The market dropped all week on news that Russia is behaving badly. Our drop was a slight echo of the market drops in China, which more and more is looking like they're going into a recession; Japan, also not doing so well; Russia, being a bully; and Europe, 'cause, well, they just like to worry. Warren Buffet says we're in for another 50% market drop someday, but not this year or next year. He's pretty smart. Perhaps also a bit optimistic.
Most current released info on Malaysian flight MH370 includes that there was brief radio contact at 8:11am, 7 hours after the previous "final" communication and very close to the plane's fuel limit. If true, no matter what you have heard, this plane landed somewhere. The Rolls Royce engines ping a satellite every hour, offering to upload maintenance data. The position of the satellite that had the communication at 8:11 is known, and the distance to the plane from the satellite is known, giving you a large circle. Add in the fuel range, another large circle with a different center, there's only two places it can be. It's either very south in the Indian Ocean surrounded by nothing but water or it's in Xinjiang in western China, in the Taklamakan desert. Officials say it's unlikely the plane could have flown through Myanmar and Tibet without being spotted on Indian or Chinese radar. Yup. Remember the guy who flew from Germany across Poland, Lithuania, Belarus, Russia and landed in Red Square outside the Kremlin without being spotted? What if the plane is in Xinjaing? You find a dry lake a few miles across, you have a landing strip. You toss some tan tarps and netting over the plane and it's gone. What's the plane for? We're all well aware that it could be used to crash into a building. But if the muslims have a Pakistani nuke, it could be flown to 45000+ feet over eastern China and detonated in the air, producing an EMP which would wipe out most of the electronics in Beijing. Computers, phones, cars, much of the electric grid, all gone. Beijing would be back to 1960 in 2 seconds. Four years ago one of my friends predicted just this - that the CIA would get a Pakistani nuke, smuggle it to western china and make it look like it was muslims who got it there, and use it on Beijing. There have been rumors of unaccounted Pakistani nukes for some time; now they may also have a delivery system. How do you do it? Find some aircraft flying from Dubai to Beijing. Dial the 777 transponder to the same ID as the Dubai jet, then fly 500 yards behind and below them. No one will notice anything until it's too late. Suddenly the world is looking a lot less stable. This is hugely ironic, btw: China supplied Pakistan with their nuclear technology, so if Beijing gets nuked it will effectively be with a Chinese nuke. Or someone went to a huge effort to dump a plane into the Indian Ocean without telling anyone why. There's no radar anywhere in the south Indian ocean so search efforts are focused there.
Where is the internet? Here's a false color map that I find revealing.
Obamacare, Obama and the democrats just had their first electoral test and got their nose bloodied. In a Florida district that Obama carried in 2008 and 2012, where the democrat candidate "heavily outspent" the republican candidate, the republican won. Takeaways: Obamacare is a noose and there will be phenomenal spending in the November elections. More than $11m was spent on this special election and 90% of that was by special interest groups, not the candidates.
Japan and China are two nations that live on exports. Both manipulate their currencies to make imports more expensive and exports cheaper. Japan in particular is printing money like a bunch of N.Korean counterfeiters right now. The result? Both countries are running a trade deficit. China's stock market plummeted 2.5% on the news. The world economy it looking more and more rickety, and our stock markets keep going up.
15 Caribbean nations are going to sue the UK, France, Netherlands, and other European countries over slavery. They want formal apologies, reparations, forgiveness of debt, assistance to boost the region's technological know-how and repatriation to Africa. It's claimed the slavery caused psychological trauma which, for example, is a prime reason the Caribbean countries never industrialized. The Caribbean Reparations Commission said Monday that far more needed to be done for the descendants of slaves on struggling islands, saying it sees the "persistent racial victimization of the descendants of slavery and genocide as the root cause of their suffering today."
Copper prices continue to plunge, it's down 10% in a week. Copper is essential for building homes or almost any electrical or electronic device, so on Wall Street it's called Dr.Copper for it's ability to forecast economic performance. Copper and iron are commonly used as collateral for loans in China so this can lead to bank problems in Asia. Copper is telling us things are coming apart; first in China, later perhaps everywhere. Japanese and Chinese stock markets are taking a beating too. Chinese experts are down almost 20% year on year. Again, I'm not prepared to call a recession but I also don't think everything is peaches and cream.
India has subsidized onions and diesel fuel, with the result that may of their people derive 80% of their calories from onions and half their cars are diesel. Unfortunately for them they're not using the new low-emissions diesels that are dominating Europe and rapidly becoming popular in the US, they're using poorly tuned old style engines that spew out massive amounts of particulates - the stuff that causes cancer. New Delhi has twice the levels of particulates that Beijing has, and a huge number of cases of asthma and lung cancer. World Health Organization permissible levels of particulates is 10 micrograms per cubic meter; Beijing has 90 and New Delhi has 173. India could and might pass new anti-pollution laws about diesels but that still leaves them with ten million or more dirty old style diesels on the road that their poor citizens will continue to run for decades. And the Indian refineries use the cheaper crude oil that contains lots of sulphur, a contaminant that destroys the new diesel emissions equipment. If they were to upgrade their standards, they would have to build new refineries and start using the more expensive low sulphur crude at a higher cost to everyone. Due to subsidies and crazy laws the Indian oil companies lose a couple cents on each gallon of diesel they sell, so their incentive to invest heavily in new refineries is very low. In India the inconvenient truth is people are cheaper than refineries. (I'm using that phrase more often in a bid for my own Nobel Peace Prize.)
The NSA is collecting every email, every google search, every cell phone call on the planet for future use. No problemo. But now it seems the CIA learned of classified documents going around Congress illegally, so they searched some congressional servers to try to determine the leak. Diane Feinstein is livid, screaming about separation of powers and wants someone to go to jail.
We hit the wall on Social Security in 2010 - we're now spending more money than we take in. This situation will continue for more than the rest of my life. Medicare only makes it worse, that's hitting the wall pretty much right now. Millennials think there won't be any money left for them. This opinion is not stupid.
Most states have a low that car manufacturers cannot sell directly to the public, they must go through licensed independent franchises. Tesla is bucking that rule, they have no independent dealerships. New Jersey just passed a ruling that Tesla cannot sell their cars in NJ - the score was Tesla 0, New Jersey Car Dealers 696,749 (total donations to New Jersey politicians). Ohio looks to be next in banning Tesla's direct sales. Texas and Arizona have previously banned Tesla direct sales. Apple owns their apple stores and no one makes a fuss about that. I don't understand the logic here at all, I don't understand laws that require a middleman. I'm watching this with some interest. It's clear that the future trend is towards cars that are more and more electric - first hybrids with an electric assist like the Prius, then full electrics like the Tesla or Leaf or electrics with a gas or fuel cell assist like the Volt. Burning oil cannot continue forever. Tesla is the future. So, will the future be forced to live by the rules of the past? Or will one day New Jersey residents wake up and find they aren't allowed to buy the car they want? I think in the long term Tesla has the advantage.
Ten years ago, Spain was having an orgy of home construction. Banks were loaning tons of money, everyone in Spain had a construction job, money was flowing freely through the economy, new developments were springing up everywhere, big money was being made everywhere. Then came the crash. Hundreds of thousands of unfinished and unsold homes, everyone gets laid off, house prices plummet, banks have zillions of dollars of bad loans. The banks can't go bankrupt of course, 'cause, you know, 'cause they just can't. So the Spanish government takes the bad loans and repossessed houses off their hands and trades them for nice, safe Euro bonds. 'Cause we do that for our banks. Now the Spanish government owns all these houses, unemployment is 25%, what can they do? Answer: Goldman Sachs forms a company, sells a bunch of stock to heroes like George Soros and John Paulson. The approach the Spanish government and offer to buy the houses for 60¢s on the dollar. And viola, they own a bunch of nice homes for really cheap. Now they're going to sell them off slowly for roughly triple what they paid. Here's a few interesting questions: Did the Spanish government ever offer to sell these same homes to Spanish citizens and tax payers for 60¢s on the dollar? (no.) Did the government ever consider auctioning them off to citizens? (no.) Did the citizens ever hear of this deal while it was being negotiated and get a chance to comment? (no.) More and more I'm seeing the 2008 crash as a chance for the banks to wind up with even more ownership of even more stuff, helped along by various government idiots. I'm rapidly coming to the conclusion that we should simply nationalize the top ten banks and give away shares to the taxpayers. And a whole bunch of these bankers should be sued, stripped of ill-gained assets, in many cases jailed. So should a bunch of complicit bureaucrats. Jmo, ymmv.
Nearly 200 years ago Brigham Young famously said, "Any unmarried man over the age of 29 is a menace to society." Turns out he was right. Surging populations of young men lead to revolutions, wars and upheavals according to some new research. Half the stability in a country can be explained by one factor - unattached young men. In parts of India and China, due to their culture and birth policies and ultra sound, young men outnumber young women 3:2. That means perhaps as many as 100,000,000 men total who will never be married. How will it end? Badly. Poorly run countries will have instability and perhaps revolution. Better run countries will have authoritarianism and wars. And both types will be bad neighbors, with men from those countries coming to yours to beg, borrow or steal young women and thereby export the instability. Young women in Thailand currently go for about $5000; the price can only be lower in Myanmar, Cambodia, Laos, Vietnam, Philippines. Personally I'd pay the premium for a Thai, I like their cooking.
New Jersey resident Rachel Canning, 18, is suing her parents. She is demanding that her parents pay her tuition at a private high school, plus living expenses, and give her access to a college savings fund set up for her. Rachel said in her lawsuit that she left home in Lincoln Park, New Jersey after her 18th birthday in November 2013 because she was emotionally abused and neglected. Her parents, Sean and Elizabeth Canning, argued that their daughter had disciplinary problems at home and school and would not conform to house rules that included curfews and chores. Personally, I expect both sides are telling the truth. Why is this interesting? This case raises the legal question of how much the government can intervene in a financial dispute between parents and a child over 18 who is an adult but not legally emancipated. Legal experts said the case could set a precedent on whether non-divorced parents in the state are under obligation to pay for their children's college education and provide other financial support after the child has left home. I admit freely that I'm quite jaundiced; if the father was divorced there's no question in my mind he would be forced to pay. Since the parents are still married, I'm not sure.
To one of my readers, Walter: Happy 100th birthday! Walter has lived through the invention of aircraft, car culture, the Great Depression as a 16-32 y/o, WWII, the nationalization of the British Empire, Korea, Vietnam, Iraq and Afghanistan, watched gold ownership outlawed, then restored, then the dollar taken off the gold standard, watched the rise and fall of the cold war, the emergence of Germany, Japan and China as economic powers, Women's Lib and the Internet. I feel on reasonably solid ground to say that of the Presidents in Walter's life - Wilson, Hoarding, Coolidge, Hoover, FDR, Truman, Eisenhower, JFK, Johnson, Nixon, Ford, Carter, Reagan, Bush I, Clinton, Bush II, and Obama - there's one that stands out in his mind as the worst. And it's not Hoover.