Kamikaze, The Sequel

Wartime vividly demonstrates the character of individuals and peoples.  These characteristics may be less obvious in peacetime but memes developed over thousands of years tend to strongly persist unless and until wiped out by human or other natural forces.

World War II gave the world a big-show demonstrating the unique sense of self-sacrifice running through the Japanese character.   While stories have dramatically featured the act of Seppuku through the ages, nothing quite drives home the spectacle aspect of Nipponese suicide as the image of the kamikaze pilot careening to certain death in hopes of claiming some explosive flaming victory and honor for the life sacrificed.

Kamikaze emerged as a tactic when reason indicated foregone outcome of World War II.   Today, we are witnessing a national-scope Kamikaze theater as Japan tries to unleash and ignite inflation to wash away the spreading, darkening, dishonorable stain of profound Loss due to decades of wildly imprudent debt expansion.  Japan's dynamic government+financial empire may now be symbolized as a screaming earthbound kamikaze plane, bearing all the nation's citizens as sacrificial passengers.  Incoming!

The impact of Kamikaze fighting was uncertain in its opening act.  As preventive and corrective action improved the threat was contained.  Once again, we cannot be sure of the impact as Japan races to commit financial suicide.  One hopes that our own powers that be can see the falling plane aimed right at our financial munitions cache and have solid preparation in place to deflect or meet it.

Do Sports Signal Market Reversals?

A number of respected market observers say that the true, "internal" top of the Big Bull Market that started in 1981 occurred in 1998.  1998 also marked the end of the Chicago Bulls' hoops dynasty, one of the greatest ever witnessed in all of sports.  Their reversal down in 1999 was truly dramatic.  The market fibrillated until 2000 when the bubble popped, and its reversal was dramatic as well.

Now here we are in 2013.  My hometown San Francisco Giants have won two World Series' in the last three years.  This year, however, they are about as snakebit or bad a baseball team as you'll ever see and it's quite possible they'll finish the year with the worst MLB record.  Quite a dramatic reversal. Since the busted stock bubble that bottomed in 2002/3, the Federal Reserve has been on quite a campaign to pump up debt levels to levitate the market.  Especially since March 2009.  There are plenty of signs that this effort is losing effectiveness and is increasingly precarious. \

In the vein of past is prolog and history rhymes, make a mental note that the Giants' relatively short fling at the top of baseball has a certain poetic rhyme factor with the Federal Reserve's post-bubble bubble attempt at a bull market encore, that will appear to be a relatively brief historical footnote once it has turned.   The key reversal of the Giants' fortunes is in.   Will the market do the same?

Savers Bail out the US Government, Get No Thanks

This article in ZeroHedge :  http://www.zerohedge.com/news/2013-07-17/savers-and-real-108-trillion-cost-zirp should confirm the heat under your collar if you (attempt to) save in this central-bank-planned economy.

It's no secret Uncle Sam spends WAY BEYOND our collective means (for our benefit, right?) year after year and has piled up a super-impressive growing national regret of debt that is fast approaching $20T Trillion dolores.  Ben Bernanke just said this week in testimony to Congress that if he slowed down printing money ("not literally") the "economy would tank".  Oh, "tank" is an arcane econometric term meaning in the crapper, for the rest of us.

Since Uncle Sammie can't possibly afford to pay ANY interest on the swelling national regret, his handler, Bro Ben and the Federal Reserve (hey, that's a catchy band name!), has held rates at about zero for years with a snazzy policy vehicle called the ZIRP (zero interest rate policy).  It doesn't take much power of observation to see that your savings or money market accounts are getting zip nada as long as you ride the ZIRP.  In total, it's calculated that over the years the ZIRP has taken over $10T Trillion dolores out of the pockets of savers.  A lot of that is money that USG would have had to pay us savers if there were freely functioning exchange and securities markets.

Now I don't recall that any politicians ever asked the millions of savers if they would mind floating an extra bunch of irresponsible overspending, or bailing out the TBTF Banksters with all the niceties including record bonuses etc.  I don't recall that anything has been offered as a make-good down the road, you know, like some kind of savings bond where we get ZIRP for the first five years and then SIRP (some interest rate policy) for the next five to recognize our sacrifice to the coffers of the Reckless and Endangering.

There should be a Tomb to the Unknown Saver after all the ashes of Great(er) Depression II have blown away.  Somehow I doubt that will happen, but don't lose heart; there will be plenty of statues and BUSTS of the Central Banking Hero of All Time, Bro Ben.   I hear they are a great investment already.

Training America's Secret Police

If true as reported, a recent article by McClatchy on the Obama administration's "Insider Threat Program" is a deeply troubling harbinger of dark doings in the Land of the Free, Finks.

On the surface, it is bad enough that the administration directs Federal employees to snitch on each other based on unscientific observation of almost random behaviors.  Where did you go on your vacation?   Did you just make a new friend?

If this garbage policy takes hold and the feddies develop strong finking habits, first on each other, all of our futures can be compromised.   About 1 in 12 of all jobs in the USA is Federal.  That makes it possible for a zombie 4F - Future Federal Fink Force - to capriciously and maliciously monitor every citizen.

Yes there is an Internal Threat in the USA, and it starts at the top.

Fascism: Life of the Parties

Political actors and too-big-to-fail business, the unholy alliance.  We are living what the framers of the Republic warned about and Eisenhower so eloquently reminded.   It's all too easy to experience government unaccountability at the local level first-hand.   Laws can be manipulated, a gullible public misled, but the most insidious statism occurs in the administrative domain.  I am not surprised that privacy-invading, constitution-breaking depredations at the Federal level are commensurate with its resources including the power of its private sector financial, communication, sick-care and defense enablers.

Sadly, we are witnessing a macabre war-on-freedom - as the 'developed' world entrenches itself in another incarnation of Fascism, the corrupt collusion of large powerful government and private organizations. This,  only a few decades after the enormous sacrifices of previous generations to ostensibly root Fascism out.  The losers, again, are ordinary folk who misplace their trust in government that is not their friend.

Humans give the lie to Lamarck over and over. Our political ‘learnings’ do not assimilate in DNA.  So we must speak out, rise up again. Smokey Bear, where are you when we need you most?  "Only YOOOUUUUU can prevent fascism."

Farmer Green's Horse and the New Real Estate Bubble

The New York Times had this to say today on the reason for the recent run-up in real estate prices --  http://dealbook.nytimes.com/2013/06/03/behind-the-rise-in-house-prices-wall-street-buyers/

Well, well.  This high-finance chicanery reminds me of a classic story --

Farmer Brown was walking by Farmer Green's farm one day and noticed a very fine looking mare in the side pen. He stopped to admire the horse and then decided he would ask Farmer Green what he wanted for the horse. Farmer Green said he would part with the horse for $50. Farmer Brown thought it was a steal so he paid the $50 and took the horse home. A week later, Farmer Green is walking past Farmer Brown's place and sees the mare in his side yard. Farmer Green thinks to himself that he was crazy to part with such a fine horse so he approaches Farmer Brown to buy the horse back. Farmer Brown says he'll sell the horse to Farmer Green for $100. Farmer Green hands over the $100 and takes the mare home with him. Another week passes and Farmer Brown is once again walking past Farmer Green's place and sees the mare, regrets selling her, and pays Farmer Green $150 to buy back the mare. A month passes and Farmer Green is passing Farmer Brown's farm and can find no sign of the mare so he goes up to the door of the farmhouse. Farmer Brown comes to the door and Farmer Green asks, "Where is the mare?" Farmer Brown responds that he sold the mare to someone from the city who was passing and wanted to buy her. Farmer Green admonished him saying, "How could you sell her. We were making a pretty good living off that horse!" 

Rebecca Liming, Indianapolis, IN, as published by Prairie Home Companion: http://prairiehome.publicradio.org/features/hodgepodge/19990410_jokeshow/jokes/0407_14.htm

Back to our regular programming --

If you are a too-big-to-fail zombie banking institution with access to almost limitless zero-interest cash from Big Brother Bank of Federal Reserve, and you happen to hold a huge mess of stinking below-market real-estate assets, what could be better than closing down the public market and trading these assets up with your bankster colleagues across the street?  Suddenly your balance sheet looks a WHOLE LOT BETTER!  An occasional public sale at the marked-up price is all the validation you need.  BRILLIANT.

Today's 1% Solution:
"nequaquam sumere possis prius publicum commodum" - Never give the public an opportunity if you can preempt it.

What Could the Federal Reserve Learn from the BLM?

Fire Season is here, and merits reflection.  Today's images are of the 1988 Yellowstone Fire, a spectacular consequence of Bureau of Land Management fire management policy.  

For many years, the BLM had a policy of suppressing wildfires.  In the Western USA, wildfire is an essential part of Nature's cycle.  Suppressing smaller fires may have made sense for National Park attendance and other economic interests, but the policy upset Nature's balance by building up a huge unsustainable supply of brush and under-story fuel.   When it finally ignited, the results were super-sized.

For many years, the Federal Reserve has demonstrated a policy of suppressing (the appearance of) economic corrections by continuously expanding debt; facilitating the Federal Government's expansion and expenditure far in excess of its income.  In a functioning market-based economy, cyclical expansion and contraction is normal.  Contractions clear out excess/bad inventory and debt, setting the stage for a new expansion.  The Fed has been busy attempting to suppress corrections, upsetting this natural cycle.  A couple of times (2000, 2008) the correction genie got part way out of the bottle.  Each episode was an excuse to use monetary policy to further accelerate inflation/reflation of debt to suppress future market corrections.

AFTER the 1988 Yellowstone fire, BLM modified its forestry policies to allow for more frequent and more widespread wildfires to keep the fuel supply from growing to epic proportion.   All of us lost a huge part of Yellowstone before common sense guided bureaucratic policy.

The Fed, together with its global central banking associates, has built up the greatest and ugliest debt pile in known history.  Some day, that pile will ignite.  And when it does, the financial markets and the economy are going to burn like Yellowstone in 1988.  I have given up on hoping that central bankers would learn from BLM's experience.  They are determined to repeat it.  Those responsible for the great coming Financial Fire of the 21st Century may be chastised but otherwise will continue to prosper.  The rest of us will get to share the ashes for a long, long time.

The Security Myth

Security is a quaint notion that retired to a cupboard with Hope, Honesty, and a quite a few other honored but threatened or extinct behavioral memes.

An article today in Fierce CIO:  FBI cracks encrypted hard disk in mere weeks  reminds us of how ephemeral Security is.  I am not sorry the FBI applied their know-how to nailing a pedophile.  But that's not really the story, which is that information security belongs with every other hoary variation on the Security theme.   If sophisticated snoops want to know what you are doing or what you've done, they can and will.

The article suggests redirecting information security efforts from cryptographic to stenographic.  Sure.  With the incredible pattern analysis power in the hands of sophisticated IT practitioners beginning witht the USG and Google, this approach will last a few nanoseconds.  Don't waste your time.  Might as well  bring back smoke signals.

Insecurity, how can we count thee ways?

• Terrorism - huge spend on anti-terrorism with unknown benefits, but with sure detriments.  Air travel was thoroughly ruined for the innocent since 911, not to mention the budget-busting bloat of DHS and TSA that will accrue to the indebtedness of our children, their children....
• Global Peace- huge spend on military and proactive war adventrures with unknown benefits, but with sure detriments.
• Health Insurance - Doesn't make people healthier, just poorer.
• Retirement - Unless you have a fat defined benefit plan from a government entity  - Prison Guard, Fire, Police most especially (thank you, suckers taxpayers) or a very large nest egg, you have no retirement security.  
• Crime - As more and more of the public safety budgets go to pay those fat defined benefit pensions, the fewer live, working officers there will be.  Property crime is largely unpoliced in many places, including my beloved San Francisco.  You do not have security for your person or  property beyond what you and your neighbors and friends take initiative for.
• Product Quality, Food Safety - Forget it. The Chinese just bought the US' largest pork producer, Smithfield.  The Chinese national credo is "cut corners" - as we've already seen in their air, water and food public health fiascos and their ever-recalled pet treat products.  Time to start raising our own pigs.
• Freedom of the Press - unraveling before our very eyes.  A major check against government duplicity and covert crimes is crumbling.  

Good thing getting under the covers still banishes monsters and boogie men, and that there are still people who care about things like the Constitution and the Golden Rule.  We don't really need Security anyway, we just need a Chance.

Should We Just Rename the Dollar the Dolor?

If you are a saver, the governments of the world are at war with you, and they are winning.  The USG is one of the most successful saver-beaters.  The chart above pretty much says it.

Every year, governments reduce the value of your savings.  The interest you are earning (what interest?) is not compensating for the loss of value.  I guess it's a good thing we only live as long as we do.

The Dollar has become a painful bad joke.  I like the Spanish word "Dolor" (pain) better, and suggest we go ahead and change the name of the dollar to dolor, both because it's true, and because it honors the blurring of north american boundaries. (hang on, God Bless Canadians for trying).

The Federal Reserve (the biggest private bank on Earth, with legendary emperor's clothes-like control over the US debt-based economy) is busy whippin' up $85 BILLION of these Dolores every month and adding them to the ever-diluting monetary soup.  Good golly, if they weren't handing all those Dolores out to their crony banker friends to prop up their insolvent balance sheets, think what this largess could mean - YOUR personal citizen's share would be almost $300 a month.  Well, whoops, that's exactly wrong.  That's the additional government debt you are on the hook for each month.  OUCH.  Console yourself in knowing how grateful the Banksters are for your support.

Well something is gonna happen that will disrupt this crazy debt game.  We just can't know when.  Maybe Japan will do a Titanic and suck a lot of the world down with it.  Maybe it will be Europe; pick a country, spin the wheel.  Maybe we will get into one War too many.

In the meantime, I'm thinking about what I might suggest to our children who are going to inherit a hell of a mess from us and previous generations who all think/thought they are/were wizards but really are/were just dishonest.

Learn how to grow and hunt food.

Get some decent land with water where you can grow/raise something edible.

Have some alternative store of wealth to Dolores.  DHS thinks stockpiling bullets/ammo is a great idea.  Maybe we should too.  Gold and silver get a lot of airplay.  Could all the Chinese and Indians be wrong?  What about the lesser Central Banks?  All wrong?  Probably not.

Learn how to make, build and/or repair something essential.

Learn how to cook.  Your diet will improve and you'll save a lot of money.

Learn how to entertain yourself and your friends with less Internet.

Learn about natural remedies.

Keep your sense of humor, you are going to need it.

Comrade Moonshine! Russia Raises Vodka Price 36%!

Great post on ZH today :  http://www.zerohedge.com/news/2012-11-19/inverse-deflation-alert-russia-hikes-minimum-vodka-price-36

Dimitri Cirrohski here, and many of his fellow patriots, are racing to ramp up black market vodka production to save Russia from agony and despair.

An instantaneous 36% government-dictated price increase on the national staple is going to make some waves.  Vodka is sacred in Russia.  More important than... well, just about anything really.

A tax hike this big is sure to be almost as effective as a Prohibition for stimulating unregulated entrepreneurial inclinations.  A glorious new chapter in Russian history is about to unfold!  Just think, modern day RPG-tottin Al Capones reinvigorating the collective adrenal gland.   And the news media can rub their hands in anticipation for attempted political assassinations.

Exciting Times!   Za vas!

Scapegoat Betrayus

OK maybe I'm getting more cynical, but the scandal-slapping of General Petraeus really activated my BS-detection antennae.  How convenient that a central actor in the Benghazi mystery gets taken down for indiscretion, with all the licensed media following the diversion like a pack of pheromone-sniffing hounds.

The story is limp if sad to begin with.  Who doesn't want to feel like they're interesting and desirable?  Petraeus is 'mature', but this kind of limbic phenomenon is not affected by age.  Sad for him and his wife, but not exactly the stuff of high crimes, notwithstanding his function and title.

No, what now-General Betrayus has become is just another in the historic stream of scapegoats.  Scapegoats exist to take the light and heat off of someone else.  And you know what, that someone else is by definition always higher up.  Given Petraeus was head of CIA, that doesn't leave too many characters higher up now, does it?   So regardless of what misdeeds have occurred or what well-intentioned schemes backfired in Benghazi, we get a pretty good idea who the actors are.

This story will be mangled develop for a long time, and the truth will take even longer to come out.  The theorists are already having a heyday - Benghazi, training center for Al Qaida.  Al Qaida, hired hand (still, to this day) of US efforts to destablize Syria.  Etc.  Why were diplomatic staff unprotected and then erased?  Have fun speculating.  I doubt it will prove to have much to do with Scapegoat Betrayus.  

All hail the scapegoat!

Why the "Global Debt Cloud 1.0" App Will Crash

I've been involved with software businesses for most of my career.  Software is a great illustration of the aphorism about History not repeating, rather rhyming.

Many legendary software applications have covered the same covers album:

1) Feels Like The First Time
inspired concept with singularity of purpose brought to market by a small, passionate team
2) I'm So Glad
adoring adoption by a growing community of users; team grows to give them love
3) Getting Better
expansion of the mission in response to clamoring of the adoring users, further expansion of team and probable move to beautiful new headquarters
4) We Are the Champions
forecasts of rule-the-universe possibly concurrent with IPO win
5) Hotel California
difficulty getting the next release nailed down, and decelerating innovation as layered complexity begins to snarl every move
6) Clubbed to Death
Proliferating competitors/enemies, and they're winning; everything seems crazy.
7) My Heart Will Go On
spectacular epic FAIL new version/upgrade release and earnings disaster/s
8) Is That All There Is?
dispirited company acquired by a grasping conglomerate that preys on the less imaginative remaining users
9) The End
another footnote in history

The Global Financial System is a lot like a big software application, in fact resting on countless interconnected software systems.  The unprecedented expansion of private and public debt and chaotic blow-ups and near misses squarely locates us at step 6 on our software timeline.  First just Japan, then the USA was ZIRPing and QEing, now everyone's in the act.  Rogue actors regularly hijack the geopolitical scene.

It's not hard to anticipate Step #7, the Epic Fail of the Global Financial System aka Global Debt Cloud 1.0.  It could come from anywhere.  Implosions in the near-$quadrillion notional pile of derivatives worldwide.  A misstep in any of the world financial citadels.  A melt-down in the world of High-Frequency-Trading - the bastard child of Moore's Law and the always-seductive GIGO. Or just an awakening and realization by the little people.

Time to be thinking about Step 1.

The Too Sad Trick or Treat Sequel - FAIL Tech IPO Class of 2011/12

Second update to my June 1 'Commencement Post" for the Tech IPO classes of 2011 and 2012.  After two months, the career prospects for these recent 'grads' was still pretty dim overall... so I thought I'd see how they survived Trick or Treat, Dia de los Muertos and the Electile Dysfunction of 2012.... not pretty... do we need viagra for stocks or get started preparing some coffins?   I'll let you be the judge.... "fair and balanced"  LOL!

Presented in the same order, with updated charts....

1. Zynga, When are they going to do Stockville, featuring the E*Trade baby?

6/1:  Opened at 11, a real Christmas gift!  Woops, touching 6 now... don't bother bottom fishing until around 4.  Isn't StockVille such a neat game to play?!

7/31: Bottom fishers, you now have a yellow caution light to proceed depending on your level of self-loathing.

4 was a good reference point,  ZNGA gapped right past it to the 2s by 7/31.  Dead since then. Self loathers got another reason to loathe themselves if they bit this summer.  A bitter taste in the mouth indeed.  Don't be looking for a big win here... either in their games OR the stock.

2. Get Your Daily Deal - Rotten StockFish!

7/31: Back on 6/1 GRPN was trading a bit under 10. I said wait for 5.  We are getting there....

11/13: Yee-howdy, now THERE'S a discount. But compared to bankruptcy?  Do you like remorse with your pain?  This one could go all. the. way.

3. HELP! I've been YELP'd!

7/31: Back on 6/1 YELP was looking at 16 after opening at 22.  Nice levitation since then, but too early to get giddy about upside.  Needs more time wallowing at lower levels.  

11/13: I am the Wallow-Rus!  Koo Koo Katchoo!  Here's a 5-star Round Trip! Let's meet up at '14' again, k?  We can pretend to be Elite...

4. FaceJuke!  The Mother of all Bogus IPOs!  Long Live the Zuck!

7/31: FB touched $45 on opening day. On 6/1 I said way to early to even seriously watch it.  Mr. Market seems to agree.  Let's see if the fall offrom disgrace can stop at $16.  

11/13: So far the Maginot line at 16 has held... but I'm not holding my breath.  The crystal ball keeps seeing numbers between 10 and 15...

And finally, the winner.... the CHAMPION!!!!

5. LNKD -  like my 81 year old pops-in-law says, "I'm on the "LINKIN" (no it doesn't do anything for him).  Hotrod Lincoln?  Or a Ford with a fake badge?

7/31: On 6/1 I said watch out because LNKD could be "the first commercially viable social network, OMG!!!"  It was actually UP over it's opening day.  I said it was "in the pool of indecision" and it's still there, hovering around its opening price.  I still think it needs to spend some time underwater but LNKD remains the champ in this IPO group... it has legitimate earnings prospects. 

11/13: LNKD was at around 102 on 7/31, and still close to 100.  The LNKD "Pool of Indecision" is bigger than Olympic-sized!  At least with LNKD, you have not already lost most of your investment.  You may even have a gain.  With next year's tax picture, you might want to pocket that and go buy yourself a double latte.  If it drops much more here, it could roundtrip to 60.  Oh, that's not very winner-like.  My condolences to this graduating class.

Summary for the Graduates of 2011/12

7/31: The next few months could be pretty unkind to this whole group.  The low-volume manipulated rising market is very very tired and everyone seems to be focused on Central Bank moves rather than profits and prospects for more.  Main Street is tired too.  The economy is just not in great shape, it's getting harder to fake with government statistics.   This IPO class has its work cut out for it.  At least they have big cash cushions to weather economic storms and headwinds.   I think they're going to need it.

11/13: Yes, a cruel summer for the recent Grads.  And a cold winter, too.  Ned Stark was an optimist.  Winter Has Come.  And not just for these puny hype-rockets coming down with a thud.  Everyone's invited.

Your Faithful Curmudgeon

Aptitude Test for Politicians (Spoilers)

In case you are considering a career (oh how it hurts to use that word in this context) in politics, I have a Friday gift for you - spoiler answers to two of the hardest (for politicians) questions to answer correctly on the PAT (Politician's Aptitude Test) .

1. What are the best reasons to become a politician?
The correct answers:

- get your own graft channel

- harass your competitors and enemies

- protect yourself from prosecution

- build your entourage of lickspittles and groupies

2. What are the worst reasons to become a politician?

...and the correct answers:

- work for your constituents

- follow your conscience

- uphold the Constitution

"There is simply not enough salt in all the world to take with politicians' statements."

- Curmudgery

The Twin Headwinds of Debt and Unemployment

A business friend says he's hopeful he's seeing some signs of economic improvement... I tell him I wish I could agree.  There are definitely up and down spots as you travel around.  Some areas look like they're on their last legs, others are relatively thriving.  In Northern California the contrasts can come within 20 miles or so - the Social Media Center that is eastern San Francisco vs. the bankrupt Vallejo.

In business, too, there are up and down spots.  Traditional businesses are suffering.  Niches in software, biotech, health informatics (ok, lots of federal subsidy action going on there to distort things) are making it.  Businesses that can make it by tuning their operating costs and efficiencies are doing alright.  But this in itself is one of the structural headwinds ripping at the economy.

Of the Two Terrible Headwinds, Headwind #1 is Debt.  Crushing, suffocating, likely to never be repaid.  But staying and staying hidden (securitized, rehypothecated, derivitivized...) on the books from individual households to the too-big-too-fail financial behemoths, in almost every corner of the world economy.  The Federal Reserve is busy sopping up government debt like some bizarre zen-inspired carbon-sequestration program.... "if we buy up and bury the debt, and pay zero interest on it, is it really there?"  The debt-driven growth of the last 30 years has choked itself off.  Like Scotty said, "the engines just can't take it anymore!"   No sustainable economic growth will occur as long as the enormous overhang of bad debt remains.  The only question is who gets to be the fall guy?  Our crony capitalist government would like to be sure that taxpayers and especially savers foot the bill.  As one of those saving taxpayers, I want to see banks take their fair share of the pain.  This is our generational political battle royale.   Suffice it to say, you would have to have a double-rose tint on your glasses to think that the debt serfs once known as consumers will pull the world economy out of its dumps, and so doing, recreate all those lost jobs.  Forget it.  The tide has turned and perhaps in a silver lining way, people are realizing they just don't need so much junk in their lives.

Well then, won't business reinvest, say, when it feels the political climate is more "pro-business", perhaps with a change of occupancy at the White House?  Won't all the business reinvestment drive a glorious new age of prosperity?  Stop and think like a business.  Topline growth except in disruptive niches is hard to come by.  The way to increase shareholder value is to reduce operating costs.  And if that comes from increasing capital investment, where is the payback?  Um, lower labor costs?  So how is this efficiency-driven survival directive going to increase employment and household spending?
Short answer - it can't.

The last option is so ludicrous I hate to even rhetorically pose it... yes, the government will hire that growing tidal basin full of people "no longer in the workforce" (note, not "unemployed", because that is a bad statistic. As the number of employed stagnates and drops, our government statisticians must do their job and do what they can to reduce unemployment - hey, we'll just drop more people out of the labor force.  Suggestion - pay attention to the Labor Participation rate.)

Just what kind of jobs will the government create to save the economy?  The recent past may offer a hint.  The last big labor absorption initiative was creating and staffing up the Department of Homeland Security.   I know that I personally feel ever so much more secure with all the TSA folks standing around at the airports I visit, and I get a palpable sense of well-being that they are the solution to our economic malaise.   Yes, it's the miracle cure.  Just have everyone work for government. It's worked so well everywhere else... what are we waiting for?   More regulation, the engine of economic growth.  The only 'good' thing about this non-option is that it will be funded by.... more government debt, which the Federal Reserve will sop up and bury... end of problem, right?

Lies, Damn Lies and Statistics: Deceit Knows No Bounds in the Service of Politics

And now for another baffling government statistics data point - strangely, employment in the 20-24 age group just shot up in September:  "Cutting to the chase: the September surge in Seasonally Adjusted jobs give to 20-24 year old is the biggest in decades. This is on top of the only positive NSA increase in 20-24 year old jobs in history."  http://www.zerohedge.com/news/2012-10-05/strangest-number-todays-jobs-number

The 2010 census was used to manipulate employment stats - census dept *hired* boatloads of workers (for like 1 or 2 weeks - I was one and there were plenty others in my zipcode - we went to some classes and then were let go.)  Anything that can be used to make fudge will be.

If we dig enough we'll probably find a trigger like the infamous birth/death model stipulating that college students with financial aid have an employment requirement ergo they must be employed... what month do all the student loans re-up?

But all the government data fudging won't change the plainly visible facts of our so-called recovery - the shuttered shops, offices, factories and company hq; empty homes being kept from foreclosure sale, zombie homeless everywhere, huge turnouts to hiring cattle-calls for any job with some benefits, rapidly rising prices for basic commodities.

Freedom will only be restored when financial criminals are punished, bad banks are allowed to fail, and market pricing is allowed to function again.  All the incentives today favor crony capitalism, dishonesty and turpitude. The values that anchored this country's successes have been put in a perverse lockbox.  Is there a viable peaceful solution?

Common Sense is Dead, Denali Bear Killed

I mourn the Denali Grizzly that was shot this past week for.... being a bear.   A photographer with beans for brains was within 50 yards of a browsing bear.  The bear was going about its business.  The season is going to change soon... time for bears to load up on food.  The last thing a feeding bear wants is any competition in its feeding space.   50 yards is pretty up close and personal.  Oh, yeah, let's not forget that grizzly bears can thrash the best human sprinter without trying.  So this idiot photographer gets himself killed.  Sad, but not the bear's fault!

Common sense says we humans should give bears a respectful distance and learn from the mistakes of deluded naturalists.  Instead, our fearless government agents moved in and killed the bear.  This is so stupid it makes me want to cry.  Are we really so locked in to a nanny state mentality that the govvie boys think they HAVE TO DO SOMETHING when a bear kills a person, because the quaking civvies DEMAND that GOVERNMENT DO SOMETHING?   Truly sad.  The government could have easily just reminded the public to stay 1/4 of a mile from a grizzly per established and published guidelines, and this is what happens when you don't.  Now go home.

A sad day for the Grizzlies of Denali, and an even sadder day for homo sapiens that still believe in personal responsibility and common sense.

FAIL! Revisited - IPO Class of 2011-12 mini reunion

Way, way back on June 1 of this year I took a look at some of the high profile tech IPOs of 2011 and 2012 and I offered up a pretty dour view of the immediate future for these hype great investments.   So, two months later, I'm going to have a quick Class Reunion and see how all the IPO graduates have faired....

Presented in the same order, with updated stock charts....

1. Zynga, My Favorite Game!

Look out below!

Here's what I said 6/1:  Opened at 11, a real Christmas gift!  Woops, touching 6 now... don't bother bottom fishing until around 4.  Isn't StockVille such a neat game to play?!

Bottom fishers, you now have a yellow caution light to proceed depending on your level of self-loathing.


2. Get Your Daily Deal - Rotten Fish on GroupOff!

Back on 6/1 GRPN was trading a bit under 10. I said wait for 5.  We are getting there....

3. HELP! I've been YELP'd!

Back on 6/1 YELP was looking at 16 after opening at 22.  Nice levitation since then, but too early to get giddy about upside.  Needs more time wallowing at lower levels.  

4. FaceJuke!  The Mother of all Bogus IPOs!  Long Live the Zuck!

FB touched $45 on opening day. On 6/1 I said way to early to even seriously watch it.  Mr. Market seems to agree.  Let's see if the fall offrom disgrace can stop at $16.  

And finally, the winner.... the CHAMPION!!!!

5. LNKD -  like my 81 year old pops-in-law says, "I'm on the "LINKIN" (no it doesn't do anything for him).  Hotrod Lincoln?  Or a Ford with a fake badge?

On 6/1 I said watch out because LNKD could be "the first commercially viable social network, OMG!!!"  It was actually UP over it's opening day.  I said it was "in the pool of indecision" and it's still there, hovering around its opening price.  I still think it needs to spend some time underwater but LNKD remains the champ in this IPO group... it has legitimate earnings prospects. 

The next few months could be pretty unkind to this whole group.  The low-volume manipulated rising market is very very tired and everyone seems to be focused on Central Bank moves rather than profits and prospects for more.  Main Street is tired too.  The economy is just not in great shape, it's getting harder to fake with government statistics.   This IPO class has its work cut out for it.  At least they have big cash cushions to weather economic storms and headwinds.   I think they're going to need it.

Your Faithful Curmudgeon

The New Criminal Elite

When we think of crime, be honest, we flash on a random act of malice or violence that deprives an innocent victim of something... like a mugging, a smash-and-grab, or passing a bad check.  I think we are totally off-base thinking like that.  While surely crimes, the wrongful acts perpetrated by desperate societal bottom-enders, outcasts and thugs mostly pale in comparison to the crimes of their biggers and betters.

Crime pays and pays big if you are a big enough fish to begin with.  So there is motive enough.  And there is infrastructure aplenty.  Career politicianhood and powerful large business and union interests have a game table that is beautifully set for all manners of turpitude.  Government grafts and in return harasses, maims or kills those who would be obstacles to unlimited enrichment of their commercial cronies.

At the highest levels, we are treated to extortive ultimatums from the Hank Paulsons and Jerry Browns of the world - GIVE ME (MORE OF) YOUR MONEY NOW OR ELSE!!!  Or else what?  The corrupt power structure might suffer a setback or even, perish the thought, a humpty-dumpty fall?  I for one am tired of our so-called leaders and exemplars sticking us up and shaking us down.    More taxes?  Clean up your own house first and then maybe we'll talk.  Bankster bailouts - why do they deserve many-zero bonuses for taking guaranteed debt arbitrage trades from the Fed and Treasury?

I have had serious reservations about gun ownership for most of my life.  My opinion is changing.  I no longer vest much trust in institutions.  In cities like San Francisco, there is annoying and sometimes life threatening crime all around; it will never go on the endangered species list.  Police response is muted at best.  Why not?  None of the swelling ranks of six-figure plus pensionistas answer calls.  Government economics wizards have been robbing savers of their savings via ZIRP and a depreciating dollar for years now with no end in sight.  And now we are treated to Armed Forces "training exercises" on city streets... Got Guns?

FAIL! Tech IPO Class of 2011-2012. Who Farted?

FailBook, or FacePlant, or whatever you want to call it, is NOT the biggest loser in the awful crop of Tech IPOs 2011-2012.

Let's face it, the investment bankers saw the approaching implosion of financial markets as we know them, and put as much perfume on these pigs as has ever been done to arrange a marriage with retail investors, er, ignorant punters.

Let us just look at a few stock charts, shall we?  We'll save the WINNER for last because it's good to finish on an up-note, right?

1. Zynga, My Favorite Game!

Opened at 11, a real Christmas gift!  Woops, touching 6 now... don't bother bottom fishing until around 4.  Isn't StockVille such a neat game to play?!


2. Get Your Daily Deal - Rotten Fish on GroupOff!

GRPN, the ULTIMATE BUSINESS MODEL!  Take an old concept, coupons, with no barrier to entry, and PISS OFF your RETAIL accounts while JADING your end-users!  It's a sure-fire success!  Oh, forgot to note the funny business in accounting... go Chicago!  That tactic is always a great secret sauce for a BIG IPO!  Opened at 28, now under 10.  Makes Facebook look like such a Champ!!  I know that special on Falling Knives is calling your name, but wait for the next 50% off deal on GRPN,  it might go nearly to 5.   If the company survives, it might actually make you some money, then!

3. HELP! I've been YELP'd!

I LIKE Yelp.  It's actually a fun, worthwhile and potentially valuable community.  I participate gladly.  But, I didn't go near the IPO.  Yelp still has to figure out how to make large $$ off of its assets.  Sadly they do not seem to want grey-haired tech exec advice, they would rather whoop it up with a virtual pool party, taking a dive on NASDAQ.  Guys and Gals - I'm still available :-) ... and I'll keep you laughing!

Opened at 22 (gee, their underwriters must have had an unusual fit of modesty!) now probing 16 with a lot of room to range down.  If it can't hold 15-16, maybe 10?  This is not such a bad IPO story.  MOST tech IPOs are underwater six months after opening.  Yelp may make it.  I hope they do.  But the stock just gets a 1-star review right now, I won't buy any until it's quite a bit lower, and then maybe it'll rate up to 3-stars. 

4. FaceJuke!  The Mother of all Bogus IPOs!  Long Live the Zuck!

Oh those bad, bad underwriters.  Hell, they just got caught doing what every tech IPO underwriter has done for decades.  Stop your whining, dice-throwers!  FaceBook is the most talked about boring thing in my lifetime.  Yes, it can be useful and I suppose sometimes even heartwarming.  And advertisers will be sure to pay exorbitant rates to get at really meaty micro-targeted behavior- and location-based goodness.  

Never mind FB is a tool of the state police.  If Google can do it, why not the Book?  But I digress.  Opened at a much ballyhooed $28 so that the mezzanine private equity investors of a year ago could get their guaranteed double, and F to YouGuys who buy the stock retail!   Mwah hah hah!!!    This pig has a long way to go to the find bottom of the PigSty.  Too early to even seriously watch it, unless you like being zucked from behind.

And finally, the winner.... the CHAMPION!!!!

5. LNKD -  like my 81 year old pops-in-law says, "I'm on the "LINKIN" (no it doesn't do anything for him).  Hotrod Lincoln?  Or a Ford with a fake badge?

Look carefully at this... yes, it's true, LNKD is actually UP over it's opening price!  Maybe because its community is LOYAL and a good % actually PAY to use it?  Plus advertising?  Watch out, this could be a real business model.  It might be the first commercially viable social network, OMG!!!

Don't get too excited just yet.  The market can't make up its mind how much LNKD is worth.  It will go down, maybe a bunch, before it goes up again.  But at least it's in the pool of indecision instead of the drowning pool with its IPO classmates!

Moral to the story: Do not FOLLOW the smart money. If you can't ride with them, wait til they kill the innocent in their wake...  if you are patient, you might be able to get some GRPN-sized opportunities.  Happy crumb-hunting!

Your Faithful Curmudgeon