Please accept this in lieu of our usual “Coping” section this morning. This is more the flavor of a Peoplenomics report, but since we are doing through Ebola trigger points and preps in tomorrow’s report, I wanted to share some perspective on what’s ahead for the economy.
The value of the old Beechcrate is showing up this weekend as we’re going to pop up to Oklahoma to spend some time with Robin (and Mrs.) Landry.
I appreciate you don’t give a rip about my comings and goings (except that it it interesting that the trip with tail wind tomorrow morning should clock in at 1:53 of flying versus about 6-hours for driving).
What you like do care about is the reason.
Both in our Peoplenomics charts and in Robin’s extensive work using both Elliott wave counts and regression channels, the stock market is in an extremely precarious position.
We both has a very good handle on the “long wave” elements of it. Here, the short version is that a collapse into a 1930’s-style event looms larger than life. It’s just a matter of identifying what the “nominal” cause will be.
As explained in yesterday’s column, there’s been no appreciable dialing-back of debt, just more promises and cross-insurance to keep things from falling apart.
So the focus of this weekend’s working session is “When?”
There are two general cases: One is a continuing “muddle through” where we slog along until the Fed bumps up rates a tiny bit (they’ve been yammering about how this has got to be coming for months, now).
Under this scenario, we have a decline here (1,900 on the S&P?) and it possibly could decline to as low as 1,740. If that’s how coming months work out, then we would expect there to be one more absolute hum-dinger of a blow-off top.
That’s the best case.
The worst case is what happens if the markets continue to slide and wipe out critical support at 1,740 on the S&P.
If THAT comes around, we’ll be in a position of having all the modern risks of pandemic disease at the same time as we get a mega-collapse and replay of the Great Depression of 1929-1941.
This latter case is interesting because of the “mood control” of the last Depression. Remember, The Communications Act of 1934 was how government made sure that corporate (responsible/compliant control) of mass media of the time (radio) would play out.
However you want to characterize it, the result of government machinations during the Great Depression was the wholesale distribution of Keynesian Theory which today would be more properly labeled “corpgov” based on what we know.
The Great Depression brought with it an opportunity to enact sensible concentration of wealth programs to prevent the cyclical collapse which stands before us, either sooner, or later.
This happens because in a Great Depression, the One Percent are mostly wiped out. They have spent almost 50-years accumulating wealth. But it has cost us dearly, in that working people’s share of income has fallen to fund those at the top.
A good discussion of socialism’s resurgence in the 1930’s may be found over here, and in many ways it parallels the activist climate of today. Which is being managed and manipulated, if case you hadn’t noticed.
Naturally, socialism isn’t the answer, but then again, neither is ultra-capitalism – those policies that allow capital to accrue in the hands of the very few. It is the cyclical re-accumulation of wealth that triggers collapse as when working people wake up and demand part of their due in the face of deteriorating personal balance sheets that revolutionary talk arises.
I note that Marx and the other “great socialists” were offspring of upper strata families and didn’t have a real hands-on knowledge of work.
“Karl’s father, as a child known as Herschel, was the first in the line to receive a secular education; he became a lawyer and lived a relatively wealthy and middle-class existence, with his family owning a number of Moselle vineyards. Prior to his son’s birth, and to escape the constraints of anti-semitic legislation, Herschel converted from Judaism to the Protestant Christian denomination of Lutheranism, the predominant sect in Germany and Prussia at the time, taking on the German forename of Heinrich over the Yiddish Herschel.[“
Young Karl was privately educated, by Heinrich Marx, until 1830, when he entered Trier High School, whose headmaster, Hugo Wyttenbach, was a friend of his father. By employing many liberal humanists as teachers, Wyttenbach incurred the anger of the local conservative government. Subsequently, police raided the school in 1832, and discovered that literature espousing political liberalism was being distributed among the students. Considering the distribution of such material a seditious act, the authorities instituted reforms and replaced several staff during Marx’s attendance
Marx skipped military service and after a seven-year engagement married a baroness.
His cohort, Frederich Engels was another one who didn’t do well at real work:
At 17 years of age, young Frederick had dropped out of high school due to family circumstances. He spent a year in Barmen. In 1838, his father sent the young man to work as a nonsalaried office clerk at a commercial house in Bremen.[6][7] His parents expected that he would follow his father into a career in business. His revolutionary activities disappointed them
In 1841, Engels joined the Prussian Army as a member of the Household Artillery. He was assigned to Berlin, where he attended university lectures and began to associate with groups of Young Hegelians.