As we have been writing (for years) the historical rhyme with previous periods of America’s financial history are sometimes frighteningly useful. Take this chart showing the 1929 market run-up and crash, for example:
We will discuss some specific targets to be watching in our Peoplenomics.com report tomorrow for subscribers. However, since we are a tiny bit below the December 13 lows of 1928, we would anticipate a modest rally today in the 50-150 Dow point range.
Nevertheless, we are not confident enough yet to put 10’s of thousands on a long side bet. The comparison between the 1920’s and post 2009 mess is only advisory around here. Elliott counts, channels, and a host of technical projections are what guides our personal positions. Which have been cash since? 02/06/18 | 10:36 AM ET.
I don’t have any particular inclination to jump into a swimming pool that’s on fire, so until the chart fully informs us as to which side of the 1929 parallel we’re on, accounts are in cash.
Is Politics Driving?
Maybe…maybe not. But as explained yesterday, it’s a damned interesting question we don’t remember seeing in late 1928.
Indeed, as we noted Thursday, most fund and bankster-class folks are quite liberal, so there is a circumstantial case to be made that looks like this:
That story, lower right, which is a small one in terms of impact, may be explored in the Fox report “Democratic Sen. Mark Warner texted with Russian oligarch lobbyist in effort to contact dossier author Christopher Steele.”
On the other hand, although MediaBiasFactCheck scores The Daily Beast as left (politically), that doesn’t take away from the Beast report that Fox is just serving refried news: ” Fox News Hypes ‘Questionable’ Texts From Mark Warner That Republicans Read Months Ago.”
While the futures looked a bit soft, we thing on this story, it seems not to be such a big deal that our outlook for a minor bounce back can to ruled out by the close of today’s trading.
Popular Delusions Department
Mass hysteria being contagious, one of the most mindless memes being spread is about “fear of rising bond rates.”
Go over to the Yahoo Finance 5-day (here) zoom on the $TNX *(proxy for the 10-year Treasury rate) and notice that the rates peaked around 10 AM.
Sometime, it’s just fun to panic.
Still, when smart people like the Minneapolis Fed’s Neel Kashkari are asking “Why cool the economy down now, Fed’s Kashkari asks” I get tempted to go long at the lows for the day I’m expecting around the open.
Especially if the hand-wringing section in the bond market snaps out of it.
Reader Alan was asking:
Can you discuss in general the risks a triple leveraged short ETF with the DOW and S&P falling in a Peoplenomics or a UrbanSurvival article. RE: If someone buys 1000 shares of SDOW or FAZ at $10 and the price goes up to $30 as the markets continue to fall where does that money come from? Will the fund go broke and the investors just take the loss?
A fine question and a wholly inadequate answer: You have to read the Prospectus.
There was a Peoplenomics article a while back on the risks, as well. In that, I discussed how When We Get to the Big One, you may be more likely to take your winnings by holding OPTIONS. These are, in my personal view, much more difficult to just close up. They didn’t fail in 1987, 2009, or any recent mini-panics.
Rand Paul Is Right: Let’s Ignore Him
My deflationist pal Jas (who has done very, very well in the present market decline) makes an astute observation about how the Tea Party has disappeared and it’s now the Trump Party…not even the GOP anymore….
So Paul gets us, calls for more responsible budgeting and then what?
Even if you don’t watch the video of Paul’s remarks, he gets it EXACTLY RIGHT blaming both parties and noting the 700-page budget bill came off the printer at midnight and NO ONE READ THE BILL.
Crooked is as crooked does in Congress, as we are living one part Weimar, three parts Great Depression and hoping for a happier outcome. That sort of defines delusional, doesn’t it?
Spending on Illegal Students
Oh, sure, dress this up in all the politically correct BS terms you want, but it’s one more reason to beat the crowd and leave Kalifornia:
The way I figure it, they need to get documented first, get aid after. But that makes me a neo-fascist, I’m sure. Remember, I was a California taxpayer and got the hell out…
By the way, Mad Dog says there is an “earn in” option: Immigrant service members won’t face deportation, Mattis says. Somehow, I expect only a limited response to that from Berkeleyites.
Nashville is hot…
We’re Sending China WHAT?
The problem with this is that the Trump ‘energy dominance’ policy pits Washington against Moscow.
And we know how warm and friendly those relations are, right? The left would have you believe Trump was supported by Moscow, right?
This is what when you read the news, you come away with the feeling that things are surreal and “Something just ain’t right here…”
Well, sure, there isn’t. Just most media outlet’s don’t marry-up stories together so you can see the weave and waft of the whole cloth.
These are going on in background and it’s why our current “most preferred news source” is Reuters instead of the 3-1/2 useless networks pretending to inform America.
Here’s their NAFTA re-negotiation story – pretty much buried elsewhere.
Busy weekend ahead: A Making column for Sunday, update on our longer-term market outlooks for Peoplenomics.com subscribers tomorrow. May even get some work done in the garden – and that may be the Making column for Sunday. Depends how ambitious I get. Plenty of smaller projects ahead in the shop and the line of projects for the electronics bench is long… Coping section Monday is about “Finding Telepathy” which you’ll find interesting, I hope…
Have a great weekend and ya’ll come back Monday…