SAR #8337

A country that doesn’t make anything doesn’t need anything financed.

Whether Report: The US recession started in December 2007, according to the daring economists of the National Bureau of Economic Research. The NBER is a non-prophet organization.

Passe Comitatus: By 2011, NorthCom will have 20,000 combat veterans trained to "assist" state and local officials in maintaining order and putting down civil unrest if necessary. The force isn't needed to fight foreign terrorists - not even with the latest model flying carpets they cannot get significant numbers of jihadists here from over there - so there's no need to fight them in either place. Maybe Alexander Haig was in charge.

Stability or Not: Those with cash left are rushing into 3-month US Treasury bills, with a yield of 0.02%. It is seen as the ultimate safe-haven, to the point you have to pay the Treasury to hold onto your money. Throw a dart at the map and you'll hit recession, social unrest, rebellion, starvation and be happy to get your money back.

The Quote: "Poverty is spreading and may be re-clustering in suburbs, where a majority of America's metropolitan poor now live."

The Plan Hope: Bernanke and Paulson have settled on flooding the markets with liquidity and lowering interest rates to zero in an attempt to lead, trick, force the consumer into further debt. Japan has been doing this for nearly 20 years. Anybody check and see how it's worked out for them?

Do the Math: The essential step in stopping global warming, in adjusting to a post-peak energy realm, in avoiding continued mass starvation, in avoiding resource wars over water and food, in solving the problem of continuing growth on a limited planet - step the first is a discussion about how to achieve population control and a 50% reduction of human numbers. Anything else is just picking out wallpaper.

Contest: For the usual prize, name the first country Obama will bomb and explain how the administration will explain the difference between Clinton's bombing, Bush's bombing and Obama's bombing. (Note: Countries previous bombed are exempt.)

Chicken Feed: Pilgrim's Pride entered bankruptcy posting an $800 million 4Qo8 loss, including an operating loss of $250 million and a write-off of $500 million they over-paid for Gold Kist.

Lots... Construction spending on houses fell 41% in October over the previous year and was down 65% from the February 2006 peak. On the bright side, there are a lot of pickup trucks for sale.

Down On The Farm : Ammonia is essential to wheat production. Adequate ammonia leads to wheat that is 14% protein; underfertilized wheat is about 8% protein. This is important in those parts of the world where bread is a major foodstuff. Global wheat stocks at the end of the season have traditionally averaged about 70 pounds per person. For the last three years it has been about 40 pounds; the margin is thin.

In the Dakotas, farmers apply half their annual ammonia in the fall, half in the spring. This year the fall rate was closer to 10% because of higher costs and the absence of credit. Some cropland will go without fertilization in the spring of 2009 due to a lack of credit, much will go without because it simply will not be available. The national ammonia pipeline network has little spare capacity, so next spring - even if they can get the financing - Dakota farmers will not be able to make up for this fall's sparse fertilization: The capacity isn't available. Nor is the credit.

Are We There Yet? 10/26/05 Bernanke says there is no housing bubble. 2/12/08 Bernanke says housing to improve by end of 2008. Latest data show slowest housing sales in 20 years, median price continues to fall. At the current pace, housing will bottom by 2015.

Armageddon Insurance: Credit Default Swaps on 10-year US Treasuries passed 68.4 basis points on Monday, up 15% from Friday's close. Pretty impressive in that it's insurance that will pay off only if the dollar is worthless.