(iv) of I Down–for now

Of course, it could still be an irregular high flat IV at the next higher degree. 

But the main feature of this morning is that old Fifth-Dimension song, Up, Up, and Away.

Speaking of which, one fellow apparently didn’t want to wait for the Shanghai Exchange to turn around, as it did is last night’s session and leapt to his death because of Chinese market problems.

This will no doubt fuel the (growing) cast of idiots who are trying to pretend the Chinese market collapse is somehow an analog to the 1930s depression here.

And except for the fact that China is not a reserve currency country, and their stock market counts as only about 6% of global market cap, and (there’s a list), they have might have a chance of being right.

This morning, a nice short column.

I want you to circle two dates on the calendar and write down two numbers in each one.  Ready?  (this may be awkward on a laptop calendar, so don’t use a permanent marker, right?)

September 11 and 1,740 S&P  and September 14  S&P 2,012.

OK, the logic. 

Since I have been  studying long wave economics for 18 years now, how about this:  Major down moves tend to terminate their first major wave 55-days from the high?

Not saying that it WILL happen, but this is the kind of folk medicine we deal out on our www.peoplenomics.com reports along with a bunch of charts to make it up.

Which, let me see, means we should rally into next weekend, when we take off on our Peoplenomics Cruise to Jamaica, Grand Cayman and Cozumel on RCCL where Robin Landry and I can compare notes and our wives can shop the duty-frees (thus making continued  work necessary, lol).

But it’s also been arranged for the market to be closed that first Monday and we have our internet plans pre-purchased so even though it might seem like a “vacation” our columns should continue uninterrupted as they were when we did our Norwegian cruise back in February.

Speaking of travels (not that it matters) but Elaine and I are planning to be in Dubuque, Iowa October 1-4 for the Beech Aero Club national roundup so if any readers up that-a-way want to sit down and commiserate over a beer (we buy our own and so do you) then that’d be fine depending on schedule.

This is social chit-chat….where’s my market news???

Oh, shush.  You know that the financial model is unsustainable and needs to be fixed and that if you tried to run your family on the same accounting basis as the FedGov you’d be in jail.

The difference is when you print up money it’s called counterfeiting.  When government prints up money it’s called economic stimulus. 

You following, bubba?

So while the market is clawing it way up another hundred around the opening and West Texas Intermediate has clawed back up to almost $40, the reality is another thousand illegals will come in today, we are about three weeks from Q3 quarterly IRS payments to pay for everything, and going cruising is a fine way to momentarily get distracted.

Fact is, there is still a count which gives up one more move up into 2016 (late) or 2017 (late) and if that’s the case, then we will all have one last chance to get our affairs in order before the economy dies.

The only question is whether we see the Fed go to a negative interest rate, now that one Fed member met our expectation for a “surprise” announcement this week by saying, in so many words, that a rate hike was off the table for September.

And that sets up the end of the Ure Discontinuity for this fall and through 2016.  Stocks will go to the ceiling because they will be one of the few things with any kind of yield.  But the trick will be to roll back into cash at the tippy top and into Savings Bonds or Treasuries because then your money will be out of banks and (hopefully) less likely to be funding the bail-ins of 2017-2019 to save the rotten bastards who should never have been bailed out in the first place.

You see., the magic of “political correctness disease” (PCD) is that it preconditions the weak mind (yours and mine) to believe that “Oh those poor bankers…we can’t let them fail.”  Which is as close to horse shit as you’ll find outside a pasture.

But that, my friend, is what I call the economic equivalent of mass murder thinking.  “Since they can only kill me once…why not take as many…. “

Which is recent economic policy in a nut shell.  Everyone with a room temperature IQ or above knows this is not sustainable, so keep the orchestra playing and let’s run her up one more time and tell ourselves as best we can “This ship is unsinkable!”

(God that felt good to write…and it was so much nicer than “The 700 point Dead Cat Bounce”)

Gross Domestic Product

Do the Brothers Grimm write the Bureau of Economic Analysis press releases?  Yet, here it is…

“Real gross domestic product — the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes — increased at an annual rate of 3.7 percent in the second quarter of 2015, according to the “second” estimate released by the Bureau of Economic Analysis.

In the first quarter, real GDP increased 0.6 percent. The GDP estimate released today is based on more complete source data than were available for the “advance” estimate issued last month. In the advance estimate, the increase in real GDP was 2.3 percent.

With the second estimate for the second quarter, nonresidential fixed investment and private inventory investment increased. With the advance estimate, both of these components were estimated to have slightly decreased (see “Revisions” on page 2). The increase in real GDP in the second quarter reflected positive contributions from personal consumption expenditures (PCE), exports, state and local government spending, nonresidential fixed investment, residential fixed investment, and private inventory investment.

Imports, which are a subtraction in the calculation of GDP, increased. The acceleration in real GDP in the second quarter reflected an upturn in exports, an acceleration in PCE, a deceleration in imports, an upturn in state and local government spending, and an acceleration in nonresidential fixed investment that were partly offset by decelerations in private inventory investment, in federal government spending, and in residential fixed investment.

Somewhere, way down in the fine print we read (to our horror)

Current-dollar GDP — the market value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production — increased 5.9 percent, or $252.7 billion, in the second quarter to a level of $17,902.0 billion

ALL of which might be a Hallelujah Choir moment, except that the money supply M2, adjusted, is up 5.7% in the past year which gives it all a kind of barnyard nose, if you follow.

And then, there’s the matter of the Public Debt to the Penny which has remained as still as a white tail deer since February at about $18 trillion.

Note to amateur book-cookers:  You can do this by moving debt “off books” and no one will be the wiser.  One of these days, when I feel snarfy, I will call the good people at Treasury and ask them how it is this balance has gone into rigor mortis…

But in the meantime, we’re still a debtor nation, no matter how you cut it and yes, the Fed still holds FOUR TRILLION worth of paper and yes, it’s pretty much gonna crap out.  But as Ures truly has correctly reported well in advance, not just yet.

You’re still gonna get stiffed if you ask for a raise today despite this:

Profits of domestic financial corporations increased $33.9 billion in the second quarter, in contrast to a decrease of $23.4 billion in the first.

That’s hardly enough to buy the shareholders a Klondike bar, so sorry ‘bout the raise.

Politics: The Dear God Department

Is Joe Biden really the best the Dems have to offer?

Trump landslide shaping up on  the GOP side.

Let’s see:  A businessman or a career politician…hmmm…shouldn’t be too hard to figure, but PCD still rules.

Is there more to write about?

Sure…but time to hit the shower – meeting in town….so ya’ll come back tomorrow, y’hear?  And bring a few million friends with you.


(iv) of I Down–for now — 5 Comments

  1. I notice your saying that when the government prints money it’s called economic stimulus.
    My impression is that the government does not print money.
    A private company called the Federal Reserve prints the money.
    The Federal Reserve is not Federal and there are no reserves, and they do not take orders from anyone who lives in America.
    Janet Yellen told the Presadent she will be on Obama’s Cabinet, and someone in Europe tells Janet when and how much money to print.

  2. Well George, we finally come down to one word, smitah. You could have saved a lot of time and words.

  3. Thought you might like this TV program (if you can get a hold of it):


  4. My view on the Don…..One he isn’t speaking on fifty year old issues that we all know secretly that nothing can or will be done in reality..they will just be filed away till the next election. (Rowe vs. Wade comes to mind as a popular none action political issue)2. The don’t speaks his mind and like Reagan he will be on the media sites telling everyone his viewpoint, 3. He reads the bills or will have a team reading g them and I think will be on getting in our face letting us know..forcing congress to actually sit down and read them and if possible force them to actually go to work and write them,4 he has successfully learned the art of negotiations. The squeaky wheel gets the grease.. these are my opinions. I don’t want a polished politition in office this time like Reagan let’s get someone that knows you have to take care of your own community first…he has my vote