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The [not-so-hidden] 38.2% Inflation Rate

Wonder why prices are firming and why outfits like GE are turning in whopper-sized profits?  Simple:  The Federal Reserve is orchestrating a runway money supply.  Yes, indeed, right here in the Federal Reserve's weekly H.6 money supply figures it's revealed that in the most recent three months, the annualized rate of M1 increase is 38.2 percent.  Bad?  You bet!

 

But it gets worse.  I know, you're wonder "How could it be worse than nearly 40% inflation in the wings?"

 

Simple:  The preliminary month-on-month increase in M1 was 11%!

 

"Excessive exclamation point, George....."

 

Not really:  M1 in July was $2,005.8 trillion...while September's first dart landed on $2,130.8 trillion.  Compound your little heart out...the two month increase annualizes to 44.59 percent.

 

Of course, any banker presiding over BofA and other bank asset moves to under the FDIC umbrella worth his salt, would explain it's no big deal.  Except, of course, it is a big deal since it proves again my point that the Fed is trying to print money fast enough in order to avoid incipient deflation, which any damn fool can estimate as current  M2 inflation less the CPI....that gives you the annualized deflation rate.

 

So if CPI was up 3.9 percent in this week's report, the 3-month M2 annualized paper-printing is going up 21.1 percent (up from 20.8% in the previous report) then underlying deflation - the big scary part of the Second Depression is running 17.2%!

 

So, if you're wondering why the job layoffs continue, there's your answer.  We're in a deflationary depression being masked by mass money printing.  Peachy.

 

So the way this systemic hoodwink works is this:  Out come Leading Economic Indicators on Thursday:

"The Conference Board Leading Economic Index® (LEI) for the U.S. increased 0.2 percent in September to 116.4 (2004 = 100), following a 0.3 percent increase in August, and a 0.6 percent increase in July."

Now, we take that data and say LEI going up what, maybe 5% annually right now?  While money is going up 21.1% any reason to see light at the end of the tunnel?

 

Nope.  But to make it worse, we run out the Velocity of money:  Based on the new M2, the rate is down to 1.56.  In the darkest hours of 2009's lows it was up at 1.64.  Mr. Bear is still short.  Options optimism and GE earnings happy talk doesn't change facts much.

 

Now, shall we talk about who's making things worse?

 

Holding Jobs Hostage

Word out of Washington that the Jobs Bill has been killed once again in the Senate proves nothing about whether Obama is doing good, or bad.  But it seals the deal for me that republicans are willing to inflict even more pain and suffering on America by withholding job stimulus in order to build a stronger GOP case for next year's election.

 

But wait, party at the corporate trough:  I have news for you!  The American people are getting sick and tired of bullshit like this  - holding the jobs bill hostage is unconscionable.  Not perfect?  Amend as pass the damn thing, then!

 

This spoiled two-year old crap is why my thrust for next year's election is 'Anyone but an Incumbent."  And while you're at it, remember who promoted the Patriot Act and keeps up war funding, and bankster bailouts instead, shall we?  Incumbents. 

 

About That Texas Quake

A couple of readers (up earlier than me) wondered what I thought about the story circulating on the 'net that the "US Nukes underground Texas Base after 'false flag' terrorists captured."

 

Tell you what:  This note from Oilman2 offers a different idea:  The quake make have been related to oil and gas work in the area south of San Antonio...

If you want to know if the quakes in weird places are related to fraccing for O&G, then use this link. It's where the actively drilling rigs are and the depths they are drilling for.

You can zoom in and filter as you want to since it is GIS mapping.

As you can see, most of the stuff south of San Anton is in the 15K feet depth range, the approximate depth of the Eagle Ford shale they are drilling for....and the depth of the quake too. Got no idea WHO was fraccing and where, when the quake happened, but that would be interesting to know.

Just using the oilfield resources online for ya!

One other item of note:  We had a water line break about a mile up the road from us overnight, so the ground in Texas in moving and oil and gas work seems more probable than underground nukes.  Score that one to Occam.

 

Either that, or continental-sized subsidence is starting, in which case we'll have to decide whether to make a break for high ground, or just sit here and find out if this place turns into an island.  I've had recurring thoughts about the creek being a small bay sometime.  Now's as good as any, I figure.

 

And no, I'm not exactly joking about the subsidence part of the discussion.

 

Marching to the Police State

Don't know if you have been following the story out of NYC about how some [bad] cops are being outed as having planted dope on people in order to "hit their numbers" for drug arrests.  Innocence didn't seem to bother them.

 

Look surprised:  One of the traits of souring in law enforcement is cops not going good police work and engaging in drug planting instead.

---

Speaking of which - a reader sent me some info about the new "synthetic" weed that's popping up and asked my opinion; after all the claim is that it gives a similar high to marijuana, acting on the same receptors but not showing up in drug tests and such.

 

My advice?  Run the other way!  Such synthetics and bad herbage may skate on drug tests, but until you've got lab tests that it doesn't break down into carcinogens, the risk of a legal high that may come with cancer as an added bonus seems like a poor quality choice.

 

High performance people don't put much in the way of "additives" into their lives without extremely high levels of due diligence, know what I'm sayin?

 

It was Gadhafi?

Seems, curiously, that the death of Libyan leader Gadhafi fills huge amounts of linguistics for our "resign/out of office" expectations for this period.  Who'd have thought?  Gone from office for good, though.. and now the question is about what will happen in the wake of his influence in places like Africa.  Timings right, fills the language...now just need to dial in on why it read the way it did.

 

{Problem with evolving systems....lexicon needs to be constantly tuned...}

 

 

More after this...

 

 

Coping: Friday at the WuJo

Interesting email from a reader out East...

"The following recent events just happened to me, starting about 1 and a half weeks ago. As you continue to read, your timeline will shift some - all I have to say is that this is 100% true, as God is my witness this is all true!

About one and half weeks ago I bought a carton of eggs from the local grocery. The next day I started breakfast, took out the first egg, broke it and out comes two yokes. Somewhat amazed, I thought to myself, I haven't seen one of those in a long while. I picked up the next egg and broke it and again, two yokes! I remember saying out loud, "Wow...what are the odds? What are the odds of something like this to happen?" So I had two eggs, two yokes. I broke the rest of the carton and they were regular eggs.

A few days had gone by and I didn't think much of the event.

I then experienced a major medical situation where I spent four days in the acute care center. When I was in the acute care center a routine test was performed on me that requires two injections. The next day, a nurse tells me that the test needs to be repeated because the last one was performed incorrectly. So I received two tests. The parameters of this test requires two entry points in order to arrive at a diagnosis.

It was here that the number two (2) began to resonate somehow in my life. It was here that I start to wonder about things - as if something is brooding almost. I have experienced synchronicity many times before and I know how to recognize when it happens and take notice.

Eventually, I'm discharged from the hospital and my friend took me to the store to pick up a few things here at the local store. Among the items I purchased was a carton of eggs.

It is important to remember that the "two egg/two yoke" event that happened previously did not resonate within me and I wasn't expecting anything out of the ordinary - in relation to the eggs. Also, the thoughts I experienced while in the hospital with my questioning of 2s had already escaped me as well.

The next day I started breakfast, and I took out the first egg and broke it --- it was a single-yoke egg. I remember saying to myself "Awww...I was hoping for a double yoke...."

I picked out the next egg, broke it and what comes out? Two yokes! I have only used four eggs in this carton thus far so I do not know what is in the rest of my carton of eggs.

Ok, so now I have experienced a two egg/two yoke scenario, a "second egg"/two yoke scenario. And a two test scenario.

Today, I had to travel to another rural town to visit the second-hand store (as I write this I just noticed "second-hand" store in relation to 2s.) I was looking for a used toaster.

I asked Linda, the store owner if she had any toasters. She looked at me with amazement and tells me "Wow! You're the second person to ask for a toaster, that guy that just left was asking for a toaster as well." But, she didn't have any toasters for neither of us. I did buy two blankets though without even realizing at the moment --- two blankets.

I remember when she said this, all these events that are related to 2s, two eggs, two yokes...two injections, two tests...and now two people looking for a toaster!

What are the odds of this happening? All of this has happened from about one week previous to this past Sunday. What is going to happen next? And is there something more that is to be experienced? I ask myself.

I am actually worried somewhat about these events because in my past I have had synchronicity and premonition experiences that have come true.

Thus far, I have had 5 premonitions over the course of ten years that have come true. These events were events of disaster for one or more people in this world.

In fact I wish I could tell the entire story and be polygraphed or other means to determine truth. If people heard my story, they would ask as well --- "What are the odds?" If what I say is true and correct - which it is, I am left wondering if something is afoot. My reasoning being...in the past...when I have these premonitions they are accompanied with synchronicity events which occur in twos and threes. They occur in succession before the premonition is shown to me.

In the past, my premonitions did not end well. The first was the collective terror of many people passing away - which referred to 9/11. Of course I did not know what the terror was at the time of the premonition. It was not until after the fact that a friend brought it to my attention.

The second event was about a major earthquake which turned out to be the Kashmir quake in Afghanistan in 2005.

The third event was a premonition about the DOW hitting the 14,000 mark and then it would collapse and would never recover again. What I recall happened here was the DOW went above 14,000 in October, 2007; hovered for a while, fell and has never regain to this date.

The fourth event was my dream about a major right-wing political figure dying in the Spring months. This premonition related to William F. Buckley Jr.'s passing away in February 2008.

The fifth event was another dream I had of a major earthquake. There are many earthquakes around the world in these days so I do not know if this is a verified premonition.

So as you can see all these experiences I have gone through do not end well. And now I am faced with this 2 dilemma. What does it mean?

As I stated earlier, this is 100% true. It is not a fake story, it is not a hoax. This has all happened to me.

And now with the latest synchronicity events that have occurred and how it appears in my major medical situation leads me to believe that whatever the premonition is (if there is one), is it going to end badly and how bad?

I have learned over the years not to read anything into my synchronicity events. As I must be totally "open" to anything.

Most interesting, indeed.  Do please tell us when the premonition to follow the outbreak of 2's shows up.  We might want to duck, or something.

 

Around the Ranch: Home On the Range

Shooting is an art, and to get really good at it, like any art, you need to practice at it.

 

Over time, we've had different targets are different ranges over the years, but confronted with a couple of large downed trees (wind and lightning strikes did 'em in) rather than burn then, here a few days back Panama Bates got after them with the chain save and cut them into 4-6 foot lengths.

 

Next came my part with the tractor - stacking them up just so - and the result, if I do say so myself, is a shooting backstop that ought to stop just about anything thrown its way this side of repeated hits from a Barrett M82 close in, and even here, it would likely last a good while.

 

Panama's gotten quite industrious with range marks, too:  A series of 18" stakes indicates various pistol ranges.  He's working up the rifle ranges now, but likely the most used ones will be the 100 and 150 meter courses.  For accurate sighting, he's promised something of a shooting bench, although I've been eyeing the Big Game Deluxe Shooting Bench (About $80, Amazon) which would be the quick and easy solution.  That'd just leave a couple of Shooters Ridge Filled Suede Pair Sand Bags (about $25) and the range would be "done".

 

Nice thing about how it's all laid out now is that the long pistol and battle range rifle marks are both sitting in shade at mid-morning.  With the wind from the north there can be about 5-6 MPH of crosswind component, so it's not quite enough to really dial in Kentucky windage to any great degree.

 

There are two approaches in our layout, one almost directly head-on for up to 150-meters and a slight angle that may get up to 250 meters...we'll have to measure that one out.

 

The south-facing side will see the installation of a couple of straw bales, and that will be for archery up to 250 feet, or so. and there's a spot for knife throwing...another one of those skills of questionable value.

 

No, this doesn't make me a gun nut, any more than owning both a gas welder and a wire-feed electric rig makes me a "welder", or owning a metal lathe doesn't qualify me as a machinist.  But I've found that going through life collection all kinds of skills can be a useful thing.  Tie a bowline behind your back in the dark useful?  Only once so far, but it's that kind of thing.

 

It also makes reading all the more enjoyable.  When someone writes about construction, sailing, flying, shooting, metalworking, electronics, or whatever...I've got a decent sense of what the writer's getting across and enjoy the story more having held this tool, or that, myself.

 

Goes along with my theory that interesting people do interesting things.  If all you do is point and click all the time, you may not be widely enough read.  Just saying.

---

Bring up a thought that's a follow-on to Oilman2's adventure:

 

We're once again kicking around putting our house back on the market...prices have stabilized around here and the call of the northwest to get back nearer the kids is strong as ever.   Lesson learned?  When (or if) you decide to make the plunge and go rural, moving out of a big city - keep it within a 3-4 hour drive from loved ones so that a spontaneous birthday surprise dinner doesn't come with a $2-thousand dollar travel tab. 

 

Friday's Follies Follow...

 

 

 

Ways to Spice Up a Boring Party

Don't know where this list came from originally, but I've printing it off to save in the unlikely event that we ever get invited to a party somewhere.  It's a list of how to keep things, how shall we put this?  Interest....

• Speak in a strange foreign accent. when someone asks where you are from, name a country only you can pronounce.
• Use a different accent every time you talk to someone new.
• When getting food, pile everything onto your plate in heaping servings - make sure to use your hands!
• Ask the host, "Who threw this cheesy party, anyway?"
• Turn cartwheels across the floor. If you can turn a back flip, all the better!
• Bring a novel and curl up in a corner with it.
• Cough all over guests, then exclaim, "Doctor says a few more years and I'll be cured..."
• Hang your head and whisper one-word answers to questions.
• Play a lullaby on a kazoo during a speech (singing a lullaby works okay, too)
• If there is music, mix up your dancing: break dance to classical, symphony conductor hand waves to techno music.
• If you find your former dancing partner dancing with someone else, burst into tears, wailing "I thought you loved me!", and run from the room.
• Tell a middle-aged wife, "Your husband seems very happy with that girl in the closet..."
• Tell a middle aged man, "Your wife seems very happy with that boy in the closet..."
• Whisper to the guest on your right, "What kind of lame moron actually goes to these parties, anyway?"
• Bring Lego warships and fighter jets. Wage a war in the middle of the room. Urge other guests to get involved. If you are a historical expert, reenact the revolutionary war, the civil war, world war two, etc.
• Bring a soccer ball, basketball, football, or baseball. Start a game... in the kitchen.
• Karate chop everywhere and everything. Yell really, really loud. A few sudden kicks would be worthwhile as well.
• Wear wool or feathers and sneeze all night. "The doctor says I'm not allergic to anything except sheep and birds..."
• If someone says the word no to you, say, "How dare you turn down the prince / princess of Ugranialo!"
• Burst into the room an hour late, sopping wet and screaming, "I've done it! I've found Atlantis!"
• Pick out the oldest women at the party, run up to her, and exclaim, "Grandmother! it's me, Anastasia!"
• If it is a summer party in the evening, break into a duet with another guest: "Summer nights". Persuade the host to sing "You're the one that I want" with you.
• Come in saying, the guy outside in the lab coat is looking for (insert name of host).

Like I say, I don't get invited to many parties so it's either something about my personality, or people in East Texas don't party.  Or both.

 

Send Ure comments (and jokes!!!  PC and PG-R17 only please, thanks) to george@ure.net

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Sizing Up The Rally

(Shawnee, OK) I was not able to log onto my server at home for the part of today's report written before heading up this way - the Revolution Part 2, comments. So, as a result, a further Peoplenomics report may be expected tomorrow. Today (Saturday) Robin Landry has generously offered to show me his latest - which is still evolving. The plan (at the moment) is that there will be another update prior to tomorrow night that will include the R2 comments and additional discussion of the market outlook.

 

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Taming Cookies

Computer cookies have a purpose in life - they facilitate things like online banking and stock trading.  But there's a vicious side to them:  They can be used to track your web use without you even knowing about it.  And even more dangerous are the 'cross site' cookies which can install malware on your computer without you ever knowing it.

 

The answer?  Maxa Cookie Manager, MCM.

 

Take it for a free 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.  And remember our saying at MyGroPonics:  It's OK to be a vegetable... 

 

Strange Dreams?

Post your weird dreams to help our research along into what goes on at night in people's heads: www.nationaldreamcenter.com

 

"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!

----

Last week's report is always here.

 

---

Thursday October 20, 2011

Trank Me Thursday

The report that "Watchdogs to keep closer eye on ultra-fast trading" seems like an industry ruse to make people believe that there's really change in the air.  Dream on:  You may rest assured that high frequency trading is an ensconced part of the paradigm since it essential prints money for the HFT firms, and why would they ever allow their cash flows to be screwed with?

 

This morning's report is a lot longer than usual - up to the kind of length we usually hold for our Peoplenomics.com subscribers - but with no other apology since there is some much shifting going on in Global Three-Card Monte that we need to pause once in a while and make sure we see which card goes where.

 

In Europe this morning, stocks were a tad lower, same in Asia, but the US markets seem to be waiting for the weekly unemployment filings, as if that has something much to do with economic recovery for the whole world.  It doesn't, of course, but the financial MSM loves a good distraction, so here's this morning's:

In the week ending October 15, the advance figure for seasonally adjusted initial claims was 403,000, a decrease of 6,000 from the previous week's revised figure of 409,000. The 4-week moving average was 403,000, a decrease of 6,250 from the previous week's revised average of 409,250.

The advance seasonally adjusted insured unemployment rate was 2.9 percent for the week ending October 8, unchanged from the prior week's unrevised rate of 2.9 percent.

The advance number for seasonally adjusted insured unemployment during the week ending October 8 was 3,719,000, an increase of 25,000 from the preceding week's revised level of 3,694,000. The 4-week moving average was 3,722,500, a decrease of 7,500 from the preceding week's revised average of 3,730,000.

No, don't ask about sampling error, dammit - just gobble it up, OK?

---

Once you get the idea that today in index option expiration, stocks have options expiration tomorrow, you can sit back and chill.  It's more of the Same Old Thing rewrapped and sold as The Brand New Thing. 

 

In the background Europe is still on the skids with protests in Greece, where an austerity vote is about to be held:  The macro on this being the politicians who want to keep their jobs will go along with whatever the international bankers want, while the people probably didn't want the Euro in the first place.

 

And, while in the wake of rioting in Italy, we're awaiting linguistics that point to an attack on the Vatican as a temporal marker ahead, we note that Vatican Radio is doing part 1 of "Papal States and all that.'   Hmmm...curiously timed arrival linguistically....

---

You're not supposed to notice what the Christian Science Monitor headlines as "A Long, Steep Drop for American's Standard of Living." 

 

But, if you do, no worries:  Western Medicine to the Rescue!  We're now the most pill-popping country on earth with a report from CDC that antidepressant use is up 400 percent in the past 20-years.

 

 

Why do I get this nagging feeling that if we didn't have all these wars going on, if Congress would stop being on the dole from corporate interests, and if our retirements hadn't been robbed, this drug dependency problem would not be arising?

 

Gosh, there I go again, being simple-minded George.  Trank me, would'ja?  You do know the 'ganj" is less harmful, right?  Oh! Forgot...not near enough corporate revenue in that...like I said...simple-minded me.  May we have the next distraction, please?

 

Hot Joe

Human Events got an ear-full from the vice president who has made comments that crime (murder, rape etc) will rise if the new jobs bill isn't passed.

 

Unfortunately, Biden is probably right: general crime rates seem to trend up when people are unemployed and hungry.  The extreme case, in case you've forgotten, is called a revolution.

 

No More Muammar

Seems that Libyan strong man Muammar Qaddafi was captured today near Sirte.  Reports will be firming up, but he may have been killed trying to beat feet out of his last stronghold.

 

A New Iraq War?

Here's an interesting development - which could blow up, literally:  Turkey has launched an operation against the Kurds in northern Iraq.  All this time I thought it was a US state in everything but voting....shame on me...though it cost more, than federal aid to a comparably sized state would in the same period, didn't it?  (Yes, you have to count the missing pallets of money during the Bushista period...)

 

Given the increasing tensions between Israel and Turkey we have to wonder what the folks in Tel Aviv are thinking about this morning.

 

Odd Texas Quake

Dry land settling?  4.6 shaker this morning south of San Antonio.  No, we didn't feel anything up here in the piney woods...but then I'm an uncaring insensitive sort, anyway.

 

March to the Police State

I told you earlier this year about the random car stops being made by Tennessee drug police on I-40, looking for cash, drugs, and impounding any large amounts of money found.  I think I mentioned our sighting of 13 blacked out SUV's on our way to the National Society of Newspaper Columnists convention, in an 8-mile stretch of I-40 east of Memphis.  (*See why I bought an old airplane for travel?)

 

Well, the sound of jackboots ticked up a bit on Wednesday with TSA now getting involved in random in depth search (drug and bomb dogs) of trucks in the state...a YouTube vid off local TV up there may be found here.

 

I'm not sure if its the water in Tennessee, or what, but this is definitely a disturbing trend - seeing a state warmly welcome such intrusive operations.  Buses and trains, too....

 

Honestly, if there's a place America ought to be spending money, it's at that place along the still-leaking Mexican border which locals call "The Arab Road".  But no, that might be effective.  So instead, we still have drugs, illegals, and God knows how many people who would do this great nation harm and still the border leaks.

 

Which gets to an interesting question:  Why throw money at a non-issue in rural Tennessee when the real issue is our borders?  The answer, near as I can figure it, is to stampede people more and more into a compliance mindset. 

 

Why is this so important?  Because it helps maintain the failing paradigm which - in case you haven't noticed, is now in the period after Peak Everything and we're off on a race to the bottom - which could take years or even decades to work out.

 

This sets up an conflict between We the People and Them the PowersThatBe:  As you know, I have been doing a tremendous amount of study of Occupy Wall Street and the key message rolling out of this delightfully disorganized effort is that "When the systems fails this time, there won't be a reboot that will simply install the same old failed things we've been through for how many cycles now."

 

So the emphasis on Tennessee's security becomes more and more curious to watch, especially as we, the once proud and free people of America, keep being shouldered with more and more bad gambling debts from the bankster class while the "internal security apparatchik"  - the enforcers - tighten down the travel screws ever more. 

 

In today's FU'ed world, driving in Tennessee seems now to be probable cause.

 

Time to move Nashville?

 

GlobalRev Out-takes

From our Indonesia Bureau Chief, Bernard Grover in Jakarta, or not far therefrom:

Interesting (to me) little article back page below the fold. There seems to be a rash of attacks on ATMs in various parts of Indonesia…different cities on different islands. The machines aren’t being robbed or stolen. Someone(s) is dousing them with gasoline and setting them on fire. The article doesn’t speculate on motive, as the police are stumped. If one takes it as a form of protest, then it is an interesting twist on the bank-run sort of thing. Especially since someone(s) doesn’t want the money inside, just wants to destroy the whole thing.

 

A lot of folks in my circle are stocking up on rice and canned goods. Word has been circulating that food prices are likely to shoot up in the next couple of weeks. Rice is already up over 13%. The President’s controversial Cabinet clean-out seems to be a proactive move to blame them for the price hikes and rice shortages. Seems that Indonesia has gone from a net exporter to net importer of rice in the past year, due in part to a drought in the prime growing regions.

 

My theory and experience is that droughts usually end with major floods, and folks here are also preparing for that. According to folk wisdom, major floods occur on a five-year cycle. January will be five years since the last Big Swim, and given the three that I’ve witnessed here, they must be rather dramatic, because I’ve seen parts of the city completely submerged in the last four years. The folk wisdom continues by saying that major earthquakes follow major floods.

 

The interesting thing is that this may all be a circular argument. People hording rice in anticipation of floods/earthquakes may be driving up prices, leading to the Cabinet getting axed, causing folks to get angry and burn ATMs, which in turn causes people to horde.

 

And the beat goes on…

And beat we amay well be....

 

Coping: With Bad Bankers

A number of readers have asked me why I haven't made more of an issue of the Bank of America accounting shift to move a big chunk of their Merrill unit derivatives (essentially gambling bets) over to their FDIC insured bank unit.  If things go terribly bad, FDIC is now on the hook for $75 trillion of BofA derivatives losses. Or are they?

 

A colleague who really teaches forensic economics at the PhD level, sent me a note on Wednesday morning after the news had been out for about 18-hours.  I don't think he'll mind my sharing it with you:

George,

Here is how to cook the books and keep it legal:

So George, did BOA really earn $6.2 billion in third quarter profits? Here is my quick analysis of their financial statements and the footnotes thereto.

Reported third quarter net income:                           $6.2 billion

Less accounting adjustments for Positive fair value adjustments on structured liabilities                                                   $4.5 billion

Gain in trading Debit Valuation Adjustments             $1.7 billion

Accounting adjustments                                             ($6.2 billion)

Adjusted net income                                                    $ 0.0 billion

Of course my above analysis is not completely correct, since net income is after tax and the accounting adjustments were pretax, but you get the idea.

In addition, BOA reported a pre-tax loss of $2.2 billion on private equity and strategic investments. However, this was strategically offset with a pre-tax gain of $3.6 billion from the sale of their investment in China Construction Bank. Without the sale of the CCB stock reported net income, after my adjustments above, would have been a loss.

This CCB stock transaction, unlike the accounting adjustments above, is from a “real” transaction; BOA sold the shares and took a taxable gain. The accounting adjustments above are accounting fictions. A debit valuation adjustment (DVA) is an accounting rule (FASB 157) that allows banks to report a fictitious or paper profit when the value of their own credit quality falls. DVAs result from changes in the value of underlying credit default swaps.

FASB 159, just to complicate matters, lets companies like financial institutions value selected financial assets and liabilities at fair value.

Thus when a financial institution, holding a structured financial liability, determines that the fair market value of that liability has decreased they may report a gain on that liability.

When might that happen? Whenever a company can settle a liability for less than its carrying amount as usually evidenced by the decrease in the value of comparable debt.

For example, assume that a $100 million, 20 year, 5% bond is sold to yield 3%. The theoretical market value of that bond at the time of sale was about $74.3 million.

Now assume that, due to inflation, market yields on bonds have increased to 4%. A theoretical $100 million, 20 year, 5% bond sold to yield 4% should have a market value of about $67.9 million.

If you are a bank holding a $100 million bond liability with a carrying value of $74.3 million and a comparable bond now sells for $67.9 million you could in theory report a gain of $6.4 (the difference between your bond carrying value of $74.3 million and the market value of $67.9 million) because the fair value of your liability had decreased. Don't you just love accounting?

We had a long talk about "truth" and accounting disclosure in my grad class last night. Guess what we talked about . . .

My sense is this is bad but since sense and good reporting never seem to go hand-in-hand, I asked my co-author and CDO expert Howard Hill to straighten me out on this because it triangulates between scary, sociopathic and plain crazy:

"OK, Now You Have My Attention

When George asked me about “Geithner orchestrating transfer of $75 trillion of derivatives into the taxpayer-insured piece of BankAmerica.” I slipped into a role I’ve played in Georgeland since before the thing he does was called “prepping,” a role you might describe as talking him in off the ledge, or, more aptly, talking him out of the bunker or off the battlements.

Back in the 90’s, my role was to assure “survivalist” George that the world actually wasn’t going to end when Y2K rolled over in all those Cobol programs. As I pointed out when we did our own HB Hill & Co. Y2K review for the SEC, we had noticed that the year 2000 was coming since at least 1970, because we dealt with 30-year mortgages. In short, a lot of the “problem” simply didn’t exist by 1999 because most financial system programs have to deal with five, ten and even 30-year assets and liabilities.

More to the point of the level of “crisis”, every IT manager out there had a unique opportunity to increase their budgets, even doubling them, all while dealing with a crisis that they weren’t going to be blamed for. Nirvana for a cost center! Attention and money pouring in, and they aren’t even being blamed!

Lo and behold, Y2K came and went without major incident, unless you count a drastic drop in corporate IT spending for the next three or four years because the biggest letter to Santa Claus of all time had just been fulfilled.

Today the topic was derivative contracts, one of my own favorite scary things. And the headline as George voiced it would be a major mistake by the White House.

Starting with that, I pointed out that ONLY the Federal Reserve can change where a bank holding company books major blocks of business, and that the Fed does not report to Geithner, nor even to Congress or the President. His response was that Turbo Timmy called the meeting, and I snappily replied that he was blaming the social secretary that sent out the invitations to the party, a role never played by the guest(s) of honor.

Next on the list of things to lower George’s blood pressure is the obvious matter of “netting” derivatives contracts and the “notional” nature of the numbers. If Party B takes out an interest rate swap with Bank A for $100 million, what they actually agree to pay is the fixed rate of interest on $100 million, while receiving the appropriate floating rate of interest. These days, on a five year deal, that is basically an agreement by B to pay A $1.5 million per year in return for LIBOR, which at this moment is $250,000 per year. A difference of $1.25 million, in other words. A LOT less scary than $100 million. But it gets even smaller, because a year into the deal, B often comes to A and says let’s do another deal, so they “cancel” the four years left in the original deal by doing a four-year swap with the terms the same but the A vs B roles reversed. Now A and B have $200 million of notional swaps on their books, but literally absolutely no money changing hands at any time in the future. This is especially the case if Bank A is proposing a new deal to Company B that replaces an older deal B did with Bank C.

My suggestion was that the real risk is more like the total collateral pledged in these agreements, since a collateral agreement is how a party to a swap ensures they can go find a third party to do an offsetting transaction if they wake up one day to find out that their counterparty is out of business. In other words, the collateral pledged at any given time is roughly equal to the sum of the best guess as to economic losses associated with replacing lost counterparties in a stress situation.

So, I came into this little project ready to show George that the world wasn’t going to end, yet again, and that the scary huge numbers needed to be multiplied by 4% and then by 2% and then by 1.5%, so each of those trillions of dollars was really only $12 million. Still a lot, but not the end of the world.

But then, after reluctantly agreeing to take a look at the situation, I started to think I should be in the bunker with George instead of talking him into coming back out with the rest of us.

BankAmerica reported $53 trillion total derivatives to the Office of the Comptroller of the Currency (the actual regulator of commercial banks in the US; the Fed sets the rules and occasionally inspects) as of June 30 this year.

 

Of that, just under 5% was the scary stuff -- the CDS. Not a trivial amount, but again potentially paired off in multiple contracts that cancel each other so the actual exposure could be far less. But I do worry about CDS, since they are single-event payoffs that range from 20% of face amount right up to 90% (the infamous Fannie Mae CDS settlement) when the subject of the contracts goes into default.

The other thing to note from the recent OCC report is that BAC’s derivatives book is nearly 96% over-the-counter contracts. Hidden, in other words, and still not disclosed or regulated except in the aggregate, thanks to the delaying action being run against the attempt to stop the next meltdown from hitting all of us, most of whom never made a dime off the “profits” from the derivatives investment bankers who got paid billions in bonuses when they put all those contracts on the books, not over time as the contract period ran off.

So what is the new part of this?

Now BankAmerica is proposing to move all the OTC derivative contracts they got by buying Merrill (and probably also Primary Dealer Countrywide Securities) into the bank, which is subject to FDIC insurance. The FDIC was at the meeting, and they didn’t particularly like the idea of covering all this new risk without having a much larger capital cushion in place.

I have to agree.

I can’t say how much of the legacy Merrill book of CDS is still out there, but I can say that their track record of trusting the AAA ratings on the CDO bonds they structured tends to say they didn’t understand how much risk they were taking, especially at the “top” of the credit pyramid. Shades of AIG, which paid out over $200 billion in collateral calls when their CDS book began to go south, a CDS book that was exclusively written on AAA-rated bonds.

So, if BAC is now wanting FDIC (and therefore taxpayer) insurance to make good on all of their derivatives (break glass in case of emergency), then I want to know what’s in there. Name names.

 

Enough of the so-called “proprietary nature” of their competitive information. If they want me and many generations to come to pay taxes to cover the liability if they didn’t bet right, it’s time we knew what the bets were.

Dodd-Frank didn’t go nearly far enough, and if you needed any proof of it, here it is. Early on in the process, long before any votes, the wimps in Washington agreed not to try to force disclosure or regulation of the “exotic” derivatives like, ahem, the Credit Default Swaps.

For round numbers, using my trusty back-of-the-envelope WAGs (wild-assed guesses) without a scrap of hard information, I’ll guess that there could be as much as $2 trillion or maybe $4 trillion of real risk in the system, and a huge chunk of it is about to be moved onto the taxpayer’s balance sheet.

If there is any good news at all in this, it’s that JP Morgan, the biggest of the bunch, led the charge on getting the wall between investment banking and deposit insured banking broken down (Gramm-Leach-Bliley), so they already have their credit derivatives booked at the bank.

Same is true for Morgan Stanley, since the overnight approval and conversion of that outfit into a Federally insured bank on September 21, 2008. If you haven’t got enough to worry about, it seems that fine upstanding bank called Morgan Stanley reported that 100% of its derivatives were OTC, and 98.3% of those contracts are foreign exchange. Pretty impressive for a bank with $69 billion in assets to have nearly $1.8 trillion in foreign exchange bets.

So Howard...welcome to my ledge.

 

As we discussed a bit on the Peoplenomics.com site yesterday, the world almost melted down in a financial heap in 1974 due to a counterparty failure involving Herstatt Bank  - it's now taught in finance classes as the Herstatt Effect.  Continuous settlement solved that, but it doesn't apply to goodies like CDS' where, near as I can figure, counterparty risk is very, very real.

 

So while I'll grant you the interest rate swaps should be just about a zero-balance book, but as Howard admits the CDS book is another matter, indeed.'

 

So, is there some point to "protesting" BofA's move?  Hardly, but if the realizable portion for this move is already $2-$4-trillion and BofA isn't the sole problem, and if Congress didn't specifically authorize the bank moves under the publicly funded FDIC, aren't we getting dangerously close to taxation without representation?  Broadly, anyway?

 

That, in turns gets me to two other points:  The public is sold the bill of goods that the Federal Reserve has a dual mission: Economic stability and economic growth.  But, as this little moves demonstrates with stark clarity, the Federal Reserve is neither federal (it's owned by member banks/banksters) and it has not reserves, per se, other than your full faith and credit.  Point one.  Push comes to shove it's the Federal Save Ourselves as Bankers Board.

 

Last but not least, the problem is nonpartisan.. more properly it is bipartisan since both the major corporate parties in America which I try to consistently label the republicorps and the democorps have blood on their hands:  Remember, it was George Bush who got the bankjacking going in 2008.  Why is Washington - regardless of party - singing the same tune?

 

Because Banks Run America and anyone who says otherwise is blowing smoke up your keister.

 

I think of the political parties as "dueling hate machines" and if I were scoring, based on ill-researched emails, I'd say the republicorps are out front.  And since the build-a-burger types have already blessed Rick Perry, the point of having elections in 2012 is more to fund pet/wholly owned media empires to run the game another cycle.  Watch and learn:  The present debates lead to foregone conclusions.

 

But let's not go there....for now, just thank FDIC, you've just gone on the hook this week with another $6,000 to $12,000 in guarantees to cover bankers' bad bets.

 

I bet you feel a whole lot better now, don't you?  Unless you're one of the country's remaining  154 million remaining employed workers.  Yeah, the worst case on this BofA deal may only be $4-trillion, but since the "just bred and nearly dead" don't pay a lot of income (and other) taxes, the individual worker share on this is really closer to $25,974.

 

The good news - such as it is - is that this is a contingent liability.  If Mary Poppins shows up, the skies part, consumers start spending and jobs for all who want them start raining down from heaven, then it's no big deal.

 

But, in the meantime?  I'm out here on this ledge in the East Texas outback for a reason.

 

You know, if humans were allowed to report income for the purposes of the income tax, we'd be able to book an expense as these contingent liabilities become real.

 

Why do I seriously doubt that will ever happen, either?

 

Some Comments From Inside OWS

As I said earlier this week, I am still watching the developments of OWS, although I'm coming to understand that one of the main purposes of the group is not necessarily to bring the global economy crashing down, so much as to ensure that when it collapses this time, it won't reboot with the same old hands in control of society.

 

A very instructive email came in this week from a one-time Fortune 500 type who is now on the inside of OWS and his comments on the leaderlessness of the movement is instructive on how this self-organizing collective is evolving...

"Hey George, I’ve been reading your column for years and Clif’s work too. In the past few months I’ve been helping the folks out east here get their occupations organized and setting up committees and decision processes. I’m 54 yrs old so I’m looking at this as a kind of penance for my excesses of the past and the excesses of the boomers. That being said, I’d like to offer some inside scoop to our friends on your site. As far as I can see, there has been no intervention by any moneyed interest like move-on, dems, repubs, soros, unions, etc. People of all walks of life are involved and all have subordinated any label they may also carry to the idea of individual responsibility to the general assembly (GA, (not Georgia)). People must speak for themselves and not for others who are not in attendance in order to contribute so there is no invalidation of experience, just no speaking for an affiliation. If they try to, they are shut down quickly by facilitators. There are no leaders and that is why the movement has resisted being co-opted by groups. There is no one to target. Things this week took a big shift as now media outlets are aligning and presuming to speak for this movement even though they have zero control of its agenda or decisions. Anyone speaking to the press speaks for themselves and their thoughts and ideas but cannot represent any others or the movement. Thus no talking-head(s) have emerged from this expanding group.

There are an adopted set of targeted actions and policy goals that are getting discussed in local groups. Each local area is compiling a voted-on list of policy changes they would like to see put forth under the Occupy _______ banner and congress to act upon. There is an incredible amount of meaningful discussion taking place, first and foremost to building and maintaining the purity of this movement and decision making process. Young people are being trained in consensus building and facilitation skills. It is comforting to watch these “kids” get involved and take charge of their future. We call them the Millennial’s and they are our future, so I think it is a good investment of my time and resources to help out and do what I can.

I am an educated, trained and experienced group facilitator who worked for Fortune 500 companies for the last 25 years. I have degrees in Economics, Engineering and Social Psychology and Organizational Development. We used to call this stuff: total quality, continuous process improvement, team-building, group empowerment and all kinds of other BS terms to make workers think they could do something meaningful to save their jobs; Ha! I became frustrated by being used as a corporate shill, so I went out on my own to help small companies prosper through the integration of technology and human processes. That’s been much more useful of my talents, in my estimation.

Well, I guess those experiences may have been preparing me for this new journey. At the very least it is a complete paradigm shift and I am not surprised that even you have trouble wrapping your mind around what the point of it is, so far. The best I can say is that I am seeing a real kind of “Aquarian” shift away from the “Piscean” framework of the last age. Now don’t get me wrong, I’m basing this expression on what I know of those terms and do not fully subscribe to astrology metaphors, but I am trying to find a language that can properly characterize the shift of spirit and consciousness that seems to be shaping this group. They don’t articulate answers to meaningless questions the media poses, not because they are clueless, but because one can’t easily frame this shift in the old language to print in a news story. The only way to understand this transformation is to attend a couple of GA’s. The closest thing I can compare it to is a Quaker process of decentralized decision-making. I’ve never been able to adequately describe that 300 year old process either, other than to say, “go to a Quaker meeting and watch what they do”. I think that’s why all that is being reported are anecdotes of scattered situations, or 50,000 ft views because the reporters don’t know what to do/ask and we’re not real big on spending a lot of time creating sound-bites they can use. The other means of communication are the videos that are being posted. Last night a Marine castigated a group of NYC police for using violence against their fellow Americans. There is no organized way to convey that king of passion and lesson-telling better than that one American standing up for what is right. Watch these videos and you will see a new societal norming process in action.

Our local OWS group was organized 2 weeks ago with 10 people. A week ago we held our first GA with 150 in attendance. Eight committees were formed and our first rally occurred last Saturday. We are now at 1000 and growing daily as word gets out about what we are all about. We are selecting an occupy site and working closely with the local police and city council to keep things peaceful and civil. If you read up on the Philadelphia group, they seem to have a very good rapport with the city leaders. We are following their lead. The Boston group seems to be coming up with great programs and policy statements so we are watching them closely as well. Unions and other groups have attempted to infiltrate even our small group, so I know what that looks like and I can report that it just doesn’t work inside the OWS process. Come to the meetings and rallies and be prepared to speak for yourself, or just listen a while. I think what you will see is the best America has to offer the populace to correct current problems and bring government back to the people. "

And, there was this (fortunately resent) response to a reader letter in Monday's column:

Hi George, Just a note in response to Grace's email covered in the GlobalRev section Monday.

I'd just like to mention that here at OccupyPhilly, we have ALL kinds of people joining the movement. Your reader's thinly-veiled assertions that most "Occupiers" are young white kids who smoke pot are probably given mostly by the MSM's coverage of Occupy Wall Street. Which, I need to point out, took FOREVER to mention on ANY news station. In most cases, nothing was said until the Brooklyn Bridge incident.

Here in Philly, we also have a large population of homeless that have come and taken up residence as part of the Occupation. They largely represent those for which the current system has NEVER worked- minorities, those with mental health issues, veterans and others who have fallen through the cracks. There are also anarchists, "Preppers" (and not the mature, older folks your reader mentions - they are mostly hard-working people with families, from 20-somethings to middle-aged and beyond), permaculturists, peace activists, anti-capitalists, Quakers, students, social activists, minority groups, and many, many, other types of people. I will also mention that a LOT of the supporters are employed, contrary to a lot of posts I've seen online, which is why they can only "occupy" on the weekends, and aren't in front of the cameras all day. It is one of the most beautiful displays of diversity I've ever witnessed, and represents well the patchwork of America's citizens, as well as their ability to help each other and share knowledge. I would urge your reader to dismantle her stereotypes, so that she may further empower herself and her country.

While I will note Grace's legitimate concern over the possible use of a "Divide and Conquer" technique, I can't help but hear how well she is employing this in her own email. Wrapping up her rant by saying "We all need to see the good ideas being espoused by both of these generationally diverse groups shouting in the streets. Both sides have legitimate complaints.", is still clearly speaking of TWO groups.

Please, Grace, do not follow the example of a two-party system. Stating that "We need to get them together and create our new, strong, independent and FREE America from that consensus" is just pooling these "two groups" into ONE group, making it an even more homogenous option for action.

While I am all for the idea of an entity that represents the people, I would rather see entities that represent the people, and are capable of working together to address larger issues. Like the state/federal model was generally intended to be, before it become a centralized concentration of corporate interests. I think that the Occupy movement is a really good example of how many people from many different walks of life, opinions, etc., can come together and actually make decisions regarding their own well-being, in spite of differences in the details. I'd like to see that practice spread, rather than the "Us vs. Them" mentality that Grace seems to be, perhaps unwittingly, perpetuating in her letter.

Whew.  Lots to ponder this morning.

 

But there a few things regular people can do:  Direct actions.  Some of these include:

• If you still have a job and can qualify, refinance for a lower rate than your present home loan with a community bank.  These are not the megabanks - they tend to be very local, conservative, and see the Weiss Ratings to find a good one.

• You can also vote by keeping your wallet holstered when someone (either party) calls up and wants to get a donation.  I ask:  "Is this an incumbent calling?"   See Howard's rant on how politicians get hooked on a lifestyle that virtually requires them to sell out just to keep their lavish upscale lives.

• Reuse, repurpose, and recycle.  Buy American made when you can.

It's a tough personal choice, this "Decide to Do What's Right" stuff.

 

There's a quote of Thomas Jefferson that comes to mind:

"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants."

What Jefferson failed to mention is that the Tree of Liberty is a sensitive plant that can be poisoned by a most toxic byproduct of prosperity:

 

Excessive cash flows to the root system.

 

Thinking About: Old Men in the Army

As long as we're holding bad human behavior up to the light, here's one worth thinking about:  Why do we send your best and brightest young to fight in wars hither and yon?  Although this was written as humor, I'd propose that there's a fair bit of truth to it...

Drafting Guys Over 60 This is funny & obviously written by a Former Soldier...

New Direction for any war: Send Service Vets over 60!

I am over 60 and the Armed Forces thinks I'm too old to track down terrorists. You can't be older than 42 to join the military. They've got the whole thing ass-backwards.

Instead of sending 18-year olds off to fight, they ought to take us old guys. You shouldn't be able to join a military unit until you're at least 35. For starters, researchers say 18-year-olds think about sex every 10 seconds. Old guys only think about sex a couple of times a day, leaving us more than 28,000 additional seconds per day to concentrate on the enemy.

Young guys haven't lived long enough to be cranky, and a cranky soldier is a dangerous soldier.

'My back hurts! I can't sleep, I'm tired and hungry.' We are impatient and maybe letting us kill some asshole that desperately deserves it will make us feel better and shut us up for awhile...

An 18-year-old doesn't even like to get up before 10am. Old guys always get up early to pee, so what the hell. Besides, like I said, I'm tired and can't sleep and since I'm already up, I may as well be up killing some fanatical son-of-a-bitch.

If captured we couldn't spill the beans because we'd forget where we put them. In fact, name, rank, and serial number would be a real brainteaser.

Boot camp would be easier for old guys.. We're used to getting screamed and yelled at and we're used to soft food. We've also developed an appreciation for guns. We've been using them for years as an excuse to get out of the house, away from the screaming and yelling of kids.

They could lighten up on the obstacle course however... I've been in combat and never saw a single 20-foot wall with rope hanging over the side, nor did I ever do any pushups after completing basic training. Actually, the running part is kind of a waste of energy, too... I've never seen anyone outrun a bullet.

An 18-year-old has the whole world ahead of him. He's still learning to shave, to start a conversation with a pretty girl. He still hasn't figured out that a baseball cap has a brim to shade his eyes, not the back of his head.

These are all great reasons to keep our kids at home to learn a little more about life before sending them off into harm's way. Let us old guys track down those dirty rotten coward terrorists. The last thing an enemy would want to see is a couple million pissed off old farts with attitudes and automatic weapons, who know that their best years are already behind them.."

There's one more good argument for allow an all-older Army:  It solves the retirement problem.  Three hots and a cot, and going hunting every day?  That'd beat hell out of sitting in a check-out box waiting for the grim reaper.

 

Besides, the young deserve a chance to live...it's what we bring them into the world for, is it not?  If Big Corporations want a military to defend their corporate interests, let them do a direct-payment plan instead of this circuitous bullshit route we've been on.

 

Wonder what the vote would be:  Hospice or some good drugs and a chance to make a meaningful exit of a different sort?

 

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Wednesday October 19, 2011

Wednesday is for www.peoplenomics.com subscribers.  $40/year access - info

Sliding Toward Options Expiration

As the market opens this morning there is a predictable next round of EuroZone happy talk going around.  Later on, downside action through tomorrow is possible because options settlement comes late this month - and maybe it'll be as good as Halloween for Bears.  No matter, since it occurs to me that the OWS movement may already be behind the power curve and setting itself up to take the hit when the Big Crash does eventually get here.  After we whiz through some of the morning's routine headlines, we'll delves into whether OWS is too little, too late and explain the mechanics of how a Herstatt II in CDS could end the world as soon as....you got the time? 

 

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We return tomorrow morning at 7:55 AM with our usual post - have a great day in the meantime...

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Tuesday October 18, 2011

Storm

I described the pre-open yesterday as the "Calm before the what?" and this morning we have an answer:  Storm.  Casting a weather-eye toward the horizon we notice that "China economy grows at slowest pace in 2-years" which is bad since it's become axiomatic that "As goes China, so goes the World."

 

Monday's 247-point decline in the market argues that more downside is likely, down to the 11,300 Dow level, but it could collapse once there, since there are competing wave counts that suggest one more run up (12,000'ish) after a test around the 11,300 level.  But for now, our short position is once again slightly positive for the year and seeing that China's Hang Seng was down more than 4 percent overnight, we'll just stay short, thanks.

 

If you want to get a clear look into the face of doom, take a look at the Athens stock exchange which back in February of this year was up around 1,668 and which close3d yesterdat at 739 and change.  Investments in Greece - on average by this measure have been whacked to less than half their value in about 8-months.

 

I keep trying to remind you that the same thing could happen here.  Lots of smart money (or so it thinks?) is placing bets on a huge rally in purchasing power of the US dollar as our market tanks - slower than the rest of the world. 

 

The good news is stock may come down to more reasonable levels, but it also means with a stronger dollar, the outlook for gold becomes bearish.  Deserves some serious thought.

 

The Investors.com website had an interesting reason why we're all so screwed (life savings at risk and so one):  "The Austerity Myth: Federal Spending Up 5% This Year."  Or, as Reuters reported, "U.S. budget gap widens, tops $1 trillion for third year."

 

Producer Prices

Press release of the day:

The Producer Price Index for finished goods rose 0.8 percent in September, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Finished goods prices were unchanged in August and increased 0.2 percent in July. At the earlier stages of processing, prices received by manufacturers of intermediate goods moved up 0.6 percent in September, and the crude goods index advanced 2.8 percent. On an unadjusted basis, prices for finished goods climbed 6.9 percent for the 12 months ended September 2011.

If you're a quick-draw calculator type, yes, this is getting up toward 10% inflation.  But wait!  Where's the adjustments to income?  Yes, this is where all that freshly minted M1 and M2 I've been screaming about begins to show up.

 

Riots in Italy and Etc...

Italy is making much press about how they are cracking down on anarchists who are getting close to the HPM predictions of breaking into the Vatican.

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Long - I mean extra harsh - prison terms for UK rioters are being upheld by the paradigm defender's court.  Damage claims have been filed by more than 4,000 now.

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Other end of the spectrum: Canada may take two years to sort out the Stanly Cup riots a while back.

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And Greece is ordering strikers back to work - fat lot of good it's likely to do, but whatever...

 

The "Second Patriot Act"?

Business Insider quoting senator Ron Wyden who says there really are two: One being the public version and the other being the lawyers got hold of it and choose to read it this way version...that's the one we don't get to see.

 

The NY Times is after full disclosure of how it's being used, but I'm not holding my breath.

 

Here Come the Terminators

How far into the realm of sci-fi c an the newly emergent super unmanned aerial vehicles (UAV's) go?   A reader offers this summary: "The military and researchers are currently working on fully autonomous airplanes that use facial-recognition software to identify human targets, communicate with other unmanned vehicles to double-check the identities of the targets, and then, upon receiving confirmation, fire missiles at them.....Didn't the Terminator movies start out like this?"

 

That would make me get up every morning and wonder..do I have an evil twin somewhere?

 

Attack on The Underground Economy?

Say, here's an interesting story about a new law in Louisiana which might impact people in that state who sell things on eBay.

 

Lost in Spaceport

Our Canadian news analyst has been looking at space tourism again...

You may have seen coverage of monday's Spaceport America dedication attended by the New Mexico governor Martinez and billionaire Sir Branson. Perhaps Sir Richard would have broached the matter of the 50% cut in the 2012 spaceport budget by the new governor. Still one would think there remains some cushion for Virgin Goup from the $280 million paid by Aabar Investments owned by the Emirate of Abu Dhabi for a 32% equity interest in Virgin Galactic.  (Aabar dot com, I can't get the link to append.) 

    

It appears difficult to locate "details" of the spaceport lease signed December 31, 2008. But if this 2007 report of the memorandum of understanding is a guide, taxpayers can look forward to a dividend cheque in a future century.

 

By the way, latina governor Martinez is making waves in her state against the ruling paradigm. Let's look for her to show up on the wider radar given time?  

Now sure why people get excited about going into space other than as cocktail party chit-chat.  Depending on which books you read, we've already had one uber-class exit from the Earth, after all.

 

Droughtland Chronicles

A reader over in Texas Aggieland notes the change in weather down here:

"Those of us with too little rain (14+ inches and praying) are now just about to get a freeze on Thursday morning. Yes that's right, we who had 100+ degree days a week or two ago are about to have a low in the 30's. I'm glad they switched to Climate Change from Global Warming. All we need is the right Volcano to pop off and it will be Global Cooling, hmm ... isn't Tambora, the volcano that brought the world a year without a summer in the 1800's about to blow again? Or maybe was that Krakatoa or a big one in Eastern Siberia? Or all of them?

No matter this note deals with some thing a little closer to your heart. Your new little used baby bird. Word is that the cold front is a true blue norther. Winds in excess of 50 mph, with dust storms in Lubbock and big enough to flip a small plane. The fun begins at 4 a.m.and you are at least in line for some rain."

Ealine and I didn't get much sleep last night as the thunderstorms moved through, dropping about an inch and a quarter of rain here in the outback.  Our magic carpet is sleeping quietly in the hangar, although on the backside of these storms, we may head up to Denver to buy a birthday dinner for one of Elaine's boys late this week...Still looking at 33 knots at 8,500 feet this morning - 38 MPH headwind which would make it a 9+ hour numb but festival up to Centennial in south Denver.  No thanks, we'll check winds later on in the week.

 

When we were coming back from Shawnee, OK Sunday, this is what the rivers up in North Texas looked like:  Dry.  Hell, the only thing missing was sand rails...it's been that bad down in in Sahara II.

 

Even with nearly an inch in places last night, Tyler, Texas, our nearest official weather station is showing 15.29 inches year to date, so making it to January under 20 inches might let us rename this area the Texas Desert and be technically correct.  San Antonio last year ad more than 36 inches of rain...this year they're at 12.93 inches, so this is gonna be a big desert when this gets officially recognized come year-end.

 

34º in Amarillo this morning and expecting a freeze in Denver tonight, so it looks like fall is falling and winter's coming.

 

Coping:  The Largest-Ever SOC...But....

In yesterday's column we presented a reader letter with some perceptions about the OWS movement (and other things) that rub other readers the wrong way.  For instance...

"While I can agree with much of Ms. Sylke's letter, I beg to differ with her assertion that the OWS movement is a "left-wing" founded and funded movement. Really?? Is that why they've made such a point to repeatedly state We Will Not Be Co-Opted - by anyone?  

It seemed to me she did exactly what you began your missive yesterday warning that many were doing "right under our noses" - defending the paradigm - as she pointed out the left-wing's many flaws and seemed to defend the right. I watched the same 20/20 special about the plight of the Pine Ridge Souix - and they're hardly being "taken care of" by the gov't. They have the third lowest poverty rate and highest mortality rate in the country, and I'd say it's probably more about the gov't having raped and plundered their culture than being "wards of the state". Yeah, they've been "taken care of", all right.

My A-political leanings are pretty libertarian, and OWS is not really my cup of tea, but my 22 year-old son, a recent college graduate, just spent a week in NYC marching with the masses. He is not a Communist, Socialist, or even Democrat - I don't know that there is a label for his ideals, and he doesn't want one. But he has been aching for this "revolution" since long before it began. I have a fondness for cryptic fortune cookie statements, and about six months ago I got one that I liked enough to post on my refrigerator:

"Catch on fire with enthusiasm and people will come for miles to watch you burn."

My son loved it, and commented on how timely it was then, as a young fruit vendor in Tunisia had recently lit himself on fire out of deep anger and frustration with the corrupt regime that allowed its police officers to steal his fruit and humiliate him, setting off a spark of discontent in the Arab world.

I had not been paying much attention up to that point, but I discovered he was following the events with great interest (and we are of western European descent - not Arabic). He told me it was coming to America soon. In college he spent a lot of his free time learning "prepper" type skills, and said he wanted to be a "community organizer", teaching communities how to live in a cooperative, self-sufficient manner. He's got a vision for a different paradigm, and I have a lot of respect for him, so I don't try to talk him out of his involvement with OWS. He says the point isn't to have a unified message or ideology - it's just to break free from the existing oppresive power structures. My mother called me though, to express her disapproval of his involvement with the movement. Yes, she's a Tea Partier, and I know she'll never understand his perspective because she's locked in her paradigm.

Dan Wheldon just died in a fiery crash, as a participant in the competitive paradigm on which capitalism is based. Was the possibility of winning the race really worth dying for? Yes, the competition paradigm's the best thing we've had going for a good while now, but what if there's something better?

I've always been intrigued by the Old Testament story of the Tower of Babel. The story relates that several generations after the Flood, the people of the earth were "of one language" and one mind, and they resolved to build a tower to "the heavens...lest we be scattered abroad upon the face of the earth." God came down to see what they did and said: "They are one people and have one language, and nothing will be withholden from them which they purpose to do." So God said, "Come, let us go down and confound their speech."

So the people were united, and wanting to cooperatively build this tower to help them stay united, but "God" apparently didn't like that idea, as if they continued in that mindset, there would be nothing they could not accomplish! You have to wonder why humanity has remained in such a divided, competitive state for so long? Has it been by design? And are we about to break free?

Thanks so much for being a forum for these discussions."

Another wrote (in part):

"...So when I read Grace Sylkes totally right-wing, conservative blog based thoughts on the OWS I was totally appalled that you gave her as much space as you did. As one of her generation, I am also appalled by her lack of empathy, lack of knowledge of the Tea Party movement's funders, and close extreme conservative ties (the Koch Brothers), and scurious attempts at claiming that George Soros funds the OWS (while his magazine may have provoked it's start - it was bound to happen soon anyway). OWS has continued to try to maintain it's independence of those well-off who could influence them unduly by their donations.

The attempts to demonize the Native Americans as lazy wards of the government...when they were put on these reservations, denied public schooling and regular health care, given inadequate housing, and denied the monies promised them for over 200 years on the sales and use of their lands by both this US government and corporate America.....her lack of knowledge and lack of empathy are truly those of the upper 1%, of those that see themselves as more deserving.

Her attempts to demonize the government run social programs is telling as well that she has totally drunk the koolaid of the far conservative right. Social Security and medicare are "social" programs that she will likely benefit from... but we all paid into them individually. I have seen what happens when the government stops funding homeless shelters, soup kitchens and food pantries... in the past couple of years those run by churches have FAILED to keep up BECAUSE THEIR BASE OF MIDDLE-CLASS CHURCH-GOING PEOPLE have stopped being capable of giving as much as they have in the past (debasement of the dollar, higher costs of food and energy, and health care)...and the churches are suffering as well... and this was caused by the GREED of those upper 1% to keep more $$ for themselves, cut the pay of everyone else, stopped pensions, and either ended corporate funded health care or made employees pay more, off-shore jobs with NAFTA, and now the Columbian/Korean and African plans.

But speaking of other countries, this one was interesting, too:

"Oh Good: And China just put their thumbs up in “Solidarity” with the OWS’ers. What kind of government do they run over there in china again? And don’t they have millions of their own frickin people living in absolute poverty??? Sorry man I am just spouting off. I am frustrated as hell as to where we are headed. It’s either China Style government or Herman Cain continuation of the Fed..."

Then, my wish that we could pick and choose best of clas is also being decried by readers as not such a hot idea:

George in response to Grace's letter you said: "look at "best of class ideas" and pick out all the good ones and assemble them into a working system"

.........and therein lies the problem. Who decides which are the "good ones"?

Divide and conquer..........indeed. There will always be a divider. It's called "human nature". That drive in us all to have just a little bit more than our neighbor. So, that we may feel comfort in our superior position.

No, we are not by nature a selfless entity; This human thing.

My email managed to eat the fine comments from an OWS Philadelphia participant (resend, please?) but here's my problem in a nutshell:  How do we come up with a way of sorting all this out?

 

I've got readers telling me...

"Just want to update you on the leadership of OWS that the MSM does not want anyone to know. The OWS leadership is driven by the Obama Admin and the unions according to insider info inside the beltway."

 But wait!  Where's the proof on this kind of claim?  Or, is this just the rabid right fear-mongering because they can't wrap their checkbooks around the future like they did when Dick Armey, et al, set up the original Tea Party organizing web sites in the closing hours of Bushdom?

 

I'd be tempted to show up at an OWS function (a few colleagues have) but I may just be too damn methodical.  I want to know - in advance and with 100 percent certainty what the pedigree of something I get involved in before I step into a group action.  This means what?

• The planks and platform sound fine, but at some point, all revolutionary/social movements get a "face" and I want to see a face otherwise it feels too much like a herd and I'm just too independent an old cuss and a poor joiner of much of anything.

• Second, I'd like there to be a kind of history site where we could look more into the foundations of the movement.  OK, if it's a spontaneous thing and hard to document - I get that part.  But if the republicorp is saying it's "an Obama thing" where's the evidence?  And if Soros really has a hand in, where's proof of that?

• Then I want to know where this all leads.  Here's the thing:  I am an outcome driven person.  I know that Wall Street and the commodities world is dragging its feet on financial reform.  And one OWS demonstration (I forget which one) has a brilliant sign:
  " It's wrong to create a mortgage-backed security filled with loans you know are going to fail so that you can sell it to a client who isn't aware that your sabotaged it by intentionally picking the misleadingly rated loans most likely to be defaulted upon..." 
  Damn eloquently put.  But now that we know these kinds of things, what do we do about it...in other words, what's the demonstration trying to achieve other than tell the corpgov types "Hey!  We're pissed off out here in heartland America..." which do doubt, we are.

I know my friends will call it bullshit or cowardice on my part to take such a hard "Show me!" attitude, but while I'm initially sympathetic, socioeconomic demonstrations are not  - for lack of a better term - "an operating system upgrade."

 

I've been watching the goings on in Egypt on Al Jazeera and what I see there is a country which actually got rid of a leader and is now ruled by a revolutionary council...but behind the scenes, a movement toward an army-run country as an outcome is a distinct reality.

 

So what are the deal points of OWS? 

• If we close down Wall Street all of our pensions, retirements, investments in new businesses and operating capital costs all become unknowable and in B-school we have drilled into our heads a firm understanding of risk.

• If we don't want to close down Wall Street, then What is the agenda item we could just jump to right now and make happen?  Implement the Dodd-Frank CFTC changes which are being dragged out by the PTB?  Have an audit of the Fed?  (all for that, but then what?).  Declare gold to be real money?  Limit the Fed's ability to print money?  No politician in office more than two terms?  Leadership by lottery?  Ban are lobbying and the lobbyistas who run America now?  (now we're getting somewhere!)  But the implications here for each of this possibilities is what?

America is a complex system and for every action, there's an equal and opposite reaction....and since we're talking America, there are also likely several new business models which the local sharps will set up to make money on!

 

Yes, there's a lot of bad mortgage paper...but what's the plan to get it all out in the open in a public, methodical non-system-crashing way?

 

Or, are people out demonstrating because they want to crash the system?  WTF?

 

If the true issue is redistribution of wealth, fine.  Put a 90% flat tax on all income over $1-million per year regardless of source.  Give all small businesses the same tax breaks and sweetheart deductions as transnational's get (I have a huge cost center in...er...the Caymans, don't I?) and I'll be in the street tomorrow.

 

But I don't see an agenda here.  I see lots of "We've had it up to here and we're pissed..."  (agree) but then what?

 

To my way of thinking, what's needed is data: collected and compiled by a trained sociologist and Bill Domhoff's book Who Rules America? Challenges to Corporate and Class Dominance ($42, Amazon, 6th edition) is at the top of my reading list now.  The reason? 

 

We're rolling into something I hadn't given a lot of head-space to:  Class warfare.  As one Amazon reviewer put it (in part):

"...You see, nobody likes to admit that there is a class system in the United States. Bill Domhoff shows that there clearly is a corporate community that propagates itself through joining exclusive clubs, expensive private schools, and through this, having extensive connections to other people in the upper class. It has been in place since before the civil war. Yes, that's right. The age of the robber barons. And if this isn't interesting enough, Domhoff shows how they influence public policy, and even public opinion. You'll find yourself thinking twice about many of the bills that are in the news. Because chances are, they are a product of the vicegrip that the corporate community has on our country. "

Once I have a better idea of the specific mechanics, then I'll go on to what would be the "right actions" to break up the congestion "at the top" where money has been coagulating in ever-increasing amounts.  Then...as a new consensus evolves - and armed with a little clearer vision of what's the shortest route from where we are, to where we want to go, I will be able to apply my efforts for positive change in the most appropriate way. 

 

If that means going to the street, then that's where I'll go.  Harder:  Going to local political meetings and exercising influence across the grass roots.

 

To my way of thinking, when a mass of people start off rebelling against something, they sure ought to have a roadmap in their back pocket to keep them on course. 

 

When I lived on my sailboat I never went anywhere without a crystal clear destination in mind - same thing with the airplane: The Destination is where my trip planning begins.  What is the OWS destination besides a generalized Reform Land?

 

Slogans like "Reform Wall Street" are really appealing - don't get me wrong.  More crooks per square foot than even lobbyland in Washington.  But how is the reform to occur?  What are the deal points?  Tell me those and I promise to be more interested.  Hell, even participatory.  But without mileposts and project benchmarks and a clear destination (something like no corporations of more than $100 million in size?  Tariffs on cheap foreign-made goods to fund unemployment comp here, a workable reindustrialization plan, etc, etc...)

 

I see this is a self-organizing collective...I'm good with that.  But where's its destination?  Key deal for me, I'm not a change for the sake of change kinda guy.  For now I'm hitting the books before hitting the bricks.  Have a lot of video to watch from the Coup Media site, too.

 

Where the SOC's think-tank and what is the route of this railroad?

 

A reader emailed in this suggestion:

"This is bipartisan in nature and is going to both Democrats and Republicans. We should all seriously consider helping with the change suggested below. This is something I support and I hope you will too. This is short so please read it all the way through and then forward at your discretion.

The 26th amendment (granting the right to vote for 18 year-olds) took only 3 months & 8 days to be ratified! Why? Simple! The people demanded it. That was in 1971...before computers, before e-mail, before cell phones, etc. Of the 27 amendments to the Constitution, seven (7) took 1 year or less to become the law of the land...all because of public pressure.

I'm asking each addressee to forward this email to a minimum of twenty people on their address list; in turn ask each of those to do likewise.

In three days, most people in The United States of America will have the message. This is one idea that really should be passed around.

Congressional Reform Act of 2011

1. No Tenure / No Pension. A Congressman collects a salary while in office and receives no pay when they are out of office. See #3 below.

2. Congress (past, present & future) participates in Social Security. All funds in the Congressional retirement fund move to the Social Security system immediately. All future funds flow into the Social Security system and Congress participates with the American people. It may not be used for any other purpose.

3. Congress can purchase their own retirement plan, just as all Americans do.

4. Congress will no longer vote themselves a pay raise. Congressional pay will rise by the lower of CPI or 3%.

5. Congress loses their current health care system and participates in the same health care system as the American people.

6. Congress must equally abide by all laws they impose on the American people.

7. All contracts with past and present Congressmen are void effective 1/1/12. The American people did not make this contract with Congressmen. Congressmen made all these contracts for themselves. Serving in Congress is an honor, not a career. The Founding Fathers envisioned citizen legislators, so ours should serve their term(s), then go home and back to work.

If each person contacts a minimum of twenty people then it will only take three days for most people (in the U.S. ) to receive the message. Maybe it is time.

THIS IS HOW YOU FIX CONGRESS!!!!!

Misses the ban on lobbying besides, they'd never allow it, which is why people are on the street...but where's the OWS equivalent?  And where's the MSM coverage of Ron Paul's very specific $1-trillion in cuts to the federal budget proposal?

 

May opt for something stronger than coffee this morning.

 

Larry's Latest

Yes, Little Larry has sent us more...

The following was developed as a mental age assessment by the School of Psychiatry at Harvard University ..

Take your time and see if you can read each line aloud without a mistake.

The average person over 45 years of age cannot do it!

1.This is this cat.

2. This is is cat.

3. This is how cat.

4. This is to cat.

5. This is keep cat.

6. This is an cat.

7. This is old cat.

8. This is fart cat.

9. This is busy cat.

10. This is for cat.

11. This is forty cat.

12. This is seconds cat.

Now go back and read the third word in each line from the top down.

Reader Confession

Hmmm...

"The other night I was out for dinner and after more than few drinks, and having had far too much wine, and knowing full well I was over the limit, I did something I have never done before.

I took a bus home. I arrived home safely and without incident, which was a real surprise, as I have never driven a bus before.

(rim shot)

 

Although Unemployment is Serious as a Heart Attack...

It helps to maintain our sense of humor, sometimes:

"A guy walked into the local un employment office to pick up his check He marched straight up to the counter and said, ' Hi. You know, I just HATE drawing welfare. I'd really rather have a job.'

The social worker behind the counter said, 'Your timing is excellent. We just got a job opening from a very wealthy old man who wants a Chauffeur and bodyguard for his beautiful daughter.

You'll have to drive around in his 2008 Mercedes-Benz CL, and he will supply all of your clothes. Because of the long hours, meals will be provided. You'll also be expected to escort the daughter on her overseas holiday trips.

This is rather awkward to say but you will also have as part of your job assignment to satisfy her sexual urges as the daughter is in her mid-20's and has a rather strong sex drive.

A two-bedroom loft type apartment with plasma TV, stereo, bar, etc. located above the garage will be designated for your sole use and the salary is $200,000 a year.'

The guy, just plain wide-eyed said, "You're bullshittin' me!

The social worker said, "Well, yeah, I am ...But you started it!"

(rim shot)

 

---

Monday October 17, 2011

Special Update

A Couple of Fed Numbers

There are two Federal Reserve reports to munch now:  First is the NY Fed's Empire Manufacturing report which was down 8.5, not much change from the previous month, but enough to sour the mood on Wall St where futures turned negative.

 

Then there was the Fed's own Industrial Capacity and Utilization report:

Industrial production increased 0.2 percent in September after having been unchanged in August. Previously, industrial production was reported to have stepped up 0.2 percent in August. For the third quarter as a whole, industrial production rose at an annual rate of 5.1 percent. Manufacturing output moved up 0.4 percent in September after having gained 0.3 percent in August. Production at mines advanced 0.8 percent in September, while the output of utilities decreased 1.8 percent. At 94.2 percent of its 2007 average, total industrial production for September was 3.2 percent above its year-earlier level. Capacity utilization for total industry edged up to 77.4 percent, a rate 1.7 percentage points above its level from a year earlier but 3.0 percentage points below its long-run (1972--2010) average.

Not sure where the statistical noise level is on this one, but 77.3 to 77.4% utilization of capacity does seem like a kind of thin number to base any large "Good times are here at last!" parties on...

 

Peoplenomics Subscriber Note:

The additional notes, explaining how the Second Depression eventually occurs once sales growth falters among big companies is finally available here after a long battle with a cranky server last night. I eventually win, it's just how long it takes, is all.  Refresh the Index/home page first... There are also a few air show pictures and some comments on Oklahoma City...which turned out to be a very interesting visit.

 

Calm Before the What?

Without so much as a cup of coffee - and a cranky server issue (see above) I already have a set of expectations for today:  Mid- day key reversal today, or tomorrow seems a reasonable thing to expect.  Asia, though, was partying like there was no tomorrow with the Hang Seng up 2% and the Nikkei in Japan up one and a half percent...so the "feel good" mood didn't wear off there, yet.  Europe was up, too:  3/4'ths of a percent in the UK, about flat in France and up maybe half a percent in Germany.

 

Still, the rally was going gangbuster through last Friday, but Robin Landry has rolled over to the short side - I never left it - and we shall see how the week develops.

 

Headlines like "EU given a week to fix crisis as G-20 warns of global threat" seem close enough, after all, linguistically, the 17th plus or minus three days seems to be the window, though such outlooks have been off a bit at times.  We shall sip coffee and wait for "the what?" to show up in due time.

---

OWS (Occupy Wall Street) has been growing leaps and bounds leading one reader to ask:

I haven't heard you say anything about it (you may have), but the OWS movement is a bona fide self organizing collective being born all over the place....so is that a humongous SOC bot hit??

Ummm...yes, I suppose so.  Not too many places on the net were talking about self-organizing collectives two years ago, were they?  More in the "Coping" section...

 

Expect an update about 9:30 this morning when new Industrial Production and Capacity numbers come from the Fed.

 

War in the Wings

The decision by UN secretary-general Ban Ki-moon to send the Iran plot to [purportedly] kill the Saudi prime minister on US soil is being sent to the UN Security Council.

 

The UN already has sanctions in place against Tehran, so how much more they are likely to do isn't clear.  But one thing is:  The US and Israel are just going through motions here:  The way I figure it, the world's policeman is going to go through the formality of a hearing before a judge before taking Iran our back and "roughing it up a bit" for acting badly - if it's their doing, or not.

 

Cynically, we note that economic stimuli may come in many forms.  With all the attention on OWS - not to mention the housing and inflation demonstrations in Israel which don't get much play in the US/MSM, we figure since "Everything's a business model" the logical outcome here would be a what?

 

Which only leaves one big question.  With Debka headlines reading "Big US airlift drill starts Monday..." is this really just a drill?

---

Iran is back with counter-claims and warnings, too.

 

Suicide Watch

A number of stories - like this one out of Chicago - are popping up around the country about the increase in suicide rates. A result of the terrible economy?

 

Another Anonymous Note

This one is interesting...a call for Bank Transfer Day on November 5th.

 

Just one note:  Anonymous' warning of a computer attack last Monday seems like a bust, so how serious to take this is a matter of personal conjecture.

 

He Who Who Pays the Piper?

Say, wonders our news analyst up in Canada:  Does China doing a $2.5 billion deal with South Africa has something to do with the Dalai Lama having a tough time getting travel documents?

 

Ma's Nature

A new weather system in the Atlantic is promising rain and winds for Central Florida.  Can someone send this along to the dry state of Texas, please?

---

Tsunami warning center piped up with a "No worries" note about a quake up in Alaska overnight...only a 4.5.  But we continue watching things out in the Canaries.

 

Passings: Tragedy in Vegas

Race car legend Dan Wheldon died in an Indy-style car wreck in Las Vegas Sunday.  the race was called and a five lap tribute run.

 

Coping:  Internalizing GlobalRev

Watching and listening to a little bit of mainstream news this weekend (not much, but some...) I got to thinking more and more about this whole notion of "paradigm defending" which is going on right under our noses.  As I dozed off listening to a (rabid right) radio program last night I could clearly hear how people who are not "getting it" have been roped into defending the paradigm with slogans like, as one call-in suggested "We're the freest people on the planet and the OWS crowd needs to get off Wall Street and go back to the library for more study..."

 

Well, let's think about this for a sec:

• We have the highest proportion of people behind bars of any Western country.

• Our emails (and more) is snooped and we all have a database which assesses our "risk"...

• We go through the most intrusive searches at airports...

• Our lawmakers shamelessly live a lifestyle that can't be afforded on their real incomes - hosted by corporate and special interests...

• And both political parties saddle up to the corporate (Wall Street) through and scam hundreds of billions in order to "win" elections.

To much of the world, the thin veil of this marketing charade is coming apart:  That's why we don't see much intelligent comment in American media:  If you're not part of the left-right charade, the powers-that-be would caste you as a "danger" "extremist," or some other made-up label to marginalize the movement, which is gaining ground as an "Occupy the Planet" movement.

 

As I have often said:  If we were to strip the current business at any cost paradigm of its financial power to buy influence, pretty soon there would be a massive global re-think of what being a human is all about.  But, since the checks get cut every day, the charade goes on and as sales flatten we can actually model in very simplistic terms (as is on the Peoplenomics site this morning) how declining rates of sales increase show up exactly at Joseph Tainter proposed.
 

"Which was what?"

 

Well, Tainter argued that as soon as the rate of return on additional expended effort falls below zero - in other words once sales drop to where even expanded sales results in a decline of profits, the world as we know it is done - stick a fork in it.

 

That happen when decisive leadership is not possible.  Here, hate to be the bearer of bad news, but the republicorps have as much blood on their hands for what's coming for the economy, as do the democorps.  They've been so obsessed with being "right" that they've demonstrated a great willingness to sacrifices the great values of America's founders to maintain their corporate-owned paradigm.

 

So it was with these thoughts churning around that I received this reader email:

"By now, it's quite clear that the "Occupy Wall Street" movement is On the Move and spreading across the nation and the planet! Not that Europe wasn't already poised for more demonstrations and just waiting for another reason to kick them into gear. After all, Europe is on the verge of collapse because of the socialist policies they have been practicing for years that have their economies bankrupt. But never mind that.

 

I'm remembering back in 2009, when there were numerous large and loud "Tea Party" marches, some of which were prior to the name even being coined. I'm also remembering when my daughter (a forty something) and I had a conversation in early 2010.  This was just after I had awakened, along with thousands of others, and went from being A-political to very politically aware. It was quite strange, even to me, that could happen. Me waking up in the morning and wanting to know what was going on politically was so foreign because up to that point, I could care less. It was as if a switch was thrown in me that went from off to full throttle. That full throttle switch is still ON two years later. 

 

The sea of faces that represent the "Tea Party" are dominated by mature and often senior countenances. If they occupy a park, they leave it in pristine condition and the smells of maryjane aren't wafting through the air of their discontent.

 

These older Americans have had children of their own (even their children have had children, which are the majority of the faces we see in the "Occupy Wall Street" movement). These grandparents have worked hard all of their lives to amass what retirement wealth they have and hope to be able to pass on to their children and grandchildren (which they see themselves losing as the economic crisis continues). They have fought in wars and seen numerous political administrations come and go from Kennedy to Obama. But above all, these grandparents love and respect their country and the Constitution of their county. They believe in American Exceptualism and the American Way, which embodies a strong belief in freedom, equality, self-reliance, trust in God and Capitalism.

 

We all still share a belief in freedom; and I'm hearing and connecting with the cry for freedom among the "Occupy Wall Street" youngsters.

 

But we're pretty divided around the subject of equality. The original intention of American equality is all about equal opportunity not social justice in which money is taken from one group to benefit another. But we've never been so divided by any subject than we are about the subject of Capitalism. Who would have thought that Capitalism could have become an issue of contention in the US? And since when did Capitalism become a dirty word?

 

The life-experienced "Tea Party" people also understand that a few US Corporations have gotten way too much power and are in bed, real cozy like, with Government.

 

The FDA is a prime example of this revolving door system where Corporate cronies go from their corporations directly into governmental agencies and then create laws that favor their companies. Michael Taylor, "the golden boy of Monsanto", was hired to be the second man in command at the FDA, for goodness sake (actually for Monsanto's sake).

 

A top man from Monsanto was chosen by our current President to be our "Food Safety Czar"! That's appalling; but it doesn't mean we throw the baby out with the bath water and scrap Capitalism.

 

Yes, Wall Street has been playing loose with OPM (other people's money) and turned the Stock Market into a vast, unregulated casino; but that's as much the fault of government as Wall Street itself. So aspects of capitalism have been misused; but the vast majority of our Capitalistic system works beautifully and has been working beautifully since the inception of our country, which, by the way, is at the top of the list of successful economies. 

 

Now, back to what's happening in the US right now:

 

By early 2010, because the group voice of the "Tea Party" was about restoring our Constitutional Rights and reducing the power of Government, it was seen as alien to the Liberal Progressive Movement, which is about the opposite-- Redistribution of Wealth (taking from the more well-off and giving to the poor), Socialized Medicine and more government regulations to do these things.

 

Last night, I watched a 20-20 segment called "Children of the Prairie". It was about the Sioux at Pine Ridge. They are a prime example of what happens to a once strong people who are now being "taken care of" by the government. They've lost a lot of self respect, dignity or self-reliance. There are no businesses (no capitalism) on the reservation. The people depend on the government for everything including their food and their housing. When a young Sioux boy was asked what he wanted most, he said he wanted a mall to be able to go to that would also provide jobs for his people.

 

The big deal at Pine Ridge right now is the one Subway restaurant that opened last year. The people in this tribe are dealing with run-away diabetes (thanks to Government food), run-away drug and alcohol abuse and staggering numbers of suicides. That's what happens when a once proud and totally self-reliant people become wards of the government.

 

Right now in the US, there is a movement happening. It's not out shouting in the streets. It's quiet and serious; and it's not populated by the grandkids. It's called the Preppers Movement. Over 4 million people are preparing for economic and/or natural disasters. These are mature people who see the writing on the wall and believe the US is about to enter an economic collapse beyond anything we've experienced before.

 

If that happens, the already economically bankrupt government will NOT be taking care of the people. The government will be in a struggle to survive. Preppers are about becoming completely self-reliant (opposite of being on welfare). They want to be self-reliant in the two most important areas--food and energy. Many Preppers are grandparents who are prepping in order to be able to save their grandchildren (including the me-generation that's out blasting capitalism in the streets). Basically, that's what our Food Forever™ Growing Systems are all about. Helping people accomplish the first goal--becoming food independent.

 

The Liberal Progressive Movement is socialist by its very nature; and socialism is anathema to these "Tea Party" grandparents, who were raised to understand the dangers to our freedom of government run socialism and communism. At the expense of being very simplistic, let me say socialists and communists believe that government can create an equal playing field where everyone lives in Utopia. So far, it hasn't worked anywhere in the world. What ends up being created is a dictatorial nightmare in which the people are subjugated to the government.

 

What can work is already happening naturally. There are CSR Corps (Corporate Social Responsibility) companies springing up everywhere.

 

In January of 2012, a new "B" Corp is coming into being in California. A "B" Corp puts environmental and social responsibility before profits. These corporations aren't coming out of government. They are self-creating entities that lead government rather than follow governmental dictates. For example, in California there had to be enough entrepreneurs who wanted to form "B" Corps to get that initiative on the ballot and passed so "B" Corps could come into being in that state.

 

Back to grandparents and grandkids: Little did the "Tea Party" grandparents realize that a soft revolution has been taking place for years in our high schools, colleges and universities where liberal "Progressive" professors are spouting the party line of socialism to the students. And since the mainstream media exemplified by MSN, CBS and CNN is in love with our current "Progressive" President, there were very few stories about the "Tea Party" Movement of 2009. In fact, there wasn't one picture of a "Tea Party" March in the 2009 Life Magazine recap.

 

So in early 2010, when I had that conversation with my daughter, she had no idea there had been a massive march on Washington on September 12th, 2009. Quite the opposite is taking place in regard to the "Occupy Wall Street" movement. My daughter knows about it. My granddaughter knows about it. The world knows about it because the mainstream media (with its very liberal bias they pretend does not exist) wants us to know about it.

 

So what's really happening?

 

The Grandparents and their Grandchildren are being pitted against each other. Fox News and the mainstream media are at odds with one another. The Republicans and Democrats are grid-locked in Washington and the "Tea Party" and the "Occupy Wall Street" movements are coming from two opposite sides of the street. We're seeing the inevitable result of 3D reality--a world of duality.

Of course the left needed to have it's street movement.  It's been predicted by many forecasters who know how this goes.

 

Just yesterday, a couple of right leaning commentators on Fox News commented about how "white" the "Occupy" gang is looking. So today, Al Sharpton has gotten involved and is rallying a crowd of black American faces into the mix to make sure no one accuses the "Occupy" marchers of being racist like the left incorrectly did (and still does) accuse the "Tea Party".

 

The "Occupy Wall Street" movement is the progressive left's very well organized and paid for counter to the "Tea Party". It is believed by many that George Soros, one of the richest people in the world, who has bragged about his ability to topple governments, is one of its hidden funders.

 

In fact, though, the original call to 'Occupy Wall Street' came from the magazine, AdBusters, an 'anti-consumerist' publication financed by, among other sources, the Soros-funded Tides Foundation. Other Soros-backed outfits promoting big government--some with myriad ties to the Obama administration--are also now publicly driving the occupation campaign. MoveOn.org, for instance, has received millions of dollars from the billionaire banker. And now, the group is urging its supporters to join the "Occupy Wall Street" movement as well." (www.thenewamerican.com)

 

The Union bosses are steering their workers into the fray and SEIU has also joined the movement. So the mostly young look will be getting some maturity (especially on the weekends) as these organizations move in. But in the end, it is plain to see that the "Occupy Wall Street" movement and the "Tea Party" are exact opposites. 

 

Behind it all, are the ultimate controllers and string-pullers, like George Soros, who wants "World Governance, a Global Currency and an orderly decline of the dollar". He is one of the uber rich who really control the money, the power and the people. We all need to wake up and realize we are falling for the oldest ploy of all--Divide and Conquer. Don't let that happen. The real controllers want to take down the US so we will accept a World Government that they control from top to bottom--a world Government where there is no freedom of speech, no right to peacefully assemble and no right to vote. Then, how Free will we be?

 

We all need to see the good ideas being espoused by both of these generationally diverse groups shouting in the streets. Both sides have legitimate complaints. We need to get them together and create our new, strong, independent and FREE America from that consensus.

 

Respectfully Submitted,

Grace Sylke

Aquaponics USA

I think that's a reasonable outlook, but there are lots of problems getting to the point where we can - as humans - look at "best of class ideas" and pick out all the good ones and assemble them into a working system.  B Corps sound like an improvement on A Corps - so much so that I'll go read up on them even if they are not available yet, they would still fill much of the outlook about a kind of "socially responsible Capitalism" which Jack Lessinger writes about in his book Transformation Fall of the Consumer Economy Rise of the Responsible Capitalist (used, Amazon, about $36) or directly from the author's website for $20 plus shipping.

 

I told you about "Transformation" when it first came out...and I recommended it back in January of 2009 yet I expect no more than a handful of people have actually taken the time to read the book and envision the kind of systemic changes that will have to occur in order for the books outcomes to be realized.

 

In a way, it's like the main conversation I had with Robin Landry as we were driving to Oklahoma City on Saturday afternoon.  I'd asked him earlier while we were going over charts and outlooks, "What's the one single decision we can make today - and invest in - which will do as well as our single decisions of 2001 (buy gold at $275) or 2005 (buy silver at $7)?"

 

We think its either going to be food or energy.  Part of me leans toward energy since the Middle East seems inherently unstable, but Landry leans more toward food...and we could both be right.

 

That's where we are as a country right now...it's like having people form up into groups (persuasion blocks) rather than sitting back for a good spell and actually thinking through all the entrees available at the smorgasbord of Life.

 

As a result, we are seeing what amount to "food fights" when in fact there are already some great signposted out there, yet people have gotten so "sucked in" to old-school buzz/fear words like socialism and communism, that the objective review of a wide-ranging alternative series of futures never takes place...it all dissolves into a shouting match with more labels than substance.

 

In the end?  It's all a waste of frigging time.  Although the label-brandishers are useful in one sense:  To the degree people use labels they reveal which part of the old paradigm they're defending, regardless of who writes the check.  And since it becomes apparent to the aware observer, I don't engage in protests and such since it's a waste of time.

 

The easier strategy is get an idea where all this is heading (responsible capitalism if Lessinger is right, but after a bad-ass depression) and using the "best of class" outlooks, plan for that kind of future and hope is doesn't get removed from the table by a series of blinding flashes.

 

Much to think about, but on my agenda this week is a reread of Transformation since neither the arrival of widespread anarchy on the one hand, nor a jackbooted security state on the other, is particularly acceptable, except, of course to the PTB who are trying their damndest to keep humans for doing what humans are meant to do:

 

Continuously improve.

---

I don't know what your study skills are like, but I don't do well with a lot of noise and distraction about.  So if I occasionally miss a celeb story, or so such, consider that paying tuition for self-study, introspection and carefully weighing the future.

 

Occupy World is getting legs and an emerging music is coming along with it...

May drive you crazy,

But don't let it phase you...

No way!

Still, it's a long way from Hope to a new destination.  But we do see where this road goes, do we not?

 

Belt, Suspenders and Airplanes

There's a reason why even though we have an old airplane, we have it equipped with serious electronics of the latest vintage.  And, for the first time on our way back from Oklahoma Sunday morning, we actually got some value out of our Zaon PCAS MRX-A Portable Collision Avoidance (PCAS) (Amazon $449).

 

This is a box that reads our encoding mode C transponder and then "listens" for other units in the vicinity.  The radio conversation where it paid off went like this:

"Musketeer 12 Lima traffic 10 miles your 11 o'clock and closing at 4,900 - radar contact only, not participating."

 

"12-Lima looking..."   We got our eyes on...and started a super-watch in the warning direction...

 

"Musketeer 12 Lima, traffic now 5 miles, courses converge..."

 

"Musketeer 12 Lima  new heading 270 degrees to avoid."  The PCAS went off...a moment later, Elaine said " Got him, off the left wing..." and by the time I turned my head, all I saw was a WW-II vintage glass/sliding canopy figthter plane zipping northbound.

 

"Musketeer 12 Lima - have our traffic in sight, returning to heading..."

 

"Musketeer 12 Lima did you get an details on him?"

 

"No, sorry, he was a fast mover half mile east, looked like a WW-II warbird though...single engine, low wing and fast."

This week we'll be putting in our latest airplane update, a new portable ADS-B receiver which will not only show NEXRAD weather live as an overlay on the GPS, but it will show traffic, too.

 

The cretin driving the warbird was at the wrong altitude (4,900 feet northwest bound when he should have been down at 4,500) and not listening to center for ATC (although we were outside the Dallas mandatory control area) there was little danger: 

 

Flying visual rules with flight following is more work, but ATC had our back.  The portable collision avoidance unit gave us altitude of the inbound, which was the other insurance policy.  With the additional ADS-B, I figure we'll be belt, suspenders, and elastic waistband before the week's out.

 

People don't fix brakes on cars religiously, or keep up all kinds of personal equipment.  Yet a little more headwork and a few dollars invested in safety is often the best insurance policy there is.

---

Burned about the same gas as the car would.  Only thing is, instead of 6½ hours of driving it was 2½...and except for this one bit of traffic, a really empty sky with some fine folks keeping order up there from ATC.

 

The Monday Morsel

This was an interesting one:

"A Sufi master was walking alone one night between villages when he heard the sound of approaching horsemen. thinking it was possibly bandits on the lonely stretch of road that he was walking, he quickly headed into an abandoned cemetery on the side of the road. the horsemen in actuality were part of the royal guard that was riding ahead to assure safe passage for the royalty headed that way. and as things work, they spotted the lone man entering the cemetery and pursued him. quickly catching up with him and surrounding him, one of the officers recognized the master and said, "Master, what are you doing out here alone this time of night?" to which the master replied, "It may seem strange, but i am here because you are here, and you are here because i am here."

And I am here because you are here, and you are here because I am here, and so goes the thread...

 

And here's one more to start the week:

A preacher-type decided that a visual demonstration would add emphasis to his Sunday sermon.

Four worms were placed into four separate jars.

One worm was put into a container of alcohol.

The second worm was put into a container of cigarette smoke.

The third worm was put into a container of chocolate syrup.

A fourth worm was put into a container of good, clean soil.

At the conclusion of the sermon, the Minister reported the following results:

The first worm in alcohol ... Dead.

The second worm in cigarette smoke ... Dead.

The third worm in chocolate syrup ... Dead.

The fourth worm in good, clean soil ... Alive .

So the preacher asked the congregation, "What did you learn from this demonstration?"

An elderly woman was sitting in the back and raised her hand and said,

"As long as you drink, smoke, and eat chocolate, you won't have worms!"

Gimme an Amen brothers and sisters.  Now drink up that last cup - it's time to go and do something even if it's wrong.