Thursday, July 17, 2008

Mid-Summer Odds and Ends

I've been doing some reading and I don't think that I'm going to lick the corn dwarfism problem that I am seeing in my garden. It appears that the culprit is a virus that also lives in Johnsongrass, an invasive species from Europe that has spread world-wide now. Given that there is lots of Johnsongrass near where I live and that I cannot possibly eradicate it alone, I'm going to investigate other grains next year.

Given that this is the southern US, I am preparing a second planting of many things. The cucumbers did ok this year but have largely died off early. I am not sure if it was the heat or soil issues yet. The squash did its usual thing - bloom hard and hardy for several weeks then die off regardless of what I did. I may try to plant a second squash crop too. The strawberries are doing well enough, with the exception that my family hasn't seen any. The birds and squirrels keep snapping them up before they are really ripe enough. Of course if the squirrels keep that up, they may be what's for dinner instead.

I notice that the financial wizards continue to rig the markets ever more blantantly in favor of their own core group. The latest round of protections for Fannie Mae and Freddie Mac includes select financial institutions. You can consider that these are the "bad guys" of the world scene since they made billions shorting other companies but now have begged the SEC to place them beyond such responses. That list includes:

  1. BNP Paribas Securities Corp
  2. Bank of America Corp
  3. Barclays PLC
  4. Citigroup Inc
  5. Credit Suisse Group
  6. Daiwa Securities Group Inc
  7. Deutsche Bank Group AG
  8. Allianz SE
  9. Goldman Sachs Group Inc
  10. Royal Bank ADS
  11. HSBC Holdings Plc ADS
  12. JPMorgan Chase & Co
  13. Lehman Brothers Holdings Inc
  14. Merrill Lynch & Co Inc
  15. Mizuho Financial Group Inc
  16. Morgan Stanley
  17. UBS AG
  18. Freddie Mac
  19. Fannie Mae
As Mike Shedlock notes, it's also interesting who is not on this list. Since this list was supposed to protect financial companies from shorts, why not protect those financial companies getting shorted the hardest, like this list:

  1. Washington Mutual
  2. Wachovia
  3. Corus Bank
  4. Bank United
  5. National City Corporation
Those guys are getting clobbered by shorts but they are not protected! Wonder why? Because they are not part of the global elite. These companies are being sacrificed while the elite get to keep their ill-gotten gains and continue raping the planet for more ill-gotten gains, all at the expense of the rest of us. Lovely game, isn't it? The only winning move for you is not to play, to paraphrase WOPPER, the War Games computer.

I also note that, despite constant claims of imminent collapse, that the global economy is still hanging on. Now, I will be the first to say that given the numbers I have seen that fast economic collapse actually makes the most sense to me. But it's not occurring despite what I and many others think. I saw this before, in the 1979-1982 recession. People kept expecting financial armageddon and it never really arrived, at least in the form of a singular event. I also suspect that many of us equate 1929 with the Great Depression but the Depression actually took several years to get into full swing (just like this one appears to be trying to do). So one thing I would warn of is to be prepared for a longer, more extended fall than you might have expected. And it's probably going to be slower too.

Now having said that, I think the markets have settled into another trading range. This range looks to be approximately 10,800 to 12,000 on the DOW. It may last from several days to several months. The last trading range lasted from March until very recently. Some of the earlier ranges lasted far shorter. But given the gloomy financial picture, another move downward will come and if it holds true to form, we can probably expect a lower bound around 9,800 or 9,900 and a new upper bound around 11,000. However, just because other forces appear to be at work, I am going to guess that the next downward move won't really start until close to the end of the Olympics or shortly thereafter. But that's purely a guess. We just have to wait and see what triggers then next downward wave.

As for what is happening in the world, there are rumors that the major banks have all colluded to stop all mortgage renegotiations, effective somewhere around Monday, July 14. I have been unable to confirm this rumor so take it with a gigantic grain of salt but I have heard it. However, the word is out that the new mode of operation is "foreclose on anything you can" and that all the major banks are working together on this. Note that IndyMac bank, recently seized by the Feds, is still renegotiating, since that is one action that the government has urged anyway, over and over again.

In other news, global oil exports continue to decline, even though it appears we may have a new all-liquids peak date but the new value is only a tiny bit higher than the old value. (Crude and condensate remains on the same plateau it has been on for 4 years. The new liquids are NGLs, tar sands, biofuels, etc.)

Pressures continue to build around food and fertilizers. Rolling blackouts and brownouts are affecting more and more of the planet. Ammunition shortages continue but are not completely critical yet. Machine tools remain available but prices are climbing and may skyrocket as soaring steel costs percolate through the economy.

The summer drags on and the slow motion collapse continues. The blessing of a slow motion collapse is that it gives those seeking to prepare yet a bit more time. Now I need to get back to my garden and my tools. I can only hope that your focus is on you and those you care for immediately around you.