Rally and Reflection: Forward Expectations Drive

We are “on hold” this morning after the big run-up in the market – more than 300 points – on Wednesday.

Not that it is unexpected.  As I have been showing you (week after week) when we line up the market low of 1921 and the market low of 2009 using our Aggregate approach to modeling markets, it has an eerie similarity:

Whether the present rally ends based on TIME or whether it ends on PRICE will be a highly interesting speculation.  For if on Time, we will be in free-fall before June but if on Price we have almost a year to run.

Most likely it will be something else.

Tracking “Animal Spirits” Nonsense

What we believe – and expect to pop into our existence – is defined in quantum physics as being the Schrodinger’s Cat Problem.  What we expect (at a global mass consciousness level) is what tends to show up.

So I call your urgent attention to the nonsense making the rounds this week about “Animal Spirits” as an explanation for the large market rally.

Zack’s had a good one this week asking “Animal Spirits or Bubble?”

Sadly, the economic theory of “animal spirits” is the same kind of anti-science that is promoted by people who didn’t read Carl Sagan’s “Demon-Haunted World.”

It’s OK, though.  We did.

I am still trembling when I see someone like NY Fed boss William Dudley using the phrase.

Repeat after me:  There is NO MYSTERY – NONE, ZERO, NADA – about what’s going on.

The U.S. Fed is about to make the same dumb/stupid/callous mistake the Fed made in the 1928 period.  They are moving rates up.

That means we are perhaps still a year from the ultimate market high which recent calculations (more on Peoplenomics this weekend) suggest will be north of 30,000 by the Dow.

Here’s the short summary:

What the Stupid Fed Thinks:

They believe that raising rates will cause the growth rate to slow, and this will ‘let some of the air out of the market.”

They THINK wrong.  They Think rate hikes could slow a stock bubble.  They were wrong in the Roaring Twenties and they are just as wrong today.

Galbraith and others didn’t understand the physics of money worth a crap and our subscribers are making a killing on stupidity.  We’ve been long since the week after the election and we are still long.

WHAT THE DATA SAYS

The data is unambiguous and it was clear in the last Depression too, when a previous (stupid) Fed raised rates three times in 1928 setting off the final doubling of the Dow:

MONEY IS GREEDY:  It will flow from a falling market to a rising market.

When bond rates for up, what happens?  Yields (prices) drop.

So the more the Fed raises, the faster the exit from the burning theater formerly known as bonds.

Repeat after me: Bond Market Disintermediation.

The Fed couldn’t admit it in the wake of the Great Crash before and so they will blame market participants who just want to make money.

We are screwed, but we still have time to apply Astroglide to our trading plans.

(There is one more possibility:  The Fed may full-well know the physics of money and will simply dump Trump by cratering the economy so whoever the echo of FDR is can be installed and the country pushed more along the socialist path…but that would be very paranoid thinking.

Not WRONG mind you…just a bit too early to be paranoid.  No worries, it won’t be paranoid, it will be fact within five years.

The two leading candidates to drive the global depression are?  Collapse of Pension Funds and the Pending collapse of the Euro.  OK, toss in the E.U. too, but we will look at that after the May 7th second round of elections in France.

Now, where were we?

Futures

Flat opening.

Trump-Bash du Jour

Washington Post is going after Attorney General Jeff Sessions over his alleged Russian contacts.

We offer a Co-Bash of the Day award to the NY Times for “Obama Aides Left a Trail of Intelligence on Russian Efforts.”

My, how convenient.

The President For Life

Seems not to be Donald Trump but Obama.

Word that  Obama handler “Valerie Jarrett moves into Obama’s new home” gives us the distant impression that ol’ Barack has set up a Vichy Government of his own.

And since the FBI director was so cozy with the Clintons, not sure why Obama isn’t being reined-in for trying to still run government. 

‘I will recuse myself’ if necessary, Attorney General says amid Russian controversy.

But we don’t have access to the Obama House calls to plants they installed as IED’s (*installed executive deceivers) to take down Trump…

Yessir, the Bolsheviks know how to lob them electronic cocktails around, don’t they?

Meantime, Obama’s Gotta Be Pleased

Since “Iran reportedly poised for weapons shopping spree after UN ban is lifted.”

Let me think, where did they get the money to go shopping?

Oh yeah…OBAMA GAVE IT TO THEM.

Bottom Line?  “Holder Foretells The Return Of Obama: “He’s Coming, And He’s Ready To Roll.”

Is it too early to pull out my fingernails?

Drop by tomorrow…

Comments

Rally and Reflection: Forward Expectations Drive — 20 Comments

  1. Im confused…this dump in the stock market seems to be being pushed out further and further. Now it could be a year from now. In a few months could it be anticipated at the end of Trumps first term. There seemed to be such certainty with three dates..one last January..then in the next two weeks…then laye summer…now a new date possibility of next year..what up?

  2. Now, where were we? Isn’t it all “the so-called people’s choices,” and do you really think that your, to the point, explanation will influence any of it?
    I have lived long enough to believe that understanding Quantum Mechanics is probably easier than fathoming the mind of human beings; God’s chosen creatures.

  3. Don’t you wish you had a time lock safe

    I do and it’s challenging

    Especially so because I designed and made it, there,s no other one on the earth like it,it’s unique,one of a kind ,and worth more than money ,wht you say ,well the possibilities are UNLIMITED ,just like a time traveling device
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  4. http://andy2020.net/proposals/

    Hopefully Trump will endorse Andrew basiago in 2020,he has 100 proposals for our future after being told it’s in his future just as the past presidents have been told including trump

  5. You know the world is nuts when for the first time since he was sworn in, Trump reads 100% off of a Teleprompter and it is automatically seen as a great speech. Except, it was not. Of the 61 statements that he made, 51 were totally false. But, because he didn’t ramble and go way off topic and talk about his YUGE crowds, fake media and other nonsense, America was tricked into thinking he made sense and was telling the truth.

    This is exactly the Rupert Murdoch way. He started it all with the national Enquirer.( a publication that Trump has called credible. Are you getting the picture now?) That business model is to be so outrageous and crazy, so that when a serious topic is written about, it allows the media outlet to bend the truth to fit the agenda.

    Breitbart has the same model with an Alt right twist. So does Rupert Murdochs Fox News. Trump is adopting that same business model and is fooling the American Public to buy into his con game. Except the real media isn’t buying it. Trump tries so hard to legitimize the real fake news media that he controls, like Fox, that most of America now is starting to catch on.

    It is just a matter of time now. Thank goodness we have resources and the ability to research the real facts today. The awakening of the political BS is here. The irony is, the person the Trumptards voted in to drain the swamp, is the ruler of the swamp. Trump is the biggest politician of them all. For example, He is now delaying his immigration ban plan so that he can ride a wave of positive reviews for a while. Who’s interests is he really in office for? His own of course. He doesn’t give a Daman about any of you or me.

    • While Valarie Jarrett and M&O are hustling their second gov’t?
      How do you spell coup?

      • At what point will they finally call it sedition and an attempt to overthrow? Pizza-gate arrests first and then let the shoe fall? Or just sit back and take attack after attack for 4 years?

    • Jon –

      Your vitriolic use of “Trumptards” may fertilize your own self-image, but it does not serve you well when 50% of the country voted for the man.

      What we are witnessing is a war between the swamp creatures, or rich vs rich. The real truth is that NOBODY in federal elected office gives much of a damn about anyone in their home states, other than 6 months before their re-election. Do you think Hillary gives a damn about anyone but herself? Or Rand Paul? Or Nancy Pelosi?

      I’ve actually met with local, state and county guys running for office. They share the same values – lie and obfuscate to get the job, then set themselves up with revenue streams and government contacts for post-government existence. They are like little wind-up dolls, with talking points spewing out of their mouths that exactly mimic what the media say – they are not looking for anything other than to dine at the public trough.

      There isn’t going to be a draining of the swamp by Trump, whether he wants to or not. He surrounded himself with the swamp creatures in most every position he had open to being filled. That’s like bathing in blood and then diving into a pool filled with starving piranhas.

      George has the real fix for bog (<— I meant 'big', but kinda like the typo) government in his radar – the crashing of the market due to bond money running for cover, followed by collapse of the economy, trade, and then government insolvency. If you list the total indebtedness of the USA, then look at our nearly non-existent GDP, there is only one path the future can follow. You cannot bootstrap without boots, and ours are loaned out or worn out.

      The only way the swamp creatures leave is when the prey in the swamp (tax and lobbying money) die off. I don't now what things will devolve into, but devolve they must – because world and US debt is simply unsustainable.

      Talk about something meaningful, and let the whole Trump hysteria thing go. Just watch the show and be sure you can grow your own food.

      • OM2 you seem to have made a perfect 3-point landing in the fly-over country of George’s reply section. Nice job.

        Politicians have been making problems to turn around and solve them to keep themselves in office for as long as I’ve been politically aware. Doesn’t matter what the party affiliation is. The only way to attack this problem is to destroy the life blood of the pols which is money. Money allows the entrenched political animals to wield their power, for the most part, and there is a concerted effort by other countries to significantly undermine the US$’s hegemony. There is a day of reckoning coming soon and it’s about time. This is why I haven’t owned a single share of financial stock since before ’08. I much prefer the 100 to 200% return of livestock. All I want to know is when my lone silver dollar is going to pay off the wife’s car loan.

      • Only 27% of all registered voters voted for Trump. 30% for Hillary and a whopping 90 million people did not vote at all. So when you say that 50% of the country voted for Trump, think again. 90 million people were so repulsed by both candidates, as was I, that they did not vote at all. A overwhelming majority of registered voters are most likely not on Trumps side.

      • Lord o’ Goshen, Jon.
        Trump holds the office and while Pence was gov, his private email account was legally used. Not so for the HBIC and I know of people in Texas who have proudly said they voted more than once and care to guess where they are citz?
        Give it up on the voting thing, or I will point out again that pure democracies fail. Democratic republics don’t.
        If you had your way, we’d have Mob Rule and in the end the mob always votes everything for itself, destroying itself in short order. History is replete with examples.

    • https://en.wikipedia.org/wiki/United_States_presidential_election,_2016
      2008: 58.2% of eligible voters voted
      2012: 54.9%
      2016: 55.3%
      Personally, I take great comfort that Clinton didn’t win, cuz who’s ever in office when THE BIG CRASH HITS will TAKE ALL THE BLAME, and notice the figures above, voters GET OFF THE COUCH when responding to a CRASH. But don’t let a few silly little facts like that bother those who can’t see out of their Alt Right Donald Tunnel Vision.

  6. George, What do you think silver and gold will do for the next year? As I recall you thought they would be about $8 and $700 not to many months ago.

    • Since we are following in their footsteps.. as long as the fed reserve keeps the printing presses running overtime trying to cover printed paper.. Here is my guess at the future of the price of gold…. LOL LOL LOL.. but then hey who am I..some bottom feeding smart butt…

      Gold Unit Gold Price in Venezuelan Bolívar Fuerte (VEF) Gold Price
      Gold Ounce 12,247.23
      Gold Gram Carat 24 393.80
      Gold Gram Carat 22 360.96
      Gold Gram Carat 21 344.51
      Gold Gram Carat 18 295.26
      Gold Gram Carat 14 229.78
      Gold Gram Carat 12 196.90
      Gold Gram Carat 10 164.08 * 24K= Gold Karat 24, 22K= Gold Karat 22, 21K= Gold Karat 21, 18K= Gold Karat 18, 14K= Gold Karat 14, 12K= Gold Karat 12, 10K= Gold Karat 10

      • but then if you think about it we could be equal to nigeria..

        Gold Unit Gold Price in Nigerian Naira (NGN)
        Gold Ounce 385,139.98
        Gold Gram Carat 24 12,383.92
        Gold Gram Carat 22 11,351.02
        Gold Gram Carat 21 10,833.75
        Gold Gram Carat 18 9,284.96
        Gold Gram Carat 14 7,225.89
        Gold Gram Carat 12 6,191.96
        Gold Gram Carat 10 5,159.97