Challenger Job Cut Data Plus When Does a Crash Begin?

The Jobs Report in a second.  This is more important, I think…and we will have more detailed view this weekend for our subscribers.  Question is “When does a crash begin?”

Our Aggregate Market view looked like this at 6:15 AM Central today:

If this outcome is going to happen, our research projects the washout low for the year could come in around December 5th.

What we see in this chart is that early on, it looked like the market would underperform 1929 today.  But no, a drop in the job cuts announced in September might propel things up today (when opening hjysteria passes) and maybe last into tomorrow.  Next week?  Worry…

This is not to call December 5 a firm prediction, at least not yet. Where the statistical darts are landing.   Remember that all market declines are self-similar.  In other words, they all look the same, until they don’t.  On the other hand, there is some cause for keeping tabs on things when the lineups are as good as they are presently running.

We can almost look at this and think to ourselves:  Gee, what would it take to goose the market up a bit tomorrow?  An decidedly good (paradigm reinforcing) jobs report from the Department of Labor?  Then, what happens after that?  Can we look at the balance of this week as a “buy the rumor” set up to a “sell the news” sequence next week?  After that does it contine on (and down) from there?  This is one way to read the chart.

But when does a “crash” begin?  When the market tops and heads down?  When it’s all over?  Or at some “shaker event” like a Black Monday?

In today’s early slog, Dow futures were up 40-something, but more to our liking would be a jump of up 150-250 points before the weekend. Our model would like that very much, but markets don’t listen to spreadsheets.

Bitcoin is $8,255, so the bitties are still holding; a kind of “insanity barameter” to our thinking.

Feel better? If the decline we’re modeling occurs, and if it precisely mirrors all indexes, that suggests a Dow in December of  14,113 while the S&P could drop to 1,564.  Not worthy of bets, yet.  And of course this is not advice.  But it sure is a good time to have seeds, a fall back to the country, and the usual prepper gear laid-in for next year.

Because one of the main features of massive economic declines is generally hunger or famine.  Not interested in hunger?  Neither are we.

Now, About that Job Cuts Report

This ought to fuel the bounce:

CHICAGO, October 3, 2019 – Job cuts announced by U.S.-based employers fell to 41,557 in September, 22.3% lower than the 53,480 announced in August. This is the second lowest monthly total in 2019, according to a report released Thursday from global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
Last month’s total is 24.8% lower than the 55,285 cuts announced in the same month last year. It is the lowest monthly total since April, when 40,023 cuts were announced.
Despite the drop, so far this year, employers have announced plans to cut 464,869 jobs from their payrolls, 27.9% higher than the 366,058 cuts announced in the same nine months last year. It is the highest January-September total since 2015, when 493,431 cuts were announced.
Third-quarter job cuts totaled 133,882, 4.8% lower than the previous quarter, when 140,577 cuts were announced. It is 10.8% higher than the same quarter last year, when 120,879 cuts were recorded. It is the highest third-quarter total since 2015, when 205,759 cuts were announced.

After a few minutes to digest, Dow futures actually dropped a bit, but that might just be the commercials getting ready to run things up later on.  We’ll be watching this one from the sidelines.

The Circus Check

Since hysteria is America’s main growth industry anymore, let’s try some of these headlines on for “delusional fit” shall we?

Trump calls House impeachment inquiry a “hoax.”

Meanwhile, two impeachment victims are clear:  The “two old white men on the dem ticket look out since slow Joe blew it and now Bernie Sanders health scare raises questions about his candidacy.  Warren to play Roosevelt, coming to a Depression near you, as we’ve been saying.  Don’t take that to the bank…a credit union, though, will do nicely.

For distant Scottish relatives, consider the story Scottish whisky makers reel over U.S. tariffs in row over EU subsidies and remember if you weren’t in the EU, it wouldn’t be an issue, right?

World thinks we’re idiots (and they may be right) as Putin jokes that Russia will meddle in 2020 US elections.

Look for a global move to begin supressing masks and other anti-facial recognition tools. Hong Kong Plans to Use Emergency Powers to Ban Masks at Democracy Protests, for example.

In Defense of the Paradigm

Kangaroo Court, anyone? E.U.’s Top Court Rules Against Facebook in Global Takedown Case.  Such kangaroo jumps are typical in the long wave saeculum-length social cycles.  See  Strauss and Howe for more.  And oh, look who else is trying to “gobble-gobble” some of FB’s dough: Turkey fines Facebook $282,000 over privacy breach.

Quid pro Cuomo? After Hospitals’ Donation to New York Democrats, a $140 Million Payout.  Broke and Broker, by Dumb and Dumbercrats.  Get’cher free lunch!

Grate story: U.S. tariffs grate on Italy’s Parmesan cheesemakers.  And the worst of the trade was is not pastas as U.S. tariffs to hit 500 million euros of Italian food exports: farmers group.

Meantime, the MSM not making a big deal of it, but the US won a major illegal aircraft subsidy case against the EU at the WTO worth $7.5 billion as Trump on WTO case: ‘This case going on for years, a nice victory!’  Notice how his wins don’t make headlines like his losses in the MSM?

In even-handed media is does. Like Fortune which sums it all up in The Ruling on a 15-Year Dispute Over Airplane Subsidies Is in and the Losers Are…Wine, Cheese and the Stock Market.

Global Diamond Glut Crashes De Beers’ September Sales . Well, diamonds are forever, right?  Someone isn’t reading our “100-Year Toaster” book…

More Evenly

Pandemic watch: PRO/AH/EDR> Ebola update (94): Congo DR (NK,IT,SK) TZ response, corr..

Turnabout is fair hack:  We hear a lot about eastern European hackers coming after western interests.  But seems greed is an equal-opportunity motivator as Russia’s Sberbank Hit by Huge Data Breach.

That’s all I have to table this morning, except breakfast, so write when you get rich.

27 thoughts on “Challenger Job Cut Data Plus When Does a Crash Begin?”

  1. Data Breach – Smata Breach ..its just Digital Assets afterall ..they got no VALUE right?

    No Bitcoin 4 U !

  2. Diamonds have always been priced by DeBeers cartel – until Russia started making man-made diamonds and broke their grip. There are so many man-made out there now that it has become a business to verify natural or man-made. And the cartel did one helluva job with the entire wedding and engagement ring thing a couple centuries back.

    Nope – diamond glut was built-in when they deduced how to grow large single crystals in Russia.

    What happens if you zoom out on the 1929 data and smooth the curves a little? Does that push back the crash date?

    Oil Patch Update: we are in a slow rig count decline and likely to stay that way until next year. There will be sell offs of various leases that are uneconomical by the big players due to overhead (debt load) versus income – smaller players with less overhead will buy. Look for things to stay as-is until oil rises and remains at around $80-90/bbl. At that price, small plays that are uneconomical become economical. Also, big projects become economical that are not at $50-60/bbl – like deepwater GOM. For those that don’t know, the deepwater plays that we have drilled in the last decade extend across the GOM and down to Mexico. There might be a revival of the ultra-deep drilling (30,000′) on land, because the shallow stuff is pretty much being used presently.

    Unfortunately, $80-90/bbl also kills current economics – at some point we will have to adapt to higher oil prices yet again…

  3. With the major online brokerage firms bending to competition, commissions are now $0. The majority of their revenue are from other sources, so it will affect earnings but not long lasting. This is good for young people who want to accumulate stock over time. They can buy 1 share of FB, etc & accumulate shares over time. Also, small time traders can go broke slower. When I was younger, I would put money in IRA’s, buy stocks, build a position over time, & just hold it.

  4. Oilman,
    U.S. refineries produced an average of about 20 gallons of motor gasoline per one 42 gallon barrel of oil. Given that electrics are gaining steam, as of 3rd quarter data for instance, Tesla is at about 1 million units sold…worldwide electric cars total about 6 million sold. That has a big affect on gas consumption worldwide.

    The average consumer uses about 400 gallons of gas per year in a worldwide basis. (500 in US). That’s equal to 2.4 billion gallons of gas that are not being bought per year… which equates to a billions lost in revenue. That too has an affect on demand and cost to consumers.

    The consulting firm Deloitte asked….How fast can carmakers invest in new electric technology while generating profits to make the transition? The firm expects 21 million battery electric vehicles to roll off assembly lines over the next decade as EV prices fall below comparable gasoline and diesel models by 2024.

    It’s not a fad, it’s an entire paradigm shift…even in rural markets. Tons of charging accessories and options are available for the rural markets as we speak to help boost sales.

    There is not a problem that EV’s do not solve for commuters. They have the range of up to 330 miles per charge…same as gas powered cars…the recharging costs are anywhere from $5.50-$12.50 per full charge depending on location and charging port. So it saves money. Most EV’s and especially the Tesla are great looking cars…

    Many, like Tesla have superior torque and pickup of any gas powered car on the road.
    The Model 3 base model goes from 0-60 in 3.2 seconds. The Model S in Ludicrous mode goes from 0-60 in 2.4 seconds. So there’s that…

    The upcoming Tesla pick up truck WILL take over the luxury truck market, based on torque and hauling power alone. Base will be around $50,000. In top-level trim, the Tesla truck should boast a range of between 400 and 500 miles per charge, possibly more. As one might suspect, it will be all-wheel drive with a motor for each axle. Musk also noted that the suspension will dynamically adjust according to its load. Being electric and a truck means it will have gobs of torque. Musk tweeted that it could tow 300,000 pounds.

    Some additional features include 240-volt power for all of your work tools, a unique drop-down tailgate and it will parallel park. automatically & have 360-degree cameras & sonar.

    Cars as technology. It was bound to happen. Pen and paper became laptops…Landlines became Bluetooth enabled everything…even my refrigerator can answer phone calls…which is stupid by the way..but who knows, I may actually need it for some odd reason one day.

    The town cryer gave way to the Gutenberg press, which gave market share to Radio, which gave market share to TV which gave market share to the internet which is now ubiquitous in everything.

    We will still need oil for a lot of things, but like all of the above, that industry needs to start adjusting to market share shifts or die like landlines and the town cryer.

    • Did you completely miss my longish discussion of total cost per seat mile? The energy to run all the electrics involves with bird-killing wind, resource gobbling solar, or coal. They are not a “miracle” and haven’t been since they were written up more than 100 years ago in Popular Mechanics.
      I won’t argue that electrics have their plusses, but park an electric for a year and a gas engine (without ethanol, another scam) and see which one goes further. You see, besides an unacceptable recharge time for people like me who do cross country travel when we do, electrics have an unavoidable problem of self-discharge. It’s what batteries do. For Li-Ion typically 5% in 24h, then 1–2% per month (plus 3% for safety circuit) and some allowance for temperature – higher for wide temperature ranges.
      The good news is that the (few call it out) conspiracy to control humans more tightly through propaganda is working out, ethanol is being sold as “better” gas when it actually has less BTUs and doesn’t cost less.
      Ah, the world we live in, huh?

      • Let’s be realistic here, Mark. How big is the battery pack for an 18-wheeler to be able to drive 12 hours without stopping?
        What does that battery pack weigh?
        What does it cost?
        How long does it last?
        How long to charge it up?

        Bet it isn’t the million miles normal to a diesel powerplant…

        OK – what about an electric dump truck?
        hmmm…same issues….

        Electric tractor? Bulldozer? Road Grader?

        I think the place for EV’s is exactly where they were popular WITHOUT SUBSIDIES and FEDERAL INCENTIVES in the early 1900’s. In urban areas where short hauls are the norm.

        If you took off all the safety crap and crash required frame, perhaps then an EV might make sense for a few more people. But you can’t.because nobody wants responsibility for their own safety, and insurance companies want no risk.

        Ever think how much it would cost to operate a taxi business with an EV fleet? You would need 3-4 times the fleet vehicles just to be able to make pickups the current ICE fleet does now, because muh CHARGE TIME!

        What do you think our grid would do with the addition of 25 million EV’s plugged in every night? And that’s just a TINY portion of the current US autos on the road.

        Let’s imagine the grid with all our 18-wheelers trying to charge up as well. And the bobtails and dump trucks and U-hauls….

        REALITY – try wearing it for a few days.

        If EV’s were such a great idea, don’t you think they would have popped up everywhere on their own, without mandates, subsidies and forced adoption via MPG requirements and EPA tailpipery numbers?

        Aren’t you tired of Elon Musks’ hand in your pants amigo?

        Sorry G – stupidity just irritates me…

    • Really? So I am supposed to travel across the country, go 330 miles and the pull in somewhere for a charge? How long does the charge take, 5 hours? And then off I go again? NUTS! I won’t ever go to full electrics ever, the only reason it is a paradigm shift is because the globalists are behind it, it doesn’t save the environment, it doesn’t change the climate for the better, all it does is MAKE NEW BILLIONAIRES, that’s it….and takes everyone else out of what they could afford, what they could repair themselves and limits their driving distance, CONTROLS where they go and what they do. Tesla is BACKED BY GLOBALISTS, it could NEVER have made it on its own, ever, and IT IS WAY TOO EXPENSIVE! AND, they are hell to work on and EXPENSIVE to work on. All a bunch of Agenda 21/30 BS.

    • Mark, the rolling chassis of motor vehicles is the same, irrespective of power source, and is therefore subject to the same foibles and wear-induced vagaries. Electrics are much simpler to manufacture, but 2- or 4- motor electrics will never be as cheap as iron or aluminum cast ICR engines. The cost differential of electrics is in their battery pack and its associated electronics and wiring. The maintenance of electrics, over and above that of ICE-powered vehicles, is in the periodic replacement of motors and battery packs. It’s not an issue if you’re buying “new every two” or “new every four,” but it is for people who either “buy for life” or who want to buy a “beater” as either a first or second vehicle. People can buy an $800 car off Craigslist, put $500 into it, and have a solid means of transportation for several years. These same people are not going to be able to afford to buy an $800 Tesla, then drop $12k on a motor and battery pack, and the $10k price differential will never make sense to them.

      Newer vehicles incorporate hundreds, sometimes thousands of pounds of plastics in their manufacture. Wind turbines and solar panels require a high percentage of plastic in their manufacture. The (extrapolated) estimate of MTBF on turbines is 22 years. Solar panels are semiconductor banks, which degrade over time, and become inefficient at 18-22 years. Therefore, both require constant replacement. From where come the parts and new product?

      Lots of things can contribute to a more energy-efficient use of our resources, but nothing is a panacea…

    • BTW, my bigass SUV gets (at least ;-) 455 miles on a tankful and I can “recharge” it in 3-4 minutes. My car gets over 700 miles on a tankful and (if I fill-up at a truck stop) “recharges” in under a minute. I have “recharged” the SUV three times in a day on several occasions, and once “recharged” the car four times between naps (WPAFB-PHX nonstop.) That was a b!tch-drive, especially solo, at the posted speed limits, and one I’d not wish to repeat, but my car did it in 31 hours. Can a Tesla…?

    • Mark, not to be nit-picky, but 1M Teslas and 6M electrics world wide does not have a ‘big affect on gas consumption worldwide.’ The 2016 data I found for number of cars registered in the US is about 268M. That’s about a third of a percent. Compare to the Saudi refinery attack that accounts for 6% of world capacity. In other words, it is currently down in the round off error realm for gas consumption and demand. You also have to account for the 6M new cars entering the US pool each year, which in general are replacing older, less fuel efficient models. Also, the power to recharge those electrics is still primarily coming from fossil fuels at the power plant level (yes, you do get scale efficiency to offset, though).
      At this point I have to disagree that electrics are a paradigm shift since they simply shift fossil fuel consumption from the vehicle to the local power plant. And at this point they are still too small portion of market share to steer the industry.

    • One problem never addressed is that many of us average perhaps 60 miles per day, but miss the fact that many days we might not drive anywhere. When we do, it’s a minimum of 200 miles and a maximum of perhaps 1000 miles two days in a row. Only a fuel powered car can currently handle this kind of mission profile.

      My regular car gives 40 mpg on mountain roads with very little maintenance necessary. My heavy hauler gets 1/2 of that and I use it only when necessary. I need to insure both so they’re available at will. This is a significant cost. Both are paid for and I do my own maintenance. Most of the “features” of electric cars are things I don’t want or need. I just want to go, steer, and stop at will while hauling a maximum of two people and a lot of stuff, including trailers. No need for GPS, auto-parking, auto-trans, auto-anything, though a heater and A/C are necessary. I really don’t care if the car is brand new or 50 years old. Many people think like I do. Acquisition and maintenance cost matter, and MTBF and MTTR rule.

  5. George,
    -Nice treatment lately on pattern matching to the great depression. Sincerely.
    But next, rather than crediting Trump with finally teaching the attorneys how to win a case, shouldn’t we really be asking:
    -If we’re winning at the WTO, then tell me again why we had to give our markets to Brazil and put the Farm Belt on welfare?
    Best, Mike.

  6. Drudge says Trump is reaching out to China to bring down Biden.

    Think about how ridiculous that notion is during the middle of a trade war and saber rattling and military parades.

    Not to forget Trump is the leader who was the catalyst for the above Vs Biden who will theoretically roll back the Trump attack.

    And China still hasn’t said anything about the radioactive WTC steel under wraps.

    The tariffs against the EU make the Chinese stuff look cheap again.

    Full circle. Nothing changed in trade with exception to our general price level going up and a lot of people cheered the higher prices on.

  7. I had two soft broiled eggs for breakfast, and one lost half of it’s white because the shell (of the the free roaming chiken) was just too brittle. Is this an omen?

  8. The United States Secretary of Agriculture just publicly stated at the World Dairy Expo in Wisconsin that small (dairy) farms are doomed by Big Ag. That won’t sit well when word gets out.

    The movie “Joker” will be an ugly movie but many, many people will identify with it. It’s being compared to “Taxi Driver”. We all know Hollywood projects the will of the Illuminati which always announces its intentions in advance; the conditioning and preparation has been ongoing. Halloween, “The Purge(s)”, a good mask, and the selective amnesia of a supportive public…

    We’re too focused on 1929 and the following Great Depression. How about another major paradigm shift more close to home? With some short time travel, how about a retrospective of the conservatives (wealth is good) vs. liberals (wealth is bad) in the period leading to the radical 1960’s? Surely it wasn’t all just about Vietnam.

  9. I am with George on the EV’s in Ky. we make electric with coal so I’m wondering about the and why our government does not want to increase the regs. on efficiency and why we are not allowed to have this 300mpg in this country and I also did research on the cars that run on air which we did not have the opportunity to buy here either. Ya think our government is owned by the oil and gas industry[sic]…………

    • Jane, I’ve no idea why AAMCO dug up that VW concept for advertising and conspiracy fodder, but (from memory):

      The Volkswagen 1L project began in the early 2000s. The idea was to build a concept vehicle which could travel 100 kilometers (~60.8 miles) on one liter of fuel, or get roughly 235 U.S. MPG. The first built looked like a bubble-car and was either one passenger or two-staggered (can’t remember.) It was a diesel/electric hybrid, which used about a 1L (60 cubic inch) diesel and an electric motor. VWAG must be into about its 5th generation of the 1L project by now. They released a few gen3 or gen4 concept cars to the public, but it is still a development concept.

      The reasons none are (or likely will be) sold in North America (Canada takes its import cues from us) are North American diesel is so unrefined and low in power that the engines can’t digest it properly and it gums them up (this is why Mercedes discontinued diesel sales for several years in NA around 1990), and because offshore-manufactured motor vehicles have to meet safety standards imposed by the NHTSA (the National Highway Traffic Safety Administration.) The NHTSA standards cover everything from size and color of indicator lights to survivability of a rollover accident. If that sounds simple, understand, the last time I was car-shopping for a new vehicle (last millennium), a $30,000 Eurospec vehicle which was perfectly safe at 160MPH on the Autobahn, would cost between $85,000 and $115,000 to make conform to the NHTSA standards, over and above the cost of the vehicle.

      I, personally, would like to see the VW Lupo brought out of mothballs and released in the States. IT was not a hybrid, but was easily capable of 100mpg, and routinely garnered between 107-112MPG in “real-world road tests.” Oh, and it was actually a practical vehicle, being Mini-sized (if Mini built a 4-passenger Clubman) but with considerably more cargo space.

      How much energy is in air…?

    • back when I was a baby and before texaco had a fuel efficiency challenge.. the mileage has been available for a long time.. and when they want they can and will expand the fuel efficiency. I have often wondered why the coal company doesn’t make multi fuel pellets.. wood pellets for pellet stoves etc.. I use a three to one mix for my multi fuel stove.. three parts of sawdust to one part of coal .. making a three to one mixture using the coal dust that they dispose of would expand their markets and give everyone a new product that is competitive with all the other products.. they could also expand on that and sell a basket insert to elevate the burn basket giving a greater efficiency to..
      oh well.. I believe that all products should be utilized.. I get the nicest warmth out of my coal.. and wood pellet combination.. now to get them talked into making the pellets.. LOL..

  10. “World thinks we’re idiots (and they may be right) as Putin jokes that Russia will meddle in 2020 US elections.”

    Obviously you caught the joke there…lol lol lol lol ..
    That’s the kind of humor I would suspect from someone that’s been blamed for something they didnt have any involvement with..

    The global elite puppeteers have been pushing this bogus scenario daily since the moment they realized the candidate they wanted to win was going to loose. all to put the shroud of doubt in everyone’s daily thoughts along with trying th o convince everyone that what they would like to see happen is some thing unrealistic to in america ha the audacity to want more employment and balance the checkbook why would you want such a borders where your humanity …. that heck why not play with it.. as long as the shroud of doubt and the blame is there..
    The bad part about that is after spending billions of dollars to set that shroud of doubt in the public’s thoughts.. this time they could actually get involved in the outcome of the election..either way they are going to be blamed for it.

  11. Not that I’m making any calls, but I must remind that the pain ain’t over ’til the cat bounces. 800 down and 100 up is not a [redacted as offensive to cats] bounce. The most important questions are: how will I recognize that a crash is underway, and how will I react? Don’t put yourself into any position which might force you to sell into a panic. Limit orders on ETF’s tend to behave badly in flash crashes. I remember the fear on people’s faces in ’87. Think it through now, if you have money on the table. Always know your exit options.

    • As we will talk about on PN tomorrow, you ain’t seen nothing yet. If this is The Big One, this ius only wave 1 down. You spell it out right: Wave 2 and then the smelly stuff and the rotating roundy in late Oct/Nov

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