03/25/09 thoughts

Courtesy of BH

"This is just awsome. Even the EU is calling Obama out for what he is.

So long "shining city on a hill", hello Cabrini Green Section 8 Projects.

EU presidency: US economic plans 'a way to hell'

European Union president, calls US economic measures 'a way to hell'

STRASBOURG, France (AP) -- A top European Union politician on Wednesday slammed U.S. plans to spend its way out of recession as "a way to hell."

Czech Prime Minister Mirek Topolanek, whose country currently holds the EU presidency, told the European Parliament that President Barack Obama's massive stimulus package and banking bailout "will undermine the stability of the global financial market."

A day after his government collapsed because of a parliamentary vote of no-confidence, Topolanek took the EU presidency on a collision course with Washington over how to deal with the global economic recession.

Most European leaders favor tighter financial regulation, while the U.S. has been pushing for larger economic stimulus plans.

Topolanek's comments are the strongest criticism so far from a European leader as the 27-nation bloc bristles from recent U.S. criticism that it is not spending enough to stimulate demand.

They also pave the way for a stormy summit next week in London between leaders of the Group of 20 industrialized countries.

The host of the summit, British Prime Minister Gordon Brown, praised Obama on Tuesday for his willingness to work with Europe on reforming the global economy in the run-up to the G-20 summit.

The United States plans to spend heavily to try and lift its economy out of recession with a $787 billion economic stimulus plan of tax rebates, health and welfare benefits, as well as extra energy and infrastructure spending.

To encourage banks to lend again, the government will also pump $1 trillion into the financial system by buying up treasury bonds and mortgage securities in an effort to clear some of the "toxic assets" -- devalued and untradeable assets -- from banks' balance sheets.

Topolanek bluntly said that "the United States did not take the right path.".

He slammed the U.S.' widening budget deficit and protectionist trade measures -- such as the "Buy America" -- and said that "all of these steps, these combinations and permanency is the way to hell."

"We need to read the history books and the lessons of history and the biggest success of the (EU) is the refusal to go this way," he said.

"Americans will need liquidity to finance all their measures and they will balance this with the sale of their bonds but this will undermine the stability of the global financial market," said Topolanek.

Obama insisted Tuesday that his massive budget proposal is moving the nation down the right path and will help the ailing economy grow again. "This budget is inseparable from this recovery," he said, "because it is what lays the foundation for a secure and lasting prosperity."

Obama also claimed early progress in his aggressive campaign to lead the United States out of its worst economic crisis in 70 years and declared that despite obstacles ahead, the U.S. is "moving in the right direction."

AP Business Writer Aoife White in Brussels contributed to this report"

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Good Article on Obama's Presidency ...and I really like the response below.

When you've brought to economy to its knees, it can only go back up. Even if Obama didn't do anything, things would have still turned around.

We were told that we had to pass the stimulus bill over night or the economy would fail in a matter of days. Yet, once the bill was passed - nothing happened. He promised to pass all bills in the "light of day". He did exactly the opposite.

Seems like Obama's policy is this - since the economy is suffering, let's spend money on everything else that's not.

["I suspect some of those Republican critics have a short memory," Obama said, in response to a question about his deficit-busting budget. "As I recall I'm inheriting a $1.3 trillion annual deficit from them."]

Questions:
+ Who controlled the congress during Bush's second term?
Answer: The Democratic Party

+ Who CHOSE to run for the presidency?
Answer: Obama

+ Who voted Bush in the office TWICE?
Answer: The American People?

+ Who found a loop-hole to give them selves a pay raise without anyone watching?
+ Answer: Congress (Democratic Party)

+ What types of states are failing more than others?
Answer: Those managed by Democrats

Additionally, Who are is this "them" that Obama speaks of? One day its all about "let's work together" and the next they "they are to blame". So if the system works for him, all is well. And when the system doesn't work for him, blame-blame-blame.

We know that we can NEVER expect Obama to fully serve as a president who will stop pushing blame on others and step up to the plate. The only plate he has ever stepped up to are the dinner plates at the White House parties (while the market tumbles week after week).

I love Obama's move to have Joe watch the stimulus money. Joe has no future political aspirations - so should there be any issues on misspending the money, Obama will hang Joe out to dry

Note to Joe: When Obama leaves you holding the Stimulus Bag - consider writing a book as part of your retirement strategy.

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Urban Survival...

Not that I'm the only skeptic that the right medicine has been administered yet to cure-what-ails-us: Paul Tharp's got a good story in the NY Post this morning headlined "Nobel Laureates trash plan for toxic assets. One key quote (which mirrors what I've been telling you for who long?) goes like so:

"Three Nobel winners Edward Prescott, president of the Federal Reserve Bank in Minneapolis, and economics Professors Vernon Smith and James Buchanan stood by their joint statement months ago that Congress was playing in fantasyland with the huge bailout.

They call the rescue effort "a triumph of hope over experience to believe that more government will help the United States today."

So with all this going on, the biggest story of the day may turn out to be the start of the Fed coming into the market today to start purchasing of Treasuries to unfreeze the credit mess. As I've warned before, this a a 'snake-swallows-its-own-tail' kind of thing. Once started down that path in previous economies, the snake starts to get a real appetite going.

Am I the only financial reporter who's got a $105-billion in expired Zimbabwe dollars taped on my office wall to remind me how hungry that kind of snake gets?

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Things are bad when...

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Here's a world-changer for you: The U.S. Navy has a research team which has experimental confirmed cold fusion according to an article this week in EE Times. This is the best article I could find on it and it has the diagram of the experimental container, too.

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Feeling Better

Here: You judge the quip and the dead:

"I'm getting the feeling that these people are falsely comforted by the fact that somehow by having the word trillion at their disposal means that the concept of a trillion has meaning when in fact they might just as well be speaking of infinity."

Shhh!!! You'll be giving Robert Mugabe and the band of Washington socialist wannabe's ideas: "One-infinity, two-infinites, three-infinities....."

Simple choice: Hard government & soft money, or hard money & soft government... easy, huh?

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One more to ponder: "An armed society is a polite society" notes a ham radio friend. Yup.

03/24/09 thoughts

No original thoughts this afternoon. I am tired.

Urban Survival...

'Death of the Dollar' Department

The 'death of the dollar' is something which has been kicking around predictive linguistic modelspace up at www.halfpasthuman.com for several years now. And since we've got a working Theorem that 'the further in advance we see something in modelspace, the larger the impact of the event seems to be' and since we've had a couple of years of 'November' references, it seems that by the end of this year, the Barak Obama is likely to be facing one of the worst crisis ever to confront a President. Not only will he be facing a country full of social unrest in the wake of the "summer of hell/200', but we read now today how "China calls for a new reserve currency" which will be a financial nightmare of the worst possible sort.

As we've been expecting, this will r4eally 'get traction' in May, but already the Russians have been making similar noises and Vlad Putin will be putting on a pitch at the April G20 meetings.

True, yesterday's rally in the stock market was impressive as the Washington Post headlined it "Stocks Soar Most Since November On Toxic Asset Plan, Rise in Home Sales." but already weighing whether our long awaited springs rally might finally be arriving, or, a bit more darkly, if this is just the professionals having a fine 'running of the shorts' so they won't be hurt when a final bottom carved out in the next few weeks.

Not that it matters. If the kind of inflation that bailout seems to infer becomes real, gold's fall over the past couple of days may become the 'last train out'. Or, will we go back down to the $700 range one more time? Careful judgment is required and there's no 'one-size-fits-all' answer.

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There are times in the past that I've used commodity price movement for clues and sure enough, those Capitalist Tools over at Forbes are reporting that "Key commodities jump on US plan to clean up banks." Sooner, or later, those are going to show up in the grocery stores.

In addition to food commodities, the headlines also crossed this morning that the "OPEC basket price continues to gain, reches USF 50.18 pb" and with oil hitting those per barrel levels, the input costs for ag are bound to be heading up, too. Time to do more stocking up, if you're a farmer.

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Longage of Humans, Redux

Jay Hanson, who performed a huge public service with his legendary http://dieoff.org/ site, was the first writer I encountered to use the term 'longage' of something. It's the opposite or a 'shortage.'

Longages of anything cause interesting effects, not the least of which is the financial mess humanity finds itself in today. It's pretty obvious that the ideal thing to do would be to crunch down the number of humans to perhaps 5% of what it is today and start over with a little higher consciousness about how things develop. naturally, the PowersThatBe have figured this out, but lots of others have arrived at the same thoughtstination.

One of Gordo (the gold and mint seller) Brown's green advisors, Jonathon Porritt says that in order to achieve a sustainable society, the UK must cut its population in half.

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Of course, that begs the question of the selection process by which this all happens. I'm partial to environmental collapse because that would be a pretty decent/impartial way to sort out who's got hard work and survival skills, but I'm sure government will have some other plan in time.

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Making the Rounds

A reader sends in this one:

"Members of Congress should be compelled to wear uniforms like NASCAR drivers, so we can identify their corporate sponsors."

Of course, it would never work. The print would be too fine to read.

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Coping: Silently Self-Profiling -- YOU

A couple of readers have asked me lately "Is there some stuff on your mind that's bothering you? You sound kinda bleak lately." Well, yeah, kinda sorta maybe. Let me share just one of those things that's been bothering me; perhaps you'll understand. Here's what's going on:

It starts off simply enough...you get an email from a friend and it says something like: "OMG You have to see this video about [fill in the blank]. Because you're very interested in [fill in the blank] as a topic, you click over to the link to see what's a highly charged video about [fill in the blank] and the video urges you to 'tell all your friends about this video and send them the link...'.

If you're not computer/military/PowersThatBe savvy, you're likely to pass on the link without giving it a second thought. But you should give it some serious thought whenever you follow links because when you follow links you may be self-profiling yourself to the government.

Amazing? Well, no, pretty simple programming exercise, really. And, if you had the 'summer of hell/2009' coming up due to all kinds of social stresses and the breakdown of the social contract, right about now if you were trying to defend the existing social paradigm, you'd be doing the same thing, too.

It's called 'memeering' and according to our predictive linguistics friends at www.halfpasthuman.com the program is already underway. Toward what end? Well, what's a low-cost way to find out who is what kind of potential threat to your paradigm? I'll show you how it works, step-by-step so you 'get it'.

• It begins with a government setting up a web site with an emotionally charged video about something like 'black powder' or 'inter-racial relations'.

• Then a series of postings is put out on the net in places where such a video would likely get a lot of attention. Say, in a 'black powder' kind of video they will post something emotionally compelling to a bunch of gun web sites and discussion groups.

• Next, when someone goes to the web site involved, it's a simple matter for the site to log your internet protocol address. Skeptical? go to www.whatismyip.com and your 'net address comes up.

Congratulations! You have just gotten yourself into a government database of people who have an 'interest in black powder'. Since you probably don't spend as much 'head space' as we do, thinking about such computer applications, what this looks like in database set theory can be visualized this way:

So far, so good. Now, let's further suppose that want to narrow down the kind of people that would also be interested in anti-establishment direct action. Next step? Another video (or web site) only this time, we are going to use a topic like, oh, say "Startling New WTO video!" Such that folks going to this second vid site will likely include some people who also have an interest in black powder, like so:

Now, it becomes a simple matter to say "Hey! See that IP Address 12.191.191.5? That shows up in BOTH groups. This intersection between sets in database operations is the vesica pisces.

But now, let's take it one step further, because so far, it's still far too many people to round up and throw in special 'camps' should the country get into a period of social unrest; say over a 'summer of hell/2009' period. So we will put up another site, only this time it might be something like "List of upcoming "Tea Party" events. Like so:

So, you see, it's all very simple, once you get the basis concept down: How will you be self-selecting whether you get judged a 'threat' or not is a simple matter of keeping track of which links you followed to get where.

More important? There's also a simple way to build 'social networks' this way because not only is your IP address logged, but so is the time of your visit. So as this kind of data snooping continues - as long as lots of folks don't understand it, when you forward one of these sites, you are then in effect telling whatever government "Hey, I am linked to Joe your bother-in-law over here"...and pretty quick not only do they know who has an interest in guns, WTO demonstrations, and upcoming Tea Party events, but they also know that when your IP address shows up, in say half a dozen such exercises, that "Joe your brother-in-law" shows up within a day or two, and he's already on their 'threats to society' list because he actually carried a sign and was ID'ed at some other kind of event...maybe an environmentalist affair of some kind. And they get all Joe your brother-in-laws connections, too, until pretty quick you get a map in a social networking application that might look like this:

So here's my bottom line: When you do any kind of social networking, be extremely careful with whom you associate. Or, in the case of Cliff and me, simply don't follow unknown links. Nothing wrong with YouTube and Google video, but even there, the IP snooping that goes on at the phone company level is pretty awesome,; which is what the privacy people get all worked up about.

Why am I bringing this up today? Because the web bot project has been running across more of these kinds of memeering operations lately which means one of these days, one or more of them will show up in your email. And, as they do, no matter how tempting it may seem to follow this emotionally highly-charged link just remember that in the process you are self-sorting yourself into some kind of a government profile as part of 'total information awareness' programs designed to enable preemptions, national security rating, and in a worst of all cases scenario, your round-up priority if you've identified yourself as a 'risk' to the existing paradigm.

Although it may be too late to do anything about it, if you've already gotten such emails and followed them. But WTF, its easier to explain it now than waiting till the October-November period when there is a small, but non-zero, chance some rounding up will be done.

Oh...one more thing: If you think you can 'beat the system' by using an open access proxy server somewhere? Are you kidding? Those would be almost the very first people to round up because they're smart enough to 'get it' and therefore are the most threatening there are to the existing paradigm, are you kidding?

Yes, this is exactly what the electronic freedom fighters are all about, but that battle's been over for a long time. Sorry. You lost. Oh sure, something like the Google Street View controversy seems like the right fight, but are you kidding? Hell no, it's a minor distraction to keep the public off the real deal memeering.

03/21/09 thoughts

Urban Survival...

As of Friday's close of the financial markets, things were back to about evenly debated; whether we were at last in a rally which 'had legs', or whether the market would decline from here. I called my friend Robin Landry, who manages money for clients from his office in Shawnee, Oklahoma and asked him what he sees ahead.

As usual, there are two competing Elliott wave counts to be considered. Under one count, we get a decline next week and into the following, but we hold short of the recent lows around Dow 6,626 and then start a major rally from there which will see a major upward thrust by oil and the precious metals. The move of oil this week over $50 certainly argues for that case, as well as the strengthening gold prices. But on the other hand, oil weakened toward week's end.

The alternate count that Landry is watching is that the decline picks up speed next week and takes out the 6,626 recent Dow low, and from there were go down to the 5,800 level, or in a worst case 4,400 on the Dow and then we get the rally which again will feature oil and metals, but there would be one hell of an entry point if gold gets down into the upper $30's and gold were to do a short, nose-bleed inducing drop to the $700's, or even $650.

03/20/09 thoughts (Happy Spring)

I hope this is the right video...Glenn Beck talks about inflation and what the government is doing right now to our money. This is why I purchased gold and silver over six months ago, and got into Oil a couple of months ago.

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And now it gets serious. I have been hearing and reading about these over the past few weeks. This is the first one that hit close to home (literally). It does make me feel good to know there are still a few intelligent, responsible people out there. I couldn't care less what happens to the rest of them.
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It's all just for the networking anyway...I wonder what signal this is giving the US MBA programs. Do you think they will get the message?

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Urban Survival...

Great Patience Friday

The markets, of late, have been really testing my patience. I explained back in December that I would like to see a decline into the February/March timeframe and then a major rally till the early part of summer, say mid-July, or so. I think it's pretty clear that we have completed the little bounce up to (and slightly past) Robin Landry's 7,404 level, but the fact that the market closed above that for just one day puts Landry back watching his indicators to see if we will get more than a modest decline to something greater than the 6,626 level and then rally toward the 9,100-10,500 range, or whether we'll just sink like a stone from here to the real low, which then might be under 6,600 on the Dow and possibly into the 4-thousands. It's not hard to figure that the next big move could be up; the harder part is sorting out the "From where?" question. Entry points matter.

Bullish sentiment is now reported over 45%, and typically when that happens, a market high is near, so we seem set to head lower...but the vexing question is still "How much lower?" That matter requires great patience

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It's hard to be patient, however, with many of the headlines floating about today. Take for example the House behavior on AIG. While the headlines are that the "House passes bill taxing fat AIG and other bonuses" my friend The Bond Dude (TBD) made an extremely astute observation, which I'll try to fairly summarize:

"George they don't need another law just to punish the AIG guys, you know why? Because there's already a ton of law on the books about illegal conveyance. You know, the laws that prevent you from putting your house in your wife's name if you're about to lose a major lawsuit, and that kind of thing. So look: The AIG guys knew they were in trouble when those contracts were drafted, and I expect some sharp criminal lawyers could pretty easily have gone after them on the grounds of conveyance and that'd be that..."

All of which gets me back to wondering how folks, including the president on Leno last night, could be 'surprised' by any of this. While "AIG gives names of bonus recipients to New York's attorney general" Andre Cuomo, it all has an air of dreaminess about it; like it's as much about keeping the public distracted from reading their 401(k) results, and making the appearance of 'change' take place. Must be something extra cynical in my coffee this morning, or I've just lost patience.

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So much of the news is pushed and shoved, this way and that, by largely unseen forces, that it frightens me for the kind of country my children will grow up in. Just another example of unseen hands? Go look up the WHOIS record on some of this seemingly "spontaneous" (city name) Tea Party web sites. You'll find in some cases that republicorp types are involved and that the site domain names were purchased in AUGUST 2008, which means the hidden hand is working an agenda over on that side of things, too.

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Linguistics are being played like a fiddle to control your thinking. Take the title of HR 875. It's labeled as the "Food Safety Modernization Act." Yet, as the John Birch Society notes, it should be opposed because:

"Despite its noble-sounding stated objectives, H.R. 875 would effectively transfer all state control over food regulation to the new Food Safety Administration (FSA), which is destined to become a new federal bureaucracy that would eventually dominate state and local food safety agencies already in place."

And this fits what I've warned you of many times over: When government wants to expand, they just wrap things up in "anti-terrorism", "saving the environment", or even more insidious, a "hero" image, as is the case in the latest attempt to sneak in gun control by linguistic manipulation.

It's all like pushing a bill through CONgress to increase availability of matches to children but mislabeling it as a "Fire Safety Act"...who would, after all vote against "Fire Safety"? It's the same old crap from the politicos - the "yes we want no bananas" kind of wording.

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The only really good news I've seen this week is that a plan by the feds to destroy once-fired bullet casings has been reversed, but only after a couple of Montana senators intervened.

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And so goes another week in the life. So-called leaders are still scheming, government's hand is getting deeper in your pocket almost every year, and all most of us want to have is enough time to pursue whatever's in our hearts without having to hire an attorney or file a three-year long process environmental impact statement to do it. It'd be nice if the markets would stabilize, but that might involve sound money and less pulling of future demand into the present through massive advertising expenditures.

The problem is, if that were to all happen, we'd find ourselves in the midst of a most terrible Depression. Actually, though, it's already unfolding, it's just not admitted yet.

So I continue watching and waiting for some tradable to happen in the markets, amused as FDIC chair Sheila Bair seems to have enough sense to call BS on Treasury Sec. Geithner's call for a super-regulator. What did I tell you government answer to every problem is? More government?

I don't know about you, but I'm not sure how long my patience will hold out. Maybe the best thing to do will be to keep the TV off more

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Coping: Them Tea Parties

Not withstanding the fact that some of the Tea Party sites have been in the works by republicorps who are doing their best to go above and beyond the call of "loyal opposition" there are some Tea Party events that are spontaneous and not concocted by anti-democorp types. So it's worth sharing this email:

"Good morning George,

I've been bothered for months regarding the so called "Tea Party" protests. While these are an interesting expression of discontent with the disgusting pork and waste by our "selected" politicians, they are ineffective in that all they do is to make noise and help their participants feel good. Most are not covered by the media except maybe for amusement. The big difference between the real Boston Tea Party and these events is that there is no cost to TPTB. In fact, the protests may well be a way of identifying dissent and providing a channel for it's release.

Contrast this to the real Boston Tea Party:

http://en.wikipedia.org/wiki/Boston_Tea_Party

This cost an estimated 1.87 million real 2007 USD to TPTB! There were REAL consequences. The protests in France and Germany in the last couple of years were virtual riots, with millions of dollars in real damage to the perceived insiders. They were taken seriously.

I am NOT recommending violent protest or damage to others' property (that's illegal), and it will polarize things, likely playing into the hands of TPTB. I do think it's important to recognize HOW we are being played, and either change our play or remove ourselves from the game. I, for one, refuse to work for more than a nominal number of greenbacks, and concentrate my efforts on non taxable value, such as enjoying a sunset or repairing my car, house, tractor, etc. Just call it the "John Galt philosophy". You apparently do too. If even that becomes taxable, my lifestyle will shift as necessary in order to avoid support of this criminal waste and misuse. Apparently TPTB either can't recognize this or they actively wish to flush our economy down the toilet.

BTW, life is much more enjoyable this way!

While I most heartily agree with the nonviolent approach, I'd also advise some serious research to see who the organizers are... just saying...we get 'played' enough...and the only sure-fire antidote I've found that works is research & questioning all assumptions.

03/19/09 thoughts

Good article on how to recognize a company on its way to bankruptcy. With about 30 minutes of due diligence you should be able to make a decision on whether or not the company is a good buy.

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Urban Survival...

A particularly candid assessment came in the UK Guardian papers on Monday that sized up the British Labor Party's big [economic] gamble this way:

"Privately, something close to desperation is starting to develop inside government. After watching the slide in bank shares on Friday, one cabinet minister did not altogether joke when he said: "The banks are fucked, we're fucked, the country's fucked.""

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Zooming in, the Fed action on Wednesday about ensures that $1-trillion dollars will be 'created' out of thin air, although the issue as I see it, continues to be one of velocity since money at rest doesn't create jobs, money in motion does. Filling the coffers with money at rest (capital) only works when that money is loaned out at interest, a process that takes time, and that will be something for future historians to debate.

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Underlying the economic problems is a broader issue: I happened to spend a few hours yesterday in the Federal Election Commission's database of political contributions to do a little research on how much money Senator Chris Dodd (who added the executive bonus provisions to the Stimulus Bill) had received from current and past AIG executives. I got up to $54,000 with contributors through "L" in the alphabet and became so distraught that I called Robin Landry to commiserate a bit.

Landry made an interesting point after we agreed that honesty and integrity seemed to be in increasingly short supply in the country of late. He noted that with the executive bonuses, there's a fine line because if government can arbitrarily negate written contracts it sets a dangerous precedent: from then on - when contracts can be voided at the government's will, you could get to a point where systemic trust could break down. A most astute observation on his part. And systemic distrust seems a key in turning a recession into a Depression.

So that got me to wondering what would happen if I set up a keyword flag on the word "lie" and put it into my morning routine of news questing; what would come up?

"Obama LIED to us in order to push his merit pay/charter school agenda" headlines one report.

Over here, in "Dodd Changes His Story" the word 'lie' appears. And although the phrase "now I remember adding that bonus language..." comes up in some reports, the best news of the day may be that some in the MainStreamMedia are getting tougher with their questions.

Of course, as the questions get tougher, the answers found become more distasteful:

"Fannie plans bonuses of $1M for 4 execs"

"AIG's Liddy asks employees to give back bonuses" - and AIG worried about employee safety isn't giving out employee names.

We're also discovering that "Hedge funds may benefit from government cash to AIG: report"

And "Obama may find anger over bonuses backfires on Agenda"

Still, the good news is that the usual drivel and softball questions are evaporating and now we can get down to asking hard questions, not only of our leaders, but of ourselves.

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Oil Up

Over $51. Remember my projection of $3 gas within a year...prices can't stay down forever, so enjoy it while you can. The double whamming is when the dollar is slammed. That's when things will get....er...interesting.

Watch Leno Tonight

President Obama is due to be on Jay Leno's show tonight, becoming the first sitting president to make an appearance. Wonder if he'll do stand up?

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Speaking of speaking: Hopefully the teleprompter will work better for O tonight than the St. Patties Day situation where a prompter blunder left Obama thanking himself in a speech....

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Coping: Investing in TEOTWAWKI

I'm not the only guy who has a Bond Dude...someone who looks at the market from the fixed income perspective. A reader just sent me a remark by his Bond Dude which is pretty revealing:

" I don't know what to think other than that this is what the end of civilization looks like months before its occurrence. A mirage. We all just learned that we are in a depression."

But just because we are in a new Depression - something that's slowly seeping into the collective consciousness, it doesn't mean that it's totally 'the end of the world as we know it' -TEOTWAWKI. Still, there seems to be a fair bit of risk into jumping on this "new bull market" just yet. As a reader in Europe noted today:

"While only 12 calendar days the Dow registered its lowest close in over a decade, some of the sentiment data are registering very bullish sentiment from traders. It seems that virtually everyone knows the market has reached an important bottom and cannot wait to take advantage of these great bargains. Perhaps they should know the CBOE total put call ratio and the Trading Index moving averages are signaling some of the most bullish sentiment seen in years. It would be hard to imagine a more bearish scenario than that. Of course the mkt is always right and I hope it will prove me wrong."

The problem in making sense of the world, in light of the Fed decision on Wednesday is becoming more difficult, for sure, as another writes:

"I'm confused. How do you purchase your own bonds. are they literally taking them off the books by doing this. this has to create massive inflation. please comment"

You got it! The whole financial world is now certifiably unsane. Not insane - I said unsane. As in completely frigging nuts. Here's further proof:

"For your "Are-you-freakin-kidding-me?" Dept:

Ok, George, I tried to wrap my head around it, but this one is just too unbelievable to not require a shot of El Don. Get this: Geithner is in over his head and clueless as to how to move forward, so Obama has decided to "help" him out, instead of firing him...

"Citigroup Inc.'s chief economist is leaving the company for a job at the Treasury Department..."

Story Link 1

Story Link 2

You have absolutely got to be kidding me!!! The corruption is totally off the freakin' hinges. How much more obvious can it possibly get, before people realize they're being obamaboozled!

Un-freakin-believable. Good luck not poppin' a vessel over this'un.

Figuring out how to cope with - and invest a bit here and there - in the face of the massive changes now underway presents something of a problem. It's like walking into what you used to gamble in when it was an honest casino had suddenly replaced all its blackjack dealers with sleight-of-hand specialists who were certifiably nuts. And when you go over to the roulette machines, it dons on you that none of the machines are paying off anything. except for the ones that are already occupied by players who are friends of the casino's owner. And over at the dice table, the die are loaded...but the loads change on every throw or two, so no matter what, yoiu get deeper and deeper down in your own pocket to just keep playing.

At some point, you pinch yourself and ask "What am I doing in this casino?"

Folks who've been reading this site may have come to the conclusion it's a good place for cheap drinks and people watching, but little else. The sense of surreal is starting to permeate the public's mind, as in another email I read:

"I enjoy reading about "business" (well, not so novel these days) because I never took a biz course in my life... it's like reading sci- fi..."

And the change is everywhere you look:

"For a while now I have noticed that we here in the US of A are no longer "CITIZENS" and rather have become "CONSUMERS" I even see this term used by yourself. In my view, CONSUMERS are all standing in the feedlot waiting for slaughter or their need feed. When did we stop being citizens? It really sends an interesting message/mindset about who we are, don't ya think? Citizens might DO something! Consumers, well...

Tom Freidman NYTimes was on NPR recently and used the terms "I"ll be gone/you'll be gone" (IBG/YBG) to reference the attitude(s) of almost everyone when It comes to what I'll call personal responsibility. (Real estate flip that house who cares? (IBG), get that alt a mortgage (IBG) , then flip that house (YBG) Bundle those and sell 'em (IBG)...As simple as getting the order wrong at the fast food window (YBG) I think it starts way up at the top of the foodchain and business simply play the percentages and is pervasive throughout most all transactions. Here in Colorado the gas drillers want to drill in watersheds of the communities downstream Cuz they can, they leased the right from someone else (Fed) who does not live there (IBG) and they're not about to announce what chemicals they use to "frac" the gas out (proprietary info) and it's in the drinking water now! (its okay IBG) And some wonder why we're in a mess.

The first rule of wealth building: "Spend less than you earn"

Second rule: "Never break rule #1"

You think Prez Obama could here that/ follow that? (I'm not there yet, myself, only to the place where I have left-over non allocated $ from one paycheck to another. Getting my garden in,

Puts a whole range of meanings on this...

Till tomorrow?

Nothing Original Today...Urban Survival...

A Word To Ben: Velocity

One of the simplest concepts in economics is the velocity of money. It's sort of like inventory turns ratio, to my way of thinking. You know: If you have 10 widgets in inventory and over the course of the year, you sell 10, and replace those 10, you have a turnover of 1. One in, one out, kinda thing. The formal answer to inventory turns is

:

So, if you want to have a little more money fall to the bottom line, you do what? Increase the number of times your inventory turns over during the year, or run with leaner inventory to reduce inventory associated costs (like warehousing, and such). Simple so far, right?

In the study of how money sloshes about and makes the world go round, round, round, the Velocity of Money is stated in the similar form:

That big V thingy on the left means 'velocity of money' while the big T on top there is your aggregate value of all transactions, and the big M on the bottom means the amount of money in circulation in a particular period.

I mention these two formulas today because they are at the very heart of what America is presently facing and why there continues to be a chance of the US slipping deeper into a recession and dragging the rest of the world along with us into a full-blown Depression.

Not that I'm alone in this assessment, since legendary commodities trader Jim Rogers is saying much the same thing - as you can see in this video if you've got the bandwidth...

Rogers says the US bailout approach mimics the lost decade experienced by Japan after their market peaked in 1989 - says we're trying the same thing. Worse, he says "They may turn it into that (the 1930's)..." which would put us in a Depression again.

This morning, let's consider the two formulas above from the perspective of a formerly robust business segment: Auto and truck manufacturing.

Starting first with inventory, we see the pictures floating around the net how there are scads of new cars sitting unsold, even tons of product made for the 2008 model year. What had been a turns level somewhere around 1, meaning 2008 cars were almost all sold off in that model year, has now turned into something less than 1, meaning there's leftover, unsold 2008 inventory.

This then ripples into the nation's velocity of money since fewer cars are being sold, so in our Velocity of Money figuring, the big T on top has gotten smaller, while the Big M on the bottom has remained essentially unchanged.

I say essentially unchanged because of two very items:

• Bailouts for banks does not increase velocity, since much of it's going into what amounts to a stagnant money pool. If the improperly represented "bailout" was really planned to be effective, it would have at least been augmented by a program that would either reduce inventory (meaning increase business sales in general) or it would have somehow reduced the average cost of inventory. Putting money into an account doesn't help anyone but counterparties, and then only to stabilize their credit ratings. No unwinding of excessive leverage necessary, although some of that goes on, sure. But since the money went to stagnant pools, or to pay bonus, so sorry, you been lied to and the stimulus ain't gonna work for at least 12-month and maybe as long as 24-months since it takes forever for spending wends its way through traditional spending channels and get doled out as paychecks to us working stiffs.

• There's nothing evident yet that (in my judgment as an observer) has any discernable impact on loosening the consumer's death-grip on their wallets and purses.

Now let's ask, why might that be? Employment is going down, but prices keep going up. Evidence needed?

We turn to this morning's Consumer Price Index report, realizing that hedonics (the substitution of Salisbury steaks for Porterhouse, and that kind of thing) allows these numbers to be pushed hither and yon, although since the Bushco days, it's mostly hither:

"The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in February, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The February level of 212.193 (1982-84=100) was 0.2 percent higher than in February 2008.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.5 percent in February, prior to seasonal adjustment. The February level of 206.708 (1982-84=100) was 0.3 percent lower than in February 2008.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.6 percent in February on a not seasonally adjusted basis. The February level of 121.901 (December 1999=100) was 0.3 percent lower than in February 2008. Please note that the indexes for the post-2007 period are subject to revision.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U increased 0.4 percent in February after rising 0.3 percent in January. The energy index rose 3.3 percent in February following a 1.7 percent increase in January as the gasoline index rose 8.3 percent in February after a 6.0 percent increase in January. In contrast, the indexes for fuel oil and natural gas both declined in February. About two-thirds of the all items increase was due to the rise in the gasoline index. Compared to the July 2008 peak, the energy index was 29.2 percent lower and the gasoline index was down 44.0 percent. The food index turned down slightly in February, falling 0.1 percent. The food at home index fell 0.4 percent with five of the six major grocery store food group indexes posting declines in February. The index for all items less food and energy rose 0.2 percent in February, the same

Current rate extrapolated? 6.17% per year. They somehow don't mention the forward implications of 0.5% compounded out 12 months and instead, continue to play into the notion of backward-looking economics, which is why we get into so much trouble. No one bothers to see that cow in the road in front of the car, since we're all looking back at Abilene, wondering what we went there fore....

Unadjusted, the food (ex beverages) index was up 4.8% over the past year. What keeps things from looking worse? Energy prices were going down at an annual rate of 18.5% compared with unadjusted year-ago numbers.

But wait! Again, that's backward-looking. In the most recent month, energy prices were up a whopping 3.3%, which if you pencil it forward means a 47.7% increase in energy costs a year out, which means what? That if this kind of increase continues, we will be at $3.12 gas in a year if you're paying $2.11 a gallon now.

As the numbers came out, the folks down on Wall Street are looking to give back some of yesterday's trade which moved toward Robin Landry's 7,404 level...

I'd remind you that every close under Dow 7,404 in Landry's work, just let's longer term indicators on the 90-minute chart catch up to the already bearish count which is suggesting at a minimum a retest of the 6626 lows, or a mid-range expectation of 5,800, and a worst-case 4,400 before we get the meaningful rally.

Also seems to me that it increases the odds of jailed economics whiz Martin Armstrong's turn date (which I pencil for about April 21, since the date 2009.3 would be Jan 1 + [0.3*365 = 109.5] that gets us to a week after Tax Day, or so), to be a low, but that's not investment advice...just a dart over coffee and I tend to hit the water cooler more than the dartboard in my guesses.

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Role of Gold: While the Fed and CONgress seem only to be pushing velocity of money in the direction of bankers, while the rest of us wait around for trickle-through to show up, I have to wonder if maybe this isn't part of a globalist plan to install the New World Order, which as we all know is the Western Capitalist/ USA-British Banking Cabal's idea of how to run the [global] railroad.

I trust you've seen the headline that at the upcoming G20, the Kremlin is about to pitch a new global reserve currency. Since Russia is now the top oil producer in the world, if I read figures right, then it would make sense that they would look at the Chinese experience of buck-holding and want to avoid that. You'd probably make the same call.

But the other day, as I was reading through the government's statistics on money and such, I noticed that the US has 250+ million ounces of gold and that in whatever report I was reading, that gold was valued at $42.222 an ounce.

*Devil's in the details correction: from Wikipedia:

Gold reserves (or gold holdings) are held by central banks as a store of value. In 2001, it was estimated that all the gold ever mined totaled 145,000 tonnes.[1] One tonne of gold equated to a value of US$30.27 million as of February 14, 2009 ($941.35/troy ounces)[2]. The total value of all gold ever mined would be US$4.39 trillion at that price.[note 1]

Well, my, my, wouldn't it be a simple matter to reduce out debt and improve our nation's balance sheet (all in one fell swoop) to just let gold float up to the price which it's going for on eBay - nearly $1,000 an ounce? Suddenly, the whole US economic picture gets a lot healthier and we could get back to the real problems we have, namely, how do we put more cash into the hands of consumers?

Don't want to be the one to break this to you, but that's not the plan. You see the NWO, or at least the US-British Banker cabal has other designs, it seems, so we'll just keep perpetrating the myth that the US and world are in terrible financial times, all the while not mentioning that some of our key numbers are based on valuing gold at 1/20th of it's market value. Especially when the national debt is $11-trillion dollars. I'd sure think about putting $250 billion more value on books, but no lobbyist dough to be had on that, or what?

All this leaves me speculating endlessly that whatever the hidden agenda is behind all this, and while it's not yet clearly visible, I get all twitchery when I think about it too much.

Implausible Deniability Department

:Obama Administration: We didn't find out about AIG bonuses until this month..." Since we taxpayers now own 79% of AIG, I'd be asking WTF?

The real deal hints a Buffalo News article is that this is starting to shed light "on AIG political cash cow." You getting this yet? Money in, favors out. Yessir,

Here's a novel thought: How's about someone with a little balls/cajones in Washington (if there is such a person) puts in an amendment to any tax AIG execs that would require all members of CONgress to refund any and all that campaign money some of the Hill's worst no doubt received from outfits that later took public TARP or TALF money...and let's throw in payback of those MADOFF contributions, too, just for good measure.

It'll NEVER happen, of course, but OMG we are such sheep...

03/17/09 thoughts

I love a little good humor...not much I can really add to that, and I am guilty of it too.

...

Urban Survival...

Why statistics are bullshit...

Fed's Capacity Utilization Report comes out later this morning.

Just to get Monday off on the right foot (of the left one if you prefer) here's a dandy economics thought experiment: Say you have 10 factories and 2 of them are not doing any business, so you survey all the plants and calculate that they are making goods at 80% of capacity.

Now, permanently close (as in tear down) those two factories so they no longer count. Next, export all the jobs from 3 more plants and close them too, so you only have five plants of the original 10 left.

Then let's further suppose demand is collapsing too, such that of the remaining plants are operating at only 90% of capacity.

What do the statistics show? Capacity utilization is up 10% from 80% to 90%.