Coping: Dancing on the Edge of Anarchy, Trolls

We seem to have tweaked a nerve in the Monday discussion about borders and calculators.

While tomorrow’s Peoplenomics report will deal with the rise and fall aspects of borders – which gets into the whole notion of “property” and all, thence to economics – this morning we should revisit a number of key points because the issue promises to be around for a long time.

First, a word from a troll.  Trolls, in case you haven’t figured it yet, are the creatures that live under the internet, write mostly snide (or “me-too”) remarks and contribute little to the discussion in terms of facts.  Most often, their stock-in-trade is the personal attack. 

“hello mister georgie porgie,

been reading your blog for a few years now.  

maybe, just maybe, you might want to relax a bit, because you and your texan and murKKKKin neighbors do not have a clue about what is going on outside of dfw and usa.

but keep writing and cruising.  it’s nice to see and hear how the .00001 perceive their dream reality.

f

chico chico

I’m quite relaxed, thanks (125/70), I am not a Texan in the pejorative sense, and the state is actually not a murKKKin place as alleged.  What’s more, our network of sources is wider and higher ranking than you’d think.  And in term of living in a “dream reality”?  Thanks, but no thanks.

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Sleep in: Data Starts Tomorrow

I have a theory of markets and news that is pretty simple: Markets go where they will based on economics and returns on investment. But the daily news gives markets an excuse to do things that are mainly rational.

Coping: My Calculator is My Sword

(Back at the Ranch)  With our cruise delightfully free of small children and ringing phones, I had some time over the past week to sit back and reflect on one of the most genuine economic problems there is.

The little ones (how to accumulate wealth and how to keep at least up with the market) have only taken  a dozen years, or so, to overcome.

This other problem, though – that of benchmarking the world  — has proven more difficult.

There are economic answers, don’t get me wrong.  The world, as of now, has global gross domestic product by country of a bit under $78-trillions dollars.

It is a shock to the American ego to realize in GDP,  Europe is actually bigger:  This Wikipedia list is very revealing:

So, how many illegals are in the European Union?

This gets to me to asking some of those “hard to answer questions” that the modern, corporatized, me-too, neutered media don’t want to seem to ask.

How does the “Syria problem” of refugees stack up with the Obama administration-backed swamping of the US Border by Central and South Americans?

Let’s look at a Europe Union website here for the answer:

An estimated 9 million Syrians have fled their homes since the outbreak of civil war in March 2011, taking refuge in neighbouring countries or within Syria itself. According to the United Nations High Commissioner for Refugees (UNHCR), over 3 million have fled to Syria’s immediate neighbours Turkey, Lebanon, Jordan and Iraq. 6.5 million are internally displaced within Syria.

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Fed Tactics, Cycles, and Forward

(Somewhere south of New Orleans)  The Peoplenomics Cruise 2015 will be docking Sunday morning with (as we expected) no market panic.

However, just because we escaped the Big Bad Mean Depression II for now doesn’t imply that we’re out of the woods.  The Day of Reckoning has simply been (as anticipated) pushed back for a bit.

What will decide our future is an uneven stew – a mulligan is more like it – of Federal Reserve Policy, resource depletion, American presidential politics, and the wild cards thrown in by Asia’s major players and the solvency of Europe.

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Crazy George’s Playbook

With the futures down about 45 points, after closing up 76 Dow points on Thursday, I’m just sure that our colleague in doom will be placing trades this morning on this last day before Schmita (Sunday, Elul 29) on the short side.

You see, that is when the market is supposed to hit the fan.

The way I figure it, the TRUE believers in such pap would be buying short positions by the bushel basket this morning.  IF Schmita were a useful/tradable indicator, how else could they play it?

No, I doubt they will lay on the Big Catastrophe Shorts because we won’t know until after the Fed announcement Wednesday afternoon how the market will really react.

Of course IF the Fed decision in not “in bounds” they will claim a victory.  Or, if we really just go down Monday/Tuesday otherwise predictable turning points, they will say the “Schmita has inverted this year.”  Vape-o-nomics.

However, if they are not fully invested in the downside by the close of business today, I have have to remind you of the dictionary definition of the word charlatan:

“…a person falsely claiming to have a special knowledge or skill; a fraud.”

As Peoplenomics readers will attest, our Trading Model has been short every week except one since the week ending July 3, and the other week was neutral/cash.  Our model is still on the short side.

And we would not expect the market to spin on a dime here.

In my view the current period is likely to continue down to as low as 1,740, but like 2008 (when the Peoplenomics Model turned short 12-weeks in advance of Schmita which missed 22% of the decline) I would expect the same kind of thing this time.  Since 2008-2009 was 41-weeks short on the model, and since we are only 11 weeks into this decline, could we go lower?  Sure.

As I have said going into this morning, if the Schmita prompters really believe, they would go all in on the short side today.

In our Model, we will simply remain short and wait for a possible Monday/Tuesday decline as the market waits for the Fed decision Wednesday of next week.

Sadly, the Fed has a real problem – and now we get to the serious part:

If the Fed doesn’t raise rates, people will think “Oh my God…things are SO BAD the Fed can’t raise rates.  I should be short!”

On the other hand, if the Fed raises 10-25 basis points, I think people might panic the other way.

Robin Landry an d I were talking about this at dinner last night..  Robin calls it the “Glass half full” problem.

His point being that it’s very hard to tell when optimism (half full) hits a tipping point and becomes pessimism with the glass “half empty.”

What would I personally like to see?

In the equivalent period in 1928, the Fed raised 25 basis points.  But the prevailing discount rate was at 3 1/2 percent.

When the rate is down 2%, or whatever, there is a strong case that a very firm “hand on the tiller” would be for the Fed to do something shocking:  Like a 10 basis point raise.

I have never seen anything mandating even quart point/25 bips raises.  And psychologically it would be the best move in history.

To the Bears in the “Oh my God they can’t raise” camp, it would say “Sure we can.”

To the Bulls in the quarter to half raise camp it would say “We are independent minded”.

Around here, we will remain as we have for 11 weeks in the cash or short position.  I like cash.

And we pragmatically await the outcome of next week since the data will make the decisions for us.

A reminder for the two couples with us on this cruise (Peoplenomics readers), we will meet in the Windjammer Bar area at 2 PM (ship’s time/Central) and watch the market close and you can see the the Trading Model before we put it out for subscribers on Saturday morning.

Robin should be there, too…so Aggregate and his Gann-Elliott trading work.  That as a 3 PM toast to the market close.

Crazy Guess?  Modest decline today, further decline Monday, spike low Tuesday and stabilizing until Fed data.  Support levels on the S&P:  About 1,860, around 1,820, and 1,.740.

After that…well, let’s just say the Wave 4 then Wave 5 rally into the election aftermath in 2016 would be off the table.  My work says no, that won’t happen.

I had a problem once handicapping the ponies though:  The horse didn’t “read the Racing Form.”

Markets like the ponies can get’cha sometimes.

Papering Over

We suspect the only reason the Federal Debt Ceiling hasn’t been busted is by refi’s and book switching.  The Federal Debt to the penny hasn’t really changes in months and months.

And this morning we read this with 6 ounces of suspicion:  Treasury’s Lew says US can still borrow through late October.  Yeah.

Producer Prices

Hot off the press release:

The Producer Price Index for final demand was unchanged in August, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today.

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Coping: Last Days At Sea

(Somewhere off Cuba)   We will arrive back in Galveston Sunday morning – early.  From there it’s only 4-hours up to the woods and getting back to the normal order of things.

A word, or two, about commercialism of ports when you go cruising, is in order.

A look at Falmouth ,  Jamaica – on the left as seen from our balcony – would lead you to believe that it’s a beautiful place.

But not so fast, my friend.

Yes, it’s true that it is a gorgeous place, and all.  But ONLY inside the wrought iron fences that surround the port district and on the escorted tours.

As to wandering around the “old town” part of Falmouth, we were advised, both on the ship and by ground security personnel that wouldn’t be recommended.  And that’s for a party or four.

A couple of things here:  One:  Jamaica has strict gun control.  So a lesson may be learned there. The biggest problems would  likely have been lots of “in your face” street vendors and outright begging and so forth.  Crimes against persons, as in assaults and such, are low.  Still, it takes some of the buzz off the place.

You can find the Jamaican Firearms Act online here, but the long and short of it is that while it is a deterrent to the some of the newbies, the drug gangs still have them.

This will almost certainly get us into a long discussion about “How much worse things would be without gun laws…”  But, since the two conditions (armed/disarmed) cannot exist in the same place, all we can do is again note that places where there are gun laws  (Syria’s president Assad is big on gun control for State Security which in turn uses official guns to intimidate, harass, and steal outright from the civilians.…) things are usually far from peaceful.  Or, at the other extreme, you get a totalitarian State, so choose wisely.  As our Founders did.

The second thing that happens in Falmouth is that commercialization takes place.  We had a cold one at Margaritaville (yes, the one with the souvenir mugs).  That’s a familiar brand in the US, so it’s kind of interesting to travel 2500 miles (round trip)  on a ship and still have the familiar brands about..

On the other hand, we had the obligatory Tasties patty at the Port and it had only about half the meat/filling which I remember from the 1980’s.  Back then, the rule of thumb was a good patty should have equal amounts of meat (like a 1/2 inch) and that should be more than the combined thickness of the two halves of the pastry.

If you’ve never had one, think of the 7-11/QwikiMart Apple Pie/turnover as a form factor.  Now, take out all the filling and sugar and stuff a Caribbeanized version of taco filling in it and deep fry.

On the other hand, got no complaint about the price:  Just $3 bucks for chicken or beef, or the combo.  Stark contrast to the $24.95 large frozen margarita. Any nutritionist would pick the patties as best price/nutrient.

Other than Elaine posing on the (not real) treasure chest outside with the Landry’s looking on, Mr.

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Useless if Not Timely

This leaves us only three trading days to go before we find out how that other nonsense turns out. A reader did ask a pertinent question, though. What is the difference between people considering Schmittah and you using long wave economics?

Coping: Duty-Free Economics

So this morning we will stick with the tourism stuff. We arrived in Caymanian waters Wednesday about 10 AM and dropped the hook at 10:30.

Schmita and a Lesson in Backtesting

(Somewhere off Cuba)  This morning’s report is truncated.  That’s because we are doing exactly what our Model had been saying.

In short, we are now in a buying wave that will either end today or tomorrow,  and we should finish next week with a good….

Wait!

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Coping: The Woo-Woo Returns, More Cruising Notes

(Cozumel, Mexico) While the market is looking like it will be coming up green (instead of the world ending today) we have time – as expected – to focus on the relaxing parts of life.

To begin with, a reader note about a recent woo-woo experience is worth part-time pondering:

What a strange week this has been.. the first thing that happened was my wife setting her phone on the kitchen counter.. everyone seen it..

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Markets Closed, Government Inequality

Except that in Europe, things are up between a third and half a percent. However in Asia, the markets are jittery as ever. The Hang Seng was hang-dog, down one and a quarter percent.

Coping: A Couple of Cruising Notes

(Wherever, Off Mexico) – A shopping mall with cartoon characters for the kids?  Inside the middle of a ship more than a thousand feet long with its own Starbucks hustle in the middle?

Uh-huh…this is cruising on a mega cruise ship.

Our ride down from the ranch to Houston Saturday morning was uneventful.  We stayed in a modest hotel in The Woodlands, ate incredibly healthy, and got more sleep than the folks we were traveling with.

The Landry’s had a wedding to attended, so Elaine and I took the opportunity to roll 12-hours of ZZZ’s.

Boarding the ship Sunday in Galveston was a tad of the frustrating side.

The way the Port of Galveston is set up, they have two parking areas that are several blocks from the actual cruise ship and shuttle busses are used.

Here’s the problem:  Absolutely zero coordination between the lot attendants and the shuttle drivers.  “Go stand by the fence,” one told us.  But that was with a half-empty bus much closer and going to the same two ships.

The first shuttle by the fence drove right by, and while Elaine and the Landry’s were wandering around after being told “Wait by your vehicle,”  Ures truly finally found a bus with an intelligent driver and after a good bit of cross-parking lot bellowing, and did I mention $10 bucks? – we got my bus underway and picked up the three Musketeers.

You need to understand a few things about the Galveston dock:  It’s like a cattle chute system, unless you’re traveling with people who have been on a lot more “points”.  Since Robin is “Emerald” we managed all the “special lines” which cut waiting time a lot.

However, since boarding was delayed a better part of an hour, that meant things were getting hot, people grouchy, and a dozen people wanted to cut in line, since ours was moving faster.

The slow part, just as at airports, was the security check points.  The number of wheel chairs, stroke walkers, and artificial hips, knees, and so forth, was prodigious.  They don’t really need security guards so much as a trauma or triage doc for this thing.

Eventually we boarded and Robin scored a table for four on the shady side of the ship on the 11th floor because rooms were not quite ready yet. 

A good thing, as it turned out, since it gave us plenty of time to study the drink packages and we took care of that little detail.

The rest of the day was spent getting to know the place, which we did.  And in a few minutes the breakfast buffet will be opening and all hell will break loose as 3,500 people need to eat.

So far, the general impression is good, provided you can travel with a couple that has plenty of points in already.  We are “gold” but that doesn’t get you past the general herd at boarding.

Given a preference in the future, Elaine and I are leaning toward smaller ships (Norwegian Jewel size, or 2,500 passengers).

We did chat with one of the more odd coincidences.  We happened to sit for a few minutes with a nice young couple (half our age, if that) who were on the cruise for the first time.

He happened to be recently out of the Air Force and his first name was Brandon.  During three adventures in the sandbox, he was an Air Policeman.

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