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Carrie Underwood!

Congratulations Carrie Underwood for winning American Idol. Her final song, Inside Your Heaven, is running through my head and if it starts to fade I go to IdolonFox. She appears to be a good ole country girl with a gorgeous smile and no skeletons in her closet. A “Red State” woman!

The OECD Report

Has this gotten the publicity it deserves? I don’t think so!

A report by The Organization for Economic Cooperation and Development (OECD), an alliance of developed countries, has reported that a sudden decline in the value of the dollar could threaten the global economy.

The organization is concerned about the size of the US current account deficit – the difference between the value of imported and exported goods and services. In the US, demand for cheaper Asian products is exceeding sales of domestic goods.

One reason for the warning, the OECD expects the Current Accounts Deficit to be 6.7% of GDP in 2006, depending on GDP, that amounts to $800 and $900 Billion. How do foreign central banks recycle those dollars? We have already seen in the TIC reports that interest by China and Japan has slowed and is made up by purchases from the Caribbean. Jim Sinclair of Mineset says

The interesting aspect of the OECD report is even after waiting a respectable period of time – more than 12 hours since it hit the newswires, the only reference I find so far in the Western press is on Google News which says the OECD is doubtful of the US’s projected deficits.

Tag You’re It!

My friend, or should I say “fiend” TF Stern sent me this survey. I normally don’t like surveys, but so far it is a slow news day for me, so here goes:

1. Total number of books I’ve owned: I buy at least 25 books a year and I’m 61, but 1500 seems low, so lots

2. The last book I bought: The Closers by Michael Connelly. We are going to the beach with Bev’s family over Memorial Day Weekend. Connelly is most excellent as a beach read.

3. The last book I read: The Shadow of the Wind

From Publishers Weekly
Ruiz Zafón’s novel, a bestseller in his native Spain, takes the satanic touches from Angel Heart and stirs them into a bookish intrigue à la Foucault’s Pendulum. The time is the 1950s; the place, Barcelona. Daniel Sempere, the son of a widowed bookstore owner, is 10 when he discovers a novel, The Shadow of the Wind, by Julián Carax. The novel is rare, the author obscure, and rumors tell of a horribly disfigured man who has been burning every copy he can find of Carax’s novels. The man calls himself Laín Coubert-the name of the devil in one of Carax’s novels. As he grows up, Daniel’s fascination with the mysterious Carax links him to a blind femme fatale with a “porcelain gaze,” Clara Barceló; another fan, a leftist jack-of-all-trades, Fermín Romero de Torres; his best friend’s sister, the delectable Beatriz Aguilar; and, as he begins investigating the life and death of Carax, a cast of characters with secrets to hide. Officially, Carax’s dead body was dumped in an alley in 1936. But discrepancies in this story surface. Meanwhile, Daniel and Fermín are being harried by a sadistic policeman, Carax’s childhood friend. As Daniel’s quest continues, frightening parallels between his own life and Carax’s begin to emerge. Ruiz Zafón strives for a literary tone, and no scene goes by without its complement of florid, cute and inexact similes and metaphors (snow is “God’s dandruff”; servants obey orders with “the efficiency and submissiveness of a body of well-trained insects”). Yet the colorful cast of characters, the gothic turns and the straining for effect only give the book the feel of para-literature or the Hollywood version of a great 19th-century novel.

After reading this book, I want to go to Spain and Barcelona.

4. Five books that mean a lot to me: The first book that comes to mind is Atlas Shrugged. I have read the book a number of times and each time learn more. Each time I feel that we are just a little bit closer to the producers opting out of the system. Who is John Galt, indeed!

The second is East of Eden. Some books I hate to see end, and when they do, I just want to hug the book to my chest. This is a wonderful book and so well written.

The third, is a set of books written by Nelson DeMille. There’s The Gold Coast, read The Great Gatsby, then read The Gold Coast, ahh a great book.

Then there’s Up Country. A Vietnam Vet goes back to his battle sites while searching for a murderer. His books are smart and witty. However, most are pretty sexually graphic.

Fourth, I really enjoyed Eye of the Pyramid by Terry Krohn

and I wrote about the book here and here and here and here and here. Finally, and I’m running on empty and reserve the right to always have a better #5, I like A Geography of Poets, an anthology of the new poetry. Almost every page introduces you to a good poet that may be fresh to your mind.

Connelly rita Ayn Rand DeMille Krohn

Bill Cara!

Bill Cara, is a must read. Most analysts concern themselves with the daily bits and squiggles. Cara, today writes about what’s ahead, taking a longer term view in FOMC Minutes and Cara Minutes, Tues., May 24, 2005, 5:06 PM I don’t agree with everything, however I certainly believe he has the end game down.

Congress and the Federal Reserve Erode Your Dollars

From Ron Paul in Texas Straight Talk, his weekly column, Congress and the Federal Reserve Erode Your Dollars

May 23, 2005

Last week the US Treasury department issued a warning to the Chinese government with regard to its policy of pegging the value of the Chinese yuan to the US dollar. In essence, the Treasury department accuses China of artificially suppressing the value of its currency by tying it to the dollar, thus making Chinese imports very cheap and worsening our trade imbalance.

This kind of bluster may serve political interests, but in reality we have nobody to blame but ourselves for the sharp decline in the US dollar. Congress and the Federal Reserve, not China, are the real culprits in the erosion of your personal savings and buying power. Congress relentlessly spends more than the Treasury collects in taxes each year, which means the US government must either borrow or print money to operate- both of which cause the value of the dollar to drop. When we borrow a billion dollars every day simply to run the government, and when the Federal Reserve increases the money supply by trillions of dollars in just 15 years, we hardly can expect our dollars to increase in value.

If anything, the US government should be embarrassed that another nation has depressed its currency by tying it to the US dollar. An economically sound nation would take pride in its currency, one that maintains a stable value and provides incentive for savers. Yet here we are, mad at China for our own sin of flooding the world with cheap dollars.

The root of the problem is the Federal Reserve and our fiat monetary system itself. Since US dollars and other major currencies are not backed by gold, they have no inherent value. Their relative values are subject to political events, and fluctuate constantly in highly volatile currency markets. A fiat system means every dollar you have can be eroded into nothing by the actions of politicians and central bankers. In essence, paper currencies like the US dollar operate as articles of faith– faith in the policies of the governments and central banks that issue them. When it comes to a government as deeply indebted as our own, that faith is sorely lacking among investors worldwide. Politicians often manage to fool voters and the media, but they rarely fool financial markets over time. The precipitous drop in the US dollar over the past few years is proof that investors around the globe are very concerned about American deficits and debt. When investors lack faith in the U.S. dollar, they really lack faith in the economic policies of the U.S. government.
Unlike wealthy currency traders, most Americans are stuck with their U.S. dollars. Average people, particularly those who depend on savings or fixed incomes to fund their retirement years, cannot abide the continued devaluation of our currency. A true strong-dollar policy would not depend on the actions of China or any other nation. It would, however, require a constriction of the money supply and higher interest rates, both of which would cause some short-term pain for the American economy. In the long run, however, such a correction is the only alternative to the continued erosion of our dollars.

Lord, we need more men and women like Congressman Ron Paul!

Fitch Cuts GM & GMAC!

From the Detroit Free Press, Fitch cuts GM bond ratings to junk status This downgrade applies to both debt of GM and GMAC.

The ratings company also cited declining profitability and a lack of tangible progress in attacking manufacturing and legacy costs, which will result in negative cash flow through at least 2006. Its ratings outlook for GM remains negative.(emphasis added)

This is the first news I’ve seen about negative cash flow.

In 2005, Fitch estimates that negative cash flow could be in the range of $6 billion, attributed primarily to operating losses, the payment to Fiat, and working capital drains.

GM was hoping for credit distinction by Fitch between GM and GMAC, but Fitch as well as S&P rates both entities the same. Finally, this knocks GM out of the Lehman Brothers Credit Index which may bring some additional selling of the bonds by institutional invesators not already out.

Republicans Assume the Position!

Once again the Republicans have wimped out regarding the issue of the filibuster and getting an up or down vote on judges. We know this wrong, and McCain will never get my vote for anything! Here are some that are unhappy:
No Pundit Intended
Ipse Dixit
Red State Rant
Daily Kos
Confirmthem.com – has 99 responses
Amendment 9
Rhymes With Right
Michelle Malkin
Scared Monkeys
Ace of Spades HQ
The Buzz Blog
Patterico’s Pontifications
etcetera, etcetera, etcetera!

Take the Patterico Pledge:

The next time John McCain runs for any elective office, I pledge to support his opponent. I will use my blog to encourage others to vote for his opponent.


Zimbabwe, Is This Our Future?

From Richard Russell’s Dow Theory Letters (by subscription only)

Zimbabwe, formerly Rhodesia, is literally falling apart. When a nation is unraveling, you can see it in the path of that nation’s currency. Zimbabwe’s currency, which traded on the black market at 120 to the dollar in April 2002, went for 6,200 to the dollar last December, 12,000 on April 1, and 17,000 in early May. By mid-May a single US dollar bought at much as 25,000 Zimbabwe dollars, although the rate has now leveled off to 20,000. All the while the government insisted that the “official rate” was 6,100 Zimbabwe dollars to one US dollar. But last Thursday the government announced a devaluation to the new “official rate” of 9,000 Zimbabwe dollars to one US dollar. The new official rate is not expected to last very long. Of course, one problem is that the Zimbabwe dollar is not a reserve currency, which means that the government can’t pay off its debts in trash Zimbabwe dollars. In that, sadly, the Zimbabwe government lacks the US government’s ability to pay off its debts in trash US dollars.

Oil Price in USD’s and Employment

In a piece I wrote on April 22, Higher Oil Prices, Inflation or Demand?, I wrote that the high price of oil was a signal that this government was inflating. Others, disagreed, saying the high price was due to demand caused by the growth in China and India. I acknowledged there was some of that, but said

A government that cheapens its currency, like we do and most of the world governments do, is inflating and that inflation causes mixed signals.

I came across this chart today at Investech, that proves my point. Oil in USD’s has gone to new highs, but in Euros is still just equal to old highs. Really, meaning that oil is more expensive to the US than to Europe.

Investech, also, publishes a chart of the week. The following is interesting, because it allows us to peer into the future. According to this chart we are likely to start a Bear Market a year from now, and be in a recession in 2007, the year of the next presidential campaign.

The so-called “jobless recovery” notwithstanding, employable labor is becoming an ever-scarcer commodity. The weekly Initial Claims for Unemployment has dropped to a level that – in the past – led to higher wage inflation… higher interest rates… and eventually to recession within 18 to 24 months. The more important fact to remember is that a bear market usually leads the start of a recession by as much as 12 months. Stay tuned to the Hotline (at Investech) for updates at this critical time…

Designer Marcie Harris, Interviewed

Bev at Landfair Furniture has posted the fourth in her series of interviews with Top Designers of 2004, Marcie Harris. Harris has some very interesting things to say about incorporating “Universal Design” and “Green Design” into the home environment. If you are an aging “Boomer” and who isn’t, you might want to take a look. If you are into organic, believe in being socially responsible, and work to be environment friendly, and that fits with most Oregonians, then you might want to take a look. And if you don’t fall into those catagories and think she is talking about Designing “Green” colored cars and “Universal” joints, then you, like me, really need to take a look!

Copyright © 2007 Mover Mike. Design by Anthony Baggett.

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