Markets: When the Blood is Running

imageWe could be really screwed next week….if we panic.

BUT:  There’s a saying attributed to one of the Rothschild’s (another low-income family, lol) that said when people around you are panicking, to “Buy when the blood is running in the streets…”

While we don’t make specific financial advice, we know people who do  – like my friend Robin Landry.

He and I have been going back and forth about where this decline will stop. 

Without getting into a technical discussion, which we will save for our Peoplenomics.com subscribers, the two most likely stopping areas are around the 1,885 level on the S&P and around 1,760 with a spike down to perhaps 1,740’ish.

That’s when we get the base in from which we should begin a fifth wave rally that should last a couple of years.

Ideally, I’d like to see the high come in around June-September of 2017 and the real collapse of the market starting in October of 2017.  Robin’s thinking was that it might go longer.  But in any event, it should set new highs.

Still, there is a major asterisk to be watched.  That is a phenomena called a fifth wave failure.  You can search on it and read up on it, if it matters.

Unless you’re actually trading the market yourself?  I wouldn’t bother.  If your retirement fund is in a telephone switching system, you would likely be in bonds while the market is going down *(they often go up in value in major declines) and when you sense the bottom is in, then back into big stock pools.

If you are trading a few bucks aggressively on the side, you can have as much fun as the slot machines and maybe you can get your spouse to dress-up as a cocktailer – and pretend you’ve gone to Las Vegas.  Except the odds are better.

Since Elaine and I didn’t win the PowerBall last night (there were three winners, details over here) it looks like we will have to keep living life without servants.

Early on, the stock market was looking at about a 50-point gain on the Dow.  But we’re starting to see a few articles that are suggesting – as we have – that the end is not here for China.  There are some possible bargains to be had there.

While the following press is writing about ways to China-proof your investments, (“9 Dividends Stocks To China-Proof Your Portfolio”) the Leading press is writing about how Starbucks is making a big play in China.

One of the things we quietly do with our www.nostracodeus.com project is to quietly “{keep score” between leading article and lagging articles.  Over time, you can get a sense of which bucket to put which stories in.  Then, like a good farmer, you weigh the buckets and make market judgment’s accordingly.

China was down almost 2% overnight (again) and Japan was down 2.6%.  In Europe, Germany and France were down almost 2 1/2% while the Kneelers on Fleet St were down 1.5%…

While the U.S. market may stage a technical (*and options-related) bounce for a day or two, next week seems like a good time to look for a washout.

When it comes, you’ll want to be wearing good lug-soled boots…things will be slippery with all that blood running in The Street.

Import Prices Down 8.2% in Past Year!

There’s a new report out from the Labor Department that is worth a good bit of study:

U.S. import prices declined 1.2 percent in December, the U.S. Bureau of Labor Statistics reported today, driven by a drop in fuel prices. The December decrease followed a 0.5-percent fall the previous month. Prices for U.S. exports also decreased in December, declining 1.1 percent, after a 0.7-percent drop in November.

Imports All Imports: Overall import prices fell 1.2 percent in December, the largest monthly drop for the index since a 1.8-percent decline in August. While most of the December decrease was attributable to falling fuel prices, nonfuel prices continued to trend down as well. Import prices fell 8.2 percent in 2015, the largest calendar-year decline since the index fell 10.1 percent in 2008.

Fuel Imports: Fuel prices decreased 9.5 percent in December, following a 3.5-percent drop in November. The December decline was the largest 1-month fall in the index since a 12.7-percent decrease in August and was led by a 10.0-percent drop in petroleum prices. Natural gas prices also declined in December, falling 6.8 percent. The price index for import fuel decreased 40.5 percent in 2015, after a 29.1-percent drop the previous year.

imageThe decline over the past 12 months was the largest calendar-year decrease in fuel prices since the index fell 47.0 percent in 2008. For the year ended in December, petroleum prices declined 41.3 percent and natural gas prices decreased 43.3 percent. All Imports Excluding

Fuel: Prices for nonfuel imports fell 0.3 percent in December and have not recorded a monthly advance since the index rose 0.1 percent in July 2014. Lower prices for nonfuel industrial supplies and materials; foods, feeds, and beverages; and each of the major finished goods categories all contributed to the overall drop in nonfuel prices.

The price index for nonfuel imports declined 3.4 percent over the past year, the biggest calendar-year drop since the index was first published in 2001. Table A. Percent change in Import and Export Price Indexes, selected categories  (above, right)

Pardon me while I take an “I told you so” lap.

Over the past year, what have I been screaming – with no one listening except a few long-term very smart readers?

“When the reported rate of inflation is 2% and the growth of the (made up) money supply is 8-8%, then we can pretty safely infer that there is about 6% DEFLATION going on.”

Sure, it takes a while to show up, but this morning’s data tells us two very important things:

Import prices are down roughly 8% and export prices are down about 6%.  This continues to support the inference of deflation around 6% in the U.S.

And if you doubt me, I just filled up the pick-up in town Wednesday:  $1.74 per gallon.

Think Obamacare is spendy now?  Wait till the delayed (for political purposes) hikes come in 2017 and then imagine that gas prices are going up to screw anyone who drives a car to work.  Assuming you will be able to find any.

Digital Fatigue

Think digital products are the be-all, end-all?  Well, here’s a report to the contrary.

This is a well-known phenomena in ham radio.  Sure, for a few minutes, a high-powered DSP system will work marginally better under the worst-imaginable conditions.  But when you’re chewing the rag with a buddy halfway across the country at night?  Well, sir, the analogs radios around here win every time.  (Ever listen on an SX-101 or SX-0117 tube radio?  Amazing difference in “warmth.”

Same thing in music from vinyl – which is making a comeback.  Warm.  No assault on the ears from sample rates.  In fact,w being aware of this, some audio products companies, like Behringer, have come out with mic preamps for studio and audiophile use that revert back tso vacuum types (BEHRINGER TUBE ULTRAGAIN MIC200).

In our little home studio (where eventually, we will do Peoplenomics.com podcasts) we have an analog solid-state “modeling preamp” that let’s us dial in how much “tube warmth” we want.

Speaking of Bites – Bed Bug Alert

Chicago is #1 in something.   Four years running now…

Say!  Maybe this is the mystery source of economic growth in America…with products like the Sleep Defense System – Waterproof / Bed Bug Proof Mattress Encasement – 60-Inch by 80-Inch, Queen  and the cheaper Harris Bed Bug Traps (4/ Pack).

Bet you‘re just itching to try some…

Comments

Markets: When the Blood is Running — 14 Comments

  1. Recently went through the death of two parents. Having to get rid of all their stuff is proving quite challenging. It seems everyone has everything due to easy credit. The “STUFF” the parents had was all bought in the 70’s and 80’s and 90’s but none of it has held any value. He did wood working but used chipboard. Am sure you can see the theme. He died a year before her and left her to deal with everything and then she got Ill 3 weeks after his death. As the closest of their children we have had to try to get rid of 50 years of valueless accumulation.. Things aren’t worth what they once were now a days. It is important to downsize while you can and when you can before things get bad.

    • Did this for my Dad, 38 years in one house. Most of it was hundreds of solicitations from ‘so called charities’ from ALL around the world that were bombarding him daily with requests for money. He had stashed them throughout the house because he did not know how to deal with them as they became overwhelming.

      IT has taken a whole lot longer than I ever anticipated, and it is emotional as well. I am going to keep a cross section of his work, pictures, items from his life for a scrapbook, all the rest is to be divided among family members, donated, recycled, shredded, or thrown away.

      All his tax paperwork is there, too, about 50 years worth.

      I don’t want to shred/throw any of the tax info away until after I have filed his final tax return and made sure the IRS is good to go. (YES, I know they are not supposed to go back only so far, but you know, they claim they can back as far as they want to.)

      He had about 1000 books on all topics, still working on the distribution of that treasure.

      He did not really, after it was all said and done, have a lot of stuff, he was just there a LONG time.

      The thing this experience has taught me is a) reduce, recycle, shred, donate, clear out, clean up so as not to leave such a project for the person(s) left behind.

  2. Chicago Bed Bugs in the hotels and lice in the government, They both are Blood suckers. Best stay away from both.

  3. What happened to Patrick Geryl’s massive sunspot?

    Please no more of these doomer predictions, keep it reasonable.

  4. Let’s see: Chicago #1 in street gang shootings, and now #1 in bedbugs. Sounds like a great place to visit – NOT.

  5. “””Say! Maybe this is the mystery source of economic growth in America…with products like the Sleep Defense System – Waterproof / Bed Bug Proof Mattress Encasement – 60-Inch by 80-Inch, Queen and the cheaper Harris Bed Bug Traps (4/ Pack).”””

    the bed bug traps are nice for travelers in a motel.. but I wonder why more people haven’t realized that Diatomaceous Earth: Natural Bed Bug Control is cheap easy and takes care of the problem quickly. it works great with spiders as well.. spraying a fine powder. ( not heavy either..just a light spray with a puffer) takes care of the problem..
    At out house all the women hate spiders and bettles etc.. ( I like the crickets though and hate to see them being killed off) a little light puff by the trim and they are gone.( a lot cheaper than some bottle of bug spray.) yet I am always hearing about how this is a rampant problem.. the traps are great for the adults that have infested a bed in a motel..

  6. “””We could be really screwed next week….if we panic”””

    I don’t think its time yet to actually see everyone panic.. i see it snapping back and going high with much bigger digital numbers yet.. but then I am a bottom feeder with a limited budget so it doesn’t really make any difference.. when I see us panicking is a year and a few months away..
    Unless of course we instantly get a brain and stop in our tracks and realize that our money isn’t backed by anything tangible and is essentially just a pretty nice piece of printed linen paper that when the fancy guy with the plaid bell bottom pants and polyester shirt shows it to us and says.. isn’t it a nice one.. I promise it will be worth more than your goods. or better yet digital number on a screen and it all becomes evident that it was the biggest ponzi scheme in history and everyone bought the fancy mans words.. LOL LOL LOL LOL… then we will all panic

  7. Interesting George, a week ago you were saying the BTB wouldn’t let puts go below 1975. Think they can get them back up to 1940 by tomorrow’s close? It could be that the global debt overhang and the demise of the industrial economy my completely skew your Capitalist ears wave theory. What happens if that’s the case?

    • See the red circled area in Chart #9 on the Peoplenomics report from Wed. More on this point in Saturdays report…