Bush Gives Horned Hand Sign During 9/11 Moment of Silence
September 14th, 2007WARNING: If you say that this has anything to do with the Texas Longhorns, g0D will kill a kitten.
Via: Yahoo:
Related: Bush Gives Horned Hand Sign While Being Photographed with the Queen
Related: What’s the Story with Arnold Schwarzenegger’s Belt Buckle?
UK: Bank of England Provides Emergency Funding to Large Mortgage Company
September 14th, 2007Panic? Why would anyone panic? I mean, I always associate the phrase, “emergency financial support” with smooth sailing and total confidence.
Who do these pricks think they’re kidding?
Via: BBC:
The Bank of England has agreed to give emergency financial support to the Northern Rock, one of the UK’s largest mortgage lenders, the BBC has learned.
However this does not mean that the bank is in danger of going bust, Business Editor Robert Peston says.
There was no reason for people with Northern Rock savings accounts to panic, he added.
The bank has struggled to raise money to finance its lending ever since money markets seized up over the summer.
Research Credit: LM
A Secret Time Bomb Made of Gold
September 13th, 2007Anyone who hangs out in gold bug backwaters / Pentecostal snake handling dens already knows this story.
What’s different about it this time?
Barron’s.
No, friends, Barron’s isn’t usually where gold bugs go to catch drippings from the alter. Whether or not The Time is actually upon us, nobody knows.
On a technical note, gold is edging up against MAJOR resistance at $721. That’s the number to watch.
Via: Barron’s:
THE VOLATILITY SEEN THIS QUARTER IN the stock and credit markets may be new to younger investors. But there is something lurking out there that can make things really dicey.
A little-known fountain of free money called the “gold carry trade” is in danger of drying up. And if it does, then markets from gold to bonds and even stocks can be in for a wild ride.
Before even explaining what the gold carry trade entails, let me first say that its demise has been forecast for nearly a decade. In researching this topic, I found articles as far back as 1998 looking for an explosion in gold prices and commensurate damage to other markets, if not the economy. In other words, this is a story that is as old as Methuselah.
But with a sinking dollar, soaring commodities, and several diverse technical conditions on the charts, the dynamics are coming together to make the end of the gold carry trade a lot closer to reality than ever before.
The gold carry trade is similar to the yen carry trade, which has been a hot topic in the markets this year. Basically, money is borrowed from one source at a low interest rate and invested elsewhere at a higher rate. As long as relevant exchange rates and asset prices remain stable, a profit is made with little effort.
Central banks are sitting on huge supplies of gold that earn them no interest and cost them money just to store securely. To earn a little revenue on these static assets, they loan their gold to banks, called buillon banks, at a ridiculously low interest rate on the order of 1%.
The banks turn around and sell the gold in the market, typically in the London bullion market, and invest the proceeds in a higher-paying asset, such as long-term Treasury bonds. If bonds pay 4.6% then the banks earn an easy 3.6%.
The problem is that if the gold price starts to rise, profits can be wiped out or turned to losses. And in today’s market, a falling dollar not only boosts gold prices but it also makes Treasury bonds less attractive to foreign investors. That reduces demand and weakens prices to create a potential double-edged sword for carry traders.
The banks, of course, realize this and hedge their gold sales by buying gold futures. According to Kevin Schweitzer, senior vice president with Hudson Securities, a firm that makes markets in gold stocks, the hedge is not perfect. If central banks call in their gold loans, the banks cannot wait for contract expiration to take delivery on the gold they purchased via their futures contracts. They have to pay back their loans right away and if gold prices are stable, there is no problem for the banks going into the physical market to buy back their gold.
However, if gold starts to rise quickly, the added demand from the banks to buy gold can exacerbate the rally causing what amounts to a mad dash for the metal. The market will respond with steeply higher prices…
Research Credit: PD
U.S. Troops Who Criticised Iraq War Strategy Killed in Baghdad
September 13th, 2007Is the Pat Tillman syndrome spreading?
Nothing can or will ever come of it, because, as we know, “Charging a man with murder in this place was like handing out speeding tickets in the Indy 500.”
Via: Guardian:
Two US soldiers who helped write a critique from the front saying America had “failed on every promise” in the war have been killed in Iraq, it was reported yesterday.
Staff Sergeant Yance Gray, 26, and Sergeant Omar Mora, 28, were among a group of seven soldiers serving in Iraq who wrote a piece excoriating America’s conduct of the war. The piece was published in the New York Times last month.
The men were killed in Baghdad when the cargo truck in which they were riding rolled over, the Associated Press and local news outlets reported yesterday. The Pentagon had yet to confirm their deaths early yesterday.
The criticism caused a flurry of public debate because of the candour with which the men, all serving in the 82nd Airborne, described the situation in Iraq.
There was also speculation they could face severe penalties for being so openly critical of the war. Another US soldier, Private Scott Beauchamp, who wrote a shocking account in New Republic magazine about a soldier treating a piece of a child’s skull as a souvenir, had his mobile phone and laptop confiscated.
Research Credit: Idleworm
Cryptogon Reader Signs Up for Hosting with Blue Host
September 13th, 2007Thanks to the owner of johnfabrizio.com for choosing to host with Blue Host. Cryptogon receives $65!
Who Needs Hackers?
September 13th, 2007Via: New York Times:
NOTHING was moving. International travelers flying into Los Angeles International Airport — more than 17,000 of them — were stuck on planes for hours one day in mid-August after computers for the United States Customs and Border Protection agency went down and stayed down for nine hours.
Hackers? Nope. Though it was the kind of chaos that malevolent computer intruders always seem to be creating in the movies, the problem was traced to a malfunctioning network card on a desktop computer. The flawed card slowed the network and set off a domino effect as failures rippled through the customs network at the airport, officials said.
Everybody knows hackers are the biggest threat to computer networks, except that it ain’t necessarily so.
Yes, hackers are still out there, and not just teenagers: malicious insiders, political activists, mobsters and even government agents all routinely test public and private computer networks and occasionally disrupt services. But experts say that some of the most serious, even potentially devastating, problems with networks arise from sources with no malevolent component.
U.S. Stock Market Index Values vs. Collapsing Dollar
September 13th, 2007IMPORTANT NOTE: If you think, “I’ll just buy Canadian dollars then,” you’re totally missing the point of this. The point is not to suggest one gamble over another, but to let you know the reality behind the high index numbers.
Via: University of Michigan:
Lupia, who also is a research professor at the Institute for Social Research, says the value of a Dow Jones point has declined significantly in recent years, thus news reports of “record highs do not mean what they used to.” As a result, some people might be surprised to learn how little their IRAs and 401(k)s are worth when they retire.
The researchers tested their theories in an experiment that allowed a person to purchase stock or to convert the money into Canadian currency then place it under his or her bed for a year.
In one demonstration that included dividends and other benefits of holding stocks, Lupia and colleagues showed that an investor who bought all of the stocks included in the Dow Jones on Jan. 2, 2001, and sold them on the record-high closing date of 2006 (Dec. 27), gained $3,377.34 — or $2,870.74 after taxes.
If, however, the same investor simply converted the money to Canadian dollars on Jan. 2, 2001, and changed them back for U.S. dollars on Dec. 27, 2006, his or her post-tax gain would have been substantially greater ($3,074.64) than it would have been from participating in a “record-breaking” stock market.
When the researchers repeated this comparison for nearly 800,000 combinations of “cash in” and “cash out” dates between 2001-06, they found that after accounting for taxes, investors would have been better off exchanging their money for Canadian dollars than buying the components of the Dow Jones 97 percent of the time.
The reason for this surprising result is that the value of a point on the Dow Jones Industrial Index is tied to the value of a U.S. dollar, Lupia says. In recent years, due to a series of economic factors and political decisions, the value of the U.S. dollar has fallen substantially against other benchmarks, such as an ounce of gold, a barrel of oil, the Euro, and the Canadian dollar. The meaning of a Dow Jones point increase and record highs in the stock market are severely diluted, he says.
Oil $80
September 12th, 2007Think of $60 as the gateway to $40 on the downside and $80 as the gateway to $100 on the upside.
There’s a bit of a perfect storm coming together here with very tight inventories and the collapsing dollar.
Via: Yahoo:
Oil futures prices rose sharply Wednesday, briefly climbing above a record $80 a barrel after the government reported a surprisingly large drop in crude inventories and declines in gasoline supplies and refinery activity.
The report from the Energy Department’s Energy Information Administration suggested oil supplies are tightening as demand remains strong. That’s why oil prices are rising despite OPEC’s decision on Tuesday to boost crude production by 500,000 barrels per day this fall, analysts said.
Despite Wednesday’s jump, oil is still well below inflation-adjusted highs hit in early 1980. Depending on the adjustment, a $38 barrel of oil in 1980 would be worth $96 to $101 or more today.
The Coming Financial Crash: “Where Everyone in the House is Crazy Only the Sane Seem Like Fools”
September 12th, 2007Via: European Tribune:
The unease, verging on panic, about sub-prime mortgages has given us a glimpse of what is ahead. But, let us be very clear, it has been only a glimpse. Sub-prime securitised mortgages are only a relatively tiny part of the huge credit and debt structure involved in what we may group under the generic name of derivatives. They include credit derivatives, hedge funds, private-equity deals, mutual funds, pension funds and the whole gamut of financial instruments that have flooded not only United States markets but markets around the world, especially in the last five to ten years.
MEXICO GAS LINE EXPLOSIONS FORCE MAJOR FACTORIES TO CLOSE DOWN
September 12th, 2007I can’t think of a time in history when the individual insurgent has had such an incredible asymmetric advantage over his opponent. Hierarchical dominator systems—now enjoying primacy on a global scale—exist atop a delicate grid of undefended energy and information infrastructures. With just a bit of intelligent planning, today’s insurgent can turn a small improvised explosive into a weapon of mass profit destruction. Killing soldiers and cops is a waste of time and energy. Killing profits does far more damage to the enemy than killing any number of troops.
Different societies and opponents, however, lend themselves to different forms of asymmetric warfare.
In America (and wealthier parts of the “West” in general), people don’t have to blow up a natural gas pipeline and shut down a factory or cut enough fiber to crash the NYSE and the NASDAQ market systems for a few minutes, hours or days. Voluntary simplicity, or, living well on very little money, kicks evil people in the nuts and gouges out their eyes. (Pacifists may think of this as sending the enemy Joy and Happiness if they desire.) Doing this in the U.S. has a force multiplier effect because the U.S. is the largest source of the funds that keep the global ponzi scheme running. When people in wealthy countries opt out, the action causes major economic damage to the machine.
Look at me and Rebecca. In the “normal” world, in our “normal” careers, we would have an annual combined income of roughly US$100,000. What horror would the U.S. government commit with the portion of the taxes it would demand from us? We now live well on a tiny fraction of what we would make in our “normal” careers. We have no debt. We own our small farm and our vehicles outright. We convert what’s left over at the end of the month into cash savings and gold. We also give money to people who are doing good work.
Whether you decide to leave the U.S. (like we did), or not, doesn’t matter. Living well on very little, encouraging others to do the same and actually funding people who are doing good work (allocating resources to values) are the main tactics of the frugal insurgent.
There’s a big difference between choosing to live well on a low income, on your terms, and being broke on someone else’s. My friend TR summed it up this way: “It’s easier to out through the bottom than the top.”
It’s true.
It’s a matter of hacking The Matrix in an efficient and innovative manner to reduce your monthly expenses to a fraction of previous levels. The extraction/domination system in the U.S. has few effective defenses against people who opt out—to the extent possible—by making smart use of available resources. The system assumes that you’ll stay hooked forever on a lifestyle built around profligate waste and going deep into debt to buy crap that you don’t really want, or need. Indeed, most people are content to go through life this way.
Living simply on very little money kills the system slowly. This is actually a good thing. Why don’t I advocate all out war against the many Achilles heels in the infrastructure of the American Corporate State? It’s simple really: nuclear weapons.
Threaten the system too fast and too effectively and the release of nuclear weapons becomes increasingly likely. The U.S. is not going to simply fade away without a fight. The greatest trick of all for U.S. Military commanders will be to prevent the release of nuclear weapons as U.S. power declines.
After so many decades of genocide and theft, the U.S. has made many, very real enemies. Those enemies might use sudden infrastructure collapse as an opportunity to deliver a kill shot to the U.S. The chances of cooler heads prevailing in the U.S. will be lower with massive infrastructure attacks threatening the country. Such attacks could easily be perceived as the opening phases of a Strategic Information Warfare campaign by a foreign military.
Therefore, while it’s easy to theorize strategic infrastructure attacks against U.S. targets, the law of unintended consequences, especially with regard to nuclear weapons, should cause any would be insurgents to consider very carefully, not just the severity, but the pace at which their attacks are to unfold.
In other words, stop buying toothpaste and grow your own tomatoes! Start somewhere, and use the sense of power and accomplishment to find other ways to resist, teach others and direct resources to help people who are doing good work. In a society like the U.S., defunding fascists via voluntary simplicity is the most effective form of resistance that I am aware of.
In a society like Mexico, though…
Via: AP:
More than 60 per cent of Mexico’s steel production was halted and two major auto plants, including Volkswagen’s only manufacturing facility in North America, shut down Tuesday after explosions claimed by a leftist group cut natural gas supplies.
Petroleos Mexicanos said the attacks on its oil and natural gas pipelines would cause hundreds of millions of dollars in production losses for the state-owned oil company and affect 10 states. Private-sector groups told Mexican news media that the attacks and subsequent precautionary shutdowns would cost businesses close to US$90 million.
Mexico’s steel industry chamber Canacero said Tuesday that more than 60 per cent of the country’s steel production has been halted, and that it could take up to seven days to resume.
In a statement, Canacero said losses would “significantly” exceed the $36 million the industry suffered from similar attacks on pipelines in July.
The six explosions affected a dozen natural gas pipelines and one oil pipeline in the Gulf coast state of Veracruz, sending flames and black smoke shooting into the air but causing no direct injuries. The blasts occurred at valve stations where different pipelines intersect.
Industry and national-security experts say the small leftist group claiming responsibility has proved it is a force to be reckoned with.
