Although the market looks to open up this morning, it’s not really “up” in the sense that everything in relative.

For those who missed Wednesday’s trading session (Dow –160 and S&P down to 2,058.9) it wasn’t a whole lot of fun.

Later today, I’m sure my consigliore will call to scream victory since he’s been a fan of the End-of-Year rally for several months now.

Normally, that wouldn’t be a bad thing.  Except that if the top of this pig is really in, then we ought to be able to test some of our long-standing theories.

One is that from a top, a real “crash” develops around the 55-day mark.

Since Yahoo is kind enough to keep daily trading stats on the S&P in public view here, all we would need to do is thumb back through the data until we come to the recording closing high from 2014 at 2,093.55.

Looking at the intra-day highs, that occurred on December 29th, which is more than ample reason for my consigliore to score the point.

Since Excel is better at math than me at this hour, that means a crash date around February 22nd.

Since that is a Sunday (and I was supposed to be a cruise ship that day) the collapse will happen either before, or after that weekend.

One possibility is Friday the 20th, but there’s a problem with that:  It is a holiday-shortened week.  President’s day is February 16th.  So the week before should see a minor bounce (the holiday effect) and then the market should be retesting lows put in back in October 2014 (or even lower levels) since it is axiomatic that crashes don’t happen from market tops:  They happen from bottoms.

Whether this just sets up the final manic run for a couple of more years to money-printing-delirium highs, or whether this is the Big One remains open.  But we are confident enough of the look-ahead that we will not be going on a cruise with friends.  We’ll be staying home to watch the money pile up.

Of course, there’s another possibility:  The market will put in new highs this month, which would push the crash period out two further months.  In which case, it will be revealed to the world that I’m a cheap old Scrooge who didn’t want to spring for a nice balcony room on an NCL cruise which would not doubt be almost as much fun as staying home to count (and make) some money.

Time will tell.

The real point of this morning is to welcome you to the first Friday of 2015 and note that even though the market is looking bullish at the open, as the high-end graphic upper right indicates, whether it will really be an “up” day, is questionable, indeed.

What Really Matters?  Budget

The mainstream media has unwittingly fallen into unquestioning belief in press release language manipulating the playing field.

In a column this morning, The Hill looks at the looming budget battle in 2015 between president Obama and the GOD controlled congress.

It’s a generally good article, but I’d draw your attention to this little bit in here:

“….with entitlement programs such as Medicare and Social Security a potential target for cuts…”

Hold the phone, there Bucko. 

Since when is Social Security an “entitlement?”

It’s a subject for future analysis as a Peoplenomics piece, but take someone like me:  In my lifetime, myself and employers have paid in $400,000 to Social Security. 

Now, there are those who would argue that this isn’t quite right because my “out of pocket” was around (for example) $200,000.    And where can I get the kind of payout I anticipate with that kind of pay-in?  Glad you asked.

Unfortunately, the inflation game gets played on everyone at this point, because 99% of the American public isn’t as smart as you and me. 

In 1982, for example, I made $39,500 per year.  And about (round numbers) 14.5% went into Social Security.  In today’s dollars (those dirty, watered-down, mostly made up [96% made up]) things, that would be $98,392.

What’s more, in 1980, if I had taken the 14.5% of $39,500 – my part and the mandatory employer part came to $5,727 – and put it into the S&P 500, which at the time was what?   Well, December 22nd (1982) the S&P was 138.03.

For the REAL $5,727 at that point, had I been managing my own money and just tracking the S&P  instead of being held at gunpoint by Uncle Sam, that year alone would be worth today how much?   14.9 times the original sum and that’s just tracking the S&P for that period.  That would be $88,000 and change and that’s for just one work year.

I worked 50 years with those kind of numbers.  Some much higher, some lower.

Would results always be this good:  Hell no.

But I want to be extraordinarily  clear on two points here:

1.  If employees had been paid the “mandatory employer part” and invested it, we would be the richest country and the richest generation alive ever.

2. The fact there never was a “Trust Fund” – it was “invested in agency paper and other idiotically low returns” reveals that Social Security, while well-intended, had turned out to be a payoff of the poor and a terrible swindle of middle class and up earners.

Since I’ve now worked 50 years, what Social Security should be paying me on is actually well into the millions.  Watering down the money is key to the swindle, though.

So when someone dares imply that Social Security is an “entitlement” take ‘em out back, slap them around with a calculator, explain inflation to their thick skulls, and tell them you’ll wash their mouth out if they can’t see a swindle when they’re the victims.

Oh, wait, seniors are remarkably slow learners on inflation and they are largely dumb enough to believe politicians.  Two strikes.  Shall I mention the third?  That’s failure to pass on hard-fought mental acuity to the next round of suckers…

Wrong Message to Terrorists

This one caught my eye:  “Death penalty for Tsarnaev? Why Bostonians don’t favor that possibility.”

To my (admittedly jaded) way of thinking, this sends exactly the WRONG message to would-be terrorists.  The liberalistas of Boston have just painted a big target on themselves.

I’m sure my liberal pal will call incensed that I am going down the path of eye-for-eye justice.

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Yeah, I know:  Holiday morning and what the hell is George doing up writing a column?

Well, lemme see:  Elaine got up for a snack, the cat wanted in, it was cold and I was wondering if it snowed.

Since I was up, I made a pot of coffee and spied a dandy picture from SoCal sent in by our friend Jeffrey out there. 

Yee-gads!  Snow down to the what level?

“In a rare event, snow fell on the local mountains here in Orange County. A picture is attached. Apparently, the snow level went all the way down to 2000 feet.

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The nice thing about intellectual honesty is that it’s OK to make mistakes.  Especially when being suckered by history.  As it turns out, what our Trading Model is forcing us into, in light of recent action, is a complete reassessment of where we are on the calendar in terms of economic replays of great/catastrophic historical events.  But no, it doesn’t look like 2007-2008 was the all-time high as some readers have suggested.

Not that our postings on the replay of the Great Depression (since 1997) have been totally wrong:  They have been useful thought tools and we’ve made a little money along the way.

Still, “as the wheel turns” we acquire new information, such that the future is becoming more clear before us every day.

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Hot off the press (release):

New York, December 30, 2014 – S&P Dow Jones Indices today released the latest results for the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices. Data released today for October 2014, shows that the pace of home prices across the country continues to decelerate although eight cities did see prices rise faster.
More than 27 years of history for these data series is available, and can be accessed in full by going to www.homeprice.spdji.com. Additional content on the housing market can also be found on S&P Dow Jones Indices’ housing blog: www.housingviews.com.
Year-over-Year
Both the 10-City and 20-City Composites saw year-over-year declines in October compared to September. The 10-City Composite gained 4.4% year-over-year, down from 4.7% in September. The 20-City Composite gained 4.5% year-over-year, compared to 4.8% in September. The S&P/Case-Shiller U.S. National Home Price Index, which covers all nine U.S. census divisions, recorded a 4.6% annual gain in October 2014 versus 4.8% in September.
Miami and San Francisco saw prices rise 9.5% and 9.1% over the last 12 months. Eight cities, including San Francisco, Denver, and Tampa saw prices rise faster in the year to October than a month earlier.

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Oh, that time of the month, already, huh?

Check back at about 8:20 AM Central and we should be able to present the latest Case-Shiller, S&P, Dow-Jones, Corelogic (and whoever else wanders by) monthly Housing Price Index report.

As our super high-tech graphic shows:  What I would expect going into this is a sideways report.

In other words, just as the Fed’s withdrawal of “easy money” has led to a collapse of prices in oil since there’s quantitative pleasing to blow up the balloons of the oil bubble, so too, there are some incredible bargains in housing out there.  Oil is back down nibbling on $53-bucks, so someone is likely about to get into trouble in the oil patch, if they aren’t already.

The reality is (likely) that since the Fed is trying to act like there’s a recovery, the amount of free money being dispensed to keep banks owning repo’ed homes is likely starting to tighten.

Elaine and I have been looking at homes, too…something closer to the kids would be nice.  And prices have sure come down.  Places like Dallas, once off the charts, have come down to where you can get a livable (nice enough) home for under $150K.

Prices in the Pacific Northwest and down the West Coast haven’t come down much (yet) but as the bank and speculator money comes off the table, those homes are going to come on the market.  And with rates still rock bottom low, it’s getting hard not to buy a home, if you can afford it.

But we shall see how quickly the dynamics change. Do check back.  For now, a SWAG (simple wild-assed guess) would be small pick up in volume, level to declining price, but that’s with no meds and plenty-coffee.

Financial Trouble Today?

There is a BIG Crack in the World financial model developing.

Japan was down more than 1.5% overnight and China down 1%.  In Ure-Up, the frogs, krauts, and kneelers are all down 1% or more.  Which despite the premarket opening activity here (down 40 points) argues that some news item, or other, will be ceremonially blamed and down 150 or so is where the morning dart landed.

Ukraine:  Dictatorship?

What do you call it when the president of a country (put in power with Europower and US cookies) threatens martial law if the “peace process” is derailed?

Say, didn’t anyone send this fellow the new Russian Military Doctrine unveiled last week that pointed at the West/NATO as major threats to Russia?  And didn’t Ukraine just drop non-aligned nation status and throw in with the bankster crowd?

Naturally, they promise a vote, but say, those wouldn’t be ex-Florida machines, would they?

Crash Debris

That plane crash a few days back (Airbus A-320) has yielded some bodies and gloating debris.  My guess (as a pilot) is that the plane experienced a catastrophic engine event and attempted a descent, or the turbulence of the storm was simply too much.

Pilots in recurrent training are taught that what rips wings off in turbulence is keeping on too much power.  Airspeed needs to be cut at least in half, but there’s a natural instinct from pilot training to keep on power because that gives you climb if you need it when the “bottom drops out” – which is where the too much power for conditions reaction comes from.  Just a guess, however.  Having been in severe turbulence I can tell you instincts are a terrible beast to be overcome when it’s like being in a blender on the frappe setting…

Passings

Luise Rainer, at 104. First winner ever of back-to-back Oscars back in the 30’s.  Oh, and who were the other’s to do that?  The story has more Trivial Pursuit questions than most, which why it is worth reading.

Speaking of People (as in Magazine)

Had to grab the ViseGrips with this headline:  “Argentina’s President Adopts Jewish Boy to Keep Him from Turning into a Werewolf.”

Even in rehab, this would be a tough one to make up.

Another Obama Golf Story

OK, so Obama plays more golf than Eisenhower.  Unlike Ike, I don’t think there’s an Obama Tree on any course yet.  There used to be an Eisenhower Tree up until this past February, however.

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Aha!  The learning never stops around here, but this morning we’ve managed to sneak up on a key bit of personal learning.

First, let’s talk about the trip to the Social Security office yesterday. 

It turned out to be a pleasure.

First off, the fellow at the front desk recognized us from before.  And, when we weren’t getting enough/right answers from him, he was kind enough to provide access to the fellow who ran the office.

There had been a clerical error on my address – but there was also a calendar issue, so we will find out when that rolls around in about 2-weeks if all our problems miraculously disappear on that date.

Meantime, we had some waiting to do…and I got to talking with the guard.  Nice fellow, planning to retire in three years himself, get a Winnebago and travel all 49-states you can get to without swimming.

I was going to explain to him that by then, he might want to include the states of Tijuana, Sonora, Baja, and perhaps as far south as the state of Quintana Roo along with Campeche and Yucatan.

There was a bit of blood on my tongue, as I continued to bite it, realizing that explaining how the North American Onion was gong to work, how British Columbia would also be a state by then, and within 5-years, it would just have to be the “State of Columbia” because the British were not the grand guardians of social welfare as any of the real historians of BC would attest.  And the word British part would have to be axed on political grounds simply in honor of the suffering of the coastal bands such as the Haida Gwaii..  (You can probably see why I dummied up:  It would have been a long discussion.)

Instead, I asked him about the short office hours, and if someone shows up at 2:30 for an appointment whether they would be kicked out at the 3 PM office closing time.  No, he assured me, they actually stay open until 4:30 most days (sometimes later) to make sure everyone is seen.

That was reassuring and I get better about my tax dollars.  Private sucktor folks still end up about 200 vacation days short in 50 years, but did I have a cheese to go with that whine?

By the time I’d met all the folks in the office, it was pretty clear that the office doesn’t have a 27-hour workweek, as the sign says.  That’s basically the “Public should show up time.”  They get seen, the guard fellow explained.

Good one to know.  Rather than “hours” the sign really ought to read:  Show Up Between (and then list the hours). But not everyone is as literal as us.

In the case of my own application, I screwed up by questioning Social Security’s income record.  I had noted in my application, at the time of filing, that my records of income and theirs had some discrepancies. 

Turns out that part of Social Security’s public face says Social Security benefits are based on wages.  But, after two of the trips to the office, turns out they were based (in my case) on the IRS SE Worksheet.

This has had me buried in the research into how Schedule SE was supposed to work in 2008, for example.

Schedule SE is the Self Employment worksheet.  And my income there was $xx,xxx.  However, the amount of income that I paid income tax on was $xxx,xxx.

What hadn’t been clear to me at the time (and I think there’s still something smoldering in all this) is that the SE schedule was lower and that is the number used by Social Security. 

A little history check here:  No wonder government called it a “tax credit” rather than what the reductions as a “tax credit” for self employed persons is:  It makes a definite reduction in Social Security payments in later years, when the SE number, not the actual “paid tax on number” is used.  Definite lack of candor at the time, typical of the PTB.

In fact, to my way of thinking, it’s typical of Washington doublespeak:  Tell small business they are getting a tax credit for small business owners.  And then screw them on the back-end when comes time to collect Social Security.  But I’m not going to change that – it’s just the way it is…the problems are almost always with the people who write the laws, not the federal workers who are generally good folks. Vacation and bennies differentials aside.

Speaking of which…let’s not forget that president what’s-his-name has just made matters worse in regard to turning federal employees into praetorian minions:  Remember the feds minimum wage is $10.10 but for the private sucktor, the min-wage is still $7.25.

When I tell you federal employees are “special” I’m not a-kidding.  But, how soon we forget them pen-strokes.

“OK, you fixed your Social Security problem (for now) so would you please get to the retrograde stuff?”

Ah…Well, I got home and then spent a full hour on the line with CenturyLink tech support.  Our internet connectivity has become unacceptable.  Day before Christmas.  Too many retried and I’ve been working on that problem for six days, now.  They issue credits, I call the next day for another because it’s still broken.

The good news:  I will be getting free internet access until they fix it so it will stream again.  The bad news:  The won’t be until January 30th until 7 PM says the tech.

I bet you didn’t know that CenturyLink actually has a Bandwidth Exhaustion Department, did you?  This is what one of the techs told me.

Apparently, there’s no point to stopping additional sales just because there’s insufficient capacity…just add a department to fix it.  Then you can justify six ways to Sunday, rolling in the money, and loving it!

No worries in terms of UrbanSurvival/Peoplenomics:  We have a high speed satellite connection which gets us 10-down and 3-up, but only when the weather is clear.  Less in rain and not at all in storms….but I will be needing to buy more bandwidth.  We eat 3-4 GB per day around here, up to 6-when I run multiple Nostracodeus runs.

About here, I got to wondering  (lights went off between my ears, a truly unique experience)  if I was somehow in the “Mercury retrograde penalty box?”

You see, Mercury is retrograde in January (the window is the 16-24th with the hot day being Jan 21).

I’ve been a reasonably lucky guy most of my life, but I do have some retrograde periods, and I’m in one now but coming out of it.

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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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