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I bet you’re wondering what’s ahead of the economy, don’t you?
Well, not to worry, mon ami, we have the answers. A discussion from Robin Landry who has missed all the big declines like 2008/2009 and 1987 and 2001… and of course our own Trading Model which signaled the present downturn nicely by going to cash on July 3rd.
Here’s a much clearer picture that I took with some landmarks.. This is laying on a creeper on my back under the attachment where the right wing (left side of picture) means the lower fuselage of the plane (far right): The hole is shown in the enlarged inset… and that tube which is hanging down is the right fuel tank overflow tube.
You may want to check yourself in after reading the latest G’ment report on such things as personal income and personal savings.
Personal income increased $67.1 billion, or 0.4 percent, and disposable personal income (DPI) increased $61.5 billion, or 0.5 percent, in July, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $37.4 billion, or 0.3 percent. In June, personal income increased $59.4 billion, or 0.4 percent, DPI increased $52.4 billion, or 0.4 percent, and PCE increased $31.8 billion, or 0.3 percent, based on revised estimates.
As I have told you before, flying small airplanes is a lot of fun and it’s a great way to get out and see America up close and personal, without waiting for the car in front of you to move., and so forth.
Unfortunately, today I have to go into town, take a bunch of digital pictures of bullet holes in the bottom of our airplane – shots which could only have been made while we were flying it!
Here’s the write-up of the document that will be submitted to the local police department a move recommended by the Aircraft Owners and Pilots Association:
REF: Attempted Aircraft Shootdown
Incident Date: Believed to be between 5/22/2015 and 7/27/2015
My wife, Elaine Petersen-Ure and I own a 1966 Beechcraft Musketeer; model A23-19, serial number MB-129. This aircraft is hangered at Palestine Airport. Airport code KPSN.
Of course, it could still be an irregular high flat IV at the next higher degree.
But the main feature of this morning is that old Fifth-Dimension song, Up, Up, and Away.
Speaking of which, one fellow apparently didn’t want to wait for the Shanghai Exchange to turn around, as it did is last night’s session and leapt to his death because of Chinese market problems.
This will no doubt fuel the (growing) cast of idiots who are trying to pretend the Chinese market collapse is somehow an analog to the 1930s depression here.
And except for the fact that China is not a reserve currency country, and their stock market counts as only about 6% of global market cap, and (there’s a list), they have might have a chance of being right.
This morning, a nice short column.
I want you to circle two dates on the calendar and write down two numbers in each one. Ready? (this may be awkward on a laptop calendar, so don’t use a permanent marker, right?)
September 11 and 1,740 S&P and September 14 S&P 2,012.
OK, the logic.
Since I have been studying long wave economics for 18 years now, how about this: Major down moves tend to terminate their first major wave 55-days from the high?
Not saying that it WILL happen, but this is the kind of folk medicine we deal out on our www.peoplenomics.com reports along with a bunch of charts to make it up.
Which, let me see, means we should rally into next weekend, when we take off on our Peoplenomics Cruise to Jamaica, Grand Cayman and Cozumel on RCCL where Robin Landry and I can compare notes and our wives can shop the duty-frees (thus making continued work necessary, lol).
But it’s also been arranged for the market to be closed that first Monday and we have our internet plans pre-purchased so even though it might seem like a “vacation” our columns should continue uninterrupted as they were when we did our Norwegian cruise back in February.
Speaking of travels (not that it matters) but Elaine and I are planning to be in Dubuque, Iowa October 1-4 for the Beech Aero Club national roundup so if any readers up that-a-way want to sit down and commiserate over a beer (we buy our own and so do you) then that’d be fine depending on schedule.
“This is social chit-chat….where’s my market news???”
Oh, shush. You know that the financial model is unsustainable and needs to be fixed and that if you tried to run your family on the same accounting basis as the FedGov you’d be in jail.
The difference is when you print up money it’s called counterfeiting. When government prints up money it’s called economic stimulus.
You following, bubba?
So while the market is clawing it way up another hundred around the opening and West Texas Intermediate has clawed back up to almost $40, the reality is another thousand illegals will come in today, we are about three weeks from Q3 quarterly IRS payments to pay for everything, and going cruising is a fine way to momentarily get distracted.
Fact is, there is still a count which gives up one more move up into 2016 (late) or 2017 (late) and if that’s the case, then we will all have one last chance to get our affairs in order before the economy dies.
The only question is whether we see the Fed go to a negative interest rate, now that one Fed member met our expectation for a “surprise” announcement this week by saying, in so many words, that a rate hike was off the table for September.
And that sets up the end of the Ure Discontinuity for this fall and through 2016. Stocks will go to the ceiling because they will be one of the few things with any kind of yield. But the trick will be to roll back into cash at the tippy top and into Savings Bonds or Treasuries because then your money will be out of banks and (hopefully) less likely to be funding the bail-ins of 2017-2019 to save the rotten bastards who should never have been bailed out in the first place.
You see., the magic of “political correctness disease” (PCD) is that it preconditions the weak mind (yours and mine) to believe that “Oh those poor bankers…we can’t let them fail.” Which is as close to horse shit as you’ll find outside a pasture.
But that, my friend, is what I call the economic equivalent of mass murder thinking. “Since they can only kill me once…why not take as many…. “
Which is recent economic policy in a nut shell. Everyone with a room temperature IQ or above knows this is not sustainable, so keep the orchestra playing and let’s run her up one more time and tell ourselves as best we can “This ship is unsinkable!”
(God that felt good to write…and it was so much nicer than “The 700 point Dead Cat Bounce”)
Do the Brothers Grimm write the Bureau of Economic Analysis press releases? Yet, here it is…
“Real gross domestic product — the value of the goods and services produced by the nation’s economy less the value of the goods and services used up in production, adjusted for price changes — increased at an annual rate of 3.7 percent in the second quarter of 2015, according to the “second” estimate released by the Bureau of Economic Analysis.
Long term readers of this website know that I am a huge fan of cycles.
Some of them are in your face, like fall, winter, spring, into summer. And others, like the more general social cycles are harder to see and understand.
The idea that there are social cycles is most easily seen not directly, but by what we believe in.
For example, because liberalism (and its pals deficit spending) have pretty much been in a great rise and fall since Marxism came along, we can see how socialism/communism has been little more than a huge wave.
Waves never come alone.
In Elliott theory, as applied to the stock market, you have three and five wave groupings and at sea, you can often find 7, 9, 11, and even 13 wave “sets.”
But to settle on communism as a “wave set” you can see one wave in the Russian revolution, decline, then the Stalin wave (of death), the Khrushchev wave, and finally the ending wave which featured a variety of archetypes. This last included a joker/drunk, a troika, and so on.
Social waves do not happen in isolation anymore, thanks to the omnipresence of media.
As a result, the bad ideas of communism were, at least in part, adopted in the West. As they were, we can judge (roughly) our current state ion social cycles, by noticing our thinking about the West’s mirroring of Stalinism in things like the National Recovery Act here in the US.
We can also see where we are in the long wave social cycle, already well documented by authors like Strauss and Howe in The Fourth Turning, by looking at what we believe presently of past events.
Take the last Depression, for example. The common teaching when I was growing up, was that government deficits and watering down the supply of money must be good, because it helped in the great depression,
Except, that in recent years, we have seen this laid out as a Great Lie.
In short: If you think the Great Depression was abbreviated in any way by more government, extremely high taxes, and a police state that forced labor unionism on America, think again. It was as close as we’ve been to communism in many ways.
There’s a fine video on point and the article (and audio book) Great Myths of the Great Depression which springs from the Foundation for Economic Education over here.
Suddenly, the Great Depression seems less like the liberalists “success of Big Government and deficit spending” and more like an utter failure of both. Misery prolonged by bad policy. But, then again, nothing new in that.
As that wave of terror and death passed in Russia, and evolved into the Cold War with the West, the myth was repeated. And even now that communism/socialism has failed and been cast out of the Soviet Union, a great “tainted thinking” remains in the US in the form of political correctness and utter contempt for the what Donald Trump has tapped into:”the silent majority” in America.
The social wave is no less interesting to watch than the stock market waves. Although, as any reader of UrbanSurvival, or more so our www.peoplenomics.com website knows, the odds of a first major low being completed 55-days from the top of the market seems like a pretty good estimate.
This infers that our current rally will, shortly, complete, and we should continue on down to a significant low which is likely in the September 10-16 range. As much as anything, this should be accompanied by the Fed NOT raising rates and if they get the wording just right, we should be off on a rally lasting several months which will be a wave 2.
Perhaps because we are in the vicinity of a Super Cycle (and even 250 and 500 year Grand Super Cycle top) it should be instructive to see how closely the social cycles and the market cycles line up.
Which is to hint that Donald Trump, who has a vastly different view of the “right role” of government that either Joe Biden of the current fellow next door, seems to have really soared in poles as the markets have declined.
But, once the first market wave 1 down from early/mid July finishes, I wouldn’t be surprised to see Hillary Clinton’s fortunes turn a bit as well as ascendancy of the old view of the world, as embodied in modern day democrats, who are still selling the Marxist/social echo that big government is good.
Not that Trump[ is arguing that government isn’t necessary, but it’s all measured in how well it’s executed.
Look for something else to peak: The last gasps of political correctness which will be undone by the excessive zeal of its followers; the extremists. As an example, the fellow that killed the TV reporter and cameraman trying to set off a race war. Ultimately, that’s where political correctness and soft-headed thinking leads.
At its “marketing best” you see (and you can see this with too much government in the Great Depression as well, battering down doors to make sure no one was sewing clothing in the garment district at night), terms like workers paradise and Utopian society.
The ugly liberalista thinking that is never acknowledged is that every last one of these Utopia peddlers I have questioned, sooner or later reveal that everyone else is part of their scheme. Except them.
Their special role is that they get to be in charge. And that’s how all these Utopian dreams (like Russian communism) morph from an interesting collective cooperation into a dystopian nightmare.
As we come up on the 250th anniversary of America, therefore, I will predict the decline of political correctness as we shake of still more of our misguided thinking from the past and begin to realize that the beliefs of the few do not trump (used non politically) the interests of the many.
Should be an interesting show. But it will be a slow process seeing “political correctness” unwind, although the TV murders will go a long ways. As will the continued crime wave brought to America by illegal immigrants.
But here’s the point.
People are waking up to political bullshit which much of “political correctness” is. Would you refer to a plane crash as an “over speed landing”?
How about this: Rather than say three people were killed in a head-on car accident on the 405, how about “Three people received permanent tax breaks when two vehicles stopped abruptly on the 405 this morning…” Yet this is how mental acuity has been attacked.
Over the next 10-years we will see correctness and mind-control by social-psychology driven foundations slowly rooted out.
One phrase which I expect to decline will be “undocumented alien” which is used by media to “correct” to report the perps were illegals.. In the case of this rape and murder by two illegals in California, you have to read way down into the story to find out yep, illegals from Mexico….again.
I love Mexico, the Mexican people, but I have a problem with criminals and it is against the law to enter the U.S. without documents. Yet the late wave apologists cry their eyes out about clear thinking.
The thing to do is here is watch the market levels as we watch the word/thought distortions. The next 11-years should be a revealing time, indeed.
Real change is a slow-motion thing. If it were any faster, people would have to admit to their own stupidity and who wants to do that? It’s one of those things people want to work up to…slowly.
– – –
There are three kinds of people in the world: Some of us are “future people” and we are always living 10-minutes to 10-years in the future. Then there are “present people” who are in the hear and now. But the ones to watch for at the “people past” because they are what holds back the world and prevent us from all “keeping it real.”
A Research Note: If you ever run across it, I’d sure be interested in any studies you might stumble across linking health, income, and longevity to a person’s temporal orientation.
Here’s the latest from one of our readers who is dealing with the World of Woo-Woo. That place where things disappear and then reappear and then….
“I’m into the quantum leap. Back in the early 80s, I was putting together a bed and was putting the three wood planks on the rails to hold the box springs.
Think the Market have been tough lately? Only foreplay compared to the larger picture.
What most lack is the follow-thought thinking about what happens to government transfer payments and Social Security when the market enters a protracted Bear.
Everything going on in the world around you is still in pretty good condition. And as we mentioned in last weekend’s report, container traffic from Asia is actually up a good bit compared with year-ago levels, so the end of the world isn’t here.
Hot off the S& P Press release:
New York, August 25, 2015 – S&P Dow Jones Indices today released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released today for June 2015 show that home prices continued their rise across the country over the last 12 months.
So here we are and it is “Turnaround Tuesday.”
Futures this morning were up 500+ and the dollar had pulled back and despite what may go on in the rest of the world, this completes a big I down, as explained above.
The problem is that a lot of people are only using half their brains when it comes to thinking about life in these times. People act exactly like herds of animals because they don’t remember the one great truth in human affairs that comes to us from physics:
F=M*A
Which is? Force is equal to Mass times Acceleration.
Or, on the financial statements:
Assets minus Liabilities equals Owners Equity
When people forget the duality of the equal sign, they miss much of Life’s teachings.
Let me give you some examples because we have them all over the place this week.
A reader, for example, sent me an article that “Large amount of gold and silver found in reservoirs under volcanoes in New Zealand” that appears on PhysOrg.
Along with the link to the article was the reader wondering “How might this play into things?”
Simply? It won’t.
Yes there is gold under them thar hills. But it is in reservoirs “hundreds of meters deep” and even though it might look impressive (3-billion of gold, 3 billion of silver annually) there’s the other side of the equation.
Remember my slapping your knuckles for forgetting this before? Any time you read a news event, there is an equal and opposite side to whatever.
In this one, it’s “Who is going to put in multiple mines and where is the energy going to come form to mine hundreds of meters under volcanoes, and in reservoirs full of water for ore at 20-parts per billion?
Not I said the little red hen.
That is economic suicide. Not to mention environmental disaster waiting for a place to happen.
There are examples everywhere. Take this reader contribution:
Went into the detention facility (office ) this morning and everyone was atwitter over the market. We are an investment firm so I suppose there is some need for that.
New Reader Note: Our most serious articles on Long Wave Economics are over on the www.peoplenomics.com site and the one Sunday about how to build your own Options Radar to look into the future is pretty doggone interesting.
The Worst News First. I was right calling the long wave top in 2000. On an inflation adjusted basis.
Remember that? And I have told critics since that although the 2007-2008 high looked like a new high, it wasn’t when you use an Aggregate Approach to the market.
Yes the Dow and S&P did good, but what about the $5-$8 trillion that was blown up in the Dot Com Bubble? No one wants to remember that, but it was very real and it still has to be included in honest calculations about markets and economy.
Which is why I spent far too much time this weekend (most of Sunday) staring into my Options Radar and wondering why there is an options oddity in December.
Our Options Radar hints that Friday’s notion was 1,450 down to 1,400 on the S&P.
My consigliore thinks it’s because the options crowd is trying to salt year-end bonuses, but we shall see what today’s options data looks like after the close.
At the moment, futures are looking for a hard down which should continue through tomorrow and then we’ll maybe get a “turn-around Tuesday.”
Regardless, my friend Robin Landry’s work suggests that this move down MIGHT hold at S&P 1,812-1,820. Which would be nice.
There are some real drivers in here to keep an eye on.
One is the SSE (Shanghai Stock Exchange) which dropped more than 8% overnight. And that’s leading to a global 2-3% downturn in markets today. The dollar is tanking vis-à-vis the Euro which is a kind of de facto devaluation.
But let me explain this Aggregate Index of mine that is updated twice weekly on our subscriber side, www.peoplenomics.com.
The index is built on the notion of putting equal dollars in 2000 into the Dow, the S&P, and the NASDAQ Composite.
When you double-click that chart above, you’ll see it is rotated. And that’s EXACTLY the effect of inflation.
As to specifics: The week of March 24, 2000, my Aggregate stood at 13,091.83.
Where should the Aggregate be today, just using the Minneapolis Fed inflation calculator?
17,989.14. This is NOT where the Dow should be, this is where our proprietary Aggregate should be. My Aggregate closed at 15,405.09 Friday.
Well, guess what? Never made it. 16,898.64 was the high-water mark on July 17 and our Trading Model turned negative the week ending July 3. 7 out of 8 weeks since, the Model has been screaming “Down We Go!”
Yeah…so what does this have to do with the headlines?
Well, tomorrow (Asia time, which is tonight our time in ‘Merica) the Chinese market comes to a major inflection point. I’d explain in Elliott Wave terms, but you’d glaze over.
The main thing is, if the Fed is going to do anything to hold the slide in the markets, they MUST make a major announcement today.
The two likely choices are?
1. They could announce NO RATE HIKE UNTIL THE ECONOMY FURTHER IMPROVES. Bully-pulpit QE-4.
2, They could also simply announce QE-4 because as we explained in our Peoplenomics analysis this weekend, the flow of imports is going back up.
3. The USA could hint that we are going to Devalue, too. In which case, American exports would become more competitive. Exports might increase and gold would go to the moon., But there would be plenty of pain. Forex markets are doing it, regardless.
If they DON’T come up with a “surprise announcement” early this week, as my fixed income buddy asked:
If this gains steam and I mean 1,000 to 3,000 point down days – we’ll see where that great depth of market HFT industry ends up……….
Yeah, between that and the big derivatives problem for the Big German Bank that no one is talking about (low visibility at this point) the most likely course for the Fed would be to take pricing of a rate hike out of the equation.
Still, Landry’s S&P 1,812-1,820 spot sounds good to me.
Oh, oh…going to DreamOver land now. Special corner of the World of Woo-Woo.
If you’re a new reader, DreamOver is a novel I have written and which I will be touching up this week to get it off to my lifelong buddy who is a seriously excellent proof reader. And then it will get published perhaps on Amazon (though I am still waiting to head from a couple of publishing agents…). Not exactly a line at the door yet, haha.
So what does the book have to do with the dream I had this morning and how does that relate to climate change?
Therein lies an interesting tale.
The book is about the problems the arise for a branch of the U.S. military when an officer doing secret personal surveillance work has his “consciousness entered” by a retired investor. The investor, in turn, goes to a psychiatrist and learns that there has been a tremendous skills swap going on in addition to the basic dream content. And the “skills swap in dreams” turns out to be a two-way street…
More on the book, later. The main concept of the book is a phenomena called “Dreaming Over.” Entering the lives of others in a dream state. Not to control, but just to learn something of their future.
The book is partly based on my own paranormal experiences; mainly precognitive communications/experience.
Some of the dreams are very near time-wise, such at the dream about the oil rig platform in the Gulf of Mexico (18 hours lead time) , while others are more personal like knowing my youngest daughter had a medical operation even though I was hundreds of miles distant and not around telephones. In that dream, she was wrapped in a green flag with a black spot on it. Later turned out to be the surgical sheet.
Or that Arizona precog dream about a road closure and detour while on a driving trip – 2-3 hours in advance. See the column “Serious, Personal, WoWW March 13, 2014.”
So fast forward to the jump this morning.
I am viewing through male eyes and the dream takes place in a big city. A conference on climate was just winding up. It was it a campus/university/big hotel kind of place. The Dream View Port (VDP) was a conference participant in the government/academic space.
The viewer in the dream went to a morning session was about to check out of the hotel and was being chastised for the lack of real progress at the conference. The conference wrapped on a Friday.
There was also the image of people speaking in different languages. Not only that, but there had also been a LOT of partying going on at the conference. Apparently the people at the conference were all operating in two modes: In one mode, they were all putting on airs as though they were dedicated worker types. But there was this party mode thing as most of the people at the conference were in the 20-35 age group.
There was a poker game or some kind of gambling that some conference people went to the previous night. Others partied, and a few stayed in working on conference related work.
Flip to the Friday morning session: One male figure was short (5’8” or under), had a dark beard and mustache, hair combed back, and he had a very serious – almost fiery look – to his eyes.
He was mad – or even furious – since he believed he had the most salient points – a paper or some presentation he wanted to do at the conference. But he wasn’t given time to present and discuss his work.
Quick! What has five graphics plus nine charts?
Normally, we don’t get up and start work at 5 AM on a Sunday, but as shown in our report Saturday, this is anything but a “normal” weekend.
So here’s the plan:
First I’m going to show you how to build your own D.Y.I.
Good news and bad for you. The good news is the market is closed on weekends. The bad news is follow-on downside is possible into Tuesday, at which point a turnaround is possible.
Even though our Trading Model has been short 7 out of the last 8 weeks, it’s still a worrisome possibility in our charts that this is a Wave 1 down, not a IV correction before a final romp higher. We’ll give you the trading targets and the charts in a minute.
The real problem we all face is this: Your retirement is under attack in a serious way now, a topic we will cover more in coming weeks. Whether by handing it out to immigrants, or the falling rates of return due to low interest rates, retirements are not looking good.
The short-term problem with the future is that it’s a “negotiation” and all the interested parties who have some skin in the game will try to push things one way, or the other.