At the macro-economic level, we are not yet in “field position” for war. Leastwise, according to how the economic long wave has worked in the past. Usually we get big depression than big war.
Besides, you know how you can tell it’s NOT “game on” for war yet?
The lights are on.
If the lights go out from EMP, you may (or may not) have time to dig a blast trench. Here, following out long-term “Exurban Strategy” we have advocated (be 100+ miles from any target worth MIRV’ing) could pay off in spades.
The U.S. is a great country and all that, but we have allowed ourselves to fall way behind in the “Civilian Population that can be Held Hostage” race. Civil Defense? Whatzat?
When you flip over to the Wikipedia discussion of Blast Shelters here, you’ll find even Singapore has blast shelters built into their subways and other such nuclear brinksmanship finery. Seen one here lately? Nope.
The de-emphasis of Civil Defense has turned America into a gigantic glowing BBQ pit waiting for a nuke.
We’re not the only “Outback” people thinking and talking this way. Back in 2002, for example, Jim Benson wrote a fine article in BackWoodsHome about how it’s time for a revival of American Civil Defense.
Those of us who live in the woods know that people in the city verge on crazy and worse, those who reach the heights of power are almost universally certifiable. But that hasn’t changed the election of power processes either here, in the Middle Easts, or in Moscow of Beijing. Absolute Powers will sacrifice what they will, even if it’s We the People.
So we watch with our solar back-up, winds aloft forecasts, tube-type radios, and sure, maybe a gun or twelve, while patiently praying for the return of Reason.
So far it hasn’t. Prospects are dim, too.
Nothing much changed over the weekend. Things haven’t been so bad globally since the October 1962 Cuban Missile Crisis.
Count the flashpoints:
Russia (with their Shia buddies in Iran backing Syria’s pres. Assad) is threatening Trump over Syria bombing. Trump doesn’t react well to criticism, in case no one had mentioned it. Red lines at night, warriors delight, or some such. That’s the handwriting on the wall.
The U.S. Navy has rerouted the carrier Carl Vinson from a schedule port call in Australia to the Western Pacific, which you may properly read as international waters off North Korea and ready to light off some cans of whup-ass.
We don’t need a declaration of war on the NK’s – I think the Armistice may have been broken by then developing nukes in their massive tunnel networks.
Nikki Haley at the UN says “nothing is off the table” but curiously that includes a number of escalation paths that could end at WW III. Oh well, huh?
The Washington Post’s (alleged) FactChecker gets into how “Ryan and McConnell flip-flop on use of force in Syria to deter chemical weapons…”
Why hush my mouth…Imagine: Double-talking republicans wearing Labels of Convenience…Who’d have thought?
Adding even more intrigue is the arrest of an alleged Russian hacker in Spain who was outed by a Russian back home as somehow being tied to US election influencing efforts.
And if all of this isn’t convoluted enough, a normal person – seeing a field of confused and dazed participants might well be tempted to pull all their money off the table and run for the woods.
But no, logic is not in charge anymore. A little more than an hour before the open, US futures were actually up a little bit. Japan was up a fair bit last night (+133 on the Nikkei) while Europe is flat to down a smidgeon.
We think there will be two indicators to keep an eye on as this Monday rolls out: Oil futures are up 1.2%, heating oil is up nearly a percent and gasoline about 6-10ths of a percent. Between that and interest rate futures, we may be able to intuit future developments.
Investing In War: Serious Up Here
Here’s a little brain-stretcher for you: If you were on either side of a pending nuclear showdown, how would you play your investments?
Let’s take the Russian side first:
If you were going to blow the U.S. to smithereens with nukes, wouldn’t you go short the U.S, market? Geez Louise – think of the cash cow that would be!
Or, if you were the U.S. and were going to “first strike” Putin and Iran to take those troubles off the table, wouldn’t you hit there?
The answer – after thinking about it a good bit – would be no, neither move would make sense.
The U.S. shorting the Russian markets would be a non-starter because even though Russia has a much more robust Civil Defense system than we do, there would be no financial infrastructure left to make good on the big financial score. Hollow victory.
The same works in reverse: Sure, Russia could nuke the U.S. starting with an EMP first strike (which might be plausibly laid-off on the NKs or Iran) but then, should the NYC financial district be vaporized, where’s the proof of ownership and tell me how does financial clearing work in the minutes or even months following a nuclear conflict?
There is one place you might move a lot of dough in advance – and this is what we will be looking at on our www.peoplenomics.com subscriber site in coming weeks:
How does the Mexico, Brazil, India, and those other players in the global party work out?
Seems to me that the “strategic money” of the U.S. and/or Russia would likely reposition assets to clearing systems that could be firewalled from a nuclear holocaust. And, thereby, preserve some ‘continuity of government money” for the successor regimes.
There…betcha feel better now, huh?
You start seeing bit pops up in foreign markets and corresponding drops in target zone markets and then yeah, time to bend way over and kiss your….. but let’s not worry YET.
Bidness as Usual
Know how you can tell its a slow news week? Stories like “Neil Gorsuch’s confirmation shattered political conventions. Here is why.…” are still around.
Yesterday’s news, bubbas. Democrats pulled the same shit…it’s all about using power, ain’t it. Move along. next?
Oh, sure, we’re preoccupied with making a buck (or more) around here by playing the markets fast and loose. But there are some useful stories around.
Take this one where the creator of the internet (no, it was NOT Al Gore) says we need a rethink on how to stop “nasty ideas” from spreading.”
No! Tell me it ain’t so! Who’s been telling you “It’s coming!”
How many times have we said “Net licensing will be one of the fallouts of the Second Depression (when it gets here) and everything will be held to the same standard as the broadcasters were for 60 years: Applicants for radio and TV had to show how they served the “…public need, interest, and concerns…
in order get gain a broadcast license. Or in the future, a routable IP address.
Should the same kind of standard be used for web content?
Like it or not, gang rapes live on social, stalked on social, radicalization of social, and (you know the rest of the shit on the list, right?) that all needs to be reined-in.
Mark my words, there’s a good case that an annual web licensing process might be useful…and then, as with broadcast…groups that DON’T think a media (like a big social outfit) is really doing the public any genuine good, could “file on it’s content license.”
The social media company would still be around, but their (analog to frequency…IP addy’s) would be toast) and a new group would take over the IP.
God, what a view, huh? But other than occasional heart-warmers, what exactly has social media done to improve things like, oh, workplace productivity, for example.
And has it, or has it not, caused death and mayhem through texting while driving?
I rest my case…for a few minutes anyway.
The Week Ahead
Banks and markets mostly closed this coming Friday – still the Cost of Living should be out Friday.
Labor market conditions later on this morning and a Janet Yellen talk this afternoon which will be dissected to death by 6 PM.
Neel (let’s rethink Too Big to Fail) Kashkari of the Minneapolis Fed speaks tomorrow.
Bank Reserve Settlements and Import/Export data Wednesday.
PPI Thursday, CPI Friday.
Somewhere between now and then the market could set up for a break-out or break-down.
I’ll be the guy in the backroom with the HUGE spreadsheet on the 55:” UHD figuring out money flows in and out of non-target markets.
When the money ducks out, then it’s time to worry…really, seriously, sincerely worry.