The Dow Jones Industrials dropped 189 points Wednesday following the Federal Reserve meeting at which the reins of power (money) were handed over to Janet Yellen. Hopefully, Gen Bernanke’s first task now will be to write a follow-up book to his Essays on the Great Depression. However, I’d suggest a cooling off period of 4-5 years so he will have additional data about the now-emerging Depression Deux.
You’ll have to pardon my artwork here, since our art department has had massive layoffs and I can’t seem to train the cats to run CorelDraw, but the scrawl on the right shows how Fed policy since the 1999 peak of the Internet Bubble has been a series of serial bubbles over the valley of National Financial Death, through which the River of Ruin runs and threatens to take all with it.
You may recall a while back that IMF bossette Christine Legarde warned of deflation risks, too. This is not a US-only problem.
But, at the same time, the Fed is discovering that quantitative noodle-pushing has its limits, too, and as a result they took $10-billion of free money off the table at their meeting Wednesday and were hoping that it would not cause panic.
Well a 190-point drop in the Dow may not seem like a big deal, but we can’t help but wonder what will happen when critical support at S&P 1770 breaks. Will support around 1,725 and then 1,680 be in line to fall, too?
The Fed has a problem: How to you put a whole country into economic rehab without blowing off another round of jobs?
The rational answer is, you simply can’t which is why – despite looking like a minor rally was expected at the opening of today’s trading – I don’t trust this market any further than I can throw it. China was down another one half a percentage point last night, And Japan dropped a further 2.45% and is now threatening the psychologically important 15,000 level.
In early European trading, Germany, France, and England were all down about a third of a percent, which would translate to the Dow down another 50, or so. But the problem here is this: Once we get a convincing close under 1,770, then the way for much larger declines open and that’s when you want to have the preps for whatever all topped off.
The Daily Happy Talks
While we wait for the rest of the market to figure out near term direction (bounce then hard down) we can’t help but share the latest GDP report, issued by the Hallelujah Choir over at the Bureau of Economic Analysis… A quote from the Scripture According to Gubmint, please?
Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 3.2 percent in the fourth quarter of 2013 (that is, from the third quarter to the fourth quarter), according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 4.1 percent.
The Bureau emphasized that the fourth-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency (see the box on page 4 and “Comparisons of Revisions to GDP” on page 5). The “second” estimate for the fourth quarter, based on more complete data, will be released on February 28, 2014.
The increase in real GDP in the fourth quarter primarily reflected positive contributions from personal consumption expenditures (PCE), exports, nonresidential fixed investment, private inventory investment, and state and local government spending that were partly offset by negative contributions from federal government spending and residential fixed investment. Imports, which are a subtraction in the calculation of GDP, increased.
All of which would be fine and you might even be able to swallow, except for the fact that year-on-year container counts coming in were DOWN at west coast ports in December.
“Gee, Ure, what do you think is happening, then?”
Oh, golly, let me think: MAKING UP MONEY!
We will get fresh numbers this afternoon, but when M1 being printed up at a 9.5% annualized increase rate and M2 is printing at 5.8% annualized over the last three months, come on: What do you think will happen to the paper GDP?
Drought: First of Four Million?
No, my estimate of the possible relocation impacts from the drought in California are only hip-shots based on the modern-day impacts from a Dust Bowl-sized relocation scaled up to present day, but already we see the potential for a few of the 12,000 people who live in 17 communities to start “getting mobile” in the next three or four months.
The reason is that 17-communities are on the verge of running out of water.
I suppose that the good news is that a bit of mist and some very light rain is moving through Modesto, CA at this hour, but that won’t last long – before noon it should be ending – and that will leave the area 2.4 inches or more short for the year to date.
On flip side of weather, the snow and ice that slammed Anchorlanta (Atlanbanks?) this week is being blamed for 13-deaths. I’m not sure terms like “post apocalyptic world” are right. How about “winter” instead?
Dark Shadows of the PowersThatBe
In yesterday’s Peoplenomics report I unveiled a new concept that I want everyone to be watching for: the “Gentlemen’s War” between Russia and the West/EU which boldly told Putin in a press conference this week that the EU has expansionist designs that would extend its treacherous reach from “Lisbon to Vladivostok..”
I’m not the only one to pick up the innuendo from the press conference Tuesday…it’s showing up in Ukraine media, but few in the West realize the power grab in play.
While headlines this morning are still trying to whip things up (at the West’s direction) our consulting wargamer sees things similarly:
Putin is probably the most skilled at realpolitik of all the world’s current leaders, doing what is best for ‘his’ Russia vice doing what is morally and/or globally right.
I like your ‘chess match’ analogy. Putin completely understands the NWO agenda, while the PTB collectively recognize the formidable power that Putin wields from Europe across the Middle East to the Pacific Ocean.
Obama may be totally in the PTB’s pocket, but Putin remains a dauntingly defiant single-state force that must and will eventually be reckoned with. That is when things will really get interesting
For those a little short of coffee, here’s the new West/EU global elite/New world order takeover plan: Pick the “next country” wanted. Recently, they trying Syria. So the game was to support the opposition – even if al Qaeda-linked – in order to topple the government.
Now, we see the same smarmy attempt being made in Ukraine…Western dough coming in to agitate and steel influence from Vlad Putin.
Now, since the West is buddy-buddy with AQ (at least in Syria) Putin knows that his hands are tied until after the Sochi games. But when those are done, look for Putin to start calling out the NOW’ers of the EU who fancy themselves able to steal directly elected government from people foolish enough to follow their crap. Tossing one more good country (Ukraine) doesn’t turn their sack of crap financial picture. It just makes them too big to fail…power mongering pricks.
But, I don’t have any strong feelings, mind you. Just calling it like it is. Near as I can figure it, about here Putin is “pissed but patient.” Until Sochi wraps up…
Meantime, I betcha the Russians will be asking the Volgograd bombers some questions – and maybe with a little chemical or liquid help – will likely ask about where the backers were front…
Immigration: If you can’t beat ‘em…
Of course, there is a practical answer to all the hot emo tricks being used to pull the wool over everyone’s thinking on this: Grant people coming to America exactly the same social benefits they would receive in their home country. No welfare check in Mexico? None here then. Would a ‘norte’ be exported to the US? Hell yes. No free school, welfare, or drivers licenses for us down then. Screw it! Turn about is fair play.
The reality is that we desperately need an underclass so what used to be the American Middle won’t figure out how they’ve been screwed out of middle class membership. Bringing in hoards of poor will also help Social Security, too.
But it’s all a terrible cover-up. Past congresses screwed the pooch by squandering the national budget (Hear the joke “Social Security TRUST Fund?”) and now we need an “instant underclass” which is why cheap-ass business execs are stumping for cheap illegal labor. Has nothing to do with “rights” – and everything to do with maximizing profit.
While the left and sold-out right (amazing how these sellouts can be led around by their campaign money) few media will put it as plainly as the Patriot Post put it when they wrote “Amnesty: A Disaster for the American Worker.”
While Fearless Leader panders to federal workers with his $10.10 minimum wage decree, the American working class is getting screwed with the instant import plans for 11-million felonious job thieves.
Oh, and those corpholes who encourage illegals to come in and work on the cheap? Ever read Title 8 Code § 1324 – Bringing in and harboring certain aliens?” That “earned the right” guy at DHS doesn’t see it as the law, apparently. No busts that I’ve seen…
Instead of standing up to high corporate prickdom, both sides of congress have gone limpdick and have forgotten who’s in charge of America. Rollover for them, bend-over for us working folks. ‘Merica: The land that used to be…
Meantime, the Texas Department of Transportation – the same geniuses who figured how to squander money on toll roads so only the rich would benefit – are now looking at connecting up with the high speed rail Mexico is building to border towns. Missed that little story, did you?
You do, my friend, live in the North American Union now, it’s just the Washingtonians forgot to clue you in on the name change. Laws? Constitution? We don’t need no stinkin Constitution. The fix is in, and American regular folks have been outbid.
Didn’t you learn anything from those auto bailouts?