Mover Mike

From May 28 Newsmax.com, Peter Paul: Rosen Acquittal Doesn't Clear Hillary

"This is by no means an exoneration of Hillary's campaign," Paul told NewsMax. "In fact. it's an indictment of her campaign."

...snip...

"This vindicates my civil suit," Paul said. "It gives me corroboration of all the major allegations in the civil suit. The civil suit is more important now than ever as the only way to get Hillary under oath."

From the Washinton Times, Arizona border checks blocked

U.S. Border Patrol checkpoints near the Mexican border are essential in stopping the flow of illegal aliens and drugs into America, say law-enforcement authorities, but permanent checkpoints in southern Arizona are not allowed.

Rep. Jim Kolbe, Arizona Republican, senior member of the House Appropriations Committee,

has vigorously argued that permanent checkpoints are not the best use of available Border Patrol resources, saying: "If it's permanent, then everyone knows where the checkpoint is and they just go around it."

Isn't Arizona lucky. Not only does it have have Sen. John McCain, but Rep. Kolbe, as well, both Republicans.

On May 16th I said

Mover Mike will be reading and reviewing the new book Their Lives: The Women Targeted by the Clinton Machine (World Ahead Publishing, $25.95, ISBN 0974670138), author Candice E. Jackson.

Bill Clinton wrote a a bestseller titled My Life; over 1000 pages. Their Lives is in part about the missing chapters that deal with Elizabeth Ward Gracen, Sally Perdue, Gennifer Flowers, Paula Jones, Kathleen Willey, Monica Lewinsky, and Juanita Broaddrick. It is, also, about being a liberal misogynist. Jackson defines "liberal misogynist" as a person who supports women's rights politically yet repeatedly mistreats women personally.

Candace Jackson is a libertarian feminist and an attorney. She graduated from Stanford and Pepperdine Law School and has worked for Judicial Watch. Jackson interviewed the seven women, and may have learned more than has been generally available in the press. Although, I have followed these women closely since there stories became public, I wasn't struck by too much that was new. The pattern in each case seemed to be denial of the woman's claim, trashing the woman's reputation, failing that, intimidation.

What did strike me as new, was her analysis of modern liberalism, which can help us all understand politics better. She has identified seven tenets of liberalism. Here are the first two and you can read the book for the next five:
1. In modern liberalism, political goals justify any political means to achieve them.You can think of gender equality and affirmative action. Which leads to the "greater good theory", namely if any harm "occurs in the pursuit of those two goals, it's worth the suffering...for the greater good."
2. Modern liberalism relies on intermediaries to take care of the unpleasant tasks of enforcing the means to their political ends.

Most liberals aren't outright socialists demanding government ownership of the economy, but they use legislation and regulation to establish nearly-plenary government control over the economy.

I think the fundamental lesson from the book is that any political philosophy, including liberalism, to the extent that it aligns itself with force to achieve its goals, is a danger to our free choice. It seems the press only wants to scare us all only about the Republicans and the Patriot Act.

It is becoming increasingly clear that Hillary Clinton could be the Democratic candidate for President and is more liberal than Bill Clinton. She is the one person who could have exercised restraint on Bill Clinton, but instead supported his misogyny, and she could turn out worse for us than he. Supporting Hillary Clinton, as much as you want a woman president, is a slap in the face to all women and the goal of gender equality.

Clintons jackson

From Reuter's, Non-Mexican immigrants swamp Texas border cityThe number of illegal immigrants from Central America and Brazil caught crossing into this Texas border city (Eagle Pass) jumped threefold in the past year as they rush to exploit a legal loophole, U.S. authorities said.

The U.S. Border Patrol has nabbed 15,195 non-Mexican migrants crossing over the Rio Bravo around Eagle Pass in the past eight months, a rise of almost 240 percent on the same period last year, officials said on Monday.

I'm Back! Bev and I spent the Memorial Day weekend with her Mom and Dad, sister and two brothers and some of their families in a four bedroom house perched above the Pacific in Manzanita. We ate, laughed, ate, walked on the beach, ate, hot-tubbed, ate and drank. We walked into Manzanita to make reservations at the seafood restaurant and paused at a Friends of the Library book sale. Ever since I read The Shadow of the Wind by Carlos Ruiz Zafon, I have wanted to see pictures of Barcelona. I found a little book, Spain, published by Panorama-Books, 6 3/4 square by 1/4 inch, that contains 30 color plates. Just exactly what I was looking for.

I also found a book written and autographed by William Langewiesche: Cutting for Sign, One man's journey along the US-Mexican border, published in 1993. In some places the wall that separates the two coutries is a man made wall that funnels people and trade, and is relatively easy to control; but mostly it is a sieve, and the border patrol can be overwhelmed. I read about Tecate, Mexicali, Nogales, Ciudad Juarez and Ojinaga that swell with disease up against the border. I read about the desparate struggle for existence on the wages paid in the maquiladoras. And, I read about smuggling, of people and drugs. This book was written in 1993. I kept thinking has anything changed? Is the US any better 12 years later at stemming the flow? Has the poverty and pollution on the Mexican side gotten better or worse? After reading this book, I am not optomistic.

Langewiesche

Seems White Collar Crime Prof Blog had the goods about the Rosen verdict, when he predicted that the government had a weak case

WorldNetDaily has a story Mexican commandos new threat on border. It seems, to help fight the drug war on the US/Mexico border, the US trained an elite group of Mexican commandos. Now those commandos, now called Los Zetas, have switched sides and are working for the drug smugglers.

Using the commando training, Los Zetas are known to be extremely violent and have been blamed for an outbreak of violence along the Mexican border.

There are reports of the commandos making cross-border runs into U.S. territory in military-style vehicles, armed with automatic weapons.

Do we as the providers of the money to fight the drug war, have any idea of the amount of money spent? Do we have any evidence that the war to keep drugs out of the US is working? Do we as the providers of the money have a right to demand accountability? I suspect the money has been wasted! I think it's time to consider legalization, because it's about the money, ours and the profits that are made by the drug runners.

Rob Kirby writes in The Anatomy of a Fictional Hedge Fund Collapse about a dream (nightmare) that in part involves Long Term Capital Management (LTCM) which went bust in 1998 and some say, almost brought the financial system down. In part of the article Kirby refers to a report NOT FREE, NOT FAIR: The Long Term Manipulation of the Gold Price by John Embry and Andrew Hepburn of Sprott Asset Management. According to Embry and Hepburn there were

claims that gold market was being actively managed. A few large bullion dealers consistently appeared as strong sellers on the COMEX and stopped promising rallies dead in their tracks. Word emerged that LTCM was short approximately 400 tonnes of gold. Covering this position wouyld have sent gold soaring, harming the balance sheets of LTCM and other significant gold shorts.

For those who haven't followed the gold marjket, a little history. Gold peaked in the 70's at $850 to $900 per ounce, and had been in a bear market ever since. Oh there had been rallies in those 25 years, but basically it was down and down, until it bottomed in 1999 at $250 per ounce. Gold doesn't pay any interest. Some bright guy or gal got the terrific idea of borrowing the gold from the central banks or leasing it (carry-trade), and presto the central banks would get some income. The borrowers sold the gold and invested the money elsewhere, and probably got huge bonuses for their idea. Where's the risk? Gold is a dead investment. It always goes down. Central Banks had 30,000 tonnes of gold.

After languishing near $260 an ounce, gold awoke in dramatic fashion following the September 1999 Washington Agreement On Gold. 15 European central banks agreed to limit gold sales over 5 years and curtail lending activities. The price exploded, climbing almost $80 in two weeks as panicked shorts rushed to cover. The gold "carry-trade" had turned dangerously unprofitable.

It is alleged:
1. that the Central Banks intervened in the Gold Market to prevent a gold derivative crisis brought on by LTCM and the Washinton Agreement
2. that the Central Banks had loaned out gold far in excess of annual production.
3. that LTCM was short 300-400 tonnes of gold
4. that the announced gold sales of England were not really sold into the market, but a political decision to manage the price of gold. See, if I lease something to you and you sell it and then I want it back, you have to buy a replacement to satisfy me. What if it isn't available anymore or it is available but at double or triple the price. The leasee or borrower is in deep trouble.

Back to Rob Kirby's nightmare. What if the central banks leased 15,000 tonnes of their 30,000 tonnes, and the leasee's sold it. The price of gold has moved from $250 to $420. What if the Central banks have managed the price by selling physical gold and used derivatives, all to keep the price down. I have posted before that there is a relationship between oil and gold of 15:1. What if the relationship reasserts itself back to 15:1. Gold is then $765! Somebody is in big trouble. This time it's not a short position of 300-400 ounces, it's 15,000 tonnes. That's the nightmare of Rob Kirby.

Pundita has an interesting post about Kennedy-McCain immigration bill? Now, first off if McCain is attached to it, that lowers the quality of the bill right off the bat! McCain-Feingold? McCain and 14 Senators bend over regarding the filibuster. Pundita says the bill "asks for studies of the security situation" and goes on to say

The United States is seeing a resurgence of infectious diseases that were wiped out in this country. The US is now on the verge of a leprosy epidemic. Not only leprosy but also tuberculosis, polio, and several other serious diseases are threatening the American population and with attendant costs to industry and families, not to mention "the taxpayer.

The path for reintroducing 'extinct' diseases to the US is via foreign visitors of all kinds--tourists, students, immigrants both legal and illegal, and so on. The question is how to set up health screening for the legal visitors, including temporary guest workers. This task should not be left to the US companies employing temporary workers. Nor should it be left to the companies that have come to depend on illegal workers. We need the screening program in place first, before making any legislation with regard to updating visa programs.

Ideally, we should quarantine all immigrants for some number of days, just like we did with astronauts when they returned from space. After all, with astronauts it was the future health of the world, here it is the health of the US. We show no inclination to round all of them up, let alone quarantine them. But, with a million illegals per year, we have plenty of time to study the situation. Maybe, as Pundita suggests, there are too many financial interests at stake to give a damn. Pundita, cites one--the real estate industry. I'll cite others. Those coming here to make 10 times what they could make in Mexico, will be needing banking services, cars, TV's, food and clothing and the Feds get workers paying into Social Security. And...the politicians get voters.

Update:

In todays Oregonian there's a column by Steve Duin, The downtown stations slowly run out of gas. Duin writes that the Chevron station on SW Broadway and Columbia is closing on the last day of May. The 1/3 acre sold for $3 Million, probably, he says, for retail-residential. After the close, there will only be two gas stations in the downtown core, the 76 Station on SW 4th and Burnside and the 76 Station on SW 22nd and Burnside. Can you imagine being down town with the gauge on empty?

I thought Duin's article was interesting, because there seems to be a dearth of gas stations, when you need one. In December of '04 Bev and I were on our way to the airport. We were to meet friends for dinner at the ------, at 6:30, stay the night there at the airport and fly out the next morning for Cabo. It was a good deal, we thought, for the parking was free, secure, and the car would be waiting for us when we returned.

My job was to pick up Bev at home on the way to the airport. Well, I was running late working at the store for us. I had planned to get gas on the way, but Bev was nervous about being late for dinner so I skipped it and said I would wait until we got back. After, a great trip to Cabo where I tried to buy a timeshare (Bev was the holdout...again!), we got to the car about midnight, started the car and the little yellow light came on. We needed gas!

There used to be a Chevron at the airport, but it's torn down. I knew there would be no stations on the freeway home, so I decided to drive south on 82nd. Now you married guys know the trouble I'm in, and if we run out three miles from home at midnight, I will never hear the end of it. I discovered there are no stations all the way to Sandy Blvd. At Sandy I paused. Should I turn East away from home for the chance of gas or turn West? I chose to turn toward home. Still, I'm getting heat from Bev. We live off of 33rd. I see 72nd - no gas. 60th and no gas! Finally a station on 53rd and Sandy and we limp in and exhale. "See", I said, " I told you to relax and not to worry." (Ladies, that's what all men say, right?)

I went back to 82nd and Sandy, some days later, wondering if I would have worried less if I had turned East. Nope! It was 2 1/2 miles until I saw a station. On the way home today, I didn't need gas and there are two stations at 33rd and NE Broadway. I think they cluster the stations where the need is low.

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!

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 organisation 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.

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, 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.

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!

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.

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.

Update:

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.

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...

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!

Maxedoutmama does incredible research! In Bird Flu Found In Wild Geese (China) she keeps us informed about the progress of Avian flu and cites Recombinomics. There are a number of us that are very interested in this subject, Maxedoutmama is one of those.

The latest outbreak of avian flu was discovered after tests on 178 wild geese found dead on May 4 in the western Qinghai province. The bodies of the birds were on the shore of a vast lake in the province that borders Tibet and is a favourite migration pitstop.

When I saw the Motorcycle Diaries, I wondered how Che Guevera could be in contact with people in the Leper colony and not get the disease. I had only fears of the disease based on faulty knowledge. This evening I see in WND, Are illegals making U.S. a leper colony?, that it appears illegals are bringing leprosy into the US.

"For example, in 40 years, only 900 persons were afflicted by leprosy in the U.S.; in the past three years, more than 7,000 cases have been presented."

There is a link in the article to Leprosy from the American Leprosy Missions. Check out these questions and their answers:

Leprosy facts & myths

THE DISEASE
1.1 What is leprosy?
1.2 Why is leprosy also called Hansen's disease?
1.3 Is leprosy in the Bible the same as it is today?
1.4 How is it spread?
1.5 Is it inherited?
1.6 Can other people get leprosy from a patient?
1.7 Do household members need treatment?
1.8 What are the earliest signs of leprosy?
1.9 What about stories of fingers and toes dropping off?
1.10 What tests can be done to make the diagnosis?
1.11 How is it treated?
1.12 What side effects do the medications have?
1.13 What is a leprosy reaction?
1.14 Why are the medications continued if reactions occur?
1.15 How are reactions treated?
1.16 What happens to pregnant women who have leprosy?

PREVENTING DISABILITY
2.1 What happens to the eye in leprosy?
2.2 What type of nerve damage occurs?
2.3 What can be done to prevent disabilities?
2.4 What about footwear?

Dr. William Levis, head of the New York Hansen's Disease Clinic, told Columbia News Service.

"This is a real phenomenon. It's a public health threat. New York is endemic now, and nobody's noticed."

Levis thinks America could be on the verge of an epidemic.

Knowledge is power. Might as well know what we are up against.

Carnival of the Capitalistsis up hosted by Ideologic LLC. There is some great reading here and once again Mover Mike is proud to be a part of it with the post titled Rob Kirby, Pirates Reprise

Congratulations to Yippee-Ki-Yay who's been posting for three years. Yikes! That's a lot of reading, writing and devotion. As Randy would say, "You the bomb, dog!"

From CNN.com, the Sumatra quake was the longest ever recorded, lasting between 500 and 600 seconds, rending the earth in a 800 mile long gash; a force equal to a 100 gigaton bomb, ground movement along the fault of at least 16.5 feet. The enormity of the quake is beyond comprehension, not to mention the loss of at least 170,000 people, and this 9.1 to 9.3 quake set the whole planet shifting and stressing. We are seeing earthquakes in places that are highly unusual. You could fear one like this in the Northwest, but it seems a waste of time. People all across the US have tornados and hurricanes and flooding. Better to be prepared with adequate food and water supplies. Better to plan where to meet loved ones if we get separated. Better to live and love each day, than worry. Just today, I pointed out to Beverly, that the potted Azalea on our back deck is popping with the most brilliant pink flowers.

Please welcome and take a look at:

Dan Sherman - An Oregon entrepreneur, some first rate ideas.

FireWolf's Blog - who just recently lost his twin sister and still may need your help.

Red State Rant - Country Fried Rant with a Side of Turnip Greens and Black-eyed Peas

nag.PDXNag.com - a Lawyer from Oregon - Selective Immunity -- Demanded By Folks Who Need It Least . . . It Is Only Human . . . The More They Get The More They Want . . . The More They Have The Better They Are At Getting Even More . . .

I'll bet you thought I'd forgotten about AIG. Not so. In the NY Post

AIG and its board of directors set up a subsidiary that not only illegally made deposed AIG chairman Maurice "Hank" Greenberg and a select group of cronies rich but helped other companies evade the law, according to an amended complaint filed this week.

The insurance giant's C.V. Starr & Co. Inc. subsidiary was "a corporate governance nightmare," according to Stuart Grant of Grant & Eisenhofer, the law firm that brought the suit on behalf of the Teachers Retirement System of Louisiana.

The suit alleges that Starr — and a smaller company, Starr International Co. Inc. — had no valid business purpose and was set up to "line the pockets of its owners" — seven AIG directors — by siphoning off more than $500 million in AIG commissions.

Let's see! One of the reasons I voted for Bush over Kerry: Kerry advocated bilateral talks with N. Korea, Bush insisted on multilateral talks within a six nation framework of area-involved nations. So that's why this is so shocking: US held direct meeting with N. Korea: White House

"All North Korea has to do is commit to resuming the six-party process and we could have as many bilaterals as they want within that process," said Joseph DeTrani, U.S. envoy to the talks.(emphasis added)

From Canada.com, WHO report charts disturbing changes in avian flu virus, urges preparations

The report raises concerns that molecular and disease pattern evidence may indicate the virus is becoming more adept at infecting people. It also reveals some strains of the H5N1 virus may be developing resistance to oseltamivir, the drug wealthy nations are flocking to stockpile as fears of a pandemic mount.

An influenza expert who helped draft the report said it's meant to convey the message that the level of anxiety regarding the virus has risen.

Recombinomics has been chronicalling the developments in avian flu for some time. Hat tip to Free Republic.

From WorldNetDaily Union rep: U.S. troops killing journalists

Echoing a claim that led to CNN executive Eason Jordan's resignation, (Linda Foley)the president of the 35,000-member Newspaper Guild asserted U.S. troops deliberately are killing journalists in Iraq.

This time there is a tape of her remarks.

I wrote about the TIC report on 5/16 and Rob Kirby in an article titled PIRATES REPRISE at Financial Sense Online says there have been major changes in the numbers from one month to the next with no footnote to explain the changes.

I noticed the oddity when I posted the new numbers for the first three months. I wanted the same format from the month prior. I noticed the numbers didn't match up. I didn't say anything, because I was unfamiliar with changes that take place there.

Here are the original numbers I posted:

Month--------------------------Feb-------------Jan
Japan--------------------------702.0-----------701.0
Mainland China----------------196.5-----------195.2
United Kingdom---------------171.0-----------160.7
Caribbean Banking Centers----103.6------------92.6
France-------------------------15.2-------------9.2
Grand Totals------------------1995.8----------1957.8

Here are the numbers I posted on 5/16 that just adds March:

Month----------------------Mar-----Feb-----Jan
Japan------------------------679.5---680.3---679.3
Mainland China--------------223.5---224.9---223.5
United Kingdom-------------122.9---110.7---100.3
Caribbean Banking Centers--137.2---104.7----94.2
France-----------------------25.1----27.2----21.2
Grand Totals--------------1977.1--1945.7--1908.1

If you compare Feb with Feb, Japan is down almost $22 Billion, Mainland China up almost $28 Billion, The UK down almost $60 Billion, Caribbean almost the same, and France up $12 Billion. That is a total "slop" of $122 billion in one month's time. Kirby is appalled and doesn't see how we can base investment decisions on this kind of information. I don't either.

Bush reportedly to OK space weapons order Of Course he will approve space weapons. As I posted here, we have the TAW-50!

The TAW-50 is capable of moving at a speed of 38,000 miles per hour. The velocity to escape the earth’s gravity is 25,000 MPH. That means the TAW-50 is a spacecraft as well. It has a crew of 4 and is run by computers. It can carry a combined payload of glide bombs and a package of MIRV (Multiple Independently Targeted Reentry Vehicles), mil-speck for a group of intercontinental ballistic missiles, each of which can seek out and strike a different target. It has a killer laser system to track SAM, STTA, ATTA missiles. The lasers can take out fighter interceptors. It has hyper-dart missiles by the hundreds. It has an on-board 2-day air supply for space. It can hide in hundreds of miles of space, orbiting at 22,000 MPH and can dive through the atmosphere at 38,000 MPH on a 80-degree attack vector, reverse direction within 150 feet of the ground with little loss of motion and without a glide turn and also almost instantly go vertically straight up at over 38,000 MPH until long after it leaves the atmosphere and resumes orbiting in space

We are spending over $400 Billion on defense, more on defense than the next 10 countries combined. For that kind of money we should be getting some Star Wars Weapons!

Gideon Strauss has a provacative post today. He is covering the move of Belinda Stronach from the conservative side of Cnadian Parliament to the liberal side and says:

while Ms. Stronach's move was indeed opportunistic, her opportunism was principled and prudent. Given that I believe libertarianism to be the most destructive of the significant political movements in North America today,(emphasis added) and given that she is the closest thing to a principled social and economic libertarian among the federal politicians whose views I know, Belinda Stronach has just become the most dangerous politician in Canada.

I have not heard libertarians described this way, so I was interested in Strauss' reasoning for reaching this conclusion.

I find it hard to make use of the standard left-right spectrum. As far as I can tell there are a few basic options that structure politics, resulting in a more complex set of positions than that for which the left-right spectrum can account. One of these basic options have to do with our vision of society, which goes down to the question: What is the basic unit of society? I think there are three ultimate answers possible to this question: (1) the individual, (2) some or other collective, or (3) diverse groups. I hold to (3) as being more true to reality. ... ... while libertarians represent the radical modern fringe of those who hold to (1), the individualist position. Historically, collectivists (including fascists, nationalists, racists, statist socialists a.k.a. communists, religious integralists) have done more explicit and obviously horrific damage than individualists. But there are no hard-collectivist movements in the ascendancy in North America today. (Outside North America it is of course a different matter altogether.) So for the time being, the acid of individualism, eroding basic human relationships, is a greater local threat to human wellbeing in North America than collectivism. by: Gideon Strauss (URL) on 2005-05-18 11:59:52

Now I read Strauss, but the acid of individualism! My BS meter just went off the chart. We have come a long, long way from my heroes, Hopalong Cassidy, The Lone Ranger, Superman, Batman, Spiderman, the Founding Fathers, etc.

I subscribe to Richard Maybury's Early Warning Report. In it he has "preached" for years that Liberty is a system and it has little to do with democracy, collectivists, statists or individualists. Liberty is built on a Higher Law than any human law. This Higher Law consists of two laws:
1. Do all you have agreed to do.
2. Do not encroach on other persons or their property. Please, Strauss! Ayn Rand is spinning in her grave.

Bogs Daddy's last post was "Boycott Islam". I hope he was not "Whacked"!

The "Donald" has proposed scrapping the design of the freedom tower to replace the World Trade Center Towers. Calling the designs "crap architecture", he proposes rebuilding the towers, but make them 100 feet higher.

Deroy Murdock at NRO asks, What Are We Afraid Of?

Had savages destroyed the Empire State Building, the Capitol, or the White House, the restoration of those icons surely would be underway. Rather than Pataki’s time-wasting architectural beauty contest, rebuilding the Twin Towers should have begun the moment the last pebble of debris was plucked from the crime scene. Before this country squanders more time and national honor fiddling with the Pataki-Libeskind Fear Tower, Americans should demand the disposal of this high-rise dog’s breakfast. Instead, Herbert Belton’s and Ken Gardner’s new and improved Twin Towers should rise like the Stars and Stripes above Ground Zero.

Some will say, "Oh mustn't do that, we don't want to offend. That would be like waving a red flag."

IMO, they should rise like to upturned middle fingers. Remember "Nuts!" and "Damn the torpedos, full speed ahead!" and "Remember the Alamo!" Thanks Donald! Build 'em high and build 'em proud.

Bill Cara slaps down Kudlow in Cramer-Kudlow all show, no go.

During this evening’s shows on CNBC, first Larry Kudlow, and then Jim Cramer, told their audiences that Retailers led the rally. In fact, it was the lead story on both shows.

The problem is it was a fabrication, and here is the proof.

Tonight both Kudlow and Cramer tried to re-write history. That’s what people do when they control the media, and that is precisely why independent (and ethical) blogging will win out every time against traditional media.

Way to go Bill!

It is worthwhile to read John Maudlin. Today Maudlin reprints a letter from Richard Duncan, author of the Dollar Crisis: Causes, Consequences, Cures. Richard lays out how the Bank of Japan authorized the creation of 35 Trillion Yen or $320 Billion out of thin air to help the US, starting in 2003 and continuing for 15 months, and ending in Q1 of 2004. You can see how the money supply in Japan sky rocketed and why our Founding Fathers warned against fiat currency. There are no limits to how much currency can be created. That $320 Billion is still in the world's financial system and can't be taken out without dire consequences for the world economy.

The Oregonian reports Home prices go through the roof

The Portland-area median home price jumped 15.3 percent in April -- to $224,900 -- compared with the same month in 2004, according to the Regional Multiple Listing Service. The median price in the first four months of the year ran 14 percent above the figure for the same period last year. That's after a 10.2 percent increase in the annual median price in 2004.

...snip...

Increasingly, buyers from out of state (California) also are snatching up Oregon homes as investments, real estate agents say.

In the NE area of Portland where we live, homes are going for $200+ per square foot. Rents for 1200-1300 square foot Condos in the Pearl are going for $2500-$3000 per month. Amazing, but aside from low interest rates, in-migration, investors from California, we, also, have an urgan growth boundary that concentrates the real estate activity, leading to a limited supply.

Here's a thought. At 14% increase in price per year equals a double every 7 years. We purchased our house for $155,000, 10 years ago. Last time I checked, it's probable market price is $350,000. Another seven years it would be $700,000, and then $1,400,000. Yahoo! Wonder if a Starbucks will be $10 or $15 by then?

While we're on the subject of toilet flushing, check out Hyscience posting about the other story: overreaction on the part of Muslims. Is the story justification for rioting and murder?

From WND,

Ora Mae Magouirk, the 81-year-old Georgia widow at the center of a contentious family fight over her medical treatment and right to live, died of a stroke today at approximately 8 a.m. Eastern, at a nursing home in LaGrange, Ga., according to her nephew, Ken Mullinax of Birmingham, Ala.

MAJOR FOREIGN HOLDERS OF TREASURY SECURITIES as of 5/16/05

COUNTRY---------------------Mar-----Feb-----Jan

Japan----------------------679.5---680.3---679.3
Mainland China-------------223.5---224.9---223.5
United Kingdom-------------122.9---110.7---100.3
Caribbean Banking Centers--137.2---104.7----94.2
France--------------------- 25.1----27.2----21.2
Grand Totals--------------1977.1--1945.7--1908.1

We see in the latest statistics showing Major Foreign Holders of Treasury Securities that of the $31.4 Billion increase Japan and China were again flat, but the UK and and the mysterious Caribbean Banking Center increased by $44.7 Billion. The fear, and I posted about it last month, is that the FED is printing money to take up the slack for Japan and China, who are not buying much, anymore. We need to import roughly $2 Billion per day. In the last month net capital inflows fell to $45.7 Billion in March from $84.1 billion in February, and of the $45.7 Billion, $44.7 Billion came from two areas. Who the heck are the Caribbean Banking Centers?

The London Irvine Report (free, by subscription) has some interesting information about oil. It reports that OPEC says that they have about 2 million barrels per day (mbpd) excess capacity, able to meet growing demands. In addition they expect by 2025, oil demand will be 111 mbpd and the expect to supply almost 50% of that amount.

London Irvine asks how?

Existing oilfields are declining by 1.5% to 3% a year. To reach the demand target for 2025, we must find 27 mbpd of new production or about another 32% equivalent of existing demand, and find about the same again to offset current levels of decline. Some think it just cannot be done. On May 27, Houston and London based oil investment banker Matthew Simmons' new book Twilight in the Desert gets released. In it he is expected to say that most Arab oil reserve claims are unfounded, and that the rate of decline in the existing Saudi elephant fields will accelerate. He believes we will live through a Saudi oil shock

From Bloomberg, New York Fed's Manufacturing Index Decreased to -11.1 in May

Inventories piled up by the most since the second quarter of 2000, discouraging companies from placing orders with factories, economists said. Higher costs for energy and other raw materials are limiting equipment purchases and economic growth, economists said.

...snip...

Inventories rose at an $80.2 billion annual rate in the first quarter, the biggest increase since the second quarter of 2000, the Commerce Department estimated last month. The jump in stockpiles from January through March will prevent inventories from contributing to growth this quarter, economists said. Inventories haven't grown by more than $70 billion at an annual rate in back-to-back quarters since the six months ended in March 1998.

As I posted in At What Cost, A Lower Trade Deficit?, consumers may be tapped out.

Mover Mike will be reading and reviewing the new book Their Lives: The Women Targeted by the Clinton Machine (World Ahead Publishing, $25.95, ISBN 0974670138), author Candice E. Jackson. The publicity says the book is about

how Bill Clinton used his political power to harass, intimidate, and terrorize women who got in his way. Whether it was assembling a smear team to attack a grief-stricken widow, threatening a reporter for her research into an Arkansas health care scandal, or hiring private investigators to bully an ex-flame's family members, Jackson says that Clinton showed no reluctance to go after any woman who inconvenienced his political career.

Sounds like a juicy book to read at the beach over Memorial Day weekend. Sometime ago, World Ahead Publishing asked me if I would read and review books they publish. I said I would be interested. I enjoy reading and I enjoy writing about books. In this case I will get a free book, no obligation to praise or pan the book, and I get to be part of the PR hype that may help with increasing traffic to my site. All in all, a win-win, with no ethical violations.

Clintons jackson

Carnival of the Capitalists is up at AnyLetter. I see some familiar names and some brand new, to me, names.

How did I miss this: Why, it's an ... an alien implant! (Hat tip to The Tomo Report) Dr. Roger Leir, podiatrist, removes T-shaped object from a foot and says it must be an monotoring device implanted by aliens.

If you think some corporations are morally challenged, check out the "Purpose, Vision, Values, Goals" of Designmaster Furniture in Values of Designmaster at our sister site.

This week in Have you heard of Pebble Bed Modular Reactors? and More about Pebble Bed Reactors, I posted about a nuclear energy source that would provide energy at the equivalent to buying gasoline at 1/2 cent per gallon. Today I read in Live Science about Personal Nuclear Power: New Battery Lasts 12 Years

A new type of battery based on the radioactive decay of nuclear material is 10 times more powerful than similar prototypes and should last a decade or more without a charge, scientists announced this week.

Quick, I need this for my digital camera, which chews through batteries like shoes and a new puppy.

Excellent Jim Puplava interview today at Financial Sense Online with Doug Noland of Prudent Bear, financial markets strategist at David Tice & Associates. These two talk about the debate going on over deflation vs. inflation. Both are very concerned about the credit creation that has taken place resulting in soaring asset prices in the US. Both seeing the need for the Fed to get control and put us through small pain today instead of large pain in the near future. Large pain would be hyperinflation and currency collapse ala Argentina in the late '90's. Credit Collapse and Will The Dollar Hold? have a listen!

In Weekly Market Watch at Financial Sese Online, there is a rundown of the various commodities and included is a Commitments of Traders (COT) report. It is usually not a good idea to bet against the professionals or the Large Commercial Traders. Here's what I noticed about some key commodities:

Oil has declined from above $59 to about $48, and now commercials have the largest net long position since December of 2004, at $41 per barrel, before Oil took off to $59. See Chart.

Gold large commercials are holding an historically large net short position as the price has fallen from $450 to $420 per ounce, however the Comex has dramatically lowered the margin requirement for gold effective the close of business on Monday – from $2250 to $1350 per contract and large commercials reduced their large short position by 29,000 contracts. See Chart.

USD commercials are holding the biggest net short position in nearly a year. See Chart.

June T-bonds commercials are holding their smallest net long position in nearly three months.

Bottom Line: COT expects Oil Up, expects Gold down to sideways (or bottoming), expexts USD down, and expects Bonds Up to sideways (or topping). Let's see how the traders fare.

There has been a lot written this week about derivatives and GM and trouble in Hedge Fund Land. Mark Gilbert at Bloomberg has written an excellent article on the subject to bring you up to date: The Tick, Tick of GM in Hedge Fund Derivatives

You know, if you choose your time period, everything looks good. The 10 year Treasury today made a new high on this move, bringing hope to some, because of a weak economy, that we are going to get another shot of jet fuel from our mortgages to propel more consumer spending. The 10 year has moved from about 107 1/2 to about 112. Remember, bonds up, interest rates down.

Here's a chart: 10-year Treasury note

Interest rates are back to where the were in the first week of February and lowest in six months. However, if we expand out time period to June of 2004, we traded for almost five months between 112 and 114. Those traders have a lot of losses and would like to get even by selling. So maybe things aren't quite so rosy.

How about the surprising strength of the dollar, these last few days. That same time period in 2004 offers a significant amount of overhead resistance to traders who bought USD's.

I think it goes to something deeper. I think we are too focused on the short term, and remember little of our history, and you know that cliche about repeating history.

Now, if true, this may explain a lot of those sightings. CapitalUpdates.com has this quote from part of the Intertnational Forecaster May 2005:

We have a new antigravity space-fighter-bomber, the Advanced TAW-50.

The technology defies reality and is the result of the study of crashed foreign space ships(emphasis added). The TAW-50 is capable of moving at a speed of 38,000 miles per hour. The velocity to escape the earth’s gravity is 25,000 MPH. That means the TAW-50 is a spacecraft as well. It has a crew of 4 and is run by computers. It can carry a combined payload of glide bombs and a package of MIRV (Multiple Independently Targeted Reentry Vehicles), mil-speck for a group of intercontinental ballistic missiles, each of which can seek out and strike a different target. It has a killer laser system to track SAM, STTA, ATTA missiles. The lasers can take out fighter interceptors. It has hyper-dart missiles by the hundreds. It has an on-board 2-day air supply for space. It can hide in hundreds of miles of space, orbiting at 22,000 MPH and can dive through the atmosphere at 38,000 MPH on a 80-degree attack vector, reverse direction within 150 feet of the ground with little loss of motion and without a glide turn and also almost instantly go vertically straight up at over 38,000 MPH until long after it leaves the atmosphere and resumes orbiting in space. It nullifies the G-Force on pilots. It is far too fast for tracking radars. It can be refueled and rearmed in space from a space station. Refueling is done in less than 10 minutes. With a few extra tanks of liquid oxygen it can fly to the moon and back. The planes are at the Lockheed Martin’s skunk works at Palmdale-Helendale, Ca., and at Northrop in the Tehachapi Mountains, northwest of Lancaster, Ca. We for years went shooting in those areas. That is awesome.

My afternoon naps not only serve as a time to refresh, but to think or reflect. As I lay there, I thought about Amber, our golden retriever, who died suddenly on March 5th. My mind drifted to a section of Grant Park, where my wife and I and Amber had had some good times. We scattered some of her ashes there and the rest we put in a ceramic two piece dog. My eyes went to the container on top the dresser. I thought it strange that the dog we knew for eight years was just gone!

I knew that the ashes in the container are not Amber. And of course I not only felt grief, but guilt. Could I have recognized her sickness earlier? When she was younger she could leap up on the bed. When we got a new bed that was 8 inches higher, she was no longer able to. At night she would signal us she wanted up and we would move a bench to the bottom of the bed and she would use that as a step. In the last year, she signaled she wanted up, but even with the bench, needed coaxing. Again, I wondered if she had a soul, and where it was.

I posted about a book I finished called Eye of the Pyramid by Terry l. Krohn. On page 195-196 Esau, The Gifted One, is asked to

search out the mind of this prophet in Jerusalem and make him see the benefits of our Society.

Later when asked if he had searched out Jesus, will he join us, were you able to sway his thoughts, "The Gifted One breathed deeply and then exhaled. He looked directly into the master's eyes and spoke slowly, his words carrying a melodius tone"

Master, my power is but a grain of sand and His all the sands of the Earth, my thoughts a drop of water and His all the oceans of the world. The tides would stop; the sun would hide its light, would He but ask. The very air He breathes is loath to leave His body; the food He eats nourishes Him with unbridled joy.

He sees my thoughts through mine own heart, mine own mind, my very soul; His presence in me is benevolence incarnate, my ecstacy at His spirit's gentle touch beyond humble words. I am but a man; He is so much more.

Even had I the power to act against Him, I could not, His kindness is so strong, His compassion a force far stronger than the greatest of mountains, the whole of the earth.

So, there I lay, all this running through my head and I glanced again at the ceramic dog. Suddenly, this thought hit me. Why do I look for her among the dead?

With a little help I found this passage in Luke 24:

1 Now on the first day of the week, very early in the morning, they, and certain other women with them, came to the tomb bringing the spices which they had prepared.
2 But they found the stone rolled away from the tomb.
3 Then they went in and did not find the body of the Lord Jesus.
4 And it happened, as they were greatly perplexed about this, that behold, two men stood by them in shining garments.
5 Then, as they were afraid and bowed their faces to the earth, they said to them, "Why do you seek the living among the dead?
6 He is not here, but is risen!

The passage from Luke had another meaning for me. It is easy to look back and focus on regrets, mistakes, and sins, but there is no life there. He knows what love is in my heart. And, reading the passage from the Eye of the Pyramid filled me with knowledge of His love and magnificense. Amber can't help but be in good hands and filled with His love. Bev and I are ready to share this good life with another furry friend.

Krohn

From The King Report(by subscription only) M. Ramsey King Securities, Inc. Thursday May 12, 2005 – Issue 3154 "Independent View of the News"

Many pundits and analysts hail the lower than expected US trade deficit as good news. If you want the US trade deficit to decisively contract without real fundamental change, you need a recession. The trade deficit declined due to the enormous jump in US inventories – from Q4’s $47.2B to Q1’s $80.2B – and a consumer spending deceleration to 3.5% in Q1 from Q4’s 4.2%. Ergo, economic ebbing is a cause.

We would like to see a lower trade deficit, but not if it means consumers are tapped out. It appears there is some of that going on.

Seems the spin today is from the Dept of Energy, but who should we believe? From Financial Sense Online by Mike Hartman:

First of all, the Energy Department claims crude grew by 2.7 million barrels...

Prices of crude declined on the news leading some to say crude is overpriced by $15.

...but the American Petroleum Institute reported crude inventories actually DECLINED by 6.1 million barrels.

Similarly, the government claims a build of 200,000 barrels of gasoline...

leading investors to expect lower gasoline prices,

...but the API reported a build of only 84,000 barrels. The market expected a gasoline build of 800,000 barrels, so both inventory reports came in well below estimates, but the price of gasoline declined by more than 2% today to close at $1.479 a gallon.

I have argued that the price of oil has gone up not because of industrial demand, but in reaction to a depreciating USD.

...oil came down today because the dollar strengthened, not because of the bearish numbers from the Energy Department. Lower oil makes the dollar look better, and the dollar needs all the help it can get…even if it is pure propaganda.

For weeks there have been rumors of big losses in Derivatives. Not since the takeover of LTCM in 1998, when Greenspan came to the rescue have rumored losses been this high. However, in 1998, we would be talking about billions, today the notional value of derivatives is near $250 Trillion, and leverage can be as high as 20 to 1.

According to Reuters,

Hedge funds have been building up stakes on the European debt of the U.S. auto firm General Motors...over the past six months, risking losses in a highly volatile situation, fund managers and bankers said.

According to FT (by subscription only)

The complex trades struck by many hedge funds mean any troubles risk drawing in the counterparties, particularly banks, with which they conducted the trades.

A derivative is an agreement between two parties to alieviate risk, often done over the counter and often done without regulatory oversight. One side is a losing side. That losing counterparty can rack up huge losses that must be paid to the other party. With all the leverage and the size of the derivatives outstanding, many have felt it is a WMD in our financial system. Another factor is the large number of hedge funds, all competing for capital gains in a low interest rate environment. That means a hedge fund operator needs to take bigger risks or use more leverage to meet his objective returns. The downgrade of GM and Ford has added supply to junk bonds and upset interest rate relationships between asset classes, sending destructive ripples through the investment community.

From the WSJ online, U.S. to Assume UAL Pension Plans

The agreement...would allow UAL to sidestep more than $3 billion in minimum-funding contributions over the next five years.

In all, the PBGC estimates it would assume $9.8 billion in total liabilities by assuming the plans, which count more than 120,000 active and retired United workers as participants.

The retired pilots and the Association of Flight Attendants will take huge cuts in payments as I wrote about here.

Today in the LA Times, in Commentary, Once Again, the Big Yalta Lie, the left is supporting the Yalta Accord and Alger Hiss. One Clear Call has another reality behind Yalta and supports President Bush with his acknowledgement of the injustice of Yalta. Her husband's parents from Latvia survived and he interviews his mother about those times:
Part I – Escape From Latvia

Part II – Finding a Safe Place

Part III – Camp Life

Afterword

From the London Irvine Report, Fears of recession keep the cap on interest rates, bankers are shocked in England that index of manufacturing declined so rapidly from February to March, 1.6%!

Philip Shaw, an economist at Investec, called the figures "truly appalling". Geoff Dicks, an economist at the Royal Bank of Scotland, said: "The 2002 Jubilee apart, this was the worst month in over 10 years."

More about Pebble Bed Reactors from Wikipedia

The technology in various forms is under development by MIT, the South African power utility Eskom, General Atomic (U.S.), the Dutch company Romawa B.V. (http://www.romawa.nl), Adams Atomic Engines, a U.S. Company, and the Chinese company Chinergy, working with Tsinghua University.

The reactor provides heat, which is used to turn a generator. However, there are a number of different design choices.

The uranium, thorium or plutonium fuels are in oxides (ceramic form) contained within spherical pebbles made of pyrolitic graphite.

The pebbles are in a bin or can. An inert gas, helium, nitrogen or carbon dioxide, circulates through the spaces between the fuel pebbles. This carries heat away from the reactor.

Yes, there are safety issues as some have pointed out already in the comments. However, there are safety issues with burning fossil fuel. Our energy needs are so vast that nuclear energy in the form of Pebble Bed Reactors is being pursued in China and S. Africa. We also need energy to extract hydrogen and for desalinazation, as proposed in S. Africa. Face it, technology kills people. Look how many die each year in car accidents. But, horses killed people, too. And, if we all rode horses to get around...well, I don't want to think how deep the horse manure would be.

Richard Russell's Dow Theory Letters (by subscription only) has a comment, today, about Pebble Bed Modular Reactors (PBMR).

The Pebble Bed Modular Reactor (PBMR) is a small, safe, clean, cost-efficient, inexpensive and adaptable nuclear power plant.

The PBMR is a nuclear power plant that uses coated uranium particles encased in graphite to form a fuel sphere (60 mm in diameter or about the size of a billard ball). In addition, the PBMR design makes use of helium as the coolant and energy transfer medium to a closed cycle gas turbine and generator.

This design differs in a number of ways from Pressurized Water Reactors. These design differences result in the PBMR being an inherently safe and economical power plant.

No more big cooling towers. The PBMR is about the size of a soccer field and the height of the building will be 18 stories, half of which is below ground level.

I have saved the best for last. Uranium is about $20 per pound. At that price, relative present fuel costs are:

Coal - $1.25 per million BTU
Natural Gas - $3.5 per million BTU
Oil - $6.00 per million BTU
Uranium - $0.055 per million BTU

"Let's assume that Uranium increases to 50 times the current price as demand picks up again. The new PBMR nuclear plants would provide energy at the equivalent to buying gasoline at 1/2 cent per gallon."

The environmentalists should love this. There is no danger of "The China Syndrome", the is no pollution as in fossil fuel plants, and there will be enough room on site for the spent fuel to be stored in dry storage tanks within the PBMR building. Finally, a PBMR lasts for 40 years and takes 24 months to build.

Update:

Carnival of the Capitalists is up hosted by A Penny For.... Mover Mike is pleased to be included in
Personal Finance: How Cheap Are Stock Right Now?

Don Luskin in Bottoms Up!

Once upon a time this all happened just the other way around. In the summer of 1987, stocks were red hot, with the S&P 500 having rallied more than 40% year-to-date. At the same time, bonds were pariahs, having collapsed by 10% over the same period. According to my valuation model, by September of that year(1987), stocks had gotten precisely as overvalued as they are undervalued today (emphasis added).

So let's take a look once again at 1987. The Dow Jones Industrial Average (DJIA) had a high of 2722.42, Dividends were $71.20 and the yield was 2.60%.

Friday the DJIA closed at 10,345.40, Dividends today are $246.39 and the current yield is 2.38! Why Don, the yield is lower today than in 1987 at the high. That doesn't meet the test of "stocks had gotten precisely as overvalued as they are undervalued today."

Next let's take a look at PE ratios. According to Barron's, the PE on the DJIA on Friday was 17.89. Now, if you take a look at the first chart, it shows the PE ratio for the S&P. If you look for 1987, you see the PE looks about 17.00. Why Don, the PE is higher today than in 1987. That doesn't meet the test of "stocks had gotten precisely as overvalued as they are undervalued today."

So let's look at another way to value the market. Barron's shows the Market to Book Ratio, based on the close Friday was priced at 3.55 times book. Look at my second chart. It shows Price to Book in 1987 of the DJIA to be about 2.00. Why Don, the market to book value is almost twice as high today as it was at the peak in 1987. That doesn't meet the test of "stocks had gotten precisely as overvalued as they are undervalued today."

One of the reasons the market cracked in 1987 was interest rates were rising. Today we have a FED that is raising interest rates again. We have been told that rates will continue rising incrementally to keep inflation under control. If that's the case then the market will have more competition and we could reach a tipping point just like 1987.

IMHO, we have seen the last rate increase by the FED. If you look at the employment numbers, the government says the economy created 274,000 jobs. However, 257,000 of those "jobs" were courtesy of the CES business birth/death "plug" number used by the Bureau of Labor Statistics. I think it is a "spin" job. The economy is not as strong as we are told and thus no more rate increases. Which also means, maybe, there is not as much "E" in the PE and stocks are even more over priced. Don, you are wrong to insist, as you have, that stocks are the cheapest in 20 years. Stocks are more overvalued today than they were at the peak of the market in 1987, before the crash.

Update on Social Security as practiced by Chilean private accounts. Last week John Tierney wrote here about social security here in the US vs private accounts in Chile. We would be better off there! Some asked him about the risks of the market in Chile. He says in Place Your Bets the greater risk is in the US:

But there's also another kind of risk to consider, one that Chilean workers kept mentioning to me. The best part of their private accounts, they said, was that they'd put "la plata donde mis ojos la vean" - the money where my eyes can see it. They knew they might lose some of it in the stock market, but they preferred that to watching it all disappear into politicians' hands.

Amen to that! How can you trust politicians when they have squandered 5 million ounces of silver, rung up $8 Trillion in debt, trashed the dollar, and borrowed all the money in the Social Security trust fund replacing the money with IOU's.