Socialism is Close at Hand

Judging from the lack of comments as of late I must be putting together crappy posts. Sorry if the material has not been interesting. I am really fond of the post Tuesday night where I put the idea:
"..there seems to be a real struggle right now trying to value insolvent banks. As their true value is of course ZERO, their value as a FED backstopped institution is unknown."
Watching the wild gyrations of the financial stocks seems to back up that line of reasoning. Anyways, hope the material is still entertaining and value adding.

Budweiser- Say It Will Not Happen!
The Belgian super sized brewer InBev submitted an unsolicited take over offer to Anheuser-Busch Co Inc. I am not going to comment on the deal, as I have zero interest in the details. I just want to go on record with the statement DO NOT CHANGE BUD PLEASE!. Yes, I am a Budweiser drinker. Yes, I know it is trendy to make fun of Bud and say it is piss and all that. I like it. I like the crisp taste. I love how consistent the beer is from package to package. I like UFO Heffenwizen, but every 3rd or 4th six pack tastes so bad I cannot drink it again for a while. Never happens with Bud. If InBev gets BUD, please do not change a thing.
Note: Late tonight the Mexican firm Modelo has said they have been approached by BUD as a possible blocking move to the InBev deal. I will keep an eye on this one!

Socialism Making a Deep Push Into the Collective Mindset
The key to making people as a group do something that you want, you nee to do two things:
1.) Make the desired outcome seem preferred to the group
2.) Limit or close off alternate options
This is how communism and socialism get a toehold. No sane person thinking rationally would ever choose socialism (or communism for that matter), yet Europe is dominated by socialists, and even modern day communists are just over eager socialists.

In America the whole capitalism thing is under attack right now because the rising prices of some items that people do not want to be more expensive is causing some irrational thought. The whole Bear Stearns bailout will be seen as THE inflection point where something got broken. The next step will be the housing price attempted floor setting.

Not to be outdone, why not just control, well, everything? Take a look at this headline and see how bad things have become:

Oil is too important to leave to market forces
A six-point plan is needed to see off the latest threat to the economic stability of the world
Anatole Kaletsky
Full Article: http://www.timesonline.co.uk/tol/comment/columnists/anatole_kaletsky/article4116318.ece

I will not even excerpt this terrible piece which basically says oil and gas are too important to let free markets decide the prices. Home prices were ok to let the markets set them as long as they were rising, but now not so much. Oil is an important world need, so more regulation is needed. You know the drill.

I am shocked daily at the kind of pure socialism thought that is rampant right now in the US. While I am a firm believer that you get exactly what you pay for as well as exactly what you deserve, I realize this was probably inevitable. It is still as sad process to watch though.

Raise Interest Rates
Today saw more talk about inflation and raising the FED rate in August, or September at the latest. Longtime readers know what I think of that line of thought, but just for new readers I will tell you what I think about the idea that the FED will be raising rates anytime this year:
NO WAY! and NO HOW!
Got that? The markets keep wriggling around as if some comments form some FED officials make policy. Actions speak louder than words and August will be here soon enough. We shall see who is right, and who is gullible.

Writing Interlude
I had recently come across a few poems that I remember from High School English written by the great Edwin Arlington Robinson. He wrote two that I remember clearly, "Richard Cory" and "Miniver Cheevy". This remembrance also put me in the mind of the Edgar Lee Masters work "Spoon River Anthology" which I also loved, and am now in the market for a good copy of (preferably old and valuable). Here is "Richard Cory" for review:

Richard Cory
Whenever Richard Cory went down town,
We people on the pavement looked at him:
He was a gentleman from sole to crown,
Clean favored, and imperially slim.

And he was always quietly arrayed,
And he was always human when he talked;
But still he fluttered pulses when he said,
"Good-morning," and he glittered when he walked.

And he was rich, richer than a king—
And admirably schooled in every grace:
In fine, we thought that he was everything
To make us wish that we were in his place.

So on we worked, and waited for the light,
And went without the meat, and cursed the bread;
And Richard Cory, one calm summer night,
Went home and put a bullet through his head.

As always, I am open to Friday night entertainment ideas for the blog, so leave a comment.

Have a good night.

China Holds Tons of US Debt and They Have all the Vegetables

Every day brings more amazing news and pictures from the Phoenix Mars Lander. Hard to believe we can send a robot that far out into space and land it within 20 meters of where it was meant to land but we still cannot figure out that you cannot spend more than you make for long. Humans are a strange species indeed. In all the buzz of the new lander, do not forget the two little rover robots Spirit and Opportunity that are still rolling around Mars gathering data long after they should have ceased to function.

The Markets Need Daily Reassurance and Explanations To Function
It started with the FED way back in time when they started their BSC bail rigging followed by the lending of cash to banks of all kinds. As if as sea of cash swapped for toxic mortgage paper was not enough, no attacks are being levied at the evil of high oil prices.

Things are so bad right now that daily explanations of data and reassurance on a constant basis seems to be the only way to keep the markets from imploding. That's bullish, right?

Today there was a reported drop in oil inventory numbers that was significant in size while the expectation was for a slight increase. Of course, we can't have a panic so we get the following snippet from this AP story( http://biz.yahoo.com/ap/080529/oil_prices.html):

"In its weekly inventory report, the department's Energy Information Administration said crude oil inventories fell 8.8 million barrels last week, while gasoline supplies fell 3.2 million barrels. Analysts surveyed by energy research firm Platts had expected slight increases in supplies of both.
But the EIA also offered a rare explanatory note on the Gulf Coast tanker problems. Gulf ports have closed many times in recent months due to fog, said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago."

Got that? The huge drops were due to recurring fog! Why not issue fog alerts ahead of time? Can we expect the fog to "moderate over the coming quarters" or is it here to stay? Will there be fog futures? Who knows. What I do know is that when every piece of good news needs to be pumped hard and every piece of bad news has to be explained away, delusion is running high. That means that right now risk is high. Very high. Higher than Jeff Spicoli.

China Holds Tons of US Debt and They Have all the Vegetables
We all know the deal. China is sitting on so much US debt that they cannot reasonably expect to ever get paid back. HaHa! I have written before that the price of this debt being called will one day cost the US by having to agree to a China invasion/takeover of Taiwan at some point. Sorry guys!

While I was looking into what kinds of things to plant in the garden, I kept coming across the same data tidbit; China produces most of the vegetables that are eaten worldwide. Think about that for a moment. Look at this list of Chinese production (all from 2005 stats on Wiki):

• Carrots and Turnips - China accounted for at least one third of the global output
• Tomato - 125 million tonnes of tomatoes were produced in the world in 2005, with China, the largest producer, accounting for about one-fourth of the global output
• Lettuce - China is largest world producer
• Potato - China accounted for one-fourth of the global output
• Cucumber - China produced at least 60% of the global output of cucumber

I was too freaked out to research any more. As you can clearly see, China holds the most US debt and they also hold all the vegetables! I would rather have the veggies than the debt, but that is just me.

What does this mean? Maybe nothing at all. China has the most people so it makes sense that they produce tons of well, produce. Or maybe it is a good spot to be in to hold a bunch of debt and have a strangle-hold on veggie production. Who can say. One can guess though.

Have a good night.