Now 17 years after the Soviet Union disappeared, it might be high
                       time for the US to recall what Dwight Eisenhower said in his farewell address in 1960. 
                                   "We annually spend on military security more than the net income of all
                           United States corporations. This conjunction of an immense military establishment
                           and a large arms industry is new in the American experience. The total influence --
                           economic, political, even spiritual -- is felt in every city, every State house, every office
                           of the Federal government. We recognize the imperative need for this development. Yet
                           we must not fail to comprehend its grave implications. Our toil, resources and livelihood
                           are all involved; so is the very structure of our society.   In the councils of government, we must
                           guard against the acquisition of unwarranted influence, whether sought or unsought, by the
                           military industrial complex. The potential for the disastrous rise of misplaced power exists
                           and will persist. We must never let the weight of this combination endanger our liberties
                           or democratic processes. "

                           The US support and installation of dictatorships that terrorize
                        their own people are a recipe for eventual retaliation and US foreign policy nightmares.   

                               The US is an Empire in significant decline.  It cannot afford its military budget and
                        system of global bases.  Using the CIA to covertly overthrow democratically elected
                        governments, like Mossaegh in Iran in 1953, Arbenz in Guatemala in 1954, and
                        Allende in Chile in 1970 reveals how deeply our Presidents have been guided by promoting
                        narrow commercial interests rather respecting human rights and refuse to take care that the
                        long-term interests of the US come first.  Fear of Communism was always the excuse used. 
                        Just as now we are told to fear Islamo-Fascist terrorists.   But  Iran's Mossadegh was
                        anti-Communist.   So was Chile's Allende.  A million Indonesians died as a result of the CIA's
                        overthrowing of the nationalist Sukarno government, again in the name of fighting Communism.
                        This disregard for human rights and the contempt shown for the sanctity of other
                        countries' sovereign rights appear over and over in the pages of the Pentagon
                        Papers.   In 1949, Ho Chih Minh appealed to President Truman.  He wanted Vietnam's independence
                        movement against French colonialism to be recognized in the spirit of the American war
                        of Independence.  Truman preferred to side with the French colonialists. In November
                        1963,   Kennedy sought the overthrow of the President Diem.  The corrupt General Diem
                         had been propped up as long as he seemed the best defense against the insurgents who
                         mainly wanted to unify their entire country.  As a result, Ambassador Lodge gave the
                            US Ambassador HC Lodge OKs assassination of Vietnamese President.
                         "green light" to have South Vietnamese generals remove General Diem.  He was coldly
                         assassinated the next day.   George Bush's lies about the reasons for starting his war
                         with Iraq should be seen in the light of long history American Presidential arrogance
                         and the massive influence exerted by private military contractors, which Eisenhower
                         had warned against, through their ties with Bush and Cheney.  Even 9/11 might not
                         happened but for the extensive American military bases in Saudi Arabia.

                                                                  Patriotism is Not about Empire. 
                                   Why Is It Not Defined as Caring for ALL Those Who Are Americans?

                                   Like the Roman Emperors, American leaders choose  to not to admit the limits
                    of America's power or its treasury.  They start wars of plunder and debase the currency
                    to pay for their military operations.  They wear lapel pins, as though that alone makes
                    them patriotic.  The result is the destruction of the middle class and the deepening poverty
                    of those who must hold two jobs to provide for their family.  The US military budget now
                    equals in cost the military budgets of all the other nations on earth.    No wonder, moral
                    decay has set in.  Contractors steal as much as they can from the US Treasury and the
                    Administration punishes those who report these crimes.  The President has lied America
                    into a war of aggression and Congress lacks the moral courage to stop the killing.  The cost
                    of a war, which 70% of Americans want a quick end to, is estimated  now to be between
                    $3 and $4 trillion.  It grinds on and on, just as the war in Vietnam did.   

                                 Corruption in Rome is often given as a cause for that Empire's collapse.  US CEO's get paid
                    five, ten, even fifty million a year, even though their company's stock plunges 90%. Greed
                    is rampant.  Loan officers did whatever was necessary to make commissions.  The banks
                    and financial institutions bundled mortgages and sold them as secure debt, without giving
                    any thought to what would happen if housing prices fell.  Make the money now and let someone
                    else worry about the consequences was their only ethic.  There was no regulation!   Bush's
                    Republicans, in their core, believe in the magic of pure greed.  They don't believe business
                    should be regulated and they are richly rewarded for protecting their business clients. 

                                     So, no one in the Bush Administration looked ahead to see what might happen
                    if housing prices fell or Crude Oil prices rose and rose and rose.  Their philosophy was
                    the same as a miner in the West.  Get all the gold ore you can as quickly as possible
                    and leave the mess to someone else to worry about.   Small wonder that Bush and Cheney
                    treated alternative energy development, conservation and public transportation with the same
                    contempt and hostility that they showed regulations and research to promote clean, healthy air
                    or to protect wilderness areas.  

                                     With the same criminal neglect and incompetence shown by FEMA, and
                    with the same perverted under-spending on the system of  levees guarding New Orleans,
                    because it did not benefit the military industrial complex, Bush's appointees at the US Treasury
                    and the Federal Reserve did not bother considering what would happen when
                    housing prices started falling.  How hard was it to see that allowing "zero-down" speculative
                    purchases of houses were just as dangerous as allowing speculative buying of stock "on margin
                    with 10% down" in 1928 and 1929.   They should have been fired long ago.   Instead, they
                    party, play golf, take month-long vacations and "double-dip" big-time. "Yes", people
                    are bitter.   It is time for a big change.

                    

                                                               A Perfect Financial Cyclone
                                                      
                                    Former Republican Kevin Philips on the Book Channel talked this week
                        about what ails America.  In 1969, he wrote a book, "The Republican Majority"
                        that became the basis for the Republican Southern strategy.  So, this is an astute
                        observer.      He depicts a very grim economic future.   What we are now seeing, he
                        says is train wreck in slow motion as a perfect storm descends.  Small wonder the
                        stock market has gone straight down so much since the (April 21, 2008)  New York
                        Times review.  He covers mainly topics that I have already discussed in my Blogs. 
                        Unfortunately, he leaves out from his perfect storm three additional elements that should
                        also be factored in:
                                      1) Chalmers Johnson's concept of Blowback .
                                      2) The degree to which maldistribution of wealth in the US has reached levels
                                     not seen until just before the Great Depression.
                                      3) Protectionist sentiments are growing.  The US Smoot Hawley Tariff of 1930
                                      led to widespread world trade restrictions.

                                   "By 2007 total indebtedness was three times the size of the gross domestic
                               product, a ratio that surpassed the record set in the years of the Great Depression.
                               From 2001 to 2007 alone, domestic financial debt grew to $14.5 trillion from $8.5 trillion,
                               and home mortgage debt ballooned to almost $10 trillion from $4.9 trillion, an increase
                               of 102 percent. A crisis in the mortgage market in August 2007 brought the party to an end...

                                   "The second component of the perfect storm is the upheaval in the oil industry.
                               Domestic production peaked in 1971, and there are signs that production worldwide
                               is also peaking.  And with the emergence of new economic powers like China and India,
                               demand has risen dramatically and prices have been climbing steadily; by 2004 a rapidly
                               growing China had become the second largest oil consumer, after the United States.
                               Despite the bad news at the gas pump, however, America has actually been getting a
                               cost break, because the major suppliers price their oil in dollars. But with the dollar
                               falling, OPEC has been talking about moving into other currencies. Were that to happen,
                               “the effects,” Mr. Phillips says tersely, “could be painful.”

                                      "Finally, Mr. Phillips turns to what he terms America’s “calcified” political system.
                               We may need new regulations to deal with the debt mess, along with an energy policy
                               to address the changing world of oil, but Washington, he says, has become dedicated to
                               “the politics of evasion,” reluctant to pass dramatic reforms or to call for sacrifice from
                               the public. Democrats and Republicans alike are so entrenched, so dependent on campaign
                               money and special interests, that “the notion of a breath of fresh air has become almost
                               a contradiction in terms.” Instead of a “vital center” in Washington, we now have a
                               “venal center.” Mr. Phillips holds out little hope of improvement from a new president.."

                                                       Fannie Mae and Freddie Mac Are "Insolvent"
                                                   The Biggest Bank Failure in US History on Friday

                                          We have said for months the credit crisis was going to get much worse.
                                It has and it will.  I take no pleasure in chronicalling the Bush Administration's
                               destruction of so many Americans dreams. But they must be reported to be
                               changed.   The mainstream media has the backbone of a sick jellyfish.  It falls
                               on independents on the internet to break the silence.  Our ability to see
                               what insiders are doing helps enormously in the task of getting past the
                              smoke and mirrors.  See "The Shame of Insider Selling" in financial stocks.
                              This was posted a year ago.  Now we see clearly why they were selling.

                                          This Friday afternoon  IndyMac Bank  was shut down by regulators Friday
                                 as the mortgage crisis claimed one of its largest victims. The Pasadena thrift,
                                 with $32 billion in assets, was a prolific lender during the housing boom,
                                specializing in so-called Alt-A loans that allowed buyers to borrow with little documentation
                                 of their finances.  Losses are expected to mount among Alt-A mortgages as more
                                 borrowers decide to walk away from residential investment property plunging in value.
                                Pasadena-based IndyMac's failure is expected to cost the FDIC between $4 billion
                                and $8 billion, based on the regulator's preliminary estimates. The bank will reopen
                                 Monday as IndyMac Federal Bank, run by the Federal Deposit Insurance Corp.
                                 (Source: http://www.bizjournals.com/pacific/stories/2008/07/07/daily61.html )  This is
                                 the second largest bank failure in US history.

                                          Four billion may seem large.  But what happens if housing prices continue
                               to fall, as seems very likely.   Almost 9% of Mortgages are either Delinquent
                               or in the process of Foreclosure.   According to Federal Reserve data on
                               consumer net worth, real estate net worth fell last quarter for the first time in over
                               25 years.   "Not surprisingly, the combination of falling housing prices and rising
                               unemployment is causing consumers to pull back. Auto sales are falling sharply,
                               and consumers have had to make tough choices, leading to less spending on
                               non-discretionary purchases. While retail sales at discounters have slowed modestly,
                               consumers have materially slowed their spending at department stores. Weaker
                               employment, declining housing prices and tighter consumer credit virtually ensure
                               subpar U.S. economic growth for the foreseeable future.  Making maters still worse
                               for consumers,  the US Dollar is falling and Oil Prices are rising steeply.  These are
                               realties of a perfect Economic Cyclone.  They are imaginary fears, as McCain's
                              chief economics adviser, Phil Graham said this week.   See Mark Kiesel, "
                              "US Credit Perspectives", July 2008.        

                                        

                                                               Another Bailout?  Nationalization?

                                        The US Government is now $9 trillion in debt. Treasury Secretary Paulson
                              is "planning a $15 billion capital injection" and the use of the Fed's Discount Window,
                              where they can put up questionable bundles of mortgages for loans.   Paulson
                              wants the government to receive in return special shares in beleaguered FRE
                              and NM, which now provide 70% of the newer mortgages.  He would let the
                              companies continue.  He maintains that letting  the market place destroy these
                              companies would mean allowing the mortgage market to grind to a halt and
                              further weaken confidence in US securities. 

                                               The Best Government A Banker's Money Can Buy
                               
                             
                              Fannie Mae chief executive Daniel H. Mudd, left,
                                       and Chairman Stephen B. Ashley testify before
                                       the Senate Banking Committee. The hearing was
                                       convened to review accounting fraud at the FNM.
                                       In a settlement with the SEC and OFHEO, FNM
                                       agreed to pay penalties of $400 million. 
                              ( http://www.washingtonpost.com/wp-dyn/content/article/2006/06/15/AR2006061500677.html )

                                        Despite FNM's past accounting frauds,  Treasury Secretary
                               Paulson has decided today to bail out these companies and let these
                               two companies' CEOs keep their huge salaries and perks.  Daniel H Mudd's
                                $7.1 million in compensation at Fannie Mae is now safe.  Mudd  gave $15,500
                               to the Republican Party in 2006.  This was the best investment he ever made! 
                               Richard Syron's $1.35 million salary and bonuses are also now secure as CEO
                               of FRE.   He and the PAC has organized has given $31,000 to Democratic
                               Senator Christopher Dodd and Senatorial Democrats in the last four years.
                               Dodd is leading the Democrats in the area of subsidizing homeowners in the
                               their mortgages.   If the government took over these two companies and
                               kicked out the CEOs, it would save millions.  But Paulsen and Dodd won't do this.

                                                            

                                        Other plans include nationalization,  simply having the government take over
                              the $12 trillion in mortgages of the nation's two top mortgage lenders  Fannie Mae
                              and Freddie Mac.  It would place them in a "conservatorship", making the shares
                              next to worthless,  which is what the President of the St. Louis Fed says they are
                              now worth, if all their loans are marked to the current housing market's prices.   
                              The high paid executives for these companies would presumably disappear.
                              But since the US Government already supposedly stands behind these loans,
                              such action would, in effect, "take these national".  The taxpayer might have to
                              come up with as much as $5 trillion, if all mortgages failed.    They are as highly
                              leveraged as any bank...  These companies have guaranteed trillions and trillions
                              of dollars of mortgage loans. 
                                               (  Fannie Mae, Freddie Losses Make Them `Insolvent,'
                                                                 Pres. of St.Louis Federal Reserve Says
                                       July, 10th  http://www.bloomberg.com/apps/news?pid=20601087&sid=as4DEc5UFopA&refer=home
                                                    News - http://www.reuters.com/article/marketsNews/idESBNG18193220080711?rpc=44&pageNumber=2&virtualBrandChannel=0   )

                           

                           

 
                           Where Will The DJI Find A Bottom?

                                         DJI Declines of 20% or More since 1915

                         The DJI is now down 22% from its peak in October.  The recent Peerless Buy B2s are
                    not very trustworthy, in that we have no earlier cases of these Buy B2s reversing a cluster of
                    major Sell S9s and Sell S4s with the DJI down more than 20% from its peak.  The
                    Tiger OPCT ("aka "OP21) remains negative. For a meaningful rally to be predicted
                    we will need to see major Buys and the OPCT and its moving average (MA)  turn
                    up and positive.  You can see many examples of bear market bottoms further below.

                         Below you will find the charts of the following bear market years.  These are the
                    deepest declines during a single year.  

                                     Year   Decline for Year    Buy Signal
                           1           1917  -34% - Index Buy B1, Buy B2
                           2           1920  -38% - Index Buy B13
                           3           1921  -20% - Index Buy B1, Buy B2
                           4           1929  -45% - Index Buy B1, Buy B2
                          5          1930  -45% - Index Buy B13

                          6         1931  -60% - Index Buy B13
                           7        1932 - 55% -  Index Buy B13
                           8        1934 - 23%  - Index Buy B1
                           9         1937 - 38%  - Index Buy B6, Buy B13
                          10          1938 - 25%  - Index Buy B1

                          11           1939 - 22%   - Index Buy B1
                           12           1940 - 27%  - Index Buy B1, Buy B2
                           13           1941 - 21%  - Index Buy B1, Buy B6
                           14           1946 - 24%  - Peerless Buy B9, Buy B16
                           15           1957 - 20%  - Peerless Buy B1, Buy B8, Buy B17

                          16           1962 - 27%  - Peerless Buy B6, Buy B13
                           17           1966 - 25%   - Peerless Buy B8, Buy B17
                           18          1969 - 21%   - no Buy ... market goes lower.
                           19          1970 - 30%  - Peerless Buy B12, Buy B16
                           20          1973 - 25%  - Peerless Buy B16

                           21          1974 - 25%  - Peerless Buy B16, B12, B9, B19
                           22          1977 - 20%  - Peerless Buy B9
                           23          1978 - 20%  - Peerless Buy B9, Buy B17
                          24         1981 - 20%  - Peerless B9. B17, B19
                           25         1987 - 40%  - Peerless B16, B17

                           26          1990 - 21%  - Peerless B8, B17
                           27          1998 - 20%  - Peerless Buy B8
                           28          2001 - 27%   - Peerless B8, B17
                           29          2002 - 30%   - Peerless B9, B17, B19

         ------------------------------------------ DJI - 2007-2008   ----------------------------------------------- 

                                                      

                             
                      
                                                             BEAR MARKETS SINCE 1915-2008  

                               Officially, a bear market  is called when the DJI falls 20% or more.   Here
                     are the cases since 1915.  
                                                              

      ------------------------------------------ DJI - 1917 -----------------------------------------------             
     

                                                         

      ------------------------------------------ DJI - 1920 -----------------------------------------------                      
               
                                                     
      ------------------------------------------ DJI - 1921 -----------------------------------------------                      
                                   
     ------------------------------------------ DJI - 1929 -----------------------------------------------                 

           ------------------------------------------ DJI - 1930 -----------------------------------------------       

------------------------------------------ DJI - 1931 -----------------------------------------------       

------------------------------------------ DJI - 1932 -----------------------------------------------      

     ------------------------------------------ DJI - 1934    ----------------------------------------------- 

      ------------------------------------------ DJI - 1937    ----------------------------------------------- 

           ----------------------------------------- DJI - 1938   ----------------------------------------------- 

               ----------------------------------------- DJI - 1939   ----------------------------------------------- 

    ------------------------------------------ DJI - 1940    -----------------------------------------------

         ------------------------------------------ DJI - 1941   -----------------------------------------------

    
         ------------------------------------------ DJI - 1946  -----------------------------------------------

      
          ------------------------------------------ DJI - 1957  -----------------------------------------------

      
         ------------------------------------------ DJI - 1962  -----------------------------------------------

      

           ------------------------------------------ DJI - 1965-1966   -----------------------------------------------


           ------------------------------------------ DJI - 1969   -----------------------------------------------


            ------------------------------------------ DJI - 1969-1970   -----------------------------------------------

       
              ------------------------------------------ DJI - 1973  -----------------------------------------------

             
                  ------------------------------------------ DJI - 1974  -----------------------------------------------

           
              ------------------------------------------ DJI - 1977  -----------------------------------------------


             ------------------------------------------ DJI - 1977-1978   -----------------------------------------------

            
                      ------------------------------------------ DJI - 1981  -----------------------------------------------


                  ------------------------------------------ DJI - 1987  -----------------------------------------------

              
                 ------------------------------------------ DJI - 1990  -----------------------------------------------

               
                ------------------------------------------ DJI - 1998  -----------------------------------------------


               ------------------------------------------ DJI - 2001  -----------------------------------------------

            
                 ------------------------------------------ DJI - 2002  -----------------------------------------------