As our Peoplenomics readers have known for a good while, there has been a small – but larger-than-zero – chance the stock market would end its meteoric rise (on Made-UP-Money) around the President’s weekend.
So far, that has evidenced itself by a slow-motion, rolling-top in our Aggregate Index work.
While this doesn’t mean “The End” is here – since market’s don’t crash from highs – it does have us looking at the nominal 37-trading/55-calendar day figures from past tops (like 1929, for instance) and have us wondering what the Bernanke/Yellen “dynamic duo” of Modern Monetary Theory will pull out of the hat next?
There are several things driving the [final] topping process. Some of the factors we are serving today include:
- Monthly Housing data from Case/Shiller (S&P, et al) will be dished up tomorrow morning. While housing has been hot, any relaxation from slope of trend now could be problematic.
- The Covid-19 death toll is passing the half-million victims rate. 498,901 dead in the U.S. as of this morning. Something we were forecasting last October when we projected 400,000 deaths by February. And there we go….By the way, if you were glasses, you’re 3-times less likely to get Covid. (Why, toss in young and Type-O and this isn’t such a big deal. Except Fauci d’ Ouchi says masks for another year, anyway. See the NY Times column “The Jobs the Pandemic May Devastate,” too. Very much on point.
- The real damage to the economy is what really hasn’t been discounted by the Markets, yet. Sure, Bitcoin is still holding over $55,000 at press time. And, as Linda in our Houston Bureau notes, Elon is making hay of Tesla’s now Billion in Crypto profits. Still, as we learned in costly schooling in commodities trading, you can have paper profits all day long. What matters is “what you send home” when the smoke clears. Plenty of smoke in made-up-money, for sure.
- Even deeper, though: There are still about 10-million fewer people working now compared with a year ago. And while it sounds good for J. Powell to call for a war-like footing on job creation (he speaks Wednesday, so plan on a “courtesy rally”?), the fact is America is overload with useless shit. Who would have ever believed that we would have so much excess consumption that we would have to rent boxes (e.g. storage units) to store it all in?
The Market today, therefore, has a number of reasons to head south for a bit. There’s getting to be a “lack of Greater Fools with money or assets” to rip-off. And once the lack of “fleecee’s” becomes evident, those holding “illusions of assets” will become the Modern Bag Holders.
Mixed Bag in CFNAI
Chicago Fed’s Monthly National Activity Index (which is an index of indices – 85 of them, in fact) had a little something for everyone today:
On the Upside: “Led by improvements in personal consumption-related indicators, the Chicago Fed National Activity Index (CFNAI) increased to +0.66 in January from +0.41 in December. All four broad categories of indicators used to construct the index made positive contributions in January, but three categories decreased from December. The index’s three-month moving average, CFNAI-MA3, decreased to +0.47 in January from +0.60 in December.
But, on the Downside: “The CFNAI Diffusion Index, which is also a three-month moving average, moved down to +0.34 in January from +0.49 in December. Fifty-three of the 85 individual indicators made positive contributions to the CFNAI in January, while 32 made negative contributions. Forty-nine indicators improved from December to January, while 36 indicators deteriorated. Of the indicators that improved, 13 made negative contributions.
We love the term “negative contributions.” We’re hitting the sauce early today, trying to figure out how if “49-indicators improved,” “13 made negative contributions…” Say WTF? (Yes, we want no bananas?)
Can you imagine a stick-up artist jumping out of an alley, waving a Glock, and saying “Make a negative contribution to your net worth!” Sugar-coating for idiots.
What Would be Graceful?
Aggregate Market Theory (something we cobbled up in the wake of the financial industry lie-over about the collapse of the Tech Wreck in 2000-2003) suggests that Elliott Waves still work. It’s just that they behave more like commodity Elliott, rather than stock Elliott.
The difference? In commodities, the 5th wave is usually largest, while the stock Elliott fifth waves need only be larger than the 1 wave. Still, no hard and fast rules since exceptions abound and the Fed have been arbing the markets up in very non-public ways. In fact, if you or I were to manipulate on such scales, it might be “price-fixing.” Government, hiding behind “It’s good for the People” gives itself a pass. Which is all part-and-parcel of why the U.S. dollar has about 3% of its purchasing power left. The rest being hollowed out with debt since 1913.
Anything Else Matter?
Like millions of Texans, we continue in boiled water mode and waiting to see how grocery resupplies work out.
We will be doing a resupply this week, since the really warm weather (almost 70F Sunday) has cleared roads which means back-filling will make a lot of people overtime.
The food wrinkle to all this has refocused attention on indoor farming, though. Which in turn has morphed into “can we make farms from office buildings?” and other such questions.
For some though, the pain of the storm will be permanent. As the CBS report “Family of boy who died during Texas winter storm sues ERCOT and Entergy for $100 million” emphasizes. Long-term lack of power resulting in hypothermia seems to be where this is headed.
Life Marches On
Irrational markets? Irrational weather? Gee, what else drops into that bit-bucket? We go sampling:
Intel operatives are still employed: “Swede Charged With Spying for Russia.”
Tech talk ab out future in Fortunes article wondering if we’ll see a “A national strategy for 5G?” I mean besides throwing money at things… (Say, when will we get StarLink out here? High bandwidth LEO microcubes are welcome any time around here…pleeze?)
Pumping the racial divide? “‘Absolutely defeated’: Black nurses struggle with mental health support while battling Covid-19” reports CNN. We’re wondering if White nurses are exempt from such issues?
And a word from Ned Ludd here. The story Porsche CEO warns ‘very serious’ global chip shortage could affect operations for months has me harkening back to a day when Bosche, wasn’t it? Owned the world of mechanical fuel injection. No chips? No problem! A bit more work – and my 911-E was equipped with six Zenith TIN 40’s. But see how old tech employed specialists? There’s worthwhile job creation, for you. Bring down the price of Porsche repairs and I might buy another one some day.
Around the Ranch: Spousal Rehab Diet
While Elaine is having a tough time getting back up and around, in part because of a 50% weight-bearing limit due to that hairline crack top of her femur, we have discovered a new benefit from all this medical stuff:
Ure has now lost 11-pounds from date of surgery to this morning’s bounce on the “scales of justice.”
The reason, near as I can figure it, is three-fold, or more:
- I am on my feet almost constantly these days. Writing a column, or grabbing a nap, is about it for butt time. Where we used to split up the chores around here, it’s all fallen on me. Not complaining, though: I’m back into rolling bath towels, running the dishwasher, and even hauled out the vacuum cleaner a few times… So, part of the weight loss is “Increased Activity.”
- Then there’s the food angle. Cooking for two, I have become more conscious of leftovers. I’m trying to limit those. And so the second aspect of the Spousal Recovery Diet (SRD) is “Portion Control.”
- Related, though different, is “TBTE” – which of course means Too Busy To Eat. Some of the foods I like (freshly made corned beef hash, for example) doesn’t fit with Elaine’s taste. Her idea of a good breakfast is egg, bacon, cheese on a croissant with fruit and juice. I do an extra slice or two of bacon (for me) but it might end up in a can of clam chowder…while cleaning the kitchen, running laundry and whatever…
Honestly, no complaints at all. This is one of the best dieting regimens possible. If you’re too busy to eat, the fact of losing weight doesn’t have time to prey on the mind. Rather, you simply don’t think about food. It all pales compared to the importance of the Agenda. Which includes medication times, exercise times, being on hand while walking, and so forth.
Weather has turned from Ice Age to Eden this weekend. Although it’s cool this morning (37F) the outlook for today is mid 50’s and every bit of the snow is gone, save a few tiny patches in the shade.
With roads open, our mail (and garbage) service will resume. Should be instructive on what that brings.
Sleeves rolled-up, coffee onboarded, it’s time to rock the kitchen…and get a fresh ice bag for Elaine… Coffee is a Texas-two-fer now: Boiling the water and juicing it up, a bit…
After maybe a quick day trade: Short last week, and with the Dow futures down 200 and the S&P down 34, the question comes back to “Take the money and leave? Or play spin the bottle and think in terms of Turnaround Tuesday?”
We shall see…
Write when you get rich,