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You’re wasting our time!

Elaine and I were among the millions who suffered through the worst case of “dick measuring” and name-calling either one of us has heard since junior high – so make that 50-years –in the insipid debate last night.

The debate format, too, was horrible.  I was appalled that Dana Bash’s name made it on screen in a huge font, but the names of who was speaking – the candidate names, which is the whole point – showed up in an unpredictable, haphazard way.

The streaming sucked, too.  Is is really important that four more posts have appeared?  The appearance of self-promoting add-ons seemed to coincide with when our stream dropped. 

In the end, out here at the end of the string, the most reliable audio came from our Amazon Echowhich grabbed the stream off WGTK out of Atlanta.  The CNN stream was a throw-away out here.

As for opinions?  Winners?  Sure.

Dr. Ben Carson blew his chance to challenge by speaking political gobbledygook.  Previously, he’d been dignified and more on point.  He spoke politick last night…bad move.

A few came up in our estimate – Cruz and Carly – although we have plenty of questions there, as well.

The main gripe was the personality content and in this regard these talking heads wasted our time. 

Yet, there is another way.  The Ure Plan

The American presidential nomination approach is broken and this year’s slate of candidates can change the future – if they have the cajones to do so – by simply breaking with bad historical precedent.

Here’s how it would work:

1.  All of the candidates (15) who made it to the debates last night should type up a one page resume and take a jet to some conference center for a week, sit down, close the doors, and sort out ALL their minute differences.

Then cut the pie between themselves.  How about you be President, you be VP, you fix HHS, your take Defense, you take Commerce, and so forth.

I would recommend Jackson Hole on the theory that if it is good enough for the Fed…

2.  Once the doors are locked,, the candidates would vote amongst themselves on who would be the best person to fill all of the key positions in a new Republican administration.

The voting would be simple:  Each candidate would initial which jobs they see themselves holding not just for president but for other key posts as well.

Tabulate the results.  Re-vote, tab again until consensus is reached.

As an example, since Chris Christie is a former U.S. Attorney, he might check president and vice president, but he might also be the best guy to be U.S.

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Let’s begin by describing where we are in the economic Long Wave.

The week ending September 18, 2015 is analogous in my work to the week ending March 1, 1928.

If you remember our previous discussions, the Fed has the same problem  now that it faced back then:  Money was sitting on the sidelines (mainly in bonds) and was not out chasing higher return potentials in the secular economy.

To counter this, the Fed raised interest rates (reported here as the discount rate) several times leading up to the ultimate blow-off top September 3 of 1929.

As you can see, the 1920s Fed began with a hike in August of 1927, and since we are in the analog to March of 1928, we note that the Fed increase is way overdue.

However, the Fed was not as subject to public scrutiny back then.  Communications was mainly in long boring tables of data published in back sections of big city newspapers.  In today’s world, reactions will be faster.

The good news about reactions being faster, though, is that the speed of trading can  reduce the evolution of “information asymmetry” within the complex global financial system.

We have seen recently, for example, how the Shanghai market has managed to decline from a 52-week of of 5166.35 down to as low as 2,289.87 without the world falling apart.  I believe it is significant that a market can lose more than 50% of its value without imploding the world.  It proves something but we can’t be certain what.

I like to think that when the Fed talks its next move a year in advance that everyone except a few wild-eyed traders can see what’s coming.

What the Fed should do, as I see it, is a 10 basis point increase.  This would be proportionate to a “normal” 25 BPS increase at higher interest rates.  It would signal to the bond market that the Fed thinking is that things really are improving, yet at the same time, it would avoid potential bloodshed if a larger increase was enacted.

Even so, a 25-basis point hike would not be the end of the world.  You see that “velocity of money at M2” chart?  That gives you an idea of the “inventory turns” of money.  In a fractional reserve system, such as ours, the turn-over rate is critical.

During the ramp up to the Internet bubble peak (1997) the turnover of money was around 2.2 times per year.  Here recently, the turnover rate has been much lower:  1.497 times and 1.5 times per year in the most recent two quarters.

The job of the Fed right now (which would be in keeping with their dual mandate) is to provide stable prices and good employment.  The road to both will involve, as I see it, some increase in the turnover of money.

Raising the interest rate is a prickly problem to understand.  But it goes something like this:

If you have a bond with $100 of face value, paying 1%, the price of the bond will be discounted to maturity some amount based on prevailing inflation expectations.

Thus, in a world where there is zero inflation, the 1% bond will have some value we’ll call X.

Now, however, let’s increase the inflation rate to 10% to illustrate a point.  The NPV (net present value of the bond will drop – very significantly) in order to compensate for the higher inflation rate.

Frankly, I can almost hear the backroom discussions at the Fed.  It might go something like this:

“Yeah…if we raise interest a big, where would the money go?  Normally, we should create jobs with infrastructure projects like highways and housing, but in this economy of Apps and stupid things like a $100 pencil for a tablet, where will be bond money go?”

“I think maybe into consumer goods.  But if prices go up a bit there, it won’t hurt us too badly….”

“Well, if we do that, it will be price-driven inflation, not wage driven.  Shouldn’t we see some of that first?”

“Yeah, but the prevailing inflation rate is really much higher…what’s masking the real increase is the massive declines in oil prices.  You filled up your car lately?”

“Yeah, but I thought our plan was to press energy down so government could up taxes more so we could get more tax revenue for infrastructure, before we raise interest rates…let state and local take some heat…”

“Yeah, but states are in trouble because of defined benefits and their retirement funds will grab anything that comes in so I say raise now…”

That’s all hypothetical, but you can see how the dance goes.  Round and round.  At some point in this dance someone is going to get their foot stepped on.

The argument could be made that the bondies have done massively well as the rest of the country suffered through real estate equity evaporation.  So it’s their turn at the wheel.  If the bondies take a hit, well so be it.

The bondies will scream like it’s rape, but it’s really just rates.

Besides, there are two aspects to any long-term bond investment:  rent on money and risk of default.  The bondies need a lesson or two that they’ve managed to dodge so far.

Should that money chase $100 laptop pencils?  No.  But there’s this new field called photobiomodulation I’ve been telling subscribers about…

Futures were about flat going into the morning’s first numbers…

Data:  Save By Auto Sales, Redux

Hot off the press release:

The U.S. Census Bureau announced today that advance estimates of U.S.

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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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(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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(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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