“Global clock for financial collapse strikes one minute to midnight” begins on the scare-you stories this morning.
If I had a Peoplenomics subscriber for every fool who listened to the Doom and Gloom crowd, I’d be a rich man. But people don’t engage their brains much, for reasons that are not clear to me.
If you don’t follow them, there has been a continuing cry the past few months about how the world is ending right now and how you should buy up everything you can in the way of survival assets and so on. Gold, guns, this, that, and the other thing.
Yet, here we are, just 10 days out from the usual annual high in the markets (around Aug. 26 plus or minus a bit) and here are the markets, set to open about flat for the week.
No sign of gloom.
Nor, have I yet seen an apology from the End of Worlders who were screaming how we should all buy bitcoins when they were at $800 after peaking higher. A Btc is around $257 this morning that’s not particularly impressive.
You may recall during the peak of the Btc stampede we threw cold water on everything with our February 2014 report and outlook on Btc’s and as if that wasn’t clear enough, the follow up six months later was.
At some point, I will be a buyer of Btc;s – as soon as I hear enough people getting up and detesting them as an electronic fraud or sham. That’s when a market bottom is potentially near.
Not that we have worried about the predictions of others; our www.peoplenomics.com site has been righter than most, and cheaper, too, if you’re trying to preserve hard earned savings.
I told you back in April that the only the only level that matters will come (likely around Fed decision time in September) when we might drop down to the 2,040 kind of level in the S^P.
Yet all my work still says not only is it OK for the Fed to raise a couple of times, but that as they do the stock market could go soaring.
But not until the gloomers run down prices this fall to our line in the sand.
If this turns out to be an irregular high flat Elliott (IV), then so be it. That would set the stage for a year or two of much higher markets and what could be the blow off top like 1929.
Not that gloomers are wrong all the time. Remember, even a broken watch is right twice a day. And yes, we will likely see a decline this fall.
But is in the end of the Western Financial System? Nope. We still have plenty of central bank moves to play through first. And until we get there, yes there is deflation (West Texas Crude is in the 41’s this morning) but that just lowers production costs for stock companies.
And it’s this slower (far less frothy) data that will matter. There’s nothing wrong with being a contrarian. But our Model has been negative for the past 6 weeks, so yeah, go reread my April piece on S&P 2,040 being the dance step to master.
The most graceful thing I can imagine is that the market trades sideways until the week of the Fed meeting (coincidentally, the week we get back from the Peoplenomics cruise – and no, that’s no accident) and then momentarily – like one or two days worth – drops under 2,040.
That would be a peachy end of the irregular high flat (IV) and then I might be a huge buyer of cheap 1-year index call options because opportunities to cut a fat hog like the one that may be coming don’t happen very often, in life.
And at the top (after we have sold our airplane, btw) we will flip around to the short side and do it again. Just when the last of the “weak hands” are buying from the strong hands.
Not to say it will happen this way, but betting on EMP or buying another thousand rounds of ammo and thinking that’s an investment? Seriously?
Disappointment in the Election of 2016 or the aftermath in early to mid 2017…that’s when the doomsters could be right.
For now, it’s another week on autopilot.
The Central Banks have lots of options left. The main one is to raise rates so that piles of private capital hiding in banks paying 1% (or less) are scared back into play by soaring rates. When that happens we will get a stock bubble the likes of which hasn’t been seen since 1928-1929 in my work.
Rather than shorting prematurely, we will wait for the data and once the Fed has done two raises this fall, then we might have something to talk about. This one minute to midnight stuff is true, but only if you remember the timescale could be one minute equals two years..
Empire State Manufacturing Survey
Just out – more reason why the world won’t end:
“The August 2015 Empire State Manufacturing Survey indicates that business activity declined for New York manufacturers. The headline general business conditions index tumbled nineteen points to -14.9, its lowest level since 2009. The new orders and shipments indexes also fell sharply, to -15.7 and -13.8 respectively, pointing to a marked decline in both orders and shipments. The inventories index dropped to -17.3, signaling that inventory levels were lower. Price indexes showed that input prices were slightly higher, while selling prices were flat. Labor market indicators suggested that employment levels and hours worked were little changed.
Tomorrow we have housing starts (about level, I’m guessing) and then Consumer Prices. If you go to the store, you already knows those will be up. In fact, I expect food to lead but the second will be slanted by the exceptionally cheap energy prices which will make it seem like things are still in deflation land.
The Fed is papering over the mess by printing up oodles of dollars. Up 6.9% on M1 (cash and equivalents). (How you “seasonally adjust 12-month numbers” seems scammy to me – since the seasons are the same as a year ago, so on this kind of data we look at the YoY data and dispense with statistical quackery of seasonality in annual numbers.)
Collapsing oil prices only go so far…and so far has been enough so far, if that makes sense.
Anyway, Wednesday’s consumer price report will paper everything over with cheap oil and when that stops, better grab the ankles.
You News, You Snooze
How many emails will it take before the 37 percent of people who still believe in Hillary will figure out she’s a liar? The email count is to 60 classified docs and climbing.
If this sounds like a Watergate deal, you’re not the only one thinking thataway.
End the Anchor Babies
So sayeth The Don. That ought to make the “country without borders” people nuttier than they already are.
The grim theater is this becomes a talking piece what what’s-her-laptop and she’s looking for anything hot she can to dodge being candid.
I can hardly wait for The Don to announce “No Social Security Benefits for people who don’t have US citizenship.”
As We’ve Been Saying
Here we go, again. Just like the Ure axioms: violent video games lead to real-life violence.
As I was looking for a good book to recommend on how conditioning work, what should be listed just under Contingencies of Reinforcement: A Theoretical Analysis (B. F. Skinner Reprint Series; Edited by Julie S. Vargas Book 3)?
A KNIIFE called a NEW Real Stag Handle skinner SS7005.
Yes sir, proof again that computers are smarter than most of the people using ‘em.
History is Rhyming, again?
So is “Straight Out of Compton” going to be the hip-ho-gen version of Saturday Night Fever?
Half an extended economic long wave cycle, so yes, it fits. Man from UNCLE missed the rhyme by too many years. But then every movie mogul knows the Long Wave, right?