Black Ops Jungle: The Academy of Military Industrial Complex Studies
September 19th, 2007Via: Mother Jones:
Dedicated to everything from architecture to sports medicine, “career academies” claim to offer high school kids focus, relevancy, and solid job prospects. Now add a new kind of program to the list: homeland security high. In late August, Maryland’s Joppatowne High School became the first school in the country dedicated to churning out would-be Jack Bauers. The 75 students in the Homeland Security and Emergency Preparedness magnet program will study cybersecurity and geospatial intelligence, respond to mock terror attacks, and receive limited security clearances at the nearby Army chemical warfare lab.
The new school is funded and guided by a slew of federal, state, and local agencies, not to mention several defense firms. Officials say it will teach kids to understand the “new reality,” though they hasten to add that the school isn’t focused just on terrorism. School administrators, channeling Cheneyesque secrecy, refused to be interviewed for this story. But it’s no secret that the program is seen as a model for the rest of the country, with the Pentagon and other agencies watching closely.
Students will choose one of three specialized tracks: information and communication technology, criminal justice and law enforcement, or “homeland security science.” David Volrath, executive director of secondary education for Harford County Public Schools, says the school also hopes to offer “Arabic or some other nontraditional, Third World-type language.”
Research Credit: DS
Clotheslines in America: The Right to Dry
September 19th, 2007
The Farmlet is far, far away from Irvine, California
Via: Wall Street Journal
It was a sunny, 70-degree day here in Awbrey Butte, an exclusive neighborhood of big, modern houses surrounded by native pines.
To Susan Taylor, it was a perfect time to hang her laundry out to dry. The 55-year-old mother and part-time nurse strung a clothesline to a tree in her backyard, pinned up some freshly washed flannel sheets — and, with that, became a renegade.
The regulations of the subdivision in which Ms. Taylor lives effectively prohibit outdoor clotheslines. In a move that has torn apart this otherwise tranquil community, the development’s managers have threatened legal action. To the developer and many residents, clotheslines evoke the urban blight they sought to avoid by settling in the Oregon mountains.
“This bombards the senses,” interior designer Joan Grundeman says of her neighbor’s clothesline. “It can’t possibly increase property values and make people think this is a nice neighborhood.”
Ms. Taylor and her supporters argue that clotheslines are one way to fight climate change, using the sun and wind instead of electricity. “Days like this, I can do multiple loads, and within two hours, it’s done,” said Ms. Taylor. “It smells good, and it feels different than when it comes out of the dryer.”
The battle of Awbrey Butte is an unanticipated consequence of increasing environmental consciousness, pitting the burgeoning right-to-dry movement against community standards across the country.
Related: Building a Clothesline and Other Subversive Behaviour
U.S. Banks Brace for Storm Surge as Dollar and Credit System Reel
September 18th, 2007If all of this is still a bit baffling, spend some time with this excellent piece by Mike Whitney.
Via: Counterpunch:
By now, you’ve probably seen the photos of the angry customers queued up outside of Northern Rock Bank waiting to withdraw their money. This is the first big run on a British bank in over a century. It’s lost an eighth of its deposits in three days. The pictures are headline news in the U.K. but have been stuck on the back pages of U.S. newspapers. The reason for this is obvious. The same Force 5 economic-hurricane that just touched ground in Great Britain is headed for America and gaining strength on the way.
On Monday night, desperately trying to stave off a wider panic, the British government issued an emergency pledge to Northern Rock savers that their money was safe. The government is trying to find a buyer for Northern Rock.
This is what a good old fashioned bank run looks like. And, as in 1929, the bank owners and the government are frantically trying to calm down their customers by reassuring them that their money is safe. But human nature being what it is, people are not so easily pacified when they think their savings are at risk. The bottom line is this: The people want their money, not excuses.
But Northern Rock doesn’t have their money and, surprisingly, it is not because the bank was dabbling in risky subprime loans. Rather, NR had unwisely adopted the model of “borrowing short to go long†in financing their mortgages just like many of the major banks in the U.S. In other words, they depended on wholesale financing of their mortgages from eager investors in the market, instead of the traditional method of maintaining sufficient capital to back up the loans on their books.
It seemed like a nifty idea at the time and most of the big banks in the US were doing the same thing. It was a great way to avoid bothersome reserve requirements and the loan origination fees were profitable as well. Northern Rock’s business soared. Now they carry a mortgage book totaling $200 billion dollars.
$200 billion! So why can’t they pay out a paltry $4 or $5 billion to their customers without a government bailout?
It’s because they don’t have the reserves and because the bank’s business model is hopelessly flawed and no longer viable. Their assets are illiquid and (presumably) “marked to modelâ€, which means they have no discernible market value. They might as well have been “marked to fantasyâ€,it amounts to the same thing. Investors don’t want them. So Northern Rock is stuck with a $200 billion albatross that’s dragging them under.
A more powerful tsunami is about to descend on the United States where many of the banks have been engaged in the same practices and are using the same business model as Northern Rock.
…
For weeks we’ve been saying that the banks are in trouble and do not have the reserves to cover their losses. This notion was originally pooh-poohed by nearly everyone. But it’s becoming more and more apparent that it is true. We expect to see many bank failures in the months to come. Prepare yourself. The banking system is mired in fraud and chicanery. Now the schemes and swindles are unwinding and the bodies will soon be floating to the surface.
“Structured finance†is touted as the “new architecture of financial marketsâ€. It is designed to distribute capital more efficiently by allowing other market participants to fill a role which used to be left exclusively to the banks. In practice, however, structured finance is a hoax; and undoubtedly the most expensive hoax of all time. The transformation of liabilities (dodgy mortgage loans) into assets (securities) through the magic of securitization is the biggest boondoggle of all time. It is the moral equivalent of mortgage laundering.
Research Credit: PD
Gold Rallies on Rate Cut
September 18th, 2007😉
Via: Bloomberg:
Gold futures rose to a 27-year high after the Federal Reserve cut interest rates, sending the dollar to a record low against the euro and boosting the appeal of the precious metal as a currency hedge.
The Fed lowered its benchmark rate by 0.5 percentage point, more than economists forecast, to 4.75 percent, the first cut in four years. Five of the past six bear markets for the U.S. currency have sparked a rally in gold.
“Investors are scared,” said Ron Goodis, futures trading director at Equidex Brokerage Group Inc. in Closter, New Jersey. “The rate cut is inflationary, and money is flowing into gold as a hedge.”
Gold futures for December delivery jumped $11.70, or 1.6 percent, to $735.50 an ounce at 3:26 p.m. in electronic trading on the Comex division of the New York Mercantile Exchange. That marked the highest price for the most-active contract since Feb. 11, 1980.
“Today’s action is intended to help forestall some of the adverse effects on the broader economy that might otherwise arise from the disruptions in financial markets,” the Federal Open Market Committee said in a statement after meeting today in Washington.
The reduction in borrowing costs was the first since 2003. Before today’s meeting, the Fed kept rates unchanged since June 2006.
Several Readers Contribute to Cryptogon
September 18th, 2007The following readers have sent contributions:
TM $46.50
MW $20
AH $15
Pookie $53
Thank you all very much.
U.K.: Strong Decline in Housing Prices
September 18th, 2007Could the top finally be in on that thing?
Via: in2perspective:
The Rightmove monthly report shows a 2.6% decline in house prices across England and Wales in the last month.
Rightmove, the largest advertiser of property for sale in England and Wales, has published figures showing the largest monthly fall in asking prices since the survey began. The surprising news is that London is no longer immune to the slowdown, average prices across London fell by 2.5%.
Australia Cuts Grain Crop Estimate 31% on Dry Weather
September 18th, 2007We’re pouring on the joy and happiness today…
Via: Bloomberg:
Australia cut its forecast for barley, wheat and canola crops 31 percent on dry weather, adding pressure to shrinking world supplies that have driven up prices.
Total grain output may be 25.6 million metric tons in the harvest starting October, the Canberra-based Australian Bureau of Agricultural and Resource Economics said today in a statement. That compares to its June estimate of 37 million tons and last year’s drought-ravaged crop of 15.7 million tons.
Wheat futures rose to within 13.25 cents of the record reached last week as demand outpaces supply and inventories head for a 26-year low. Crop expectations in Australia, vying with Canada to be the world’s biggest wheat exporter after the U.S., are being cut after below-average winter rain.
“In the environment we are in, with such low-level stocks, you’re going to see quite a bit of volatility in prices around these supply shocks,” Justin Smirk, senior economist at Westpac Banking Corp. said today from Sydney. `It’s quite possible that you could push up through the record again.”
OIL RECORD
September 18th, 2007Another eddy current to add to the perfect storm.
Via: IHT:
Oil prices climbed to a fresh high above US$81 a barrel amid hopes that the U.S. Federal Reserve will cut a key interest rate later Tuesday, a move the market believes would bolster the economy and strengthen petroleum demand in the world’s largest energy consumer.
Investors expect the Fed to cut the benchmark federal funds rate at least a quarter point to 5 percent to ease pressure on the U.S. credit market.
Collapsitalism: What I’d Keep in My Collapse Portfolio
September 18th, 2007WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
NOTE: I am a BullionVault client and affiliate. I have no relationship with Everbank. I have no relationship with Powershares. I hold gold, U.S. dollars and New Zealand dollars.
– – – – –
Becky and I don’t have much money to worry about, but some Cryptogon readers do. This is an email I wrote to one of Cryptogon’s most generous supporters in response to her question about asset preservation during a financial crisis. I’m posting this because it might help others of you who have significant assets and are looking for ideas. If Becky and I had substantial financial assets that weren’t allocated to property or preparations, this is what we would do.
I don’t include allocation percentages because those will vary widely according to each individual’s risk tolerance.
This is a slightly edited version of my email message:
Of course, any decision is up to you, and only you are responsible for the outcomes, good or bad, but I would be very careful with the foreign currencies. It has to be done right, with diversification kept in mind at all times. Currencies are considered “speculation” meaning maximum risk.
Diversification. Diversification. Diversification.
I would get an Everbank (Everbank WorldCurrency CDs) professional involved. Consider a basket of currencies that provide you with a mix of security and yield.
Currencies to consider for security and strategic cash hedges:
Swiss Franc
Euro
U.S. Dollar
To understand this in greater detail, see: Making Sense Of The Euro/Swiss Franc Relationship. In summary, by holding these three currencies, you’re pretty much going to go… nowhere! Which is the point of trying to hold onto what you have.
Since you’re going mostly nowhere on your U.S. dollar, Euro and Swiss franc holdings, consider adding high yielding / higher risk currencies:
Icelandic krona — Pure gamble for highest yield
New Zealand dollar — Commodity based gamble
South African rand — Commodity based gamble
Consider the unlikely event that the U.S. dollar will rally (rise) sharply. Because it seems impossible, you should assume it will happen. This is why you keep one foot in the stinky, filthy USD pool, just in case. Even with the U.S. Dollar Index under 80 and the wheels coming off the cart. YOU NEVER KNOW WHAT WILL HAPPEN. That thing could gap right back up. That’s ok, you’re covered with your plain-jane FDIC insured CDs.
Now, what’s the problem with each and every currency out there?
That’s right, they’re all fiat, based-on-nothing ponzi schemes.
Consider positions in gold and food.
I like BullionVault for my gold needs, but if you are confident with your security situation, take personal, physical possession of your metal. If taking personal physical possession, pay cash at a dealer who doesn’t want to know your name. American Eagles are, by far, the standard for Americans. Canadian Maples are good too.
Keep in mind, the U.S. has outlawed gold possession before. That’s right, diversification again, in terms of geography this time. Maybe take personal, physical possession of some and keep some in Switzerland with BullionVault.
Now, food. Check out the PowerShares DB Agriculture ETF:
This is a simple way of betting that prices of corn, soy beans, sugar and wheat will rise. If you think prices of these staples is going to rise, this might be worth considering. This isn’t heavily leveraged like buying the underlying futures contracts. It moves much slower because of the lower leverage on the ETF.
If the crash is hard (grid down, no Internet, total collapse, mad max, etc) none of the above matters. In a hard crash, it’s the same old same old:
Shelter, water, food, and security/community.
Ok, that’s the best information I have to offer, and how I’d do it if it was me.
Best,
Kevin
Question Kerry About Skull and Bones Membership, Get Tased
September 18th, 2007Via: Youtube:
