Month: April 2014

The market will fall today.  It is NOT the end of the world.  That comes this summer.

Peoplenomics subscribers, though, have to be deliriously happy with our Trading Model which has, for about the past three weeks been setting up on a “replay of summer 2011” and which I trade quite publicly.  It’s one thing to have a trading model that keeps you in the Big Trends, but it’s another to bet against it and the market as I have been. Neener, neener.  Ure wins a cheeseburger.   For a change, the market is coming around to my way of thinking.

I’ve mentioned Roget Reynolds email list a number of times.  He’s an “old hand” (OK, not that old…) at markets and he sent out a note after Thursday’s little bloodletting…

DID YOU KNOW THAT—-LAST FRIDAY APRIL 4, 2914 THE DOW JONES INDUSTRIAL AVERAGE MADE A NEW ALL TIME HIGH. BUT—DID YOU KNOW THAT ON AN HOURLY BASIS IT DID A BROADENING TOP PATTERN DURING THE DAY? THIS COMPLETED A BIGGER BROADENING TOP STARTING ABOUT MARCH 1. —-BUT, THIS COMPLETED AN EVEN BIGGER BROADENING TOP STARTING ABOUT DECEMBER 1.

SINCE THE BROADENING TOP IS A FORM OF DISTRIBUTION PATTERN—-IT MEANS SOMEONE HAS BEEN SELLING AGRESSIVELY ON EVERY UPTHRUST SINCE DEC 1.

SINCE THE 2007 TOP WAS ALSO A BROADENING TOP OF ABOUT 4 MONTHS—-JUNE TO

EARLY OCTOBER—-INVESTORS SHOULD CAREFULLY MONITOR THEIR STOCKS.

If you want on his list, try sending him a note at randkreynolds@usa.net as he’s been kind enough to accommodate new readers in the past. 

Tomorrow’s Peoplenomics will pick up the pieces after today’s session but for now the big battle today will be whether the S&P will be able to close the week over 1835 on the S&P.  If it doesn’t, then the market’s next level down ought to be 1740 (Robin Landry) or 1751 (Ure) and in any event, I’m still thinking about the 1,540 level around the 4th of July.

But I’m not the only one looking at this scenario, apparently:  Dow looks set to open firmly down again and with it, all kinds of talk about the end of the financial world.  And with good reason, mind you.

As I pointed out in Thursday’s headline “Bad News is Good News! (But it’s really BAD)” the news really is bad.  We’ve just gotten onto it way sooner than most…which is what we do around here.

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The markets are on crack.  A special kind of crack called “Easy Money.”  We’ve gone from Helicopter Ben to Jump-shot Janet. Let’s  run through a nickel-bag’s worth of data:

• Russia hasn’t finished its exercising yet and hasn’t pulled back.
• Ukraine is still a mess that could flash nuclear any time.
• The US is hinting that we might send troops to beef up NATO.
• The Baltic Dry Index is falling quickly.,
• Beef prices have just hit all-time highs
• Presidential and congressional approval ratings suck
• The police state emergence continues (we’ll get more into that in a sec)
• And robots are coming to take all our jobs.  Firemen next.

So what does the stock market do when the Fed hints in its meeting minutes that there might be a  delay in interest rates going up?  The market rallies!

The lone (but very reasonable) dissent noted in the Fed Minutes came from Board member Narayana Kocherlakota:

“Mr. Kocherlakota dissented because, in his view, the new forward guidance in the fifth paragraph of the statement would weaken the credibility of the Committee’s commitment to its inflation goal by failing to communicate purposeful steps to more rapidly increase inflation to the 2 percent target and by suggesting that the Committee views inflation persistently below 2 percent as an acceptable outcome. Moreover, he judged that the new guidance would act as a drag on economic activity because it provided little information about the desired rate of progress toward maximum employment and no quantitative measure of what constitutes maximum employment, and thus would generate uncertainty about the extent to which the Committee is willing to use monetary stimulus to foster faster growth.”

Now, let me explain the mechanics of this, in case you’re not clear on it:  The reason the Fed is not already raising rates is that the the economic recovery has been buried.  Hiring more police and bureaucrats is just barely able to keep up with core jobs going down the tube.  The unemployment rate is stuck at 6.7 and institutionalized  unemployment has become a sad fact of life.

Let me put it this way, if the coffee hasn’t hit yet:  Recovery is sick and on life support.

What the Fed minutes mean is what?  They are admitting that things are bad!

So what rally?

Well, we get back to interest rates.  The longer rates are held low, the longer the hedge funds can get (essentially free) money from the Fed though puppet bankermediaries, and this gets spun up and poured into even more stocks.  The higher they go, eventually the further they’ll….what?

And since there’s not enough IPO action of late, the existing stock prices are bid up anyway even if sales are flat and the profits go offshore.

So that’s why the market screamed ahead yesterday:  the bad news (that the Fed might not have the pricing power to raise rates as soon as their own press hype held) means that the upper class will continue to get free lunches like they’re going out of style.

If there was anything to the notion that trickledown worked, we would see a 20% across the board increase in money for Social Security recipients.  Oh, and the money’s there if anyone in Washington would fix their low-T issues.  For instance:

There are wire service reports that there are $2.1 trillion in untaxed US corporate profits laying around offshore.  Got that?  UNTAXED.

Let’s run some numbers, shall we?

OK, let’s assume that $2.1 trillion didn’t all pile up in the last year.  Let’s say it’s only $1-trillion worth.  And let’s then figure that could all result in a 20% corporate tax revenue increase.  $200-billion.

Now, it says over on this Social Security site that we have 63.4 million people on social security.

That means that IF the government would get off its ass and go collect the tax-evading money due, we would be able to send out a $3,000 bonus check to everyone on Social Security this year.  ($3,154 and change to be more precise.)

And that would jump-start the bejesus out of the US economy.  Some seniors would buy a new car, eat out now and then, and in the even, since we grays are always handing money out to the kids, this would really “trickle down” to the family level and would allow employers to raise wages and all kinds of other happy outcomes.  Force multiplier.

Solutions like this should be obvious as hell to anyone with a lick of common sense.  Oh, wait.  I may be at the root of the problem here… How else can government officialdumb keep ignoring the chance to snag a fat gift for We the People that keeps on giving? 

THE ANSWER is simple, but ugly:  Payoffs to the people in office.  Via unlimited campaign dough.  K-Street Mafia.  Interstate election buyer co-ops…you know the drill.  You’re the one being drilled here…

Who needs a Don Corleone when there are special interest groups with unlimited dough?  Political crime is the new organized crime and it’s been legitimized by the courts.

Between taxing corporate profits and selectively hitting back at K-Street America could be won back.  But the fix is in because good people – people who went to Washington with integrity – have failed to keep their on on the real problems of this great land.

While attorney general Eric Holder, argues “vast discretion” over the enforcement of laws (selective enforcement/tolerance policies), I’d venture the American public is sick of the ruling  financial class which just got a green light from the Supreme Corporate Court to keep out-bidding the regular people who live in America. 

Ain;’t gonna happen, but it would be nice.   If Holder can’t answer a  subpoena in more than a year, it’s hoping too much that he’ll be able to tax offshore money in the short time before his boss if out.

Corporate feudalism is the future.  The Obamanista “change” was just another marketing slogan repeated ad nausea to the simpleton voters.  And sure, it suck to be us…because the Fed minutes belie the truth:  that recovery is more smoke and mirrors than walking-around money in you pocket.

And that’s why the market rallied: Out of your pocket, safely into theirs.  America’s just been bent over again.

More after this.  And after my blood pressure comes down enough to continue looking through the crap rolling off the wires this morning…

Nevada: Research on “The Jackboot Cycle”

My consigliere counseled me Wednesday:  “What the government is guilty of in Nevada is gross stupidity…”

It was hardly a breakthrough thought, since I’d just read that story about the town of 7,.000 in Ohio getting a tank… but still, fair point.

The long story made short is a Nevada rancher who disputed land grazing bills from the Bureau of Land Management is now surrounded by 200 federal agents who are picking up his cattle to pay the bill. And it is not like this hasn’t been going on for a while.  The court order against Cliven Bundy in the case has been on the books since July 9th of last year:

IV. CONCLUSION
IT IS HEREBY ORDERED that the United States’ Motion for Summary Judgment (#18)
is GRANTED.
IT IS FURTHER ORDERED that defendant Cliven Bundy’s Motion to Dismiss (#28) is
DENIED as moot.
IT IS FURTHER ORDERED that Bundy is permanently enjoined from trespassing on
the New Trespass Lands.
IT IS FURTHER ORDERED that the United States is entitled to protect the New
Trespass Lands against this trespass, and all future trespasses by Bundy.
IT IS FURTHER ORDERED that Bundy shall remove his livestock from the New
Trespass Lands within 45 days of the date hereof, and that the United States is entitled to
seize and remove to impound any of Bundy’s cattle that remain in trespass after 45 days of
the date hereof.
IT IS FURTHER ORDERED that the United States is entitled to seize and remove to
impound any of Bundy’s cattle for any future trespasses, provided the United States has
provided notice to Bundy under the governing regulations of the United States Department
of the Interior.

So in comes the government to collect its due.

Except that they came in with helicopters, road blocks, and more.  Which has many people in Nevada upset including one reader who advises us:

I’m deeply involved in the ongoing effort to transfer the Federally managed public lands to Nevada as promised when Nevada joined the Union.

Nevada BLM was found by a judge in  the Hage case to have committed fraud and to have been in violation of Rico.  Nevada BLM is a criminal organization.  Use of snipers on Nevada’s public lands is outrageous, and the Clark County Sheriff is negligent and in violation of oath in not enforcing state law.

All of which brings up a critical question every state legislature in America ought to be asking at the end of all this:  Should the federal cessions of land be rethought?

The state cessions are those areas of the United States that the separate states ceded to the federal government in the late 18th and early 19th century. The cession of these lands, which for the most part lay between the Appalachian Mountains and the Mississippi River, was key to establishing a harmonious union among the former British colonies.

The areas ceded comprise 236,825,600 acres (958,399 km²), or 10.4 percent of current United States territory, and make up all or part of 10 states.^[1] This does not include the areas later ceded by Texas to the federal government, which make up parts of five more states.

The further west you go, and the later in history, the murkier things become.  Don’t forget that the Texas Independence Movement figures the federal government still owes the state (in 2003-2004 dollars) about $7-trillion for the lands it got. 

Present legislatures and (effectively) eBayed politicians are not likely to make an issue of such facts as cession of land to the central government.  But the Nevada case puts this whole issue back on the table. And it’s one that won’t be gong away any time soon, as the central government continues to kick the public of public lands.

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Tolstoy I am not. Although we seem to have a gambling streak in common, I remain confused just what a “non-violent and spiritual anarchist “ is.  But I do have a good grip on the gambling side, which is why tomorrow morning’s Peoplenomics report will be so interesting.  I developed something called “The Trading Model” which was designed to keep your 401-k or saving from being run over and tossed in the ditch.

Still, we have to admit the title “War and Peace” is a pretty novel way of framing the morning’s news, especially because it’s Tolstoy’s homeland that is warning of civil war if Ukraine uses force to put down the Eastern uprisings which will (unchecked) cede more of the former Ukraine back to Russia.

War in never civil, even if that’s the term.  And by now, you have likely read James Dunnigan’s works on war, what goes into them and so forth.

The hell of it is that  I’m pretty sure that Donetsk will fall, say next week, and that should put us in a position to rally from pending lows (specific targets tomorrow) back up before the Russian moves on the whole of Europe ramp up in May, if I have anticipated their timing right.

This morning, the market is not taking the news particularly well.  After killing 166 points in the Dow Monday, another loss seems likely today, and into next week’s options expiration at which time U know who will be buying up armloads for the next cycle (May).  I generally don’t play options anymore, but when news events and history seem to lay out a path to “rob the bank” with limited risk, it’s a WTF decision.

War isn’t the only thing weighing on the market this morning.

The Federal Reserve’s Consumer Credit (it’s really debt, but in banking it’s always about me, me, me, and the me in this case is creditors) Report that came out yesterday.  Revolving credit card use is cratering again, going down at an annualized rate of 3.4%.  Sure, there was some improvement in non-revolving debt, but that was from things like student loans.

See footnote #7 and the gain under major types of credit by holder to “federal government” over here.

I’ve said before – but it bears repeating – that in a real recovery, the consumers is doing something besides buying cars, borrowing money to pay taxes, and scrimping to pay HUGE healthcare premiums.  The real solution is found is barring credit card companies from charging delinquent people more than regular interest – knock off this 30% whack on the pee-pee stuff that jams people down into debt and just fattens up the banks stress test line and ultimately just grows the divided between the haves and the have-nots.

I know this is dirt-simple and should be apparent, but it seems to be beyond the grasp of more than 500 Fools on the Hill or the guy down the Pennsylvania Avenue from them.

Hence, this morning’s outlook:  People are buying gold because they don’t trust a) Russia and b) the US.

Of course, there is the falling tech angle, too.  This is making headlines in places like the Financial Times.  Of course, if you had read my March 27th report (A “Social Decline” in Motion?) you would not be the least bit surprised.

Thus, we fearlessly forecast an S&P that could hit 1,751 within a week or two, (or Friday) which could jam gold up to the $1,375  range, or maybe even higher.  Fear is predictable.

This is a great time to be thinking like a financial doctor:  If this morning’s headlines are the symptoms, what would the patients be doing to self-medicate?  Cutting debt, buying gold, holding breath would be a fair stab at it, I would think.

And since no one in Washington can stand up to the K-Street Mafia, Bankster Division, there will be no real reform of punitive/oppressive lending practices, and, as a result, the cycle of boom and bust, not to mention class divisions at the human level, will only continue to get worse.

From the longwave economic perspective, we’re at the tail end of falling interest rates and as yesterday’s chart showed, this is when the odds of financial discontinuities is highest – when interest rates are nearly zero.  Think about negative interest rates for a second…and mull it over.

With that as a backdrop, it’s no wonder KGB judoka are warming up their irons to strike.  Sound-bite media are paving the way and superficial analysis isn’t the work of the devil, but it may help the sons of Lenin a good bit.  An under 35-state department and leftovers of the Bushistas and PNAC aren’t likely to help, much, either. 

So the close (shortly?) under S&P 1835 should take us down tdo our next trading target.  Give it a week or two, and let’s see how it plays.  Economics and war is just like golf, with just slightly different ballistics.  Tee time, as always, is 9:30 Eastern.

More after this…

(We’re always prepared to celebrate something around here…)

Sun, Grand Crosses, and Jittery Times

One of my biggest worries is that NASA has become a political football, of late.  Not only has the US decided to tank relations with Russia, but the “Oh, D’oh!” moment comes from the fact that we no longer have a way to get astronauts into space without relying on the Russians for lift.

So it’s in this kind of “caught in our own thinking” and budget drops, that we eagerly wait each month for the Solar Cycle Projections, knowing that if any more cuts come to NASA they could start dropping important data, like this monthly chart.

The reason this is key?

Large solar flares happen on the backside of the solar progression (11.something years) and so we’re now in the high risk period.

Line that up with an astrological Cardinal Grand Cross, (details part 1, and part 2) and while we’re at it, let’s also serve up this year’s four blood moons starting next week, and you have a greatly simplified explanation for why my inbox is filled up with emails like this one:

“Got a creepy feeling about this Friday —

Flash crash on Friday???
I got a creepy feeling.  A couple of 11’s, a 22 and a 13.  And of course the Grand Cardinal Cross next week with the influence of Uranus being found in the disappearance of MH370 (that also = a 22 and a 13), and multiple earthquakes making the nightly news.”

Like the old saying runs, as above, so below.  Just keep Robin Landry’s 1,740 S&P level circled as an interesting intermediate stopping point.

In the meantime, the alignment of Earth, Mars, and the Sun today does lead to an increased chance of earthquakes, worry others.

MH370 Search Claim

China’s Xinhua news agency is going wall-to-wall on the MH370 debris story claiming their patrol ship Haixun 01 was first to hear the pinger.  We’ll see…

Island Fever’

The Senkaku’s are back in the news…those being the small islands in the East China Sea where Japan has laid claim.  None of which would matter except that the world is running out of oil, and there’s oil under those reefs and so it is a really BIG deal.

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We have three stories this morning which can be broadly lumped under the “waiting for the wreckage” concept.

The first, as always around here, is financial in nature.  This is because in the Grand Long Wave Theory of things, we’re getting down close to the bottom of the trough of long-term interest rates and we are nearly at Ure’s Paradox.

A chart in one of the recent Peoplenomics reports sums up the problem graphically:

What this means is that as interest rates fall, stock prices with stable earnings will go up.

But there is a boundary zone, because as interest rates approach zero then suddenly the value of stocks drops precipitously because confidence in the whole economy just got crushed by inflation.

And this, of course, explains neatly why a) the market is continuing to replay the spring-summer of 2011 so nicely and b) why the stock market fell on its butt on Friday.

This morning, has anything changed?  Well, no. 

The Market is waiting to open down about 50 on the Dow and somewhere in here we will begin edging down to the 1835-1840 S&P level. 

Unfortunately, our Trading Model will have announced a sell signal somewhere before that (at least likely so) and that will set up further panic down to the next lower level, which is around S&P 1740, by Robin Landry’s calculations.

But if/when THAT fails, then we finally get around to an S&P with a target of 1,565 (my work) or as low as 1,540 (Landry’s work) as possibilities along in August, but perhaps earlier.

The next Biggie, in terms of market data, will be the Consumer (yoke of) Debt (credit to banksters) which will be released by the Fed today.

With M1 interest rates jacked up to 18.3% annualized (printing money is the apparent replacement for QE’s going away) we will be holding our breath to see if people are putting on the yoke of debt at high enough levels to sustain the economy going forward.  The yoke is presumably very comfy if you’re a Fortunate 500 corporation, but the credit card money-changers don’t give a rip and so they’re still screwing people with 29.9% rates on delinquent payments.

And it is EXACTLY this spread (the 29.9% F.U. Consumer Rate – versus the 0.25% we love you bankster rate, that Her Yellinness doesn’t seem to be addressing.

Until that spread is narrowed (with a return to usury laws, perhaps?) it’s only a matter of time until the economy goes off to become the poster child for wreckage, also to be known as the Second Depression.

Our #2 Wreckage story after this shameless bit of self-promotion…

The Pinger-Dinger

The media hype machine is going full blast this morning.  And once again, it’s the hunt for MH370 and reports that a promising signal has been heard.

If this is starting to sound a little suspect, I can tell you as someone who has worked on battery powered projects involving battery instrumentation (and yes, on patents for it) there is not a lot of reason to put stock in these latest reports.

Batteries, you see, are chemical and the colder they get, the less energy they put out.  I don’t have the specs on the pinger’s battery in front of me, but a month, under cold water and “keeps on running?  Count me skeptical, for sure.

Another reason to be skeptical is this note from a source:

Following my previous emails to you regarding flight MH370 going north and not south I wish to update you and point out to you that there is still no public technical evidence to support that the flight really did go south as the media reports. I am an expert in RADAR, RF, IP networking and Doppler theory/capabilities. You, I am certain are well versed in radio and RF theory. You will thus understand that the so called Rolls Royce Engine satellite pings that were received by the two satellites could only measure transit time and RF Doppler shift. Thus:

1) East/West relative direction could be determined for the plane by measuring message transit time and Doppler shift.  I believe the MH370 flight path was certainly in the west side of the map ellipse depicted in map-1 below.

2) But the Doppler shift of the carrier frequency of the RF ping will not allow anyone to ascertain whether the plane went north or south, but only along with the signal transit time that the plane moved as far as the limits in the black arc on map-1.  North or south cannot be known from this data

As you can see (look at map 1 of the 2 maps below) if the flight went north it would have ended up in one of the “Stans” such as Kyrgyzstan or Pakistan or very close to it.  Terrorism in Kyrgyzstan has increased since the U.S. military invaded Afghanistan and overthrew the Taliban in 2001. Southern Kyrgyzstan is increasingly sympathetic to terrorism and radical Islam according to Wikipedia. Western governments would not want terrorist organizations to know that they know where the plane is now located.

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Oh, I can feel the stampede of bulls in just a half-hour when the market opens.  Nothing helps climb a wall of worry like a solid jobs report just out…

Total nonfarm payroll employment rose by 192,000 in March, and the unemployment rate was unchanged at 6.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment grew in professional and business services, in health care, and in mining and logging.

Household Survey

Data In March, the number of unemployed persons was essentially unchanged at 10.5 million, and the unemployment rate held at 6.7 percent. Both measures have shown little movement since December 2013. Over the year, the number of unemployed persons and the unemployment rate were down by 1.2 million and 0.8 percentage point, respectively. (See table A-1.)

Among the major worker groups, the unemployment rate for adult women increased to 6.2 percent in March, and the rate for adult men decreased to 6.2 percent. The rates for teenagers (20.9 percent), whites (5.8 percent), blacks (12.4 percent), and Hispanics (7.9 percent) showed little or no change. The jobless rate for Asians was 5.4 percent (not seasonally adjusted), little changed from a year earlier.

The number of long-term unemployed (those jobless for 27 weeks or more), at 3.7 million, changed little in March; these individuals accounted for 35.8 percent of the unemployed. The number of long-term unemployed was down by 837,000 over the year.

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