Recovery, Or Bear Market Rally?

It's true that one can cherry-pick any numbers and find an economist to support any idea one wants to imagine. With the recent upturn on Wall Street, the bulls-versus-bears battle seems to be tilting towards the bulls and a recovery. The question remains; is this the recovery, or is it just a bear market rally preceding another plunge?

Over at National Review, Head Wall Street Cheerleader Larry Kudlow is as giddy as a schoolgirl with a senior class ring. With a 10% rise in the DJIA in July and a 46% rise in the S&P 500 since the March 9 low, he's dreaming of a Dow at 14,000, an 8% growth rate, and a "Reagan rebound." A Reagan rebound? For God's sake Larry, have another scotch and calm yourself.

For a more balanced perspective, there was a good article in MSN Money yesterday by Jon Markman that compares the positions of the bulls and bears. Mr. Markman is decidedly bullish, and to his credit, he says so in his article. Mr. Markman's contention is that some foreign markets are doing well because they are buying American technology. The US tech sector historically leads the way out of recession. The place to buy now, he says, is US technology exporters.

Both articles mention several stocks, so I've been looking through them this weekend, especially the tech sector. I never found a split between foreign sales and domestic sales to confirm Mr. Markman's idea, but I have found some interesting info. Let's take our old perennial favorite Cisco Systems Inc., as an example. It's a good company with low debt and rising revenues. When the recovery comes, they'll be in a good position.



If you've sat on your Cisco stock through the recession, you're probably feeling pretty good right now. If you're looking to buy, there are some cautionary signs here. The top chart shows the daily prices with the 50 and 100 day moving averages (DMA's). The current price is about 2 points higher than the 50DMA, which is a bit high. The higher the spread, the less likely it will remain high. The middle chart shows the price/earnings ratios (P/E) over the last 12 months. It's about as high as it's been, suggesting there may not be room left for growth. The bottom chart shows the slow stochastic, which theoretically is supposed to track long-term trends. Notice that the long-term trends only last about 2 weeks. It's been that kind of year, I guess. In any case, it's heading down. I'll predict that Cisco, along with the rest of the market, is in for a rough week.

A couple of other things I noticed about all the stocks I looked at, both having to do with institutional investors. Every stock, about 15 of them, showed a negative buy/sell ratio among the institutions. This would suggest that the big money is already taking profits and getting out. Also, in the lists of top ten institutional investors, nearly every stock showed a combination of State Street Bank, Bank of New York/Mellon, Northern Trust, Barclay's, and Bank of America; all bailed out banks. I couldn't help but wonder if those billions of dollars invested were actually taxpayer funds that we'll never see again. Could the government be manufacturing a rally to give the impression of a recovery? Trust is such a fragile thing. I'll stick with the bears for now.

Democratic Dogfights

There has been quite a lot in the press the last few days about political maneuvering in regards to the health care debate. One interesting thing about it is the terminology used by the big government control-freaks and their lackeys in the press. The term of the day is "blue dog". The term "moderate" has apparently been disallowed by the powers that be, when speaking of Democrats. Even the right wing press goes along to get along. From The Stimulist

Democrats are now paying the price for the cynical strategy they used to capture their Congressional majorities in 2006. In recruiting the 40-plus Blue Dogs, who went on to defeat Republicans...

It seems the Republicans aren't the only ones with a moderate problem. I have to wonder how many of these moderate Democrats are even more conservative than the Republicans they replaced. Might we one day be treated to the term "conservative Democrat"? I won't be holding my breath waiting for it.

For Republicans, there's not much to do but pull up a chair, pour a glass of lemonade and enjoy the show. Our post-partisan President doesn't seem to think Republican votes are necessary to non-partisanship. Unfortunately for him and the Pelosi cartel, conservative votes are necessary. The underlying problem being every congressman's main concern; self preservation. You can take the Republicans out of Congress, but you can't take conservatives out of the Districts.

Supply and the Health Care Debate

Today's lesson in economics comes from Abe Lincoln. With the Civil War raging, and the Confederates approaching Washington, Lincoln received a report that J.E.B Stuart's cavalry had kidnapped a general and stolen 40 horses. The next day a messenger appeared saying, " There's good news Mr. President. We've found the general." Lincoln replied, "That's unfortunate. I can always make a new general, but I can't make more horses."

Any government can arbitrarily suppress prices, at least for a while. Adding 40-50 million new health care recipients arbitrarily increases demand. It is on the supply side of the equation where things are beyond government control. The government can't dictate that someone invent a new medicine, medical device or procedure. Supply is created by individuals making choices, and applying their talents, according to their own self interest.

If you were 20 years old right now, would entering the medical profession look like a good idea, or would you be thinking of doing something else? Knowing that doctors already spend a great deal of time filling out paperwork and arguing with insurance providers, bureaucrats, lawyers and accountants, would a smart kid still want to be a doctor? With malpractice insurance and other costs remaining the same, and the prospect of lowered fees and less time for the customers, is there still a point to becoming a doctor?

Given the news of the day, would a technically gifted kid want to manufacture heart valves or wind turbines?

As the Soviet Union learned, supply cannot be mandated, distribution from a central point is ineffective, and if there is nothing on the shelf to buy, the cost to the consumer doesn't matter. With fewer reasons to enter the medical field, fewer people will enter it. With increased demand, rising costs and falling prices, a decrease in supply (rationing) is an absolute certainty. Like Lincoln and the messenger, we are about to discover that even the President of the United States is limited by natural law.

The Coming Devaluation

It looks like the stars are coming into alignment for a devaluation of the dollar. The first set of signs comes from then recent run-up in stock prices, and subsequent multi-billion dollar bonuses, involving the Wall Street banks. An excellent look at this is by Daniel Harrison, who points out that some of the bigger banks resorted to accounting tricks to post a good quarter.

But on closer inspection, these profits reveal little more than the return of risk appetite in the face of rising problems at the operating-level. For instance, in the case of JPMorgan, investment banking revenue helped offset rising defaults on consumer loans, while Citi masked its operating losses with a one-time asset sale.

They are not likely to post another good quarter which will add fire to another round of stimulus.

On top of that, both gold and the Euro are poised for an upturn. There is a great video that shows the analysis for a gold price increase. It also doubles as a good primer on how to analize a chart, if you've ever wondered how they do that. It runs about 7 minutes. There is also good video on the rising Euro versus the dollar. Currencies are more complicated than commodities, but it's the same idea.

The only good sign I can see on the horizon at this point, is the typical end of summer fall in gas prices. From a consumers point of view, we'll still be able to get around, we just may not be able to afford anything when we get where we're going. Whether it's inflating prices, or a deflating buying power of the dollar, the end result at the consumer level is the same. It's looking like it's about to get worse.

Blogola and Me

There are two questions about blogging that I am sometimes asked, and I have never found a satisfactory answer for; "What is your blog about?", and "When are you going to start making some money at this?". A blank stare is my usual answer. I'm 54 years old and no single subject has ever held my interest from one day to the next, nor have I ever made much money at anything. Why should my blog be any different?

What brought this up was an article in the recent Forbes Magazine marketing section entitled "Blogola". It seems there's a guy named Ted Murphy, whose business is paying bloggers, up to $3,000, to write nice things about various corporations. Recently, several bloggers earned a $500 credit from K-Mart for their posts. Was it the WW II era linoleum floor that they so admired? Was it the screaming kids, drowning out the mind-numbing Muzak that turned their heads? Was it the creatively arranged fertilizer display in the gardening section that caught their eye? Sadly, I'll never know. The article didn't say.

I do know one thing though. If I ever start a sentence with, "I had the most wonderful shopping experience...", then one of three things has happened. In descending probability they are:

1) I have completely lost my mind.
2) I'm being held hostage by corporate terrorists and forced to write blog posts against my will.
3) I really, really, really needed some new bath towels.

On some level, this is a serious subject. After all, the Federal Trade Commission is keeping an eye on Mr. Murphy and his ilk. There are some truth in advertising rules that could use a little tightening. There are people whose livelihood depend on a bold line between journalism and advertising. As for me, I'm content to meander along, like a lazy flowing river, curious to see what's around the next bend. Who knows, maybe I'll find a purpose for my blog there, or maybe even a way to make some real money without selling my soul to the Devil.

Please, Not Another Date Night

Photo by Penny Starr/cnsnews.com

Earlier in the week, Joe Biden, last years smart VP candidate, addressed a meeting of the AARP in which he was quoted as saying:

“We’re going to go bankrupt as a nation,” Biden said.

“Now, people when I say that look at me and say, ‘What are you talking about, Joe? You’re telling me we have to go spend money to keep from going bankrupt?’” Biden said. “The answer is yes, that's what I’m telling you.”

It remains unclear if he "got any action" in the after-speech shmoozing session, but other reports, as yet unconfirmed, attribute him as saying:

"Under our new plan, your doctor may actually be a lawyer, but at least you'll have health care".

"I knew John Kennedy. John Kennedy was a friend of mine. You're no John Kennedy. I just made that up".

"Killing Al Queda in Afghanistan is completely different from killing Al Queda in Iraq. It's not the same thing at all".

"The public simply must keep financing Wall Street banks. The only people who can get us out of this mess, are the ones who screwed it up. Nobody else on the planet knows how to be a bank president. I don't, do you?"

"Buying American doesn't necessarily mean protectionism. Foreigners can still sell things here all they want to, we just won't buy them."

"It's not necessary for legislators to read legislation. When I was a Senator, I just read the Boston Globe; they have someone over there who reads all that legislative stuff".

GM makes wonderful cars. I've never personally owned a car, myself, but I hear they're nice. Are they the ones who make the Mercedes limo?"

"The University of Delaware is an excellent law school. I learned all my rhetorical skills there".

Why I Should Be The Next Empathetic Supreme Court Nominee

Seeing as how we are about to set the precedent that empathy is the most important quality of a Supreme Court Justice, as opposed to say, brains for instance, I've been thinking that maybe I could be a Supreme Court Justice too. After all, I'd like to think I'm a pretty empathetic fella'. Why, just off the top of my head I can think of 15 reasons why I should be considered for the job.

15)As a youngster, even though Willie Mays was black, I cheered for him anyway, sometimes even in public.

14)I once read Bob Gibson's autobiography, From Ghetto To Glory. He's black too.

As a teenager, I took a summer job washing dishes in a Jewish hospital cafeteria which means...

13)I've done menial labor.
12)I know what it's like to live on minimum wage.
11)I helped the Jews.

10)I once had to forgo giving advice to President Nixon regarding his Watergate affairs because I was busy getting loaded at a Santana concert. Carlos Santana was Hispanic before there was such a thing as Hispanic- how cool is that!

9)Although deep-fried Cajun soul food is not my particular favorite, I once had the gizzards and chitin's sample platter at M&M's Fish And Chicken Shack, and didn't throw up.

I'm no longer a member of the Boy Scouts, so I can't be held accountable for...

8)Their instance that leaving an oversexed homosexual alone in the forest with a group of impressionable boys may not be the best combination.
7)Their constant yammering about honesty and trustworthiness and all those other outdated notions.
6)Their walking around in uniforms like some sort of midget Gestapo.

Sometimes I've dated Hispanic women, from whom I have learned...

5)How to order Carne Asada without sounding like a total redneck
4)That even though the government of Mexico is little more than a rival gang of the drug lords,our country should try to be more like Mexico anyway
3)Eating a bowl of Menudo can give you the runs.
2)The meaning of "pinche guerro".

And the number one reason for why I should be the next empathetic Supreme Court Justice, just like Judge Sotomayor, is...

1)I don't think anyone bothers with the Constitution anymore either.

This Just In: Youtube Discovers An Honest Senator

We won't get to see how our money is being spent, but at least Omaha gets a new museum.

More Legislation Without Representation

In a previous post, I referenced the fact that the Energy Bill, that recently passed the House, was unread by anyone at the time of the vote. In fact, the bill wasn't even in completed form. Over the weekend, Rep Steny Hoyer, when asked by CNN, actually laughed at the idea of reading the Health Care bill before passing it.

"I’m laughing because . . . I don’t know how long this bill is going to be, but it’s going to be a very long bill,"...If every member pledged to not vote for it if they hadn’t read it in its entirety, I think we would have very few votes,’’ he said. The majority leader was declaring, in other words, that it is more important for Congress to pass the bill than to understand it.

So nobody's going to know what's in this bill, when it passes, either. We can likely add to these two, the cap and trade bill currently being slapped together. Will anyone have read that before it passes? No doubt many liberals will be shocked in the near future, when they find out Wall Street companies are making billions on trading carbon credits. Every trade goes through Wall Street, and that means commissions. Little wonder why they're in favor.

Also over the weekend, with all the talk centered on the Sotomayor hearings, the Senate quietly killed the Federal Reserve Transparency act. Senator James DeMint of South Carolina vows to fight on, but he is largely alone.

What we have in all this, is a "partner" acting in secret, developing relationships behind our backs, and hiding our finances from us. Does this sound like a healthy relationship to you?

Text In The City

I guess it was only a matter of time before we were treated to this headline: Teen Girl Falls In Open Manhole While Texting.

Alexa Longueira, a high school sophomore, was walking along Victory Boulevard near Travis Avenue on Staten Island Wednesday evening when she felt the earth move and was plunged into smelly darkness..."It was just really gross and it was shocking and scary," she said.

In her defense, there were no orange cones or barriers up warning of the open manhole. Of course, they will be suing the city for neglect.

Alexa's mother, Kim, said: "It could have been an elderly person, a mother pushing a stroller. It could have been anyone."

Except that most people, especially mothers pushing baby strollers, tend to watch where they're going. By this logic, if a man turns his head to look at a pretty woman walking down the street and walks into a lamp post as a result, he could blame the woman. After all, if she didn't have an attractive backside, he wouldn't have a bump on his head. Right? Right.

And finally, there's this:

Alexa lost one of her sneakers in the sewer. She does not want it back.

Somewhere in Gotham, a rookie sewer worker breathes a sigh of relief.

Ode to the Unstimulatable

Incredibly, there is talk in Congress of a second stimulus package. For the record, the first stimulus is somewhere between 15-40% spent, depending on who you choose to believe. It's not due to get to 100% until sometime next year. Apparently, for the truly empathetic, one just can't spend other people's money fast enough. For whatever reason, this has caused me to burst into song.

Ode to the Unstimulatable (sung to the tune of "Unforgetable" by the legendary Nat King Cole)

Unstimulatable, that’s what you are
Unresusitatable, even by a Czar

We all agree, it’s so complainable
Credit bubbles are unsustainable

The printing press will get no rest

Unstimulatable, or so it seems
Unpenultimatable, by any means

You’ve stopped buying- that’s regrettable
Supply, demand, is still resettable

That’s why I
Am unstimulatable too

My Last Sarah Palin Post (At Least For A While)

OK, here's the deal. The market is so over-saturated with Sarah Palin stories that even I don't read them anymore. It's time to let the poor woman exit the stage. Let her go make some peanut butter sandwiches for the kids and be a mom. Let her get, what had been, a normal life back.

It's not that Governor Palin was such a great candidate. She wasn't. She was the last slim hope and the most difficult candidate I ever tried to defend. With her resignation, she not only abandons the field, she takes all of our weapons with her.

Those familiar with my political views, know that I separate the Republican Party into 2 major factions; east coast old money and western new money, Wall Street versus Main Street, fur coats and cloth coats. It was a long time between Calvin Coolige and Ronald Reagan. I suspect I have seen the last of the cloth coat candidates, at least on the national stage. Too bad. Life goes on.

Reid-Pelosi Date Night

Undisclosed sources are reporting that Senate Leader Harry Reid and House Speaker Nancy Pelosi had a "night on the town" recently. A gushing Ms. Pelosi was overheard saying, "I've never been to the Senate cafeteria before. It's simply stunning!" The tab for the chicken fried steak, mashed potatoes and green beans, was said to be in the neighborhood of $1.3 Billion. The frisky couple then retired to an undisclosed location where they spent the remainder of the evening rolling around in a pile of money and laughing hysterically.

Photo courtesy Drudge Report

Twitter Theater presents...

Twitter at the Siege of Yorktown

Any similarity between the characters and persons living or dead is strictly coincidental. However, I would like to thank the 40 or so people I'm following on Twitter for their inspiration. Icons are from clipart.com, all rights reserved.

Cast of Characters……………....……..played by

MeFirst…………………........General Washington
YankeeYuppie……Aide to General Washington
Glutton4Gluttony…………...……Lord Cornwallis
DandyCandy…………...Aide to Lord Cornwallis
WillSail4Wine.………French Admiral De Grass
FuturePresident.…………..Alexander Hamilton
DocBentIt…………………......…Town Intellectual
PrivateAnon ……..Continental Army Private
InnkeepersDaughter……......……….…Anonymous
IDontStink………………......…High Society Lady
MatronlyMom……......……Working Class Woman

Note:Unlike a regular blog post, Twitter starts at the bottom and scrolls up. Our story starts at the bottom of the post and ends here.



DocBentIt FUNFACT: French people have 6 toes on each foot. #NewResearch




IDontStink My betrothed and I strolled along the wharves this afternoon. We met several gallant French Naval Officers. #2ndThoughts




MatronlyMom Fresh rat flanks ½ off @MidtownMarket




MeFirst @Glutton4Gluttony Very well, I’ll accept at noon this Inst'. #pwned




Glutton4Gluttony @MeFirst For the Love Of God man, I implore you, accept my sword. I’ve not had good veal in a fortnight.



PrivateAnon @MeFirst Begging the General's pardon, Sir, May I request you let them starve? I’d give a months wage to see @Glutton4Gluttony in a size 3 corset.



YankeeYuppie @MeFirst Could you hold off a little while longer General? I’ve got 2 bits on @DandyCandy not surviving.



Glutton4Gluttony @MeFirst It would appear you have the advantage, Sir. I’m prepared to offer my sword at your earliest convenience



DocBentIt FUNFACT: Surplus Continental Army bread doubles as a coarse cement. #NewResearch




DandyCandy @WillSail4Wine That’s DandyCandy you illiterate swine. I’m currently living in a mud puddle with commoners #disgusting.



WillSail4Wine @MeFirst I’ve dispatched the British fleet and am moving into range of the town. Where did you say @CandyAssDandy lived?


Two weeks later…



FuturePresident @PrivateAnon If I ever find out who you really are, I'll have you horsewhipped.




MeFirst @FuturePresident Very well, then. Proceed.




PrivateAnon @FuturePresident Good thinking Colonel, dying will definitely give us something to do.



FuturePresident @MeFirst @YankeeYuppie But the troops are idle. Attacking will raise morale and give them something to do.



PrivateAnon @FuturePresident Begging the Colonel’s pardon, how many is 10?




MatronlyMom My 7 yr old knocked over an entire hogshead of molasses in the barn and didn’t tell anyone. I’ll be scrubbing sticky cow hooves all morning now.



YankeeYuppie @FuturePresident Request denied. Fort number 10 has no strategic value whatsoever.



MatronlyMom My 13 yr old left a Bullfrog in the night pot for me last night. I didn’t get any sleep at all after that.



FuturePresident @MeFirst @YankeeYuppieI’ve found an opening in the line near fort number 10. Permission to attack?



DocBentIt FUNFACT: New poll out, women prefer men who bathe more than thrice a year to men who don’t. TinyBraodsheet83 #ClarkesvillePostDispatch


InnkeepersDaughter @WillSail4Wine I don’t presume you’ll be making port in Charleston to ‘re-provision’? ;)




WillSail4Wine @YankeeYuppie I’m off the coast of Carolina. This wind sucks.




YankeeYuppie @WillSail4Wine The General requests you make haste. The British fleet is approaching the bay.



Two weeks later…



IDontStink My betrothed ‘let one go‘ at supper tonight, right in front of everybody, then he blamed it on my plum pudding. #ihatehim



DocBentIt FUNFACT: Witchcraft due for a comeback, human soul weighs 3.2 ounces, more Vermont goblin sightings TinyBraodsheet81 #CottonMatherInst.ofScience



MatronlyMom I’m at the market. All they have that’s fresh are rats. I’m getting the putrid beef instead, again. :(



YankeeYuppie @DandyCandy Speaking of which, is it true they have to hide the livery boy whenever you’re @3ForksTavern? #pwned



DandyCandy @YankeeYuppie Bring it Hillbilly. I’ve heard what the ladies say about your aim. #pwned



IDontStink Just heard my betrothed traded his thoroughbred for a washer woman and a used carriage. # iluvhim



YankeeYuppie @DandyCandy The General desires that I remind you we have plenty of powder and shell for the artillery, and we know where you live.



WillSail4Wine @MeFirst Finally rounded up the crew and set sail, departing St. Martinique. This better be worth it.



DandyCandy @MeFirst Lord C. does NOT tweet with rabble. Go back to your pig farm, Nature Boy.




DocBentIt FUNFACT: tooting low grade snuff, 3 times daily reduces risk of sinus infection 10% #newresearch



MatronlyMom I dumped the night-pot out the window. Someone drank WAY TOO MUCH ale last night. I’m making breakfast now.



MeFirst @Glutton4Gluttony Good morning, Your Rotundity. I do hope the artillery hasn't been disturbing your sleep. I am prepared to entertain the terms of your surrender, should you feel the need.

Great Tweets Through History

I'm still in the lurking phase on Twitter, but I think I'm beginning to figure it out. In this mornings Financial Times Gideon Rachman is beginning to figure it out too. Along the way, he imagines what Twitter feeds might have looked like at different times in history. My personal favorite of his is Karl Marx:

If Marx really had lived in the age of Twitter, he would probably not have been sending out thunderous political messages. It is more likely that his Twitter feed would have read: “Just arrived at British Museum. Going for a cup of tea.”

I can imagine a few others. Here's ten, in no particular order.

Ulysses S Grant during the siege of Vicksburg:
GENOFWEST Going to artillery barrage. Already have headache.

Hannibal crossing the Alps:
CARTHAGETOPGUY Frozen elephants twitpic #weird.

Brutus in the days leading up to the assassination of Julius Caesar:
SATURNSPAL 10% off @Romulus Cutlery. Good stuff.

George Custer at the Battle of the Little Big Horn:
YELLOWHAIR Arrived @ Indian Village. The place is packed.

Thomas Jefferson at the Constitutional Convention:
VIRGINIAPEN Added preamble to doc. John likes it. Will show to others forthwith.

From the Lewis and Clark Expedition:
BOATMAN Picked up crackerjack Indian gal. Husband's a douche.

John C. Fremont from somewhere in Nevada:
FUTUREPRESIDENT Idiots can't find the cannon. Moving on.

Adolph Hitler responding to a tweet from Normandy Beach:
YESTHATFUERHER @LOVINGPARIS wtf???

Christopher Columbus discovering America:
ITALIANSAILOR Arrived @ India. It's not what I imagined.

A converstion between Alexander Graham Bell and his assistant while inventing the telephone:
AGBELL @BELLASSIST Can you hear me now?

BELLASSIST @AGBELL No. What?

AGBELL @BELLASSIST Did you say something?

BELLASSIST @AGBELL No. Was in bathroom.

AGBELL @BELLASSIST Say something.

BELLASSIST @AGBELL Did you hear that?

AGBELL @BELLASSIST Delivery boy at door. Say again.

Stealth Laws and Subsidy Bubbles

HR 2454, The American Clean Energy and Security Act of 2009 passed the House on Friday. It is a 1,090 page document with a 300 page amendment document that apparently was never reconciled before the vote. This led to an interesting question from Texas Republican Rep. Joe Barton:

"If a bill for which there is no copy were to actually pass this body," Barton asked, "could the bill without a copy be sent to the Senate for its consideration?"

Answer: Not unless Pelosi and Reid have telepathic powers of which we are unaware. Should a bill ever materialize in the physical realm, it's likely most senators won't read it either. Which raises another question; Can anybody still call this "representative government" with a straight face? I suppose that the act of voting either up or down would represent someone. But who?

From what I gather from people who have some semblance of an idea what's in the bill, it contains taxpayer funded subsidies for renewable energy projects. Unlike the "hard news watchdogs" who are busy barking at Michael Jackson's multiple autopsies, George Will has some actual information about it in his latest opinion piece. He includes a link to a study done by economics professor Gabriel Calzada at the Universidad Rey Juan Carlos. Spain is a world leader in renewable energy production. Not coincidentally, Spain also has an official 18% unemployment rate. Some excerpts from the reports summary:

Spain’s experience cited by President Obama as a model reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created.

...it is not possible to directly translate Spain’s experience with exactitude to claim that the U.S. would lose at least 6.6 million to 11 million jobs, as a direct consequence were it to actually create 3 to 5 million “green jobs”... the study clearly reveals the tendency that the U.S. should expect such an outcome.

Each “green” megawatt installed destroys 5.28 jobs on average elsewhere in the economy: 8.99 by photovoltaics, 4.27 by wind energy, 5.05 by mini-hydro. These costs do not appear to be unique to Spain’s approach but instead are largely inherent in schemes to promote renewable energy sources.

Professor Calzada's study goes on to discuss the dangers of "countercyclical" situations. The countercyclical is a fairly simple, mainstream idea familiar to any economist, and goes like this:

1) The government wishes to fill a perceived need and calls for incentives (taxpayer subsidies) to be provided to private industry.
2)The taxpayer funds are used as a selling point to attract private investors.
3)Investors, seeing a potential for short term growth, add their money to the pool (artificial demand and misallocation of resources).
4)Unpredictable and uncontrollable market forces (hurricanes, civil unrest, etc.) cause growth to slow, stop, or recede.
5)Private investors, seeing their returns drying up, pull their money out, causing the government to call for further and larger subsidies, which creates the countercyclical.
6)Seeing a possible recovery, private investment returns.
7) The cycle repeats with ever higher peaks and ever deeper troughs (Elliot waves).
8)The end is reached when government is either unable or unwilling to sustain ever larger subsidies to a now massive industry. Private investors, sensing that the end is near, begin selling in panic and the largest downturn of them all ensues.

We have seen two of these countercyclical patterns in the last twenty years. The technology bubble of the 1990's was allowed to crash. We are currently in a countercyclical period with the financial industry. It may or may not be the last; time will tell. Might we avoid all this and allow people to invest in value rather than artificial demand? Have our representatives learned nothing in the last twenty years? I wish I could be optimistic, but I see interesting times ahead.

Vote For Me, I Only Take My Pants Off At Home

As a general rule, I don't comment much on social issues. It's not that I don't care about them, but I'm hardly a poster boy for the family values set. I make no claims to marriage counseling skills, relationship building formulas, or advice for the lonely at heart. However, given the twin SNAFU's in the Republican ranks of late, I think remaining silent would be a mistake.

I think we can all agree that fidelity is a good thing and infidelity isn't. And, it's not just for married people either. Fidelity to ones country, ones family, ones cause, ones friends, and so on, is a good thing. Go down the list and fidelity is always better than infidelity. The point overlooked here is that even by bachelor standards, (yes, there is such a thing) both of these guys are seriously unhinged. Let's start with Governor Sanford.

Argentina? The guy went all the way to Argentina just to get a little sugar in his coffee. Had he gone to the Adirondacks, like his staff said, and picked up the first cutie impressed with his clean fingernails, I could skip this post. I mean, I might drive to Dayton for it, maybe as far as Fallon even, but Argentina? For God's sake man, get a grip. The rule here is that anytime you have to board an airplane to chase a skirt, you've probably lost all sense of perspective.

And then there's our own Senator Candypants: Cheated on the wife, strike one; she was married, strike two; and here's the kicker. Never, ever, ever, never, ever fish off the company pier. Never. Ever. Or, as an old friend once explained it, 'A dog don't eat where it shits. It's just common sense'. If your amount of common sense is something less than the average canine, you have no business being in the front yard.

Now then, since we Republicans are in a back-to-basics mentality, lets revue; near = good, far = bad; single = good, married = bad; friend = possibly good, co-worker = bad. It's not that difficult. If you're having problems, perhaps you could make some flash cards. I'll bet the wife might even be willing to help.

I'm glad we had this little talk.

Keeping Up With The North Koreans

I don't remember hearing about this when it happened, or maybe it was one of those news items that went in one ear and out the other. The article describes a gunfight on Dec. 22, 2001 between the Japanese Coast Guard and a suspected North Korean "spy ship". It makes for some pretty sobering reading in light of the UN Mandate regarding vessels suspected of carrying nuclear contraband.

There is also some naval maneuvers described here regarding the North Korean threat to launch a "test" missile towards Hawaii.

With all the attention on the Iranian's fight over who will represent the Mullahs, it seems to me this is the more important story. The attention on Iran could be short-lived. Happy Father's Day from the Axis of Evil.

Fed Transparency

Texas Congressman Ron Paul's Federal Reserve Transparency Act (HR 1207) now has 234 cosponsors including Dean Heller (of course), and Shelley Berkley, along with 64 other House Democrats. From the summary:

Directs the Comptroller General to complete, before the end of 2010, an audit of the Board of Governors of the Federal Reserve System and of the federal reserve banks, followed by a detailed report to Congress.

The cozy relationship and cronyism between Wall St. and Washington would surly make for some interesting headlines in the future.

Meanwhile, over in the Senate, the companion bill, S.604 has only 2 cosponsors and is currently in the Committee on Banking, Housing, and Urban Affairs. Neither Nevada Senator has spoken about it. Senator Ensign has been a little preoccupied with a zipper malfunction lately, and Senator Reid presumably wants no part of it; the Senate Bill I mean.

Progressive Roots and Silent Tigers

When I was little I would sometimes ask my Grandma to tell me a story about "the olden days". She was born in 1892 and she was a Grandma straight out of central casting; short, plump, with wavy gray hair and enough wrinkles to make a prune jealous. She would always start with "Things were very different when I was a little girl". She'd then go on to tell me about Christmas Day supper - no presents, block ice delivered by horse drawn wagons, and all the things one could buy with 2 cents. She had seen many wondrous inventions like airplanes, washing machines and deodorant for men, but she never said a word about politics. That, apparently, was Grandpa's realm.

He had grown up in the mines, and was a solid pro-union Democrat all his life. I learned later, much later, that he had also been a bit of a drinker and a "brawler" before Grandma made a church-goin' family man out of him. That would explain why Grandpa didn't like to tell stories to little boys about "the olden days". Too bad. I'm sure he must have had some classics.

So now I'm reading Jonah Goldberg's Liberal Fascism as part of the Voxiversity group. For the record, I went 9-1 on the first quiz. Vox seems to be taking his time with this one, so I've been able to read ahead. The first 3 chapters cover the early years of Mussolini and Hitler, and a thumbnail sketch of the life and times of Woodrow Wilson. What is most striking about this time in our history is the popularity of fascist/socialist ideals.

Democratic Capitalism was seen as having run its course. It was too messy, too chaotic, with too much wealth and power concentrated in too few hands. Liberty and individualism would need to be replaced. It would be easy to demonize the early fascists/socialists, call them misguided, put them in a nice, neat little box and label them as damaged goods. Easy, except for the fact that they had no foreknowledge of what would transpire in the coming decades, and for me personally, the case of Grandpa's tigers.

In my mother's house are two pictures of tigers. They are finely woven with silk thread in the oriental style. Grandpa received them as a gift from a group of Japanese miners for his efforts in improving their working conditions. The exact details of what he did are unknown. Did he risk his next promotion? Did he risk his job; his life? Did he get what he wanted, or settle for what he could get? Nobody knows. Grandma did most of the talking. We only know that he helped them somehow, and they were grateful. Which brings us back to the importance of individual liberty.

No matter the system, it is the individual that senses injustice, judges right from wrong, decides on action or non-action, and ultimately learns to live with his own conscience. When the meetings are over, the arguments made, the deals cut, the doors close and we have only ourselves to combat. Collectivism can do none of these things without appealing to and convincing the individual. The lone conscience, searching itself, will always have the final word.

Palin Hits Back

As if winning the election wasn't enough, the left continues their attacks on Sarah Palin. What are they afraid of?

Visit msnbc.com for Breaking News, World News, and News about the Economy

I have to love the "so-called comedian" bit. Nice shot.

Fascism 101

Voxiversity 3 is starting this week with Jonah Goldberg's "Liberal Fascism". Before any of my lefty friends out there roll their eyes, Vox says there's plenty in there about Republicans too. Just having read the introduction (the first assignment) Goldberg has already identified Compassionate Conservatism as fascist and says that No Child Left Behind would have been a good fit with Mussolini's school reform policies.

But, this will mostly be about the roots of the American Left. Up until World War 2 fascism was pretty popular in the U.S., and many of it's ideas are still with us. The turn of the 20th Century ushered in many changes in the relationships between government, business and the military in our country. It's an important time to study.

There are 2 big problems with the study of fascism. 1) There is no consensus as to what fascism is. A lot depends on the culture it arises in and the personality of the leader. It is not necessarily racist. 2) The Holocaust tends to overshadow any debates on the subject. The anti-semitism in Germany was not matched by the Italians. Two surprising facts are that there were several Jewish fascists serving in Mussolini's government up until the Nazi invasion in 1943. Fewer Italian Jews died in WW2 than in any other European country except Denmark. Not all fascists were/are Nazi's.

If anyone is interested, you don't have to sign up for anything; just get the book (available in paperback) and be ready for the first quiz on Saturday. Having watched the first 2 voxiversities go by, I'll warn you; Vox keeps a pretty brisk pace, so it will take a serious effort to keep up. Assuming I'm not culled from the herd, I'll be posting some updates as I go along. It should be fun and enlightening.

Remember

The Negative Interest Rate Explained

There have been several articles written over the last moth or so about the possibility of negative interest rates. Conventional wisdom holds that interest rates can not go below zero. With the Fed Funds Rate currently at 1/4%, any further action by the Federal Reserve would have to be negative. Raising interest rates would be the smart thing to do, but is politically unacceptable. So, are negative interest rates possible?

The easiest way to understand the idea is explained by Alex J. Pollock writing in American.com:

Would anybody rationally pay $1.02 for $1.00 in cash? They do today, if they take cash as a non-customer from an ATM. The average ATM surcharge fee is about $2. For a $100 withdrawal, that is equivalent to a price of $1.02. Alternately thought of, if a $200 withdrawal were cash for one month, the average fee would be equivalent to a negative 12% interest rate.

Currently, the banks are using the bailout money to increase their deposits with the Fed in an effort to cover all their bad loans and toxic assetts. One way to get the banks to release the money would be for the Fed to "go negative", giving the banks an incentive to put their newfound wealth somewhere else.

The problem for the Fed right now is that all other interest rates, including passbook savings accounts, ultimately take their cue from the Fed Funds Rate. Imagine the political fallout when us commoners are not only paying to bailout the banks with our tax dollars, but seeing our savings drained by those very same banks. The resulting bank run would not only bring on the collapse of the Federal Reserve System, but would surely spell the end of several political careers.

It's the proverbial rock and a hard place and a good reason why I believe the Federal Reserve System is about to be replaced, either by choice or by default.

Correction(s)

In case anyone missed it, Jillian's Dad left a comment that reads in part:

They (the Mitty Monarchs) were playing for the Division II California Central Coast Section Championship and with the win they remained ranked #1 in the country on both the ESPN and USA Today high school softball polls.

Apparently this citizen journalist needs to invest in a 99 cent notebook along with his fancy-shmancy camera. Management regrets the error.

Bernanke Loses Grip On Reality

Federal Reserve Chairman Ben Bernanke made some unbelievably stupid statements before a House panel yesterday.

“Maintaining the confidence of the financial markets requires that we, as a nation, begin planning now for the restoration of fiscal balance.”

Let's take a look at the "confidence of the financial markets" that Mr. Bernanke seeks to maintain. Here's what the confidence in Citigroup looks like:



Here's the confidence in Bank of America:



But wait, somebody's confident in Goldman Sachs:



The company with the inside line to the Treasury Dept. looks to be coming along just fine. I'm becoming increasingly confident that the game is rigged. Here's another pearl of wisdom from the chief:

“Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth,”

After 2 quarters of -6% GDP, and trillions of dollars poured down the toilet that is the financial market, this amounts to a deathbed conversion. Anything short of disassembling the Federal Reserve System, and throwing the bankers into debtor's prison, won't restore financial stability. Unfortunately, few of our leaders are set to "begin planning" for that.

Charts courtesy of bigcharts.com

Notes on a Spring Break

For part of my vacation, I went to visit my Dad in Las Vegas. In between a busy schedule of eating, drinking, and laying about, we managed to visit a few petroglyph sites in the area. Grapevine Canyon is about 50 miles south of Las Vegas and well worth the trip.



Unlike northern Nevada petroglyphs, which are carved into basalt and last for thousands of years, petroglyphs in the south are carved into oxidized granite. As the oxidation weathers away, the petroglyphs fade out. These are probably 2-3 hundred years old. Just judging from some of the designs, they're of a much more recent vintage.



We visited a few other petroglyph sites that weren't nearly as impressive as Grapevine Canyon, but in a meadow in Red Rock Canyon I spotted what I think is a wild Desert Orchid in late bloom. It's a rare sight, if that's what it is.



Speaking of wild desert flowers, I also met-up with E!!-lizabeth.



Yep, there I was, in a darkly lit uptown cantina, a rum and coke in one hand and a steak sandwich in the other, plotting revolution with a classy dame. Man, I love blogging.

Then, it was back to San Jose to watch my niece, Jillian, play for the Central Coast Catholic League Championship. With 2 outs and a runner on 3rd, she stepped up to the plate...



They went on to win 3-0, finishing the season 32-0 and ranked 1st in the state. Some will say this is the result of good parenting skills. True enough. However, the effects of good uncling can not be overstated. It is the drinking of half of the dad's beer that allows good parenting to take place. It takes a village, don't-cha know.

Experts Grasping At Straws

I'm sure I'm not the only one to notice this, but the blame game over the economic situation seems to have entered full tilt boogie mode. First, it was all Phil Gramm's fault, no wait, it was Bill Clinton. Hang on a minute, it was Jimmy Carter's fault, no wait, it was Allen Greenspan that caused it all. Just a second here, what about Barney Frank? Now, here comes Paul Krugman blaming Ronald Reagan. It's awfully nice of Paul not to leave out the 'ol Gipper. Blaming the only dead guy in the group will surely end the argument.

Meanwhile. Vox Day continues painting the big picture uninterrupted:

...I doubt that it is necessary to do much more than wait for events to take their course. Pyramid schemes always fail in the end, and there are an increasing number of signs indicating that the post-Bretton Woods reserve currency system is rapidly approaching terminal status.

So bring it on boys, those of us at the bottom of the pyramid are as ready as we'll ever be. Solve the debt problem by creating more debt. Solve the over spending by spending even more. The sooner the collapse comes, the sooner the madness will stop. Maybe then someone in the expert class will ask the right question; Who was doing something right when things were going well?

On Vacation

At 5PM Friday I'll be off like a prom dress for some much needed and overdue R&R. I'll be away from computers most of the time, so my experiments in digital technology are on temporary hold. Not that there has been a lot of progress lately, so maybe a break from blogging will be good for me too. I'll be back in a week or so.

Geese Are Really Smart

It came to my attention recently, that certain Reno bloggers don't like geese. I would like to remind one and all that geese have several swell character traits. The following video may be old news to some, but I think it will prove my point.

1)It is an established scientific fact that geese enjoy the company of humans.
2) Geese hate Fabio.
3) Therefor, Fabio is not human.
4) Geese, having figured this out, are really smart.

Notes from a Bystander

There’s been some interesting developments in the Reno blogger community lately, regarding first amendment rights and freedom of speech. It all started in an obscure corner of the world; women’s soccer at UNR. As the lawyers gathered, Ryan Jerz weighed-in with an opinion of it on his blog. Since Ryan’s interest in sports far exceeds my own, my initial reaction was something like, “I can’t believe he follows women’s soccer (?).” It was easy to pass it off as just another quirky interest of a fellow blogger.

But, it soon turned into more than that. The hyper-active soccer coach filed a defamation suit, of the harassment type, against Ryan, forcing him to take down his post. Bob Conrad wrote a 4 part post on the whole ordeal, and AG and LB have also written about it. Their posts and the comments sections make for some thought provoking reading.

There are a handful of bloggers that have been a lot of help to me over the past several months, and Ryan Jerz has certainly been at the forefront of that. There have been times when it appeared that Ryan was promoting my blog more than I was. I sometimes wonder how it is that I’ll ever be able to return the favors. It’s clear to me now that I missed an opportunity. Not that I could have offered any legal advice, or gone into high dungeon about the proper role of a free press in a free society. But, a simple note of support would likely have been welcomed, and certainly would have been better than nothing.

I don’t blame Ryan one bit for being disappointed in the general lack of response. The term “blogger community” is probably overstating what we have here. There are some loose-knit bands and temporary alliances, but no real community. In an effort to keep the conversation from fading away, I’d like to point out that along with freedom of speech issues and other high moral principles, there are some basic human principles to consider as well. Two of them would be giving back for what one has received, and sticking up for one’s friends.

It’s true the landscape has changed. It’s also true that we have it within our power to create what we wish, and one person can not build a community by himself.

About That Government Transparency

Nick Gillespie of Reason, has a video interview with Mike Pickett, CEO of Onvia, who has recently created a new website called Recovery.org. It is in direct competition with the Obama Administration's Recovery.gov, which to date is reporting exactly zero of the stimulus money it was meant to track. Officials say they hope to have something on the site sometime in October, or maybe early 2010. Onvia's site is already tracking over $40 Billion worth of stimulus money and estimate they will be tracking $100 Billion by October.

Onvia is in business to help small, independent contractors nationwide place bids for government projects. It's in their own self interest to provide a transparent accounting of the stimulus money. You can go to their website and call up any state, county, and/or city and watch the gravy train roll by. In the meantime, score one for the greedy capitalists.

Lockwood Goslings

I was out in Lockwood for part of the morning scoping out a spot for Episode 2 of "Tales from the Rue de la Noir." Normally, the geese there stay on the far side of the river where there's less people and no dogs. Today two groups came over to the near side. I got a couple of shots before the parents got nervous.

Tales from the Rue de la Noir

In episode 1, a classic masterpiece of Johann Sebastian Bach is taken out of context and cut to pieces for the puerile amusement of the global community.

On a personal note: My first effort is pretty sloppy, with lots of room for improvement, but I think I'm getting the hang of it.

Towards a Tangible Value Economy

I don't know if it's the fact that politics has become too depressing for me, or my preoccupation with my new digital toys, but I'm still paying marginal attention to the news. On President Obama's plan to reduce the importance of Wall Street though regulation, my Libertarian Thought Leader of choice, Vox Day lays it out in one sentence:

So long as the paper money system exists, the easiest and fastest way to obtain more of it is to play paper games.

Regulating Wall Street beyond that of other markets, will only drive the brightest minds towards those other markets. The root cause of our dilemma is that the Federal Reserve Note has no tangible value. It is only an I.O.U. from the government to the people, based on the people's trust that the government will still be with us tomorrow, presumably to hand out more I.O.U.'s. It's difficult to see the government going anywhere any time soon, so the trust is maintained, if only slightly.

If, on the other hand, the dollar was backed by gold, silver, or any basket of commodities, it would take on a tangible value independent of anyone's level of trust. With a tangible valued currency, the best minds would gravitate to producing tangible assets, as that is where the most value would be. Manufacturing, intellectual property, even farming would assume a new importance. Who knows, newspapers might make a comeback.

It's an idea that used to work, and could be made to work again, if only our "leaders" would try it. What, real assets traded for real money with all having real value? Nah, just another wing-nut idea from the hinterlands.

Gosling Update

It's only been a week, and the goslings at Rancho San Rafael are noticeably bigger. They swim a little, nap a little, but mostly they eat.

The Specter Trade

Republican Senator Arlen Specter was traded to the Democrats today for an undisclosed amount of cash and a governorship to be named later. In a prepared statement, Coach Harry "Silver Tongue" Reid said of the deal: "Arlen's unique abilities to drone on and on without ever coming to a point will be very helpful in the upcoming health care debate. We welcome him to our team."

Not all Republicans were happy with the deal. Maine's Olympia "White Shoes" Snowe, after expressing disappointment in not being part of the trade said, "I hope this doesn't mean that it's going to be all principles all the time now. It's so tedious. I just don't understand it. What's the point of having principles if you can't ride around in a limousine the rest of your life?"

Republican coach Mitch McConnel stated: " We really wanted to make Olympia part of the deal, but we were up against the deadline and couldn't get it done. They were only willing to give up a county commissioner seat in DeBuque for her. We just couldn't make it happen."

Team Democrat now has a virtual "Murderers Row" of gasbags to overwhelm all opposition. Coach Reid even went on to speculate that after ramming through everything everyone ever wanted, they may try to make history by redirecting the course of a tornado later this summer.

Tales from the Rue de la Noir

I spent most of the weekend shooting meaningless and mostly unusable video. One of the places I went, for no particular reason, was Lockwood, up the canyon east of town. They're building a park there called Lockwood Trailhead. It looks like it will be pretty nice, once the landscapers are finished. I also saw another set of goslings, but the parents were nervous so I couldn't get a good shot of them.

As I was leaving, I drove into the town of Lockwood, which isn't really a town but a trailer park. It's not half bad, as trailer parks go, but I had to laugh at the street names. They're all in French. There's names like Avenue de Colours and Ave de la Argent. I believe that should be Ave de L'Argent, but what do I know. My knowledge of the French language is roughly equivalent to that of your average Trailer Park Planning Commissioner. Apparently, whoever names these things believes that fancy French names add glamour and status. They don't. They do however, force you to explain why you live on a street with an idiotic name. The conversation might go something like this:

Person 1: So, where you livin' now?
Person 2: I'm over on the Avenue Da Champs Da Leezay.
Person 1: (pause) What?
Person 2: I say I'm over on the Avenue Da Champs Da Leezay.
Person 1: (pause) Where the hell is that?
Person 2: It's the trailer park.
Person 1: Oh.
Person 2: Yeah, when you get there, just keep goin' straight and it's just past Rudy Culldisack Street.
Person 1: OK.

My personal favorite in Lockwood is the Rue de la Noir. I could imagine drunken dance hall girls careening down the dark, foggy street, and being a trailer park, may not be too far off the mark. Could a modern day Toulouse Lautrec be sitting in his driveway, painting portraits of lawn gnomes while discussing the philosophy of country music with his neighbors? Would the spectre of Edgar Allen Poe appear through the early morning mist? I don't know, but it's a great name for a video series. The challenge will be, to find something the least bit entertaining in Lockwood.

Reno's New Arrivals

Yep, it's definitely springtime.

Memo To The Grasshopper

I regret to inform you that your job as mascot of Local So-And-So is being phased out. You have done your duty well, my little friend, but the situation has changed. The world turns, and time is a friend to no living thing. It's not even a friend to a picture of a living thing. At least, I assume you were alive when your picture was taken. Anyway, plans for the entire stock photography library have been put on indefinite hold.

As I'm sure you're aware, the blogoshere being what it is, we all need to keep pace with the times. As we transition to original content, your arrangements in the hard drive will remain the same. Remember, communicators never say "good-bye", only "see you later,", or words to that effect. I will always admire your symmetry, your simple forthrightness, to say nothing of those cute little antennae. But we must part ways. Both you and the hippopotamus will still be invited to the company picnic.

Sincerely,

Local So-And-So
Purveyor of Fine Quality Social Media

Reid Fundraiser Protest Video

Duty called and I was stuck at work on Wednesday, so I missed the TEA Party protest. I managed to swing by the Harry Reid fundraiser later that day. It was reported that Republican Mayors Bob Cashell of Reno and Geno Martini of Sparks would be at the Democratic Senator's fundraiser. Naturally, a few Republicans were a little annoyed with that. Of course, I muffed the money-shot of Mayor Martini leaving the building with a sheepish grin on his face. Maybe it's just as well, unlike Mayor Cashell, Martini at least had the guts to exit from the front door.

Homemade Charts

Yeah, it's been quiet around here lately- a little too quiet. In between messing with my new camera, video editing demos, and format conversion programs, I've reached one of my long-term goals; making my own charts. My method was to start with the most grandiose idea I could imagine, and as the number of failures mounted, work my way down to the simplest thing possible.


This chart shows the Consumer Price Index (CPI) measured against the value of the 1793 dollar. In other words, if you had earned $100 in 1793, the first year of production for the US Mint, you could have bought $100 worth of stuff. But, if you had saved that money until 1794, how much stuff could you have bought then? What about 1795, 1796, and so on, until 2008.

There are several points of interest in this method that I'll be exploring in more detail later. One hears economists talk of the strength of the dollar today, but this is true only if it is measured against other currencies. It is a subjective value measured on a subjective scale. The year 1793 provides a point of reference for an objective scale. The dollar's value has always been, and will always be, subjective. It's the nature of the beast.

Japanese Robot Women To Invade Moon

Hardly a week goes by that I don't see a story regarding Japanese Robot Women. This time, they are preparing to land on the moon.

Photo from Drudge Report

I can think of only three reasons for the Japanese Robot Women phenomenon:

a) Japanese scientists really need to get out more
b) Critical equipment can only be located in the area of the bust line
c) Both a and b are true

I'm beginning to think the Japanese scientific community owes the world an explanation. Shouldn't the leaders of NOW be raising concerns about this? As yet, there's no word on whether or not the moon rocket will be equiped with dual nosecones.

And here's another one. A Japanese Robot Man, named "Adam" has made his own scientific discovery involving yeast enzymes. But, not to worry. Adam is only a prototype. Eve is under construction. According to her creator:

“Eve is better designed and more elegant.”

Well, being better designed kind of goes without saying, doesn't it fella's? And elegance, everybody knows Japanese Robot Men are obnoxious brutes. They can't even tell the difference between a soup spoon and a soup ladle. They'd probably drink out of the gravy boat if left unsupervised. Yes, better to send the Japanese Robot Women to check the place out and make sure it's OK for the Japanese Robot Children. There's no telling what the moon would end up looking like if the Japanese Robot Men landed first.