We have certain luxuries around here, not the least of which is being somewhat prescient about where markets are going.
This is demonstrated in the call I made for new all-time highs in the market back in January and here this morning we see headlines about how stocks are smashing all records. Old news around here – it’s been baked in the cake for 9-months.
The Bonus outlook this morning, however, is that the first real (in my work) zone to even begin thinking about a market crash doesn’t arrive for another 308-days which gives us plenty of time to sit back with our long on the long side. That is not the all=time high date…that comes sooner. Or later, depending on which track of Futury shows up.
Sorry; Futury is my shorthand of the set of possible future only one of which will show up on the present shared timeline. At long lead-times before a future date on calendars, the future is a broad almost Gaussian collection which narrows as you get closer and closer to it.
At some put the futury set resolves into a “most likely” which we can then think of as The Future.
Long lead-times are soft in this stuff because of the exponential nature of probabilities.
Not that this way of seeing is fool-proof, however. World’s full of fools here lately.
Still, the chart work is meaningful and we are doing research right now on the impact of “news outliers” on the markets. The results – and thoughts on point – will be in Peoplenomics.com next week. And while I’m at it, tomorrow’s PN will feature a long but damned interesting article on “why we prep” and “what to prep for” from Captain Midnight That’s not his real name, but because of his sensitive position in the world, he must write under the nom de plume.
Oh…and a most excellent book to read – suggested by strategic contributor warhammer: The Predictioneer’s Game: Using the Logic of Brazen Self-Interest to See and Shape the Future.
From the Amazon write-up on this:
Bruce Bueno de Mesquita is a master of game theory, which is a fancy label for a simple idea: People compete, and they always do what they think is in their own best interest. Bueno de Mesquita uses game theory and its insights into human behavior to predict and even engineer political, financial, and personal events. His forecasts, which have been employed by everyone from the CIA to major business firms, have an amazing 90 percent accuracy rate, and in this dazzling and revelatory book he shares his startling methods and lets you play along in a range of high-stakes negotiations and conflicts.
All of which circles around to my contention in the Futury stuff from Day One: There is no single best way to assess the future. It is simply too complex and so it requires a multidisciplinary approach. The Predictioneer book, for example, explains how the “self-interest” of the stakeholders in outcomes works in surprising ways. But we have other tools as well, including linguistic shifts – measurable by bots or word frequency studies – along with not-so-conventional analysis such as historical cycle data and cultural diffusion studies.
On this latter, the current “take-down” of the USA as a “melting pot monoculture” into a morass of “undisciplined multiculturalism” is especially keen to watch. It is presently embodied in the jihadist movements of Islam.
Does that in any way tie in to events such as the tourist area bombings in Thailand overnight?. Too early to tell…it may just be indigenous reaction to a strong military government, but my money is on outside influences though who knows (yet) of what stripe/
Then we have polling data about the future. For certain kinds of outcomes – such as political – you can look at a “poll of polls” to see which way the presidential winds are blowing. For marketing products and ideas, you can look into focus group data and the classic by Trout and Ries’ Positioning: The Battle for Your Mind.
My favorite all-time reference as to techniques of futuring is Delphi Method: Techniques and Applications. But some knowledge don’t come cheap. The hardcover on the used market is in the $200 class and the paperback is pushing $60.
Not to get into too long a discourse on how the Future (that singular thing we like to think of) arrives, but it casts many shadows before it. It is at its heart multidisciplinary and complex. Which is why market prediction accuracy is such a fine measuring stick by which to judge accuracy of technique.
My personal conclusion is that those who don’t put down real money on their predictions – and see the accuracy of their work judged by their personal net worth – are contributing to the general noise level of the internet which is high enough already.
But to each their own, I suppose.
Those Big Numbers
Two of them hot off the press releases: Let’s roll with Retail Sales first:
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for July, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $457.7 billion, virtually unchanged (±0.5%)* from the previous month, and 2.3 percent (±0.7%) above July 2015. Total sales for the May 2016 through July 2016 period were up 2.5 percent (±0.5%) from the same period a year ago. The May 2016 to June 2016 percent change was revised from up 0.6 percent (±0.5%) to up 0.8 percent (±0.2%).
Then we have the Produce Price Index and Final Demand (which always strikes me as funny because there is no final demand when you think about it):
The Producer Price Index for final demand decreased 0.4 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices rose 0.5 percent in June and 0.4 percent in May. On an unadjusted basis, the final demand index moved down 0.2 percent for the 12 months ended in July. (See table A.) In July, the decline in the final demand index was led by prices for final demand services, which fell 0.3 percent. The index for final demand goods decreased 0.4 percent. Prices for final demand less foods, energy, and trade services were unchanged in July after rising 0.3 percent in June. For the 12 months ended in July, the index for final demand less foods, energy, and trade services increased 0.8 percent.
Final Demand Final demand services: The index for final demand services fell 0.3 percent in July, the largest decline since moving down 0.3 percent in March. The July decrease can be traced to margins for final demand trade services, which fell 1.3 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.) Conversely, prices for final demand services less trade, transportation, and warehousing advanced 0.2 percent, and the index for final demand transportation and warehousing services increased 0.1 percent.
All of which leaves the markets to chill. Our Peoplenomics Oscillator has been running a bit “hot” lately and this pausing period should provide for things to return to the normal range as we get on toward the average annual high date later this month.
Ah…big breath. Hold…and release.
Futures are flat after yesterday’s run.
The Sun’s Weather Forecast
I keep forgetting to mention this…but the government puts out a report monthly on the activity of the Sun.
By some people’s estimate, activity on the Sun ia tied to how weather works out on Earth. Most sunspots seems to weakly correlate to “global warming” and so it looks like cooling might be implied as the Sun goes to sleep for this cycle:
This all depends, of course, on how strong, or weak the correlation is – and will be – as we slide toward the Future. For now, it’s in the futury pile.
Is There and “Arkansas Mafia?
You would think so, if you follow the body count that conspiracy-minded media have tallied around one of the presidential hopeful’s family.
Still, it’s an eyebrow raiser when a lawyer who was suing the Democratic National Committee, Shaw Lucas, ends up dead under murky circumstances.
This doesn’t prove anything, except that I plan to stay well away from such speculation here until I can afford a bigger life insurance package.
Media Manipulation 101?
We can’t help but note the L.A. Times story under the headline “She’s old, for a woman’” Media around the world condemned for sexist Olympic coverage…”
Problem: Who did the “Condemning”?
I tried to figure out who the “Koreans” were who put up the Google doc spreadsheet and all I got from translation services was gibberish like “2016 The li right Olympic sex discrimination report Oh chi round”
Hold da’ phone: I mean besides a reporter…where’s the “condemning?” WHO (you know, one of the five basic elements in a story) did the “condemning?”
Sometimes when I read things early in the morning they just strike me as programming of the public…and maybe I should read this when I have a shower and more coffee.
Sheesh. Headline writer error? Who knows.,.