UrbanS Housekeeping Note:  When we changed to a static IP address last week, we discovered that a number of (long-caching) DNS servers couldn’t cope.  So, if you know anyone who is not getting our updates – we haven’t missed one –  Google how to Flush your DNS cache and try that.  Another reason we have a batch file on our local machines calling CMD to run ipconfig /flushdns as a batch file.  We like fresh...and speaking of which:

Fresh Economic (NFIB) Data

We don’t normally repost a large portion of a “news release.”  It has long been tradition in the failing media to re-write such things in order to have a “unique slant” on things.  Emphasis on “slant” however.

The National Federation of Independent Business outlooks are – in our view – a damn-fine summary of SLE (street-level economics) and frankly, we couldn’t think of a legit reason to re-write what’s already a well-written news release.  It goes like this:

“”Washington, D.C. (June 9, 2020) – The Small Business Optimism Index increased 3.5 points in May to 94.4, a strong improvement from April’s 90.9 reading. Eight of the 10 Index components improved in May and two declined. The NFIB Uncertainty Index increased seven points to 82. Reports of expected business conditions in the next six months increased 5 points to a net 34%, following a 24-point increase in April. Owners are optimistic about future business conditions and expect the recession to be short-lived.

“As states begin to reopen, small businesses continue to navigate the economic landscape rocked by COVID-19 and new government policies,” said NFIB’s Chief Economist Bill Dunkelberg. “It’s still uncertain when consumers will feel comfortable returning to small businesses and begin spending again, but owners are taking the necessary precautions to reopen safely.”

Real sales expectations in the next three months increased 18 points to a net negative 24%. Expectations about future sales are beginning to rebound after April’s lowest reading in survey history of a net negative 42%.

Fifty-two percent reported capital outlays in the last six months. Of those making expenditures, 35% reported spending on new equipment (down one point), 20% acquired vehicles (down one point), and 15% improved or expanded facilities (up two points). Five percent acquired new buildings or land for expansion and 10% spent money for new fixtures and furniture.”

I could change the words around, or run it through SpinnerChief.com…but why bother?

Our Personal Econ Data Points

Since the (to date) all-time high in our Peoplenomics Aggregate Index (Feb. 19) to the market lows in the third week of March, and now back up to what could have been the end of the Wave II bounce Monday, there has been no shortage of local coincident indicators that the economy is still in a “heap-o-shit.”

With the Fed meeting starting today, we offer the following points:

  • There doesn’t seem to be much urgency (nor higher prices) for tree farmers. Honestly, with toilet paper more scarce than an honest politician, we had hopes timber sales off our tree farm would have commanded top dollar.  They didn’t:  $930.85. Lots of chips, this time. One should appreciate that living on a tree farm – as we are evolving ours – involves  more regular, smaller harvests.  Essentially, the idea is to take out enough trees that the property looks like a state park.  The timber company (Roberts Timber, site) effectively becomes our “grounds crew” that pays us…rather than us doing the work.  They feed the mills, we get a park.  What’s not to love?
  • Toilet paper has become available again online.  We’ve found Amazon to be a bit slower and spendier than Walmart.com.  We’re stocked back to “ready for dysentery” levels.  Normal times?  Maybe 6-months worth, 5 if we take too much vitamin C…(ahem…)
  • Meat – especially the good stuff (USDA choice or prime) is still unobtainium out here.  You’d think with all the cows around here…
  • Other groceries?  Except for power tools, we have mostly nothing to spend on and with streaming and Amazon and Netflix, hard to make a case for cable or satellite services unless you are manic about media…

And yes, the garden is doing just fine .  Come August we will start “hatching out” the fall/winter seedlings.  Broc’s and cabbages and celery and…

Fed Staring Down a Barrel

The Fed has been in a “policy box” that has turned into a one-way ride into a box canyon.  If they didn’t piss-away money buying financial instruments, pension funds would be collapsing left and right by now.  Will they try to shoot their way out with negative rates?

Their problem is:  The shoot-out is likely to happen anyway. With rate announcement time tomorrow, there really may be  no right answers.

Raising rates (our pick) would drive stocks down like mad.  But, it would keep real estate going.  On the other hand, lowering rates is an option, as well.

Early Dow Futures were down 282 points when we looked.  Not so much driven by headlines (like “Signs Stock Rally is Doomed to End After $21 Trillion Rebound“) but by the fate of the US dollar.  Whose hegemony is on life-support: “A Crash in the Dollar Is Coming” is an example.

We figure gold, silver, machine tools, and farm goods will hold value – and we hope you picked up armloads of oil futures options at the negative pricing extremes… West Texas is over $38 and Brent is over $40 early.

The “Delivery Generation” Impacts

We like to me miles ahead of trends – and sometimes what we write is so far in advance that its forecast is almost forgotten the reality shows up.

This is the case with our  Peoplenomics report  from June 11, 2016:  Bezos and Bentonville:  Barbarians at the Mall:  These people are turning every phone into a cash register with 2-day shipping and outfits like Federated Department stores should be worried as hell.

I mention this because what we forecast is (to borrow the lyric from Jesus Jones) “Right here, Right now.”  “As Many as 25,000 U.S. Stores May Close in 2020, Mostly in Malls.

What’s Next?

Well, there’s this other Peoplenomics report…February 1, 2020: Survival Prospects:  Rural or Urban? We have a surprise from us “Hicks in the Sticks” – Tech is losing its Urban bias.

You do know low-earth orbit 5G is coming along, right?   The need to live “in a coop” is passing.  Delivery (of everything) is about to rock the old advantages of urban living.  Especially in Communapolis eyeing the end of in-city detached single-family homes.

But ya’ll enjoy “urban collectivization” as promoted by the latter-day Stalinists in left-wing city governments.  Out here, we don’t need to deal with bureaucratic power-trippers to plant, paint, build, or raise whatever the hell we feel like.  We don’t have a chicken count ceiling, either.

Point is? Freedom’s sill alive… sort of.

Some Short Takes?

Yeah, sure, you betcha…

Um…stock futures down 300 now. No, make that down 221.  Fed must have the checkbook open.

Says Fortune, “Morgan Stanley says these four factors could clip the wings on the S&P 500 rally.”  Those and Europe being down more than 2%.

As CV-19 is now roaring in states like Texas, where a lot of people didn’t heed our remarks (CV-19 is a medical problem, not a political problem) we found this interesting: France Pledges 15 Bn Euros For Stricken Aviation Firms.  See the trend?  Defending the old paradigm! Which pisses away national treasuries, but Europeans are mostly socialists, anyway.   And  no  the world cannot afford to do  that.

(Updated CV-19 outlook on  PN tomorrow.)

Passings: Bonnie Pointer, founding member of The Pointer Sisters, dead at 69.”

Business is ‘smokin’ we see in the MJBD which offers a “Chart: Medical marijuana sales in Oklahoma near $300 million in first five months of 2020.”

And keep an eye on “Nut Korea” asNorth Korea says it’s cutting communication channels with South.”  Pre-war gamesmanship?  Are they a China proxy?  Is this “only a test” or a distraction to get us focused on the NorKs while China gets ready to grab Taiwan?  Stay tuned, flash-goggles at the ready, of course.

Say Good-bye to Wave II this week, we think.  And remember, the Fractal Economist’s Thursday circuit-breaker advisory could become real about Thursday of this week.  Once the market fails to hold above the 200 Day average, the round rotator and the brown stuff collide.  And the Fed’s pissed away how much trying to fund their alt. reality ala Zimbabwe?

Is breakfast ready, yet?  A financial Last Supper?

Write when you get rich,