Bonfire of the Equities

Like I was saying yesterday morning, except a huge DCB (dead cat bounce, in case you missed Friday's dissertation).  And, it was a dandy!  Intraday, the market rallied from the previous 12,159.21 close to as high as 12,341.54 - a 181-point lovefest.  And reality bit.

Like most dead cats, the bounce was pretty short-lived, and by the end of the session, the Dow was down about 60 points and the phone wires were burning up around here.  As far as most folks were able to tell, the $146-billion "economic stimulus" package was a poorly contrived 'same-old' that wasn't going to a) make it through CONgress and b) wouldn't make much difference, even if it did.  As one reader wrote in "They think $800 bucks is going to solve the problems of being in debt to the neck in bank cards and on the verge of foreclosure?  What are these people on?"

Without going into an answer to that, which would likely land me on someone's hit list, we'll stick to the simple facts of the matter: Tax cuts are about as likely to bail us out as space aliens coming down and handing out Starbucks coupons (which won't happen till later in the year, in any regards.)

So we're left to sort out the economic future from a curious perspective.

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One of the phone calls yesterday was from my attorney, who proudly announced "I'm off to visit the 'other' gamblers' this weekend!  You know, the honest ones!"  This means, being mid 50's and single, he was headed to Lost Wages, NV to bet the payroll at the blackjack tables.  About an even bet with equities - maybe even a tad better this week.

Before leaving though, he shared an interesting point:  "This may be one of those rare periods when the individual investor really does have a leg up on Big Money. "

Wondering what he meant, I prompted him to continue.

"You see, you and I can do the back-of-the-envelope kinds of calculations on the futility of trying to buck the tide here - but with equities about to crash [even more - G] the Big Money players have to work all weekend burning the midnight oil so they can get together with their 'investment committees' and work out their go-forward strategy.  You and I don't have to mess around with that - we can just pull the trigger and that's that."

OK, I got it.  What does it mean?

"What it means is that investment committees of some of the big players won't even meet until next week and that means late next week, or the week after, before they will be able to do much of anything in the markets.  So you see what I mean?  This may be one of those rare moments when small individual players may have a head start over the institutional players in heading to the exits."

The Big Players will no doubt pimp up the markets to sell at higher levels, but I get it.

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When they finally do get around to meeting (next week and the week after), the investment committees will have plenty to ponder.  Not the least of which is that "Peak-To-Crash" chart that I update every week for Peoplenomics.com subscribers and post around here once in a while.

A few other headlines that will likely weigh:

• "Earnings won't bail out Market this time"

• "Collapsing housing market clouds Nevada caucuses"

• "Oil prices back above $90 a barrel"

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A couple of other phone calls came in while I was working out the eight orbital parameters of the dead cat bounce in mid session.  (If you don't know the 8-elements of orbital calculations, you're a Keplerian dunce and you need to click here).

Just as I was penciling out the right ascension of ascending node (for the dead cat bounce take-off early in the session) the time monks called "This weekend, we've got a bead on what happens to 401-k's this summer in the latest run...may get it posted on Saturday afternoon" 

Oh damn, that report won't be good, and it just means more work for me because instead of a nice simple report on how to retool higher education system in America, Peoplenomics will be addressing where to park money while the developing  401-K disaster blows over.  Still, nice to know what's coming.  Having a time machine is sometimes useful and this may be one of them.

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Another call came from some well  a connected source that reported that gold, trading in US dollars inside China, is already well over $1,100 (US paper)  per ounce and going nowhere but up.  Sure enough, the story is getting legs now with headlines coming out of Chinese sources that "Gold Rush grabs Chinese as prices hit new high.

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Then someone else called to report that Jim Sinclair was expecting a couple of thousand point drop days in the Dow just ahead.  His timing would be coincident with those investment committees getting their act together.  Jim's posting last night "The end of a powerful week in finance" is a must-read, but with a caveat.

The caveat is this:  You know how some people will turn their head from a horrific accident, while other folks will watch?  Well, if you're the kind of person who turns your head and feels a bit squeamish, you might want to skip Sinclair's column.  The rest of us (those who would will stare into the cow-catcher of an oncoming train as it arrives ) will just go ahead and read it.

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Meantime, elsewhere, God may save the Queen (or not) but He's certainly not doing much for British markets.  They dropped below 6,000 as measured by the FTSE.

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So, to wrap up before pouring another double spilt shot Americano tall with a shake of chocolate powder and two biscotti's, let's just wrap up with the week with another chorus of "I told you so!" Oh, and this being way-rural East Texas, there's no baristas in sight so I'll get by with watered-down Folgers and a biscuit.  But I'll be six bucks ahead and out here that makes more sense than biscotti's.  Until those aliens show up with the coupons.

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Did I mention Venture capital funding is at a 6-year peak and despite a looming recession?  I thought these people were smart.  I've been wrong before.

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Note from our Houston Bureau:

"The Houston Bureau thought you would be interested in the following article:

"All signs point to U.S. consumers hunkering down in recession bunkers" ''I'm walking down Fifth Avenue the other day, and all the stores have big signs saying 50 to 70 per cent off everything, and the only people in there doing any actual buying are, like, from Canada or Europe.''

Note from the Bureau Chief:  "Don't look now... "

Say, if that's a cow catcher, then this must be a train wreck, right?

"How Cool is That?" Department

Well, minus 67 Fahrenheit is a might chilly, but that's what's coming to Siberia shortly say the Russians.  Where is Global Warming when you need it?

Geniuses Department

The headline "Britain to target al Qaida-linked web sites" has us wondering how long it took the Brits to figure this out.  Wonder if they needed help?  Wouldn't that have been obvious, say a week after 9/11?

Language Has Meaning Department

I noticed the phrase "former supermodel" applied to someone today, and wonder if people just wake up ugly some morning to deserve such a label as 'former'...or if hanging out with the president of France has some under-reported medical side effect?

I would have thought a term like 'supermodel' would be more enduring - kind of like great wines can age well sort of thing.

Arizona On Speed

The $1.3 billion Arizona state budget is becoming a salesman dream for those peddlers of photo-radar machines.  Turns out that - and a lottery - are among AZ's tools to fix its budget.

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Virginia is simply raising the gas tax.

The Runs:  4Th Party?

With the Good Doctor still being written off by MainStreamMedia, we notice how without even running NY Mayor Michael Bloomberg's just chatting with Ross Perot's ex-campaign manager makes headlines.

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Coping: Taming Feral Cats

Lots of ideas here:

"Hi George!

Finally a subject I'm an expert on ;).

1. There's NO "speeding-up" of the process. On the contrary, any attempt to speed up will result in a setback.

2. When befriending a semi-feral cat, a long period will seem like nothing much happens (that's the time the cat is getting to trust you), and then bam!, one day perhaps the cat comes and dares to sniff your fingers, or perhaps lets you pet her: that's when the trust is acquired, and the rest will be very easy.

3. How to proceed: - Feed her at regular times (around dawn and dusk). Call her when you put her dish down, and sit at a comfortable distance the whole time she feeds. Do not talk much, do not move much, move slowly, do not leave before she does. If you look at her, close your eyes very slowly --- this is a way to tell her you're relaxed and there's nothing to fear.

- Move a little closer each day. Anytime you see her retreating, retreat as well. You can talk to her from time to time. If she comes closer, do not move. You can try to extend your hand a bit to see if she would sniff you (that would be a big step!). After that, it is easy to graduate to scratching the cheek lightly. Then the taming is done.

- What I did with a feral was to put the bowl of food closer and closer to the bench where I was sitting while he was feeding (several days), then I put the bowl on the bench (several attempts, had to put the bowl back down some days), then finally on the bench close to me, then on my knees. All this time I did not try to pet the cat. When he was eating from the bowl on my knees, then I started petting him lightly. After the first purr --- and what a rush of joy that is --- the rest was very easy.

- It takes a lot of self-control not to reach to the cat. We humans want so much to grab --- the old predator instinct in us. That's a very hard part. So stay still, and consider it your "Cat Zen Practice". :) Remember, THE CAT HAS TO COME TO YOU.

Good luck George, I'm sure you'll do great."

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"Approach as close as you can, s-l-o-w-l-y, place the food down, and back away, s-l-o-w-l-y to a distance where the kitty will approach and eat the food. Sit. All the time talk in a low tone in a high pitched female type voice. Anything is appropriate- baby talk, economics- whatever. The important thing is the higher pitched female like tones. Try to avoid a sound that sounds like a growl( mostly "r" sounds). Sit until kitty is finished and walks away. Approach s-l-o-w-l-y again to get the now empty food plate. It the kitty looks at you , at your face, give a slow blink with both eyes and stick your tongue through your closed lips. Blinky eyes and a tongue through lips are both non-aggressive affectionate moves for kittys. Repeat process and get closer each time. Always be ready to stop or back away if kitty shows signs of distress. Put as much food in the plate each time as the kitty will eat. It might take awhile, but eventually kitty will be family. Tinuviel took a couple of weeks, Mittens took 42 days, Cuddles took 20 months. Depends on the kitty. Hope this helps. "

And about alternative uses for the dishwasher - cleaning up old ham radio gear:

"George, about your HAM parts in the DW, most motorcyclists say that one of the best wifely traits is not going ballistic at finding motorcycle parts in the DW . . . sounds awfully similar."

To me, the dirtiest Heathkit is likely cleaner than a Harley (Hibbly Diblitzen), but I suppose that depends to some extent on which club you ride with....

"re: dishwashers/electronics

Alternative:

Spray the unit with Fantastic let it sit for 3 minutes or so, hose off all the crap with hot water in the bathtub. (hand held shower works well) 455 IF transformers should be plugged, the tacky stuff you use to put up posters works well.

Go easy on the varnished paper under the power transformer. Let dry for at least a day. Over the years I've noticed the gear gets cleaner. Early broadcast stuff was brown with nicotine, those days are gone."

Send snip & save items to george@ure.net

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Friday January 18, 2008

D.C.B.  Friday:  Headlines & Reactions

OK, I know, "What is a D.C.B. and why are you taxing my brain at this hour when all I want is to know what the market will do?"  It means "Dead Cat Bounce" and describes what I expect after this great stimulus package is unveiled today. Fear on the Street is it will be nothing more than a new collection of old gimmicks.  The hope is enough folks will fall for it to postpone the inevitable.

First, let me advise you that if you've been paying the scantest amount of attention around here, worrying about the market should be completely off the table because we're in 'catch the falling knives mode' - and likely will be for most of the year.  Or, to put it less subtly, "Catch falling guillotines" is more like it. 

If you don't have what you want for retirement paid for and out of harms way (e.g. unencumbered) by now, you may never get there, given how past long waves in the economy have worked out.

My friend Robin Landry up in Shawnee, OK summed it up pretty good yesterday while we were talking about 'next lines in the sand' on Thursday (Low: 12,000 & then 11,500 or on the up side 12,411 then 12,600).

"George, I tell my clients it's like this:  Every 16-years or so, you get a good-sized recession. Remember 1990? And then every 60-70 years, you get a depression.  And then every couple of hundred years, you get a revolution in investing."

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My great, great, grandfather (Andrew Ure) was kicked around by Karl Marx often enough  in the 1840's for being an apologist for factory labor exploitation by the British ruling class during the Industrial Revolution, so my family has had plenty of time to reflect on Marx.  Watching the antics of the elite is something akin to genetic for me.

One of the few things Marx got right had to do with owning of the means of production.  But, not by some proletariat mob, mind you.  In a sort of Marx-Ure middle ground, I figure the means of production should be in the hands of 'average folks' who could then put these means to best use, depending on their ambition and s