Hump Day

It's the middle of the week and still the financial news is dominated with Europe.  I don't like to stereotype, but I really think Europeans must be insane.  The US looks stable as a rock compared to these nutjobs.  They will say anything to keep the blame of themselves.  Here is Italian PM Silvio Berlusconi's reason for volatile markets in Europe.  They are all coked-up!

Italian Prime Minister Silvio Berlusconi's Undersecretary Carlo Giovanardi said the government will study if it's feasible to conduct drug tests on stock-exchange traders, with the help of the Milan Bourse and the country's market regulator. Giovanardi, who is in charge of family policy and drug prevention, said that the abuse of drugs including cocaine might explain part of recent stock volatility.

You would have to be on drugs to think these guys have any idea of what they are doing.

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It's hump day and I found 2 stories about a couple real screw jobs.  First, I think I would flip if I was told I couldn't build a tree house for my kids, ON MY PROPERTY.  Heck, I wish I could build one that looked this good.

Treehouse Faces Demolition

FALLS CHURCH, Va. - It seemed like a great idea -- build a treehouse on his property for two growing boys. But for one local man, it's turning into a big, expensive lesson in government red tape.

Mark Grapin thought his two sons would love the treehouse.

He called Fairfax County before starting to find out the rules for the Broyhill Park neighborhood in the Falls Church area of the county.

"The guy in building permits laughed me off the phone," Grapin says. He was told it's a treehouse and not built to any code.

So Grapin went to the local home improvement store, bought $1,400 worth of supplies and spent six weekends building the treehouse.

It has red clapboard siding, shingles, a slide, a pull-down ladder, two climbing ropes, closed windows and shutters.

It is wrapped around the tree but stands free, not touching the tree. It stands to the side of his house.

Grapin says his immediate neighbors had no complaints, but someone did complain anonymously to Fairfax County.

Grapin was told he had to treat it like an addition to his house and get a zoning variance. He spent more than $1,800 getting the proper forms and going through a hearing.

The home sits on a corner lot and Zoning Board Chairman John Ribble says that means what Grapin thought was a side lot is actually the front lot.

The variance was rejected.

Grapin says he has an appeal scheduled for Nov. 30, but if he loses that he will have to remove the treehouse.

"I don't have the heart for it," he says. "I'm gonna go pay some day laborers and hide in the house while they take a saw to it."

If that happens, what will he tell his kids?

"Daddy makes mistakes. We tried our best. I made a mistake by not knowing enough."

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The second story is literally a "screw job".  You know this guy is bragging to all his friends about it.

"Mind Blowing" Sex Can Wipe Your Memory Clean

A 54-year-old woman showed up in the emergency room at Georgetown University Hospital with her husband, unable to remember the past 24 hours. Her newer memories were hazy, too. One thing she did recall: Her amnesia had started right after having sex with her husband just an hour before.

While sex can be forgettable or mind-blowing, for some people, it can quite literally be both at the same time. The woman, whose case was reported in the September issue of The Journal of Emergency Medicine, was experiencing transient global amnesia, a rare condition in which memory suddenly, temporarily, disappears.

People with transient global amnesia suffer no side effects, and the memory problems usually reverse themselves in the span of a few hours. It's a rare condition, affecting only about 3 to 5 people per 100,000 each year. But what makes transient global amnesia so eerie is that researchers aren't sure what causes it, or why patients remain otherwise chatty and alert while missing large chunks of their memories.

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Now that I got that out of the way, here is a way some of you could make some money.  I can't give recommendations on how to take advantage of this move on the blog, but I can if you contact me.  This is from Stansberry Research.

And today, Jeff sent an update saying, "Let's buy some more gold." One of Jeff's favorite indicators for the gold market just reversed from "extreme oversold" conditions, creating a buy signal. This is just the third gold-sector buy signal in the past two years…

The last two times this buy signal flashed, The Gold Bugs Index (HUI) rallied 15% in one month. Take a look at the chart:



Now, Jeff's indicator is more oversold than it was on either of the previous occasions. And he expects an even bigger rally this time around.

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Lastly, here is a look ahead to today's trading.  Earnings season kicked off with Alcoa.  Hopefully, most companies will have better news than they did.

Bumpy Start To Earnings Season

If Alcoa is an indication, the earnings season could be off to a rocky start.

Pepsi [PEP  60.95     -0.92  (-1.49%)       ] is up next when it reports Wednesday morning, and traders are nervously awaiting banking giant J.P. Morgan's [JPM  32.30  ---  UNCH        ] results Thursday.

"I really think the corporate picture might even supplant the European story for the short term...For the next couple of weeks, we might see more of a focus by traders on corporate earnings," even in the bond market, said Abdullah Karatash, head of the U.S. fixed income credit trading at Natixis.

Markets have been hanging on every development in Europe's sovereign debt crisis, but now traders are looking to U.S. company forecasts to see how much a weakening Europe and the hit to confidence might affect corporate profits and the U.S. economy.

"The corporate story will give a little more clarity. Up until now, the European story has been somewhat opaque. I think clarity is lacking in the market," he said.


"Frozen by Fear"

Alcoa kicked off the earnings season Tuesday on a weak note that could spook investors. Its stock fell more than 5 percent in late trading, after it reported profits of $0.15 per share, below the $0.22 expected by analysts. Revenues increased to $6.42 billion from $5.28 billion. The company blamed its miss on lower metal prices, seasonal factors, but also softness in Europe.

Alcoa [AA  10.30     0.21  (+2.08%)       ] CEO Klaus Kleinfeld, in an interview on CNBC said the "world is frozen by fear and (it is) cooling down growth. It almost feels like we're worrying ourselves into another recession."  He said the fear can be seen in the increase in speculative short selling in Alcoa and other commodities companies' shares.

But he also stressed things are better than they were in the financial crisis and he called Alcoa a "confident company in a very nervous world."

Alcoa affirmed its forecast of a growth rate of 12 percent for global aluminum demand for 2011 and said that it expects demand to double by 2020. Alcoa's earnings report hurt sentiment in Asia, where Tokyo stocks were trading lower early Wednesday morning. U.S. stock futures were also lower in Tuesday evening trading, after stocks traded quietly in Tuesday's session. The Dow finished down 16 at 11,416, and the S&P 500 was up less than a point at 1195.

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Those Europeans do make good commercials though.

Municipal Changes

The local government landscape is slowing eroding.  Lack of tax revenue is causing quite a few towns to make some strange cutbacks.

Topeka to Stop Prosecuting Domestic Violence

Cash-strapped Topeka, Kansas, has decided to stop prosecuting domestic violence casses in order to save money.

The City Council announced the proposal Oct. 4, after the Shawnee County District Attorney's office announced it could no longer prosecute misdemeanors, including domestic violence cases. The city's maneuver may even require repealing the part of the city code that bans domestic battery. Mayor Bill Bunten told the Topeka Capital-Journal city officials take domestic violence seriously, and it would be "dead wrong" to assume offenders won't be prosecuted. But the dispute is over who would pay for it, he said.

Shawnee County has already dropped 30 domestic violence cases since it stopped prosecuting the crime on Sept. 8. Some 16 people have been arrested for misdemeanor domestic battery charges and then released after charges were not filed.

County District Attorney Chad Taylor has reportedly offered to review all misdemeanor cases filed in Topeka for potential prosecution, including those now handled by the city's municipal court, in exchange for a one-time payment of $350,000 from the city.

The Topeka YWCA said the problem must be resolved.

Multimedia

"When an abusive partner is arrested, the victim's danger level increases," Becky Dickinson, interim director of the YWCA Center for Safety and Empowerment, told the Capital-Journal. "The abuser will often become more violent in an attempt to regain control. Letting abusive partners out of jail with no consequences puts victims in incredibly dangerous positions."

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St. Mary's, GA to Staff Firestation with Inmates

Officials in southeast Georgia are considering a money-saving program that would put inmates in fire stations.
The program would put two inmates in each of three existing firehouses in Camden County.
Officials say the inmates would respond to all emergencies - including residential fires - alongside traditional firefighters.
The inmates would have no guard, but would be monitored by a surveillance system and by the traditional firefighters, who would undergo training to guard the inmates. Authorities say one traditional firefighter with correctional training can supervise up to three inmates.
Authorities say the inmate firefighter program could save the county more than $500,000 a year by some estimates. Inmates charged with crimes such as drug offenses and thefts would be eligible.


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Here is my bizarre for the day...

Mountain Biker Gets Taken Out By Antelope

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The Bank rules is monopoly sounds very familiar to real life banking.  

THE BANK

Besides the Bank's money, the Bank holds the Title Deeds, and the houses and hotels prior to purchase by the players. The Bank pays salaries and bonuses. It sells and auctions properties and hands out the proper Title Deed cards when purchased by a player, it also sells houses and hotels to the players and loans money when required on mortgages.
The Bank collects all taxes, fines, loans and interest, and the price of all properties which it sells and auctions. The Bank "never goes broke." If the Bank runs out of money, the Banker may issue as much as needed by writing on any ordinary paper.

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More Similarities to 2008

No, it isn't 2008. It is a pale imitation. At least based on the Columbus Day (yes, bonds were closed then too) rally back in 2008 when the S&P soared by a ginormous 11%. Obviously what happened next was a roughly 40% plunge in stocks over the next several months. Suggesting the same could happen again would be preposterous: after all everyone knows Mars is willing and ready to bail out the world when the time come now that every single central bank is dodecatuple all in on preserving the status quo. Not for nothing, but even Greece recently ran out of ink... 

 

 

Futures Higher on Euro Debt Hopes

I think this headline has been used about 25 times since July.  Do people really care anymore?  Germany is the only Euro country not completely broke.  It's hard to find a story that isn't about the Euro this morning.  Mike Krieger sent me a story about a Greek town that has started using a barter system.

Truly Revolutionary: Greek City Starts “Rebel” Barter Economy and Alternative Currency

“You have much more than your bank account says. You have your mind and your hands.”

You won’t likely see it headlining The Drudge Report, making its rounds in talk radio, or featured for discussion on cable news panels, but the October 1stNew York Times story covering the emergence of a barter, trade, and alternative currency economy in Greece is one of the most important stories of our day.

The Silver Circle Movie is a story about a band of rebels who vow to take back their freedom amid the economic and political ruins of a catastrophic monetary collapse, but our fictional movie’s predictions for America’s not-so-distant future are the real world economic realities in Greece right now, and the New York Times piece tells the story of real-life rebels taking their future, their prosperity, and their economic freedom back into their own hands, bucking the Eurozone’s fiat monetary system in favor of providing real value in exchange for real value:

“The first time he bought eggs, milk and jam at an outdoor market using not euros but an informal barter currency, Theodoros Mavridis, an unemployed electrician, was thrilled.

‘I felt liberated, I felt free for the first time,” Mr. Mavridis said in a recent interview at a cafe in this port city in central Greece. “I instinctively reached into my pocket, but there was no need to.’

Mr. Mavridis is a co-founder of a growing network here in Volos that uses a so-called Local Alternative Unit, or TEM in Greek, to exchange goods and services — language classes, baby-sitting, computer support, home-cooked meals — and to receive discounts at some local businesses.”

In Greece today, the real rebels aren’t the thousands of protesters angry at the government’s austerity measures, but these few honest, rugged souls who are flourishing on the merits of their own hard work, innovation, and cooperation with others in their local community. These emerging barter and alternative currency networks are happening at the intersection of the most stalwart conservative values and the most ardent hippie ideals:

“Part alternative currency, part barter system, part open-air market, the Volos network has grown exponentially in the past year, from 50 to 400 members. It is one of several such groups cropping up around the country, as Greeks squeezed by large wage cuts, tax increases and growing fears about whether they will continue to use the euro have looked for creative ways to cope with a radically changing economic landscape.”

The new Greek barter economy combines and exemplifies the influences of decentralization, free markets, a strong work ethic, and rugged individualism, as well as the ideals of localism, sustainable living, cooperation, and community organization –all shot through with a healthy dose of the Silicon Valley start-up mentality: innovative, problem-solving, entrepreneurial, and full of bright optimism instead of the fear and resignation that characterizes so many markets and communities today.

People like Theodoros Mavridis are realizing a great new opportunity for sound money advocates and opening up a new front in the war against centralized fiat currencies. One of the fiat system’s most visible opponents is U.S. Congressman Ron Paul (R-TX), who has mobilized an impressive coalition of activists working to publicly audit and eventually abolish the central bank in America– but what if that were as unnecessary as abolishing the U.S. Postal Service?

What if the alternative currencies and barter economies created by people like Theodoros Mavridis simply grew to replace centrally-issued paper currencies as the predominant monetary products the same way email, companies like FedEx, and even text messaging have come to replace centralized, government-sponsored services for exchanging parcels and information? Not as the result of some great ideological revolution, followed by a major political reform, but simply because the alternative works better and people like it more?
As for the feasibility of such a future, sound money advocates the world over can take hope in the fact that the Greek government is not only not hostile to these locally emerging systems of money and exchange, they’re even trying to help:
“Even the government is taking notice. Last week, [the Greek] Parliament passed a law sponsored by the Labor Ministry to encourage the creation of ‘alternative forms of entrepreneurship and local development,’ including networks based on an exchange of goods and services. The law for the first time fills in a regulatory gray area, giving such groups nonprofit status.”
Here at the Silver Circle Movie project, our hats are off to these true revolutionaries, who don’t see their actions as revolutionary. Here in the cradle of Western civilization, suffering from the growing pains of Western civilization’s adolescence, these Greek citizens are just doing what human beings have done for thousands of years: using their minds and their hands to make their lives better.

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Buffett Tax

The Buffett Tax is a joke.  It isn't going to solve any problems.  Here is how the numbers would play out.

(Zerohedge): In order to keep the ongoing class warfare waged by the administration in perspec­tive, today the CBO was kind enough to score the revenue impact of the proposed and much de­bated Buffett Tax, now appearing in non-populist literature as “Surtax on Millionaires.” According to the Budget Office, said tax which is the source of substantial consternation among the popula­tion, would generate, over the next decade, a grand total of... drum roll... $453 billion. Why the drum roll? Because as we pointed out a few days ago, the US closed the 2011 fiscal year having added $1.23 trillion in debt (a number which would have been $1.4 trillion absent some year end settlement gimmickry). In other words, last year the US government had on average a $100+ bil­lion deficit each month. In yet more other words, the great populist gimmick that is the Buffett Tax will have the great benefit of generating, between 2011 and 2021 enough money to plug a debt hole, at the rate America currently spends money, of 4 months.

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I always love a good Wal-Mart story.

Bleach Fight Shuts Baltimore Walmart

A Saturday morning of shopping turned into an emergency hazmat situation at a Baltimore Walmart where two patrons threw bleach and disinfectant at one another, officials said.
Baltimore County Police responded to a call at about 10:48 a.m. Saturday and found two women fighting inside the store.
The bleach and disinfectant created toxic fumes, forcing the immediate evacuation of the entire Arbutus store, officials told ABC News affiliate ABC 2. It closed for several hours.
Fire, EMS and hazardous materials units were dispatched to the scene, as well as 10 medics.

Nineteen people reportedly received treatment, including three Walmart employees. One person was taken to the Wilmer Eye Institute at Johns Hopkins Hospital for treatment, officials said.
Three Walmart employees were being treated for respiratory problems, a Walmart spokeswoman told ABC News.
Police have arrested Theresa Monique Jefferson, 33, after she turned herself in to authorities, according to the Associated Press.
She has reportedly been charged with first-degree assault, second-degree assault, theft under $100 and malicious destruction of property. She is being held on $350,000 bail.
The brawl was a result of an ongoing dispute between Jefferson and the victim because the victim's boyfriend is the father of Jefferson's child, according to the AP.
Police spokesman Shawn Vinson told the Washington Post that Jefferson initiated the attack when she followed the victim into the store.
For Walmart's part, "this is obviously not the type of behavior we would expect from people at our stores. We apologize for any inconvenience this caused to our customers," the spokeswoman said.
Walmart closed the store for several hours to clean and ventilate it.

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Real median annual household income fell significantly more during the economic recovery from June 2009 to June 2011 than during the recession from December 2007 to June 2009.
During the recession, income fell by 3.2 percent from $55,309 to $53,518. During the recovery, income fell by an additional 6.7 percent to $49,909. Altogether that's a brutal 9.8 decline over four years.
The economy is recovering; it's just leaving behind a lot of Americans.

Let Them Eat Steak!

For those of you who don't watch Jon Stewart, you should start.  He seems to be one of the few who is telling it like it is.  In 9 minutes he made me laugh about the media, Occupy Wall Street, and Congress.  The last couple minutes are really funny, so watch the whole thing.

The Daily Show with Jon Stewart
Get More: Daily Show Full Episodes,Political Humor & Satire Blog,The Daily Show on Facebook

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Non-Farm Payrolls jump to 103,000 for September

So much for the recession? September NFP prints at 103,000 on expectations of 60,000, with August revised to 57,000 from that roulette busting double zero. The unemployment rate held at 9.1 percent, as expected. From the report: "The increase in employment partially reflected the return to payrolls of about 45,000 telecommunications workers who had been on strike in August. In September, job gainsoccurred in professional and business services, health care, and construction. Government employment continued to trend down." Average hourly earnings also came in line with expectations at 0.2%, with the previous revised from -0.1%, to -0.2%. Yet not all is good: manufacturing jobs declined by 13K on expectations of an unchanged number. And, oh yes, real unemployment, U6, printed up from 16.2% to 16.5%, the highest since December 2010.
U6:


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You think it's hard selling cars these days?

Used Car Dealer Becomes Horse Trader


PINELLAS PARK, Fla. (CBS Tampa)  With the economy in troubled times car dealers are having to adjust their way of doing business, including trade-ins.
Park Auto Mall Preowned Car And Truck Superstore in Pinellas Park is taking car trade-ins to the next level in today’s cash poor times.

When this used car dealership says “Whether it rolls, floats or flies we will take it on trade,” they can now can add anything that gallops to the phrase.
Recently a woman with no cash came to Park Auto Mall needing a used van for her large family. The only thing of value she had to trade was a horse. The woman and her family now have a van and the horse has new owners thanks to the unique and non-conventional way Park Auto Mall sells used cars.
When they say they will make a trade with anything of value they not only mean it, they prove it. The growing list of items that they have taken in place of cash for a trade include a mobile home, signed baseballs, artwork, an airplane, jewelry and now most recently a horse.

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Who wants to help pay for a Harry Reid monument.  Too late, we already are...

Taxpayers to Pay for Reid Monument

You might be surprised to hear there is a Harry Reid Research and Technology Park. You won't be surprised to learn that U.S. taxpayers are funding part of it.
This monument to the Senate majority leader was not subsidized through some earmark Reid stuck in an appropriations bill. The $2 million grant came through a little-known part of the Commerce Department known as the Economic Development Administration. As Republicans assert that this time they are serious about cutting spending, killing a corporate welfare agency and pork machine like the EDA would be a great start.
Freshman Rep. Mike Pompeo, R-Kan., has introduced the EDA Elimination Act of 2011. In the upper chamber, conservative Sen. Jim DeMint, R-S.C., proposed a similar measure. While EDA is relatively small and nearly unknown, Pompeo sees this as a crucial fight. He calls the EDA "pure redistribution" and the prime example of how federal involvement in the economy allocates wealth "by political processes rather than market processes."
If you've read about absurd congressional earmarks, the list of EDA grants will be dispiritingly familiar. Cedar Rapids, Iowa, is building a $52 million convention center, with the EDA covering most of the cost. EDA paid $2 million to subsidize a "culinary amphitheater" and wine tasting room in Richland, Wash. Essar Steel Minnesota is building a new plant, and the EDA is footing $1.4 million of the $1.6 billion tab.
The EDA is not a "social" agency. It's not about subsidizing the arts, feeding the hungry, promoting diversity or caring for the poor. It is purportedly about increasing economic prosperity. While other aspects of the Great Society agenda (under which Lyndon Johnson created the EDA) are openly about sacrificing wealth for helping the less fortunate, this agency claims to do the same thing that the free market does: increase society's wealth.
Pompeo is right: Abolishing the EDA is an excellent test of whether Republicans actually believe what they say they believe.
Nearly every Republican voted against President Obama's stimulus in 2009, arguing that the deficit was too high, that government shouldn't be in the game of picking winners and losers, and that Washington doesn't create jobs. But the EDA adds to the deficit, picks winners and losers, and purports to create jobs. If Republicans vote to continue the EDA, they flaunt their hyprocrisy to critics, who charged in 2009 that GOP opposition to the stimulus was pure politics.
Is the Republican outrage over the subsidization and bankruptcy of solar company Solyndra anything more than political theater? If the Solyndra sound and fury signify any actual principle, the GOP would also kill the EDA.

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I hope everyone has a great weekend.  GO HOGS - BEAT AUBURN!!!

Jobs, Steve That Is...

We are going to see hundreds of articles over the next week about Steve Jobs, so I won't post them here.  It's a shame cancer cut a brilliant life short.  He literally changed the world with his company's innovations.  I honestly don't know how I would function without my iPhone.  I use it more than anything I have.  My heart goes out to his family and friends.

I am curious to see what happens to the stock after this news.  It might be a time to get into the stock.

Yesterday's job report was better than expected.  Or so the media spin machine would like you to think.
U.S. private-sector employers added 91,000 jobs in September (above expectations of 75,000)… But another report out today shows employers are planning the most layoffs in more than two years. Last month, U.S. firms announced plans to cut 115,730 jobs – including huge cuts from Bank of America and the U.S. military. That's more than double August's total of 51,114 jobs… And that's the highest number since April 2009, when companies announced 132,590 layoffs.

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Michael Lewis might be the best financial journalist around.  His article in Vanity Fair about California going bust is very insightful.  It's very long so I won't copy it here.  You might want to save it for later.

California or Bust

The smart money says the U.S. economy will splinter, with some states thriving, some states not, and all eyes are on California as the nightmare scenario. After a hair-raising visit with former governor Arnold Schwarzenegger, who explains why the Golden State has cratered, Michael Lewis goes where the buck literally stops—the local level, where the likes of San Jose mayor Chuck Reed and Vallejo fire chief Paige Meyer are trying to avert even worse catastrophes and rethink what it means to be a society.

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I'm not sure how many of you read ZeroHedge but it's has the stories that the spin doctors don't want you to read.  Yesterday, the CNBC drones went on and on about how they shouldn't be mentioning the websites name on TV.  Pretty funny.

More money printing...

Bank Of England Expands QE By £75 Billion To A Total Of £275 Billion, Keeps Rate Unchanged

As many expected, the Bank of England has followed in Bernanke's footsteps and proceeded with extra QE, 75 billion extra, or about 25 billion more than consensus - this is the first expansion in the British QE since November 5, 2009 when it did the latest  £25 billion expansion. Unfortunately, this is just the beginning: much more global QE is coming down the line as the "monetary authority" realizes it only has itself and its printers to rely on in a world rapidly reentering recession.  

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This ties in with the story about California.  It's isn't just one state with a problem.  It's all of them.

Nearly Half of U.S. Lives in Household Receiving Government Benefit

Families were more dependent on government programs than ever last year.
Nearly half, 48.5%, of the population lived in a household that received some type of government benefit in the first quarter of 2010, according to Census data. Those numbers have risen since the middle of the recession when 44.4% lived households receiving benefits in the third quarter of 2008.

Click for full-size image

The share of people relying on government benefits has reached a historic high, in large part from the deep recession and meager recovery, but also because of the expansion of government programs over the years. (See a timeline on the history of government benefits programs here.)

Means-tested programs, designed to help the needy, accounted for the largest share of recipients last year. Some 34.2% of Americans lived in a household that received benefits such as food stamps, subsidized housing, cash welfare or Medicaid (the federal-state health care program for the poor).

Another 14.5% lived in homes where someone was on Medicare (the health care program for the elderly). Nearly 16% lived in households receiving Social Security.
High unemployment and increased reliance on government programs has also shrunk the nation’s share of taxpayers. Some 46.4% of households will pay no federal income tax this year, according to the nonpartisan Tax Policy Center. That’s up from 39.9% in 2007, the year the recession began.

Most of those households will still be hit by payroll taxes. Just 18.1% of households pay neither payroll nor federal income taxes and they are predominantly the nation’s elderly and poorest families.
The tandem rise in government-benefits recipients and fall in taxpayers has been cause for alarm among some policymakers and presidential hopefuls.

Benefits programs have come under closer scrutiny as policymakers attempt to tame the federal government’s budget deficit. President Barack Obama and members of Congress considered changes to Social Security and Medicare as part of a grand bargain (that ultimately fell apart) to raise the debt ceiling earlier this year. Cuts to such programs could emerge again from the so-called “super committee,” tasked with releasing a plan to rein in the deficit.

Republican presidential hopefuls, meanwhile, have latched onto the fact that nearly half of households pay no federal income tax, saying too many Americans aren’t paying their fair share.

UPDATE: Nearly half of the population lives in a household that has at least one member who receives some kind of government benefit. An earlier headline incorrectly suggested that half of American households receive some government benefit. Due to differences in household size that isn’t the case.

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I thought I would finish with a funny letter I received yesterday.  I don't think I have any Texas A&M fans on my distribution list.  If so, I'm sorry in advance.

 October 2, 2011



Michael L. Slive 

Commissioner

Southeastern Conference

2400 Dale Ernhardt Jr. Drive, Trailer 23

Tuscaloosa, AL 56843



 Re: Request for Assistance

Commissioner Slive:

This letter is intended to inform you of a misunderstanding we had regarding our recent
application to join the SEC, and to seek your assistance in rectifying the situation. As you are
aware, Texas A&M University takes great pride in its athletic accomplishments and is an
outstanding academic center. Our recent decision to leave the Big 12 Conference was designed
to enhance these attributes.

In considering the conferences in which Texas A&M would have the best fit, particularly as a
football program, it was decided in a meeting amongst our Regents that the Southland
Conference was the best overall fit. We have played a number of teams from that conference
over the last few years, and hoped to build new regional rivalries that would be attractive to our
fan base, while maintaining the competitive edge that Aggies expect from their football program.
(You should have seen how happy the fans were when we roasted Stephen F. Austin last year 42-
7--now that’s football!) Apparently, however, some notes were incorrectly transcribed, and the
next thing you know, we accidentally submitted an application to the Southeastern Conference.
I am sure you can see how such a thing could have happened.

It probably was just as surprising to you that we submitted an application to the SEC as it was to
me. After all, we haven’t beaten a team from the SEC since 1995. Most of our incoming
freshman wouldn’t even be able to remember that game! I mean, seriously, we certainly would
not have knowingly applied to be a member of a conference like that. I probably should have
recognized the mistake sooner, but I’ve been flustered recently by this whole Longhorn Network
situation. In any event, it wasn’t until this weekend when people kept saying that the Arkansas
game would be a conference game next year that made me recognize the error. “What?! I
thought, we wouldn’t want to play Arkansas in a conference game! Every year! That’s crazy!”
That would mean we’d have to play Alabama and LSU, also. That would be inconsistent with
our goal of actually someday winning a conference title, a goal that has proved elusive to us for
the last 14 years as a Big 12 member.




So, I looked into things a little closer, and found the source of our error. I really, really
apologize for the confusion. The President of Sam Houston State and I had a chuckle over the
whole mess this morning. He assured me that the Southland Conference would not let our
mistake hold up our approval for competing in that conference beginning July 1, 2012, but we
will need the SEC’s permission, given that you formally accepted our erroneous application.
Thus, this letter is intended to seek your permission.

Please, please, please, please, please do not make us play Alabama, LSU, Florida, or even
Mississippi next year! You’ve seen us. We’re 0-7 and we haven’t even played SEC teams
ranked in the top 10. Have mercy! You don’t want 13 members anyway . It’s an odd and
unlucky number. So this works out best for all involved.

Again, my deepest apologies for the transcription error that caused this unfortunate
misunderstanding. We need to get our schedules arranged with Stephen F. Austin, Lamar, and
Sam Houston State quickly, so we would really appreciate your approval of this request at the
earliest opportunity. I look forward to hearing from you soon.



 Sincerely,

 R. Loftin

 R. Bowen Loftin



P.S. In the alternative, Texas A&M would be willing to play in the SEC provided all games are
limited to only two quarters. Four quarters is a lot to expect out of student-athletes.



Cc: Commissioner, Southland Conference

Mr. Market's Wild Ride

It's crazy that a headline about a bank, maybe receiving help, could swing the market 400 points in 30 minutes.  One thing I do know, fundamentals don't really matter.  Good companies can go down just as much as bad ones.  The trick is to stay true to your beliefs and realize that these short term swings shouldn't affect your long term plan.  I have quite a bit to read today.  I don't really have a theme, so here goes.

I posted a link the other day about Gold ATMs.  China announced yesterday they are putting in 2000 of them.  You still think gold doesn't have a place in the currency world?

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The guy worked in your administration, Joe...

Vice President Joe Biden doesn't know who Van Jones is

Tuesday morning on AM Tampa Bay on 970 WFLA, Vice President Joe Biden was asked by Jack Harris about the Occupy Wall Street Movement.  The VP said "I really don't know about the Van Jones group, except what I read in the press."  The group is currently protesting in New York City against the social and economic inequality, corporate greed and the influence of corporate money and lobbyists on government.

Later in his response in talking about the frustration seen in the Tea Party and the Occupy Wall Street Group, Biden said "you have on the one end Van Jones' guys, whoever he is, talking about Wall Street."  Jack Harris and Tedd Webb stopped him to tell him he had previously been "Green Czar" in the administration.  The VP responded, "Oh is that... alright"

Van Jones was appointed by President Barack Obama in March of 2009 to the newly created position of Special Advisor for Green Jobs, Enterprise and Innovation at the White House Council of Environmental Quality. Politico reports that Van Jones was vetted by Joe Biden himself.  Van Jones wrote about the VP on the White House website.

Jones resigned from the Obama administration in September, 2009 amidst controversies including his statements alleging U.S. government complicity in the 9/11 attacks as well as particularly disparaging comments about the GOP.

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20% of Americans don't have a job, but the first lady doesn't have a problem taking her entourage to Africa on our dime.  My favorite part might be that the kids were listed as "senior staff".  The half million was just the airfare.

Over $500,000 spent on Michele's trip

How much does it cost taxpayers to fly First Lady Michelle Obama, her two daughters and her mother, a niece and a nephew, a hairstylist and makeup artists to South Africa and Botswana to give a few speeches, meet Nelson Mandela, and enjoy a safari on a private game preserve?

Nearly half a million dollars, according to documents obtained by Judicial Watch via the Freedom of Information Act (FOIA) concerning Obama's June 21-27 journey.

Judicial Watch said the U.S. Air Force provided a C-32 - a Boeing 757 modified by the military for the purpose of flying big-wigs around the world - to fly the First Lady and her entourage to and from Africa, at a cost of $424,142. Another $928.44 was listed as the cost of providing 192 meals for the 21 people who made the trip

The Obama daughters were listed on the manifest as "senior staff."

“This trip was as much an opportunity for the Obama family to go on a safari as it was a trip to conduct government business,” said Judicial Watch President Tom Fitton.  “This junket wasted tax dollars and the resources of our overextended military.  No wonder we had to sue to pry loose this information.”

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This is what I mean when I talk of fundamentals in investing.  The physical metal is being snatched up on every dip.  No matter what the price you see on CNBC.  That is just manipulated by the powers that be.  Currently on the CRIMEX, silver is trading about 20% of the known silver in the world on a daily basis.  Tell me how that can be possible.

Indian Silver Demand Leads to Supply Issues, Capacity Stretched, Higher Premiums

Physical demand for silver remains high and is being reflected in a slight uptick in premiums. GoldCore have seen continuing coin and bar demand and physical buyers are not being deterred by the latest sell off on the COMEX market. Those buying silver continue to expect silver to rise to $50/oz and many expect silver to rise to over $140/oz which is the real record (CPI inflation adjusted) high from 1980.

Demand from western buyers remains minimal as buyers remain a contrarian few with the majority of investors and savers having no allocation to silver whatsoever.

However, this is not the case in Asia where both gold and silver are held in far higher esteem and appreciated for their wealth preservation qualities.

Indian demand has been very significant in months and has accelerated in recent days after the sell off and tentative signs of a bottoming.

 Heightened physical demand for silver from the Indian subcontinent is causing “supply issues” according to UBS this morning. UBS note that airline capacity  to deliver the precious metal is being “stretched” and premiums are unsurprisingly on the rise.

With gold having risen 17% year to date but silver flat so far in 2011, many in Asia are seeing silver as better value at these price levels. Also, many buyers in Asia cannot afford gold at these prices and thus are buying silver instead as silver again fulfills its roles as “poor man’s gold”.

The physical silver market remains tiny vis-à-vis equity, bond and currency markets and even a small increase in allocations to silver could lead to sharply higher prices. As ever buyers should focus on value rather than price and use silver as a wealth preservation tool rather than simply for capital gains.

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Since I'm on a metals roll...

Johnson: I'm Still Buying Gold

Lending money to a European Investment Banks who form a Special Purpose Vehicle who issues bonds guaranteed by broke countries to use as collateral to borrow more money to buy more bad debt? That's their plan? No thank you; I'm still buying gold.

The financial markets are not their usual jovial selves, aggravated by the inconsiderate nature of fiat currency. Gold, long touted as the antibody to central banks and political brinkmanship, has failed to hold up its end of the bargain. (Track Gold & All the Metals Here)

Everybody likes a winner, unless they consistently picked them to lose badly. As the price of gold dropped from a high of over $1,900 an ounce to sub $1,600 territory, the run seemed beleaguered, if not altogether dated. But unlike most things that involve money and emotion, this isn’t all that complicated.

Last quarter’s fixation with the obvious, that developed nations have underwhelming economies and mature obligations, has awakened the bears from hibernation. The European debt crisis, known for being easy to look at and hard to watch, motivated the US money market funds to reduce their exposure to Europe by $700 billion.

The European banks, however, must not only repay previous short term financing received from American institutions, but account for 25 percent of all commercial and industrial loans in the United States. Starved for dollar denominated assets intended to fulfill transactions, they likely pawned the precious metal to manufacture liquidity the way once wealthy families part with remnants of a more prosperous time.

It seems that roller coaster rides to nowhere impact sophisticated investors as well. Given the recent volatility, margin calls where triggered, prompting traders to sell assets with double digit year to date returns as liquidity needs trumped long-term concerns about the health of sovereign debt. The exchange operator CME also raised the margin requirements on gold by21 percent, forcing speculators to put more skin in the game.

Despite the rotation of balance sheets and bandwagons, Greece still teeters precariously on the brink of default, and with it, the prospects that Italy and Spain will soon find themselves on the coattails of excess. A bailout of Italy alone would cost €2 trillion and Apple is worth more than the top 32 European banks combined. Gold may have dropped from its peak, but Europe is still broke.

One of the proposed solutions is to increase the European Stabilization Fund and create a European Investment Bank that in turn forms a Special Purpose Vehicle to issue bonds and purchase suspect debt, which would of course be guaranteed by nations who may need a bailout themselves.

Investors must wonder when shell games replaced affluence and gimmicks became the kissing cousin of opulence. It should be obvious that fiat currency is the silhouette of a free market economy that hasn’t existed for some time, the body long ravaged by thirty years of debt.

As one reviews the reasons why gold recently dropped, the case for owning the hard asset becomes stronger than originally thought. Greece’s economy will contract by over five percent this year, which causes tax revenue to drop by 10 percent. Austerity measures originally meant to solve the problem are now the hoe that digs a deeper hole.

Gold has seen price declines like this before, although the global economy has little experience unwinding this much debt. The need for liquidity may have been temporarily solved, but paper money still isn’t backed by anything of value. It should strike as ominous that when a real asset was in demand, gold was held in the highest regard.

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And now for the bizarre.

Driverless Car Does Donuts

D’Amico said that he found an opportunity to jump into the passenger-side window while he was standing inside the circle the car was making.

The empty older model Ford Thunderbird took to the road on its own when the driver got out of the car in order to switch seats with his passenger, officials said

The car's passenger suffered minor injuries when he tried to jump back in the car earlier.

They then called 9-1-1 to get some help, authorities said.

The rebel car was towed away from the scene. Its owner had no comment on the matter Monday.

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I can't believe they pulled Hank.

ESPN pulls Williams from MNF opening



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This was all the talk in the markets yesterday.  Kinda spooky...

For Those Who Don't Believe History Can Repeat Itself

We posted this earlier, that the S&P 500 closed at exactly the same level yesterday as it did on October 3, 2008: 1099.23.
Anyway, this is really making the rounds on Wall Street today.
Citi's technical analysis folks sent it out in chart form with the amusing title: For Those Who Don't Believe History Repeats Itself...
As you can see, not only did the market close at the same level, well... markets got slaughtered right after that.

Resources and The Mule Jump

I continue to be baffled by the move in gold and silver stocks.  There are 2 ways out of the Euro issues.  Either they continue to print money, or default.  Either way it's positive for gold and silver.  Demand for these two metals has never been stronger.  Therefore, I don't see any change in the fundamentals of the mining and metal stocks.  Goldman Sachs came out yesterday and essentially said they expect more monetary easing.  I fully believe that if we are in a recession, which the market seems to have priced in, the governments around the world will turn on the printing presses.

I figure I will keep the rest of my stuff light today.  We get enough doom and gloom from reading/listening to the news.

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I'm not sure how many of you ever listened to George Carlin, but he was not just a comedian.  He spoke of real issues during his shows.  I saw this over the weekend and it really hit a nerve.  He is totally right.  There is some cursing so skip this if it offends you.

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This weekend is the 23rd Annual Pea Ridge Mule Jump.  For those of you who have never been, it's a fun family event.  He is a clip of the winner a few years ago.

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I don't stay up late enough to watch Jimmy Fallon, but he usually has the best musical guests.  Last Friday was Pink Floyd week.  The best band in alive, Pearl Jam, came on and played PF's Mother.  They never disappoint.



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This chart was interesting to me.  It seems the big market baseball teams are losing attendance and the smaller markets are gaining.

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I don't agree with the way this billboard was handled, but it's pretty funny and accurate.

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Hairy, crazy ants invade from Texas to Miss.

NEW ORLEANS (AP) — It sounds like a horror movie: Biting ants invade by the millions. A camper's metal walls bulge from the pressure of ants nesting behind them. A circle of poison stops them for only a day, and then a fresh horde shows up, bringing babies. Stand in the yard, and in seconds ants cover your shoes.

It's an extreme example of what can happen when the ants — which also can disable huge industrial plants — go unchecked. Controlling them can cost thousands of dollars. But the story is real, told by someone who's been studying ants for a decade.

"Months later, I could close my eyes and see them moving," said Joe MacGown, who curates the ant, mosquito and scarab collections at the Mississippi State Entomological Museum at Mississippi State University.

He's been back to check on the hairy crazy ants. They're still around. The occupant isn't.
The flea-sized critters are called crazy because each forager scrambles randomly at a speed that your average picnic ant, marching one by one, reaches only in video fast-forward. They're called hairy because of fuzz that, to the naked eye, makes their abdomens look less glossy than those of their slower, bigger cousins.

And they're on the move in Florida, Texas, Mississippi and Louisiana. In Texas, they've invaded homes and industrial complexes, urban areas and rural areas. They travel in cargo containers, hay bales, potted plants, motorcycles and moving vans. They overwhelm beehives — one Texas beekeeper was losing 100 a year in 2009. They short out industrial equipment.

If one gets electrocuted, its death releases a chemical cue to attack a threat to the colony, said Roger Gold, an entomology professor at Texas A&M.

"The other ants rush in. Before long, you have a ball of ants," he said.

A computer system controlling pipeline valves shorted out twice in about 35 days, but monthly treatments there now keep the bugs at bay, said exterminator Tom Rasberry, who found the first Texas specimens of the species in the Houston area in 2002.

"We're kind of going for overkill on that particular site because so much is at stake," he said. "If that shuts down, they could literally shut down an entire chemical plant that costs millions of dollars."

And, compared to other ants, these need overkill. For instance, Gold said, if 100,000 are killed by pesticides, millions more will follow.

"I did a test site with a product early on and applied the product to a half-acre ... In 30 days I had two inches of dead ants covering the entire half-acre," Rasberry said. "It looked like the top of the dead ants was just total movement from all the live ants on top of the dead ants."

But the Mississippi story is an exception, Rasberry said. Control is expensive, ranging from $275 to thousands of dollars a year for the 1,000 homes he's treated in the past month. Still, he's never seen the ants force someone out of their home, he said.

The ants don't dig out anthills and prefer to nest in sheltered, moist spots. In MacGown's extreme example in Waveland, Miss., the house was out in woods with many fallen trees and piles of debris. They will eat just about anything — plant or animal.

The ants are probably native to South America, MacGown said. But they were recorded in the Caribbean by the late 19th century, said Jeff Keularts, an extension associate professor at the University of the Virgin Islands. That's how they got the nickname "Caribbean crazy ants." They've also become known as Rasberry crazy ants, after the exterminator.

Now they're making their way through parts of the Southeast. Florida had the ants in about five counties in 2000 but today is up to 20, MacGown said. Nine years after first being spotted in Texas, that state now has them in 18 counties. So far, they have been found in two counties in Mississippi and at least one Louisiana parish.

Texas has temporarily approved two chemicals in its effort to control the ants, and other states are looking at ways to curb their spread.
Controlling them can be tricky. Rasberry said he's worked jobs where other exterminators had already tried and failed. Gold said some infestations have been traced to hay bales hauled from one place to another for livestock left without grass by the drought that has plagued Texas.

MacGown said he hopes their numbers are curbed in Louisiana and Mississippi before it's too late.

The hairy crazy ants do wipe out one pest — fire ants — but that's cold comfort.

"I prefer fire ants to these," MacGown said. "I can avoid a fire ant colony."