Friday, February 27, 2009

The Watchmen as a Lesson in Memeering

If you haven't read the graphic novel The Watchmen, I highly recommend it. It is NOT a typical "superhero" comic. The story is nuanced, complex and, without giving away the plot, can be read as an object lesson in "memeering" - or the attempt to shove history down a path at a Shock Point.

The movie should be spectacular.

Fire This Time...

Let's see - GDP was revised down sharply and Citi is turning into an AIG-like black hole for federale money and purchases of houses is down hard and Eastern Europe continues to crater into debt default hell and violence.

If the model of socionomics proves to be accurate, then these are expressions of a deeply deteriorating social mood and that as this process continues, we should continue to see a roller-coaster of emotion - violent swings into optimism that are ground down by the long wave descent into a swamp of negativity that will burn itself out before the coming Renaissance.

The big picture stories are fun (or scary) to follow, but you and I should be just as worried about the localized expressions of this sour mass mood. The "news" is, in my opinion, just stories we tell each other to try and explain and act out the herding impulse that drives everything from the Rotary Club to entire societies. These "stories" have lot's of possible plot arcs and endings and that is why the memes that infect a society through television, art, books and speeches can, at key crisis points, lay out a direction for "stories" that can either lead to utter destruction or a cathartic cleansing.

That's why it is important to look for anecdotal items like this to help get a feel for what "story" we are going to find ourselves in over the coming years:

Arsonists Torch Berlin Porsches, BMWs on Economic Woe
By Brett Neely
Feb. 27 (Bloomberg) -- When Berlin resident Simone Klostermann returned from vacation and couldn’t find her Mercedes SLK, she thought it had been towed. Police told her the 35,000- euro ($45,000) car had been torched.

“They’d squirted something flammable into the car’s engine block in the gap between the windshield and the hood,” said Klostermann. “The engine was completely destroyed.”

The 34-year-old’s experience isn’t unique in the German capital. At least 29 vehicles were destroyed in arson attacks this year, most of them luxury cars, according to police. The number is already about 30 percent of the total for 2008. The latest to go up in flames was a Porsche, on Feb. 14, two days after a Mercedes was set alight in a public car park...

This sort of property destruction, the riots in Greece, the movement to occupy empty houses - they are the little "paragraphs" that build up into an epic novel.

There may come a time you have a chance to push the story line in one direction or another - a kind word, aiding someone in need, not allowing yourself to succumb to the passions of the mob - you can help shape events for the better. You can't stop the steamroller of history, but you can at least help lay the groundwork to limit its destruction in your tiny piece of the world. Another reason to be connected in your community.

Wednesday, February 25, 2009

Anger in Paradise

Picture courtesy Daily Mail Online

Anger continues to bubble and boil across the world. This story could get repeated all through the Caribbean if mood continues to deteriorate as I fear it will:

Britons flee French island of Guadeloupe as rioters turn on white families
by Mail Foreign Service, The Daily Mail
Britons are among thousands of tourists fleeing Guadeloupe after full scale urban warfare erupted on the French Caribbean island. Trouble broke out on the island earlier last month after protesters began rioting over high prices and low wages.

But the situation escalated this week after protesters began turning on rich white families as they demanded an end to colonial control of the economy...

Us vs. Them is quite possibly the most basic herding instinct present in mammals. Think about that...

Tuesday, February 24, 2009

The Elites Must Be Brain Dead

UPDATE: After looking into the story further, it appears that McDonald's corporate is supporting Mr. Haskett in his fight against the insurance company. While I still think they should have jumped on this earlier, at least they do have some sort of understanding of the emotional drivers behind this issue. Also - an object lesson in how a meme can spread quickly...

The elites who have risen to the top of corporate food chains across America continue to show their utter cluelessness.

Here we have an example of a chance for a major conglomo to bank the equivalent of millions in free positive advertising, of goodwill and possibly an incremental increase in respect from their minimum wage proles flipping the burgers that generate massive cash flow every day for managers and shareholders.

Instead of leaping at the chance to take this hero and pimp him out to sell more burgers, McDonalds decided to throw him under the bus, then piss on his injured body.

McDonald's: No workers comp for employee shot protecting patron
by Muriel Kane, therawstory
Fast food giant McDonald's has denied workers compensation benefits to a minimum wage employee who was shot when he ejected a customer who had been beating a woman inside the restaurant. A representative of the administrator for McDonald's workers compensation plan explained that "we have denied this claim in its entirety as it is our opinion that Mr. Haskett's injuries did not arise out of or within the course and scope of his employment..."

...Kennon went to his car, returned with a gun, and shot Haskett multiple times. Haskett staggered back into the restaurant and collapsed.Kennon, who has a long criminal record, was arrested a few days later and charged with first-degree battery. The judge at his arraignment praised Haskett as a hero.Haskett has since undergone three abdominal surgeries and has incurred over $300,000 in medical bills. McDonald's has declined to comment on their reasons for refusing his claim, because the case is still pending before the Workers Compensation Commission, but according to Haskett's lawyer, Philip M. Wilson:"McDonald's position now is that during thirty-minute orientation Mr. Haskett and the other individuals going through the orientation were supposedly told that in the event of a robbery or anything like a robbery . . . not to be a hero and simply call 911...

Don't be a hero. Don't stand up and try to make your community a better place by protecting a woman under assault. Don't be a man.

I wonder what those employees will think next time one of their minimum wage co-workers makes off with inventory? Or gives away free food? The end result of this could cost McDonalds well over the $300k they think they are saving.

Remember those old McDonalds commercials where they showed the ethnic kid getting suited up to work the fry cooker and harped on how this would build up R-E-S-P-E-C-T? (Love the reference to the famous work by ethnic artist Aretha Franklin - these meme wizards know their trade - emotional hook to a popular song AND a member of your ethnic group that was famous and successful). Yeah, it sounds even more hollow now.

I know this isn't a typical story we cover, but it screams out the fact that "System" guys, bureaucrats and lawyers have gummed up the works at every level of what should be a rather nimble and customer-friendly conglomo. It's a microcosm of the cluelessness and the hyperactive attention to detail on crap that just doesn't matter that pervades the Beltway and Wall Street.

h/t Cronkite at iBankCoin.

Monday, February 23, 2009

The Lost Decade

The Death of the Expert

If you are still looking to the "experts" for "solutions" to the Great Collapse, I would like to throw a little reminder out to you. On 31 July 2008, we here at FutureJacked posted a link to a "call" by Cramer, who wants to "keep you in the game" entitled Cramer Calls a Bottom. The YouTube video linked as a response to his "call" still stands.

I will provide the money quote from his giddy rant here:

“The banks are leading us back up,” [Jim Cramer] said. “New leadership and I'm liking it. That's what causes a bottom."

What’s Cramer mean by bottom? The Dow will not test the lows it saw on July 15, which his when it dropped below 11,000 for the first time since July 21, 2006.

That was it,” he said.

The DJIA is at around 7,225 as I post this.

Mr. Cramer's degradation of the discipline and effort necessary to protect your nest egg, the time and self-education you must put in to learning how to best allocate what extra money you might make each month to a mere "game" is appalling. Remember, the finance playerz and elites have turned the markets from an engine that drives entrepreneurship and economic growth into a rigged casino. It is a game to them - and they want to keep you in that game because, as anyone whose ever gambled before knows, in the long run, the casino ALWAYS wins.

No investment advice is given or implied. I do suggest you put in the long hours of reading the history of the markets, of learning and applying a method of market analysis (I prefer Elliott Wave Anlaysis - but there are plenty of other disciplines to choose from, such as Graham and Dodd's works) and, even if you choose to continue working with an investment professional (good ones ARE out there and they are worth their weight in gold), demand that he or she be just as informed as you are and demand honest answers to tough questions.

The Banking System in One Paragraph

When Jim Kunstler is on, there are few better at illustrating the reality behind the frantic, Oz-like, howlings of the Powers That Be as they try to jawbone the United States back into a state of delusion -

The Abyss Stares Back
...The sad truth is that banking has become a Chinese fire drill -- a frantic act of futility -- as insolvent companies persist in covering up their losses in order to avoid the counter-party hell of credit default swaps that would ring the world's "game over" bell. This can only go on so long. All the chatter about "nationalizing" the banks really boils down to what kind of bankruptcy work-out will they be put through, how destructive will the process be, and how much of the pain can be shoved forward in time to people now in diapers and their descendants...

Sunday, February 22, 2009

Shock Points

We've shifted from ranting about the absurdities of an economic system doomed to collapse, to amazed observer of that collapse over the last several months. The hope is that as we make our way along the road to Whatever Comes Next, we will be able to dodge the flaming debris raining down on our heads and avoid being squashed by the Vice-Presidents of CDO offices as they leap from their corner office windows, Wharton MBA clutched tightly in their well-manicured hands as they plummet to earth.

The tool most-used here will be socionomics. We will continue to use it to survey the landscape and look for IEDs that could erupt and derail our plans. These short-term shocks will continue to hit the system as the Great Collapse continues to unfold. The long-term shocks of Peak Oil and a multi-century cycle of descent into negative mood will govern the big picture over the next decade or two, but unless you are ready and able now to start growing a large percentage of your own food, have moved away from urban flashpoints and are busy learning the basics of woodworking, auto repair, machining or robust basic electronics, then it is the short-term stuff that will be of concern to most.

Here are a few Shock Points to consider. Hopefully they will help you build a more robust set of contingency plans:

Bank Crash

I personally think that by the end of this crisis, both fiat money and the fractional reserve credit system will be dead. In a world no longer powered by ridiculously cheap fossil fuels and carved up into angry fiefdoms, fractional reserve banking and fiat money make little sense. I expect the opinion that Andrew Jackson had of banks to prevail by the time of the Second American Revolution and the coming Renaissance.

Until then, however, we all must worship before the Golden Calf that is the banking system. The fragility of this system becomes more apparent every day. You need to be ready to handle what might happen when a, or several, big banks go down in a silent bank run that crashes the ATM networks, cuts you off from your online bill pay and keeps you from accessing that hard-earned cash you are stashing away. This shutdown might last only a few hours, a few days or a week or more. Be prepared...

The One Jaw Dropping Video that Every Fool Must See
...Congressman Paul E. Kanjorski of Pennsylvania reveals some shocking information regarding a bank run which occured right here and indeed brought this country and the entire world economy to within three hours of complete and systemic financial collapse. In this video, Congressman Kanjorski reveals (at about the 2:15 mark) that the move to raise the move to guarantee money market funds up to $250,000 was an emergency measure to stave off a massive run on the banks that removed $550 billion from the system in a matter of just a couple of hours. Treasury then injected $105 billion to no avail, and shut the system down to prevent a panic continuation of this electronic bank run. By "their" [read Treasury's] estimation, had they not shut it down and issued the guarantee, money market withdrawls would have reached $5.5 trillion by two 'o'clock that afternoon!! He then indicates Treasury's assessment that the run not only would have destroyed the U.S. economy immediately, but would have collapsed the world economy within 24 hours...

Just meditate on his words starting at around the 2:25 minute marker.


What happens to you if/when this expression of rage pays a visit to your city or town?

Warning for the West as crisis spills onto streets
...Last month saw the biggest demonstrations in Latvia and Lithuania for nearly 20 years. In Vilnius, the capital of Lithuania, a mass protest against austerity measures ended up in a riot as protesters hurled eggs, rocks and snowballs at the police.

In Latvia's capital Riga, people dug up cobblestones from the street, smashed storefronts and trashed police cars. The protests followed the government's decision to push through massive cuts in social security payments.

Angry demonstrations have broken out elsewhere in Eastern Europe. The centre of the Bulgarian capital Sofia was brought to a standstill by protesters who surrounded the country's parliament building.

In Romania, thousands of workers walked out of factories and marched against government plans for more privatisation and budget cuts.

Tension is rising in Hungary, where unemployment has jumped to above 8%, according to analysts in Budapest. Last year, the government was forced to turn to the International Monetary Fund to avert a debt default, and the economy is forecast to contract as much as 3% this year...
Up to 120,000 protest in recession-hit Ireland
DUBLIN (AFP) — Up to 120,000 protesters brought Dublin city centre to a standstill on Saturday over government austerity measures aimed at stabilising the once high-flying economy now wracked by recession.

The demonstration came a day after the global economic crisis led to another political casualty elsewhere in Europe, with Latvia's prime minister quitting as his country grapples with deepening recession.

Organised by the Irish Congress of Trade Unions (ICTU) and featuring teachers, police, civil servants and others, the Irish protest was the "first step in a rolling campaign of action," ICTU general secretary David Begg said...

Thinking About Blowback

Focus your contingency plans on how you might deal with the blowback from headline-grabbing events like a bank crash or a riot that trashes communications or transportation networks.

Do you have enough food for a week, if you absolutely had to stay put in your home or apartment because of rioting?

Do you have enough food, gasoline or have sufficient family support to handle a five day shutdown of the ATM and credit card networks?

How many of your neighbors rely on constant supplies of high-octane meds to "keep it together?" Seriously - if a severe disruption of supply networks meant that anti-anxiety meds went into short supply, if people couldn't get their sleeping pills or mood enhancers - what kinds of decisions would they be making?

Just something to think about.

Thursday, February 19, 2009

Eastern Europe Begins to Give Way

During a visit to Romania back in 2007, I marveled at all the construction going on in and around Bucharest. Talking to the locals, there was a lot of money moving in from both Russia and Western Europe and throwing loans around everywhere - much of it denominated in Euros and Swiss Francs. Looks like Eastern Europe may go Iceland on us soon, if Dr. Faber is correct.

Action Items

Nothing new here - lot's of problems continue to crop up in the banking sector. Review your contingency plans to see how well you'd fare if a banking crisis of some sort caused a shutdown of ATMs for a few days or a week.

Other than that, I strongly suggest you enjoy this period we are in. Insane financial policies and corrupt elites are still driving the Republic into a wall, but you still have time to calmly plan fallback positions and shore up your financial position.

Grow that garden. Save that cash. Have a little gold or silver in your possession. Connect with your community. Enjoy a sunset. Read a good book. Turn off the television.

Tuesday, February 17, 2009

Money Well-Spent

Missouri Boat Ride

Retooling your mental software to deal with a collapsing system of finance and governance will be critical in the coming years. It is possible - probable - that we'll all face the storms of financial collapse, revolt and possibly revolution.

We have suggested in the past to read up on times of turmoil - such as the French Revolution - to help with that process.

Another option is to watch movies such as The Outlaw Josey Wales. There are all sorts of levels to this movie. The following clip helps illustrate that. I especially recommend you meditate on the Union Captain's comment at the 4:55 marker and haul out that quote as the political system crashes and whatever is in store for us next comes along.

Worst Case Scenario World Continues

I thought that when you invaded a country, you were supposed to loot them, not your own homeland...

A 'fraud' bigger than Madoff
Senior US soldiers investigated over missing Iraq reconstruction billions
By Patrick Cockburn in Sulaimaniyah, Northern Iraq for The Independent
In what could turn out to be the greatest fraud in US history, American authorities have started to investigate the alleged role of senior military officers in the misuse of $125bn (£88bn) in a US -directed effort to reconstruct Iraq after the fall of Saddam Hussein. The exact sum missing may never be clear, but a report by the US Special Inspector General for Iraq Reconstruction (SIGIR) suggests it may exceed $50bn, making it an even bigger theft than Bernard Madoff's notorious Ponzi scheme...

Monday, February 16, 2009

Presidents' Day

Happy Presidents' Day.

I strongly suggest you take time to read a biography or two of George Washington. The reality behind the cartoon-like character he is often portrayed as (or, alternatively as the whipping boy of revisionist historians) we learn about is fascinating and gives important lessons for those of us who want to thrive in this coming time of turmoil.

Friday, February 13, 2009

Another First

Before this Bear is done feasting on "investors," there will many other "firsts" for negative data.

S&P heads to first quarter ever of negative earnings
by Kate Gibson, MarketWatch
NEW YORK (MarketWatch) - As Wall Street tracks Washington's moves to help the beleaguered banking sector and pass more economic stimulus, nearly 400 of the S&P's 500 companies have weighed in and reported a collective loss -- even excluding financials.

"This is the worst, after the sixth quarter of negative growth, it will be the first quarter ever of negative earnings," said Howard Silverblatt, senior index analyst, at Standard & Poor's.

A sixth quarter of negative growth ties the prior record set when Harry Truman was president, and ran from the first quarter of 1951 to the second quarter of 1952...

Thursday, February 12, 2009

I Love My Industry

I love the Russian approach to putting a pretty face on the nuclear industry.

UPDATE: Idaho Samizdat (THE place for nuclear industry news) is all over this important story as well.

Finalists for Miss Atom 2009

Canterell Dying, Mexico Close Behind

Enjoy the cheap oil now, friends. A great reckoning approaches.

Pemex Oil Output Declines at Fastest Rate Since World War II
By Andres R. Martinez, Bloomberg
Jan. 20 (Bloomberg) -- Petroleos Mexicanos, Mexico’s state oil company, will probably report its fastest drop in production since 1942, eroding revenue as plunging crude prices limit the amount of cash available to drill for new reserves.

Pemex last year likely extracted 2.8 million barrels a day, down about 9 percent from the 3.08 million a day pumped in 2007, representing a total of $20 billion in lost sales, according to data compiled by the government and Bloomberg. The Mexico City- based company, which had revenue of $104 billion in 2007, plans to report annual production figures tomorrow...

...Cantarell represents about one-third of Pemex’s output today, down from 65 percent at its peak in December 2003...

Action Items

  • Get serious about contingency plans for fuel supply interruptions
  • Grow a garden
  • Always remember we are in a cycle of negative social mood - there will be a day for "mustard seeds" and foolish optimism again, but that day is far off. Focus now on saving, on planning for major disruptions in your life, on living well in a time of decline. The Renaissance will come, but only after the crash wipes out this current world system
  • Know and understand the implications of the Export Land Model on petroleum supplies
  • If you live in the Southwest, have a contingency plan for the eruption of violence fueled by drug wars, mass population movements from Mexico and a true plunge into another Civil War south of the border once the oil money dries up

Another Anger Anecdote

Granted, The Fly (AKA Horatio Clawhammer) is foul and bombastic, but I think he is tapping into a growing feeling about the markets and society in general here:

The Heroless Era
Past generations were marked by national heroes. Men like Babe Ruth, Lou Gehrig, or the countless World War veterans, conjure up visions of greatness for millions of Americans. I remember when my Grandfather told me stories about the heroes of his generation, which included baseball players, champions of industry, politicians, police officers, actors, family members, neighbors etc.

Conversely, today, we are a viagra driven society, whose only interest is to f--k something or someone, out of coin or innocence.

Our athletes are cheating fabulists. Our politicians are criminals and/or too stupid to lead. Our “titans of industry” resemble the mafia from 50 years ago, minus the honor amongst thieves. Families are fractured, due to asshole parents taking a greater interest in their own vanity, instead of raising a family and leading truthful/admirable lives.

Don’t get me started on today’s actors and actresses. Let’s just say the days of Cary Grant are long gone.

The stock market is a reflection of a failed society.

A society without virtues is one worth blowing the f--k up and starting over.

And we aren't even in the prime time of the coming Crash...

Wednesday, February 11, 2009

How Do You Say 'Daddy' in Mandarin?

The Chinese are in a tough spot. If they push too hard, the U.S. economy craters further, undermining the value of their treasuries (or the dollars they are denominated in). On the other hand, the elites in my country have hooked the government on the crack cocaine of Chinese purchases of treasuries. When your sugar daddy calls, it is hard to say no. Disgusting.

Chinese Bank Advisor Demands Guarantees on Its Treasury Bond Holdings
from naked capitalism
On the one hand, the demand by China that the US somehow guarantee its $682 billion in Treasury holding reads like a political and negotiating strategem rolled into one. It reenforces the idea that the economic crisis is the solely the fault of the corrupt, profligate West and it constitutes a demand that the US will have to deflect (at best) or trade something for...

...China seems not to recognize the peculiar position it has gotten itself in. Even if there were no worries about the US economy, even if it wasn't constrained by the need to keep buying Treasuries to hold the yuan down. China could not sell its holdings to a meaningful degree without having a serious, adverse market price impact.

But regardless of the logic, having China say bad things about the US's credibility as a debtor is not exactly what the Fed and Treasury probably want broadcast right now...

Free Week at EWI

As regular readers know, we use Elliott Wave International products and analysis as we try to puzzle our way through the treacherous times we find ourselves in. One of the other main tools used here - socionomics - has its foundations in work done at EWI.

As they like to do a couple of times each year, EWI is offering one of their very popular FreeWeek events, where they throw open the doors to some of their most popular paid services to non-subscribers for one week only.

If you’re not taking part right now, you’re already missing the valuable opportunities your peers are getting for free.

Learn more about EWI’s FreeWeek here

The usual caveat - FutureJacked is an affiliate of EWI. That means we get a small credit when someone follows a link over from this site to EWI and signs up for their free services. If you don't like that setup for some reason, then please type in their web address manually and go sign up for free week that way. The tracking from this site won't follow you and you will still get these valuable services to try out.

Things are going to get much more volatile in the markets and in politics. You need to be prepared and the folks at EWI have been spot on with every major trend over the last 18 months. This is invaluable information. Make sure you take advantage of it.

Monday, February 9, 2009

You Want a Reason?

All other arguments - pro and con - aside, this is why the United States should legalize drugs immediately:

Warrior in drug fight soon becomes a victim
Mexican general was seized, tortured and slain in tourist mecca of Cancun

By William Booth, Washington Post
CANCUN, Mexico - The general didn't get much time. After a long, controversial career, Brig. Gen. Mauro Enrique Tello QuiƱones retired from active duty last month and moved to this Caribbean playground to work for the Cancun mayor and fight the drug cartels that have penetrated much of Mexican society. He lasted a week.

Tello, 63, along with his bodyguard and a driver, were kidnapped in downtown Cancun last Monday evening, taken to a hidden location, methodically tortured, then driven out to the jungle and shot in the head. Their bodies were found Tuesday in the cab of a pickup truck on the side of a highway leading out of town. An autopsy revealed that both the general's arms and legs had been broken...

A reasonably stable, competent and uncorrupted bureaucracy and law enforcement division is a necessity for any State that would provide a framework for peace and some sort of prosperity or at least protection from non-government looting.

The huge dollars associated with drug trading have already hollowed out Mexico. As Mexico continues to descend into 4GW gang-ocracy, it WILL spill over the Rio Grande. Stories like the one above will then be about sherrifs and national guard generals in Lubbock and Phoenix and Texarkana. And it will all be happening as the U.S. struggles with the devastation wrought by the debt bombs that are going off all around us.

Of course, because we are living in Worst Case Scenario World now, dope legalization won't happen until it is too late to make a difference - but don't kid yourself, it is coming.

And no, before the emails start - I don't do dope, I think it is a stupid waste of brain cells, but the same can be said for booze. The social costs of the Drug War now far outweigh the benefits.

Just To Get Your Blood Going

Bandos With Congressional Support

One of the memes that we here at FutureJacked will be watching over the course of the year was the "Bandos Unite!" meme. Bandos (defined in sense 4 here) getting out there and "liberating" empty houses has the potential for some very serious violence and anger to propel it. This intersection of legitimate defense of property rights, mixed in with a flavoring of distant corporate "ownership" of the house post-foreclosure and local economic agony has the makings of one hell of a stew.

Imagine for a moment your family is homeless and you are at your wit's end. Now multiply that by at least a tiny fraction every time you see another horrendous jobs number and you get the point.

Well, thanks to the sharp eye of reader WL, here is this little gem that will help illustrate the kind of emotional energy building up to propel this meme:

Congresswoman Encourages Squatting in Foreclosed Homes
As the economy continues to spiral downward, a US Congresswoman from Ohio, Marcy Kaptur, is encouraging her constituents to squat in their foreclosed homes. She is advocating that homeowners should simply stay put until the bank “produces the note” that proves it owns the home.

Because mortgages have been divvied up so much, the banks are having a hard time finding the original paperwork - and by telling a bank to “produce the note,” a homeowner can delay foreclosure by forcing the lender to prove the suing institution is actually the same which owns the debt.

Note the Congresswoman's request for a "legal revolution." This rang a bell here and I finally remember why - if you have not read it, I strongly urge you to immediately pick up a copy of Hernando de Soto's outstanding work, The Mystery of Capital. I especially urge you to think about what he has to say about how the West adapted their property laws during times of crises or transformation to adapt and allow for growth and individual ownership of property, especially in the early days of the United States.

We are in the very early stages of a transformation of some kind. Property rights and preservation of capital will be of immense importance if we are to cleanse the system and rebuild. If a revolution in property laws is required, well let's try and make sure it is to the benefit of the small-holders and individuals - the able and hardworking that want to build up capital and have a little something to pass along to the next generation - not live as parasitcal rentiers.

Friday, February 6, 2009

Mood Matters

Posting has been, and will continue to be spotty. Apologies, but I'm trying to roll out some IP for licensing, plus my day job. Makes for a hectic week.

That said, there have been some juicy stories that help paint the picture of this coming descent into anger, despair and violence. Again - this too shall pass, but the "mustard seeds" that Kudlow shills about are about to trampled into the mud of a stampede of the "herd" of humanity into a deepening state of negative mass mood. They'll germinate and take root for the eventual Renaissance, but they'll sprout up through the ruins of the current world system that is only now collapsing.

Anecdotal Evidence

Israel no longer in the mood for peace
John Lyons, Middle East correspondent for The Australian
ISRAEL is an angry country about to vote. It goes into its general election next Tuesday as a country that feels isolated, under threat and having been abandoned by the bulk of the international community.

That national mood comes in the wake of the recent Gaza war. In military terms, Israel won it comprehensively. But in terms of image around the world, Israel has taken a pounding, accused of a needless slaughter of hundreds of civilians among the 1300 Palestinians killed during the 22-day war.

That anger was reflected recently by the head of the Government Press Office -- part of the Prime Minister's department -- Danny Seamen, who branded foreign journalists covering Gaza as "a fig leaf for Hamas". The anger is feeding into a siege mentality apparent this week at Israel's top annual security and defence conference in Herzliya, near Tel Aviv. The editor of The Jerusalem Post, David Horovitz, told conference delegates he saw a "rising tide of delegitimacy" against Israel following the Gaza war...

Emphasis added. I only use this story as a socionomic marker, not as a comment on the ongoing Middle East struggles.

A sense of despair, but clashing views on how to respond
by Carter Dougherty , International Herald Tribune

DAVOS, Switzerland: At this year's annual meeting of the World Economic Forum, the word "optimist" comes across as an ironic joke, and precious few of the high and mighty who attend this meeting are prepared to guess what comes next. Whether from the United States, Europe, Asia or Africa, the men and women meeting here prophesied gloom.

"We cannot underestimate the challenges and dangers that the world economy faces in 2009," Stephen Roach, chairman of Morgan Stanley Asia, said at the forum's traditional opening debate on the macroeconomic outlook. "It will most likely be the first year since World War II when GDP actually contracts," he said, referring to gross domestic product...

Emphasis mine.

Protectionism, unemployment and riots as the global slump deepens
...The collapse of exports in China has triggered a "wave of social instability", noted Michael Sheridan in The Sunday Times. In the southern province of Guangdong, for instance, three unemployed men bombed a hotel to extort money from the management. Europe, too, is facing a winter of discontent. Unemployed youth in Greece have rioted, while one million French workers took to the streets last week. The Russian government is "extremely worried" that recent unrest there caused by the slumping economy will mount, an anonymous diplomat told Canada's Globe and Mail. Meanwhile, British workers have gone on strike to protest against foreign labourers being drafted in to a construction job at Lindsey oil refinery, a move that prompted wildcat strikes elsewhere...

Emphasis mine.

Couldn't have asked for a better headline.

Action Items

The equity markets continue to churn sideways. Whether we are in a "failed fifth" and about to launch upwards for a multi-month bear market rally before the coming gut-wrenching Cycle level third wave decline or whether this is the setup for one more plunge before said expected bear market rally, brighter minds than I will speculate. I will just say that we are still in worst-case scenario land. The elites are going to war against the frugal and against the good companies that kept a strong balance sheet.

What I once took to be overblown caricatures of intrusive government in Atlas Shrugged are now played out as proposed national policy. Who the hell knows how it will all shake out.

Do please keep an eye on things you might never have looked at in the past. Things like:

  • Planting reports for crops. If the credit situation stays tight, a significant number of farmers may not get the credit they need to plant this spring - or at least plant as much.
  • Along with the ag theme, watch how weather plays out this spring. If it is cold and wet, watch how much gets planted. Yes, I am worried about food supplies. Our food distribution system in the U.S. is highly efficient and highly brittle, in my opinion, with no slack or emergency fallback in the form of victory gardens or robust local truck farmers for most communities. I worry because famine seems to be an historical theme in times of serious negative mood.
  • If you are receiving a check from any level of government, might want to keep an eye on how that money is funded or budgeted for and plan accordingly.
  • As usual, local themes will determine your immediate safety and prosperity. Get, or stay, plugged in to your community. Know which way the wind is blowing.

Be safe, save, prepare.

Monday, February 2, 2009

January Economic Stats

Calculated Risk has posted a January Economic Summary in Graphs. A must-read.

Another must-read, for those of you that like to wonk out, is "The Financial/Economic Dichotomy in Social Behavioral Dynamics: The Socionomic Perspective,” published in 2007 in the Journal of Behavioral Finance and now being made available for free from the Socionomics Institute.

Sunday, February 1, 2009

Sunday Services

Put on your Sunday Go To Meetin' clothes, dust off your prayer rug and pry open your wallet. Sunday Services are now in full swing, courtesy Dmitry Orlov:

I believe in worldwide Ponzi schemes and universal gullibility. I believe that reckless lending can be cured by reckless borrowing and that fraudulent borrowing can be healed by fraudulent lending. I believe that a housing bubble fueled by loose credit can be corrected by easing credit. I believe that each trillion of hallucinated dollars that disappears in a puff of Wall Street smoke then always reappears magically from behind a Treasury Department mirror.

I believe in America's almighty financial geniuses and monetary officials, who destroy wealth indiscriminately and indefinitely, and whose kingdom shall have no end. It is divine justice that those who cause financial catastrophes are rewarded with public money, while innocent bystanders are punished in their stead. I believe that central banks can print all the money anyone will ever need. I believe that if one stimulus package does not work, the next one surely will.

I believe in the redeeming power of financial complexity. I believe that hedge funds and sovereign wealth funds are righteous to enter into incomprehensible contracts having convoluted ownership and no inherent value. And I believe that opaque, secretive companies which pretend to insure those investments are offering a valuable service, even if this requires the use of public money.

I believe that economic stability and confidence will return when every failing business is bailed out, with no failure too small to be left behind. I believe that all dying institutions shall be consolidated, merging the smaller basket cases with the larger ones. The lion and the lamb shall lie down together in a new spirit of national competitiveness.

I believe that the end of days shall come when there is only one institution left, comprehensively unified, far too big to fail, owning everything and controlling nothing. All shall come and supplicate before its holy ATM machines, for they are subtle and quick to anger. It is in this one true financial institution that I put my faith, truly gigantic, truly bankrupt, amen.

From Club Orlov, courtesy the Reverend Frank...

Dmitry is a must-read, as is his book Reinventing Collapse. I had my issues with that book, mainly because I wanted much more detail on how Russians coped post-Soviet Collapse, but that aside it is a must-have for your Doomer bookshelf.