Modeling 2015, Part 1

This weekend and next week, we will be keeping a “tight” focus on our outlook for 2015 which – much as I hate to say it – continues bullish into the new year. Although an end-of-year rally will be satisfying to a lot of people, there are some technical reasons why the rally may continue even into 2017 – and it’s a set of reasons that will have us looking back at market data from the 1920’s (and earlier) for comparisons, this weekend and on Wednesday. But comparisons are complicated because (like it or not) humans are “coming out of the investment loop.” And as this happens, the “meaning of money” is changing. And that gets us into crypto currencies and then….

Markets: Trading in an Alternate Dimension

It would be so easy to become filthy rich, if only we had a time machine that could advise us in advance of what’s coming.

There have been (and still are) plenty of efforts to obtain one.  The latest “secret ingredient” being used is software, and it’s working out OK for a very few.  But time machines have their limits, and when we get glimpses of the future by using advanced technology, while the information may be pretty good, it is often not tradable.

Take this week, for example: On Tuesday, chief code-slinger Grady at our www.nostracodeus.com project posted this:

Predictions:  There are indications that near Christmas, news about Ebola and North America could ‘ramp up’. (WHO indicates there is still a danger of Ebola breaking out and spreading ‘World Wide’.) Ebola Vaccine research in Switzerland is halted.

The Event monitor suggests there may be an attack by ISIS or ISIL tomorrow or Thursday. There are hints that it could be directed against the USA and/or its assets.  The event monitor uses the same algorithm that, among other successes, predicted the Washington State school shooting last October.  As with all human attempts at peering into the future, sometimes the event monitor is wrong.

So how did it all work out?

Ebola:  The very next day, the Washington Post run the story that there was a lot of exposure of scientists to Ebola.  I think we count that a hit.

And about the ISIS (ISIL if you’re John Kerry) outlook?  Well, there’s the shoot-down of a Jordanian aircraft reported, with the pilot being held by ISIS.  But whether that’s real is somewhat debated since Jordan is playing an updated version of the old song by Bob Dylan “It ain’t me, babe.”

In terms of human vs. human, there was the Berkeley, MO shooting which will give the mainstream divisive media yet more opportunity to sell the leftist anti-cop side of digital anarchy.  Law enforcement, however, got ahead of the curve on this one and was super-quick rolling out videos of the scene, and as a result perhaps, much of the activity (so far) has remained peaceful.  Except for the violent parts and arrests.  But it hasn’t gone viral on any action networks designed to mass agitate.

All of which is interesting (in that the holiday worked out more or less to our linguistic expectations, but the bottom line to all the technology and reading hundreds of thousands of pages is what? 

Unfortunately, not really tradable information. 

Oh, I suppose  Jordan could have grounded flights, CDC  could have released its data earlier instead of what has the odor of “butt covering” and maybe the police in Missouri could have put a body-cam testing program in place.

But from the investor stand point (which is what we focus on around here) what really matters is that Dow is in record territory and the odds of a collapse between now and the end of trading for the week is just about zero.

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Coping: Managing Your Personal Profit & Loss

I wanted to begin with a few comments about the “Tyranny of Things” that we all have to deal with. To do so, we need to think in terms of financial pro formas first, however. What is a pro forma? Think of it as the “imaginary set of financial expectations.” A good businessperson doesn’t “just happen” to make money when growing a company.

Coping: A Christmas Statistical Note to Atheists

Since the markets are closed in the US for the holiday, I wanted to get up early this morning anyway and drop you a quick note.

A few of our atheist readers bash Christmas, so let’s run some numbers, shall we?

Authoritatively, the Smithsonian estimates the number of cells in a human body at around 37.2 trillion.  That’s 37.2 for me, and 37.2 for you. almost 75-trillion cells between us.  Most of those cells have to be doing their jobs in order for us to be having this chat.

Now, you take this morning:  I got up and engaged my trillions of cells with billions upon billions of local atoms.  Waste was recycled, my clothes were where I put them last night, and my vision was sharper when a few hundred million molecules were placed on my face; my glasses.

I opened the door and Zeus the Cat  (about 2-trillion cells worth) sauntered in like he does every morning, purred, complained, and got fed.

After feeding Zeus (extra sprinkle of catnip for the holiday) I made my morning coffee. 

Argonne National Labs has a discussion about how many molecules there are in a cup of water over here:

“(224 grams of water) divided by (18 grams per mole) = 12.4 moles
(12.4 moles of water)(6.02×10^23) molecules per mole = 7.5×10^24 molecules in the 8 ounce glass of water.

I used about 44 (followed by 24 zeros) worth of molecules to make the pot of coffee.  I won’t bore you with the calculations on the coffee itself, but let’s simplify that to “lots.”  Applying so many  kCals (or BTU’s, your choice) of heat, the coffee was excellent, as always.

Now, hold that thought for a sec and let me point out another one for you:

Take dice – just one die:  The odds of rolling 6 sixes in a row right here, right now on your first try is exactly one in 46,656.  The odds of rolling the same thing tomorrow morning, again on your first try, to have two such occasions back-to-back are one in 2.176 trillion.  Things become outlandishly improbable by Saturday.

Back this morning:  I’m now 65-years old.plus or minus a ham sandwich.

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Surveying the Road to Riches for 2015

What does an FA-18 Hornet going transonic just before busting up over Mach 1 have to do with why Ford brands a car as its “Mach One” and how does this fall figure into the price of oil and where to make the next smart investment?

It’s all in how you “grid the world.”  It’s something we all do, but it’s not something often articulated because it all goes back to parenting, schooling, jobs, and the bouncing around through life.

But ultimately, how well you do on the financial side of the house is decided by two simple concepts:  How you think and its next door neighbor what you think about most.  And then it all distills down to what you do about it.

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18,000 in the “Sugar-Plum Fairy” Economy?

Oh-oh, the price of oil is ticking back up, ever so slightly ($56 and change when I looked) but at least gasoline prices are not completely recovered.  The Triple A fuel gauge report shows $2.376 while a year ago was $3.25. 

Of course, we all know that when the gas price drops much more, the cost of the taxes will soon outweigh the cost of the underlying product. In California with their love of state revenue, the tax is 71.3-cents a gallon.

You might want to tank-off Monday or Tuesday or next week, since prices tend to go up around holidays. 

Sure, it may only be a few cents, but cents become dollars, and dollars become taxes, or something like that.

Before we get into the serious part of this morning’s report, I’d like to suggest you share some 4-way before hand, or you’ll miss the effect of Popular Delusions fed by federal statistics.

First up we have the GDP figures for November.  May I have the envelope, please>

“Real gross domestic product — the value of the production of goods and services in the United States, adjusted for price changes — increased at an annual rate of 5.0 percent in the third quarter of 2014, according to the “third” estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.6 percent.

The GDP estimate released today is based on more complete source data than were available for the “second” estimate issued last month. In the second estimate, the increase in real GDP was 3.9 percent. With the third estimate for the third quarter, both personal consumption expenditures (PCE) and nonresidential fixed investment increased more than previously estimated (see “Revisions” on page 3).

The increase in real GDP in the third quarter primarily reflected positive contributions from PCE, nonresidential fixed investment, federal government spending, exports, state and local government spending, and residential fixed investment.

Imports, which are a subtraction in the calculation of GDP, decreased. The acceleration in the percent change in real GDP reflected a downturn in imports, an upturn in federal government spending, and an acceleration in PCE that were partly offset by a downturn in private inventory investment and decelerations in exports, in state and local government spending, in residential fixed investment, and in nonresidential fixed investment.

Estimate GPD for Q3 is $17.5998 trillion.  America’s Public Debt to the Penny this morning was around $18.028 trillion.

If you had debts in your personal life of $18,028 dollars and annual income $17600 dollars, how would you describe your condition?

I mean it’s not insurmountable (almost unavoidable for a while if you own a home) but in the FedGov’s case, they aren’t buying a home….

Next on the breakfast specials, we have Durable Goods, the big stuff that doesn’t wear our in 10-minutes.

New Orders
New orders for manufactured durable goods in
November decreased $1.7 billion or 0.7 percent to
$242.3 billion, the U.S.

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Coping: With the Christmas Run-Up

Comes that time of the year when I go through my “seasonal changes” and make ready for my “New Years Revolutions.”

But not before savoring this year a bit more and passing on some of my “best of class learning” for the year.

Seems to me that a reasonable thing to do each year is to spend a little bit of time (if only an hour) sitting down to ask the really important questions, like.

Is my health better or worse than last year?

Did I learn anything important this year?

Did I share things that really mattered?

Am I ready for the coming year?

Am I still in love and full of the boundless energy that comes with love offered and returned?

What are the biggest problems in your life and are you working on solving them?

I think if a person can answer yes to those, they’re got life wired.

Having said that, I’ like to go through a few of my personal responses to this list because odds are good that you might be able to borrow an idea or two.

On Health

Our health is as good, or better, than last year.  We eat exceptionally “close to source.”  Which means instead of using a lot of processed foods, we eat simple fare.

Take breakfast, for example.  I’ve mentioned my “cottage cheese pancakes” now and then and you might want to experiment with the recipe, which is really simple as all get-out.

You take your favorite pancake mix (we use either Krusteaz or Pioneer) and for each cut of dry ingredient you add 2-somewhat heaped-up tablespoons of cottage cheese.  The drier stuff works better than a runny brand for the applications.

Then you add cold water (just like always) except you make the mix a little thicker than normal.  About like a good oat meal.

That’s it.  Place in a well-buttered pan and cook the first side to golden brown (picture above) and then flip. 

A little butter and some pure maple syrup and what you have is a pseudo-blintze in hardly any time at all.

On Learning

Oh, gosh, where to begin?  I go through books like crazy:  Non-fiction.  I look at the library as going “concept fishing” whenever I get a spare moment.  Just this morning on the throne I managed to absorb the fundamentals of the Sears-Haack body and how that may be one of the secrets to getting a few more knots out of the old Mouse.  We’ll see.

I try to keep one or two non-fiction books going all the time:  Pick up a page here and there and first thing you know, you’ve got a lot of knowledge, even about a hobby like ham radio, gun-smithing, or whatever turns your crank.

Sharing Things that Matter

I don’t know if I have ever mentioned this, but both Elaine and I are “shower people.”   It’s either the negative ions (released by falling water and lightning storms, or showers, which is why some people like to get up and hit the shower as much as they hit the coffee first thing…).  The idea of sitting in a tub is not particularly attractive, since you’re stewing in your own dirt.

For some reason until I was about 40, I had always thought of the personal showers hose attachments as an “old person’s” deal.

Something like the Waterpik SM 653 CG Original 6-Mode Massage Handheld Shower, Chrome which runs about $25 bucks.

The reason I like the handheld shower extension is that it has a “high pressure” mode which is ideal for doing a daily “pressure wash” of certain body parts.  Oh?  Yes, of course “there” but also since most have a pressure blasting setting, they get soap out of the hair in a lot less time…and if you every wake up in the morning (thinking something died in your mouth from the previous night) they can also work like an over-sized WaterPik to wash your mouth out.

So if you know anyone who doesn’t have one of these, and who is addicted to the morning showers these things are great…been using them for years, just don’t think I mentioned it before.

The most recent place (outside home)  we ran into ‘em, I think, was up at the Dodge City Boot Hill Casino a few years back.  2011?  We’d flown in (KDDC is hard to see if you’re new to flying that part of the world, the runway looks like dirt, about the same color, but it’s really paved…ended up flying the GPS until we could see the barely visible runway numbers back then).

To make a long story longer, I don’t know if I looked particularly haggard, or what, but they put us in an ADA compliant room, and shower wands are a requirement.  So we didn’t bother changing rooms (ADA rooms are larger with more room to move about) and ever since we’ve been huge fans of shower wands.

Consider yourself “shared” upon.  And if you’re under 50, still thinking shower wands are a waste, give them a try.  It solves the marriage problem of “I like showers like rain”  (Elaine). She’s so meticulous with it, she doesn’t even get the glass doors wet in the shower.

Me, on the other hand?  Call FEMA when I hit the shower.  Set  the hose to pressure-washing mode and 70 PSI, thanks.  Hell yeah…ceiling is wet and so is everything else within 8-feet by time I get done with pressure-washing. Such a clean disaster area you’ve never seen.

One other idea here (kind of a crackpot thing, but you find quirks amusing, right?):  I have a pet theory that people who don’t rinse off well enough after showers set themselves up for health problems later in life: 

The thinking is that soap residues are probably bad for you.  I figure they may block the skin from doing its job OR residues might be absorbed.  So I’m one of those people who uses soap only on the hair, pits, and there.  The hands get clean doing the elsewhere sudsing (if that’s a word) and washing your soap.  (If soap was meant to have hair on it, I’m sure P&G would make a brand that way…but that’s way TMI, lol.)  [That’s just sick and groady enough to become a hit product…hmmm…]

Am I Ready for the Coming Year?

No.,  I would be, but here’s the thing:  We have been down to the Social Security Office twice and spent 7 1/2 hours of phone time and they are a totally F/U’ed organization.  We may try it again this morning, but as I said before, they can’t manage 50-million people getting benefits with a dozen products while Amazon manages 250-million and tens of thousands of products.

Except for Social Security being incredibly bureaucratic (I sent  complaints to my congressoid and sinator, but since I know they didn’t read the last budget bill, the odds of any real action on my behalf are about bupkis…

Other than that, yes.  Ready.  We would otherwise be all chilled, kicked, and enjoying the remnants of 2014.  But thanks to Social Sec.

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Santa the Bear Sleigher

Oh, goodie, goodie!  Joyous Glad Tidings all around.  Presents for the Boyz, nog for the reindeer.

Santa has just dropped a National Activity Increase in our stockings early.  And what it shows is that growth in November speeded up a bit.

The index’s three-month moving average, CFNAI-MA3, rose to +0.48 in November from +0.09
in October, reaching its highest level since May 2010. November’s CFNAI-MA3 suggests that growth in national economic activity was above its historical trend. The economic growth reflected in this level of the CFNAI-MA3 suggests modest inflationary pressure from economic activity over the coming year.

As you, um, head-off to work this morning, we must have missed this in our weekend Peoplenomics report, but here it is, another bank failure, this one a little bank up in the north woods somewhere:

Northern Star Bank, Mankato, Minnesota, was closed  by the Minnesota Department of Commerce, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with BankVista, Sartell, Minnesota, to assume all of the deposits of Northern Star Bank.

The two branches of Northern Star Bank will reopen as branches of BankVista during their normal business hours. Depositors of Northern Star Bank will automatically become depositors of BankVista. Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship in order to retain their deposit insurance coverage up to applicable limits.

Of course, what no one bothers to mention is that there has been a continuing flow of bank failures ever since IndyMac kicked off the Second Depression’s Bank Failure Season.  We’re up, by my count, somewhere north of 6,500 branch closures now. In fairness, a lot of those didn’t come from financial failures, so much as electronics replaced the need for physical locations and as a result, well, off with more heads.

Except Santa’s – the Dow futures are up 50 even if oil is still on its ass.

Meantime, the head of the Federal Reserve, Janet Yellin’s remarks last week about being patient with regards rates have trigger emerging markets to become a bit concerned.  This article in the Irish Times for example says these markets might want to fasten seat belts for the period ahead.

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Coping: Which Disaster to Prep For?

This morning I’d toss out the idea that earthquake preps are worth reviewing, even if it is the holiday and subjects like prepping might best be spared for some other time of the year.

It has been observed, on dozens of forums around the net, that quakes seem like they happen around major holidays and we’re in one of those periods right now, where we have major holidays all over the place.  When you look at the various maps, you can see that earthquake potential is particularly high for the US as plates do the “bump and grind” with us dancing on top of ‘em.

There’s possibly a scientific reason why seasonality would be the case:  Maximum stress on the tectonic plates would reasonable come when the earth’s tilt is at any of four conditions during the year:

    • When the summer solstice occurs in North America around June 21
    • When the winter solstice occurs (about now)
    • And the two equinoxes about midway in-between

    The “holiday thing” doesn’t act alone:  There are probably other factors at play, as well.  Southern California lore suggests that quakes happen 18-months to 24-months after periods of exceptional rain.

    Another theory – and this was shown in the movie 2012 in the opening scenes where particles from the Sun were the culprit.  Since we have just had a boatload of those arrive, we’re left to ponder whether planets “condense” energy into matter around Suns.

    Earthquakes seem like an easy thing to prep for, too:  Food, water, enough pipe cement to put PVC pipes back together, and maybe some other items, as well:  Routes to work which reduce the amount of time spent on (or under) elevated roads and bridges.  Few have the luxury of moving from post and tension construction buildings, but in the past dozen years, countries like India have been paying much closer attention to earthquake resistance of post & tensioned buildings.

    OK, about here you’re thinking “OK, Ure has his little neck hairs up about the possibility of a major earthquake because of the solstice and Holidays.  Got it.  Next thought, please?”

    Not so fast.

    My real topic that I’m warming to is the definition of what prepping is, and why people do it.

    After thinking about it a good bit, perhaps 10-years or so, I’ve decided that prepping as presently expressed on the web is mostly “Personal Continuation Planning.”

    Yet the one thing we don’t do an especially good idea of prepping for is death.

    Not that it hasn’t been heavily monetized.  Of course it has!  If you tithe me 20% of everything you make, I’ll be sure to put in a good word for you in the Afterlife.  If there is such a thing.

    And this gets me to what is on my mind:  I’m curious to find our (research help request follows) as to whether you have run into any of the following data which I’d find extremely interesting:

    1.  Are prepper sorts more (or less) likely to believe in Something Bigger Than Them?

    2.  Are preppers also seriously into alternative medicines (vitamin regimens and oils and therapies of one sort, or another) than are people untouched by the “prepper” label?

    3.  Last, but not least, are Preppers any more or less afraid of death/dying than is the general population of the USA?

    Every morning I get up, look at my “Threat Board” – just a collection of headings under which I store risks to “personal continuation” 

    I use the seven major systems of life approach (Food, shelter, communications, transportation, energy, environment including medicine, and finance).

    Then I look at each one of these every morning, or two, and assess our personal exposures.

    For example, under the House label:  We have certain risks that we can quantify, and some we can’t.  An example of the risks we can quantify, I would list our septic system.  We know it works like a champ and since it’s the old style that doesn’t depend on electricity for pumping water and effluent around) we are quite happy with it.  Which means we pay much more attention than most people as to what happens at the “far end of the flush.”

    That’s a risk we manage by having yearly tank emptying and we use lots of bacteria starters (and the odd can of tomatoes whose acid offsets some of the ammonia build-up) so if we needed to run five years (or longer) without service, we could do it.

    Still, we’ve thought through that part of “personal continuation” a good ways and having a backup septic system may seem extreme, but hey, so is having more than a year of food and water.  At some point, you just have to get back to living sustainably, whether you like it or not.

    OK, two years of food then and five years of seeds…let’s not quibble.  These are risks that you can put a pencil to and they are actually pretty low.

    The number of people in the continental USA who are restarting life due to EMP of major earthquake after-effects is…uh…how about zero?

    Still, the threat list keeps us honest:  Every year lots of people lose their homes to tornadoes.  So backing up everything (tax records and electronic backup documentation) off site makes sense.

    But back to point:  Is that to be considered prepping or is that just personal continuation planning?

    I’m debating whether I should add an eighth and ninth item to my “Threat Board.”  Death/Dying is one nominee.

    There’s plenty of reason to:  We know for example, that excess weight kills.  Directly from heart attack and from companion disease like diabetes and so forth. 

    The reason I’m adding that to my threat board is that it dawned on my this weekend while I was working on my novel, that I do far too much sitting and writing.  I need more exercise and a lack of that will kill you slower, but with far more certainty than a dictator in North Korea or furious mobs from Ferguson.

    Elaine is one of those people who automatically works out every day.  Some kettle ball reps, some free weights, yoga-like stretches for 15-20 minutes, and being exceptionally active around the house.

    I have trouble with that, although lately I’ve been taking the odd call while on the treadmill walking.

    Our latest vitamin testing continues with L-Carnosine  (NOW Foods L-carnosine 500mg, 100 Vegetarian Capsules) and, when it gets here, PQQ (such as PQQ 20mg (Pyrroloquinoline Quinone) 30 vegecaps).  We’ll let you know how the additional research goes and no, this is not medical advice, just an update on what we’re doing.

    Hat tip to reader Douglas for the PQQ tip and there’s a ton of data on the stuff over at the PubMed site of the National Institutes of Heath. Or, just put it into the search engine of your choice and sit back and be amazed.

    And that’s the point:  Adding Death/Dying/How to Avoid or Postpone It as a tab on our Threat Board (which has gotten big enough to become a OneNote workbook in and of itself).  And secondly, that we are not giving up on the personal testing of vitamins and our responses to them.

    Last, but not least,  we are becoming extremely concerned with the increasing levels of polarization in America.  Those six corporation that control 90% of news coverage are working us – us being the general public- to their own profit-oriented ends.

    When media touts and promotes divisive views by working the public’s “hot buttons” it simpley makes them rich and raises the general stress levels in life.

    We don’t need that.  When positive economic feedback encourages negative social feedback which is precisely what’s going on.

    The biggest unstated socioeconomic problem out there is the impact on society of rewarding corporations for “steering news.” 

    When assignment editors began to receive bonuses based on shares and ratings, America’s collapse began in earnest.  Instead of a focus on “What Unites Us” we’re now wallowing in a sea of “What Divides Us” while the profiteers of racism and sexism use classical divide and conquer to destroy America.  Us versus Them is a load of crap.  We’re all us, at least around here.

    What’s more, when organizations take up slogans like “No Justice, No Peace” it’s an affront to the social order.  I would suggest that calls for “No Peace” are thinly veiled calls for insurrection and anarchy.  Just fuzzy enough to skate and pull partisans into false debate. 

    Let’s think this through, though, shall we? Destroy peace and what do you have left?  What’s really on the other side?   That lack of analysis is what gained Al Sharpton the label “racial arsonist.”

    Of course this enrages the left.

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    Broken Web II: Digital Anarchy Arrives

    As if this will take any of the readers of “Broken Web: The coming collapse of the Internet” by surprise, the Sony hack has put a whole series of perspectives into place about what life will be like on the digital frontier from here forward. We’ve got everything from “made up money” in the crypto currencies, to rips of books, and robots following close behind. A primer on digital anarchy after our ChartPack, a review of the Trading Model, and a few significant headlines to light off Saturday… More for Subscribers ||| SUBSCRIBE NOW!

    Markets and the “Angle of the Dangle”

    I’m sure, if he were reading my column this morning (which he isn’t because he’s off in Vail skiing), my consigliore would be saying something like “Neener, neener, neener, Told You So!”

    Still, we won’t be out of the woods completely on the markets unless we exceed the old highs in the next couple of weeks, but with futures up, that looks quite possible.

    In fact, based on how the market closes today, we will have a fresh set of projections for our Peoplenomics.com subscribers in tomorrow’s report.  But we have run back from the edge of the abyss, at least for this week.

    So what’s going on?  I mean, fundamentally we still have problems and this still has the look and feel of the Roaring Twenties.  There is a general collapse of Oil Prices underway, and while that means great things for manufacturing, plastics, and gasoline prices in the very short-term, it also means that down the road a ways, there will be problems with oil companies on the exploration side laying down rigs and calling it quits.

    OK:  The KEY QUESTION then becomes this:  Will a decline in the oil sector be large enough to cause an even greater collapse than did the House Bubble falling in on us?

    My friend Howard Hill, author of “Finance Mon$ter$” who was deep in the backrooms of the banks where financial engineering was born sums the problem up this way:

    “Today, about two-thirds of all CDS trades are booked with central clearing operations and subject to calls for margin capital. Failure by one participant results in that participant being wiped out, but not a daisy chain of other participant failures.

    For the other reason, I checked records that FINRA, the securities dealers’ self-regulation organization, keeps of various deal types, broken out by year of issuance, and what I could glean from the MarkIt web site without being at an institutional client that pays for details.

    His post  “Lowering Threat Level to Orange” is exactly one of the routes which could press the high of the Dow into the 18,000 plus area early in the new year.

    Still, if you remember the Peter Falk Columbo character, the famous line is “’Scuse me, mam, but ders diss one ting dat bothers me…

    It’s triggered by the slightly off-color old fire-house saying “The heat of the meat is inversely proportional to the angle of the dangle…”

    And when I look at this week’s chart, the “angle of the dangle” is what has me concerned that the market might not make it.

    While there’s a good chance of a double-top, the scope and power of the rally this week is mighty impressive.  Maybe someone besides Howard has run out the numbers and figures the public can be sucked back into the market one more time.

    Still, when the angle of the dangle is this steep, it’s either a falling market rally OR  a major change in how the Fed is planning forward.    I’m  pretty sure there’s something in Gann’s work, too:  Reflexive rallies that are much sharper than declines are suspect.

    The problem – which isn’t clarified many places – is that if the Fed is admitting that they don’t have pricing power enough to raise rates without killing the economy, that argues persuasively that deflation, not inflation is still around and maybe even growing stronger.

    Look at the price of oil.  Could the Russians and the Chinese be doing the beat-down on oil in order to bankrupt the United States?  A kind of brutal payback for Reagan bankrupting the Russians with Star Wars and Kojack episodes, while the Chinese may not really want the tentacles of control offered in a most domineering way by corporate globalists…

    A check of the latest Fed data shows the M1 and M3 levels are indeed not collapsing and the rate of growth in money creation is back up to higher levels (in the case of M1 than they were in the 6-month view and M2 is almost back up to the 6-month view,

    What it suggests to a small mind like mine was that the Fed actually thought for a few moments that the recovery was real and that the bankster scum could be gently weaned off cheap and easy money.

    I’m always willing to be entertained, of course, but seems to me that rehab from the easy money and low interest rates is something of a wet dream and the market’s recent decline was just making this point.

    Whether there’s enough “juice” to bust through 18,000 should become apparent shortly.

    Putin Critic Slammed

    Looks like a critic of Russian prez Vlad Putster will have up to 10-years to think about when to hold his tongue.  As in Russian style, the critic is being charged with embezzlement so it will look like it was for a legit crime.

    But there’s a fine global lesson here:  When government that’s bigger than its people takes hold,l they can make up the rules on the fly and to believe otherwise is foolish.

    IRS Hostage Taking

    Here we go again, the Obama administration’s IRS is threatening the speed of refunds in the coming tax season and blaming budget cuts at the agency.

    If you’re lucky enough to be a small businessman and filing quarterly returns, the idea of having your money held hostage is not very appealing.  So I suspect I won’t be the only one firing up TurboTax Home & Business 2014 Fed + State + Fed Efile Tax Software + Refund Bonus Offer  and running out our 2014 returns on a pro forma basis to figure out to avoid overpaying on the Q4 filing due in early January.

    Over the past few years I’d gotten into the habit of paying my quarterlies at higher than necessary rates so we would always get a refund about the time annual airplane maintenance bills came in.  Not this year.  I’ll probably whittle down that Q4 and keep the float for myself, thanks.

    Until they threatened to hijack prompt refunds, I’d always looked at overpayments as something of a savings program for myself.  With the threat this week, I’m (how to say this?) disinclined to continue that practice.

    Speaking which, Gaye up at BackdoorSurvival   (her 60 prepper items for a buck each is a great source of gift ideas, BTW) turned me on to the high-speed Fujitsu ScanSnap iX500 Deluxe Bundle Scanner for PC (PA03656-B015).  Although spendy, it makes keeping perfect tax records a breeze.  Virtually every bill we get goes into the thing, is scanned as a PDF and is then backed up on local and off-site drives.  One must document, document, document in this world.  And this scanner does two sides at once and is just smokin fast.

    Time to Nuke North Korea?

    I say this advisedly:  When it comes out that North Korea has plans to send in commandos to the US and attack our nuclear power plants, it’s maybe time to rethink our ‘tude toward them.

    While the Obama administration may be able to send in Dennis Rodman, now and then, I’d say the egotistical head of state has revealed himself too much with the attack on Sony and (worse) their acquiescence to the crank demands.

    The simple US response should be a half dozen well targeted cruise missiles into a single high value target.

    How should the US respond?  Simple:  Follow up with a hand-written note from the President of the US:  “Try that again and you will regret it.

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    Coping: Christmas Prepping

    What?  Prep for Christmas, as in “prepping”?

    Absolutely, but of the more subtle dimension of prepping – the emotional side.

    You see Christmas and New Years are supposedly joyous times of the year, but for many people, that’s a load of hooey.

    As every Christmas rolls around, there are forgotten people everywhere.  A tip of the hat to Texas law firm Cordell & Cordell, a men’s family law advocacy firm down in the San Antonio area that is actually running commercials (on WOAI) asking people to remember men who are going through the heartbreak of divorce this year; and asking families to invite and involve the newly “singled” into their holiday plans.

    I’ve been was in broadcasting 20-years and a multimedia consumer of gluttonous proportions ever since and I have never heard commercials from a women’s advocacy firm.  Maybe women are more welcome than men at this time of the year.

    Been there, done that, years ago when my kids were young, so I thought we ought to have us a conversation about some of the prepping options that are available.

    I always found it useful on holidays when the kids weren’t coming over to work on my hobbies.

    At the time, I was living on a 40-foot sailboat in Seattle, so one year I decided to become involved in the annual “Christmas Ships” parade.  With a great power system on the boat,, it was not problem to make a 50-foot string of Christmas tree lights, hoisted aloft at the center by the mainsail halyard.  Floating blinking trees are a marvel.

    It was so much fun (playing follow-the-leader) that the next night, I took the boat out, put the engine in neutral (the engine heater was welcome below decks as it was cold and showery) and I just drifted around on the north side of the 520 Evergreen Point floating bridge, knowing how much in earlier years, I’d enjoyed the view of boats with Christmas lights against the black background of the lake or Puget Sound.   It was wonderful to imagine the view from the bridge.

    For me, it was one way to pass the time in a productive way.  Single-handing a 40-foot boat isn’t hard.  It’s the docking with a moderate wind that gets challenging, in the rain, and all.

    There are other ways to get involved, too.

    A good book, or better, a good author with a series is always a safe bet.  My favorite serial author was (and still is) Clive Cussler’s Dirk Pitt series.  Cussler’s latest is Havana Storm (A Dirk Pitt Adventure).

    Dirk Pitt, not to spoil the read, is a man’s man kind of fellow.  Collector of antique cars, a scuba-diving mining and underwater operations expert, he travels the world with all kinds of adventures. 

    Surprisingly, the Dirk Pitt character didn’t translate into film as well as I would have thought.  But if you have seen the movie version of the Pitt adventure “”SAHARA BY MCCONAUGHEY,MATTHEW (DVD)” it’s still one of our favorite movies.  We drag it out every so often because the characters are characters, the music is great, there’s a plot to it and it’s just….well….Cussler-like.

    His latest new character (once you’ve enjoyed at least half a dozen of of the Dirk Pitt books, is Isaac Bell who is the #2 man and head of operations for a detective agency in the early 20th century.  As such, he has one adventure set in the San Francisco area, at the time of the Great Earthquake there.  It’s in the historical grounding of his novels that Cussler really shines.

    Most authors just tell a story.  But others, well they just start weaving a story.  Not Cussler, though.  He sets his stories against actual historical events that you can look up for yourself.

    I’ve been debating posting one of my longer writings (like the first three chapters of my novel) just in case you have an interest….

    But now, back to point:

    It’s been  my observation that a lot of people don’t spend much, if any time, in solitude, any more.  There’s always a beep, a text, a tweet…one damn thing, or other, that conspires to keep up from working on one of the most important parts of life:  Internal alignment.

    It only took me about one lonesome Holiday to blow through that depression stuff, but that’s not to say it’s not real and must be faced down or it will haunt you forever.  The Robert Service poem, The Quitter was particularly useful.

    All of us are going to die, of that I’m nearly certain.  But I don’t see any sense in trying to elbow to the front of that line until I’ve worked out a good bit more wandering around through life.

    Even things like terminal disease has a point to it, multiple moments of learning and self discovery.  I assume you know Life itself is a terminal disease, a kind of waiting room for the Hereafter.

    Life  has plenty of nooks and crannies to explore and winter around the holidays is a great time to do some exploring.  Hiking in the woods with snow falling, sailing in snow, or for me being anchored our with a diesel stove going, head popped out an open hatch and seeing deer come down to the beach; exploring in the last of the light, hoof prints visible in the snow on wet sand.

    Being alone, I man really alone, is not something most people do.  Why?  I couldn’t tell you but I suspect it’s because so few people really like themselves.  It takes a little bit of work and often results in personal change.

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    Fed: When in Doubt, Hint the Print

    Crack head Santa rally to continue:  It’s still the Roaring Twenties.

    I bet you didn’t know the Federal Reserve had its own flag, did you?

    Well, whatever.

    The reason for the massive rally in markets yesterday was that the Fed could see, just as we pointed out to subscribers, that we were sitting on the critical 200-day moving average.

    If you hadn’t learned this already, what happens is most money funds will dump equities and run screaming with their hair on fire when the market closes below the 200-day moving average.  So that couldn’t be allowed to happen. 

    Of course, it  happened anyway, but for now this is the Santa Rally that we’ve been calling/waiting for.

    It is overdone?

    Of course.  Reading this part of the Fed Statement you might not see the change:

    Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators moving toward levels the Committee judges consistent with its dual mandate. The Committee sees the risks to the outlook for economic activity and the labor market as nearly balanced.

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