For those who missed Wednesday’s trading session (Dow –160 and S&P down to 2,058.9) it wasn’t a whole lot of fun.
Later today, I’m sure my consigliore will call to scream victory since he’s been a fan of the End-of-Year rally for several months now.
Normally, that wouldn’t be a bad thing. Except that if the top of this pig is really in, then we ought to be able to test some of our long-standing theories.
One is that from a top, a real “crash” develops around the 55-day mark.
Since Yahoo is kind enough to keep daily trading stats on the S&P in public view here, all we would need to do is thumb back through the data until we come to the recording closing high from 2014 at 2,093.55.
Looking at the intra-day highs, that occurred on December 29th, which is more than ample reason for my consigliore to score the point.
Since Excel is better at math than me at this hour, that means a crash date around February 22nd.
Since that is a Sunday (and I was supposed to be a cruise ship that day) the collapse will happen either before, or after that weekend.
One possibility is Friday the 20th, but there’s a problem with that: It is a holiday-shortened week. President’s day is February 16th. So the week before should see a minor bounce (the holiday effect) and then the market should be retesting lows put in back in October 2014 (or even lower levels) since it is axiomatic that crashes don’t happen from market tops: They happen from bottoms.
Whether this just sets up the final manic run for a couple of more years to money-printing-delirium highs, or whether this is the Big One remains open. But we are confident enough of the look-ahead that we will not be going on a cruise with friends. We’ll be staying home to watch the money pile up.
Of course, there’s another possibility: The market will put in new highs this month, which would push the crash period out two further months. In which case, it will be revealed to the world that I’m a cheap old Scrooge who didn’t want to spring for a nice balcony room on an NCL cruise which would not doubt be almost as much fun as staying home to count (and make) some money.
Time will tell.
The real point of this morning is to welcome you to the first Friday of 2015 and note that even though the market is looking bullish at the open, as the high-end graphic upper right indicates, whether it will really be an “up” day, is questionable, indeed.
What Really Matters? Budget
The mainstream media has unwittingly fallen into unquestioning belief in press release language manipulating the playing field.
In a column this morning, The Hill looks at the looming budget battle in 2015 between president Obama and the GOD controlled congress.
It’s a generally good article, but I’d draw your attention to this little bit in here:
“….with entitlement programs such as Medicare and Social Security a potential target for cuts…”
Hold the phone, there Bucko.
Since when is Social Security an “entitlement?”
It’s a subject for future analysis as a Peoplenomics piece, but take someone like me: In my lifetime, myself and employers have paid in $400,000 to Social Security.
Now, there are those who would argue that this isn’t quite right because my “out of pocket” was around (for example) $200,000. And where can I get the kind of payout I anticipate with that kind of pay-in? Glad you asked.
Unfortunately, the inflation game gets played on everyone at this point, because 99% of the American public isn’t as smart as you and me.
In 1982, for example, I made $39,500 per year. And about (round numbers) 14.5% went into Social Security. In today’s dollars (those dirty, watered-down, mostly made up [96% made up]) things, that would be $98,392.
What’s more, in 1980, if I had taken the 14.5% of $39,500 – my part and the mandatory employer part came to $5,727 – and put it into the S&P 500, which at the time was what? Well, December 22nd (1982) the S&P was 138.03.
For the REAL $5,727 at that point, had I been managing my own money and just tracking the S&P instead of being held at gunpoint by Uncle Sam, that year alone would be worth today how much? 14.9 times the original sum and that’s just tracking the S&P for that period. That would be $88,000 and change and that’s for just one work year.
I worked 50 years with those kind of numbers. Some much higher, some lower.
Would results always be this good: Hell no.
But I want to be extraordinarily clear on two points here:
1. If employees had been paid the “mandatory employer part” and invested it, we would be the richest country and the richest generation alive ever.
2. The fact there never was a “Trust Fund” – it was “invested in agency paper and other idiotically low returns” reveals that Social Security, while well-intended, had turned out to be a payoff of the poor and a terrible swindle of middle class and up earners.
Since I’ve now worked 50 years, what Social Security should be paying me on is actually well into the millions. Watering down the money is key to the swindle, though.
So when someone dares imply that Social Security is an “entitlement” take ‘em out back, slap them around with a calculator, explain inflation to their thick skulls, and tell them you’ll wash their mouth out if they can’t see a swindle when they’re the victims.
Oh, wait, seniors are remarkably slow learners on inflation and they are largely dumb enough to believe politicians. Two strikes. Shall I mention the third? That’s failure to pass on hard-fought mental acuity to the next round of suckers…
Wrong Message to Terrorists
This one caught my eye: “Death penalty for Tsarnaev? Why Bostonians don’t favor that possibility.”
To my (admittedly jaded) way of thinking, this sends exactly the WRONG message to would-be terrorists. The liberalistas of Boston have just painted a big target on themselves.
I’m sure my liberal pal will call incensed that I am going down the path of eye-for-eye justice. But I assure you that’s not the case.
It’s more four or five eyes for each one on our side.
Lookie here: The sad reality of war is the winner is the side that kills the most and those who don’t understand that are what has turned us into an international laughing stock not to be feared and taken seriously even when we talk tough.
Because in the end, it’s just talk and do-gooders galore. And that makes such fine slaves, in case you hadn’t figured it out. I’m thinking prayer rugs must be selling like hotcakes in Boston.