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Urban Survival...
06/08/09
What separates the concept of 'recession' from 'depression.' In a recession, as lagging sectors of the economy start to feel real pain, the leading sectors of the economy are already pulling out and the turn is in.
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Tension Building Behind Markets
A good report in the NY Times this morning about how tense things are among president Obama's economic advisors is worth study. One gets the idea that the happy-talk about the recovery may be a bit over-done and that despite the change-out in the Dow this morning we still have a lot of structural issues to face yet, including the possibility of a commercial real estate collapse and so forth as we move along into summer.
For one thing, the unemployment rate is running ahead of expectations of most (except us, eh? Wink, wink, nudge, nudge...) and the much-touted 'things are looking better mantra' that became apparent in the www.halfpasthuman.com linguistics about 9-months back is here. The rhyme off "Good Times are Just ahead."
You can see it in a chart that I did for Peoplenomics subscribers this weekend, too. The current circumstance is looking more and more like 1929's Great Depression, when compared with the market breaks in 1919, 1987, 2000 and now. Not exactly confidence inspiring.
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Tomorrow, wholesale inventories are expected to be down about 1%, anything more in the way of inventory building would be a negative for the market.. Wednesday brings the balance of trade figures, but since the latest figures for the Port of LA are down 15% year-on-year, while outbound is only down 4.23%, anyone with 31-cents worth of brains would expect the trade gap to narrow.
If you like reading light fiction, you might tune in for the Treasury Budget on Wednesday afternoon.
Retail sales and business inventories come out Thursday, which is not exactly a nail-biter. If you want one of those, wait for the University of Michigan's consumer sentiment report on Friday. Best guess is that it will be about 70.5 from it's previous 68.7, but a downside surprise can't be ruled out. Just depends on how many gunpoint-vacation auto workers showed up in their polling.
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Seems to me like the rally may continue into next week - which is options week - and perhaps a bit of selling by late in the month as portfolio managers try to book some profits before repositioning into early July. If you want to play the last of the rally up to the 9,600-9,700 range, that might be a decent game plan to ponder.
Not that this is financial advice. Although I've suggested before that since everyone except us seems to have gotten all of this spectacularly wrong, your investment advice money might be better spent on I-Ching sticks, a set of rune stones, or an ayahuasca vacation.
At least then, you'll know what kind of trip you're on. Wall Street is doing a fine cross between Prozac withdrawal and Alzheimer's, best I can...er...where were we? Oh yeah...just...
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06/09/09
Looking Ahead: The "Counterfeit Gold" Problem
We arrive now at a curious little eddy in the flow of time where according to the linguistics out of www.halfpasthuman.com, we should be seeing lots of action/headlines and awareness about the 'counterfeit gold' meme.
This is potentially and important one because there are several ways the linguistics can 'fill', but the main concept is fake gold. And there's plenty of that popping. A story in the Toronto Star now reveals that the 'missing gold' in Canada's Mint could be in the tens of millions of dollars worth.
Also missing is silver, platinum, and palladium. So we will find out when the audit is released in two weeks or so. However, I'm not sure that timeline will hold since when there's this kind of discrepancy who knows what kind of you-know-what-covering will be going on.
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Meantime, the trading price of gold has failed to continue its upside breakout that many people were expecting. One report says a move down to $933.50 may be in the works, but for most people who are adding a bit of metal to their portfolios, it may or may not matter, since gold has been a long-term hedge against inflation/excess money printing and as such is more a buy & hold rather than trading adventure.
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Around June 21, the new $10/slice weekly predictive linguistics reports will become available from HalfPastHuman, so it ought to be interesting to see how the 'fit' on the counterfeit gold is coming along. However, just as a 'head's up' independently, both Cliff and I purchased not one but two of those inexpensive digital scales off eBay to double-check the weight and then measure the size of a gold coin should either of us come to own one. We both already have calipers... After all, no point in knowing the future if it can't be turned into something actionable, right?
Sound Money Concerns
As we move into the balance of the summer, where linguistically we have the derivative meltdown second dance beginning, I'm expecting a boat load of stories that will seem to confuse the issue of 'what is money' and 'what holds value'.
For example, we read today how "China as fears on US Debt, dollar: Lawmaker" where we read how China would like to diversify somewhere out of dollars.
Consider the following hypothetical situation which could arise shortly and ask yourself "How would I allocate assets in this kind of environment?
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China begins to back away from dollars in a serious way. As does Europe and other regions. This forces...
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The Fed to buy more Treasuries which in turn...
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Spurs an increase in interest rates because of more paper chasing the same economy.
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Gold (and silver) however, come under a cloud as reports about 'counterfeit' or just plain outright 'missing' reserves start to appear, which would kick the knees out from under the role of the metals as a sort of 'last resort' or benchmark monetary unit, at least insofar as the small investors who buy coins and small bars are concerned.
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The ripple here could be that gold coin prices could be attacked - trapping people into paper denominated assets. Safety in stocks? Not hardly...
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Simultaneously, the stock market would be under pressure, too, since the arrival of the second leg down (commercial real estate) ought to be heading down around then.
That's the kind of problem that keeps me up at night. I remember the 'good old days' when the investment problem used to be picking the asset class with the greatest upside potential.
That seems to have changed, however, to where the largest problem for most investors is better stated as "Pick the asset class which has fewest booby traps and which has the greatest intrinsic value."
Intrinsic value of things like gold coins, only works as long as there is full faith in gold coins being of a certain quality. Same goes for silver.
Oh sure, the acquisition of something like producing ag land (trees and goats in our case) may be one way to hedge, but the problem is that it doesn't meet two of the key qualities that make something 'money'. It's not easily transportable nor is it easily divisible.
Prepared people have been grappling with this one for years. The metals being easily transportable, divisible, and having a great historical track record, would seem to be an obvious target of the PTB in trying to lock people into playing the paper assets game. At the same time, slowly increasing regulation of independent food producers, through agendas like the National Animal Identification Act and de facto support of chemical farming, again all serve to reduce people's options and force them to play the game.
One upon a time, America was a place where individual freedoms and Liberties stood as a beacon of hope for peaceful hard working people who wanted to get ahead through their own efforts. Seeing this, a group which I simply label the PowersThatBe have installed themselves as a kind of protection racket. You can have your freedoms, but not all of it...there's tribute required.
And the amount of tribute seems to grow over time. Whether it's through the obvious debasement of the currency - which has lots over 95% of its purchasing power since 1913, or whether it's the promise of higher taxes to come as government's here to 'help' by nationalizing auto companies, and insurance company, or many of the nation's banks.
I notice reporting only - not so much criticism - as Hugo "Chavez moves to nationalize Venezuela chemical plants." Know why this is not a drum-beating event? The PTB and their lackeys in the MSM know darned good and well that too much criticism of Chavez might get him out on a speaking tour where he'd explain how his seizure of chemical companies would be a trifling compared to an AIG bailout - something that it seems to me the power structure would not be too fond of having people figure out.
Not that it doesn't leak out around the edges anyway as former republicorp veep runner Sarah Plain is saying to voters "Told you so!" It's just that she's still nominally in the fold, and besides, a bit of criticism is tolerated, just to keep up appearances that we're not living in a controlled society.
Well, fine. We'll just keep spreading our bets here and there, hoping to figure out how the House has rigged the tables in this Casino in their favor and play along with that while eyeing the calendar looking for the next primary election to come along, which is where the paradigm has to shift, because it's in the primaries where the ruling paradigm maintains its grasp by suppressing third parties.
Good Fiction
Well, what's this? The Wall Street Journal's got a good op-ed piece this morning about how "The media fall for phony 'jobs' claims".
Why, that sounds remarkably familiar. Wonder where we've heard that mantra before?
Repackaged
And there's an AP story out headline "Obama repackages stimulus plans with old promises."
'Year Without Summer'
Not only are some parts of the US talking about a 'year without summer', but there's an AccuWeather story you have to read about the "Recent Upswing in Lightning." Does this mean the weather situation is 'static'? (Don't worry, this horribly lame attempt at a high tech pun will make sense to some...just keep the coffee hot and keep on reading - the puns get worse from here..)
Doesn't Ad Up
Oh sure, we've seen those stories about how ad sales are down big-time in various newspapers. But, as USA Today reports "Reality bites Internet as 1Q ad sales fall 5%". Not unexpected though because we have what?
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Boston Globe workers have rejected proposed wage/benefit cuts.
Debt-Powered Economy
I forgot to mention last week's Consumer Debt report - mislabeled by the Fed as the Consumer Credit report so it won't be so apparent that it's the how far you're in hock report. Consumer debt total is declining at an annual rate of 7.4% as people slow their spending on junk products and save for necessities only - like food and a roof. But the real key here is revolving debt (things like credit cards) where the annual rate is down 11% - a mere 0.2% uptick from the previous month.
Want a simple way to see if the economy is recovering? Look for an improvement in consumer debt. But be careful as you look, since if the consumer debt is going up only as a function of inflation, that's illusory.
No California Welfare?
Could this be a Diaspora driver? "California contemplates ultimate reform - no welfare." If they do, here's a simple prediction: They will need more crime fighting money...
You Know You're In Trouble When...
"World Bank boss sees China spurring global recovery."
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http://globalresearch.ca/index.php?context=va&aid=13872
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