This 1928-1929 Stock Chart Helps

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.

(Continues below)

 

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.

Inquiring Minds

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.

A video from Zacks.com over here discusses some aspects of the ETF  blowing up question.  (The XIV case.)

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?

Government shutdown set to end as budget deal passes Senate, House…

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:

UC Berkeley plans to allocate $800G for needs of undocumented students.

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.

Meantime, talk of the Silicon Valley Exodus is back – crime and politics (including sanctuary status) are driving, says here.

Nashville is hot…

We’re Sending China WHAT?

How soaring U.S. oil exports to China are transforming the global oil game.

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.

NAFTA Talks

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.

Also, long as we’re on media matters, notice online is now 60% of the revenue for the NY Times?  Oh, and they are losing money

Ahead, then…

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…

Comments

This 1928-1929 Stock Chart Helps — 42 Comments

  1. Robert: “Moral” simply IS. Every single major religion has, within its teaching, some version or other of the latter six of the Judeo-Christian “10 Commandments.”

    Does this mean theft, murder, and adultery were morally okay, before the dominant religion of an area codified them as “sin…?”

    • …Or does it mean a “society” (a tribe, or perhaps even a confederation of cave-dwellers), once sufficiently advanced to make a list of “things for which we’d kill each other,” came up with a list of “things we shouldn’t do, if we don’t want to wake up dead,” and the dominant local religion, when it came into existence, later adopted that list into directives or commandments?

      • Morality isn’t religious; it is common sense. The fact religions have adopted morals, put their individual “stank” on them, and attempted each to apply and enforce its particular version of groupthink on the individuals under its influence, doesn’t make it any more religious.

  2. Understand, not everything is controlled by the World’s hidden sociopolitical overlords. Lots of stuff in the U.S. is so-controlled, because our system of government, being more free than others, lends itself to unprincipled incursion by individuals and groups whose personal agenda is in apposition to that of the people who assembled our government. This is the basis of Franklin’s warning. It is also the reason for John Adams’ statement: “Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.”

    To control the United States, all one must do is alter the public perception of a word or two, like “general welfare,” or “moral.” During the conquest of CONUS, we killed a half-million or so Indians, over a period of roughly 280 years. To build the countries Xi and Vlad now control, their predecessors killed roughly 100mln and 120mln people respectively, over periods of a few decades, so along with a much-less penetrable political structure, these two Nations have a much more recent, and bloody history than do we, i.e. their populations and methods of control are much less pliable than ours.

    I don’t care for the term “deep State” because it is a label attached to embedded lackeys in our government bureaucracy who implement the will of the puppetmasters. Removing “deep State” agents, although undoubtedly a good thing, would be treating a symptom instead of the cause.

    The massing of Russian and Chinese materiel within spitting distance of North Korea is not directed at us, but at Pyongyang. This is the countries which are the closest thing to allies NKorea has, telling the young Un not to mess with the Olympics. Don’t get me wrong, The U.S., and SKorea, Japan, Taiwan, and probably Canada, Australia, and the Philippines are programmed in so targeting can be redirected in seconds, but we’re not #1 in the shooting gallery right now, and neither is Seoul…

      • I second that! Although defining moral could be troubling. It has rigid overly religious connotations, as though only believers are capable of achieving such thoughts and behaviors. Puritanism is the logical direction that morality measures leads to. I don’t want to live in that environment.

        I’ll settle for America first and MAGA and losing the demonization the left has placed on nationalism and defending the native dominant cultures that many people from other nations helped create and wanted to be a part of as their desire to get here..its the American dream and all the opportunities it offers to people who want to see them, that use to lure foreign peoples to the USA and they, like my past generation relatives, wanted to be an American first. Not all who come here now have that perspective.

  3. When Obama was in office it was the PPT keeping things from falling apart. Now that an (R) is in office it’s the “Deep State” and rich people crashing the market.

    It’s a mighty complicated web of fabric that’s being woven by folks to buttress their political persuasion.

  4. Hmmmmmm… civil war 3.0 or proxy with China through korea?

    Just thinking out loud.

    Moving 300,000 troops to the border durring the Olympics in Soel. A very peculiar move.

    As it is now, 20 % correction in the markets then to all time highs.

    Unless there is a FF or China war. If we go to war with China, in pretty sure Iran will attack israel

    • Possible..we see what’s being said and done. Now consider all the countries that have been actively in our news as huge threats just in the past two years.
      Isis sneaking warriors into the US posed as refugees, Russia moving troops to aid a bordering county,syria and the battle there and the gas fiels, diamonds in south afrika. The list is pretty extensive and up till lately was a common discussion on the news.
      Now all of a sudden..nothing at all. Did all of these situations that we were spending hundreds of millions on get solved.
      Are they being kept from us so we will focus on this. Or a deeper darker image. That they are sitting the sidelines waiting for us to move. Realizing that alone we are just to big and to powerful that by combining their efforts can succeed.
      The puppet masters greed get the better of themselves.
      The world is deeper and darker than we know.

    • What I don’t get is this..
      The USA has bankrupted themselves.
      We are totally dependent on other countries for our goods.
      We overspend trying to get the wealthiest wealthier. Our society and survival depends on their greed rather than our intelligence and ingenuity and industry.
      To conquer America would only require destroying the greed of the wealthiest. Devalue the dollar by adopting another backed currency.Then put the average citizen in the bleak situation of despair and hopeless poverty like Argentina and greece. The wealthiest in all their endeavors hasn’t even considered anyone but them. Then come in with aide gain the confidence and trust of the average for their survival.
      Kind of like pulling the rug right out from under them. Without even firing a shot.
      A gandi defeat
      Just saying we already depend on them for almost everything already. Our whole society is designed around the desires of the wealthiest. Our politicians only act in their best interests.

  5. I had to think of you George when I read in a CBS news article “What is a stock market correction?”

    The world is so full of sheeple now that the news is having to explain what a correction is!?!? I wonder when CBS will run with “What is a depression?”

  6. Every drop of oil exported from the USA is that much less oil that will be domestically unavailable when the dollar devalues. Remember back in the day when we would get the family car on a Saturday night, load up with friends, put a dollars worth of gas in it, and cruise around all night? That difference in gas prices is not because the utility value of oil went up, it was because the dollar devalued. Keep the n mind that back in those days, one income was more than enough to support a family and buy a house.

    And why will the dollar devalue? Well, that finance bill just passed guarantees at least three $trillion more will be printed in the next two years. In addition to that, the treasury needs to roll over more than $1 trillion of older debt. If you want to understand how that works, do a little study about Venezuela.

    There is absolutely nothing produced in the USA that cannot be acquired elsewhere for a cheaper price. The reason the USA exports any thing at all is that world trade is currently in dollars, and it is preferable to hold hard goods instead of dollars, and the BRICS countries have been working 24/7 for years to provide an alternative to that dollar game.

    The key here is that your house may be worth a million or you might see gains from the markets or bitcoin, but at some point you will actually want to buy something with that wealth, wealth that does not exist until you wish to purchase something more desirable by exiting that position. The gain from that current position disappears when the dollar devalues.

    As Jim Sinclair, one who truly grasps the current financial situation says, the only way to not lose in the current economic situation is to not even play the game. Metal is the only safe position, because it is the only asset that does not have a liability on the other side of it. Even real estate has taxes and insurance liabilities attached to it. The “markets” go up because all those printed dollars need someplace to go. Fundamentals like dividends or interest or corporate/national solvency no longer have any relevance to the value of those instruments. Their value is determined by the expectation/perception of those playing that game, not by the production of anything that pays wages or increases value of resources like manufacturing.

    • Exactly X-Pac back then when they discovered those old wells in Alaska and then put a cap on them they said hey there’s enough here to feed our nation for 200 years but what are the greedy all companies going to do know they’re not going to sit on it they’re going to now is the opportunity and they’re going to sell it to other nations and so we’re still going to have to compete on the oil Market as Citizens

      • I wonder…
        Could we actually stop the velocity of printing money without stalling the economy?

      • This comment or message or Pace from wherever it comes from is Two Georges I believe we can if we have propositions the challenges you know good suggestions yes we can do that.

        .
        Change is like saying hey Japan is now part of the United States isn’t it even though it’s not a state is part of who we deal with and protect and have power over.

        Famous powerful force that’ll take over everything that you knew about the Earth is happening and it’s a person that has a stiff upper lip and you know who that is yes you do that’s stiff upper lip is saying you’re fired or you’re hired and you’re not going to be able to no longer deny the people of the world what we need to survive in Harmony and expand Beyond this planet and Galaxy

  7. I , YOU, WE have a story to tell about the Nanobot.
    The gnat.
    The rat and the
    The bat the little pesky bat or the big bat something that’s long wide traveling through the universe that decides to enter our solar system an disturb our electrical Manufacturing as it is and was or were but the future is ,it shall be ,it will have shall have been,
    From outer space
    Riding on the back Of the GORILLA.

    Remember thoughts have wings

    Everything works in circular ways and waves

    Is the oscillation

    Toward your advantage

    Or can you do what George does .

    Narrowing it down to a fine art minutely without shilly-shally.

    Have a nice day and may all beings be lovingly for Phil and always remember do not let one thing get you down go around

  8. Hard to say which side of 1929. Given that the market continues to Hemmorhage, it’s nauseating. Even though the buy the dip crowd hasn’t completely dispersed & after hours vix plays are still going on, unusual things are moving in lockstep & everything is up & down. Have no doubt somebody is profiting handsomely from these maneuvers. The darn automated computer trading needs to be curtailed.

    • Got a hell of an interesting chart brewing for PN tomorrow… I just bottom fished (I hope!!!)

      • I hope you are right, George, since I am riding out this downturn. Does Jas have a website, investment service, or book on options trading? That trade was amazing. My only experience with options is writing Covered Calls to generate income.

      • I hope you did too.
        I missed it driving home this afternoon from Kentucky where I am once more destroying US ARMY Nerve Agent Weapons. Maybe I can catch the wave Monday on my smartphone.
        Anyway It brings up a question I was wondering about: Do you still track the 2DMA and 5DMA Vs Ag in addition to the 9DMA and the 128DMA?
        I was wondering as when I charted it all tonight I see that the Ag and all the indexes went positive on the 2DMA tonight.

      • Details in PN this AM… good points and yes, I got all in long side Friday that block was at %79 and change – but the bulk of it was around $84.6 but UDOW closed 86.4’ish so no complaints.
        You may see a meltup Monday if I’m right – but details on the pn side.

  9. George
    One thing that bothers me is that almos all colleges and universities, give full aid to students in the DACA or not documents status. There are a lot of American students and even legal residents who receive a small percentage of financial aid for their education and that for me is not fair, and upsets me that some of these people brag about it, I know this from my own experience as a father of two college kids.
    From a human sense, I understand some of these kids came as babies and for whatever reason, and they deserve some process to legalize them, however, that does not means they have priority over everybody else, and because they play the victims, they get everything.

      • No worries – I write on a huge device. I call my typos “thinkos.” Cus I’m off thinking about what I’m writing not perfecting the written…er…where was I?

    • Would you agree to have someone from another solar system that is extremely Beyond anybody’s knowledge on Earth to come here and pay them give them almost anything they want maybe a million-dollar year contract to teach us everything that we don’t know okay now that’s reduce that and say there are some people out there living around this world that need the opportunity to come here and expound that opportunity now how many of us that are living here has the ability to have a paid college education because we’re that bright you see where I’m coming from here..

      I think that was part of it it wasn’t the Muslim or religions coming in in the past it was hate this little place on the globe call the United States is back by the bankers and they want anyone and everyone that has an idea into the new technologies to come here and we’ll pay you .
      Do you see how the Puppet Masters work

      • This is how the smart power structure works there always advertising and pain 4 news for you. Knowledge ideas.

        To expand their gold mines and hold them in reserve for when they need them they may not use them now which is what they done they have vast vast knowledge and Technology but they don’t use it and it’ll be to their device to try to reduce the population that gives less knowledge into the things that they don’t know about they think they know it all but they don’t they haven’t even scratched the surface

  10. Is there a site for real time tick data for TNX / 10 year interest rates? Yahoo does not refresh automatically.

  11. Rand Paul talks a good game, sure, but he voted in favor of the tax cuts for the wealthy, which added another $1.5 trillion to the national debt. (Recall that 83% of the tax cuts went to the Wealthy, but the remaining 17% for the rest of America was paid for by the SALTs, etc). He’s just another lipstick Conservative. Mike

    • “Rand Paul talks a good game”

      There’s a lot of psychology to politics.

      Nobody told Trump to quiet his yapper when he was talking up the market, now that the market is declining it’s a ‘soft coup’ against Trump and America. LOL

      We see it everywhere.

      Some people talk against the single momma problem perceived prevalent in the black community, yet overlook Sarah Palin breeding a brood of singe mommas and even propping one up on the national stage as “Conservative” role models.

      The folk who supported Palin overlook single mom syndrome in her family while those who believe in ‘substance over symbolism’ get called “libs” by the overlookers… even though the Clinton kid holds ‘conservative values’ by finding a guy, dating, getting married then having children.

      How many “conservatives” jumped into the “lib” pile when GM went tits up and a pension was on the line. “That’s different” although they were and still are their own stewards.

      *”Liberal policies generally emphasize the need for the government to solve people’s problems.”

      All that to say, tell the people what they want to hear.

  12. It seems to me that MSM can only describe events in superlative terms anymore. The market soars one day and plunges the next. Every event on CNN is “breaking news” no matter how trivial or mundane.

    Is there any question why people remain dumbed down and glued to their screens 24/7?

    • I know Bob it seems like it’s just terrible but within yourself you know there’s a solution what is it tell us

  13. Yeah,it was expensive, but it takes the democrat’s bargaining chip (holding the military hostage for DACA), off the table. Trump now dictates the terms of DACA.

  14. I haven’t been around in a while, but since the latest stock downturn, I needed to hear what George had to say. George, you still have it! Great articles all week.

    George knows I am in real estate in California and the news about an exodus is a bit misleading. Yes, people are leaving. It’s mostly baby boomers retiring to areas that have more baby boomers like the affordable Sierra’s, Del Webb communities and states they may have originated from to retire with extended family. And they can happily move because their houses are worth so much money, that it provides a huge nest egg for them to retire on. 31% of our sales involved a retired couple or person and the average sale of those properties were $1.65 million. (George, you can look me up on Zillow) Most of the homes sold had little to no mortgage to pay off too.

    But here is where it gets misleading. Of those homes for sale, there were 8-10 buyers competing to buy each of those homes, each one driving up the price several hundred thousand dollars over the list price.

    The fact is, there are still a ton of highly skilled engineers and post grad talent moving here on a daily basis. I have a big team that tracks relocation of this talent. They are a major part of our transactions.

    So, there may be more people moving out, but there are just as many people moving in. However, It’s a gentrification of highly educated and highly paid and globally sourced techies that have changed the landscape of our neighborhoods. I of course, welcome the change and the incredible building and growth that accompanies it. It is fuel for my business. But, I can see how many older and more established families are annoyed and a bit saddened watching their once sleepy suburban towns get transformed into vibrant tech hubs complete with high rises, crowded main streets and increased traffic.

    This new theme in the Silicon Valley is not exodus, it is the housing shortage. For every article like the one you posted, there are 10 that talk about our lack of housing and in particular, affordable housing. You can google Bay Area or Silicon Valley lack of housing inventory and get 5 pages of articles. And yes, if we don’t address the housing shortage, we will eventually see more articles on exodus, mainly because these tech workers that are moving here need a place to live. They all don’t want to rent forever.

    • You’re absolutely right about what you say in Andover up on itself if it was bad that bad people could start buying houses for a dollar which I did on the east coast well almost $2 so what we’re getting at is what you’re saying is exactly true the people who can’t afford to live there move out the people who are coming in with all the bright ideas and all this technology there find it hard to but they do find it they find a place they find a way somehow to make it there so yes I agree with what you’re saying

      • You might be on to something there. The small town USA trend..
        Usually a small community starts with a thought. A group of people with the goal of building a respected responsive town. To bring markets and others welcoming like minded.
        They struggle their kids see how vested their parents are they work just as hard. This goes on for a couple generations each generations expectations dim. The children move away and the older hate to see the changes that are needed so the community ends up dead everything the great great grand parents worked so hard to build is gone.
        Homes end up being sold for nearly nothing and a new set of young people move in with their hopes and dreams. Their own little section of a grave yard. Simply waiting for the next cycle.

  15. Re: “Nashville is hot”
    Some in Nashville feel it is becoming what the former Californians left, I hear. They are bringing the left coast atmosphere with them, much like Austin, TX.

  16. We’re sending oil to China. OPEC is sending oil to China. Russia will send oil to China. With the population level they have and will-have, they will be the #1 energy consumer of the world. And this just accelerates how fast the oil depletion happens. Who knows when but don’t we yet have an end of oil date figured out? End of this century? Something like that?

    • China just moved 300,000 troops to the N. Korea border. I think that is significant move. We already have a significant amount of troops in South Korea and (correct me if im wrong) we have 5 carier groups in the neighborhood. Russia moved troops to N. Korea border along with their best missile defense system in december.

      China is liquidating it real estate holdings in the US and if I remember right isn’t buying our bonds anymore.

      Mean while, the greater US population focus is on the turmoil in the US government.

      Is it one big soap opera distraction from what’s really going on? I know from experience that prior to the gulf war I knew we were going 4 months prior to it being announce. The share logistics of a big war, are astounding. Just the movement of fuel, food, lodging, bullets, fresh water, etc. Etc. Takes months to prepare for.

      Stocks are in “correction” across the world. These are not normal times we are living in.

      Something greater is a foot.

      • You have 3 major players and 2 minor players all sitting around adding gasoline and wood to the same fire pit. And one crazy minor player, playing with a book of matches.

        One false flag, one shell fired at south Korea and it’s go time.

        Not saying this will happen. But nothing gets the US unified inns fight like a false flag operation. War is a business model.

        Bay of pigs part 2?

      • My opinion on this is that each country is moving troops and/or resources for their own reasons – however having all this concentrated in such a small area – even though all parties (mostly) know of each others presence is very dangerous. One screw up and ‘the race is on’ and at the very least, life in that part of the planet will be impacted for hundreds if not thousands of years.