Here are four thoughts to trip over as we round yet another sharp corner on the path to economic recovery.

1) The perfect world arrived last summer.

Deregulated US banking, housing and financial sectors led to a world of no credit.

This is the era for which a vocal financial publishing crowd has been begging. No regulations. No credit. No borrowing. No more extra debt.

So, how are you enjoying their world… is it the paradise as outlined in the millions of pages in books penned by our betters who sniffed because hoi pathetic polloi lived on credit?

Of course, you know we’re about to wreck this beautiful Eden with a big bite out of the borrowing apple.

Me, I can’t wait to realize Eve is naked.

And, I sure wish the publisher John Wiley and Sons was publicly traded, because its presses are going to be cranking overtime.

2) As you’ll see, we don’t have this problem here at IDE, but here’s a huge economic truth, one that’s created a lot of hypocrisy lately.

If you buy a corporate bond, you are a creditor. You have lent a company your money – commercial paper, secured debt, unsecured debt, senior debt and subordinated debt – you hope you’ll be repaid at a tasty profit.

That’s different from when you buy a stock – a share. In that case you buy a share of the company.

A bond must be repaid, usually at an agreed upon amount.

If the company goes bankrupt – defaults on its repayment to you – you get in line, somewhere near the back, and hope to get some of your money back, while most shareholders are S.O.O.L.

This is the world of credit.

What the hell is wrong with that?

Even better, today, we’re told that corporate bonds are one of the world’s safest investments. Here at IDE, Steve McDonald has, what I am told, a great bond trading program.

You should check it out because to heck with Polonius, I want to be the lender… as long as the return is high.

But, while hypocrisies are delicious, you need to be aware that if you buy bonds you will need to cut the crap when it comes to credit and borrowing rhetoric.

You buy a corporate bond… you tout corporate bonds… then you can’t strut around and complain about a credit-wrecked US economy.

That’s more than okay with me. I’d rather hear you talk about your fat profits than listen to complaints about that which is out of your control.

Ohhh, the prospect of sweet silence – quick, everyone go see Steve McDonald. The line starts here.

3) I do not care what the Debtors of Doom… or the Doomsters of Debt say… credit makes the world go round.

This is a centuries-old reality that somehow evaded a bunch of cranky two-century-ago Austrians.

They probably couldn’t get credit… thus, they couldn’t get hot chicks… thus they wanted everyone to spend cash to level the playing field when it came to chasing hot frauleins who swooned over bankers and barons and not pfennig-less economic geeks.

Honest, maybe there was no Federal Reserve, but credit is really old… the world revolved around it years before revolving credit.

Do you actually think Christopher Columbus put up his own cash to explore the New World?

4) While the Doomsters of Debt will choke on it, the indisputable truth is that credit will lead the globe out of its economic crisis.

You see, borrowing is good.

Next year will prove it.

During the past few months, we’ve seen some amazing – unprecedented – coordination between governments and central bankers that should pay off with some seriously revived growth. That’s all because virtually every country in the world will have low (and lowering) interest rates.

Under those circumstances, it is absolutely inconceivable that the combined power of global economic stimulus won’t work.

Sometime during the first four months of 2009, the creaky 2007-08 economies will be overwhelmed by an age-old force – cheap money and credit.

President Obama’s jobs program will start to take shape. He will force bankers to be bankers again and start lending all those government bailout dollars.

Low interest rates will heat up the housing market.

Homebuilders will crank things up a bit (hint: sometime in January or February take a good look at homebuilders’ stocks or a homebuilders’ ETF, then thank me around Christmas).

The stock market will heat up by March…

We’ll start blowing the bubble again… a huge one this time, because people will be in a race to make it all back.

Banking profits will start to soar and they’ll pay back Uncle Sam.

Homeowners will once again refinance to pay off other debt.

Suburbs and exurbs will expand farther from job centers.

The federal debt will be crazy.

People will be happy and employed.

Medicare and Social Security will still be a mess.

My generation will emulate its parents and steal from its children.

All will be right with the American world.

This is just the way it is now… a much larger scale of the way it’s always been… credit is one of the world’s oldest professions.

The seasons will go round and round… the Debtors of Doom will sell more “open-your-stupid-eyes” bad-news books…

The rest of us will dream of the trappings that make us look more upper class. We’ll pop beers, toss steaks on the grill and flinch at the thought of how close the end is.

Tell me different and I’ll tell you that you’re probably someone who enjoys it when bad things happened to good people.

But that’s not me, man. I not only know my place, I revel in it.

Fairways and greens, baby… and maybe a just hint of an illegal smile.

See you next week… seven days closer to full economic health.

Make Money, Not War
Andy

Source: Good Credit Cures A Bad Economy

Declassified US government documents show that in the 1980s while Iraq’s Saddam Hussein was involved in the genocide against his country’s Kurdish population (using poison gas), the US opposed punishing Iraq with a trade embargo.

The reason was simple. It was cultivating Iraq as an ally against Iran and as a market for US farm exports.

According to the documents, the Reagan administration “got carried away with their own propaganda. They began to believe that Saddam Hussein could be a reliable partner.”

Kinda makes you wonder if Osama bin Laden were to come out of hiding and start his own country if the US wouldn’t try to, once again, be his friend… make him a trading partner.

Source: Be Careful What You Export

This from Investor’s Daily Edge

Some people – even fellow IDE contributors – think Paul Volcker should be the next Secretary of the Treasury… even Chairman of the Federal Reserve.

A non-scientific survey leads me to believe the majority of these Volcker fans were not adults between 1979 and 1987… heck, I suspect most were in diapers or not even here yet… you know, that gleam in daddy’s eye stuff.

Because, as you’ll remember, those were the years when, as Chairman of the Federal Reserve, Volcker twice purposely sent the country into deep recessions.

The other thing I suspect is that many of today’s Volcker-ists are young goldbugs… people who really don’t care what happens to anyone or anything as long as their precious metal goes up.

Volcker is a legend to these people.

You see, back in the 1970’s when he chaired the Fed, Volcker’s attempts to use interest-rate increases to slay inflation backfired. It was met with a great deal more inflation. But, in February 1980, with the Fed funds rate at 14%, gold hit a then all-time high of $875 an ounce.

Goldbugs dined out for 25 years on that.

But, while he made a few people happy, it was Volcker’s three-year experiment with Milton Freidman’s theories on monetarism that left a real mark (scar) on the US.

Instead of targeting the Fed funds rate, Volcker tried to fight inflation by strangling the dollar’s availability.  The results were disastrous.

The problem was that even though inflation is a monetary phenomenon, as Friedman noted, in the late 1970s the majority of physical dollars resided outside the 50 states (they still do), so attempts to control the quantity of dollars within the US were bound to fail.

Worse, given the Fed’s efforts to control money rather than rates, the Fed funds rate bounced wildly on a daily basis. That meant businesses and farmers faced an impossible task of trying to raise capital without knowing how much they would actually owe.

Credit became impossible… either to compute or afford.

In the end, however, Volcker’s policy ultimately did slay inflation. You see, double-digit interest rates led so many businesses to fail that millions of people lost their jobs…thousands of family farms went under.

People without money don’t spend – inflation solved.

Had you lived through this, Paul Volcker would be the very last man you’d want President-elect Obama to name to a cabinet position.

Oh, and by the way, gold was back down to about $300 an ounce by mid-1982… talk about whipping inflation!

Source: Hold On There Volcker Fans, Don’t Forget The Past

1) Back in 2008, the sky may have been dark, but those who reached for it are 2012’s biggest winners. They were the people who kept feeding their retirement plans and investment accounts… these were people who understand that fear, like euphoria, is a transient emotion.

Of course, the difference between fear and euphoria is that people in the midst of a euphoric event know that it’s likely their joy will eventually become tempered.

But, people who are filled with fear think it’s a permanent state – a world without end – a place so desolate that no matter how many friends they recruit to join them, they’ll always feel alone.

2) Delisted from the NYSE in 2009, after trading on the American Stock Exchange with other outlaw stocks, Ford (NYSE:F) and GM (NYSE:GM) now trade on the pink sheets.

3) A small company called Barotex Technologies made big news in 2010 when its high-tech fabric was adopted for wide use on auto bodies.

4) In 2012, everyone wants a piece of Vietnamese stocks or they’re buying into the hot luxury housing markets in Chu Lai and Hoi An City. If it hasn’t happened yet, an American named Henry Fahman is about to become famous for his exploits in Vietnam.

5) China’s massive infrastructure spending will push the shares in Hong Kong-based KHD Humoldt Wedag past $40 by late 2010.

6) Though he named Hilary Clinton to the Supreme Court and admitted that $80 oil is “good for world peace,” President Obama is reelected by handily turning back the GOP’s Newt Gingrich/Robert Gates ticket.

7) By the way, as the people of 2012 will attest, $80 oil is good for world peace. It keeps the Russian, Iraqi, Saudi, Iranian and Brazilian economies cooking and stable. Nobody, besides extremists, is really mad at anyone as long they’re making money.

The United States has cut its oil use by 15%, but that’s not a big deal because China and India picked up the demand slack.

10) Psychologists still can’t explain the phenomenon, but sometime in late 2009 the concept of being happy became separated from money and the stock market. When asked whether or not they were happy, Americans simply said “yes” or “no” without first consulting stock prices.

11) By 2010 FOX News is 20 hours a day of paid infomercials and four hours of actual faux-news-entertainment … two hours of O’Reilly followed by two hours of Hannity.

This programming was aimed at what became known as the US Appalachian Belt. The rest of the country, outside the belt, was generally content. There, people read Kindles, or watched FOX TV’s House… then rushed to WebMd to check their symptoms.

12) Other than a few small, brilliant banks – such a Wainwright Bank & Trust (NASDAQ:WAIN) and its 5% dividend yield – the US banking scene is dominated by three national banks… Bank of America (NYSE:BAC), American Express (NYSE:AXP) and JP Morgan (NYSE:JPM).

13) The economic crisis of 2008 exposed credit card companies for what they are – thieving bastards. Most of them went out of business when a Democratic Party-led congress outlawed interest rates higher than 12% and capped late and over-limit fees at $15 a month.

14) A shocking thing happened on the way to a mortgage crisis. In the past four years, only 5% of all mortgages written before Jan. 1, 2008, have defaulted. In the end, lots of nice people, who once thought federal mortgage help was the same as welfare, ended up taking some help themselves.

It seems unemployment got a bit out of hand back in 2009, so lots of people needed a brief hand out. The Proverbs’ warning, “Pride goeth before the fall,” saw a brief, but popular, revival in the first half of the year.

15) By 2012, most Americans (even some in the Appalachian Belt) agreed that the middle class and their mortgages did not cause the great economic upheaval of 2008. We agreed that the prevailing environment – outrageous arrogance at the top of corporate and political America – trickled down and made it easier for us to blame each other than to blame those who purveyed corporate and political avarice and greed.

In 2012, for some reason, the US is a much happier place. Except for the mushroom cloud of hate that continues to rise from the Appalachian Belt, the shouting has stopped. We finally learned that most people do not invite the bad things that happed to them. Today, as a culture, we save more and consume less. We no longer let mass-media prophets and self-serving politicians pit us against one another… we refuse to allow them to infect us in the way they made our parents bitter and scared.

Back in 2008, we had a choice.

In the end, we chose to exorcise from our culture the ghosts of those who peddle petty selfishness. No one takes Ayn Rand or long-dead Austrians as the gospel anymore.

In 2012, we now argue about important things, like what led the Cubs to blow the 2011 World Series to the Red Sox… which is more boring, the National Football League or The World Series of Poker… and, will Harry Potter kick his crack cocaine addiction… seems the series didn’t die after all.

Source: Keep Your Head To The Sky

Government regulations allow the bank to use that money for a few days before you get your shot at it. Hope the President opts for direct deposit on his pension check, book royalties and the millions he’ll get paid to speak in public.

Anyway, the Associated Press reports that, earlier this week, it was an impatient White House that prodded banks and other financial companies to quit hoarding billions of dollars flowing into their vaults from Washington and start making more loans.

Hoping to thaw the economy-chilling credit freeze, the Bush administration told banks to stop being sissies and open up loan windows for cash-starved businesses and consumers who have pulled back on spending.

“What we’re trying to do is get banks to do what they are supposed to do, which is support the system that we have in America. And banks exist to lend money,” White House press secretary Dana Perino said.

While there are limits to Washington’s power to affect banks’ behavior, the White House decided it was time to use its bully pulpit.

Meanwhile, you have just a few days remaining to charter a bank and get yourself in on some of the gravy train.

Because, it will be a week or so before the Treasury Department can fix a glitch in the bank rescue program that currently prevents some 6,000 of the nation’s 8,500 banks from applying for government support.

Treasury is buying preferred shares in banks as a way of injecting cash into the institutions.

But about 6,000 of the nation’s banks don’t have publicly traded stock shares, so they don’t have a way to qualify for the handout.

Treasury officials assured banking industry representatives that they’d fix the application forms so that both publicly traded and privately held institutions can qualify for the program.

If the fix takes too long, the Treasury will extend the Nov. 14 deadline for applying for government support.

If it can do that for banks, don’t you think the government could deal with your Medicare disputes a little faster?

Source: Changing The Rules On The Bank Bailout

Quote of the Week 2: “Why reasonable people go stark raving mad when anything involving a Negro comes up, is something I don’t pretend to understand.” – Harper Lee, To Kill a Mockingbird

Nine thoughts on week 44.

1) It’s weird, you can go to Harvard, spend hundreds of hours in pursuit of clearer thinking, then run across something that ties it all together. It’s what you’ve been hearing for years. But it comes out of left field, in a different contextual setting and wham…

So what follows here is thanks to Bob Sutton, author of The No Asshole Rule and a brilliant blog called Work Counts.

I’ve been pretty obsessed about the difference between smart people and wise people for years… Perhaps the best description I’ve ever seen of how wise people act comes from the amazing folks at Palo Alto Institute for the Future…

[T]he Institute’s Bob Johansen… explained that – to deal with an uncertain future and still move forward – they advise people to have “strong opinions, which are weakly held…”

Bob explained that weak opinions are problematic because people aren’t inspired to develop the best arguments possible for them, or to put forth the energy required to test them…

It [is] just as important, however, to not be too attached to what you believe because, otherwise, it undermines your ability to “see” and “hear” evidence that clashes with your opinions. This is what psychologists sometimes call the problem of “confirmation bias.”

2) Here’s a shocker about US offshore oil.

It costs $63.71 a barrel just to explore and find oil in US coastal waters. It then costs $6.83 a barrel to bring it to the surface. These are known as “finding” and “lifting” costs.

Combine the costs, and you’ll discover that, no matter who is president, oil is going to have to be at about $71 a barrel for oil companies to break even on US offshore exploration.

That’s a high cost for such benevolence.

And, before you start howling that I am some liberal weenie (from MSNBC) or conservative bully (from FOX News)… in other words a liar… these are official US government statistics that are straight from the Energy Information Administration’s annual January update.

If you’ll remember, the EIA is controlled by the current administration.  It’s had nearly eight years to make these numbers say anything it wants.

So, $70.54 a barrel is the breakeven number for offshore oil… that means to book a 12.5% profit offshore, oil companies need oil at $79.35 a barrel… a 20% offshore profit demands oil at $84.65… that’s with no hurricanes, greedy speculation or OPEC cuts.

The story is worse in the Canadian oil sands… low grade oil that will likely turn out to be one of the world’s all-time great scams… but I’ll save that for a time when I’ve broken my no-new-cynicism pledge.

3) Can you tell me what to make of this?

Gov. Sarah Palin said it in the Sept. 22, New Yorker, about why Alaska taxes oil companies and sends some of that money directly to its citizens (the underline is mine). “And Alaska – we’re set up, unlike other states in the union, where it’s collectively Alaskans own the resources. So we share in the wealth when the development of these resources occurs.”

4) Do you remember late this summer when I irritably predicted how cheap oil would become by Election Day. Back then I said $70.

It looks like I could be wrong, now that oil is under $65.

What I’d like to see now is someone in Washington, or on Wall Street, admit that the run up from $80 to $147 was the work of hedge fund oil-futures speculators.

Because, when you think about today, and you think about three months ago, what’s really changed?

Pretty much just the stock market… and that generated a lack of confidence that had people pulling money out of hedge funds, assuming those funds had any money left.

They certainly don’t have the cash to bet on oil.

It makes you wonder how many hedge funds are blaming the credit crisis for their failures, when in reality, they were wiped out by their own oil futures speculation and the ensuing margin calls.

5) Also, remember a month ago when I said I’d love to hear someone simply admit that they were wrong about the decisions and deregulation that led to the US’s financial crisis?

Well, I was happy to see that Alan Greenspan did apologize. Of course, in the wake, many people, some of them quite smarmily superior, skewed him.

I don’t get it (though I am sure some of you will instruct me). People want someone to blame… anyone to offer a hint of accountability.

Someone says, “blame me.” But, it’s not enough.

Maybe people were mad because Greenspan said there was nothing wrong with the mechanics of his overall plan… he just didn’t factor in human nature.

I actually think that he was shocked, even rocked, by how similar the actions of his peers – all those well-bred Ivy Leaguers on Wall Street – were to what happens when regular old Joes and Janes see money bags drop out of an armored car along an interstate.

Some people will do the right thing… but many others will see free money, stuff their pockets and run like hell.

What would you do?

6) It’s amazing how the world has changed. Eight years ago, politics was about morality… warring values.

Four years ago it was about religion… two Gods at war: their earthly servants doing their bidding.

Today it’s about money… your money. It’s the poverty of nations – street-level warfare against an invisible hand that threatens to scramble urban, suburban and exurban realities.

I’d trade the current crisis, in an instant, for an election where we argued about non-pocketbook stuff like reproductive rights or someone’s right to whack Bambi with a Howitzer.

7) This not a campaign issue, but it is a perspective issue.

Isn’t it perfectly clear that some people have totally lost perspective when they think a VP candidate – one whose base salary is more than three times as much as Joe the Plumber’s – needs a wardrobe that costs nearly four times what Joe makes a year… a makeup artist that makes more in a month than Joe makes annually… and a hair stylist that makes as much in eight weeks as Joe makes in a year?

This shouldn’t change anyone’s vote… but, I bet it makes some folks think twice about ever again sending those people any more… ideological dollars paying $11,500 a week for makeup artist Amy Stozzi because she earned an Emmy nomination for her work on “So You Think You Can Dance?” Come on!

They’re going to donate the wardrobe to charity… what are they doing about a $600,000-a-year makeup artist… have Stozzi give makeup lessons to people in unemployment lines?

Five predictions…

• Should Sen. John McCain lose on Tuesday, well-mannered people will be shocked by how quickly other less well-bred people throw Sen. McCain, not under the bus, but under the bulldozer. Suddenly the poor, tired old fud’s gambling problem will come to light as part of an ethics investigation. He’ll be pilloried for selling out his beliefs.

• Should McCain lose you can be assured that the “PALIN 2012 – YOU BETCHA!” will be running off the presses by Friday.

• Should McCain win, you’ll spend a week reading stories about how Diebold voting machines were hacked and how, like President Kennedy, Sen. McCain’s mafia connections won the day for him.

• Larry Flint will offer Gov. Palin $10 million to pose in Hustler. The majority of her supporters will be crestfallen when she demurs.

• Plumbing won’t seem like such a hot profession when Joe the Plumber finds out what congressmen make – perks and pension included. WURZELBACHER ‘12 signs are already printed.

Thankfully, much will be revealed on Tuesday.

9) This is as far as I ever get when I try to write a self-help book…

Whatever it is you really want, count movement toward that, and only that, as your measure of success.

My guess is Michael Masterson and MaryEllen Tribby’s new tome – a number one bestseller – does a little better than that at explaining how to make it big in this crazy new-world order.

Have a great weekend.

Make money, not war.

Andy

Source: Strong Opinions,  Weakly Held

But that’s just me. Why are the cocaine-sniffing, marijuana-toking, sex-trolling and “gift”-taking members of the Bush administration’s MMS important to you? Well, among a number of energy related tasks, one thing the MMS does is report on staffing levels on oilrigs in the Gulf of Mexico… or “gee-oh-em” in oilrig talk.

As you might imagine, these staffing levels are actually an important part of the information that’s used by big oil and natural gas investors. Imagine if this data could be bent by outside sources who buy an MMS staffer with some coke, pot, prostitutes or tickets to an NFL game.

And, because the MMS is so corrupt, what are we now supposed to make of its Sept. 7 report on GOM oil rig and platform staffing levels?

The MMS claims that companies have evacuated workers from 452 production platforms (63.0%) and 81 rigs (66.9%). It also claims that 95.9% of the GOM’s oil production and 73.1% of its natural gas production were shut-in as a precautionary measure as Hurricane Ike approached the central and western gulf.

Can we believe the MMS when it reports that Shell Oil began evacuations from its offshore GOM facility last Sunday? And that on Wednesday, the oil and gas super-major decided on “a full evacuation.”

The MMS also reported that Ike forced Anadarko to evacuate all 600 workers from its facilities. It also said that Anadarko shut-in all of its GOM production on Thursday.

That included Anadarko’s Independence Hub. This is the Gulf’s largest natural gas processing facility. In fact, at 1 billion cubic feet of natural gas per day, the Independence Hub accounts for 10% of all the natural gas produced in the GOM.

So you can see how the MMS reports could influence markets… and why the number of MMS employees who were so easily corrupted for penny-ante payoffs is so disturbing.

After all, where do you think energy prices are headed when the MMS reports that giants such as ExxonMobil (XOM) and ConocoPhillips (COP) are shutting down GOM facilities, such as Conoco’s Magnolia platform?

Wouldn’t it be great to have someone in your pocket who could influence the markets in the direction you wanted by issuing a small press release with a big headline?

You bet it would.

Also, you have to wonder what it is about the energy industry and corruption. Could it be that prices are easier to influence than we regular Joes might imagine?

Because, there’s a delicious irony that the MMS’s venal shenanigans begin to come to light during the very same week that a federal court okays a $7.2 billion payout to Enron investors.

You have to think the current crowd on Pennsylvania Avenue – the one that manages the MMS and invited the Enron boys to help set national energy policy – has got to be more than ready to get out of Dodge. Of course, the current crew still needs to get “the hero” Scooter Libby his pardon. But, you can bet that this administration’s bags are packed. And it’s ready to go because, as the Reaganites and Clintonites would tell you, this ain’t a monarchy.

Eight years is a long time to keep the lid on all the bad stuff you’ve done or allowed to happen on your watch.

So, when I look back at the past eight years… no make that the past 16 years… no, the past 20 years… no, make that the past 28 years… I realize that MMS can only mean one thing.

“Make mine scotch… a double, please.”

GLOBAL HUNT FINALLY INTENSIFIES

Back in 2005, the CIA disbanded the unit dedicated to hunting Osama bin Laden.

Today, seven years after 9/11, the man suspected of being the largest mass murderer in American history remains at large.

Even more interestingly, word out of Washington is that the hunt for al Qaeda’s leader is once again priority.

But, as Peter Bergen, CNN’s national security analyst reports, while it’s a near certainty that bin Laden is living in Pakistan:

“American intelligence agencies have nothing of any substance on bin Laden. Given the hundreds of billions of dollars that the ‘war on terror’ has consumed the failure to capture or kill al Qaeda’s leader has been one of its signal failures.

“That said, it is worth bearing in mind that finding any one individual can be hard. Think of Mohamed Aideed, the anti-American Somali warlord who was known to be in Mogadishu, the capital city of Somalia in 1993, yet some 20,000 US soldiers deployed there were not able to find him. Think also of Radovan Karadzic, the alleged Bosnian Serb war criminal arrested in July in Belgrade who it took more than a decade to track down after the end of the civil war in the former Yugoslavia, and he was hiding in a relatively small country in Europe, not the badlands of the Afghan-Pakistan border.

“And given the fact that bin Laden is not making obvious errors such as talking on phones the signals of which can be intercepted and the fact that no one in his immediate circle will rat him out for the long-advertised cash rewards for his head it is likely that al Qaeda’s leader could evade detection for years or even decades.”

You have to figure President Bush still rates catching bin Laden as a top personal priority.

Bergen suggests that it’s one reason there have been so many recent missile attacks on suspected al Qaeda and Taliban strongholds within Pakistan’s border.

The idea is not to kill bin Laden, who must be well hidden, but to kill so many of his associates… their wives and children… to cause sudden uncertainty and increased communications between terrorists.

That extra communications traffic will make it easier for intelligence agencies to monitor. It could lead to more top al Qaeda leaders, and even bin Laden.

This is a real departure in US policy. It’s the first real push to capture – more likely kill – bin Laden since he, somehow, evaded US troops and spooks at the battle of Tora Bora in eastern Afghanistan in mid- December 2001.

Stay tuned for an October surprise.

Source: Corruption In The Oil Patch

This from Investor’s Daily Edge:

Now, this is just a gut feeling …

But, doesn’t US foreign policy – that will continue under McCain… and in a year or two under Palin – make a strong case that the US is trying to isolate itself from the rest of the oil-producing world?

The US will get little or no oil or gas from Russia. None from Iran. There’s a chance it could get some from Iraq, but turn your back on that mess for a second and fugetaboutit!

On top of that, Saudi Arabia needs to manage its reserves to make them last. And, finally, McCain/Palin won’t kiss OPEC darling Hugo Chavez’s butt, so don’t count on much more than a dribble from Venezuela.

NIMBY’s Last Gasp

So, who is going to feed the beast?

In the end, the neo-isolationism will force US citizens to demand a rapid expansion of domestic production – offshore and on – or pay $5 to $6 at the pump.

The Canadians, who already sell the US more oil than anyone else, will go nuts in their oil sands in order to meet demand.

And, maybe this isn’t a bad strategy.

After all, the whole world is growing up… becoming mechanized and modernized in the image of the US. The US can’t keep coming up with excuses to attack every country that has major oil reserves.

Russia is going to sell to Europe and China.

The Africans will keep what they need and sell to Australia, the rest of Oceana, China and India.

The Azerbaijani’s will sell to China and India, as will the Iranians and, ultimately, the Iraqis.

This isolation plan will also sit well with the US’s ultra-conservative minority, which doesn’t want to be beholden to any darned foreigners… heck, they barely tolerate them bagging their groceries (maybe their wives don’t tell them about that) and mowing their lawns.

Lucy, I’m Home

So, by isolating itself, the US can return to Happy Days… the charming 1950s when women stayed home, African Americans stayed in their place and Mexicans stayed in Mexico.

And, don’t go all liberal smug on me here… there are million and millions of Americans who really crave the 1950s, so you must be sensitive to their feelings.

Even better, this neo-isolationism will find the petrochemical industry restored to greatness and its close friend the President, Sarah Palin, returning North America to its Industrial Revolution pollution standards – all in the oily name of national security.

Russia will be an enemy again. School kids will once again learn duck and cover. The environment will be a mess, food will be unsafe, but Social Security will suddenly become solvent because people will once again start dying younger, like in their early 70s.

Man, does this isolation stuff solve some big problems or what?

Story of O

And, the only guy who can screw this up is that Sen. Barrack Obama.

He wants to make friends with the world.

I mean, you know he’s a big-time, left leaning, equal opportunity-for-all-including-your-wives-daughters-and-graddaughters, pinko liberal.

But, maybe the nut bags on America’s fringes are correct and US Sen. Barrack Obama is also a God-fearing Muslim… not a God-fearing Christian… because any culture that actually believes you get a passel of virgins in Muslim heaven as a reward for crashing into the World Trade Center is naïve at a deep and scary level… as in naïve in its cultural DNA.

So maybe Sen. Obama is naïve enough to put forth a foreign policy strategy that wants to make friends across the globe and to restore the US’s reputation as mediator and not a kick-butt-cost-is-no-object instigator.

Because, you have to be inexperienced in the ways of US politics to think that twice in a lifetime someone can win the US presidency without a global enemy with which to threaten the electorate.  It’s the rule Bill Clinton broke and the real reason some people hate him … and the reason they’ll hate Sen. Obama if he can pull it off.

It scrambles the global petro status quo.

Source: Raining Petro-Dollars In Georgia

Kathleen thinks she knows me… wow, that kind of sounds like the opening line of an Elvis Costello song, but it’s not. Kathleen is an IDE reader. She responded to something I wrote at some point. I can’t tell what, but, as you’ll see, she’s honked off… ripped at me… roaring at men. Makes me wonder if I shouldn’t run over to Dick’s and buy a cup, just to, you know, be on the safe side.
I wish I knew what piece drove Kathleen to use the response feature that comes with every IDE missive. Maybe she’ll write back and clarify her concerns.

Frankly, I think she is just angry in general. There’s a lot of that going around these days.

You know, conservatives who fear the White House is lost. Non-conservatives who think the White House is lost… investors who think all is lost… homeowners who worry that all could be lost and haven’t got the message from their betters – college educated finance majors – who smugly assume that homeowners voluntarily dug their own deep holes and should now just allow the walls to collapse around them.

Doing that, by the way, would make the problem go away fast so that the MySpace/Facebook finance-degree crowd won’t have time to consider the fact that their parents’ debt, second mortgages and lack of retirement is what paid for their comfy childhoods, extended adolescences and college educations.

Then, there’s the biggest angry crowd of all. New York Yankees’ fans who suspect all is lost.

So, until corrected, I’ll assume that Kathleen knows I live in Boston. And it’s baseball that’s really making her mad.

Now, as you know, it’s my belief that you should be able to respond to me in a manner that allows you to have the last word. I rarely deviate from that.

But, I need to fudge on that just a bit because Kathleen is so wrong about so much that the lovely Lynn Carpenter – my wife – really wanted to write this response.

Katie my girl you are correct. Yes, I am cynical and yes, I am overweight, but I am not going to go all Winston Churchill on you here.

Still, it should be noted that your email’s general premise might come as a bit of a surprise to the women politicians I helped get elected and worked for (one of the men I helped get elected would ruin my reputation with the right wing) and to the women publishers and managing editors for whom I work(ed).

On the other hand, I suppose you could teach me how to hate women.

I am soooooo tired of this kind of article. Written by a cynical, balding, overweight, divorced, woman hating, let me show you how smart and worldly I am man!

Try inspiring me and “just the facts” informational writing would be a breath of fresh air instead of a stale one. Or would tapping into your right brain be too much of a stretch?

Kathleen (yes a woman or female) broad!!! Wow, your showing your age.

P.S. Brace yourself Mr. Macho, women presidents are becoming more the norm all over the world!

See you all on Saturday,

Andy

Source: My Aim Is True

No Crash Here

Anyway, as far as AB&I was concerned, the markets weren’t crashing at all. In fact, Tuesday was a heck of a day for its subscribers.

So, I checked with Lynn to see what was up with her Rising Tide Letter portfolio. It was having a nice day, too. As was the case with AB&I, Rising Tide was a sea of green with gains that ranged as high as 12 percent.

That made me feel sad for the publishing legend.

If his portfolios were crashing, it meant he is likely still trading on the misbegotten notion that the new global marketplace reality is nothing but an investment fad.

He’s hoping that GM (NYSE:GM) and Ford (NYSE:F)will be resurrected, that the US airline industry can be revived. He’s hoping that US workers will decide that it’s patriotic to take 60-80 percent pay cuts so all those lost manufacturing jobs will come home… that companies that make pills, cathode-ray televisions and Windows operating system PCs will be healed. He’s hoping that another generation of politicians will get away with passing the infrastructure-crisis buck so his children end up with the whopping bill to fix roads, sewers and bridges.

And, he yearns for the days when Donna Reed and June Cleaver, clad in cute little dresses, trotted their 22-inch waists around the house dusting, vaccing and cooking, which is so unlike these tough, pushy modern broads who wear pants, boss men around, sit on boards and think they’re actually smart enough to replace men in Washington as congressmen, senators and even – arrgggg! – President… as in President of the effing free world.

Dear Mr. Fantasy

Now, I would never deny a man his fantasies, but I wouldn’t invest in them, either.

Global is not a fad.

Today, Japan makes about 2 million more vehicles per year than does the US. Even more telling, in 2007, China built about 1.8 million fewer vehicles than the US did. In a couple of years, it will build more.

The US will then be the world’s third largest automaker, though Germany will be closing in.

For a while longer, the US will still be the world’s largest consumer. But, those iPods, PC’s, laptops, HDTV’s, stereo speakers (I used the archaic term there), digital cameras, heck, even the iconic Brooks Brothers’ suit, will be made 7,000 miles away.

What I find most surprising about this global reality is that it didn’t happen overnight. It’s been growing for decades… so what’s surprising is how many normal, sane, rational people are in denial about it. Or, to invoke a cliché, think the genie can actually be put back in the bottle.

The Can Company

One of my favorite wine shops on the East Coast is located in Baltimore. The Chesapeake Wine Company resides in a redeveloped – repurposed, if you will – old factory. It is a factory that was a blight on Baltimore’s waterfront for a couple of decades after it was shuttered.

Today, it’s home to restaurants, retail shops and DAP’s world headquarters.

In its first heyday, the huge complex was owned and operated by American Can.

You remember American Can, don’t you? Back in 1928 – a short 80 years ago – it was one of the original Dow 30.

Other original Dow 30 companies included American Smelting, General Railway Signal, Nash Motors, Paramount Publix, Postum Incorporated, Radio Corporation (NYSE:RSH), Victor Talking Machine and Wright Aeronautical.

My guess is no one back in 1928 saw the future clearly. Nor did they in 1938, ‘48, ‘58 or ‘68.

No one saw the advent of McDonalds (NYSE:MCD) (fast food), Microsoft (NASDAQ:MSFT)(computer software), Citigroup (NYSE:C) (banking), Walt Disney (NYSE:DIS) (entertainment), Intel (NASDAQ:INTC) (computing hardware), Home Depot (NYSE:HD) (retail home improvement), Wal-Mart Store (NYSE:WMT) (discount retailer) or Procter & Gamble (NYSE:PG) (consumer goods conglomerate).

Yet, each of these companies is a Dow 30 member today.

And, that should lead you to wonder how long it will be before Lenovo replaces IBM (NYSE:IBM) in the 30 or China Mobile (NYSE:CHL) replaces Verizon (NYSE:VZ)?

Because, as a historical look at the Dow 30 reveals, the world is always changing… its reality is always in flux.

But, it’s only changing too fast – spinning out of control – for people who cling to the past.