A One Man Economic Daily Newspaper about the Second Depression in near real-time...
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Saturday August 13, 2011 04:40 am CDT Visit our FAQ
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Virus Attack Update
All of my web sites: UrbanSurvival, IndependenceJournal and Peoplenomics are presently under attack as of Sunday morning.
The UrbanSurvival and IndependenceJournal sites should be back in normal operation by 9 AM but you may still experience a 'flag' or warning using any browser.
There is apparently a software vulnerability on Peoplenomics and it will be repaired Monday by the vendor.
Meantime, the Sunday Peoplenomics will be posted at Midweek to the Peoplenomics site.
I apologize for any inconvenience, but we do have the IP address of the attack (it's in the UK)
I'll be resetting passwords all around today.
Please pass this on to all your friends who read the site...as I said earlier - we must be getting close to some 'core truth' for this kind of thing to occur. The PTB/PTW really don't like us and I expect you can figure out why.
Reader Advisory: This being the weekend, and hopefully you have more time, you're invited to catch Saturday and Sunday content on the www.peoplenomics.com website. Except, there's a catch: That site requires a $40 per year membership - but that ain't bad, since it's what pays the bill for this site. Details are here. On the agenda this weekend: Some really interesting stuff, including Sunday's thoughts on "spontaneously ventured companies' - as a Depression 2 coping strategy. Saturday is sorta like a weekday around here, except I tend to use the spell checker and such, though plenty of our trademark double-meaning typos do slip through there, too.
At any rate, whether you join over there, or just get baked out this weekend, this site will be updated Monday morning per usual, assuming I continue waking up within driving distance of a computer...be well.
Where'd "Normal" Go?
One good guess: Normal is probably not hanging around Wall Street. The price of gold, which had popped up briefly this week to north of $1,800 had been beaten under $1,750 this morning. But the truth of the matter is the decline probably has less to do with demand (since countries around the world seem bound for another burst of competitive devaluations) than it has to do with the margin requirements at the CME which just made speculators cough up a bit more dough to play.
One of the BIG numbers which any truth seeker might want to ponder when reading the latest Treasury Department monthly budget report which came out on Thursday afternoon is this: For the current fiscal year - check this out - you pay attention here! - Individual income tax receipts are UP 23.8 percent, while corporate income tax receipts are down about 6-10'ths of a percent.
So either a) corporats (sic) are really making less or b) the Ure sniff detector which has been going off a lot about "Off Shore Corporate Monte" really is onto something and corporate shell games are resulting in a counting revenue decline.
Of course, this gets us to the Numbers of the Day:
I assume you saw that the trade gap widened last month?
In "The New Normal" we don't have anything to export, except a few Boeings and some software. But that software isn't manufactured in the USA and there's no easy way to tax IP which gets into another round of the "Three Corp Monte" shell games.
And exporting things like Hollywood revenue....well, my point is that when our standard of living is in collapse and since no one paid attention when I screams about jobjacking, now that we don't make diddly ('cept Bo) in this country, the numbers are following an expected course.
If you are still awake (hello? anyone there?) our next sonambulistic marvel is this morning's retail sales figures.
Which charts out to look something like this:
But, of course, the aware reader knows that without unit volumes none of this is easy to decipher since we have no idea what the present printing frenzy of US dollars really does to the picture. I mean, if M1 (money in circulation, cash and demand deposits) is up 13% over last year, then an 8 point something price gain may be hiding 3 point something percent real deflation but no one with a sheepskin would be cause dead in peer-reviewed delusion-land saying such obvious truth. Instead, they'll insist that's real growth - and it may be since M2 is only seven something, so we could have a 1 point something grown rate but if you're still reading this and feel your eyelids getting heavy it's not for a lack of truth-seeking around here. It's because this is boring stuff that only matters when you reach in your pocket and want to buy lunch of a latte.
All of which doesn't mean anything and while the Eurozone has firmed a bit, the US market is still in a longer-term decline now that the run-up from 2009's market lows is either "correcting" or "collapsing" depending on where you're drinking the Bull Kool-Aid, or Bear hemlock tea. That's the new "normal" - get used to it.
Remember Our Hint?
A couple of days (and several thousand miles) ago, remember I told you about the big bet in the bond market that was placed prior to the S&P debt downgrade? I hinted "Say, you don't suppose some of the world's richest men have spies, do you?"
Well now, lookie here: The SEC is asking S&P who knew what about the downgrade in advance.
Remember the item in one of Clif's reports (output from the linguistic time machine) about how people would be wearing masks while perping protests and otherwise not putting up with the systemic bullshit of the machine? Well, check out how the London cops are deploying facial recognition for use in finding rioters after the fact. Box score? 1,700 arrested so far, if you're keeping count.
Watch mask sales pop. Be impressed. It's OK, it won't go to my head. there's nothing there, anyway.
Political Silly/Stupid Season
Oh, we could go through the whole litany on this, but it all comes down to the owners of Howard's Church of the Almighty dollar really use the American presidentialk primaries like gigantic focus groups to see which prezzy wannabe gets bought into office, just so like, and the numbers will shade the investments accordingly.
Syria is going for it's guns again as the protests there against president Assad continue.
Wonder what the start-up costs are for making body bags?
Expanding more settlements. Not wise is the consensus out of the EU. Talk's cheap.
Why It's Cloudy
The reason for the cloudys - if they're around your place - is that it's nature's way of keeping you from seeing the Perseid Meteor shows tonight and tomorrow. I never see anything and there is always cloudy weather seems when they come by. I've given up and I just watch the inside of my eyelids closely, instead...
Text for the Day
From a reader's email sig:
The astute reader may notice a slight variance in texts selected here versus, oh, what Forbes picks, for example...
More after this....
Coping: With Global Rev in the News
Eventually, this is a discussion of network topologies for social use, but like anything else around here, we start somewhere near the middle of the story, like so:
Got home from the airport around 5:30 PM, or so (next story) only to be channel surfing through the FTA (free-to-air) channels that include such presumably unpopular with the PTB outlets as Xinhua's English television, Al Jazeera (also English) and Russia Today.
The show just starting on RT was "Adam vs The Man" and the first part of yesterday's episode had the host (the Adam dude) with a real enough looking helmet on the desk and a pretty good wall map of the world, pointing out what ails the world.
He went through the highlights of what's happening everywhere - the troubles that China is having, the issues of London, the so-called Arab Spring, and so on, all of which led up to even more highlighting of the various battlefronts in GlobalRev, which - if I followed his rap - all went to the idea that there's a global revolution underway, that corporate money is funding everyone including the Tea Party and people are getting sick of the whole charade.
I found myself nodding in agreement at many (if not most) of his points, but that could have been due to extreme fatigue as well, but....whatever...it was sure an interesting surreal moment to have been writing about "GlobalRev" based on what was falling out of the rickety time machine's modelspace for a couple of years and then click on the tube and see the battle lines made into a television show. Odd sensation.
A long while back, I suggested to you that this Second Depression would be highlighted with a clampdown on citizens' free speech rights, including - and especially - the Internet.
My logic was several-fold. Mainly, we know that Radio was a real voice in the late 1920's and that by 1934 the Communications Act had been enacted. For one thing, the central government then realized that they needed to 'get control of the media'.
Imagine, what could have happened, if - for example - the Bonus Army which had 43,000 demonstrators marching on Washington, had somehow gotten hold of one of the newly minted radio stations (which were going mainstream at the time) and had turned it into a Depression-era version of Pirate Radio?
Or, to consider another case, what would have happened if during the government suppression of the Wobblies (International Workers of the World) demonstrations 20-years earlier, there had been radio - of the equivalent of social media - would the outcome of history have been different? More vilent? Government challenging?
Fast forward to this week and you'll find articles like Chris Matyszczyk's piece on CNET's Technically Incorrect page about how "Riot-ridden Britain in a tizzy over social media."
Not to make too big a deal about this, but the next thing that should be along in six-months (or less) should be growing public awareness of the coming government regulation of internet use, which some (perhaps paranoid people - or insightful, you pick) say is coming including possible licensure to use social media and real-time texting.
It's going to be a fine race because there are two vastly difference approaches out there and it may account for some of the data gap in Clif's spring 2013 period, although as we discussed previously, there are other possibles causes like a massive coronal mass ejection (CME) from the sun, OR there's just such a high level of emotionally hot immediacy values that we can't see through them, they're just so damn thick in modelspace.
A bit of history: Back in about 1985, or thereabouts, I had the privilege of working with the late Donald L. Stoner at what turned out to be the forerunner of what's now Avaya. Besides providing the hardware when we did the first-ever broadcast of computer data on the main audio channel of a radio station as a public test/experiment (on KMPS AM/FM in Seattle in 1982/1983) Don had come up with a really cool idea for a self-organizing packet radio system that could be national in size and wouldn't depend on central servers and what have you.
That demonstration, by the way, was very successful and Don's invention of half-cycle modem technology, made it possible to sell a $5 modem which would the then astounding speed of 9,600 baud became the Sofcast product which we tried to bring to market in 1986 - without a lot of success.
By the way, you can still hear the technology today when your local emergency broadcasting system test is run on the local radio station. That scratchy noise in emergency alerts is the Stoner main channel digital data concept at work. Nice to know where some of this stuff comes from. The scratchy noise is long enough for maybe a 200 word emergency message. Cool stuff...at least we were convinced of it in 1982-85...but back to the plot line here this morning...
The central idea behind the self-organizing computers model which we called The National Digital Network - was that each computer would have a wireless card - like most laptops have now - but instead of having a central server, a distributed addressing scheme was proposed. People would dream up a numerical address for their computer (he'd suggested social security numbers) and that whenever x-number of computers linked, they would form a node, and the node (25 computers, 100, or more?) would then have an address and that, in turn, would like into other nodes and this floating - self organizing network - would arise.
At the time, the idea failed because it required FCC approval and despite some discussions & correspondence with the company (first Microperipheral Corp. and then later Digital Systems International (which went on to become Avaya as these things go...) the FCC didn't OK the project. But remember, at the time there were (and continue to be) issues of spectrum use and so forth. In our discussions at the time, the FCC had just come off the powerful uprising on the airwaves of the 1970's CB radio craze and wasn't in much of a mood to go experimenting. Especially where people would not be traceable to a particular address where enforcement actions could be brought.
And now we bring this around full-circle to today: As the pressure mounts on server-based social media technology - which like the FCC's wet dream about having as physical address to go raid or shutdown in the event of misuse of privileges for whatever class of radio, so too, government has an even bigger problem now: How can the move toward social mass media, which Arab Spring and even the recent riots in Britain show is a naturally arising need of people to self-organize and into meaningful social units - which oh, by the way, - includes social action, be kept under control?
Therefore, if you're looking for a long term event-sequence, something like this ought to occur:
This should work out over the next 3-4 years, since the rate of change is increasing and much of the code which would be used to launch peer-to-peer store and forward is already in existence.
The one limitation of the Stoner topology is that while it has the same kind of store and forward capability as used in existing government radio systems, such as FS-1045-1051 Automatic link establishment, it did not have the capability to do "intercity" well. Wireless cards get only so far.
In other words, as these theoretical nodes came up, things would work fine, as long as there was a path to the next city or set of nodes. To get around this, Stoner's idea was to have a certain numbers of node addresses which could be converted into a "telco friendly" AX.25 or other early data protocol.
In the modern iterations of 'floating networking' (and outside the cloud) the idea is similar - a burst file from one node to another and off you go.
Naturally, the idea of peer-to-peer is already getting traction (think Bitcoin and music file sharing) but it really gets to be a tough one for government if they're not included as one of the peers. Which is why wireless card licensing will likely come - but that'll be some ways down the road.
For this morning, just wanted to note Adam Vs The Man and lay out the network topology battle which is underway now with peer-to-peer nets being used on an ad hoc basis in some of the MENA conflicts. Just, government doesn't want that getting too big, or the social media gets really uncontrollable and that may not be good....as some folks in London could argue.
The real answer? Slow everything in the world down. Put a two hour delay on all emails and social media posts, or something like that. Mobs wouldn't be able to flash and the Twitter in Chief might not get out his message as quickly, but still, regulation of the time domain would be an option.
Trust me ...getting hold of the time domain is key. Flash mobs and social media are the 'new CB' and how fast it passes we can only surmise.
I'm astounded by the hours of human endeavor are wasted on transient social bullshit, but I'm not your every day poster. Remember or time seeds discussion? Everything in you do in your life plants a seed that grows into a future.
Son of a Beech
I have rediscovered another major similarity between flying and offshore sailing: Your body gets whipped. Trashed and trounced and you feel like you been 'eaten by a goat and crapped over a cliff'' kinda whipped.
We got our newly acquired old Beechcraft off the ground about 6 AM Eastern time yesterday morning up at KMRT (Marysville, OH). Everything had gone smoothly - clockwork operation.
The early morning climb out was smooth - as the sun was not yet full up - just enough to blind me taxing east to depart runway 27 - and the air overnight was cool and clear outside northwest of Columbus.
By the time we got down to Blytheville, Arkansas for refueling, four hours later the weather had warmed up a good bit - up to about 90 at the field where the new business tool ate $214 worth of fuel at $5.18 a gallon flying into a slight headwind. About 41 gallons of fuel, and at around 490 miles, it was looking like 12 MPG. Four hours and something.
Still headwinds, or not, the new airplane ran like a clock. But it's not built for hot weather flying.
Taking off from KHKA (Blytheville is pronounced by locals with no 'th' sound by locals, so it's Bly-vull, BTW) to KPSN (Palestine Muni) direct, we climbed up through some clouds to 6,500 feet - a grueling process which took 35 minutes at cruise climb (90 -100 mph) to accomplish. That's a not very spectacular 171 feet per minute of climb.
Most people forget that when the weather is hot - and humid - the apparent elevation of an airfield goes up. By the time we got down to KPSN the field elevation was 3,400 feet - on a density altitude basis that's a huge difference over the roughly 430 feet it normally is.
What this does to aircraft performance is interesting: When you have a plane that should pop up to 10,000 feet easily, when it gets hot - such that you're effectively flying off the deck which is the equivalent of 3,300 feet, or so, suddenly that 6,500 climb out is about all the aircraft has left in it.
So no, not a hot weather bird.
The kidney busting length of the flight was otherwise uneventful, except my CIFI (28,000 in everything from experimentals to 767's long haul, Learjets and C-130's) that I wasn't as sharp after 9+ hours of flying and suggested that instead of getting up and writing a column after watching part of the Harry Potter movie on the tube and the last episode of Bill Maher for the season, it might be a better idea next time to sleep.
Only two patches of weather of any note: About a 60-mile diversion around and to the north of Little Rock, where we got a bird's eye view of the two BIG thunderstorm cells from our 6,500 foot perch. as we flew over the Army base and parachute drop zone north of town. Although we were VFR, the Little Rock ATC was extremely helpful (flight following) vectoring up between lines of thunderstorms.
Eventually, as we got south of Texarkana, the 6,500 foot got thrown out because we got into seriously bumpy clouds. I mean it was like a roller coaster. Up to 6,700, down to 6,300 with airspeed varying from 80 on the climb to 120 on the way down. Lots of thermals.
Eventually, we decided that I'd start "ringing the bell" (200 feet off assigned altitude) sooner or later as the turbulence built. So cancel flight following and down to 4,500.
Where it was hot. Plain damn hot. And bumpier. 83 outside and probably 5 degrees, or more, warmer on the inside.
Eventually, we sighted the airport, and my landing was passable, but not enough cross control in the crosswind for my instructor - so the prescription is for 10 more landings prior to sign-off on the flight review. No big. Everything else is great. And honestly, the manual flaps are hard to pull and no, this is not a 'light touch' plane like a C-172. This one take a little 'armstrong."
So that was it - flawless trip, quart and a half of oil burned. I had done research and decided to run some Marvel Mystery Oil in the fuel and a product called Avblend in the crankcase. Both work to keep lead deposits in the air-cooled engine down and and I'm very keen on Avblend which is amazing stuff if you read up on the stuff. May even toss a half quart, or so, in my riding mower.
A couple of minor "squacks" for the log, including I've got to figure out why the traffic avoidance system is not working, but that's not too terribly big. And my Garmin-minded right seat muttered about the displays available on the Lowrance 2000C which will like become a backup GPS to either a Garmin Aera with XM Weather or one of the new iFlyGPS units. But I do want live weather as our Little Rock work around showed. ATC may not always buy the "...er...our NexRad is down..." excuse.
So 9.6 hours, or so of left seat, half an hour of IFR in that, probably, a sore shoulder and achy body from it, I'm reminded this morning of what the serious sailing and serious flying have in common: As I sit in my chair this morning on terra firm, I've about fallen out of it twice from the inner ear still expecting that next big 200-foot drop - just like sailing it took 3-4 days on land to get used to the floor not dropping a few inches.
Between that - and turning into a contortionist to get gear into the baggage compartment (there's no baggage door on the early Beech - which was a serious design oversight) I feel like I've been roughly shot out of a cannon, or so.
Except, or course, cannons offer a superior rate of climb. Might have to get me one - or better? A Mooney Rocket 305. Now, I just gotta find a bank robbing school which offers Pell Grants for destitute pilots. But at least we ain't gonna die of boredom...just broke.
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That Damn Velocity Problem
Given where the economy is likely to head this fall, and this week could be a poster child for it, or foreplay at a minimum, we need to spend a bit of head time on two important dynamics which assure us that we are not yet in the absolute depths of the Second Depression and that things are going to get much, much worse. The two villains killing the economy are falling velocity and corporate offshore expense allocation schemes. Some perspective here may help us 'small fish' keep swimming just a tad longer.
Cookies Are Dangerous
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
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Thursday August 11, 2011
About That "Four"
(Marysville, OH) Are we on our leg down to 9,600 now? Still pondering the market results from yesterday, since I had re-entered a 'half-in' short position on Tuesday in the afterhours market when I got to thinking that "You know, this is way too fast a ramp up and it really ought to come down and retest the lows before turning into the 'four' [in Elliott wave rules] that I mentioned in yesterday's column.
So, if you're following the 'adventures of George' on how to do OK during the financial collapse down into the bowels of the Second Depression, the entry point for this was the triple bear EFT [SRTY] in at $25.724 per and out yesterday late in the session at $29.00 per share which is a 12.735% gain.
No, I am not bragging (though 36.7% YTD in the portfolio after commish would make me a rock star if I did this for a living) the real point is that just as I've been putting long-term charts in your face for a good long time (like since 1997) it takes experience and plenty of damn luck plus getting the Big Picture right.
Many people lose hand-over-fist in declining markets because they are afraid to move, to tell their brokers what they see ahead with their own judgment - and then have the courage to act on it.
When the bottom finally arrives - as it should - some of the leveraged financial products like the assorted double and triple bullish ETF's are about the paper abstraction analogy to 'shooting fish in a barrel.'
BUT the flip side is also true: If you don't get the future right, or the long term trends kright, ther triple (or even double) levered products will wipe you out all the more quickly.
So get help, but remember, even though the US Dollar is still getting hammered, getting out and into cash, or cash equivalents like bonds (TreasuryDirect accounts) still probably makes sense.
The reason? We went to the local Wal-Market up here in Ohio last night to pick up a few things for the airplane. And you know what they take? Dollars. Not silver, not gold, but dollars.
Oh, and prices were pretty reasonable - we got all kinds of things including a new roll-around cooler for the sandwichs for today's trip back to Texas, and so on (jug of Marvel Mystery Oil, - more in the Coping Section) for under $100.
Yes, there is some inflation in the system right now, but there is deflation running rampant, too. And because the political parties in Washington spend more time talking than thinking (always a bad thing) tyhis may be the only website around which screams "Velocity of Money is tanking! Get out of Street!"
You're on your own, and this is not an offer to bjuy or sell stock and get professional advise and do read our disclaimer. But the main thing is Money doesn't casre about political BS. It's just numbers and the more you study them, the easier it becomes to hang onto to your accumulated savings.
The goal of a Depression (look around you!) is to "shear the sheep" and at some point, the pain of the real estate implosion will be transferred to the backs of the taxpayers and savers. So while short-term we're in deflation, at some juncture later on this year, or early next, there will come a time (after gold drops back to maybe half where it is now, and real estate prices collapse back to 1980's levels which they already have in some places, the budget cutting corporate lackeys will wake up to the need to deficit spend and that will mean what? Inflation.
That's not hear yet. The economic ship of state is still being run onto the rocks and I blame people like former presidential economics advisor Larry Summers for not 'getting it right'. I believe that the longer view of history will judge Washington, so no need to get into that here, but this time rkeally is different. And not.
Problem is no one in government gets this clear and puts it out there to people for what it is, which is why you can get 18 different opinions from people in Washington or your local state capital but NONE will give you the Big Picture right, so don't be surprised if you get "wrong ansers".
People don't go to Washington to think (generally). They go with the best of intentions, but after a junket or several, some meeting with key lobby groups, my how the tune changes.
Oh, and about that Elliott "four" - may take a visit to Dow 9,600 before it gets organized. Don't blame me...the history books are there for anyone to read and it's not going to be on a prime-time special, though it should be.
Here's a pretty good report on how the FGR played aout in the markets Wednesday. B y time you read this, we will likely be wheels up out of here, but good luck!
If the rally of 430 points earlier this week was in fact a short, violent Elliott 'four' then 9,600 ought to be in sight shortly. It could be as larger (or larger than) the initial lega down from the recent highs of a few months back. But once the bottom of this move is in, we could see a rally.
And that's what I'm biding my time awaiting: It's all about that four.
If you think we're having fun now, just wait till the downgrades in the mini market for states and local governments. Moody's is telegraphic its punch early on this, so don't get caught off-guard. After the rally off the larger one, this is the stuff the third wave down - to Dow 6,627 later this year as I see it (but I'm crazy, so toss that in your plans) could be made of.
The Obama admionistration is being called out on giving a Hollywood filmmaker access to the SEAL team that popped Osama bin Laden. Conspiracy theorists will explaim something like "freezer burns notwithstanding..." I'm sure
Some democrats are beginning to wonder, says the UK Telegraph, about whether they should 'have picked Hillary.' Pass me the Kool-Aid...er...after i'm done flying today, of course. That's a choice like "Do you want to try our hemlock? Speaking of which...
Pentagon plans to launch the world's fastest (though unmanned) plane - which should be able to hit 13,000 miles per hour. Funny think it, on a 'cost per knot' basis, my old Beechcraft will be a lot cheaper. Way, way, way, cheaper, I think. Of course, that's measured in 1966 knots, lol.
Vlad Putin is off treasure-finding on 'vacation'. My, what a coinkydink, huh?
Drought Sucks Dept.
Not only has it not rained again/still/will this ever end? in the Parched South, but there's been a rise in skin infections due to sweat levels being up.
More to the point, out west in Texas, Big Spring is looking at sewage recycling. I knew there was a reason to keep some bleach and Everclear on hand.
Coping: No Comment
Super short note today since my main focus this morning is checking enroute weather and trying to dodge around a 12-knot headwind and showers in the northeast Arkansas area this afternoon which could change our route and refooling plans.
"George- I calculated $42.00 based on a 5 cent refund per can. Which we would have in MA anyway..."
Yes I read all emails...and here's one I'd invite some group discussion of for tomorrow's column...
"Not really sure if you read any of the BS emails you get. Ive been a huge fan of Clif and your work. Ive been reading and reading for about 2+ years and i have to say that im pleased to hear things going the way they are. Let me explain. You probably deal with people who think your a lil crazy. I know your not, as well as i know that im not either. Its just totallty satisfying to see that all of the predictions that were made , are all coming to pass and the people that called me "chicken lil" are all questions now. I dont see this getting better at all, and am prepared for some bad senarios. I could be more prepared but that just isnt in my deck o cards. I just wanted to personaly thank you for the help that you and Clif have given me to at least mentally prepare for the coming issues that the whole world looks to be facing. I can still say that i feel alone when it comes to my thoughts about our future ( alone meaning in my circle of people ) but the attitude of the POP is obviously changing isnt it? Ok, so the reason im writing..... Im just one guy, who needs some insight from the people who have made me think this way. I can tell you guy def try to calm the public on interviews as to not ToTallY scare the shit out of them, but im passed that. Is there anywhere i shouldnt be??? I need to know this. Please help becaue for some reason i feel my life and my families depend on some sound advice. For instance, My sister is a is dibetic, thats life and death if she cant get medication. If you can take a few sec and just respond , i would greatly app it. I owe you a huge debt for waking me up. Thanks from one thinker to another. "
Email ideas to email@example.com - thanks.
Ah, remember that piece Clif did on how "We're all dead..." from Fukushima? Just an update here: "Experts: Fukushima off-scale lethal radiation infer millions dying.."
Seems to me someone mentioned this to you.
So on that note, off to hit the shower and one last check of weather. More tomorrow. I hope!
Wednesday August 10, 2011
This is a Four
Reader Note: By the time you read this report, I ought to be airborne, headed for Ohio to pick up the latest "office accessory" - a used Beechcraft Musketeer, which if weather continues to improve along our route, should be back in our hangar at the local airport here sometime on Thursday afternoon.
So today and tomorrow are likely to be very short reports - which may be refreshing, or not, depending on your tolerance for run-on thoughts & sentences.
We'll also get the usual disclaimer out of the way first: This isn't financial advice, just a discussion of how I trade my own account. I don't sell stocks or bonds and you're on your own there.
Oil this morning (3:30 AM is morning, even around here) was down to $82, and since it had been up around $94 recently, this is about a 10% reduction which should start to show up at the pumps in a few weeks.
Although the first thing most people will do is cheer, consider that a collapse of a buck-a-gallon in gasoline prices would mean we're in a full-on second recession which, when eyed against the backdrop of a failed recovery, sure looks to me like the Second Depression. But maybe I just need my eyes checked.
The Fed, by some accounts, has just admitted with their promise to keep rates low for more than a year - that we're in deep kim chee, which is not exactly news, since we've been pointing to the collapse in the velocity of money for some weeks now.
This leaves the Obama administration (and markets) screwed: With velocity collapsing (lower now than at the depths of 2009, in fact) they lcan print money and pass out scrip all day long - it won't result in inflation. Instead, massive deflation is underway.
As I'm looking at things, we're likely in an Elliott one of "four", which could rally up (three of the fourth) to 11,500 and maybe even do an underside 'kiss' of 12,000. But, since I'm going to be otherwise occupied, and I don't want to miss the last drop, which should take the Dow down to 9,500, or thereabouts, I took up a 50% short position in the after-hours market on Tuesday and on any break today may exit with a small gain. Or not.
We shall see.
As we've been expecting, the headlines on sites like Drudge, and so forth, are proclaiming what we've been framing for you (thanks to www.halfpasthuman.com 's rickety time machine and Shape of things to Come reports): GlobalRev is here.
Backing up the heads like "Riots Break Out Around Globe Amid Economic Anxiety" are backed up with more in-depth reports like CNBC's "Economic Uncertainty Leading to Global Unrest."
Quick, look surprised - not like we haven't seeded the language with the right terminology, so one of these days GlobalRev is sure to go mainstream, but as it does, we've already zipped last that into the part when markets are puking, so this is just the run up to the top of the roller-coaster. The really awe-inspiring stuff will come in late October, but no point getting ahead of the libretto.
A reader email sums the view up this way:
It's a kind of open-secret that the spiders were launched onb July 15-16 and there is a chance of another Shape of Things to Come report in September-ish, so we shall see.
Fall of the Internet
What's key to watch going forward, per the rickety time machine's outputs, is the coming demise of social media. (Which may answer why I continue to write in old-fashioned HTML and though I do post on the UrbanSurvival blog cite, the disposal of social media would not disrupt things here, although it would maybe cause the the "data gap" in 2013.
The word in the British Guardian that a "Glasgow boy arrested for 'inciting riots' on Facebook" may be viewed as just another foundation block in coming changes in mass (unfettered/licensed) access to social media.
Suite101's post "UK Riots 2011: Facebook arrests in Social Media Battleground" should be seen in similar light.
One hopeful sign about the rickety time machine: There may be life on the other side of March-June 2013: Without going too deeply into it, the problem may be that (using radio receiver technology as an analogy here) the "front-end" may simply be overloaded in the period by high immediacy values. If we can cut through the high immediacy value overload problem, there may be a way to "tunnel through" the language and sniff out long-term values on the other side.
Not sure whether it will work - although when Clif is not dinking around with designing carbon fiber composites for the [fleet] of catamarans, he's noodling on code that might penetrate.
Or, to put the two concepts in simplest terms: The internet, like Radio which was regulated by the Communications Act of 1934, may change dramatically (like Radio did in the last Depression).
And then further, as the change happens, and we get into a kind of Kurzweilian Singularity where [yo shits on fire] is global, the swamping/.last minute stuff could be monstrous data behavior.
Pies and ponder to that.
....is not always a good thing, as the largest flare in several years is giving reason to worry about solar flares on the peak to backside of the present solar cycle. Which also, disturbingly, hits in that 2013 spring period.
OK, I got a plane to catch. Mine.
Coping: With Recurring Wall Street Jokes
We are living in truly bizarre times. For example, it's a hell of a note when the US stock market is performing worse than the Russian stock market. Yessir, that's right. Using Yahoo Finance as a highly reliable source (I can't make this stuff up) we notice the Russian RTSI index bought a year ago out performed...oh...you know...that stuff we've been peddling...
See what I mean? Do you have any idea how crazy 'Merican Kapitalists are to allow the Russians - our sworn enemies for how long??? - to whip our total market return (even if ex-dividends)?
Still, everyone loves to have their jollies at the expense of Wall Street, and can't say I blame people, since that's where most of our money has gone in the form of missing home equities and missing retirement savings and all the rest. But still, my inherent sense of fair play demands I step up and defend the crooks on Wall Street every so often, now and then.
Which gets me to my letter of the day from a reader:
Hmmm...even Wall Street gets a break from me, once in a while, deserved, or not. OK, then, mostly not. Here's what I sent back:
Just writing the note back to the reader and I got a headache.
Tuesday August 9, 2011
FOMC: Sees Slowing of Growth
Market reaction initially? Up 140, then Down 70 points... we shall see...
A Longwave Economics Review
Second Depression: The Big Picture
Before getting into a discussion of how far the markets will fall (globally) today, let me give you the thumbnail sketch of how all this fits in the historical context. Having this broader view may help you hold to the Big Picture and prevent undue panic, at least so I'd hope. If you want to skip straight to Robin Landry's latest, click here, but this background stuff really is important.
Nota bene (NB): There's not a lot of humor in this morning's report. Too many people are being hurt and their life savings stolen to be too chipper and light - this is serious time and this is triage alley.
As any long-time reader knows, this site has been - since 1996-1997 - about writing about just this period in history; the period when the panic selling shows up and we get into a longwave economic collapse of the sort that happens periodically and, as some of its students, including me, argue, those times include right now.
Most major business schools pay scant attention to economic cycles. True, there's a bit of obligatory mention of the shorter term cycles, but these are usually mentioned with a large helping of disdain by academics because they are not formula intensive and thus, require long-term thought, contemplation, and judgment, rather than simplistic formula creation and application in order to explain human behavior. We ain't a simple enough formula to be repeatable, except as some gross levels like food & water.
The major cycles are (roughly is descending order of credibility among academics):
Why the K-Wave Matters
The two longest wave structures in longwave (LW) economics are the most important because they serve as boundaries for the sub-cycles; Kuznet, Juglar, and Kitchin.
Even more important than its bounding function is the implication for public policy makers. This, unfortunately, is difficult since the underlying causes
of the K-wave have been hotly debated for years.
In the mid 1990's, while I was completing my MBA, I was a fairly regular poster at the University of Colorado's Center for a Sustainable Future economics discussion board called simply "Longwaves." May of the greats from that period of online discourse are still around today:
I'm sure I've left other's off the list...
Key thing here is that even amongst this group there was never agreement on just what ultimately drives the long wave. Here's a sampler of the ideas kicked around:
A 1987 Replay Side Note
In Peoplenomics last weekend, I presented a chart comparing the events of this week to the events of 1987. I updated the chart this morning so you can look at the similarities for yourself, I've drawn some arrows to help. Both are zero'ed to the first of respective years and the 2011 period is offset about 50-days.
Does this imply that this move could continue to the Grand Super Cycle Elliot Wave logical stopping point around Dow 9,500? Well, I'm no soothsayer, but it is possible.
The only question is WHEN?
I'm leaning toward the "Rapid Resolution Model" that says we continue down another 1,200 Dow points from here in the next week, or three, and then stage a good-sized rally back to the 11,500 Dow range. That way, the larger decline, which in both predictive linguistics and the "master matrix" would get underway in mid October and may culminate with a Dow around 6,627 about the Winter Solstice, December 21 - a Wednesday, and so the markets should be open.
At that point, if this scenario is the one that is followed, I'd be buying hand over fist, since an expected bounce from that level would mean a huge profit opportunity before the "Sell in May and go away" windows shows up in late spring of next year.
(This is not financial advice, just a discussion of longwave economics and my personal outlook. You do what you will - you're on your own.)
Longwaves and Wars
Longwaves are dangerous things (great chart) in that they have a tendency to end in wars. Take the longwave winter of 1860, just for instance. That'd be our Civil War, which was anything but.
And what really ended the Great Depression (1) in the 1930's? The Keynesians (deficit spenders) argue that it was the massive public works projects like the REA, Grand Coulee Dam, the Tennessee Valley Authority and so on.
Unfortunately, this is only partly true. What really jerked America out of the longwave economic malaise was the little blip called World War II, and so when you see China and Russia posturing today, as they are, and when you read about how US domestic travel controls and so forth are being increased - including requiring official approval to leave the country - shades of the Jews plight in 1939 from Germany - we can make out a pretty ugly outline of the (to borrow HG Wells and Clif's work) the shape of things to come. A nightmarish half-rhyme off the last time around.
There, don'tcha feel better? No global war possible till at least Q3 of next year - I hope - so we move on to shorter term outlooks.
But read up on the K-wave and in particular, the longwave cyclical wars and ask yourself "Is that what all that fighting in Iraq, Libya, and the sandy-stans is all about?"
Uh-huh, yup, you bet'cha. The policy game here has been trying to pull the war stimulus forward, ramp up spending, but the rabid right has lost focus on the longwave and by preventing deficit spending now, and tax increases, the way down into a lower economic low becomes a shoo-in, and that, unfortunately, doesn't end pretty.
But that's the Big Picture in a nutshell - many pieces left out - but maybe enough to help you frame why we've been so insistent on accumulating the long-term foods and other items (stored meds and such) in order to help "muddle through" what's an ugly period ahead.
The main difference this time? This global depression is like to be one level of greater degree from the last one. Robert Kaplan's book The Coming Anarchy: Shattering the Dreams of the Post Cold War ($10.50, Amazon) is a fine companion, because this particular Mulligan will have a different taste to it.
And if you don't know what a Mulligan is, you missed some of Louis L'Amour's finest stories - the ones about how he knocked the country, helped make the stew at a tar-papered shack in Long Beach while trying to find a deck job of any sort as a merchant seaman around during the Depression.
Depressions are horrific things. For people like L'Amour, however, who bought tiny "pocket classics" and read them to sailors in the fo'c'sle of tramp steamers in the Pacific, they were formative and built not only hjis character, but that of the Nation.
Unfortunately, we're there. And as America heads into a lot of "character-building" in the coming few years, we hope to be able to help. And that's why this weekend's Peoplenomics is all about spontaneously creating companies....think of it as Grass-roots Entrepreneuring 101. You'll want to keep it handy.
OK, the Big picture out of the way, let's move on to Robin Landry's latest note to colleagues in the investment community which he kindly shares with us (and folks like Bob Prechter, too...):
On the www.urbansurvival.com/week.htm page, clicking the charts will give you the larger .pdf versions.
One other great bear site? Fiend's SuperBear Page. Like me, he's been "growling since 1996..."
The Looks of Asia and Europe
Once again, our Jakarta Bureau Chief, Bernard Grover, has the overnight wrap-up:
In keeping with South American dictators and certain branches of government UrbanSurvival readers are according honorary doctorates. Save them sheepskins for starting fires under the Mulligan next year.
Europe is making a half-ass bounce attempt this morning, or was an hour before press time.
Other Logical /Logifying Frameworks
...which we use once in a while is called the Manufacturer's Resource Wars which is what's going on under the [longwave] surface here as China, Russia, and other large players (think NATO/Libyan-oil & water) are all being fought over via proxies.
This note from our Winnipeg reader is spot on:
And, of course, the first major framework is Clif's GlobalRev work that fell out of modelspace of the predictive linguini/ web bot project. This is a particularly pertinent framework if you're trying to figure out why all those young people are still rioting in London.
Answer as to their motivations? Simply the Janis Joplin lyrics at work again: "When you ain't got nothing, you ain't got nothin' to lose..."
Or, a word of advice to both the Brit/Parly's and the US Congressers frrom the book of Joplin: "Nothing don't mean nothing, honey, if it ain't free." Hear that? Off in the distance? Yo, shit's on fire.
Or, a little more foreground: as the Belfast Telegraph frames it in yet another graceful context "Global Crisis goes full circle." Yessir, sure does.
And from the Book of Dylan, this morning's last bit of social scripture: "For the first ones now, shall later be last, for the times, they are a changin....'"
And the chorus: To everything, turn, turn, turn, there is a headline.
Where's my damn coffee?
Back to point: I would not be surprised to see the UK activate their "COBRA" committee today, but that, by this two year back article - may be exactly the wrong thing to do according to the report.
Are we having fun taking bets on whether the Fed will raise a quarter? You bet - and their decision will be out this afternoon. We'll post an update if I'm not tied up on the phone with clients, etc.
I noticed the Bloomberg headline "Fed's [D. Nathan] Sheets quits as Bernanke's Chief International Advisor".
Can't help but note the Fed is now one sheet to the wind. I sheet you not.
Productivity Numbers have just been released this morning - maybe enough to keep you awake for, oh, say a couple of minutes...
Tomorrow it's wholesale inventories in the morning and the Treasury Budget in the afternoon. Remind me to write Stephen King a note as ask if he's been called in as a consulting writer...The Dead Zone is a good title for the economy, and Needful Things seems to fit Washington to a tee. Just curious, mind you.
Hungry to Learn
Might want to look around your own state to see if something like this is in the works as budgets collapse: The Detroit News has been reporting on how 30,000 college students have been kicked off food stamps in Michigan.
"Loan aps from kids" are up 20% this week alone, here at the National Bank of Dad. No repayment expected.
X-Marks the Sun
Biggie solar flare:
Couple of readers have asked if this could impact GPS systems and the answer [should be] is no. Still, I've got an hour planned to write down old-fashioned VOR navigation frequencies for my flight back from Ohio. VHF (line of sight) radio works. Good to have belt and suspenders, lol.
Recurrent Training Issues
Say, here's a weird one: The Air Force grounding of F-22 Raptors is in its fourth month says this here report. They figure 210 days of not flying makes someone need to retake the whole training sequence.
Here I thought a biennial flight review was bad; control, throttle, carb heat and a few stalls and recoveries. Hah! On the other hand it's a $20K older Beech versus a $415-million per copy taxdoggle.... the Project On Government Oversight has been following the Raptor for five years now...
Air Force Times reported last month on toxins like propane and anti-freeze in the bloodstreams of some pilots - except those out of Tyndall. A maintenance procedure? No telling.
We'll just take our aspirins (which assist oxygen uptake at high altitudes) and keep the pulse oximeter handy, thanks.
Coping: Wandering Through the Inbox
People are forever sending me emails - to the tune here lately of about 300+ per day. I can't answer all of them, I get the ones and read each one, in spite of note responding every time. But here's some representative stuff which might be of interest:
This one is easy: First, not everyone thinks of silver as a storehouse of value, Asia in some ways. And, we are in the midst of an ongoing collapse of highly leveraged players and they have to raise money somehow. This is likely why the price of silver is not going up like gold - selling to cover positions and desperation and not wanting to miss those $50 days in gold.
As the Depression winds up and gets into full swing, gold and silver may both decline. Reason? Simply that as I've explained before, there is a huge collapse in the velocity of money, so in this setting inflation is not likely. So, what happens? Precious metals will fall, too.
And let's not forget that a downgrade in ratings may actually increase yields on Treasury products. As to the wisdom of holding US dollars in the long term, I checked, and the answer was not at the bottom of last night's martini, but I promise to look again, soon.
This one is simple:
With a link to the new "radiation-proof underwear" being developed for young people. Which gets us on to wondering if the species is worth perpetuating, based on our track record, just sayin...
And this one from a Peoplenomics subscriber who is a PhD at a real college teaching economics!
Howard's a way smarter dude than me. His latest post explains the weighted averages of investment portfolios and a most savory explanation of how that worlds in Fixed Income Land. Closest I ever got to that was a few Series I bonds...
The "National Center for Home Food Preservation" at the University of Georgia.
Video du Jur
Fine vid of an unusual lightning storm in Montreal a week, or so back. Reader who sent it in said:
Naw...just normal...er....cloud to cloud lightning? Hmm...does remind me of that alien ship stuff in Skyline a bit now that you mention it.
The music was worth watching it anyway. Near as I can figure it, the hot brunettes and the music are the two main reasons why Montreal should be saved. Now, if they'd all just speak English....just kidding!!! Hell, we're losing that lingo, too...
Monday August 8, 2011
Worked for a while: Beat Map
Dow Down 300: So much for the PTB bing 'in control' of the situation:
Fine picture of plunge protection teams at work here...
Question is: Can they hold back the tide?
Monday: Red, Gray, or Black?
I suppose it really matters where you look: At the highest levels we notice that Asia was down as expected, Europe is trying to buy it's stairway to heaven by buying bonds (with still more paper) and the US is on pins and needles waiting to hand us bears (short side players) a whole gob of money today. So let me begin like a doctor and patiently make the rounds.
The overnight dispatches from Bernard Grover in our Indonesia Bureau were pretty interesting around midnight - 1AM local (US CDT) time:
My use of the Android browser didn't seem to wake Elaine up and by the time markets closed - and Bernard ran out of coffee - it was looking like this by 4:40 AM US Central time:
Grover also pointed us to an article in the Jakarta Post's business section which said the US and Euro crises will slow demand in that part of the world (Doh!). As we've written of many times in the past, this is how a cold in one place turns into global rheumatic fever.
So with expectations set, I popped open the Asia results on Yahoo Finance and sure enough, just as expected: China was down 2.17% on the Hang Seng and the Japanese markets about the same. South Korea was down 3.82% as was Taiwan.
Yep, that's the red markets.
Now, before we advance to a look at Europe, my friend and co-author Howard Hill spent a lot of time thinking about the money flows in the bond market this weekend.
In particular, the European Central Bank (ECB, which also stands, I expect, for Europe's Certainly Broke) decided that in order to prevent global implosion they'd go buy bonds in Spain and Italy, and I wouldn't be surprised if they bought other paper, too, which I'd call sovereign junque. If this were SEO (search-engine optimization) this would definitely fall into the gray hat category; hence the gray in this morning's headline.
Now, if you want to wrap your head around what's going on at the PowersThatBe/PowersThatWere (PTB/PTW) level, you really deserve to read Howard's elegant discussion about "Getting the Sign Wrong."
In our Peoplenomics report this weekend, I focused on the one thing which the central banksters seem to get getting wrong - and Howard's all over it, too - like white on rice: The velocity of money is collapsing and the very opposite strategy to what's being done is what's need to pull the US (and rest of planet) out of this malaise is more spending.
Coming from a dyed-in-the-wool Eisenhower republican like me (prior to that party becoming the corporate-controlled republicorp) is quite a flip, but the fact is that a US dollar (at M2) was 'turned over' about 2.1 times per year in 2000/Y2K. However, at the bottom of the 2009 market, that had fallen 1.64 turnovers per year.
That that [stupid] first half-assed "stimulus" only increased velocity to 1.69 times and now velocity is lower than 2009's!!!
So here comes the UUEA: Ure's Ugly Economic Axiom:
"There ain't no recovery till money is being spent again."
(Velocity dammit! Isn't anyone listening?)
Sorry to say this, but Howard and I agree: The recent declines in government employment have been overdone to the point where the Second Depression is becoming more and more likely. To quote this bit from my esteemed colleague:
Oh, did I mention this is presactly what's going on now? Next ingredient into the blender will be the collapse of tax revenues, too, both property and business, and (thanks to the multinationals) the continued disappearance of corporate taxes by playing the recently perfected game of Three Tax-Haven Monte. A variant on Three Card Monte, except instead of one sucker/player losing, we get to crash the global economy. They stay rich.
Oh, and tipped by an artful Wall St. trader, we see in the article "Inflating Our Way to Prosperity" The Atlantic admits (or seems to) that planned inflation may be less painful than a couple of decades of this crap (look around you, Tums & Rolaids at the ready).
To his credit, Howard is still hopeful that less than my Global Collapse will ensue this fall. He argues in his second post of the weekend (which explains why the book takes so long to write) that one pretty good indicator of whether the 'second dip' recession is coming has been an inverted yield curve. The discussion under "Death of the Yields Curve" is one of the few areas where we disagree.
Howard's still considering that by avoiding an inverted yield curve, the
Second Depression may not show up and blow over the houses of either the Five Little PIIGS (Portugal, Italy, Ireland, Greece, and Sprain) - which it's doing a fine job of so far, or the larger mcmansions of the Three Bigger Pigs - Asia, Euroland, and the US.
I'm hellaciously more cynical. Since Europe is already broke, any cockamamie schemes they gin up this week may take a while to collapse, but that's how check kiting ends: Ugly. Tthe minor nit that if you or I tried it, we'd be in a federal prison. Not these clowns. If the ECB tries it, and they are, figure there either a Nobel prize in it for bravery if not a phat paycheck, 'fo sho'. And maybe an OBE, to boot. FMTT.
I happen to disagree with Howard on the importance of the yield curve, as an artifact of the "old days" when the US really ruled the roost. As I pointed out last week: Renovatio Monetae.
Besides, the inverted yield curves of the 1913-2000 period were, I'd argue, one of the primary means by which the Fed was able to engineer recessions just thus and so, to accomplish the banker agenda. But, nowadays, there's so much froth in the financial picture, what might have once been an "honest fix" by the Fed (which dominates the short end of the curve) has recently become obscured (overwhelmed?) by global factors.
So we agree to watch this one develop.
Then there's the Black part of this Monday. If you need to get the circuit breaker levels for today, click here.
The S&P 500- was down about 30 points earlier this morning, which, for those of us playing the triple bear ETFs will push our 'take' for today to maybe up around 7 - 7½ percent, or so.
Not like I make a secret of my being a bear. The biggest realization in one's investment life is figuring out how to make money when markets are going up is sometimes harder than making money when markets are going down. Like today's is poised to deliver.
Just as our part Treasuries and part Gold strategy seems to be working out, at least for now, the name of the game in here isn't to get rich.
It's to not get slaughtered.
No big numbers today, tomorrow we get productivity, which is always good for a smile. And the Fed decision tomorrow on rates should be more fun than a barrel of...er...politicians.
Inquiring Minds Want to Know Dept
I don't think so - they're acting very ethical in how they operate and as I said in Sunday's post, you can't beat a company up over CMO product ratings and have them not apply the same standards to government paper, can you?
On the other hand, there was a billion dollar block of bonds traded Thursday which has use wondering if something leaked inadvertently. Say, you don't think some of the world's richest people have spies, do you?
As the chart above shows (or did at press time, anyway) the price of gold - which we wrote about buying in 2001 in the $275 range - is now over $1,700 an ounce, but tempering some of our glee is the 28% tax on bullion. Still, better than a poke-in-the....
Silver has been slow to catch up...and only managed to claw through $40 which either makes it a sleeper or a laggard, or a turkey; depending on who you listen to.
Say, every month we're pleased to share the monthly chart(s) which fall out of a complete data crunch of the USGS Database going back to 1973 provided most generously by a fellows whose initials are Tony Ring.
While most of the planet seems jittery about the money situation this morning, a forecast forward of the earthquake data doesn't look especially good for the 2013 period when we could be up to levels of four 7.0 quakes per month and many times that in 6.0 and above quakes:
The red trendline is our favorite (5th order poly.) and the smaller black trendline is a 12-month moving average. Still, either way you look at it, interesting to watch.
The "Beats Me" Files
Say, sure you've read about the riots in London, etc. but here's useful stuff from a Canadian reader up in Winnipeg:
Just the thing to bookmark next times you're mobile in London, eh? Now, in the wake of the state fair beatings in Wisconsin this weekend, we're snooping around for a Wisconsin cam...
Beats me why people act this way. Isn't anyone using the PTB methods of hiring lawyers or renting hookers to set people up, anymore? What is America coming to?
I'll post a "heat map" on the UrbanSurvival.com site around 8:45 if I remember. Age is a beast.
Coping: With Winds of Change, II
Besides writing a lot this weekend, I spent a huge amount of time (again) preparing for the Biennial Fright Review. Something the FAA requires in order to keep flying, and since that will be a part of the return trip Thursday from picking up our new (like 1966 is new?) airplane up north.
I was struck again, this weekend, by the similarities between sailing and flying and since it's summertime (and the living is easy, right?) some reflection on point:
Noticed flying the simulator (and avoiding the crappy weather around the Midwest this weekend) that our biggest problem may be getting to the Mississippi River Valley with crumby weather. I'm hoping that will blow out by first light Thursday.
Made up new a/c checklist cards, all color coded; preflight through landing all have various colors, but the last one - bright red and labeled EMERGENCY is the one I hope to never use. Maximum glide speed: 78 knots, Emergency Descent: 132 knots and things like that.
All mentioned so that on Wednesday and Thursday mornings, you'll not be surprised if the report is short and to the point, although I am planning to take one of our Flip UltraHD Video Camera - White, 8 GB, 2 Hours (3rd Generation) NEWEST MODEL ($89, Amazon) along and maybe get a picture or two for Thursday morning.
Something off, BTW: The White Flip camera is $88 while the black one is $94. Five bucks difference just to have the 'right color'? Sheesh!
Wednesday weather in Chicago looks to be clear, and, if the usual patterns hold, that means we should be in for clear, or nearly so, skies Thursday when we take off in the Ohio area. Local pilots tell me the weather in Chicago one day, is about what the Ohio Valley has the next.
On the other hand, Memphis may have some T-storms Thursday, so we may head a little more northerly enroute here. Rain and squalls with lightning at KHKA (Blytheville, AR), too, so maybe something like either Louisville - Nashville, and down into the deep south then head west, or just stay north and pick our way south from Illinois.
Eyeing a moving map/XM-Weather connected GPS for the plane in order to be able to dodge cells, but the surest way of avoiding weather is be wheels up while it's still dark and get our flying done before the afternoon thunderstorms come up.
Like sailing, flying is a lot more work (done right) than most people give it credit for.
Ran into it in sailing, too: The non-serious sailor would just hoist up whatever piece of canvas they could and call it good. But the fanatical racing skipper (mirror, please?) would test, test, and then test the boat some more. When the boat comes to weather, are the three 'tell tales' on the jib (top, middle, and bottom) all breaking/stalling at the same instant?
May not seem like much of a 'big thang' but the movement of a jib sheet car is the fastest way to add one or two knots of boat speed when sailing. But, like so many other things, it can't be done 'by feel.' The recipe is pretty simple: A sail is just a big airplane wing that works in 7 knots of wind instead of 70 knots of wind. The idea's to have list proper-like the whole length of the wing.
To ensure this, you need instrumentation which is why North and other sail makers sell those stick-on yarn 'telltales' - we often ran five of them on each side of the jib and a similar number on the mainsail. Why? Because you can make decisions without data.
However, one you know the recipe (all tells break the same) you can either move the jib car (the turning block where the jib sheet comes aboard so they do) or on the mainsail, the application of just the right bit of (chose as may as you want) topping lift, downhaul/Cunningham/ and outhaul.
Clif's a huge fan of the newly resurgent crab claw sail plan, but I'm one of those ,wing believers, who thinks most wing type sails are poorly staffed as much as anything and (no surprise here) lazy people get bad performance.
Still, the crab claw sail plan is for sure an up-an-comer. May be somewhat more "idiot proof" on the one hand, and since the rig has a lower aspect ratio, it certainly is safer in heavy weather.
Wandering back to point: Just as the essence of good seamanship is an uneventful voyage, so too, flight planning is where the essence and flavor of a trip is set. So over the next few days, I'll be watching weather up north like a hawk.
Just as "Gentlemen never go to weather" while sailing, "Gentlemen never to go thunderstorms [ or known icing] when flying."
Look for the key recipes, formulas, or 'secret knowledge', then instrument, implement, relax and enjoy. Which is why I lead such a boring life - and hope to continue doing so - well into my 200's.
EMP Will NOT End ALL Life
Been reading an interesting email between a lawyerly gent I know and a senior researchy-PhD type. Lawyer's note first:
Well, er, ah....not so fast, wrote back the researchy-PhD type:
Your concern ought to be somewhere between "Modest preps are in order for it" but far less than "Find a rock to hide under and store ammo" because there's a range involved here, even with a gigantic X-Class flare. Bigger issues may be earthquakes, as explained in the news section of this morning's report.
Still, something 100 times larger than the Carrington Event of 1859 might knock out computers and the internet (and life as we know it) for a while, so yeah, there may be blips in the global flow of infotainment.
But that's OK: There's already a solution at hand.
Books. Remember them?
MMM: The Monday Meditative Moment
A fine Native American fellow send me emails, now and again to "Yua-Tah-Hey" and sometimes they are good for a ponder:
And through the efforts of Mrs. Olsen, we'll all be awake for it. Thus spake the futures.
Sunday August 7, 2011 14:30 CDT
A Guide to: Black Monday?
I've set aside my plans to work on the book I'm writing with Howard Hill to bring you a special update on some of the key concepts that you need to be aware of in order to keep a level head about you as it seems near-certain that the Monday news flow will be dominated by financial markets reacting to the S&P downgrade of the US government's debt instruments. So here are some observations, in no particular order:
1. The first markets to react to the news of the S&P downgrade positively tanked. Not only was the Israeli opening delayed 45-minutes, but when the market did open, the, it dropped by more than seven percent.
To extrapolate the actual 7.6 decline by one of the broad Israeli market indices, that could drop the Dow to approximately 10,574 (plus or minus a box of Rolaids).
2. Although I expect gold will rise, and this weekend some metals sellers like www.apmex.com were advising deliveries could not be confirmed until Asian markets open, we need to bear in mind that a 7.6% rise in gold would place it significantly higher.
If we use the basis of $1,664, a 7.6% rise would target $1,790. However, because global financial instability may cause an even steeper rise, on a perceived 'flight-to-safety' basis, gold north of $1,800 Monday or Tuesday seems possible.
This means retail previous metal coins, which typically command a $100, or so premium above spot, may fetch $1,900, or higher, this week.
3. News headlines have started to get really, really wonky, so beware of your trading emotions and try to keep an even keel which the rest of the world goes a little ba-zit-szu. Some examples:
a. Tim Geithner is staying on as Treasury Secretary. One of Geithner's big pluses on the Obama team is he's (I think) the only one fluent in Mandarin Chinese. That may be a useful skill. Why? Ah....
China is in the process of whacking and spanking us (video) on several fronts for our continued excessive spending, but let's be real: It's been a succession of overspending congresses and presidents who stuck us in this hole, and singling out either Geithner or Bernanke should not be the talking point since the Titanic has hit the ice in the form of what I've written about for years: The Debtberg.
b. No use blaming Standard & Poors, either. After going through the DC-wringer over their ratings of real estate mortgage products, S&P has been very consistent about "keeping it real' much to their credit. Regulators and congress can't have it both ways: I think S&P has called it right - and this isn't a popularity contest.
c. Some new is stuff that doesn't make sense to anyone with a good perspective on the real performance of the economy. Take, please, the story about Alan Greenspan saying there's no double-dip recession ahead, but there are wories about Europe.
This kind of view should be compared with a "Going to the Doctor" story: Doctor says "Good news! You're not having a heart attack. But you do have terminal lung cancer."
In other words, the global economy is just that: irrevocably interconnected and linked, so if the hearts fine, but the lungs collapse, it's still death.
As I explained to Peoplenomics readers in this weekend's report, the US Velocity of Money has been in free-fall since the late 1990's and we've likely come to the inflection point (or very near it) where even a huge increase in consumer debt spending (which was, right on schedule, reported in the Fed figures out Friday up at an annualized rate of 7.6%) may not be enough to kick the death spiral into something of a recovery.
What the happy-talk brigade of the market pimps isn't mentioning in their reports about this is that just the previous day (Thursday) the Fed's H.6 Money Stocks report showed a huge 13% annualized increase in M1 (cash and equivalents) and 6.0% increase in M2. Q2 estimated annualized growth rate of 4.6% sucks compared to the money printing.
I'd mention mention that Trader Bart's M3 reconstructed is up around 7.2%, too, but in all fairness, I should check to make sure you don't have any sharp opbjects nearby when you read that kind of data.
Take these in tandem, we might wonder just what the "rosy growth' paradigm has been smoking and if we might be able to share in some of them vapes, too.
4. You may want to print out this NYSE News Release from June 30th and keep it handy by the computer, TV, or barf bucket in case you're about to see your already damaged retirement dreams whacked again:
I would not be surprised to see a Level 1 halt, then a reopening, and a drop a bit further, but then a decline ending around 10,600, which would be only a thousand points or so.
A bit more was outlined Saturday for Peoplenomics readers and yes, we have been 100% short since last week when I was going on and on about "Back in Crash Country" on Tuesday, was in and out playing dips, but doing fine and ended short Friday so this should be interesting.
(This column may be updated Sunday evening as additional markets open and we see how the metals jump on any flight to safety move...if they do, that is.)
Main thing is to remember money doesn't have emotions, people do. Make cold and harsh trading decisions; wishin' & hopin' ain't gonna help. We all have a lot riding on things.
Last time I checked, John Williams' Shadow Stats was reporting if unemployment was calculated on the same basis as it was in 1994, we'd be at a 22%+ unemployment rate. And, since I started this site in 1997 and started warning "Here comes the Second Depression" less than 60-thousand people on Friday bothered to read this site.
Given we've got what, 311-million people, that's about one person in 5,183 who's actively trying to follow the bouncing ball on the economy and see through the hype, shuck, and jive. Remarkable, given how their balls (and retirement plans, etc.) are about to get bounced.
I'll keep reporting though. The only bad fight is the one not fought.
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 11-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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