Any person with half a brain can see what’s going on here.

And since I nearly qualify, let me explain what’s going on.

The price of crude oil went up a buck, or so, from under $35.  That means someone is believing the FedSpeak about raising rates.  Good for them.

The problem is that other than covering some developing short-side action (and yes, we expect oil will go even lower and perhaps into the $20’s when all’s said and done) that not too many other indicators are following-through.

Take your POG (Price of Gold) for example.  It plain sucks. $1,063 is not a reasonable price – if the Fed is going to raise.

Even the 10-year Treasury is languishing…see the one-month chart here.

Back in 1979, my consigliore (my tax advisor, CPA, JD and man about town in Ohio) did a very thorough dispersion study designed to figure out how long oil price changes take to completely work their way through the economy. 

The answer is surprising:  up to 60-months.

Point is, as you read the latest chapter from the National Book of Fairytales (a/k/a/ Labor Statistics) you need to apply you finely tuned retro-vision.

Retro-vision is that human skill that allows us to see all of our mistakes perfectly in hindsight.  It works in economics, too.

The simplest retro-vision that I can find (it’s early) is the price of gasoline kept by Triple A.

A year ago, the Price of Gas  (the POG everyone follows) was $2.545.  Today’s report pegs gas at $2.013.  Here in Texas, we’re eyeing $1.,803.

What this means, coupled with the collapse under $35 for West Texas crude, is that we have a good ways to go on the downside in prices yet.  Hell, I wouldn’t be surprised if by the time we get to February we’re now around $1.50 a gallon as by then, we could have crude in the $20’s.

Point is that energy costs really are in the driver’s seat when comes to the consumer price report.  Just remember there is at least 30-90 days on the gasoline pricing to work through (which means March, perhaps) and on goods like your finished plastics (that water bottle, say), the prices will be contained for another year.

The crude goes in and goes to refinery row in Houston.  Made into some industrial chemicals.  Goes on a tank car (1-4 weeks) as feedstock for a plastic resin, or what have you.  Goes for another train ride, maybe.  Eventually gets made into a blow-molded bottle.  Which then gets filled and by the time you get it out of a machine, we’re almost through summer of 2016.

Clothing is even more circuitous.  The raw materials go all over the world.  And then you have ocean freight lag and….well, that’s how a dispersion study is built.  You get a spreadsheet and a six-pack an d wait….and wait…..and wait….

Eventually, the numbers get compiles (after the goods arfe sold) and then we have another month of statistical lag.  You buy a bottle of water on the first of November, it shows up 45-days later as a component is today’s CPI report.

Which I suppose we should defrock about here:

“The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in November on a seasonally adjusted basis, the U.S.

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Who was that political candidate who said “if nominated, I will not run. And, if elected, I will not serve“?

General William Tecumseh Sherman of Civil War fame is the correct answer, BTW.

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This is going to be one hell of a Monday, so don’t expect a dynamite column  tomorrow.  Come to think of it, if you’re looking for a a dynamite column, check out the San Francisco Chronicle archives and look for some of Herb Caen’s work.  It’s more dependable and only slightly less dated.

Caen, as with most of my literary heroes, have been dead a good while.  1997 for Caen.

In fact, come to think of it, the only really good newspaper columnist I worked with for any period was Emmett Watson, of the Seattle Post Intelligencer.

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A look at the Futures board (over here) said everything you’d need to know about the markets in a single compelling sweep:

• The Eurostox 50 was down 1.7% at first glance.
• US marts are staring into a one-percent drop at the open.
• If the US keeps pace with floundering Europe, we could drop 300 on the Dow today.
• The price of oil continues to implode and we’ll get to what that means down in the Houston area later on, but the short answer is “grim.”  West Texas Intermediate was down around $36 and change.
• And running counter – never a good sign – the price of copper is back up to the $2.10 range.  We follow copper closely because the price of copper is a very good indicator of war-threats.  When copper goes up, it means the odds of war are spiking.  You need copper to make bullets, after all.  Unless you’re firing some of the epoxy-coated steel casings coming out of Russia as 7.62X39 (AK-47 rounds) but you can have a conversation with our armorer about that offline sometime. Berdan’ed what?

A fair question to begin with is?  “Why are things sucking so much?”

Since you may not be a www.peoplenomics.com reader, the answer is simple and has been in sight since Tuesday’s close.  The S&P has dropped under both the 50 day moving average and the 200 day moving average briefly.

When this kind of thing happens, you will sometimes see a bounce as the commercials will load up on the short side.  Next week, I expect the market to be down even more.  Let’s all try to stampeded the Fed, shall we?

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Living out “in the woods” as we do, there is nothing so important as a good, reliable pick-up truck.

And, among pick-up trucks, the ONLY ones that have ever made sense to me are full-size, half or three quarter ton trucks.  Something you can lay a sheet of plywood in and have it supported its whole 96-inch length.

The reason is simple:  Seems like we are always going into town (Lowes or McCoys) and picking up something that won’t fit in Elaine’s car.  Whether it’s treated “peeler poles” for landscaping, a hundred T-posts, or several sheets of plywood, finished MDF, or sheetrock, there is nothing so useful as a pickup bed that is at least 4 feet 1-inches wide – even with the bed liner in.

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Whilst we sit around and twiddle, waiting for Janet et alia to do their thing next week, we can’t hope but sit back and appreciate the “ViseGrips Moment” in here.

To the good:

• The U.S. unemployment rate is still very nice.
• The U.S.

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It was time once again this week to head into the doctor’s office Monday for a blood draw – and as expected my cholesterol was still high.  The blood pressure was OK, but the whole thing got me to thinking that it’s time to haul out the “personal chemistry set” and do some more tweaking.

I have not been terribly worried about weight loss.  I’m down to “pre-cruise” levels and the general energy levels are very high.

But in going through the “chart review” with the doc, I realized that many of the vitamins I have been trying have eventually fallen off my daily regimen.  Most of them for the simple reason that they didn’t provide any noticeable improvement in cognitive function – which is what got me started on the whole process in the first place.  That and gout.

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A report very much geared to the immensely important problem of where to park your retained earnings is on tap this morning.

While that would have been an easy question for us to answer back in 2003 when our Simple Strategy was to buy gold at $275 and put an equal amount of dough into U.S. Savings Bonds, the problems in today’s world are incredibly more complex.  At some points, rates will bottom and head up again.

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Yes:  The market will drop 200 points today.

Yes, it is due to trade with China collapsing:  “Commodities rout deepens as Chinese trade data signal weaker demand.”

And yes, the Baltic Dry Index is at 551 and dangerously low, as we have been telling you for months.

We begin this morning by wondering whether the Federal Reserve will really go ahead with its announced intentions to raise rates a week from tomorrow.

The reason is that events are starting to pile up against a rate hike.

Let’s consider the problem broadly:  America has roughly $18-trillion in public debt and it all needs to be financed.

The Fed, which is looking to raise rates a quarter, would increase the cost of paying interest on that debt $450 –billion.  That expense has to be born by someone (check the mirror for the answer).

In long wave economic theory, there is a good case to raise rates when times are bad and when deflation is running amuck.

The reason is the most of the One Percenters have their dough tied up in interest-rate related investments.  Obviously, if rates are low, say 2%, a million dollar nest egg is only going to generate $20,000 of interest income per year.  But, when the Fed is watering down the purchasing power of the fiat Federal Reserve “Notes” by 5.9% per year, 2% returns are losing on a purchasing power basis.

When the interest rate is higher, say 5%, then the interest income on a million buc ks pencils out to $50-thousand a year.

As interest rates have fallen, it is this very dynamic that has forced the One Percent to concentrate larger and larger pools in fixed income products.  Why take chances, right?

So in order to have a workable $500-thousand a year income with a 2% interest rate, you need $25-million to play with.

As the money piles up around the edges, the rates keep coming down and sooner, or later, you get a deflationary depression as prices collapse.

The magic is to increase the interest rates.  And the way to do that is increase the cost of money…and the latest Fed Money supply figures show there has been no growth in M1 – ion fact it was dropping 9-10th’s of one percent per year if you look at the 3-month average.

All of which is foreplay to rates going up..

But the problem to behold this morning is whether Yellen has played this game of “chicken” too long?

We are seeing some impressive arguments against the rate hike in a quick scan of business data this morning.

First, and foremost, the National Federation of Independent Business is our with their just-release take on how the business climate looked for small business in November.  Here’s a telling quote under their headline “Small Business Optimism Collapses in November after Three Stagnant Months”:

“Uncertainty in DC, federal agencies playing politics and a President that is willing to punish the current economy for inconsequential environmental benefits in the future indicates that business conditions will not be revived anytime soon. Even though there is talk that the Fed will be raising rates this month, it will hardly signal that they are feeling more optimistic about the economy.

“Overall, the outlook remains the same with a slow 2 percent-ish growth and there is still not much pressure on prices from Main Street.

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That headline off to the right there should give you a pretty good idea about what being “tuned-in” to “the force” is all about.

We received an email from what sounded like a county government worker who was being blessed with the job of installing a whole bunch of new lights – and the job would take place ahead of Thanksgiving.

But the really AMAZING part of this reader’s description of a sold change in the pace of the news flow is how absolutely-freaking good his call has been.

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