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Decoupling From Reality

James Howard Kunstler

May 11, 2009

http://www.kunstler.com/index.html

Back in the golden age of American Flyfishing -- say around 1913 -- when technical innovation in a prissy and recondite sport was joined by a new leisure class emanating from the white glove canyons of Wall Street, some new-minted guru of angling came up with method for whipping up action on a trout stream when no fish would rise to the fly. It was really lame. The idea was to artificially create the illusion of a mayfly hatch -- that moment when the larva of, for instance, Ephemerella subvaria, the Hendrickson mayfly, swims to the surface, molts, and dries its newly unfurled adult wings in the brisk spring air. This is famously the moment that drives trout crazy, and when it occurs en masse, with zillions of mayflies "hatching" off the water, a trout feeding-frenzy can ensue. The idea with the artificial hatch was to pitch a fake Hendrickson fly made of feathers and fur in so many furious, rapid casts that the dumb trout lurking below would get suckered into a feeding frenzy -- and, shortly, into the buttered frying pan, with a nice "tuxedo" of cornmeal and bacon.

In the annals of flyfishing, this gambit has been all but discredited, except among the mentally sub-normal who sometimes venture over from the lumpen realm of crank-and-plug fishing in search of improved social standing. But the tactic naturally transferred into the precincts of finance, where it reappeared in such disparate practices as Ponzi schemes and Keynesian "pump-priming." Now it is being employed at a scale never seen before, on an economy that is the equivalent of a great dead river poisoned by the toxic effluents of the same society that inhabits its banks (no pun intended). The dark secret of this river is that the fish who once ran there are all dead.

Much has been made in recent weeks of "animal spirits" and the "psychology of markets" in the hopes that mere attitudes might overcome the laws of thermodynamics. Math wizardry has now yielded to self-esteem building, an understandable sequence of events, since trafficking in the mutant spawn of Wall Street algorithms has ended up completely demoralizing the United States of America. Sadly, this is a little like subjecting a man who has just watched his house burn down to twelve segments of Oprah shows about the triumphal secrets of weight loss.

The Great Wish across America is to resume the life of comfort-and-convenience that seemed so nirvana-like just a few short years ago, when the very constellations of the heavens might have been renamed after heroic Atlanta realtors and Connecticut hedge fund warriors, and the boomer portfolios groaned with earnings, and millions of graying corporate salary mules dreamed of their approaching retirement to a satori of golf and Viagra, and the interior decorators grew so rich installing granite countertops that they could buy their own houses in the East Hampton, and every microcephalic parking valet in Las Vegas qualified for a bucket full of Ninja mortgages, and Lloyd Blankfein could dream of divorcing his wife to marry his cappuccino machine.

The choices now are stark and the kind of life on offer by the future is rather austere. The job of the current president, and the people who work with him, is to manage an epic contraction -- let's say, to land a very large, loaded defect-ridden airplane that has both run out of fuel and suffered grievous mechanical breakdown... and to bring down that vehicle in an unfamiliar country filled with angry savages. Sadly, the new president and his co-pilots just want to keep the plane up there, circling. The president's viziers are working round-the-clock to come up with some way, some toggle-switch, that might turn off the laws of gravity (which are not unrelated to the laws of thermodynamics). But all they seem to be able to come up with are mumbled prayers that are pale imitations of the algorithms once concocted by the Wall Street engineers who designed the aircraft they're riding in.

Well, that's enough conceits and metaphors for today.

We've digested the so-called "stress tests" for now with nary a burp and in a few weeks General Motors will step into the dark cave of bankruptcy. All the ancillary businesses linked to the US car-makers face contraction and annihilation. A couple of things occur to me which have not even entered the national debate on these matters: 1.) the US will still need to manufacture engines and chassis for military vehicles. Do we intend to send out to Mitsubishi for those things in the years ahead? 2.) the US will need rolling stock (i.e. choo-choo cars and engines) for a revived passenger railroad system. Do we intend to buy all that from the quaint peoples of other lands? (While the US workforce instead focuses on updated releases of Grand Theft Auto.)

At the moment, there is tremendous hoopla and jubilation over the start-up of so many "shovel-ready" highway projects around America -- as if what we need most are additional circumferential freeways to enhance the Happy Motoring lifestyle. How insane are we? Is this the only thing we know how to do?

I remain confident that the months ahead will introduce the American public and our leaders to a range of horrors that will begin to penetrate our addled collective imagination. We're far from done with the crisis of banking and money and the related fiasco in mortgages -- which translates into the very real situation of many people become homeless. It remains to be seen what may happen on the food production scene, but the current severe shortage of capital and the intense droughts shaping up around the world will resolve into a much clearer picture by mid-summer. The price of oil has resumed marching up and has now re-entered a range ($50-plus) that spun the airline industry into bankruptcy last time around. Enough carnage has already occurred on the jobs scene that the next act among many chronically jobless may tilt toward desperation, anger, and violence. The sporting goods shops around the nation are already rationing ammunition.

It's not just the stock markets that have decoupled from reality as we enjoy the fragrant vapors of spring -- it's the entire conscious consensus of everybody holding the levers of power and opinion. To put it as simply as possible, we're still sleepwalking into the future.

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Has love found ‘never been kissed’ singer?

Offers from men are pouring in to spinster singing sensation Susan Boyle

http://today.msnbc.msn.com/id/30262844/

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Pension stock loss may be lesson

Plunge in value comes amid investment debate

By Michael Kranish

Globe Staff / April 16, 2009

http://www.boston.com/news/nation/washington/articles/2009/04/16/pension_stock_loss_may_be_lesson/


Senator Chuck Grassley of Iowa was quoted in 2005 as saying that Congress should consider putting part of the Social Security trust fund into stocks based upon the success of the railroad retirement fund.' (Harry Hamburg/Associated Press)

WASHINGTON - A special pension fund for railroad workers that was given permission during the Bush administration to invest its assets in the stock market lost more than a third of its value during a recent 18-month period, a loss that could influence an ongoing debate about how to keep government-affiliated retirement programs solvent.

After the National Railroad Retirement Investment Trust initially made healthy gains by investing in the stock market, it was hailed by some lawmakers as a model for how to save Social Security - either by investing part of the Social Security trust fund in stocks or by creating private accounts and giving individuals a chance to do the same.

Senator Chuck Grassley of Iowa, at that time the Republican chairman of the Senate Finance Committee, was quoted in 2005 as saying that Congress should consider putting part of the Social Security trust fund into stocks "based upon the success of the railroad retirement fund." Many other members of Congress made similar comments, and then-President Bush launched an un successful campaign to give people the power to invest portions of their own Social Security funds in the stock market.

But since the end of 2007, the railroad fund's returns have crashed. The fund, which had previously been restricted by the government to investing in Treasury securities, put its assets into everything from foreign stocks to real estate to "opportunistic" investments. As a result of the losses, taxes may be raised on the railroad companies and their workers, as provided for in the law under which the trust was established.

"They just kept on investing more and more and more into the market," said Marvin Dickman, inspector general of the fund's parent agency, the federal Railroad Retirement Board. Dickman said in an interview he would like to know more about the investment strategy but has run into roadblocks because Congress classifies the board's trust fund as a separate, "nongovernmental" entity.

"There is a total lack of oversight," he said.

But the federal railroad board that oversees the program believes the strategy will pay off in the long run and it has no intention of halting the investments. Asked if he worried about the losses, Federal Railroad Board general counsel Steven A. Bartholow responded, "I would say that we don't have any overriding concern . . . you expect the market to go up and go down."

The railroad retirement program predates Social Security as a federally sanctioned retirement plan, having been created in 1934 - and becoming the model for the Social Security plan that President Franklin D. Roosevelt implemented a year later.

As a result, Congress created a special exception for railroad employees: They do not receive Social Security and pay no taxes for it. Instead, they pay taxes for a two-tier system that supplies benefits similar to Social Security, as well as a pension plan that is funded through the Railroad Retirement Investment Trust.

The government took pains to make sure the money wasn't lost on any risky investments, requiring that the assets be invested in conservative Treasury securities.

In 2001, however, the managers of the railroad fund pushed for permission to invest its assets more aggressively. At the time, proposals were being floated to allow the Social Security trust fund to be invested in the stock market. Former President Bill Clinton earlier had proposed putting a portion of the Social Security trust fund into the stock market, and an influential former Social Security commissioner, Robert M. Ball, had urged the measure as well, saying stocks would produce "a better return for the Social Security system" than bonds.

While Congress never approved putting Social Security funds into the market, it did make a bipartisan decision to allow the railroad retirement program's trust fund to be put into stocks and other investments - as long as the rail industry agreed to make up for any shortfall. The industry and its unions embraced the idea in the belief that it would enable them to have lower taxes but higher returns. If it worked for the railroad trust fund, backers reasoned, then it could be applied to other programs.

The fund says on its website that its target portfolio is to have 26 percent in US stocks, 22 percent in foreign stocks, 10 percent in private equity funds, 15 percent in real estate and commodities, and 27 percent in fixed-income - an investment strategy that some analysts consider too risky.

But the exact nature of the investments is difficult to determine. Congress gave the fund the authority to make its investments autonomously, exempting it from direct oversight by an inspector general. As a result, Dickman, the inspector general, last year took the unusual step of issuing a public "statement of concern," complaining that the program had "fewer safeguards than those established to protect the retirement investments of Federal and private sector workers."

The fund did well from 2002 to 2006. That prompted a number of politicians to say the idea should be tried elsewhere. In addition to Grassley's comment that the idea should be considered at the Social Security trust fund, Senator Ben Nelson, a Nebraska Democrat, said he "wondered why that suggestion hadn't been made by others" and was "anxious" for details, according to a 2005 article by Congressional Quarterly. Nelson said through a spokesman that he didn't follow up on the idea.

Grassley spokeswoman Jill Kozeny said the senator today would "approach that debate as he did in 2005, wanting to talk through every option in order to save the program."

While Congress never approved the proposal to invest Social Security trust funds in the market, the federal Pension Benefit Guaranty Corp., which insures private pension plans, pursued the idea vigorously for its trust fund. Officials from the pension agency met with the general counsel of the railroad trust fund to learn about the idea, and then approved a similar investment strategy, which is now being implemented.

But the railroad retirement fund has done poorly in recent months. While the fund won't release cumulative figures, its reports indicate the fund dropped in value by more than one-third, and perhaps as much as 40 percent, from September 2007 to February 2009, after taking benefit payments into account. In the last quarter of 2008, for example, the fund said its investment performance was down 17.15 percent.

Dickman said the railroad fund's decline should serve as a warning to officials at Pension Benefit Guaranty Corp. He said it is "ludicrous" for the pension agency to be "investing one dime into the stock market at any time."

The idea of investing part of the Social Security trust fund in the markets remains a possibility - but on a much smaller scale than adopted by the railroad fund and the pension agency.

James Roosevelt Jr., whose grandfather implemented Social Security and who advises the White House on the issue, said he might support a test that put 5 percent or more of the fund into the stock market as long as everyone agreed to one principle: "As ought to be true of every investor, don't invest more than you can afford to lose."

Michael Kranish can be reached at [e-mail].

© Copyright 2009 Globe Newspaper Company.

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Geithner and Summers Want More Debt Bubbles: The Result Could Be Catastrophic

By Thom Hartmann, Smirking Chimp. Posted April 16, 2009.

http://www.alternet.org/workplace/136835/geithner_and_summers_want_more_debt_bubbles:_the_result_could_be_catastrophic_/?page=entire

The Geithner/Summers plan seems to hinge on reinflating the debt bubble. The outcome will be inflation, a more serious crash, or both.

"Everything predicted by the enemies of banks, in the beginning, is now coming to pass. We are to be ruined now by the deluge of bank paper. It is cruel that such revolutions in private fortunes should be at the mercy of avaricious adventurers, who, instead of employing their capital, if any they have, in manufactures, commerce, and other useful pursuits, make it an instrument to burden all the interchanges of property with their swindling profits, profits which are the price of no useful industry of theirs."

--Thomas Jefferson letter to Thomas Cooper, 1814.

Are we standing at the edge of a Great Inflation (like Weimar Germany), a second Republican Great Depression, or a return to the middle class prosperity of the Roosevelt/Eisenhower New Deal era? Until Americans understand the difference between "money" and "debt," odds are its going to be one of the first two, at least over the next few years.

Money

"Money" is a convenient replacement for barter in an economy. Instead of my giving you five pounds of carrots, so you wash my car, then you trade the carrots for a new shirt, and the clothing store then trades the carrots to a trucker that brings them their inventory, we all just agree to use a ten-dollar bill. Because a nation's money supply represents that nation's "wealth" -- the sum total of goods, services, and resources available in an economy/nation -- it needs to have a fixed value relative to the number/amount of goods, services, and resources within the nation.

As an economy grows -- more factories, more goods, more services -- the money supply grows so one dollar always represents the same number of carrots. (And with a fractional reserve banking system like we have, that growth is created mostly by banks lending money and creating it out of thin air in the process.)

If the money supply contracts, or grows slower than the economy, then we experience deflation -- the value of money increases, goods and services become less expensive (fewer dollars to buy the carrots), but because the value of money has increased it becomes harder to get. When this happens quickly, because of its economically destabilizing influence (businesses and people can't get current money -- cash -- or future money -- credit -- because money is more valuable), it's called a Depression.

On the other hand, if the money supply expands or grows faster than the economy, there are more dollars than there are goods and services so the number needed to buy a pound of carrots increases. This is inflation, and when it happens suddenly and on a large scale, it's called hyperinflation.

Therefore, one of the most important jobs overseen by Congress and executed by a Central Bank (or the Treasury Department if we were to go with the system envisioned by the Founders and Framers of the Constitution) is to "regulate the value" of our money (to quote Article I, Section 8.5 of our Constitution) by making sure the number of dollars in circulation always steadily tracks the size of the overall economy. If the economy grows 2%, then that year there should be 2% more dollars put into circulation. More than that will create inflation; fewer will create deflation.

Debt

"Debt" is not money. Instead, it's a charge against future money. But even though it's a charge against future money, it can still be spent as if it was today's money -- except that it must be repaid with interest. And therefore debt must have some sort of a balanced relationship to the total size of the economy -- albeit the future economy -- for it not to be destabilizing.

In other words, if over the next twenty years (the term of a typical and healthy mortgage) the economy is expected to grow by X percent or X number of dollars, then the total amount of twenty-year debts that can be issued should be limited to X. But if it's greater than X, then when the future arrives there won't be enough circulating money to repay the debt, because the economy (and the money supply) won't have grown as great as the debt repayment demand. The only two options are for debt holders to default (bankruptcies, foreclosures, etc. -- Depression), or for the government to suddenly increase the supply of money (inflation).

The same is true of one-year debt (credit cards), four -- or five-year debt (car loans, typically), and all other forms of debt. In aggregate, if the amount of debt is allowed to grow faster than the economy will grow over the term of the debt, when the debt is due there will be a problem, and if it's grown hugely, a disaster.

This is what we're experiencing right now. Over the past three decades -- largely since Reagan -- debt (both private and public/government) has expanded much more rapidly than the economy has grown. "Now" was "the future" when the debt was issued, but the economy hasn't grown to the point where there are enough dollars (in reality, enough value -- goods and services) to repay that debt. Thus we are experiencing a "wringing out" of that debt -- bankruptcies and foreclosures -- relative to the current wealth of the economy.

This is the most critical thing to see clearly -- without adhering to this simple concept, a government or central bank will always either create boom/bust cycles (depressions/recessions) or inflation. Without regulating debt, a government will be taken hostage and an economy destroyed by for-profit institutions that are able to create debt without regulation (banks).

Panics

Although Thomas Jefferson and Alexander Hamilton -- two opposite sides of the national bank debate -- both understood this simple concept, it wasn't brought into the realm of law until the mid-1930s with a series of strict regulations on the abilities of banks to create debt (loan money), and strong political limits on the ability of government to go into debt outside of wartime. That's why from the founding of this nation until 1935, we experienced a "banking panic" at least once every 10 to 15 years from 1776 until 1935.

Then Roosevelt took the banks in hand, by creating a series of regulatory agencies and empowering them with strict laws. The result was that for fifty years in the United States -- roughly 1937 to Black Monday of 1987 -- we didn't experience a single national "panic" or consequential bank failure. The stock market grew steadily (allowing for the blips surrounding WWII).

It was also hard to get a credit card (short term debt), buy a car (medium-term debt), or get a mortgage (long-term debt) without proving that you would be able to repay the amount in the future -- in other words, that there would be future expanded-economy dollars that you could lay claim to because of your particular job and skills. Credit was regulated.

Reagan changed the rules of the game, particularly when he brought in the anti-regulation Libertarian Alan Greenspan as Chairman of the Fed. He ran up a massive federal debt -- greater than that of every president from George Washington to Jimmy Carter combined -- in just eight years, and began the process of loosening the power of bank regulators.

That process was finished by a Republican Congress (particularly Phil Gramm) and President Bill Clinton (with help from Rubin and Summers) and then booted out the door by George W. Bush, who borrowed even more than Reagan. Bush even used an obscure 19th century law to fight states' attorneys general who wanted to regulate or prosecute fraud among banks and mortgage lenders in their states (see the article by Eliot Spitzer in the Washington Post just before his being outed for sleeping with a hooker).

Green Eyeshades

During the "Great Stability" -- that period from the 1935 onset of the New Deal and the beginning of its end with Reagan's massive tax cuts of 1981 and 1986, leading directly to the stock market crash of 1987 and the S&L debacle -- banking was, as Paul Krugman noted in a recent column, "boring." Credit and currency were considered part of the commons, not something off which a small elite should profit. Like the utilities in the game Monopoly, banks provided a predictable but relatively low profit. Nobody got rich, but nobody lost anything, either.

Bankers were the safe and predictable guys who wore green eyeshades at work and pocket protectors in their shirts. The nation's main products were goods and services; nobody "made money with money" in any big way.

Since the serial deregulations of the financial services sector brought on by Reagan, Bush, Clinton, and Bush, however, bankers became fabulously rich. They called themselves the "Masters of the Universe." They came to dominate contributions to politicians, and facilitated the takeover of most major US newspapers, all the while using debt as their mail tool to make money (burdening those newspapers with such debt that many are now going out of business because they can't repay it).

By 2005, fully 40 percent of all corporate profits in the US came from the financial services sector -- a group of people who didn't produce anything at all of value, nothing edible or usable, nothing that would survive into future generations. They invented fancy derivative "products" that they "sold" at high commission rates around the world so others could "make money with money." In fact, they weren't making money -- they were taking money. Behavior that would have been criminal during the Roosevelt, Truman, Eisenhower, Kennedy, Johnson, Nixon, Ford, and Carter administrations became "normal" and was even encouraged: more than half of all the graduates from many of America's top colleges and universities went into finance so they could get in on the very lucrative scam.

They created debt. As Ellen Brown notes at www.webofdebt.com, according to the Bank of International Settlements, they created and sold at a profit over 900 trillion dollars worth of debt -- and risk-based "instruments." That's a pretty mind-boggling number when you consider that the GDP of the United States is around 14 trillion and the GDP of the entire planet is around 65 trillion.

All of these "products" were made and sold based on the assurance that when "then" became "now" the economy would have grown fast enough for there to be enough dollars to pay it back. But the reality of a debt bubble that exceeds the world's GDP many times over came crashing in on us in 2007 -- and still hasn't fully crested -- producing the "crisis" we currently face.

Are we there yet?

Are we recovering from it all now? Will things soon be back to normal?

If by "normal" we mean like life during the "Great Stability," the answer is: "Not a chance." Back then we had in place tariffs and trade policies, first initiated in 1791 by Alexander Hamilton, that protected our domestic manufacturing industries. We still made things -- in fact, the USA was the world's largest exporter of manufactured goods, and the world's largest creditor. Like today's China, for over 100 years we'd loaned other countries money so they could buy our stuff!

On the other hand, if by "normal" we mean how things were over the past 28 "Reaganomics" years -- a stagnating middle class, disintegrating manufacturing sector, and piles of money being made by bets and debts -- then maybe. After just the first decade of Reaganomics, we went from being the world's largest exporter of manufactured goods to being the world's largest importer; we went from being the world's largest creditor to being the world's largest debtor.

None of that has changed. We haven't repealed Reagan's disastrous tax cuts, which have exploded our nation's budget deficits. We haven't repudiated NAFTA and the WTO and gone back to an international trade policy that puts American interests over those of transnational corporations. We have not re-regulated the banks, and have not brought back 6000-year-old laws against usury (excessive interest rates on debt).

The bankers, in fact, are fighting it tooth and nail -- the financial services industry in whole has spent over $5 billion lobbying Congress over the past ten years -- and their acolytes like Lawrence Summers and Tim Geithner play major and consequential roles in the Obama administration.

It appears that the plan today is not to regulate the amount of debt that banks can create, but instead to both print more money and do everything possible to reinflate the debt bubble. (Lacking a return to Hamilton's national manufacturing and trade policy, as a nation we just continue to slip deeper and deeper into Third World status as an importer and debtor -- this may be our only choice if we don't wake up soon.)

If followed, the Summers/Geithner policy can have only one of two outcomes: inflation or another, more serious crash. It's possible we could have both. Apparently the bankers and Summers/Geithner's hope is that neither or both don't happen for at least three and a half years...

See more stories tagged with: bush, clinton, debt, banks, government, money, depression, reagan, great depression, crash, treasury, summers, geithner, bankers, exchange, great stability

Thom Hartmann (thom at thomhartmann.com) is a Project Censored Award-winning New York Times best-selling author, and host of a nationally syndicated daily progressive talk program The Thom Hartmann Show. www.thomhartmann.com His most recent books are "The Last Hours of Ancient Sunlight," "Unequal Protection: The Rise of Corporate Dominance and the Theft of Human Rights," "We The People: A Call To Take Back America," "What Would Jefferson Do?," "Screwed: The Undeclared War Against the Middle Class and What We Can Do About It," and "Cracking The Code: The Art and Science of Political Persuasion." His newest book is Threshold: The Crisis of Western Culture.

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Some Americans Resorting to Depression-Style Local Currencies

April 10, 2009 | From theTrumpet.com

http://www.thetrumpet.com/index.php?q=6099.4491.0.0


Towns in western Massachusetts adopted the BerkShare as a more stable currency in the failing U.S. economy. (Reuters)


The “Great Recession” has some in the U.S. abandoning the dollar.

A group of small business owners in Detroit began printing their own currency last month, part of a local currency movement that is growing in popularity across the United States.

During the Great Depression, businesses, local governments and individuals launched currencies known as scrips. Michael Shuman, author of The Small-Mart Revolution: How Local Businesses Are Beating the Global Competition, estimates that 75 different local currencies have been created recently. He says that local money is a direct response to the national economic crisis.

One of the most successful local currencies is the BerkShare, launched 2½ years ago in the rural Berkshire region of Massachusetts. Consumers can purchase $100 worth of BerkShares for us$95. They can then spend BerkShares at local stores for their full value. Stores or individuals can convert their BerkShares back to U.S. dollars at a rate of 100 BerkShares for us$95. This means that they save five dollars out of every hundred if they spend BerkShares locally rather than exchanging them for U.S. dollars. Over $2 million worth of BerkShares have been issued since the currency’s launch. Approximately 350 regional businesses participate in the scheme, and an additional 200 businesses accept BerkShares on occasion.

Advocates of local currencies argue that they can help stimulate growth in the local economy. Rather than spending the money on things hundreds of miles away, local currencies give consumers a monetary incentive to buy local, keeping money in the local community.

“It reformed the way many business owners and residents think about their local economy and helped educate the community on why shopping locally matters,” said Susan Witt, a board member of BerkShare. “The current national economy has only increased the use of BerkShares.”

The economic crisis is causing people to resort to Great Depression-era solutions. Read "Can the Financial Flames Be Stopped?” more on this subject. •

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"My Retirement Savings Are Gone"
The solution: Trim expenses and keep socking away cash.

By Laura Cohn, Associate Editor

From Kiplinger's Personal Finance magazine, May 2009

http://www.kiplinger.com/magazine/archives/2009/05/if-you-lost-your-retirement-savings.html


Douglas Paddock says spending time on his boat with his wife has changed his perspective on delaying retirement.

Douglas Paddock always thought he'd retire at 55. But having recently reached that milestone, he has yet to put down his briefcase. Paddock changed his plans after losing a chunk of his retirement savings during the market meltdown last year. Paddock now hopes to quit his day job in three years. And a crucial part of his new plan is powering down his expectations. "Through the years, I've come to see that being satisfied in retirement means being satisfied with less," says Paddock, who lives in Wilmington, N.C.

Like many baby-boomers, Paddock, a vice-president of financial planning at BB&T bank, has delayed his retirement after watching his portfolio shrink by 30% to 40%. According to a survey by Bell Investment Advisors, of Oakland, Cal., 60% of boomer investors have put off retirement by one to four years because of the plunge in the market. To cope with the setback, 78% of those surveyed plan to cut spending as well.

Cutting spending to increase savings is also part of Paddock's plan. To track expenses, he and his wife, Meyka, have started using personal-finance software. Meyka, a 48-year-old tax preparer, plans to join him in retirement in three years, and they hope the program will help them save more. Already, it has helped them cut spending in categories such as eating out and entertainment. "What's critical for us in the next three years is maximizing our savings," Paddock says.

As they clamp down on their expenses, the Paddocks will keep contributing to their retirement plans, which include 401(k)s, Roth IRAs and a SIMPLE IRA. By maintaining their contributions, the Paddocks share the approach of most investors. In an analysis of more than three million investors, the Vanguard Center for Retirement Research found that most participants in employer-based plans are still socking away money for retirement -- and investing in stocks.

Despite suffering steep losses, Paddock says, he still has faith in the market. Never a huge believer in bonds, he concedes that putting nearly all of his money in stock funds was an aggressive move. But he never thought the market would fall so far, so fast. At most, Paddock says, he thought he'd lose 20%.

As the Paddocks work to cut their spending, they face a decision about what to do with their house. In February 2007, when the stock market was still climbing, they bought a 3,000-square-foot, three-bedroom home on the North Carolina coast for $405,000. At the time, they viewed it as the perfect investment, so they put another $25,000 worth of upgrades into the place. If they could, they'd sell the house now to free up some cash. But the local real estate market is virtually frozen. And with a low, 5.5% rate on their 30-year fixed-rate mortgage, refinancing won't help. So they have to wait for buyers to come back.

Paddock says he's willing to be patient, and he's philosophical about delaying his goals. "A couple of things have changed my perspective," he says. For one thing, last year he was diagnosed with prostate cancer. That, along with the realization that he probably won't recoup the losses in his portfolio, has made him appreciate the simpler things in life. He and Meyka were inspired by new friends to buy an old 30-foot sailboat they found on Craigslist for $4,500. The boat, named "Miss M," after Meyka, provides an oasis of calm on the weekends, when they drop anchor in the local bays. "We now know we can be content with less," he says.

Always contribute as much as you can to your 401(k). In 2009, if you're 50 or older, you can put in $22,000. At that age you can also contribute $14,000 to a SIMPLE IRA. Particularly if you're 55 or older, don't stop funding your retirement, says Debra Neiman, a financial planner in Arlington, Mass.

If you've lost a big part of your savings, consider an annuity that guarantees minimum payouts regardless of the market's performance. You could get a 6% payout per year for the rest of your life no matter how the investment performs. If it does well, you could cash out after the surrender periodÑtypically three to seven years -- and invest it in whatever you want. But the fees for these guarantees can be steep. You can compare annuities at www.annuitygrader.com.

Finally, monitor your savings. Frank Armstrong, author of The Retirement Challenge: Will You Sink or Swim? has developed a tool to help you determine whether you'll have enough.

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'ER' ends 15-year run, but life will go on


Eriq La Salle and Alex Kingston in the series finale of 'ER.' (james stenson/nbc)

By Sarah Rodman

Globe Staff / April 3, 2009

http://www.boston.com/ae/tv/articles/2009/04/03/er_ends_15_year_run_but_life_will_go_on/?s_campaign=8315

As NBC's stalwart medical drama "ER" prepared to sign off after 15 seasons, original cast member Noah Wyle returned as Dr. John Carter. Carter had transformed from med student naif to wizened elder, after enduring professional and personal triumphs and tragedies. During a recent episode Carter addressed filmmakers documenting life in a busy inner-city emergency room.

"I try to embrace the idea that everything that happens has never happened before," he told them.

Of course, what made "ER" compelling - and sometimes frustrating - over its lengthy run was the opposite. The repetitive cycle of saving and losing lives, breaking in new doctors and saying goodbye to old ones, the exciting beginnings and sad endings of romances borne of long, adrenaline-fueled, and often bloody days and nights kept millions tuned in even when that recycling got a little a too familiar.

This season the writers approached the end skillfully with each episode gathering momentum toward last night's gratifying two-hour series finale.

The conclusion managed to pack in the return of several familiar faces - in an admirably organic fashion - and the tying up of story lines for current cast members as it laid out one 24-hour stretch in the ER.

In some smart ways it was just another episode as the patients of the week - including a teen with alcohol poisoning, a pregnant mother in distress, and an elderly woman taking her final breaths - helped the hospital staff move a little farther down the road of enlightenment. In particular, Dr. Tony Gates (John Stamos) and nurse Samantha Taggart (Linda Cardellini) appear as if they are finally going to make it work thanks to a lesson about treasuring the time we have.

There were also several grace notes that included callbacks to previous episodes with the especially enjoyable touch for longtime fans of the reprise of the pulse-quickening opening credit sequence tying together old and new cast members appearing in the finale.

In a classy move, many of the longtime supporting characters - nurses Chuny, Malik, and Haleh and desk clerks Jerry and Frank - were given touching and funny moments and a chance to say goodbye.

And as Carter opened a state-of-the-art health center for the disenfranchised in his late son's name, many veteran faces returned to reminisce including Drs. Weaver (Laura Innes), Lewis (Sherry Stringfield), Corday (Alex Kingston), and Benton (Eriq La Salle).

But, as we were so often told, since County General is a teaching hospital, several students were also introduced as a reminder of the cycle. One prospective student turned out to be Rachel Greene (Hallee Hirsh), daughter of the late Mark Greene (original cast member Anthony Edwards).

It was hard not to think about saying goodbye to an era as "ER" signed off. Although it's been years since "everyone" watched anything, including "ER," the drama was the last vestige of a TV landscape that pre-dated the explosion of the viewing universe with countless niche channels, exceptional original cable programming, and time-shifted and Internet viewing.

The show itself ended much as it began 15 years ago. Ambulances careered into the lot in front of the emergency room bay doors and a team of doctors, nurses, and med students sprang into action. (Almost comically echoing the series own increasing descent into over-the-top melodrama the last trauma was a multiple-patient, substation explosion.)

"ER" 's time of death may have been 11 p.m. last night but it concluded with the realistic sense that although the screen had gone black, the cycle of life and death is still going on at County General.

© Copyright 2009 Globe Newspaper Company

[sumisu]

TIPS INDEX FUND [Trading symbol TIP]

The investment seeks results that correspond generally to the price and yield performance of the inflation-protected sector of the United States Treasury market as defined by the Barclays Capital U.S. TIPS index. The fund invests at least 90% of the assets in the inflation-protected bonds of its underlying index and at least 95% if the assets in U.S. government bonds. It may also invest up to 10% of assets in U.S. government bonds not included in the underlying index. The fund invests up to 5% of assets in repurchase agreements collateralized by U.S. government obligations and in cash and cash equivalents.



Associated headlines from Yahoo:

http://finance.yahoo.com/q/h?s=TIP

[sumisu]

Pension plan choices may shrink
Underfunding could affect many

By Todd Wallack

Globe Staff / March 25, 2009



http://www.boston.com/business/personalfinance/articles/2009/03/25/pension_plan_choices_may_shrink/?s_campaign=8315

The stock market's decline has already ravaged your 401(k) plan. Now it could hurt your pension, too.

Under a law that took effect last year, underfunded pension plans may be forced to limit lump-sum payments and suspend cost-of-living increases for retirees. In addition, some plans could be frozen, preventing current employees from earning credit for additional years on the job.



"Companies are going to have to make drastic decisions about their pension plans," said Peter Austin, executive director of BNY Mellon Pension Services, which advises businesses on retirement plans.

Pension funds are typically invested in a mix of stocks, bonds, and other securities, most of which have fallen sharply. By some estimates, thousands of pension plans could be affected by the law because their funds have become so depleted. Watson Wyatt Worldwide, a consulting firm, estimated pension assets declined 26 percent in 2008. The firm also reported the 100 largest US pensions were just 79 percent funded in 2008, compared with 109 percent funded at the end of 2007. That means they have 79 cents set aside for every dollar owed to current and future retirees.

About one-third of employees nationwide participate in a traditional or defined benefit pension plan, according to the Employee Benefit Research Institute, a Washington nonprofit.

The law has already started affecting some local employers. For instance, Boston book publisher Houghton-Mifflin Harcourt Publishing Co., notified its 5,000 employees last week that effective April 1 they no longer have the option of receiving a lump-sum payout at retirement. Now, they can only receive half the money, with the rest paid in traditional monthly payments.

"We had no choice," said Houghton-Mifflin spokesman Josef Blumenfeld. "The law doesn't leave us with any latitude."

Nortel Networks Corp., a telecommunications equipment maker that recently filed for Chapter 11 bankruptcy protection, said it was also required to stop making lump-sum payouts because its pension was underfunded. Nortel, based in Canada, has 30,000 employees, including about 680 in Massachusetts.

While the way retirees receive their pensions may be affected by funding problems, the plans themselves are not at risk. Even if a company files for bankruptcy, most traditional pensions are guaranteed by the federal Pension Benefit Guaranty Corp. - up to $54,000 annually for someone who retires at 65. The agency said it guarantees more than 29,000 private pension plans.

But the law does require companies to cut back on some benefits that employees may have counted on, said Robert D. Webb, a partner at the Boston law firm of Nutter McClennen & Fish. Webb said the restrictions are intended to act as a "safety valve" to ease pressure on underfunded plans.

Specifically, when pensions are less than 80 percent funded, the law bars companies from disbursing more than 50 percent of a benefit in a single payment.

While retirees traditionally receive a pension as a lifetime monthly payment, roughly half of companies offer lump-sum payments, said Carrie Duarte, a principal at PricewaterhouseCoopers' human resources practice in Boston. Most workers who have the option take it, she said, so they can have more control over their money by investing in a tax-deferred retirement account.

The law also makes it more difficult for companies to sweeten pensions, such as by adding early-retirement benefits, cost of living increases, or faster vesting. The restrictions don't apply to public pension plans covering government workers.

The law becomes even tougher when plans fall below 60 percent funding levels. Companies are then barred from making any lump-sum payments or providing "shutdown benefits" - accelerated pension payments - that some employees are promised if their offices close.

For pensions that cover union workers at more than one firm, the law requires restrictions on lump-sum benefits when they fall below the 65 percent funding threshold or suffer other liquidity problems. More than 100 such plans nationwide were critically underfunded last year, according to the US Department of Labor. That included the New Bedford Fish Lumpers Pension Plan, which notified the Labor Department in April 2008 that it faced a deficit and was considering trimming benefits, including early-retirement and disability payments. The pension office did not return calls seeking comment, but it has 71 participants, mostly retirees, according to filings. Fish lumpers unload fishing vessels.

Jerry Mingione, a principal at Towers Perrin, a Connecticut company that advises businesses on retirement benefits, estimated that nearly half of pension plans may have to limit disbursements unless they step up contributions or find other ways to avoid the restrictions. Nearly 5 percent of plans nationwide could fall short of the 60 percent threshold, he added. Richard Wildt, a principal at Deloitte Consulting in Boston, agreed with those estimates.

Duarte of PricewaterhouseCoopers said she has spoken to executives at Massachusetts companies who are scrambling to ease the impact on workers. For example, she said, some are contributing more money to pension plans, while others are looking to trim benefits.

"We are having many more discussions," Duarte said. "Companies are trying to do the right thing."

Todd Wallack can be reached at [e-mail].

© Copyright 2009 Globe Newspaper Company.

[sumisu]

2009 Economic Stimulus Package Recap

Financial News

http://www.soundmoneymatters.com/2009-economic-stimulus-package/

It’s officially called the American Recovery and Reinvestment Act. This plan comes in at $787 billion. It won’t make everyone happy, but it will help some people and that’s the best we can hope for given the partisan nature of our government. I’m not going to summarize the entire bill, but here are the key points that will impact many Americans. Visit the New York Times for a complete summary of everything in the bill.

Food Stamps: $20 billion in increased food stamp funding. As food costs rise and more people lose their jobs, food stamps are the thing that stands between families and hunger. Another $900 million is included for other government nutrition programs and food banks.

Pell Grant: The maximum college grant is increased to $5,350, which will help families struggling to afford college.

Social Security Supplement: Recipients of Social Security, SSI, and other government pension programs will receive a one-time payment of $250. These people are very likely to spend the money rather than save it.

Aid to States: Many states are drastically cutting their budgets due to massive decreases in property tax revenue (as well as income and sales tax in states with those taxes.) If states can’t spend money, then people will lose jobs or services. It’s not direct stimulus, but it will keep teachers, cops, and firefighters employed. It will also help with Medicaid funding and other state initiatives.

Energy Spending: Most of the energy spending will go toward creating or maintaining jobs related to modernizing our current energy conduits, developing new energy sources and technologies, or helping people buy more energy-efficient appliances. If you need to weatherize your home (which will reduce your energy costs) or need to buy new appliances, see if you qualify for these programs.

COBRA Supplement: If you became or become unemployed between Sept 1, 2008 and Dec. 31, 2009, the government will cover 65% of your COBRA payments so that you can keep your insurance for 9 months.

Infrastructure: Although you may not use the facilities being upgraded through infrastructure projects, the programs will create many new construction jobs.

Income Tax Credit: Individuals will receive a credit of 6.2% of earned income, up to a max of $400 per individual and $800 for couples for 2009 and 2010. Again, the credit phases out at $75,000 and $150,000 respectively. The credit is refundable, so people with no tax liability will receive money. You may see the credit as additional money in your paycheck (around $13 a week.) You will not receive a stimulus check from the government.

Homebuyer Tax Credit: Individuals earning up to $75,000 and couples earning up to $150,000 will receive a tax credit worth up to $8,000 for the purchase of a new home. The credit is refundable and not repayable unless you sell your home within three years. It phases out after the income limits.

Child Tax Credit: People earning as little as $3,000 will now qualify for the child tax credit.

HOPE Tax Credit: Expands the HOPE tax credit to $2,500 a year for four years of college tuition and textbooks. It’s partially refundable and phases out starting at $80,000 for individual and $160,000 for couples.

Hybrid Tax Credit: If you’re thinking of buying a new car, this increases the tax credit for the purchase a new plug-in hybrid to $7,500.

New Car Tax Credit: If you can’t afford a hybrid, this is a tax deduction for the state, local, and excise taxes for the purchase of a new car up to $49,500. The credit phases out at $125,000 for individuals and $250,000 for couples.

Unemployment: Something for people who’ve lost their jobs: extension of unemployment through the end of the year. Unemployed workers receive up to 20 weeks of unemployment insurance, up to 33 weeks in high unemployment areas. Increases the average payment by $25 a week. It also exempts the first $2,400 from federal income taxes in 2009.

AMT Patch: This is usually passed at the end of the year, but it will affect most Middle Class people who still have jobs. At the very least, it will save the IRS a boatload of money they usually spend redoing all the forms when Congress waits until November or December to pass the patch.

There’s a lot more in the bill, but these initiatives are the ones most likely to impact you or someone you love. I was also happy to see that this bill includes oversight, unlike some programs (TARP). Go to Recovery.gov for reports from the oversight board. I’m sure it won’t be perfect, but some oversight is better than none. Personally, I hope to take advantage of the new home and new car tax credit.

What do you like or dislike about the stimulus package? The comments are open for debate.

[sumisu]

It Ain't Gonna Work III

BY TIM W. WOOD

03 20 09

http://www.financialsense.com/Market/wrapup.htm

Back in October when that stimulus package was being discussed I wrote a couple of articles which were posted here, stating that it “Ain’t Gonna Work.” This past Wednesday the Fed announced their latest intentions with a plan to buy $300 billion in long-term Treasuries and $750 billion of mortgage-backed securities. I’m now beginning to wonder if the powers that be are really in their minds trying to “fix” things or if they are actually trying to destroy the dollar, the free markets and perhaps even the nation. To be honest, the latter is starting to make more sense to me because surely there is enough intelligence in Washington to understand the potential consequences of these actions. In any event, in the wake of this news the equity markets surged, the dollar sold off and commodities rallied. Hip, Hip, Hurray. Hip, Hip, Hurray. It’s 2007 all over again, or is it?

In my opinion, this re-inflation effort is ultimately not going to work any better than any of the previous efforts. The technical damage that has been done over the last couple of years is not something that can be fixed by some stimulus package. The equity markets are still operating within the context of a massive secular bear market and the bounce that is currently underway is nothing more than a bear market rally. The commodity bubble is a thing of the past, even though this counter trend bounce still likely has further to run and the decline in the dollar was totally expected based on my cycles work. So, at this time I’m not seeing anything out of the ordinary or that wasn’t expected based on my cyclical work.

Also, with the average American consumer tapped out, ask yourself a common sense question. How, are these bailout plans going to stimulate aggregate demand? Did the balance in your checking account increase because of any of these efforts? Did the liability side of your balance sheet change? Do you suddenly feel the urge to go borrow more money or to make a major purchase? As I see it, these efforts are not reaching the consumer and therefore, this is not going to stimulate demand. What it is doing is saving the financial institutions that made the bad loans. I feel that not only should the over-indebted consumer pay the price, but so should the responsible institution for making the bad loans. Printing money out of thin air and/or using tax payer dollars to bail out financial institutions that made poor business decisions to make loans to high risk consumers is wrong and will not ultimately fix the problem. At best, this may temporarily re-inflate equities and commodities.

As for commodities, we saw last year what $4 a gallon gasoline will do to the economy. So, why would we expect the outcome this time around to be any different. As I see it, high commodity prices have an automatic relief valve built in because once prices reach a certain level, the consumer automatically pulls back. When this happens, demand drops and prices follow. With the average consumer still feeling the economic pressures from round one of the on going economic disaster, I have to ask the common sense question, how would more inflationary pressure on the consumer stimulate the economy? It won’t and for this reason I do not see these reinflation efforts working. The built in check valve of rising commodity prices will prevent any such efforts from working.

Of late I have received a few e-mails asking me if because of these reinflation efforts whether or not the technicals still matter. The answer is without a doubt, “Yes!” Reason being, it does not matter what drives price. Price can be driven by sound fundamentals or by bogus manipulation. From a technical perspective, we are still looking at price on a chart. In other words, everything is discounted into price, be it good or bad, fact or fiction, reality or hype. The only thing that may change is the interpretation of that chart. If these manipulative efforts are going to matter, then that will be reflected in price in a way that will turn the technical and statistical picture bullish. If these efforts are going to fail, then that too will appropriately be reflected in price. As technicians, all we have to do is interpret the price action as ultimately it all boils down to price, and knowing the meaning of that price action is what technical analysis is all about.

Another reason I say these manipulative efforts will ultimately fail is because we are dealing with K-wave winter and K-wave winter is a natural part of a long-term economic cycle that must take place before a new cycle can begin. This cycle, the markets and the economic disaster we are all facing is far bigger than the Fed. For the benefit of newer readers I have again included a few of the signposts surrounding K-wave winter.

“Global Stock Markets Enter Extended Bear Markets”
This should be obvious to all.

“Trends During Winter: Stocks Down, Bonds Up, Commodities Down”
I would say that this is still on track.

“Interest Rates Spike In Early Winter Then Decline Throughout”
In June 2004 the Discount rate was at 2.00%. By June 2006 it was at 6.25% and since August 2007 the Fed has been forced to cut the Discount rate back to .50%. So, this too seems to fit and now the Fed is targeting long-term rates as well.

“Economic Growth Slow or Negative During Much of Winter”
This too should be obvious to all.

“Commercial and Residential Real Estate Prices Fall”
This obviously began back in 2006 and is still in a major slump.

“Bankruptcies Accelerate and High Debt Eliminated by Bankruptcy”
This has obviously begun and is no doubt related to the housing and credit bubbles.

“Social Upheaval and Society Becomes Negative”
We are only just beginning to see this.

“Banking System Shaken and New One Introduced”
The banking system is now only beginning to be shaken. There should be much more to come.

“Free Market System Blamed and Socialist Solutions Offered”
This has not yet happened, but just wait.

“National Fascist Political Tendencies”
More to come.

"Debt Level Very Low After Defaults and Bankruptcy"
This has not happened.

“Trade Conflict Worsen”
This basically has not happened.

“View of the Future at a Low Ebb”
This has not happened as everyone seems to be looking for the bottom.

“New Work Ethics Develop Since Jobs are Scarce”
If I can assure you of one thing it is that this has not happened.

"Greed is Purged from the System"
I can absolutely assure you that this has not happened yet.

“Real Estate Prices Find Bottom”
This has not happened.

“There is a Clean Economic Slate to Build On”
Not happened yet.

“Investors are Very Conservative and Risk Averse”
Again, this has absolutely not occurred.

“Interest Rates and Prices Bottom”
Not happened.

“A New Economy Begins to Emerge”
Has not happened

“Stock Markets Reach Bottom and Begin New Bull Markets”
This is still a long ways away.

So far, these signposts remain on track and ultimately they are telling us that these reinflation efforts will fail, and that in the end any bout of inflation that is sparked will ultimately end with the deflationary grind into the K-wave winter low.

From a Dow theory perspective, we are still operating within the context of the bearish primary trend that was established on November 21, 2007. I also want to remind everyone that according to William Peter Hamilton, on November 21, 2007 the “Stock Market Barometer” forecasted “Stormy Economic Conditions” and today nothing has changed. Therefore, the Dow theory is also currently suggesting that these reinflation efforts are not going to work. The current chart of the Industrials and the Transports can be found below.




As for Dow theory, I want to point you to the following quotes from the great Dow theorist Robert Rhea.

“Manipulation is possible in the day to day movement of the averages, and secondary reactions are subject to such an influence to a more limited degree, but, the primary trend can never be manipulated.

Hamilton frequently discussed the subject of stock market manipulation. There are many who will disagree with his belief that manipulation is a negligible factor in primary movements, but it should always be remembered that he had, as a background for his opinions, a most intimate acquaintance with the veterans of Wall Street, and the advantage of having spent his life in accumulating facts pertaining to financial matters.

The following comment, taken at random from his many editorials, affords convincing proof that his views on the subject of manipulation did not vary:

‘A limited number of stocks may be manipulated at one time, and may give an entirely false view of the situation. It is impossible, however, to manipulate the whole list so that the average price of 20 active stocks will show changes sufficiently important to draw market deductions from them.’ (Nov. 29, 1908)

‘Anybody will admit that while manipulation is possible in the day-to-day market movement, and the short swing is subject to such an influence in a more limited degree, the great market movement must be beyond the manipulation of the combined financial interests of the world.’ (Feb.26, 1909)

‘…the market itself is bigger than all the ‘pools’ and ‘insiders’ put together.’ (May 8, 1922)

‘One of the greatest of misconceptions, that which has militated most against the usefulness of the stock market barometer, is the belief that manipulation can falsify stock market movements otherwise authoritative and instructive. The writer claims no more authority than may come from twenty-two years of stark intimacy with Wall Street, preceded by practical acquaintance with the London Stock Exchange, the Paris Bourse and even that wildly speculative market in gold shares, ‘Between the Chains,’ in Johannesburg in 1895. But in all that experience, for what it may be worth, it is impossible to recall a single instance of a major market movement which depended for its impetus, or even for its genesis, upon manipulation. These discussions have been made in vain if they have failed to show that all the primary bull markets and every primary bear market have been vindicated, in the course of their development and before their close, by the facts of general business, however much over-speculations or over-liquidation may have tended to excess, as they always do, in the last stage of the primary swing.’ (The Stock Market Barometer) ‘…no power, not the U. S. Treasury and the Federal Reserve System combined, could usefully manipulate forty active stocks or deflect their record to any but a negligible extent.’ (April 27, 1923)

‘The average amateur trader believes the stock market is guided in its trends by a certain mysterious ‘power,’ this belief being the one factor, next to impatience, most responsible for his losses. He reads tipster sheets avidly; he scans the newspapers industriously for news likely, in his opinion, to change the trend of the market. He does not seem to realize that by the time the news of real importance is printed, its effect, so far as the basic trend of the market is concerned, has long ago been discounted.’

‘It is true that a flurry in the price of wheat or cotton may influence the day to day movement of stock prices. Moreover, sometimes newspaper headlines contain news which is construed as bullish or bearish by market dabblers, who collectively rush in to buy or sell, thus influencing or ‘manipulating’ the market for a short period. The professional speculator is always ready to help the movement along by ‘placing his line’ while the little fellow timidly ‘lays out’ a few shares; then, when the little fellow decides to increase his commitments, the professional begins to unload and the reaction ends, and the primary movement is again resumed. It is doubtful if many of these reactions would ever be caused by newspaper headlines alone unless the market was either overbought or oversold at the time---the ‘technical situation’ so dear to the hearts of financial news reporters.’

‘Those who believe the primary trend can be manipulated could, no doubt, study the subject for a few days and be convinced that such a thing is impossible. For instance, on September 1, 1929, the total market value of all stocks listed on the New York Stock Exchange was reported to have amounted to more than $89,000,000,000. Imagine the money which would have been involved in depressing such a mass of values even 10 per cent!’

Yes, it is true that this is not the early 1900’s. We also know that today the Fed has more tools available to influence the market as well. But, at the same time the markets are much, much larger than they were in the early 1900’s. So, even though the Fed has more tools available, is this fact over ridden by the fact that the market is now many, many times larger than it was then? Personally, I would say yes. Can the Fed actually hold off K-wave winter or keep the market up forever and ever and create a period of endless prosperity without the market ever experiencing Phase II or Phase III of the bear market? I guess this remains to be seen, but my view is NO.

Tim W. Wood

Copyright © 2009 All rights reserved.

CONTACT INFORMATION
Tim W. Wood, CPA

[sumisu]

When will bad bankers go to jail?

Wall Street lies in tatters, but we're still waiting for the prosecutions that might reassure investors that the system works. One key issue: Were risk-taking bankers criminals? Or just dumb?

By Michael Brush

MSN Money

3/12/2009 12:01 AM ET

http://articles.moneycentral.msn.com/Investing/CompanyFocus/when-will-bad-bankers-go-to-jail.aspx

In the second year of a massive market meltdown that cost the world an estimated $50 trillion in 2008, there's something sorely missing -- besides all the money.

When do the bad guys start going to prison?

Investors hoping for a cleanup on Wall Street are still waiting for the Ken Lays, the Dennis Kozlowskis or at least the Martha Stewarts of the mortgage collapse to emerge.

Otherwise, the takeaway might be that nothing illegal happened and that economy-rocking losses caused by risky, overleveraged loans are just the way things work -- and then investors won't trust the market again for years to come.

Hang on, say former prosecutors who have connections inside the branches of law enforcement handling these kinds of cases. The prosecutions are on the way.

Lawyers are buzzing

"The financial-fraud unit of the U.S. Attorney's Office in Manhattan is humming," says Steven Feldman, a former assistant U.S. attorney in the Eastern District of New York, the Department of Justice office that typically develops cases against the Gordon Gekko types. "From everything I can tell in talking to my former colleagues, they are working very hard," says Feldman, now a criminal-defense attorney with New York law firm Herrick, Feinstein.

"I think you will see federal prosecutors kicking into high gear soon," agrees Mark Ressler, a former federal prosecutor who is now a criminal-defense attorney with Kasowitz Benson Torres & Friedman in New York.

Who will take the hit? These attorneys don't say and probably don't know. But FBI Director Robert Mueller recently told Congress that the bureau had launched more than two dozen investigations into Wall Street companies such as Bear Stearns, Credit Suisse Group and Lehman Bros., as well as mortgage companies Fannie Mae and Freddie Mac and insurer American International Group.

They're looking into:

The details of Ponzi schemes run by alleged scam artists like Bernard Madoff.

Hedge fund managers who allegedly talked up their funds to avert panic withdrawals while privately acknowledging things looked ugly.

Whether top executives at some of the key players in the financial mess made promises to customers or shareholders that they knew were impossible to keep.

So what's taking so long?

The FBI only recently shifted resources away from counterterrorism to investigations of white-collar crime, says former Assistant U.S. Attorney Karl Buch, now a criminal-defense attorney with New York law firm Chadbourne & Parke.

Such cases are complex, so they take a lot of time to build, Buch says. Prosecutors must sift through tons of paperwork and e-mail to find smoking guns. They also have to interview a lot of witnesses, hoping to pressure underlings to rat out their bosses.

"They could be working on 100 cases, but they are not going to tell you about any of those until they are ready to make arrests," Feldman says.

Another problem is that the Securities and Exchange Commission and banking regulators had eased up on chasing financial bad guys over the past several years, says former SEC special counsel Michael Malloy, now a professor at University of the Pacific's McGeorge School of Law in Sacramento, Calif. "The normal pipelines for criminal referrals have dried up," he says.

That said, a scan of media reports and my interviews with white-collar-crime defense attorneys and others reveal where prosecutors are -- or should be -- aiming their investigations. Here's a look.

The Ponzi schemers

The case against Madoff, who allegedly ripped off investors for tens of billions by shifting money around to produce paper returns, may be the easiest to build, if only because he appears to be cooperating. He's expected to plead guilty Thursday.

But while Madoff has been compared to guys like Enron's Lay and Tyco's Kozlowski, his operation sits apart from the banking meltdown.

Others in the Ponzi scheme crowd face only civil charges thus far. But that could change. Civil cases usually come first because they are easier to build; criminal cases require a higher burden of proof.

On the list right after Madoff is R. Allen Stanford, accused by the SEC of suckering investors for $8 billion. Instead of putting investors' money in the high-yield certificates of deposit he'd promised, Stanford allegedly used the funds to buy a Caribbean island, a $10 million castle (with a moat) in Miami and a fleet of private jets, along with supporting three or four "outside wives" in addition to his real one.

Criminal or just plain stupid?

And what about all those mortgage brokers who encouraged homebuyers with a nod and a wink to overstate their incomes, or at least failed to verify their income levels? Risky practices were allegedly widespread at places such as Countrywide Financial, later bought by Bank of America (BAC, news, msgs), and Golden West Financial, purchased by Wachovia, which was later bought by Wells Fargo (WFC, news, msgs).

To put any of these former mortgage brokers or their bosses in prison, prosecutors would have to show that they broke laws knowingly and on purpose -- as opposed to just acting stupidly.

The same goes for the midlevel staff members at the investment banks repackaging those mortgages and the credit rating agencies that gave the faulty debt instruments glowing ratings. "We need to differentiate between what is criminal and what is negligent or stupid," Feldman says. "It is important not to criminalize stupidity."

To that end, it may be a good thing that investigators are taking their time. "Whenever a financial crisis like the current one occurs, there is always the risk that the government will get swept up in the public demand for aggressive law enforcement," says Ressler. "It's better for prosecutors not to get caught up in the public outcry."

At the time of publication, Michael Brush did not own or control shares of any company mentioned in this column.

[sumisu]

ENERGY BULL 3X SHARES - ERX

[sumisu]

The Inflection Is Near?

By THOMAS L. FRIEDMAN

Published: March 7, 2009

http://www.nytimes.com/2009/03/08/opinion/08friedman.html?_r=2&th&emc=th

Sometimes the satirical newspaper The Onion is so right on, I can’t resist quoting from it. Consider this faux article from June 2005 about America’s addiction to Chinese exports:

Skip to next paragraph

Fred R. Conrad/The New York Times
Thomas L. Friedman

FENGHUA, China — Chen Hsien, an employee of Fenghua Ningbo Plastic Works Ltd., a plastics factory that manufactures lightweight household items for Western markets, expressed his disbelief Monday over the “sheer amount of [garbage] Americans will buy. Often, when we’re assigned a new order for, say, ‘salad shooters,’ I will say to myself, ‘There’s no way that anyone will ever buy these.’ ... One month later, we will receive an order for the same product, but three times the quantity. How can anyone have a need for such useless [garbage]? I hear that Americans can buy anything they want, and I believe it, judging from the things I’ve made for them,” Chen said. “And I also hear that, when they no longer want an item, they simply throw it away. So wasteful and contemptible.”

Let’s today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it’s telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall — when Mother Nature and the market both said: “No more.”

We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese ...

We can’t do this anymore.

“We created a way of raising standards of living that we can’t possibly pass on to our children,” said Joe Romm, a physicist and climate expert who writes the indispensable blog climateprogress.org. We have been getting rich by depleting all our natural stocks — water, hydrocarbons, forests, rivers, fish and arable land — and not by generating renewable flows.

“You can get this burst of wealth that we have created from this rapacious behavior,” added Romm. “But it has to collapse, unless adults stand up and say, ‘This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate ...’ Real wealth is something you can pass on in a way that others can enjoy.”

Over a billion people today suffer from water scarcity; deforestation in the tropics destroys an area the size of Greece every year — more than 25 million acres; more than half of the world’s fisheries are over-fished or fished at their limit.

“Just as a few lonely economists warned us we were living beyond our financial means and overdrawing our financial assets, scientists are warning us that we’re living beyond our ecological means and overdrawing our natural assets,” argues Glenn Prickett, senior vice president at Conservation International. But, he cautioned, as environmentalists have pointed out: “Mother Nature doesn’t do bailouts.”

One of those who has been warning me of this for a long time is Paul Gilding, the Australian environmental business expert. He has a name for this moment — when both Mother Nature and Father Greed have hit the wall at once — “The Great Disruption.”

“We are taking a system operating past its capacity and driving it faster and harder,” he wrote me. “No matter how wonderful the system is, the laws of physics and biology still apply.” We must have growth, but we must grow in a different way. For starters, economies need to transition to the concept of net-zero, whereby buildings, cars, factories and homes are designed not only to generate as much energy as they use but to be infinitely recyclable in as many parts as possible. Let’s grow by creating flows rather than plundering more stocks.

Gilding says he’s actually an optimist. So am I. People are already using this economic slowdown to retool and reorient economies. Germany, Britain, China and the U.S. have all used stimulus bills to make huge new investments in clean power. South Korea’s new national paradigm for development is called: “Low carbon, green growth.” Who knew? People are realizing we need more than incremental changes — and we’re seeing the first stirrings of growth in smarter, more efficient, more responsible ways.

In the meantime, says Gilding, take notes: “When we look back, 2008 will be a momentous year in human history. Our children and grandchildren will ask us, ‘What was it like? What were you doing when it started to fall apart? What did you think? What did you do?’ Often in the middle of something momentous, we can’t see its significance. But for me there is no doubt: 2008 will be the marker — the year when ‘The Great Disruption’ began.”

[sumisu]

A Rising Dollar Lifts the U.S. but Adds to the Crisis Abroad

By PETER S. GOODMAN

Published: March 8, 2009

http://www.nytimes.com/2009/03/09/business/09dollar.html?pagewanted=1&_r=1&ref=business

As the world is seized with anxiety in the face of a spreading financial crisis, the one place having a considerably easier time attracting money is, perversely enough, the same place that started much of the trouble: the United States.

American investors are ditching foreign ventures and bringing their dollars home, entrusting them to the supposed bedrock safety of United States government bonds. And China continues to buy staggering quantities of American debt.

These actions are lifting the value of the dollar and providing the Obama administration with a crucial infusion of financing as it directs trillions of dollars toward rescuing banks and stimulating the economy, enabling the government to pay for these efforts without lifting interest rates.

And yet in a global economy crippled by a lack of confidence and capital, with lending and investment mechanisms dysfunctional from Milan to Manila, the tilt of money toward the United States appears to be exacerbating the crisis elsewhere.

The pursuit of capital suddenly seems like a zero sum game. A dollar invested by foreign central banks and investors in American government bonds is a dollar that is not available to Eastern European countries desperately seeking to refinance debt. It is a dollar that cannot reach Africa, where many countries are struggling with the loss of aid and foreign investment.

“Virtually all of the low-income countries are in very serious trouble,” said Eswar Prasad, a former official at the International Monetary Fund and a senior fellow at the Brookings Institution, the liberal-leaning research organization in Washington.

He went on: “This is the third wave of the financial crisis. Low-income countries are getting hit very hard. The flow of private capital to the emerging market has dried up.”

Private money invested in so-called emerging countries plunged from $928 billion in 2007 to $466 billion last year and is likely to fall to $165 billion this year, according to the Institute of International Finance.

Not that the United States is enjoying a great influx of money. Globally, investors are holding tight to cash and extracting it as quickly as they can from risky ventures.

In the United States, investments by foreigners have slowed markedly. But as Americans eschew foreign deals and keep their dollars at home, and as foreign central banks — especially China — buy Treasury bills, the United States is absorbing money that used to be scattered around the globe. And that is making money tighter elsewhere in the world.

The most immediate crisis appears to be in Eastern Europe, where investors borrowed exuberantly in foreign currencies — notably the euro and the Swiss franc — using those funds to build office towers and factories. Their debts are growing as their currencies decline in value, leading to bank losses and requiring government bailouts along with aid from the I.M.F..

Economists liken this episode to the financial crisis that assaulted much of Asia in the late 1990s. Then, as now, investors borrowed in foreign currencies. When investment left the region, local currencies plummeted, particularly in Thailand and Indonesia, setting off defaults and sowing job losses and poverty.

“Eastern Europe looks incredibly similar to Asia in the 1990s,” said Brad Setser, an economist at the Council on Foreign Relations in New York.

In one key regard, this crisis is more problematic: In the 1990s, the rest of the global economy was growing vigorously. Once danger abated, Asian countries were able to resume growth by selling goods to the United States, Europe, Japan and China.

Indeed, the very plunge in currencies that precipitated the crisis also provided a fix, making Thai, Malaysian, Indonesian and Korean goods that much cheaper on world markets.

This time, as many low-income countries again see their currencies fall, they are confronting a world beset by recession, in which demand for their products is weak and falling.

In a report released Sunday, the World Bank predicted that the global economy would shrink in 2009 for the first time in more than half a century and forecast that global trade would decline for the first time since the early 1980s.

“Depreciation isn’t enough now to offset the global contraction,” said Mr. Setser, noting that export powers like Japan, Korea, Taiwan and Brazil have had rapid declines in sales in recent months. “Everybody’s looking vulnerable. All commodity exporters are potentially subject to currency crises.”

Fears are growing that a much broader group of countries will plunge into trouble. Mr. Prasad’s list of potential danger zones includes Vietnam, the Philippines, Malaysia and Indonesia, as well as Pakistan and Ecuador.

In the Asian financial crisis, countries at the center of the storm were particularly vulnerable because the values of their currencies were mostly pegged to the dollar. Once central banks ran out of dollars to exchange for their own currencies, they lost their ability to influence the exchange rate. As a result, their currencies fell, turning already large debts into impossible debts.

Many more countries now allow their currencies to float with the whims of the market, removing this grim chain of events. Still, as economic activity slows and banks are stuck with larger losses, the damage could swell beyond the ability of governments to finance bailouts, said Kenneth S. Rogoff, a former chief economist at the I.M.F. and now a professor at Harvard.

“Debt collapses are going to wreak havoc with exchange rates,” Mr. Rogoff predicted. “A lot of countries in Europe are already on the brink of default.”

Only two years ago, many analysts were suggesting that the I.M.F. — created more than 60 years ago to rescue countries in financial distress — no longer had a clear reason to exist. Now, the fund is scrambling for contributions from developed nations to bolster its $350 billion war chest. Mr. Setser suggested it needed $1 trillion for all that might yet unfold.

Because worries are deeper nearly everywhere else, the United States and the dollar have essentially benefited from the worldwide panic. In the last year, the dollar has risen 13 percent against major foreign currencies after adjusting for inflation, according to Federal Reserve data. Foreign holdings of Treasury bills rose by $456 billion in 2008.

“It’s a huge safe haven effect,” said William R. Cline, a senior fellow at the Peterson Institute for International Economics in Washington. “The basic assumption that people are making is that the U.S. government will never default on its debt.”

As the dominant flavor of money used in business worldwide, the dollar has once again been affirmed as the global reserve currency.

Only last year, some analysts said that as the American economy sagged, foreign central banks would be reluctant to sink national savings into the dollar. That has been soundly debunked.

In ordinary times, the rise of the dollar would provoke American worries that it would crimp exports by making goods more expensive on world markets. But for American policy makers, what matters now is attracting enough buyers of American debt to finance the rescue plans, and if the dollar must rise along the way, that is a cost worth paying.

“The fact that we can still borrow at lower interest rates is saving us from much more severe adjustments,” Mr. Rogoff said. “We’re really still staring down an abyss.”

[sumisu]

This Is What A Financial Collapse Looks Like

Argentina's Economic Collapse

http://informationclearinghouse.info/article22169.htm?ref=patrick.net

[sumisu]

We Are Breeding Ourselves to Extinction

Posted on Mar 8, 2009


AP photo / Andy Wong
China has long imposed a limit of one child per family in an effort to reduce population growth.

By Chris Hedges

All measures to thwart the degradation and destruction of our ecosystem will be useless if we do not cut population growth. By 2050, if we continue to reproduce at the current rate, the planet will have between 8 billion and 10 billion people, according to a recent U.N. forecast. This is a 50 percent increase. And yet government-commissioned reviews, such as the Stern report in Britain, do not mention the word population. Books and documentaries that deal with the climate crisis, including Al Gore’s “An Inconvenient Truth,” fail to discuss the danger of population growth. This omission is odd, given that a doubling in population, even if we cut back on the use of fossil fuels, shut down all our coal-burning power plants and build seas of wind turbines, will plunge us into an age of extinction and desolation unseen since the end of the Mesozoic era, 65 million years ago, when the dinosaurs disappeared.

We are experiencing an accelerated obliteration of the planet’s life-forms—an estimated 8,760 species die off per year—because, simply put, there are too many people. Most of these extinctions are the direct result of the expanding need for energy, housing, food and other resources. The Yangtze River dolphin, Atlantic gray whale, West African black rhino, Merriam’s elk, California grizzly bear, silver trout, blue pike and dusky seaside sparrow are all victims of human overpopulation. Population growth, as E.O. Wilson says, is “the monster on the land.” Species are vanishing at a rate of a hundred to a thousand times faster than they did before the arrival of humans. If the current rate of extinction continues, Homo sapiens will be one of the few life-forms left on the planet, its members scrambling violently among themselves for water, food, fossil fuels and perhaps air until they too disappear. Humanity, Wilson says, is leaving the Cenozoic, the age of mammals, and entering the Eremozoic—the era of solitude. As long as the Earth is viewed as the personal property of the human race, a belief embraced by everyone from born-again Christians to Marxists to free-market economists, we are destined to soon inhabit a biological wasteland.

The populations in industrialized nations maintain their lifestyles because they have the military and economic power to consume a disproportionate share of the world’s resources. The United States alone gobbles up about 25 percent of the oil produced in the world each year. These nations view their stable or even zero growth birthrates as sufficient. It has been left to developing countries to cope with the emergent population crisis. India, Egypt, South Africa, Iran, Indonesia, Cuba and China, whose one-child policy has prevented the addition of 400 million people, have all tried to institute population control measures. But on most of the planet, population growth is exploding. The U.N. estimates that 200 million women worldwide do not have access to contraception. The population of the Persian Gulf states, along with the Israeli-occupied territories, will double in two decades, a rise that will ominously coincide with precipitous peak oil declines.

The overpopulated regions of the globe will ravage their local environments, cutting down rainforests and the few remaining wilderness areas, in a desperate bid to grow food. And the depletion and destruction of resources will eventually create an overpopulation problem in industrialized nations as well. The resources that industrialized nations consider their birthright will become harder and more expensive to obtain. Rising water levels on coastlines, which may submerge coastal nations such as Bangladesh, will disrupt agriculture and displace millions, who will attempt to flee to areas on the planet where life is still possible. The rising temperatures and droughts have already begun to destroy crop lands in Africa, Australia, Texas and California. The effects of this devastation will first be felt in places like Bangladesh, but will soon spread within our borders. Footprint data suggests that, based on current lifestyles, the sustainable population of the United Kingdom—the number of people the country could feed, fuel and support from its own biological capacity—is about 18 million. This means that in an age of extreme scarcity, some 43 million people in Great Britain would not be able to survive. Overpopulation will become a serious threat to the viability of many industrialized states the instant the cheap consumption of the world’s resources can no longer be maintained. This moment may be closer than we think.

A world where 8 billion to 10 billion people are competing for diminishing resources will not be peaceful. The industrialized nations will, as we have done in Iraq, turn to their militaries to ensure a steady supply of fossil fuels, minerals and other nonrenewable resources in the vain effort to sustain a lifestyle that will, in the end, be unsustainable. The collapse of industrial farming, which is made possible only with cheap oil, will lead to an increase in famine, disease and starvation. And the reaction of those on the bottom will be the low-tech tactic of terrorism and war. Perhaps the chaos and bloodshed will be so massive that overpopulation will be solved through violence, but this is hardly a comfort

James Lovelock, an independent British scientist who has spent most of his career locked out of the mainstream, warned several decades ago that disrupting the delicate balance of the Earth, which he refers to as a living body, would be a form of collective suicide. The atmosphere on Earth—21 percent oxygen and 79 percent nitrogen—is not common among planets, he notes. These gases are generated, and maintained at an equable level for life’s processes, by living organisms themselves. Oxygen and nitrogen would disappear if the biosphere was destroyed. The result would be a greenhouse atmosphere similar to that of Venus, a planet that is consequently hundreds of degrees hotter than Earth. Lovelock argues that the atmosphere, oceans, rocks and soil are living entities. They constitute, he says, a self-regulating system. Lovelock, in support of this thesis, looked at the cycle in which algae in the oceans produce volatile sulfur compounds. These compounds act as seeds to form oceanic clouds. Without these dimethyl sulfide “seeds” the cooling oceanic clouds would be lost. This self-regulating system is remarkable because it maintains favorable conditions for human life. Its destruction would not mean the death of the planet. It would not mean the death of life-forms. But it would mean the death of Homo sapiens.

Lovelock advocates nuclear power and thermal solar power; the latter, he says, can be produced by huge mirrors mounted in deserts such as those in Arizona and the Sahara. He proposes reducing atmospheric carbon dioxide with large plastic cylinders thrust vertically into the ocean. These, he says, could bring nutrient-rich lower waters to the surface, producing an algal bloom that would increase the cloud cover. But he warns that these steps will be ineffective if we do not first control population growth. He believes the Earth is overpopulated by a factor of about seven. As the planet overheats—and he believes we can do nothing to halt this process—overpopulation will make all efforts to save the ecosystem futile.

Lovelock, in “The Revenge of Gaia,” said that if we do not radically and immediately cut greenhouse gas emissions, the human race might not die out but it would be reduced to “a few breeding pairs.” “The Vanishing Face of Gaia,” his latest book, which has for its subtitle “The Final Warning,” paints an even grimmer picture. Lovelock says a continued population boom will make the reduction of fossil fuel use impossible. If we do not reduce our emissions by 60 percent, something that can be achieved only by walking away from fossil fuels, the human race is doomed, he argues. Time is running out. This reduction will never take place, he says, unless we can dramatically reduce our birthrate.

All efforts to stanch the effects of climate change are not going to work if we do not practice vigorous population control. Overpopulation, in times of hardship, will create as much havoc in industrialized nations as in the impoverished slums around the globe where people struggle on less than two dollars a day. Population growth is often overlooked, or at best considered a secondary issue, by many environmentalists, but it is as fundamental to our survival as reducing the emissions that are melting the polar ice caps.

[sumisu]

A Brief Overview of Cycles

BY TIM W. WOOD

http://www.financialsense.com/Market/wrapup.htm

Of late, I have received a few e-mails about cycles and the ways in which I use them. I’ve learned that in many incidences it seems that when I talk about cycles many conjure up images of some sort of black magic, voodoo, chicken bones and the like. However, I can assure you that this is not the case and in this article I’ll show you why. Cyclical analysis is simply a method of trend identification that allows one to look at various trends of like degree. In my case, I data-mine these trends in an effort to find common traits. In doing so, probabilities can then be applied to the various trends of the various degrees and I term this technique “trend quantification.” I use technical indicators that I have developed to help me identify the various trends and their turn points. Then, I apply the applicable probabilities to current cyclical events in order to develop a forecast. These methods also have an added benefit in that they take the emotion out of the decision. What I mean is, this does not allow a belief that something is going to go up or down to taint the analysis. With this method, the probabilities are what they are and I simply follow them. My goal is just to get it right regardless of the direction.

The first dimension that I work in is the long-term. Please see the diagram below. The red trend lines are representative of the long-term cycle. The overall trend is obviously up when this cycle is advancing and is down when this cycle is declining. These lows are identified using statistics that have been developed over the years, the price action of each cycle of smaller degree and the help of price oscillators, mainly my Cycle Turn Indicator. Once a long-term cycle low is identified and confirmed, we know that the trend is up. We can then use the declines into the lows of the cycles of smaller degree as buying opportunities. The opposite would of course be applicable when the long-term is moving down.



The second dimension in this example is the intermediate-term. This is represented by the green trend lines in the diagram above. We also have timing bands or windows in which the next low should occur. These timing bands are again developed and are based on the historical averages of the previous cycles of the same degree. This in effect gives us a time target from which to expect the next low. As this intermediate term cycle advances, we then monitor the price action of the short-term cycle, represented in blue, in order to identify possible tops and bottoms of the intermediate-term cycles. Plus, I use very specific indicators that I have developed to help identify these cyclical tops and bottoms.

The third dimension in this example is the short-term. This is represented by the blue trend lines in the diagram above. When working with the short-term cycles, there are also statistical based timing bands to help identify the time target for the next corrective move down. Notice that as this cycle moves up, each short-term cycle low is higher than the previous low. Also notice how each high is generally higher than the previous high. As long as this pattern holds, the trend is clearly up. The trick, which has taken years to develop, is the identification of which high and low marks THE cycle high or low and its meaning.

How The Three Dimensions Work Together

Notice at the first intermediate-term cycle top, labeled “A,” that the last short-term cycle failed to move above the previous short-term cycle high. I marked this event with a small red line. This setup is what I call a failure and this last occurred in the stock market on January 28th. In doing so it warned of the decline that we are now seeing. In the case of the equity markets, the longer and intermediate-term trends were also down at the time of this failure. Anyway, getting back to this example, once the short-term cycle began to move down, notice that the previous short-term low was violated. This violation then serves as price confirmation that the intermediate-term cycle has topped. Therefore, the intermediate-term trend then turned down.

As a cycles analyst, I then look for the price action to continue down into the statistical based timing window for the next intermediate-term low. The price action of the short-term cycle is continuously monitored as the intermediate-term cycle moves down. I then use the combination of the timing window for the intermediate-term cycle low, the price action of the short-term cycle and my Cycle Turn Indicator to identify the next intermediate-term low.

Notice that at the intermediate-term low, labeled “B,” the short-term cycle makes a low above the previous low. This is sort of a failure in reverse, as price failed to make a lower low and was then followed by a higher high. This higher high is the final price confirmation that the intermediate-term trend has turned back up. At that point one can re-enter the long side or add to existing long positions as the long-term trend continues to advance. This analytical process is then repeated for the next intermediate-term cycle.

Let’s now jump to the last intermediate-term advance. Notice how the intermediate-term cycle advance, labeled “C,” was brief in this example. Also, notice how the short-term cycle went parabolic into the final high. A similar example of this would be the top that occurred last July in the CRB and crude oil. Going back to the example above, there was no warning by the formation of a failed short-term cycle. However, in this case the cycles analyst would have known that the advance was running on borrowed time as his timing bands for the cycle top would have warned that the top was near. Then, when the short-term cycle went parabolic, he should have been further warned that the end was near for this cycle. However, in this example there was absolutely no cyclical deterioration until price fell below the previous short-term cycle low. This event is marked with a small red line. Once the violation of the previous short-term low occurred, the cycles analyst should have known that the intermediate-term had topped. He also should have noted the warning based upon the structure of the intermediate term cycle that the long-term cycle had likely topped as well. Additionally, the short-term cycle has violated the previous short-term cycle low indicating that the intermediate-term cycle has topped and the price oscillators, particularly my Cycle Turn Indicator, should at this point be warning of imminent danger. Then, with the break of the intermediate-term cycle below the previous intermediate-term cycle low, the confirmation is given that the long-term cycle has topped. Therefore, the turn in the long-term direction of the market has just occurred and that direction is now down. Once the long-term direction turns down. We can then expect to see both the intermediate-term and the short-term cycles make lower lows and lower highs all within the context what we refer to as left-translated cycles, which is another indication of the ongoing bearish environment that will continue in force until the long-term cycle low is reached.

Please understand that this is a VERY simple example of how I incorporate cycles into my overall technical analysis of the markets. Also please understand that this very simple diagram is an idealized example. In the real world no technical or fundamental approach is foolproof. However, this is an approach that I have found to work. All we have to do is follow the Cycle Turn Indicator and work within the statistical based timing windows for price lows.

For the benefit of new readers I will give you a couple of examples, sparing you the boring details of how I have used these methods at longer-term market junctures. Back in 2000 I used these methods to call the stock market top and stated, based upon the probabilities, that the 4-year cycle low, which I said was due in 2002, would close below the 1998 4-year cycle low. As it turned out, this is exactly what happened. As the market continued pressing higher into October 2007 I continuously stated emphatically that we were seeing an extended 4-year cycle. Based on the statistics I maintained that neither the July 2006 low nor the low in March 2007 were 4-year cycle lows and that the decline into the 4-year cycle low was still ahead of us. This has since proven correct as well. It was in October 2007 at the New Orleans Investor Conference that I first laid out the possibility of a 1930 to 1932 style event occurring as the current 4-year cycle failed and set itself up in the very bearish manner that has since come to pass. More recently, these same statistical methods were also used last summer to forecast the top seen in commodities and these methods specifically gave sell signals on the CRB, crude oil and gasoline the week of July 18, 2008. So point being, when cycles are properly interpreted and the appropriate indicators and statistics applied, they can be a very, very important tool and they have nothing to do with black magic or voodoo. Cyclical analysis and trend quantification is simply an attempt of applying a scientific method to the markets that is non-emotional. Also understand that within the context of these longer-term trends, the same methods are used to identify intermediate and short-term trends and turn points as well.

As for the current case with equities, we are amidst a very similarly structured market to that of the 1930 to 1932 period just as I first warned about in October 2007 at the New Orleans Investor Conference. That being said, there will be bounces along the way and some of these bounces will be very flashy, tradable and very convincing affairs. As the market advances out of each of these bottoms the talking heads and clueless politicians will say that the low has been seen. We will probably hear that the Obama plan has begun to work and that the bear market is over. Don’t buy their hype. These guys never saw this problem coming in the first place, they don’t understand that they can’t fix it and they wouldn’t know how to identify THE bottom if they had to. My approach is to work within the context of the Dow theory and the long-term cycles work as a backdrop. Then, use the intermediate and short-term Cycle Turn Indicator and statistics as tools to identify more meaningful bounces along the way. But, when you hear the mainstream guys on TV and the politicians telling you that the bear market is over, change the channel and ask yourself this question. Did these guys warn me about the bear market in the first place? No, they did not. So, why would we think they would be able to identify the bottom? They can’t! You have been warned!

Tim W. Wood

Copyright © 2009 All rights reserved.

[sumisu]

Forget gold, farmland makes sense

By Graham Norwood on Thursday, February 26, 2009

http://www.business24-7.ae/articles/2009/2/pages/02262009_dd84bd22ac574af68da29b25969ebc69.aspx

Here is a suggestion from the Graham Norwood school of property investment: why not put money into British farmland?

It seems a perverse suggestion given that farmland prices across the Western world have had fewer spectacular peaks and troughs than other property-related investments like commercial premises, the residential sector or even property funds. But actually, that's the point.

We are living in a period where no investment is safe, perhaps least of all those that show sharp rises only to suffer equally swift falls. Spectacular is out, safe-but-dull is in.

British farmland rose in value by 21 per cent in 2008, despite a slowdown late in the year, according to land agents. This is a remarkable performance compared with, say, mainstream residential prices which saw falls of some 15 per cent in the same period. It takes the five-year increase for farmland to 135 per cent, also well ahead of commercial property. In the longer term, the performance is even better.

Many investors see gold as a good investment in times of economic uncertainty but in fact British farmland has performed even better in the past 25 years. If you look back to 1983 and take the price of gold and British farmland at that time as a base, gold has risen in value by 81 per cent but farmland is up 115 per cent – indeed, even oil prices have risen only a little more than farms.

Now if you selectively choose shorter periods within that quarter of a century, residential and commercial property have both performed better still but they have then floundered badly over the longer term. Not so farmland – small peaks, smaller troughs, and a good long-term performance have been the norm.

Little wonder that in the past 12 months only 53 per cent of the purchases of British farmland have actually been undertaken by farmers. Many of the remaining 47 per cent involved bankers spending bonuses – don't expect that to happen in 2009 – and institutional investors seeking a good long-term bet. That final group is likely to play a bigger part in the future, as the search for a safe haven for funds becomes a little more frenzied. After all, stock markets are not exactly guaranteed to be successful, are they?

The Danes and the Irish have long invested in British farmland, attracted by a similar climate to theirs and a looser regulatory framework for ownership and governance. British farm experts now expect a much wider level of international interest, because not only is there an impressive track record but there are also falling exchange rates to make asking prices particularly appealing to foreign buyers.

I doubt very much whether we have seen anything like the long-term peak of British farmland prices, whatever happens month-to-month. Average regional prices range from £2,928 (Dh15,640) per acre in Scotland to £4,180 per acre in the East Midlands and £4,796 in East Anglia. So why will they rise in the long-term?

There will always be demand for land from farmers to increase their boundaries or who want increased privacy around their existing farmhouse home. In addition, farms in Britain tend to be well-managed; most have relatively low gearing and have diversified so are not seriously exposed to financial uncertainty, and while they may not buck all the effects of a global recession they may at least be well insulated. If British government housing targets are confirmed when the recession ends, it is expected that some agricultural land may be used for new homes too. They will trigger a sharp increase in value, should it happen.

There are strong alternative investment prospects, too, thanks to the expected expansion of the use of bio-fuels currently under trial by airlines and some car manufacturers, and the British government's promotion of anaerobic digesters which rely on – amongst other things – crop wastes to be turned into energy. Industry experts predict that this will help create a constant and reliable demand for crops. When they have high commodity prices worldwide, the fields will be used for that purpose; but when food demand drops the fields will grow crops for bio-fuels, instead.

The biggest obstacle for overseas purchasers is actually finding a farm to buy. With little debt and good growth enjoyed in recent years, British farmers have rarely been better placed. But there are some farms coming to the market as the weather improves in Britain in March and April, and the expectation is that there may be a scramble to purchase them.

These days, nothing can offer 100 per cent financial safety. But farmland has been a traditional hedge in times of economic uncertainty – and so it is proving now.

- Graham Norwood is a property correspondent for The Observer.

[sumisu]

What You Need to Know About the Stimulus
When -- and how -- you will get your share of the money.

By Kevin McCormally, Editorial Director, Kiplinger.com

February 23, 2009

http://www.kiplinger.com/features/archives/2009/02/how-to-get-stimulus-money.html

Four key provisions of the massive stimulus package will put money directly into Americans' pockets: the Making Work Pay tax credit, a supercharged first-home buyers credit, a $25-a-week increase in unemployment benefits and a valuable subsidy for workers who lost their health insurance when they lost their jobs.

But the key question is WHEN you'll start seeing the money? Although many details are still up in the air, we can fill in the blanks.

Making Work Pay tax credit

This is the heart of the put-money-in-peoples'-pocket plan. The credit is worth $400 for a single taxpayer or $800 for a married couple who files a joint return (whether one or both of the spouses work). Yes, that's less than last year's rebates, which were worth $600 for singles, $1,200 for married couples, plus $300 for each dependent child younger than 17.

And, unlike last year's stimulus -- which was delivered via direct deposit to bank accounts or checks in the mail -- this year's "grease" for the economy will come in dribs and drabs through slightly higher paychecks for the rest of the year. The IRS produced revised tax withholding tables in record time, and employers are now scrambling to get new numbers built into their payroll systems. Once that is accomplished, workers will automatically enjoy higher take-home pay. You don’t have to do anything to get your money.

Some lucky workers will see extra cash in their paychecks in March; almost everyone should enjoy higher take-home pay by April.

In both 1992, when President George H.W. Bush ordered a cut in withholding, and in 2001, when President George W. Bush's tax cut triggered a midyear change, it took about six weeks for reduced tax withholding to goose paychecks. This time, because 12 months' worth of lower taxes have to be packed into the last nine months of the year, you can count on about $45 a month extra if you're single or a little less than $90 a month if you're married.

The tax credit, which is actually 6.2% of pay up to a maximum of $400 or $800, will show up on 2009 tax returns filed next spring. The idea is that reduced withholding now will jibe with reduced tax liability then, thanks to the credit.

We noted above that almost everyone would enjoy reduced withholding because both the credit and the reduced withholding to reflect it phase out at higher-income levels. The credit disappears as 2009 adjusted gross income (that’s basically taxable income before subtracting exemptions for yourself and your dependents and before subtracting your standard or itemized deductions) rises between $75,000 and $95,000 on a single return or between $150,000 and $190,000 on a joint return.

Double dipping. Although it's not certain, it appears that if both husband and wife work, each of you will enjoy $800 in reduced withholding during 2009, even though you'll get just one $800 credit when you file. That will cut your refund or hike your tax bill when you file next spring. If you want to avoid that, you can file a new W-4 form with your employer so that additional tax will be withheld from your checks.

Self-employed workers. The self-employed aren't subject to tax withholding, so there's no way to ratchet back withholding to pump up paychecks. But you're not out of luck. You can reduce your quarterly estimated tax payments (the first one is due April 15) by $100 each quarter if you're single or $200 each quarter if you're married. You do that when you file your 1040-ES forms during the year. Claiming the credit next spring will bring your tax bill down in line with your reduced payments.

Retirees. In the first version of the stimulus bill, retirees were left out in the cold; only folks who were still working qualified for the Making Work Pay credit. But by the time President Obama signed the legislation into law, Congress added a one-time $250 payment for pensioners. The money (electronic deposits to those who get their benefits direct deposited and checks to the rest) will go to recipients of Social Security and Railroad Retirement benefits, Supplemental Security Income and veterans pensions. Retired government employees who don't receive Social Security will also get $250. If you're married and file a joint return and both husband and wife qualify, you'll get $500.

What if one spouse is retired and the other still is working? The worker will enjoy $800 in reduced withholding, and the retiree with get the $250 payment ... but the couple's credit next year will be just $550. Effectively you'll wind up paying back $250 delivered by lower withholding via a higher tax bill or reduced refund in the spring of 2010.

These payments will likely go out starting in May. The law says they must be made by June 17.

First-time home buyers credit

The new law makes a huge change in this powerful credit. People who bought first homes after April 8, 2008, and before the end of the 2008 get a $7,500 credit on their 2008 tax return. The trick is that the credit has to be paid back over 15 years starting with 2010 tax returns. You'll get your $7,500 now ... and add $500 to your income tax bill each year between 2010 and 2025.

Folks who buy first homes between January 1 and November 30, 2009, get an $8,000 credit -- and they never have to pay it back (unless they sell within three years of the time they buy the house).

And, get this: It really doesn't have to be your first home. You qualify for this tax break if you haven't owned a home for at least three years. The right to claim the credit is gradually phased out as adjusted gross income rises from $75,000 to $95,000 on a single return or $150,000 to $170,000 on a joint return.

Qualifying taxpayers claim the credit (10% of the house price up to a maximum of $7,500 for 2008 buys and $8,000 for 2009 purchases) on Form 5405. This should put money in your pocket within weeks of the time you file your tax return. If you owe more tax with your return than your credit amount, it will instantly reduce your tax bill dollar for dollar. If you owe less than your first-time homebuyer's credit, you'll get the balance via a tax refund. Filing your return electronically and having the refund directly deposited to your bank account is the fastest way to get your money.

What if you bought in 2009 and filed your return before the credit was bumped from $7,500 to $8,000? Don't worry, you can get the extra $500 by filing an amended return. Wait until you get your refund from the first return, then file a form 1040X to claim the final $500.

Extra $25 a week for the unemployed

The new law extends the period for which workers who have lost their jobs can collect unemployment benefits and adds $25 a week to those checks.

The increase will appear as early as next week in some states -- Indiana for one -- and early in March in other states. In Illinois, for example, where unemployment benefits range from a minimum of $66 a week to a maximum of $534, the additional $25 a week will go into checks in the first week of March, according to Greg Rivara of the state's department of employment services.

You don't have to make any special application for the increased benefit. The $25 should automatically be added to your checks. Although states set their own rules for how much the unemployed receive, the $25-a-week boost applies in all 50 states and the District of Columbia.

The new law also makes up to $2,400 of unemployment benefits tax-free. If you received jobless pay in 2008, however, the full amount is still taxable on your 2008 return. The new break applies only to benefits received in 2009.

Subsidy for COBRA health insurance

The new law adds a valuable benefit for workers who lost their health insurance when they lost their jobs. A federal law called COBRA generally requires companies with at least 20 employees that offer health insurance as a fringe benefit to continue to offer coverage to workers who leave or lose their jobs. Relatively few employees take up their former bosses on this deal, though, because of the high cost of COBRA coverage. While employers often pay two-thirds or more of the cost of health insurance for their employees, in most cases an ex-employee has to pay 100% of the cost, plus a 2% administrative fee.

But the new law rides to the rescue. For employees involuntary terminated (other than for gross misconduct) from September 1, 2008, through December 31, 2009, the federal government will pick up 65% of the COBRA tab. If you would otherwise have to pay $1,200 a month for family coverage under COBRA, for example, your cost will drop to $420; the feds will pay the other $780. Because the subsidy can last for as long as nine months, this would be worth more than $7,000 in this example.

If you're paying for COBRA coverage now, your premiums should fall in March. Employers actually have to pay the 65% federal share, then recover their outlays by reducing their tax payments to the government.

Normally, you have to elect COBRA coverage within 60 days of the time you leave a job. But, folks who lost their jobs since last September and did not opt for coverage get another bite at the apple. Employers are required to locate eligible ex-employees and give them up to 60 days to sign up for COBRA at the reduced price.

As with so many tax breaks, there is an income cap for this subsidy. If your income for the year exceeds $145,000 if you're single or $290,000 if you're married, you have to report any COBRA subsidy received as taxable income. (Of course, that's still a lot better than having to pay the full premium yourself). If income exceeds $125,000 on a single return or $250,000 on a joint return, at least part of the subsidy will be considered taxable income.

[sumisu]

>Nothing. Bulldog Resources has been bought out [made a great profit] and I use this board for items that I want to readily access.

You might want to see #board-9881 for sustainable living articles.

sumi

[rt20]

Nice post!!!

What's it got to do with this board?? lol

[sumisu]

Creating a cottage garden

by Rosalind Creasy

Published Feb 23 2009 by Dave Smith, OrganicToBe.org
Archived Feb 23 2009

http://www.energybulletin.net/node/48153



From Rosalind Creasy (1985)
Edible Landscaping

The early Puritans left their mark on us in a number of ways, some of which make life a series of joyless tasks. Sometimes I think their devotees must write garden books. The tone of many of the how-to books reeks of rules, admonitions, and dicta. How about a garden that is programmed to give you joy, to take care of you? The cottage garden is an outright celebration of what a garden can do for every part of you: colors to see, textures to touch, fragrances to smell, bird calls to hear, and myriad tastes for the palate. And, of course, we can’t forget the most important part, your soul. You will experience the renewal of life, that primordial urge to believe in the future. You will put your fingers on the emerging carrot seedlings, anticipate the taste of the first tomato, and feel delight when the hummingbird visits the sage and the monarch butterfly sips from the dew collected by the nasturtium leaf.

I am suggesting that you plant a rather hedonistic variation of the traditional mixed border. Put it where you usually see a conventional shrub or flower border—along a fence line for instance, or along a walk or driveway, next to the patio, or along shallow hillsides. Fill it with joy, with colors, tastes, fragrances and even tactile pleasures—a swath of flowers and foliage.

The mixed border, sometimes called the perennial border since it usually includes a large number of perennially blooming plants, has been in fashion since the late nineteenth century. It has its roots in the English cottage garden, and, at its best, the border is a subtle work of form, texture, and color—all used to together to delight the soul. Properly planned, the border changes with the seasons.

Traditionally the staples in the mixed border were non-edible flowers, mostly perennials, with a sprinkling of annuals for quick color. Popular perennial flower choices for this type of ornamental border were iris, peony, phlox, dalia, dais, chrysanthemum, poppy, and the like. A new variation in today’s perennial border is the addition of beautiful edibles such as ruby chard and flowering kale; plus a number of savory and attractive herbs such as variegated sage and dill; edible flowers such as nasturtium and carnation for your salads and desserts; and, to add still another dimension, fragrance, choose sweet-smelling lavender and stock. For many more choices, see the lists of flowers and beautiful edibles below.

Think of the pleasure these gardens can give. Imagine having your barbecue on the back patio surrounded by bright borders of nasturtiums, violas, geraniums, and many herbs and edibles. You could reach over and pick a few leaves of spicy basil to put on your guest’s still-warm tomato slices. Then you could harvest some of the nasturtium and viola flowers to add zip to your salad. Throughout the meal the fragrance of alpine strawberries would hint of the dessert to come, and the light fragrance of peppermint geraniums and lavender would perfume the air.

Your cottage garden could be near the front walk to welcome guests with fragrance and color. Or if your space is limited, you could even plant your pleasure border in the strip between the street and the sidewalk.

In planning your pleasure border, keep in mind these simple guidelines:


1. Make the border less than three feet wide or provide a path or access on both sides of the beds so you’ll be able to pick flowers and edibles and perform maintenance tasks.

2. Choose plants that require the same soil, water, and exposure.

3. If you are covering a large area, your design could depend on large quantities of one or two types of plants to unify the border, to create a theme to pull the border together for the eye.

4. There are two ways to work with color in these flower borders: (1) you can limit yourself to three or four basic colors, with one of them serving as an accent (for example, use red, orange, and yellow with an accent, a dash of blue); or (2) work with variations on one color theme (combining blues, lavenders, and pinks, for instance). Or throw caution to the wind, put in your favorite plants, and see what happens. Some people think that all flowers go well together, others don’t; it seems to be a matter of personal taste.

5. Think about the height your plants will be when they are full-grown. Consider height as a distinct design element; thus, tall plants will be at the back of the border while shorter ones will be toward the front.

6. Try to choose as many “double-duty” plants as you can; that is, choose those that have both colorful flowers as well as edible or fragrant flowers.

7. Choose attractive varieties of edibles for your border. Some vegetables and some varieties of vegetables are not particularly suited to a mixed border. For example, large vining squashes and pumpkins usually climb all over their neighbors; brussels sprouts usually get top-heavy and rangy with age; potatoes need to die back and turn yellow before they can be harvested. (See the list of suitable edibles below.)

Caution: Because, for the most part, you are using edible plants and flowers to fill these borders, exclude ornamental plants that are poisonous. Poisonous flowers you might be tempted to use but should avoid are sweet peas, autumn crocus, bleeding-heart, foxglove, lantana, and larkspur.



Planning and Preparation

“Choose a sunny area where you would like to see your pleasure garden. Then envision the area as a three-dimensional painting or a colored sculpture—with lots of textures, colors, and shapes. Only what you are creating grows! The fact that you are creating a work of living art adds a whole dimension of chance and excitement to the creation.” So says Kate Gessert, an experienced pleasure gardener and author of the book The Beautiful Food Garden. Unlike many food gardeners, she has been interested not only in how vegetables and fruits grow and taste, but also in how those edibles look in the garden. In fact, she was so interested that she managed a test plot of over one thousand varieties of annual vegetables at Oregon State University. As overseer, she evaluated the ornamental aspects and tastiness of the plants and included much of the information in her book. In an effort to share her experience and her vision of a pleasure garden, she has put together the following comments and recommendations:

“When you put in your pleasure garden, first, make sure that you have chosen a sunny, well-drained site. Next, incorporate plenty of organic matter; healthy plants are beautiful and productive plants.

“I love the way gardens are when various kinds of plants are all mixed together. I enjoy working in these gardens, being in the middle of them, looking out into a forest of deeply cut zucchini leaves, big round seed heads of leek, graceful, sweetly scented lily heads of lily flowers, and rampant caged tomatoes.

“I also enjoy the planning process, dreaming in winter and spring about what we’ll grow the next season. In particular, I enjoy planning the flower-vegetable-herb bed that we plant in front of our house in the planting strip between the sidewalk and the street.

“In spring, after working in plenty of organic matter, I sowed kale, leeks, and parsnips. Later, I added rhubarb chard, celery, and chrysanthemums, with short-term fillers—coriander, lettuce, and California poppies. These were replaced in late summer by carrots and ornamental kale, which really came into full color after the first frost. That fall the rhubarb-chard leaves turned a deep mahogany, and nearby were the yellow and red chrysanthemums and the bright green foliage of parsnips and carrots. In another part of the bed I used cooler colors: grayish foliages and pink and purple flowers. With the purple-leaved ‘Coral Queen’ flowering kale, I planted ‘Fragrance’ carnation, burnet (a cucmber-flavored herb with a rosette of delicate blue green foliage), fall ‘Violet Carpet’ aster, ‘Dwarf Blue Scotch’ curly kale, leeks, artichokes and wine red and lavender chrysanthemums. The combination was spectacular!

“Now it’s late fall, and we’re mulching the borders and planting spring bulbs. Already we are planning next year’s pleasure; we will enjoy snowdrops near the burnet, ornamental alliums near the leeks, and iris reticulata near the ruby chard.”

Look at the accompanying plans and pictures of the bed Kate designed. In particular, notice the arrangement of the different plants. The vegetables such as leeks and carrots, which you usually associate with long, straight rows, are clumped together instead. Nowhere is it written that vegetables have to grow in straight rows. In fact, that is not usually the most productive configuration. Straight rows have met the cultural needs of agriculture and its equipment, but the home gardener can produce more food per square foot by using wide rows or clumps. As Kate says, “Ornamental plants seldom look their best in long, straight rows—picture tulips or daffodils planted that way. Vegetables look best in clusters and arranged in pleasing shapes.”

Choose your pleasure plants from the list that follows. On the list there are plants that give fragrance, taste, and a bounty of color and texture. Some of the flowers are edible and are delightful in salads or floating on a clear soup; many of the flowers are suitable for cutting and drying. Think how nice it will be to save money on flower buying, as well as to give bouquets that don’t have a “canned” appearance, as so many purchased ones do. And they’re always the same varieties of flowers. Your bouquets will have an individual touch that reflects you, not the florist. Check to make sure that the flowers and vegetables you choose grow well in your area.



1. Alyssum
2. Asparagus, interplanted with kochia in the summer
3. Coreopsis, ‘Brown Eyes’
4. Dahlia, ‘terpo’
5. Artichoke, ‘Green Globe’
6. Chrysanthemum, lavender and burgundy red, interplanted with ‘Barrett Browning’ narcissus in the fall
7. Anemone, ‘Max Vogel’
8. Dahlia, pink
9. Clarkia in the spring; Zinnia linearis in the summer
10. Helenium, ‘Butterpat’; interplanted with ‘Carbineer’ narcissus in the fall
11. Swiss chard, ‘Rhubarb’
12. Chrysanthemum, ‘Freedom’
13. Parsnip, ‘Hollow Crown Improved’
14. Bunching onion, ‘Japanese’
15. Kale, ‘Dwarf Blue Curled Vates’
16. Leek, ‘Unique’
17. Celery, ‘French Dinant’
18. Chrysanthemum, ‘Fireside’
19. Lettuce, ‘Red Salad Bowl’ in the spring; ‘Portola Giant’ gaillardia in the summer
20. Sage, ‘Joseph’
21. Sage, ‘Broadleaf’
22. Viscaria, ‘Maggie May’, in the spring; ‘Coral Queen’ flowering kale in the late summer
23. Aster, ‘Violet Carpet’; interplanted with snowdrops in the fall
24. Petunia throughout the summer; interplanted with ‘Minnow’ narcissus in the fall
25. Coriander in the spring and summer; ‘Early Red Ball’ beets in the late summer
26. California poppy, ‘Sundew’; ‘Royal Chantenay’ carrots in the late summer
27. Thyme, ‘Dwarf Compact’
28. Carnation. ‘Fragrance’, interplanted with Iris reticulate in the fall
29. Burnet
30. Thyme, creeping






~
See also Rosalind’s More Food, Less Lawn - Saving Money With An Edible Landscaping Plan
and Seed Saving and the Heirloom Vegetable Garden
~
Certified Organic Seeds and Plants available from Seeds of Change.

Rosalind Creasy is author of Rosalind Creasy’s Recipes From The Garden: 200 Exciting Recipes from the Author of the Complete Book of Edible Landscaping and many others.
Excerpted from: Earthly Delights, by Rosalind Creasy, 1985
Images Credit: Rosalind Creasy
OrganicToBe.org | OrganicToGo.com

[sumisu]

BOSTON WORLD OIL CONFERENCE

10 25 06 - 10 28 06



ASPO-USA positions itself to be a big player

By Michael Kane, FTW Energy Affairs Editor

http://fromthewilderness.com/members/103006_boston_oil.shtml

[sumisu]

Newton's stature jeopardized by fiscal reality

Panel says city must change to maintain level of services

By Rachana Rathi

Globe Staff / February 18, 2009

http://www.boston.com/news/local/massachusetts/articles/2009/02/18/newtons_stature_jeopardized_by_fiscal_reality/?s_campaign=8315

For decades, Newton has enjoyed an enviable reputation for good schools, leafy parks, and close proximity to Boston. Sure, taxes are high, but the schools are considered among the best in the Commonwealth.

Now, a new committee is telling residents that their city is not as great as it used to be.

Students are facing the prospect of underfunded technology, higher fees, and larger class sizes.

The capital budgeting process is "arcane" and the city does a poor job of communicating its priorities to the public, the panel said.

"This, in our judgment, is a city without goals," Malcolm Salter, chairman of a 14-member Citizens Advisory Group, told the Board of Aldermen last week. "The process is insulated from the general public" and "reactive rather than proactive."

Salter, a professor emeritus at Harvard Business School, led the process for the group, which spent several months preparing in-depth reports about how Newton measures up to other communities, articulating choices facing the city, and identifying ways it can bridge the growing gap between its revenue and expenses.

In many respects, the city's problems are similar to communities all over Massachusetts, but the news is jarring in Newton, where residents accept paying an average tax bill of $8,043 in exchange for living in a city with a reputation for top-notch services and schools.

The five reports - 464 pages so far, and still unfinished - arrive as Newton readies for city elections that will bring in a new mayor to replace David B. Cohen, who is leaving office after three terms. The city has been in the headlines because the $195 million high school it is building is the most expensive school ever constructed in the state.

The citizens' group says the city would have to spend millions more to take care of its other poorly maintained school buildings and roads, while continuing to meet the high expectations of its residents. But, members of the group say, the city's economic model is not sustainable, and therefore residents face a choice: raise enough money to meet expectations or learn to live without some services.

When group member and Canton schools Superintendent John D'Auria said in a meeting that Newton schools are on a "downward slope," some School Committee members were surprised and objected.

"I don't accept that we're on a downward trajectory," said School Committee member Dori Zaleznik in a phone interview. "Most communities in Massachusetts would still give their eye teeth to be Newton."

The citizens' group found that when compared with other cities with similar demographics, Newton pays its teachers higher salaries and serves more children in special education and the Metco program, which buses urban students to suburban school districts. All of these are points of pride in Newton, and underscore the group's point that Newton residents have high - and costly - expectations for their city.

But the Citizen Advisory Group says Newton cannot sustain its level of services unless it makes changes.

The school system, for instance, is facing a growing financial gap. To maintain services, the district needs to increase revenue by 5.9 percent a year. The city's revenue has been growing at about 3.9 percent over the last five years. About 84 percent of the school budget is costs related to people - salaries and benefits.

For long-term financial sustainability, the citizens' group says, Newton needs to look at changing the educational model. One possibility it mentioned was relying more on technology, and less on personal interaction between teachers and students, where appropriate. Another is to hire a chief financial officer to develop a vision.

In the short term, the School Committee can find savings by measures such as outsourcing its school lunch program, controlling utility costs, reducing use of school buses, and increasing bus fees - moves that might not be popular with the parents who elect them.

"We recommend you make them," said Ruthanne Fuller, vice chairwoman of the group, to the School Committee. "But I'm not elected."

"And may never be," responded one School Committee member to laughter.

Therein lies the problem - a sound business decision might not be a good political one.

"The political process directs decisions toward the short term and toward needs that are obvious," said Fuller, a Harvard Business School graduate and strategic planner for nonprofits. "They need to think of the long term. And that may not get them elected again."

And raising property taxes may not be an option in the near future given the state of the economy. Last May's $12 million override request failed.

"Are these things going to be fixed on the backs of homeowners alone? I don't think so. . . . We all need to take a step back and look a little broader," said group member Laura Thompson to the Board of Aldermen last week.

In its revenue report released in November, the group said Newton's choices are "more profound than simply increasing revenues or reducing costs. Rather we must consider reductions in the historic scope and scale of municipal and educational services."

"If voters' recent rejection of the property tax override ballot question suggests limited support for increasing revenues through tax increases, then Newton's residents and their elected leaders must make these difficult choices," the report said.

At a meeting last week, Newton's elected leaders said they intend to study the findings further, then take action.

But some officials were quick to point out that they were forced to make choices because of state mandates.

When Salter said Newton has historically underfunded maintenance of the city's roads and buildings to the point that they are in disrepair, an aldermen said it was a result of Proposition 2 1/2, which caps the additional property tax revenue a community can raise yearly at 2.5 percent.

Salter and Fuller were clear that their directive was not a full-scale evaluation of the city's services and educational system, and their reports stopped short of making any sweeping statements.

But Fuller said they did see "signs of erosion" in the school system, supporting the belief of some residents that Newton is riding on perception.

"We've been living on our reputation," Jeff Seideman, a local tax advocate and Board of Aldermen candidate, said in a telephone interview. "There's been a constant chipping away at the services and infrastructure for quite a few years."

Seideman said the contracts Newton negotiates with its unions, the teachers' union in particular, will have a measurable impact on the city's future because employee salaries make up the bulk of Newton's expenses.

Fuller said residents will have an opportunity to that end with the mayoral and municipal elections this fall - to choose leaders with a vision geared toward long-term financial sustainability.

Also, the group says the city needs to involve employees in simplifying operations on the municipal side, and finding innovative solutions on the schools side.

"We're at a turning point here," Fuller said. "We have to be very creative and thoughtful about how we go forward, or we're going to leave a legacy to future Newton residents of a weaker city."

Rachana Rathi can be reached at [e-mail].

[sumisu]

The Day the Earth Still Stood

posted by Tom Engelhardt

01/20/2009 @ 3:47pm

http://www.thenation.com/blogs/notion/399749/the_day_the_earth_still_stood?rel=hp_currently

[sumisu]

'Atlas Shrugged': From Fiction to Fact in 52 Years

JANUARY 9, 2009

By STEPHEN MOORE

THE WALL STREET JOURNAL

http://online.wsj.com/article/SB123146363567166677.html

Some years ago when I worked at the libertarian Cato Institute, we used to label any new hire who had not yet read "Atlas Shrugged" a "virgin." Being conversant in Ayn Rand's classic novel about the economic carnage caused by big government run amok was practically a job requirement. If only "Atlas" were required reading for every member of Congress and political appointee in the Obama administration. I'm confident that we'd get out of the current financial mess a lot faster.



The art for a 1999 postage stamp.[Getty Images]

Many of us who know Rand's work have noticed that with each passing week, and with each successive bailout plan and economic-stimulus scheme out of Washington, our current politicians are committing the very acts of economic lunacy that "Atlas Shrugged" parodied in 1957, when this 1,000-page novel was first published and became an instant hit.

Rand, who had come to America from Soviet Russia with striking insights into totalitarianism and the destructiveness of socialism, was already a celebrity. The left, naturally, hated her. But as recently as 1991, a survey by the Library of Congress and the Book of the Month Club found that readers rated "Atlas" as the second-most influential book in their lives, behind only the Bible.

For the uninitiated, the moral of the story is simply this: Politicians invariably respond to crises -- that in most cases they themselves created -- by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.

In the book, these relentless wealth redistributionists and their programs are disparaged as "the looters and their laws." Every new act of government futility and stupidity carries with it a benevolent-sounding title. These include the "Anti-Greed Act" to redistribute income (sounds like Charlie Rangel's promises soak-the-rich tax bill) and the "Equalization of Opportunity Act" to prevent people from starting more than one business (to give other people a chance). My personal favorite, the "Anti Dog-Eat-Dog Act," aims to restrict cut-throat competition between firms and thus slow the wave of business bankruptcies. Why didn't Hank Paulson think of that?

These acts and edicts sound farcical, yes, but no more so than the actual events in Washington, circa 2008. We already have been served up the $700 billion "Emergency Economic Stabilization Act" and the "Auto Industry Financing and Restructuring Act." Now that Barack Obama is in town, he will soon sign into law with great urgency the "American Recovery and Reinvestment Plan." This latest Hail Mary pass will increase the federal budget (which has already expanded by $1.5 trillion in eight years under George Bush) by an additional $1 trillion -- in roughly his first 100 days in office.

The current economic strategy is right out of "Atlas Shrugged": The more incompetent you are in business, the more handouts the politicians will bestow on you. That's the justification for the $2 trillion of subsidies doled out already to keep afloat distressed insurance companies, banks, Wall Street investment houses, and auto companies -- while standing next in line for their share of the booty are real-estate developers, the steel industry, chemical companies, airlines, ethanol producers, construction firms and even catfish farmers. With each successive bailout to "calm the markets," another trillion of national wealth is subsequently lost. Yet, as "Atlas" grimly foretold, we now treat the incompetent who wreck their companies as victims, while those resourceful business owners who manage to make a profit are portrayed as recipients of illegitimate "windfalls."

When Rand was writing in the 1950s, one of the pillars of American industrial might was the railroads. In her novel the railroad owner, Dagny Taggart, an enterprising industrialist, has a FedEx-like vision for expansion and first-rate service by rail. But she is continuously badgered, cajoled, taxed, ruled and regulated -- always in the public interest -- into bankruptcy. Sound far-fetched? On the day I sat down to write this ode to "Atlas," a Wall Street Journal headline blared: "Rail Shippers Ask Congress to Regulate Freight Prices."

In one chapter of the book, an entrepreneur invents a new miracle metal -- stronger but lighter than steel. The government immediately appropriates the invention in "the public good." The politicians demand that the metal inventor come to Washington and sign over ownership of his invention or lose everything.

The scene is eerily similar to an event late last year when six bank presidents were summoned by Treasury Secretary Hank Paulson to Washington, and then shuttled into a conference room and told, in effect, that they could not leave until they collectively signed a document handing over percentages of their future profits to the government. The Treasury folks insisted that this shakedown, too, was all in "the public interest."

Ultimately, "Atlas Shrugged" is a celebration of the entrepreneur, the risk taker and the cultivator of wealth through human intellect. Critics dismissed the novel as simple-minded, and even some of Rand's political admirers complained that she lacked compassion. Yet one pertinent warning resounds throughout the book: When profits and wealth and creativity are denigrated in society, they start to disappear -- leaving everyone the poorer.

One memorable moment in "Atlas" occurs near the very end, when the economy has been rendered comatose by all the great economic minds in Washington. Finally, and out of desperation, the politicians come to the heroic businessman John Galt (who has resisted their assault on capitalism) and beg him to help them get the economy back on track. The discussion sounds much like what would happen today:

Galt: "You want me to be Economic Dictator?"

Mr. Thompson: "Yes!"

"And you'll obey any order I give?"

"Implicitly!"

"Then start by abolishing all income taxes."

"Oh no!" screamed Mr. Thompson, leaping to his feet. "We couldn't do that . . . How would we pay government employees?"

"Fire your government employees."

"Oh, no!"

Abolishing the income tax. Now that really would be a genuine economic stimulus. But Mr. Obama and the Democrats in Washington want to do the opposite: to raise the income tax "for purposes of fairness" as Barack Obama puts it.

David Kelley, the president of the Atlas Society, which is dedicated to promoting Rand's ideas, explains that "the older the book gets, the more timely its message." He tells me that there are plans to make "Atlas Shrugged" into a major motion picture -- it is the only classic novel of recent decades that was never made into a movie. "We don't need to make a movie out of the book," Mr. Kelley jokes. "We are living it right now."

Mr. Moore is senior economics writer for The Wall Street Journal editorial page.

[sumisu]

UNINTENDED CONSEQUENCES
20th CENTURY & BEYOND
by James Quinn
January 5, 2009

http://www.financialsense.com/editorials/quinn/2009/0105.html

[sumisu]

The masters of the universe who cannot live with failure

Faced with losing their fortunes and their status, desperate financiers are being driven to take their own lives

Andrew Clark in New York guardian.co.uk,

Thursday 8 January 2009 15.49 GMT

http://www.guardian.co.uk/business/2009/jan/08/credit-crunch-suicide

One day, they have it all. The next morning, they don't. Sudden, dramatic slumps in fortunes caused by the credit crunch can take a tragic toll on high-flying businessmen accustomed to a life of success.

Germany's fifth richest man, the billionaire industrialist Adolf Merckle, this week threw himself under a train in an act blamed by his family on the "desperate situation" of his business empire, compounded with a sense of uncertainty and powerlessness. Merckle had lost hundreds of millions of euros on a speculative bet in Volkswagen shares.

His act was not an isolated case. There has been a trickle of self-inflicted deaths among financiers struggling to come to terms with heavy losses in a brutal, barely anticipated economic downturn.

At least six documented suicides in the financial industry have been linked to the credit crunch. Experts caution that suicide is never caused by a single factor – underlying mental health problems often play a role, as can substance abuse. But it has become clear that the recession is exacting a human toll.

"Some people have been so successful throughout their lives that they haven't learned through experience how to tolerate loss or failure," says Lanny Berman, executive director of the American Association of Suicidology. "Some people identify their sense of self so rigidly around the concept of success that loss of success – failure – can push them to despair very quickly."

Just days before Christmas, French fund manager Thierry de la Villehuchet was found dead at his desk in New York with slits on his arms. His firm, Access International Advisors, had lost more than $1.4bn of clients' money at the hands of the Wall Street financier Bernard Madoff, who has been accused of fraud. Villehuchet's brother Bertrand, who was the recipient of one of several suicide notes, described his death as an "act of honour" after "catastrophic" losses.

A Bear Stearns analyst, Barry Fox, jumped from the balcony of his 29th floor apartment last year within days of learning that he had lost his job at the bankrupt bank. His partner, Fred Philippi, said that after several personal setbacks, the bank's collapse had been the "last straw" in breaking Fox's spirit.

This week, the chairman of a leading US property brokerage was found with an apparently self-inflicted gunshot wound inside his car at a wildlife preserve near Chicago. Steven Good, chairman of Sheldon Good & Co, left no note and his reasons are as yet unexplained. But he recently spoke at a business conference of the tumultuous conditions facing the real estate industry.

As yet, there are no statistics to demonstrate whether suicide rates have been affected by the global financial crisis. But there are historical precedents – in the US, the rate of suicide reached an all-time peak of 17.4 deaths per 100,000 in 1933, at the height of the Depression.

Researchers say that unemployment has a "clear and direct" relationship with suicide. So does the loss of a home – a concern after a year in which US banks began foreclosure proceedings on more than 2m households.

Ronald Maris, director of the University of South Carolina's suicide research centre, invokes the French sociologist Émile Durkheim's concept of "anomie" – a condition of weakened social regulation during a crisis which leaves individuals feeling adrift.

"A recession can cause a lack of orderliness, a disruption in social control," said Maris, who argues that high-flyers can be particularly vulnerable.

"Their situation is more volatile, they've got a lot more to lose," says Maris. "It's the disruption, the change in lifestyle, the suddenness and abruptness of that transition."

The male-dominated culture of high finance does not help. Both in Britain and America, suicide is three times more common among men than among women, partly because depressed males are less willing to seek medical help. Women, in contrast, are more frequently involved in non-fatal suicide attempts.

The long-term suicide trend has been downward on both sides of the Atlantic. In Britain, the latest government figures showed that suicide dropped to an all-time low of 8.5 per 100,000 population in 2006. In the US, the equivalent rate was 11 per 100,000.

Aware of the danger of burn-out, many Wall Street banks offer confidential employee assistance programs for staff suffering from personal problems. These can include 24-hour helplines offering a referral service for anything from depression to alcoholism, substance abuse or legal problems.

But Alden Cass, a New York-based clinical psychologist who specialises in treating financial workers, says some are reluctant to use such services for fear that word could get back to their colleagues.

"There's a lot of foolish pride. As you go higher up the food chain, you're going to be more tight-lipped about problems and issues," says Cass, author of Bullish Thinking. "If you've lost a lot of money, there can be a sense of shame, of guilt and helplessness going on in peoples' minds."

A year ago, Cass noticed an increase of 25% to 30% in inquiries from frazzled traders and brokers. But the increase has tailed off, which he blames on money: "The money's not there any more for therapy; people are cutting back. Therapy, for a lot of people on Wall Street, is viewed as a luxury rather than a necessity."

In Britain last year, fund management boss Kirk Stephenson jumped in front of an inter-city train after struggling with pressure over the financial crisis's impact on his firm, Olivant Advisers. His wife, Karina Robinson, told an inquest jury that when the banking system seized up, he had become "very tense and worried about a lot of things he had worked hard for".

In certain cases, the credit crunch has exposed a longer term vulnerability. A San Francisco hedge fund manager, Eric Von der Porten, took his own life last month when his fund had dropped by more than 40% on the year. His family told the San Francisco Chronicle that he had struggled with bouts of deep depression in the past, but that the market had finally proven to be a "big trigger".

To some, losing money may seem an insufficient worry for an individual to take such drastic action. But the tipping point can come for any number of reasons according to the AAS.

"Prestige, employment, marital problems, bereavement - anything that happens to be important to that individual," says Berman. "If the individual is not able to balance themself when they fall, they may break."

[sumisu]

Madoff's Lessons For the Market



Wednesday, December 17, 2008; Page D01



http://www.washingtonpost.com/wp-dyn/content/article/2008/12/16/AR2008121602875.html

Yes, but is it good for the Jews?

That's the punch line of a long-running joke among those of us who grew up among Jewish parents and grandparents whose first reaction to almost any event would be to calculate how it would affect the tribe.

Looking at life through such a parochial lens is hardly unique to Jews, but for generations of Jews who were subject to various forms of persecution and discrimination, the instinct became ingrained. Arthur Goldberg to the Supreme Court: good. The espionage trial of Julius and Ethel Rosenberg: not so good. The "Godfather" movies breaking box-office records: good (puts spotlight on some other ethnic group). Sandy Koufax refusing to pitch a World Series game on Yom Kippur: bad (encourages anti-Semitism among Dodger fans).

For some, this instinct survives to this day. JTA, a Jewish news service, last week put out an upbeat story on the Blagojevich scandal in Illinois by noting that the governor's arrest has greatly improved the odds that Congresswoman Jan Schakowsky -- a Jew untainted by the scandal -- might be appointed to the Obama seat.

All of which brings us to Bernie Madoff -- "the Jewish T-bill" as he was known affectionately in Palm Beach and on Wall Street because of his reputation for delivering solid, reliable returns to his investors. The Madoff scandal is definitely not good for the Jews -- a shanda far die goyim, as my grandmother would have whispered in Yiddish so as not to upset us children. It's not only that this macher of the Jewish community may wind up holding the world indoor record for financial fraud with his alleged $50 billion Ponzi scheme. Even worse, many of his alleged victims were well-known Jews or Jewish philanthropic organizations, among them the Jewish Federation of Greater Washington, which placed about $10 million of its endowment with Madoff.

The fallout from the Madoff scandal extends well beyond Jews, however. It's also an unmitigated disaster for Wall Street, which already stood accused of using complex new financial instruments to create the worst financial and economic crisis since the Great Depression. With the Madoff story, it is now revealed that the masters of the universe aren't just too clever by half -- they're not clever at all. For years, they not only allowed themselves to be bamboozled by a con artist but also willingly and enthusiastically served as his market agent, offering friends, relatives and favorite charities the opportunity to invest with their good pal, Bernie Madoff. (So much for the idea that wealthy individuals and "sophisticated" institutional investors don't need the protection of government regulators.)

L'affaire Madoff has also revealed a dirty little secret about a corner of the hedge-fund world known as funds of funds. These are hedge funds that raise money from pension funds, university endowments and wealthy individuals and, for a fee of 1.5 percent a year, invest it in other hedge funds, which charge even higher fees. In return for paying double fees, these middlemen claim to offer investors access to the best hedge funds, which can be choosy about whose money they accept. They also offer the peace of mind that goes with knowing that the funds have been thoroughly checked out.

Now it turns out that some of these funds of funds had parked billions of dollars of their clients' money with Madoff without asking how he could so consistently produce returns in up market or down, or demanding to know why his books were audited by a three-person firm that nobody ever heard of operating out of a broom closet on Long Island. Britain's Man Group, Spain's Banco Santander and Switzerland's Union Bancaire Privee all had funds of funds that lost big money with Madoff. But none put more faith in Bernie than Ascot Partners, a fund of funds run by J. Ezra Merkin, who invested virtually all of the $1.8 billion that had been entrusted to him with Madoff, a close friend and fellow trustee of Yeshiva University.

It will be a while before the full story behind Madoff's scheme finally comes out. But it is already possible to see that this is just the most recent case of a financial disaster that could have been avoided if the professional gatekeepers had done their job.

That was certainly the story behind the failures of Enron, WorldCom and the other blowouts from the stock market bubbles, when auditors allowed their desire to preserve lucrative consulting contracts to warp their judgment and override their concerns about how these companies were keeping their books.

In the more recent fiasco involving mortgage-backed securities, collateralized debt obligations and credit-default swaps, it was the failure of the rating agencies to adequately assess the risks of complex securities that led to massive losses for investors who thought, or wanted to believe, that they were buying AAA paper. And in Madoff's case, there seems to be little doubt that competent and uncompromised auditors would have quickly discovered that the firm's investment arm was paying out returns it didn't earn.

It doesn't take a PhD in finance to see the pattern here: Accounting firms and rating agencies are too easily compromised by the fact that they are chosen and paid by the management of the companies whose books they are auditing and securities they are rating. There are simply too many built-in conflicts of interest.

The solution is equally obvious: turn these firms into something akin to a regulated public utility. For any public company or investment fund, or for any newly issued security, auditors and raters should be assigned by exchanges or regulators at random and on a rotating basis. The firms would be paid from the proceeds of a small tax on transactions and new issues, based on rates competitively bid at the beginning of each year. Those firms that make serious mistakes would be subject to significant fines; those that screw up more than that would lose their licenses.

As you might expect, the accounting firms and ratings agencies hate this idea and conjure up all sorts of reasons -- a few of them credible, most of them bogus -- why the system should remain pretty much as it is. What they don't offer is any remedy more credible than "It wasn't our fault, but we won't let it happen again." The vehemence of their opposition probably correlates pretty well with the degree to which their interests are no longer aligned with those of the investing public.

After a decade of these scandals, something needs to be done to restore the public's faith in financial markets. The quickest way to do that is to assure the competence and independence of the system's gatekeepers. That would be good for Wall Street, good for investors and good for companies in desperate need of capital. My guess is that it would also be good for the Jews.

Steven Pearlstein will host a Web discussion today at 11 a.m. on http://washingtonpost.com, where he is also moderator of a new Web site, On Leadership. He can be reached at [e-mail].

[sumisu]

The History of Postage Rates in the United States

http://www.akdart.com/postrate.html

[sumisu]

Mailing Our Way to Solvency

By MICHAEL LIND

Published: October 5, 2008



http://www.nytimes.com/2008/10/06/opinion/06lind.html?_r=1&partner=rssuserland&emc=rss&pagewanted=all

AMERICA’S financial landscape is changing before our eyes. The absorption of major Wall Street investment banks by commercial banks threatens to create colossal universal banks that are too big to fail and might need to be bailed out in the future. Meanwhile, the structure of public and private finance in the United States chronically fails to address four problems: the almost 10 percent of Americans without a bank account; the concerns of all Americans about the security of their savings; the growing indebtedness of the country to foreign governments and financial institutions; and underinvestment in public assets like sewer systems and bridges.

These four problems may seem unrelated. But they can be addressed in the United States, as they have been in similar countries, by a single institution that is at once new and old: the postal savings bank.

Britain created the first postal savings bank in 1861, and by the early 20th century many other nations had postal savings bank systems. The details vary among countries, but the idea is simple: use the one government institution that can be found in most neighborhoods and rural areas — the post office — to encourage small savings and a habit of thrift.

Well, we don’t do things that way in America, you might object. On the contrary — we did! In 1910, Congress created a postal savings system. The Post Office offered small savings accounts to individual Americans. The system boomed during the Depression and World War II, with a balance of more than $3 billion in 1947 — almost $30 billion in today’s dollars.

But F.D.I.C. insurance of private bank accounts removed the advantage of security from the postal savings system, and its fixed 2 percent interest rate was uncompetitive. By 1966, deposits had fallen to $344 million (still more than $2 billion when adjusted for inflation) and Congress voted to abolish the system.

A new postal savings system should be part of America’s post-meltdown financial architecture. When Congress created the postal savings system nearly a century ago, one of its goals was to encourage savings among the large number of low-income immigrants. A new system would help today’s immigrants as well as the native poor. Banks are not interested in people with so little money, many of whom are preyed upon by payday lenders and credit card companies.

A postal bank could also supply middle-class and affluent Americans with an extra layer of financial security. The accounts would be limited to a small amount per person. They would provide a government-guaranteed, low-risk, low-return investment, even for those who put most of their financial assets in conventional bank accounts and the stock market.

Non-Western countries like Japan and India have used postal savings systems to reduce their economic dependence on foreign investors. What better way to reduce the dependence of the United States on Asian banks and petrostate sovereign wealth funds than a system that pools the modest savings of ordinary Americans to pay down the national debt?

A revived postal savings bank, in addition to holding much of the national debt, could provide a purely domestic source of savings that could be tapped by a national infrastructure bank. There is growing support for such a government-chartered institution, which could borrow money to modernize roads, power grids and sewage systems; according to one estimate, we need $1.6 trillion over five years. That money is unlikely to come from Congress.

Japan’s postal savings bank, privatized during the heyday of market fundamentalism a few years ago, was criticized because it encouraged too much saving and too much investment in infrastructure. If only the United States had such problems!

When the financial crisis has passed, Americans will need to rebuild our financial system. A new postal savings system should be part of the plan.

Michael Lind is a fellow at the New America Foundation, where he directs the American Infrastructure Initiative.


A Scout Is Thrifty: 1913

Submitted by Dave on Tue, 10/28/2008 - 7:03pm.

Tags: ShorpyArt Boy Scouts Harris + Ewing

http://www.shorpy.com/node/4779


1913. "Boy Scouts, postal savings; Scouts depositing." I know there's someone out there who can translate that. Harris & Ewing glass negative.

[sumisu]

Is it Inflation - or is it Deflation?

By Peter Degraaf

Nov 3 2008 3:56PM



http://www.kitco.com/ind/degraaf/nov032008.html

Almost daily I receive E-mails from subscribers who worry about deflation. Here is my simple answer: “Watch what they do – not what they say!”



The above chart (courtesy Federal Reserve Bank of St. Louis), is up-to-date. It reflects a monetary increase of 305 billion dollars into the US money supply in the short space of under 2 months. Nothing like this has ever happened in the USA before! The little bumps on this chart between August 2007 and August 2008 include Bear-Sterns, Northern Rock, Lehman Bros, Fannie and Freddie and AIG, yet none of those monetary shocks compare to what the FED is doing now.

This is inflation with a capital ‘I’!

Quite often when the monetary authorities inflate the system, it takes a while before the newly created funds filter down, and before people catch on. Large numbers of people believe what the officials are saying (communications like: “we’re more worried about deflation than inflation”).

They want you to believe that ‘asset inflation’ (lower prices for stocks and commodities) translates into monetary deflation. The two are quite different.

The current asset deflation is caused primarily by gross mistakes made by people in the banking industry. This ‘assets deflation’ continues while monetary authorities worldwide are adding to the money supply. Meanwhile fear then sets in and the decline in asset values continues till it exhausts itself.

As soon as enough people catch on to what is happening, scarce commodities, (and the stocks involved in bringing those commodities to the marketplace), will rise and rise much higher than most people anticipate.

It behooves those of us who understand what is going on, and to position ourselves to benefit from the rise to come by investing in gold, silver, oil, natgas, copper, coal, uranium and agricultural commodities. Just about anything that the government does not have the ability to produce. (Government’s specialty is cutting down trees into thin slices, adding some ink, superimposing a picture of a former ruler and adding a number, and voila their product is ready for circulation).



Featured is the weekly gold chart, courtesy (http://www.stockcharts.com) The call-out boxes on the chart represent the ‘net short’ gold positions of the commercial traders. The report issued October 31st showed a decrease of 162,000 from the 247,000 at the top, to the current 85,000. This is where corrections end, and the next rise begins.

Price has found support just above the 200 week moving average (rising red line), and the target for this next advance in the gold price will be a challenge at the previous high of 1,030.00 attained in March 2008.

The RSI (top of chart) is turning positive, and the MACD (bottom of chart) is very much oversold at -.32 (the most oversold since the bull market began in 2001. In order to make a profit in any investment, it makes sense to ‘buy low and sell high’. The time to buy low is at the bottom of a correction. The seasonal tendency is for gold to bottom in July – August and again in November. So here we are, just in time for the annual Christmas rally. If we are not at the exact bottom, we are no doubt very close.



Featured is the LIBOR chart, courtesy (www.stockcharts.com)

The watershed drop in assets that we saw in September and October was to a large extent fueled by the rising LIBOR rate. This rate reflects the trust or lack of trust, which banks have in so far as inter-bank lending is concerned. Near 4.6% all lending ceases. The rate is slowly returning to normal, as is the Ted Spread which opened today at 2.65 after having risen to 4.34 on Oct 15th. Investors around the world were spooked by the rising LIBOR and Ted Spread rates and began to sell just about everything, including commodities. With some degree of normalcy now returning to the markets, we can expect those items that have become ‘oversold’ to begin to bounce back, and after a while the commodities that I referred to in the opening section of this article to outperform everything else.

Please remember that the ‘real rate of interest’ (T-Bills less CPI), remains very negative. As long as the rate is negative, gold can and will rise (with hiccups in between).

Happy trading!

Peter Degraaf

[sumisu]

Devolution Now?

http://news.goldseek.com/EmergingGrowthStocks/1224860400.php

[sumisu]

Chicago Fed National Activity Index (CFNAI)

http://www.chicagofed.org/economic_research_and_data/cfnai.cfm

[sumisu]

Peak oil: are we there yet?

Friday, June 20, 2008

http://www.creditwritedowns.com/2008/06/peak-oil-are-we-there-yet.html

[sumisu]

The Five Tibetan Rites: Exercises for Healing, Rejuvenation, and Longevity

By Mary Kurus

Copyright Mary Kurus 2001, All Rights Reserved

http://www.mkprojects.com/pf_TibetanRites.htm

[sumisu]

Retirement: Reality or Mirage?

Challenges in a changing world

BY TONY ALLISON

06 23 08

http://www.financialsense.com/Market/wrapup.htm

Baby Boomers, and even succeeding generations, need to be looking at their retirement years with eyes wide open. In a rapidly changing world, “hoping for the best” is not a viable strategy. For millions of unprepared Americans, retirement may prove to be more mirage than reality. The following is one of a continuing series of retirement-themed essays outlining potential risks to avoid and necessary preparation for a successful retirement.

Risks to a stress-free retirement

There are many risks lurking in the weeds to derail one’s retirement dreams. There have always been risks of course, but today’s global economy pushes the risks to a higher level. The US is no longer the world’s economic giant, dominating global commerce. Retirees in 1960 were cushioned by low inflation, generous company pensions, inexpensive health care, and the backing of a country that was a net creditor, energy self-sufficient and unchallenged in industrial and technological might. None of these “security blanket” elements exist for today’s retirees and many government promises of future benefits may prove more rhetorical than real.

Under-Saving

One of the most basic risks to retirement is just not putting enough wealth away during one’s working years. Many people have 401k’s and IRA’s, but don’t fund them every year, or carefully monitor the investment performance. With the major indexes flat (or worse) this decade, many 401k’s have shown little if any growth. In addition, many investors make the mistake of leaving most of their 401k savings in their own company stock. In these turbulent times, betting on the success of any one company is taking a big risk with your retirement savings.

Unfortunately, many other Americans have never started retirement accounts at all, and with inflation gnawing at the dollar’s purchasing power, find it difficult to put any money away for the future. In addition, those who assumed the equity in their homes would fund their retirement are seeing that dream severely tested.

Under-Preparing

This goes along with under-saving, but includes other aspects of retirement. For those close to retirement, this would include preparing a budget to get a realistic picture of expenses now and what they may look like in retirement. Without a clear understanding of both essential and discretionary expenses, it is impossible to know if one’s retirement income will be sufficient to fund the desired lifestyle. We all have caviar dreams, but none of us want to end up eating Alpo to get by.

Many pre-retirees may fail to prepare because of an “expected” inheritance. However, circumstances can change over time, and the size of that inheritance may shrink substantially. In addition, the potential for higher estate taxes in the future could devour large chunks of a substantial inheritance.

Preparation would also include looking into downsizing into a smaller house or moving to a more tax-friendly state. It is also important to have access to health and medical facilities if you plan to relocate.

Higher Taxes

The risk of higher taxes, while uncertain, is overwhelmingly likely in the decades ahead. The demographic reality of 79 million retiring Boomers will, without doubt, put a tremendous strain on the government to provide Medicare and Social Security benefits. The $60+ trillion in unfunded future liabilities will very likely lead to higher income and payroll taxes, as well as lower benefits and means-testing. In addition, our growing $9 trillion national debt will keep compounding, and our massive trade deficit, much of which is imported oil, will need to be financed (currently $2 billion per day, every day, from foreign sources). Unless the government simply prints the money and destroys the value of the dollar, then higher taxes (of all shapes and sizes) will be a reality for future retirees. The biggest danger is we may see both realities. The third option would be for government spending to be radically cut in future decades. As long as retirees can vote, don’t expect that to happen.

Health Care Costs

The explosive rise in health care costs does not seem likely to ebb as the aging Boomer generation floods into the health care system in future decades. This is one of the most difficult categories to predict for most retirees. It is safe to say most will not have budgeted enough for future health care costs, including long-term care. The shrinking dollar carries much of the blame.

Inflation

This may be the biggest risk of all and one that affects all the other categories. Inflation acts as an invisible tax and can destroy the dreams and lifestyle of any retiree that is not adequately prepared for it. Earlier generations were fortunate not to be subjected to high rates of inflation for prolonged periods. Current retirees may not be so fortunate. The combination of massive federal, state and personal debt, fewer productive workers, and (since 1971), a purely fiat currency leads one to believe that inflation will be a painful reality for future retirees. It is imperative that strategies for future inflation be part of the retirement planning process.

Longevity

This will be a huge societal issue for the Boomers and those generations to follow. Current advances in medicine, health-care, and improved lifestyle habits are already leading to huge leaps in longevity. The Baby Boomers will, as usual, take longevity to new levels, with hundreds of thousands (or more) expected to live to 100 and beyond. This new reality means retirees must seriously consider living nearly as long in retirement as working, and how to make the money last. Going back to work at 94 is not an appealing proposition.

In 1900, 1 in 25 Americans was over 65 years old. The vast majority was self-supporting or supported by their family. By 2040 it is estimated that one out of every 4 to 5 Americans will be over 65. This vast majority will be supported by the government to some degree. According to the Concord Coalition, by the mid 2020’s America will be as old as Florida is today. Imagine seeing more people pushing walkers than baby strollers.

Debt

Debt, in moderation, can be beneficial during one’s working years. However, dragging a large debt load into retirement is a major concern. It is true that future debt payments will be made with inflated dollars, but debt also compounds and can wreak havoc on a fixed income. Clearly it would be best to pay down one’s debt load as much as possible while still working. The government can simply print more money to pay its debts. The retiree should not try this at home. It is entirely plausible that many Boomers will delay long-planned retirement due to the albatross of high personal debt.

Role of Bonds

Fixed income has been the traditional investment of choice for retirees. While bonds still have a role to play in a retirement portfolio, it should be a lesser role if you believe that significant inflation will be a reality during the retirement years. Moreover, in a study published in the October 2007 issue of the Journal of Financial Planning, two college professors, John Spitzer and Sandeep Singh, argue that retirees should spend their bonds first, gradually lowering the fixed income allocation. Their contention is the greater the exposure to equities, the less likely a retiree will exhaust his savings.

Most retirees would be uncomfortable without any fixed income. One strategy suggested by Professor Spitzer would be to retain 20-30% of one’s portfolio in short term bonds to use during times when the stock market is weak. When the stock market is strong, equities could be sold and more bonds could be purchased. This of course is a direct challenge to the “target-date” funds that automatically lower the equity allocation as one approaches retirement. It is impossible to predict the perfect allocation years from now, but my concern is that retirees will invest just like their parents or grandparents did in 1960.

Role of Stocks

Equities obviously can play a significant role in funding a successful retirement. The key of course is diversifying among many companies, and buying successful companies with established track records for growing earnings and paying dividends. The role of dividends will become ever more significant in future decades as retiring Boomers seek income and inflation protection. Owning a company that pays a dividend that grows and compounds every year is one of the few ways to protect one’s purchasing power in retirement. There will likely be hundreds of new mutual funds catering to this niche in the future. Many of these funds will hold companies from Asia, Europe and around the globe. The hunt for growth and dividends will be a global phenomenon.

Role of Diversification

If possible, retirees should be diversified among their assets, including stocks, bonds and real estate. They should also seek some currency diversification as well. If all one’s assets were denominated in US dollars and the dollar continually loses value, then purchasing power is lost. Examples of diversification out of the dollar could be investing in tangible assets, and foreign stocks, bonds or real estate.

Role of Flexibility

It is important to stay flexible and involved in one’s retirement planning, even years into retirement. The traditional “ratios” may not apply in 10 or 15 years from now. Planning to live on 75% of your working income may not cut it if inflation hits 10% for an extended period of time. Even 5% inflation can be devastating to quality of life unless you plan for inflation and hedge against it. Even if you haven’t planned for it, there are ways to mitigate the inflation if you are flexible enough to take action. But just staying put in fixed income bond funds as your standard of living implodes is not a recipe for a happy retirement.

The world is a very different place than it was in 1960, or even 1990. This doesn’t mean one can’t enjoy a long and fulfilling retirement in the 21st century. However, for most of us it does mean more diligence, preparation and discipline is going to be required. Every journey begins with the first step. If you are not already on the journey, it would be wise to start walking now.

Today’s Markets

Stocks stalled Monday, ending mostly lower after rising oil prices and ongoing worries about the financial sector gave investors little reason to buy a day ahead of a Federal Reserve meeting.

The Dow Jones Industrial Average was down .33 to close at 11842.36. The S&P 500 Index was also flat, closing up .07 at 1,318.00. The Nasdaq however was lower, ending at 2,385.74, down 20.35.

Disappointment that Saudi Arabia is not boosting production by more than 200,000 barrels a day sent oil prices higher, fanning concerns about inflation. Light, sweet crude rose $1.38 to settle at $136.74 per barrel on the New York Mercantile Exchange.

Gold tumbled nearly 3 percent in volatile trade on Monday, ending just above $880 an ounce as a sudden rise in the dollar against the euro prompted panic selling by funds in exchange for cash.

Wishing you a good evening,

Tony Allison
Registered Representative

Copyright © 2008 All rights reserved.

[sumisu]

Brownout

Mark P. Mills 06.30.08, 12:00 AM ET



http://www.forbes.com/forbes/2008/0630/038.html

What happens when you don't build more power plants? Get ready for spiking electricity rates, brownouts and even blackouts as demand soars

If you think runaway oil prices are upsetting, just wait for what's in store for electricity. Similar forces are in play. Demand is rising fast; supply is not. The cost to get coal and natural gas out of the ground is going up, and to that expense must be added the cost of the carbon permits that Congress and the presidential candidates are contemplating. Environmentalists are getting power plants scotched. China is sucking up energy. Leave such dynamics in play long enough, and price spikes in electricity follow. But that's just the beginning. We may be facing brownouts (voltage reductions) and even rolling blackouts.

By as early as next year our demand for electricity will exceed reliable supply in New England, Texas and the West and, by 2011, in New York and the mid-Atlantic region. A failure of a power plant, or a summer-afternoon surge in the load, could make for a blackout or brownout. "There really isn't any excess in the system," says Rick P. Sergel, chief executive at the North American Electric Reliability Corporation (NERC).

Price shocks are already occurring. In May, long before peak summer demand, the wholesale price of juice jumped twofold in Texas, to $4 per kilowatt-hour, 25 times the average retail rate in the country. Prices exceeded the allowed rate of $2 for seven days and threatened the viability of power resellers who contracted to deliver cheap rates to consumers. New Yorkers may suffer a summer of price discontent if regulators are right about peak wholesale prices jumping by up to 90%.

In the past few years, in dozens of utility regions such as Georgia, Louisiana and Ohio, price hikes have ranged from 20% to 80%. Overall, the cost of electricity, which declined (in real dollar terms) for the last two decades of the 20th century, has been relentlessly tracking up since 2001.

While oil gets the attention, America uses just 15% more of it today than when the first modern energy crisis hit in October 1973. But electricity use is up 115% since then, thanks to all those plasma screens, iPhones, computers and data centers. And all economic forecasts see substantial growth in demand for electricity--think just of the coming electric cars--yet lots of problems in meeting it.

Right now the nation has 760 gigawatts of power plants to meet current consumption, with another 154 in reserve capacity to maintain grid reliability. But in fact only 10 gigs is truly excess capacity. The other 144 is utterly essential to keep lights on when unexpected demand arises from heat waves, outages or maintenance downtime. That reserve will begin to shrink quickly. NERC estimates that over the next decade 135 gigawatts of new capacity will be needed to meet the growth in consumption. But right now plants producing a total of 57 gigawatts are planned.

Ninety percent of electric power is fueled by nonrenewable coal, natural gas or nuclear power. Renewable sources will not cover the growth in demand. While wind is gaining ground (and now supplies 1% of power), hydro's share (7%) is shrinking as dams are dismantled. Solar, at 0.01%, is an inconsequential contributor.



Coal generates half of America's electricity. The U.S. is the world's second-largest producer. China is the largest, and used to be a net exporter. A year ago China became a net importer of coal. So U.S. coal exports are rising now, up 13% already this year. America has plenty of coal, but as exports grow its price will start tracking world coal prices. Those have more than doubled in the past year to $100 per short ton, and Merrill Lynch forecasts another near doubling by year-end.

Coal is cheap, but it has no friends. Anticoal activists brag that 59 coal-fired plants were canceled in 2007. Nearly 50 more in 29 states are being contested. Recall how the private equity buyers of Texas utility txu agreed last year to cancel eight power plants to defuse environmental opposition. It takes years to plan and at least six years to build a large power plant.

Also playing into this is the possibility of a carbon penalty. Whether taking the form of a visible tax or imposed through a cap-and-trade scheme, a $30-per-ton tax on carbon dioxide could propel a 60% to 150% rise in the cost of electricity, even without further price hikes in raw fuel, according to the Department of Energy.

Next, the favored hydrocarbon: natural gas, used for 20% of U.S. electricity. Natural gas prices seem on track to meet, and perhaps substantially exceed, previous peaks. The same problem here: Demand is up, but supply is not. Natural gas is largely a domestic fuel (as oil was decades ago). But U.S. production is falling because of environmental restrictions on exploration and tapped-out existing gas fields.

The savior was supposed to be a plentiful supply of liquefied natural gas imported from abroad via tankers. Good luck. Countries such as Japan and Korea are willing to pay 30% to 40% more than the U.S., so lng producers in Spain and India, for instance, are diverting shipments away from the U.S. David Ratcliffe, chief executive of the southeastern utility Southern Co., says he knows of times when a tanker loaded with lng was rerouted to a better-paying part of the world. Besides, relying on lng guarantees two things, neither good: more dependence on imported hydrocarbons and higher prices as the U.S. natural gas market gets tied to world prices. If we assume natural gas prices track oil's, gas will double from today's already high level.

Nukes produce 20% of U.S. electricity. But there hasn't been a new nuclear plant started in three decades, and licenses are expiring on existing nukes. Opponents are fighting renewal of those licenses.

So how will this scenario play out if more plants don't get built? The first thing is that utilities will burn more natural gas. There is excess capacity now in gas-fired electric generators, currently used for peak loads and for filling in gaps during maintenance and plant breakdowns. (Electricity has an unresolved, annoying feature--it cannot be stored in any useful quantities, and must be produced the instant it's needed.)

But that margin of safety will disappear in only a few years, according to NERC. Electric rates, especially at peak times, will then soar--as much as tenfold. After that, we may see forced conservation, meaning voluntary or involuntary rationing, or even blackouts in rotation among business and residential customers. Utilities could give consumers the choice of staying cool by paying a lot more for the privilege.

Recall the summers of electric discontent for California in 2000 and 2001? Wholesale electricity prices skyrocketed, reflecting tight supply conditions (conditions that were exploited, but not created, by traders at Enron). The consequences were a bankruptcy filing by the state's biggest utility, Pacific Gas & Electric Co. (amex: PCG.PR.A - news - people ), and the early departure of a governor.

Multiply by dozens of states. Add in brownouts. Buy candles.

Mark P. Mills is a founding partner in Digital Power Capital, an energy tech venture fund, and writes the Energy Intelligence column for Forbes.com.

[sumisu]

STORING FOOD IN BUCKETS

Long term food storage part 1

Long term food storage part 2

Long term food storage part 3

Bucket Packing with Wendy Mae - Part 1

Bucket Packing with Wendy Mae - Part 2

[sumisu]

Sulphur adds profit to mix for Shell Canada

Spinoff product highly prized for farming

Sean Silcoff, Financial Post

Published: Wednesday, May 28, 2008

http://tinyurl.com/6xfmn2

If you thought some minority Shell Canada investors were unhappy with the price they got when they were bought out last year by parent Royal Dutch Shell, there is now insult to add to injury.

Recall that Royal Dutch in October, 2006, offered to buy the 22% of ShellCan it didn't own, for $40 a share. At the time, oil sold for US$59 a barrel, down 25% from its high the previous July. Minority holders led by Jarislowsky Fraser Ltd. (JFL) said the offer was too low, and that the parent was preying on fears of falling oil prices to snap up a coveted asset.

Royal Dutch upped its offer by $5 a share. That won enough support from investors to pass 13 months ago, when oil was US$66 a barrel; today it's close to US$130, and headed higher. "These guys got such a steal," says JFL president Len Racioppo.

And then some. You see, ShellCan had a side business everyone ignored: sulfur. It removed the ugly (yellow), smelly, unloved substance from crude oil and gas to make it cleaner-burning. Luckily, there was a use for the waste: more than 60% of the world's produced sulfur is used by makers of phosphate fertilizer to separate phosphate from mined rocks in order to make plant food.

Turns out Canada is the world's leading exporter of sulphur, and ShellCan among the top producers, making about two million tonnes per year, or 16% of global exports. That didn't count for much until recently. But if you've been paying attention to news from the farm, demand and prices for crops and fertilizer have soared in the past two years. Take it down a notch to sulphur, and suddenly, that stench is the smell of money.

A year ago, (10 years ago, too) sulphur sold for US$60/ tonne. Today, it is US$650. It's simple supply and demand: there used to be more sulphur produced than needed. There is now a worldwide shortage of about two million tonnes.

Now, look at ShellCan's sulphur business. We don't know what it used to contribute to the bottom line, but assume it was marginal. Now turn to ShellCan's 2006 annual report: for each $1 rise in the per-tonne price of sulphur, it says, operating profit would rise by $2-million.

So let's see ... sulphur prices are up almost US$600, the greenback has dropped 15% against the loonie, the costs of selling the stuff haven't changed and ... Wow. Lowly sulphur is poised to earn $1-billion more or so in operating profit this year -- or would have, at the old ShellCan.

That's probably the last thing former ShellCan shareholders need to hear. The company's operating profit was $2.2-billion in 2006, and even without the boost from sulphur, would have been a lot higher in 2007 and 2008 due to the effect of higher oil prices. Stock prices of its peers have risen by 25% to 65% since RoyalDutch tabled its final offer in January, 2007.

Sulphur prices likely won't stay this high, but it means that, for at least the next couple of years, there may actually be some value to be derived from these side-businesses for other producers. That means this is a particularly good time to sell out. Of course, it's generally a better time to sell out when commodity prices are rising, rather than during a temporary pullback.

Oilpatch investors shouldn't forget that the next time any of the oil majors - who are starved of good buying opportunities in stable Western countries - come with an offer.

[e-mail]

[sumisu]

Book review - World Made by Hand

by Mick Winter

Published on 26 Apr 2008 by DryDipstick.com. Archived on 26 Apr 2008.

http://www.energybulletin.net/43291.html

World Made by Hand - a Novel
Author: James Howard Kunstler
336 pages
ISBN: 0-87113-978-2
2008, Atlantic Monthly Press
http://www.worldmadebyhand.com

This book could more precisely, but less poetically, be named "World Made by Kunstler". Author and Peak Oil commentator James Howard Kunstler has written a novel that brings to life a community and world that Kunstler himself has created. It's not just any creation, however, because what he has created is informed by his many years of study of our society, its built environment, and the Peak Oil threat.

As a novel it's entertaining and interesting. As a demonstration of Kunstler's vision for the post-Peak Oil future, it's vivid and compelling. Kunstler imagines a time where all systems have broken down because of Peak Oil, climate change, economic collapse, apparent nuclear war—a number of U.S. cities are gone—and, of course, famine and pestilence. In short, it's a world ravaged by the Four Horsemen and a bunch of their close friends.

Needless to say, things aren't quite the same after all this. Kunstler's protagonist, Robert Earle, moved with his wife to her home town of Union Grove in upstate New York after "the bomb went off in Los Angeles". Robert, a former software marketing executive whose job became rather superfluous, now supports himself as a carpenter, living alone while grieving for his dead wife and daughter, and his long-missing son.

His community is not thriving, but it is surviving. Nearby is another sort of community, run by wealthy and enterprising land-owner Stephen Bullock, who has created his own fiefdom, a plantation where industrious workers labor in the various farm and manufacturing enterprises their "manor lord" has created. It is a totally self-contained community, as sustainable on its own resources as was any such community in early 1800s America. That is, it still depends on trade with the outside for the things it cannot grow or make itself.

Into the town of Union Grove comes a sizable religious sect—the "New Faithers"—led by Brother Jobe, a charismatic and increasingly mysterious leader who purchases the town's former high school as a center for his flock. That flock is interesting in itself, being decidedly non-pacifist and equally non-puritanical.

Another community just outside of town is led by Wayne Karp, who with his hardcore biker followers has taken over the town's former refuse dump, and now "mines" it for salvage materials. With these four examples of possible post-Peak Oil communities—small town New England, religious sect, back-to-the-1800s plantation dwellers, and hard-drinking Mad Max ex-bikers—the scene is now set for Kunstler to lead his protagonist Robert through what is in effect a coming-of-(a new)-age novel for both Robert and his town.

Kunstler suggests that all of these types of communities are likely to occur in the not-distant future, although he obviously favors the small town community that by the end of the novel comes together stronger and closer, experiencing a simpler and more meaningful life. It's democracy with a little "d", in which people work out problems because it's too destructive to their community if they don't. It's also a restoration of an earlier America.

Union Grove is hardly a utopia, and Kunstler has no illusions that creating—or ending up with—such a community is an easy thing. But as his other writings also show, he does believe that such communities can be brought about in this real world, preferably earlier than later.

Kunstler has spent many years justifiably ranting about the anti-human aspects of our suburbs, the destruction of our cities, and the resulting decline in our civility and way of life. He has emerged as a major, and very vocal, spokesman for the Peak Oil movement; one who calls on us all to repent, mend our ways and forsake our dependence on "Happy Motoring" and the strip mall cul-de-sac suburbs that have resulted.

Now Kunstler has written a novel—I'd call it more a novella, a moving snapshot—of what he envisions may be our future. Despite a couple of bizarre scenes which remain frustratingly undeveloped, and a line or two of dialogue fraught with a meaning that is never revealed (although perhaps other, smarter readers than I will decipher them)—he has created a vivid depiction of what he envisions may be, can be, and should be, our future.

Just as the communities are varied, so are the book's characters. Kunstler has tempered his usual neo-Gonzo writing style and created interesting characters with depth and complexity who inhabit a world which is described quite lyrically at times. There are no stereotypes here; the "good" guys have flaws, the "bad" guys have their strengths. World Made By Hand is well worth reading. After you read this book, you can decide which, if any, of those communities you'd like to work toward. And if none of them, you may at least see more clearly your own image of the future.

Kunstler has taken a major step by providing us with a detailed vision of a very possible future. It gives us a starting place for a very important, and long avoided, discussion. Give it a read.

~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~

Mick Winter (www.DryDipstick.com) is the author of Peak Oil Prep: Prepare for Peak Oil, Climate Change and Economic Collapse (www.peakoilprep.com)

[sumisu]

Power Metals, and Metals That Bring Power To The People

By Jack Lifton

03 Apr 2008 at 07:15 PM GMT-04:00

http://www.resourceinvestor.com/pebble.asp?relid=41670

[sumisu]

ENERGY INVESTMENT REPORT

http://energy-investing.org/

The above website provides the weekly status of oil, gasoline, distillates, and refinery utilization.

[sumisu]

TriStar deal boosts stake in Saskatchewan energy rush
Bulldog increases junior's Bakken holdings

NORVAL SCOTT

December 07, 2007

http://tinyurl.com/36gxrp

CALGARY -- Calgary-based junior TriStar Oil & Gas Ltd. has joined the competitive race to develop oil in Saskatchewan, acquiring Bulldog Resources Inc. for $200-million in stock.

Bulldog, also based in Calgary, mainly produces light oil in southeastern Saskatchewan and holds land in the Bakken play, a red-hot exploration area that's been the subject of numerous deals in recent months as firms seek out light oil properties that aren't affected by the upcoming increase in Alberta's royalties.

"The combination further expands our Bakken position and solidifies our position as a top player in southeast Saskatchewan," said TriStar chief executive officer Brett Herman in a press release.

TriStar will pay 0.59 of a common share for each Bulldog share, according to a statement yesterday from the companies. Including the assumption of $5-million in debt, the deal is valued at about $205-million, TriStar spokesman Brian Purdy said in an interview.

About 75 per cent of Bulldog's production of around 2,200 barrels of oil and gas equivalent a day comes from the Fertile oil project in Saskatchewan, which Mr. Herman called one of the best discoveries in the province in the past 15 years.

This is the second acquisition in less than three weeks for TriStar. The company on Nov. 19 said it agreed to acquire closely held Kinwest Corp. for $80-million plus the assumption of $12.5-million in debt.

After these two deals are completed, TriStar will produce over 8,000 barrels of oil equivalent a day of light oil in Saskatchewan, and be one of the top three participants in Bakken.

As recently as last year, crude from Bakken was perceived as too expensive and tricky to extract, because the tight formation of the reserves prevented large amounts of oil from being recovered. However, advances in technology - including the use of systems developed by Calgary-based Packers Plus Energy Services - that effectively fracture a larger area, allowing more crude to be extracted, has opened up the reservoir for explorers such as Bulldog.

Bidding for resources in the Bakken region has been heated. In September, Crescent Point Energy Trust bought Innova Exploration Ltd. for $360-million in order to boost its holdings in the area. That followed Crescent Point's purchase of Mission Oil & Gas Inc. in September, 2006, for about $700-million. Last month, Petrobank Energy and Resources Ltd. inked a deal to buy Peerless Energy Inc., which also operates in Bakken, for $334-million, including debt.

© The Globe and Mail

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Bulldog Resources Announces Fertile Pool Reduced Well Spacing Approval, Updated Reserves Evaluation and Third Quarter Results

Thursday November 8, 4:05 pm ET

CALGARY, ALBERTA--(Marketwire - Nov. 8, 2007) - BULLDOG RESOURCES INC. (TSX:BD - News)

HIGHLIGHTS

- Fertile Pool - reduced well spacing approved

- September 30, 2007 GLJ reserve update - 60% increase in proven plus probable reserve to 5.194 million BOE from 3.240 million BOE as at December, 31, 2006

- Drilled 14 oil wells (6.75 net) in Q3 (100% success rate )

- Increased Q3 production volumes 23% to 2,031 BOE/day from 1,648 BOE/day in Q2

- Increased Q3 cash flow per share 33% to $0.36 per share from $0.27 per share in Q2

- Achieved Q3 "top decile" field netback and cash flow of $56.98 and $53.93 per BOE.

- Continued operational efficiencies resulted in low production and transportation expenses in Q3 of $3.55 per BOE.

QUARTERLY SUMMARY

http://biz.yahoo.com/ccn/071108/200711080424241001.html?.v=1

[sumisu]

Bulldog Resources Announces Second Quarter Results, Successful Fertile Pool Reduced Well Spacing Pilot Project and Increasing 2007 Capital Budget

Thursday August 9, 7:09 pm ET

CALGARY, ALBERTA--(CCNMatthews - Aug. 9, 2007) - BULLDOG RESOURCES INC. (TSX:BD - News)
Bulldog Resources Announces Second Quarter Results, Successful Fertile Pool Reduced Well Spacing Pilot Project and Increasing 2007 Capital Budget

HIGHLIGHTS

- Increasing 2007 capital expenditure budget by $3 million to $30 million

- Expanded drilling program in Q3/Q4 to include 26 gross (13.75 net) wells

- Fertile Pool - successful reduced well spacing infill drilling pilot project

- Current production as of early July in excess of 1,800 BOE/day

- Achieved "top decile" field net backs of $53.54 per BOE and cash flow of $49.76 per BOE in the second quarter

- Efficient Q2 operations delivered production expenses of $3.95 per BOE

- Drilled 10 gross (6.02) wells resulting in six oil wells (3.27 net), one vertical well awaiting completion (1.00 net), one vertical stratigraphic test well (0.50 net) and two D&A wells (1.25 net) in the second quarter

[continued in following link]

http://biz.yahoo.com/ccn/070809/200708090406845001.html?.v=1

[sumisu]

Bulldog Resources Releases First Quarter Report and Fertile Pool Assessment of Resources and Reserves

Thursday May 10, 1:56 am ET

CALGARY, ALBERTA--(CCNMatthews - May 10, 2007) - BULLDOG RESOURCES INC. (TSX:BD - News):
HIGHLIGHTS

- Increased production 35% to 1,697 BOE/day in Q1 from an average of 1,261 BOE/day in Q4, 2006.

- Cash flow increased 38% to $7.3 million in Q1 from $5.3 million in Q4, 2006.

- Cash flow per share increased 29% to $0.27 per share in Q1 from $0.21 per share in Q4, 2006.

- Achieved field netbacks of $51.17 per BOE and cash flow of $47.83 per BOE in Q1.

- Continued low production expenses of $2.12 per BOE in Q1.

- Drilled 9 gross (4.53 net) wells in Q1 resulting in 7 oil wells (3.08 net), one well (0.45 net) currently waiting on completion and one net D&A well.

- GLJ's assessment of resources and reserves on Bulldog's Fertile property was completed in May 2007.

- Closed two property acquisitions.

[continued in following link]

http://biz.yahoo.com/ccn/070510/200705100389771001.html?.v=1