Wednesday, September 30, 2009

Purchasing Power

"What is remarkable is that for as long as there was no Federal Reserve Board - that is between 1800 and 1913, the purchasing power of the dollar was more or less constant. However, as soon as the Fed was formed in 1913, the purchasing power began to decline - in fact by 92% over the last 100 years or so."
Marc Faber, 12/15/05

Tuesday, September 29, 2009

Arianna & The Funk

Could Arianna be catching on to the downward trend in mass social mood? Yes, but she might be placing it in the wrong context.

"Let's talk about unhappiness. Specifically, how it's growing in one segment of our society. And no, it's not white congressmen from South Carolina, hip-hop artists who feel Beyoncé got slighted, or recipients of ill-timed foot-fault calls. It's women. According to study after study, women are becoming more and more unhappy. This drop in happiness is found in women across the social and economic landscape. It doesn't matter what their marital status is, how much money they make, whether or not they have children, their ethnic background, or the country they live in. Women around the world are in a funk."
Arianna Huffington

Read more at:

Monday, September 28, 2009

Here Come The Tablets

The scoop on Microsoft's new secret tablet device leaked out today. Gizmodo reports that:
"Courier is a real device, and we've heard that it's in the "late prototype" stage of development. It's not a tablet, it's a booklet. The dual 7-inch (or so) screens are multitouch, and designed for writing, flicking and drawing with a stylus, in addition to fingers. They're connected by a hinge that holds a single iPhone-esque home button. Statuses, like wireless signal and battery life, are displayed along the rim of one of the screens. On the back cover is a camera, and it might charge through an inductive pad, like the Palm Touchstone charging dock for Pre. Until recently, it was a skunkworks project deep inside Microsoft, only known to the few engineers and executives working on it—Microsoft's brightest, like Entertainment & Devices tech chief and user-experience wizard J. Allard, who's spearheading the project. Currently, Courier appears to be at a stage where Microsoft is developing the user experience and showing design concepts to outside agencies."
The details:
Rumor has it that Apple will release a similar product soon.

Sunday, September 27, 2009

Fear, Distrust, and Anger

"As social mood becomes more positive people become more confident trusting and content. They feel little need to prepare a defensive or offensive force. As social mood becomes more negative, people become more fearful, distrusting, and angry. They are impelled to prepare to defend themselves or attack an enemy."
Elliott Wave Theorist, 1999

Saturday, September 26, 2009

Finally Some Rubber Bullets and Tear Gas!

I've been noting that the mobs at the recent protests (tea parties) appeared to consist mostly of nerdy white guys with smiles on their faces. Well, it looks like we finally have some riot gear, rubber bullets, and tear gas in Pittsburg at the G-20 summit.

"Riot police turned back hundreds of protesters trying to march downtown on the first day of the Group of 20 summit, arresting nearly 70 people as authorities braced for smaller, scattered protests at dozens of businesses and organizations Friday. Police, in an overwhelming show of force, declared Thursday's march illegal almost as soon as it began, firing rubber bullets and canisters of pepper spray and smoke after small bands of anarchists responded to calls to disperse by rolling huge metal trash bins, throwing rocks and breaking windows." Associated Press

The article:

Friday, September 25, 2009

The Maestro Of Exhuberance Now Warns of Danger

The wolf now warns of trouble in the hen house:

From Bloomberg:
"Former Federal Reserve Chairman Alan Greenspan said Sept. 16 that U.S. debt, already about 84 percent of GDP, is “very dangerous” and threatens both Treasuries and the dollar. Greenspan said that if there was a significant issuance of Treasury securities that increased the debt, “there would be of necessity downward pressure on the dollar.” “We’ve got to confront that issue immediately,” he said."

This chart should alarm everyone. This is an unsustainable trend my friends.

Michael, Plaxico, and Bubba

One of the interesting aspects of a shifting mass social mood relates to criminality. While the mood is "positive" and economies are expanding, the masses tend to be more lenient when it comes to punishment. As that mood tips the other direction, the masses emulate the mob and seek out a lynching. The mood began to tip in 2000. In 2004, the SEC comically convicted Martha Stewart of securities crimes. We couldn't seem to find a really bad guy instead. In 2006, we convicted the Enron boys. In 2007, Michael Vick received a two year sentence. This week Plaxico Burress starts his two year sentence. With all of this in perspective, we must look back to 1998 when our president, the most powerful man in the world, partook in an affair with a young intern. While it made for great TV, the mob wasn't angry enough to take serious, extreme action. Imagine today, if our current president did the same thing. The mood and the mob are in a different mindset which results in very different outcomes.

Thursday, September 24, 2009

Running With The Crowd

"Most predictions fall within a rather narrow range that does not deviate from consensus views in the financial community. In large measure, this reflects an all-too-human propensity to minimize risk and avoid isolation. There is, after all, comfort in running with the crowd. Doing so makes it impossible to be singled out for being wrong, and allows one to avoid envy or resentment that often inflicts those who are right more often than not."
Henry Kaufman's Memoirs

Wednesday, September 23, 2009

Happy 60th Bruce!!

My main man Bruce Springsteen turns 60! After seeing him play for over three hours earlier this year, that is hard to believe. I hope that I can slide across a stage at 60. With his friend, Pete Seeger, still performing at 90, I'm guessing that there are a lot more great music and performances to come. Happy 60th Bruce.

Monday, September 21, 2009

The Culture of Fear

I'm humorized by Team Red's new mantra relating to liberty, patriotism, and anti-government. There's so much "chest beating" going on these days regarding to our loss of liberty. What really confuses me is why Team Red didn't get upset when Bush & Company pushed the Patriot Act through without opposition. The reason? The sheeple were scared into a tight herd by the wolf (9/11 terrorism).

An interesting perspective on the Patriot Act is provided below. Why Team Red wasn't throwing tea parties and marches on Washington really confuses me.

"Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism -- a.k.a. the USA PATRIOT Act -- is a huge program with a catchy little title that does more to increase the size of government than it does to fight terrorism. It was easy to pass -- everyone was emotional over the unfortunate September 11 terrorist attacks. It was developed behind closed doors between Congress and the Bush Administration, and there was initially no debate or amendments allowed. It just passed -- unfortunately, using terrorism as an excuse to attack our individuality and personal freedoms. It's anything but patriotic."

"But, why be so concerned with two-year old legislation or any additions to it in the first place? Well, for one we've had more time to think it through and see first hand how this legislation has impacted the "war against terrorism." Are U.S. citizens safer and more secure because of the PATRIOT Act? Or are we at greater risk for being falsely accused and imprisoned for "terrorist" activities? How does this kind of legislation contribute to a culture of fear? Is the PATRIOT Act an invasion of privacy or a necessary law enforcement tool? Who does this legislation really benefit?"

Source and entire article:,289142,sid14_gci914763,00.html

Sunday, September 20, 2009

The Minsky Moment

One of the interesting aspects of the contraction cycle is that things that have been "out of vogue" suddenly become interesting and popular again. One shift that is occurring is that "buy and hold" might be loosing popularity to "market timing". The article below presents an interesting story of the rise and fall of economic theories.

"After spending his life warning of the perils of the complacency that comes with stability - and having it fall on deaf ears - Minsky was understandably pessimistic about the ability to short-circuit the tragic cycle of boom and bust. But he did believe that much could be done to ameliorate the damage."

The entire article:

Saturday, September 19, 2009

Natural Gas On The Move?

In June, I made a post regarding the historically low natural gas prices. This past week has seen some nice activity in the commodity. Could it be the commencement of natural gas' comeback?

Friday, September 18, 2009

The Naked Sandwich

Years ago I remember reading Peter Lynch's bestseller, "One Up On Wall Street". One of the memorable stories was his discovery of Hanes L'eggs pantyhose in the grocery store when his wife pointed out the cool egg-shaped containers. His follow-on research confirmed it a "buy" and I believe it eventually became a "6 bagger" for him. His theory was buy what you know and keep yours eyes and ears open when roving through the marketplace.

Jim Puplava frequently elaborates on his "cashier surveys". At checkout, he asks the cashier how business is doing. I started doing the same a year ago and the responses can be very interesting and telling.

I just went out for my standard quickie lunch at Quizno's across the street. Walking up to the store, something looked different. Posted on the door was a notice of closing due to lack of rent payment.

As Warren Buffet has stated, "when the tide goes out, we'll see who has been skinnydipping". Looks like I'll have to find a new sandwich.
Keep your eyes and ears open for live market indicators.

Thursday, September 17, 2009

Carter & The Elephant

I read this article this morning and couldn't agree more. The fearmongering in the past year has been staggering. I'm quite confident that there is more to follow and at even more extreme levels.

SOURCE: Fox News

Carter's Courage
"By identifying the racial dimensions of the current political moment, President Carter has pointed out a huge elephant in the room. Until the rest of the Democratic Party musters the courage to do the same on a regular basis, President Obama will continue to take unnecessary hits.

In the past few days, former President Jimmy Carter has caused a national firestorm by remarking that much of the current opposition to President Obama is rooted in racism. As expected, the racist wing of the GOP quickly dismissed Carter's comments as wrongheaded and divisive. In truth, however, President Carter was merely identifying a political reality that many of us have been unable or unwilling to recognize: much of the current anti-Obama sentiment has little to do with policy and much to do with race. Since becoming the Democratic party's nominee last May, President Obama has been the victim of the most racist smear campaign in American political history. From the xenophobic investigations into his religious background to the moonbatish birther controversy, the right-wing political machine has gone to extravagant lengths to paint Obama as an uppity, untrustworthy, and unprincipled outsider whose very existence represents a threat to the American way of life.

Although the language of race has rarely been explicitly invoked, terms like "Marxist," "Nazi," "extremist," and "foreigner" have been used to smuggle racism and xenophobia into the public conversation without political consequence. Of course, this is not to suggest that everyone who opposes President Obama is a racist. To the contrary, there have been numerous legitimate reasons to challenge the president's policies and plans since the beginning of his term. Unfortunately, even the most legitimate critiques have too often been cloaked in a deeply radicalized veil that appeals to the most vulgar sensibilities within our country.
I have witnessed this firsthand at several of the health care town halls, where angry white citizens gathered not to talk about policy details, but to vent their anger that "this guy" was changing "their country" by trying to give health care to "those people."

While strong opposition to health care reform existed during the presidency of Bill Clinton -- whose health care plan was far less moderate than the current proposals-- the 1993 protests were relatively devoid of personal animus and vile ad hominem attacks. In the case of Obama, however, many citizens are closing ranks around racial anger and fear rather than a principled and unified political vision. Still, despite mounds of evidence, the left has refused to substantively address the racist dimensions of the current assaults on Obama. This is largely due to the Republican Party's masterful manipulation of our nation's racial anxieties. As soon as Obama became the Democratic nominee, Right-wingers began complaining that they could not critique President Obama without being labeled racist. Despite being completely unfounded-- both Obama and his liberal defenders have been loath to address issues of race except under extreme political duress-- such arguments have placed Democrats in an all-too-familiar defensive and reactionary posture. Instead of speaking out aggressively against racist tactics, they opt to say nothing to avoid being accused of exploiting race.As a result of the right's preemptive strike on the racial front, liberals have remained dangerously silent in the face of the most egregious acts of racism against Obama to date. It is for this reason that Representative Joe Wilson could heckle Obama during his Congressional address and only be challenged for his rudeness rather than his racism. Although he has received a formal reprimand from the House of Representatives (the political equivalent of an after-school detention) such a punishment is nothing more than a badge of honor that enhances Wilson's street cred amongst those who were happy to see the nation's first black president "put in his place." This type of political cowardice from Democrats only emboldens the right to continue prosecuting its war of racial terror. By identifying the racial dimensions of the current political moment, President Carter has pointed out a huge elephant in the room. Until the rest of the Democratic Party musters the courage to do the same on a regular basis, President Obama will continue to take unnecessary hits. And so will our national character."

Marc Lamont Hill is a Columbia University professor and FOX News contributor.

Understanding the context and "frame of reference" below makes it all predictable. Unfortunately, we're early into the contraction cycle.

Is It Go Time For The Shiny Coin?

In The Shiny Coin in July I made the case for the breakout in gold. Gold is currently trading in the $1017/ounce range above the psychological $1000 barrier. Is this the beginning of the next great run? I'm feeling the same about it as I did in 2002.

Wednesday, September 16, 2009

The Last Great Exit???

It might be time to ask the question, "are we at the last great exit?". The markets have had a great run since my confession. Have we run out of steam? Has this been another great manipulation by The Fed?

Here's a potential outcome (Dow peaking in the 10000-10500 range). Maybe another wrong prediction. Time will tell.

The Lost Symbol Has Arrived

Mr. UPS just delivered my copy of "The Lost Symbol". The opening page has already sucked me in.
"To live in a world without becoming aware of the meaning of the world is like wandering about in a great library without touching the books."
The Secret Teachings of All Ages

See you in a few days!

Saturday, September 12, 2009

Wave 2 Psychology

"The stock market rebound since March counts well as a Primary Wave Two. In Elliott Wave analysis of wave two personality in a bear market, this means investors are thoroughly convinced that the bull is back. Aggressive euphoria and denial abound. This compliments the talk of “recovery” that dominates the noise of what passes for news."
Elliott Wave International

Thursday, September 10, 2009

The Age of Reagan

“In doing so he effectively marked the end of the Age of Reagan, the 30 years beginning with the rise of former President Ronald Reagan in which business was given free rein to create wealth wherever and however it wanted, with the bare minimum of government intrusion.”
Wall Street Journal 10-23-08

Wednesday, September 9, 2009

The Loss Of Confidence

"Once confidence is lost, and remember gold is a barometer of confidence. Once confidence is lost, then the purchases of gold, silver become almost mania-like and they overwhelm the market."
Jim Puplava - Financial Sense Newshour - 9/5/09

Puplava's track record:

Thursday, September 3, 2009

Pin The Tail On The Donkey

"Barack Obama seems to be driving south into a political speed trap known as Carter Country: a sad-sack landscape in which every major initiative meets not just failure but with scorn from political allies and foes alike."
The Washington Post

From Random Roving (3/24/09, 6/30/08): "Don't Shoot The Messenger"

"The Bush/Obama plunges in the polls bear out Conquer The Crash's contention that in a bear market voters don't care about the party. It also shows that personal magnetism has nothing to do with it, as Obama is no less charismatic than he was when he took office. The man in charge just gets the blame; and if the bear market is big enough, the people don't wait for the downturn to start pinning it on him."

The Elliott Wave Theorist - 8-27-09

Tuesday, September 1, 2009

Zombie Financials

"Then there's the dominant source of trading volume, financial stocks. And not just any financial stocks, but five former giants that paved the way into last fall's bearish tsunami, Citigroup, AIG, CIT, Fannie Mae and Freddie Mac. These five stocks accounted for 30% of NYSE volume on August 21. The stocks are sometimes referred to as the zombie financials because they are bankrupt or nearly bankrupt enterprises that have, to varying degrees, become wards of the U.S. government."
Elliott Wave Theorist - August 27, 2009