I began with, a nice dish of organic chicken stroganoff over (also organic) Yukon gold potatoes for breakfast.
Then, for dessert, it was a hot peppermint cocoa…
“Hey! Ure! WTF with the culinary crap? Where’s my insightful look at where the market is going today?”
Easy, there big fellah. I’m making a point. Pay attention….
The point is the market is in the process of making a January low that may have a 50-50 chance of being the low for the whole year. With options expiration next week, who cares if we are down another 400 points on the Dow today?
In my world, things look very far from grim – we’ll get to that in a sec. But first, even if I pencil in a 44-point further loss in the S&P today, that still doesn’t get us out of my “target” green circled area for this week – and in fact, with even a small rally at the close tomorrow, we are likely to be right in the green, so to speak:
Sure, it would be more graceful if we could get down into the yellow circle, but that’s just wishing and hoping. The deeper the pullback, the more upside money may be made…everything has a gold or silver lining to it.
How can I blithely not buy into the current doomporn outburst? Let me count the ways…
1. Man With Knife Shot Dead After Trying to Attack Paris Police Station – which means that we could be rounding a corner where force is met with force in Europe when people start misbehaving.
2. In the Middle East, Iraq is offering to mediate between Iran and Saudi Arabia. Depending on how this goes, we could see a chill-down in regional tensions.
3. The ADP Jobs Report yesterday was pretty good, really. And this morning, we have the Challenger Job Cuts report just clearing:
A strong economy, coupled with what appears to be a growing reluctance to announce layoffs during the holidays, contributed to December experiencing the lowest number of monthly job cuts in more than 15 years, according to the report released today by global outplacement consultancy Challenger, Gray & Christmas, Inc.
U.S.-based employers announced planned workforce reductions totaling 23,622 in December. That was 24 percent lower than the 30,593 job cuts announced in November and 28 percent below last year’s 32,640 December job cuts.
December was not only the lowest job-cut month of 2015, it was the lowest job-cut month since June 2000, when employers announced 17,241 planned layoffs. Last month also represents the lowest December job-cut total on record, since Challenger began its monthly tracking in 1993.
The December decline was significant enough to prevent 2015 job cuts from reaching a six-year high. In all, employers announced 598,510 job cuts during the year, 24 percent more than the 483,171 planned layoffs in 2014.
While 2015 total still saw the heaviest downsizing activity since 2011 (606,082), the year definitely ended with job cuts on the decline. Employers announced 105,072 job cuts in the fourth quarter, down 49 percent from 205,759 in the previous quarter. The fourth quarter total was 12 percent lower than the 119,763 job cuts announced during the same quarter in 2014.
4. Options expiration is next Thursday – I look for prices to recover from here because stock owners hate nothing more than handing option traders money on the monthly payday. So a turn higher before next Wednesday seems likely.
5. We’re not sure that North Korea really has a “mini-H-bomb.” Our military affairs expert (warhammer) tells us…
The AF Ass’n news (snippet below) details how the WC-130 Constant Phoenix aircraft is sniffing around to determine if North Korea indeed unleashed a Hydrogen bomb earlier this week:
“WC-135 to Sniff Out Truth of H-Bomb Claims
?The Air Force will deploy a WC-135 Constant Phoenix to test for radiation near North Korea in an effort to determine whether the communist country actually did detonate its first thermonuclear…weapon, reported the Washington Post, citing an anonymous defense official. “
Wikipedia has nice rundowns on the difference between an Atomic bomb and an H-bomb For anyone interested.
If the NK bomb was atomic as an igniter for fusion, or not, won’t change much of anything. It would only matter greatly if an unholy triangle evolved (ISIS, North Korea, Iran) and they all worked together on a missile delivery system, would we be worried and that would take time to evolve. Or, NK bombs SK…which is “dis-likely.”
6. Whenever I see a story (like this CNBC piece on how George Soros is saying “It’s 2008 all over again…” I get really skeptical. Mr. Doomporn Profits, Hisself.
Ask Ure-self this: What asset class of regular folks is outsized? Not housing, not stocks, not bonds, not gold….so WHAT is he talking about?
The Eurabia Immigration Bubble? Hahaha…this guy slays me. Stgomp yuour feet, Soros…stampede the chicken…we love to see ‘em scamper, too.
You see, folks like Soros make their money by (to use an old Rothschild expression) buying when the blood is running in the streets. So when I read Soros promoting fear, I have to wonder if he’s being a tool who is just looking for even lower prices and a better long-side entry. Yah-think?
In the real world? Soros is a democrat and if this is a REALLY a replay of 2008, the political reality is that democrats are even more inept than the republicrats.
Why, this would a) destroy the Smart Obama Myth amongst liberals and b) Hillary whatzzit’s party would own the Greater Depression…and History says that won’t happen.
7. Since the 10-year Note has essentially NOT MOVED since the Fed “rate increase” the fed would, in keeping with the previous Depression rhyme going on, raise rates at least one more time before the Big Finish in late 2016 or early 2017.
Fact: Most of 2013 and 2014 the 10-year was at higher levels so the Fed has gobs of room to move again. The odds are they WILL.
Lord O’ Goshen, am I the only guy who remembers there were three rate hikes leading into the last Depression? See Fed Discount Rate data right:
8. I have been telling you this stuff for weeks, but if you’re not hearing it yet, UBS has issued a forecast of a Peak yet-to-come and then a 30% collapse late this year and who knows after that. But again, the key point is? Seems too early to collapse just yet.
9. China’s leadership is pragmatic. They have announced a stimulus already, but Ure thinking is that they will opt for a further stimulus, as well. Headlines like this one ask “China: Is stimulus the answer?”
The correct headline is “If one isn’t big enough, how big will be next stimulus be?” China is not down, out, or about to play dead. They have 4,760 more years of public finance experience under their belt than the USA since our founding a mere 240 years back.
People tend to forget the depth of Chinese culture and experience. Sadly, these are the same people who forget it’s illegal to pass out national secrets for favors or to put classified information on a private server.
But hey! If there’s no indictment-to-come on the email scandal, Chinese government, Russia’s, and even most governments in the Middle East, begin to look like ethical high-grounders in comparison to U.S.
When that realization spreads, then we will have cause for real panic – it will mark the moral bankruptcy of our government. In the meantime?
Panic is a fine and savory thing.
But it can’t compare with chicken stroganoff, a hot cocoa, along with a cool, detached view of things.
Besides, if a thousand points off the Dow scares you, you’ll be reduced to a puddle of jelly by what 2017-2018 bring. So cowboy the ‘ef up and get done what you need to do.
In a perfect world, the S&P will close Friday at 1,960.48.
Oh, one more: a rare P.S. from warhammer just in:
Some random observations . . .
Remember those reported DHS camps awhile back? Perhaps they were not for John and Jane Q. Citizen, but instead were in preparation for a massive influx of illegal aliens?
Who’s fingers are holding the Middle East shit bag zipper today? Iran appears to ardently preparing to let it hit the fan.
Lastly, on the more severe end of the Armageddon scale, marshmallow toasters of the world have scientific reason to be optimistic.
Now, while you wait for spring, go read something useful…