The Shift In Respect

I might have jinxed Kent State with my recent post referencing their riot in the 60's. Last weekend over 60 students were arrested while they started fires during an evening of parties gone wild.

If you want to see mob mentality evolve over a few hours, take 7:38 to watch this video. A total lack of respect for authority. Yes, the easy explanation is drunk college kids, but I don't remember starting any fires or having police fire pellets at me in the 80's.

http://www.youtube.com/watch?v=vfYwrZZ6sRQ

The Associate Press reported:

COLUMBUS, Ohio – "An end-of-year college block party spiraled out of control as police fired pellets and used pepper spray to break up hundreds of rioting students who sparked a string of street fires at Kent State University. Video posted on the Internet shows students hurling furniture and street signs into the flames on Saturday night as a SWAT team in riot gear converged on the crowd. Kent police said the party grew violent after one reveler was arrested and students began pelting officers with bottles, bricks and rocks. It was the first violent clash between Kent State students and police in years. In 1970, four Kent State students were killed by Ohio National Guard troops during a campus protest of the invasion of Cambodia. "They were burning pretty much everything," said police dispatcher Rosemarie Mosher. 'They were throwing stop signs on the fires, they were throwing chairs, couches, tree branches. Basically anything they could get their hands on.' "

The mood of the mob doesn't appear that different from the days directly following Hurricane Katrina in New Orleans. It doesn't look any different from Thailand over the past few weeks. The Associated Press reported:

PATTANI, Thailand - "At least 78 people were suffocated or crushed to death after being arrested and packed into police trucks after a riot in southern Thailand, officials said Tuesday. The announcement dramatically increased the death toll from the latest eruption of violence in Thailand’s Muslim-dominated south. Officials had earlier said that six people were shot to death during clashes Monday at a police station in Narathiwat province."

Viewing the video on the news showing the rioters attacking the vehicle containing the ousted prime minister was quite disturbing.

The angry and fearful mob behaves the same whether they're charged on beer or political distress.

A Green Day Alignment

Take a moment to digest this one. It's non-partisan and really summaries the "big picture":

http://www.financialsense.com/editorials/quinn/2009/0421.html

Rick Warren On The Recession

Rick Warren was a guest on Larry King a couple of weeks ago and made an interesting comment regarding the recession. He said people tend to do three things when times get tough: go to bars, church, and the movies. They go to bars to connect with people, they go to church to enhance their faith, and they go to movies to escape the reality of it all.

The Unwed Baby Boom

I read this on CNN and found the percentage to be staggering:

"Nearly 40 percent of babies born in the United States in 2007 were delivered by unwed mothers, according to data released last month by the National Center for Health Statistics. The 1.7 million out-of-wedlock births, of 4.3 million total births, marked a more than 25 percent jump from five years before. Statistics such as these, which include for the second year in a row a bump in teen pregnancies, after a 14-year decline."

Locked & Loaded

In Talkin' Bout A Revolution I mentioned that I knew a lot of people in the market for weapons. Time Magazine reports a disturbing trend:

Americans are afraid of this economy. As a result, they're getting locked and loaded. To wit: Jacquita Baker, a soft-spoken single mother from Kentwood, Mich., near Grand Rapids. She works as an administrative assistant at the Grand Rapids Urban League and is studying criminal justice at a local university. As of Monday, she's the proud owner of a shotgun. Why bear arms now? "The economy played a large part in my decision," says Baker, 27. "When people don't have jobs, they might go breaking into people's homes. I want to be safe in my home."

She's not alone. Three recent tragedies have thrust gun control back into the national discussion. On April 3, a Vietnamese immigrant in Binghamton, N.Y., shot and killed 13 people at an immigrant service center before taking his own life. On April 4, a Pittsburgh, Pa., man opened fire on three police officers responding to a domestic-disturbance call. All three officers died. That same day, a man from Graham, Wash., distraught that his wife was planning to leave him for another man, shot and killed his five children and then committed suicide. These horrible tragedies are already roiling gun-control advocates. But those who strive to see shotguns sidelined have to cope with another stinging reality: gun sales are soaring.

According to the SportsOneSource, a research firm that tracks the sporting-goods industry, firearms sales in large retail outlets are up 39% this year. Shops across the country are reporting ammunition shortages because stores can't meet demand for bullets. Data from the FBI's National Instant Criminal Background Check System, which the industry uses as a proxy for overall firearms sales, are also revealing. From November 2008 through March 2009, FBI background checks, which are required every time a federally licensed gun dealer makes a sale, rose 29.3% over the same period a year earlier. In November alone, checks jumped 42%, to 1,529,635, the largest monthly total in the decade that the system has been in place. "Consumer demand is unprecedented," says Larry Keane, general counsel for the National Shooting Sports Foundation, a trade association for the firearms and ammunition industry.

Two factors are fueling the rise. The first is political. It's no coincidence that a record number of background checks occurred in November, the month Barack Obama was elected President and the Democrats took control of Congress. People grew anxious that the Obama Administration would ban semiautomatic weapons, so they rushed to buy guns before legislation could be passed. In a December survey by the research firm Southwick Associates, nearly 80% of active hunters and target shooters said they believed firearm purchases would "become more difficult" under the new Administration and a Democratic Congress. "Everybody is waiting for when the next foot is going to fall in taking away the right to bear arms," says Doug VanderWoude, owner of Silver Bullet Firearms in Wyoming, Mich., near Grand Rapids. He estimates that business is up 50% in 2009.

The last Democratic President, Bill Clinton, put into law an assault-weapons ban in 1994. President George W. Bush allowed that ban to expire, but last month Obama's Attorney General, Eric Holder, said the Administration wanted to reinstate Clinton's ban. "The gun culture is hypersensitive," says Miles Hall, an Oklahoma City gun-shop owner. "If someone sneezes in Washington, we hear it and get nervous. There's a lot of anxiety out there."

A new market of gun buyers is emerging. Hall estimates that some 80% of his sales since the election have been to first- and second-time gun purchasers, many nervous that this may be their last chance. "Thus far, the Obama Administration has done what they set out to do," says Joe Keffer, who owns a shop in New Holland, Pa. "And therein lies the concern."

For gun-control advocates, this dynamic is bitterly ironic. Tough government talk against firearms, amplified by the Obama Administration's popularity, has actually helped spark a sales increase. It's yet another cost of good intentions.

The recession is another factor in the sales jump. Guns are expensive — Baker, for example, paid $200 for her shotgun — yet fear trumps the cost of a weapon for people worried that the economic crisis will lead to more crime. "Protection of the family, protection of the home, is utmost on people's minds," says Keffer. Many big cities have indeed seen crime tick higher during the downturn. But in the wrong psyche, this sentiment can carry deadly consequences. For example, the mother of the Pittsburgh man who shot and killed the police officers said her son had been stockpiling guns and ammunition "because he believed that as a result of the economic collapse, the police were no longer able to protect society."

Entire article:
http://www.time.com/time/nation/article/0,8599,1889886,00.html?cnn=yes

Gun advocates stress that a few extreme cases shouldn't penalize law-abiding citizens who exercise their Second Amendment right to bear arms. Roy Richmond, for example, just bought his first small handgun. He's the heat-packing pastor of a nondenominational church near Oklahoma City. He's carrying the weapon for protection. "Things are getting worse and worse," he says. "There needs to be some people out there with guns." With the weapons business booming, Richmond and his fellow firearms advocates are seeing their wish fulfilled.

The Heartland Theory & The Middle East

I'm continually dumbfounded by the fact that people still believe that we invaded Iraq for these reasons:
-Sadaam Hussein was an evil person (he was "our boy" for many years; if we're humanitarians, we missed a few nice opportunities in Africa over the past two decades)
-Iraq was involved in 9/11 (most of the young men were from our favorite Middle Eastern country, Saudi Arabia; why didn't we invade them?)
-Iraq had weapons of mass destruction (so does N. Korea and Pakistan. Why didn't we invade them?)

The real reason is OIL. Yes, oil. Surprise surprise. On our annual beach trip in June 2004, we were having a lively discussion on the Middle East. The next day, the USA Today had the following article presenting the "bigger picture". Once again, history provides us with the answer. After reading the article, integrate the recent announcements by the Obama administration regarding Afghanistan. Remember, his campaign pledge was to exit.

In OMG and Holy Sh*t Obamaman I referred to the Pentagon meetings that President Obama was going to have and had. I envision at these meetings that the strategy described in the article below was outlined with the Middle East as the focus. I'm perplexed why the American people find it farfetched that our strategy all along was to invade Afghanistan and Iraq only to "set up shop" in the most important oil region in the world. If we are there, Russia and China have to "come through us". Remember, the French and the Germans had oil contracts with Iraq. That is why they opposed the invasion. Upon our imperialistic takeover, we immediately declared those contracts null and void. That might be the arrogance President Obama has referred to and apologized for in the past weeks.


'Heartland' strategy in Iraq: Right idea, if done the right way
By William Hamilton
Some critics like to say American foreign policy is discernible only in retrospect. Even so, such opinion could be taken as a left-handed compliment for a nation that has done rather well in defending itself and its allies in the previous century, and now, at the beginning of the 21st century. Though it might be too early to put a name to the Grand Strategy we are employing with regard to Iraq, just "being there" suggests that our strategy aligns quite nicely with the Heartland Theory put forth in 1904 by Sir Halford John Mackinder, one of the great military strategists of the 20th century. Here's how the Heartland Theory would apply to Iraq: Get a globe and put your finger on Iraq. Notice how your finger is resting right in the middle, the "heartland," of the Middle East, halfway between Egypt and Pakistan.

In 1904, British geographer Mackinder placed his finger on Eastern Europe and declared that to be the "pivot area" or "heartland" of Europe. He declared: "Who commands Eastern Europe commands the heartland; who rules the heartland commands the world island; and who rules the world-island commands the world." (By world-island, he meant the Euro-Asian-African landmass.)

Did anyone buy the Heartland Theory?
Yes. Napoleon understood it even before Mackinder was born. That is why he attacked czarist Russia. Moreover, Kaiser Wilhelm II, Adolf Hitler, Josef Stalin and three generations of the world's foremost military strategists embraced it as gospel and acted upon it. Even now, the United States is steering NATO's drive into Mackinder's Heartland with the addition to its ranks of Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.

Just being there is enough.
The essential element in the Heartland Theory is simply "being there." Properly applied, being there means Iraqi oil revenue cannot go to al-Qaeda. Being there means the Iraqis can choose whatever government they want, as long as it does not support terrorism. Being there means interdicting the radical Islamists' lines of communication that run across the Middle East from Cairo to Islamabad, Pakistan.

But being there need not include the imposition of a Pax Americana on Iraq's cities.
The inevitable collateral damage of urban warfare creates a no-win situation for U.S. troops in a news-media world dominated by the hostile Al-Jazeera TV network and by a Western media that daily prove the dictum: Bad news will travel around the world before good news can tie its shoelaces. George Friedman, who runs a private intelligence service, suggests that the U.S.-led coalition can still be there while, at the same time, withdrawing its troops from Iraqi cities. By occupying a series of desert outposts, we retain the strategic advantage of being in the heartland of the Middle East. If al-Qaeda or the Iraqi insurgents want to fight our troops, they must expose themselves in the open desert, where their rusting, bomb-laden pickups are no match for our Abrams tanks and Bradley Fighting Vehicles. Our casualties would plummet. Theirs would skyrocket.

Bush administration's opportunity
But even as it becomes increasingly clear that our troops are being withdrawn from Iraq's troubled cities — especially now that governing power has been transferred to the Iraqis — the debate as to the wisdom of being there in the first place rages.

One way for the administration to answer its critics would be to explain the invasion of Iraq and our continued presence there in terms of the Heartland Theory. While that explanation might make a great deal of sense to armchair strategists and war-college graduates, it could be a difficult sell to a pop culture that cast more votes during the latest American Idol season than it cast in the most recent presidential election.

Meanwhile, the inescapable geographic truth is that we are occupying the heartland of the Middle East. If Mackinder's theory is correct, our mere presence there will have a major impact on how we fight, and whether we succeed, in the ongoing war on terrorism. But maintaining public support for our continued presence will require military tactics that reduce our casualties to more acceptable and sustainable levels.

If that can be achieved, the armchair strategists and the soccer moms may create the common ground of broad public support that will be essential to our successful occupation of a strategic base in the region's heartland.

William Hamilton is a syndicated columnist, retired Army officer and co-author of The Grand Conspiracy and The Panama Conspiracy —two novels about terrorists targeting the United States. He lives in Colorado.

http://www.usatoday.com/news/opinion/editorials/2004-06-29-opcom_x.htm

Peter Schiff Interviews Marc Faber

I highly recommend a reading of this interview. Marc Faber often makes guest appearances on Puplava's Financial Sense Newshour. He seems to always have a great pulse on the other 90% of the world.

http://www.europac.net/report/reports/report_faber.pdf

Recession Comparison

Chartoftheday.com presented this interesting chart below comparing prior recessions. Will we be average, Great Depression-like, or a new record? I conclude that the data supports a record setter.
Source: http://www.chartoftheday.com/20090403.htm?T

Shiny Happy People

In the past, I've mentioned the initiative and website, All Pro Dad. It provides some great resources and a weekly email message. This one was sent recently:

What happy people don't do
Happy people spend a lot of time socializing, going to church and reading, but they don't spend a lot of time watching television, a new study finds. Although people who describe themselves as happy enjoy watching television, it turns out to be the single activity they engage in less often than unhappy people, said John Robinson, a professor of sociology at the University of Maryland.The moral of the story? If you want to be happier, and have a happier family, then minimize television to perhaps an hour a day (or less) and make the most of your time together enjoying TV-free pursuits, like reading, playing outside, taking up a hobby or helping out at a soup kitchen.

More on the topic at:
http://www.allprodad.com/playbook/viewarticle.php?art=365

http://www.allprodad.com/

Shiny Happy People - REM
Shiny happy people laughing
Meet me in the crowd
People people
Throw your love around
Love me love me
Take it into town
Happy happy
Put it in the ground
Where the flowers grow
Gold and silver shine
Shiny happy people holding hands
Shiny happy people laughing
Everyone around love them, love them
Put it in your hands
Take it take it
There's no time to cry
Happy happy
Put it in your heart
Where tomorrow shines
Gold and silver shine
Shiny happy people holding hands
Shiny happy people laughing

Frequent Flyer Forecast

This tip was published in 1995 by Robert Prechter in his book, "At The Crest of The Tidal Wave"....page .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."

The Inevitability of The Economic Cycle

"The psychological foundation of liquidity is confidence. We cannot stress this point strongly enough. When investors are optimistic, confidence remains high and liquidity expands. When this optimism goes away, the spigot will run dry. The psychological foundation for the asset boom, a rise in social mood, has slipped away. As confidence continues to wane, the resulting destruction mounts. It may seem strange that even as the fundamental changes dig in, people cannot see what is before their very eyes. Of course, this is how the progression toward a pessimistic extreme has to happen. The untold story of 2008 is that it is just the opening salvo."
Robert Prechter

http://www.elliottwave.com/
http://www.socionomics.com/

Here Come The Ladies

This was reported today in Houston by KPRC. It looks like the ladies have joined the party!
Which way is the trend?

FBI Concerned About Bank Robberies
April 17, 2009
HOUSTON -- Bank robberies in the Houston area are on the rise, and they're becoming more violent, officials told KPRC Local 2 Thursday.

A man robbed Wachovia bank on Smith Street near downtown Houston on Wednesday.
One could say he was caught red-handed, but most of the red was in his pants, where a dye pack exploded. Instead of a smooth getaway, he ran into a man. He requested KPRC Local 2 not use his name. "I chased him with my car … got to a stopping point where I could point the gun and the car at him," he said. "I drew the gun and he started emptying the money from his pants area."

The man said he was fed up when he saw the man. "(That was the) second time that bank got robbed," he said. "Those are my friends in the bank." Police arrived and the man was arrested.
Houston FBI agents said they are very concerned. There are more bank robberies in the area than normal, and they're becoming increasingly violent, officials said.

"We've had robbers that have gone into banks that have assaulted tellers during the bank robberies," spokeswoman Shauna Dunlap said. "They've assaulted security guards that are in the bank. They're fired gunshots inside the bank."

Investigators have dubbed one group of robbers the "careless crew" because of the way they wield assault rifles inside grocery stores. The group is believed to be responsible for at least eight robberies.

"They go in armed with handguns and also assault rifles," Dunlap said. "They fire gunshots inside the banks and also one time in the parking lot on the way out the bank." Detectives said one man, dubbed the "point-blank bandit," is wanted in at least three bank robberies.

"He's basically going in armed and he puts the gun right up to the side of the tellers' head during the bank robbery," Dunlap said. "It's very concerning, very dangerous and we're very thankful that no one's been hurt." Investigators said more women are robbing banks. Two have been arrested in the last two weeks.

Malcolm Gladwell on Outliers

Malcolm Gladwell recently published his third book, "Outliers". This one, like his first two "Tipping Point" and "Blink", is really intriguing. He uses a unique approach of taking universal concepts and weaving them through what appears to be unrelated and diverse topics.

"Outliers" is about human potential and the evolution to success. Here's the author presenting the concepts of his latest book:

http://www.bnet.com/2422-13950_23-246894.html

http://www.bnet.com/2422-13950_23-246904.html

Early Signs of Change - The Premature Evacuation

As I've mentioned in the past, I exited this market originally in May, 2000.....what I call my "premature evacuation"! I dove back in October-2007 with a commodites focus (oil/natural gas/gold/silver). The gold/silver half has recovered, but the energy piece is still hurting.

This blog really started in that time period via email with my inner circle of friends. As the Dotcom meltdown evolved, things didn't smell right. My friend Mark and I engaged in some great discussions regarding these topics.

-----Original Message-----
From: Kirk Barrell [mailto:kbarrell@geodynamic.com]
Sent: Tuesday, July 23, 2002 8:38 AM
To: Mark R.
Subject: RE: markets

Mark,
Implosion is the only word I think of when I read the news in the morning. At this point, even trailing earnings are in question due to the bogus numbers. So do we even know what the PE's are? I told Michelle this weekend, it's kind of like it used to be in the airport when you arrived early and you sat there and watched all of the "latecomers" running to their flights. My advice is to sit back and watch things unfold. If I had some cash outside of retirement accounts I would be shorting and buying gold (the real stuff).

It's amazing to watch all of the witchhunts going on....CEO's, accountants, priests, American Talibans, baseball players on sterioids, and poor Martha Stewart! Is Oprah next!?!?! My greatest concern is real estate. I think that we bought our house close to the top. I like to think (or hope) that our area has a good foundation, but the first tremor could be the HP cuts this week.

Long term, I really like the oil patch. Supply/demand and the Middle East bode well for this sector. In the short term, OPEC could move into crisis with Venezuela's quoto cheating. Lower oil prices would play into Prechter's deflation argument.

Prechter writes a lot about "change in mood". I'm seeing it on TV at night and in every day conversations. The news about Morocco and Spain fighting over a barren, uninhabited, goat-populated island "took the cake" last week!!

For now, my thoughts are that "cash is king". Our mentality shift now might have to be that 2% is better than -20%.
www.financialsense.com has some great information posted on a daily basis.
Keep me posted on your ideas,
Kirk

.....................................................
From: Kirk Barrell
To: Mark R
Sent: Sunday, August 18, 2002 9:22 AM
Subject: RE: Big banks are next on list of free-falling stocks

I with you...Jim Puplava posted a great article on the banks last year...especially focused on those with large derivative positions. JPM Chase has an incredible position. My two neighbors work for Chase and I saw them at the park last weekend. They said that things were not good.
The wild ride continues!!
Kirk

..................................
From: Kirk Barrell [mailto:kbarrell@geodynamic.com]
Sent: Tuesday, January 14, 2003 8:40 AM
To: Kirk A. Barrell
Subject: Bedtime reading

a interesting new article at financialsense.com.....
http://www.financialsense.com/stormwatch/update.htm
..........a snipit.....................
Given all of these uncertainties, where should one invest this year? I believe the "Next Big Thing" is going to be in "things" such as commodities. The big winners in this decade are going to be gold, silver, and energy. Other commodities from sugar, coffee, cocoa and grains, to other soft goods will also be winners. Commodity prices will rise because of two trends: a declining US dollar and rising populations and industrialization of developing economies.

The time for paper is over and the rise of "things" has just begun. Another trend that is taking place is what Marc Faber calls the reemergence of the emerging economies. Economic power is moving from the West to the East and this trend is irreversible.
Kirk

A Summary of the Tea Parties

I was surprised to received an email Tuesday evening inviting me to a tea party in my neighborhood. It was planned to occur at a local park. My understanding is that the parties were planned to protest taxes and the bailout. T.E.A. stands for "taxed enough already". A brief viewing on TV last night of these nation-wide events to me appeared to be hundreds of Team Red members that are still grieving over their election loss. Maybe they should have been SGR Parties....Sour Grapes Republicans.

If you've read my posts in the past, you know that I'm very opposed to any bailouts. If your company took too much risk, than it must suffer the consequences. I believe that the statement "it is too big to fail" is ludicrous. No company is too big to fail. No country is too big to fail. If you owe $100, but have $50, than you're broke. If you have $30,000,000, but owe $60,000,000, then you are broke. No difference. I've made the dying patient analogy already. Contraction is inevitable, but don't drag it out. Let it occur naturally. The massive bailout will now mimic the great Japanese contraction (1990 to present).

I do find it very perplexing that Team Red is now protesting spending. Where were they during the entire Iraq affair? Is spending billions on the imperialistic invasion of a country okay? Why didn't they have tea parties than? If they are opposed to government intervention and liberty, than where were these patriots during the approval of the Patriot Act? Someone please answer these questions for me.

I wrote a big check to the IRS yesterday....very painful. I'm sure many others did to. I consider it my American obligation. It's not patriotic, it's a requirement (some do debate this). I've also stated prior that Buffet's perspective on taxes is a fair one. If you want to feel real tax pain, move to Norway. Why is Team Red protesting taxes now? Why didn't they protest taxes during the Bush administration? The reality is that if McCain won, he would be raising taxes too. How else are we going to pay for all of our obligations that EXISTED PRIOR TO OBAMA?

I constantly recommend to my favorite Republican that we should all "fly our helicopters" above all of this political chatter and focus on the facts, the data. Despite this recent massive spending spree, we already had major debt obligations. Our children and grandchildren were ALREADY burdened with this, so if tax burden is your issue, I would have expected you to be throwing tea parties a long time ago. Our massive debt is NOT a new issue or fact. Increased taxes is a reality no matter what team you cheer for. Team Red must recall that The Gipper was one of the biggest spenders of all time.