My consigliere called Monday to point out that Art Cashin on CNBC had noted that the last time we had this many Hindenberg Omen’s we had the 2008/2009 financial mess. “Aw shucks, I think we have a while to run yet…after all, auto sales have been strong and this oughta take a bit more time to roll over….” I explained, having just taken a gram of optimism pills.
This morning, the happy pills have worn off and we have a less than thrilling Retail Sales report just out a few minutes ago:
The U.S. Census Bureau announced today that advance estimates of U.S. retail and food services sales for July, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $424.5 billion, an increase of 0.2 percent (±0.5%)* from the previous month, and 5.4 percent (±0.7%) above July 2012. Total sales for the May through July 2013 period were up 5.2 percent (±0.5%) from the same period a year ago. The May to June 2013 percent change was revised from +0.4 percent (±0.5%)* to +0.6 percent (±0.2%).
Retail trade sales were up 0.1 percent (±0.5%)* from June 2013 and 5.6 percent (±0.7%) above last year. Auto and other motor vehicle dealers were up 13.3 percent (±2.1%) from July 2012 and nonstore retailers were up 8.8 percent (±2.1%) from last year.
Are the good times in auto sales ending? Sure looks that way. Consumer super-saturation we call it around here. Eventually everyone buys the last new car anyone can afford or the last possible iPhone…
Where we are now is simple: Waiting for the other shoe to drop. While some are suggesting around November 1st (like Steve Quayle and the Guerrilla Economist) its as good a crash date as any, although it could come a month before, or next spring. In the meantime, the market should open up a bit this morning, but the premarket optimism was halved by retail’s fail.
In the Big Picture, we should see a modest decline begin shortly, and its then that many will be tempted to toss money into short positions. Inevitably, this will be followed by a “running of the shorts” and it’s right there (with blood running in the streets) that Ure’s truly will enter the short side in a meaningful way…along with the commercials, of course. It may not play out exactly this way, however, so constant vigilance and a good supply of tea leave to read is important. We have our libretto and the tea has been ordered.
Ignoring implications from the effects of tax changes, I built you an infographic that explains why you feel like you have been working harder for little or no gain…
Meantime, real prices have continued up, and that’s why the old joke “The harder I work, the behinder I get!” is no longer an old joke. It’s present-day reality.
The one thing that surprised me was that the story was written by Forbes contributor Avik Roy. I would have expected a different reporter like, oh, Ben Dover.
The Hot/Emotional LBGT Story du Jour
Rather than have a bunch of people figuring out that their lifestyle is going to decline, since prices have been going up faster than GDP growth in real terms since 2007 by my scrawlings, we instead are being flooded with hot-emo stories about how California has now strengthened the state’s treatment of transgender K-12 students in public schools, signed by Calgov Jerry Brown. Depending on which side of gay rights you’re on, this is either a good thing or one of the dumbest, most insane things ever to come down the pike.
Oh-oh….here we go off on anyone one of our “question everything” trips: Got a hot tip from long-time reader Teresita in Manila who stumbled over something on YouTube with less than 1,700 views, and one is extraordinarily odd:
“How true is this? Just got it today and for some reason, why would anyone want to fake this – Stonehenge!!?
Just experiencing another typhoon since yesterday. It seems to be leaving and hopefully it does soon.
Boggles the mind and yet here it is. Just wondering what is going on.
Well, yes, if sure looks like Stonehenge pictures and since the site originally posting was Russian, seems to me that there’s a chance that this is based on black and white pictures that the Russians had in their spy archives.
Whether there’s anything to this video, I will leave to you to discern. But, if one accepts that it is footage from the original site, and then you begin to piece together why would anyone go to such lengths to make us believe in “ancient wisdom” with a high-precision astronomical calendar, maybe it has something to do with bolstering the legitimacy of ancient “orders” and such. Or, people like me would ask why does the calendar and astronomical calculation series based on Stonehenge work out to so many decimal places of precision? Wouldn’t Earth’s rotational change have changed over time?
Kim’s Got WuJo
What’s better than a good WuJo report to ponder? This one’s a peach!
Good morning George,
I’ve been an avid reader and off/on subscriber for years. I love your Wujo reports, but never thought I’d experience anything worthy of reporting. The other day something occurred that might make the cut. I held of on sending it until reading your column today. Your theory that the disappearing/reappearing items might correspond to the writer’s emotional attachment struck a chord.
I purchased a Wi-Fi hotspot device a while back because my daughter and I travel frequently for softball tournaments. I am the team’s scorekeeper and broadcast a live “scorecast” to our parents at home over an Internet application.
Todd, like me, was already looking for the Pandora’s box of of economic wasps to be opened around then when he noted this wasn’t a big change from his earlier estimates:
“Deadline was revised due to Fannie withholding a $30 billion payment to the U.S. gov’t…please share this video with as many people as possible so folks will have ample resources on hand by the end of October.
From a note this morning by economists at Barclays: The US federal budget deficit has been improving at a dramatic pace in recent months. As a percent of GDP, the deficit peaked at 10.2% of GDP in the four quarters ending in Q4 09; over the past four quarters, it has totaled 4.2% of GDP, down from 7.7% one year earlier.”
Not that he’s wrong, mind you, but I expect we will need some “out of left field event” in the preceding week or three before that so that Wall St. will be able to maintain “plausible deniability.” You know, like the post-Internet Bubble collapse has been buried by effectively having the “pain and suffering sectors” of your brain’s hard drive overwritten by the events of 9/11..
In fact, following that brain and hard drive analogy, maybe it was more than a simple file re-write…maybe it was a whole low-level reformat! Everything is terrorists, terrorism, War on Terror and that (other than the Housing Bubble) has really taken America’s eye off making money and other old-fashioned American ideals.
China was up more than 2% overnight, Japan down 3/4’s of a percent, or so, And in the early going in Europe, France, German, and the UK were all down earlier, so a short, coordinated dive off the low board is about all we can expect this morning when markets open.
Todd’s guess as the real diving action (off the high board) will be along in 11-weeks, or so, which means you still have plenty of time to prepare. Or, if you’re not inclined to do that, at least you have time to invent some creative denials.
The Week Ahead
The Treasury Budget out this afternoon is expected to show the US ran a –96 billion deficit this month. More amusing should be the accounting to prove we haven’t really blown through the budget ceiling…and we know the answer to that one: Off-books accounting! Plus short-term transfers from Peter to pay Paul…
Accounting is a very precise science, but if airliners were designed with this level of integrity, we’d be surrounded by crashes because in aeronautical engineering reality isn’t so easily papered over.
Tomorrow we see retail sales, which I expect will continue to show the Auto Industry as the only sector doing better than inflation dollar-wise.
Producer prices Wednesday will be another one worth watching…since it may be something of a barometer on how much of the Fed’s noodle pushing has actually strengthened prices. My guess is not much.
The week’s “biggy” will be Consumer Prices and a rise of 2-10th’s of a percent for the month which means about 2 1/2-2.6 percent annualized is the consensus view.
Which means, with the Fed printing and QE’ing M2 at a 5.3%, the implied deflation rate is likely in the 2.7% range which (considering all the jobs which corporatists have moved to Mexico and Asia (that includes China and India, right?) is not totally bad. But close enough for home use.
Unable to pass a budget? Stuck in sequester? Pernicious unemployment papered over? Forget the pooch, let’s get on to the presidential golf outing for the rest of the week’s “news.”
If I were Vlad Putin, meantime, I’d be smoldering pissed: Stiffed on a summit and yet time for golf? What was the Nobel Committee thinking? (If at all…)
Holder’s Latest Non-Answer
I don’t like “tolerance policies” – I went through a lot of that as a 21-year old radio news beat reporter when I started my news-chasing addiction back in 1970. I watched development in Seattle and King County (Washington) and after a series of corruption cases, concluded that “tolerance policies were a bad idea.
But, as I see it, this is the wrong policy and just another cluster-mawhozit instead of doing the right thing. The right thing is to tell the booze lobby that “Time’s up…no more penalties for home grown and home use of marijuana…ya’ll have had 50-years of profits and now you’re going to have to deal with a drug that seems to fight cancer and certainly is better on the liver.”
Admittedly, Holder’s got a tough one here: Oh, sure, a tolerance policy would allow some rebranding of “criminals” from Mexico who aren’t gang-related and yes, it might play in the Colorado region. But is it even application of law, equal enforcement? Or, is it just another stupid “special class” and a further abandonment of equality?
More chasing around of their tales…but if that’s what it takes to balance prison over-crowding against booze lobby fund raising, I get that’s how complexity in End Times works. Fair laws, evenly administered? Gone are the days, gone is the foundation that made American jurisprudence exceptional. Tolerance policies and the erosion of contract law…
Ah, the delights of following mis/dis info around the net. I bet you’ve heard by now that a bill sitting on Calgov Jerry Brown’s desk would be a “bathroom bill” which would allow males to use girl’s bathrooms in school IF they felt gender-leaning.
But wait! Cynical George wants to know if that all it does, who are the idiots in Scrotomento who pass laws that don’t actually do something new? (This might be why California’s in bad financial conditioned and the most over-regulated state in ‘Merica…) Or are both sides of this story….oh, you know: MARKETING!
From the Compounding Economic Pharmacist:
I’ve counted well over 6,000 bank branches having been closed as I meticulously did whenever the FDIC filed a bank closure report. I did this going back to IndyMac before finally giving up at about 6,300 branches. There seemed little point to it.
We need to talk seriously here about economic prescriptions. Here, let me slip into appropriate professional wear so I can at least look the part, OK? Hand me my lab coat, would you?
The whole/Big Picture Truth of what’s going on in Bank Land is complicated. But if I were an old-fashioned compounding economic pharmacist, I would mix up:
Seven parts bankus disrectus au finance for balance sheet collapse.
Nine parts consumus todeathtus for transitioning out of paper on into all plastic.
21 parts connectus onlineus since digi-dollars don’t need a roof or staff time and last but not least
12-parts automatus tellus which has the financial alchemical symbol “ATM”.
Mix in a mortar, crush with the pestle of regulatory reform, and package as troches. Avoid taking before elections, may cause systemic reactions including monetary diarrhea.
6.2 quake this morning off the northern coast of Peru. If you are expecting the global tsunami when the southern part of the Pacific Plate breaks off on a line from Polynesia to South America, this is more dust-bunny sniffing news, for sure, since there was also a 6.0 along the Kermadec Islands 500 miles Northeast of New Zealand…. The black line would be the plate crack and the black circle is the Peru quake…
Earthquake charts of the long-term view tomorrow morning! Oh, and reader Hank out in Hawaii sent this Sunday morning:
Big Island had a 4.8 earthquake at 6am local time this morning. Not huge, but worrisome is the location. It was on the southern cliffs of the volcano where the massive ‘crack’ in the south flank is located. Someday that chunk is gonna slide into the sea… ala-Canary Islands… and we will have about 20 minutes before the wave inundates Honolulu.
Yes, there are several undersea landslide run-outs from Hawaii undersea slide that send 50-100 foot tsunamis into the US West Coast in historical times. Float us some Kona Roast and Macadamias on a long board when it happens…I’ll wander out to Phoenix to pick ‘em up!
Eyes on South Americas
This from our Winnipeg news analyst is interesting…
Why, all we need to toss in to make this a blockbuster column would be Godzilla….but to preserve some semblance of respectability, we’ll eventually get to the point here: I got to wondering about the comparison between Fukushima and the loss of life that happened in World War II. Our consulting (real life) reactor engineer is about as good a source as you’ll find:
I know that radiophobia plays well and I acknowledge the Fukushima meltdowns as catastrophes of colossal proportions, but you had what I assume was a throw-away sentence in the update that just isn’t borne out by the facts. You stated in your blurb on the anniversary of the Nagasaki bombing that the Fukushima disaster “[s]eems destined to outdo the wartime use of nukes in terms of impacts including long-term loss of life.”
Even in the most fevered dreams of the anti-nukes (at least the ones that acknowledge science and historical data) that is a gross overstatement. I have no doubts I’ll spend the rest of my life having to hear it, but that still won’t make it true. The same thing was said about Chernobyl – that the death toll would be in the hundreds of thousands (http://en.wikipedia.org/wiki/Deaths_due_to_the_Chernobyl_disaster). The real death toll is somewhere in the range of 6000 (less than 100 for the accident and immediate response, the rest on estimated cancers) or so and much of that from the Soviets forcing gulag inmates to work in a very high radiation environment, along with some soldiers and engineers who risked their lives to get that situation under control.
In some ways Fukushima was worse than Chernobyl – more plants at the site, a breached spent fuel pool building, no site power for many days, flooded reactor with seawater, etc. So let’s look at that. First off, no one died at the Fukushima complex as a result of radiation exposure during the meltdown phase. A recent attempt at estimating deaths/reduction in life expectancy (http://pubs.rsc.org/en/content/articlehtml/2012/ee/c2ee22019a) gave a figure that ranges from hundreds to nearly 2000 that is based on theoretical reductions in life expectancy due to cancer and uses the LNT (linear damage theory – no threshold model, a very conservative way of calculating radiation health effects). Time will have to tell, but this will be the most studied cohort of accident victims ever produced, in my opinion.
As bad as the Japanese response has been in some ways (especially in terms of transparency of data) this population will be followed their entire lives, so one way or the other, we will get an answer to your statement, but just like in the early days post-Chernobyl, we are going to see that the real death toll will be much, much lower than feared. Also, because more coal fired plants are being ramped up now to offset the reduction in nuclear, more fatalities and illnesses from respiratory problems will kick in, possibly swamping the theoretical deaths that might be caused by the Fukushima releases (http://pubs.acs.org/doi/full/10.1021/es3051197).
I know we are also not allowed to talk about it in polite company, but there was an absolutely massive exposure event in Taiwan where around 10,000 people were exposed to low-level radiation for around 9 years and the results were not a devastating cancer epidemic (http://dose-response.metapress.com/link.asp?id=u570v06p72857877), but the total population actually showed a reduction in cancer incidence. This is why you don’t hear about this massive exposure incident in the mainstream press or from radiophobes.
I’m not saying go out and buy a Co-60 source to hug on at night, and there were complications noted for some subsets of that population (kids, pregnant women), but the cancer/death figures one expects using LNT are not seen, even several decades on. Let’s just say rad effects on people are a complicated topic and not amenable to sound bites.
Much of the problem as I see it today is that TEPCO has no credibility left. The Japanese government has no credibility left. Regarding the leaks into the groundwater, they should be providing constant information on test well readings all around the area. This is very straightforward stuff. Dig the well. Take a sample. Place it in a standard counter. Report the results of the test along with all metadata (detector type, calibration date, any calibration factors necessary to compensate for geometry, etc.) on a publicly available website and then allow audits. We would then know for sure if/when levels begin to exceed regulatory limits and if/when they begin to approach concerns to health (a much higher number).
As for the reactor facility and spent fuel pools, fuel removal is ahead of schedule. There was never a zirc fire in the spent fuel pools. The fuel is the potential source for a potential new disaster there. Contaminated water is a real problem, but we know how to deal with it – collection in resin beds, prevent use of contaminated wells, monitor the coast and fisheries. The dose levels we are talking about that have made it into the food supply are still in the single digit Becquerel (http://en.wikipedia.org/wiki/Becquerel) range. Remember that a banana averages around 15 Bq. That is a nice value to compare to. Again, I am not saying don’t worry. I am saying be vigilant, but don’t panic yet. Save the energy, there may be a need to panic later and you don’t want to be wore out by then from needless worrying.
People evolved in a much higher radiation environment than we have today on earth. In reasonable doses, we can tolerate it – though I don’t disagree that some people are more sensitive to rad exposure than others, just like some people are more sensitive to peanuts than others.
Another quick hit for you – the Great East Japan Earthquake killed almost 16,000 people, with over 2,600 people missing/dead. Recall also that the Boxing Day Tsunami in 2004 killed at least 230,000 people. Where are the calls to permanently evacuate all coastal cities and towns along the Pacific Rim?
Thanks for letting me get this off my chest.
It’s always an honor to here from the front-line pros who actually run reactors…
Speaking of radiation fears, I have three wireless routers in my office plus a lifetime of messing in high RF environments and so far I’m not even medium-rare. But it may have an unstudied side effect: typos.
The reason I mention this is that not one person in 1 thousand on the street have any clue what a scenar is….so in an effort to set up this WuJo Report you need to understand what they are. So here’s the report:
I think I just had a woo experience today.
I have a scenar (cosmodic) that I purchased a few years ago, from following the bots.
My son was using it at a summer club basketball tournament (July 26). Teammate had stepped on his hand in practice earlier in the week, so we brought it to the tournament for last minute control of his injury. After the tournament, drove home, remember taking it out of the car, throwing some trash away outside and then going inside the house. An hour after we got home, I was looking for the scenar for use on my neck. Couldn’t find it. Look in the outside trash can, dumped out the contents, in case I accidently dropped it in the trash. Looked in the car, still couldn’t find it. Looked all over the house, no luck. Have not seen it since July 26. I was bit upset, since this scenar was from the Ukraine and was expensive. Oh well…
Today, son and I are in living room and I go upstairs to get laundry. Coming down the stairs I look down into the living room and there it is lying on floor about 2 feet from the couch. I asked my son, and he said he saw it there about 30 minutes earlier, but did not notice it earlier in the day. I asked my son if he had touched it or moved something that was covering it and he indicated that he had not touched it or moved anything that might have been covering it.
I was almost convinced that I had never taken it out of the car, and that it was stolen at the basketball tournament. Looks like a cell phone in a case. But I still clung to the notion that I had taken it out of the car.
In any event, I was happy to see my scenar and I told it, I was glad it was back and hoped it had a good trip. There is no way it was lying on my living room floor for 15 days in plain site. I know it took a trip,
You can leave my name out of the woo report.
No problem, reader Bill Smith, of UrbanTown, Illinois…(which is better than John Doe, I figured…).
Here’s an interesting thread of a thought revealed in this case. Do you think it’s possible that the disappearance and reappearance of items has to do with people’s mental/emotional attachment to the objects involved?
With all the revisions to the UrbanSurvival website, I can now post comments a lot easier and so every once in a while I’ll post charts like the one below. First, however, let me explain what this chart is and why I developed it.
The stock market goes up, the stock market comes down. Most non-professionals don’t pay a lot of attention to which index they look at. If you hear “The Dow is up!” most folks assume that if the Dow is up, everything must be peachy. Well, that ain’t the case.
What a lot of people gloss over is the size of the Internet Bubble collapse and its impact on long-term investment performance. The way I figured it, if Dow Jones & Company could pick and choose 30-stocks to make up their Industrial average, why couldn’t I take three indices and add them up and come up with something which would be an “index of indexes” and thus, get a little keener insight into the big game?
I don’t usually mention fan mail (maybe because I seldom receive it) but an email from Peoplenomics subscriber by the name of “Lou” about this weekend’s discussion of socioeconomic displacement shock was just too good not to share…
Dear Mr. Ure,
The Aug 10th Peoplenomics is one of the best Peoplenomics I’ve ever read. Displacement Shock X: NLO is a superb analysis of the current economic situation and what to expect in the future. It’s a Brave New World out there and it’s accelerating. One person’s optimization is another’s Black Swan and discontinuities are lurking at every corner in the future. How many people truly understand the environment we’re in or even have an inkling? Some of the 1% do. Peoplenomics subscribers do too. That is way cool.
That’s some mighty fine rightin from Teaxas I’ve just read. I appreciate your hard work. You da Renaissance Man!
Future Shock was heady stuff when Alvin Toffler wrote the book. And yet, as things have turned out, most of the futurists have, and do, continue to miss the graceful artiness of complex systems. Like Kurzweil in his Singularity: Cool conceptually, but it glosses (OK, ignores, then) the financial backplane. In other words, who pays for the future and who gets run over in the process.
… is, of course, Fearless Leader himself, who is heading to Martha’s Vineyard, reports USA Today, for a week or rest and relaxation. Hallelujah. As you may expect, he’s being widely criticized for taking the time off. But, around here, we take a more thoughtful view of things: It’s more time that he won’t have to spend on coming up bad ideas, like the idea of making Larry Summers the next Fed boss.
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