Black Friday: What Could Go Wrong?

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This is the day a good part of America goes nuts.  Bonkers, bahzitsu, meshuga… We expect treatment stations for seasonal illnesses such as “click sprain” and “credit card burn” plus “package-induced back strains” will be full by mid-afternoon.

This being Black Friday, as always, odds are good that you’ll be hitting the major sites, too.

Sadly, we already are seeing reports like “Huge Black Friday brawl inside mall as ‘shopper throws shoe which hits baby’ and women wrestle on floor…” in a frenzy that started last night with “U.S. online sales surge, shoppers throng stores on Thanksgiving evening.”  Gotta love it…  Turkey and materialism overdoses at the same time.

(Continues below)

 

The wealth effect should be apparent to all:  It’s the economics analog to not just counting your chickens before they hatch, but actually trying to cook an omelet with ’em and make a bucket of chicken, too.  Like so many things in America these days, it doesn’t have to make sense…it’s just what we do.

Bitcoins this morning were still in the $8,250 range (we are half-looking for $9,500 before sobriety appears) but there’s no way of telling how splits and folks will work out.  Toss in the CME looking at crypto futures and a strange analogy comes to mind – which is our point-of-the-day.

Once upon a time there was a world when gold and silver ruled.  They were recognized as real “storehouses of value.”

But then, along about 1905 (or thereabouts) along came chartalism which redefined life as we know it.

You see, previously, governments salted away gold and silver.  But the key notion of chartalism is that governments can just “make up money on the fly” so long as they have taxing authority.

One thing leads to another, but the key question for you distills to this:

“What do you think “money” is?”

Back in 2001, or might have been 2002, we postulated (with the world on the brink of an economic meltdown in the wake of the Tech Wreck hitting the wall) that governments might be able to “muddle through” a then-pending Great Depression (which still hangs over the world like the sword of Damocles) by consciously out-printing deflation.

So far, it’s working.  The Fed has continued to print more money than is necessary – and making it up has fueled something called Modern Monetary Theory (MMT).  Free Lunch theory come to life.  (For now…)

Money is being transitioned out of “representing a fixed amount of some physical good or commodity” and it’s becoming a “made up notion based on The Printer’s future ability to collect taxes.”

You wouldn’t ride in an airplane if it was based on the “Future sobriety of the pilot in time to land…” But, that’s not exactly how economics works.  As long as the passengers on the plane don’t panic, the plane can fly forever.  (Fuel and cockpit breathalyzer readings notwithstanding.)

The theory is that as long as you print just enough more than is necded, people will keep spending.

Those 59,974 people who filed for non-business bankruptcies in September alone?  Collateral damage.  Sorry.  Sh*t happens.

The good news – and there’s a fair bit of it – is that since the Housing Bubble, there has been a decline in things like- like credit card delinquency rates:

As you can see (credit where due):  Credit card delinquencies did recover surprisingly quickly following the Housing Bubble collapse.  Gold stars all around.  Yes, the Obama administration and the Fed can take some bows.  We calls ’em like we see’s ’em.

What makes for a Depression, understand, is when confidence fails and people’s faith in the future is shattered.  They pull in their horns and stop spending.  As the spending stops, what was once the virtuous cycles turns into it’s evil opposite: The Vicious Cycle.  So far, though, the confidence game has continued non-step.

The data above seems to suggest that we could have a better than expected retailing season this year.  Bankruptcies are down, there are more people working, and in generally the “Trump Bump” is moving along nicely.

True, stock valuations have completely unhinged from future earnings projections and yeah, we don’t need those connections in a bat-sh*t crazy world where everything is a floating craps game, but that’s today’s world.

So have a wonderful day of pick & click…we’ll update you Monday (or early next week) when the tallies start coming in.

For now, between hearing the clatter of hooves on roofs, we don’t expect the world to end, unless there’s an “out of left field” event – like a massive DDoS attack during shopping prime-time.

Meantime, though, I’m looking at “smart home” devices (Black Friday-Cyber Monday Clearance Sale Day 2017-Wireless Mini Smart Plug Outlet, Works with Alexa,WiFi Smart Socket Outlet Remote Control,No Hub Required) but it’s bothering me a bit:

I have to take care that our “double-wide in the woods” doesn’t end up smarter than its occupants…

Yes, Markets Are Open

But they will be closing at 1 PM eastern time today.  The Fed data not released yesterday will be released after the market close today.  If you were going to “hide bad news” in press releases, announcing when the market is closed would be ideal.

So we will look at all things federal after the close and see if there’s any grist for tomorrow’s Peoplenomics.com report for subscribers…

Dow futures are up another 65, or so.

Mail will be delivered today and tomorrow and most parking meters will be working…

The Watch List

Trump diplomacy working?  China closing main road connection with North Korea.

Eight Men Found Washed Ashore in Japan Say They Are North Korean.  So much for the worker’s paradise pitch, eh?

But also be aware of this from CNN: Pilots train every day for 12-minute flight to battle in North Korea. Hmmm///

Indictments to Come?

Michael Flynn’s Lawyers Reportedly End Communications With President Trump’s Team.

If Mexico Can Do It….

Monsanto says Mexico revokes permit to market GMO soy in seven states.

Why is the (effectively bought-off) FDA still shoving GMO’s down American gullets?

OK, off to make (guess what kind) of sandwich…see you tomorrow (Peoplenomics) or here Monday…=

19 thoughts on “Black Friday: What Could Go Wrong?”

  1. If Bitcoin can go over $8,000, how high can the Stock Market (that actually has value) go ? DOW 50,000 to 250,000. It’s a RIOT to quote a poster. If the Tax Plan doesn’t pass, buy Trump shirts & ties made in China to help his family pay his future Estate Taxes.

  2. YOu ask in your column today, why the US hasn’t suspended Monsanto’s right to market GMO crops in the US. If you weren’t already aware, some of those GMO patents were granted to Monsanto AND it’s partner the USDA. Just in case you are keeping up on this issue. Talk about an extinction level event. GMO’s certainsly qualify, one long “nothing to see here folks” event…

  3. You wouldn’t ride in an airplane if it was based on the “Future sobriety of the pilot in time to land…”

    But don’t you see, we DO. As well as the future functionality of the engines, landing gear, airframe, etc.

    Money is and always has been purely psychological. What constitutes a storehouse of value changes over time.

    Wealth, on the other hand, is the tangible creature comforts that each of us thinks we need to live a satisfactory life.

    For me, it’s Beany Babies, Baby.

    73s.

  4. Printing presses will keep on printing. The DOW will be 125,000 and the world will leave the dollar in the dust eventually ! So what to do ?? DO NOT leave your money in the hands of the banksters, they will keep it for themselves and leave you penniless ! Think “banking riots of 2019”, and you will get the picture. This is just pure and unadulterated greed at an exponential level. Get your money out of the system at some point where the rules of law do not apply. Hey, think Wells Fraud-Go, John Corzine at MF Global, front running futures trades at Goldman Sachs. The list is endless !!

    • “John Corzine” so funny how its already all forgotten and so will be everything else. Therefore, me worry? :-) No!

  5. George, I not get the attraction to money being tied to hard assets like gold. If mild devaluation is keeping us one step ahead of a Great Depression, why is that such a bad thing? Can’t we just add a zero to the bills every 40 or 50 or 90 years? And forego the human misery and the totalitarian, war regimes of 1930s Europe? Best wishes for the Season, Mike.

    • good thoughtful question..
      If…
      I bought a few shares of twa stocks rears ago.. loved the company.. before things went south for them my wife asked if I was planning on selling them.. I said I didn’t think so.. my thought was the company that bought the airplane company would just absorb it into the company and the twa stocks would then be converted to that companies stocks.. instead it didn’t quite work out that way and all those stocks actually cost me thirty dollars to get rid of them instead of making some cash off of it.
      the same thing could play out for the dollar.. lets say the middle east decides to dump the dollar.. the dollar and pound I believe would literally be worthless..but if they decide to lets say print new money value it ten million to one then it would theoretically have value..https://www.csmonitor.com/World/Africa/2008/0325/p06s02-woaf.html
      but lets say they decide to go with the chinese currency and china decided they wouldn’t honor any of the dollars as value then it would be like my twa stocks in my opinion..
      http://america.aljazeera.com/articles/2014/5/20/russia-china-bankdeal.html
      My thought is As long as we are dependent on them for our manufacturing and our currency only has a value because they place one on it.. then we pretty much have to play by their rules.. at least that is what I think.. George has a better handle on this stuff than I do.. I am just some bottom feeder schmuck from nowhere with an opinion..

      • The World Com’s and Enron’s investors share your pain, same with all the consolidations that have been happening for nigh on 40 years now. Someone else said it, it’s like holding the hot potato to the end, problem is they don’t always show themselves as hot and throwable before they explode.

  6. Had conversation with kids yesterday, about driverless vehicles. Two of them were all in on the tech. The other two plus my son-in-law thought it would be not-so-good.

    Some questions were:

    What do the truck drivers do when they have no work?

    What do taxi drivers do?

    Revenue will be lost when the truck drivers have no work – what replaces that income tax, sales tax and the rest that the truck driver pays? Same for taxi drivers – what replaces their former contributions to federal, state and local taxes when they have no work? Where does a 20-year truck driver find work when his industry is collapsing? And please don’t tell him to take out a loan and go back to school – we can see how well that is working out already.

    What happens when the drivers license fees, registration fees, inspection fees, mandated insurance and the rest suffer declining revenues due to driver-less technology?

    What happens when texting drivers encounter self-driving vehicles? This is not intended to be funny, as I have had 3 PARKED vehicles totaled by texting drivers in the last 6 years. So how does a driver-less vehicle handle an accident? What happens when driver-less herds run in packs down the freeway, and there is a road problem (as in section of concrete in bridge falling out, since that happened a mile from where we were last winter)?

    Who is liable when self-driving cars are involved in an accident? Does the programming go on trial, because I don’t think programs have cash. What about when a sensor fails from road debris and people are killed? Is it the car manufacturers? The programmers? The sensor manufacturer’s? The fleet owner? How long will that litigation take, and what is the cost of that?

    What happens when the internet is down in the aftermath of a hurricane or ice storm or other event?

    If laws are passed and the infrastructure does not support the technology, what happens? My son asked this, as we cannot get cellular or internet service at our farm without satellite. Does it mean mandating rural people to have satellite access at a certain bandwidth? Why do rural people pay taxes supporting the city infrastructures which are never delivered to rural locales even today, and how does that work out for driver-less vehicles?

    The two of my kids who are technophile cornucopians were clashing hard against some of these questions, and universally fell back on either the government will sort it out or else it will work itself out over time.

    My question still exists – what happens to the revenue the government loses by unemploying entire sectors of the economy? With a very limited unemployment safety net, what happens in real life, not at the BLS…

    As I have a home in suburbia and in very rural TX, I can see problems in both, but more problems in rural application.

  7. Bunny funny fed Money is a belief system.
    Every nation has one most of the time and that’s what wars are fought over who’s Bunny funny fed Money

    • Oh, please, they be failing tests all along, wall or no wall, the problem is profit, and the spreading of those body scanner machines. IF we didn’t have to buy those radiating tumor machines, we could have managed our borders like a REAL country!

  9. As for the weather in the NE–makes you want to live forever, that’s how lovely the fall season is, specially walking throw Central Park.

  10. Apple is at a P/E of 19, GE is at a P/E of 21. Apple represents new America & is well managed, & GE represents old America & is poorly managed. Which is the better buy? The new American FAANG stocks. Their stock price & earnings will go much higher during this bull market. Maybe as high as Bitcoin, stock price wise.

  11. Don’t worry about anything, Hurry out and load up on worthless Chinese Junk, Ho Ho is coming the Bills and financial problems can wait. After we are fully employed rich Americans it is our right to be stupid.

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