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Archive for February, 2008

World Crisis scenarios for the 21st century – Peak Oil. (update 9)

Posted by Adrian on February 29, 2008

World Crisis scenarios for the 21st century – Peak Oil. (update 9)

Light crude, trading on the NYMEX, closed at 102.59. Although the high oil price is not endemic of the peak oil theory per se, one should keep in mind that it is a combination of the collapsing USD, inflation and the booming commodity markets under the auspiciousness of scarcity and demand. With both wheat prices, oil prices in a constant increase upward. It could be argued as long as the reserve banks of the world lose control of global inflation with the continued falling asset markets such as stocks and property combined with instability in the currency markets; namely the USD, GBP. Traders, investors will be looking at the commodity markets, hence the current commodity boom. With oil climbing upward, even with the US slowing down (or in recession), oil will continue to trade above the $100.00 mark as mentioned in Morbius Glass forecasts 2008 (economic) . The implications of a high oil price is a big worry for the world economy and society, now exasperated by global reserve banks that do not seem the least concerned about inflation and declining currencies.



Posted in Finance and Economics. Strategy and Society | 1 Comment »

Global Stagflation a possibility.

Posted by Adrian on February 28, 2008

The Federal Reserve is becoming more and more predictable, Ben Bernanke and co will attempt to ward of a US recession (which has already begun), cut rates and anticipate consumption from the 170 million dollar fiscal injection into the US economy. The illogic there, even if the Fed are not concerned about inflation (which is huge concern), it’s now global problem. Japan and the rest of Asia are grappling with high inflation on oil, food and other amenities.

The worlds second largest economy Japan is inches away from falling into a recession, their industrial output came lower at 0.2%; which basically means all output industry is slowing sharply. Japan which in a lot of ways is caught in a problematic situation, stagnant growth and high inflation on oil food – and extreme low interest rates, now at 0.5%. even talk, that if American dives further into harsher recession, BoJ may cut rates. Japan, could be already in recession; but also have a reserve bank that again talks in denial rhetoric of it’s economic predicament.

But with Asia in inflation predicaments such as South Korea, Philippines, Indonesia, Singapore (beginnings of stagflation?) and Japan. The question is, to what point do inflation and recession begin to form stagflation? Also, will stagflation occur globally? With Europe struggling to contain inflation, yet have slowing economies such as the UK – the inflation problem being tossed aside with the hysteria that a country can maintain growth. The UK, like the US is in the midst of a rate cutting policy (UK rate now at 5.25%). The UK could be the first EU country to go down the stagflation road with the US.

For a brief explanation on stagflation go to this: Fortune online. A good short video, I actually think Fortune has being putting out a lot of decent articles lately, namely following inflation and the investment banks debt/writedowns (losses) fiasco.

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The systemic failure of the Federal Reserve.

Posted by Adrian on February 27, 2008

On the 27th/28th Feb 2008 GMT  treasury Secretary Henry Paulson and Fed chief Ben Bernanke will appear before the House Financial Services and Senate Banking committees to explain to the panel that they will cut rates and deny that America is in a recession or will go into a recession.

The question is, if the the US is already in Recession (that may have started as early as December 2007). How will a constant rate cutting policy work?

Investment Bank Merril Lynch (who took huge write downs in the last quarters) says the US in recession and according to an Associated Press-Ipsos poll 61% of Americans believe they are now in a recessionary economy.

The horror of inflation, is it eroding any asset wealth left of the American populous. America is currently in stagflation, even worst on top is the high oil, food and utilities (electricity, water) costs.

So it is bad.

With the Fed in denial, printing money and having lost control of the US economy; the market censuses is that the Fed will cut rates (in March at next Fed meeting), Asian and South American markets have rallied spurred by the speculation of rate cuts.

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DVD Reviews – Planet Terror (Director Robert Rodriguez)

Posted by Adrian on February 26, 2008


As I mentioned in my expose of Japanese Grindhouse (refer here), in regards to the term Grindhouse. Which wasn’t a veined criticism (or maybe it is?) of the ideas behind the movie Grindhouse. That it is really a term not many people would get if they didn’t know their movie history. The kitsch aspect of Grindhouse era was the presentation of the Grindhouse movies, i.e sloppy editing, scratchy film, blurred colours, offset angles, crazy zoom action and so on. All that adds to the charm of the Grindhouse movie genre. Planet Terror duplicates all that, right down to the scratched film, blurred shots and the movie reel going haywire.

So it is understandable why the two movies were split from the one banner ‘Grindhouse’ and released separately aiming for the DVD market.

Planet Terror is a such a good movie, Rodriquez has thrown in all the things we love about the 70’s, 80’s b-grade movie charm. Lets face it Hollywood can make a movie that is so over budgeted and forgettable, but all these small budget, risque flicks that fell under the Grindhouse genre can still stand the test of time. Although Planet Terror would have had a substantial budget behind it, as oppose to the low budget b – grade movies that Planet Terror pays homage too.

I like Rodriquez’s style, he makes a movie that is action packed, blood soaked (his violent movies) and with a ton of schlock. The movies are fun and this what Planet Terror is, a fun flick. It would have been awesome making this, with Planet Terror you get 70’s psychodrama medical flicks (TV soap operas), that 70’s synthesized acid tripping music combined with 70’s George A Romeo zombie flicks, some 80’s zombie drama (military conspiracy, chemical warfare and a zombies), back to some Grindhouse themes of small American town psychosis, make the movie look old and scratched, show a missing real (“apologies from the management”) whilst a ‘deep throat’ inspired 70’s sex scene goes missing. I mean it’s a work of art, modern art, an in joke. Maybe most people won’t get it, and there would be nothing worst than having a movie ‘geek’ point out all the 70’s, 80’s Grindhouse/b-grade influences in Planet Terror.

But then again, to make this movie worth while maybe you should sit down with you wife/husband/girl friend/friend/special friend and go through some early John Carpenter flicks, especially listening to the scores, look at Carpenters ‘The Thing’ (gore), watch Dawn of the Dead, check out some early porn – that would be a good start.

Stand out scenes? Because there is a lot going on in Planet Terror, a lot of characters intermixing with the backdrop zombie theme, it’s hard to pinpoint memorable scenes. I mean, they are so many memorable scenes. The psychopathic doctor, who before checking patients, pops a thermometer in his mouth and checks his own pulse. That scene to me, is a Quentin Tarantino inspired scene, especially when the psycho doctor discovers his wife’s female lover ends up dead (brain scooped out by zombies), and he then crunches the thermometer in his mouth. Just small scenes like that, layered onto the main theme of the zombie plague about to engulf the world.

If you are an 80’s child (generation X’er) and you remember the huge amount of b-grade movies that came out of the 70’s and 80’s. You’ll love this flick, you will identify with it’s homage to a time in cinema when movies were churned out that that in someways, deliberate or not, had social/political/sexual/ and dissent messages.

Well worth checking Planet Terror, also look for the trailer of the Grindhouse movie that doesn’t exist (under Planet Terror clip) – Machete.

Machete trailer

Posted in DVD reviews | 3 Comments »

The destruction of the middle class, freedom, inequality and the rise of class distinction. Economist Paul Krugman and Jounerlist/filmaker Adam Curtis

Posted by Adrian on February 25, 2008

I just finished reading a transcript done on the ABC from the Commonwealth Club in San Fransisco, the speaker is the economist Paul Krugman; he has offered an insight into why the middle class of America doesn’t really exist anymore, in comparison to the ‘baby boomer’ era 1950’s. The reasons, as he puts it, is a puzzle, the fact that such inequality between the rich and poor as far as pay, health care, union protection and job security almost doesn’t exist for the so called middle income earners to lower income earners. Yet, there hasn’t been a back lash politically against societies inequality, which as Paul Krugman argues levels of inequality is in regards to income distribution; hasn’t polarized the masses. It appears from his estimates the gap is so significant between asset wealth, income wealth between rich and poor, that the scenario reflects the prolonged American gilded age right into the 1920’s.

The illusion, or feeling of wealth is the fact that more spouses are working, hence double incomes. Yet prices, costs of living have risen dramatically. You could also say the amount of credit that has been available to people, contributed to the deception of the wealth effect

He puts some good points across, regarding the reason politics went so far to the right, the utilization of the race card in right wing America politics, the end of the union movement and of course fear (terrorism).

Please check out the transcript of the speech here

Adam Curtis is the documentary filmmaker who brought us the amazing well thought out documentary the Power of Nightmares. His latest documentary is called ‘The Trap’, in which argues that society has entrapped it’s self into a predicament by world governments.

I am under no doubt that the biggest con job humanity has ever fallen for has taken place, more notedly the ‘War on Terror’ (a war without end, with a ‘structured’ enemy that doesn’t exist), the global economic boom and ‘wealth effect’ (in regards to developed nations populous not being any richer), governments (in which are run like businesses, hording incredible amounts of money – namely sovereign funds) and the destruction of democracy in the west.

Adam Curtis documentary The Trap revels a governing system, that in some ways was reinforced by old misgivings of humanity. In the sense, they (governments) believe that humans need to be controlled, led and watched. We can’t be trusted. We are only bio machines, with only self preservation and a desire for freedom – and our leaders are the only ones that can deliver this too us.

The BBC, ‘The Trap’ is an extensive documentary; below are YouTube links of the The Trap. The links belong to the ‘Lonely Robot’ a subpart of The Trap doco

Part 1 – The Trap, “Lonely Robot” (Adam Curtis)

Please note these are only exerts from the main documentary, it would be well worth buying the DVD.

Posted in politics and social commentary | 1 Comment »

Is Gold correcting (update 1)

Posted by Adrian on February 20, 2008

Gold continues to be the reliable inflation hedge for any portfolio. The forecast correction for gold hasn’t happened as yet, but as stock markets globally lose significant value, indicators like the itraxx point to widespread credit defaults amongst companies, the banks continue to write down huge losses on CDO’s and make a mess of marking down value on mortgage backed bonds (which in turn indicates to the market consensus that a bank is trying to cover up it’s ‘exposure’ to losses).

With the value of bonds, CDO’s, shares and every other complex financial instrument eroding very quickly. Gold is holding it’s own. Oil, in my opinion, will start to trade above $100.00 with dips into the high $90’s becoming less and less, again gold may provide a solid investment against rising costs. The global credit crunch, interbank liquidity issues, the global US subprime exposure, continued asset writedowns from all the world banks and high inflation will continue with ferocity throughout 2008; add also the higher Oil costs – which could resonate as an ‘Oil crunch’ for all economies worldwide.

Gold reached a new high of $946, currently trading against the USD in the range of 945 – 940, between barrier at 912.00, and resistance 936.00. Now trading above the resistance line (breakout), and above the 5 day and 50 day averages (on a 1 day platform). The price has also gone above the top Bollinger band at 930.00.

This would indicate gold is overbought on a 1 day platform. But with current global inflation worries and the US falling into stagflation, gold may continue the rise. A sell off may occur on news that the Fed may pause their rate cutting. This needs to be taken into account.

Trade long, option locked in at price 949.00.

*please note morbius glass does not give investment advice. The following information is for reference only. Trade at your own risk.

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World Crisis scenarios for the 21st century – Peak Oil. (update 8)

Posted by Adrian on February 19, 2008

Oil reached new highs of $100.10 (a barrel) on close of trading on the NYMEX. As I believe, amongst others, oil will begin to trade from the $100.00 range. With dips under $100.00 becoming rarer. There is speculation that with the global slow down, especially in the US, oil will decline in price. I can’t really see that, if we are going to see lows they will be seen in the $95.00 to $98.00 range. Now with OPEC cutting output, the apparent reason is the idea to lower costs; or maybe shortage problems? There is just so much in the mix, the reality of the peak oil situation, increased refinery costs, geopolitical disputes (over costs), inter company disputes (over costs) and prolonged middle eastern conflicts.

World Crisis scenarios for the 21st century – Peak Oil. (update 8 )

Note the light crude graph, with record high of $100.10 a barrel


Article: Oil hits record over $100 on OPEC supply concerns

Posted in Finance and Economics. Strategy and Society | 1 Comment »

Nanotech update. Clothes that will produce electricity

Posted by Adrian on February 15, 2008


Clothing that one day could produce electricity to power an ipod or iriver mp3 player. Clean energy created from friction/movement. Link: BBC News/Technology

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Japan, Singapore already in recession? Spain, UK rest of Europe next? (update 1)

Posted by Adrian on February 14, 2008

Japan’s GDP has shown a higher increase in the last quarter, an apparent 3.7%. Which has boosted the Nikkei (current) to 13,591.65 up 518.06 (3.96%), refer to graph

The conflicting aspect here is the GDP decline within the Singaporean economy, which is part of the Asian trade chain; the Singapore economy could be close to a recession as the government considers a fiscal stimulus, similar to the US massive fiscal stimulus to invigorate consumption again.

The higher Japanese ‘exports’ contributing to higher GDP could be on inflation from fuel and food inserted into the calculations, hard to say and I am speculating.

The US economy has just recently shown that retail spending is back up, again possibly on the back of higher food and oil costs.

You can see the similarity in with the rise of the dow and nikkei, from the news on higher Japanese GDP figures and steady consumer news from the US. Refer to graph (3mths):


This would also indicate a coupling to the US market woes, including any optimistic news from America and what that news does to the Japanese and US stock markets.

Will the Singaporean economy time their fiscal policy with the release of US fiscal policy?

At this point both the dow and straits times index are diverging. Refer of graph (3mths):


Needless to say it will be interesting to see what Japan reveals with banking and subprime losses in the next quarter; not to forget their housing market has collapsed.

Does anyone remember that quote from Quentin Tarintino’s Pulp Fiction, from the character Wolf? Played by the great Harvey Keitel.

Upon hearing the higher GDP figures, this quote came to mind, “Well, let’s not start sucking each other’s d**** quite yet.”

Japan, Singapore already in recession? Spain, UK rest of Europe next?

Japan Economy Grows 3.7%, Twice as Fast as Expected (Update3) Bloomberg

Singapore Cuts 2008 GDP Estimate on Global Slowdown (Update2) Bloomberg

Posted in Finance and Economics. Strategy and Society | 1 Comment »

Inflation – Asia, Southern Hemisphere

Posted by Adrian on February 13, 2008

A friend mine runs a medium size business, she is a professional in her field of work, a few days ago we had a coffee, mine was espresso, or short black; she bought a cappuccino. I don’t usually like the coffees I have been buying recently, firstly they are overpriced, without a fresh grind, it is obvious that the ‘portafilter’ hasn’t been banged out – so they try and get as much out of the one grind. The cafe is reasonably filled for a smallish space. In other words there is a steady flow of customers. During our coffee meet up, she mentioned to me how (joking), ‘as busy as I am you would think I should be a comfortable millionaire’.

Australia and South America, like Asia, like Europe and not to forget the stagflation recession of the US, are all suffering from inflation. Some more extreme then others. A global issue, that has eventuated into a serious disposition for the global populous. The ‘global boom’ was supposed to instill a general wealth, but instead high inflation has eroded wealth. Prices have spiraled upward. More money used to purchase, pushing prices further up, interest rates either go up (attempt to contain inflation) or go down (if you live in the US and the UK). In hyperinflation even saving rates are unattainable, even if interest is high, due to the fact more money is used to purchase than save, so cash term deposits become a luxury. As more money is flooded into the economy, inflation becomes more serious. Individual or consumer wealth becomes stagnant or negligible as the purchasing power of currencies lose value.

A kinda fucked up situation.

Worst, when governments and Reserve Banks lie, brush off, play down, mess with the figures in regards too inflation risks. The Federal Reserve and chairperson Ben Benanake have been accused of this, either not fully enclosing all inflated prices in the ‘basket’ assessments of CPI; or playing with the figures to fit a favorable inflation rate. Inflation could be higher than most reserve banks would like to admit, at the same time (as I mentioned earlier) wealth becomes stagnant and purchasing power diminishing on a larger, almost uncontrollable scale.

A good example of a government cooking the ‘inflation’ books is Argentina, after massive deflation in the early 90’s. The country has contributed to the Chinese export boom and is still one of the major trading partners with China. Argentina falls under the fading theory of decoupling from a US protracted recession, other countries that fall under the ‘decoupling’ theory are Australia, Chile, Brazil and other mining export countries from South America. I do not believe in the decoupling theory at all, as global inflation is a very good indicator that the markets are intrinsically connected.

In regards to the Argentinian inflation figures being fudged, from Financial Times online ‘IMF asks Argentina to clarify inflation’ figures times online:

“Private economists and shoppers say rising prices are not reflected in official statistics, but the government denies widespread allegations that it has manipulated the figures in a bid to mask mounting inflation.

In January, Ms Edwin (head of Argentina’s statistical institute, Indec) defended official data as “absolutely trustworthy” after dissident Indec workers published their own 2007 inf-lation estimates of between 22.3 per cent and 26.2 per cent – up to four times the official 8.5 per cent rate.

Indec last week reported prices rose 0.9 per cent in January compared with the previous month. Market expectations had been for a rise of up to 1.5 per cent.

“Indec’s performance is just a joke. It started as a little lie and it’s snowballed,” says Eduardo Fracchia, director of the economics department at Argentine business school IAE.”

Below is a graph of the Australian All Ords and Argentinian Merval index over a 3mth period, both trading under similar % range, which is trading below or negative.


Singapore is trying to juggle high inflation and a slowing recessionary US economy, with tax cuts and hand outs, similar to George Bush’s fiscal stimulus plan.

‘Southern Hemisphere Singapore budget to tackle 25-yr high inflation’

“The Singapore economy is slowing on the back of an ailing U.S. economy, so analysts expect the government’s budget to assuage growth fears by sharpening the island’s competitive edge.

But its main focus will be on the politically sensitive issue of the rising cost of living — a concern from the United States to Hong Kong.”

Posted in Finance and Economics. Strategy and Society | 2 Comments »