Watson's Web Is An Official Affiliated Elliott Wave Partner
The Coming Economic Depression
September Update
By Mark S. Watson
For a pdf version click here
New readers take note: This is a long running series of Articles that begins here
The month of August was very eventful and full of front page and back-page news. There was so much of it that we will only cover the most important of events. The Dow had a wild month and we saw the index fall below 10,000; that 'magic' number that miraculously sparks strange and wild rally's based on the most horrible of news. This time the Dow shot up just days after Hurricane Charley wrecked havoc on the Floridian Peninsula. From the data so far there was over 20 billion dollars worth of damage according to the most dire estimates, though Bloomberg citing insurance industry professionals estimated about 6.8 billion worth of damage. Over 10,000 homes were destroyed, 16,000 homes suffered severe damage and as of the 23rd of August, thousands had remained without power. This is a true disaster, thankfully it was not quite as bad as Andrew. And while the toll has been high in a financial sense and it appears from many reports of individuals who actually live in affected areas that the death toll is much higher that is being reported in the media, these reports are claiming deaths in the hundreds.
Economically this is not a major setback when seen on a national basis, though it remains to be seen how the insurance industry responds and pays out claims. Many a homeowner will awaken to a nightmare when they discover that if the home is a total loss, they will not get a fair market price for their homes. Some will only get the insurance company to pay off the mortgage leaving them homeless and broke. The insurance industry is becoming less scrupulous in their dealings these days. When the Northridge Earthquake hit California, there was a big scandal dealing with insurance and many of those who had coverage really got screwed. Indeed many of the homes inexplicably caught fire just after the quake. It stands to reason that those homeowners knew that they did have fire insurance, though not earthquake insurance, which in California is very expensive. Thus, 'spontaneous combustion' was epidemic in the San Fernando valley where quake damage was heaviest. Personally, I know that getting information on my insurance policy for my Condominium is like pulling teeth. Many of these policies only pay off the mortgage leaving the homeowner, that is the one who actually makes the payments, in a lurch while the bank (who does not make the payments) gets the payoff. In fairness, much of this is due to simple economics as the price of homes has risen so has the exposure to the insurance company. In order to keep insurance prices affordable coverage must suffer. It would be wise for homeowners to double check their policies because disaster strikes when least expected.
The Dow reacted to this massive destruction with glee, etching out gains after several days of losses.
So while billions in payments must be made to homeowners and thousands are now homeless, The Dow figures that this is good news and rallies accordingly. This is exactly why I simply do not think that this index has any relationship to economic reality. It is more of a psychological index, manipulated for the express purpose of keeping the average Joe in the market and keeping pension funds from going belly-up.
Pensions
This is a very important and sensitive subject. United Airlines is now seriously considering ending all pension benefits. This would be tragic for those individuals who worked all their lives paid into the system only to have it defrauded from them later and yes, it is essentially fraud. Yes, United Airlines is in a terrible situation. Yet one must consider the hey-days of the 80's and 90's when corporate raiders went into companies, especially Airlines, and raided the pension funds because they were 'overfunded', in other words, there was money in it they could steal. Big named raiders got away with a lot of cash, and stole a lot of money that hard working people paid into. This is one reason that all the accolades and praise regarding Regan are badly misplaced. It was his policies and that of his successors that allowed this to happen. Now United Airlines may very well go out of business. Delta as well is in deep trouble, having already slashed its workforce by about 16,000. TWA was already merged away when it went (essentially) bust...and where is the pension money?
“There is no more important challenge for the labor movement today than to stop the use of our own money from cutting our own throats” - AFL-CIO Secretary-Treasurer Richard Trumk
It seems clear that the myth of the New Economy caused America's corporations to look at pensions as a way to capitalize their respective industries. Allocating money from peoples retirement into their general operating funds and often times into the pockets of the Board of Directors, their family and their friends was common in the 80's and 90's. The corporate Crime Wave that was epitomized by Enron and Worldcom are outgrowths of both the New Economy myth and the convenient 'truth' that these funds were 'overfunded'. There is over $3 Trillion in Pension Funds in America, this includes private, Union and public Pensions. Simply put, this money was seen (and still is seen by some) as available to fund 'new economy' projects which included, mergers and acquisitions, layoff's, building plants overseas, and irresponsible speculation and rather than protecting the pension funds when markets were clearly overvalued. Pension 'experts' left the money in these markets and cost retirees billions. When one considers that pension fund managers have siphoned off between 200-400 Billion dollars in fees over the past five years for this kind of abysmal performance, changes should have been forthcoming. The losses the Pension fund industry suffered were staggering and he inability of the pension fund managers to recognize and shift funds to safer yet still performing financial instruments is not only inexcusable but may perhaps even be criminal.
Today, we are beginning to reap much of this new-economy in the form of reduced or rescinded pensions to older Americans who paid all of their lives into a system that robbed those funds... legally. Yet many financial and political pundits would argue that this theft was a horrendous 'mistake' or a 'comedy of errors' (a favorite DC beltway term used when serious corruption is involved). This subject is included in this update at length because this is going to be one of the most important financial issues in the months and years ahead. Not just private pensions but also Social Security. The pension crisis is not a hundred years away but it is happening right before our eyes. Greenspan made note of this in the 27th of August at a Central Bankers Summit urging Congress to act to save the system.
"If we have promised more than our economy has the ability to deliver to retirees without unduly diminishing real income gains of workers, as I fear we may have, we must recalibrate our public programs so that pending retirees have time to adjust through other channels," he said, according to a text of his remarks released by the Fed. "If we delay, the adjustments could be abrupt and painful." - Sir Alan Greenspan
He also stated
"Financing expected future shortfalls in entitlement trust funds solely through increased payroll taxes would likely exacerbate the problem of reductions in labor supply by diminishing the returns to work - Sir Alan Greenspan
Pension theft and the coming reorganization of the retirement system is one of the 'capstones' to the plans of the financial elite that run this nation. I know that this is not personally what my more conservative readers want to hear but when one considers historically, the deep antipathy Wall Street has had for Labor Unions and the gains that they have made for working Americans since the 1930's, I think it imperative to put these issues in perspective. Therefore these events can be put in a somewhat different light than the simple theft of billions of dollars. When the industrial revolution began, people worked for peanuts, they worked long grueling hours, with no or very few breaks; they had no benefits and worked in very unsafe conditions. When someone was killed as a result of those conditions there was no legal recourse. It was the era of the sweatshop and the corporate baron who did not care if his employees lived or died because he knew there were thousands of hungry and homeless people out there who would step over the corpse of his predecessor and take his place. When one looks at the history of that time and the struggles that millions of working Americans endured to get safe working conditions, a shift that did not run late into the night, and later medical and pension benefits, one can appreciate Labor Unions and the blood and sweat it took to build them. The gains that these people made for working Americans is to be commended not condemned. Yes, there were times when unfortunate alliances were made and criminal elements got involved in the Unions. Because of this, one can understand much of the concern people have over unions and the labor movement. Yet, in order to secure much needed rights Labor Unions were indispensable. Yes there were times when labors demands grew exorbitant and union corruption reeked, but one must look at all sides of this phenomenon; the times in which they transpired and labor situation that existed before jumping to any politically correct conclusions.
One can look back at the Kennedy era to find important clues as to how many on Wall Street wanted to roll back the gains made by labor in the 40's and 50's. Much maligned and hated by certain elements on Wall Street, Kennedy was constantly vilified in press controlled by Wall Street's more powerful interests. In the 60's there were still some powerful independent newspapers that supported Kennedy and his reforms. Sadly, that independent press exists only on the Internet today. Today one need only look at the trends that have been forced on American workers and American businesses through free trade agreements to understand the real threat that exists to pensions, wages and other benefits. These agreements, I am convinced, were aimed directly at those gains made by Labor in those tumultuous years following the industrial revolution. In an effort to roll back those gains Corporate America saw the best way to accomplish this was to globalize trade making it impossible for businesses that provide benefits to its employees to compete with foreign sweatshops. Once this happened, calls would be made to remove the protections Unions struggled to obtain. If one really looks at the news today one can see the trend is moving in that direction. In July new rules went into effect removing overtime pay for the vast majority of workers in America and as mentioned before, UAL is seriously considering stopping all pension payments. These things are being forced on Corporations and this was surely the plan when President Bush (the first one) negotiated the NAFTA agreement in secret. Yes, it was a secret agreement that no one was allowed to view until it hit the house floor. Signed by a lame-duck President Bush in December of 1992, it now has the force of the Constitution (as all foreign treaties do). Now of course CAFTA, essentially an expansion of the NAFTA agreement, is also on track for speedy ratification. Plans are in the works to bring it to the floor in a lame duck Session of Congress just after the November elections. These agreements have but one real purpose, rhetoric aside about how it will 'help' Americans, these treaties are designed to roll back the gains made by labor unions. There is no way to compete with a sweatshop unless you run a sweatshop. Thus, in order to compete, American industries have two choices 1) become sweatshops or 2) move operations to nations that have sweatshops. This trend has everything in the world to do with pensions because there are no pensions in China and India for those who work in sweatshops; they simply cannot afford to pay them if they are going to compete. That is exactly where we in America is heading. At this point in time it is already too late to stop this train. It has already rolled over the American people, they just haven't figured it out yet. But those who are about to lose their pensions are waking up, as are those who have watched their jobs go overseas. The opportunity to change these trends passed long ago. This is why I have been adamant that America economic power and the standard of living we once enjoyed are things of the past and yes, you can include your pension in that as well. You see the government agency that guarantees America's Pensions, the US Pension Guaranty Corporation is in deep trouble. It had to bailout steel industry pensions just a couple of years ago and assumed payments to over 67,000 retirees and has bailed out well over 3000 pension funds since its inception. This agency cannot assume more pension payments without more money from Congress, and they can only get it by borrowing yet more money adding to our deficit.
Jim Puplava has a couple of excellent interviews on this but looks at it from a generational perspective. The audio interviews are with Jim Kotlikoff, whose resume is impressive and includes being on the Presidents Council of Economic Advisor's and can be found on the link provided.
http://www.financialsense.com/Experts/2004/Kotlikoff.html
Oil
During the month of August, Oil Futures almost hit $50 a barrel. This is truly a new age as former predictions of eternal $30 oil have been shot down. Oil is the story of the century because this is one area of the Global economy that cannot be manipulated out of. There is only so much in the ground and it is becoming increasingly apparent that we may have pumped more oil out of the ground than there is left in; at least of the crude oil that is relatively easy to extract and refine. Those of you who have been following this newsletter online for a while know I long ago predicted $50 oil. We are getting there much sooner than I would have thought. While prices have retreated somewhat since they spiked last month just shy of $49 a barrel, a wake-up call has gone forth in the complacent financial community that is not likely to be ignored. Oil, who has it, who needs it as well as who can drill, ship and refine it are going to be the driving factors in much of the news for the next several decades. It will fuel long running wars, and start new ones, it will forge new alliances and destroy old ones. Even now one can see this happening all over the globe. But there is something a little more disturbing going on in the world of oil. As the Saudi's biggest and most important oil field, production may have peaked. This should scare the pants off of anyone who isn't completely brainwashed by bubble-vision's parade of financial foolishness.
The Saudi's promised to increase oil output when the price of oil was approaching $45 a barrel. Yet despite Saudi 'jawboning', they did not increase production as expected. Indeed not only did they not increase production but when one looks back, they actually decreased it by around 400,000 barrels a day in July to 9.1 Million barrels a day. This is ominous as this is the Worlds largest and most important oil producer. The energy strategists are beginning to wonder if the this gargantuan oil field may have peaked production and cannot produce any more than what are now producing. There could be many reasons for this but since I am not a petroleum-geologist, I will not attempt to draw any conclusions as to the long-term viability of the Saudi oil fields. The decrease in production could be a decision made by the certain members of the Saudi Royal family to not increase production for the sake of the US elections. It could also be the result of Terror attacks on foreign oil workers on whom the Saudi oil industry is deeply dependent. One thing that most commentators miss when looking at the Saudi regime is the fact that the Royal family is deeply split. There are elements within the Royal Family that do not like America or America's new war. There are elements that sympathize with the Iraqi resistance and those Islamic elements that are diametrically opposed to US foreign policy. To add insult to injury the Saudi Royal family are extremely ruthless and arrogant, which may be one reason they have gotten along so well with America's elite for so long. They have been told quietly by US representatives that they need to open up their society and broaden participation in political decision making. They have not listened and are not likely to. This is why a violent uprising seems inevitable in the next couple of years. The Saudi's are not even willing to listen to advise on how to beef up security. No dear readers, with that kind of bone-headed haughtiness, they will not be in power for very long at all. How the US will react to this is uncertain. The US is concerned with Iran and its nuclear program and will be bogged down in Iraq for probably the next 10 years. Interestingly Iran is creating its own oil exchange, much to the ire of American interests as Iran feels (with good cause) that they may be cheated by US dominated Petroleum exchanges. America is also busily working on reorganizing its military forces around the globe and redeploying troops to counter the new threats identified by the new 'strategic' doctrine of the Bush administration. Thus, while the US will not allow a hostile regime to come to power in Saudi Arabia; if forced to, it may back elements that will overthrow the Saudi's if those interests are committed to 'price stability' in the oil markets. This is all very important because the EIA (US Energy Information Agency) predicts that the US will become even more dependent on Oil from the gulf in the years ahead. Interesting audio can be heard here.
http://www.visualcommunications.com/csis/energy/20040224_global_oil.m3u
More On Oil Depletion can be found on the link below.
http://www.odac-info.org/bulletin/documents/DepletionAnalysis.pdf
Indeed the situation in Mexico is not much better as the Cantarell Oil field, which produces 2.2 million barrels a day is expected to decline significantly over the next few years. This coupled with the situation at the primary Saudi Oil field will cause oils prices to skyrocket over the next few years (guesstimate to well over $100 a barrel eventually). Yet there is one place on earth that does have significant reserves but is not likely to allow US oil interests to own or control its oil industry. That nation is Russia.
Russia
Russia oil is going to be a focal point in the future. Russian oil is in America's future and while Russia is doing its level best to keep American interests from gobbling up its precious resources, someday oil will probably flow from Russia to the US in large quantities. Political intrigue and skullduggery today seems to be in vogue in the Russian oil industry as Yuko's has demonstrated. It was revealed in the Financial Times (August 7) that the Yukos lawyer who mysteriously crashed in Britain was believed to have been the mastermind behind one of the world's biggest tax evasion and money laundering networks. Lawsuits have been filed and many believed before his death that this lawyer was really a bagman for Russia's oligarch's. Now is it becoming clear that he may have been the key (as in mastermind) behind a huge global web of money laundering and tax-evasion. Well, maybe now we can see why the world has had a series of bank-runs in many parts of the globe. However, Russia may not be able to resist US involvement in its oil industry for long. Its oil infrastructure is failing and is in need of repairs and modernization and its pipeline system is on its last legs. This compounds the transport problem because tankers and Russian geography do not seem to be well suited, as Russia has no deep water ports that can accommodate oil transportation over long distances if such transportation is to be economically as well as environmentally sound. Suffice it to say it remains to seen how much help the Russians are willing to accept from America and what must be given back in return. This is going to be an important point in future US-Russian bilateral relations. American establishment think-tanks and Universities have attempted to cast Putin in an most unfavorable light saying he is 'out of control' and there is no 'rule of law'. Yet when one considers who was getting ripped-off in the Yukos tax scam that deprived the Russian Treasury of millions and the nation where this Yukos lawyer was mysteriously killed, one must seriously wonder who was really behind this scam and what its real aims were. A clue, I think is finding out who is complaining the loudest about Khordokovsky's arrest and why no major paper in America has really delved deeply into this matter other than issuing its usual 'reflex recriminations'.
Lunatics and Peak Oil
Interestingly and tragically as well, there are some anti-semitic writers who always want to blame 'Zionists' (read Jews) for all of the evils in the world and are attacking what petro-geologists; that is, those who have actually studied the science of oil geology and who have actually been to and worked at the worlds largest oil fields in their work around the world, are now saying. It is sad to see some of these professional haters weave their web of hate and deceit on the web, doing their best to shift the debate away from the problem of overconsumption into the direction of neo-Nazi like Jew-hating. It really turns my stomach as their constant pathological immersion into the latest anti-semitic conspiracy theories does nothing to stimulate intelligent and positive debate into this important issue. Suffice it to say that I will not even provide a link to these hate-sites now or in the future but will caution my readers that there is no miracle technology and no one really to blame but ourselves for this pressing energy problem. We are over-consuming a limited resource and the projected increase in the worlds population coupled with the thirst for oil by industrializing nations is only exacerbating the problem.
Namibia
Another interesting story on the subject of oil today is in the nation of Namibia. Hunt Oil has been granted an exploratory license to scour the nation for in search of oil. This could be good news for the Namibian oil industry, however when one considers who they are dealing with, it might turn into another African oil nightmare if oil is actually found. Hunt Oil was founded by what many considered at one time to be one of the richest men in America, H. L. Hunt. This Texas oil man was one of the most important America icons in the 50's and 60's. Without digressing too much, many JFK researchers have pointed the finger at H.L Hunt as being the overall mastermind behind the JFK assassination. It is no secret that Hunt was a vocal enemy of Kennedy and elements close to the President want him to reduce or even get rid of the oil depletion allowance which allowed oil men like Hunt to get rich off the backs of taxpayers. In any event, today the private Hunt Oil company is run by Ray Hunt. Who is Ray Hunt?
He serves on the Board of Directors at Halliburton
He serves on The President's Foreign Intelligence Advisory Board
He serves on the Board of Directors of the American Petroleum Institute.
He serves on The Board of Directors of the Federal Reserve Bank of Dallas.
When one thinks of men like Ray Hunt two words come to mind 'Establishment' and 'Power'. It remains to be seen what happens to Namibia if large amounts of oil is found. Hopefully it will not look like Yemen, another nation where Hunt Oil has significant interests. Today Yemen is in the midst of a Civil War, more on it can be found here. Hunt Oil's operations are primarily in Yemen, Canada along side primarily exploratory activities in South America including troubled Argentina where US financed interests were attempting to overthrow the twice elected government. I truly hope I am wrong, but if oil is found in Namibia, I just don't think it will do the Namibian's any good at all; blood, oil and fire will be the more likely result.
One should keep an eye on the developments regarding the mercenaries that were involved in the coup attempt in Equatorial Guinea. Mark Thatcher, son of former British Prime Minister Margret Thatcher was arrested on the 26th of August while apparently attempting to flee South Africa for allegedly financing the plot. The Mercenaries were arrested before they arrived in the target country and are now being held for trial. This is a long saga and solid information on this has not been easy to get. Fortunately, I have some other sources that have from time to time kept me informed on developments. Africa's problems, many of which are of its own making are not exclusively so. Western nations have a long and vile history of coup plotting, election fixing, massacre's, land grabbing, assassinations and installing brutal dictators that has caused a lot of suffering in Africa. Many western nations believe that all of the world's resources are theirs and they have the devil-given right to steal, kill and destroy Africans and their fledging institutions in order to get them. The UK and Spain seem to have been at the forefront of the coup plot and the reason here is oil. Now the Western media is trying to cast the President of this small African nation as a 'paranoid'. Why is he paranoid? Because he thinks people are out to topple his regime. Go figure.
T-Bills And Debt
Source:
US Treasury
Despite the dire predictions of foreigners fleeing the US debt market, nothing could be further from the truth. US sales of debt instruments have been brisk and uninhibited by its gargantuan twin deficits. Foreign holdings of US debt can be found here . This means that the US will be able (or at least should be able) to continue to operate for a while longer. This does not mean that a day of reckoning is not near for the US deficits, it is. It is just that for the time being the UK, China, Japan and shadowy Caribbean interests, have 'ponied up' and purchased Uncle Sam's treasury paper. Stephen Roach of Morgan Stanley makes in clear that this disequilibrium is not sustainable. Roach notes with his usual eloquence and truthfulness that as of year-end 2003, BIS data reveal that “dollar-denominated assets made up about 70% of the world’s total official holdings of foreign exchange reserve -- more than double America’s 30% share of world GDP”. This is not going to continue and you can bet on it. But when and how it will stop invites numerous scenarios some of which Roach spells out in his article called “The Funding Of America”. Roach has been bucking the trend in Wall Street and has been telling it like it is for a long time it is unfortunate that his views are not held (or more accurately publicly articulated) by the majority of Wall Street's analysts and economists.
By our reckoning, America’s $531 billion current account deficit in 2003 absorbed a record 79% of the world’s total surplus saving -- well in excess of the 68% global saving absorption over the 1985-87 period, when the US last had a current account funding problem. - Stephen Roach
However recognizing that some foreigners are still willing to buy our debt even in light of our huge deficits and profligate spending asks us to sit back, pause and consider. The real question must be put forward; How long can this go on? Yet... another far more important question that needs to be asked is this; Are foreigners really buying our debt? Now, dear readers I am not questioning Treasury's numbers on the sales of US Treasuries, but if we got to the point that we (the FED) were forced to become the Lender of Last Resort to our own debt auctions, the dollar would drop like a rock on such news. Now of course Greenspan knows this. How does one get around that? I don't know but I will tell you how it could be done. One would have a foreign Central Bank with which you have the closest of political and economic relationships to buy up your debt in its name and keep the real purchasers identity in strict secrecy. This can only be done by a nation that speaks the same language as you and to which you have the deepest of historical, political, cultural and banking ties. Do this, coupled with purchasing your own T-bills using offshore accounts and hedgefunds in the Caribbean and you can keep this secret for a while. Now be assured that this is probably not happening now, but when the Fed is forced to become the lender of last resort, look for this or something like it to happen to hide our national bankruptcy for a little while longer. For those of you who wish to look at the numbers and do you own 'crunching' check out the Treasury's TIC page here . Finally it needs to be noted here that private institutions (such as hedgefunds) as well have become increasingly large purchasers of US Paper and this also has helped up keep the ship of state afloat.
Other Events And Trends
Jobs are still a problem in the economy. More people have fallen off of the Governments Jobs statistics and are no longer counted being considered 'discouraged workers' . Even more are working two jobs for low wages and no benefits. There is no such thing as a jobless recovery and more and more the numbers are beginning to show how fragile this Fed induced recovery is. New home sales dropped 6.4% in the month of July and in some areas housing is starting to cool ever so slightly. Mortgage refinancings are also down and this will cool consumer spending as this kind of lending has been a prime motivator for consumer sentiment. Greenspan is likely to increase the money spigot though, at least until the elections if consumer spending lapses too fast. He has, as we all know, indicated his intention to raise rates at a measured pace. Because Job growth has been so anemic any new stimulus that goes into the economy will almost certainly be translated into debt that will fuel more consumption. Some interesting charts on Job Growth in the US can be found here
This chart was made by those at Jobwatch, a project of the Economic Policy Institute.
There are real problems with Jobs out there and the Job creation that was prognosticated by Bush has not come to pass is that it is really hurting a lot of people. Now I am not blaming Bush alone for this it goes to the primary trend we have been seeing in the economy since NATA and GATT were signed by previous administrations. In fairness to Bush and any administration that comes to power in the future, Presidents have been legally hamstrung from helping Americans. These treaties, by law, severely limit the policy options available to any future President that can effectively stem the tide of job loses, loss of benefits and the reduction in wages. That is why those on the political left and the political right who try to blame each other in this election year are dead wrong as they point the finger at each other. The problem is the two party system which is really a single 'ship your job to China party' that 90% of voting Americans will vote for. What is sad is to see seemingly intelligent web sites sites carry the Bush or Kerry banner while they whine about jobs and benefits fleeing the nation en-masse. Well, as an old military buddy of mine opined to me many years ago, 'stupid is as stupid does'.
One of the more ironic and tragic facts that is somewhat obscured by the political rhetoric of the day is that reservists who return home from combat in Iraq are losing lobs, losing benefits or promotions while they serve. What kind of nation is our President building? Reservists do not even get full benefits anymore when they are called to active duty, thanks directly to polices set forth by President Bush. These guys are getting the royal shaft by Bush. Why? Ostensibly to save money but here is the irony; some $8-9 billion dollars is missing from Iraq. Yes, some estimates are much lower but trust me on this, billions have been stolen and there is no way to know where it went. It seems we have the money to give to corporate criminals who literally steal billions from the US Treasury but can't afford to give our troops proper medical care. I am a veteran and served in Desert Storm (though not on the front lines) and I am going to tell you right now, any Reservist or National Guardsman who goes and fights, particularly on the ground in this war for this President really needs to consider these facts very, very carefully and the consider the message millions of voters are sending to our troops when they support men who got soft jobs (because of wealthy privilege) when called on to serve. Consider as well that these same weaklings often did not even bother to show up for this cushy duty while others fought and died in their place and then have the audacity to attack a decorated veteran that did serve. Consider this as well, Morale is at an all time low in Iraq and there are no plans to change anything there. How do I know? Because we have not had a coherent policy since the day the Ba'athists were removed from power. It has been a collage of idiocy, bad decisions, woeful disregard for Iraq sensitivities, blood lust, torture, looting and rape. When I see what is going on in Iraq, and it pains me deeply to say this, but I am deeply ashamed to have ever served in the US military, not because of those honorable troops who are working so hard to accomplish an impossible mission, but because of the obese, ignorant and foolish American people who think war is a new video game you can buy at the nearest electronics store.
In Other news...
*The Philippines is on the verge of an economic collapse, debts incurred total to 80% of the nations GDP. The collapse Arroyo has referred to in a speech is not imminent, but is coming soon if the gap between income and spending is not closed soon and significantly. Arroyo voiced concern that rising interest rates may put her country in a position that debt payments would b e difficult if not impossible. She drew parallels between Turkey and Argentina and has called for sacrifices and knows that if something is not done soon, the nation could find itself in dire economic straits.
*The SEC is looking into off balance sheet accounting in Corporate America and suspicious restructuring that could be used to hide Enron style debts. No nothing has really changed after the last crime wave on Wall Street has it?
*Late credit card payments fell to 4 year lows.
*Lumber prices have shot up in price, largely to to Hurricane Charley.
*Lazard restructuring Group has warned of another wave of Corporate bankruptcies looms over the economy.
"The 2005 level of bankruptcies is going to kick up and get to fairly significant levels in 2006,
2007," said A Lazard representative
Lazard is a old line Wall Street Banking house that caters to the most elite names in the Global Corporate world.
*The Federal Reserve has issued new rules that cover how check's are to be handled the by the banks. It purports to streamline the system making it easier for banks to clear checks by allowing electronic collection and return of checks regardless if banks have existing agreements with other banks to allow this or not. It allows banks that do not use an electronic system to issue substitute checks to be created from an electronic check to be delivered to the bank. The system is similar to the one already in use by Credit Unions. It remains to be seen how this new regulation will effect everyday people who write a lot of paper checks, though more on this can be found here.
In summary there has been a lot of activity in August, more than I would have thought in this contentious election year. Interestingly, it is Wall Street and the financial community and even the FED Chairman that are really talking about the serious issues of our day while the candidates discuss where they were 30 years ago. Not to belittle Kerry, who actually went and fought the war but to underscore that while character is an important issue in any President, this unproductive finger pointing is not solving the nations fiscal problems and is it not stimulating the kinds of debate that needs to take place. Perhaps that is why each candidate wants to spend all of their time talking about Vietnam. Finally, to you military men and women who serve, I personally am not ashamed of any of you who serve honorably, just the American people who put the AWOL and draft dodgers into office, wave the flag as the wind whistles through their empty heads while, in the mean time, we literally destroy a nation that has never attacked us and never really had an intention or the ability to. Terrorists were never in Iraq in any significant number before the war except in the north, where America was in control. Saddam had little influence there, he could not even fly a plane in those areas. Today terrorists of every stripe have entered into Iraq's target rich environment, their numbers swelled by America's recklessnesses. 911 is turning into, not the day we started the war on terror, but the day ignorance, violence, greed and hate were given a free hand to further destabilize our already troubled planet. Having said all of this President Bush is not really to blame for this sorry state of affairs.
You can thank the willfully ignorant American people instead.
By,
Mark S. Watson
Great Links
Financial Sense Online An excellent web site dedicated to giving sound financial information as well as investment advice. This site also has one of the best internet radio shows around. Highly recommended!
Prudent Bear's Credit Bubble Bulletin
The Larouche Movement. Many have foolishly mocked these people but everything they have predicted has and is coming to pass. (yes... I know many of you hate this guy but his economic research is pretty good and more honest than the numbers coming out of the BLS)
Crash News - A daily snippet of the real financial news
Depression TV - The depression will not be televised...
Preventing A Banking Crisis in The Future
Peak Oil - One factor that is already beginning to weigh on the US economy in is the fact that oil production world wide is set to permanently decline in the near term. This paper deals with this issue.
Disclaimer: The above article is commentary and is not investment advice. The author is in no way connected to the wall street gang and therefore cannot dispense financial advise within the parameters set forth by Wall Street and the legal profession, nor will the author attempt to do so. This article is not investment advise nor is should it be construed as such. Please do not e-mail me asking for financial advise. I cannot and will not give it on any level.