As Markets Replay 1929, Break Seen Ahead

The problem:  Could break up – or down.

As you may know, this website began as my Master’s capstone back in 1998-1997.  It’s focus was originally Long Wave Economics and how will America cope when the financial crap hits the fan. The “dollar” has less than 4 percent of its 1913 purchasing power left. the rest has been sucked out by debt.

When we take the longer view, the next 300 points down – which will likely happen shortly after the open this morning – will continue a long-term Elliott Wave phenomenon that has been visible since the Housing Bubble Collapse in 2007-2010 with the nominal stock bottom in April 2009.

As you can see in the chart below, however, that was not really our first near-brush with disaster and a “second ’29-style debacle.  That had come on the heels of the collapse of the Internet stock Bubble in 2000.

The reason most people can’t cope with this data is that they are young and honestly haven’t been around long enough, or read deeply enough, to see what the data is saying:

If the numbers used don’t make sense, it’s because we use an Aggregate Index in our work on the side of the house.  It assumes that you put an equal number of dollars into the stock market in 2000 and let it ride.

That major decline following the spring 2000 peak was the Tech Wreck which wiped out $5-7-Trillion of American savings.

What’s also evident that the US Fed undertook a HUGE STEALTH INFLATION in order to end the bottoming process post- 9/11.  You see, the USA was in a prime position to repeat 1929 and whack 75% off stock prices then.  But, the Federal Government has a strong sense of self-preservation.

1929 analogs were hauled out instantly.  Including hiring programs the likes of which would rival the early First Depression hiring binges with the Civilian Conservation Corp and the Works Progress Administration.

Until the 1930’s, these were rolled-out almost overnight (in response to false-flag or real terrorism – it doesn’t make any difference):  We knew these as the second Middle East war and the TSA  plus uncountable jobs created in supporting industries like body scanners, Fusion Centers, and all the rest of it.

Moreover, there was also a lot of work done to ensure that “emergency hiring” would light an inflation fire, again.

For one, Alan Greenspan allowed “no doc” loans to flourish.  The Fed and the OCC (Office of the Comptroller of Currency) could have demanded better loan standards…but why risk a slow recovery?  It didn’t stop there….

The US Government, you see, no doubt has a lot of advanced socioeconomic modeling horsepower that gives highest-level policymakers a very good view of the future.  And honestly, the potential for the internet bubble (or whatever it would become) was already likely visible in continuity of government models in the early 1990’s which is why no serious student of history was surprised at AmeriCorp as an echo to the Civilian Conservation Corp was planned in the early 1990s…...As Wikipedia explains…

“The program first became operational in 1994 and has expanded over time,[8] with over 80,000 members participating annually as of 2012.[10] Members may be provided low financial compensation in the form of cost-of-living allowances, student loan deferment, Public Service Loan Forgiveness, and the Americorps Education Award. Less tangible benefits include professional skill development and work experience.[11] An internal study found that participation in AmeriCorps strengthened civic attitudes and sentiment, making members more likely to choose careers in public service.

We note that the year before initial operational status (’94) al Qaeda had already tried to blow up the Twin Towers already.  Again, that was in 1993.  The US needed to be ready.  And we were…mostly.

With a ground war to prop up the defense industry and errant (or fake) WMD claims, an easy-to-demonize group of anti-American terrorists, and multiple instant hiring programs (TSA, AmeriCorp) plus a buttload of grants and projects for “security” all that remained was for the Fed to roll with the stealth hyperinflation which began puffing up stocks from 2009.

It’s here that our weekly data reveals how closely we are continuing the 1929 path and why a bet on the upside – after a bottoming process that could spill into year end, or early next, might leave us one more chance to have a blow-off top.  Highly inflationary?  Yes.

The problem, however, is that we have no assurances that there is one more major wave up to come.

As you can see, the Elliott case could be read that the following “rules” have already been met: (Referring to the first chart: )

  •  Wave 1 up from 2009 was complex (two parts) so the 6 should be simple.  Which it is.
  • Wave 3 must be bigger than Wave 1.  Which it was.
  • Wave 5 must be bigger than or at least equal to Wave 1.  Which it is.

In short, events may drive in the media, but on Wall St and at the Fed is where decisions will be made.  Perhaps one last rate hike and then a “no more hikes for a while” would set off the final blow-off to the upside, if that’s the way models call it.

American Economics Requires CoG

While most websites play “follow the leaders” – the more leftist media around these days -and play “pin the fake news on the donkeys” who have it coming, most people have never considered how much economic policy might be driven by contingency Continuity of Government plans.

Yet, if you have read the second report of the American Continuity of Government panel, available from 2016 via this Brookings Institution site, you would see some of the “worst case scenarios” that have been enshrined in TV shows like The Designated Survivor.

ISYN – See if this isn’t a perfect fit.  This is from the AEI-Brookings report:

At 9:20 p.m., a passenger airliner takes off from
Ronald Reagan Washington National Airport.
The pilot, an Al Qaeda sympathizer, diverts the
plane toward the Capitol Building, which is less
than three miles away. There is no time to inter-
cept the plane, and anti-aircraft devices fail to
bring it down before it crashes into the Capitol.
Emergency personnel arrive quickly, but they
have difficulty reaching the House chamber.
First responders finally make their way to the
site of the crash and find many dead. Many
others must be buried beneath the rubble that
has collapsed upon them.
At 9:45 p.m., the military informs the Secretary
of Agriculture that there is no contact with
anyone else in the line of Presidential succession…”
Now compare this with the plot line of the TV show Designated Survivor from Wikipedia:
On the night of the State of the Union, an explosion destroys the United States Capitol building and claims the lives of the President and everyone in the line of succession except for Secretary of Housing and Urban Development Thomas Kirkman, who had been named the designated survivor. Kirkman is immediately sworn in as President, unaware that the attack is just the beginning of what is to come.

The CoG work came first, of course.

The continuity report cited above was not a government effort…

“The Continuity of Government Commission is a private AEI-Brookings commission funded by the Carnegie, Hewlett Packard, and MacArthur Foundations. It is comprised of members with experience in various branches of government and expertise in the daily functioning of our government. It was founded in the fall of 2002 to consider how each of our three branches of  government might reconstitute themselves after a catastrophic
attack on Washington, D.C. and to make recommendations for statutory and constitutional changes that would improve the continuity of our basic institutions.”

I mention this in some detail because when the economy is in crisis, it is often the result of other factors.

Take today:  We face an invasion at the Mexico border from a massive caravan of mostly military-aged  males from Central American nations that do not hold to American values and, ion fact, hate us.

Why would we let them in?

The answer is simple:  Understand that Leftists control the media (and if you don’t believe that assertion go read how Google, Facebook and Twitter staffs splurge on Democrats ahead of midterms.)

With the Caravan approaching, we have to ask “Why aren’t the Open Border People speaking up?” Answer?  They will like to keep their jobs, of course and we’re close to elections…ergo  Democrats avoid sparring with Trump on caravan as midterm nears.  Oh…so they’re caught on the wrong side of the collusion coup, are they?

One last note in our focus this morning:  Terrorism is very seldom  the work on “lone wolf” type operators.  It’s usually well-orchestrated.  So toss this into the blender while you’re ruminating on “What’s going on…really?”

Boston Marathon bomber Dzhokhar Tsarnaev in notes to law enforcement: ‘I did what is necessary’.

Who gave the order and whose side were they on?

Best Govt. Money Can Buy Dept.

U.S. judge affirms Monsanto weed-killer verdict, slashes damages.

Saudi Wiggles

Saudi Arabia reassures on oil supply, says will meet demand and Saudi sees deals worth $50 billion at investment conference despite boycotts.

The mainstream still largely ignoring the former Interpol boss missing in China, but there’s the matter of whether he had “clean hands.

Also in that ‘hood US. Sails Warships Through the Taiwan Strait in a Show of Force to China/

More Bad News for Dems

This press release caught our eye: Record Job Openings and a Volatile Market Impacting Average Americans’ Financial Satisfaction: Index to be Released this Thursday, October 25.

Enough of our Tuesday rant…moron the ‘morrow…futures down 400 at click time.

Blood in the streets?


18 thoughts on “As Markets Replay 1929, Break Seen Ahead”

  1. Semiconductor stocks are taking a beating in this downturn. But it is creating a buying opportunity down the road because chips are the backbone of AI, cars, robotics, & blockchain. Look at SMH ETF.

  2. I think if you did a poll of people who claim to be liberal, you will find a majority of them do not think the Hondurans should be allowed into our country. So don’t Pin this on them. Middle of the road guys like me definitely do not not want them crossing…They can show up and go through the process of applying legally…but illegally crossing the border like it was some drunken wedding crasher event…no way!

    I am not sure why the media isn’t up in arms about this. This isn’t a humanitarian issue…It’s an INVASION and should be treated as such.

    This isn’t DelMonte, Dole, Archer Daniels or Cargil sneaking in Immigrants in cargo planes to work during harvest time…this is 5,000 people in a March formation…easily filmed…transparent and ready to audition for a prime time event showdown where Trump will come to save the day.

    I said this yesterday…This whole mess sounds like a Trump concocted TV event. And… Nobody knows a TV event like Trump. This stinks to high heaven.

    • Mark: Today you shocked even me. More likely Nancy Feinstein, Chuck Schummer, & a Dr. Ford impersonator looking once again to scam the public. PT doesn’t need to stoop to planning an immigrant invasion for votes; you are being ridiculous, or looking for a position on the Mueller investigation team. When the RED WAVE hits, up goes the wall.

      • ECS,
        Trump is the one politicizing it though. He is making threats and calling for fines and sanctions. He wants the military on the border to stop these marchers. He is stoking fear and that is what he does…This is an event that he wanted…a event that he is part of the main talking points at his rallies this week and therefore…It makes sense that he is the event planner in charge of this charade. Like I said…Nobody knows how to run a media event like the Donald.

      • Hold it! So he’s made up the 6000 military aged males heading our way? WTF of course he will defend the border from an invasion

    • “I am not sure why the media isn’t up in arms about this.”

      Mark, ‘are you for real’ not being sure?

  3. Voted early today, a straight Republican ticket. The RED WAVE has begun! Time to body slam the Democrats who are trying to trample the sovereignty of our country. PT will have the power, the strength, the insight, the boldness, the intelligence, to MAKE AMERICA GREAT AGAIN.

    The Democrats will have PTSD.

    • Congratulations ECS! Well done!

      However, “PT will have the power, the strength, the insight, the boldness, the intelligence,…”

      That I doubt extremely on account of lack of current evidence. He’s already missed his greatest opportunity as ‘commander in chief.’ It’s mostly braddagio and little effective action. He’ll get rolled up like most of his predecessors. SORRY ;-(

  4. Questions arise over who is funding the ‘refugee march’ to the U.S. border. Some point fingers at Soros and like minded oligarchs, but competing nation/states also find ways to fund and exploit our inherent weaknesses, ‘shaping’ and influencing our American population. Fixated on social media and all things networked? The dark side is targeting you. Love to watch trendy, media-hyped movies or television shows? Those are soft propaganda, the ‘soup before the meal,’ readying your mind for the programming that will follow. Proud of the fact that America was built on the backs of immigrants? They’ll flood the borders with so many ‘yearning to be free’ that the bad apples sprinkled among the legitimate ones will be hard to pinpoint without person-to-person vetting. Big fan of globalism? Your international business colleagues and partners have a very good chance of being a state operative for their home country, and the outgoing and friendly inquisitiveness they display has a nefarious purpose. Enjoying travel to far away places? Your room, luggage and electronic devices are likely being hacked, probably searched while you are out and about enjoying the exotic environs. All of the above is the view of a ‘realist,’ one who recognizes the fact that there are evil forces bent upon facilitating America’s fall. If you fit the bill for most or all of these situations, you are an ‘idealist,’ believing that America showing the way will win the hearts and minds of our enemies. Good luck with the latter approach. History shows things generally do not end well taking that approach.

    • OK…I will bite.
      Name once where it worked out? I must be aged & addled ‘cuz I can’t think of one…

      • WH… what gets me is from my perspective.. the wood cutter with the ax is also the Tree… which I can’t quite grasp.. why chop yourself down. there has to be another avenue to this.. why depreciate the dollar so bad that it hasn’t any-other way to go but down.. why destroy the constitution that supports their lifestyle by corrupting public officials with greed when the things you are corrupting them with are the avenues for your own personal destruction.. it just doesn’t make logical sense.. in one way they gain in another they loose miserably.. the LET THEM EAT CAKE attitude has only caused the well let me loose my head..
        as for the countries that absolutely hate us and are trying to come to the USA.. well if we had been dignified and let them live their own lives rather than destroy theirs so that the wood cutters cutting their own tree could gain control over things this wouldn’t be a problem.. the whole control over the masses project could take a very ugly term and frankly terrifies me quite a bit..
        this all has happened in the past and probably will this time to..
        The sad part is.. at this point in time I doubt there is anything anyone could do about any of it .. when things should have made the change is back when Kennedy was in and then when Carter took office.. if our congress would have let his plan work.. we would have had a rough few years but would have pulled out of it.. call it good old farmer know how.. instead they sold out and chopped at the constitution so bad that I know the idiots haven’t a clue what they have voted in and changed..
        911.. funny but I was reading in some old magazines an article on Clinton going over to the middle east to talk to the Taliban on putting a pipeline in for a major company to the coast and how the taliban leaders were dead set against it and some of the major leaders of other countries were against it as well like Iraq the same time on George Noory’s show was a war games annalist telling how they have been running war games on Iraq, Iran, Syria,and NK.. with in five days NK was back up with their nuclear testing and in less than four months the twin towers went down and we were in Iraq.. the pipeline was built..and the goal of gaining control over the leviathan oil field is still going on today..

  5. The Migrant conundrum!

    Think about it, how far is the migrant walk from where they began to the US border? My guess its about the same as trying to walk from the Texas southern border to Washington DC.

    So, lets assume all of us will walk from Texas to Washington DC in a legal mass migration. At 3mph walking speed, and walking 8 hrs/day, in about 100 days we should reach our destination. How do we prepare for such a journey? What will we eat? Where will we go to the bathroom, where will we sleep? Places to sleep no problem, under the stars. Bathroom, homeless in San Francisco solved that problem long ago. Crap on the side of the road. Food, now that is a problem. Can we haul 100 days worth of food? Can we get 100 days of food begging for it? Not likely, so how do we survive such a long journey. Simple, we have CASH!!! If so, where did this cash come from? We can speculate, but I really don’t know, all I know such a journey would definitely require cash!

    OK, so migrants through force made it into Mexico. Mexico must have some support systems for homeless. Why don’t the migrants apply at a US embassy in Mexico for permits/visas to enter the US legally? It may take time, but migrants can avail themselves of Mexican hospitality while they are being processed for legal entry into the US.

    Perhaps this is too simplistic of a thought process. Point being if laws are systematically broken, the end result being there is no respect for those laws. If there is no respect for laws, whats to say other laws not to their liking will be respected? Me thinks we have a big problem!!!

    • “migrants can avail themselves of Mexican hospitality” my experience with Mexican hospitality is such that the person who was supposed to ‘bring back the change’ disappears and nobody remembers them ;-(

  6. Thought provoking as usual, thank you George & the US community!

    A bit off topic for today but have y’all seen the new documentary called The Creepy Line? “Your personal data is valuable. companies are using it for their gain. The creepy line exposes those who are exposing you.” Many of the usual ‘webolutionary’ suspects discussed. Watch for free on ‘prime’ now:

    Here’s to the best to you & yours,
    From NJ With Love

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