Bin Laden, 9/11, Sub-Prime Meltdown Woes, Nukes on B-52s – A Tense Week

There’s plenty for the wary to watch this week. Much anxiety circulating on the net regarding:

1. The new video from Osama bin Laden
2. Wall Street sell-off on Friday thanks to bad labor statistics
3. Nukes hitchhiking across the country
4. 9/11 anniversary on Tuesday
5. Interesting "put" options that suggest someone may think (or know) that a catastrophic economic event is about to occur

I don’t think I’m wrong when I say that this week has more negative portends than any week in a long, long time, so a quick analysis of each of them follows.

New bin Laden video

It’s not the first time we’ve seen OBL since 9/11/2001, but it’s the first time we’ve seen him with a dyed, trimmed beard. What’s the significance of that? According to this study of Islamic thought regarding the trimming of beards…Hard to say. It’s amazing that Western Civilization is locked in a battle to the death with people who feel the need to argue and write extensively about trimming facial hair. There’s also some concern that September 11th is on Tuesday this year, as it was in 2001.

Wall Street

For the past several weeks, it’s been the sub-prime mortgage meltdown making headlines. Now Countrywide says it’s laying off as many as 12,000 workers. The problem is deepening, and will continue to accelerate, since the housing industry is enormously important to the strength of the U.S. economy, even if the Fed doesn’t see it (or doesn’t want to panic us). Housing drives the economy. It provides jobs, that provide disposable income that allows people to buy things. The appreciation of real estate "values" has created money through home equity loans that bought millions of flat-screen HD tvs. Well, that equity is drying up, and so will the tv sales (and the auto sales, computer sales, vacation spending and in many cases, consumer debt servicing). It’s a bad scene.

Hitchhiking nukes

Six nuclear warheads flew on the missile pylons of a B-52 bomber last week, in clear violation of Air Force rules governing the transportation of atomic weapons. How in the world could this kind of "mistake" happen? Was it a mistake, or were the weapons flown, rather than trucked from Minot, ND to Barksdale AFB in Lousiana to meet a deadline? There’s buzz (also known as "informed speculation) that since Barksdale is a staging base for Midlle East deployments, the weapons were on their way to be launched against Iran, but some dissident military assets blew the whistle. Some say it was all a stunt intended to send a message to the Iranian government that we’re not messing around. There are even those who say the nukes are to be used on us. Any way you look at it, it’s a dangerous situation.

9/11 Anniversary

Tuesday marks the 6th anniversary of the attacks on the World Trade Center and Pentagon by someone hostile to the American people. Whether you believe it was, in fact, 19 Islamic extremists or some sinister cabal who want you to think it was the work of Osama bin Laden, the fact remains, not only is Tuesday the anniversary of those horrific events, but September 11th was also a Tuesday. Some who see conspiracy everywhere are pointing to such a coincidence. Hard to say whether the kind of people who would commit such acts care about that or not, but it’s still worth noting. The human mind and eye constantly searches for familiar patterns, and throughout the history of our species, such patterns reappear time and time again.

Those strange "puts"

In the weeks before 9/11, some still unidentified investors purchased options that would only pay off if the stock prices of American Airlines and United Airlines dramatically fell. Well, since 9/11 caused both of those companies financial hardship (since their aircraft were used in the attacks), someone made billions of dollars. Did they know 9/11 was going to happen? Sure seems so. Well, now word is circulating of an even bigger "bin Laden" trade. Someone has bet a billion dollars that the stock market is going to lose 30-50% of its value by September 21. If it doesn’t lose that big, the entity making the trade loses close to a billion dollars US. What do they know? A more rational (but not completely reassuring) explanation for these trades says they’re merely a "box trade" engineered to provide a low interest rate loan.

Be well, be safe and be prepared.

Posted in Housing Bubble, Terrorism, US, War