Hello Mr. Wolf, won't you please sit down?

[centipede]

JWFITZ, I'm just now getting around to checking out your post. All I have to say is "thank you".

[JWFITZ]

Sure, I appreciate the "appreciation."

Still getting over this horrible head cold--sorry if this isn't too coherent. God, what crappy weather, eh?

Regardless of how I might feel about the "stimulus package" and the enormous moral hazard it incurs, it really appears at this point there really is no other option. The main reason that "failures" and "foreclosures" are unallowable at the moment is that city, state, and the federal government over the last decade have been so utterly incompetent in managing an equitable tax base or tax revenues that with the precipitous drop in incomes across the nation at all levels there is a real risk of (further) systemic insolvency with the potential of a real collapse in the availability of services. If we are going to retain some semblance of civility this must not be allowed to occur. Consumption must be stimulated at all costs to get profitablility at least on the books--even if it's all paper--to stave off the very real risks of major defaults in both the corporate and public sectors. On a global level, oil prices must be brought back up as the lack of profitablility in oil revenues around the world in the oil producing nations is not only forestalling necessary R@D but in fact destabilizing governments and indeed entire regions, including Mexico. You can be assured that oil prices will be restored at any cost. Any cost. You and I will bear the primary burdens of the cost for all these things--the strategy afoot is nothing more than a desperate play to buy time hoping for a miracle blow-over. Of course, this is what governments ultimately resort to.

There is a whole wave of people who are catching on, and like Steven I predict a land rush to Puna as people desperately look for that place to make a last stand. Local policy as it exists(and is in process) is markedly lacking in the prescience to comprend these factors in time for due management. Roundabouts, grading, and weed are going to be the least of our concerns. I as well stick with the assertions that the role of civil government in general will only become more burdensome, out of touch, and increasingly irrelevant to the reality on the ground. Still, for Hawaii in general and the BI in particular, for those of us who understand what is coming--god, one couldn't be in a better place, so far as I can see.

In that sense I'm an optimist.

Update on Monday morning while doing a little research. I'm wrong on that call as the business fundamentals have completely changed and we're past the point of a "recovery." There will be no recovery. We are facing a complete restructuring of the world economy and at this point valuations are in need of complete re-analysis.

[Hotzcatz]

Yeah, the DOW may become really irrelevant very soon. If money is worth nothing why bother piling it up in heaps?

I'm not sure about the land rush scenario, though. Folks generally "don't get it" until they personally are in some sort of hurt and by that time they no longer have the resources to relocate in any meaningful fashion. Also, other than lacking the resources to relocate, it takes a lot of resources to set up a workable situation once they arrive.

What's the psychology of financial stress? Do folks hunker down where they are or go off looking for somewhere better? Do they stay in place and keep scrabbling until there is nothing left in any of their reserves, either money or health? The mass migrations during the Great Depression were from drought, mostly, or losing their farms, wasn't it? It takes money to relocate so it is even harder to go somewhere when the stress factor causing the desire for somewhere different is lack of funds.

There is also the need for community and family when things get tight. To move here most of them would have to leave any support groups they would have.

---

"I like yard sales," he said. "All true survivalists like yard sales."
Kurt Wilson

[AlohaSteven]

One fine Sunday morning about a year and a half ago I was enjoying a remarkably tasty crepe at Macuu Market --served piping hot from Le Magic Pan; delicious, those!-- quietly munching at the food tables, and overhead a nearby conversation between several locals. Perhaps because I was dressed in mind-numbingly bright orange and red hibiscus flower tourist mufti from Hilo Hattie their conversation was unrestrained.

Rather intimate financial details were discussed, the upshot of the to and fro being that friends of the persons speaking had come into a big chunk of disposable cash (over $100,000) via the liquidation of some real estate holdings on the mainland. Given the outlook at that moment, these friends of the speakers decided to quietly invest the entire amount into purchasing a shipping container filled with axes, picks, mattoxes, shovels, machetes, and so on (without going into detail about the "so on" part). Mainly durable hand-tools useful in manual agriculture, the plan being to simply let the container sit sealed for several years until after everything goes to hell in a handbasket --fuel and food not arriving daily from the mainland-- and to at that time open up shop trading these then-very-valuable items at advantage for goods and services of genuine value (not for worthless cash).

An interesting investment strategy.

In light of this true story above, here is a question: would Puna's rebound from a direct hit by several hurricanes be more similar to that of Haiti or Vietnam?

THERE is a new lake outside Gonaïves, a town of 300,000 people and the fourth-largest in Haiti. It blocks the road south to the capital, Port-au-Prince. It formed last autumn when four storms, three of them hurricanes, swept over the poorest country in the Americas in the space of a month. The rain—a metre’s worth on one night alone—fell on saturated mountains, long since denuded of their forest cover, and swept down on to the coastal plain. It seemed a modest victory that only 793 people died, compared with 3,000 killed by Hurricane Jeanne in 2004.

Five months later, bulldozers have cleared the mud from the main streets of Gonaïves. Away from them, on countless side streets, pedestrians look down on rooftops on either side. The houses have been dug out by hand, and the dirt piled in mounds on the roadway.

Only 20% of the town has been cleaned up, estimates Olivier Le Guillou of Action Contre la Faim, a French charity, which has paid 1,800 residents to help do the job. The damage was not confined to Gonaïves. Haiti’s agriculture minister reckons that 60% of the harvest was lost and 160,000 goats were killed, along with 60,000 pigs and 25,000 cows. In all, the storms have cost the country $900m, or 14.6% of GDP, according to a donor-funded government study. That is equivalent to 12 times the damage of Hurricane Katrina in the United States, and comes just four years after Jeanne wiped out 7% of Haiti’s GDP.

...Though more than half of Haitians work in farming, they produce less than half the country’s food needs. Haiti’s agriculture is the least productive in the world, says Joel Boutroue of the United Nations Development Programme (UNDP). A hectare of rice paddy in Vietnam will produce 20 tonnes of rice a year, whereas a Haitian hectare yields just one tonne.

From Rebuilding Haiti -Weighed down by disasters
http://www.economist.com/world/americas/displaystory.cfm?story_id=13109907&CFID=45536276&CFTOKEN=29373535
The Economist 12FEB2009 print edition

The whole article is well worth reading, imho, in view of the increasing probability for more frequent and more severe storms and the largely if not entirely predictable economic aftermath of such events. Storms in Haiti and Vietnam raise the prices of cement and rice here even if a hurricane never, ever, comes ashore in Puna ...but how likely is that?


-------------------------------------------------------------

FAIR USE NOTICE: This post may contain copyrighted material. Such material is made available for educational purposes, to advance understanding of human rights, democracy, scientific, moral, ethical, and social justice issues, etc. This constitutes a ‘fair use’ of any such copyrighted material as provided for in Title 17 U.S.C. section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

-------------------------------------------------------------


)'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'(

A pleasant slideshow: http://www.thejoymovie.com

)'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'( )'(

[JWFITZ]

100%.

It takes very little insight or time in the forest to recognize that in the native forests there are a great number of fallen trees, all of the same age, all blown over in the same direction.

[Guest]

quote:

---

...Though more than half of Haitians work in farming, they produce less than half the country’s food needs. Haiti’s agriculture is the least productive in the world, says Joel Boutroue of the United Nations Development Programme (UNDP). A hectare of rice paddy in Vietnam will produce 20 tonnes of rice a year, whereas a Haitian hectare yields just one tonne.

---

Some folks are cut out for production.
The only difference is the difference between Vietnamese and Haitians culture.

Look at Israelis and the Dutch, They produce massive amounts food in very poor places.

Look at the changes in agricultural output of Zimbabwe and Venezuela. Ask yourself what changed there that led to their absolute agricultural collapse.

I bet you a dollar that if Haiti elected pslamont as their president, they would be food exporting country within 2 years.

[aprild]

Now that the Dow, et al, have hit a low and sustained a 3 day run-up what do you all think? Jay?

Have we bottomed, complete with capitulation?

Will we re-test the lows? How many times? (We re-tested the previous low at least three times. And then went lower.)

Go even lower?

Return to volatility and sideways trading over a long period of time?

Continue to rise to _______ (what level)?

I understand that stocks are still over-valued. So what now? Do they get down to realistic prices or no?

I heard Obama say today that recovery must be based on reality and good valuation and that it must be a firm base--not going from bubble to bubble. What a relief to have someone with common sense and integrity in the position of leader. I was very happy to hear him say that.

All opinions welcome.

april

[Hotzcatz]

I think you hit it when you said you thought stocks were still over valued. Right now we are having a dead cat bounce and then it will go even flatter after that, IMHO.

DOW at below 4,000 by the end of this year, anyone?

Although our money is merely faith based so if we can get enough folks to have faith in it again, maybe we can get things going the other way? Somehow, I don't see that happening until the unemployment numbers start decreasing.

---

"I like yard sales," he said. "All true survivalists like yard sales."
Kurt Wilson

[Guest]

I agree with Hotzcatz,

Gold often drops on market rallies but they held pretty steady this week.

When the pressures of the enormous deficit, unemployment and the anti business tax policies start bearing down on our economy, interest rates will have to sky rocket.

That will pressure the stock market to drop.

[JWFITZ]

I'd say at the moment we're at a bit of a crossroads and it's pretty hard to say where the future is headed--at least in any sort of constructive detail. Still, there are things we do know.

We know that values will not return to pre bust levels any time soon, which means decades.

We know there is almost 500 trillion dollars of bad debt out there that is hidden in black magic contractual obligations--well beyond what any bailout can really address.

We know that the sole sector of the economy that had any money--in spite of what it looked like--the 2 upper quintiles of the Baby Boomer gen--have lost 50 percent of their net worth. The 4th quintile will be forced to sell off assets of all classes and end up on public assistance like all the rest. Only those who have assets in excess of 2 or 3 million dollars have any chance at anything resembling a "retirement."

Tax revenues as a result remain in flat or declining state--public debt becomes ever larger and defaults common.

So, in this environment, who would really want to own stocks? Who wants to own stocks or participate at all while banks still lie about their financial condition, businesses lie about their profitability, and government runs willy nilly dispensing bailouts and favors to campaign contributors.

I expect these observations might lead to an answer of where the market is going to go.