Osama, Obama, and Slap Ya Mama

Well The Boogeyman is dead....or is he?  Big bad Obama knocked off big bad Osama.  And so these modern day "Crusades" continue on.  We might have just entered the next era.  So I assume our troops are heading home...right?

It will be fun to watch the battle for the credit.  It might resemble when Reagan took office and witnessed the release of the Iranian hostages.  Bring on 2012!

And yes, try that "Slap Ya Mama" seasoning for your next crawdaddy boil...great stuff!  I needed a third rhyme!

Terrorist Technology

This one has to make one chuckle.

"A "Black Widow" suicide bomber planned a terrorist attack in central Moscow on New Year's Eve but was killed when an unexpected text message set off her bomb too early, according to Russian security sources.  The unnamed woman, who is thought to be part of the same group that struck Moscow's Domodedovo airport on Monday, intended to detonate a suicide belt near Red Square on New Year's Eve in an attack that could have killed hundreds.  Security sources believe a message from her mobile phone operator wishing her a happy new year received just hours before the planned attack triggered her suicide belt, killing her at a safe house."
Source: Leader Post

Yeah-man!

 It sure seems convenient that we have another bomb scare within a week of the election.  Hmmmmm.

"Yemen officials arrested a suspect Saturday in the alleged plot to mail bombs to two synagogues in Chicago, but clues also lead to a bombmaker for Al Qaeda in the Arabian Peninsula (AQAP), reports say."
Source: The Christian Science Monitor

Yemen somehow comes to the forefront again.

"How con-VEEN-ient!"
The Church Lady - Saturday Night Live

The Pakistani Boogeyman

"A U.S. drone attack targeting militants in Pakistan's troubled northwestern tribal region bordering Afghanistan has killed six of them, media reports quoting intelligence officials said.  It was the fifth such attack by pilot-less U.S. aircraft in the area in the past 17 days."
SOURCE: RTT News

"For a White House that has been seeking a new relationship with the Islamic world, the prospect of another terrorist plot that appears to be connected to Pakistan will present a series of complicated -- and politically treacherous -- issues to confront."
SOURCE: The Washington Post

Is it a coincidence, or do we always find a culprit sourced from the country that we want to justify military action against?  The "Christmas Day Pants Bomber" was from Nigeria, but somehow we immediately set our targets on Yemen.  Is it a coincidence that Yemen sits just south of our major oil supplier, Saudi Arabia?  It also has the Gulf of Aden off its coast where large oil tankers and pirates hang out?  Have you heard of the Bab El-Mandab?  Take a moment to understand the "chokepoints".
http://www.eia.doe.gov/cabs/World_Oil_Transit_Chokepoints/Background.html

Now we confirm a Pakistani male linked to the Times Square incident.  For the past month, we've been bombarding Pakistan with missiles fired from our military drones.  Is there a correlation?

"How con-VEEN-ient!"
The Church Lady - Saturday Night Live

The Man Under The Hood

Just prior to the kickoff at our high school football game last night, the announcer asked for a moment of silence for the deceased and the families affected by the tragedy at Ft. Hood yesterday. I had yet to hear about the event and was clueless to the purpose of the moment.

God bless the souls of the lost, the wounded, and their families. Having experienced something similar in my youth, I can feel for these families. How quickly life can change. It's always perplexing when one decides to take the innocent down with them. These type of events have become way too commonplace these days. We're not numb to it, but we are no longer shocked by it.

This morning on the news, the fact that the murderer was Muslim caught my attention. I immediately thought "Team Red is going to have a field day with this one!". Thirty minutes later in the car commuting to the office, the radio already had Bubba calling in saying that the Houston Ship Channel had cargo boats pulling into port every night with terrorists hidden on board. He went on to say that there are hundreds of them huddled up in hotels planning their next event. Glenn and Sean are going to have a busy day on the radio!

Xenophobia continues to rise at an alarming rate. I would hope that someone would do the research to show that out of the past 20 similar events, none of the gunslingers were Muslims. We might be shocked to find out that many of these murderers claimed Jesus Christ as their Savior. I still predict that the next major event on U.S. soil will be done by a white man with bible in hand.

Zooming out to the larger view, it's troubling to continue to see these events play out in a downward trending mass social mood cycle. As the "tide lowers", some struggle emotionally for survival. Whether it's a lost job or already fragile relationships, the notch moves to the next lower level. As Warren Buffet once said, "When the tide lowers, we'll see who has been skinny dipping.". Of course Mr. Buffet was speaking about financial skinny dipping, but I believe his metaphor can be applied to ones emotional and psychological state.

Scanning the TV channels in the hotel room the other night, I caught the beginning of the movie "Mississippi Burning". This movie is so well done, the acting is superb, and it depicts this true story to a deep level. The fascinating aspect of the story for me is the fact that so many people, black and white, on both sides cowered because of fear. The blacks were too fearful to turn in the white supremacist murderers. The white individuals, who in their heart did not believe in "the cause", were too fearful to go against the majority. In the end, it's the aggressive whites against the brave blacks that make the final stand. Like all conflicts, losers are found on both sides.

As this cycle continues downward, it will be important to know what you believe in. You will be challenged to stand up for what you believe in whatever that is. When you see the cowardly hooded white man on horseback heading down the road, what are you going to do about it?

Mr. Geologist, How Much Speculation Is In That $90 Oil Price?

I had the honor and privledge to sit at the same table as legendary GE CEO Jack Welch at a family wedding in November, 2007. Halfway through the meal without warning, Mr. Welch says "Mr. Geologist, how much speculation is in that $90 oil price?". I quickly responded "I don't know". He said "what do you mean you don't know?". I then realized that he probably wasn't used to that answer. I then quickly changed my answer to "$30". He said "that's what I thought."

Historically, I believe that there has been two factors controlling the price of oil: supply/demand and whatever OPEC wanted it to be. In recent years, I believe that a third factor has arisen and that is fear. The fear factor could include "peak oil", terrorism, and geopolitical conflict in oil prone regions. This factor can explain the rapid rise to $145 per barrel this year. Supply and demand hasn't changed that drastically to explain the rapid rise or rapid fall. Most OPEC companies desire oil to be above $70 per barrel, so some overpowering force has won. Most recently, the "sprint to cash" and deflationary fears could explain the capitulation in the price of oil along with all other commodities.

In the coming years, I believe that these fears, geopolitical events, and market dynamics will drive the price of oil to very high levels. In the meantime, lets hope that low gasoline prices don't encourage us to take our eye off of the ball regarding the long term underlying problem of overconsumption.

Waves and Mass Social Mood

Robert Prechter is the promoter of R.N. Elliott’s “Elliott Wave Theory”. It’s too technical to explain briefly, but essentially he believes that markets progress in waves and are directly tied to human psychology and the brain’s limbic system. His books, “At The Crest of The Tidal Wave” and “Conquer The Crash” are very insightful. His main thesis is NOT technical at all. He believes that “mass social mood” fluctuates in waves. Through history, herding human mammals go through cyclical optimistic and pessimistic mass mood shifts. When we’re happy and greedy, we drive financial markets upward and we’re predominantly peaceful. When we’re angry and fearful (now he says), we crash financial markets and start wars. He believes that financial markets are merely BAROMETERS of mass social mood. He believes that happy people buy stocks and the price rises versus believing that rising stocks make people happy. He’s coined the term “socionomics” for this psychological phenomenom.

His two websites are:
http://www.elliottwave.com/
http://www.socionomics.com/

Some excerpts from his books:
"Only a true understanding of the nature of people's behavior as it relates to markets will allow you to reason through emotionally charged situations and deal with them properly"
Robert Prechter, At The Crest of The Tidal Wave, 1995, p. 161

"Even at this early date, we might speculate on just a few developments that appear likely. For instance, I would be inclined to expect that the Middle East and Latin America will destabilize;....wars will erupt in Asia and the Middle East....foreigners will commit terrorist acts on U.S. soil"
Robert Prechter, At The Crest of The Tidal Wave, 1995, p. 435

"So what is the right course of action? The Elliott Wave Theorist cautioned in early 1986,'Once the craze really takes hold, just be aware of what is going on, and make sure you are not caught up in the amorphous feelings of confidence, complacency and love at the ultimate top.' The reader of this book faces a difficult task, one that will put him in such an extreme minority that he will feel isolated and unsupported. By selling all of your stocks, you will take the maverick road, and you will take it alone. I have no doubt that by the time this bull market is ending, our call for a huge crash and depression will be laughed off the street. Do not lose your perspective when the time comes. It will take great courage to make money during this bull market. However, it will take greater courage to get out near the top, because that's when the world will call you a damn fool for selling."
Robert Prechter, At The Crest of The Tidal Wave, 1995, p. 217

"Collective man will enjoy the same successes and repeat the same mistakes over and over, with minor differences in specifics, throughout eternity, although each time from a higher level of advancement. Mistakes are repeated not because people fail to learn from history, as many contend, but precisely because they do learn from history, from recent history, their own experience."
Robert Prechter, At The Crest of The Tidal Wave, 1995, p. 20

"It forces the analyst to look at the big picture. A proper long term perspective elevates the wave analyst above the cacophony of daily news. It provides the opportunity to make sense of the great trend changes in markets and dramatic social events that accompany them."
Robert Prechter, At The Crest of The Tidal Wave, 1995, p. 12

Prechter’s outlook for many many years has been massive deflation as in the Dow Jones Industrial Average equaling 700. Yikes! His theory is that everything crashes: stocks, commodities, and the economy. Associated with that is major strife across the world including major military conflict. Not the option we hope for. He was “dead on” with 9/11 and Fannie/Freddie.

Airlines at The Crest of The Tidal Wave

Saturday afternoon I happen to catch the Continental Airlines CEO's press conference where he announced major cuts and incredible "doom and gloom" for the airlines industry.

This event forced me back to my information source, "At The Crest Of The Tidal Wave" by Robert Prechter, because I remembered some interesting comments on the transportation
industry.

...some more "brain candy"....

Saturday September 15, 11:19 am Eastern Time
Press Release
SOURCE: Continental Airlines
Continental Airlines Announces Long-Term Schedule Reduction And Furlough of 12,000 employees
HOUSTON, Sept. 15 /PRNewswire/ -- Continental Airlines (NYSE: CAL - news)
Continental Airlines announced today that it will immediately reduce its long-term flight schedule by approximately 20 percent on a systemwide available seat mile basis, and will be forced to furlough approximately 12,000 employees in connection with this reduction. "The U.S. airline industry is in an unprecedented financial crisis. We call on the President and members of Congress to take immediate action to restore the stability of this vital industry, on which our nation's economy heavily depends,'' said Gordon Bethune, Continental chairman and chief executive officer. "Our industry needs immediate Congressional action if the nation's air transportation system is to survive.'' Prior to the terrorist attacks and this announcement, Continental Airlines and its subsidiaries flew over 2,500 flights a day. The airline, which currently employs more than 56,000 people, has been the industry leader with superior operational performance, 26 straight profitable quarters, numerous national and international customer service awards, and repeated designation as one of the 100 Best Companies to Work For in America.

"At The Crest of The Tidal Wave"....published in 1995
---p.103
"The airlines issue credits to reward people who fly, order flowers, take a language course, stay in certain hotels, rent cars, call long distance, or even invest in a mutual fund. This frezied purchase of customer goodwill has been paid for with future obligation, so it is simply debt, a huge debt. Already, nonpaying flyers account for 7% of the seats filled on the average flight by major carriers. When the depression arrives, that percentage will soar. The industry's debt
to its best customers is now huge, and its ability to pay it is negligible. The problem is just beginning to show up in airline's policies of further restricting the time and seats available for certificate redemption. This is only the hint of the default that is coming. Any renewed contraction in the economy will devestate the transportation industry. If you have accumulated
any frequent flyer miles, you should use them up as fast as you can."

p.161
"Only a true understanding of the nature of people's behavior as it relates to markets will allow you to reason through emotionally charged situations and deal with them properly"

p.435
"Even at this early date, we might speculate on just a few developments that appear likely. For instance, I would be inclined to expect that the Middle East and Latin America will destabilize;....wars will erupt in Asia and the Middle East....foreigners will commit terrorist acts on U.S. soil"

p.217
"So what is the right course of action? The Elliott Wave Theorist cautioned in early 1986,'Once the craze really takes hold, just be aware of what is going on, and make sure you are not caught up in the amorphous feelings of confidence, complacency and love at the ultimate top.' The reader of this book faces a difficult task, one that will put him in such an extreme minority
that he will feel isolated and unsupported. By selling all of your stocks, you will take the maverick road, and you will take it alone. I have no doubt that by the time this bull market is ending, our call for a huge crash and depression will be laughed off the street. Do not lose your perspective when the time comes. It will take great courage to make money during this bull market. However, it will take greater courage to get out near the top, because that's when the world will call you a damn fool for selling."

p.12
It forces the analyst to look at the big picture. A proper long term perspective elevates the wave analyst above the cacophony of daily news. It provides the opportunity to make sense of the great trend changes in markets and dramatic social events that accompany them."

p.438
"If you can keep your head when all about you are losing theirs...Yours is the Earth and everything that's in it" Rudyard Kipling

p.20
"Collective man will enjoy the same successes and repeat the same mistakes over and over, with minor differences in specifics, throughout eternity, although each time from a higher level of advancement. Mistakes are repeated not because people fail to learn from history, as many contend, but precisely because they do learn from history, from recent history, their own experience."

A must read......