Archive for December, 2008

Unless you are reading this from a tropical nation the you’re well aware that winter has settled in for the 08-09 session of frozen beauty and bliss. And along with the dropping temps come an increased demand for fuel for heating our homes, and gas for our defrosting cars. Last winter was a season of record pricing and turmoil in the combined market segments relating to energy, and this year may not be starting out so bad, but it’s early yet.

In keeping watch on the futures we see that Light Sweet Crude settled in at $39.03 per barrel on the markets. The price had started to rise on news of the renewed fighting between Israel and Hamas, but guess what? More bad news of the US economic problems dampened the rise.

Part of this whole problem is with the Lehman Brothers bankruptcy filing from September after the Washington Yahoos decided they would not bail them out. I still think Goldman Sachs was behind this move. Good old Hanky Panky Paulson looking out for the hood, so to speak. I understand that there was a loss of around seventy five billion total, with unsecured notes of over twenty million involved.

Ironically, the world’s first carbon free city is being built in Abu Dhabi, said to potentially house up to 50,000 people. No cars, and all energy from renewable resources. But the efforts to produce more oil will not be eliminated. No siree. They’ll continue to produce until there is no more to produce.

One of the scams floating around in the wake of Comrade Gores’ global warming scare is the new way of buying what are called ‘Carbon Offsets’ Businesses wanting to grab the green buck business claim that you can help solve this manufactured crisis by purchasing these credits. In exchange for your green back, theses green bucks will plant a tree or invest in some scheme to reduce CO2 pollution.

Of course, if you were truly concerned with saving the world, wouldn’t you opt to not participate in the activity that you are buying offsets for in the first place? Meaning, in the example of the concert in this clip. would it not be better if the concert were not held in the first place? Planting a tree in Brazil will not eliminate the pollution a concert in Portland’s Civic center would create.

The RGGI auctions our unelected representatives have opted in on are going to be forcing our electric rates to be raised to cover the offsets these utilities have purchased as a bribe to keep the environmentalists off their backs. It’s a business expense, they’re not going to swallow the costs, but merely pass them on to the consumer.

It’s time we Mainer’s start facing the truth behind these scams and start electing people to represent us that will refuse to bow down before the mother earth crowd. Call up your rep and ask them what they know about the carbon auctions and global warming. Then ask them if they know the truth. Maine’s headed into a lot of trouble, but the powers that control the strings in Augusta are not letting the public know what’s coming. Demand to know what is going on. The next session starts soon

Another day, another dollar is an old expression. Given today’s economic maelstrom we’d have to change it something a little more appropriate to get the same meaning. Maybe another day, another barrel of oil?…
I gave an opinion the other day that gas prices would rise slightly sometime in the first two weeks of next year, reaching maybe a 5% gain over what they were at the time. It appears as though I may be right. Middle East tensions over the conflict in Gaza seems to be ratcheting up the wholesale price as light sweet crude closed today at just over $40.00 a barrel. Keep checking with the Gas Buddy tool…

Unfortunately, the dollar isn’t going up in value. Instead it lost again to the Euro and the Yen. This will increase the wholesale cost of anything we buy overseas, like all of that cheap Chinese crap we yearn to buy, and oil too.

While foreign markets made some gains it appears as though the US markets fell again today, led by a decline in the Dow stocks.

Maine used to have a pretty wide range of repair businesses such as tailoring and cobbler shops where you could get just about anything mended. Over the last few decades we have become more and more engulfed in the disposable life where we would just throw it away and buy a new one. Money was thrown about without thought or consequence. Perhaps we’re learning some new old lessons here about thrift and saving.

But we love it here in Maine anyways, right? A lot of people complained about the weather we had just before Christmas and the so called ‘Ice Storm 08’ as it has been dubbed, but we were not alone. The entire northern tier of the country has suffered as well. An unusual winter? Hardly, but not a common one. We’ve had worse, and we’ve had better here in Maine.

Keep in touch, there’s much worse to come. I’ve noticed that a lot of economic analysts seem to place little notice or care in how the value of the US dollar affects our economy. I’ve also noticed that most weathermen also seem to place little interest in forecasting by the jet stream and its resulting effect as well. Perhaps they should. Both of these indicators are actually key components in both meteorological and economic storms. But nobody seems to care. Why is that, I wonder?

Oh well, that’s Dan’s Maine view for today….

That’s right, Maine is not alone in this global financial crisis we are feeling. Funny, but the leftists have always been partial to the UNs drive for globalization, and now we’re all paying for it. Emerging markets, such as China and India have become the new labor force allowing the US to consume much more in the way of imported goods. But even though they may be growing financially, they are not immune.

We talk about the have and have not’s, the rich versus the poor, and the middle class struggle here in Maine but what we fail to realize is that while all men are created equal, that doesn’t mean they all have to have the same bank balance. It was never intended that we all lead the same standard of living. We need the rich. But since we have all become envious and desirous to obtain those levels of wealth, we have given birth and rise to a credit industry that feeds into our lusts and allows us to buy more than we really need. Just so we can feel like we are rich. And naturally, everybody tags along for the ride.

We can criticize the greedy lenders, but the only reason we are in this boat is that we are too weak to ignore our own greed, and so we feed the need, just like an addict hooked on drugs, alcohol, tobacco or any other unbridled passion we may have as humans. The credit industry would not exist as it does today if we had only learned from past economic turmoil and developed habits that led to savings accounts and paying cash for what we wanted. But no, we keep feeding into and off of a constantly evolving industry of false fiat currency.

And because we still fail to see the real reason for the current situation, and we are too proud to realize we may need to do with less, we fall for the inevitable scams that come along in the wake of a shooting star.

But will we Mainer’s learn to shrug off the media driven urge to satisfy our lust? Or are we doomed to follow along on the globalization mantra, claiming we should all be equal, not just in freedom, but in our wealth as well? The hidden and ignored class system has existed in the United States since our ancestors arrived on the shores of Popham Beach in Phippsburg 400 years ago. We will always have the rich, and the poor. There is nothing wrong with wanting to better yourself, and gain wealth, but when that wealth is a false reliance on the plastic cash world, we are not really wealthy. We just seem like it. True wealth comes from true value, not false value. Start saving. Set aside enough cash that you will be able to survive future economic crisis. Build a retirement fund. Open dedicated savings account so that you can buy that snowmobile and you can own it, not the finance company. Lets work at putting the credit industry back into its proper palce.

Attention shoppers…the store will be closing…

How many times have you heard this at the end of the shopping day? Many stores will be announcing they will be closing for good over the next year or so in Maine, unfortunately. At this point, the causes for the recession we are undergoing are irrelevant. The bigger question is why didn’t anybody listen to the fear-mongering analysts a few years ago? Or better still, what will be the effect, short and long term, on the future of Maine?

A news item this morning says that EMS is closing their Augusta store, leaving Maine with just one outlet in Portland. AUGUSTA EMS store closing in Jan. The article says only ten people will be out of work, which in the big picture is a minimal number, but how many people in all will be cast into the ranks of the unemployed before all is said and done here in Maine? Office Depot announced recently that they will also be shuttering all of their Maine stores as well.

Many retailers are cutting back and laying staff off or simply eliminating positions, and thereby reducing payroll. Other expenses are being cut as well. Right across the board we can see retailers cutting back and minimizing expenses so they can ride out this economic maelstrom. A lot of them probably won’t make it, no matter what and how they save to accomplish their goals.

Just once I’d like to see one of those Washington boneheads we keep sending back stand up and say “Hey, we screwed up. We didn’t listen to the people. But we will from now on.” Good quote from no one, and there isn’t one senator or congressman that will admit to it either. but like I’ve said before, we rely upon the plastic dollar to get what we want and not real wealth, and that is the bottom line in our problem.

Working in retail like I do, I see far too many items being put on a Visa or MasterCard. And I know damn well they cannot afford to pay for what they are buying. So they end up paying and paying and paying and… You get the picture. As long as the minimum payments are made, you’re good to go. But if that is all you can afford to pay, you are only covering interest and will never pay for the product you purchased.

So we end up where we are today, paying all this money to companies that really don’t manufacture anything except for fiat currency, and for what? So some foreign billionaire can criticize the US’s policies? The bailouts are not going to solve our problem. They’ll only make it worse. We learned that from the Great Depression as some call it back in the twenties and thirties. A lot of undereducated historians claim Barak Obama will save us just like FDR did back in the forties. Except for one problem, it sounds like a good plan. The problem is that FDR did not solve the depression. WWII did. So, will the Great B.O. drive us into WWIII? Is Africa going to become the new battleground? FDR had Europe and Asia, Truman had Korea, Kennedy through Nixon had Viet Nam, and the Bushes had the Middle East. Obama, next in line may end up in Somalia, Darfur, Zimbabwe, and any number of other up and coming military conflicts from Sub-Saharan Africa. Will that solve our economic problems?

It would probably be a temporary fix, but until we learn that plastic money is not real money, we’ll continue to get ourselves in hot water financially. Credit is a valuable tool if used wisely, but the US is no longer a wise user of credit. We need to cut those plastic cards up and start paying with cash for our everyday needs. Real money, not just a vague promise of real money at 22.9% interest and no payments for ninety days. Use credit to buy a home and car, but cash for everything else. Put off buying those widescreens and snowmobiles if you have to, but pay cash, and start driving up the value of our currency. That is the only real cure for this crisis. Put the credit mongers out of business for good.

Surprisingly enough, this future of failing retail enterprises is what the environmentalist want for Maine. By stabbing the taxpayers in the back and forcing the mega developments through the hoops in the Moosehead region, i.e. Plum Creek, they have assured us that only the menial low paying jobs are good enough for Maine. Jobs that have no security, pay low wages, offer no benefits, and have an uncertain prospect at best. The LURC erred in allowing this proposal to go forward as presented to the people. They done did us wrong, folks.

We need to get back to our industrial roots here in Maine if we are going to grow as a state. We need to get back those manufacturing jobs that drifted overseas where the cost of doing business is tremendously less than it is here. We need to contact our elected representatives and tell them we want a full investigation and review of the LURC’s actions, as well as the involvement of all of the stakeholders associated with the presentation of this plan. Especially in light of the fact that they have placed the future of Greenville in peril by limiting their options to failing economic segments such as retail, travel and the hospitality industries.

Like I mentioned about a month ago, I’d get back on the energy cost issue towards the end of December. That time is here, but things are still a little cloudy as to predictions in my crystal ball. I mentioned also in one post that there may be a slight increase at the pump in early January, perhaps of 5% or so. With the news today that Light Sweet Crude traded slightly higher today for February, I expect that that jump will probably be the case. It settled in at $37.71 for a closing price, so I’ll stick with 5% as an increase for now.

Part of the formulation includes the stock markets as well, and overall, the markets weren’t faring as well as I’d like to see, especially retail and related segments. It appears as though that as an industry, retail sales had an average of 8% loss in volume which kept the trading slow and low. But we need to remember as well that this is the holiday season, and many investors are vacationing.

But as usual, the biggest part of the equation, and one that I feel is largely ignored is the exchange rate. The news today states that the exchange rate for the US dollar against both the Euro and the Yen was pretty stable with the light trading conditions. To a point this is a good situation. But on the other hand, the US dollar lost a lot of ground against world currencies, especially the Euro and Yen, as well as the Rial back in Jan/Feb of this year. Surprisingly, the decline in the value of our currency occurred at the same time as it became clear that Obama was going to be the Dems choice for the Presidential bid.

Of course, seeing as I like to look under the rocks in our back yard a little differently than other people do, I come to different conclusions. But sometimes I am right. Here are the latest exchange rates from GoCurrency.com if you are interested in real info…

Currency Converter

So what does this mean for Maine? Well, in my humble opinion, I would say we are going to see low energy costs for at least another month, but if I were you I would try to get a locked in heating fuel rate for the rest of this season as soon as possible. It wouldn’t hurt to get locked in for the ’09-’10 season as well, if possible. With the coming stimulus packages that the Great B.O. is promising will come an increased taxation and increased regulation to us all, causing an abrupt rise in the cost of doing business here in the US.

The big question is whether or not we are going to let the socialist leaning government of Maine follow suit and increase taxes and regulation along with the national level government, encouraged by the Great B.O. and Madame Pelosi’s maniac desires. Will comrade Baldacci swallow his leftist pride and do what is best for Maine, or will he just go along with the crowd and let Hannah Pinegree have her merry way, egged along by her C. Pinegree’s foolish philosophies. I looked at a picture of Chellie at a speech. The expression on her face reminded me of a raving lunatic, just like Pelosi. You don’t suppose they’re from the same test tube do you?

But we’ll see what happens over the first quarter of 2009. I really don’t expect much good to come of it. I do expect these people to drive up the cost of living in Maine though.

That’s Dan’s Maine View for today.