Fed Moderates, Bitcoin Brightens, Markets Ponder

We need to go over three charts this morning because somewhere in them, there’s a message, but damned if I can figure out what it is just yet.

The three charts are the M2-Velocity of Money.  This one says, in so many words, how often money is “turned over” during the year.  The second chart updates our comments of Thursday because it now looks like (at a minimum) Bitcoin is setting a new higher-high and that brings either another stunning up-move, or at a minimum a huge head-and shoulders peak.

The third chart is where the stock market sits.  While yesterday was a “smoker” of a rally (and a finely sprung bear trap) we note the Fed has backed off the manic creation of money – and that argues that they will try to time (arb’ing up) the rates in January (*or so) when the possibility of some tax changes comings along.  That’s something of a long-shot, given what the Senate is looking likes – and that get’s us into a discussion of how both political parties turn out to have their own skeletons in the closet – some of which will talk – and some will talk for money.  Sleeves rolled up?

(Continues below)

 

So here are the charts and discussion starting with Velocity:

The Velocity of Money at M2 essentially explains how much money is in “real circulation” in America.  In  other words, you can print money all day long and if the money isn’t turning over – and in the process chasing goods and service – then you will NOT have inflation.

We know from looking at the latest Fed H.6 money stocks report that the Fed has dialed back a bit at M1 in the latest reporting period.  So that may prevent the stock market from getting too manic in here.  Also, when the Fed eases a bit at the printing press, it will result in a slow increase in the “cost of money” – which is why interest rates in here should firm and move a bit higher.

In the meantime, the Fed is trying to sell off sacks of troubled assets it bought in the wake of the Housing disaster – and when these are sold-back to investors, then the Fed will be ready for another crisis.

We don’t honestly anticipate the Big One (depression) to really get organized until mid next year.  We note the departure of three top Fed officials will be done by then, and a new round of Fed management will have been installed.  That will give the current round time to get to the rocking chairs before “the music stops.”

When it does, there comes to be a “perfect storm” of Wave 5 – the all-time final blow-off setting up.  It would come in the fall of 2018 when the oil glut is gone and we move into that horrible period of more demand than available production.  At that point, auto and travel in general/use will collapse.  Might be a fine time to short the hotel stocks and such.

On the other hand, since oil is out of favor right now, putting a few dollars into oil companies that have the largest proven reserves might be an interesting strategy – but more on that for Peoplenomics.com subscribers.  This is the “cheap seat in the bleachers” version, lol.

Next chart?

Driver?  See: Fork talk lifts bitcoin to all-time high near $8,000

In yesterday’s report, we were speculating on how low Bitcoin could go IF there was no quick, sustained up-move.  Specifically, what I said was:

The good news is there is still a count where what I have labeled wave 1 up on the left there doesn’t count and we need to look as a different count starting with the bottom of wave 2.  This underscores one of the weaknesses of Elliott in irregular markets.

So, this morning for your dining and dancing pleasure, we have the Bitcoin chart updated to show the break *(at least momentarily) to higher prices.

I also included the high and low lines for Wave 1 up, applied them so you can see how Wave 3 met the Elliott test of “larger than 1” and then, from the bottom (for now) of 4, we offer than since under Elliott, wave 5 must be at least as large as 1, then we can begin to sniff around the $9,500 Bitcoin dollar spread.

I know that’s going to make coiners deliriously happy…

Then we’re on to stocks.  Again, this is one of the charts updated for Peoiplenomics.com subscribers that we usually don’t share with the bleacher seats, but we note that the manic (bear-killer) rally of Thursday did NOT put a new all-time high into our Aggregate Index approach to markets.

What it did do, however, was generate a close above the red line, which is a 9- moving average.  We will have this all updated tomorrow on the subscriber side because it’s axiomatic in our work that it’s pretty damn tough to make a real “call” on market trends until the Hot Money has called it quits for the week and has their money back safely in banks and longer-term positions for the weekend.   

Then, the silliness will get underway again next week.  But for next week, we actually EXPECT the market could move higher because that’s what holidays tend to bring:  rallies in stocks.

For today, World stocks claw back losses but set for second weekly fall.

Turkey Day rallies are not usually as robust as the Santa Claus rallies that come next month.  One reason those tend to really “get legs” is that a lot of upper echelon Wall Streeters have their bonuses based on December levels and performances for the year.  The higher the better.

Expect a possible adjustment in late winter as prices could go down (thinking in terms of a macro-trend wave 4 down) to set up the all time high which would be a monster wave 5 which would bring the huge rally in oil, and gold, and another real estate bubble kind of top.

For now, the country has a shorter term set of problems:  The price of real estate in some of the especially bubbly markets seems to be softening a bit.  Elaine and I have been watching Seattle and Phoenix closely.  And then there’s the problem of consumer super-saturation.  That’s the “what’s left to buy that we actually need that’s out there?

Answer all of these correctly, figure how to lever them all to the max and good luck.

Our stated goal in life has been, and continues to be, to invest with the idea of better inflation by a fair bit and we continue to meet that objective.  Overly cautious at times, no doubt.

But that’s why young people can “take a flyer” on something like Bitcoins – because if they drop to nearly zero it doesn’t matter if you still have 30-years of work life ahead to recoup the loss and go on to more rational investments.  But the world is changing and more on that for subscribers tomorrow…

Sexatics

Let me see if I have this right:  If a republican – like Roy Moore – is taken out of a race because of allegations of chasing after under4-aged girls, how come the Washington Post is rolling with a liberal apologist piece when democrat Al Franken is the poser in the photogs?

Yet there it is for you, another case of liberals defending their own in “I’m a feminist. I study rape culture. And I don’t want Al Franken to resign.”

I’m a normal senior male, I study liberal issue-manipulation, and I DO want Franken to resign.

The democrats have a “double-standard” take-out window.  Which is why Uranium One is still not being probed.  Teflon spray, perhaps?

Or not as “Bill Clinton Should Have Resigned After Monica Lewinsky Affair, Democratic Senator Says.”  Amen.

Giving Head?

No, not a sex story.  Instead this is about how the “World’s first human head transplant successfully carried out.”

(You didn’t really think we would blow our PG-rating, did you?)

Passings

Sicilian Mob Boss Salvatore ‘Toto’ Riina Has Died While Serving 26 Life Sentences.

“Totò is another nickname for “Salvatore”), was an Italian mobster and the chief of the Sicilian Mafia, known for a ruthless murder campaign that reached a peak in the early ’90s, when the deaths of Antimafia Commission prosecutors Giovanni Falcone and Paolo Borsellino caused widespread public revulsion and led to a major crackdown by the authorities. He was also known by the nicknames la belva (“the beast”) and il capo dei capi (Sicilian: ‘u capu di ‘i capi, “the boss of the bosses”),” says Wikipedia.

The Sicilian mob also has its own 10 Commandments:

  1. No one can present himself directly to another of our friends. There must be a third person to do it.
  2. Never look at the wives of friends.
  3. Never be seen with cops.
  4. Don’t go to pubs and clubs.
  5. Always being available for Cosa Nostra is a duty – even if your wife is about to give birth.
  6. Appointments must absolutely be respected. (probably refers to formal rank and authority.)[134]
  7. Wives must be treated with respect.
  8. When asked for any information, the answer must be the truth.
  9. Money cannot be appropriated if it belongs to others or to other families
  10. People who can’t be part of Cosa Nostra: anyone who has a close relative in the police, anyone with a two-timing relative in the family, anyone who behaves badly and doesn’t hold to moral values.

Just so’a you know.

The passing of Toto, however, doesn’t impact the operations of other Italian mobs and the Ndragnheta in  particular:

The ‘Ndràngheta (Italian pronunciation: [(n)?dra??eta])[2] is an organized crime group centered in Calabria, Italy. Despite not being as famous abroad as the Sicilian Mafia, and having been considered more rural than the Neapolitan Camorra and the Apulian Sacra Corona Unita, the ‘Ndrangheta became the most powerful crime syndicate in Italy in the late 1990s and early 2000s. While commonly tied together with the Sicilian Mafia, the ‘Ndrangheta operates independently from them, though there is contact between the two, due to the geographical proximity and shared culture and language between Calabria and Sicily. A US diplomat estimated that the organization’s narcotics trafficking, extortion and money laundering activities accounted for at least 3% of Italy’s GDP in 2010.[3] Since the 1950s, the organization has spread towards Northern Italy and worldwide. According to a 2013 “Threat Assessment on Italian Organised Crime” of Europol, the ‘Ndrangheta is among the richest and most powerful organised crime groups at a global level.[4]

Now you understand a bit more about how The Network operates…

Las Vegas Leftovers…

Speaking of conspiracies and such…

While the change in command of Saudi Arabia has been making headlines, watch the video over here on YouTube because it lays out how the LV Shooting may have been fallout from a failed attempt to kill the incoming crown prince of Saudi Arabia.

Videos like this one, imply that the alleged shooter, may have been working for the US FedGov.

Which, brings into focus the idea that some of the “soon to be removed” princes at the time may have gotten wind of the pending changes in Saudi and planned the “hit” in LV.

When that went south, a mass shooting ensued to “cover up” the failed attempt on the crown prince.

It makes for “who done it?” conversation at the Thanksgiving table.  Gone are the days about talking about uncle Herman, eh?

To rejoin the games in play, click Saudi offer in corruption crackdown: ‘cough up the cash and go home’ and then Saudi Arabia Faces Pressure To End Blockade As Crisis Worsens In Yemen.

Just Out: Housing Starts:

Privately-owned housing starts in October were at a seasonally adjusted annual rate of 1,290,000. This is 13.7 percent (±10.5 percent) above the revised September estimate of 1,135,000, but is 2.9 percent (±10.1 percent)* below the October 2016 rate of 1,328,000. Single-family housing starts in October were at a rate of 877,000; this is 5.3 percent (±12.1 percent)* above the revised September figure of 833,000. The October rate for units in buildings with five units or more was 393,000.

Dow futures down about 40 – so we may end the week right around the 9=day moving average.  More tomorrow for Peoplenomics subscribers…and let’s all meet up here Monday, shall we?

Comments

Fed Moderates, Bitcoin Brightens, Markets Ponder — 28 Comments

  1. Bruno Maybe you should come to Albuquerque and look around some. More beautiful ladies than can imagine. One of my great hobbies has been people watching. They are really here in droves. Sit down on central at Starbucks and watch them parade buy.

    • I do the same at the “Crosswalk of the World.” Most of the beautiful ladies seem to be held captive in local penthouses, or so it seems. However, every two weeks one or more escape and mix with the “linebackers from the waist down.” Just don’t get me wrong; You are a lucky fellow living in Albuquerque, enjoy!

  2. Here is the latest on the bitcoin fork

    Dear Coinbase customer,

    There have been a number of developments with Bitcoin Segwit2x since our last update. No action is required and all funds stored on Coinbase remain safe.

    Last week, the Segwit2x development team announced they would no longer continue with the project. In addition, a significant portion of miners and other community leaders withdrew their support for the fork. However, despite these developments, a small number of miners may attempt to go forward with a fork.

    We wanted to provide clarity about the potential outcomes of the fork and what Coinbase will do in each scenario.

    To protect customer funds, Coinbase will disable Bitcoin sends and receives at 2 am Pacific Time on November 17th, and disable buys and sells an hour before the fork, which is currently predicted to occur between 6am to 8am Pacific Time on November 17th. All functionality will be re-enabled shortly afterwards.

    Scenario 1: Network is unusable
    If support for the fork remains at current levels or decreases, the Bitcoin2x network will be unusable. Coinbase will not support withdrawals or trading as it will not be possible to move these assets. Currently we believe this is the most likely scenario.

    If the network gains support at a later date, we will enable Bitcoin2x withdrawals from the platform.

    Scenario 2: Network is usable
    If transactions are being confirmed at a reasonable speed and miner support is strong, we will allow Coinbase customers to withdraw Bitcoin2x. We will not immediately enable buys and sells as previously stated, but we may enable them at a later date.

    We will keep customers updated through our blog.

    Thank you,

    Coinbase Team

  3. It maybe off topic perhaps but here I go: There is extreme shortage of “attractive looking” people in the world ;-(. When I grew up abt. >80 years ago, there were at least 1/2 dozen attractive girls right in my neighborhood vs. today, when I watch thousands “unshapely” girls pass by most every day. This has nothing to do with age, because my son, and others, report the same fact; “Unattractive people” predominate. That maybe one of problems that lead to our general dissatisfaction?

    • That is merely the social extrapolation of “I’m Okay, You’re Okay” to its logical terminus…

      Seriously, the kumbaya crowd has been force-feeding us the paradigm: “Inner beauty is what’s important” in a zero-sum manner to the point that two generations of Western culture have come to believe this means “outer beauty is irrelevant.” Add to this the current “dirty hippie” regurgitation from the ’60s, and the notion that women (and girls) should wear what they see “in fashion” rather than fashionable clothing which suits their body type, and you end up with an abundance of unattractive-appearing guys and gals. Because of PC disease, no one can tell these kiddies they look ridiculous, so you are not likely to notice any change for the better, in the foreseeable future…

      • Hey Hollyweird has been a Pusher for the culture for over 40 years, we are in the midst of the ‘Hookah’ culture right now, combined with the why walk or work when you can hitch a ride for free? Not done, then let’s glamorize fat and Roid em up with chemicals and pesticides and gmo’s, if that ain’t good enough, let’s promote heroin ‘Sheik’, are we tripping yet? When women look like line backers, and men look like boys, you know you are in the Twilight of Life Zone. Don’t forget those pesky mosquitos called vaccines that cause allergies in kids plus systematically destroy the gut lining and also causing brain damage and autism spectrum disorders and obesity and we are rolling on all FOURS!!!! That’s A- Meer-Cat-A. Hey, they’ve finally released that Ruby told the FBI to watch the fireworks the day of JFK’s assaination as in ‘Assinine Nation’s that has an FBI which should be renamed Federal Bureau’s Ignoramuses, and a CIA that should be renamed ‘Can’t Identify Anything’ since it has taken over 50 years to uncover who shot who when and what paid for the Hit Wit! Are we making Headway yet???? Yeah, looking at the Weinerstein reports and our 15 million in sexual assault payouts of the US Government, I would say we are!!!!!

  4. 210k gallon spill from Keystone Pipeline, threatens the largest N American Ogallala Aquifer, yet no celebrities were groped, and a few Saudi princes couldn’t find any employable mercenaries to ruin a Country & Western Concert nearby as they needed to engage in more Music Festival arrests & deaths to prop up future oil prices.

    http://www.cnn.com/2017/11/16/us/keystone-pipeline-leak/index.html

  5. With my connection to the local university, I sadly see an incredible bias to the left. Far worse than I saw back in the 60’s. There are entire buildings dedicated to “feminist studies” and minorities! The SJW types have made it near impossible for a guy to come on to any girl without risking allegations of rape and/or expulsion. There are mandatory indoctrination programs on “The Grey Area” to “prevent sexual assault”, yet they provide no guidance on what’s allowed, only what’s not. The girls are not taught to take responsibility for clear communication, yet guys are expected to always be the sexual lead. This makes it impossible for a guy to know where he stands with regard to any female. We’re expected to judge body language and respond “appropriately” with no rigid rules or guidance, yet with clear and potent penalties for getting it wrong.

    In the old days, what the politicians did with girls was borderline acceptable, and any punishment would come from brothers or fathers. Now we are retrying these allegations in a completely new frame where any sexual advance is deemed “rape” if it’s unwanted, even if the girl doesn’t say a word.

    Lastly, I’m surprised that former senator Biden hasn’t been crucified for his many gropings of wives and daughters of fellow politicians and others. This is all over youtube yet never a word in the MSM press.

    • The reason not in the msm is that it’s run by butt-groping lefties, lol
      And you just need to chill because without climate and gender studies and sjw’s the world would be awash in unemployment because there just isn’t enough “gotta have it stuff” to be made. And not everyone can live self-reliant and off the grid like us, Mike…

      • George, I’d suggest that there really are things to be invented and developed that ARE worth having. For starters, squaring the curve of life satisfaction(health at all ages until you drop dead), democratizing healthcare so that people rather than specialists can do a good job of it, colonizing the moon and Mars, finding ethical ways to reform prisoners in minimal time, exploring the hedonic imperative such that we can all have much happier lives. Let’s not forget anti-gravity, ZPE, and other oddball things that some of us are interested in. How about just harvesting the sea for the plastics we throw into it? And ways to safely use the energy in high level nuclear waste, beyond just storing it in caves forever?

        I thought we were supposed to be colonizing Mars by 1980 or so? And where’s my flying car? These seem like much better dreams than bickering over what sex or color of skin gets to be privileged. How about researching how to have harmonious and loving relationships and teach that?

        Just my two cents.

      • @ NM Mike…

        All the social risk (and now criminal risk) in dating has driven a lot of the younger set to serial monogamy. At least my own are nowhere near as promiscuous as I was in my 20’s. HIV and other STD’s also seem to drive the sensible into serial monogamy, but weren’t around when I was younger.

        My son says that it’s pretty easy to pick out the crazy ones – their expectations for everything are unreal and after the initial meeting, he just crosses them and any of their friends off of the possible list instantly… Does make dating rather a pain I imagine.

        I wonder if this is also why people are marrying later and later, besides finances?

  6. Oilman2 does ask a good question George. How do you see this working out in the REAL world for folks with minimal financial instruments in play?

    My wife and I are 5 years senior to you and have stayed mostly in cash over the past 2 years missing any big run up in the stock market but probably ok until the big sleep unless the crash wipes us out.

  7. George;
    I don’t know if I need a head transplant or a body overhaul, tough decision

  8. When this worldwide reset (of prices) occurs, the world economy is going to freeze/shrink for a time, and the demand for oil will plummet even further. This allows those who control the world with hydrocarbon energy to maintain their control for a while longer, even through a period of shrinking oil reserves.

    Just as there exists two economic groups in the USA, those flush and those essentially insolvent, two groups that have very little interaction with each other, there exists two economic groups in the world, those that are able to get their hands on the $trillions that have been created (a pool that continues to grow), and those who can’t. The addiction to the American Dream (called that because you gotta be asleep to believe it—Carlin) blocks Americans from seeing that. Once a person separates these two groups in their paradigm of reality, they quickly realize that all the government and Federal Reserve reports mean absolutely nothing in the scheme of things. The corollary is that the small investors, competing against the AI of the computers that place at least 60% of the buy and sell orders WITHOUT HUMAN INTERVENTION are no different than someone playing the numbers with their local organized crime rep.

    This is not an economy any more, that disappeared with zero interest rates and massive money creation. Acting like it is, is like praying to the god of electricity before flipping the switch. The light always comes on, but the religion is not what is really happening. The “markets” are no longer markets, they are casinos, and as we all know the house (computers) always win. The markets become nothing more than a weapon of mass distraction for a segment of the population looking for unmerited wealth while the culture, which at one time included a real economy, sinks into a black hole abyss from which no light escapes, which incidentally, makes it invisible to those closest to it.

    That’s how it looks from Ecuador, 8 years out of the USA culture.

    • Unlike the rest of the world, working Americans do not surrender to the jealous masses or trouble. Trump got elected didn’t he. The old “Can Do Attitude” still remains dominant in the Heartland.

    • The way I see it is this: The (non) Federal Reserve has funded all takeovers and monopolies. Facebook, google, name em, they funded em, behind the scenes, it’s a done deal. That’s why The (non) Federal Reserve will NEVER be audited. IF you are in the IN crowd, you’ll get enough money to buy a country or bomb it to bits, and send other people’s citizens to fight you wars for you. If you aren’t, you are the rest of the teeming masses THINKING you got a competitive chance, you don’t. When it ALL shakes on down, though, it’ll shake everyone, not just the lowest totem polers.

  9. Coast to Coast has an interesting program on the Search for Intelligent Life. Despite years of attempts, there’s no reply. Either we’re the only form of intelligent life, or the extraterrestials don’t want to get mixed up with a bunch of idiotic earthlings.

    • As long as they don’t try to search for intelligent life in D.C. They might find it.

  10. Perhaps, we’re all bothered by too much current information? What is really (most!) important?
    Avoiding pain, IMHO, and I’m so glad about that.

  11. The Sergio Canavero guy is quite the creepy-looking one – mad scientist gleam apparent in all the stuff I see.

    Cane vero means “real dog” in Italian – is that significant?

  12. I guess my question is, when the 5th wave hits (funny how that was the title of a very recent EOW movie), will that be a stock crash, dollar death, banking crash or what? What dominoes from the market taking a huge smack, other than the FANGS and most financials getting their teeth pulled?

    How do you see this first market crash working out in the REAL world, for folks who have minimal financial instruments in play?

      • Remember that scene in the movie where the guy rode the bomb down whooping and hollaring??? You know at the end, he got up and said, ‘what a ride on the wild side, let’s do it again!’

    • Actually he didn’t, but the current situation is more like James Cagney setting off the fuel storage tanks and shouting, “Top of the world, Ma!” Desperate times cause desperate measures, and crazy fools do not know how to ‘get out’.

      • It was a joke, honey, in other words, he was blown to smithereens, instead of fraternizing with K Spacey!!!

      • Honey? I have a name – and it isn’t ‘Honey’, sweetums . . . I am an information wonk, nerd, whatever . . . honey is for bees!