Monday, January 31, 2011

Fear Itself

The Western political establishment still seems to believe in a sort of reverse "Exceptionalism".  The Arab world CAN NEVER operate in a democracy. They will ALWAYS turn to despots OR religious extremists.


Much has changed in the world since 9/11/2001.  While those that benefit financially, or by prestige or status from the insane security apparatus that the West, and especially the U.S., has constructed are too busy compiling worthless reports to be read by those without the capacity for abstract thought, the world has moved on.

Under no circumstance is Egypt the next Iran. Iran won't even be the next Iran for long (provided Iran does not become a nuclear power). Egypt might well roil for some time, but anybody that thinks that that society is going to tolerate a theocracy has rocks in their head.  This is not 1990!  That pitch from the Despots: "It is us or the Islamic extremists" is Bull Sh#!  No matter how censored a society is it is damn near impossible to keep out the influence screaming out of the Web.  Don't be fooled by the illiteracy pitch, either... illiterate people in every society get very little done, that rule applies to the Arab world.

"Stability", as far as the OECD is concerned, in the region has only one definition: Stability in the flow of Oil out of the Persian Gulf, Gulf of Oman, and the Arabian Sea.  None of the feel-good-Lefty-weenies of the social-safety-net-variety in the Welfare/Euro Zone gave a good fart how many Egyptians, Tunisians, Yemenie's, or Saudi's had their armpits cooked with a blow torch by their respective "secret police" - the prisons in these countries would make Papillon's skin crawl - as long as the Oil kept flowing.

Yemen is days or weeks away from full scale revolt, and Algeria ain't far behind... and with approximately 25% of the Oil exports of Saudi Arabia, Algeria is a problem all its own... but in the end, it was the Kingdom of Saudi Arabia ("KSA") for whom all Western (read U.S.) policy regarding the Middle East and North Africa has been promulgated; I have already covered Saudi Arabia in my previous post.

Events are overtaking most of the West's liberal-democracies, and they are scrambling to "respond". A great deal of blame and claim is going to go around, most of which is not warranted. The Arab world is not doomed to an eternity of ignorance, though they might be doomed in the short term to violence.  In the final analysis the flow of Oil from what is now the KSA is going to be determined by what is in the best interests of the Arabian people, no Saudi about it.

Sunday, January 30, 2011

Saudi Arabia

What is transpiring right now in Egypt is a non-event to the West - sort of.

The 800-pound-gorrila-in-room is Saudi Arabia ("SA").

If Mubarak falls, and I see little chance that that does not happen, then at some point I believe Saudi Arabia's monarchy falls, too. The argument against that rests largely on the monarchy's ability to spread Oil income around. I think this to be specious and faulty reasoning.

The ruling elite in SA have already spread that wealth around in ever increasing circles, to the point where the bizzilions of princes can no longer count on a $1mm annual allowance any more.  SA has created the most extensive welfare state in the world (relative to population) and the country can barely afford that state now... and their population is growing incredibly.  The idea that they possess vast amounts of excess wealth to spread around to keep people happy is absurd in the extreme. NAFC.

SA is one of the most heavily internet censored nations in the world - so is Egypt. 20% of the people living and working in SA are "guest workers". Most blue-collar work is beneath the dignity of a Saudi and so the nation must bring in massive numbers of people from South and Southeast Asia to do that work.  These people have NOT been censored all of their lives, nor have they been sexually repressed.

The power of the Ulema in the event of a challenge to the monarchy has been overrated in the extreme.  These guys are the equivalent of the SS in Nazi Germany.  Their fate will mirror the fate of many of the SS officers after the fall of Hitler's government.  Establishment western thinking is that the Ulema would fill the power vacuum... my vision is that many of the Ulema will find themselves being flogged, hands amputated, and bodies decapitated... with body parts cooked to a nice medium rare over a street fire... and it couldn't happen to a nicer bunch of guys.

When SA falls, there will likely be several turnovers at the top of government, so to speak. The U.S. is in no position to put hundreds of thousands of boots on the ground, and even if it could that would be counter productive in the extreme. It is simply not possible to occupy all of the Oil producing Middle East, and the other military powers (China) would simply not tolerate that in any event.

No, this is the 21st century, and monarchies and dictatorships do not belong, and cannot survive, in our time. That includes the House of Saud. How and when this comes about might be up for some discussion... but not a lot. And Oil? It is simply not in the people of SA's interest to sell Oil as fast as possible - and they will see this as clearly as the nose on your face when the people, however you define that, come to power.

And the people are coming to power. One way or another.

When those people over there come to power, the people over here are going to be challenged a great deal. The great lie of the Great Society programs will come to light in ways I am not poetic enough to describe.  Federal budgets for EVERYTHING are going to get vaporized.

And life will go on, perhaps better in many ways than it has been (here in the U.S., anyway).

Saturday, January 29, 2011

Damage Control

The Powers That Be in the industrialized world are freaking out right now.

Freak all you like, fellas... its tough to stuff shaving cream back in the can. Look to your own houses... Arab House is afire, you won't be able to stunt the flames for very long - if at all.  Look to your own Houses.

Right or wrong, fair or not - BHO, Cameron, Sarkozy, Merkel, Harper - none of these folks will survive the next election should the House of Saud fall.  And if Egypt falls, the House of Saud is toast, as is the government of Yemen. Think Kuwait is safe? Think again.  Wealth brings envy... and when envy meets up with ambition - LOOK OUT.

Iran must be nearly overcome with emotion from this extreme piece of luck... unless the Iranian regime catches fire, too. And that could easily happen there as well as in Pakistan.  Oh, what tangled webs we weave...

I had this to say in my post of November 24, 2006:

Notice how I did not mention Saudi Arabia in my blow-by-blow country description? I am no diplomat; I have never worked in any foreign policy capacity. But, I will make a bet with you: Flip a coin as to what comes first – the peak in world Oil production or the collapse of the House of Saud. These 2 events are inevitable, and each event by itself will have a similar effect. Together, the compounded effect would be… well, disconcerting.
On June 5, 2008 I posted:

Saudi Arabia, perhaps soon just Arabia, holds the world's economy in its hands. When, not if, the House of Saud falls, no one will hold what is left of the world's economy in its hands.
Go back and look at all of the news releases over the past year... how many articles/stories about Radical Islam? Now count how many articles/stories about popular revolt in Tunisia and Egypt... it NEVER comes quite as expected, now does it?

If Mubarak meets his maker very soon (or even if he flees with his skin) The Boys From Saud are next.


Dear Senator Rand Paul:  This would be an excellent time to retract your idea of cutting foreign aid to Israel.  If ever the U.S. needs Israel, it is now.  I was a supporter of yours, and I want to support your efforts to dismantle the Department of Energy, Commerce, HUD, et al... but your timing could not have been worse, and I sincerely hope you beat a hasty retreat.

Shot(s) Heard 'Round the World

Is this THE explosion in the Arab/Muslim world?

Egypt, unlike Tunisia, is an important political and economic bastion (Tunisia population = 10mm or so... Egypt = 80mm).  The World's total Arab population is 380 million - and 90 million have just revolted against their despotic governments.  Know what that means?

There is NO CHANCE the Saudi Arabia's monarchy does not fall at some point in the relatively near future (and of course there is always an outlier... but you get the idea).  Given that Saudi Arabia supplies 17% of the world's total Oil export market, AND IS THE WORLD'S SWING PRODUCER, and given that it is really not in the best interests of the PEOPLE OF SAUDI ARABIA (not to mention that the new rulers might not be terribly interested in "The People" either... and that there might be some "turnover", if you catch my drift, at the top in that country), it is reasonable to conclude that a major energy crisis could happen at any time.


If you have been reading my stuff for any length of time, you should know that I am not an alarmist "doomer".  HOWEVER. If the Saudi monarchy falls, you can count on disaster - gasoline and food hoarding in the extreme. I make no predictions about probability of outcome, only what I said - WHEN (notice capital letters) the Saudi monarchy falls some absolutely incredible things will take place.  These things will be SURREAL.


Forewarned is Forearmed.

Friday, January 28, 2011

Egypt, Tunisia & Oil and Saudi Arabia

The commodity markets, especially Oil, were selling off HARD yesterday.  They have reversed HARD today.

The folks in the know in the Oil markets know this:

If Saudi Arabia's government is overthrown and "the people" seize power, those "people" might not be interested in Selling their Oil off as fast as possible.  They might prefer to sell half as much fro twice the price... in fact, you can count on that.

This is a situation that needs to be watched very, very closely.

We Allow OURSELVES to be Deceived... Nobody does it for Us.

The story from Broke-Ass Grouch that I linked to recently has been rolling around my mind ever since I first read it.  Broke-Ass ("BA") is intelligent, witty, insightful, and brutally honest... with a glaring exception:  BA assigns blame to the wrong people.

To my mind, and stay with me a moment while I piss off a number of special interest groups, BA was the victim of the university/industrial complex and the Feminist Marriage/Divorce Industrial complex. Herewith, BA in her own words:
Now, to be fair, Broke-Ass Grouch is neither Mexican nor was she poor until three years ago. Like many of you good-doers, Broke-Ass was raised by middle-class intellectuals to be a middle-class intellectual, and graduated from a snooty liberal arts college. Also, like many of you, she spent her career working at high-status, low-paying, terminally insecure work. 
To be fair, BA's first critical error - spending the present day value of $200k on a Liberal Arts college undergrad degree In English Literature - was made as a teenager.  Having been a teenager myself I can sympathize endlessly. The family resources that went into an English Degree from Bennigton College could not have been more ill spent. Let's give BA a Mulligan for that critical error... and let us learn a lesson.  If you are not rich, say liquid-after-tax net worth of $5mm+... don't let the University/Industrial complex extort a fortune for an education that could be had for a library card... $200k for an engineering degree from MIT might well be worth it; $100k for an engineering degree from Georgia Tech is most definitely worth it... knowing your Faust and Thoreau, et al? Not so much.  Still, BA can turn a phrase. Somehow, I think she would have been better off with a mortgage free house and a State University degree than the Lit Degree from Bennington.  Just saying.

More from BA:

Broke-Ass Grouch, like many in America, found herself abruptly cashless. Like many of the heretofore liberal elite, she had been trained exclusively in a non-essential trade (writing for a living), and thus had no marketable value in the general economy. Having lived a life of unexamined comfort and self-satisfaction, Broke-Ass now found herself with never more than $37.68 in the bank, and three little children to support (though she did count herself extravagantly lucky that her two older children's father sent them to private school, and that her 12-year-old used minivan hadn't collapsed in vapors -- yet). She began to see the primacy of McDonald's Dollar Meal and rifling through the bargain bins at Walmart, searching for tube socks and jeans made by 7-year-olds in Bangladesh for a dime a day.
Hmmm. Presumably BA had a husband or partner that was at some point supporting her and her children... but somehow her husband extracted himself from supporting her while still supporting his/her children.  BA does not comment much on this. I wonder why? I can only speculate, but my sense is that BA had a good thing and did not do everything within her power to protect and nurture it.  Maybe BA resented the Patriarchy aspects of marriage that exist when the man is the primary provider.  Maybe BA was not the loving partner she could have been. Who knows? Maybe BA prefers lonely poverty to a middle class existence as somebody's "wife"?  Look, for all I know the older children's father is a No-Goodnic... that just happens to send his children to private school.  And maybe he left BA for some young Tart in spite of BA's tremendous efforts to welcome him home from work everyday with the warmth of a family dinner as well as the incredible warmth BA generated in the marriage bed.

Maybe a lot of things... but I smell Feminist ideology on her writings, background, and college experience... while correlation does not imply causation, that ideology DOES NOT CORRELATE with a happy family life and long term marriage, if I may make use of understatement.
Plus, she still wanted her children to know the virtues of the liberal arts phenomenology -- the unalloyed pleasures of reading, thinking, investigating, experimenting -- even though said phenomenology had dumped her by the side of the road in middle age and left her for dead.
BA seems to recognize where she is... I merely submit that BA blames the wrong forces that put her there.  For mother's of young children, the disintegration of a marriage is usually an unmitigated disaster (to say nothing of its effects on the children).  Why no emphasis on imploring mothers to protect themselves and their family other than by divorce court? Our society has defined the proper role of a husband... it is there for all to see in our literature and media reports... when was the last time you saw the Media present a mother's roll in the family?  It is always one of "choice". Stay at home mom, working mom.... whatever (and BULLSH*T). None of us has much of a choice about most things, and the propaganda that we do has led many to a life of therapy and Prozak.

Happiness is self-inflicted. Unfortunately, all too often, so is misery. So much of the misery of people who never miss a warm meal and always sleep in warm, clean bed comes from the culture wars and propaganda efforts of the special interest groups.  We ALLOW these groups to deceive us - or WE DO NOT.  We make that choice. The University/Industrial complex is only too willing to leave you as an indentured servant for the rest of your life... the Marriage/Divorce Industrial complex is only too willing to suck up vast amounts of resources that would otherwise be available to the FAMILY. It is up to us as individuals.

So what's this got to do with energy? Nothing.  This is a lesson in family financial planning... and a brutal one, at that. I daresay something along these lines should be part of a Liberal Arts education.

Thursday, January 27, 2011


Front month Oil is trading at $85.72. December delivery is trading at $95.15.

I have no idea why the front month is breaking down and the later months are not... but it makes it very, very tough on the speculators to guess how the gap gets closed... and it favors the equities.

Careful out there.

Wednesday, January 26, 2011

Got Milk? Must have had Corn

This is one of the better commentaries on being frugal and self-sufficient I have seen in quite some time.

Is that hysterical, or what?


Livestock feed costs might drive down meat costs in the near term... look out later.

My old desk partner when I was with Bear Stearns sent me this article a few minutes ago:

By Tony C. Dreibus
     Jan. 26 (Bloomberg) -- Milk may jump 22 percent by June as
higher feed costs drive producers to slaughter dairy cows, said
Shawn Hackett, president of Hackett Financial Advisors, who
correctly forecast in October that prices would advance.
     The 80 percent gain in corn and 31 percent advance in
soymeal in a year increased feed costs and outpaced the 13
percent advance in milk prices. U.S. cattle slaughter rose 6
percent in December from a year earlier, in part because dairy
farmers sent more cows to meatpacking plants, Hackett said.
     “When you look at the price of milk in the U.S. and what
it costs to produce, dairy farmers are not making a profit,”
said Hackett, forecasting $20 per 100 pounds in the next four
months. “The producer has gotten into a situation where he’s
leveraged as much as possible. Banks won’t lend any more. If
prices remain uneconomical, he will no longer be able to draw
loans with the hope that prices will eventually rebound.”
     Dairy farmers have missed out on the booming U.S. farm
economy as higher feed costs and surplus production cut profit.
Producers expanded herds following the jump in milk prices to a
record in 2007, just before the U.S. began its longest recession
since before World War II and unemployment rose to the highest
level in a quarter century.
     Hackett, who called milk an “amazing buying opportunity”
in October, said rising milk futures will mean higher prices at
grocery stores. Dairy farmers have borrowed as much money as
banks will allow and, because of rising input costs, are being
forced to sell their animals to slaughterhouses, said Hackett,
from Boynton Beach, Florida.

                       Liquidate Positions

     Milk for February delivery gained 11 cents to $16.41 per
100 pounds on the Chicago Mercantile Exchange at 10:16 a.m. The
price has increased 24 percent this month. It may decline in
February as investors liquidate positions to capitalize on gains
before resuming its rally, Hackett said.
     U.S. cattle slaughter in December totaled 2.92 million
head, the Department of Agriculture said on Jan. 21, up 6
percent from a year earlier. Red-meat output in the U.S. touched
4.36 billion pounds, the second-straight month production
reached a record, USDA data show. Beef output rose to 2.27
billion pounds, also up 6 percent year-on-year, the government
     “Culling is extremely high for this time of the year,”
Hackett said. Reductions in the herd “really started in
December. That’s when dairy farmers realized they were in deep
trouble. They know that they can raise capital by selling their
herds so they’ve been doing that because they have no other


Milk consumption is half of what it was, per capita, back in the 1960's.  Why? Who knows. Yuppie/New Age marketing?  Considering how fat American kids are maybe Milk should be on the table and not gatorade/whatever.

Unlike hogs and chickens, it takes a long time to bring a cattle herd back.  And the poultry and hog markets are under pressure from feed costs, too.  These markets are also losing the interest of capital.  There are no actions without unintended consequences.

Oil Imports SURGE

"When young professionals and the socially hip raise chickens in their backyards, newspapers do articles with slideshows. When us Mexicans do it? People call code enforcement."  Gustavo Arellano, who writes the "Ask A Mexican" column for the Orange County Weekly


Oil imports over the past 4 weeks are surging when compared to the same period last year, increasing about 5% YOY.  Domestic production is up decently over the last 3 years.  We have very, very cheap money.

The stock market loves it, especially the energy sector.

So why are Oil prices so still high? (Front month might be down to $86+ but December 2011 futures are $94+).  I don't know... what I DO KNOW (or what I claim I know) is that the U.S. is clearly no longer the price determinant market place for Oil.  Further.... NOTHING moves in a straight lines. Even if Oil exports are in permanent decline, that does not mean that the balance of Oil imports to the importers will decline in an orderly fashion.

Oil is in a bull market (but not correction proof!!), and is likely to stay that way until it chokes off the economies of the importers.

Tuesday, January 25, 2011

Think Spring

Winter is wearing on us... so here are a few farm photos from Spring and Summers past...  Springtime in Tennessee is just heaven...

This is my year to take my homestead where I want it to be. See the chicken yard in the middle photo? That's where the raised bed garden is going. The chickens will go into a half acre run and the hogs will have the old garden area. The Hog yard will be cut off with the hogs going in the back 25% during the growing season so that I can grow corn, beans, and pumpkins in their area and then let them out to harvest the produce themselves before going to market.  I am going to put the bee hives about 30 feet to the left of the horse in the bottom picture which will be immediately adjacent to the garden.


A hat tip to an anonymous doomer reading here who emailed me some NASA publications on a potential Solar Storm in 2013... Peak Oil has been absorbed reasonably well so far... as I have said before its all about the rate of change, and there would have to be another big event to cause serious trouble... any of you folks following this "Carrington Event" or Solar Storm for 2013?  Also this Fox News Video.  Something like this could be a real bummer if it occurred contemporaneously with an Oil import shortage...

I am going to email Stu Staniford at and see if he has anything to add... he's a physicist and I am a retired Wall Street hack turned organic farmer... so I haven't got a lot say about it, but if any of you folks have a contact with training in the area, by all means, I'd love to hear what he/she has to say.

Monday, January 24, 2011

A Sad Day in Mudville - Jack Lalanne 1914-2011

The Man, The Myth, and The Legend - Jack LaLanne - has died.

The man for whom the "Jumping Jack" was named after was a personal hero of mine.  Besides an enthusiasm for life that just could not be repressed, Mr. LaLanne was possessed of a sense of humor that, I am sure, contributed greatly to his longevity.

My personal favorite of his was offered 2 years ago at the age of 94... he said:

"I have sex almost everyday! Almost on Monday; almost on Tuesday; Almost on Wednesday...."

This was a great man.

Friday, January 21, 2011

OPEC, State Bankruptcies, and Math

California is on the verge. How long they can stave off the inevitable is unknown, but the outcome is not up for debate.  Now comes the Federal Government with, not a rescue, but a solution - Bankruptcy.

Well... that's not exactly what some would call a "solution"... but there it is.  The Muni bond market has gotten killed over the past several weeks as this story has been leaking out, and then waterfalled when Whitney made her prognostication on CNBC a couple weeks ago.

There are SOOOO many ways that this can play out - municipal borrowing rates soar, defaults spur a deflationary wave, the Feds come to the rescue by printing and spur an inflationary wave... no matter what, pink slips are on the way to millions of state and local workers (thankfully).

How'd we get here? A tremendously complex economic model has evolved in the U.S. and the ROW... and it is being tended to by folks with no mathematical, analytical, nor economic talent.  Our system, at least in the West, is still Lawyer based.  We would be better of with physicians, and FAR better off with accountants, running the show... but that just ain't the way it is...

And in the background, Oil is slowly chocking the living snot out of the American economy.

OPEC, responsible for 40 percent of global supply, issued a statement on its website saying “there is more than enough oil on the market,” and promised action in the event of a supply shortage. The group is next due to review production quotas in June, skipping its usual first-quarter conference.
"Any assumption that there is tightness in the market is incorrect,” OPEC Secretary-General Abdalla El-Badri said in the statement. “In reality, commercial stocks remain well above the five-year average and forward cover stands at around 60 days. There is more than enough oil on the market.”

I love that. I love the smell of propaganda in the morning.... it smells like... Fresh Horse SH#!

Over the past 72 months, yearly world Oil production has increased ZERO. World population, on the other hand has increased by over 6.5% (just over 1.1% per year)... Per capita availability of Oil has decreased commensurately, and that can be seen in the price of crude today.

Does the world have 60 days of supply ("DOS") or what the OPEC spokesman refers to as forward cover?  Perhaps, but I sincerely doubt that.  There is simply no way to measure world inventories that accurately - and there no better a mechanism for the discovery of truth in a market place than price (and even that is not always so hot, especially when it comes to commodities or markets that are being interfered with by government).

For the sake of California's budget, let us sincerely hope that the OPEC spokesman is correct.  No state economy is more dependent than the geographic colossus of California. New York relies on Banking... California depends on gasoline...

Because the use of propaganda is only going to escalate. What children should have learned at home is no longer being learned at home for reasons we have discussed ad nauseum... and the statists appear willing to continue the fight in spite of the water clutching their ankles as they sink their own ship... though a few of the rats are abandoning the sinking vessel... and all for want of a nail.

The laws of mathematics are immutable and common sense will once again rule the day.

Thursday, January 20, 2011


This is one of the most fascinating and thoughtful political analysis I have read in years.

Read it a couple time... there is so much here it takes a couple reads to put it all together... this is not a "Palin" issue.

More soon.

Wednesday, January 19, 2011

Media Manipulations and Propaganda Continue Apace

"The Constitution was designed to govern the government, not the people." - Steve Hanke

Oh, no! The the people of Camden, NJ are going to have to live with the services they can afford to pay for!

Before you are overwhelmed with the word "Should", let's think this through.

What will become of poor Camden? Is it Armageddon? Is this The End? Stay tuned, same Bat Station...

The answer is none of the above. Over time, the city of Camden, NJ will depopulate. People will move away, and there will absolutely, positively be excess deaths over births.  Those that remain will, over time, learn to provide for themselves and learn to conduct themselves such that they are not the second highest crime city.

As for the Camden police officers?  They will get other jobs that do not burden citizens with their absurd (relative to their contributions both monetarily and to society) life time benefits, and less people will wind up in prison where they HONE their criminal skills and make contacts that evolve into the gangs now over running the city.  Fewer police will get killed in the line of duty enforcing laws that have not proven to be such good ideas.

As for Fire protection?  A brutal cost/benefit analysis will be forced on every municipality out there.  Without question, it is cheaper to GIVE people a new home than it is to maintain fire protection.  This is not 1890 Chicago; fires do not consume entire cities (well, except Philadelphia).  Oh, and what about saving lives? Darn few "saves" are made by fire personnel at fires... ambulance and First Responder service is not what we are talking about here.  Every blizzard, Metro New York City knows that a certain number of people will be killed in car crashes.  FACT.  Does the region shut down all travel?  Nope. They could, but they don't.  Wannt know why? Because losing 5 or 10 people is an acceptable cost of doing business. Brutal - and Simple, Like, That.

Camden might need to disband, and its people might need to move elsewhere and become like the productive citizens of their adoptive cities.  Or, Camden's citizens can adopt the profile of a city like Fargo, ND, with its low crime, sense of community, and ability to fund their own services and remain.  Why is it that a city living beyond its means, and beyond the pale, is any different than a country?  We all seem to recognize that the U.S. is out of bounds with its budget and wars, yet Camden is somehow a victim?  BALONEY.

This story is going to be repeated over and over again in the coming years. Just fill in the blank for the name of the city.

Tuesday, January 18, 2011

Tiger Mama

This post has nothing to do with the markets or with energy issues... I just couldn't let this go by without commenting about WTF is wrong with us. If you are Politically Correct, perhaps you should skip this.

I hope most of you have read about Amy Chua, Yale Law Professor and simply over-achiever par excellence who, just to add insult to injury is an outrageously attractive and THIN married mother of 2, Asian-American woman. (If you have not please feel free to google Amy Chua or Tiger Mother/Mama. Here is the original excerpt that sent people into orbit.)  Please note that I do not necessarily agree with all of Ms. Chua's parental philosophies... maybe she goes too far, and maybe she was speaking in a self-depricating manner.... so what? The proof is in the pudding, as they say. Oh, and a disclosure: I am from the lower end of the working class and not of 100% European ancestry and my wife is an Asian Immigrant (and is stereotypically accomplished herself, yet has decided it best for the family to be a full time mom)... I wouldn't know how to classify my kids, other than "beautiful"... 

Besides the simple fact that Ms. Chu will be HATED for all of the above listed reasons (brilliant, accomplished, thin, able to maintain a marriage, and takes responsibility for parenting), Americans simply cannot withstand the thing NOT BEING SAID IN ANY OF THE CRITICISMS of Ms. Chua.

And what's that?

What is the prison population of children raised by parents using Ms. Chua's formula?  Zero?  How many Doctors, Lawyers, Investment Bankers, Engineers, Computer Whizzes, Military Officers, and World Class Musicians were produced in strict, demanding homes versus those with absentee fathers and irresponsible mothers?  The Web is going ballistic over Ms. Chua's "Chinese" parenting style, a style that is successfully producing our society's best and brightest (and a couple of suicides and adult-offspring in therapy... nobody's perfect). Please compare that to what is going on in the African American community:

90% of African American children will require government food assistance during their childhood (to be fair 33% of White Children and 50% of all children will find themselves in the same sh*ty boat).

72% of African American children are born to un-wed mothers (the moron that wrote this article said "So What?") 

Seventy-two percent of black babies are born to unmarried mothers today, according to government statistics. Statistics show just what that fullness means. Children of unmarried mothers of any race are more likely to perform poorly in school, go to prison, use drugs, be poor as adults, and have their own children out of wedlock. 
The black community’s 72 percent rate eclipses that of most other groups: 17 percent of Asians, 29 percent of whites, 53 percent of Hispanics and 66 percent of Native Americans were born to unwed mothers in 2008, the most recent year for which government figures are available. The rate for the overall U.S. population was 41 percent.

The Arizona shooting notwhithstanding, gun crime is largely an African American issue.  Half of all murder victims are African American and 93% of those murders were committed by another African-American - and the Web and Blogsphere think that "Chinese Mothers" are the problem?  Maybe they are the solution to what was has proved to be an intractable problem.  Want to solve crime, poverty, gun violence, and any of the other social ills in America? Then do what Willie Sutton did.  He robbed banks cause that's where the money is... The sad fact is we now have an African American in the White House that simply does not address these issues... if there ever was a president that could take these issues on, that could call African American men on the carpet and demand that they accept responsibility for their children (OMG! Did I say that?  You bet. Every child deserves a father and I couldn't care less if somebody is offended by my pointing out the obvious)... BHO could have been that president... I guess he's holding his thunder for his second term.  

Maybe a drill seargent national Mother figure is in order...  maybe that's what our poofy, feel good, pansy asses need.   China is wiping the floor with us.  The Chinese people are willing to work and COMPETE, they have strong families, and they actually know how to live within their means.  Holy smokes! Can you imagine?!!  (Any American so much as mentions the issue is immediately labeled a "racist" by the "Progressives"... Ever notice how white Progressives always seem to marry other white Progressives? )

Amy Chua for President in 2012.

Friday, January 14, 2011

Slack in the System, Commodity Prices, and the Rate of Change

Fascinating things are going on in the economy and in the markets.

I don't need to tell you folks... Wall Street price mechanisms have disconnected from Main Street's employment and income projections... All asset classes, even those that in the past had inverse correlations (move in opposite directions) are now fully correlated...  Commodity prices have rocked while Real Estate and Wages have not.

What the heck is goin' on?

Well, that's more complicated than any Think-Tank could answer, let alone a lone blogger... still...

It would seem that the U.S. and the West had a great deal more slack in many of their systems than any of us realized.  As bad as things are economically, I thought they would have been somewhat worse, and I think this has to do with "slack" in various systems and the impact that slack has on the rate of change. To my mind, the rate of change is EVERYTHING... we can adjust to just about any environment change if the rate is slow enough... In no particular order here are slack items to consider:

Money printing has caused price inflation in the commodity sector, but there is little to no inflation elsewhere in the economy.  Awful lot of slack in the money supply... of course, this might just be a lull in the action.

Housing.  As I have said a Gizzilion times... we don't have a housing crisis... we have a housing finance crisis.  In a long ago comment "Coal Guy" paraphrased someone and said "When this is all over the houses will still be there, and the people will live in them".  The Fed and other central banks were able to buy, and then "write off", the various banks' bad loans and recapitalize the system because of the slack mentioned about above on money printing.  So the banking system has survived, something I was not particularly sanguine about just 12 months ago.  There will be fits and starts, and markets could get very tough... what I was worried about was contra party risk... the risk that the guy on the other side of the trade is not there to effect delivery.  We seem to have gotten over that hurdle. (With plenty of risks to be sure.  The CDS market is the silliest and most dangerous thing man could have conceived of if he wanted a deadly virus to be perpetually floating around the body of the financial system, to say nothing of sovereign debt risks...)

Oil imports are down, 20% or so in 5 years. 20%!  Yea, things are tough... I thought it would have been a great deal worse.  This does not mean that imports won't continue to decline and approach essentially zero in 10 or 15 years (with the exception of Canada)... but efficiencies will develop and domestic production of Nat Gas and Oil has increased nicely, North Dakota alone will be 700k bpd by 2020, up from zero over the past 5 years.  With our new found Nat Gas production capabilities the rate of change should be manageable PHYSICALLY.  Politically and then the politics of economics?  Well, I am not so hopeful there... The point is that we will likely have the time necessary to work on Mass Transportation and more efficient living arrangements without having tens of thousands of people freeze to death one winter soon, something else I thought could very well have happened and that risk has been eliminated for the next decade given our new-found Nat Gas resources (and no, at some point they won't be cheap... but better to be expensive than not have it).  We have been given a reprieve, not a pardon.  We will need to a great many things from shrinking to insulating to mass transiting, if you will... but these things CAN be managed if the rate of change is not overwhelming.  This is not to say that our car centric life will continue unchanged... we will be driving a great many fewer miles. The point is we will adjust and life can and will go on.

Food. The Federal Government has approved a plan to go to 15% ethanol in our gasoline... not sure where the ethanol is going to come from, as we already consume nearly half of the U.S. corn crop to supply 10% of our "gasoline".  The mirror image of this is that we have plenty of grain for food!  All we have to do is consume less gasoline. How this all balances out, your guess is as good as mine... I would bet even money that some kind of disaster would happen first to bring about a dose of sanity, and THAT is disconcerting... but on the other side of that the issue will be what it always was - WEATHER.

There are real risks in the food supply, but they are not the simple sh#! you hear tell from the doomers.  Like plane crashes, it would likely be a series of unfortunate problems that compound themselves into trouble... with the the final compounding effect being WEATHER.  Let me give you a scenario:

TPTB see a supply crunch coming in liquid petroleum, and trying to survive the next election they endeavor to bring ethanol up to 15% of gasoline consumption by volume.  In doing so, they deplete the West's grain reserves to a point not seen in our history.  They survive the election.  They are sworn in in January. YAY! Kum Bi Ya!  The northern hemisphere planting season starts out normal enough.  Corn prices are $11 a bushel because inventories are so low, farmers are slaughtering livestock because they can't afford to feed them, meat prices plunge as a result, and crop farmers plant corn at the expense of wheat and soybeans because of the price and because they were bribed by the government to do so.  It is now April/May and 80% of the corn crop has been sown.  By June, it is apparent that the U.S is in the grips of a 1936 style drought and heat wave. Unfortunately, so is Ukraine.  By harvest, the U.S. crop is down 60% from projections and the Ukraine crop is down 40%.  Corn is $40 per bushel, and the Western economies have been destroyed by high Oil prices along with high food prices...

Farmers across the continent saw their worst harvest on record, causing corn and wheat prices to rise quickly. Droughts and heat waves were common in the 1930s. The 1930s are remembered as the driest and warmest decade for the US (the Dust Bowl years) and the summer of 1936 was the most widespread and destructive heat wave to occur in the Americas for centuries.

Or something like that.  The point is, if an issue in that space were to materialize it won't be something as simple as a single event, i.e Peak Oil. It will be a compounded event, and the fact is that grain inventories have never been lower than they are today in the post WWII period in terms of days of usage, and the world is one really bad weather event away from catastrophe... and that has ALWAYS been the case.  Any body who is not a "prepper" has rocks in their head.  Its just probability theory.  Given enough rolls of the dice, every possible outcome will be realized eventually.

So? So things are not as bad as they could be.  Life goes on, the wine will flow, and there will be much rejoicing.  Odds are we get through all this alive and well, but with a great deal of economic pain... which is really calibrated against our outrageous expectations. But there will be a year's worth of food in my pantry. 1936 will absolutely, positively happen again - just hopefully not during my lifetime.

Wednesday, January 12, 2011

Another Perspective

I got to thinking about some of the commentary from my last post... Kathy's point about mental health issues got me a "googlin"... I found this outstanding piece.

Back soon.

Sunday, January 9, 2011

Outrageous - cont...

Today's quote:

"So long as governments set the example of killing their enemies, private citizens will occasionally kill theirs." ~ Elbert Hubbard


I had this to say in my December 16, 2010 post, "A Funny Thing Happened on the way to..."

In the nothing to do with Energy department...
Some times I despair for my fellow man (woman). The one wild card in all of our lives that we can do so little about are the crazies running amongst us, waiting to go off like a time bomb.
We have nuts going into school board meetings and firing 9mm handguns at their innocent and unarmed fellow man... and we have well known WABC Weather Girl Heidi Jones fabricating an attempted rape... Our government has raided religious groups and their supporters blew up a federal building killing innocent children... a man flies his plane into an I.R.S. building... Going "Postal" is now broadly understood in the lexicon.... Good grief. What's next?
We lack civility in our political discourse, we glorify violence in the media we allow our children to consume, we reject the sanctity of Life from abortion, to street violence, to war, to capital punishment... everybody is a victim and everyone seems to belong to a group that hates somebody with a passion.... and we wonder that people are going off half-cocked because somebody did them wrong?
Rational, and other wise law abiding citizens barrel down my street here in South Florida (20 mph zone) at 60 mph and are furious when I don't get out of their way... seemingly oblivious to the consequences should they hit one of my kids...
Sometimes I think I'm the only normal person left... is it just me, or have we gotten meaner?  Well, mean people suck.
Maybe.... just maybe... the answer is not more government control, regulation, and tax extraction to fix all of these things.... maybe, just maybe, people would not be would so tightly wound that they are ready to shoot me over a parking space if they weren't so frantic in their lives... maybe we need to stop growing GDP and start growing GNH - Gross National Happiness.  It seems for every attempted government solution we wind up with 2 new problems to solve - and 4 new taxes to pay for the solutions.
Forget "Power Down"... how about "Frantic Down"?

"Good Grief.  What's next", indeed... What was next was another attack on our government's institutions, and the murder of innocents.  I am already seeing on my Facebook page people on the Left attempting to make political hay out of this... the problem is "Guns" or "Sarah Palin" or some other such simple explanation and if we will only do "X", this problem, and the "wing nuts", will be removed and we can all get together and sing "Kum By Ya".

Why does it not dawn on the big government, interference, and regulator crowd that maybe, just maybe, there might be something else going on here?  After all, we have people shooting our public officials and flying planes into IRS buildings... is it a "Plane" problem, too, in addition to guns?

Gerald Celente has this great quote - "When people lose everything, they lose it". Maybe.  Or maybe we have created an expectation of "having it all" or "everything" and when it does not come true people lose it.  Maybe our policies have created millions of government dependents and debtors full of anger and fury.  How many times can "Its not Fair! We're mad as hell and we are not going to take it anymore from fill-in-the-blank" be broadcast to millions and millions of people before it finds its way to a lunatic willing to kill to vent his spleen?

Let me ask you something... when was the last time you heard of an Amish drive by shooting? Or even a swindle? These people have little in the way of financial wealth, and few modern conveniences... and have exactly zero murders, political assassinations, or shoplifting for that matter... clearly, they are on to something.

I am not talking about just our social policies and programs... I am talking about the Big Box Takeover of the hinterlands, and the Big Bank Takeover of the financial system... the Corporate cronyism and lobby/statute power that has corrupted our system and destroyed small towns, small business, AND the family unit across the U.S. I know the Left loves when people like me talk like that, they hate the corporations (for all the wrong reasons)... they should continue to listen... maybe even hear me... these corporate policies are what they are because they enable the vast tax collections of the Federal Government to a far greater degree than was possible from a bizzilion small businesses and merchants, the very people that ran the local institutions, owned properties, and coached Little League... before the Big Boxes put them out of business and laid waste to their small towns... these tax collections were absolutely necessary in order to fund all of the social programs that are at this moment bankrupting the nation and addicting a substantial portion of the population to programs that absolutely, positively won't be there... They enabled the far reaching decisions of the Activist Jurists of the past century that have transformed our presidents from "Commander in Chief" into "Regulator in Chief", and then they funded the bureaucracy that continues its heavy handed extortions from and harassments of Americans who have lost most of their Constitutional Rights as a result of the takeover of the judiciary by the Progressives... you know, the folks that came up with our 12,000 page income tax code.

I am a HUGE John Lennon/Beatles fan... but it seems the very people that chant "All you need is Love" and "Give peace a Chance" are unable to see the outcomes of the combinational game theory actions that they are participating in.

Listen to the words of Judge John Roll, the Federal jurist who was murdered in the Arizona shooting:

The addition of what sometimes seems to be an inexhaustible number of law enforcement agents and federal prosecutors in Tucson division has now produced a tsunami of federal felony cases far beyond the management capacity of the four active district judges in Tucson division.
Was the Judge asking for more judges? Or was he questioning the propriety of an ever expanding police state?

The Federal Government's reach, budget, and desire to control every aspect of our lives must be stopped before we have nothing of what was America remaining... and they must be stopped by us, the reasonable people that reject violence and deeply respect the value and sanctity of human life.

Saturday, January 8, 2011

Simply Outrageous and DIsgusting

"Give Peace a Chance" - John Lennon


U.S. Congresswoman Gabrielle Giffords was wounded today in an assassination attempt that killed at least 5 others, including a 9 year old girl and a Federal Judge.  The Judge, John Roll, was a Republican appointed to the bench by President George H. W. Bush.  Congresswoman Gifford is a Democrat.

I think Arizona's Senior Senator said it best:

Whoever did this, whatever their reason, they are a disgrace to Arizona, this country and the human race, and they deserve and will receive the contempt of all decent people and the strongest punishment of the law.

Yes, Senator...  they are a disgrace and they have my complete contempt. I have never heard of Rep. Giffords until today. I am saddened and outraged by this senseless tragedy.  I believe the Right to Life extends to Democratic Members of Congress, the unborn, Bedouin Tribesmen in Iraq, drug users (who all to often wind up dead in "police encounters"), Mark Madoff... and you and I.

This politically motivated mass murder is yet another unintended consequence of the lies and distortions of the propaganda machine that the American Body Politic, Left and RINO, has become.

And now what? What if another incident like this were to occur?  Then what? Will our democracy be forced behind bullet proof glass? Or will we have to have a Secret Service detail for each Member of Congress? Will it be the local police next? The Rule of Law is under attack like no other time in its short history... and it is under that attack as a result of the unintended consequences of the actions taken by those that purport to support it... though they will be unable to see it that way, opting instead for another run at our Second Amendment Rights.

This is a sad day for all Americans, indeed.

Thursday, January 6, 2011


The Republicans first day in office over at the House is a screaming disappointment.

THIS would be the moment to let your Congressman know that you are watching.  Call, write, email, smoke signal.... whatever.  Just let them know The People are watching.  If they fail here, its all over but the gunshot.

Disappointing as it may be, the Left is absolutely correct in their assessment of this first day.

I sincerely hope that this is not just more of the same... but I am bitterly disappointed at the moment.  The time for half-truths and half-measures has passed.


Please read this very intelligent piece on Chapter 9 Municipal Bankruptcy.  I find it amusing that some think that these issues will be settled by a Judge in a Court of Law.  No such luck for you Activist Jurist enthusiasts.  In the end, what will happen is what happens to many debts in the private sector - they simply won't be paid; there will be a great hew and cry, some gnashing of teeth, and a couple of circle jerks... and then they still won't be paid.

"You can't get blood from a stone."


Oil is NOT an easy trade here.  But on any pull back I want to be long Dec 12 Futures, and let's hope the curve comes in with the front month... Oil is at risk to the equity market, just like every other commodity.

Look at the chart of the Baltic Dry Goods Index and the Railfax report.  Goods have to be transported.  The volume of goods shipped and the price commanded by the shippers reflect what is going on in the real economy.


The incomprenhensiable position of the "Progressives" regarding the U.S. Constitution should be glaring to the American people on this day.

All of America's elected representatives and appointees draw their authority FROM THE CONSTITUTION IN ITS ENTIRETY.  You don't get to edit or omit portions that might be offensive to the descendants of slaves or of women who did not have the vote until 1920.  That's what we have the amendment process for.

Ladies and Gentlemen of both houses.  This is our history and the basis for all of our law.  You, and we, are going to have to live with ALL of the document... warts, hair and all.  How dare you exercise authority granted you by an instrument you then reject?

Yes, Senator Schumer, the SCOTUS does have the FINAL say on what is Constitutional, and Congress should have THE FIRST SAY AND NOT PASS LAWS THAT ARE IN OBVIOUS CONTRADICTION OF THE INTENT OF THE FOUNDERS.  Further my dear Senator, your group's brilliantly executed strategy of flooding the Law Schools and the Courts with activist Jurists has run its course, Thank G-D.

FDR should rot for his contributions in the matter.  Members of the Lucky-Sperm-Club such as FDR and JFK are very, very dangerous in high office... as FDR famously quiped they seem to possess "first-rate temperaments and second-rate intellects"... and are burdened with the guilt that comes from privileged circumstances at birth.

Thank goodness we were spared Teddy Kennedy.

Wednesday, January 5, 2011

‎"When you have "The Truth", then anybody who opposes you is either ignorant or evil. You rule over the ignorant and you kill or lock up the evil. Then you can make the world run according to your perfect "Truth".... On the Left and the Right. Same thing" - Orson Scott Card


Mutually exclusive events:

"Service Industries Expand by most since 2006"

"Investors Should Fear "Mindless" U.S. Spending, Gross Says"

If it wasn't for the "Mindless" U.S. spending, there would be no expansion of service industries, or any other industry.  The American economy (not the "corporate economy"... over half of the U.S. S&P 500's business is off shore... not so for Main Street) is extremely dependent upon U.S. deficit spending, which in turn is extremely dependent on the International Bond Market, which is the MIRROR IMAGE of the U.S. trade deficit, which is, what? 70% to 80% tied to Oil imports?

This is a very complex set of permutations, the margin of error in the interaction between each of these being quite large... making the future predicting business very challenging.

Still, I think that one of the ultimate outcomes of "Mindless" spending is much higher Oil prices, which in turn will "Truth Out" the amount of excess production OPEC has - or has not.


This is one of the more important articles you will read this year.

The Constitutionalists have the momentum at the moment.  Can they keep it? Will they be faithful to it? Let us hope, let us pray, and let us do everything we can to support their efforts.


This morning's front-page-news-"plant" on over treating in healthcare...

What is somewhat more disconcerting than the obvious... is the attempt to manipulate the population prior to a massive policy response.  Not that each and every one of these studies are not accurate; I suspect they are. However, one can see the slippery slope of manipulation being used to move some very disturbing policies forward.

If you are in healthcare, or know somebody who is, forward them these posts and my links... and take it from somebody who spent over 20 years in the financial services industry with no litigation or regulatory derogatories despite those years being an era of never ending witch hunts: It pays to stay WAY out of the grey area.


Tuesday, January 4, 2011

RINO's and Keynesians

I received this from my good friend and attorney, "Rabbi" Stan Gewanter (he's not a real Rabbi... that was just his inter-office nickname at my brokerage business), perhaps in response to my post and link regarding the "old, old" on January 1.


Winter is again upon me, but why can I not
shake off, as my dog water, this slowly creeping fog
clouding consciousness, knowledge, reasoning, anticipation,
dreams, the sweetness of life?

I am again afflicted with a malaise the Bard called:
“That time of year...When yellow leaves, or none, or few,
do hang upon those boughs which shake against the cold.
Bare ruined choirs, where late the sweet birds sang....”

Inshallah, may Spring come to once again infuse
my trunk with sap, bring movement to root,
renewed vigor, warmth and suppleness to branch
and twig, and un-dam my love of life!


I know I spend a great deal of time lambasting the economic and cultural policies of the Left... I don't give enough time to the RINO's asinine policies, mostly because their cluster f*&#!s are just so glaring they don't need my attention.

Here is an excellent article, which I give a B- to in accuracy (my highest ranking... there are no A+ ratings for accuracy anywhere in the media), enumerating many of the dumbest economic policies of the RINO's over the past 40 years.  If you are a Republican... you are either a Libertarian, or you are a RINO... you can't get a little bit pregnant.  The Left tends to mush Republicans all together (and the Repubs do the same in return), but Republicans are hardly united in their vision and I think the last election brought that out into the light.


Jeffers Media Theory says these articles mean somebody is in big trouble.  These stories are planted every day. It should be interesting to see what the policy enforcement of this looks like.  Just pay attention on any of the major news sites - a new story of this theme appears every day.  That ain't no coincidence.


No obvious culprits in the sell off in Precious Metals?  What, you guys never heard of tax-loss-selling, and its uglier step-sister, "Print Day Buying"? ("Print day" is an original of yours truly... but tell me, after the last 2 days action that you aren't a believer...)

"Print Day", 12/31 is past, and the specialty hedge funds that drove certain commodities to the brink for the big pay day are no longer interested in sopping up sellers... in fact, some of these trades are dangerously overcrowded.  DANGEROUSLY.

Forewarned is forearmed.


"Arnold exits, Legacy Vague"???

They should have asked me... I would have cleared the matter up before the commercial break.

The MTVization of politics is only the latest manifestation of how dysfunctional our society is.  Arnold and BHO were hero's of the camera, not hero's of political accomplishment prior to assuming executive office... and frankly, it showed - in both cases.  I am a big Arnold fan.  I am absolutely sure that I would enjoy a pick up game of hoops with BHO.  What, exactly, enabled (and I mean that in the 12 step sense) these men to seize the executive reins for the Cal and the U.S.?  Our media culture.

But never mind that...

The fact is that California is going to do have to do something DRASTIC before the end of Q2... I just don't see a federal bailout in their future, given the new makeup in Congress.


In today's Financial Times:

High oil prices threaten to derail the fragile economic recovery among developed nations this year, the leading energy watchdog has warned, putting pressure on the Opec oil cartel to increase production. 
Over the past year the oil import costs for the 34 mostly rich countries that make up the Organisation for Economic Co-operation and Development have soared by $200bn to $790bn at the end of 2010, according to an analysis by the International Energy Agency. 
The increase, due to high crude prices, is equal to a loss of income of about 0.5 per cent of OECD gross domestic product, according to the IEA. 
“Oil prices are entering a dangerous zone for the global economy,” said Fatih Birol, the IEA’s chief economist. “The oil import bills are becoming a threat to the economic recovery. This is a wake-up call to the oil consuming countries and to the oil producers.”

No, this is not a "wake up call". This is a challenge: Either OPEC has the excess capacity they claim or they do not.  The price over the next 12 to 24 months will tell all. ALL.

Saturday, January 1, 2011

You are being Prepped for much higher Oil Prices

Look at the number of articles on the front page of the big web aggregators regarding $100 Oil in 2011.

You are being prepped for much higher prices.  TPTB don't want this coming as a surprise... and they want to convince folks that this is OK, the new normal, whatever.... and its the right thing to do (Otherwise you might have crazy people blowing up gas stations to express their anger)... and they are getting it done

There is always one idiot that blames it all on speculators...

The IEA suddenly comes out of nowhere and declares the era of cheap oil is over? And then Iran cut their subsidy for gasoline and diesel? Something brews...

So... How high?  $110 to $200, with $200 being highly unlikely, and $110 being highly likely. It all depends what price is necessary to cause people to alter their driving, flying, and consuming habits.... since it seems that they have become accustomed to $3+ retail gasoline, it would seem that prices could go significantly higher before bringing about those changes in behavior.


Here's a poignant article written ostensibly about old, old age by someone just entering the senior years.

Read it and THEN consider the perspective of the author - a highly educated in the humanities, liberal, feminist, aging CHILDLESS person.... You know, the folks with all of the answers... except the answer as to who is going to give even the slightest sh#! about her in her old age.

I feel for her... self-inflicited, pompous, and condescending as her life's positions were...

I was reading one of John Michael Greer's pieces recently, where he pointed out to the "raw food"crowd that in every culture on earth people warm their food... there must be a good reason for doing so... I would like to point out to those that think "family" can have many forms... maybe... but it has had only ONE form in almost every culture that ever existed in the history of humanity... certain factions have attacked that form vehemently over the past couple of decades... those people are now coming face to face with their own mortality... I wonder how sure they will be of themselves in their old, old age.

I know this commentary will be met with tooth and fang from certain quarters... I call it as I see it... I am not looking for your vote.


The Left's other ugly step child, the public employee unions and their outrageous healthcare and retirement benefits have completely worn out their welcome.

When and how this explodes in the face of the True Blue/dumb-as-a-bag-of-hammers when it comes to math, statistics, and economics Left (not questioning their Latin skills) is of little importance... the fact is it is coming, and soon... and it is gonna be BIG.

These Stories are coming hard and Fast

We are being bombarded with Healthcare finance propaganda and news stories.

If you are an investor, you really need to pay as much attention to this as the price of Oil.  Somebody BIG (as in Big Brother) is making sure these articles stay on the front pages of the major news aggregators... and that is NOT happening by accident.

OK, here's why its important:

When you hear that the U.S. economy is 70% consumer driven that number INCLUDES healthcare.  It then follows that with healthcare at 18% or 19% of GDP that consumer is accurately only 51% or so of total GDP... now, my contention is that one way or another healthcare will be reduced to 10% to 13% of GDP, and that would represent a significant drag on economic expansion... coupled with $100 Oil and deflation in housing prices, a contraction in credit, and rising Treasury yields (we seem to have a bunch of 800 pound gorillas in the room with us)... Old Uncle Ben (Bernake) better have QE 3,4,5, and 6 up his sleeve.

This does not mean that asset prices cannot go even higher... Russian Roulette can be won beyond six rolls of the cylinder... 

Healthcare is going to come under attack from the Government - its going to be a massive attack.  Given the lobbying money from that industry this is going to be interesting... but given the hints in the media my bet is this industry is already under attack and they don't even know it yet.  Count on indictments of over-diagnosising physicians, among other things.  The government overuses its criminal prosecution powers, and those folks are looking for a way to justify their existence... so saving money for society on the healthcare side has a sexy story to be told.

Send your kid to Dental School.  Those guys are fairly safe as it is a "self-pay" market place.  In the end, 20, 30 , 40 years from now, everything will be "self-pay". "Health Insurance" was ALWAYS a dumb idea.


Oil and Nat Gas were in rally mode on 12/31... can't tell if that was sympathy buying for "print day" or something more... but the trend is your friend... I added to positions in anticipation that the rally in Oil & Gas holds, but I am what they refer to in the trade as a "weak hand"... any selling and I will be, too.