We have three stories this morning which can be broadly lumped under the “waiting for the wreckage” concept.
The first, as always around here, is financial in nature. This is because in the Grand Long Wave Theory of things, we’re getting down close to the bottom of the trough of long-term interest rates and we are nearly at Ure’s Paradox.
A chart in one of the recent Peoplenomics reports sums up the problem graphically:
What this means is that as interest rates fall, stock prices with stable earnings will go up.
But there is a boundary zone, because as interest rates approach zero then suddenly the value of stocks drops precipitously because confidence in the whole economy just got crushed by inflation.
And this, of course, explains neatly why a) the market is continuing to replay the spring-summer of 2011 so nicely and b) why the stock market fell on its butt on Friday.
This morning, has anything changed? Well, no.
The Market is waiting to open down about 50 on the Dow and somewhere in here we will begin edging down to the 1835-1840 S&P level.
Unfortunately, our Trading Model will have announced a sell signal somewhere before that (at least likely so) and that will set up further panic down to the next lower level, which is around S&P 1740, by Robin Landry’s calculations.
But if/when THAT fails, then we finally get around to an S&P with a target of 1,565 (my work) or as low as 1,540 (Landry’s work) as possibilities along in August, but perhaps earlier.
The next Biggie, in terms of market data, will be the Consumer (yoke of) Debt (credit to banksters) which will be released by the Fed today.
With M1 interest rates jacked up to 18.3% annualized (printing money is the apparent replacement for QE’s going away) we will be holding our breath to see if people are putting on the yoke of debt at high enough levels to sustain the economy going forward. The yoke is presumably very comfy if you’re a Fortunate 500 corporation, but the credit card money-changers don’t give a rip and so they’re still screwing people with 29.9% rates on delinquent payments.
And it is EXACTLY this spread (the 29.9% F.U. Consumer Rate – versus the 0.25% we love you bankster rate, that Her Yellinness doesn’t seem to be addressing.
Until that spread is narrowed (with a return to usury laws, perhaps?) it’s only a matter of time until the economy goes off to become the poster child for wreckage, also to be known as the Second Depression.
Our #2 Wreckage story after this shameless bit of self-promotion…
The Pinger-Dinger
The media hype machine is going full blast this morning. And once again, it’s the hunt for MH370 and reports that a promising signal has been heard.
If this is starting to sound a little suspect, I can tell you as someone who has worked on battery powered projects involving battery instrumentation (and yes, on patents for it) there is not a lot of reason to put stock in these latest reports.
Batteries, you see, are chemical and the colder they get, the less energy they put out. I don’t have the specs on the pinger’s battery in front of me, but a month, under cold water and “keeps on running? Count me skeptical, for sure.
Another reason to be skeptical is this note from a source:
Following my previous emails to you regarding flight MH370 going north and not south I wish to update you and point out to you that there is still no public technical evidence to support that the flight really did go south as the media reports. I am an expert in RADAR, RF, IP networking and Doppler theory/capabilities. You, I am certain are well versed in radio and RF theory. You will thus understand that the so called Rolls Royce Engine satellite pings that were received by the two satellites could only measure transit time and RF Doppler shift. Thus:
1) East/West relative direction could be determined for the plane by measuring message transit time and Doppler shift. I believe the MH370 flight path was certainly in the west side of the map ellipse depicted in map-1 below.
2) But the Doppler shift of the carrier frequency of the RF ping will not allow anyone to ascertain whether the plane went north or south, but only along with the signal transit time that the plane moved as far as the limits in the black arc on map-1. North or south cannot be known from this data
As you can see (look at map 1 of the 2 maps below) if the flight went north it would have ended up in one of the “Stans” such as Kyrgyzstan or Pakistan or very close to it. Terrorism in Kyrgyzstan has increased since the U.S. military invaded Afghanistan and overthrew the Taliban in 2001. Southern Kyrgyzstan is increasingly sympathetic to terrorism and radical Islam according to Wikipedia. Western governments would not want terrorist organizations to know that they know where the plane is now located.