Thursday, June 7, 2007
Future News Headlines
What's the use of subscribing to services like Stratfor or Elliott Wave International and reading news analysis sites like UrbanSurvival or Sociotimes if you can't use that data to try and forecast events?
We all forecast events, even when we are not conscious of it. The "buy and hold" strategy of investing is nothing more than a forecast that, over a long time line, equity prices will be higher than they are today? Or when building a house, you are forecasting that there will be no major earthquakes or hurricanes to destroy your investment and that the community will thrive enough to provide you with a secure place to live. Contrast the attitudes of folks building homes in Detroit one hundred years ago, with the situation there today and you can see that the timeline of your forecast is important.
So, here are some headlines I expect to see over the coming years. These are some of the assumptions I'm making when I make choices in my career path and in my personal life.
"Chinese Contagion" Spreads to US Shores, DJIA Down 23% in Two Weeks
The collapse in Shanghai and Hong Kong equity markets continues to spread to US and European markets. Four hedge funds have folded in the last few days as they were forced to "mark to market" a large number of collateralized debt obligations. Fed Chief Ben Bernanke continues to reassure investors that "all is well, the Fed continues to work with our associates in the finance industry to make liquidity available in the quantities needed." Rioting in Shanghai continued for a fifth straight day as investors who lost everything stormed the local communist party headquarters...
Basra Becomes New Dien Bien Phu
Negotiations continue between British commanders and local representatives of the Mahdi Army, along with organized crime leaders and militia chieftans who have besieged British forces at a number of bases. The situation is tense but calm after weeks of fighting that erupted after a botched raid by British forces on a Mahdi Army command post. Shiite sympathizers have cut supply routes all through Southern Iraq and two British outposts were overrun, with the loss of thirty-two soldiers.
U.S. forces are tied down in heavy fighting in Sadr City and have been unable to come to the aid of their Coalition partners, except for two Stryker Brigades, which are fighting their way south. Airstrikes continue to pummel insurgent bases, while videos of dead civilians are poured out onto the internet. The bodies of two Iranian Revolutionary Guards officers were displayed by U.S. officers...
"Squatters Rights" Movement Gains Strength in Colorado
Fed up with the slow pace of government action against predatory lenders, groups of victimized homeowners have banded together to prevent local authorities from forcing families from homes that have entered foreclosure. One such group, Citizens Against Repossession of Property, have prevented sherriff's deputies from evicting homeowners in two subdivisions of Denver in the last week.
Says Orlando Cabrera, local leader of CARP, "We will fight for our rights to hold on to the American Dream against the bankers and the corporations." The governor's office has been petitioned by lending groups to send in National Guard troops to end what they call "this illegal seizure of properties that were legally foreclosed on." The governor will announce his decision tomorrow...
Saudi Officials Continue to Deny that Major Oil Field has "Collapsed"
Officials in Riyadh issued an angry condemnation of ARAMCO whistleblowers and oil industry analysts whom they referred to as "fearmongers, liars and idiots" in a statement issued on Saturday.
A report in the Washington Times in late October, claiming that the water cut had spiked to 85% at the Ghawar oil field, the largest oil field ever discovered, has sparked a flood of reports out of the Kingdom that oil production is in complete collapse.
Local imams have issued a fatwa against Mr. Matthew Simmons, an investment banker who's book "Twilight in the Desert" first brought attention to the potential that the huge Saudi oil fields might be nearing their "peak" production and that the world could soon be facing an actual decline in worldwide supply of petroleum for the first time in history. This fatwa calls for muslims to kill Mr. Simmons because his "false teachings have led to lies and panic being spread in the holy Kingdom of Saudi Arabia, endangering the lives of the faithful."
Privately, officials from the U.S. Department of Energy worry that Saudi Arabia could be facing the chaos and collapse in revenue that has been so prevalent in Mexico over the past six months. The main Mexican oil field, Cantarell, continues its steep decline in production, and has led to a serious drop in revenues, as well as in supply to U.S. refineries that count on Mexican oil.
Arms and military trainers are being rushed to Riyadh for...
Layoffs Continue, State Offices Still Shut Down in Florida
It will be a cold Christmas in 35,000 more households this year as Motorola, Pfizer, IndyMac, Wells Fargo and Countrywide all announced new rounds of layoffs. And the jobs crash continues to spread to the public sector as tax revenues plunge across the U.S.
Florida entered its second week without state government services as the governor and legistlators continued their fight over what programs to cut and what taxes to raise as they face a shortfall of 17% below the projected tax revenue. New York, California and Illinois are all facing similar crises...
Hate Rock - The Newest Big Thing in Music
Drillhead, a hot new band out of St. Louis continues to dominate the world of music downloads. Their lead singer, a former Marine who served two tours in Iraq, sums up their artistic aims in a recent interview with Kurt Loder for MTV.com.
Says Jeremiah Stone, "Drillhead is our way of spreading the hate, anger and rage that we lived with every day in Iraq. All these suburban kids in their new cars and clean clothes - we want to sh*t in their brains, so they will wake up and see that life is pain..."
Markets "Should Stabilize This Spring" Says New Fed Chief
U.S. stock markets posted their first monthly gain since May of 2007, with the DJIA up 2% to 4,853. This has investors heaving a sigh of relief that the worst of the storm may be over.
"We all kind of freaked out when they shut the NASDAQ down in December," says Bear Stearns trader Joe Cagliostro. "But after getting a solid month of gains behind us, we think 2008 will be the year of recovery. We are advising our clients to be fully invested to catch the big recovery boom we expect to see this year."
Michael Milken, President Bush's new pick for Federal Reserve Chief, says that "markets should stabilize this spring...
Aztlan Liberation Army Strikes Again
Another police station was bombed in southern Texas this week, killing four police officers and wounding ten others in El Paso.
The Aztlan Liberation Army claimed credit for this new bombing in a statement uploaded to YouTube, in which a masked spokesman stated "This is only the beginning. We will massacre the invaders and occupiers as they massacred our ancestors. We will not rest until every Anglo has been killed or forced out of the occupied lands of Aztlan."
Aztlan is a mythical name for a huge swath of the Southwest United States. While there have been movements and protests in the past, this wave of violence and gang activity is unprecedented on U.S. soil...
I look forward to looking back on these thoughts and hopefully laughing about it in a year.