Go figure this one out: The Russians actually have their senate VOTE on the use of troops in order to secure their border and the world panics. When the US invades countries, we conveniently forget about Declarations of War.
So the only inference I can draw from all this is simple. What’s spooking the market may be John Kerry going to Ukraine, as much as Russia securing its naval base and military resource in Sevastopol.
A couple of Analogs? Sure: Ukraine breaking away size-wise would be like California, Oregon, and Washington announcing they were seceding from the US.
And you don’t think the USA would march into Cuba to protect our base at Guantanamo? OMG, people, how shallow are we? Tit-for-tat.
What Ukraine was – and continues – is an oversized flash-mob of anarchists and now we’ll see if they can pull it into something more real. But the anarchist spew is really soiling the picture. Whether Kerry can find a moderate government (which could avoid war with Russia) is the open bet.
And judging by the futures, the market is shading that. So, when a “breakthrough” comes, look for a 200+ point relief rally. Or, have your flash-goggles ready if it goes the other way..
Our Monday begins with trying to dig out the real reason for the decline. It’s not Ukraine. It’s the fact that the Big One – China – was down 1.47% overnight.
So while the (me-too) press is tying all the negatives in the market to Ukraine, the wise investor is reading stories like “China move hints at 30% market correction.” Key quote from the article:
Chinese policy makers’ move to weaken the yuan may affect stock market valuations all around the world.
Well, guess what? China is the big dog here. Japan was down, but only 1.27%. And a tiny 1/3rd of a percent in Oz.
What’s going on in Europe right now is ugly: The Brits are down 1.83% while the Germans and French are both down more than 2%.
I will grant you that Ukraine does weigh on the EU – since the Western-backed uprising is not going like a walk in the park (nor will it). But the first 1.75% is laid at the feet of China.
If you want to believe that Ukraine is driving, have at it. It’s partly so.
The more realistic view is that the global economy is set for a massive 30% correction and that brings our target of 1,540 on the S&P (Robin Landry’s view) into play. In the short term, we may see his predicted bounce of gold to $1,400, but from there things should fall to the $1,000 an ounce level or under. Just saying.
This kind of outlook is not going to win me any popularity contests. But, in case you haven’t noticed, I’m not interested in a fan following.
Being right matters more.
Russia’s actually voting on deploying its troops in advance. There’s a great lesson there in who’s running a democracy lately. I must have slept through the US vote on sending troops to how many countries is it, now?
Personal Income and Laughter
What better way to start Monday than thinking that paying down a credit card is “savings?”
While I fetch us the ViceGrips and roll us a doobie, you read the personal income and expenditure press release. Particularly the bolded part:
Personal income increased $43.9 billion, or 0.3 percent, and disposable personal income (DPI) increased $45.2 billion, or 0.4 percent, in January, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $48.1 billion, or 0.4 percent. In December, personal income decreased $5.5 billion, or less than 0.1 percent, DPI decreased $9.7 billion, or 0.1 percent, and PCE increased $6.5 billion, or 0.1 percent, based on revised estimates.
Private wages and salaries increased $14.8 billion in January, in contrast to a decrease of $9.1 billion in December. Goods producing industries’ payrolls increased $1.8 billion, compared with an increase of $1.7 billion; manufacturing payrolls decreased $0.4 billion, in contrast to an increase of $0.2 billion. Services-producing industries’ payrolls increased $13.0 billion, in contrast to a decrease of $10.8 billion.
Personal saving — DPI less personal outlays — was $540.1 billion in January, compared with $544.5 billion in December. The personal saving rate — personal saving as a percentage of disposable personal income — was 4.3 percent in January, the same rate as in December.
There…want a hit of nitrous to go with that? And don’t forget to sterilize the ViceGrips when you’re done with ‘em. We’re using ‘em a lot lately and don’t want problems.
Well Diggers and Witches
If you’re off to the east of us, we’ve left enough moisture in things so that you’ll be able to have some snow and ice to enjoy, or not. Don’t want you feeling left out.
Despite the snow and ice in Texas, there’s still a drought on. At the moment, we’re about 2” below rainfall normal for this time of year. And you can hear the rain dances out toward Abilene, when the wind blows just so.
The National Weather Service website offers some fine graphics (that band sweeping down the rest of the country) which is fun to look at, but not so much fund to be dealing with in person. Things will be crappy through about Wednesday back east.
Out west, the problem is still drought, too, says the LA Times in their story about how the recent “California storms did little to ease drought conditions.”
I trust you see where pot farmers are being blamed for the drought, too?
The Texas drought continue bad up in Armadillo (Amarillo to some). There the rainfall year to date is 0.46” and normal is 1.34 while last year at this time they’d have 3.29 inches. That was enough to keep down the feedlot smell of the place (which you can pick out 100-miles east of town when the wind’s right).
No offense intended, though. Amarillans would say that’s the smell of money. And they’d be right.
Sun Out to Lunch
A slight increase, but another weak showing by the Sun in the latest sunspot tracking report out from the NOAA Solar Weather Prediction Center.
And yes, as goes the Sun, so goes the climate and so go the oscillations in Ninos/Ninas.
There is a chance of X-flares in here because we’re on the backside of the peak. But no 7.0 or larger quakes now is something like four months running.
Speaking of life up near Amarillo, I assume you’re watching the stories about how the “South Central US Poisoned by New Mexico Nuke Garbage Dump” problems?
12-Years a Slave if you’ve been having power outages.
When a woman who is 116 says the secret to living a long life is eating suchi and sleeping 8-hours a night, I wonder if it sounds a little fishy…
Note To Your Anti-Gun Friends
I’m sure you’ve been on the receiving end of past calls from liberalista gun-grabbers (who think the plainly written Second Amendment needs “interpretation”). They seem to be clueless what “shall not be infringed” means.
So anyway, I know a number of such people and when I suggested a while back (following a multiple stabbing) that “We ought to register knives, too…” that I was being a jerk.
Well, jerk, or not, here’s the story out of China this weekend about 29 people being killed with knives by Muslim separatists. 130 wounded in he deal, too.
Now, please repeat after Ures truly: Guns don’t kill people. Knives don’t kill people. People kill people.
Yes, it’s really as simple as that. And so is “not infringed.”