VJ Day Celebration in Hawaii - 14 August 1945

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This video, showing the spontaneous celebrations in Honolulu after the victory over Japan, is from a Vimeo post by Richard Sullivan. The film footage sat in a can for 60 years before being found, scanned and edited into the presentation below.

The clarity and immediacy of the images really grabs you.

Richard Sullivan's describes it as follows:

65 Years Ago my Dad shot this film along Kalakaua Ave. in Waikiki capturing spontaneous celebrations that broke out upon first hearing news of the Japanese surrender. Kodachrome 16mm film: God Bless Kodachrome, right? I was able to find an outfit (mymovietransfer.com) to do a much superior scan of this footage to what I had previously posted, so I re-did this film and replaced the older version There are still images from this amazing day, in color, at discoveringhawaii.com

It originally had no sound, but Mr. Sullivan did some foley work on it, and added perfect music by Jimmy Durante.




Some identification of places (from post comments):

:28 - South St. next to the Advertiser building
:38 - Kapiolani Blvd. seen from South St.
:47 - Halekulani Hotel Cottages where Navy officers were housed, apparently
1:05 - "Parade" goes from Victoria St. onto King St. with Thomas Square in background (with military buildings in it)
1:21 - Red tile roofed structure is Lippy's Service Station on Kalakaua
1:26 - Ala Moana Blvd. with HECO plant at back left
1:28 - Kalakaua Ave. nearing Kapiolani Blvd., with Kau Kau Korner at the intersection (later Coco's, now Hard Rock Cafe)
1:40 - Moana Hotel
2:05 - Looking up at viewers on the exterior fire escape stairs of the Moana Hotel
2:17 - Orange awning is the House of Coral store

Other than the Moana, all the other Waikiki buildings seen here are long vanished.

A final comment from Mr. Sullivan:

There is 50 minutes of footage or so including the official military parade downtown on VJ Day, September 02, as well as the return of the Pacific Fleet Armada to Hawaii, plus friends having fun as tourists. I used iMovie to put it together but it is very quirky and cannot handle large files. I've cleaned up the foley work a little from this version, but assembling the foley was the fun part, as many people believe this is actually a sound movie.

I hope he will post some of the additional material.

If the linked video above ever stops working, try this link.
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Guns and Football

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Here is an interesting statistic:

From 1997 to 2002, 34 students were killed by guns in elementary or secondary schools. During the same period, 53 high school students died playing football. (National Center for Catastrophic Sport Injury Research, Feb. 2001, and National School Safety Center data)

I could go on and on about "football free zones" and arresting third graders for drawing pictures of footballs, but I think you see the point.

If I had my way, every school would have a shooting range to teach kids shooting skills, gun safety and appropriate use of force.  It would help to instill a necessary sense of freedom and independence in the future populace.

Thomas Jefferson had it right:

A strong body makes the mind strong. As to the species of exercises, I advise the gun. While this gives moderate exercise to the body, it gives boldness, enterprise and independence to the mind. Games played with the ball, and others of that nature, are too violent for the body and stamp no character on the mind. Let your gun therefore be the constant companion of your walks.

   --- Thomas Jefferson, letter to his 15-year-old nephew Peter Carr, August 19, 1785

The Greatest Ponzi Scheme of All Time

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Edmund Conway at the UK Telegraph explains what is going on:

Politicians temporarily "solved" the sub-prime crisis of 2007 and 2008 by nationalising billions of pounds' worth of bank debt. While this helped reinject a little confidence into markets, the real upshot was merely to transfer that debt on to public-sector balance sheets.

This kind of card-shuffle trick has a long-established pedigree: after the dotcom bust, Alan Greenspan slashed US interest rates to (then) unprecedented lows, which helped dull the pain, but only at the cost of generating the housing bubble that fed sub-prime. It is not so different to the Ponzi scheme carried out by Bernard Madoff, except that unlike his hedge fund fraud, this one is being carried out in full public view.

The problem is that this has to stop somewhere, and that gasping noise over the past couple of weeks is the sound of millions of investors realising, all at once, that the music might have stopped.

When "Ponzi World" collapses, those evil rich people on Wall Street will be blamed instead of the true culprits: socialists like 0bama and his buddies that have been working on "change" for the last 40 years.  When you give everyone everything free, soon no one will produce anything.  As Margaret Thatcher once said (somewhat paraphrased):

The problem with socialism is that you eventually run out of other people's money.

But it all works out for the socialists in the end:  Capitalism is destroyed.  No one will ever be rich again.  We will be lucky to find food.
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The Natural Price of Gold

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"If all the reported Fort Knox gold was re-valued at $36,000 per ounce, it would pay off all the debt in the US."

-- Ben Davies, CEO of Hinde Capital, CNBC Interview, 26 May 2010

Another way of looking at this is that the dollar is overvalued by a factor of about thirty.
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Data-Driven Enhancement of Facial Attractiveness

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When things get too serious around here, we present some interesting/fun stuff.  The following doesn't involve 0bama or economics or the collapse of civilization....



Imagine how nice it would be if we all had eyeglasses that performed this transformation in realtime on all the faces we see everyday.

Everywhere we looked, people would be beautiful.
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Entitlement

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All I can say about this is that there seems to be a lot of people like "Jo" around these days.

Recent Snippets of Totalitarianism

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"I am pleased with Obama. I think he is brilliant. The Republican Party should get out of his way and stop trying to hurt him.... It would be good… if he could be dictator for a few years because he could do a lot of good things quickly."
--- Woody Allen, "La Vanguardia" (translated), 17 May 2010

"...I have fantasized--don't get me wrong--but that what if we could just be China for a day? I mean, just, just, just one day. You know, I mean, where we could actually, you know, authorize the right solutions, and I do think there is a sense of that, on, on everything from the economy to environment. I don't want to be China for a second, OK, [but] I want my democracy to work with the same authority, focus and stick-to-itiveness. But right now we have a system that can only produce suboptimal solutions."
--- Thomas Friedman, "Meet the Press", 23 May 2010

"Every murderous totalitarian government of the 20th century began with some insulated group of faux-intellectuals congratulating each other on how smart they are, and fantasizing about how, if they could just install a dictatorship-for-a-day, they could right all the wrongs in the world. It is the ultimate fantasy of the narcissist. And we’ve got whole generations of them, in control of our media and our government, all intent on 'remaking America.'"
--- Elizabeth Scalia, 24 May 2010

"A love of autocracy often lurks beneath the liberal veneer. There's this idea that the right answers are known and the people are just too deluded and distorted to see what they are and to vote for them. And Friedman openly deplores the internet...
--- Ann Althous, 23 May 2010

I guess being in charge of the White House and the Senate and the House of Representatives isn't quite enough. "The power isn't pure enough, not invincible enough."  Ah, it must be frustrating to know the ultimate solutions to all problems, and be constantly held back by internet-empowered lower people who do not understand.

I wonder what the liberal response would have been if Carl Rove in 2003 had made the same statement on "Meet The Press" that Thomas Friedman made.

 Woody Allen with his daughter/wife

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California: The Next Greece

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California is the world's eighth largest economy. It is just behind Italy and ahead of Spain and Canada. It is larger than Brazil, South Korea, India, Mexico and Russia. (Data as of 2005.)

Like Greece, California's debt is completely unsustainable under its present socialist philosophies. There appears to be nothing California can do that will balance the budget without people rioting to demand their $5,000 per month welfare benefits, or raising taxes and causing a mass exodus of business that will completely destroy the economy.

If you can get out of California, now would be a good time. If you have a business in California, you definitely need to relocate to another state where you can actually make money.

Here is a good summary:


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Financial Reform Bill Will Cause the Next Crisis

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In a CNBC interview today,  Sen. Judd Gregg (R-N.H.) said almost exactly what I said in a blog post over the weekend:

"The bill is a disaster because it doesn’t address the fundamental underlying causes of the economic issue, which were real estate and underwriting,” he said. “This bill became, ‘I want to score the most points against Wall Street.’ Most of the initiative of this bill wasn’t directed at solving the problem, but it was directed at scoring political points.”

The new Financial Reform Bill actually enshrines the practice that CAUSED the meltdown.  It establishes a new organization that will force banks to make loans to people who can't pay the money back, in the name of "social justice", setting the stage for a new much larger crisis.

“You’ll basically have a consumer protection agency which decides to go out and in the morning and say, ‘well everybody who’s XYZ should have a loan, even though the local community bank says XYZ shouldn’t have a loan, because if we give them a loan, we know they’re not going to pay back,’” he said. “It’s going to become an agency that defines lending on social justice purposes instead of safety and soundness purposes.”

As I said yesterday:

[The collapse] was actually caused very simply by poor loan underwriting that was a direct result of government mandates to artificially provide homes to people who could not pay for them.  Wall Street simply tried to sell off the bad loans.  Everyone assumed that the government -- through Fannie Mae, etc., would guarantee them as promised.  Surprise:  They didn't, because they couldn't come up with the huge amount of cash to do so.... Note that the current Financial Regulatory Reform Bill does absolutely nothing to address the true cause of the 2008 collapse.  Nothing.  Nothing at all.

Now, the government is "doubling down" to create even more bad loans -- on purpose.  Not only are they doing nothing to fix the problem, they are making the problem much much worse.  It is like they want the economy to fail again.

Here is the interview:



If 0bama were trying to destroy the United States, what would he be doing differently?

Nothing.
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Greece is a Giant Ponzi Scheme -- and We Just Bought In

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Steven R. Earle is the former chief executive of AirSea Lines International Canada Ltd., who tried to start up a seaplane service for the Greek Islands.  His experience in the Greek guaranteed-employment culture led him to write an article, excerpts of which are below:

...I can conclude there is no bailout solution for Greece because the Greeks and their unsustainable beliefs and practices are not fixable under a bailout situation. As a start, their entire political and economic system is designed to bleed foreign investor corporations, banks and other nations of cash. In effect, debt, financial aid, development funding and the acquiescence of others to their faulty system is part of their business plan. The politicians do not see the debt as being debt. They see it as income. The Greek state accepts money it cannot, will not and never had any intention to pay back. It is a hybrid of a Ponzi scheme, a beggar and an addicted relative.

Think about it. On the surface, they accept money on promises to act in a certain way, pay it back with return, and act a good steward of the funds. However, any funds they do pay back have been paid back with other debt. Now they have no one else to feed the pipeline and it all collapses. This is a Ponzi scheme. As evidenced by GDP per capita, there is no productivity created with the funds which would be necessary to pay back the money, and as such, like many heavily in-debt people, they kite debt to stay afloat until they cannot, and they go bankrupt or to jail.

Giving money to Greece is like giving money to Bernie Madoff even after his fraud was exposed. Why is 0bama doing it?

Read the whole article here: http://network.nationalpost.com/NP/blogs/fullcomment/archive/2010/04/28/greece-is-one-giant-ponzi-scheme.aspx#ixzz0omqCUgCW
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A Trend to Disaster

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It is often useful to attempt to look at the big picture, and try to ignore the day to day panics of the media.  Stepping back from current events, here is one large trend I see:

For many years, really dating back to the 1960's, there has been a worldwide trend to pay people more and more for doing nothing.  More pensions, more vacation time, shorter work weeks, larger unemployment payments, more welfare payments -- all mandated by government law and government funding, which really means of course that those actually working are paying for it either through taxes or in monetary inflation.

Now we even have "free" health care coming, which really means health care that costs more overall, paid for by those who work.

Nowhere is this more evident than in Europe.  In Greece, most of the economy is the government itself.  Government and union workers are paid for 14 months for every 12 months they work.  In addition, they have large amounts of paid vacation time per year, and are guaranteed large pensions and early retirement.  Their productivity is so low, few Greek products would be competitive on the world stage.  But subsidies from the government make them competitive.

Not surprisingly this Greek economic Ponzi scheme has collapsed.  And the US is now helping to foot the bill, assuring that Greek civil servants continue to have their large pensions and paid vacation, and early retirement etc.  So the working people of the US will  now be paying Greeks not to work, on into the future.

But what happens when the whole world economic shell game collapses?  The collapse of course will be blamed on greedy Wall Street, not on government policies that give people money for not working -- just as 0bama continues to blame Wall Street "greed" for the 2008 collapse. It was actually caused very simply by poor loan underwriting that was a direct result of government mandates to artificially provide homes to people who could not pay for them.  Wall Street simply tried to sell off the bad loans.  Everyone assumed that the government -- through Fannie Mae, etc., would guarantee them as promised.  Surprise:  They didn't, because they couldn't come up with the huge amount of cash to do so.  I believe the total number of bad loans is at almost $50 trillion.

(Note that the current Financial Regulatory Reform Bill does absolutely nothing to address the true cause of the 2008 collapse.  Nothing.  Nothing at all.)

This is all consistent with the Cloward-Piven strategy which states that people should be given so many government benefits and guarantees that when they inevitably cannot be provided, a series of crises and interventions ensues, with each one larger than the last.  These crises then cause the collapse of the capitalist rule book, which can then be replaced with the socialist one.

Cloward and Piven neglect to describe what happens then, but my take is that the final result is poverty, starvation, and world war.  Complete collapse of civilized behavior and indeed civilization itself  is likely.

Again I must ask:  If 0bama was purposefully attempting to destroy the US, what would he be doing differently?
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Oil in the Sea

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I am constantly amazed by the media attention given to the "big" oil spill in the Gulf of Mexico.  Apparently, it is seen as a gigantic disaster that will pollute the ocean and the shoreline for decades.  Here is  a prediction map for 23 May, from www.nola.com.

 Click for Larger Image

Here is another map for context.  Note the small black area.  That is the major portion of the spill.  Lesser amounts are in the gray area encircling the black.

Click for Larger Image

Currently, there is only a little oil washing up, right at the Mississippi delta.  Other reports of tar balls in Alabama and further afield are consistent with natural ocean oil.  They are probably not from the spill. And the tar balls reported tonight in Key West are certainly not from the spill.  They are completely natural.

Yes, it is natural for oil to be in the ocean.  Crude oil leaks from the sea bottom, and has been washing up on shorelines for millions of years.

I am not talking about a little bit of oil here.  According to this paper, up to two million metric tons of oil per year are released by nature.  That converts to 14.6 million barrels per year.

Oil has been observed on Caribbean beaches since the time of Columbus.  I have vacationed at island resorts that provide turpentine to clean your feet of the tar you get from their "pristine" white sandy beaches.

Somehow, the fish and birds and vegetation survive.

The last large oil spills near the US were in 1969 and 1989.  I don't think a few million barrels released by mankind every 20 years or so really matters at all.  British Petroleum should plug the leak by relief drilling and mud pumping, reimburse the fishermen whose harvest is impacted, clean up any oil that makes it to shore (to a reasonable extent), determine a solution to mitigate the chance of a similar accident in the future, and simply go on.  It just isn't a big deal.

The spill in 1969 killed around 10,000 birds near Santa Barbara, California.  Heck, more than that will likely be killed with "green" wind turbines every year.

If you are still uncertain about the truth of natural oil seeps, take a look at this description that I found.  In 1846, newspaperman Edwin Bryant headed west.  His diary, when published in 1848 as "What I Saw in California", became one of the best known trail guides for the surge of people that would follow after the discovery of gold at Sutter's Mill.  On page 385 of my copy, Mr. Bryant states:

On the coast, a few miles above Santa Barbara, there are, I have been told, immense quantities of pure bitumen or mineral tar, which, rising in the ocean, has been thrown upon the shore by the waves, where in a concrete state, like rosin, it has accumulated in inexhaustible masses.

People who believe in a perfect, clean, natural world are horribly mistaken.  The oceans are full of oil, and have been for millions of years.  This oil spill, despite the hype, is really not significant at all.
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Russia says that the pirates they captured have all died somehow...

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After capturing 10 Somali pirates, Russian special forces commandos said that they let them go due to "imperfections" in international law that would have complicated their trial in Russia.

It is so sad, but somehow all the pirates died on the way back to Somalia in their little boat.

An unidentified high-ranking Russian Defense Department official told Russian news agencies the pirates' boat disappeared from Russian radar about an hour after their release.

"They could not reach the coast and, apparently, have all died," the official said.

The statement was met with skepticism, especially in light of a comment made by the Russian president.

"We'll have to do what our forefathers did when they met the pirates" until the international community comes up with a legal way of prosecuting them, Dmitry Medvedev said on the day the ship was stormed.

This is not what happened.  I swear!

The Russians always seem to know how to handle this kind of stuff:

When Islamic fundamentalists kidnapped four Soviet diplomats in Beirut on 30 September 1985, at the height of the foreign hostage crisis in Lebanon, and demanded Moscow press its client state Syria to stop shelling Sunni Muslim militiamen in the northern port of Tripoli, the KGB responded with characteristic vigour.

After clandestine negotiations failed to secure the men's release, Soviet agents grabbed half a dozen fundamentalists in West Beirut and reportedly sliced off a few of their fingers, sending the severed digits to the fundamentalist leadership with the message: "Release our people or you'll get your people back piece by piece."

As I recall, the scuttlebutt at the time was that it was not fingers, but another anatomical part that was severed.

The Russians were released immediately, but several American captives languished for years.
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Financial Quote of the Day

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"Europe is in trouble and it’s getting worse.  I can’t imagine the euro does anything but goes lower. And I have to say after centuries of war and religious differences, I don’t know why anyone thought that France, Spain, Germany and the other nations of Europe would embrace one another’s economies. Don’t forget the last time Europe had one currency, it was ruled by the Romans."

     -- Dennis Gartman, investment guru, publisher of The Gartman Letter (CNBC Interview, 18 May 2010)
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Spain's Green Economy is a Disaster

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0bama has referred many times to Spain's "green economy" as a model for what he wants to do in the US. But according to a leaked report on Pajamas Media, it has created a huge budget deficit and the loss of 2.2 jobs for every job created. Each of these created jobs has cost approximately $800,000.

In short, Spain's showcase green economy is an economic catastrophe, and is contributing greatly to their sovereign debt crisis.

 Advanced Sterling-Cycle Solar Energy Systems in Spain

Economic laws are real. If you disrupt the workings of a market, be prepared for very negative results. Electricity generated by windmills and solar panels costs many times more than electricity generated by coal, oil, natural gas, or nuclear.  If you force inefficient energy technologies into an economy, the whole economy will become less efficient. Since energy is an input for every product, costs for all products will skyrocket, and the economy will decline. If you subsidize the inefficient technologies to make them appear to cost the same as or less than regular sources of energy, then the deficit will increase, taxes will increase, and we all become poorer.

And, as Spain's experience has shown, if you base your whole national energy plan on such a "mandate for change", your whole economy will fall in a heap.

The natural consequences of breaking economic laws simply cannot be avoided.  But Mr. 0bama's entire set of economic policies is based on breaking economic laws.

For more on monetary conflicts of interest and malfeasance with "Big Wind" and "Big Solar" in the 0bama administration, and the involvement of George Soros in promoting the 0bama plan to impose a green economy on the US, check out this and this.  Remember, as I pointed out here, that George Soros's primary goal is the destruction of the US -- and that he is the money behind 0bama.

Once again, I must ask:  If 0bama wanted to destroy the US, what would he be doing differently?
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Can you hear like a teenager?

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Take this test to see how well you can hear high frequencies.   Your ability to hear these tones may be somewhat dependent on your computer speakers, so turn it up fairly loud.

http://www.noiseaddicts.com/2009/03/can-you-hear-this-hearing-test/

I can hear the 17kHz tone, barely.  The 16kHz tone is loud and obnoxious to me.  Since I am in my 50's, I figure that this is pretty good hearing for my age. 

But I used to be able to hear bats sailing through the air above my backyard.  They sound like a door hinge squeek, scanning from low to high, squeeeEEK.  And I used to torment one girl in high school classes by making a high pitched whistle that only she and I could hear.  It gave her a headache.  :-)

I have been very careful with my hearing.  I only recall a few times in my life when I was exposed to very loud sounds.  Once was at a concert that was so painfully loud that I was gritting my teeth.  Several times, I have gone shooting without ear protection, but only with small .22 caliber.  Once I shot a 9mm without plugs just to see what it sounded like.  My ears rang for an hour.  Finally, my oldest kid, when he was a baby, would cry so loud that it made a tearing noise in my ears.  Ear plugs can definitely prevent shaken baby syndrome...

Interestingly, after I took this test, my ears felt stuffy for a while.

Hearos NRR 33dB -- The best ear plug in the world

If you use soft foam earplugs, be sure to roll them into a tiny cylinder with your fingers, then put them into your ear canal as far as you can.  It is easier if the plugs are cold.   Most people require some practice to do this properly.

Quote for the Day

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Every normal man must be tempted, at times, to spit on his hands, hoist the black flag, and begin slitting throats.
-- H. L. Mencken (b. 1880, d. 1956)

BDUIF as an Analysis Tool for World Markets

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Some funny things have been going on in the world commodity and stock markets over the last week or so.  By using the perspective of the Big Dustup Index Fund (BDUIF), we can get some insight that otherwise is not immediately apparent.

First of all, the basic events:

• The Greek Sovereign Debt Crisis looked bad, but has been been mitigated, or at least pushed into the future using moneys and guarantees that came mostly from Germany
• Oil has dropped significantly
• Gold and other precious metals have increased significantly
• World stock markets declined, then crashed, then almost immediately recovered

Remember that the intent of the BDUIF is to allow investment in "crisis" gold and oil, while mitigating the risks of "normal" economic fluctuations of the prices.  The strategy is to follow the average of two ratios:  the price of oil to the Dow Jones Industrial Average (DJIA), and the price of gold to the DJIA.   It does this with leveraged stock market short ETFs, leveraged investment in gold ETFs, and non-leveraged investment in oil ETFs.

When oil and gold do better than the stock market, the BDUIF makes money.  If oil and gold do well and the market goes down, the BDUIF makes a lot of money.  The inverse is of course also true.

Let's look at the latest BDUIF chart from 12 May:

As you can see, the BDUIF has tracked the average of the two ratios pretty well until recently.  The recent decline of the BDUIF from the average was mostly due to the fact that I biased the BDUIF to be heavily short European equities, so it was actually more closely following the ratios to the DAX rather than the DJIA.  When the DAX recovered following the Greek bailout announcement (and I did not get out of the shorts fast enough), the BDUIF took a step downward from the light blue line.

But aside from that error, the BDUIF has done fairly well when measured against its goals.

It is clear that a sea change has occurred in both equity and commodity markets.  I based the BDUIF on the fact that oil and gold were tied to the stock market; all are indicators of economic activity.  I had been hoping for a "break" where gold and oil go up due to a crisis in the Mideast, for example, with the stock market falling.  What we have is oil breaking the wrong way, gold breaking the right way, and the market continuing to increase or stay reasonably stable.

Regardless, the relationship between oil, gold, and stocks has changed dramatically.  It remains to be seen if this will continue or not.

Here is what I think:

Oil:  While inventories remain high, there was no fundamental reason for the decline.  The spill in the gulf should have driven prices up -- and did for a short time.  The tensions in the Mideast seem lessened right now, mostly because there is a lot of other news items that are taking up air time.  But the big oil traders are savvy people -- much more experienced than the typical stock market participant.  Low oil prices likely mean that someone thinks that demand is going down, i.e. the economy is contracting.  I have noticed that moves in oil often signal future moves in stocks.  If so, stocks will be going down soon -- or oil will begin a recovery.  So I am hopeful that the BDUIF as presently constituted (I have added more oil to it at these low prices) will do reasonably well.

Gold:  The Greek bailout has greatly increased the demand for gold.  In Germany, coin dealers are running out of product.  Large investors are loading up too.  The Germans remember Weimar, and the hyperinflation of the 1930's.  They believe Germany's deficit-spending to help Greece is highly dangerous.  They expect Greece will need more help, and will eventually default anyway.  Spending is the new contagion.  First it was the US bailing out companies that were too big to fail.  Now Europe is bailing out countries that are too big to fail.  With truly astronomical deficits going forward, it is likely that there will be a world-wide sovereign debt crisis in the next 5 years.  If so, gold will be the only thing of value --except for maybe canned food and land. So the rise in gold to record highs is another indicator showing trouble ahead.  It is particularly bad since it is occurring even in the face of the dollar rising with respect to other currencies.

Stocks.  The stock market is doing OK, but I see it as lagging gold and oil moves.  The world is a mess. The naturally pessimistic oil and gold traders see it, but the stock market traders don't want to even hear about it.  They actually have good reason to be optimistic since revenues and profits signal a recovery.  But what happens when the Fed takes away the stimulus?  What happens if they keep the stimulus and the unprecedented deficit spending causes inflation -- or more likely stagflation?

I recently took advantage of the gold runup and the oil decline to move more of the BDUIF to oil from gold.  The short positions were causing problems, so I reduced them a little.

Here is the current BDUIF makeup, which heavily favors oil.  I plan to reassess this on Friday, and potentially reduce the oil holdings, maybe add to the shorts, and maybe add gold if it goes down.

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More Snow in Colorado

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We woke up to about 5 inches of snow today, but most of it melted by the afternoon with temperatures reaching about 40 degrees.  Tonight we should get about 4-6 more inches.  The temperature at 11pm is 34 F.

The heavy wet snow has covered flowers and broken tree branches. In the mountains and the foothills, snow depths of more than a foot have been seen.

While snow this late in the season here is not unheard of, it has not occurred in recent years.  When I was a kid, I think we even had a few flurries in June.

The sun remains blank.  There were quite a few small sunspots earlier this year, but it is still a very slow start to Solar Cycle 24.  The ramp up began almost two years late, and has been pitifully slow.  While the cause and effect relationship between the activity of the sun and the weather is still debated, it is a fact that the Maunder Minimum of 1645 to 1715 coincided with the Little Ice Age.

The Sun is Blank

(The small dot near the center is a flaw in the imager)

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El Nino Collapses - Global Cooling and Big Hurricane Season Ahead

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As the El Nino collapses, Joe Bastardi of Accuweather describes his forecast for the next year.

Among his predictions:

1. Big north Atlantic hurricane season due to La Nina in the Pacific and tripole of temperatures in the Atlantic.
2. Normal to mild winter for the continental US.
3. Cold winter in Alaska.
4. Overall global cooling.

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Quote of the Day

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"With iPods and iPads and Xboxes and PlayStations, -- none of which I know how to work -- information becomes a distraction, a diversion, a form of entertainment, rather than a tool of empowerment, rather than the means of emancipation."

       -- Barack Hussein Obama, Hampton University Commencement, Today, 9 May 2010

Wasn't this the guy who was supposed to be up on all the latest technology and trends -- reaching out via social media -- transforming government to be relevant to our youthful society?  Our "first wired President"?  Apparently it was all a fake, engineered by his handlers.

How can we have a guy as President who doesn't even know how to run an iPod?

Even George Bush had an iPod.

Well, railing against the free flow of information is consistent with other things that he and his handlers have done:

• Trying to control internet blogs and radio content to eliminate dissent.
• Campaigning against Bush's Patriot Act, and then not only renewing it, but removing Bush's expiration limit on most of its provisions to make them permanent. 
• Complaining that "Fox News isn't really news", since it is critical of his regime.
• Referring to dissent as criminal "sedition" against the government.

Ah, hope.  Ah, change.
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Do Not Use Stop-Loss Orders or Market Orders

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I think a lot of what happened to the stock market on Thursday was simply due to stop-loss orders being filled. As they were filled, the market dropped more, causing even more to be filled, in a chain-reaction. With computerized trading, it all happened very quickly.

About 11 years ago, I learned the hard way not to use stop-loss orders when trading stocks.

A stop-loss order is a standing order from you to your broker to sell your holdings in a stock if the price of that stock goes down to a certain level. With a stop-loss, you don't have to be right at the computer or on the phone to protect your investment if it starts to crash.

Except that it doesn't really work that way.

I owned a significant amount of a thinly traded stock in 1999. The price had increased from $3 to around $5, and I was concerned that it would drop when I wasn't watching. So I put in a stop loss order at $4.50, just in case.

Within an hour, the stock price dropped to $4.50, my stock was sold, and then the price hopped back up to $5.00. Because it was thinly traded, and there were buy orders waiting to be filled, the market maker in the stock simply dropped the price to pick up my stop loss -- and everyone else's in that range too.

Since then, I have seen similar things happen quite a bit.

It is important to note that once the stop-loss price limit is breached, your stop-loss order becomes a market order. If the price is falling quickly, the order may execute at a price far below what the limit was. I think this happened a lot on Thursday, driving the whole stock market lower and lower.

Of course, you should never put in an order to sell "at market". The market price can be whatever the market makers want it to be. You never know at what price your trade will execute -- particularly in a volatile market.

There are now "stop-loss limit" orders that will trigger when the stop-loss price is breached, but will only execute at that price. But if the price is falling quickly, it may not execute at all.

So watch your investments closely, keep your stop-loss limits in your head, not as formal stop-loss orders, and never use a market order.

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Markets and the BDUIF

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The Big Dustup Index Fund is a strategy for investing in gold and oil that minimizes downside risk due to economic swings. It is long 2x gold and 1x oil, with a hedge consisting of  short 3x US large caps and short 3x world developed markets. It is designed to hold steady regardless of world stock market swings, and only gain when gold and oil go up in comparison to the world stock market.


The Big Dustup Index Fund gained 2.7 percent today, which is not bad for a crazy trading day.

I had increased the DPK position on Wednesday since the short hedge (of which DPK is a part) was obviously not big enough during the oil sell-off of Tuesday and Wednesday.  This was proved out very well on Thursday when oil again fell, and world markets nearly crashed.  DPK's one-day increase was over 12 percent, nicely offsetting the drop in oil.

The short position is probably a little large now -- which would be risky but not disastrous in the event of a market recovery.  I attempted to reduce the DPK position late in the day on Thursday, but could not get an order in due to website overloading.  If we do have a "bad" stock market day on Friday, the BDUIF should do well.

Here are the present BDUIF holdings:

 

And here is what it looks like with the effects of 2x and 3x leverage explicitly shown:

The performance of the BDUIF since its inception is shown below, compared with the ratios of both gold and oil to the overall Dow Jones Industrial Average.  Remember that the idea is to hold steady in normal markets, and gain if there is a war, disaster, or severe economic problems.  This risk mitigation comes at the cost of potential gains in normal markets.

The BDUIF attempts to follow the average of the gold/DJIA ratio and the oil/DJIA ratio.  This average is the light blue line.  "WTI Cushing" is West Texas Intermediate Light Crude, delivered at Cushing Oklahoma.  "A-Mark Gold" is the spot price as shown at A-Mark Precious Metals.  I transitioned to the A-Mark number since it was readily available, and was more timely than the London PM Spot.  It is a good representation of the world spot price late in the US day.

The nexus that occurred on Wednesday is significant.  The cumulative performance of gold since fund inception exceeded that of oil for the first time since mid February. 

The fact that I had to add to the hedge position shows that oil dropped more in relationship to the stock market than had been anticipated.  I believe this is because many of the oil bulls who have been buying oil and oil futures waiting for an event to occur -- even in the face of huge inventories -- gave up when the price started falling.  This would indicate that a) the price was artificially high, and b) it dropped lower than it should have (so is now artificially low).

It will be interesting to see which way things go on Friday, but the BDUIF is fairly well positioned regardless.

I may sell some of the DPK Friday.
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Big Dustup Index Fund Changes

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One of the nice things about managing the BDUIF is that even though its "philosophy" is to invest in oil and gold along with a balanced, leveraged hedge on the stock market, I can change it at will -- unlike real funds where the managers are trapped into a particular approach come hell or high water.

So I changed it a little today.  Early in the morning, it was obvious that the hedge position was not keeping up with the drop in oil from yesterday and today.  So I sold 25% of the OIL ETF position along with 25% of the BGZ ETF position, and used the proceeds to double the fund's holdings of the DPK ETF.

Thus I moved a little bit away from both the front-month oil futures (OIL) and the US Large Cap 3x Bear hedge (BGZ), and heavily emphasized the Developed Markets 3x Bear hedge (DPK).  DPK has worked very well in the Fund over the last week, returning somewhere around 20%, but it had been a very small part of the Fund.

DPK is heavily invested in short European, Japanese, and other developed markets.  I think that these shares are going to take a beating as the Greek contagion spreads.

Indeed I see this as the beginning of a series of sovereign debt crises that could well end up with the dissolution of the European economic union and, potentially and eventually, the death of the dollar.

Margaret Thatcher once said that socialism works fine until you run out of other people's money.  Greece ran out, and is trying to get more from Germany.  Eventually Germany's tolerance or their funds will run out too.  At the top of the chain is the US.  It will probably take a little while, but with 0bama, we are falling down the sovereign debt well too.

But Europe will go first.

I wrote about all of this in an email to a group of friends about 3-4 years ago, when I had never even heard of Barack Hussein 0bama.  I will post it when I get a chance.

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Deepwater Horizon Explosion

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Click on the photos below for large images of the Deepwater Horizon explosion and fire.  Additional large images and a good technical description of what went wrong are at Watts Up With That here.  Be sure to read the comments at that site for additional technical detail.

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The Devastation of Oil Spills, Wind Energy, and Household Pets

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As I watch the oil slick wandering northward in the Gulf of Mexico, I am somewhat amazed at the hysteria in the news.  There has always been oil in the ocean.  Even Christopher Columbus reported blobs of oil on the beaches of Cuba.  Natural seepage of crude oil pollutes the oceans much more than offshore drilling.  But I guess I shouldn't expect that to be a consideration when "birds are dying for our greed".

Offshore oil and gas facilities are responsible for just a few percent of the total oil in the ocean.  Around North America, most oil is from natural seeps.

I have always said that if the La Brea Tar Pits were not a natural formation, the area would be the largest EPA Superfund cleanup site.  Since it is just Nature In Action, somehow it is OK that toxic petroleum solvents bubble up in the middle of Wilshire Boulevard and in the lobbies of nearby buildings.

But anyway, back to the birds.  In 1969, one of the worst off-shore oil spills occurred off of Santa Barbara.  It is widely credited with creating Earth Day and the entire environmental movement.

During that disaster, about 10,000 birds died, according to Wikipedia.

But wind energy kills living flying things too.  The National Research Council estimates that 30,000 to 110,000 bats, and 6,000 to 45,000 birds (depending on which study you use) will be killed annually by windmills in 2020. Here is a griffin vulture getting whacked by one in Crete. 



Even though the video says "fatal," the bird was given medical care for a broken wing, and may be released. More info here.

Of course if you really want to save birds, you should kill off all domestic cats.  According to the same report, cats are responsible for "hundreds of millions" of bird deaths annually.  Everything else is just noise level.

I saw an article recently that said each dog and cat you keep in your home produces more CO2 than an SUV when you consider food production, breathing, health care, toy manufacture, and all the other things you do to take care of your pet.

No oil spill, not even this latest one, has ever come close to the environmental devastation caused by household pets.



Perhaps we should start a movement to ban cats and dogs.

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Addendum:  The Big Dustup Index Fund (BDUIF) is heavily invested in oil futures ETFs.  The disaster in the Gulf of Mexico, along with the shut down of nearby platforms, and 0bama's immediate ban on new drilling in the gulf, raised oil prices significantly last week, which, along with declines in the stock market, brought the BDUIF up to near record levels.  It will be interesting to see how next week plays out.  I really think that oil will continue to go up with respect to the general economy as 0bama continues to create economic dislocations, ignores or exacerbates world problems, and thus pushes the resulting crises out into the future -- where they will become much larger.

The BDUIF is a way to invest in long-term crisis oil and gold while hedging against short-term losses due to general economic declines.  See my previous BDUIF posts for more details.
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