Markets: Black Thursday, Anyone? Gray?

Hopefully not, but those of us who prefer the “short side” of trading were looking at the early futures today and wondering if we’re not getting closer to a dramatic replay of 1929.  A couple of charts will explain the problem:

As you can see here, when we line up the October 3 peak in the present-day markets  (*using our Aggregated Markets view), we are “hanging out” over what could turn into a Valley of Death for investor assets.

An Aggregate View is necessary, because of inter-market arbitrage.  That is, if the New York Dow 30 goes up 1 percent, there’s no gain in a balanced portfolio if the S&P and the NASDAQ are both down 2 percent.  Instead, there’s a loss.

This approach  has allowed us to evolve certain market views, though not specific investment advice, that our Peoplenomics.com subscribers find useful.

This second chart bears directly on point:

Some further discussion of the yellow highlight in the (lower center) zoom-in:  The yellow line warns us that IF (or once) we break lower than this, we will likely experience free-fall for a ways.  While I’ve credited by friend Robin Landry with his 2,520 S&P area call, in the Aggregate view, we could be into the 2,475 range on the S&P.

Our slower-moving indicators (that we apply to strategic non-equities, too) have been in cash or short since October 18th.  We don’t offer trading advice, but when our oscillator crossed under our arbitrary long/short indicator, the Aggregate was at 23,493.  Based on futures pricing early today, we’ll be in the 22,369 area, so our indicator pointed to cash or short 4.78 percent higher than where we could trade this morning.

The scary part, however may be yet to come.  IF we are indeed about to begin a similarly-sized free-fall, the equivalent to 1929 in the Aggregate work could be down in the 5,000 range. From the “get into cash” marker, that might be a decline on the order of 78.7 percent in the coming year.

I’m not saying that will happen, though…

No one wants to see the whole system implode.  A decline of that magnitude would drop the Dow into the 5,530 range.  Which would – on a purchasing power basis – be the next level down from the 6,500 range the Dow was hovering at at the depths of the Housing Bubble implosion in early spring of 2009.  That was 10-years ago.

The reason for (limited) optimism is that the Fed still has a firm had on the economic levers.  A strong case exists to touch the S&P 2,500 level and then roar on for one more series of final all-time-highs before the once-every-three-generations disaster comes calling.

Much will depend on the public mood…but you can see in one of our indicators (and more on this for Peoplenomics subscribers Saturday) something changed a while back.  Not certain what, but the very way the markets traded on a semi-regular basis of ups and downs began to oscillate out of “usual bounds” and the trouble of today can be traced back, I think to whatever that change was.

Another Useful Dream…

I awoke with an amazing crackpot theory, that came to me in a dream early today and maybe there is something to it.

The idea was that as part of the Tax Reform Act – the one that brought a lot of fat American company bank accounts back to our shores – the last bubble up of the market began.  Under our theory of Consumer Super-saturation, it has been nearly impossible for CEO’s to desk real earnings, so they went for the next-best thing:  Synthetic Earnings.

Pretend you were the CEO of a major company and you were suddenly handed half a billion dollars.  What would you do with it to make money?  How about some stock manipulation?

That’s exactly what I would do if i could get it through legal:  I’d tell my CFO to run out and buy all the Call Options on earth involving my company stock.  As soon as the options were in the company account, I would then begin a modest stock buyback program.  Shares would soar,

This would be a “two-fer.”  Not only would I be moving up my stock’s share price, but I would also make a killing on close-in (time-wise) options because the closer-in an option strike date, the smaller the time premium paid.  It’s value would all be based on stock price…and as CEO and CFO, care to guess who has their hands on them levers?

Even with prohibitions on such shenanigans, it would be simple enough to work with a co-conspirator.  One of the private banks.  Oh, sure, in the files would be plenty of PowerPoints and dog & pony crap, but in the hall, the “wink-wink” department would give those knowing the head’s up when the stock buys were coming.

But, the money supply hasn’t been infinite.  So, once again, the CEO/CFO can maybe sell a little stock back into the market after a run-up.  Either through a company account, or a co-conspiring organization,  the “players” would buy up a huge number of put options – options that make money on the way down.

As soon as the “wink-wink” came, options would be acquired, and as share prices softened, the option earnings – this time being on the short side – would soar.

I realize this is wild conjecture on my part.  But the variance in our oscillators began in a time-frame that seem to fit, at least superficially.

Sure, it’s somewhat conspiratorial…yep, no question.  But there’s my oscillator and there’s the market shuffle.

At a broader level, such stock price manipulations would be very useful for American companies, were there not rules against it.  Our theory has long been that as we begin the Manufacturer’s Resource Wars period of modern history, companies will be largely reduced to making no money through conventional manufacturing or service means.  Commoditization’s a bitch.  No one has pricing power.

And that, dear reader, is the kind of nightmare that goes through my head.  At some point, is their an Evil Cabal of folks in the financial industry who are brighter than me and in positions to pull off such operations>

It would be a toughie to prosecute.  The CEO and CFO would have been, at all times, operating in the shareholders interests – trying to make as much money as possible.  That we might, as a country, be going through what might later be called The Tax-Cut Collapse would be mostly coincidental.

Besides, there’s enough “news” going on that people wouldn’t be looking for such a cynical group.  Instead, prompted by the left-wing media, there would be a further assault on president Hoover-Trump…who would be left holding the bag for even suggesting such things as tariff reforms.

Then, like the liberalista rise in the 1930’s, we will see an ascension of the radical left and, in time, the benevolent liberal dictator, along the lines of FDR, who was the reason we put in president term limits as an Amendment to the Constitution.

While all this rolls out, we will see the specters of hunger in America, massive unemployment, and eventually war.  After that’s done, and world population is reduced by three-quarters….well, like I said, this ain’t financial advice.

But if you read 20-years of UrbanSurvival, you’ll see that we’ve been careful to “walk the talk” and “going rural” is a very wise thing to have done by now, plus being debt-free, and owning some of your own “means of production.”

Because, in the kind of world we’re seeing off in the distance, if you can’t work with your hands, you won’t be able to work, at all.

With Bitcoin down scraping along the $3,700 range this morning, we will close this grim POV with two simple questions.

  • Why would any Central Bank feel that they would need to offer anything in exchange for a cryptocurrency?
  • And why would any Central Government leave the Internet up and operating when it would just service to offer millions a “demand path” to make good on financial representations?

On that, note, the future is coming.  And we’d best be ready for it when it shows up.

A few headlines now?

Jobs Data Landing

As we’ve been saying, we seem to be riding past a “Peak Employment” bubble.  Just out is the Challenger Job Cuts report for November: 53,073 whacked.  But it was the tone of the press release that grabbed us:

“CHICAGO, December 6, 2018 – Companies around the globe are beginning to announce largescale layoff plans, possibly signaling an upcoming downturn. The number of planned layoffs announced by U.S.-based employers totaled 53,073 in November, according to a report released Thursday by global outplacement and executive coaching firm Challenger, Gray & Christmas, Inc.

In November, Japanese tech and energy conglomerate Toshiba announced plans to cut roughly 7,000 workers, while German pharmaceutical giant Bayer announced 12,000 cuts following its merger with Monsanto. It remains to be seen how these announcements will impact the U.S. workforce. Challenger tracks job cut announcements by U.S.-based companies or those that occur in the U.S., as specified by the company.

The big story in the U.S. last month, however, was the announcement by General Motors that it would cut 15 percent of its workforce, or up to 14,000 employees, after offering 18,000 buyouts to workers in an effort to save over $6 billion. Challenger counted 14,000 cuts due to cost-cutting. GM’s announcement is the 7th largest single job cut announcement by an Automotive company since 2001, according to Challenger’s tracking.
“Announcements like GM’s will not be the last, as companies adapt to shifting consumer behavior. We’ve already seen major plans in the U.S. from Verizon, Wells Fargo, and Toys“R”Us for exactly those reasons,” said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.

There is other data to consider as well, including the ADP report:

It showed jobs created in November at 179,000 – which is not what we’d like to see with a holiday season at hand.  Here’s the drill-down:

Globally, China was down almost 2-1/2 percent (2.47) overnight, so we expect that with Europe dropping similar amounts, the “financial contagion” may be getting started.  Just remember, when you see gold selling begin, it can be an indicator that “someone big” is in trouble and they’re throwing everything they can overboard.  And yes, that includes the cryptos  – because banksters are stupid, too.

More for your Data Dancing & Digestion

Next, we have trade data out from Census.

Remember, so of this was “stocking” for the tariffs, so we will likely see a slump in early 2019…

After that, we get to Productivity is just out from Labor….

“Nonfarm business sector labor productivity increased 2.3 percent during the third quarter of 2018, the U.S. Bureau of Labor Statistics reported today, as output increased 4.1 percent and hours worked increased 1.8 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.)

From the third quarter of 2017 to the third quarter of 2018, productivity increased 1.3 percent, reflecting a 3.7-percent increase in output and a 2.3-percent increase in hours worked. (See tables A1 and 2.)

Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers.

Unit labor costs in the nonfarm business sector increased 0.9 percent in the third quarter of 2018, reflecting a 3.1-percent increase in hourly compensation and a 2.3-percent increase in labor productivity. Unit labor costs also increased 0.9 percent over the last four quarters. (

BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity. Increases in hourly compensation tend to increase unit labor costs, and increases in output per hour tend to reduce them.

What matters? U.S. third-quarter unit labor costs revised lower.

Later on today,  factory order, PMI, ISM, and ee-aye, ee-aye, owe..

Remember, even with the futures sucking wind, we were lower than futures priced levels on November 23rd, so not quite time to panic, yet.  We’re pretty sure the Plunge Protection Team (and no, it’s not a myth…) is arbing up the open a bit…they don’t want panic, either.

One other to note: CoreLogic Reports Homeowners with Negative Equity Declines by Only 81,000 in the Third Quarter of 2018.

Let’s Play!  “Useful or Useless?”

Score ’em as you please:

Time to warn the pigs and chickens…Ure’s off to break the fast.. but we plan moron the ‘morrow…when we will see which of the “50-shades of gray” the market delivers…ankles ready?

author avatar
George Ure
Amazon Author Page: https://www.amazon.com/George-Ure/e/B0098M3VY8%3Fref=dbs_a_mng_rwt_scns_share UrbanSurvival Bio: https://urbansurvival.com/about-george-ure/

30 thoughts on “Markets: Black Thursday, Anyone? Gray?”

  1. At 70, the sell side of the market happens faster than I can think. I believe estate law still allows the basis of stock to increase to current market value at death. Could affect the Bush Estate…lower basis, higher taxes when stocks go back up & they sell. Especially with these low oil prices since the Bush’s are into oil & banking (or money laundering).

  2. George – Ure charts have been screaming “Look Out Below” for several months now. My summer trading was not as profitable as I would have liked, due to markets persistence in defying economic realities. Stock market kept going up, while I kept buying downside protection (hedging). Mr Market kept either ripping my face off, or sticking it up my keister..ouch!
    Needless to say vindication is mine, Debear has been feasting on Puts (the right to sell underlying stock at fixed price in the future). I buy Puts when underlying is at top trend channel, and wait for the market to come to Debear.

    ?1) Assume Fiat/FRN’s being worthless – lost faith in value /backing.
    How the hell else would Central Banks acquire Bitcoin/Litecoins?? They have to buy them in the markets..OTC/Open Mkt. – Coinbase just like they do GOLD or EUR/JPY/GBP currencies – hence Manipulation (s).
    Problem is, no matter what price Bitcoin is manipulated Up or Down To, the old original wallets including Satoshi’s 30 some million BTC’s, have not moved, in years.
    Probably see those “Satoshi” BTC’s equitably distributed right after Bitcoin Halving event in 2020. Could theoretically “distribute” 1 extra Bitcoin per new “Hashed” block.
    George you might want check out who (corporations) has % ownership of the Lighting Network “project” business – Criminal Gangsta (s) no doubt.

    2)How the hell else do central banks move 99% of ALL currencies/money today?? Its all digital, must be some of that old money magic…you know “the baby”.

  3. “No one wants to see the whole system implode.”

    Why not? What’s the sense in prepping then?

    Also, you’ve probably meant SP-500=2,600 rather than 2,500?

    • The sense in prepping is that you have a stress free life! If I want, I can go to the store this week and buy something, but there’s no real need to for a month or three. If I want to build something, I have the materials and tools(and power) to just do it.

      I’m warm and cozy and never need leave my property but once a month except for social reasons. Taxes are paid for the next year. Yes, this lifestyle works better if you have a S.O., but it works regardless. If TSHTF, then I’d at least have breathing room.

    • Don’t forget that George Soros made a bundle when the British pound crashed. It took down the government of Prime Minister Gordon Brown when the Bank of England opened. It makes sense to be prepared. Remember Pearl Harbor.

  4. Hmm… Gas dropped a nickle again.. last night..hmmm

    Is the great slide about to happen?

    Major necessities all did their annual increases early this year.. hmmm…

  5. George

    Since the subject is money and resources maybe this tidbit I picked up on a youtube video will give people something to mentally chew on.

    “Money optimizes around the Morphogenic Fields” – Catrherine Austin Fitts

    Testing this could be interesting!

    • Totally agree – BUT my field research showed my money “morphed into air” at the highest rates around casinos…

  6. The situation at Stonehenge is not useless!

    To bring it to something that Texans might appreciate, suppose that sewer work was being done to handle tourists visiting the site of the Alamo – and while preparing to work they dug a test hole to test the soil and put it right on a spot where something important had happened on the way to the battle and that artifacts had been there and more were suspected to exist.

    Wouldn’t people be peeved?

    (And some wonder why certain places should be strictly ‘off limits’!)

  7. Russia and China not only ones selling US Treasuries. Fed has reduced holdings below 3.9 trillion.

  8. Bitcoin will die.

    First, there is no barrier to entry, and the next smart person can just invent a new one. The whole “scarcity” by limiting the number of bitcoins is irrelevant when new ones can be created elsewhere. It’s like collecting modern baseball cards, which was a hit 20 years ago. They will never be valuable because A) everyone collects them and B) they can just print more. I saw this as a fatal flaw from the beginning.

    2. It has no real utility for making purchases. The only people buying are speculators.

    3. Without electricity and/or internet, you have nothing.

    4. The entire bitcoin infrastructure depends on “mining,” which really means being rewarded for computing to maintain the ledger. When the cost of mining exceeds the value received, mining will stop. We are currently here. When mining stops, the ledger freezes and anyone with money in “bit-bank” can no longer get it out. Value then drops quickly and the system collapses.

    • BTC down to $3,618…I will say it AGAIN – in the long term Ure (and the CPA Prepper) will be right!

  9. It would be the best thing in the world if the market/casino collapsed, for that’s the only thing that will break the strangle hold that the billionaire club has on the government and the country.Funny how Trump rails against those flooding into the country yet there’s a bill before congress (which I’m sure he will sign into law) to give 300,000 Indian graduates fast track citizenship along with their families,while American graduates with their overblown/overpriced education are left in the cold.Chalmers Johnson was said in reply to his wife’s question did he see anything good coming to America,yes it “financial collapse” he replied, and its coming if they don’t start a war before it happens,for now Trump has borrowed Bush’s propaganda line that we can fight over there or over here as he builds up the forces around Syria…

  10. There was nothing “benevolent” about FDR or his dictatorship! He was a conniving politician and nothing more. He reminds me of Cheney. He deliberately created SS with an intergenerational pattern that couldn’t be broken without causing an entire generation to finance something they would be deprived of. Instigating generational hatred, IMHO. He deliberately withheld information that could have prevented/mitigated the Pearl Harbor attack, and he was responsible for putting Japan up against the wall on energy.

    Funny how history has become such a political football.

  11. As to corporation hiding money out of the country. Taxes are not due until they bring the money back. But as an individual. I pay taxes where ever I lives as U.S. citizen. The United States is one of the few counties in the world with this requirement. Almost every country does not go after its citizen for taxes when they live in a different county. Is that fair. No. But lobbyist run Washington D.C. and make the laws.

  12. Off topic, but:

    Twice in three days I have seen a headline with “Trump” and “Nixon” in it. The PTB are linguistically programming the masses for the democrats’ impeachment attempt, likely next year.

    If one watches closely, it’s easy to spot these attempts to shape public perception. Another obvious one was the runup to the 2nd Iraq invasion.

    Keep an eye out for the confluence of those two surnames over the next weeks/months, and ponder if it’s really coincidental!

  13. Well I guess your crack pot idea really sums up why stock is “live” as it has a 1.75-1 split every year, can provide me with food energy and is not easillyanipulated by schiesters.

    Too bad it is difficult to obtain outside investment with the low returns ag has.

    • Nano-thermite was found in the World trade center demolition dust. This shows impeccable proof that our own government was in on the attack. IF their is a EMP over America, you can be sure, our own government will be in on the act. I hope that doesn’t break any bubbles. This is the same government that funded WW1, fomented and paid into WW2, falsified the Gulf of Tonkin taking us into Vietnam, falsified WMD thus ‘tanking’ us into Iraq after conveniently wiggling themselves into Afghanistan, the same government that destroyed Libya without a vote for war, and the very same government that has led a militant destruction of Syria. Seesa, they need a little excuse to take out Iran, and then another excuse to de-construct Russia and take them down several centuries, So, nice little article advertising themselves looking into this very serious threat; but surely not one they can’t craft to benefit themselves. Little People, be warned.

  14. Dear Mr. Ure,

    Mandarin is a tonal language?

    A prolific Wikipedia editor on concurrent Chinese matters could conjugate up some interesting food for thought of December 1st events that he updated on December 6th.

    Firstly there is the matter of the Huawei cfo Meng Wanzhou, apparently #3 in the company, shanghaied in Vancouver as you mentioned above. Company #1 has been publicly alleged by the USA to be Chinese military. According to “The Globe and Mail” reporting, the Canadian PM knew some days ahead that the arrest was pending arranged by “the appropriate authorities”. Film buffs at this point might be recalling the fictional movie scene where Blofeld fed his #3 to the sharks.

    Curiously on the 6th, Chinese state media organ, “the paper” dot cn, reported the December 1st passing of the genius cutting-edge physicist, tenured professor, and Silicon Valley venture capitalist Dr. Shou-Cheng Zhang who succumbed to depression. The English equivalent media site is “thesixthtone” dot com.

    Join together your new world hands, everybody, because “the first three notes just happen to be…”

    https://youtu.be/PEodUg43Zpo

  15. Okay, I’ll play…

    Jennifer Aniston responds to Dolly Parton’s threesome comments: ‘My mouth just dropped’

    I met Dolly over 40 years ago — have talked to her exactly twice. This is a prime example of her sense of humor. The gossipers need to just deal.

    Stonehenge Site Damaged During Road Construction, Archeologists Say

    Yeah — When it comes to bringing the modern world to historical or archeological sites, just say “NO!”

    How intimacy coordinators changed how Hollywood films sex scenes

    We’ve always had ’em. In past generations, they were called “chaperones.”

    OPEC agrees oil output cut, no final figure yet: delegate.

    Well, DUH! At $90/bbl, the Saudis can maintain their social programs and our oil shale becomes profitable. At <$60/bbl, not so much. The GenXers and Millenials need to experience waiting in line for hours to purchase 5 gallons of petrol — 'Might form the basis for an actual perspective on life, especially if it teaches them the value of turning the damn' engine off…

    France fines washing machine makers $214 million for price rigging.

    Meh, merely the price of doing business in the European Free Market…

  16. Im in retail store front, used household goods sales. For the month of November, I experienced a nearly 2/3 drop in sales. December isnt fairing much better, but its still early. Traditionally, these last two months of the year have always been good performers. I fear that internet outlets like Wayfair, eBay and Amazon, have finally overtaken the old storefront norm of strolling through a store to cruising the screen of your cell phone, laptop or pc. I also see an increase in packages being delivered to consumers in the bldg I live in and have so the past year. Not to mention food delivery services bringing people lunch and supper, although i still see in person restaurant patronage still trending the same, atleast in my cursory viewpoint.

    My downturn in brick and mortar related sales, dropped like a lead balloon. October was actually a good average month and the months prior too , although the last two years have seen successive drops in gross sales each year. 2016 was the best and top sales year for me. So, all I can say is something is changing in the habits of consumers and it happened without any warning.

    • Sorry to say this – but, without warning?

      Have you been living under a rock?

      The advent of computers, cellphones, and things electronic have caused a MAJOR shift in the modern world – often not for the better (in my ‘old’ opinion). People have less time or will to shop in a store – as we are predisposed to be ‘lazy’. Health services are now a hot field as a consequence.

      Unless one is very smart or lucky, retail will remain iffy at best.

  17. Instead of gaming the system by stock manipulation to make a profit, how about producing a quality product and selling it for a profit?

    Quaint idea, huh?

    Unfortunately, Americans can no longer afford quality, and there are fewer employed people that can afford to purchase any product.

    15% of the homeless in the USA are employed.

    Go into any store and examine a few imported items and imagine a life where those products cost 3 times what they do now. That’s your future no matter how much you prep or how much money you save.

    • EE, the quality doesn’t exist, irrespective the country of origin or manufacture, of the product.

      A crappy product is sold forever.
      A perfect product is sold but once.

      You’re an ex Ad-wonk. You know this stuff very well.

      As for imagining a life where crappy products are 3x their current cost, I don’t care. I buy no manufactured product new, except underwear, glasses, and occasionally some HAM radio kit or a tool, and have no desire to do so. Potential food cost is a concern, but one I hope to completely alleviate within the next two years.

      I’m not a hardcore “prepper” like the ones who frequent the prepping and survivalist forums. I’m a practical prepper, like everybody was until the folks born when the U.S. printed its own money began to die out, and society forgot why it was important to have a workshop and a pantry. As long as I have sufficient Coin of the Realm to pay my property tax, your projection will never be MY future. Unfortunately, it well MAY be my grandchildren’s future, but if it be so, it will also be your grandchildren’s future, with no escape for any…

Comments are closed.

Toggle Dark Mode