Markets 1928 or 1929?

The markets should make an explosive move in the next three weeks, or so.  When they do, it will resolve one of the most difficult questions facing investors…do you “gamble your future” on markets rolling skyward?

We have a number of critical indicators to watch, such as this morning’s Chicago Fed National Activity Indicator:

“Led by slower growth in production- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +0.10 in March from +0.98 in February. Three of the four broad categories of indicators that make up the index decreased from February, but two of the four categories made positive contributions to the index in March. The index’s three-month moving average, CFNAI-MA3, decreased to +0.27 in March from +0.31 in February.”

(Continues below)


Reduced to a picture, it looks like this:

This doesn’t seem too bad – and the market put on a minor bounce in the next day or two.  Friday was a bad day for bulls.  But, by the end of the week the party may be nearing its end.

Remember, stocks are speculative and they discount the future.  They really need a good fairytale to keep rising.  Not may of them around.  Even the corporate tax reduction is all but fully discounted now.

We the People are being screwed by two corrupt political parties.  They talk solutions and deliver bupkis.  The National Debt is going through the roof.  At the same time, the Federal Reserve is dialing back its “easy money” a bit – and this will begin to impact markets.

The place to see this is in two summary tables in the H.6 Money Stocks report.  You can see in last week’s data that in the period “to March” (which means through the end of February) M1 money creation was puffing up at a 7.2 percent annualized rate based on the most recent three months.

When you look at the second summary, for the week ending April 9, that hefty annualized rate of M1 creation had been dialed-back to 5.2% annualized.  It’s a big swing and it’s likely one of the factors behind the market beginning to look “toppy.”

As of Friday’s close, our Peoplenomics Aggregate was at 22,584.  Since the first week of 2018 came in at 22,991, one MIGHT argue that stocks are down 1.78% from the first week of the year.  And optimist would “cherry-pick” the data, using the last reading of 2017 (22,362) instead.  This would support the idea that there has been a (whopping 1%) rise in general stock prices.

It’s a foolish discussion, however, because there is so much more money sloshing around the system.

The Federal Reserve in this period was “making up money” at better than a 5% run rate, while even the bullish argument that 1% for the year suggests an annualized 3% for the markets.

Here’s the problem with that:  If the market’s up 3% for the year – and the money chasing the market is up 5-something percent – elementary economics says there is still systemic deflation in play.

Which is why even though gold and silver were “strutting their stuff” about in the past few weeks, in deflation the prices of hard assets tends to decline.

Rising Prices on Declining Volume is another key concept to understand.

This basically says that as prices rise, the number of sales will decline.

Tomorrow morning we’ll see the latest Case-Shiller Housing data and the go-go markets (Bay Area and Seattle) will be the most revealing.  That’s because prices have been going up like crazy.  But, when prices rise on falling number of sales (called ‘volume’) then a top is most often at hand.

The NASDAQ, for example, set a very short-term high volume rate on March 27 and the low came in April 1.  Since then, prices have been marching steadily higher, but volume has been steadily declining.

Most important point of the week is this:  What kind of “health” and “growth” are we seeing in the real economy?

The concentration of money in the “hands of the rich” continues.  But for most, something as simple as a power steering unit going out on the family card, can wipe out all the savings of this year, and maybe last.

It’s then that real people wonder, in effect, “Have I just worked my ass off for six months of savings, only to have it taken away by a single car repair?”

Neither political party has delivered on the higher standard of living that real people work for.  While the FBI has lost the confidence of the American people (because of its political witch-hunting), the truth of the Mueller fishing expedition with a side of hookers is that the whole political distraction has been designed to keep you wrapped around the political axle, so you don’t complain about the power steering unit costs.

The charade is revealed, though, when you read stories like the AP’s “Russian lawyer questions why Mueller hasn’t contacted her.”   NSS, unless, of course, it’s more fun chasing hookers, perhaps?

The problem, in other words, is that “The richest 1% are on track to control two-thirds of the world’s wealth by 2030.

We’re not looking forward to an economic Depression, but such catastrophic events do have their silver lining.

It goes like this:  When markets collapse, so do savings.  And, since most of the savings are held by the rich pricks in the one percent, they will finally be stripped of their wealth.

If an economic depression doesn’t come along to save the middle class, the Rich will simply write big checks and “buy a longer life” while the rest of humans will be doomed by “managed healthcare” which is, in itself, another rigged game.  (They often treat only symptoms, not causes.)

Good News?

Not to start you off with a Monday Bummer.  There are companies that appear to be making an effort to both “do business” and “do good” at the same time.

A read of the KB Builder’s Sustainability report, is an example.

Late Spring This Year

Ran the data out this weekend and sure enough, temps here are running about 6-degrees cooler, on average, than last year.

Not just here that spring’s late:  Heavy rain and thunderstorms from the Southeast up to the Northeast this week.

If weather sucks, so does farming, and that set up much higher food prices for the coming fall and winter.

The Coming ‘Trade War’

Although it has dropped from noise headlines for the finally illerate, the problem hasn’t gone away.  So we will keep pointing to stories like U.S. fund managers brace for trade war with focus on pricing power.

Wearable Tech the Answer?

Not so much:

New UTSA study shows wearable technology also contributes to distracted driving.”

World of Bizarre

Canadian accused of murder is lynched in Peruvian Amazon.

Don’t touch a shaman, huh?

Moron the ‘morrow…

24 thoughts on “Markets 1928 or 1929?”

  1. Tulsa tv weatherman said last week this April is the coldest on record. Robert Felix’s theory is looking more accurate all the time.

  2. Follow the money as it flows to the kryptos.

    Make sure you got your bucket inline when the money Flo’s and rolls and travels in bulk.

    It’s even better if you got a wide neck funnel that way you don’t lose any of that good stuff coming into your bucket.

    • Why you ask ?

      When other countries start abandoning the Fiat dollar and then your country does it too do you want to be stuck with those pieces of paper I mean do you really trust your government from all the things you’ve learned throughout your lifetime well this is a big game changer.

      And I wouldn’t want to be on the minus side of that you know.

      As I said again follow the flow of the money as it leaves and leads into another entity.

      I got the crypto crypto Rock I got the crypto crypto lock I’m going to lock in on some Litecoin then maybe next year will change will change our game and make it feel like it’s raining those cryptos.

      You know if you turn on your radio the music radio mostly you’ll hear a bunch of Heartache who wants heartache we want to hear some positive stuff like hey Ya people don’t have to starve anymore people won’t get evicted anymore people don’t have to Rob other people anymore wow is that all possible because of cryptos I don’t know I’m a dreaming but hey it’s better than going down the tube with the fiat currency.

  3. mechanics are charging more than ever so car repair is the perfect excuse to save $ by buying more tools! most parts stores rent specialty tools for free (with deposit of course). youtube and autoforums have tons of how-to advice. i’ve saved god knows how many thousands over 30+ years of d.i.y. hell even many pricey shop manuals are now free downloads (fair use only of course) 8). here’s some for you highly intelligent vintage honda buffs like myself:

    • Yeah take that DHEA ,
      DHEA that stuff really works.

      I’d show you a picture of my six pack abs but will let me think you are the only six pack I got is the beer cans that are sitting over there on the side with a lots of laughs lots of love

  4. Down why just keep getting better at this s*** okay here we go.

    Before you build your house so you green house you take a piece of equipment and you dig down plow out do whatever 10 12 feet wide by 1012 feet deep or you can go for foot wide by 4 foot deep and then you take this thing that you digging and you go like 100 to 50 feet and you cover it up and then this tunnel is going to come up under your house and then only of the side house if you have a greenhouse there is going to enter into the greenhouse what we’re doing is where creating a force field of hot Energy from the ground or in the summer case it be cold Energy coming from the ground that’s killing your house and calling your green house and is this this a you had one mile long bring house what’s the heaven Mars what you look do as you would create the underground first and then create your structure on top so you always going to have a temperature that is the same clothes to underground that way have need no need for heating or cooling because of come from the natural I’m the ground and it could be a mile long

    • That’s why it’s cheaper take a bulldozer dig down in the ground long trench same thing they did in it and the Artic they dig trenches down into the the ice packs and they installed nuclear energy there anyway you can do the same thing Wherever You Will long trench with one of those tractors go down as deep as you want the deeper the better and then put a faults heavy roof over it where you can put your house or you can put your Greenhouse with all the plants on top of it this is the survival technique that’s been used for me and Z years in the face of the Earth that you don’t know about they use this in ground and they have discovered and use plants that don’t need sunlight but anyway this is a start if you want to be successful and having a greenhouse on your property you don’t want to have a greenhouse that’s above ground you want to have the underground structure that enables you to not have to use any fuel or heating sources except the ground underneath of you

  5. “We the People are being screwed by two corrupt political parties.”

    And ‘We the People’ are so innocent????? I have news for you: It cannot be corrected, because of us, We the People. Casa cerrado!

  6. George,

    Have you spent much time looking at the fundamentals of the Chinese economy?

    I read something that sounds crazy, their debt increased last year by a huge multiple of their GDP. Wouldn’t that be like our debt going up Some multiple of 18 trillion? Doesn’t seem sustainable, or that the author was truthful.

    Just curious if you ever look at their economic model closely, to help predict their ways. For instance, the way the article I refer to read, they would be nuts to start a war, and we are totally in the driver’s seat. They need us more than we need them. Do you agree?


    • China has both very smart folks and very stubborn folks. They realize that they’re joined at the hip with the USA, though less so than ten years ago. China is building out their domestic infrastructure while building a social control grid. Most Chinese are used to a collectivist lifestyle and it grates on them less than it would on us. They’re also building markets on every populated continent, most obviously via the New Silk Road to Europe. China knows they’re playing brinksmanship, just like our president does.

      The results are yet to be seen. IMHO, Taiwan is one to watch, and finding a peaceful resolution may be more difficult than settling the Korean peninsula troubles.

      I don’t see either side in total control.

  7. I’ve been wearing tech on my left wrist since I was a kid, and it’s never distracted me. The answer to distraction is discipline, not regs.

    Pilots need to aviate, navigate and communicate simultaneously and generally do a good job of it. Flying an instrument approach requires serious discipline, reading an approach chart, navigating on instruments, interacting with ATC, and keeping the aircraft where it belongs regardless of turbulence and other distractions, such as ice. Drivers have a much easier job, though the spacing is much closer. There’s no excuse for driving beyond your ability most of the time. Yes, you can be caught in weather and have to make it to a safe place, or have something weird happen like a blowout or ball joint failure. There’s no need to ever sacrifice safety for simple communication.

  8. Off Topic ..but relevant in such that it reflects the mission creep of the leftist agenda into groups and organizations that should not be partisaned…weve seen the SPLC and the ACLU become highly partisaned and biased against Trump. Where does it stop.

    I agree with the lawyers opposed to the statement. It is highly partisan and a broad brush to demonize republicans, conservatives and all supporters of Trump. Thats wrong. It also demonizes those who arent open borders types and pro nationalism vs globalist, no borders no immigration laws, like our grandparents and great grandparents honored and immigrated under. 

    • PS – I mistakenly left off the MSM in my grouping of the SPLC and the ACLU, as examples of groups and organization’s that have become nothing but mouthpieces for the leftist agenda and extreme anti Trump forces .

    • ACLU is leftist, but not usually radical antiAmerican. Their silence though on the seizure of Cohen’s files, probably the most egregious violation of civil liberties to occur west of East Berlin in the last couple centuries, is deafening.

      SPLC is a joint effort by Ralph Abernathy, a black communist lawyer from Memphis, who was the “staff” attorney for Martin Luther King and his organization, the SCLC (probably the reason MLK’s FBI file was as large as it was), and Morris Dees, a low-level agent whose job was to read American newspapers and translate the news and social drivel into something certain Eurasian peoples could understand.

      SCLC is the Southern Christian Leadership Conference. It was a huge deal in the 1950s and 1960s, rivaling the NAACP (to which it eventually became a part.) When Abernathy and Dees got together in the (hey, there’s that time period again) late ’60s to early ’70s, they did so to create a Soviet-friendly disinformation and “social-steering” entity. They named it the Southern Poverty Law Center, SPLC, because that was acronymically very close to MLK’s SCLC, with which Abernathy was already a high-level associate.

      It infuriates me every time I see the SPLC quoted or used as a resource, because neither their mission nor their method have changed in 45 years…

      • Back in the early 90s, Morris Dees prosecuted a case against some skinheads responsible for the murder of a black man named Mulgetta Seraw. That murder happened in the neighborhood I would eventually into two years later. That murder, but more so, the leadership of that skinhead group in San Diego, would become the basis for the movie American History X. I think Morris Dees got justice for the Seraw family in that case.

        That was nearly thirty years ago. Now the SPLC names any group who isnt PC a hate group, simply for having opposing ideas. I think that only creates more animosity.

      • SPLC has always done the Blacks vs Nazis thing. That was the original “justification” for their existence. They use that justification as license to label any person or organization they choose (including military vets, originalists or constitutionalists, and Ron Paul supporters) as “hate,” “terrorist,” “anti-American,” or any combination of the three. Don’t let a single course of action cloud your view of the big picture. Even Hitler and Stalin did good deeds…

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