Obama and The Hogs

On January 23, 1971, just four years after they drafted him, the New Orleans Saints traded Billy Kilmer to the Washington Redskins. As a Saints fan and Kilmer fan, I was torn. At age eight, I made the decision to start rooting for the Redskins as my "backup" team just in case the Saints didn't make the playoffs. Well, that turned out to be a great strategy!

In 1987, Doug Williams came off of the bench to replace Jay Schroeder at quarterback for the Redskins. That led to a playoff birth and a victory in Superbowl XXII. At that time, there was a lot of skepticism about black quarterbacks. Many thought that they were not smart enough. Doug Williams proceeded out on the field that day with a lot of pressure on his shoulders. Despite the fact that he underwent a six hour root canal the day prior, he performed off the charts. The Skins scored five touchdowns in the second quarter and finished with a convincing 42-10 rout of the Broncos. Doug Williams delivered and set the record straight.

Football is a sport that includes eleven teammates on the field at one time. One of the great strengths of the Redskins in that era was their coach, Joe Gibbs, and their offensive line appropriately nicknamed "The Hogs". The Hogs protected many Redskin quarterbacks through the years.

Barack Obama, our president elect, is faced with a similar scenario as Doug Williams. He carries a huge burden on his shoulders being the first black president. In January, he will enter the Superbowl as quarterback. His "root canal" will be the financial system and unrest in the Middle East. In the coming weeks, we will see who he selects to be his coach and Hogs. If I were him, I would pick some massive Hogs that can block and give him time to complete some passes. Start off slow in the first quarter, and then try to make some big plays in the second quarter. Doug Williams paved the way for Cunningham, Stewart, McNair, Culpepper, McNabb, Brooks, Vick, and Blake. Barack Obama now has the opportunity and challenge to pave the road to the future for many others.

P.S. After Joe Gibbs left the Redskins, I lost touch with the team and picked the Colts up as my new "backup" team when Jim Mora arrived. The later arrival of my fellow New Orleanian, Peyton Manning, sealed the deal. But remember I predict a Super Bowl victory for the Saints next season!

The Death of Michael Crichton

I was shocked to read this morning of Michael Crichton's passing. I was not aware that he was battling cancer. Here's a nice article and audio from NPR:
http://www.npr.org/templates/story/story.php?storyId=96689392

I've read several of his books and his knowledge of science and technology is incredible. After reading "Jurassic Park" years ago, I was disappointed that his stimulating intertwining of science in the book didn't transpire to the silver screen. He presented a good, fair, and diverse perspective on the environment in "State of Fear". The end of the book contained a massive amount of references for further reading. "Next" presented a very scary view of the future of the biotech industry. Talking monkeys, yikes!!

His life story on Wiki:
http://en.wikipedia.org/wiki/Michael_Crichton

We've lost a stimulating, intelligent, and insightful author and entreprenuer at too young of an age.

Congratulations Mr. Obama

It was predicted to be a historic night and that it was. The masses have spoken and they've spoken clearly. Barack Obama captured 52% of the popular vote and a staggering 67% of the electoral vote. As the cycle turns, the house gets cleaned. Most interesting to me is that 56% of women voted against Palin. Over 118 million people voted. That's double an American Idol vote!

It was exciting to witness history being made. Throughout most of the election process, race was not discussed greatly. Last night, it was obvious that many were excited that we finally elected a black person to the office of president. As a country, we should be proud of this moment. I believe that it has spoken volumes to the world.

I believe that Republicans have to admit the following: Obama is a very intelligent man. He ran an incredibly strategic campaign. He is an extremely eloquent speaker. He has inspired the masses. I've not seen rallies quite like the ones I saw last night. He has inspired Generation X. He has attracted people like Colin Powell and Warren Buffet so I expect that he'll build an impressive cabinet.

Mr. McCain gave a gracious speech and laid the groundwork for participation and cooperation.

Seeing live video from Harlem made me think about my late uncle, Father David Kirk, who marched with Dr. Martin Luther King in the 60's and spent 40 years in Harlem fighting for the homeless. He would be very proud today.

Mr. Obama has a challenging job ahead. This morning on CNN, one of the correspondents called it "the worst inbox in the world". Stay tuned, these are interesting times.

Source: CNN

An Election Day Reflection

The day has finally come. Two years and $2.5 billion later, we finally have out opportunity to cast our ballot. It seems that we've been in this process for ever! The experts predict that we will have a record turnout. Based on the timing in the economic cycle, that make a lot of sense. No matter the outcome, today proves to be historic.

Back in June at our annual beach trip, I predicted that Obama would win by 14%. That prediction was unanimously scoffed at and all stated that it will be a "photo finish" like Bush/Gore. My prediction then and now is that Obama will win by a landslide. I don't believe this because I think that he's the dominating candidate or necessarily the best candidate. I believe this because of the timing of the election with the economic cycle. As we entered the new millennium and the beginning of the "contraction" phase of the cycle, Bush took office. His approval ratings have consistently slid down to an all time low. In contractions, the mob becomes angry and fearful. Kings and presidents are thrown out of power during the contractions. The Republican party will suffer greatly during this election due to timing. The imperialistic occupation of Iraq has been cited as the explanation for the down trend in ratings, but ironically the conflict also aligns with the behavior "of the crowd" during the contraction phase.

The Obama landslide victory will reflect the significant shift in mass social mood from "happy and greedy" to "angry and fearful". The anger is focused on the Bush administration, yet the fear appears to be focused on the policies of a potential Obama administration. I believe that the anger will overpower the fear. When we're happy and greedy, we forgive a president for having sex with an intern in our country's White House. When we're happy and greedy, we typically re-elect the incumbent. John McCain is considered the incumbent. George Bush Sr. knows what happens when the tide shifts slightly off kilter. He still hasn't forgiven Greenspan for not printing more money to artificially stimulate the economy prior to his re-election bid. Greenspan made up for it during W's term.

Most concerning to me during this process, and mainly during the past six weeks, is the content of emails that I've received from my Republican friends. The fear mongering has been staggering. The most shocking have been those wrapping the election decision under the veil of Christianity. I believe that Jesus loves both candidates. The Republican party made the conscious decision to "go negative" instead of telling us why McCain was the right choice. During the Republican convention, all I heard were two things: "Vietnam POW" and "maverick".

The interesting question to ask on election day is: Should one vote for what they believe is best for themselves or for their country? For me personally, being a white upper middle class geologist in the petroleum industry, most would agree that I should vote Republican. The Republican Party states that they will keep my taxes low, keep illegal aliens from mowing my lawn, and they want to drill, drill, drill. Sounds like a simple decision. I actually believe that one should vote for what's best for the country as a whole. I firmly believe that one should assess the picture on a global scale. I also believe the "the chain is only as strong as the weakest link". If our "weakest link" gets weaker, it will affect all of us. So who is the best candidate for the country as a whole?

I don’t think it matters who the next president is. I know that 99% of you will disagree with this statement. I believe that he will be doomed by the economic cycle. The cycle is much greater than a president or a political party. The next president will time it horribly like Carter did, but much worse. He will be the fall guy. He will be worn down by the Middle East like LBJ was with Vietnam. Hopefully he won’t receive the fate of JFK. Yes, that sounds pessimistic, but history is very repetitive. Although Obama and Palin don’t have enough experience, especially for dealing with the rogue waves that lie ahead, I believe that both have great potential for a future moment in time. Obama has brought excitement and hope to the masses. I don’t ever recall seeing a 100,000 person rally for a presidential candidate. Palin has brought a freshness to the process and great hopes for future female candidates. McCain and Biden are career professional politicians and that’s not what the country needs. Bush’s term aligned with the “beginning of the end of the great expansion” and McCain can’t shake the Bush connection. I’m still trying to figure out if Obama is a Christian, Muslim, Arab, Kenyan, or terrorist?!?!

This morning I voted for Ron Paul as a "write in". I believe that our two parties are stuck in a state of significant paralysis. The rigidness and extreme perspectives are at a standoff. When this cycle finds a bottom in the coming years, it might be the opportunity for a third party to rise in power and stature. My vote can be easily cast as a wasted vote, but I truly believe that out of all of the candidates and through the entire process, Ron Paul was the only candidate that conveyed an honest and accurate understanding of the situation along with providing real, concrete solutions. He understands that a fiat system will ultimately come to a catastrophic ending. Someone in charge has to have a plan for this. Of course, I hope that I’m wrong. I’ve thoroughly enjoyed, and have been a full participant in the Supersize Me Era.

It's interesting to observe politics on the home front. My 14 year old son wants Obama, 12 year old daughter McCain, and my wife still was rooting for Hillary. How's that for diversity!

Now that the entire process is ending, I present my awards for the candidates:
-Best resume' for the job award: Mitt Romney
-Most bewildering strategy award: Rudy G
-The "What Was That" award: Fred Thompson
-The Bill Clinton award: John Edwards
-The Pitbull With Lipstick Award: I can't stand the Clintons, but I have to give it to Hillary. She's the only person that I've seen turn Bill O'Reilly into a teddy bear.
-The most sincere award: Three candidates conveyed honesty and sincerity to me throughout the process: Mike Huckabee, Barack Obama, and Ron Paul. How's that for a diverse group.
-The best speaker award: Barack Obama
-The Big Winner Award: Sarah Palin; she rocketed on the scene and will be a huge winner in defeat. She's given hope to all of the young ladies that want to seek leadership positions in the future.
-The live off the distant past award: John McCain; I respect the man greatly for his military service and incredible tenacity to survive a terrible situation, but you can't focus a campaign on your military story from 40 years ago.
-The best tag line award: I'm torn between "change" and "maverick"
-The financial guru award: Ron Paul; he has incredible knowledge about the world financial system and the challenges ahead. The media and the process marginalized him and will regret it in hindsight.
-The Most Diverse Candidate Award: Barack Obama; multi-racial, raised in Hawaii by white mother from Kansas and grandparents, Kenyan father, degrees from Columbia and Harvard
-The big big winner: Tina Fey and SNL!

Well, these are interesting times. This will be an interesting day, week, month, year, and decade.
Good luck to your team. Your input is always appreciated!
Welcome to the blog!

A Presidential Comparison

Interesting contrast….which president do you want in charge right now:
A)
"We're in the midst of a serious financial crisis, and the federal government is responding with decisive actions. I'm a strong believer in free enterprise, so my natural instinct is to oppose government intervention but these are not normal circumstances. The market is not functioning properly. There has been a widespread loss of confidence. Without immediate action by Congress, America can slip into a major panic.”

B)
"Gentlemen, I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves . . . I intend to rout you out, and by the Eternal God I will rout you out!"

Lets just say that to get your headshot on a U.S. greenback you had to kick some butt.
A) GW Bush
B) Andrew Jackson (despised the fiat currency system)

http://www.presidentprofiles.com/Washington-Johnson/Andrew-Jackson-Removal-of-deposits.html

Four Potential Outcomes

I believe that the future will follow one of these potential outcomes:

Potential Outcome #1: Major deflation (Robert Prechter’s long term projection)
We would incur a major decline in everything. 1929 would look easy compared to this one. Run for the hills with a bag of silver/gold pieces and a gun.

Potential Outcome #2: Inflationary depression (Jim Puplava’s long term projection)
Buy commodities and buckle your chinstrap.

Potential Outcome #3: A long term Zig-Zag (U.S. 70’s repeat or Japan 1990-current)
No major pain, up-down-up-down-up-down-up; buy a leisure suit, crank up the Led Zeppelin, and grow a beard…..it will be a long ride

Potential Outcome #4: Young/Old new president
He wow’s the country with his “change” vision and extensive plan and the credit orgy continues into the future. Party on Garth!!!!

If a meltdown is certain, I vote for the short painful one versus the long dragged out one. Consult your Japanese friends on this one.

“If the Bear Market continues (which I think likely) sooner or later it takes down even the strongest companies. “ Warren Buffet March 2008

I’m betting on Puplava’s forecast of massive inflation. Buy some Krugerrands and interest in an oil well.

My Predictions
· Oil: $150/barrel before $50/barrel
· Gold: $1500/ou before $500/ou
· Dow Jones Ind. Avg.: 5000 before 15000
· Next ten years will be the toughest we’ve ever experienced in our lifetime
· Next twenty much tougher than last twenty
· Next fifty much tougher than last fifty
· Military draft: within ten years, probably 5
· Brett Favre won’t be playing for the Jets next season
· Paris Hilton’s career tanks
· Saints win the Superbowl in 2010!!!
It ain’t all bad…………..

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.

The Storm Series

I stumbled upon http://www.financialsense.com/ back in 1999 and was extremely impressed with Jim Puplava’s diverse content and his weekly radio show. I’ve listened to it since then on a weekly basis. His forecasts of the future have been amazingly accurate. In 2000-01, he wrote a series of papers entitled “The Storm Series”. I found that he had significant data supporting his forecasts and most of all, it made sense. I’ll recommend reading it again: http://www.financialsense.com/series2/perspectives2.html

Puplava called $140/barrel oil and $1000/ounce gold. In February this year he ranted every week on his radio show about “naked short selling”, “credit default swaps”, and “derivatives”. I was originally unfamiliar with these terms and was amazed last week when they became front page news.

Life At An Inflection Point

I believe that 8 years into this “change in trend”, the masses are finally mentally and emotionally engaged in the situation. Even politicians other than Ron Paul are talking about the subject!

“First they ignore you, then they laugh at you, then they fight you, then you win”
Mahatma Ghandi

“Didn’t anyone know that this was coming?” Glenn Beck 9-24-08

Many intelligent people have been forecasting these exact financial events for a long long time. This shouldn’t have come as a surprise to anyone. The media reports on what “has occurred” and they spend little time presenting the perspectives of intelligent people with regards to what they think “might be coming”. The internet provides a source of extensive content that we all should spend time sorting through and sharing. My personal interest has never really been the financial markets themselves, but more importantly the associated events and changes that will greatly impact our lives, our children’s lives, and our grandchildren’s lives. As I’ve stated before, my 9/11 impact was “is our generation prepared for the challenges ahead because we’ve had it so good for our entire adult lifetime”. We’ve been lulled to sleep by 26 years of comfort and good times. I believe that it’s very important to read and to locate material from a diverse range of sources. CNN probably isn’t the best place. My wife told me last week to “stop reading those books”, but I believe that one should have a perspective on all possible outcomes and have a plan for each. Reading history might be the best place to start because we always seem doomed to repeat it. I’m currently reading “Tradegy and Hope” a documentation of world history from 1880 to WWII.

“George, this one’s a pickle. It’s a pickle. Potter’s paying ten cents on the dollar.” Uncle Billy

Cycles of Regulation

During the expansion phase of the growth cycle, regulation always laxes. When the markets implode, the regulators come running in (e.g. Sarbanes-Oxley). Guess where we are now? Enron was not an isolated incident involving unethical management. Neither was Tyco, Worldcom, AIG, or Bear Stearns. They are all part of an overall cycle of laxed regulations and euphoric credit-induced expansion. Many participated in the process. Go research the accounting changes over the past 20 years. Get ready for the IRS audits.

The Oracle From Omaha

Who couldn’t like Warren Buffet. His track record is astonishing on all fronts and he’s so impressively humble. When you listen to an interview his perspective seems like simple common sense. His approach is basically “always buy value”. Last week, he might have illustrated that better than ever….$10 billion put to work buying the last standing financial institution for $.10 on the dollar. The most interesting investment of late in my mind is his purchase in the railroads. The what??? Yes, railroads. Warren might see something coming that everyone is clueless too….a transportation shift back to the rail. Could the “3000 mile salad” take to the rails? Last night I saw a CSX commercial with the tag line “How Tomorrow Moves”. http://money.cnn.com/2008/03/07/pf/sivy_apr.moneymag/index.htm?section=money_topstories

Sleep Easy, Those in Charge Know What They're Doing

"No one knows what to do. We are in new territory here. This is a different game. We're not here playing soccer, basketball or football, this is a new game and we're going to have to figure out how to do it." Senate Majority Leader Harry Reid
What?????

“This action does entail risk.” George W. Bush
I feel better now

Jan-2008: Democratic Rep. Marcy Kaptur of Ohio launched into a lengthy question to Ben Bernanke during the Fed chairman’s House testimony about community banks, securitization of home loans and investment banks’ role in the crisis, ending with this point: “Seeing as how you were the former CEO Of Goldman Sachs…”She was quickly stopped by Mr. Bernanke and the laughter in the room. “I’ve got the wrong firm?” she asked, before being corrected that she was thinking of Treasury Secretary Henry Paulson. “Oh, OK. Where were you, sir?” Said Mr. Bernanke: “I was the CEO of the Princeton Economics Department.”
She’s one that will be casting another vote on Thursday.

“Economics is something I don’t really understand.” John McCain
Yikes!!!!

“This all started with the subprime mortgage crisis.” Barack Obama
Wrong!

It started in 1982 with Reagan/Voelker and the Fed’s credit machine. This is a 26 year issue, not a 2 year issue. The system and problem is much greater than the mortgage market.

Join The Revolution

You won’t see too many politicians with this level of knowledge of the financial system. He was mocked and marginalized, but now many can go back and watch the interviews and realize that we actually had one politician in the game who actually was informed and wasn’t afraid to speak the truth. It’s not too late to write him in on your ballot. So refreshing to see honesty, intelligence, and sincerity all wrapped in one.
http://www.youtube.com/watch?v=dv6rQ0U01Yc&feature=related
http://www.youtube.com/watch?v=Fcyv_E_FUXA&feature=related

The Great Fallacies

1. The government won’t let it happen
2. This time it’s different
3. It’s now a world economy
4. The internet changed everything
5. The world is flat (only if we want it to be)

The Rising Tide

The rise in credit drove the rise in the financial markets, home sizes, debt levels, confidence, waistlines, car sizes, and childhood obesity. It’s all intertwined and some might say it was all artificially created. The “supersize me” era has ended. History will show that 2000 was the beginning of the end of this massive credit orgy. While everyone is blaming the mortgage market, I believe that this situation or cycle dates back to 1982 with Reagan/Voelker. That’s when the credit and greenback printing presses started warming up. Bush Sr./Greenspan participated. Clinton/Greenspan accelerated to a higher level and Dubyah/Bernanke continued the process. ALL were participants. Both political parties. To hear Greenspan interviewed last week and state that he knew this was coming is outrageous. He was the mastermind behind the majority of the credit cycle. The Fed continues to destroy the U.S. dollar. At some point, the printing presses will run out. Two years ago the Fed quit reporting M3 figures. They said that it was too expensive to track!!! Zimbabwe did the same thing with their inflation rate. Don’t worry, we got ya covered!