Wednesday, September 30, 2009

Deflating Christmas

I still think we'll see a massive deflation and that right soon. I agree that hyperinflation will come, but only after the debts have been destroyed by deflation and there is no credit system left to worry about from the hyper type of inflation. But I could be wrong.

Until then, there may be a few silver linings in the deflationary clouds:

Wal-Mart supersizes its $10 holiday toy program
By Nicole Maestri
SAN FRANCISCO (Reuters) - This year, Wal-Mart Stores Inc is supersizing its $10 holiday toy offering.

Last October, the world's biggest retailer cut its prices and began selling 10 popular toys for $10 each in its U.S. Walmart stores to win sales from early bargain hunting holiday shoppers.

This year, the retailer has ramped up the program and is offering more than 100 toys, including Barbie dolls and board games, for $10 each, throughout the Christmas shopping season...

Monday, September 28, 2009

Look Out Below

Hedge Fund Management is getting to be a dangerous occupation.

A.C. Escalator Fall Kills Executive
by Danielle Johnson
A hedge fund executive died early Sunday morning after falling three floors from an escalator at The Pier Shops at Caesars, according to police. Atlantic City police said James Vellanti, 40, fell from the third to the first floor. Vellanti lived in Clinton, Hunterdon County and was Chief Operating Officer for the hedge fund JNF Asset Management, LLC in New York...

Posts have been and will continue to be spotty - ebook project in the works and a client audit of one of my big projects at my day job eating into my FutureJacking. Oh well, we are still in one of those "calm" phases. George Ure over at UrbanSurvival keeps telling us to watch out for the end of October. Good a date as any, I guess. Be prepared, friends.

Tuesday, September 22, 2009

Trust Erodes

Trust, that vital, ephemeral spark that allows civil society to function and gives me confidence my orders from Amazon will be filled properly, continues to erode.

HSBC staff carrying personal alarms in case credit crunch customers get angry
by Sean Poulter, The Daily Mail Online
HSBC staff have been issued with the latest hi-tech personal alarms to call for help if customers get upset or angry.

The measure comes against a background of increasing frustration that High Street banks are pulling the rug from under the feet of customers...

...A businessman in the North West revealed he arrived at a branch of HSBC in Manchester to be met by what he was told was a new risk management strategy. This involved the bank staff being required to take personal alarms into meeting rooms.

The man asked why this was necessary to be told: 'I guess there will be some difficult conversations with clients happening at the moment.'

A spokesman for the Federation of Small Businesses said: 'We have been worried for a while that the relationship of trust between banks and their customers just doesn't exist any more...

Viewing it from a different perspective, people are doing unto the big banksters that which has been done unto them. They are getting angry. They are seeing through the spin and propaganda that most of us grew up believing about trusting business relationships. They are feeling some power, even if it is just venting anger at banksters. And they are liking it. The banksters, on the other hand, are feeling threatened. And with good reason.

As the ever-perceptive John Robb puts it:

...People are learning to do what businesses do (they learned it the hard way: businesses they have relationships with routinely default on or avoid upholding their contracts, from insurance coverage to pensions) when their investments crump: they default. In this case, it's people learning to walk away from a big mortgage on an underwater property. Who's doing it? The people with an ability to pay and great credit scores. The reason: they understand that the short term pain of a lower credit rating is nothing compared to a crushing debt load on an asset that may not recover to a level sufficient to cover the debt until 2032 (according to recent estimates).

Moralistic behavior, in this environment, is for chumps. Legalistic behavior is becoming the new standard.

If he's right, that is just more sand in the gears of the economy. Socionomically, it all fits. We'll get to see it fully expressed when this short squeeze evaporates and the markets turn down again. HSBC banksters may not be going into meetings with little alarms. They may be going into meetings packing heat.

Wednesday, September 16, 2009

Suicide Continues its March Among the Wealthy

Two more very wealthy individuals taken out, both Harvard men, apparently by their own hands. The pattern continues...

Rockefeller Chief McDonald Dies in Apparent Suicide
by Charles Stein, Bloomberg
Sept. 15 (Bloomberg) --James McDonald, chief executive officer of New York investment firm Rockefeller & Co., died Sunday from a single gunshot wound that was probably self- inflicted, officials in Massachusetts said.

His body was found in a car behind an auto dealership in Dartmouth, Massachusetts, said Gregg Miliote, a spokesman for the Bristol County district attorney’s office in New Bedford. While police didn’t find a note, McDonald had called his wife earlier in the day, Miliote said...

Suicide Victim May Have Hidden Millions Abroad
by Lynnley Browning
He seemed, in many ways, like a man from another time, a Gatsbyesque figure who glided through a world of old money, private clubs and pedigree horses, his family name emblazoned on Ivy League halls.

Then, in an instant, he was gone — his privileged life ended, by his own hand, with a single gunshot to the head...

The Real Reason Why Joe and Kanye and Serena Won't Apologize

The climate of anger and divisiveness that comes along with an historically huge bear market is manifesting daily before our eyes.

Why Joe (and Kanye and Serena) Won't Apologize
by Brad Hirschfield, the On Faith blog at Newsweek.com
We have entered what columnist Kathleen Parker calls "a political era of uninhibited belligerence," that is finding expression in sermons, at town hall meetings, on radio talk shows, even on the floor of Congress -- especially when we differ. Why are people so angry and belligerent, and so willing to express their anger publicly? Why has our civil discourse become some uncivil? What does this public anger say about our private faith? What should we do about it?

The why is depressingly obvious to those of us feeling our way forward using socionomics.

Things aren't as bad (yet) as the era of anger and divisiveness that led up to the failed War for Southern Independence in the U.S., but when we have Representatives or Senators beating each other to a pulp, then another sad watermark will have been reached.

You can see the tension rising everywhere. Note too how opposition to President Obama's policies are being framed as being rooted in the fact that "[President Obama] is a black man, that he's African American" according to none other than former President Jimmy Carter. That's a polarizing card to play in an administration with over three years yet to run and much more economic and social turmoil ahead of it than they realize.

Avoid getting caught up in this wave of negativity the best you can. Anger, us-versus-them labeling, blamestorming - it is all a waste of your energy and your time. We have more important things to worry about.

Monday, September 14, 2009

Friday, September 11, 2009

A Basic Preparation Exercise for TEOTWAKI

Walk the area in a quarter-mile around your place of residence this weekend. Meditate on the types of houses or apartment buildings near you. How many of your neighbors do you know? How many do you at least recognize? How many have gardens?

Meditate on this: War has broken out between Israel and Iran. Oil supplies are interrupted from Saudi Arabia. Venezuela stops shipments of heavy crude to refineries in Texas. Gasoline rationing is imposed. The "just in time" inventory system that keeps Wal-Mart and grocery store shelves stocked becomes unreliable.

Is what you have on-hand sufficient to handle several weeks of shortages? What about your neighbors? Who do you think you can rely on in a time of trouble?

Item for consideration: When a multi-week supply chain interruption of some sort occurs, consider hosting or helping arrange a neighborhood potluck. Have nametags available and use it as a way for everyone to get a little more familiar with each other. Most people, when they think of crisis or supply crunches, automatically default to Armageddon-like scenarios of violence and predation. Be ready to help set up an alternative, constructive way of handling a crisis in your tiny little patch of earth.

Also, even if you have a significant stock of food stored up - make sure you are seen to be standing in line for whatever food becomes available just like everyone else. No need to rub it in anyone's face that you are a little bit more prepared and make sure you and yours keep your mouths shut about food or weapons. Loose lips invite mob action.

Action Item

Get a piece of paper or set up a spreadsheet and go through the canned, boxed, bagged or otherwise stored foods in your house. Add up the total calories (if you want extra credit, note the percentage of carbs vs. protein vs. fats as well). Divide that total calorie number by the number of people you hope to feed with your food stock. Divide that number by 1800. That will give you a (very rough) idea of how many days, per person, your on-hand food supply will take you.

Obviously the above is just a rough idea. I am leaving out any food you might have in a freezer. I am also assuming you will have access to useful amounts of drinking water. Your situation will be unique in the details, but please make sure you have a good idea of just how far your supplies will carry you. We in the Northern Hemisphere are headed into fall and winter will be here before you know it. Be prepared.

Wednesday, September 9, 2009

You Are Evil, Thieving Bastards

Anger goes viral. We'll see if it is early enough in the downturn for this to translate from internet wannabe activism to real disobedience to the System. Expect more of this. Much, much more.

"You can ruin my credit, but the banks aren't loaning money anyway..."

h/t Zerohedge

Tuesday, September 8, 2009

If You Wait Too Long...

Think about what this would mean in the U.S. if B of A and Citi or some combination of big conglomo banks were to be served with such an order? Are you prepared?

UK was hours from bank shutdown
FSA ready to close cash machines during crisis
by Larry Elliott and Jill Treanor, The Guardian
Britain was within hours of a banking shutdown last autumn as the government battled to piece together a rescue plan for the stricken Halifax and Royal Bank of Scotland, it has emerged.

Treasury mandarins and Bank of England officials battled the clock to come up with a support package on the weekend of 12 October. If they had failed, the Financial Services Authority could have ordered the closure of cash machines and prevented deposits at either of the two main casualties of the global financial chaos...

Eat the Rich: Idiot Ex-CEO Edition

Dick Fuld is a walking example of why every wealthy individual should be conversant with socionomics and Elliott Wave Theory. If he had spent some of that time on his corporate jet reading Socionomics: The Science and History of Social Prediction or any of the articles written about mass mood, he would know not to be suckered in by this false sense of optimism that the financial and political elites are feasting on right now.

Fuld thinks the danger has passed. He is being suckered by a Primary Wave 2 rally, in my opinion. When mood turns and the markets and news stories follow that mood down to depths of mass anger and fear unknown in our lifetimes, he will be wishing he had kept his damn mouth shut and praying that the mob will have forgotten his name:

Reuters Exclusive: Fuld says being "dumped on" for Lehman failure
By Clare Baldwin, Jui Chakravorty and Jonathan Spicer
NEW YORK/KETCHUM, Idaho (Reuters) - "You don't have a gun; that's good."

That was how Richard Fuld greeted a Reuters reporter who had tracked him down to his country house in a bucolic setting beside a river and amid tree-covered slopes in Ketchum, Idaho last Friday.

The man vilified for the collapse of Lehman Brothers (LEHMQ.PK) almost a year ago, a failure that triggered the global economic crisis, seemed burdened but not crushed by the pressure of the upcoming anniversary.

Standing on his gravelly driveway wearing a black fleece vest, dark gray shorts and sandals, Fuld indicated he was torn about speaking out in his own defense, partly because of ongoing litigation but also because he felt the world was not ready to listen.

"You know what? The anniversary's coming up," he said. "I've been pummeled, I've been dumped on, and it's all going to happen again. I can handle it. You know what, let them line up..."

Fuld seems to "get it" in some ways. He mentions the gun and he talks about it not being to time discuss his efforts at Lehman. He obviously has some sense of timing and mood. But he gave in to vanity, gave in to the urge to get his story out and instead of politely telling the Reuters reporters to come in for some coffee and then go away, he started talking. Does he think anyone cares he now flies Delta back and forth to Greenwich? Good Lord, his plane tickets each week are probably more than the unemployment benefits a lot of people are living on right now - and whining about the government not bailing Lehman out is the height of mendacity. He is of a class of American that preached to the masses the benefits of free enterprise and limited government intervention in the economy and now he is whining that he didn't get a handout from Uncle Sugar. Idiot.

He has been made a symbol, an icon on which anger can be focused. His name is one of the many channels down which rivers of anger will continue to flow for a generation. It isn't fair, but the coming revolutionaries will say that the income he steered to his bank accounts wasn't fair in terms of his benefit to society. Whining about how you are treated does not go down well amongst a populace that is experiencing high unemployment and a rising sense of fear as they watch the foundations of their future prosperity crumble to dust.

Mr. Fuld, for your own safety, please be quiet. Your instincts to lay low were correct. Don't let this rally sucker you in to talking with the various media that cover this case.

And please, don't ever say something like: "I do believe at the end of the day that the good guys do win. I do believe that." It is the kind of quote can easily be brought up by the prosecution in closing arguments in a show trial.

Dick Fuld is a shining example of how not to handle the false optimism of a suckers rally. If you can learn anything from his job as poster child for the idiotic wealthy classes it is this - don't be a Dick...

The Blow-off?

Futures are up strong. DJIA 10k by the end of the week? Who knows, but this levitation - while impressive - may just be the last run up folks. If you are still long in this market you are being given a gift by the dark gods of finance to get out.

As usual - this is not to be construed as financial advice. This is just one guy watching the markets. If you choose to trade in financial instruments based on what you perceive as advice from FutureJacked a nursing home somewhere will be overrun by cobras - and you might lose money.

Friday, September 4, 2009

Happy Labor Day

For those of you in the U.S., enjoy your Labor Day holiday. With events, in my opinion, trending towards a huge reckoning this fall, you should take time to enjoy friends, family and a good meal if and when you can. The near future may be a bit hectic for all of us.

FYI, I may be a bit thin on posts in the coming weeks. I am working on an e-book project that I hope to roll out soon.

Thursday, September 3, 2009

A Continent Filled With Zoltans

The following article should be more grist for the mill. Moving into an era of negative mood, of upheaval, of conflict and pessimism, those of us in the U.S. need to be especially alert to blindspots that may have infected our models and our worldview over the decades of the Great Boom. Technology has become a sort of minor pagan god to many - a demon to be invoked and supplicated, not a tool to be harnessed and understood. Many of our decision makers have begun to neglect the key element to every social organism - people.

Here is an example of a highly motivated individual that made a big difference. Imagine what happens when the economy falters and violence begins visiting currently calm neighborhoods - we have a vast pool of talented men and women who can and will take current and "obsolete" technologies and turn them into powerful tools for self-defense and profit and probably it will be done in ways not even thought of right now:

How to Take Down an F-117
Strategy Page, Air Defense
The Serbian battery commander, whose missiles downed an American F-16, and, most impressively, an F-117, in 1999, has retired [in 2005, FJ note], as a colonel, and revealed many of the techniques he used to achieve all this. Colonel Dani Zoltan, in 1999, commanded the 3rd battery of the 250th Missile Brigade. He had search and control radars, as well as a TV tracking unit. The battery had four quad launchers for the 21 foot long, 880 pound SA-3 missiles. The SA-3 entered service in 1961 and, while it had undergone some upgrades, was considered a minor threat to NATO aircraft. Zoltan was an example of how an imaginative and energetic leader can make a big difference. While Zoltan's peers and superiors were pretty demoralized with the electronic countermeasures NATO (especially American) aircraft used to support their bombing missions, he believed he could still turn his ancient missiles into lethal weapons. The list of measures he took, and the results he got, should be warning to any who believe that superior technology alone will provide a decisive edge in combat. People still make a big difference. In addition to shooting down two aircraft, Zoltan's battery caused dozens of others to abort their bombing missions to escape his unexpectedly accurate missiles. This is how he did it...

People matter. Never, ever forget that. As Col. John Boyd said - People, Ideas and Hardware, in that order. The article above shows what a motivated individual can do with a well-trained team against a far, far superior technology.

The above story is provided as a warning, not as bashing the U.S. Armed Forces. Clinton sent them in for an ill-advised little war that, in the end, accomplished little for U.S. interests, aside from stoking the hubris of the political class. This was a little war that helped set the stage for the uglier and bigger wars that are helping to bankrupt the country at the expense of the lives of the best and bravest of a generation.

Optimism and System Failure

Systems that grow and then ossify during a great bull market are demolished during the bear phase that follows. During a time of great optimism, credentials can seem to be more important than competence. Technology can seem to overwhelm ability of individuals to "make a difference." When a system comes crashing down - be it a government or collateralized debt obligation markets and the opaque CDS "market" it can wipe out an entire generation of talent, trained to take advantage of that now-dead ecosystem.

The crash should, in my opinion, be seen as a good thing. When things collapse, the nimble, the brave and the smart have a chance to shine and a chance to build something better. Much pain will be felt - but much pain is felt by many left out of the current system. Surely we can do better.

Tuesday, September 1, 2009

Stocking Up on Intellectual Ammunition for the Eating of the Rich

The coming Revolutionaries and Populists will need some sort of emotional "hook" to justify and underpin their intial campaigns for power. Once in power, Might Makes Right, but getting there requires buy-in from an angry and fearful multitude. Showing the masses that a high-powered elite "controls" all financial flows and is responsible for collapsing the world economic system would be an effective meme, one would think, in a world filled with formerly middle class men and women who believed what they were told by the financial mass media, played by the rules and find themselves destitute from following the advice.

Study Says World's Stocks Controlled by Select Few
Companies from US, UK and Australia have the most concentrated financial power
Aug 25, 2009
By Lauren Schenkman
Inside Science News Service

WASHINGTON -- A recent analysis of the 2007 financial markets of 48 countries has revealed that the world's finances are in the hands of just a few mutual funds, banks, and corporations. This is the first clear picture of the global concentration of financial power, and point out the worldwide financial system's vulnerability as it stood on the brink of the current economic crisis.

A pair of physicists at the Swiss Federal Institute of Technology in Zurich did a physics-based analysis of the world economy as it looked in early 2007. Stefano Battiston and James Glattfelder extracted the information from the tangled yarn that links 24,877 stocks and 106,141 shareholding entities in 48 countries, revealing what they called the "backbone" of each country's financial market. These backbones represented the owners of 80 percent of a country's market capital, yet consisted of remarkably few shareholders...

h/t Matt Savinar at Life After the Oil Crash

Just as an aside, this sounds very much like one of the plot lines from Robert Heinlein's outstanding novel "Friday" - which by the way, is well worth reading as we get ready for the Great Collapse.

Stories and research like this are digging the new riverbeds down which the anger and negative mood can travel. If you are very wealthy you best have plans and means to camouflage yourself, your core assets and be ready and willing to be nimble. That high-pitched grinding sound you hear are the sharpening of the long knives and that smell in the air is the cordite of the ammunition being laid up by a boiling mass of increasingly resentful populace. If you are planning on leading a coup or heading up an upstart political movement, start getting systematic in how you collect your data that will be used in your campaigns, with particular attention paid to showing how networks of influence might work (Muckety is a fantastic example of one such tool and I'm sure we'll see such tools taken to new heights of innovation).

Back in the Bubble Era, you could put a few cocktails into a Wall Street Big Shot and get to hear him (or occasionally her) opine about how the "masses are asses." Well, an ass is not always docile and that kick can kill...

Great Quote: 1 September 2009

I have warned for more than two years that despite all the claims that "The government has this under control" that they do not - they were doing what so many people in government do - either lying outright or displaying tremendous hubris, believing that by waving their hands in the air and shouting they can overcome the math. - Karl Denninger, Market Ticker