We are “on hold” this morning after the big run-up in the market – more than 300 points – on Wednesday.
Not that it is unexpected. As I have been showing you (week after week) when we line up the market low of 1921 and the market low of 2009 using our Aggregate approach to modeling markets, it has an eerie similarity:
Whether the present rally ends based on TIME or whether it ends on PRICE will be a highly interesting speculation. For if on Time, we will be in free-fall before June but if on Price we have almost a year to run.
Most likely it will be something else.
Tracking “Animal Spirits” Nonsense
What we believe – and expect to pop into our existence – is defined in quantum physics as being the Schrodinger’s Cat Problem. What we expect (at a global mass consciousness level) is what tends to show up.
So I call your urgent attention to the nonsense making the rounds this week about “Animal Spirits” as an explanation for the large market rally.
Zack’s had a good one this week asking “Animal Spirits or Bubble?”
Sadly, the economic theory of “animal spirits” is the same kind of anti-science that is promoted by people who didn’t read Carl Sagan’s “Demon-Haunted World.”
It’s OK, though. We did.
I am still trembling when I see someone like NY Fed boss William Dudley using the phrase.
Repeat after me: There is NO MYSTERY – NONE, ZERO, NADA – about what’s going on.
The U.S. Fed is about to make the same dumb/stupid/callous mistake the Fed made in the 1928 period. They are moving rates up.
That means we are perhaps still a year from the ultimate market high which recent calculations (more on Peoplenomics this weekend) suggest will be north of 30,000 by the Dow.
Here’s the short summary:
What the Stupid Fed Thinks:
They believe that raising rates will cause the growth rate to slow, and this will ‘let some of the air out of the market.”
They THINK wrong. They Think rate hikes could slow a stock bubble. They were wrong in the Roaring Twenties and they are just as wrong today.
Galbraith and others didn’t understand the physics of money worth a crap and our subscribers are making a killing on stupidity. We’ve been long since the week after the election and we are still long.
WHAT THE DATA SAYS
The data is unambiguous and it was clear in the last Depression too, when a previous (stupid) Fed raised rates three times in 1928 setting off the final doubling of the Dow:
MONEY IS GREEDY: It will flow from a falling market to a rising market.
When bond rates for up, what happens? Yields (prices) drop.
So the more the Fed raises, the faster the exit from the burning theater formerly known as bonds.
Repeat after me: Bond Market Disintermediation.
The Fed couldn’t admit it in the wake of the Great Crash before and so they will blame market participants who just want to make money.
We are screwed, but we still have time to apply Astroglide to our trading plans.
(There is one more possibility: The Fed may full-well know the physics of money and will simply dump Trump by cratering the economy so whoever the echo of FDR is can be installed and the country pushed more along the socialist path…but that would be very paranoid thinking.
Not WRONG mind you…just a bit too early to be paranoid. No worries, it won’t be paranoid, it will be fact within five years.
The two leading candidates to drive the global depression are? Collapse of Pension Funds and the Pending collapse of the Euro. OK, toss in the E.U. too, but we will look at that after the May 7th second round of elections in France.
Now, where were we?
Trump-Bash du Jour
Washington Post is going after Attorney General Jeff Sessions over his alleged Russian contacts.
We offer a Co-Bash of the Day award to the NY Times for “Obama Aides Left a Trail of Intelligence on Russian Efforts.”
My, how convenient.
The President For Life
Seems not to be Donald Trump but Obama.
And since the FBI director was so cozy with the Clintons, not sure why Obama isn’t being reined-in for trying to still run government.
But we don’t have access to the Obama House calls to plants they installed as IED’s (*installed executive deceivers) to take down Trump…
Yessir, the Bolsheviks know how to lob them electronic cocktails around, don’t they?
Meantime, Obama’s Gotta Be Pleased
Let me think, where did they get the money to go shopping?
Oh yeah…OBAMA GAVE IT TO THEM.
Is it too early to pull out my fingernails?
Drop by tomorrow…