The Present in Plain Text

Bush Implies the Truth for Once About Ford and GM

With the difficult financial times currently being endured by both Ford and GM it is weird that Washington has not mentioned the word "Bailout." Even more suprising is this statement by President Bush on CNBC:

I think they're going to have to learn how to compete.

The question I'm asking is, "Why should they start now?" It's not like our government hasn't protected the Big (Only) 3 Automakers for decades. It was only grudgingly that the Japanese automakers were ever alllowed into this market. Once here, of course, we all know the history, and the success of those companies placed further pressure on Congress to loosen import restrictions (otherwise known as Protection Tariffs/Quotas). When Honda opened up their first plant in Ohio back in the mid-1980's and I heard the glowing praise from my in-laws about how great those cars were I knew the "Buy American" stupidity was in decline. The Japanese car companies knew that they would get even greater acceptance in the American marketplace if they built their cars here.

The changed attitude reflects the markedly reshaped political situation in the auto industry. For two decades, Japanese and European auto makers have sprinkled job-producing auto-assembly plants across the U.S. Those have created a political constituency for foreign auto companies that didn't exist before.

Many of those plants are situated in southern states such as Tennessee, Alabama, South Carolina and Texas, which make up the heart of the red-state region in which today's dominant Republican party is strongest. As a result, politicians have less desire to penalize foreign auto makers as a way of shielding traditional American auto manufacturers than they did in the past.

In my search for a new car I gave only passing glances at cars from both of these companies (Mine was a Chrysler family growing up, not that those cars were any good either) looking mostly at cars from Toyota, Honda, and Subaru, all of whom have plants here in the states. I don't give a hoot where the car was made, personally, but for Bush voters who buy into the protectionist "They Stole our Jobs!!" rhetoric, that fact goes a long way. All of this means one thing, better cars for less money from more manufacturers.

Now, my question for the President is this, if the car companies like Ford and GM are going to have to learn to compete, why shouldn't the cattle ranchers and the timber companies?

Ta,

Intellectual Property -- Another Oxymoron of State Control

Thanks to Capt. C. Vain for e-mailing me this link. This is a great article on the true nature of intellectual property including some great thoughts by the architect of the U.S. Patent and Copyright system, one Thomas Jefferson.

I remember reading Stephan Kinsella's arguments against intellectual property on LRC years ago and being, at first, recalcitrant to the ideas he was presenting. But, over time this dimbulb(sorry, Stephan I couldn't resist invoking The T.P.) was able to convince me that he was correct. It didn't help that I was willing to re-examine my views on property to see if they were, in fact, in error.

Basically, my point about 'intellectual property' is this, in order to enforce your ownership of my idea you have to infringe upon the use of my private property to do so. Any enforcement of this type is clearly theft and, therefore, any claim you make invalid and immoral.

The founders understood this conundrum and attempted to put in place an untenable middle-ground system which both had the unintended consequence of stifling the very innovation they sought to protect and laid the groundwork (by codifying the abridgement of private property to a small extent) for an expansion of the system in both time and severity of punishment.

Just another example why minarchy is indefensible rhetorically, logically and historically. Not that the people who most desperately need to hear this are reading this page.

Ta,

The E-E:The Future for Oil Prices

The E-E links to an article by Steve Polos of Export Development Canada who thinks that oil prices are headed lower. In which he states his reasoning (which I'll offer counterpoints for as we go):

1. Oil prices seem to be heading down right now. -- See this page and tell me what you think oil prices are currently doing?
2. The $USD has found its legs. -- See this page and tell me if you would buy Dollars right now?
3. Worldwide demand is slowing. -- If that's the case then why does the price keep going up? Why are there not refineries being built?
4. The run up in the Oil Price was due to speculation based on supply interruption. -- Short term shocks to the market show up as dips on the chart (usually coinciding with technically supportable events ) not 4 year long perfectly structured uptrends.... again see #1.

John, I hope the above list is enough to change your mind about the validity of Mr. Polos's argument. He's basically saying that the entire oil market is wrong. I'm not betting with him on that one. My prediction? $4 a gallon for gasoline in the U.S. by this time next year.

That's just one reason why I'm not buying a Jeep Liberty, but a Toyota Matrix.

Ta,

Ignore the Carnage: The HUI Marches to Its Own Beat

With the consolidation that has been occuring in the precious metals market sparked by the Dead Cat Bounce of the $USD off of the 1995 low centered around 0.80 I have been occupied with other things keeping only cursory tabs on the state of things. There is always a tendency, in me especially, to get irrational while exploring and analyzing a particular thing (market, philosophy, cars, game, TV show, etc). To temper that irrationality I find it best to focus on something else for a while. In terms of market analysis, I'll move away from the day to day moves of the indices and take a look at longer terms views (2 to 10 year charts). If things look healthy from that standpoint, then it's definately time to back off and spend time cultivating some other hobby or interest for a few months.

With the recent action in the DOW ($INDU) and both $GOLD and $SILVER, it may be time to begin looking at things a little more closely, especially with an eye towards increasing my positions, if, indeed, we've reached a bottom in the $HUI.

The link above is to the latest article by Adam Hamilton over at Zeallc.com , which does a very nice job of showing the non-relationship that exists between the $HUI (Unhedged Precious Metals Producers) and the general market as represented by the S&P500 ($SPX). It is a popular concern that in any broad market sell-off PM stocks will likely take a beating getting caught up in the whirlwind of selling. The question Mr. Hamilton brings into focus, using recent data, is the likelihood of that happening. The results are fascinating to say the least.

His statistical regression of the data suggests that there is no relationship at all between the broad market and the $HUI. Ergo, look for something else as a prime mover of the price of that index, and don't sell your gold stocks because the DOW is in trouble. If one is going to sell out of his postion, have a better reason than flipping a coin, because that is what the data says you'd be doing.

In a sell-off fear dominates the markets. Those who conquer their fear, survive the carnage better. The general market has begun, I think, its next downleg in this bear market. $GOLD and $SILVER are both fundamentally and technically very strong, so there is no reason to fear a selloff on that front. When their technicals break down, ask why and consider selling. But, now is not that time.

Now is that time to consider doubling down and breaking the bank. Gold Stocks are lagging the gold price right now so during the next few months it makes sense (given no technical breakdown of the gold market) to take positions when appropriate.

A quick look at all of the charts linked to in this article tells me that the broad stock market has yet to really begin to turn down. 2-year uptrends lines have yet to be broken which means that the fear that looms over this secular bear market has not taken hold just yet. Therefore, focus on the $USD for clues to $GOLD's direction. Eventually, the $HUI will follow.

Ta,

No GM bailout now....

With the latest Senate vote the total spending on the Wars in Iraq and Afghanistan now exceeds the debt load of financially-troubled General Motors. GM, who posted a $1.1 billion loss on Tuesday and pulled their forecasts for the rest of the year, is obviously over-burdened by both rising material and labor costs. Given the rancorous bargaining going on between GM and the UAW over restructuring the health care benefit it is unlikely that GM's balance sheet is going to improve on that front any time now either. Taking a look at GM's 10 year chart gives us some insight into where this company could be headed. One has to wonder if anyone at GM has dandruff... I mean there's enough Head and Shoulders present here to cure most of western civilization of those dreaded flakes.

Even James Cramer is yelling "Sell!" on GM's corporate debt now. Don't be surprised if the link doesn't work... I wouldn't pay this guy for this kind of advice either. Honestly, he's about 5 years too late.

Got gold?

Have a weekend.

Ta,

The Trial -- Down Under

For those who have not read Kafka's The Trial, or seen Terry Gilliam's Brazil, this entry by my predictable source of material The Eclectic Econoclast will give you a taste of both of those seminal works.

Basically, a christian pastor in Australia was convicted of hate speech for using textual references fromt he Quran on the inferiority of women in his sermon. His crime... 'religious vilification' of Muslims.

He found out about this here. While the article starts off strongly, with the bits clipped by the E-E, the author then tries to make a connection between this incident of the state run amok with the National Review removing books objectionable to CAIR (Council on American Islamic Relations) from their online shelves.

She seems dismayed that a bunch of laptop bombardiers and Cheeto-Stuffing Couch Jockeys would duck and run for cover at the first hint of confrontation.

Let's just say that I'm amused by this.

A great many things have been said about the potential abuses of 'hate crime' legislation and I don't think it's necessary to repeat them here. Besides most of what I have to say about such legislation is both inappropriate to this space and could be, in places like Australia, considered hate speech.

Ta,

$HUI to $GOLD Update: Technical Breakdown

While it makes little sense to me (not that I'm the world's most informed guy on these matters) the triangle formation in the HUI:GOLD ratio that I've been tracking here for the past 6 months or so has finally broken down.

Looking at the chart linked to above you'll see a breakdowns of both the original lower trendline in mid-march and horizontal support centered around 0.45 last week. That latter breakdown would suggest to me that stocks which comprise the HUI are going to need much more time to recover.

With Gold (and Silver, for that matter ... yay! Silver) itself bouncing assertively off of it's multi-year lower trendline this week (an event I had little doubt would occur) it would lend credence to the idea that the stocks of the HUI should recover without much further breakdown.

I expect some chop in the HUI, unless Gold does something drastic, in the coming 6 to 8 weeks. If I had any free capital I would probably consider adding to a position at this point. There are some very good buys out there in the small cap precious metals arena.

Ta,

W.A.C.O. -- What A Cook Out!

As per usual, Justin Raimondo is spot on with his using Waco as an analogy to the War in Iraq.

For those that haven't seen the excellent film, Waco: The Rules of Engagement, I suggest renting/NetFlixing it ASAP.

During the construction of my house, it was the only thing that stopped me from being on the job-site by 8:00am. Riveting. Sad. Damning.

From Raimondo:

To all those liberal Democrats out there who are horrified by the Iraq war and its consequences, just remember this: before there was a Donald Rumsfeld in the Pentagon, there was a Janet Reno in the Department of Justice.

Ta,

Seriously Challenging the Pro-War Libertarian

Thanks to JT for putting me onto this article (especially in light of the events with the LPAC) from the Light of Reason.

Herein the author describes the mechanism of non-debate used by those 'libertarians' who can justify to themselves the foray into Iraq somehow as being in keeping with libertarian philosophy and the resultant stance of non-interventionism.

Certainly worth the time.

Ta,

Benedit XVI : A Hope for Continuing the Goal of Peace

Having been raised Catholic (and today my mother is Catholic enough for my entire family, which looks good on her, btw) I remember the death of Popes Paul Vi and John Paul I and the hours spent watching TV waiting for their successors to be chosen. While I never truly embraced the faith or the teachings of the church, and today refuse to categorize that which I call 'spirituality,' I do recognize importance of choosing of a new Pope.

For too much of my life I ignored the events of the world around me. I did not spend any energy or thought on the works of the current Pope; did not understand the ramifications to the cause of peace that his actions represented. My rejection of the church as a teenager created an all-too-predictable animosity/dismissiveness towards it (and its servants) that I am only now coming to terms with. It's nearly shameful to admit that I did not understand how much John Paul II did in the service of bringing about the kind of world that I now, so passionately (and some would say too passionately), advocate.

So, here I am today, having just removed myself from an organization that I founded (the Alachua County Libertarian Party) because I and my 'radical agenda' are no longer truly welcome there, reading the words of John Paul II's successor, Benedict XVI, at just the right time. To know that an organization of such immense power and influence, in these tenuous times, chose to continue the work of John Paul II and stand in direct opposition to the collective horrors of the 140 years (since Lee surrendered at Appomattox), fills me with hope and strength. Ironically, the very thing the church and God are supposed to do for someone.

Mysterous ways, indeed. (My mother would be proud of this admission, btw)

More importantly, I know that I can stand proudly with the Catholic Church on this issue. Playing politics with the best of them, knowing that 'they've got my back,' as it were. There is no substitute for the truth. This is no retreat (as a friend accused me of in e-mail this morning), only a tactical repositioning of resources, my precious time.

These ten days have been spent arguing points with people who were incapable of listening. Unwilling to consider a point of view that they had convinced themselves they disagreed with without having done the examination of that point of view themselves, they proved themselves closed-minded, myopic and insulting.

I apologize for having neglected my readers (all 3 of you) to spend time with them in the pointless pursuit of influencing a dialogue, the execution of which does violence to the word itself.

The Pope is dead.

Long Live the Pope.

If Benedict the XVI is half the man that John Paul II was, the Catholic Church, and the world itself, is on the path towards hope.

Ta,