Author: VD

Just ran my numbers. As a good contrarian, I was suspecting that it might be buy time anyhow, with France announcing that it’s going to sell 500 tons by 2009 out of the blue while the Financial Time was loudly beating the same “gold is dead” drum that it was beating back when gold was at $275. Those inflation reports must have the big gold shorts sweating. Anyhow, the drop to $398 today brought us to a third day sitting at 1.02 R/DMA, which is my buy point. Silver probably would have been the better buy yesterday, as it actually dropped below 7 and a 1.2 RMDA for a few hours.

If Prechter happens to be wrong here, again, I think it will be safe to ignore him on metals. I’ve been loathe to do so entirely, but this is one area where his leaving inflation out of the equation just doesn’t compute.

Richard Benson explains it very well: The primary sources of manipulation are: 1) Making sure the wrong items are in the index; 2) Taking “hedonics” to ridiculous extremes; 3) Getting consumers to do more of the work and receive less services; and, 4) Changing to a Chain Weighted Index.

If you’re having trouble understanding how the CPI is by no means an accurate measure of inflation, read this. Benson makes it very, very simple.

From the Washington Times: The number of illegal aliens being apprehended on the southwestern border has jumped 25 percent in the first three months of 2004 compared with last year, and some are blaming President Bush’s immigration proposal in January for enticing immigrants across the border. “It doesn’t take a rocket scientist to tell you the president’s speech was the catalyst for lots of folks to make their way north and try to get into this country in order to get what they accurately believe to be amnesty,” said Rep. Tom Tancredo, Colorado Republican and chairman of the House Immigration Reform Caucus. The increase in apprehensions was driven by a spike within the two Arizona sectors, Yuma and Tucson, which saw increases of 60 percent and 51 percent, respectively.

Since our Republican friends are chock-full of secret Bush strategies, maybe this is his secret libertarian plan to destroy the Welfare State by flooding it with folks on the dole. This is in obvious cooperation with secret libertarian Alan Greenspan’s plan to bring back the gold standard by destroying the debt-backed dollar. The plan, it’s working, it’s working! Mwuh-ha-ha-ha-haaaa!

The State Department on Thursday “strongly urged” private U.S. citizens to leave Saudi Arabia as it announced plans to order some U.S. diplomats out the country because of security concerns. “Private American citizens currently in Saudi Arabia are strongly urged to depart,” the State Department said in a travel advisory after it decided to send nonessential U.S. diplomats and all embassy family members home.

June 30th is coming fairly soon. Perhaps the President and his military advisors have decided that it’s time to grasp the nettle. There’s no shame in admitting a strategy isn’t working, only in sticking with it once you know it isn’t working. I doubt it, but it’s possible.

From the BBC: Italian hostage defied killers. The Italian hostage killed by kidnappers in Iraq was a defiant hero in his final moments, Italian Foreign Minister Franco Frattini says. The dead man was identified as Fabrizio Quattrocchi, 36, a security guard. As the gunman’s pistol was pointing at him the hostage “tried to take off his hood and shouted: ‘now I’ll show you how an Italian dies,'” he said.

Sometimes, your only choice is to die poorly or die well. Bravissimo, Fabrizio. Ha mostrato il cuore di un leone. Il suo onore e il suo coraggio confondano i suoi assassini. Resta nello pace.

The Dark Prince of politics, Robert Novak, writes: When George W. Bush faced the nation in a rare prime time press conference, he was responding to a crisis of confidence among his Republican supporters. His recent difficulties in dealing with adversity had planted serious doubts among party leaders. The president’s performance Tuesday night eased their anxiety about an imminent loss of support by his base, but worriers were not completely reassured. Considering how he has handled the first three months of this election year, President Bush’s press conference was indeed a welcome relief. Republicans had feared another public relations disaster following twin failures in his State of the Union address and his appearance on NBC’s “Meet the Press.” While he dodged a third bullet Tuesday night, Republicans concede Bush was less than triumphant.

Funny, I don’t remember either the State of the Union address or Meet the Press being mentioned as disasters at the time. I do remember some breathless color commentary on NRO’s Corner, generally more positive than Jonah Goldberg’s laconic review this time around: “I thought Bush was fine though. At first I thought the prepared remarks were a bit too down-tempo. But it became clear his comments were building on each other. I think he set the right tone and said the right things.”

No doubt we’ll be hearing about how the next one was satisfactory, in contrast to the previous three disasters. In any case, Churchill he ain’t.

The Asia Times covers the Chinese economy: So, all hunky-dory in the Middle Kingdom? Maybe. In the past decade, and certainly since the Asian crisis, warnings by some contrarian analysts of a rapidly overheating Chinese economy cranked up a few more notches. That didn’t faze foreign investors and Chinese policymakers, who scoff at the babble as banal – the same way Asia ignored, then lampooned, similar talk in the mid- to late 1990s. Then, wham! Asia’s economic castles were found to be built on sand. Their miracles were almost entirely debt-financed. And still other analysts fervently describe Chinese economic development as a miracle par excellence. Some are already saying this century is China’s. The zeal and eulogies are all too familiar. But the contrarian chatter is fast catching up to China, with stronger tones – not something Chinese policymakers can afford to ignore anymore.

“The miracles were almost entirely debt-financed.” Why does that remind me of something?

Oh yeah, Mogambo was going off as if he had a cell phone attached to him: as a case in point, I take the $21 billion weekly issuance of debt, multiply it times fifty-two weeks, and compare that annual debt issuance to, oh, let’s say, income. Oh, not YOUR income of course, because you are so smart and handsome and you make the big bucks. No, I’m talking about the national Personal Income, which is listed as $9,364 billion, a figure that includes the pathetic contribution of us ugly little trolls out here slaving away at our pathetic little low-paying, dead-end jobs, and then coming home at night to listen to someone else whine about THEIR pathetic little low-paying dead-end job, although we have no interest in her damn day, and I think I speak for all us trolls when I say that we seethe with envy at your good fortune. Anyway, so when I calculate all that out that, I find that the federal government, our lackluster elected officials, are putting us in more debt, to the tune of 11.5% of our income

Right, there’s your white-hot 8.2 percent growth. The triple-D economy. Debt + Debt+Debt = short-term growth, long-term bust. Not good times.

The commission, anyhow. Let’s follow the progression. Gorelick writes a memo setting up a bureacratic wall. Said wall is widely considered to have made the 9/11 attacks more easily accomplished. Gorlick named to 9/11 commission, commission goes on TV and the memo is released. An obvious conflict of interest given that Gorelick was a participant in the events leading up to 9/11, and yet the vast bulk of the mainstream media claims that it doesn’t matter or attempts to ignore it altogether.

Get up, ah, get, get down.

911 is a joke in your town….

BLS writes: I would respectfully suggest you distill your political beliefs down to the two or three most important to you, then decide which candidate you think is most likely to support them after actually being elected. It’s a two-part process: who can win, and of those, which is better….

No difference between JFK and GWB is a common theme on this blog. It may indicate lack of clear thinking.

I’ve distilled my hot buttons down to five. In fact, this is precisely why I am totally indifferent as to who will win in 2004, just as I was in 2000. I understand that some people believe that it matters greatly if one person is willing to commit 10 percent less fraud than another, as for me, I don’t care to support anyone who embraces the concept. We can agree to disagree, of course. I’m throwing ideas, not rocks.

1. Ending the Federal Reserve and inflation paper.

JK=O

GB=0

GN=1

2. Protecting private gun rights

JK=0

GB=.5

GN=1

3. Leaving the United Nations and all organizations infringing on national sovereignty

JK=0

GB=0

GN=1

4. Respecting the American Constitution.

JK=0

GB=0

GN=1

5. Responding to the petition of We The People.

JK=0

GB=0

GN=.5 (based on his negative comments about income tax, I believe he would at least investigate the claims.)

I believe Gary Nolan of the Libertarian Party – the only Libertarian candidate I’ve interviewed thus far – is by far the best candidate for the Presidency. Management of the undeclared war on method isn’t even in my top ten, especially since I am increasingly of the opinion that Bush is bungling the war that the global jihad has declared on America. So, I’ll cheerfully vote for Gary Nolan, assuming he wins the Libertarian nomination.

If I had just one wish this Christmas season, it’s that all the children of the world would join hands and sing together a song of peace in perfect harmony. If I had two wishes this Christmas season, it would be to hold a heavily short position on the QQQs the day before Congress forces Wall Street to expense employee options. NRO’s Ramesh Ponnuru was wondering why there’s such a big fuss about expensing options, and this little pair of charts should help explain why:

It is unlikely, however, that the average private investor is aware of how significant options accounting is for the earnings of tech companies…. As you can see, excluding employee options as a cost of doing business increased reported net income per share by an average of 77% in 2001, 61% in 2002 and 34% last year. For some companies, like Cisco and Ebay, for example, earnings per share were doubled or tripled due to the accounting fiction that the cost of employee options grants should not be considered an ordinary cost of doing business.

Yeah, get rid of half or two-thirds of their earnings, since the shareholders will never see them, and I imagine that their share prices will tend to sink a bit. I imagine the Wrinkled Whores will have a little something to say about ever allowing that to happen, though.