Fed: When in Doubt, Hint the Print

imageCrack head Santa rally to continue:  It’s still the Roaring Twenties.

I bet you didn’t know the Federal Reserve had its own flag, did you?

Well, whatever.

The reason for the massive rally in markets yesterday was that the Fed could see, just as we pointed out to subscribers, that we were sitting on the critical 200-day moving average.

If you hadn’t learned this already, what happens is most money funds will dump equities and run screaming with their hair on fire when the market closes below the 200-day moving average.  So that couldn’t be allowed to happen. 

Of course, it  happened anyway, but for now this is the Santa Rally that we’ve been calling/waiting for.

It is overdone?

Of course.  Reading this part of the Fed Statement you might not see the change:

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced. The Committee expects inflation to rise gradually toward 2 percent as the labor market improves further and the transitory effects of lower energy prices and other factors dissipate. The Committee continues to monitor inflation developments closely.

If you were a wild-eyed trader, though, the only part that mattered was this:

Based on its current assessment, the Committee judges that it can be patient in beginning to normalize the stance of monetary policy. The Committee sees this guidance as consistent with its previous statement that it likely will be appropriate to maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time following the end of its asset purchase program in October, especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal, and provided that longer-term inflation expectations remain well anchored.

What that is really saying (without saying it – there’s an art to this stuff) is that the Fed would really like to have a healthier economy, but doggonit, ain’t happening.  So the bargain-basement rents on money will persist.

What this means is there will be easy money to reorganize failing oil shale operations, and so on.  Still, with oil only up to $58 and change, there’s still a massive problem with deflation of energy prices.

This “easy going” Fed has been met with a kind of global “Mikey Likes It”  Japan was up 2 and a third percent overnight and several Euromeister markets were sitting with 2% gains as well, although the staid Brits were up a lousy percent and a fraction earlier.  They get more excited about cricket.  Besides, cozying up to Cuba might hurt Grand Turk or Cayman banks under, lemmesee which flag was that, mate?…

A big winner was gold, but it pulled back a bit when someone besides me figured out the “be patient” doesn’t mean the sky is opening up and money raining down on the public.  We still have problems like deflation, a government that doesn’t listen to the electorate, and oh, yeah, North Korea which has managed to keep Sony from releasing the movie “The Interview” over Christmas.

To recap:  Print more money to continue the illusion, cave in to NK hackers, and keep setting up game pieces for war to come over the energy resources of Ukraine.

The Ukraine Gambit

Speaking of which, the NY Times has a dandy article about how economic concerns may force Russia into a deal over Ukraine.

While the article goes out on a limb and trying to present another US bullying option (additional economic pressures to come), I’d suggest that someone back in the District of Confusion remember the wisdom of that great foreign policy advisor Janis Joplin who wrote:

“When you ain’t got nuthin, y’ah ain’t got nuthin’ to lose…”

Every time we tighten the screws, we are making the red light special that much more appealing.

Russia is (and has been since ICBMs were invented, only one 20-minute push-button from ending such threats.  And has anyone else noticed how Putin is taking a very, very hard line on troubles hitting his country?

Opening With Cuba

President Obama has announced a breakthrough in relations with Cuba that began with an exchange of spies this week.  But, as the Washington Post reports, the deal has been in the making for a year and a half.

The opening, negotiated Tuesday by phone with Raul Castro, sets the stage for there to be a flurry of economic activity in south Florida, which would directly benefit from a resumption of relations.

Still, anti-Castro forces will not be friendly to the warm-up; realizing from bitter experience how strong-man regimes crush opposition.

For now, though, this has to be the first real evidence that the Nobel Committee wasn’t completely wrong back when.  If relations are fully normalized, otherwise it’s just the one worlders taking over Cuba they way they attempted to take over Libya.  And look what it got Muammar Gaddafi in the end.

The China Problem

Meanwhile, although it was hailed when Nixon opened relations with China, look at where that has gotten us:  Gutted our US Industry with offshoring and jobjacking.  In hock up to our butts…  And now we’re reading about how China has launched a missile that has been MIRV’ed.

While China continues to buy up US property and facilities with the money went were forced to borrow from them, seems to me this move to develop MIRV’s could be taken as a sign of something, but I’m not sure what….

Lon as we’re at it, kudos to former prez Bill Clinton for passing on the technology to them to make it possible.

Why just think what Hillary could do, eh?

Scrying the Future

EIA data on energy is due out this morning, which might deflate that 181 point pop that was expected in the Dow open  this morning.

Add to that tomorrow being quadruple witching (options and a bunch of other stuff comes off the table).

Best guess would be a big, hard pop into mid day, and then a retreat Friday, that’s because options indices expire at tonight’s close and with a nice down day Friday, that would give the commercials a nice Christmas & Hanukah present.

Someone’s gotta get rich, just not you or me.

If you really think the market is in a sustainable rally, two thoughts:  Numero uno:  Baltic Dry Index dropped another 13-points this morning to a depressing 814 reading. 

And the robots are still coming to get your job:  Roomba has announced a 3D printable robotic that you can download and print to clean your house; loser: humans.

Now, go yee forth, verily, verily, and  personally save the economy, would you?  And may the Government that passeth all understanding, be with you.

Coping: with Cat-Knockers

imageNow that we’re getting into the eggnoggy time of year, we can all relax, knowing the Fed is going to print however much money it takes to fan the dying embers of inflation while deflation rages on.

This leaves me time to get on to the all-important task of inventing technological breakthroughs which I offer you this morning, free of charge..

I’m big on properly trained pets.  Zeus the Cat has turned into a pretty fair copy editor (so much so that people notice the lack of creative typography here lately). 

Zeus behaves pretty much like a dog:  Comes when I whistle for him, drinks out of a water outlet outside, stares at what he wants and meows for it, sits for his meals and even sleeps on my feet on cold morning’s like this one.  Almost a dog, although I have thought about a Jack Russell terrier.  Main thing about cats is they bury their waste, and I’ve stepped in enough dog piles to last me a lifetime.  So dog training, applied to a cat, seems to work for us.

Circling back to the point (which I inadvertently do now and then):  When I put in the outside door to the new recording/studio room, I made the mistake of letting Zeus in when I heard him scratch on the door.

Unfortunately, this led to him enjoying clawing at the door and that began to degrade the outside weather-stripping.   Hmmm…looked like crap so what to do?

One of the nice things about being half-crazy is it’s easy to let the creative juices roll on command.  What was I really after?  What was the cat after?  What would be the most interesting and novel solution to the problem?

A Cat-Knocker!

As shown on the diagram above, this is about a 2-minute project.  All you need is a strip of thin paneling which is the backer board and through this you screw a fairly loose hole so your knocker pendulum will swing freely.

For the knocker pendulum itself, I used a piece  of scrap that was about 14-inches long and about 3/4 deep by an inch wide. 

Mount the backer with two countersinking head screws (behind the knocker pendulum so they don’t show) after first attaching the pendulum with a screw and backing it out half a turn so the pendulum can swing freely:  Presto!  A Cat-Knocker.

Why no one else has built one of these obvious-as-hell inventions brings me to the first point of this morning’s column:  Lots of people have torn up doors where their pets have ripped the door and door jam to shreds. 

But of all the folks I know with pets, nary a one has seen the problem for what it is (an opportunity to invent some little doo-dad like this one) and solve the problem in a graceful way.

What’s more, unlike other designs which are already on the market, my approach offered this morning doesn’t involve batteries.  But, if you are interested in a really high tech solution, you might consider something from literally dozens of other options.

One is this Pet Door Bell and for $50 or so you can set up to the Cat Doorbell – Wireless Indicator for your Cat.

All of which scurrying to the marketing books to work out a clever feature lists for my little cat-knocker.  Let me see…. it’s:

    • Made of 100% recyclable materials
    • Not covered with dangerous coatings
    • Pre-sanded, paint to match your own door
    • Invisible installation system
    • No batteries to wear out or replace
    • Safe for use around children
    • Works on left or right-hand doors
    • Installs on the door jam – nothing to trip over
    • Requires no maintenance
    • Hear up to 20-feet away

    And so we (finally, thankfully) arrive at the point of this morning’s scrawl:  A good marketer can always think up at least half a dozen features for even insanely simple products (two pieces of wood, one of which has a predrilled hold in it, and three screws).

    All that’s needed now is some packaging – and there will probably cost as much (if not more) than the materials for the Eco-Cat Knocker itself.

    With a name like that, I was figuring to get an endorsement from Al Gore, hisself.  I have to look into whether the Sierra Club does product endorsements, but them of Greenpeace would be fine.

    The next step would be to partner up with the guy who invented the new toilet paper that has no throw-away rolls on the inside of it, and get really serious about re-visioning the low level products of life; the ones we use every day and don’t spend any time thinking about…

    Already I’m looking at a hunk of quarter inch rebar to update existing toilet papers holders to the new “no roll” variety.  I reckon about the only cost would be for the quarter-inch rebar, about 6-inches long…and that will get me into seeing if there’s an SAE or Metric or ANSI spec for the width of toilet paper. 

    We are absolutely flush with profit potential for the new venture.

    Be sure and drop my tomorrow as I unveil my new eggnog dispenser..  These breakthroughs are going to make us all rich, I tell you.  In all seriousness; or at least some of it.

    March of Robots

    Sugar Plum Fairies seem a lot less threatening that artificial intelligence (AI) if you’re following:

    George… not a member but love your site! Here’s a great link to a TED talk about AI that ties into your article on computer/machine learning.
    Sounds like the birth of Hal and The Terminator is at hand!

    Thanks to reader Michael for the tip.  Now I just need to find 20-minutes…

    Tiny Bubbles

    A reader asked “How do I read the comments on your website.”

    Simply look for the little bubble quoty-thing upper right above the first article in a batch.  The tiny bubble thingy.

    Tex-Abuse or Truth?

    Getting to the time of year when people with free time on their fingers forward Tex-Abuse stories.  Like this one:

    “A young Texan grew up wanting to be a lawman. He grew up big, 6′ 2″ strong as a longhorn, and fast as a mustang. He could shoot a bottle cap tossed in the air at 40 paces.   

    When he finally came of age, he applied to where he had only dreamed of working: the West Texas Sheriff’s Department.  

    After a series of tests and interviews, the Chief Deputy finally called  him into his office for the young man’s last interview.

    The Chief Deputy  said, “You’re a big strong kid and you can really shoot. So far your  qualifications all look good, but we have, what you might  call, an “Attitude Suitability Test” that you must take before you can be accepted. We just don’t let anyone carry our badge, son.”    

    Then, sliding a service pistol and a box of ammo across the desk,  the Chief said, “Take this pistol and go out and shoot:  six illegal aliens, six lawyers, six meth dealers, six Muslim extremists,  six Democrats, and a rabbit.”   

    “Why the rabbit?” queried the applicant.    

    “You pass,” said the Chief Deputy. “When can you start?”

    I’ll leave it to you to discern whether this really happened, but I heard it was just east of the Pecos River.

    Time to head off to see how my ink stocks are doing, now that the Fed is planning to use more. 

    Write when you get rich or break-even.

    George  george@ure.net