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Archive for March, 2008

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

Posted by Adrian on March 17, 2008

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

It can be argued that the current bull market with commodities could be solely down to the declining USD dollar, inflation, and investors looking to hedge against continuing losses of anything related to the debt markets. Tied into the commodity bull run, is the scarcity aspect with world rice, sugar and other food (commodity) stockpiles declining. Gold which has now reached the $1000.00USD mark with Silver trailing ( cheap, with no obvious future corrections). But oil could be in a league of it’s own. Investors are currently seeing oil has a inflation hedge, some analysts say a correction is eminent, that oil could fall down to $70.00 a barrel. But with emerging economies still charging on, namely China. The demand for oil is going to increase and hence the price. In that sense oil stands alone in someways as a runaway inflation contributor (not only a hedge against inflation from an investor perspective, but also a global contributor to inflation), oil/fuel is needed to transport, set up and establish all industries including food production and utilities etc.

So with price inflation already on food (global food stockpiles declining), oil will also continue to add to the costs of food and food transport.

If there is a massive and deep global recession or depression, there maybe a decline in the oil price. But with demand and shortages continuing with oil, the $100+ range could be constant.

With the huge problems forming in the world markets, oil could be that nail in the coffin for global economies.

The high oil price and countries stockpiling oil (refer to MarketWatch article on Chinese reserves adding to high oil costs), could be another indicator that Peak Oil could become a consensus backed reality.


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The morbius glass schlock, horror, 80’s, grindhouse, sex and violence movie marathon. John Carpenters ‘They Live’ (1988)

Posted by Adrian on March 14, 2008


I like John Carpenter’s movies, he mixes in his own style with 70’s exploitation style movies with his trademark music (synthesizer) scores. A unique director.

‘They Live’ is a classic Carpenter movie, it has intentional b-grade written all over it. Released in 1988, it covers the seminal dislike and disillusion of 1980’s yuppie consumerism (a time before we all became yuppies in a credit expanded universe of the 21st century, metaphorically speaking). Actually I saw this movie in 1988 in a busted up independent cinema, perfect setting for this movie in a post recession world of 1988. It’s a blame game movie, and why shouldn’t it be. The wealthy, the elite (the minority) subliminally instill a feverish consumerism into the populous, at a time when the general society is breaking down with the poor looking for work and living in shanty towns in Los Angles. John Nada (Roddy Piper) a drifter wanders into LA looking for work, sleeping in the streets until he ends up at shanty town. From there he figures out that a underground network has emerged to inform the masses that they are being lied to by the powers at be, mostly through advertising. In fact the powers at be are ghoulish looking aliens, that can only be seen with modified ‘Rayban’ style sunglasses. Carpenter has borrowed heavily from the cultural jammers of the 70’s, with the local underground resistance intercepting commercial media with their ‘jamming’ trying to reveal the hidden alien agenda.

How does this movie sit today? Well it still holds merit, especially with blind consumerism. You could add (sensibly) liberal amounts of conspiracy theories to why humanity is what it is today, but They Live, in my opinion, drew most of it’s influences from the rise of 1970, 1980’s elitism or as I mentioned yuppies of 20+ years ago. But never the less the appealing impact from They Live, is the alteria motive of modern day advertising. After seeing this movie you will double check a advertising billboard, especially if you see a scanty clad girl on a beach (“marry and reproduce”).

With its political and social commentary They Live is fun ride, the movie doesn’t take it self too seriously and Carpenter was able to draw in some relevant themes to make They Live a cult classic.

I like this quote from the Carpenter, in regards to the yuppie alien invaders, “The creatures are corrupting us, so they themselves are corruptions of human beings.”

Posted in Popular Culture/Culture | 1 Comment »

Is Gold correcting? Hits $1000.00! (update 3)

Posted by Adrian on March 13, 2008

Gold hits the historic 1000.00 an ounce. This was bound to happen anytime soon, everything as far as market anticipation was correct; Inflation, corroding USD, bear market emerging in stocks, credit markets still straining, general fear.

The question is will gold hold that upper range? From all perspectives gold appears to hold investor favour, like oil (which is now bouncing off the 100.00 mark and going up).

From my perspective on a 1 day and 3hr chart the current price of 994 looks comfortable (with support at 992). With Asian trading about to begin (14 March 2008), I suspect the Gold price will rise back into the high 900’s and may even settle into the 1000 point.

Date:03/13/08 09:30 O=998 H=1000.5 L=997.3 C=998


(please note the above chart is a weekly chart)

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

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

The Federal Reserve $200 billion Treasury swap, toxic mortgage debt. Is a major bank about to go under? Hedge Fund market collapsing.

Posted by Adrian on March 13, 2008

This is old news now, when announced (12th March 2008 ) that the Fed were going to lend out $200 billlion to free up the interbank markets and clear out a lot of toxic mortgage back securities (MBS) sitting in banks. There was a euphoric rise to 416.66 points on the Dow Jones then falling back to -46.47 points refer to graph.


But almost immediately after the euphoria the market read it two ways:

1. This is not going to work, interbank rates will still rise, liquidity markets will freeze up again and credit markets will continue to contract.

2. The whole fed injection was to rescue or prop up either Bear Stearns or Fannie Mae – both potential on the brink of insolvency.

So the market is still looking at stocks, debt ladened companies as risk and dumping them. Not too mention the precarious position the Hedge Funds industry is in (discussed in World Crisis Scenarios for the 21st century – worldwide economic depression (update 12). As a prelude into widespread ‘panic’ fund withdrawals), in regards to ‘bets’ gone wrong, missed margin calls, contracting credit markets, shrinking balance sheets and possible widespread insolvency.

The Times online March 13th 2008, :

“Several hedge funds with assets of more than $4 billion (£2 billion) were on the brink of collapse last night or had halted withdrawals, despite moves by the US Federal Reserve this week to ease America’s deteriorating credit crisis with a $200 billion collateral lending facility.

The potential closure of six funds came as a leading private equity executive, who declined to be named, said that such funds were “snapping like twigs”, with one failing every day.”

The Federal reserve appears to be continuing on with a rate cutting policy (so far with policy speeches and little care about the demise of the USD). Oil is now heading towards the $110 mark( barrel). Gold is still climbing, but yet to reach it’s anticipated $1000 mark, although there are solid trades (buy) at $984.

The continuing high oil price will be tracked in World Crisis scenarios for the 21st century – Peak oil (update 9)

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

A new liquidity crisis looming. Could a declining USD spark a currency crisis? (update 2)

Posted by Adrian on March 11, 2008

The term crisis is in it’s self a dramatic term, but what other term can be used when the banking sector is freezing up to the the point of it being completely frozen. In the world of business and competition it’s kinda funny the uneasy alliance the banks have had between each other (in regards to interbank lending). All looking for market share. But as the investment banks and commercial banks ran headfirst (risk management gone) into the debt markets and structured finance, derivatives markets; the banks all got hammed. In turn it shattered all confidence in the credit markets (hence the global credit crunch).

Now the rumour mill begins, especially when talk of a big bank (namely Bear Stearns) has insolvency issues; or hasn’t disclosed losses connected to the debt markets. This is bank to bank rumours. So with the credit crunch widening, rumours (or truths) continuing, it just proves the crisis of the liquidity and credit markets is serious, from CNNmoney:

“Wall Street was hit Monday with renewed signs of weakness in the financial services sector as rumors circulated that a number of large investment banks could disclose more writedowns.

Shares of Lehman Brothers (LEH, Fortune 500) fell nearly 6% after a report that the Wall Street bank is planning to cut 5% of its workforce, or about 1,400 jobs. Lehman will report first-quarter results next Tuesday.

A research report from a Citigroup analyst said Lehman could write down an additional $1.6 billion. The report also forecast a $3.2 billion writedown by Goldman Sachs (GS, Fortune 500), $2.9 billion for Merrill Lynch (MER, Fortune 500) and $1.2 billion at Morgan Stanley (MS, Fortune 500).

Bear Stearns (BSC, Fortune 500) stock fell more than 9% after reports that Moody’s had downgraded some of the brokerage’s corporate debt. A Bear spokesman said the reports were false.

“There’s no reason to buy right now,” said Ryan Larson, senior equity trader at Voyageur Asset Management. “It’s sell first, ask questions later.”

Now the currency crisis. As summarized last on morbius glass in ‘A new liquidity crisis looming. Could a declining USD spark a currency crisis? (update 1)’ ; with commodity prices booming (thanks to a dying USD) – will the commodity produces want to get more bang for their purchase? The middle eastern currency de-pegging rumour is also spreading, with the UAE assigning a committee to look at de-pegging from the USD. The last part of the rumour. The decision whether to de-peg or not will be at years end (2008). I would speculate that a decision, if one is made, will be sooner than later. Especially when Oil will hit $110+.

But all currency’s are volatile especially the EUR (overbought), and the relatively strong Asian currencies. As long as the credit crisis causes low yield borrowers to become risk averse; it’s hard to know what global currency is going to replace the USD (if any).

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World Crisis scenarios for the 21st century – Worldwide economic depression.(update 12)

Posted by Adrian on March 7, 2008

World Crisis scenarios for the 21st century – Worldwide economic depression.(update 12)

When the financiers (banks) of economic booms start to contract rapidly, the costs of interbank rates skyrocket, and the company default rate indexes start to move upward rapidly. This is already occurring within the US recession, and now also with the global slowdown. It is a very worrying development for global markets.

The credit crisis or credit crunch is yet to reach a defining climax, in that sense we may not have seen a real devastating blow from the credit squeeze globally. But the writing is on the wall.

In simply terms, the banks are restricting credit or calling in debts. This in turn is effecting the ratio and credit rating of indebted companies. So investors that are trading debt backed bonds such as corporate bonds, tracked primarily by the iTraxx which is showing default speculation rising rapidly. If business can’t finance, or refinance debts –  they are in trouble, hence bankruptcy. A troubling scenario on a global scale.

The collapse of Hedge Funds industry could be that wider precursor shock to a financial markets. The hedge fund industry is a heavily leveraged industry (like the Private Equity industry) that borrowed for a lot margin investing. Which is possibly on the verge of systematic failure. A industry that in all reports is very vulnerable to the current global credit crunch, in the sense that a tightening of the credit markets via the banks, is inevitably going to hamper growth in the industry. Paired with potential margin calls on ‘bets’ gone wrong – you could see a panic withdrawal on an industry that relies on huge amounts of investor capital for it’s high returns and management fees. The hedge funds now are locking out investor withdrawal. Similar to a banking crisis, but more exclusive to high yield investors. But never less an indication of systemic failure in the finance industry; on a large scale of losses,

from Business Week online,

“Since November at least 24 hedge funds have barred or limited investors from taking their money out, tying up tens of billions of dollars for an indefinite period. Among them: GPS Partners, a $1 billion fund that bets mainly on natural gas pipelines; Pursuit Capital Partners, a $650 million portfolio with troubled debt; and Alcentra European Credit, a $500 million fund that owns slumping loans used to finance private equity buyouts. The new rules affect not only the pension funds, endowments, and well-to-do families that buy the funds directly but also smaller individual investors exposed through diversified portfolios of hedge funds, known as funds of funds. Some hedge funds have broad powers under their contracts with investors to make such changes at their discretion. “It’s the largest period of redemption suspensions in the industry’s history,” says Jonathan Kanterman, a managing director with Stillwater Capital Partners, a money manager.

It’s understandable why hedge funds would want to keep investors from pulling out their money en masse. In this market, any sales would almost certainly be at cut-rate prices, guaranteeing big losses in portfolios. And once managers start dumping assets, there’s also the danger that big banks, which provided the funds with credit lines to amp up returns through what’s known as leverage, will demand their money back as collateral shrinks. Those margin calls would prompt further sales, setting off a vicious cycle that could ensure a fund’s demise.”

The credit tightening is not just going to effect consumers that use debt for everyday purchases, the credit tightening that is occurring is most certainly effecting companies from small to medium, finance, industry and so on.

Recent troubles with US mortgage bank (Thornburg Mortgage) and US mortgages trusts (REITS) – (not Hedge Funds) is an indicator of the problems when margin calls are missed in current credit markets environments.

from CNN business:

“Thornburg Mortgage (TMA) plunged 51.5% on bankruptcy fears after the residential mortgage lender said it had failed to meet a $28 million margin call and is now in default on $320 million in financing. Margin calls require borrowers to pay back loans or offer more collateral.

Mortgage real estate investment trusts (REITs) slid after Carlyle Capital Corp, a Dutch company that invests in mortgage-backed securities issued by Fannie Mae and Freddie Mac, missed margin calls and received a notice of default. Other mortgage REITS falling include Annaly Capital Management (NLY), MFA Mortgage Investments (MFA), Anworth Mortgage Asset Corp. (ANH) and Capstead Mortgage (CMO).”

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

Is Gold correcting? Soon $1000.00 ounce (update 2)

Posted by Adrian on March 6, 2008

This is a no brainier, with the USD being sold off, US and global inflation. Gold is going to hit the $1000.00 mark very soon. In fact if you are brave you could anticipate the 1000.00 mark to be hit by March 10 2008.

Locked in at 1000.00 against the USD (long)

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

refer to:

Is Gold Correcting? (update 1)

Is Gold Correcting

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

Argentina, Brazil high inflation, energy issues could lead to sharp decline on Stockmarket

Posted by Adrian on March 6, 2008

The two powerhouse South American emerging economies, Brazil and Argentina have in a lot of ways followed the turmoil in the US markets including the now serious global inflation issue, and it appears also one of the bad habits learned or borrowed from the US federal Reserve is too play down inflation.

Any speculative ‘good’ news coming out of the US economy caused both the Brazilian BSVP index to move up 1.53% and the Argentina Merval index to jump to 2.23%. Internal country (market) speculation, in regards to BSVP index and the Merval index, is on the prospects of oil discovery in Brazil and increasing their meat export markets. But, with inflation being ignored again, or being played down (especially in regards to Argentina) higher costs for energy could be the dramatic market damper. Could a new energy crisis emerge in South America? With industries running at full steam and a looming winter coming, it appears that disputes and problems with Bolivia and it’s natural gas supply deals have already occurred, from International Herald Tribune (Feb 25th 2008  )

“Brazil has declined to cede any of its imports of Bolivian natural gas to Argentina, which is struggling to find more energy sources to avoid supply shortages that could derail its fast-growing economy.

Argentina and Brazil are facing the possibility of short-term energy crises from a lack of natural gas, which is needed to fuel industries and generate electricity for residents. Bolivia is sitting in the middle, with the region’s largest gas reserves.”

“Bolivia, which has seen a rise in domestic energy demand, has struggled to meet its contractual obligations to supply natural gas to both Brazil and Argentina. Petrobrás, the Brazilian national energy company, which has a much larger contract with Bolivia, has been unwilling to divert any supplies to Argentina because of concerns here that Brazil could face its own energy shortfalls.”

Now currently a possible boarder dispute between Ecuador and Colombia, over a military incursion by Colombian into Ecuadorian territory. With oil producing Venezuela offering military support to Ecuador. This has added now to the record oil price, now trading at $104 a barrel.

It appears that the both the Argentinian and Brazilian have overbought stock markets, that are vulnerable to market shocks – especially the Argentinian MERV index. Refer to graph below:


3 mths graph of the MERV, BSVP and the DOW. Refer to graph below (note the adjoined dips of the MERV and BSVP indices of January 21st and 23rd 2008.):


The fall in both the MERV and BVSP on the 21st and 23rd Jan, would indicate a join at the hip; with both Brazilian and Argentinian stock markets closely trailing each other. South American countries now also seem prone to energy market fluctuations and their own geopolitical instability, combined with the US market troubles adding to a volatile South American stock market.

Posted in Finance and Economics. Strategy and Society | 4 Comments »

Overview of Pink Sniper (Eros Comix). Writer/Artist Kengo Yonekura

Posted by Adrian on March 5, 2008


Japan culture/popular culture is fascinating. There seems to be taboo issues, extremities and a ton of other cross cultural aspects taken from western culture. Wrapped up in their own style, if anyone followed Manga animation, you would understand the bizarreness in some of the characters. Unique stories that are essentially modern Japanese story telling. So does each culture looks at sex differently? The Japanese Manga comics that deal with sex either show two things (part from the actual sex), domination, control – that seem to interact from female to male, and back again.

Pink Sniper is just completely out there, there is wall to wall sex from start to finish (although the comic is read Japanese style back to front, if you know what I mean). The Story? Well a local school doctor Haruna Sakurai (who is a buxom, voluptuous woman with an insatiable sexual appetite) seduces various students that end up in her Health Room, or as the students call it the hell -room. The art is extremely detailed, so get ready for some well drawn sex in a comic. It’s a strange mix, you have half animal humans, a medical student (Niibia) who is prodigy. Who ends up as a sexual prize for Dr Sakuri, so the comic begins and ends with Dr Sakuri having sex with Niibia in every-possible way imaginably. The half humans also have sex at some point in the comic, with the sexual submission of the uptight Niibia continuing right through the book. To a reverse climax (reverse climax?) at the end of the book, you know the dominated now gets to dominate, a role reversal.

There really isn’t too much else too add, like I mentioned the art is very well drawn. The eye for detail has to be seen to be believed. I mean Kengo Yonekura has captured the human form in all it’s glory (in a caricature Manga kinda way). The dialogue isn’t too bad, so you get the general idea what is going ion, the translation is well done. So the Pink Sniper flows quite well.

Recommendation, well this comic has a certain amount of ‘pulp’ fiction to it, in that sense it comes across as collectible aspect. You’ll see nothing like this comic, there is a unique bizarreness about it. A humours ride into sexual mayhem.

What I will say is the difference with sexual literature, comics, books even narrated photo journalistic style erotica. Is that there is imagination and thought, and an equal showing of desire. Porn, or the modern porn today is fastfood junk sold to the inert mind.

Posted in Books, Comic Reviews | Leave a Comment »

Australian trade deficit higher than market consensus

Posted by Adrian on March 4, 2008

It would be fair to assume the decoupling theory (America goes into recession, others countries do not follow, namely Asia) is all but a fading fallacy – a sloppy hypotheses of the free market theory of disconnecting from loss and connecting too gain. As a uniformed and global economy, with America (although now in recession) still operating as the biggest economy and consumer base in the world. The effects of a US recession will be global. An indicator of global slowdown (lead by the US) is shrinking demand on export markets.

Asia have been reporting large trade deficits (South Korea’s trade deficit came in at 13.97 per cent, highest since 1997). The Australian Bureau of Statistics has reported a huge increase in the Australian trade deficit, it now sits at massive 19.4 billion (market consensus was for 17.8 billion) – this could indicate that inflation is high, even if consumer retail spending is slowing. Australia like Asia is grappling with the high costs of oil and inflation on food. The AUD is now overvalued and is slightly overbought sitting (current) 0.93 Carry trading may now get overshadowed with risk aversion, when it appears that an economy is slowing and inflation is picking up (Australia) – which would mean the high yield currencies may get dumped.

But Australia, like Ireland and Spain (and other highly leveraged world property markets) has a hugely inflated property market.  A sharp decline cannot be ruled out.

The Reserve Bank of Australia will lift interest rates today (0.25%) adding to the overall cash rate of 7.25%, I suspect a spike in buying of the AUD, but not a massive rally and certainly not pushing it to anywhere near the $1.00 USD mark. As mentioned risk aversion will come back into play.

Please refer to some early posts regarding Australian hyperinflation and the Australian trade deficit.

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