The Dow Jones Industrials rose some 208 points Thursday. This morning, though, we look to give-back all but 3-bucks of that; if not all of it and then some.
So, the first thing out of the hopper today (and this is not financial advice) is that we did mention this in Thursdays column…so it isn’t like you couldn’t see it coming.
In the very-short term, we could see similar up and down action through Turkey Day, as pre-holiday rallies are relatively common. But, after that?
55-days from an all-time-high (ATH) in our work arrives November 27- right after the holiday when everyone’s back to work (and drying out for the next holiday random-stop gaunlet).
Remember: The time from the ATH in 1929 to the Black Monday was how many days? 55! The only way to assure us that’s not possible in these “modern times” is if the markets manage to pull off a flippin’ miracle and trade at new all-time highs in the next (counting today) seven trading days. Sure, we’re optimists and all, but we ain’t damn crack-headed fools…that’s as poor a bet as you’ll find away from slot machines.
With a possible meeting between presidents Trump and Putin shortly thereafter, the futurescope looks a bit foggy. Because there are a lot of other “moving pieces on the board” – any of which could take-down global markets in a flash collapse. Need we remind you of these?
- The right-minded citizenry of the UK want out of the European Union, but BREXITing has turned into a (pardon this) turd soup. No one in the UK seems willing to hear the Will of the People.
- Then there’s the not-so-little matter of Kid Korea…is he Yan King us around with false promises and deception? I expect if he is, the skies opening up with falling Trump notes is not out of the question. Screw us one, shame on us…Twice? Don’t think there would be a “twice” with Trump.
- The Saudis and OPECkers are working on upping prices by reducing oil output. That could toss some gas on the inflationary fires that are already smoldering hot because of the US Deficit spending. The left-wing mean are quick to pounce on Trump for this, but he didn’t make up the federal budget – that rolls from Congress…
- And over there, not only is vigilantism about to surface with the newest collection of “Fools on the Hill” being seated in January, but there’s this whole Mueller report swirling around in the background along with no confirmed head for the Just Us Department.
And – and God-forbid ALL of these – could torpedo consumer confidence.
Also of note: Not to pull-hard on the change of the Digital Tulips Crowd, but the more than $800 drop in Bitcoin in the past week has us looking at two rather frightening notions.
One is that someone besides us has read that longish report from the Bank for International Settlements on the very limited future of Bitcoins and cryptos that we mentioned previously – got scared – and is bailing from the narrative. By itself, no big deal, but like any other Ponzi scheme (which we hold cryptos to be) there must be “fresh meat” thrown in or the bubble collapses. And when the digital tulip blight becomes obvious?
The other thing that may be going on? Maybe one of the Big Banks that has been dabbling in the narrative sees something else – something REALLY BIG AND BAD coming – and they are tossing the digi-tulips in advance to “get liquid.”
Frankly, we don’t know which it is, but either possibility should scares the “new believers” who are buying similarly “made-up” products.
We warned you about fake-out rallies and suggested the BIS report from this past summer on cryptos – which simply validated a view held here from the beginning of the crypto-hype.
We hold to an extension of the late Martin Zweig’s “Never Fight the Fed…”. The rewrite nowadays is “Never Fight Central Banks in general.” Not that in the short-term folks like Ponzi and Madoff didn’t live large (as, indeed, some of the crypto kings are doing now…). But, eventually, all flawed business models reveal themselves and not without some cost to society at large.
The March of Monetization
Trading markets, while fun, doesn’t solve the larger problems of the global economy just now. We are again where we were in 1929 as you can see in our 2009-present comparison with 1929. The black line is the track of the Dow (back when) and the red is our cobbled-up Aggregate…
Oh, I should mention that the Dow then and the Aggregate now represent almost the same total fraction of economic activity since things like the FAANGS matter now as we’ve gone down the Complexification highway…
The biggest problem we continue to worry about is “Consumer Super-Saturation” because the whole GLOBE has become far more services than goods-producing. It’s from Econ 201: The Shopkeeper Economy. The phrase “nation of shopkeepers” dates to Napoleon.
To put it into modern parlance, when the baker bakes bread for the shoemaker, who makes shoes for the woodsman, and the woodsman sells firewood to the baker…you have a circle-jerk.
Not that static economies are bad…it’s just that they don’t grow – and if they aren’t growing, on what basis might prices move higher? I mean besides hype and BS? And buy-backs, lol.
With no global projects (save warming/climate change hype – and these don’t monetize well) what is to kep 7-billion all “playing nicely” with one-another?
Not to get into a much longer Peoplenomics length report on comparative unit sales volumes YoY, something more useful for the people in the loge seats, the question is “When does the music stop?”
That’s why seven trading days has our rapt attention.
Because so many of the headlines we’re reading are monetization efforts at their core.
Want some examples? OK, then…
- Climate monetization continues, but this is the “snowiest decade” reveals little has changed.
- Can your phone make toast yet? No? Well, Apple’s going into the first-run movie business, then…Gotta grow something, right?
- AYSM? $90 million for a piece of art from a “living artist?“
- Say, here’s another sicko: Let’s raise rare white lions and then sell them so hunters can shoot them! See what I mean about monetization disease? Not yet?
- Supply glut mars Turing effect for Nvidia shares – what a surprise, huh?
- How about therapeutic horseback riding, those these “service animals may be too big to take shopping, you think?
- Global insanity – not just US is apparent- as government growth and over-reach expands. Try this for crazy: Woman refuses to hold escalator handrail, case to be heard in Supreme Court of Canada.
- And if that’s not enough, how about a speed trap that will nail you half a mile away?
You see how all the daily “sick news” can be clearly understood once you grok Everything’s a Business Model?
God help us all. We have no values left, only prices spreads left where morality once grew.
We are soooooooo screwed.
(Though it makes going short pretty easy, lol…)
Trends to Track
California judge orders next Monsanto weed-killer cancer trial for March. Meantime, we’re wondering about all that GMO Round-Up ready seed that has seen how much dough poured-into? Don’t look now, but this is the kind of sea state change that could drive famine. Watch this one closely…
Buying oil at coming lows might make sense to some commodity traders: Oil heads for week of losses despite talk of supply cut. thing is, if climate is flipping into cold, then more energy, not less will be needed and prices could soar, as we figure it.
Nuclear lies revealed: French Polynesian president acknowledges nuclear test lies/ But then everyone else lied, so no harm, right?
Fed’s Industrial Production and Utilization report due out shortly…click over here for it. Futures still down around 2-bills worth…as we said, fake-out rallies, eh?
Take a Shower Tonight
Why? (here comes a poor attempt at Friday humor…)
OK, moron the morrow...and don’t forget to come back Monday, too.