Edging Toward “De-Bubbling”

[Reader Note:  Refresh this page at 8:15 AM for Housing data.]

We first began to notice this “possible De-Bubbling”  recently in our Aggregate Index charts.  There is a major pause (reverting to “normal?”) going on  in several domains of finance.

Cryptos:  Dreams and Demons

We have a couple of reasons to be offering (again!) our advice to be extremely leery of digital anything’s.  A CNBC story, for example, noted that BTC had dropped under $50,000 recently.  But, the key part for us was their notation that “Treasury Secretary Janet Yellen called bitcoin “extremely inefficient” and warned about its use in illicit activity.

An hour before “click-time” today, the digital-darling was down to $47,000 and change.

You’re no doubt sick of me telling you this, but:

There is no reason for the US FedGov to offer ANY convertibility to a blockhead currency when one is “officialized.”

Moreover, since there are more than 2,000 different currencies (and in our view, there’s no compelling reason for ANY of them to have state-sponsored conversion). we view cryptos as not only one cause of power problems but also a con that’s long-in-the-tooth.

As we have held since day one, people who play with cryptos:

  • Are taking advantage of people too dumb to know what (Tulip) manias are about.
  • They hate climate change and environmental preservation – since cryptos use huge amounts of energy to make nothing *(except made-up numbers) as deliverables.
  • They sell to Greater Fools – and it’s like the old Iraqi Dinar scam for a decade or two back.  True believers want to believe.

Meantime, we’re appalled to think – owning a tree farm, selling back power to the grid, and never having accepted a single crypto – that our future’s being pissed away.  With crooks making up money and people today being too dumb to spot a swindle when one comes along.

But, hey…that’s just me.  No doubt, this part of the De-Bubbling will move in fits and starts.  We might even be able to notch higher highs, before it all implodes.  That’s the Nature of Bubbles.

Divergences Matter

Philosophically, I feel Warren Buffett’s and Charlie Munger’s pain:
As co-chiefs of Berkshire Hathaway, they have made fortunes using a simple-enough concept:  Value Investing.

Some basic notions to keep in mind:

  • Stocks need to “pay their own way” either in terms of growth or by paying dividends to investors.
  • Better:  Companies that have high book values compared to prices.  The $400-million dollar lemonade stand (um, like Tesla?), that make great lemonade that sells a few hundred thousand in lemonade just doesn’t make sense.
  • Even with an 8-1/2% drop in share prices Monday, Tesla still had a market cap of $764 billion and change.  Actual revenue (lemonade sales) were $31.54 billion on a trailing twelve months basis.  Exsqueaze me, but isn’t that revenue of 4.13% of stock (bubble)?
  • Ure looks at this as 1-part performance and 19-parts story.  Good story, told with flair, but what was it Jerry Maguire said?  “Show me the money!”
  • Which circles back to why Buffett and Munger probably don’t have a long shopping list.  Yet.

Not Like They’re Alone, Though

“De-Bubbling” is going to be ugly.  And, it may have already started.

Two charts that ought to be more sobering than running out of hooch:  The first is one you can generate yourself at Yahoo Finance which we highly recommend as a data source.  Start with ^DJI 31,521.69 27.37 0.09% : Dow Jones Industrial Average – Yahoo Finance and lay on some comparisons with the Nasdaq and S&P 500:

Don’t know how clear it will be, but see the red line?  That’s a view of the Dow.  Mainly Big Stocks and some actually pay dividends.  Top trace is the NASDAQ *(which doesn’t pay as much proportionately, focusing on “growth”).  See anything?  Like a series of divergences headed toward a mean?

History Teaches

The Art of financial management by the government is not so much art but dumb luck.  We’ve been through bubbles before (1929, the Internet Bubble, and Housing bubble) so we have an idea how they work out.

1929 is a fascination for us, though, since it has such an outsized “communications” parallel playing out.  You do remember than the Radio Trust was the big driver in the late Twenties?  And you’re awake enough to see the social media bubble?

Thus, the wave form comparison on the Peoplenomics side is one of our best indicators of where we are likely sitting in the “historical bleachers.”

Write this down and remember who said Shakespeare was right:  “Beware the Ides of March.”

We’ll lay out some timing ideas on the Peoplenomics side tomorrow.

What Else is “News?”

Well, since Peloser and Shifty can’t seem to get stimulus done, kind of interesting to see how fast a dem-in-trouble-with-a-recall (GavNoose) and company can hand out money.  California OKs $600 stimulus payments for 5.7 million people.  Not worth moving, for, though.

The House (of Fools) is still fiddle-dee-farting with more bloated Pork Paper….and then it’s on to the Senate.  Facing eviction?  I wouldn’t bank on any help from these clowns.  By April Fools?  Bets?

Elaine and I have been holding back on mRNA vaccinations for CV-19.  As such, we were pleased to see FDA advisers to consider EUA recommendation for single-dose Johnson & Johnson Covid-19 vaccine this week.  Gee:  No serial jabs and no untested tech…wouldn’t that work?

J. Powell tries to talk sense to the child-like idiots this morning.  Powell to Testify as Focus on Economic Pain Persists.  (Child-like because they don’t read, yet.  We keep waiting for voting by lawmakers on unread legislation to become a felony, but that’s never gonna…)

Iran’s gone crooked again.  And – thanks to Slow Joe – they will get away with it.  The grim in “Iran begins restricting watchdogs’ access to nuclear sites: report.”  We figure it’s only a matter of time until O’Biden sends more payoffs east.

Not hard to figure:  But, if you need help, see “Why Taipei Revealed That U.S. Marines are Training in Taiwan…”

On that chipper and cheery summary of how bad can it get, off to boil more water.  Oh, that’s coffee?

Big post storm day today:  Vehicle start and test day for us…and getting my charge to walk more, and do more reps of the post-hip surgery routines.

Part 2 of this morning’s report will be the Case-Shiller Housing data up around 8:15 AM Central, or thereabouts.

Write when you get rich,


29 thoughts on “Edging Toward “De-Bubbling””

  1. J&J, “The baby powder sure is safe.”

    Did you guys notice the Boeing 777 engine ‘problem’ rhymes with 1979? McDonnell Douglas.

    Over 40 years of subsidies and we get the same planes.

    “On May 25, 1979, the McDonnell Douglas DC-10-10 operating this flight was taking off from runway 32R when it crashed into the ground after the left engine detached.”

    • Out of Work Steve
      February 23, 2021 at 08:16 “On May 25, 1979, the McDonnell Douglas DC-10-10 operating this flight was taking off from runway 32R when it crashed into the ground after the left engine detached.”
      You are right about ‘when’ but the ‘why’ was left un-stated.
      The DC10 engine detached due to a late night engine change using a fork lift rather than the slower, authorized method. Using the fork lift cracked the main engine pylon mount. Human error rather than a design flaw caused this failure. Using a fork lift for aircraft maintainance would be like doing hip-surgery with a meat cleaver. Kinda messes with the “trust” issue. Read the directions…

    • As we said to one another at the time “Harry Stoncipher bought the Boeing Company (for McDonnell) with their own retirement fund”. As a close observer I can assure you Boeing did not take over McDonnell.

    • It should be noted that the engines in question are made by Pratt & Whitney… not Boeing. It was not a Boeing fuselage problem that caused the turbines to explode. But the press will spin it because it was on a Boeing aircraft.

    • 1979 was simpler times. People mesmerized by the Bee Gees on their 8 track players roaming the planet searching for “Nessie”, Big Foot and Chupacabras.

      Per-Internet reasons/post-Internet reasons.

      Mrs. O’Leary’s cow did it.
      The janitor tossed the Moon Landing tapes.
      The maintenance guy didn’t bolt the engine on right.

      Post-Internet Boeing initially blames the first 737 Max crash on the black guy, pilot Yared Getachew, 29. “Not enough experience.”

      Last month they were tagged for $2,500,000,000 for misleading some folks.

      Boeing will pay $2.5 billion to settle charge over 737 Max crashes. Boeing, which will admit that employees misled regulators, still faces lawsuits by the families of passengers who died in crashes.

      – Jan 8, 2021

  2. I haven’t heard if the Texan bitcoin mining rig company of angelic investor eBay co-founder origin was able to feed power into the grid during its time of need last week.

    • For those who’s main source of heat is electric resistance heating, you might as well use your graphics card to mine something(in the winter). You’ll be paying the same amount for power, with the possibility of a tulip here or there.

      It won’t work for me since I’m using much cheaper heat sources, and I don’t have time to deal with the crypto learning curve.

  3. Bob and Brad Physical Therapists on yt are great! Good hip exercise for after replacement helped me.

  4. Check out this interview at USA WATCHDOG…

    Building a Bitcoin Prison – Catherine Austin Fitts

    Former Assistant Secretary of Housing and investment advisor Catherine Austin Fitts says you have to be careful and fully understand Bitcoin. Fitts explains, “We do know they want to go to an all-digital system with central bank cryptos. The easiest way to build the prison is to get freedom lovers everywhere to build the prison for you.


  5. “What chu talking bout Willis?”

    “There is no reason for the US FedGov to offer ANY convertibility to a blockhead currency when one is “officialized.” Hunh ? Say what?
    G – put away that crack pipe – before it puts U away.

    The US Govt. is desperately trying to acquire BTC, any way they can. If you cant beat something, you join it or perish…like a couple supremes..when is purim ? dam rabbits again. Really think there is any Gold and or Silver in fort knox, or anywhere in underground vaults/NYC ?

    21% pullback so far, nice and healthy, would like a further pullback filling the 30% range – so I can buy MOAR made up numbers – at least there are ONLY 21 Million of them…ever.

    U call BTC a “blockhead currency”
    -what do you call USD/ Fractional Reserve Banking/FIAT , besides the GREATEST Invention in modern history?
    You know – where if bank has $1 buck on deposit, they make up 9 bucks and invest in sketchy financial derivatives, rinse and repeat all day – every day M-F.

    Obviously they Dont LEND money anymore, at least not to sheep.

    Worldwide our economies are crumbling under weight of wrong headed/misguided/intentional malfeasance in Locking Down Sheeps -masking up&social diastancing..geniuses.

    How has that all worked ? Just F-ing great ! only 500 thousand people DEAD in US so far, and Trillions$ flushed down the sewer..
    In case U were not aware..
    -violent Crime, home Invasions, robberies are SKYROCKETING in numbers around the world.

    Who has BTC’s ? How can you tell ? You cant, it is IMPOSSIBLE..which is why IRS keeps asking Sheeps to self report.

    Who has productive land ? How can you tell ? See above regards surging crime rates-hello san fran, and extrapolate further deterioration of economies..hungry peeps, no jobs, no prospects, hungry mouths to feed..Oh My.

    No worries – El Pretendente sloooooower than molasses Zhou Bribem – will energize the populous as he stumbles and slurs his way thru this mess, his masters have created, leading us to a ultra stronger economy and a super bright technological future..you know the one where we get 50 mpg (gas)finally in 2021 – bwahahahahahaha
    Ya Humanity has NOT been suppressed&oppressed, like ever.hahahahahaha

    Forget the popcorn, got sheep chow?

    • It is not impossible to tell who has bitcoin. It is difficult and it depends on how you got coins into your “wallet” and where your wallet exists. If you bought on a marketplace, there “might” be records of the IP used in the transaction of the wallet ID where it was moved, the fingerprint of the browser, etc. Certainly more difficult then bank transactions, but not impossible. It is currently impossible to crack a local wallet encryption (maybe until quantum). But many have forgotten passwords, or lost their local wallets.

      The problem I personally have with Bitcoin, as a currency, is how it relates to human productivity, as any currency should represent. A currency cannot shift in value radically or no one will “spend” it or accept it. As a store of value, it will work as long as people continue to collect it. Just as 60s muscle cars and old masters paintings also are collected and store value. As soon as the crypto is cracked or some fundamental flaw is discovered with its blockchain, it will have no intrinsic value. Maybe that never happens, but it is software, and has perfect code ever been created?

      Creating a bitcoin adds nothing but energy consumption to the human condition. Mining and creating gold or other metal, building a car, creating a portrait at least has real work that must be accomplished and these have other uses other then currency or value store.

      If I grow a tomato and trade, for leather, there is something real that was done. Currency is supposed to represent the value of that work on both sides. What human “work” is done mining a bitcoin?

      • But the US dollar is just Fiat money as well. It takes energy and resources to print and trade such currency. What’s the difference? My U.S. dollars in the wallet of my pants pocket make zero equitable gain. The crypto’s in my digital wallet, while having the power to buy stuff with, moves with demand. My digital wallet is up 1,200% and increases despite purchases made with it. My leather wallet is emptied and produces nothing but heartburn from a burrito I bought with said dollars..

      • Wow is there serious mis information and mis conceptions regards bitcoin.in this community..

        Of course why would anyone consider listening to a guy whose 1st name is crash – I’m a idiot.

        Please do Ure selfs a favor and watch and LISTEN to one of stronger intellects in world of finance – better explain exactly what the hell is going on with Bitcoin.
        ..She? is LynAlden, one of the sharpest analyst presently tracking BTC.

    • Funny how 500k got the covid but the flue season only got 500 peeps this year. Correct me if I’m wrong but didnt Covid single handedly wipe out the flue which has been around for aeons. Covid almost erased the flue all on it’s own.

      And nobody noticed.

      Pretty neat.

    • like Lt Columbo, I got just this one little item to clear up, sir,,, where did all the money used to purchase Bitcoin go?

      • Bitcoins do not exist

        when stored on a hard wallet

        that is not connected (hard) to the internetz .

        See coin scramblers – would take tons of $ & time to track em once washed thru a tumbler.

        All that money does not exist UNTIL the hard wallet is connected, BTC transferred to exchange and sold. * many small sales over time to avoid notice > $150k in a yr. ..several accounts/exchanges..

        but which coins, exactly, got Sold, coming out of a scrambler?

      • Mmm…the Bitcoin money went to expand the massive Adaptive Integrity horizon. And what is inside that Adaptive Integrity event horizon? Why crypto kleptos and their magic beans are inside, of course, of course.
        And will this fairy tale have a happy ending? It will end the same as with all the other Ponzi fairy tales that proceeded, only with less, since this fairy tale started with a small balloon filled with nothing, and will be that once again in the end.
        But will the crypto kleptos be able to walk down the street in public afterward? That I do not know.

    • As the history books of North America note, there were all sorts of materials posing in lieu of government-issued legal tender as colonists got too far ahead of prevailing infrastructure. Cryptocurrency to my mind is simply a digitized wooden token.

      Here the Bank of Canada is studying digital currency processes in order to make recommendations to the federal government on enabling legislation that would be required.

      It seems the process may be further along in the USA. You may wish to consult “S.3571 – Banking for All Act” that reached Senate Committee level. Your Federal Reserve would oversee distribution of digidollars. The currency would be handled by financial institutions of at $10 billion size. Under-served regions would receive the currency via postal facilities. The Federal Reserve will be reimbursed for its…productive efforts. Bitcoin will join wood tokens in the chipper. Otherwise, one imagines that pretenders to the throne will be dealt with by the Secret Service?

      • Sure you betcha Jester..

        the secret service – that stood down for antifa/blm capitol hill riot?

        Yeah yeah lets get the FBI involved too, they have been trying to steal BTC for several years now – you know the FBI that stood down on riot day, after delivering a report warning of imminent attack on capitol 1 whole day prior to riot.
        How about Pentagon – nope they stood down riot day.
        National Guard – Nope – ordered stand down riot day.

        Like the CIA based Hijack Overrides run thru engine management systems..onbaord ALL 9/11 planes ??oh wait – classified info..whoops! no mention of that in official reports..
        Same exact situation – same exact agencies on Ordered stand down as 9/11

        Sorry comrade – its all about Liberty. Something Canucks have NO clue about, none.

        Sovereigns are still trying to catch up to where BTC network was 5 years ago. Just read Yellens latest harfed-up furball of knowledge regards BTC, dumber than rock that one.
        might wanna stick to working hard for the greater good of all canuck commies – gonna need moar lumba for da new wooden nickels, as silver/nickel and cooper disappears before our eyes..

  6. The engines that “exploded” were both on the right side of the plane. Fueling connections and other ground services access a plane at the ramp mostly on the right side. (Galley, Cleaners, Fuel, Mechs & Techs…)

    Both engine failures were “shortly after takeoff.”

    Both are American carriers.

    Two such failures about 12 hours apart.

    Just plain coincidence. Probably.

    Me? I’ll be watching for a third event.
    THEN, I’ll have a different opinion.

  7. “True believers want to believe.” So obvious!

    Apparently it was less trouble for GOD to part the seas than to change the mind of a Pharaoh. ;-))

    • Bitcoin, Ethereum, and other top cryptocurrencies are of interest only to people who have too much money to begin with, IMHO.

      Nothing wrong with “having too much money to begin with” because one can always share.

      • “Nothing wrong with “having too much money to begin with” because one can always share.”

        OTFLMAO…..I almost choked..
        Just my opinion .. but ask as any waitress how that works for them.. the push country club has to force them to give tips.. they couldn’t keep waitresses lol..lol lol.. working in grocery they would use a variety of tricks to get free food..
        I delivered pizzas and took the wealthiest neighborhood.. after a couple weeks I told the boss I was going tohavetoput my notice in..he asked why..I cant afford gas.. everyone started to laugh..they had been taking bets on how long It would take for me to get it.. he said there was a reason why they had to bribe drivers to deliver there.. lol lol lol..

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