Tuesday, November 24, 2009
(1) We support smaller government, smaller national debt, lower deficits and lower taxes by opposing bills like Obama’s “stimulus” bill;
As stated in earlier posts, I'm all for this.
(2) We support market-based health care reform and oppose Obama-style government run healthcare;
If we haven't had "market-based health care reform" by now, when will we have it? This country has had decades to straighten out this mess and it is only getting worse. Still, things could get even worse. And the shortest rout to that is "government-run healthcare." But, I don't know what the Republicans are talking about. No one wants to address COSTS that are largely "market-driven." Everybody gets this issue wrong.
(3) We support market-based energy reforms by opposing cap and trade legislation;
There is no evidence in more than 150 years of industrialization of even a hint of "market-based energy reforms." Give me three examples. You can't. That's just naive. Think Lake Erie. Think black lungs in impoverished manufacturing conditions. Think child worker abuse. All before cap and trade and other beneficial government mandates. The market will not manage the environmental consequences of its actions because it costs more money, it doesn't generate money, and there's no direct risk to the business itself for mucking up the our finite resources. This is a historical fact.
(4) We support workers’ right to secret ballot by opposing card check;
Huh? This sounds like a red herring.
(5) We support legal immigration and assimilation into American society by opposing amnesty for illegal immigrants;
I agree. No amnesty. ¿Hablas inglés?
(6) We support victory in Iraq and Afghanistan by supporting military-recommended troop surges;
Hmmm. I'm not sure what victory means. Iraq was a mistake. Period. We need more troops in Afghanistan. I'm so-so on this one.
(7) We support containment of Iran and North Korea, particularly effective action to eliminate their nuclear weapons threat;
Absolutely. In fact, I think we should bomb any nuclear plant that isn't being used for peaceful purposes in nations not in compliance with the nuclear non-proliferation treaty. Here, I'm more aggressive than your average neocon.
(8) We support retention of the Defense of Marriage Act;
Marriage needs defending from the mockery heterosexuals make of it with the never-ending cultural acceptance of regimented polygamy (otherwise known as divorce). Loving couples, regardless of their gender, should be able to marry. If it's a sin then God can take care of that later. Neither you nor the government need to get involved.
(9) We support protecting the lives of vulnerable persons by opposing health care rationing, denial of health care and government funding of abortion;
This is another way of saying we can talk about the cost of healthcare but only some of the costs. Republicans (like most political parties) love to sound lofty while avoiding hard choices. A beating heart does not a human being make.
(10) We support the right to keep and bear arms by opposing government restrictions on gun ownership;
No problem with that. But, I do think if you have to register your automobile you should register your guns. People who think gun registration is the first step to government confiscation of guns are extremists. Is the government going to take your car, your home, your indentity? Individual liberty does not always trump collective responsibility. A common error among all political parties.
So, how did I score as a Republican? 3 solid agreements. 3 qualified so-so's. 4 yougottabekiddinme's. Guess I fail the Republican litmus test. But, I already knew that. Thanks to the conservative Republican activists for verifying this, and to the Republican Party in general for leaning so far right that socialism has become an acceptable alternative.
Saturday, November 21, 2009
After lunch I stepped out into the open carport. There was a shifting breeze, slightly gusting at times, mid-November, little fall color left. Two weeks past the peak, the remaining reds, burnt oranges, yellows, and golden browns clung to the reaching hardwood’s branched appendages, increasingly subdued.
With the changing season the tall pines that once mastered the sky returned to rule all the greens of the coming winter. I found myself on the carport with the potting bench, the grill, and the Cadillac, my house with near gardens neglected. Pastures and abrupt, thick forest and brush surrounded my place. Through streambeds and shallow ponds, dried with the worst drought the land had known in 100 years, everything struggled. Yet out of that rough intercourse there emerged a marvelous collection of strained color dotting the woods, a sweeping, natural impressionism.
It was a mostly cloudy day. Thick white deformations gave way to dark impenetrable spheres of defused wetness floating past in the breeze of the sky so close to the ground that their damp embodiment might rumble, yet they were silently adrift. After my brief admiration of the color of the day as I stood in the shade of the carport the sun suddenly burst through and proclaimed the world bright and grand.
To my right, the east, the sound of crows caught my attention. Five were perched in their own judgment of the day on tips of extended dead branches frozen in time. Their bodies black crowned the dull, grey skeleton of a once reaching southern red oak struck by lightning in a now much desired thunderstorm from three springs ago. Haphazardly cawing seemingly off-handed criticisms, they towered now, an isolated grouping where once thousands of living leaves had adorned. I studied them against the sky. Two flew away.
The breeze eased to nothing, a stillness upon the place caught my attention and seemed to make this my moment. I let go of creating a lifeworld where my insights on the writer but not the thinker were preferred. It was Now. Me. This.
Other birds were about but I was attracted to a spot on my carport where the distorted frame shadow of the roof met in a point on my graveled driveway. Beyond there was nothing but woods mulching the ground around their bases, hopeful of the next precious rain, in the snow-like fall of their leaves and the breeze, sun brightly ablaze.
On that spot, my body exposed to the sun, I broadened my arms and turned south to face the near noon sun late in the seasonal sky. Feeling the blinding warmth on my face as I stretched asana-like in my gym sweats attired frame, chest open, slightly extended. It felt warm in an unaccustomed way, more like late-September than this November day. Even the crows grew quiet, and there was a stillness but for the gentle push of other breezes nearby but not upon me. Somewhere off a small plane droned.
At that moment, a sudden gust of wind swept from the east and, whirling seemingly upward from the ground, sent a swarm of yellow leaves high into the air from a black walnut tree behind my house. Swirls of speckled yellows canvassed against an opening clear blue sky like a work of animation, like a simulacra of bejeweled effects from some clever, intense music video. Attuned to the tranquilizing splendor of computer-generated visions, the real world, so perfect and poetic, sometimes seems deconstructed, the beauty without the splendor, the splendor simulated and mistakenly thought real. The leaves outlined a cloud of wind columning up in a three-dimensional ovoid.
Then I felt the breeze address me gently. For all its punch was spent gathering up the leaves 100 yards east. My eyes followed the graceful horde until I realized they were descending toward me trailing in the same draft that had just touched my face, an invisible field moving through everything, house, land, myself. As I followed the circular descent, the leaves came my way, yellow flecks taking form, body and suppleness with tips, angles and curves. Closer. Until I discovered to my surprise that the leaves were falling all around me. I had not moved but had unknowingly positioned my self predestined to be bathed by this rain of color on a mid-November afternoon.
Little pecks of stiffened, sun-dried leaf here and there punctuated the gravel driveway. Lazy leaves shifted as they haphazardly littered the course of the drive back down to the paved country road named for a church that topped a nearby rise in the otherwise flat valley of farmland. Irving Hill. The leaves fell to earth, the wind passed and stillness returned in the air around my body with the last leaves hollowly tapping on roof and drive.
Having risen on that same gust of wind, unknown to me, came blackbirds by the hundreds to populate a neighbor’s red oak over my opposite shoulder to the west. That tree was still golden brown, clothed in most of its leaves and would so remain many months, just before our next spring.
The blackbirds sounded their abrupt semi-crow calls, dotting the ear like the color of the forest dotted the eye, though distinctive, more concentrated, collective in varying degrees. They spoke in chaos like a room filled with convention goers before the call to order. The tree took voice and was the mighty lectern of their momentary caucus, reorganizing in mass for the next stretch of their flight…awaiting new winds.
The combination of the distance between the initial oak that showered me with leaves and the blackbirds’ oak granted me a certain knowledge of space. This Now seemed vast, all the leaves and birds and trees stretching in the sun off into pastures in the distance peopled by no utterance. No vehicle had traversed the country road since I came out to where the potting bench and grill were. It was Friday, everyone was at work. I shared the blackbird flavored country air with no other human being.
The leaves rustled again and the blackbirds started to filter to a further tree about 3 acres of open pasture away. They flew off in dozens among the hundreds still declaring their pointed cawk. Were they calling in unison, in groupings, tribes, or were they at argument with themselves? Who could tell? The stream of dozens drifted away over the privet-hedged space to an oak isolated on the border of two cut hayfields. Their relocated cantankerous romp forming a kind of spacious stereo with the target tree rising slowly in volume as the home tree was slightly diminished by the transference of numbers.
The next breeze came, the stillness was gone even as the blackbirds accentuated my sense of isolation precisely at the moment it was about to be broken. The blackbirds silenced themselves as one. This brought me back to where I was. There. At a point of light in my graveled driveway in the sun. I consciously noted the slowness of all this. Nothing was rushed. It happened. The world was slow again. Two planes now droned somewhere, my direction leaving me, watching the birds.
How many days like this had I known in the course of my life? They stretched back to my childhood on my family’s farm, alone with my dog in fields guarded by many of these same trees in autumns past. I could seemingly feel every self that had touched these moments, scattered through time. Each self listening to the drone of planes on bright, quiet afternoons, wrapped in solitude. Each self taking too much for granted, ignorant of how insufficient a thousand such days are in a life time. They seemed so few for almost a half century of living.
By comparison, how many days were spent writing or in meetings, researching, seeking career guidance or giving lectures? It was here all that time. While I had attended to things far more transient, this slow and easy day had proceeded, hanging leaves, blown, crows and blackbirds in calm anticipation and flight, changed but slightly as the globe warmed. I felt the twinge of uncertainty of whether this day might be threatened by residential development and that I might outlive the day in this place to only discover it some other.
The two planes, one before the other, droned lazily out of range and it was quiet again. Briefly. A farm truck came over a nearby rise of land. I heard him only because of the blackbirds’ abrupt silence as they took flight, all their hundreds, only the faint sound of wings aloft. The truck was suddenly there, the light roar of its engine, its tires upon the pavement passed me and seemed to follow the grouping of birds that angled away to the west, to a farther space where I was not, where they might offer themselves to anyone attuned to their splendor.
Tuesday, November 17, 2009
My daughter recently won a local art contest with the above charcoal drawing. She's great with photography and painting too. So, now it's on to state competition with her "baby face" entry. Unfortunately, the pic I took doesn't really capture the sharpness of detail in the actual piece of art. I think she really captured the innocence of this child's smile. Drawn from a random photograph that caught her eye. I'm very proud of her.
Monday, November 16, 2009
Still, there is no stronger signal in Dow Theory that "all is clear" for the markets than for both averages to close at new highs simultaneously. The markets should go even higher in the near term.
Gold is now at an all-time record high. Most of my gold stocks were up 3%-4% today. This steep rise can't go on forever. Gold is severely overbought and due for a correction. Still, it doesn't seem unreasonable to look at $1500 gold in the weeks ahead. I'm watching GLD and GDX for signs of new entry points in order to broaden my position in the only "real" currency in the world today.
Late in the day bank analyst Meredith Whitney warned against getting too excited. She said this rally has nothing to do with "fundamentals." I couldn't agree with her more. This could all still be part of a bear-market rally. Despite the new highs overall volume has been low indicating caution on the part of most investors. Indeed, some see this as a "disintegrating rally."
But, as far as Dow Theory is concerned the immediate trend is clearly bullish for the near-term. The rally just keeps going and will probably continue upward to test the 50% Principle at about 10,725 (see Nov. 11 post) in the coming weeks. I personally do not expect that level to hold. I continue to formulate a strategy for getting out of equities completely and transferring my gains over into the Gold Bull Market where returns hold greater promise in the face of what everyone agrees is a weak recovery.
Sunday, November 15, 2009
The British were so arrogant that they entered into the war without any real strategy on how to win it. “Incredibly, North’s government had led Britain into a faraway war without a plan for waging it. All along it had presumed that the Americans would back down when faced with British force. The government also believed if the rebels were so foolish as to resist, their army could not possibly be a match for regulars. It, and the rebellion, would be crushed in short order. Lexington-Concord, and especially Bunker Hill, awakened most ministers from their reverie.” (page 62)
While General George Washington deserves credit for maneuvering the British army out of Boston, his response to the redeployment of the British to New York was a near disaster in 1776. His army lost every battle. Only the incompetence of British General William Howe saved the Continentals. “For the second time in less than three weeks, Howe’s men had an opportunity to score a major, perhaps decisive victory. Had they moved quickly to seal off every road that linked the Continentals in the city with their comrades in Harlem Heights, one, and maybe both, divisions of Washington’s army could have been eradicated. There can be no question that the Continentals who were still in the process of evacuating New York City – roughly one-quarter of Washington’s army – would have been trapped. Perhaps never during the entire war was the Continental army in such mortal danger as at mid-day on September 15, but it was saved by excessive caution of the British command.” (page 141)
But, the British would retain New York as their primary base for the rest of the war.
A few months later, however, Washington redeemed himself with a “sensational victory” at the Battle of Trenton, possibly his greatest military moment of the entire war. “Its success energized the American rebellion. Four months before, the British high command had expected to inflict one blow after another on the rebels. A month earlier – at a time that General Howe was knighted by the king for his victory in New York – few British officers had believed the Continental army would even exist by the start of 1777.” (page 186) Instead, the British now abandoned New Jersey and sought fortifications along the coast, leaving the vast colonial interior to Washington.
This was followed by the catastrophic British invasion of that interior out of Canada which resulted in the great rebel victory at Saratoga in 1777. Even though Howe managed to capture Philadelphia later that year, it proved a hollow victory. So what? Howe’s army was pinned in the city and could not maneuver. Washington, though losing the Battle of Brandywine, kept his army intact. The British parliament began to waver and the first debates on peace took place. Howe ultimately retreated and gave up position of the port city.
In truth, things were bad for both sides at this point. The British were no closer to squashing the rebellion and the Americans were grimly hanging on to their resistance efforts, their army stationed at Valley Forge. There in 1778: “Upward of 2,500 of Washington’s men perished that winter, very nearly one in seven of the Continentals that were with him late in December. (In contrast, about one American in thirty who were involved in operations in the Battle of the Bulge, one the deadliest American engagements of World War II, dies in battle). More than seven hundred of the army’s horses perished as well.” (page 280)
At Valley Forge, Washington did not share in the deprivations of his army. He often dined exquisitely and maintained an aristocratic stature throughout his command and his life. But, significantly, Washington kept an army, some army, any army in the field and that was enough to afford continued legitimacy to the rebellion. This was no easy task considering that 1779 brought the worst economic conditions in American history.
“The most rapid currency depreciation in United States history occurred that year, a faster free fall than followed the stock market crash of 1929. In January 1779, eight dollars in Continental currency had been needed to purchase one dollar of specie. By October, thirty dollars were required. By December, forty-two were needed. Washington’s letters to Congress portray an army so emasculated by the economic collapse that his ability to wage war was adversely affected. By mid-1779 the number of Continental soldiers was down by some three thousand from the previous autumn, yet Washington was not immobilized by the sudden financial crisis. He entered the campaign season of 1779 with some 12,000 Continentals under his command, a force that could be augmented – as it would be in future campaigns – by the militia.” (page 351)
Yet, for the most part, Ferling points out Washington did little with his force and fought no major battles for over three years. After he fought British General Henry Clinton to a draw at Monmouth in 1778, Washington did not commit to another major battle until Yorktown in 1781.
Ferling calls Washington “indecisive” and “insecure”, often his judgment was “clouded.” He points out that, for most of his life, Washington was not a military man. He suggests that more aggressive British leadership could have trumped Washington’s operational skills. As it was, however, the British lacked such capacity.
Washington remained so fixated on New York and on the possibility of an American invasion of Canada that he concentrated very little on the more important military activity in the South until the opportunity at Yorktown presented itself. By then sufficient French forces had joined the Continental cause and the activity of General Nathanael Greene, among other commanders, in the South made it obvious where he should direct the forces under his command.
This is not to minimize the considerable actions of Washington. Ferling is clear that “Britain’s suppression of the American rebellion was foiled in the fighting in the North between 1775 and 1778.” But this did not win America’s independence. Ferling gives a great deal of credit to Nathaniel Greene and to the fighting particularly in the Carolinas as the campaign that tipped the scales in favor of the Continentals. “In the final analysis…American victory was won at last in the South in 1780-1781.”
The fighting in the North was generally along traditional European linear tactics perfected by Frederick the Great. After years of effort, Washington ultimately drilled his Continental Army into a competent tactical force. Meanwhile, in the South the war became unbelievably savage for the times. The South Carolina interior was swarming with rebels in spite of the British capture of Charleston, in fact, perhaps because they had invaded the colony.
British General Charles Cornwallis won the Battle of Camden. Then all hell broke lose.
“But by mid-summer Cornwallis was no longer calling the shots. Even before Camden, he had reported to New York that the ‘whole country’ along the border and in northeast South Carolina was ‘in an absolute state of rebellion.’ Rebels were pouring out of the woodwork to take up arms under one leader or another. Six engagements were fought in the last two weeks of July, more or less the inaugural salvo of partisan resistance. Sixteen more battles of varying size were fought in the seventy-five days that followed.” (page 456) It was the American Revolution’s most intense, constant, day-after-day type of fighting. Not European-like at all. Almost tribal.
Ferling’s style is not just factual but cultural, which is one reason I like his book. “By its nature, war is harsh, brutal, and pitiless, and while it can call out the best in humankind, it can also awaken the darkest side of human nature, arousing many participants in coldhearted callousness. For most, danger begets fear. For some, fear sires ferocity, and ferocity spawns a ruthlessness that subsumes compassion. For still other men, more than is gratifying to acknowledge, soldiering is a license to unleash iniquitous qualities that they had struggled to suppress in peacetime.” (page 453)
Cornwallis entered a war against largely partisan forces. Such partisan warfare reached its terrible apex at the Battle of Waxhaws.
Unprecedented carnage (for this war) was the aftermath of a British cavalry charge against a lesser trained Continental force from Virginia. “Battlefields are horrid places, but this one was especially ghastly. Here were men with severed hands and limbs, crushed skulls, and breached arteries. Some men were decapitated by the slashing cavalrymen. Others were trampled by maddened horses. The bellies of many were laid open by bayonets. Although resistance ended within seconds, the carnage continued. Tarleton did not order the slaughter that ensued, but he did not stop it either. As the Virginians screamed for ‘quarter,’ for mercy, Tarleton’s men waded among helpless rebels hacking and bayoneting in a saturnalia of bloodshed. It was a massacre. (‘I have cut 170 Off’rs and Men to pieces,’ Tarleton said straightforwardly in his report.) In a war in which rarely more than 6 or 7 percent of combatants fell on the battlefield, nearly 75 percent of the Virginians fell victim to the horror in the Waxhaws.” (page 436)
Over time, however, actions like this took their toll of the British command. The total number of troops dropped dramatically as the British tried to secure their supply line in addition to finding and combating Greene.
Cornwallis faced Greene alone for the last time at the Battle of Guilford Courthouse in 1781. The Continentals had become interlocked with the British army. Hand-to-hand fighting and Greene had the momentum. “In the end it was Cornwallis who took the boldest step. With his army buckling in the close quarters fight with the rebels, Cornwallis cruelly – but necessarily – ordered his artillery to fire into the brawling mass of friend and foe alike. Grapeshot tore down men from both sides. The British commander took his brutal, ghastly step to stop the fighting and retreating, and with it the ominous likelihood of being overwhelmed. Technically Cornwallis was the victor, as he held the field, but Greene provided an accurate assessment of the outcome. The ‘Enemy got the ground…but we the victory,’ he said a few days later. The British had captured all the American artillery – ‘all horses being killed,’ the field pieces had to be abandoned, Greene later explained – and 1,300 stand of the rebels’ arms. But Cornwallis had lost nearly 550 men, about twice the number of his adversary. Everyone on the American side, and not a few British, thought the battle a rebel victory.” (page 499)
Cornwallis limped through North Carolina, through more partisan action, and headed for the coast of Virginia. Greene got behind him and headed southward guaranteeing that the once strongly loyal British colonies of the south remained in firm rebellion. Outside of port towns like New York, Charleston, and Savannah, the British had little control over anything. Inland loyalist regions were shrinking. In the end, of course, the about one-third of the total British army in North America got bottled up at Yorktown. A French naval victory over the British fleet made the resupply of Cornwallis’ army difficult if not impossible. The army surrendered to superior Continental and French forces. By this time parliament had had enough and called it quits in order to concentrate on other pressing issues within the great British Empire.
Ferling gives a terrific account of a very interesting story that occurred in the aftermath of Yorktown and the general British surrender in the war. Washington remained a general but he essentially had no army. The Continental forces disbanded soon after the British surrender. The strange thing is that the British military force remained in an essentially defenseless America for over two more years after their defeat. What were the former colonists going to do with them?
The Red Coats couldn’t simply vanish. They had to be systematically transported out of wherever they were stationed. Most of them were at the tip of Manhattan Island were New York City is today, but a small port town at the time. On November 25, 1783, twenty-five months after Yorktown, numerous troop transports had assembled and were carrying away last 20,000 British soldiers in the new American nation.
Several weeks before, in anticipation of this event, Washington left Philadelphia, the capital of the new United States, and gathered what troops he could along the way up to New York. In the end he managed to cobble together an “army” of 800 infantrymen, mostly from New York and Massachusetts. There was little interest on the part of the revolutionary colonies for army service in 1783.
“When the voyage of the huge British fleet commenced, the Continental army resumed its march, coming down the Boston Road into New York under the flawless blue sky. On and on the army marched toward the lower end of the island, down Pearl Street, then west on Wall Street, and ultimately to Cape’s Tavern on Broadway, where the commander in chief alighted from his great horse and entered the inn to enjoy the first of a week-long spree of dinners and ceremonies.” (page 558)
There’s so much more in Almost A Miracle. The bold, bright military mind of Benedict Arnold, one of Washington’s most admired lieutenants, a hero at Saratoga. He could not see how the rebels could win and turned coat. The daring and brilliant naval exploits of John Paul Jones. The various failures of the war by both sides on the very active Canadian front. The politics of how France become involved. The geopolitical complexities of the war in relation to world events, particularly in the Caribbean. You have to view the war in a wider context to understand why the British were willing to cut their losses with America.
Ferling tells a fascinating historical story in a rich, expressive, factual style. I thoroughly enjoyed his book.
Saturday, November 14, 2009
I was surprised to learn, however, this was not the first time NASA has announced the presence of water on the Moon. That happened several weeks ago regarding a report on the mission of India's satellite Chandrayaan-1. So, the space program in India should really get more credit. But, of course, the LCROSS mission is an American endeavor.
At any rate, water is the basis for life as we know it. Without water there is no biological possibility. With it there is vast biological potential. You can use water in so many ways, not only for drinking. It makes a permanent settlement on the Moon much more likely, though I doubt it will be in my lifetime.
I would love to live to see that happen though. It would strengthen my sense of wonder about Being. Still, knowing this is rather inevitable (having faith that the Moon will be colonized) broadens my view of things.
When we look back on a great events of the past sweeping centuries, we see the great global explorations upon the sea. The connection of peoples through air travel and satellite communications. The discovery of so many cures for so many diseases. These are the fundamental shifts in the human paradigm.
Centuries from now the fact there is water on the Moon will be seen in similar significance. The Great Recession will be no more important than the Panic of 1837. And the War on Terrorism no more lasting than the War of the Roses.
Wednesday, November 11, 2009
For several days recently the Transports have been down while the Dow has been up (yesterday, for example). According to Dow Theory, such divergence is a sign of market weakness, a possible signal of a correction to the present rally.
The recent battle for the 10,000 level in the Dow has been interesting to watch. So many forces are in play. Is this a bear market rally or a new bull market? Will the future be dictated more by the forces of deflation or inflation? A case can be made either way.
Since early this year I have had my eye on the 10,300 level for the Dow. 10,300 is roughly the mid-point between the lowest low in March and the highest high for the Dow back in October 2007. According to Dow Theory, the 50% Principle is best applied to longer-term swings in market activity. The longer the period taken into account, the more significant the level.
For example, the calculations above reflect the 50% Principle over the course of the last 25 months. If you take a broader view of the rally from 2002 through 2007 (roughly 60 months of activity) the mid-point between the low in 2002 and the high in 2007 brings you to 10,725. By the definition of time, this mid-point is weightier than the 10,300 level which takes a comparatively shorter period of time into account.
So, since I entered the market again in January and added to my holdings in the Dow, S&P, and Gold ETFs, I have been looking (hoping) for a rally into the 10,300 area. If the Dow could make this level (and for a short time it looked as though the Great Recession would not allow this to happen) then it would be time to see if it could advance just a bit further. Closing above the 10,725 mark would strengthen the case that we are in a new bull market.
The strongest technical indication that we are possibly in a sustainable rally comes from the Dow's recent history with the 50-day moving average. Since rallying up to the 50-day MA on March 23, the Dow has "tested" the average three times. The first time, between June 22 and July 15, it actually went below the average - a sign of weakness. But since then it has touched the average on October 1 and again on November 2. Each time the Dow has "bounced" off the average, indicating strength in momentum.
Compare the Industrials (top) and the Transports (bottom) over the past 3 months. Each candlestick is one day's activity. The blue lines are Bollinger Bands. The tan line is the 50-day moving average. Notice how both averages have quickly rebounded when they tested the 50-day MA, though the Transports have clearly been the weaker of the two. Still, such rebounds are a possible sign of strength. (Charts made at BigCharts.com).
Of course, by itself, this doesn't mean a new bull market is in force. It simply means the short-term trend is positive. No reason to get out of the market.
When looking for a correction it is best to shift perspective away from the 50-day MA to the 200-day moving average. History tells us that this broader average has to be retested at some point. Currently, that average is at about 8700.
The greater the distance between the 200-day MA and the actual market close, the more violent the "snapback" will be toward the average when a genuine correction occurs. We saw this happen most recently in March when the distance between the MA and the Dow was over 3000 points! There was a short, sharply positive correction. Then the market stalled at the 200-day MA for a couple of weeks before resuming its current rally. Fortunately, at the moment the situation isn't that extreme. Still, the difference is currently 1500 points with the Dow above the average.
In the broader view, over the last decade the longest the Dow has gone without returning to the 200-day MA has been from April 29, 2003 to May 10, 2004 and from August 11, 2006 to August 16, 2007. Those were both bull market periods. The recent bearish activity took the Dow below the 200-day MA from May 20, 2008 to June 3, 2009. These are all exceptionally lengthy periods.
The 200-day MA (see tan line above) since mid-February. Notice the recent uptrend after leveling off in July and August. A positive sign. Also notice the gap between where the Dow actually fell in March and the 200-day MA. A huge, ahistorical gap. The "snapback" then occurred with the Dow stalling at the average in June. Then a powerful upswing which is carrying on through today. But the 200-day MA moves slowly compared with the 50-day MA. So as the market rises quickly the gap between the 200-day MA and the market widens. Another snapback possibility? The market never strays too far from this average for long.
Before the Great Recession took the Dow so far away from the 200-day MA, the Dow has remained within less than 1000 points of the 200-day MA for all but a handful of days throughout the last 10 years. In other words, it is highly unusual for the Dow to be as far above or below the 200-day MA as it is today.
That is reason for concern. Which brings me back to the Transports and the 4045 level. If the Transports can better that level simultaneously with the Dow going to a new high, then we will most likely be in for an extended period above the 200-day MA as we had in the years mentioned above. Basically, this would signal a new bull market.
If the Transports breakdown again, however, and fail to better the 4045 level - regardless of how high the Dow might go - then we will likely have a correction back toward the 200-day MA.
Obviously, a lot of variables are in play here and we are in a complex, historic situation with all this stimulus money being generated out of thin air. But, my instincts tell me to watch the Transports. Failure to "confirm" new highs in the Dow will give more weight to the Dow Theory non-confirmation.
Even though the Dow closed at a new high for the rally today, the continued non-confirmation by the Transports makes a "snapback" correction even more likely. Factoring this non-confirmation into the complex mix of the actual state of the economy, a significant number of bank failures, gold setting a record high (great for me!), the housing crisis, the US trade deficit, the unprecedented dumping of liquidity into the system, the massive rise in deficit spending, and the continuing rise in unemployment might make the potential for more gains too risky compared with the potential for correction. The Transports should offer us guidance.
But, of course, no one knows.
Wednesday, November 4, 2009
The final bow. Pink Floyd, July 2005. David Gilmour, Roger Waters, Nick Mason, and Richard Wright. The greatest rock band of all time.
July 5, 2005. It is late afternoon and I’m sitting in the basement of my brother’s house watching Pink Floyd live at Hyde Park in London. It is a great image on a 50-inch high-definition flat screen TV. It is late evening over there. It is the first time Roger Waters has performed onstage with his former band mates in well over two decades.
A heartbeat. Repeating. The crowd roars as the curtain opens. A female artist singing a scream in tune with the bass. In the crowd hundreds and hundreds of flashs of light from digital cameras trying to capture the moment. Then they ease us back into themselves with Breathe. Ah, yes. The Floyd. Glacial. Poetry. This is followed by what I consider to be the best version of Money I’ve ever heard anywhere, including the original record. Dick Parry joins them on-stage to brilliantly recreate his original saxophone segment of the tune. Amazing. I am so blessed.
But then the US coverage of the worldwide performance interrupts this historic moment for a few words from our sponsors. WTF! In my disappointment I realize I am not in London. I am at my nephew’s birthday party and hot dogs are being served to be followed by presents and cake. My life goes elsewhere.
Gilmour and Waters manage to harmonize pretty well through the chorus of Wish You Were Here. We didn't get to see this live in the US.
Fast forward. The night before we left for Boston. I just finished reading the new biography on the band. It goes into great detail on what is for me a familiar story. The initial importance of Syd Barrett and his influence on the band after he went crazy. The way the band meandered for years, struggling to find a definitive style that would be artistically satisfying to them. “Psychedelic noodling,” David Gilmour called it. The sudden, meteoric success with Dark Side of the Moon. The slowly growing tensions within the band as Roger Water’s ego struggled to overwhelm the other band members. The financial difficulties the band faced as a result of gross financial mismanagement.
There were some surprises in the biography. I never realized how much of the material for Dark Side of the Moon and Wish You Were Here was performed live in the band’s tours before it was ever recorded in the studio. The band used their live shows as laboratories to tinker with new tunes, which evolved over time before any studio work was actually performed.
I also never realized how bad the Floyd’s financial situation became after they lost almost all their enormous fortune due to a series of bad investments made on their behalf by a financial advisory company that ended up failing. It was also new and interesting to me to learn of the few, scattered attempts Roger Waters actually made after the band’s Live 8 performance to get together once again. David Gilmour had no interest. He still doesn’t. Roger made things so difficult for so long that the thought of a fully reunited Pink Floyd is just unthinkable for him.
For David Gilmour it was always more about the music than the ideas. He is one of the world's greatest guitarists. He retains an incredible singing voice. He was the Yen to Waters' Yang.
One small section particularly interested me because, after years of frustrated attempts, I have developed a profound liking to the massive novel by Marcel Proust. But, I know how difficult it is to get in to Proust. The Floyd encountered Proust in 1972, before their rise to super-rock status.
“Earlier that year Floyd had been approached by choreographer Roland Petit to write a piece for his dance company, Ballet de Marseille. Petit wanted to stage a production based around Marcel Proust’s epic novel, A la Recherche du Temps Perdu. Lindy Mason was a ballet dancer, so Nick, for one, was well aware of Petit’s credentials. The idea immediately appealed. ‘The French have a more emotional. More intellectual edge to the arts,’ he enthused in the press that year. After an initial meeting in Paris, Roger bought the entire twelve volumes of Proust and suggested the band start reading, before giving up himself after just one volume, with David Gilmour supposedly bailing out after just eighteen pages. The outcome would eventually be five performances in Marseilles in November 1972 and a further run in Paris a few months later.” (page 157)
Been there. Got beyond that. Interesting that the Floyd was involved in a failed ballet about Proust’s brilliant novel. I didn’t know that.
All in all it is a very good read and the most complete book I’ve ever come across on the history of the Floyd. Its one shortcoming for me is that it does not go into any great detail about the actual creative processes involved with any of the records and only superficially discusses some of the technical aspects of their very complex live performances. The Floyd was a pioneer of live rock music, but the book doesn’t really go into all that. It is very much a stick-to-the-facts, dollars-and-cents type of history. The considerable Art of Pink Floyd is left rather opaque.
Despite the US televised commercial interruption of the band’s set, I still felt lucky back in 2005. I never thought I’d see Roger Waters with the other three members on stage again. The last time that had happened I had not even gone to India yet. Another lifetime ago. Then a few months later I discovered that the BBC had broadcast the entire set of Breathe – Money – Wish You Were Here – Comfortably Numb uninterrupted. I downloaded the large divx file.
Seeing the entire performance brings a high sense of wonder to me. They are all playing so well together. The crowd of over 200,000 there in London is totally into the music. Millions around the world are watching. They sound great on Breathe. They totally nail Money. Roger’s voice is gone but Gilmour carries him well - they are, in fact, harmonious - through the chorus of Wish You Were Here, a terrific piece of poetic writing by Waters. Gilmour’s guitar totally overwhelms the space at the end of Comfortably Numb. The crowd goes wild.
Roger Waters on bass. A hugely powerful and poetic rock visionary whose ego ultimately destroyed the band in the early 1980's.
Jennifer and I watched this file for the first time on my PS3 over the weekend. The video quality of this divx file on our high-def TV is about the same as VHS tape. Certainly acceptable. The sound, as usual with the PS3, is outstanding, deep and rich. Over the last four years I’ve watched the 23+ minute file many times on my PC and listened to it in my marvelous Bose headphones. Just an incredible performance. They sounded like they’ve been playing together all this time.
Of course, anything but.
I am a huge Pink Floyd fan. Pink Floyd gets my vote for the greatest rock and roll band in history. I’m in the minority view there, of course. There are a multitude of other great bands. But a strong case can be made based upon the commercial success and artistic excellence in The Dark Side of the Moon, Wish You Were Here, Animals, and The Wall.
They are definitely the band of the 1970’s for me. At the time, however, I was a huge Eagles fan. My adolescence. That’s all changed now. Of course, no one tops Neil Young in my book, but he’s not a band. (Don’t try telling Neil that.)
I was in college before I discovered Pink Floyd. Dark Side of Moon was an album every roommate I ever had already owned. I never bought the album myself (I now own the remastered CD of it). My first Floydian purchase was Wish You Were Here, which is still my favorite Pink Floyd effort. I bought Animals and thought it was incredible.
When The Wall was released college guys would hang out together, get totally wasted and listen to it all the way through. We would have conversations about what it was about. About the philosophical and psychological aspects of the music. Of course, you could also disconnect from all that and just get into the brilliantly performed music. (This is true of all the aforementioned albums.)
Roger Waters, the driving force behind the ideas of this spectacular flare-up period which saw Pink Floyd sell many tens of millions of records worldwide, fascinated me. David Gilmour’s voice and guitar rocked me. These two guys were made for each. For all that Waters possessed in poetic, biting lyricism and richly thought-out concepts, he very much benefited from Gilmour’s amazing musicianship and his strong, distinctive, effortlessly pleasing vocals.
Nick Mason on drums. He is, in fact, the only member of Pink Floyd to survive all the band's early incarnations, making him truly its only original member.
There was a sharp edge to all these albums. Gilmour softened them somewhat and made them musically acceptable to the mainstream audience who didn’t always care for Waters’ deeper message. They just wanted to rock. Yet, ultimately Roger wanted a dictatorship. The band split after years of unparalleled success coupled with intensely divisive internal bickering. To be reborn sans Waters for a few years afterwards. Rogers sued the other band members. He felt that without him no one should be known as “Pink Floyd.” He lost. But, despite the considerable financial success of the post-Waters Floyd in general and the artistic merits of The Division Bell in particular, the David Gilmour-Nick Mason (with Wright) version of Pink Floyd was never quite the same as when Waters did the writing.
Plenty of bad blood. But, after 20+ years, Floyd fans got a reprieve in 2005 for one final set. There was hope that another set might be in the future. But, Gilmour had no interest in it.
In 2008 Richard Wright, the keyboardist, died suddenly of cancer. So, now it is no longer a matter for a truce in the Gilmour-Waters feud to decide. Death has made Hyde Park the final set.
Richard Wright plays keyboards with Pink Floyd. His jazz influence contributed much to the band's style on several albums. He would die three years later.
There is a certain weight to that finality. Richard Wright wasn’t that much older than me and he looked to be in fine health, similar in frame to me. You have to be careful to “breathe” and not let that weight weigh you down. There is the music itself. Hold to that while accepting the sobering truth that you have been on this earth a long time already.
Rick Wright, Roger Waters, and David Gilmour rock over 200,000 in London plus millions worldwide on television.
Note to Readers: The title of this blog comes from Pink Floyd’s fourth album. It is a double album with one record devoted to the band’s early live performances and the other devoted to various experimental pieces of music by the individual band members. As such it is a collection of scattered personal ideas linked to a record of the band in life. Kind of like this blog itself. Thus the name. Legend has it that the word also has certain erotic connotations which I find clever and are somewhat revealing about myself. Don’t tell my mother.
Sunday, November 1, 2009
Of course, the SCV does a great deal of honoring our Southern ancestors. But, now it has become almost a quasi-political organization greatly influenced by the ridiculous League of the South. Several key members nationally in the SCV came from the secessionist-minded League of the South.
My reading for my bio-blog on Nietzsche took me through his brilliant essay on history a few months back. It was the second time I had read that “meditation.” The SCV has always been an “antiquarian” historical entity. Nietzsche is critical of this approach to history.
“It understands merely how to preserve life, not how to create life; hence it always undervalues becoming because it lacks the divining instinct for it – the instinct which exemplary history, for instance possesses. Hence antiquarian history impedes the powerful resolve for the new; hence it paralyzes men of action who, precisely because they are men of action, always will, and always must, offend against some piety or other. The fact that a thing has acquired age now creates demand that it should last forever.” History as an intimate possession, to be forever possessed, laced with a dark side. “The moment antiquarian history is no longer inspired and quickened by the vigorous life of the present, it degenerates.”
For Nietzsche anything that interferes with “the new” or “becoming” is an inferior form of history. And I agree. By contrast, “exemplary” (Nietzsche also calls this “monumental”) history inspires the new and participates in Becoming. “That the great moments in the struggle of individuals form a chain; that in them a great mountain ridge of mankind takes shape through the millennia; that the peaks of such long-lost moments might still be alive, still luminous, still great, for me – that is the crucial idea in the belief in humanity which the demand for exemplary history expresses.” Exemplary history is heroic history, visionaries, great humans that made things happen, made change while always focusing on the present or the future. The past as inspiration.
(The essay also speaks of “critical” history as the third kind of history but that doesn’t apply to the context of this post.)
When I joined the SCV there were several additional “funds” to which members could contribute. The largest one was the Heritage Foundation. It was a fund to basically promote the public display of the Confederate battle flag. I never gave to this fund because for me promoting the flag had little to do with me honoring the military service of my ancestor. I still fly a Confederate flag from my home for several months out of the year. That was my public “contribution” to the Heritage.
Almost ten years ago the Heritage Foundation was renamed the Heritage Defense Fund. This was meant to step things up a notch and actually attempt freedom of speech protection for the Confederate battle flag in the public sphere. It has been shunned by society, labeled racist. Some legal actions were filed, mostly on high school boys wearing the battle flag on t-shirts to public schools. The results were mixed. Sometime the battle flag won out. Sometimes it didn’t.
That means the battle flag is no longer sacred. What General Stephen Dill Lee charged the SCV with – in carrying forward the work of the United Confederate Veterans – is jeopardized by the passage of time. New standards threaten the old ones, which were threatened to begin with – thus the War. So, the SCV becomes more militant. A typical Southern response, really.
“All we’ve got is cotton and slaves and arrogance.” – Rhett Butler
I do not believe the Confederate battle flag is a racist symbol. For me, it is a ruin of a prideful, agrarian Feudalist society who resisted the inevitable tide of mass manufacturing and modernity. It was a rebellion against where the Now was headed. The Now won the war. Perception is as good as fact and the symbolic elements of the flag have all been stolen by its original victims, who now get to define the flag in its entirety as far as the world is concerned.
Southerners are a distinct minority in defining the meaning of their own flag. So, now the Heritage Defense Fund is called the Heritage Offense Fund. And the plans to take an “in your face” attitude toward America with the flag and other Southernisms are just too “in your face” for me.
The Confederacy is not going to return. It is an antiquated ideal. This constant “reenactment” of it is the kind of history I find neurotic. I appreciate it for what it was. Parts of it are in my Now, but they are the romantic and idyllic cultural aspirations so very much out of fashion today. I appreciate many other objects and periods of history like the Mongol Empire or Arctic exploration. But, unlike most of my historical interests, the Confederacy is in my direct family history. The question is whether or not that is a privileged position. Does that allow me to hold on to the way I intimately view the flag? Must I be a racist?
By way of example, it is, of course, an absolute fact that Disney’s wonderful Song of the South film cannot be released to mass distribution in the US anymore. It is too racist. But, I would say it isn’t racist at all. It is a joyous film in the spirit of the old South. Everyone else says screw that, though. Perception is reality. A great film from my childhood is literally burned by a thefty, political perspective.
I called Stanley, the local camp commander, to tell him personally I wouldn’t be renewing my membership. I didn’t feel like I could let something like this go in silence. I have personally known the commander for years. He is bright and has many libertarian views. He doesn’t like the political turn of the SCV, but, as he said on the phone, “I don’t know what I can do about it.”
“We’ve lost members over the years because of this political stuff,” he said. “Most years we get a few more new applications than resignations. But, these last few years we’ve dropped.” Membership in the camp is actually about 25% less than it was four years ago. Some of that might be based on the economy though. Dues are a bit over $50/year.
Stanley takes life in stride, just as is father did. His dad was well known in the community as a gardener and an arborist (as well as a respected educator, among other things). He was esteemed as “an intelligent, Christian man.” Jennifer knew Stanley’s dad for many years. They were master-gardeners together. He had at least a dozen hip replacements late in life. Each time, after rehabilitation, he went regularly to square dances. Way over 80 and still dancing up to a year or so before his death. That’s the spirit, right?
I mentioned my idea about the evolution of the “heritage” funds names through the years. He laughed and said he hadn’t thought of that.
“Well, don’t beat yourself up too much over this,” Stanley said with a genuine chuckle.
“I just wanted to do this personally. I didn’t want to just throw the renewal notice in the trash.”
“Well, I appreciate that. I hope we can change things at the national level,” Stanley said, meaning the national SCV influence by the League of the South.
“I hope so too.”
“There’s a chance at next year’s national convention there could be some shift back toward where we were.”
“Well, I certainly remain interested in what goes on inside the organization. It’s just gotten far too political for me. We need to get back to honoring our ancestors and not trying to keep the world the way they saw it.”
“Listen, you take care of yourself, Keith.”
“Nice to catch up with you Stanley. Bye.”