Almost a Peoplenomics report this morning – which you can thank our subscribers for.  The detailed charts will be up for them tomorrow.

While it is a major talking-point amongst believers in conservative economics, the notion that this year has been marked by a huge “Trump Bump” in the markets, a more even-handed appraisal of facts suggests it not a good idea to “get on that bandwagon” just yet.  To be sure, the Trump administration has changed a lot of status quo operations back in “Swamp Land” and much of it is for the better.

However, we still hold to a lot of “old-fashioned” values; one of which is that your “money” should be worth something.  So should your savings.

(Continues below)


The nation is not presently “looking out for your purchasing power.”  Indeed, the so-called “dual mandate” of the Federal Reserve articulates congressional guidance (or a miserably weak form) that the Fed should maximize employment and moderate long-term interest rates.  The notion is that if these two things happen, America will enjoy something approaching stability.

Where voters get “wrapped around the axle” of the double-speaking political class, is when they don’t understand data analytics and take “the data” at face value, not thinking about it clearly.  While it’s a grand idea to “Make American Great Again” (MAGA), the task is terribly more complex than the 7th-grade US Media portrays.

In addition to old-time conundrums of capital formation, skilled labor, and innovative design, the unaddressed challenges ahead will include “Human Replacement.”  As we have argued, mainly on our subscriber side, there is a compelling reason to tax the work product of robotic system imputing an income tax analog on the output of machines because for ever machine that displaces humans, the burden of social support on government grows.

Your Chart Declares Your “Party”

To illustrate the public’s bias, I’m going to show you two charts this morning.  They will compare stock market performance of the S&P during the first  year of three presidential terms.  The first chart looks at the raw point gain during each of those first years:

Naturally, the Conservatives will point out (correctly so) that Obama was inheriting a collapsing mess that bottomed in the spring of 2009.  From this heavily over-sold condition, it is only natural that the market would “bounce-back” more in this period.  From the political perspective, the easier “sell” would be the comparison of Obama Term 2, Year 1 with Trump Term 1, Year 1.

While the partisans line up to duke-it-out on this point, we continue our inquiry:  What about the percentages gained by the S&P in these periods?  A vastly different picture emerges:

This analysis demonstrates that Obama had a wildly more successful first year in Term 1 than was his follow-on performance.  Here, the Conservatives will quickly point out the 2009 low is the culprit.

There’s one other aspect of all this:  The impact of inflation.  If we decrement the December S&P for the years in question?  Would that ‘even the playing field?’

NO; While the 2.72% inflation in 2009 would indeed knock the Obama percentage down 5 points, it also knocks Trump down 2-1/2 points.

What’s Ure point? Are you saying Trump’s bad?”

The point I’m making is that like climate, political figures tend to look for ways to “market the results of natural forces” that operate largely outside of the politi-sphere.   Populism is fine, and Making America Great Again is a dandy concept.

What’s still missing, however, is the break-through new technology that will “kick it up a notch” and set the world ablaze with new hope and ambition.

People forget about long-term economic cycles.  They also forget the S-curve of growth some marvelously articulated in the works of the extremely bright like Andrew Odlyzko and Cesare Marchetti.

By the way, with Bitcoins trading down in the $14,250 region this morning, you owe it to yourself to read Odlyzko Recent Papers on Technology and Financial Manias.  Pay particular attention to the Odlyzko paper on Sir Isaac Newton losing a pile in the South Sea Bubble.  Not for the detail, so much as the new directions in Bubble research implied.

Around here, we’ll hold to our simple view – articulated more clearly by larger brains than ours – that the Shakespearian “tide in the affairs of men” could easily be the popularization of the economic long wave.

You just don’t get to see it while you’re stuck in either the partisan or dolt roles so carefully marketed by systemic oppression of innovative thinking.

As long as you’re made a partisan in BS politics, and so long as you don’t see fiscal decisions in their longer-term contexts in concert with technology S-curves, you’re stuck in the cheap seat in the outfield.

The reality is presidential “success” is as much luck of history, timing in the larger economic, technology, population, war, and religious cycles, as specious claims and jingoism of populist promoters.

While I haven’t gone back and done a longitudinal study of the matter, an intriguing question comes about:  Is America in a slow, inevitable decline, based on constraints on resources, limited innovation, and global dependencies?

In other words, when one looks through the lens of history, weren’t our greatest percentage gains in times of either war or exploitation of natural resources?  If you think the answer is yes, then it implies that “years to come” could be ugly.  Absent some non-radioactive power source breakthrough (thorium, cold fusion, zero-point?) we are definitely seeing signs of the “oil glut” coming to an end.

So, as it does, and as rampant partisanship supplants data, research, and longer-term logical thinking, does America simply become an “unmanageable country?”

Self-Balkanizan is our greatest enemy and its largest “weapon in the inventory” is social media.  Warring “organizations” are already engaged in the virtual warfare.  Start to make notes because there are constant efforts to suck you in and your money with you.

Although it has taken much longer than I would have ever guessed, I think the existence of Social Media is the #1 problem facing the world right now.  Just as Radio had to be regulated in the last Depression to moderate radicalism, when we get to our next big financial blow-down, remember the Internet is just radio for your screens.  And the armies of opinion are there playing convert or kill and you’re in their sights.

There: Feel better now?

Bonds Close Early

The Dow looks to open up 80.  As Stocks cheer $9 trillion year, downer for the dollar.  I figure the dollar decline is mostly because our National Debt keeps going up.

Gold’s making a minor move up – coming back toward the $1300 per ounce level.  Doesn’t mean gold just saw a change in its intrinsic value, so much as it just takes more of the ever-more watered-down scrip to buy it.

Remember, your dollar buys four-cents on the dollar compared with purchasing power in 1913.  And we’re heading for three-cents…

Meanwhile, the crypto mania continues: South Korea students dive into virtual coins, even as regulators crack down.

Eyes on the NorKs

North Korea: South seizes ship amid row over illegal oil transfer.

You should be carefully tracking the rapid advances the NorKs have made in sea-launched missile systems.  As one of our sources noted:

“.   What is scariest is the ICBM missile designed by the Soviets which can just be dropped off of a ship and then fire itself out of the ocean.  NO submarine with a launch tube required … just any old freighter with a crane to pull it out of the ship’s hold, drop it in the ocean … and it is ready to fire about 60 seconds later!!  It can also be fired from  sunken barge, etc.. Apparently the NK’s are building the barge type needed for firing the weapon from a barge.”

And that should scare most Americans much more than the pacifistic MSM are letting on.

Climate Change

Forecasters Warn of Hypothermia and Frostbite For Swathes of the U.S. as Deep Freeze Sets in.

We’re not the only ones to call it: President Trump Said the Freezing East Coast Could Use Some ‘Good Old Global Warming.’

Fair to Mostly Useless

Tracing of S. Carolina killer’s hands advertised online.

Why Solange canceled her New Year’s Eve show. *(Who?)

And the Biggliest Story of the morning?  Why is gin and tonic getting pricier?

We are planning a grassroots campaign in 2018 to make it a federal crime to drink G&T’s when the temperature outside is lower than 75.

We now return to mixing up our sourdough pancakes.

2017: The Last “Civilized year?”
Coping: Sunday Night is SKN