A One Man Economic Daily Newspaper about the Second Depression in near real-time...
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February 11, 2011 07:55 AM CST
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IMF: Out With the US Dollar
Don't know if you caught it - but the IMF reportedly is calling for an alternative to the US dollar. Maybe some of this is pressure from China, or who knows what else, but fact is this constitutes a major change in the order of things financially and although the dollar is doing OK this morning, its days as the world reserve currency could be limited and the consequence of that could easily be higher prices for imported goods. Nice way of saying inflation.
Still, redenomination of the Special Drawing Rights (SDR's) might make sense:
From the IMF paper on topic, some highlights:
What they don't mention is the little item about how this erodes the position of the US dollar, makes us even more vulnerable to globalista's agendizing, and what's more, sets the stage for the "death of the dollar" which is what we've been talking about for years now as a sure sign that the twilight of American Empire has arrived.
And with friends like this, who needs......oh, Egypt might work for a while, which would explain this next item:
Our "There Goes Egypt" Dept
The guy doesn't take a hint very well, does he? Watched the Mubarak speech on Al Jazeera and sure looked to me like a condescending slap to Egyptian people who have been out on the streets. Everything in Europe, save Switzerland and Norway were doing poorly this morning as a result.
Then there's the little matter of CIA chief Leon Panetta getting last night's events wrong, too. Seems he'd been expect Mubarak to go.
No change in the number of US Navy ships at sea, least so far as carriers and gators go, but we'll be checking that every day. The West just can't afford to have the Suez go down, but then again, with the economy slow to add jobs, may well be the PowersThatBe are working this as a job creation program...time will tell.
Mohamed El Baradei, a retired diplomat and Novel Prize winner, figures it will only be a matter of time till Egypt explodes into violence.
Seems to me this is like betting the sun will go down. Latest video off Al Jazeera sure points that way...calling this Farewell Friday.
Understandable, Israel is nervous and is calling for slow change, too.
What seems to have escaped the notice of the PTB is that (linguistically in Clif's work) there's a GlobalRev underway and if they're not with the people they will be cast as against the people and that's gonna come back and bite 'em.
BOT: Sucking Sounds
OK, so here's how it sketches up (to the most miserably inclined): The US dollar is about to be repladced since the IMF can read our soaring debt-loaded national balance sheet as well as anyone else, and short of a major war - soprry...peacekeeping - operation in Egypt, we are going to implode due to our Balance of Trade anyway.
And the latest evidence here slaps us in this morning's reported include of more than $2 billion a month in the US Ba;ance of Trade Deficit. Fun, huh?
Chew On This
Kraft is out with an announcement that some of its food products are going up in price. Not like Kraft is alone: Sara Lee, Smucker, and Kellog are also raising. After warning you for how long, is it? We've been expecting this.
One reader who's got a sweet tooth and likes a particular kind of Keebler cookie, reported his price paid at his local store had doubled in about 10-days. I didn't have the heart to tell him sweets aren't necessary.
And I assume you've seen this?
And what have we said about putting in a garden this year? Not to nag but...
Got a note from my EMT son up in Seattle who volunteers with the Public Health Reserve Corps in Seattle/King County that there's an outbreak of Noro virus up there. Disease details here. Outbreak is in a low income housing facility...
So today, volunteer teams will be wiping down public surfaces - counters, doors, and nurses will be going door-to-door.
Reassuring to have dedicated people in the medical community who volunteer for such things. And a reminder that its efforts like this that keeps the rest of us safe...
A porn flick being filmed on a public Miami Beach island is making headlines in the Miami Herald. Waiting for pictures to show up on Page 3...or not...
(more after this...)
Friday at the WuJo
Coping: The Inner World Mapping Project
Elaine and I were in San Francisco yesterday. No, not the San Francisco of everyday waking hours, but the one in my "dream world." That inner world where every once in a while I get a glimpse of the future (like the day before the Gulf Oil disaster, where I dreamed of murder, oil, and a place called "the wall") and where almost all of my dreams are played out.
You may have such a place, too. A kind of inner world which serves as a background against which many of your dreams are played out.
As you might be aware, one of my part-time projects is the National Dream Center (www.nationaldreamcenter.com) where people post their dreams about coming events. Not only are some of the dreams pretty darned interesting, but it provides a way to track the relative frequency of dream types.
The idea is loosely borrowed from Chet Snow's book Mass Dreams of the Future since I have had enough personal experience with dreams being 'real' that I wanted to provide a place where 'future dreams' and '
future dreamers' could gather.
But back to our adventure in San Francisco yesterday: Apparently in this dream series, I'm some kind of 'consultant' and after staying in a nice high-rise hotel for a day or two in the dream, we had to rush from the hotel, about 6:45 PM local time, to catch our plane back to the northwest (Seattle).
It's a familiar trip, and one I've made often. What I call "planes" are more like "levitators" in that they seldom get more than 500-feet above the ground and roughly follow terrain contours; much like riding a kids roller-coaster with the up and downs, or so I recalled from a recent southbound trip.
The most striking parts of the dream, however, were what got me to thinking (upon waking and the first half-cuppa joe) about mapping these "inner worlds" where dreams take place.
For one thing, the "inner world" setting seems a much older land than the existing West Coast. For example, east of Seattle there's a series of rolling hills. Not as flattened as the hills coming down the hill from Denver on I-80 toward Kansas...but certainly nowhere near the sharp foothills of the northwest today.
The impression one gets is that the cities have somehow reemerged in a geologically weathered land in the future and have reconstituted with a new population. Like visiting a far-off future.
Then there was the city of San Francisco itself: The airport was not down at the south end of the Bay, because there was not Bay. In it's place was a series of high hills almost plateau-shaped. The airport was atop a plateau and located what I'd judge to be northwest of the city, although located only a 15-minute cab ride from our hotel. These hills were covered with deciduous trees.
Some other distinctions of this inner world: One was the key to our hotel room (6234, brass with dark plastic or rubber base where the number was imprinted) was really the key to room #3264. As one of the bellmen explained, "This was to reduce the chance of someone finding a lost key and being able to enter a guest's room."
Next notable feature was the elevator system in the hotel. To get to the upper floors, as in some older high rise buildings, you took an elevator to an upper floor, then made a horizontal transfer either by walking to the next bank of elevators, or some of the elevators were capable of making horizontal movements on their own, and then continuing up. I've noticed this is other cities in this dream world.
It was the noting of these features that got me to thinking about actually trying to "map" these inner locations, both cartographically and by indexing some of the technology, since it seems somehow important. Not sure where it is, but this 'inner world" is also where I've been "learning things by attending classes" in other dreams, but the knowledge just doesn't transit the dream/waking boundary well. Again, the properties of this learning might be instructive to share.
All this came together as a question: Did Freud and Jung miss something that might constitute a series of signposts to our shared future by not focusing more on these common dream elements?
Years ago, I talked with Edwin Steinbrecher, author of The Inner Guide Meditation: A Spiritual Technology for the 21st Century and was impressed with the fact that as part of his "Inner Guide" meditation process he found almost all people - universally - were able to access an "inner world" where direct energy work could be done with embedded personal archetypes.
His book describes a process whereby a person can reconfigure their "outer life" by working with the various archetype energies of the "inner life" (analogous to the tarot system) since these forces seem frequently get out of balance with one another.
For example, doing something seemingly "pointless" (chewing on a pickle, just to pull something out of the air) might be just the act needed to bring an "inner energy, ray, or archetype (call it what you will) into harmony with your other energies.
This chat with Steinbrecher was back in '85 or '86; he had visited Seattle to give a talk at the Seattle Jungian Society, and as I sat this morning, contemplating how we'd just barely made our 7:05PM departure from the dream-land version of SF (which arrived just in time for me to wake up in Texas...a neat trick, huh?), I got to noodling how people may well "share an inner world" that we manage to ignore in waking life.
Perhaps there's nothing to it. But, I'll post this and a page or two of drawings/maps of my inner world's geography over on the blog portion of the National Dream Center site.
Curious that if everyone can access their "inner consciousness" well enough to bring back maps. As Steinbrecher has shown, certain mention motions can access the realms (enter a cave, then move ahead, left, and then right, eventually emerging into an inner realm). Not to be taken lightly, though, since the inner realms are fraught with deceptions and 'false guides'...directed meditation is powerful stuff and takes genuine work.
Some morning, after you have a particularly memorable dream, if you'd sketch out the land where your dreams take place, feel free to send it along.
Email or postal is fine. I can scan and digitize them. Be curious to try and piece together a map of the inner realm, seems like an interesting project.
Oh - by the way: there were no security checkpoints or pat downs in the inner realm - just right to the plane. And it was a small airport, too. About the size of Burbank's in the mid 1980's - and no jetways, Just walk out on the apron and up into the plane or whatever it is they are...
Cured - By Cannabis?
Speaking of which - working with energies and such - don't know if you've seen it, but the YouTube vid of "Cured: A Cannabis Story" is worth watching, I'm told.
Not sure if there's something chemical about wedd (I mean beyond the expected) OR if with some people, the use of de ganj allows them to do a certain amount of personal 'energy work" to get right with the 'wave of reality' and that's where the cure happens.
A note: Steinbrecher's book suggests at least two weeks of no ganj or any other mind altering substances before doing Inner Guide work. Still, one does wonder...since shamanic work is often drug-related. Hmmm...have toi vape up and do some research, I guess. (Just kidding!) [Oh?]
Everyone's a Critic
My function is NOT to bum everyone out, but rather to help people see the way ahead and figure out as early as possible how to proceed. I may at time3s sound like I'm a bit too chipper about what's ahead, but since its in view (at least n shadow form) no point dwelling on it.
The analogy is of someone standing on railroad tracks and hearing a train coming at them a good distance off. While the person could jump off the tracks at the first sound of the train, if they were getting benefit from staying on the tracks (jobwise and so forth) wouldn't the thing to do be to look up and gauge the train's distance?
That's what this website is about: We're all on the tracks...the train some days seems closer, or on others farther off. But as long as we remain on the tracks, we can be better prepared for the moment (in advance of the train smacking us) that we choose to step off the tracks and into an alternate world, which presumably we've been building with some of the excess of our "on track" efforts.
Make sense? I mean as much as the Fed or IMF?
Best Retirement Places
Pretty interesting story from CNBC about the best places to retire outside the USA might be worth a quick read.
SurvivalWoman this morning has a dandy, too: "Cruise Ship Economics 101: A cruise vacation as frugal bliss..." She and SurvivalHubby paid $60 per day and yes, that pencils out to $1,800 per month if you snap up such deals. Why pay for a spendy apartment somewhere if you can live "boat-to-boat" instead of day-to-day?
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Hiding Survivalism in a Hobby
Had an interesting epiphany this week while pondering the events of this weekend, which I hear might include a football game. The 'extensible thinking' was around football as a socially acceptable war substitute, and how that might be an analog to war-making among tribal cultures. We're one of those too, but don't like the label. Football is about survival, I concluded: It teaches one or two players after each snap, the fine art of dodging a crowd of angry people running after you. Why Major League Baseball and the National Football League didn't send scouts to Egypt is a fair question. So this week some thoughts on hiding prepping under more socially acceptable coverings - like hobbies - and stick around for the 'surprise ending.'
If your computer runs slowly, you may have a problem with cookies. These little code snippets are how some websites (and spyware) recognize you, track your movement on the web and so forth. Here lately, as new class of super cookies has been evolved by the admen (and worse) that are resistant to normal cookie deletions through your browser's interface. Flash cookies, persistent cookies, and super cookies...all easily managed with the Maxa Research Cookie Manager.
Take it for a test drive by clicking here - and it you like it, activation is easily done. If you're a heavy web user (who ain't?) you may find like I do that you've accumulating a hundred or more cookies per day. Only a handful need to be white-listed, like your brokerage account or your bank. The rest? Software designed to spy on you that robs you of computer performance. Been using it for several years and pleased as the Dickens with it.
The "Do Drop Inn"
Amazing gardens in about 2 square feet of floor space: www.mygroponics.com
Post your weird dreams to help our research along:
"Live on $10,000" A Year
Having a hard time making ends meet? (Like who isn't, right?) A good starting point to better match up income with outgo is our $10 e-book "How to Live on $10,000 a Year...or less!"
It's an automatic download. It's written in an information dense style: The whole thing runs about 65 pages, but it gives you a vision of how to not only live on the cheap, but also how to migrate up the economic foodchain if you have a little hustle left. A bonus section called "How to Build Anything" should instill confidence if you've never taken on a home improvement/home creation project before, too..... Click here for the index and details.
Pass It On
Please pass along word of this site to your friends by simply clicking here to send 'em a short email. - Thanks!
Thursday February 10, 2011
The "Top-Calling" Festival
I've been telling you for better than a week that my friend who's about to launch a ($100-million and up) hedge fund thought the market would peak (for some months) around Tuesday's date. And, although the market measured by the Dow struggled up another 6.74 points yesterday, the broader S&P closed less than a point higher than Tuesday's. So he's been damn close - so far.
Not like I was the only one waiting for it: Business Insider had a story that crossed on Wednesday "There's a Rumor Going Around that Legendary Hedge Fund Manager Paul Tudor Jones Just Called the Top" and in addition to hitting Robin Landry's target, there are a number of technical indicators that are beginning to scream "Overbought!"
Not that this is information advice - just information. The difference being that information is something that might be thought about in your decision-making processes. Advice would be telling you "Go do such and so..." Which I don't do.
Another worthy view is that of Art Cashin (frequently seen on CNBC) and quoted on Business Insider quoting from Phil's Stock World (we'll get to the point here eventually...) likening it to a moon shot with thrusters powered by the Fed's easings. Makes sense...since much of the QE2 spending seems destined to prop up balance sheets in this most ingenious way. (Till it stops working, and then we're screwed...but I digress.) What goes up....
Now let's do a little forensic investigating, shall we? The most recent Comptroller of the Currency report puts the notional value of derivatives at $234.7 trillion dollars as of the Third Quarter of 2010.
To keep this in perspective, let's recall that in Q3 2009 the derivatives book was $204.3 trillion. So (grabbing the calculator and slurping/ more bean-juice) it looks like the growth of derivatives in the most recently reported year is up (sitting down?) almost 14.9%.
By the time you back out the underlying deflationary pressures, and when you look at how in order to show an improving trend in the jobs numbers, 620-thousand people had to be made to "disappear" from the ranks of the labor force, you can see why Ben Bernanke's testimony this week was a little glum.
Later today - and possible for a month or a test of the 200-day moving average - the markets globally may take his cue.
Waiting for (Inflation Adjusted) Magic
If you get a little time, the testimony/highlights of Ben Bernanke's Wednesday testimony (and summary of points) can be found at Politico.
Bernanke also reminding Congress that his QE2 is smaller than their deficit...which has me muttering under my breath 'Sticks and stone may break my budget...but paper & ink adore me..."
If you're stifling a big yawn at this point, I appreciate that, but let me put on my economic historian hat for a sec and mention a paper I wrote (Dec. 22, 2000) under the heading "One Over Virtuous Cycle" in which I laid out how the ultra long waves work in the economy over the 48-85 year kind of span they seem to cover.
The sequencing of the Second Depression is what future economic historians will write about, just as the South Sea Bubble and Tulip Mania are in the books now, so too will be the Tech Bubble - which few will remind you - popped in 2000.
The disguising of it has been masterful, both on the part of Alan Greenspan's Fed and now Ben Bernanke's, but its right there in the data should a person thoughtfully look at where the Dow needs to be in order to be at anything like the inflation-adjusted Y2K levels.
Not to rub salt in your trading account, but if you hit the Minneapolis Fed website and use their inflation calculator, you can see that from Dow 11,723 in Y2K, the Dow just to hold value would need to be at 15,026 today. Nowhere near, is it?
Whenever I mention this, my inbox almost instantly fills up with emails wishing to argue the point. Totally tranced victims of the Wall St. Money Machine don't like to hear this kind of thing, so they make up lots of complex justifications why their retirement fund is smaller.
I could go on in this vein all day, but the most telling indicator of all is the Aggregate Index chart show every week to Peoplenomics subscribers on Sunday and it sits at the bottom of this page every week, dutifully updated.
This home-made metric is based on what would happen to a portfolio that was divided into three piles of money putting ⅓'rd into each of the Dow, S&P 500, and the NASDAQ Composite in 2000. The chart is NOT inflation adjusted because it gets really ugly.
But, since you asked: 13,091.93 inflates to a present day $16,781. Last week, the index closed at 10,158.44, so on an inflation-adjusted basis I figure iof your portfolio had simply tracked the market, you'd be down on a purchasing power basis 39.46 percent.
The trick in running Fed monetary policy through all this is not to let people think about inflation-adjusted real savings. So instead, there's an emphasis on year-over-year results with an occasional prayer that people like me won't get too many people thinking about real net positive returns.
And there are some. If you had gone short in 2000, long in early 2003, short in summer 2008, and long again in the spring of 2009, you'd have beat inflation all to hell & gone. Most folks didn't.
Which leaves us at the headline suggests: Waiting for the magic to show up and create a few million jobs. As the Chairman noted in his remarks yesterday, that's gonna be several more years out, and unfortunately, barring a massive new consumer mania like our appetite for personal electronics whizzies and FB and Twitter and such, the odds of a big jobs recovery seem pretty damn slim.
This week, the market is working out (in terms of price) that that not-so-cheery future's going to be like.
The UK, German, and French markets were all down anywhere from 4/10th's of a point to 9/10'th's and that could translate into a softening of prices from here, but as always, we'll just watch to see if it breaks the 200-day average which for almost two years has been a formidable (and so far defensible) barrier.
Jobless claims hit a 2-year low, says one headline. May be there was no one left to fire...
Tomorrow, we get the Balance of Trade and a week from tomorrow, the CPI figures.
Food Prices To Rise?
Every newsroom has a 'tickler file' which reminds journalists what's in the day's "news budget" and if I had just one story to pick for trend-watching input today, it would like be CFTC Chairman Gary Gensler up before the House Ag committee this morning...
If I can remember, we'll look at the long-term wheat contract tomorrow. 985.4 at yesterday's close.
Defending the Paradigm
Though pictured as right-left politics, most of us know it's a play-acting school carried on by the have's versus the have-not's. Still, interesting to watch the republicorps try to out thrift the democorps, especially since wasn't the largest increase in federal spending under presidents like Reagan and Bush?
There continue to be attacks on Christians in Indonesia, but our Bureau Chief there reports at the same time, the economy is flourishing...
The serious question in return, for him is this: Tell us Bernard, is there any way we can ascertain how much of the Indonesian prosperity is due to jobjacking of formerly American jobs to there?
As several scholarly types have suggested: What the world didn't understand when the Soviet Empire collapsed was that the concurrent arrival of mass internet communications would bring with it, a tremendous increase in transnational labor, in everything from software development, to small-scale manufacturing (remember that, Ohio?) and CSR jobs up the ying-yang (if I can use def.2 without being too politically incorrect.)
Really that's the thing most Americans wonder when they look at the Asian 'tiger' economies. How much of it is just American jobs gone catting about?
Coping: Brushing Off the Fluoride
Have to admit it, when I was young putting 'extra' fluoride on kid's teeth was all the rage. Today, we notice that the Calgary (Canada) city council has voted to take added fluoride out of the city's water system.
The two sides of this one are about as far apart as you can get. On the one side, there is some science that indicates that serious fluoride deficiencies can cause tooth decay at faster rates. However, other studies say that most places, there's more than enough naturally occurring fluoride to take good care of teeth.
The other side, with even more vigor points to the addition of fluoride in water supplies of prisoner of war camps to dump down and make the population more malleable.
My personal opinion is that there's likely enough naturally occurring that I've been going without fluoride-laced toothpaste for a couple of years now. Medicine's key tenet is "First, do no harm..." and as near I can tell, putting an industrial waste product into water is not necessary.
On the other hand, I have a most excellent dentist and whenever Elaine or I need something done to the chompers, we're pleased to have the best dentist either of us has had located here.
Still, there's a fair bit on the web about "dental self-sufficiency" and this site is certainly a starting point (suggested by a reader) and the whole notion of teeth decaying from communicable infectious agents certainly makes sense.,
Part of my spending a little time to do a 'rethink' on this dental stuff is that I'm having a birthday here shortly and it's one of life's biggies. I'll be old enough to take Social Security, such as that is.
Nevertheless, with aging comes the urge to lose weight (down 10 pounds since I started that a month ago) and paying a lot of attention to things like blood pressure, which for me averages around 140/85 now. But the 'deal point' on dentistry and aging is the link between heart disease and periodontal issues.
Daily walks, a low dose aspirin, attention to BP, and getting enough sleep and paying attention to ones teeth...all seems to be the prescription for a long and vigorous life.
Although in economic terms, I often whine and moan about tax burdens on the middle class, everyone I know wants to be around as long as possible to pay them.
You know how we're always talking about shortages of this & that? Here's an off-the-wall one: "13 states ask for federal help on execution drug shortage."
This one from a reader is worth pondering:
Hmmm...let me get back to you on this...in October, say?
A most excellent email siding with the fellow who's tired a bit of my Everything's A Business Model preachifying...
Depends on the currency involved, I think.
I've always generalized the 'business model' stuff as a non-monetized weighing via scales kind of thing. Thus, if a person defines the main business of thgeir Life as the improvement of others conditions, then that (what I may mistakenly call a business model is really more akin to a balance scale.
People who act in an admirable, non-self-interested way, with a genuine goal of improving the lot of humanity are acting in accord with their Life's business, if that makes sense.
And while I agree with you it might very well be "cheaper, easier, and more profitable just to provide millions of hungry people the food they want" such egalitarians ideals are [presently] offset with the urge among the PTB to concentrate power (and control) in their own hands; power's like coke to these people.
And since they've decided that their business in life is leadership/control then the perversion of healthy food is their stock-in trade; traded for power which is their coin of the realm. Make sense?
Few people spend serious time on the whole "business of your Life" question, at least early on when there's time for maximal effect. For many, the reckoning (from this karmic accounting level) doesn't happen till death's bed, and perhaps even later.
The "time seeds" discussion we were having did get some favorable reviews:
Yes, please do let us know...and on the book idea? I've already got a draft of the "book of George" (Victims of Process: How unwritten recipes run our lives...") but I just haven't gotten around to a first rewrite, but when I do, I may offer it as an ebook.
Meantime, the book I'm writing with Howard Hill (working title: "The Never-ending Argument" where we try to come to terms with what the economy is and what it's doing to all of us, is a higher priority.
Back when I was a kid, a DJ I worked with at the old school R&B station in Kirkland, WA always ended his show this way:
"Make the most of what you yet may spend, before you to the dust descend."
All depends on which accounting package you've chosen.
Wednesday February 9, 2011
US Planning To "Save" Egypt?
I may (as usual) be letting monkey-mind run ahead of events a bit far, but seems to me that there's a pretty good chance that the US is about to become involved in coming weeks with action of an interventionist kind in Egypt.
Let's do a couple of bullet points first, though before we get to the punchline, starting with what president Obama is doing this morning as noted by the White House press office:
And VP Joe Biden's been on the blower to the Egyptian Vice President per this WH briefer note:
Meantime, the pressure is being upped by the Israelis. The Jerusalem Post headlining that the "Muslim Brotherhood text reveals score of radical creed" on the one hand, and Tel Aviv University is planning a big press backgrounder on the conflict.
But, since we're a little too busy to attend briefings, I'll just jump ahead to this main feature of evolving events and this one argues that the US may be positioning for some kind of direct intervention in Egypt: The US Navy website reports there are now seven US aircraft carriers at sea and four 'gators' [amphibious warfare ships] and I'm just guessing they may be heading thataway.
Within two weeks, shall we say? If an eighth carrier goes, my back-o-the-envelope odds go up to 75%.
Not that you care, yet. Pew Poll out shows this frightening summary:
Frigging loverly. And these people vote. Explains a lot, doesn't it?
Extended Rally - Poof!
The line in the sand for the Dow today would be yesterday's high of 12,238.79. If that falls, we could maybe make a decline down to the 200-day moving average which I hear is someone around 11,820, or so on the Dow.
Whether yesterday was a spiral calendar turn date off last years 'flash crash' remains to be seen, but the futures were a tad pale early on. Fed laid out $5-billion in 28-day notes yesterday; settlement date is tomorrow.
Ben Bernanke will be in front of the House today, and markets are a bit dodge-headed on that. Market stability trumps sound money. But you knew that.
Mortgage Rates Up
The Mortgage Bankers Association weekly report on housing deals is reflecting the increasing mortgage rates, see highlights I've added:
Given all the crap weather, we have to start asking what the cumulative impact of weather will be when pipeline slowing works through. I would have guessed the weather would have had more impact last week. Speaking of which...
I've taken to using the 1st Infantry Div. HQ at Fort Reilly as one of the world's more spendy weather stations lately. But with another storm coming down through the Midwest, the operations folks at Ft. Riley are a very good indicator as to how bad this wave of cold will be, as anything:
Which - compared to base operations of last week - seems to indicate this round won't be quite as bad as late week.
Here at the ranch we're expecting maybe an inch of ice pellets and snow as the day chills out...heavy drizzle at the moment, which is fine with us.
But talking to Robin Landry yesterday, seems like Oklahoma and the rest of the Midwest is set for another cold winter ass-kicking - up to a foot's worth. Yahoo/AP calling it the "...US's snow-weary midsection."
I notice that the Israeli Defense Forces are hiring 120 new "media fighters."
Scarcely surprising since the latest big hack seems to be the NASDAQ computer system.
On a smaller scale, Sony is reportedly expanding its legal offense against hackers of PS3 systems.
So one of the things we are figuring out from following WW IV (3 was the cold war) is that it's evolving to a not-bullet playing field and as a story in computing out of the UK headlines "Minister warns that cyber terrorist attack on UK is highly likely."
Gosh, darn: May have to renew my subscription to 2600 to see when corps and govs start recruit with full page ads...if you don't know what 2600 is, you've maybe missed the arrival of the new reality.
While I'm sure you've read the Wired report that children of USAF member's will be breaking laws if they read WikiLeaks, the two biggest stories have to do with Julian Assange's future when he goes back to court in the UK on Friday for closing arguments on efforts to extradite him to Sweden.
And there's also the little matter of "Who's got the key to unlock the 'poison pill' data file?" We don't here much of that except a lot of people have been questioned and it's something of a hot potato for the PTB.
Panda Security - which is cloud focused - has it's third annual security summit going on in Orlando today and one of the quotes out of it came from Bob McMillan of IDG News Service:
Hmmm....but is it?
The morning's "biggie," in the MSM - which we already knew from reading (the late) Matthew Simmons book "Twilight in the Desert" - is that the Saudis are overstating their reserves of oil by something like 40%.
I'm not sure how much of a leak this is. As Simmons explained in his book before his untimely death, which "coincided" with his outing the still leaking conditions in the Gulf of Mexico (coincidence? you bet'cha), the reason the Saudis and all the other OPEC'ers overstate oil is so they can get a higher cartel production quota.
So whether this one is a big deal seems unlikely, at least compared to the ongoing mess in the GOM which Simmons was telling people about...
Peter Principle, Alphabet Style
The ABC/AP impact report: "At CIA, Grave Mistakes, Then Promotions" seems to cast some shadows on the Agency and its promotional processes.
Always one of the problems of management: Who to promote?: The outspoken (as they seem so damn confident in their work) or the quiet thinkers?
Always been a fan of this latter, but group dynamics being what they are, the loud & proud usually end up at the top of the heap.
A solemn reminder why I took the book Delphi Method: Techniques and Applications so seriously. Amazingly simple to operate, and summed up neatly in a pocket-sized explanation over at Wikipedia. Equalized braggadocio and brain power.
Isn't like this is a problem isolated to the alphabet agency types. It's a pandemic afflicting the world forever.
Structurally, this is one of the most under-addressed global problems of the evolving complexity: How do we sort through the high noise and slick-talk (or slick PPT's) to get down to the truly important and arrive as best conclusions instead of "most popular" conclusions?
Seems to me, if we can't get that little problem of slick versus right sorted out, at some point we collapse as a society back into the heap we arose from.
Oh! Wait! We're already going there. Drop by my little Amazon store and check out the "supersaturation" section.
Slick gets elected at all levels, thought and thrift get punished. Another side of ViseGrips with your coffee? Some tranks and diuretics and a beta blocker, too, then...
Coping: Business Models and "Time Seeds"
Yesterday's piece which explained (in a nutshell kind of way) how the airline industry, North America operates as a business model was both well-received and hated by readers. Show you what I mean:
First: Thanks for reading the column; I try to write a decent column to stimulate the brain a bit because that is one of the best purposes of the web. If I did nothing but repost other site's proprietary comments, this would be just another "wannabe" site most of which seem to exist solely to make money/generate ad clicks, rather than a site that tries to move people toward a more positive future.
Oh sure, at times it doesn't sound that way. There's a key difference between 'data' (which is what news reports are) and information - which is what this site is about. Data is ever-noisy. The reason I get up and go through so much work the first three hours of each day to personally recalibrate my thinking to the arriving "reality" which is drifty. None of us can change the past, and at any particular instant the range of action possible in the present is bounded. But the future? Ah! Now we're into an are that's pretty neat and which (as some experiments Clif's run) seems to be quite malleable.
Agreed, at times I may sound a bit redundant, but there's actually a statistical reason for it: More than half of UrbanSurvival readers only check in/click to the site every other day.
Oh, and a few really liked the description of the airline financial modeling system I developed for the PC way back when:
Thanks...another wondered "...you aren't a fellow old school LUV airline alumni are you?" Answer: Nope: KX.
If you've followed along this far, there's one other reason that I love to build business models as operating tools for companies. I mean besides the fact that it gives a manager a continuously updated look at how the company should perform financially.
It's that working with business models develops a good sense of what I call "time seeds" and the art of "future planting."
This is a [curious/odd] way I have of looking at life as an analogy to farming.
How so? Well, every day as we go about 'living in the moment', we're really planting our own "time seeds". These are the activities which may seem like minor events in the daily scheme of things, but which given time to grow, bear wonderful fruits in our lives.
Problem: Most people have little (or an irregular) understanding / consciousness of the 'time seed' planting and harvesting process.
True, it's implied in current society, but the idea is not overtly stated nor, near as I can figure, is it taught as a clear thinking discipline.
Like EBM (everything's a you-know-what) and EP (everything's process), this is one of those key insights to the nature of the larger reality that supposedly everyone knows, no one speaks directly about but is what social / cultural imprinting is all about. But, since the elite already own their future, why should they give away their secrets and democratize their future?
"Time Seeds" are really neat as they come in all sizes and are life changing once you learn how to constantly plant and harvest them.
At the smallest/lowest level a time seed might be stopping halfway through your shopping trip to the grocery store and consciously looking ahead into the future and asking yourself "How do I want that future to arrive?"
Your answer might be something like "I want the future to arrive with a skinnier me!". Now, since you're in a grocery store where the skinnier/fatter you is actually constructed, it's absolutely the best time to manipulate that particular group of time seeds.
Do you have any idea how many people consciously stop midway through shopping to compare the future outcome they put in their cart with present their present behavior? Know what so many Americans are over-weight? No one is actively talking about planting 'time seeds' in the grocery store.
As a result, people spend way more on food than they need to because they have been acculturized/paradigm imprinted with a set of personal behaviors which they don't actively question. Ain't no sign saying "The Wages of Junque Food is Fat!" anywhere, at least where we shop.
Every time you make a purchase, not only are you casting a vote as to which country you want your goods & services to be made in, but you're also 'buying your own future' such that if I invest my time in writing a website or three, doing consulting, and so forth, that will cause a different outcome in my personal future than working 80-hours a week to build someone else's time seed for them.
You see the time seeding process now, right? A corporation is just a time seed around which much labor is organized. Every time the Board of Directors makes a minor decision in a business model, such as deciding to shift marketing dollars from one directional city-pair to another in the case of an airline, or to spend more or less on product development, they're actually planting, or replanting time seeds.
Think of every day as a chance to plant something for tomorrow. Putting the ice cream back in the store, or resolving to learn how to bake your own bread; these are the virtually no cost time seeds you can plant.
Not to get obsessive about it, mind you. Just be aware of it.
I shouldn't admit this, but I thought I could let the concept of EBM lead those interested in mastering 'time seeding' to the same kind of realization. But, perhaps not.
So there it is...out in the open and plain as day. The time seed concept. Believe it, or not, that's up to you. If the future shows up bringing unemployment and disease it may be - not saying is just may be that you planted the wrong time seeds and come the harvest, it'll be bitter or sweet depending on your farming skills.
This also explains a good bit about what *ssholes get rich and saints live in poverty. The majority of the non-degreed, successful in spite of it New Rich have somehow picked up the idea of being Time Farmers. The victims, well, they haven't made the connection as tightly.
I'll make an effort to do a little less discussing of 'business models' but instead in its place will point out obvious 'time seeds' in the news now and then.
My personal quest has been to become a decent Time Farmer and whether the decision is to go to four years of school (an obvious act of planting a future), or whether it's just to cut back calories (plants a skinnier you), the three main tenets of my life presently are "Everything a Process," "Everything's a Business Model," and "Be a Time Farmer."
This last is hidden in plain site as "reaping what you sow" but how many people live that? Except for a fleeting moment on Sunday's, of course. Then we jump right back into the "hand me the clicker" paradigm and forgitaboutit. It's the Land of DoOvers, except it's not really because time, like money, only gets spent once.
Normal: The Joke's On Us
Whenever I talk to Clif lately, if the conversation edges toward humor (which, amazingly it sometimes will) one of us will usually say "Normal!" And that gets the other laughing, or at least smiling, because there's not much in the way of "normal" to be found anymore.
Which is why the note from SurvivalWoman this morning about the film "The Trouble With Normal" is so interesting. Click over to the site and hit the preview...I can hardly wait.
Tuesday February 8, 2011
The Fed Versus the World
I'm doing pretty good today...made it all the way to 05:07 AM before firing off my first spreadsheet of the day; but this one is important. It's how the Fed's Consumer Credit (which on you and me is the "yoke of debt") is doing. And what it shows is that in December, the estimated increase in total consumer borrowing was about 3%. The larger part was 3.5% in credit card and other revolving debt, while a more modest 2.8% was in non-revolving debt - things like student loans and such. The blue bars are the Total Consumer Credit (debt) figures...
This (nicely done) bit of 'channeling' is actually a good thing as far as it goes. It suggests that although Christmas wasn't huge last year, it did encourage people to go out and do a little spending. And further, with a 3% rise in consumer debt level overall, the results through December, at least, gave some credence to the idea that the Fed's efforts to step on the gas, just enough to power through a period that would (longwave cyclically) be deflationary.
I've held out this possibility for some number of years - namely that the Fed would try this approach. And when you couple the 'easy foot on the printing press throttle" with the slow-motion evaporation of real purchasing power, there's some cause to believe that if the effects of the overhanging commercial mortgage crisis (yet to come) can be weathered, then the economy could actually enter the predicted longwave expansion mode that folks like retired professor of business history Dr. Jack Lessinger writes in his book The Great Prosperity of 2020: Fall of "What's in it for Me?", Rise of "What's in it for Us?"
The trick of course, will be surviving long enough to see that 'arriving prosperity' and at the same time get enough of your savings and personal capital through the present (long grinding) period to be able to make something of good times when they arrive.
Yesterday's close in the Dow might be the high water point for a good long while. China has announced it is raising their interest rates for a second time in a bit more than a month and that has taken the wind out of the global market's sails. Still, one more closing high might be in the offing today before the market heads down. I'll stick with my Monday Dart for now.
Economic Stress, II
Or, we might be looking back by June wondering where the recovery went. Agreed, the Fed seems to be on track presently, but there are two problems to be addressed in the momentary flush of rosiness in the Consumer Debt report.
One is summed up in this headline: "AP Analysis: Foreclosures raise US economics stress" and it goes to the idea that when you look at foreclosure rates, unemployment, and so forth, that recovery hinted at in the Fed data looks illusory.
And, we ought to keep in mind that the Consumer Debt figure is a rearward-oriented data set. It's a prelim number off December after all, and outfits like Zillow & RealtyTrac have been suggesting that foreclosures will be going at a record pace this year, after a hot run in 2010.
Stories like the one that the FDIC will try to delay bonuses for top banking executives is not entirely surprising, since the slow-motion market consolidation phase of the banking crisis is still ongoing. Since the year began, only 12 banks with75 branches have been reorganized by FDIC. However, while that might sound acceptable at first glance, the zoom-out since IndyMac in July 2008 shows 331 banks representing 5,551 branch operations being reorg'ed.
To touch back on housing, Beazer Homes is expected to report a $48.8-million Q1 loss; their conference call gets underway in about an hour.
I've still got my eye on today as a possible spiral calendar market high off the 2010 May manic low; something out of left field late in today's session, or between now and tomorrow's opening would be almost expected by followers of such "systems."
This morning there's a continuation of the mass protests in Egypt. But a detained Google exec is free, so there goes on talking point for the play-by-play MainStreamMedia. Al Jazeera's coverage has been exceptional.
On the arms dealer hot list has to be the situation developing between Thailand and Cambodia with both sides saying "You started it" in the latest border flare-up.
The Sudan is reported by the NYT Times to be ready to accept the secession of Southern Sudan which would turn that into the world's newest country.
Then we have Yemen where a US drone reportedly crashed. That country is either on the verge or revolution, or not, depending on who's story you happen on.
Bond rating outfit Moody's has cut Jordan's bond rating in the wake of recent demonstrations there.
And let's not forget the revolution in Tunisia is far from over, so that could pop back onto the front page (FrontPage?) any time.
Prolonging Our National Pain
Michael Moore's movie about 9/11 is apparently heading for court over royalties. Don't know if you saw Fahrenheit 9/11, or not, but sure seems a shame to have a documentary over a tragedy end up in a tussle over money. Somehow just don't seem right.
Social Contract Issues
Not sure what to make of Fearless leader saying that corporate profits "Have to be shared by American Workers."
Last time I checked, wasn't it Fearless Leader hisself who lead a contingent of 200-American businessmen to India for an out-sourcing love fest?
What will be interesting is whether the TSA collective bargaining process will be allowed...seems to be heating up. Question that comes into focus is will Fearless Leader walk the talk, or - when budgets are suyper tight - might there be another standard applied?
Cloud of Republicorps
Happened to catch the new Harris Poll out this morning:
The most interesting part (leastwise for me) was the libretto about who's in the race which kicks off with primaries a year from now:
Might be fun to make up scratch and sniff cards like this...
Beyond Virtualized Barbie Dept.
Online fashion-game Stardoll has done a deal with Mattel. It's swell -- if you've been waiting for Stardoll virtuals to cross over into physical goods. Somehow, I hadn't been waiting...someone's grandkids are, I'm sure.
I keep waiting for more of those virtual businesses in Second Life to pop out of out of the virtualness and swallow a big player. When one of the Second Life's virtual financials pops over into this world and acquires a bricks & mortar money center bank, or something, I'll take notice...
Did hare a rumor Roger Rabbit is working on such deal, but that there's a snag with bunny cross-licensing and branding issues which are just too complicated...so we'll hop on to something else.
Thought as a drive-by I'd suggest we dump all the toxic waste bricks & mortar paper into virtual space and let it work out there, but near as I can tell, that's more or less what's happening.
Coping: Airline RPM's, ASM's, and Business Models
Since I was a real, honest-to-goodness airline Sr. VP for a while, I tend to notice stories like airline passenger numbers.
A little foreplay here: The three main metrics in the biz are revenue passenger miles (RPM's: Paying butt-in-chair-miles), air seat miles (chairs launched, paying, empty or freebies), and revenue per kilo. (RPK's which matters in freight, but not on the passenger side so much, unless like Caribbean carriers, interisland higgler traffic is cheap and balanced off somewhat by air cargo...cargo ton miles is also used by larger airlines.)
So knowing this, we read this morning how Southwest is out with January traffic: RPM's up 13.2% while revenue passengers carried is up 7.6%. Which means what? Oh...how about Southwest is leaning more toward longer haul routes, maybe? Great move by Gary Kelley and his staff.
Last week I noticed that American's domestic was down 7-10th's of a percent on RPM's while ASM's were down half a percent. Meanwhile, Delta's domestic RPM's were down 1.7% while their domestic ASM's were down only half a percent, which means they too lost load factor, down almost one percent (0.9). Notably, Delta's cargo volume picked up 19.5% so that offsets some of the passenger load factor (PLF), for sure.
Hey! You still awake?
Bottom line as I see it (and this is NOT investment advice!) the regionals (Alaska and Southwest) are continuing to expand in the mid-range and that's eroding shares for the HHM's (heavily hubbed majors).
Was going to buy my sister a ticket to come visit and noticed the majors are really pressing on their pricing advantage, air fares are going up much faster it seems than 3% inflation rates...blame oil which is coming down a bit ($88 is a bit) on hopes the Suez Canal won't be closed, so many some of the major long haul pricing will moderate.
Depending on stage length, a 737-sized plane can burn nearly 1,000 gallons of jet fuel per hour, and much more for larger. Most of the fuel burn is on climb-out, so you can see why this battle for the middle haul and long-haul routes is so intense; the longer the ride, the bigger the haul moneywise, everything else equal.
Even if you're not trying to buy a ticket for a relative to come visit, and you're not planning to go anywhere for a while, all this airline pricing stuff is very interesting to play with from a business model development standpoint. My first-ever serious business model was to figure out my airline's marketing strategy building up an operating plan with VisiCalc on a Commodore PET - and then migrating that over to Lotus 123 on a half-sized screen laptop made by HP at the time; first laptop approved for inflight use, BTW.
Then we'd sit down with our VP Finance (and his Compaq 'luggable') and negotiate an operating plan. "I'll see you all the miles you want, George, but you've gotta buy 'em from me..." he'd say.
The modeling was not too difficult: You start by making up a city-pair table - this is where you put in your basic information about how many miles, times flown, and so forth.
Next table is historical passenger load factors.
After this come equipment costs of both the fixed and variable sort, with things like cycle times in the variable costs. Each time an aircraft lands or takes off it's a "cycle" for things like engine hot sections, landing gear, tires, and maintenance checks. With me?
Then you start another table with your marketing costs for each city-pair, and it's here that you start the "spending money to make money" exercise. For example, on one city-pair, say Miami-Nashville, there might be some advertising advantage to advertise at the north end of the city-par, instead of the south.
The thinking is if you sell enough tickets in Nashville, people will fill up on the return trip. Or, if ads are particularly cheap in Miami, you'd spend in the southern end, and maybe promote the Opry, or whatever, up north to the grays (northern retired people gone and moved to Florida) who are thick as hair on a dog down there at this time of year.
Fun, huh? Kinda like chess, but with many more moving pieces, but nevertheless all kinds of fun, provided you have the staff to manage it all. Takes serious work and analysis to do it right.
Sort of a real-time P&L: Costs on top, projected revenues (less their associated costs down below that) and next thing you know, you've got a full grown pro forma operating plan. Neat.
This same overall approach works to some extent on cargo, except the traffic is more directional. You put a FedEx or UPS Overnight on a plane to go somewhere and you may - or may not - get something back.
But the city-pair battles are still there and I couldn't help but notice that FedEx just posted a fuel surcharge yesterday 0f 10%, up rom 9%.
You can learn a tremendous amount about how the airline freight business works by just reading the FedEx fuel surcharge explanation here.
A visit to the US Energy Information Administration's price table shows you what the Gulf Coast fuel costs are (about $2.77 a gallon presently). But that's a spot (bulk) price, not necessarily the uplifted (from storage to trucks, truck up into the wings) will cost. You can quickly see how the fuel cost at 1,000 gallons per hour (at gross, very short haul) pencils up to $3,000+ per operating hour, and that before you get front end crew (pilot, copilot) and backend costs (flight attendant per 50 seats I think is still the rule, one senior and a few juniors); you can guess at the HR costs.
And let's not forget the noise profiles the pilots have to fly lest they "ring the bell" somewhere like NY which is sometimes like flying a bowl of spaghetti route. Often wondered if there was a big Italian influence on approach planning.
Toss in insurance and financing of the aircraft, depreciation and maintenance reserves, and pretty quick you're up to perhaps $9,000-$10,000 per hour of costs and say you've got 146 passengers, each needs to be paying $61 per hour of flying, which is where those $150 tickets for the two hour flights came from, or around $300 round trip. Not any more - fuel's gone up.
Things never work out that anyway: By the time you take that operating cost (say $9,000 per hour) and whittle your load factor down to 70%, you've now got to charge $102.20 per hour, and that's net after computer reservation fees, commissions, frequent flyer reserve costs...oh we passed $120 per paying passenger long ago.
Didn't count DBC (denied boarding compensation) or customer service (staff and costs) yet either, did we?
And that's why those two hour flights cost $400 - plus or minus- round trip.
Wanted to mention this because running an airline is a doggone pleasure if you like complex business models, tons of moving parts, and a competitive playing field.
People will often gripe about freight or passenger costs, but my first-hand experience in the field suggests that anyone working for a regional, or a major, or one of the freight businesses like FedEx in a strategic planning role is not someone you want to play chess with. At least if you're playing with the life-sized pieces made by Pratt, Boeing, Airbus, and GE and others.
Helps to have a maintenance director who can get his hands on a spare engine with a single phone call, too.
What is it I always tell you? Oh yeah...Everything's a Business Model. This is just a fine example of how it all works.
Data Points and Jitters
A reader asked me this morning if there wasn't something odd about all the government changes going on in the preps department and the arrival of Comet Elenin this September.
Long ways off?" OK, so go read the Federal News Radio story about how the FCC is planning to test the presidential alerts system...
Your call: Is this a 'normal course of business' item, or something of a tip-off that somebody knows something?
Any other outliers? Sure...try this one:
Something to munch on with breakfast here in a minute...
Monday February 7, 2011
Monday's Dart Throw
The biggest financial story of the week is due out this afternoon at 3 PM Eastern - since that's when the Fed Consumer Debt (they call it 'credit') report is expected.
Reason this is so important is that a) American runs on debt and b) if Americans continue to evolve a more thrifty lifestyle, that would be very bad for Big Business. Why, if people keep up in this reuse, recycle, repurpose kind of track, there might actually be a reduction in the general level of indentures and people might figure out that by cooperative living, the need to get out and build things and work untenable hours is a sham, and we couldn't have that, now, could we? Nope. Economy would be spiraling into a Second Depression for sure.
Not that it isn't. A friend of mine pointed out that tomorrow would be a dandy day for the market to close over Robin Landry's 12,100 Dow target to complete the bounce off the March/April 2009 lows; it's a spiral calendar date in his work.
So what I'd look for, at least initially, would be a rally early on today and then perhaps a mid-session peak tomorrow to be followed by something out of left field hitting the fan overnight Tuesday night and a lower close for the week as we get along toward next week's consumer price report (a week from Friday).
This is only a guess how money will drive events ands it is NOT investment advice. Just a sense how how things feel as I sniff through the headlines first thing...
Then there's the summary piece on Yahoo that "Copper hits record; stocks, Treasury yields up" which means that manic high tomorrow may be a good call.
Call Me Data-Boy
My friend Gonzalo Lira ("Ballsy or Crazy? Where are we on inflation and hyperinflation?") is planning a February 10th debate with deflationary leaning Nicole Foss, if I read the banner right.
Of course, both will be wrong, near as I can tell, although maybe in a year or so that will change. The hyperinflation supporters are pointing with the price of oil and other commodities, but they seem to overlook collapsing housing. The Fed's trying to muddle through a middle ground and so far it's working and like the old market book (Zweig's) said: "Don't fight the Fed."
So in terms of let the trend be your friend, we're still in the neutral (part bonds, part metals) position. We still have a commercial real estate mess ahead and that could be very deflationary. Bank of America paying $410 million in an overdraft suit, and other financials in trouble leaves us wondering where all the inflation is going to come from, except famine, of course.
Muddle-through for now, hyperinflation later - but only maybe. I'll watch the Fed and the trends, thanks.
Egypt: The Play, Act 2
I notice how the Obama administration has been quickly moved back into the 'friends of Mubarak camp" - as if they've been given the word, or something. Then, there's Dick Cheney who calls Mubarak a good friend and US ally.
Most entertaining, for the armchair world strategists, was the media play of the gas explosion in the Sinai this weekend. While report is out that shipments of gas to Israel could reduce in 26 to 48 hours, the cause of the explosion depended on which media outlet you were listening to.
Fox News, for example, reported it as "saboteurs". The Jerusalem Post, on the other hand, headlined "Gas firm blames Sinai pipeline blast on leak, not sabotage."
I watched some of the live video coming out of the area on Al Jazeera, and was struck by the apparent lack of a source of ignition adjacent to the 'leak' if that's what it was. Underscores how subtle some of the news reports can be, though. If you believe it was sabotage, that might given an impression of the Muslim Brotherhood gathering strength and going down the explosions path, which admittedly is popular in that part of the world. On the other hand, if it was simply a leak (as reported elsewhere) then the Brotherhood is not part of the equation and the fire might not become a rallying point.
Love to see how much ink got devoted to either side in Egyptian media, but we have other items to attend to. Napping, for example.
Protesters are back in the streets of Cairo this morning, and I figure they will still be there when I get up again.
The US Navy has six carriers and three gators out...which means I will have to toss in the idea of some kind of US 'peace keeping mission..." as possibly being in [future] play.
War of the Week/GlobalRev
And this week's new participants are....Thailand and Cambodia in a border skirmish which could expand. Gee, all we need is a nice flare-up in South America now....
Baltic Dry Slide
We keep clicking over to the Bloomberg Baltic Dry Index (1,043) which has been in decline since last September and wondering how soon will markets come to their senses or we get a furious rally in the BDI. Should only be two ways out of this box canyon.
Just eyeballing the longer term chart, from BDI high to market (Dow/S&P lows) was about nine months in the 2008-2009 period. And since the BDI was around 4,200 in June of last year, 9 months on would be next month for a market low if that 9-month lead time means anything. So we shall see what happens once the high is in. Seems to me that a 10-20 percent correction ought to be along sometime. But that's not advice, just me justifying being in my short position, I suppose.
Cold Weather Fallout
I mentioned our 4-days of snow on the ground here at the ranch? And how the power was being rotated off in a state which is one of the few net exporters of energy? If you caught an odor of something a little strange there, you're not alone.
You may recall that in the past, some power providers in other episodes had faked power generation problems in order to jack up the price of power. And I'm sure our readers in New Mexico would be interested in why they ran out of natural gas, too.
High Stakes Poker
With Julian Assange back in court in London today facing extradition on sex charges in Sweden, we have to wonder how panicky the PTB are that all their secret bank account info could hit the web if anything happens to Assange. Plenty, we'd bet.
Huff Post - AOL Deal
AOL is acquiring the Huffington post in a deal worth $315 million, reports The Deal Book section of the NY Times.
Don't very often think about this, but if anyone wanted to buy UrbanSurvival, I'd let it go for under $10-million, LOL. Of course that would bring a host of problems with it, not the least of which would be what to do with all the extra sleep in the mornings. Maybe not a good idea, then...
Just for the heck of it, I put the Huffington Post into a website worth calculator and it popped up a value of under $19-million. And since AOL paid almost 17-times that, it makes Urban only worth $1-million. Damn...I can hear the almost hear the alarm clock tomorrow morning...
The War Ritual
Much is being written about the Green Bay win in the Super Bowl Sunday by a score of...wait...who cares? Apparently, the halftime entertainment was also somewhat forgettable, too.
Way I have it figured, I can go back to sleep this morning and grab another 40-winks. Since unlike a large portion of the American public, I didn't over-indulge, there's no headache or hangover. No mess in the kitchen to clean up and no new stains on the carpet.
There was also no being pulled over to blow a Breathalyzer, no nervous watching in the rear-view mirror, no judicious use of cruise control just-in-case.
No acid indigestion (at least any more than normal), no aching kidneys, stiffness, or game day tales to tell around the water cooler. Oh, and no need to clean the oven, either.
Since we didn't drive up to the Dallas area, we also missed the traffic, manic crowds, pat-downs and risk of health issues from the common cold on up that comes with being in close spaces with way more people than we know on a first name basis.
Part of me says "You must be getting old when you miss the last two minutes, at least of Super Bowl."
But the other side of me says something else: "Hey, you're growing up and becoming more independent, and besides, you can remember the National Anthem."
Still, Super Bowl means we're getting close to Spring. That's when people stop caring about chasing someone with a ball to taking up sticks again to hit balls. This will be followed by the mid April end of ball bouncing and chasing, and throwing season, and the refashioned/cut down ball (puck) slapping and skating which starts the Cup run about the same time.
As a marketing geek, I don't care for the games much, although hot dogs and a brewski above first base on a spring afternoon is a fine thing. Instead, it's the marketing differentiation that has been applied to ball striking, hitting, slapping, slugging and the variants with pucks and pig skins.
My pet theory of the week is that without major league sports, Americans would be in the streets, just like people in Egypt. But certainly not during playoffs. And we've got more than enough of that ahead.
Bread and what? Balls? My, aren't we an advanced world.
Coping: The World Hasn't Ended
Lots of people wrote to me this weekend with reports that the popular website www.godlikeproductions.com was down and asking me for any input on the cryptic message left in its place. I'd been inundated with requests for comment, since it's not every day that a highly ranked site disappears.
Where this gets to be really interesting is to note the similarities in attacks and ask "Who, or what (agency?) would have an interest in waging cyber warfare on sites that on the one hand discuss the pending future or, on the other, report on and discuss events which are not popular with the PTB/Paradigm Owners.
Doesn't leave too much in the way of suspects, does it? I keep coming up with a short-list of either a military/government cyber warfare training op (practicing both the psychological aspects as well as the out & out hacking of sites on the one hand, or a specific state player from another country doing a bit of testing. A country in the Middle East and two in Asia come to mind, for instance.
Another possibility? There's a new kind of cyber criminal out there.
This last option is one of the more interesting, since (as I'm always telling you) Everything's a Business Model on the one hand, and secondly, whenever someone comes up with a new 'business model' and it verges on illegal (or is simply outright illegal), we get to have what could be a front row seat at watching the evolution of a new kind of crime.
In other words, before DB Cooper's exploits, aircraft hijacking/skyjacking was not a major crime threat. Yet when you look back at it, it took place when I was a newscaster up in Seattle in 1971.
\What made DB Cooper so famous, other than seeming to get away with it, or dying in the southwest Washington foothills, was that it acted as an accelerant for what was already a smoldering fire conceptually.
Thus, when (still as a reporter) in 1976 the raid on Entebbe by Israeli forces occurred in an effort to retake 248 hostages from a Palestinian terrorist hijacking, the new (at the time) crime had become generalized.
Using what I call "extensible logic" I'd offer that there's a progression - or design pattern - implicit in three key hijackings. To generalize this:
This was an interesting evolutionary event, as it was not an aircraft, but a vessel and the mode of terror was a mix of high-replacement-cost physical asset plus a large enough captive population to ensure lots of press coverage.
And what does this have to do with the reported events at GLP this weekend and possibly other attacks on sites in the past?
True, it could be script kiddies on the one hand, OR we could be seeing some small probes with a larger objective ahead. In other words, since we're familiar with our own experience with a hack of UrbanSurvival a few years back, then the late 2010 attack on Clif's site, and this weekend's stalking at GLP we are likely seeing a new kind of cyber crime evolving if we look just so.
What I expect is going on (and this isn't too pretty) is that in a worst case, this could be a preliminary effort testing tools and timing and such, before cyber criminals start (quite extensibly) going after higher value targets. And I'm talking targets with high monetary value and targets which could cripple the nation's ability to conduct online business.
Just adds up to another thing to consider when you're dispersing your assets and liabilities around electronically: What's t5he most robust approach? Putting all your assets in a single place you hope doesn't get targeted or spreading out small amounts in multiple institutions in order to set a possible limit on size of loss?
Of course, it's all just an academic question is the internet backbone were the object of the attack, or if the DNS servers were attacked, but still, something to think about: How extensible is net crime? And when do we make the transition to real cyber-4GW with the modern equivalent of Robin Hood code warriors off to topple 'the system?"
I'm not the brightest bulb in the house, but looks to me like a modern-day product migration and if dumb ol' George can see it, so can someone else and maybe someone brighter who's got a business model in mind.
I have been asked by a few readers to write up a comprehensive plan to deal with the possibility of an internet outage here in the US in the event of either social unrest (massive tax rebellion, food shortage driven, etc) or perhaps one caused by widespread disaster like the New Madrid fault slipping.
I'd love to do so, but it's already been done (I so abhor duplication of effort) and it's worth printing off from the How-To wiki over at Wired.com: Click here and then print the damn thing.
Clarity of Thinking
In Peoplenomics this week there's a discussion in the Saturday section on the arrival of a new Dalton Minimum which is clearly evidence in the data coming out of NASA's Solar cycle 24 predictions, but which has been largely 'smoked' by people touting the "CME/EMP end of life as we know it" theory. Sorry to say, yes, we could get a Carrington Event on the backside of Cycle 24, but that would be more like 2013 but what's coming into focus is that Global Warming, as least to the extent moderated by the Sun's heat output, is taking a hike and this summer, or summer 2012 is more likely to be one of those "Years with a Summer" like 1816 was in the midst of the Dalton Minimum.
The latest forecasts out of NASA look suspiciously like the start of a Dalton-sized (or God forbid a Maunder) minimum. This being the case, we all need to be thinking about ways to muddle through massive declines in ag production worldwide over the next could of years.
A reader note on point:
Good time to be very suspicious of the data you choose to act upon.
Dome of the UFO
Speaking of things and such, I think it's now 50 emails asking if the Dome of the Rock UFO (video here) was "real".
Tell me what you mean by real, please? My odds are currently 10% chance of real, 90 percent chance of a dry run of Project Blue Beam of some decent special effect generator. Don't mean to pop the bubble here, just saying I prefer rational. When Obama and a reptile are having ice cream, and it's on prime time, then I'll be more interested. But lights? No particularly more informing than the Phoenix Lights... Only thing that makes this report "special" is its location and pardon me while I sit back and await something more tangible.
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.
So one of our charts for Peoplenomics subscribers oughta be widely circulated - it shows that if you line up the peak of the Dow in January 2000 with the peak in early September of 1929, we're on a very very close replay track. Much closer than even the chart shows if you were to back out inflation, and put in the effects of 1929 deflation, but that'd be real work, and I'm sort of lazy if the truth be told.
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:
"George, that's only a coincidence!" your monkey-mind will protest.
Why sure it is...you bet. A 9½ year long coincidence...yessir....just a coincidence, we're like SO sure... (Shhh...don't tell anyone that major Depressions are two-part coupled affairs like the linkage between 1920-21 and 1929, OK? Damn, dude...don't spoil it for the sheep...)
Oh...don't forget to "Write when you get rich!"
George Ure, The People's Economist
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