will have some military component to it and that at some point here shortly, Obama will have a chance to 'win a battle, lose a war' or he could 'lose a battle, win the war".  But, on the other side, that could be simply metaphorical as the economy seems to be in the midst of imploding.

 

Economic conditions are quickly deteriorating in the wake of Moody's latest red flags about the banking sector in Eastern Europe.  Here in the US, the stock futures point to a triple-Excedrin day on the exchanges, but there is a bright spot for folks like us who have already fled paper assets and have gotten back to the 4-G strategy: gun, garden, gold, and grub.  When I checked earlier, gold was well over the $960 level, and see the chart at the top of the page for more.  Seems I'm not the only one that has figured out that printing up money hand-over-fist will water down the purchasing power of dollars such that inflation/hyperinflation is a real possibility.

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Not that the US is alone in this you-know-what storm:  Japan is shopping for a new finance minister after a press conference on Saturday in Rome where Soichi Nakagawa slurred his speech raising questions about whether he'd had maybe one too many.  Or, could have been seriously jet lagged, but regardless, he's toast.

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Then there's the matter of international trade collapsing.  Later on this week I'll put together a little more depth to this, when the various Port people come back from the long weekend and get their January stats posted.  But, the heads-up Port of Long Beach shows that their total traffic was down 23.4% compared with January of 2008, so being a rocket surgeon, I figure that means at some point there may be less to choose from at Wally 'World and pretty much everywhere else, since America has exported most of its hard-good manufacturing to elsewhere. 

 

Don't even get me started on how already, corpgov is trying to make a whipping boy out of protectionism - which is patently absurd since the global financial piñata has already been smashed and it happened while the barriers to trade were about zip.  naturally, when I read stories like the Anne Applebaum piece in the Washington Post "Protectionism Anew"  my blood boils.  Free trade gone nuts has caused where we are...or hadn't you noticed?

 

If laissez-faire corporatism ('hands off' corporatism run amok) was really a grand idea and all, we shouldn't be in collapse mode and voting on a stimulus bill this week that's so big no one in Congress has read the whole thing!

 

While the Houston Chronicle down the road headlines that the "Obama stimulus bill signing will take a positive tone" I'm left wondering what he'll be positive about?  That it will pump up inflation and hide the economic collapse under a pile of soiled statistics?

 

If you do nothing else today, please make a note to yourself to watch the PBS special "Inside the Meltdown" on FrontLine tonight.  I'm not the only one seeing this for what it is:  "Economists try target practice in a Fun-House Mirror" says a New York Times preview.

 

Meanwhile, I'm just plugging away on my plan for a national recall center - to set up a clearinghouse so that people can learn about how the recall process works in America and how malfeasance or misfeasance of office really is grounds to get politicians out of office in mid term.  When the public was calling by some reports at a 300 to 1 rate against the bankster bailouts, and when trillion dollar pork bills go unread, don'tcha think that just maybe that's misfeasance?

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Readers are sending in notes like this one

"In ALTA 1109 Part I you mentioned a "shift to military posture" in/around Feb 11th that was connected to Obama's "test," which was also linked to symbols relating to mountains. The news article below about the 10th Mountain Division (Ft Drum, NY) deploying to Afghanistan as part of Obama's surge in military operations fits that prediction on all counts! Note that the first 3,000 additional troops have arrived in country, and have already engaged in combat. Score another one for the Time Monks, plus I hereby authorize George a double shot of el Don with his morning coffee!:"

Oh, yeah, that does bring up the matter of how many more troops Obama will send to Afghanistan...and can someone please remind me what we are doing there besides cornering the world's heroin supply for the narco crowd off in the background and those pipeline routes?  Russia which is nearly next door gave up because it was a sinkhole for resources...so we're doing what?

 

Hey!  I just got it!  Maybe "change" means instead of Iraq, Afghanistan will be the main feature of the Obama administration's military spending plans...got it!  How silly of me.... but what are we doing there?

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Reminder: Subscriptions are now open for the next predictive linguistics run: $280 for first-timers and $70 if you have been in a previous run.

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And another reader sends this:

"Could the "Test" of the President be a world currency crisis?

Apparently, the foreign exchange last night go volatile and the USD got strong pushing around on other currencies.   [I noticed that too...as did other readers on links like this one... - G]

Whatever it is - some FX folks got worried last night.

And, with Hillary overseas in Asia - who knows what's up (well maybe the Illuminati but they don't have a national magazine we can read...)..."

And speaking of which....

Hillary Not Welcome

Signs of the time in Indonesia?

 

Chavez Gaining Ground

The weekend election results out of Venezuela keep making headlines like "Emboldened Hugo Chávez to speed up his Bolivarian Revolution".

 

Well, at least Hugo is open and forthright about his brand of socialism.  The corpgov version steamrolling in Washington with trillions for the elite is still masquerading as 'freedom'...  And we point fingers at Chavez?  LOL....why sure!

 

And the Next Collapse Is...

Commercial  real estate maybe?  A reader asked if the headline that "Redemptions overwhelm Santander property fund" might be the leading edge of that.

 

Maybe, but it could be something like the today's "Trump Entertainment files for Chapter 11," too.

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I expect it won't be just a single event that will tip over the commercial property side.  It will likely be a soup of this commercial CMO being repriced dramatically, a run on this, a bankruptcy on that...then at some point it becomes a self-referencing feedback situation and "Whoosh!"  We're in the next round of panic.  That's how Depressions work, collapse in stepwise fashion..

 

Bail This

Might Russia end up bailing out an Oregon steel plant?  Pass the el Don.

 

Dickt

"Ex-VP Dick Cheney outraged President Bush didn't grant 'Scooter' Libby full pardon" reports the NY Daily News. 

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Lemmesee here:  If everyone in Washington operated in an honest and forthright manner, would the Country need 'get out of jail free cards'?

 

Tax All Kinds of Sh*t Department

"Householders to be charged for each flush of toilet" down under (so to speak).

 

Don't know whether it has dawned on you what's going on globally if you step back far enough and go into a soft martial arts gaze:  1) Instead of solving greenhouse emissions which is doable but which would cut corpgov profits, that got monetized with the carbon credit trading delusion. 2) In like manner, now to solve the Oz drought problem we see the flush tax.  Seeing a pattern here? 

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How about:  Humans don't want to change anything - which is why the Obama administration is just what the marketing department ordered (talk change but defend the old paradigm) they just want to tax and spend figuring that with the right mix of tax incentives everything'll be alright and as Happy Geithner would have us believe, we'll make back those lost bazillions.

 

Yeah, whatever... the difference between crack and taxes is what, exactly...I mean besides who the user is?

 

Markets

Arbies/PPT-WGFM at work?  S&P futures down  2.48% when I looked, but the Dow was only down 1.88%

 

Seat belt tight? You know we're in Robin Landry's 'crash watch' area....

 

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Coping:  Another Orlov Talk

I've become quite a fan of Dmitri Orlov's work.  If you're initial response is "Who?"  then you need to be expanding your reading horizons a bit.

 

Orlov's a Russian-born fellow who moved to the US at about age 12 and since he's culturally got a foot in both countries, so to speak, he's got a really good ability to see through the hyperbole and cut to the chase when it comes to how Super Powers implode; watch Russia and then watch what's going on in the US.

 

So last week he gave a talk in San Francisco called "Social Collapse Best Practices" and although it prints out in Word at 24-pages or so (when I put it on "old man type size") It's very much worth reading and may be found here.  A key quote:

"Food. Shelter. Transportation. Security. Security is very important. Maintaining order and public safety requires discipline, and maintaining discipline, for a lot of people, requires the threat of force. This means that people must be ready to come to each other’s defense, take responsibility for each other, and do what’s right. Right now, security is provided by a number of bloated, bureaucratic, ineffectual institutions, which inspire more anger and despondency than discipline, and dispense not so much violence as ill treatment. That is why we have the world’s highest prison population. They are supposedly there to protect people from each other, but in reality their mission is not even to provide security; it is to safeguard property, and those who own it. Once these institutions run out of resources, there will be a period of upheaval, but in the end people will be forced to learn to deal with each other face to face, and Justice will once again become a personal virtue rather than a federal department."

Other items covered include being ready to blow out of your job at any point and so forth.  If you want more details about how present events could dash the ship of state on the rocks, you might add his book Reinventing Collapse: The Soviet Example and American Prospects to your list.

 

Speaking of prisons:

 

Catch and Release Programs

So there we were, sitting around Monday afternoon having a light, refreshing meal while food is still plentiful, big ranch-style spread:  Chicken carbonara, turkey & dressing, a bunch of veggies, and some pizza (need I mention a glass or two of my second favorite jug wine, Paisano? #1 fave jug wine is Cribari Vino Bianco served very cold) and an interesting question came up:

 

In Texas, there's quite a fair portion of the population that is involved in prison work.  So here is the interesting question:  If due to governmental lack of funding, the state stopped paying the private contractors that run prisons, what would the guards do if the money to run prisons just dried up one day?  Would they release inmates into their local community, or just leave them locked up and walk out and let them starve? 

 

Oh, sure, a macabre kind of thought on the surface, but when you read Orlov's view on how the Former Soviet Union (FSU) fell apart and consider the possibility that the USA could be headed for FUSA status, then the question is a little less absurd.  Moreover, I don't know if you say the story out of Pennsylvania that "Corrupt judges paid to detain youths in private jails"?

 

I assume you saw that California may have to cut prison population by 40 percent?  A California college student editorial figures that:

"It has been over 100 days since Governor Schwarzenegger called a special session of the Legislature to fix the state budget, which came in 85 days late to begin with.

The budget they are working on is for fiscal year 2008-09, which ends on June 30. Over halfway through the fiscal year, California is without a “real” budget. "

Since the California Legislature can't seem to figure out how to cut - and they adjourned again with no budget leaving Arnold to take the heat for laying off 10,000, that problem is not going away any time soon.  No, make that 20,000.  Wonder if Arnold regrets the 'tough guy' image?

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So with states under extreme budget pressures, the question about prisons and prisoner release is far from moot, as I've got it figured.  And once you admit that states are in real trouble, then the question about how prisoners would/will be released as economic stresses go becomes a mighty important question to be asking.

 

So if you happen to be (or know) from prison administrators, it might be a very pertinent thing to be asking:  What's the strategic plan for dealing with prison inmate populations if there's a collapse of government funding due to economic dislocation?  I can't tell you precisely what the odds are - since such things are unknowable.  But I'm pretty sure the answer is a none-zero equation.

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Should I mention that Kansas may delay tax refunds, paychecks?  Like I said, its a non-zero equation.

 

Weird Science Department

Report out of the UK:  "DNA left at crime scene could be used to create picture of criminal's FACE, say scientists."  So, if you're studying for a life of crime, you might figure on masking up, gloving up, and wearing head gear...is that what we're supposed to get from this?

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And here's a dandy:  A new pill is being developed that could help erase 'bad memories".  Sounds like a dandy idea, huh?  That way we wouldn't have to learn from our mistakes or deal with the life we've chosen to live this time around... oh boy....

 

Clothing Exchanges

Here's something interesting...

"Hi George

Fitting in with the living with out 'paper money' meme ... caught mention of this on our CBC news last night and found this Canadian website about how to host/have one - even has the rules. Its a good concept. I remember participating in 'clothing exchange parties for kids clothes' during the 80's (recession). After all 'fashion and style' will still I'm sure be an important part of (I can't believe I'm going to write this gender bias) "Survival" mode for women. LOL!

The Great Canadian Clothing Exchange By Jo-Anne Lauzer  

http://www.secondhandsavvy.com/ez2/ez2_4.html "

All This Stuff Makes Sense

If it doesn't?  Your view of reality is flawed...  Hate to point out the obvious, but you need to know that at some point.

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Send snip and save items to george@ure.net

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Monday February 16, 2009

Not to Make Excuses...BUT....

On the occasional national holiday, like this being Presidents Day and all, I sometimes afford myself the luxury of sleeping in because...

• The banks are closed in the US for other reasons than failures for a change

• The markets are closed  in the US

• There are generally no parking meters in use, although I have yet to see one of those critters in Palestine, Frankston, or Tyler, Texas...an advantage of small-town living.

• There's not much action in the price of gold (chart above)

 

Still, having slept in, I usually end up regretting it.  This morning not only did Zeus (the cat who often ghost-writes large sections of this report) want to play, but Outlook decided to bless me with a "Sorry George, don't want to work today either, so sit on this 0x8003010a error and twirl, pal..."

 

Plus my favorite coffee cup was in the dishwasher.

 

OK, not exactly economic genius, to be sure, but this is a holiday, after all.

 

V for Venezuela

Old Hugo Chavez is up to his old tricks again...why despite the best efforts of our alphabet agencies, not to mention the corpgov agents of oil, he's gone and gotten himself anointed more or less presidente in perpetuum.

 

But that's no knee slapper.  Nossir.  The real (here's a new word for yah:) wryrony of it is the headline "Chavez calls Venezuela vote mandate for socialism."  Hell, ain't that what Happy Geithner and Printer Ben are doing on the banking side of things right here in the formerly Land of the Free?

 

Goodness, Gracious, Great Balls of Fire

Many calls around Texas to authorities to report fireballs falling.  While SAC says it wasn't leftovers from that satellite smash-up[ over Siberia, seems to me could be any old thing, since there was that, the usual odds of errant meteors, and not to mention those folks who report that using night-vision gear, they have seen UFO's duking it out in the skies at night.  Apparently not visible to the naked eye...  I may start taking a Gen 2+ look-see on clear mornings on the way over to the office -- I'll let you know if I see anything out of the ordinary.

 

Warning NK

Hillary speaks and warns North Korea.  Why if they don't straighten up, we'll send her in to set up a health care system for 'em.  That oughta straighten up damn quick.

 

Headline of the Day

"Adult download tax proposal awaits climax in Albany."  Come, come, now...are the editors asleep?

 

Shaken And Stirred

New Jersey has another earthquake.

 

Connect The Dots

"Former astronaut speaks out on global warming" and says "...global warming scare is being used as a political tool to increase government control over American lives, incomes and decision making."

 

Second Dot:  "As Data Collection Grows, Privacy Erodes."

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OK, off to fix Outlook....a more normal morning tomorrow, maybe...

 

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