EmpSit, a “3-Dayer,” and B2S

We will be looking for the flashing lights to go on in the school zones next week as it’s back to school (B2S) for many districts next week.  But for this morning, I’d like to remind you of something called “The Holiday Effect.”

This being a long weekend, people tend to be happy (for reasons that aren’t quite clear to me).  Why the cheerful when Labor Day marks the unofficial end of “summer” and – most places – the onset of colder weather, ice, snow, people traveling too close in the rain on the freeways – you know: The kind of stuff that gives Winter and surrounding months a bad name?  They do, my ponders notwithstanding.

Much the same happens with the stock market.  We often see unexplainable optimism in the markets right before a major holiday.  This one is especially “jittersome” because of the crazy people in North Korea.  Not that we don’t have plenty of our own, too…(*as I nervously scan headlines out of DC…)

(Continues below)

 

The Jobs numbers are just out – and as expected – the “Trump Bump” in the data continues with just a chill of fall…

“Total nonfarm payroll employment increased by 156,000 in August, and the unemployment rate was little changed at 4.4 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in manufacturing, construction, professional and technical services, health care, and mining.

Household Survey Data

In August, the unemployment rate, at 4.4 percent, and the number of unemployed persons, at 7.1 million, were little changed. After declining earlier in the year, the unemployment rate has been either 4.3 or 4.4 percent since April. “

Now we drill down:

Civilian labor force was up 77,000.  Labor participation rate (62.9%) unchanged.   Total employed down 74,000.  Unemployment rate up a 10th.

The CES Birth-Death Model estimated 103,000 jobs into existence and the biggest gains were in Leisure and Professional & Business Services.

When I looked earlier, the Dow futures were set to open up +53 after the data, and if so, the Dow may out-perform the S&P and the NASDAQ.  I still like the long side of the market for a while longer, though it may be hours more.  Skeptical of happiness, though I am, I will probably plug my nose and try to be 50% long over the holiday but looking to Pyongyang and Moscow (and the Fed data) for tips about next week seems a useful way to spend a cup later this morning.

Vladimir Putin, who will be in China next week for a meeting with what the globalists would just as soon your don’t remember is the ChiCom leadership (how bad can communism be if it makes the rich richer?) says that the NK situation is now on the verge of a larger conflict.

That said, neither Donald Trump, nor the Fools on the Hill has shown any particular interest in backing down, so once we get past the holiday, my “spidey- sense” is eyeing international events for clues about next week.

That may be overthinking the market – and I seem to remember that although Peter Parker (Spiderman, right?) got the girl, Warren Buffett got the money.

So pinched nose looks at our trading model will follow – once around 11 AM Eastern to see how big the Happy Holiday pop will be and again right before the close so I can abuse myself for not doing deeper research on “after Labor Day” market action – which may show up as a Peoplenomics topic this weekend.

In the meantime, there is other news.  Like auto sales, for example.  Business Insider has a “live” page that might be useful as the day drags on.

Ever notice how time dilates going into a holiday weekend?  The period from now until lunchtime is slower than the onset of the Ice Age?

Gas Pumps then Money Pumps

We will (uselessly) wring our hands about gas lines because of Houston oil refineries going off line for only a second or two.

To be sure, there are plenty of gas line stories around, like “Harvey Concerns Spark Dallas Gas Lines.”

But we’re inclined to agree with Texas Railroad Commissioner Ryan Sitton.  You see, in Texas, the Railroad Commission (for twisted historical reasons) runs oil and gas.  But as Sitton and others who are knowledgeable will explain:  If people all go out and buy gas to top off their tanks (panic buying) that will create a problem where there need not be one.

I knew people’s thinking was going off the rails when I overheard two clerks at the local WallyWorld talking when I picked up a few things Thursday.  “I went up to Tyler and filled up because I wanted to make it back to Palestine….”  Even in the worst gas hog in the world that’s a two gallon trip.  But I pay attention to what the clerks are saying – that’s the mainland equivalent of the Caribbean’s “marl road” – not exactly rumor mill; more how people are thinking.  It is constantly surprising how much insanity is floating around down at the rumor level of America based on 2-second “headline news” and rumors of shortages.

Magically, people get what they wish for.

The Money Pumps, Then…

Now let’s wring our hands over something we can make some dough on:  The Federal Reserve and what they’re doing at the economic money pumps.

If you look at the data (H.6 Money Stocks here), through the last day of June, on a three-month basis, the Fed was goosing the money supply at an 11.4% annualized (increasing) rate.  But now,  in the sliding window ending August 21 (that was released after the close last night) the rate of increase had been dialed back more recently to a very modest 8.7% annualized.

That will do a couple of things:  First, it means there will be less “slop” to feed into the markets.  Second, it means we can expect the market to drop this fall since withdrawal from easy money is for the economy, what coming off heroin in jail is like.

The Fed may have a perfect scapegoat, though.  Harvey, bad, bad, Harvey will get the blame.  And justifiably so:  Looking ahead we expect that a lot of insurance and re-insurance outfits will need to start raising cash – oodles and tons of cash – in order to cover the checks which they will have to write to cover insured damages.

The way to raise cash?  Sell off assets.

As of this morning, Bitcoins were up to $4,822.  They have our permission to head up to the $5,000 area and even a bit beyond.  But when they start to come down, it will signify to us that the Consumer Confidence bubble has been pricked (no pricks jokes, please) and that may be as good as any other indicator when it’s time to pop the main and be ready to pop the reserve chute, too. *(We watch the market altimeter closely when it’s getting near the “drop zone.”)

The Federal Reserve’s problem, as we have indelicately explains to Peoplenomics.com subscribers, is that interest rates can’t rise until the Fed get’s off the printing addiction. That’s because there are so many competing sources of “cheap money” that rates can’t rise naturally.  I’d point to the 10-year Treasury (data here from Yahoo) as just one example.

When the rates begin to rise is when we should polish off the bull and send it onto the “killing room floor.”

In the meantime, being risk averse, the Fed data does pencil in a tentative answer to our Thursday morning headline “Is this a V up or a wave ii bounce and wave iii down is coming…”  No advice, just some friendly paranoia.

Urban Department of Useless

We are back to wondering “Is there something in the coffee at Time?” with them now reporting We Sorted Half a Million Americans Into Harry Potter Houses. Here’s What We Discovered.

Don’t believe governments, lacking real problems to solve, becomes useless?  Try this on for size: EU bans inefficient vacuums: The BBC gets cleaning/

The gift that keeping on giving? FREEBIES FOR OBAMA Taxpayers to pick up $1.1M bill for ex-prez expenses/

And in other shocking news: “Drugs found to be more effective against depression than electric current.”  NSS.

Comments

EmpSit, a “3-Dayer,” and B2S — 18 Comments

  1. Since we were on the subject of the Secret Service:

    1. After promising during the campaign to not take time off, Trump’s travels have bankrupted the Secret Service.

    https://www.usatoday.com/story/news/politics/2017/08/21/secret-service-cant-pay-agents-because-trumps-frequent-travel-large-family/529075001/

    2. After pocketing money from .gov Trump, Inc. kicks the Secret Service to the curb.

    http://www.foxnews.com/us/2017/08/04/trump-tower-evicts-secret-service-over-rental-dispute.html

    I wonder how the headlines would read if there was a Hotel Obama or Club Clinton and Obama or Clinton went there every weekend, had the Secret Service, all the GS folks and press stay there and continued to throw presidential and government business into their own coffers? Interesting to think about, no? I imagine there would be quite an uproar.

  2. If you ever drive in Houston, you might be skeptical that taking most of those cars off the road for a week would result in gas shortages anywhere.

    And I will share Doug’s Disaster theory of economics: if a city is destroyed or severely damaged by a disaster, but the surrounding country continues to function, the likely result is a long economic boom. Example: The fire of London led to a boom that lasted literally 250 plus years. The bombing of London in WWII has led to another boom. Ditto Tokyo, Berlin, Frankfurt, and dozens of other cities. Chicago boomed after its great fire, and San Francisco after the great earthquake. Atlanta, the boomingest city in the South, was burned to the ground by Yankees. New Orleans is supposedly better than ever, after being flooded by Katrina. The struggling cities are ones that never get knocked down.

    • I don’t agree with your ‘blanket’ statement; each severely impacted city is unique, with different responses to catastrophic situations.

      For instance, fire in London whether caused by accident as in the 1660s or the Blitz allowed redevelopment of land – but is this really any ‘better’ than razing old tenements and redeveloping land that way? Don’t think so.

      Planned development is better. Good chaos is not possible in urban planning.

  3. Magically our gas prices here in Socal jumped up 10 cents a gal even though NONE of our gasoline is refined outside of California.

  4. Ahhhgg sh!t, I seen 3 garbage truck fires today. Junk bonds a blazing? Sitting on 12th and Jefferson while the fire truck puts out a garbage truck blazing away right now.

    And 2 days ago 4 people including myself had their battery go bad in their vehicle’s.

    Anway, just thought you would like some local news.

    Earthquake may be seattle. Not sure what date yet. I don’t have a local or a date. Not enough data yet to throw a dart.

    When I was a kid we used to write FTW! on everything. Lol

  5. There’s a basic prepping premise. Never let your vehicle tank drop below half when you can. Keeps moisture from being able to gather in there, and you don’t have to worry about panic lines for several days like this week. If you go through a tank a day from heavy travel, you should be carrying spare cans anyway. I had already topped off everything in anticipation of this sort of thing, so I’m able to skip the silliness.

    Interesting note, some folks that I thought had the preparedness mindset totally missed the bus on this, and I know of a couple that spent several hours traveling the greater Austin area in search of fuel and really chancing a dry tank since they had let it go so long already.

  6. OT – Harvey Recovery Update

    Mostly, people have been gotten out of jams locally. I saw more boats leaving Houston than going into the city when I returned from my farm yesterday. Gasoline is scarce in certain places, or out altogether; and there is still gouging by the convenience store owners – I doubt that will ever cease, so just vote with your wallet if you have that option.

    Our local recovery was going fine. I was at a friends helping them drag all their soaked mess outside, while they took pictures for the insurance appraisers. We had a redo-crew knocking out drywall and insulation while running fans and dehumidifiers. It’s a days long process for each home, as the contents are rated in “preciousness” by each resident.

    I left an hour ago to go get some meds at the vet. When I tried to return to the house, the constables were forcing anyone not a resident to leave. This was due to some extremely vague orders from the county. Fortunately, we got to the bottom of it, and now if you do not park in a driveway or without blocking the road, they will ticket you a $500 pop for blocking traffic during an emergency.

    Apparently contractors and ‘hobknobbers” were blocking the entire road in some areas, trapping those trying to unload their ruined stuff and get repairs going. We had a chat with our constables, and all agreed that this was in the spirit of the orders and what we needed locally, regardless of what they thought away from the affected areas. So now things are going smoothly.

    There are ERT’s (emergency response teams) all over, making sure people have water, food and assisting with larger ruined furniture, etc. Numerous churches are driving through, offering BBQ, burgers, hot dogs and more from the windows of vans and the beds of trucks – gratis.

    There were two looting incidents in the area we were working. One man was caught by a neighbor and held at gunpoint until the deputies arrived. A van with 4 guys from San Antonio was seen looting, and their van was blocked in by locals with trucks. They ran into the local woody area and were caught an hour later by another group of homeowners who chased them. They were forwarded to the constables.

    I can assure readers that if there weren’t local LEO’s around, these men would have simply been shot. It was only LEO availability that allowed them to live. People here have no time or patience for this type of senseless crap – stealing a TV from a flooded house, which you have no idea of whether it even works or not? Looters are stupid scum on the bottom of the gene pool, from where we are sitting. They should be glad things remain ‘civilized’, as it were.

    It is going to be a good month for things to really return to normal, and for some even longer. Work will start back up Monday for many that can, and it will improve as people get their stuff sorted out.

    • Hey man! Thanks for the update. Love hearing the local news from the source!

      Git er done!

  7. There ought to be actually more gas available since there are less people traveling because they’ll be penned up for a while it’s just a matter of reestablishing where the gas should go as I believe one place out east was talking about how they the company instead of making sure every gas station has gas during these crisis which causes a crisis because they’re spread too thin.
    they strategically keep certain stations full that way it creates no shortage.

    In the sixties and seventies the new Banks were vying orbiting for your business if they started out with a million dollars and offered a CD rate of 10% and a savings account interest rate of 5%.
    Then all that money that came in to their Banks from the customers was automatically turned into 9 times as much so after 30-40 years they became so rich we’re talking about the banks that they lowered the interest rates on their CDs and savings because they don’t want your money no more and because their Lending money to people is making so much more than they’re paying today
    So the banks are in a bubble of cash or at least on the books digitally wise
    And yet all those pensions Funds that people have invested in are going down because the bankers have too much money and there’s no new Investments from the younger people to keep up with the masses of people that are retiring
    Now if we could drain the bankers of all their swamp money and redistributed to the pensioners we might come out okay.
    But as the flood of water comes in the bankers are on the top of the hill high and dry and those who made some sound Investments are further down the hill and those who made okay Investments or even or even further down the hill and the ones who didn’t make any wise Investments are at the bottom of the hill and as the water rises they are first to lose
    So the question is if all the bankers money was due redistributed to the Pension funds wood the economy as a whole stay afloat

    It all just doesn’t make sense does it where’s those covers at I’m going to cover my head up and go back to sleep

    • Oh yeah 1983 September 1st Cold War Korean Airlines flight double O7 is shot down by Soviet Union jet fighter when the commercial aircraft enters Soviet airspace killing all 269 on board including Congressman Lawrence McDonald

  8. PLC is failing to factor in all those hundreds of thousands of commuters that aren’t making their daily commute. I’d guess actual consumption is DOWN for the area, or at worst close to the same levels. No drain from the rescue personnel, don’t worry over it. Not like it’s a better choice to let folks stew in their own juice now, is it? e.

  9. Listen up! ‘Earthquake’ has been the word of the day for the last few days. After a’ll the first 3 letters of earthquake is ear.

    Having trouble with ure comment section.

    I got to get to work. I don’t have time to comment on each section. Thanks to the reader that posted the comment about the rothchilds.

    I get my news before it’s news. it’s k-news.

    And now the rest of the story!

    https://youtu.be/4rysHrMClDE

  10. Was wondering how much of the “gas shortage” is from all the extra fuel being consumed here in Houston from rescue efforts etc. There is a huge presence not only from military and government but countless people that have come from all over the country (thank you all!). Also, there are likely many portable gens humming away.