Mover Mike

map 2.4 2007/08/31 06:13:50 47.568N 119.785W 0.7 23 km (14 mi) ESE of Waterville, WA

map 2.2 2007/08/31 04:17:29 45.118N 120.942W 18.9 13 km ( 8 mi) ESE of Maupin, OR

map 1.2 2007/08/31 00:02:17 45.129N 120.921W 16.5 14 km ( 8 mi) ESE of Maupin, OR

Maupin Earthquake Mover Mike

Update:

Update:

The latest track of Fitow shows less strengthening and the track is not aimed at the center of Japan. We will continue to monitor this Typhoon.

Another typhoon is gearing up to do damage, Typhoon Fitow. Currently a category 1 typhoon, by Tuesday of next week, Fitow is expected to be packing winds of 131 to 155 mph or category 4 and aiming at the center of Japan.

Typhoon Fitow Typhoon Mover Mike

Update:

Every time we have a lunar eclipse, there are many who claim the solar system bodies in a line cause earthquakes. Who knows?map 1.6 2007/08/30 06:26:17 46.363N 121.121W 0.0 32 km (20 mi) W of White Swan, WA (White Swan again)

map 1.5 2007/08/30 05:48:38 42.266N 119.368W 12.5 52 km (33 mi) N of Andys Place, NV (In Oregon near the border)

map 2.3 2007/08/29 23:00:45 42.072N 120.208W 0.0 17 km (11 mi) SE of Lakeview, OR

map 1.4 2007/08/29 22:35:50 44.139N 121.792W 8.7 26 km (16 mi) SW of Sisters, OR

Oregon Earthquake Mover Mike

Update:

If it took us 10 years to find these WMDs in the UN, how did we expect to find them in a country the size of Iraq?

United Nations officials (Iraqi weapons inspectors) found vials of dangerous chemicals,(Phosgene) which had been removed from Iraq a decade ago, in a U.N. building in New York, but U.N. officials said on Thursday there was no danger.

Iraqi+WMDs Phosgene Mover Mike

One more hero falls.

Dr. Kurt Richebächer's, who died on Monday, has writen about the economy before I was aware of him when I became a stockbroker in 1968. Even after I retired, I read his frequent writings about the economy and always learned from him and he reinforced my views. He practiced the tenets of the Austrian School of economics. The Vigilant Investor has some nice words about the man.

Some say in government that "we didn't see this turmoil in the mortgage industry coming." Richenbacher in December of 2006 wrote about MONETARY ANARCHY and warned of the consequences of the credit expansion:

It (the housing boom) was a boom that plainly went to extraordinary excess in various ways. As a rule, this suggests a very severe aftermath of painful corrections. The first effects of the housing bust have definitely been bigger and more abrupt than most experts had expected. Yet hopes are riding high for a benign adjustment. To quote Federal Reserve Vice Chairman Donald L. Kohn from a recent speech: "The economy will grow at a moderate pace for a while, somewhat below the rate of increase of its potential, and then growth will begin to strengthen."

[...]

Mr. Kohn also takes comfort from the fact that the present housing downturn, in sharp contrast to past ones, is not caused by credit tightening. As he rightly stresses, "The Federal Reserve has returned short-term interest rates only to more normal levels and long-term rates are unusually low relative to those short-term rates." We think, though, that he is drawing a totally false conclusion. All downturns caused by tight money were followed by vigorous recoveries. A downturn happening despite low interest rates and loose money seems to us the most worrying kind.

I grew up on Ayn Rand, Ludwig von Mises and the Austrian School of economics and Richenbacher to name a few. That is why the words of Ron Paul are so appealing to me.

Dr. Kurt Richebächer Austrian School of economics Ron Paul Mover Mike

I saw this at an architecture website, Babeczkaa. The language is unfamiliar to me and the regular translation sites don't translate "bez komentarza"

My thought was, "Why that's George Bush's seat of power! Those are going to be some big....shoes to fill, if Hillary is elected." LOL

President Bush Sen. Hillary Clinton Mover Mike

Here's the headline carried by Reuters and the Washington Post, State Street faces exposure to conduits: report and the Timesonline has the story as State Street bank has highest exposure to conduits

State Street, the American bank, has been identified as having $22 billion (£10.9 billion) of exposure to asset-backed commercial paper conduits, the off-balance sheet vehicles that have caused severe problems for rivals in recent weeks amid turmoil in credit markets.

[...]

These conduits – packages of retail and commercial loans financed by short-term debt raised in the commercial paper market (asset-backed commercial paper (ABCP) conduits set up in Europe by banks, mostly to invest in longer-term high-quality securities.) – have become of increasing concern to investors amid fears that banks will have to fund the debt from their own balance sheets if these vehicles are unable to sell on their maturing paper.

State Street has 17% of its assets exposed to $22 Billion of conduits.

State Street's percentage makes it the most highly exposed bank to conduits among its European and American peers, the report added.

HBOS Plc HBOS.L (London Stock Exchange) is on the hook for $35 Billion and Standard Chartered also has exposure. Thisismoney.com writes

Banks find conduits attractive because they are an offbalance sheet means of financing their mortgage and other loan books by selling short-term maturity commercial-paper and medium-term bonds.

Seems to me that the banks have done what they always do that gets them into trouble, that is "borrow short and lend long." Once again this tactic has bitten them. The asset-backed commercial paper couldn't be rolled over because the quality of the collateral became suspect both as to quality and price.

STT appears to me to have formed a massive top in the last year amd may be abouy ready to break down.

Conduits State Street (STT) HBOS Plc

The internet is buzzing with alarm over the report by Claire P. Metz that the 1st Battalion 265 Air Defense Artillery is mobilized for duty in Washington D.C.:

The 265th is part of Operation Noble Eagle.

They are ordered by the president to the nation's capital, where they will operate high-tech weapons systems against any potential air threat.

I emailed Ms Metz and asked, Clair, are these troops replacing other troops or is something totally new to D.C.?

She replied, Mike, they are replacing a team from ohio... claire metz

Mike: Thanks for your reply. Shouldn't that bit of information been mentioned in the story? Every kook in the country thinks Bush is about to declare martial law or is preparing for some terrorist attack.

It was reported... in the introduction to our piece... Thanks Mike

Clair that is not correct. Here is what everyone is quoting which is printed over your name. Where is your introduction?

Sometimes they shorten details for the internet... but it was there when we did the story Mike...

Clair I just watched the lead in and your report on the web and there is NOTHING in your report that says that they are replacing any outfit.

You judge for yourself:

Claire responds: wierd (sic) mike, because it was in there... i'll check into it... claire

I Googled "Troops Deploy To Nation's Capital" and there 1,170,000 entries. Besides just reporting the story, here are a few of the remarks:

Blacklisted news reports the story - BlackListed News is Your Total Resource for Real Uncensored Daily World News, Information, and Commentary

CRIMES AND CORRUPTION OF THE NEW WORLD ORDER NEWS - ALARM BELLS, ALARM BELLS, America!!!

Nowpublic - Could this deployment be in preparation for the upcoming protests in Washington on September 15th? Are these troops to be used against USA'ns who will be exercising their constitutional rights and responsibilities? I suppose we'll know soon enough.

How many of you remember the Chicago riots?

Clipmarks - Life as we know it may soon be over folks.

I love this one: From Yahoo Answers:

Wow thats very interesting and also kind of scary. This could actually be a sign of many things. Washington may have had a threat, Bush could be getting ready to declare a state of emergency, martial law, it could even mean Bush is staging a coup. Great question and link. Thanks

Edit: Rumor has it that they are deployed just in time for the big protest march on Washington in Sept. http://www.democraticunderground.com/dis...

Claire P. Metz 1st Battalion 265 Air Defense Artillery Troops Deploy To Nation's Capital Mover Mike

Update:

Update:

The Newark MS-13 Executions: What they didn't tell you!

100% Preventable! Illegal alien gang banger executes high school kids! Two year old stomped to death by illegal alien! Illegal alien pedophiles continue to swarm over our unprotected borders!

GBU: Elvira continues to threaten America from Mexico! Illinois Minutemen denied first amendment rights due to "conflicting viewpoints!"

Vote for us in the Blogger's Choice Awards...(click on image)

Michelle Malkin puts out a call for patriots to contact their state attorney general and demand an end to sanctuary cities...here.

Technorati Tags: illegal immigration, elvira arellano, mexico, rape, murder, executions, new jersey, ms 13, gangs, drugs, carranza, amnesty, pedophile,

What have Hillary Clinton's words accomplished?

Hillary Clinton wants Iraqi parliament to put al-Maliki aside

"I share Senator (Carl) Levin's hope that the Iraqi parliament will replace Prime Minister Maliki with a less divisive and more unifying figure when it returns in a few weeks."

Iraq's Prime Minister Nuri al-Maliki lashed out at Levin and Clinton:

"This is severe interference in our domestic affairs. Carl Levin and Hillary Clinton are from the Democratic Party and they must demonstrate democracy," he said. "I ask them to come to their senses and to talk in a respectful way about Iraq.

President Mahmoud Ahmadinejad warned and said

"They rudely say (the Iraqi) prime minister and the constitution must change," Ahmadinejad said. "Who are you? Who has given you the right" to ask for such a change, he added, addressing the U.S. critics of al- Maliki, who is also a Shiite.

How have Levin's and Clinton's public political statements helped us in this war?

Clinton Mid East Mover Mike

Every day I look at the commodity prices posted on Bloomberg:

S&P GSCI MOVERS
COMMODITY	PRICE	CHG	%CHG
LME LEAD FUTURE (USD/MT)	3297.000	117.000	3.68
GASOLINE RBOB FUT (USd/gal.)	203.930	5.790	2.92
LME ALUM HG FUTUR (USD/MT)	2524.750	36.750	1.48
WTI CRUDE FUTURE (USD/bbl.)	71.970	0.880	1.24
LME COPPER FUTURE (USD/MT)	7379.000	69.000	0.94

I noticed that these are all industrial commodities used in a growing world economy. These statistics are for Monday the 27th, but the strength in these commodities has been going on since the beginning of last week.

Take Copper, on the 21st Sept. Copper closed at $3.135. Today it traded as high as $3.45 (+10%) and closed at $3.34 (+6.5%). Annualized that's 572% and 338%, respectively! The weekly and monthly charts have multiple attacks on $3.80 since the peak at $4.16 in May, 2006. If we break through $3.80, I could see $5.20.

Last week Forbes wrote

The global copper deficit widened in the first half of this year, largely on strong Chinese demand...

In the January to June period of this year, the copper market's deficit stood at 216,000 tonnes, up 192 pct from the 74,000 tonnes recorded in the same period a year ago.

Meanwhile, mine production rose 4.6 pct to 7.7 mln tonnes over the period, (while) Consumption grew 4.8 pct to 9.06 mln tonnes

This supply deficit is not ending any time soon.

My hunch is that there is a lot of cash sloshing around the world. People in the know see inflation coming down the pike and are fleeing fiat currencies, like the USD.

There is another possibility, a wider war in the mideast. Even French President Nicolas Sarkozy said, "a nuclear-armed Iran would be unacceptable and that major powers should continue their policy of incrementally increasing sanctions against Tehran while being open to talks if Iran suspended nuclear activities.

"This initiative is the only one that can enable us to escape an alternative that I say is catastrophic: the Iranian bomb or the bombing of Iran," he said, adding that it was the worst crisis currently facing the world."

Commodities Copper Mover Mike

Hat tip to The Mess Greenspan Made for this chart:

I have never understood how this ETF works, and this kind of thing puzzles me even more. Imagine taking 50 tonnes of gold out of the system in two months and the price of Gold has stopped acting correctly. Whose interest is it to cap the price of Gold?

Gold Precious Metals GLD Mover Mike

The FED injected over $17 Billion into the economy on Friday and in one Repo this morning added another $9.5 Billion.

Federal Reserve Repos Mover Mike

Update:

The WSJ reports

Under the clarification, issued verbally by New York Fed officials to market participants in the last day, banks may pledge asset-backed commercial paper for which they also provide the backup lines of credit.

"This strikes us as a very big deal," said Lou Crandall, chief economist at Wrightson-ICAP LLC. Traditionally, he said, banks did not pledge paper that they guaranteed because this would be like "pledging your own IOU as collateral for your own IOU." But in principle, he said, the "same objection doesn't necessarily apply to ABCP, as there is an independent pool of collateral underlying the paper."

The FED feels compelled to do something. After all $500 Billion of commercial paper is rolling over and there are no lenders!

map 1.2 2007/08/23 15:37:14 47.664N 120.318W 0.5 8 km ( 5 mi) W of Entiat, WA

I received a note from Laureen , my Washington geology acquaintance. She writes:

Even though this takes place waaaaaay north of you, I thought I would send you this bit of info before the little yellow squares disappear from the map.

map 1.2 2007/08/23 15:37:14 47.664N 120.318W 0.5 8 km ( 5 mi) W of Entiat, WA

Wenatchee is considered the center of Washington state. At Wenatchee, Hiway 97 divides and travels up both sides of the Columbia River for about 30 miles and then rejoins just north of Chelan.

I travel through this area probably seven or eight times a year. The last few years I generally use the east side of 97. This is why.

Just north of Wenatchee is a small community called Entiat. Right now there are two small yellow earthquake squares at Entiat. It is not uncommon for Entiat to have little red, blue or yellow squares.

When driving the west side of 97 in the area of Entiat, you drive at water level along the Columbia River. The river looks like a lake because it is backed up by a dam. On the other side of your car is a steep rock wall. If you are paying attention you will notice that in one area the rock wall turns to a pile of little rock and crumbles out into the river. When I first noticed it I thought to myself, "wow, it looks like there was a rock slide here." Then I noticed the little brown, unnoticeable historical sign, so I pulled over to read it. I was standing on Earthquake Point, where at one time the Columbia River had been blocked.

Now if I drive the west side of 97 I break the speed limit getting through that narrow stretch. I know. It is silly. If there was an earthquake in the area it wouldn't matter what side of the river I was on, but it gives me something exciting to think about on my long drive.

Here are several links to the Entiat earthquakes.

http://earthquake.usgs.gov/regional/states/events/1872_12_15.php

http://earthquake.usgs.gov/regional/pacnw/paleo/greateq/20030722.php

http://earthweb.ess.washington.edu/crosson/ENTIAT/

http://www.pnsn.org/CATDAT/northcascades.html

Entiat Earthquake Mover Mike

Yes, he's gone. I and many, many more are surprised it took this long. However, reading the Wash. Post article, I thought, "How quickly they forget!"

At hearings on the U.S. attorney firings, Gonzales frequently said he could not remember details about key events -- frustrating members of Congress who felt he was trying to minimize his role in what they regarded as politically motivated dismissals.

Remember Hillary testifying before the Grand Jury about details of her many shenanigans and her famous replies to questions? "I'm sorry, I don't recall." Over and Over and Over!"

Alberto Gonzales was never the right man for this job. He lacked independence, he lacked judgment, and he lacked the spine to say no to Karl Rove," said Sen. Majority Leader Harry Reid (D-Nev.)

Remember Janet Reno? She wasn't independent of the real Attorney General, Webb Hubbell, who couldn't serve his position because of his many shenanigans. And was it good judgement she exercised at Waco?

"This resignation is not the end of the story. Congress must get to the bottom of this mess and follow the facts where they lead, into the White House."

Remember this was all over the firings of a few attorneys who serve at the pleasure of the president. Do you recall that Clinton had all his attorneys fired when he assumed office?

In the White House, he wrote a memo that seemed to condone some forms of torture, a sensitive point as the nation debated the treatment of terror suspects.

My God, even the Democrat Alan Dershowitz advocated the use of torture in some instances.

"Under this Attorney General and this President, the Department of Justice suffered a severe crisis of leadership that allowed our justice system to be corrupted by political influence," Sen. Patrick Leahy (D-Vt.)

Again, see Janet Reno and Mr. Hubbell. How about William Safire? He deplored

independent counsel Ken Starr's inability to show that Riady family paid hush money to Webster Hubbell to keep him from telling prosecutors about Hillary Clinton's role in sham deal; scores failure of Justice Department, under Atty Gen Janet Reno, to force John Huang to tell what he knows about Riady link as part of plea bargain in Clinton campaign finance case.

In the end, there are many who have short memories. In the end we voters think we can change things by changing the parties in power. We kid ourselves!

Alberto Gonzales Bush Mover Mike

Investors don't have enough to worry about. Now Rep. John Dingell, Michigan Democrat, wants to eliminate the interest deduction on houses over 3,000 sq feet. Why don't we eliminate the deduction on houses over 2,000 sq feet? Better yet, let's just eliminate the interest deduction on all homes? What an idiot!

This is Dingell's way to get people to conserve energy. He also wants to

...hike taxes on gasoline sales by an unspecified amount and impose a new tax on emissions of carbon dioxide, the main greenhouse gas blamed for (sharp intake of breath) global warming.

Dingell and Jeff Merkley, two politicians that have never met a tax they didn't like, because they think they can spend our money better than we can.

Rep. John Dingell Jeff Merkley Mover Mike

Aaron Russo promoting his film America: Freedom to Fascism

From Wikipedia:

Aaron Russo (February 14, 1943 - August 24, 2007) was an entertainment businessman, film maker, and libertarian political activist. Aaron lost his battle with cancer on August 24, 2007.

I posted several times about Aaron Russo here and here. Check out one his finest moments, the production of America: Freedom to Fascism

Aaron Russo America: Freedom to Fascism Libertarian Mover Mike

They aren't big ones, certainly by L.A. standards, but Oregon seems to be jittering:

map 1.1 2007/08/24 05:22:39 44.626N 124.326W 26.9 22 km (13 mi) W of Newport, OR

map 1.4 2007/08/24 03:48:51 45.351N 122.340W 20.2 7 km ( 4 mi) N of Estacada, OR

map 1.3 2007/08/23 20:30:24 44.640N 124.326W 28.5 21 km (13 mi) W of Newport, OR

map 2.8 2007/08/23 15:31:00 44.629N 124.331W 27.2 22 km (14 mi) W of Newport, OR

map 1.9 2007/08/23 14:51:11 43.227N 123.308W 3.8 4 km ( 3 mi) ENE of Roseburg, OR

map 1.0 2007/08/22 13:59:58 44.035N 121.323W 0.0 3 km ( 2 mi) SSW of Bend, OR

Oregon Earthquake Mover Mike

From The National Center for Policy Analysis dated August 24th:

Though many people consider Portland, Ore., a model of 21st-century urban planning, the region's integrated land-use and transportation plans have greatly reduced the area's livability. To halt urban sprawl and reduce people's dependence on the automobile, Portland's plans use an urban-growth boundary to greatly increase the area's population density, spend most of the region's transportation funds on various rail transit projects, and promote construction of scores of high-density, mixed-use developments, says Randal O'Toole, a senior fellow with the Cato Institute.

When judged by the results rather than the intentions, the costs of Portland's planning far outweigh the benefits, explains O'Toole:

* Planners made housing unaffordable to force more people to live in multifamily housing or in homes on tiny lots.

* They allowed congestion to increase to near-gridlock levels to force more people to ride the region's expensive rail transit lines.

* They diverted billions of dollars of taxes from schools, fire, public health, and other essential services to subsidize the construction of transit and high-density housing projects.

Those high costs have not produced the utopia planners promised.

* Far from curbing sprawl, high housing prices led tens of thousands of families to move to Vancouver, Washington, and other cities outside the region's authority.

* Far from reducing driving, rail transit has actually reduced the share of travel using transit from what it was in 1980.

* And developers have found that so-called transit-oriented developments only work when they include plenty of parking.

These problems are all the predictable result of a process that gives a few people enormous power over an entire urban area. Portland should dismantle its planning programs, and other cities that want to maintain their livability would do well to study Portland as an example of how not to plan, says O'Toole.

Source: Randal O'Toole, "Debunking Portland: The City That Doesn't Work," Cato Institute, Policy Analysis No. 596, July 9, 2007.

For text:

http://www.cato.org/pub_display.php?pub_id=8463

The National Center for Policy Analysis (NCPA) is a nonprofit, nonpartisan public policy research organization, established in 1983. The NCPA's goal is to develop and promote private alternatives to government regulation and control, solving problems by relying on the strength of the competitive, entrepreneurial private sector.

There should be a major political penalty for using this kind of image!

Hate Speech Mover Mike

Goldman Sachs (Jersey City, NJ)

From Bloomberg:

The dollar may decline to a record low against the euro in the next six months because U.S. economic growth will slow, forcing the Federal Reserve to cut interest rates, according to Goldman Sachs Group Inc.

From the current level of $1.3568 per euro, the U.S. currency will weaken to $1.43 per euro in the next three to six months, Goldman Sachs said in a research note yesterday. New York-based Goldman, the world's biggest securities firm by market value, lowered its dollar forecast from a prior estimate of $1.35. The dollar set a record low of $1.3852 per euro on July 24.

"Financial conditions are tightening at a time when clearly there's some downside risk to the growth,'' said Jens Nordvig, a senior currency strategist at Goldman Sachs in New York. Fed rate cuts ``will drag the dollar lower."

The Fed will lower its benchmark interest rate by 0.75 percentage point to 4.5 percent by year-end, according to Goldman Sachs.

The dollar will fall also because foreign investors will reduce purchases of higher-yielding corporate bonds, said Nordvig.

Goldman also said the dollar will decline to 110 yen in the next three to six months, from 116 yen at present, compared with a previous forecast of 118 yen.

In a related development, Adrian Douglas writes

Goldman Sachs covered an absolutely astonishing 3,184 short contracts (in Gold on the TOCOM) bringing their net short position to 11,358 contracts. This is another record low net short since I have been keeping records (January 2006). We have seen massive contractions in their net short positions before but ONLY when the gold price was plummeting. The ONLY time we have seen a large contraction when the POG was trading sideways was just before the BIG gold price move in 2006.

You know if you want to get this news first hand, subscribe to Le Metropole Cafe.

Goldman Sachs (GS) Gold Adrian Douglas Mover Mike

Hat tip to Maxedoutmama for chart

From the WSJ's Credit Notebook

Still Frozen: The asset-backed commercial paper market, where highly-rated lenders have gone for their short-term funding needs, is still broken despite the Federal Reserve's attempt late last week to fix the logjam in this key part of the credit markets. The Fed on Friday cut its discount rate by half-percentage point in an attempt to alleviate the pressure on banks that found their access to the commercial paper market shut off amid a crisis of investor confidence. "Apparently, the market's worse today than it's ever been," said Dominic Konstam, head of interest rate strategy at Credit Suisse. "The big failure to roll HBOS paper in Europe has upset people." Earlier Tuesday, the U.K.'s biggest lender HBOS PLC said its credit-investment vehicle Grampian will repay maturing asset-backed commercial paper from the bank's balance sheet rather than tap credit markets. Posted 3:10 p.m. (emphasis added)

It is absolutely stunning that $1.2 Trillion of ABCP has no market!

commercial paper ABCP Mover Mike

Rumors were flying early this week that Warren Buffet might be readying his war chest to takeover Countrywide (CFC) after CFC took $11.5 Billion from its credit line with 40 banks. Today the WSJ reports:

Bank of America will purchase $2 billion worth of preferred Countrywide stock yielding 7.25%, and that can be converted into common stock at $18 a share, those people said.

How close to the edge did CFC get? Is CFC too big to fail?

First Magnus fired 5,900 and wasn't too big to fail. It filed for bankruptcy!

American Home Mortgage quit writing home loans Aug. 3 and filed for bankruptcy. It wasn't too big to fail.

Mish Shedlock writes

88,000+- people in financial services lost their jobs this year (nearly 22,000 of them in August alone). And that does not count 6,000 from Magnus so make it 28,000

Does CFC get special treatment because we have revived the policy of "too big to fail?"

Countrywide (CFC) Mortgages Bank of America (BAC) Mover Mike

UPDATE:

Last month, nearly 30 years after the Khmer Rouge reign of terror, the first indictment was issued by a U.N.-backed war crimes tribunal in Cambodia. From 1975 to 1979, more than 1.7 million people died at the hands of the Khmer Rouge, led by Pol Pot. Now, after years of prolonged negotiations and conniving by the international community, the tribunal finally looks set to begin its work.

Sorry John Kerry, wrong again!

This is sure to get a rise out of some people! Remember Al Gore? Remember Kerry - Edwards?

The Georgia legislature just:

...dismissed claims that man is responsible for warming the planet.

Climate scientists and environmental activists like former Vice President Al Gore are alarmists. They use flawed statistical models to predict a catastrophic future of thawed glaciers, super-charged hurricanes, swamped coastlines and scorched crops.

John Kerry said

"There was not a massive blood bath in Vietnam"

Then the other Day John Edwards said he didn't know that medicine in Cuba was controlled by the state.

John Edwards, while talking about his socialized healthcare plan was asked if his plan was similar to Cuba’s healthcare system. Edwards’ response was simply incredulous.

John Edwards responded by saying that he was not familiar with Cuba’s healthcare system. He then asked, "Is it a government-run system?"

Who selects these people to run for the Democratic ticket? I would be embarrassed to have a Kerry - Edwards sticker on my car!

And there are many who think Bush's brain is no bigger than a pea. Comparing Iraq with Japan after WWII Bush said at the Veterans of Foreign Wars National Convention:

...critics said that Americans were imposing their ideals on the Japanese. For example, Japan's Vice Prime Minister asserted that allowing Japanese women to vote would "retard the progress of Japanese politics."

It's interesting what General MacArthur observed: In the end, Japanese women were given the vote; 39 women won parliamentary seats in Japan's first free election. Today, Japan's minister of defense is a woman, and just last month, a record number of women were elected to Japan's Upper House. Other critics argued that democracy — (applause.)

There are other critics, believe it or not, that argue that democracy could not succeed in Japan because the national religion — Shinto — was too fanatical and rooted in the Emperor.

History repeats, but Democrats refuse to learn!

John Edwards Al Gore John Kerry Mover Mike

Update:

CBS has this shot of downed Palm trees due to landfall of Hurricane Dean:

Downed palm trees in Majahual, Mexico, in the Yucatan peninsula, where the eye of Hurricane Dean made landfall, Tuesday, Aug. 21 2007. (AP Photo/Israel Leal)

Some always want to stay and experience a hurricane first hand. Here's one expat telling what it's like.

"It wasn't minutes of terror. It was hours. I wish I was exaggerating, but I'm not," said Catharine Morales, 30, a native of Montreal, Canada, who has lived in Majahual for a year. "The walls felt like they were going to explode."

Morales weathered the storm in her new brick-walled house with her husband and 7-month-old daughter Luna. Dean blew out the windows and pulled pieces from their roof.

As to Damage estimates, according to Dr. Jeff Masters' WunderBlog,

Risk Management Solutions has estimated the insured damage to the Yucatan was between $750 million and $1.5 billion. Total damage is typically double the insured damage, so the price tag for Dean will be very steep for Mexico. Dean also did an estimated $3 billion in damage to Jamaica, and $270 million to Martinique.

Hurricane Dean Mexico Mover Mike

There must have been a lot of puzzled expressions when this news hit the wires based on the chatter I've read.

The Treasury today sold $32 billion of four-week bills, the largest amount since at least July 2001. The bills were sold at a high discount rate of 4.75 percent. The one-month bill yield fell as low as 1.272 percent yesterday, and was about 2.6 percent before the auction. In a sign of weak demand, the government received $1.11 in bids for each $1 sold, the lowest since at least July 2001.

If there was such a flight to quality, the effect of which drove rates as low 1.272%, how come the bid to cover ratio was 1.11 and demand fell virtually to the floor?

Rob Kirby thinks that when Treasury Secretary Paulson on CNBC said

"...we have re-energized the President's Working Group on Financial Markets...,"

what he really did was use the resources of the Working Group to make it look as if the rush to quality was to treasuries not Gold.

You can yell "conspiracy nut", but it makes you wonder, Rob says, Who was the buyer yesterday? What happened to all that demand today?

T-Bills TreasuryAuction Mover Mike

Hurricane Dean was extraordinary. Stu Ostro posts at The Weather Channel Blog:

What really puts Dean in the upper echelon (or, I suppose, lowest) is the fact that the 906 occurred at landfall. That's the third lowest pressure at landfall observed in recorded history from an Atlantic basin hurricane, behind only the 1935 Labor Day Hurricane (892 mb) and Gilbert in 1988 (900 mb, although that was estimated).

Now Dean has been downgraded to Category 1 as it enters the Bay of Campeche.

A second landfall should occur on the central east coast of Mexico Wednesday south of Tampico, probably between Poza Rico and Veracruz (as a category 2 or 3).

Hurricane Dean Mexico Mover Mike

This series of quakes just took place on the north side of Mt Adams, about 16 miles SSW of Ellensberg in Wenas Creek and follows the recent White Swan activity in the same area.

map 1.3 2007/08/20 22:15:48 46.781N 120.631W 7.1 8 km ( 5 mi) NE of Naches, WA

map 1.2 2007/08/20 20:40:53 46.806N 120.674W 8.4 9 km ( 5 mi) NNE of Naches, WA
map 1.9 2007/08/20 20:17:04 46.789N 120.638W 8.9 8 km ( 5 mi) NE of Naches, WA
map 1.6 2007/08/20 18:40:24 46.799N 120.621W 8.4 10 km ( 6 mi) NE of Naches, WA
map 2.3 2007/08/20 18:38:55 46.789N 120.630W 8.3 9 km ( 5 mi) NE of Naches, WA
map 2.3 2007/08/20 18:35:52 46.789N 120.635W 8.7 8 km ( 5 mi) NE of Naches, WA

This looks like the webicorder from Ellensberg

Ellensberg Earthquake Mover Mike

Elvira Arrelano busted! We look at her threatening statements from last week.

100% Preventable! The harvest of innocent Americans continues...

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Hat Tip to Money matters, H-E-D-G-E, by Merle Hazard

From Forbes:

An investment vehicle run by London-based hedge-fund manager Solent Capital Partners LLP on Monday said it may be forced to sell mortgage-backed securities and other assets at a loss after failing to raise short-term funding in the commercial paper market.

To finance the assets going into the portfolio, (Solent's) Mainsail II issued commercial paper (ABCP) in the U.S. and Europe. According to a report from Moody's, the vehicle had $1.33 billion in outstanding U.S. commercial paper as of March.

National Bank of Canada will buy back ABCP at par from investors who had money in money-market mutual funds managed by the bank. Bloomberg reports:

National Bank of Canada, the country's sixth-largest bank, agreed to buy back C$2 billion ($1.89 billion) of asset-backed commercial paper from clients after a global credit crunch froze the commercial paper market.

Separately

...about C$35 billion in asset-backed commercial paper will be converted to floating-rate notes with longer maturities linked to the underlying assets, such as mortgages and corporate loans. The notes may carry maturities as long as five to 10 years, compared with one to three months for most commercial paper in Canada.

Bloomberg also reports

Landesbank Sachsen Girozentrale, the German state-owned bank getting emergency funding, has about 3 billion euros ($4 billion) in investments linked to U.S. subprime mortgages, according to a person with knowledge of the matter.

[...]

The Leipzig-based lender is the second German bank after IKB Deutsche Industriebank AG to get funding after a credit crunch prevented finance units from selling commercial paper, debt due in 270 days or less.

Commercial Paper ABCP v National Bank of Canada Mover Mike

From Dr. Jeff Masters' WunderBlog:

The latest Hurricane Hunter data and satellite intensity estimates both show an intensifying storm, and the 3:54pm EDT eye report showed a 6 mb pressure drop in less than two hours, which is a big fall. The pressure now stands at 918 mb, which is the lowest pressure Dean has attained thus far. The storm is over waters with very high heat content, and is under light wind shear, so continued intensification is probable. Landfall is expected near Chetumal, Mexico, just after midnight local time. Dean will be a tremendously destructive storm for southern Mexico. Dean is powerful enough to be able to survive the crossing of the Yucatan as a hurricane, and hurricane advisories have been posted for cities on the western coast of the Yucatan Peninsula.

RigZone is warning of another storm developing:

Energy prices jumped Friday after meteorologists flagged the possibility of a very strong storm developing in the U.S. Gulf Coast early next week, refocusing attention on the 2006 hurricane season which has proven mild thus far.

Hurricane Dean Yucatan Mover Mike

From the Financial Times:

The yield on the one-month Treasury bill fell 160 basis points to 1.34 per cent in early trading. The yield on three-month Treasury bills tumbled to 2.51 per cent, 123 basis points below Friday’s close – a sharper fall than during the October 1987 stock market crash.

The scramble to obtain government paper at any price is a sign of extreme risk aversion, and suggests the Fed’s actions have yet to stabilise sentiment in the credit markets.

Bloomberg writes:

Treasury bill yields fell the most since at least 1983 on demand for the safest securities amid concern over a widening credit crunch.

Remember, a drop in interest rates by the FED is inflationary!

Treasury bills Interest Rates Mover Mike

Dr. Jeff Masters' WunderBlog

There haven't been many news reports out of Jamaica yet, but we know that electricity is still out, many roads are blocked, and numerous mudslides have been reported across the island. Wind analyses prepared by NOAA's Hurricane Research Division suggest that Category 1 and 2 hurricane conditions affected most of Jamaica, but the Category 3 and 4 winds from the eyewall stayed offshore.

The Oil Drum should make the oil traders nervous: There is now a good likelihood that Dean will impact significantly the Cantarell and the KMZ oil complex which constitute the backbone of the Mexican production. Hurricane Dean Jamaica Mover Mike

map 2.9 2007/08/19 21:27:31 45.127N 120.946W 19.9 12 km ( 7 mi) ESE of Maupin, OR

Maupin Earthquake Mover Mike

On August 14th, I wrote

CNBC reported that Sentinel Management Group, a money market mutual-fund firm for commodities, had asked to halt investor redemptions, suggesting its investors were in a "panic."

Now Mish at Mish's Global Economic Trend Analysis writes that Sentinel Management Group has filed for Chapter 11 bankruptcy. The cash management company had $1.6 Billion in assets.

Mish writes

It turns out that Sentinel was chasing yield to the extreme. One of its short term portfolios actually had a duration of over 30 years.

What that means is that their weighted maturity was 30+ years and their fund is marketed as a short term fund, used as a money market fund. What's wrong with a 30 plus maturity? With a short term maturity, you can always sell assets and get back most of your capital back subject to some slippage. Or you can just wait until a slice of the portfolio matures. The longer the maturity the more the value of your assets move with interest rates. Think of a teeter-totter, interest rates move up on one side and assets move down on the other. Mish says Sentinel had a "Duration Mismatch" If you offer a money market fund you make sure there is no duration mismatch by immunizing the portfolio.

When an investor immunizes a bond portfolio, he will generally construct a portfolio with a, duration (rate sensitivity) that matches the duration of some given liabilities. However, duration is good at estimating only small parallel shifts in the yield curve. Large changes in interest rates will cause a duration mismatch if the cash flows of the portfolio do not exactly match those of the liabilities. Additionally, over time the duration of the portfolio and the liabilities will diverge, if the cash flows are not exactly matched. Both of these situations will force investors to periodically rebalance the portfolio to remain immunized.

Mish concludes

There are going to be ripple effects from this, perhaps lots of them. For starters, anyone that had cash parked at Sentinel can now kiss that cash goodbye. Small to medium size hedge funds with money parked at Sentinel are now likely to be facing margin calls they have no way to meet.

Mish writes that there are duration mismatches all over the place

... in mortgages as well as investments, and especially for those people in 401Ks hoping to retire in 1-5 years.

Duration Mismatch Sentinel Management Group Mover Mike

From Canada.com:

Typhoon Sepat swept China's southern coast on Sunday, killing 14 people and forcing almost a million from their homes, before weakening into a tropical storm.

Look at the specificity of the damages. FEMA could learn something!

...a total of 113,569 families or 542,371 people in the National Capital Region, Cordillera Administrative Region, Ilocos, Central Luzon, Calabarzon and Mimaropa were affected by the weather disturbance.

The NDCC added that 98 houses were destroyed by the strong windgusts packed by the typhoon while P20,608,433 (sic) in fish cages, crops and road networks were swept away

The total value of Taiwan's agricultural products affected by Sepat has reached 830 million New Taiwan Dollars (25 million U.S. dollars) and the losses triggered market worries of increasing prices farm produce.

Typhoon Sepat Taiwan Mover Mike

map 1.8 2007/08/19 04:22:07 45.107N 122.393W 17.8 15 km (10 mi) ESE of Molalla, OR

Molalla Earthquake Mover Mike

These two quakes are directly north of the epicenter of quakes near Maupin. Any connection?

map 1.4 2007/08/18 14:18:48 46.251N 120.831W 4.8 19 km (12 mi) SSW of White Swan, WA

map 1.5 2007/08/18 12:22:53 46.292N 120.815W 7.4 14 km ( 9 mi) SW of White Swan, WA

White Swan, WA Earthquake Mover Mike

Last week Countrywide (CFC) secured a $11.5 Billion credit line with 40 banks. AP Business writer Alex Veiga writes:

The credit agreements require Countrywide to maintain a net worth of at least $7.68 billion and places some restrictions on the company, including limiting the amount of debt that its mortgage servicing unit can accrue to $100 million, according to Countrywide's filing with the Securities and Exchange Commission.

I calculated that present book value of CFC is $14,431.03 Billion. That seems like a big margin for safety, so why was Merrill concerned about Bankruptcy in the downgrade of CFC? Why did the credit default swap spreads go over 1,000 basis points? Why is Jim Sinclair worried about OTC Derivatives and CFC?

Doug Noland of PrudentBear.com writes:

Credit derivatives and “arbitrage” appear to work too well during the boom, ensuring Credit excesses and wholesale risk distortions that expand over the life of the boom. However, this “market” will inevitably prove unviable during the downside of the Credit cycle. Again, there will be unmanageable losses – in this case mushrooming Credit losses - and few with the wherewithal to make good on their obligations.

[...]

Reiterating previously expounded views, the dilemma today is that it requires enormous Credit growth and risk intermediation to sustain what has become a global proliferation of myriad Bubbles. The task involves sustaining inflated financial asset prices, real asset prices, incomes, corporate profits and government receipts – not just next week but going forward. The amount of required ongoing Credit creation is unprecedented, at the same time that bursting speculative Bubbles spur unparalleled deleveraging (forced selling of previously leveraged securities holdings). GSE balance sheets aren’t available to absorb any deleveraging, placing the entire role on global central bankers. Central banks have great capacity to create liquidity. But their ability to manage the unfolding breakdown in private-sector risk intermediation is much more ambiguous.

We are addicted to credit! The FED's actions are enormously inflationary. There is no room for deflation. Central banks are not able to fight depressions, so in the end, there is only one policy, "Inflate or Die!" You saw another chapter last week.

Countrywide (CFC) Derivatives Mover Mike

Update:

For more about banking see Anatomy of the Bank Run by Murray N. Rothbard

Who is the only candidate calling for the repeal of the Federal Reserve Banking Act of 1913? Ron Paul!

The latest, but not the final report about the victims of Katrina: Whites suffered disproportionally to the population!

Caucasions were 29% of the pre-storm population, BUT 40% of the Katrina deaths. African-American were 68% of the pre-storm population, but only 56% of the deaths. Prima facie evidence of racism!

There you have it. We need an affirmative action program for whites in Louisiana, to even out the death rate among races. Otherwise, assuming no further in migration by caucasions, after future strikes by Hurricanes on the state, we are going to see no diversity in government officials, no diversity in the schools or in the private sector. We may be forced by the courts to bus in caucasions from other states. We might as well hang out signs in lunch rooms and drinking fountains: African-American Only!

Hat Tip: Louisiana Questions

Katrina Hurricane Mover Mike

THE PEAK INTENSITY IS EXPECTED TO OCCUR IN THE NORTHWESTERN CARIBBEAN BETWEEN THE CAYMAN ISLANDS AND YUCATAN WHERE THE OCEAN HEAT CONTENT IS VERY HIGH. DEAN COULD BECOME A CATEGORY FIVE AT ANY TIME BEFORE IT REACHES YUCATAN.

Pray for the Jamaicans, directly in the path!

Hurricane Dean Mover Mike

Update:

Hurricane Dean has maximum sustained winds of 150 mph a Category Four. From Dr. Jeff Masters' WunderBlog:

Dean pounded Martinique, St. Lucia, and Dominica yesterday, and the storm's death toll now stands at three. A 62-year old man died on St. Lucia while trying to save his cow from raging flood waters, and a rain-triggered landslide killed a mother and child in their home in Dominica. Martinique suffered the worst damage, with 100% of the banana crop destroyed, 70% of the sugar cane crop gone, and considerable damage to buildings on the south end of the island. Lesser damage occurred on Dominica and St.Lucia, and overall, it appears that the Lesser Antilles islands were fortunate to get off so lightly.

From Canada.com:

Eric de Lucy, president of the banana producers union for the Martinique and Guadeloupe, estimated the cost of the damage to be between 100 and 120 million euros ($134.5 to $161.4 million) and said he would be asking the French government for help.

"There are considerable economic consequences for this sector because there is not a single banana plant left standing in Martinique and more than 80 percent of the banana plantations in Guadeloupe are affected," he told France Info radio.

If they didn't have enough problems the impact of globalization is forcing banana producers to be more competitive, which means giving up European subsidies. The U.S. gets 60 percent of its bananas from Central America. So, our supply seems safe, but there could be a shortage of bananas and increase the price as a result of Hurricane Dean.

Bananas

The SacBee:

On opening day, the biggest buzz making the rounds at the (California) State Fair: deep-fried Coke.

Deep-fried Coke? How do they do that? It was started at the State Fair of Texas by Abel Gonzales Jr. who won the creativity honor at the second-annual Big Tex Choice Awards Contest.

Gonzales deep-fries Coca-Cola-flavored batter. He then drizzles Coke fountain syrup on it. The fried Coke is topped with whipped cream, cinnamon sugar and a cherry. Gonzales said the fried Coke came about just from thinking aloud.

My treat once a year, when I worked downtown, was a walk through the Tom McCall Waterfront Park Rose Festival Fun Center. First, I would have a corn dog with mustard, followed by a snow cone, then cotton candy, topped with Oregon strawberries on a scone. Now I would have to substitute deep-fried Coke for one cotton candy.

Aw, come on. It's only once a year!

Deep-Fried Coke New Foods Mover Mike

PHOTO: HSU MIN-JUNG, TAIPEI TIMES

From AP:

Typhoon Sepat _ by far the strongest storm to hit the island this year _ made landfall at 5:40 a.m. near the eastern city of Hualien, packing sustained winds of 109 mph. It later weakened, with sustained winds of 95 mph, the Central Weather Bureau said.

[...]

At least one person died in Hualien when a car overturned and plummeted into a steep valley.

The Central Weather Bureau estimated that the rainfall in the mountainous areas of the east could exceed 1,000mm, while rainfall in the mountains in Kaohsiung and Pingtung Counties could reach 800mm.

Typhoon Sepat Taiwan Mover Mike

Jim Sinclair wrote something tonight that peaked my interest. Recall, I posted about Countrywide (CFC) on 8/15:

Countrywide's credit default swap spreads were at 750 basis points but had been quoted at 1,050 basis points earlier, more than double the 500 basis points late on Wednesday, said an analyst.

Sinclair wrote

The hairiest of all the OTC derivative weapons of mass financial destruction is the "credit default swap." The amount of firms that have granted these can be counted on your fingers on one hand. Those firms that you can count on one hand are the cream of the International Investment firms. This OTC derivative is the next in line for collapse if the Fed cannot convince all the lemmings that all is well in financial la-la land. (My emphasis) Before credit default swaps fail, thereby taking out financially the crème de la crème of the International Investment firms, the dollar will be burned to dust by the Fed.

As proof of this contempt for the dollar, one need only look at the three actions this week that are counter to a strong dollar: the large injections of Cash via Repos, the and the weighted average interest rate on those Repos of less than the Fed Funds rate of 5.25%, and the reduction in the discount rate from 6 1/4 to 5 3/4. Those actions all have the effect of monetary inflation or debasing the dollar, which is not deflationary, and will show up in rising prices.

What the Fed is most fearful of is the collapse of the OTC Derivatives. Did we come close this week? I'd say so. After all, CFC's insurance cost at one point this week was over 1,000 basis points. That means investors saw two sources of credit exposure: one from the reference asset and the other from possible default by the counterparty to the transaction, CFC. It took borrowing $11.5B From 40 banks to lower the spreads back to 450 basis points, which is double its cost at the beginning of August.

Countrywide (CFC) Derivatives Mover Mike

Update:

So what did the Fed accomplish this week? It talked, talked, talked about the dangers of inflation, mean time the center cannot hold and needs massive amounts of cash injected. To lower interest rates would be inflationary, so the fed has the PPT kill gold and go long options as the market plunges. Then they drop the discount rate by 1/2 a point. Wall street gets what it wants and up goes the market. Total swing is two days is from -380 to +300. The long options are sold, gold takes off +14 from a lower level and the DJIA settles back to zero gain, finally finishing +233. How much is that up for the week, 120?

Bill Murphy at Le Metropole Cafe writes, after all of the Fed moves

*The credit/mortgage/real estate problems will escalate.
*The dollar is in big trouble.
*After a rally, the US stock market is likely to swoon again. *As mentioned and predicted here often for the past 14 months, the FED is giving up its inflation fight in the short term.

That's bullish for Gold!

Mish at Mish's Global Economic Trend Analysis writes

And once again the Fed refuses to let the free market work. Bernanke is no better than Greenspan. He proved it today. And the moral hazard of the Fed's actions are if anything likely to accelerate. But they won't work. Here is the key: There is both a decreasing demand for credit and a decreasing willingness to extend it. But there is a hell of a lot of pent up demand for cash.

Mish also pointed out in a post about Countrywide (CFC)

# ...Angelo Mozilo, chief executive officer of Countrywide, recently exercised options for 46,000 shares in the company and then sold those shares for $1,306,400, according to Thomson Financial.

# Mozilo owns 1,378,390 shares of company stock (497,297 held directly and 881,097 indirectly).

# Over the last two years, in addition to the current filing, Mozilo has been awarded stock four times totaling 787,694 shares, and has exercised options 270 times totaling 14,553,538 shares and has sold shares 268 times (14,550,928 shares for $536,348,378).

Mish asks: Where else can you make a half billion dollars running a company into the ground?

Don't forget the FED is owned by a cartel of banks, just like OPEC is a cartel of oil producing countries. The FED's goal is to maximize profits for its owners. It doesn't give a damn about you except when by coincidence your goals and its goals coincide.

Federal Reserve Countrywide (CFC) Mover Mike

Checking at The Oil Drum in light of the coming of Hurricane Dean, I see that they have set up a special thread that just focuses on the impact of Dean once it hits the Gulf of Mexico (GOMEX). This picture shows what is at risk:

Those red dot represent producing wells or platforms that will get shut down if threatened and could be destroyed by a direct hit.

Two reasons to watch the price of oil. First, the Huricane. Second, Michael T. Klare has caused a stir, buttressing the idea of Peak Oil with his article Entering the Tough Oil Era, The New Energy Pessimism. His thesis is that

The IEA report predicts that world economic activity will grow by an average of 4.5% per year during this period -- driven largely by unbridled growth in China, India, and other Asian dynamos. Global oil demand will rise, it predicts, by about 2.2% per year, pushing world oil consumption from an estimated 86.1 million barrels per day in 2007 to 95.8 million barrels by 2012. With luck and substantial new investment, the global oil industry may be able to increase output sufficiently to satisfy this higher level of demand -- but, if so, just barely. Beyond 2012, the production outlook appears far grimmer. And keep in mind, this is the best-case scenario.

[...]

The numbers are actually staggering. Just to satisfy a demand for an extra 10 million or so barrels per day between now and 2012, two million barrels per day in new oil would have to be added to global stocks yearly. But even this calculation is misleading, as Eagles of the IEA made clear. In fact, the world would initially need "more than 3 million barrels per day of new oil each year [just] to offset the falling production in the mature fields outside of OPEC" -- and that's before you even get near that additional two million barrels.

In order to get that "tough oil" the world will have to invest Trillions of dollars in countries like Saudi Arabia, Iran and Iraq. Klare quotes from the IEA report:

"A stable and attractive investment climate will be necessary to attract adequate capital for evolution and expansion of the energy infrastructure." And this is where any astute observer should begin to get truly alarmed; for, as the study itself notes, no such climate can be expected.

It is believed that this administration will confront Iran before 2009, putting even more pressure on oil prices.

I took a look at the light crude chart, daily and weekly, and it looks to me that this drop to $70 a barrel is just a correction. IMO, look for prices to once again move above $74 and signal a resumption of the bull market in oil.

Peak Oil Michael T. Klare Hurricane Dean Hurricane Mover Mike

The Daily Herald reports:

One of the most active volcanoes in the Aleutian arc could be working toward a massive, explosive eruption that could affect air travel, scientists said Thursday.

Satellite images of Pavlof Volcano taken Thursday showed strong thermal readings, consistent with what the Alaska Volcano Observatory is calling a "vigorous eruption of lava" at the volcano about 590 miles southwest of Anchorage on the Alaska Peninsula.

Pavlof Volcano Alaska Mover Mike

From Dr. Jeff Masters' WunderBlog:

In the Western Pacific, residents of Taiwan are preparing for the arrival of Typhoon Sepat, which is expected to hit the island Saturday morning local time. Sepat is no longer a Super Typhoon, thanks to an eyewall replacement cycle it underwent yesterday. Still, the storm has a huge eye about 70 miles in diameter that will bring Category 3 or 4 winds to a large area of Taiwan.

Typhoon Sepat Taiwan Mover Mike

Update:

AccuWeather has an animated view of Sepat, looking like a huge right hook at the little island of Taiwan:

http://hurricane.accuweather.com/hurricane/satellite.asp?partner=accuweather&traveler=0&basin=wpacific&anim=1

From the AP,

The Federal Reserve approved a half-percentage point cut in its discount rate on loans to banks Friday, a dramatic move designed to stabilize financial markets roiled by a widening credit crisis....The Dow Jones industrial average initially shot up more than 300 points right after the opening bell.

The discount rate is now 5.75% closer to the Fed funds rate of 5.25. Meanwhile, the FED injected $6 Billion into the economy, almost all of it collateralized by MBS.

So far the support levels of the Yen versus the USD and Euro have held, yet the USD is lower. Just as I thought.

Federal Reserve Discount Rate Mover Mike

The new support levels for the Japanese Yen: 112 for the USD (See chart) and 150 for the EURO (See chart)

So, would it surprise if the USD hit a peak, and the Yen falls back against the USD and the EURO? Let's see if the support levels hold.

Japanese Yen Carry Trade Mover Mike

Homeland Security Enlists Clergy to Quell Public Unrest if Martial Law Ever Declared

I think I've heard it all, then this use of the clergy idea comes along. I just shake my head. Why would some bureaucrat think we would listen to the clergy? Why because of Romans 13.

..."because the government's established by the Lord, you know. And, that's what we believe in the Christian faith. That's what's stated in the scripture."

From Biblegateway:

1Everyone must submit himself to the governing authorities, for there is no authority except that which God has established. The authorities that exist have been established by God. 2Consequently, he who rebels against the authority is rebelling against what God has instituted, and those who do so will bring judgment on themselves. 3For rulers hold no terror for those who do right, but for those who do wrong. Do you want to be free from fear of the one in authority? Then do what is right and he will commend you. 4For he is God's servant to do you good. But if you do wrong, be afraid, for he does not bear the sword for nothing. He is God's servant, an agent of wrath to bring punishment on the wrongdoer. 5Therefore, it is necessary to submit to the authorities, not only because of possible punishment but also because of conscience. 6This is also why you pay taxes, for the authorities are God's servants, who give their full time to governing. 7Give everyone what you owe him: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor.

Tell that to Martin Luther, tell that to Gandhi, tell that to Alexander Solzenitzen, tell that to Martin Luther King Jr., tell that to Rosa Parks, or Jackie Robinson. Tell that to all the brave men who challenged the King of England and signed The Declaration of Independence! Give me a freakin' break!

Homeland Security Clewrgy Romans 13 Mover Mike

Update:

As you must know by now, the Yen has rallied against all currencies and the dollar has rallied but not as much. Now, Jesse has a chart that indicates that this may be the top for the USD. We'll see, but the chart certainly looks interesting: http://jessel.100megsfree3.com/dollar.png

USD Mover Mike

Maxedoutmama has a great find, Peter Gabriel's YouTube video of Games Without Frontiers, one possible meaning

This is about the childish antics of adults, which is especially prevalent when their countries are competing in the Olympics.

Or competing for an extra percentage point and using leverage.

Peter Gabriel Carry Trade Mover Mike

From Forbes:

"The flushing out of [the] carry trade has been dramatic for the past two days, particularly today,” said Irene Cheung, a Singapore-based currency strategist at ABN Amro. “We’ll have to see fluctuations, a quick breakdown before the market stabilizes. People are not going to come back so soon."

The Korean Times writes:

Analysts are concerned that the abrupt end of the yen-carry trade could turn equity markets around the world more volatile, bring about possible credit shortage, and make it more difficult for companies to raise funds.

Economist Nouriel Roubini in February of 2007, described the reversal in the carry trade that occurred in 1998

The dollar/yen rout was triggered by the rush to the exits of all those who had shorted the yen and played the carry trade. They all massively tried to cover their shorts exacerbating the yen appreciation. Julian Robertson’s Tiger Fund lost $2 billion on the unraveling of that carry trade; and allegedly even other large macro hedge funds has massive losses. LTCM lost more money on that yen unraveling that then led to another liquidity seizure in US capital markets. Greenspan then declared that the world was facing a global credit crunch and worries about a world recession mounted; soon after the Fed reduced the Fed Funds rate by 75bps.

Japanese Yen Carry Trade Forex Mover Mike

Update:

Vigilant Investor has some links to sources writing about the end of the Yen Carry Trade

"The market is in panic mode," said Michael Woolfolk, senior currency strategist at the Bank of New York Mellon in New York, the world's largest custodian bank with over $20 trillion in assets under administration. "It is a full-blown unwinding of the carry trade. This is just the beginning."

The NY Times is reporting

The death toll from a powerful earthquake rose to at least 337 Thursday, a day after the magnitude-7.9 temblor rocked Peru's coast, toppled buildings and shattered roads, officials said.

More than 827 people were reported injured and the Red Cross said the toll was expected to rise.

The initial quake has been raised to an 8.0!MAP 8.0 2007/08/15 23:40:57 -13.358 -76.522 30.2 NEAR THE COAST OF CENTRAL PERU

The Quake has been followed by some very strong aftershocks:

MAP 5.2 2007/08/16 15:11:36 -13.335 -76.526 148.0 NEAR THE COAST OF CENTRAL PERU
MAP 6.0 2007/08/16 11:35:30 -14.395 -76.154 35.0 NEAR THE COAST OF CENTRAL PERU
MAP 5.3 2007/08/16 09:43:53 -14.009 -75.984 35.0 NEAR THE COAST OF CENTRAL PERU
MAP 4.9 2007/08/16 09:02:10 -14.127 -76.226 35.0 NEAR THE COAST OF CENTRAL PERU
MAP 4.7 2007/08/16 07:46:49 -13.244 -77.099 35.0 OFF THE COAST OF CENTRAL PERU
MAP 4.5 2007/08/16 06:43:13 -13.504 -77.031 12.0 OFF THE COAST OF CENTRAL PERU
MAP 5.0 2007/08/16 06:10:46 -14.095 -76.735 35.0 NEAR THE COAST OF CENTRAL PERU
MAP 6.3 2007/08/16 05:16:58 -14.250 -76.061 35.0 NEAR THE COAST OF CENTRAL PERU
MAP 5.2 2007/08/16 04:23:19 -13.518 -75.725 28.7 CENTRAL PERU
MAP 5.0 2007/08/16 04:16:48 -13.338 -76.874 14.7 NEAR THE COAST OF CENTRAL PERU
MAP 5.6 2007/08/16 04:04:10 -13.585 -76.533 35.0 NEAR THE COAST OF CENTRAL PERU
MAP 5.0 2007/08/16 02:54:20 -13.486 -76.516 35.0 NEAR THE COAST OF CENTRAL PERU
MAP 5.0 2007/08/16 02:17:10 -13.615 -75.922 37.4 CENTRAL PERU
MAP 5.4 2007/08/16 01:35:40 -14.086 -76.546 35.0 NEAR THE COAST OF CENTRAL PERU
MAP 5.8 2007/08/16 01:02:23 -13.307 -76.486 30.5 NEAR THE COAST OF CENTRAL PERU
MAP 5.8 2007/08/16 00:19:14 -14.218 -76.081 35.0 NEAR THE COAST OF CENTRAL PERU
MAP 5.6 2007/08/16 00:02:40 -13.235 -76.400 26.6 NEAR THE COAST OF CENTRAL PERU

Peru Earthquake Mover Mike

From Bloomberg:

Dean became the Atlantic season's first hurricane today as it headed for the Caribbean's Lesser Antilles, while Tropical Storm Erin hit the Texas coast with drenching rain.

Hurricane Dean is carrying maximum sustained winds of 90 mph.

From Dr. Jeff Masters' WunderBlog: Landfall in the Yucatan (as a category 5) are the preferred solutions, followed by an emergence into the Gulf of Mexico, with a second landfall near the Mexico/Texas border.

Hurricane Dean Earthquake Mover Mike

Update:

LOOK OUT NEW ORLEANS! Just a hunch!!!

FED injects $17 Billion in two repos, DJIA down 80, Japanese Yen continues strong: Japanese Yen to USD at 114.620; Japanese Yen to EURO at 153.935

FED Repos Japanese Yen Mover Mike

Update:

From the WSJ: The FED announces

"For the new reserve maintenance period beginning today [Thursday], early estimates suggest that the Desk will need to provide reserves through RP operations on most days.

Is this turning into a permanent add of reserves and thus a large boost to money supply?

Update:

Japanese Yen to the USD 113.160, and to the EURO 151.578

Typhoon Sepat could develop into a Super storm before hitting Taiwan and China, Sustained winds above 155 135 MPH would bump Sepat into Super category.

As of 5 p.m. Wednesday, Egay (Sepat) was churning the Pacific Ocean 670 km southeast of Aparri, Cagayan, with maximum sustained winds of 175 kph, gusting up to 210 kph. The typhoon had slowed to 9 kph, an indication that it was intensifying.

215 kph is Super category.

Typhoon Sepat Taiwan Mover Mike

Update:

Typhoon Sepat gains "Super" Status