Soft Summer Peak, But Then What?

Our view of economics data is just settling now.  Been up since 1:30 this morning, in fact, working on several items for the in-depth on Peoplenomics tomorrow.

The super-short version (free, lol) is that there is a case for a “soft summer rise” into about the middle of August, after which a slide into the fall and uncertainty begins to increase.  Exponentially.

In the immediate (2-3 day) future, I have had another bout of the “earthquake tireds” so if there’s a 6.7 or higher magnitude quake, that’s where it’s from.  Remember who called it.  Southwest Pacific seems hot, and I hope for Bernard Grover down in our Jakarta Bureau, it’s not in his back yard.

A bit further out on the timeline, the things “shaping” the soft peak are manifold.  First we had the Federal Reserve consumer debt report out Monday.  Total consumer credit was up 7.6 percent annualized in May (this is a driving in the rearview kind of report) and of that, the revolving (read: credit cards) were up 11.4 percent.  School loans and mobile homes and the like (read: non-revolving) were up 6.3%.

The reason to take this with a grain (or three) of salt is that while consumer spending was up in May, a portion of that is likely due to that being the period when people first started hearing the words “trade war” together.  It may have pushed people to “pull some purchases forward” using the reasonable logic that “If it’s going to be more expensive later, why not buy it now and enjoy it while we can?”

Under normal conditions, this would be dandy.  But the Fed has also been stepping on the brakes over on the Money Supply side, which will be driving interest rates up.  We’re down to a 2.2 percent increase run-rate on M1 which will firm up credit.

This credit cycle stuff is a lot like driving on ice for the Fed.  On the one hand, they wanted the interest rates to come off zero because there is always a risk across a long-wave economic low that rates will go negative and that’s something the Global Confidence Game can ill-afford.

On the other hand, the way that you slow the economy when it begins to heat up a good (Trump Bump) bit is you put on the brakes and the way this is done is throttling down the money supply – which drives up rates.

The Big Question to be answered later this week boils down to what’s the Consumer Price Index doing?  We expect to see general inflation pushing a good bit higher, which means closer to the four percent range.  The Fed, not eating food or using energy – the semi-delusional core rate will pooh-pooh the headline number and will stick to their guns.  Nevertheless, the headline number could be large enough to set off another month of “credit card bending” and that would lead to even more pressure on the money supply which will push rates up.

The important thing to keep in mind here is that rates are something of a supply and demand deal.  Right now, seems to us that the smart money allocation would be to overweight in stocks a bit in here (notwithstanding a possible blip down Friday-Tuesday depending on the inflation report).  After the middle of August, though, maybe the September CPI number, bonds may be looking better once again.

Remember:  When bonds go up, the market is going down and when the market is going up (likely in the short term but this is not investment advice) then bonds generally head down.

The bonds early were around 2.86 on the 10-year (more current data here).

All of this would be the case for an almost “non-peak” over the summer, but we’re still seeing power from the “Trump Bump.”  Take this morning’s report from the National Federation of Independent Business:

The Small Business Optimism Index posted its sixth highest reading in survey history for the month of June, at 107.2, down 0.6 from May. Since December 2016, the Index has averaged an unprecedented 105.4, well above the 45-year average of 98 and rivaling the all-time high of 108.0 in July 1983.:

There’s a lot more on their website over here and pay particular attention to the business expansion plan data on the right side of that page.  There is economic life in America, yet.

Until Mueller issues forth a close to the election report – which would not surprise us in the least.

But, Then There’s Politics

It’s very simple to see where various media have taken positions in our analytical framework called The Webolution. You will recall this is where we have a second American Revolution underway only it is happening on the Internet and not here overtly bespoken.

Take the L.A. Times coverage of the Trump Supreme Court nomination of judge Brett Kavanaugh. It reads to us like their “What Brett Kavanaugh could mean for the future of abortion, marriage equality and much more” plays to the left-coast liberal crowd.

Balance this off?  We see Fox running an opinion piece claiming “We can trust Trump’s Supreme Court pick Brett Kavanaugh to defend religious liberty — our most sacred right…”  Um…not quite…

As any of us non-partisans in the Webolution can see, everyone’s sliced up the audience, right or left, and is pandering content to maximize eyeballs in their target demographic in order to maximize revenue.  In many ways it’s bad although the good news for Donald Trump is that at some level Trump Bashing is an Industry so even the “haters” are contributing to his economy which continues to (don’t look!) grow.

Why Are Some Still Selling Hillary?

Don’t look now, but you might mention to The Drudge Report that today is July 10 and to run the UK Daily Mail piece on Hillary Clinton yet another day seems a bit….oh…you know…odd.

Bash du Jour

Meantime, our Trump Bash du Jour honors go to Politico which MediaBiasFactCheck rates “;left-center” is going after Trump with “Trump’s neglect of Europe goes beyond angry tweets.”  Say what?

Just for example, the article touts (as part of Trump’s alleged neglect) this:

“Several key European ambassadorships remain unfilled, including in Ireland, which is at the center of the sensitive negotiations over Britain’s withdrawal from the EU, and Poland, which is in a fierce battle with Brussels over alleged rule-of-law violations.”

Whoa!!!  This set off our BS meter.  Sure enough, Trump did appoint an Irish Ambassador back in March but care to guess where that’s hung up?  RINO and democrats in Congress… So what about Poland?  Ibid and ditto: His pick there was announced back in February and to us it seems specious to blame Trump (packaging it as “neglect”) when it fact the problem is not with Trump, it’s with Congress.

Then there’s the whole Globalist Mindset that permeates the Ure-a-pee-in Onion with their megalomaniacal thinking in Brussels.  The “sprouts” have been running a 30-year Ponzi Scheme – and after sequentially bankrupting members, they just “toss another country on the fire” – which is why Ukraine is so ripe and desperately needed.  Big oil reserves of the Dnieper Basin and oh, boy…we’re gonna be solvent long-term any time now…  (uh-huh…whatever, dudes…)

In the larger scheme, Trump doesn’t own the real bastard-child of Europe: It’s imported Immigration Mess.  It was an imported bailout but now the social bills are coming in.  Big.  And Britain wants the hell out.  Can you blame ’em?

We – America citizens and tax-slaves – have no obligations to bail out Europe, either.  If they don’t have their shit together enough after 100-years and two bloody wars America has stepped in and won for their sorry asses, at some point we’ve got to cut them loose. GTFU (look it up)

Even the UK is sick of economic appeasement of Brussels – which is why Teresa May and her Globalist choreographed “go slow and let’s not really BREXIT” bullshit will get her thrown out of office.

Just this morning, we see Boris Johnson making it clear – May’s in big trouble.  See the Daily Mail’sTry not to smirk too much, Boris: Johnson poses for picture of himself signing his lengthy resignation letter as he accuses May of letting ‘Brexit dream die’… and Jacob Rees-Mogg says he will make a ‘brilliant’ Prime Minister.”

Now let me take you to school on WHY I pay attention to Jacob Rees-Mogg’s remarks.  Know who he is?

Why, he’s one of the offspring of Lord William Rees-Mogg – who authored – along with James Dale Davidson, some of the most brilliant socio-economic books ever.  If you haven’t read their classic The Sovereign Individual: Mastering the Transition to the Information Agethen you’re not keeping up with the class.  The late Lord Rees-Mogg was genius and we figure his Tory son didn’t fall too far from the tree.

Whole point (yes, is there one? lol) is to point out that the “daily news” finds  more profit in pandering to Digital Mob Rule than putting a large number of inter-related facts into useable context.

No, Trump is not ignoring Europe at all.

He’s just caught between the shake-down artists on the Hill in Washington and those sprouting from Brussels.  And anyone who isn’t painting this larger context (along with the billionaires who are trying to scuttle the BREXIT plans through their socialist allies) maybe should be taken with more than the recommended daily dose of salt.

Peoplenomics tomorrow – and in it? Our analysis of how the Russian Military is working the Digital Webolution online…oh, God, do we know how to have fun, or what?

14 thoughts on “Soft Summer Peak, But Then What?”

  1. Remote Viewing must have some truth to it since it was adopted by the military. See Major Ed Dames. Why not use it to win the lottery. Below is a link to winning the Pick 3. The Pick 3 seems to be achievable. Maj. Dames won 2 days in a row. It is not his passion though. He is more interested in bigger issues. Worth a shot. If you are retired what else do you have to do but woo woo you didn’t have the time for when working.

    • ECS,

      Whenever I see the term Remote Viewing, I think of this silly movie called The Men Who Stare At Goats. George Clooney, Ewen McGregor, Jeff Bridges etc. Funny take on the subject.

  2. Well I don’t know exactly but I’m going to go ahead and express my opinion about your website you know the new website I find it not very easy to use on the smartphone and it’s not too bad on the computer but if I had my choice I would go back to what you had before it was superb really had a great outstanding excellent website now you Got a blah blog,
    Please comment ,always looking for improvements .
    I’m not condemning anyting but the website the content of the website is worth paying $40 a year for Yes siree

    • Thanks, Bryce

      We have a summer workplan that includes more updates to the UrbanSurvival site (on the security and navigation side) and we also plan to roll Peoplenomics reports (not just the front-end) over onto the Genesis format. Just a ton of work and when I’m trying to finish a book, and do a good Peoplenomics with all the charts tomorrow…you know, only so many hours in the day and we must prioritize… thanks though – duly noted… We’re up against search engine schemas all kinds of unseen stuff these days…

  3. Okay if I was going to use what you have on the smartphone and here I would go ahead and reduce the the text really really small so that way when I pull up the website it’s really small and I can scroll fast because as it is now it lags way behind when I scroll because on your old website it was very small and I could expand it and I could scroll fast

  4. People miss the obvious. The troubles within the German and British govts, advantage who? Not the Russians or the Chinese! lol

  5. Gold is just taking the suckers money. Wall St continues to pay off their mortgages between the 24k and 25k trading range.

  6. ‘stepped in and won for their sorry asses’

    ‘Cept some of those Europeans joined up with the Japs!

    Japan’s Involvement in World War II

    In September 1940, Japan signed the Tripartite Pact with Nazi Germany and Fascist Italy, in which they agreed to assist one another should any of them be attacked by a country not already involved in the war. Japan sent troops to occupy French Indochina that same month, and the United States responded with economic sanctions, including an embargo on oil and steel. A little over a year later, Hirohito consented to the decision of his government to battle the Americans. On December 7, 1941, Japanese planes bombarded the U.S. naval base at Pearl Harbor near Honolulu, Hawaii, destroying or crippling 18 ships and killing almost 2,500 men. The United States declared war one day later.

    Over the next seven months, Japan occupied the Dutch East Indies, British Singapore, New Guinea, the Philippines and a number of other locations in Southeast Asia and the Pacific. But the tide started turning at the June 1942 Battle of Midway and soon after at Guadalcanal. By mid-1944, Japan’s military leaders recognized that victory was unlikely, yet the country did not stop fighting until after atomic bombs were dropped on Hiroshima and Nagasaki the following August. On August 15, 1945, Hirohito made a radio broadcast announcing Japan’s surrender.

    copied from

  7. The truth about the Brett Kavanaugh nomination is it’s one which is okay with everyone, and after trashing him, his family (I’m sure Margaret and Liza, his daughters, aged 12, and about 8 respectively, are gonna love their dad and themselves being eviscerated in the media), and every segment of his life for the next several weeks, Congress will eventually confirm him. I tried to explain to my daughter this morning, that this is what is called “political theater,” but life moved faster than my oration. The Dems and the Media will half-assed Bork him simply to play to their base, then 5 or 6 will vote to confirm.

    The REAL theater will come about if Ginsburg, and or Breyer, dies or retires (hey, she’s 85, he’s 79.) Now THAT will be beer ‘n popcorn time…

  8. Our national debt has now surpassed our GDP. This determines credit worthiness. The repatriated money from overseas and the corporate tax reductions have to a large percentage gone to stock buybacks. A large percentage of the repatriated money was kept overseas, a hedge bet.

    The likelihood of more companies who gained from the tax cuts and the lower taxed repatriated money, building factories oversea as an alternative to a tariff trade war will continue to grow, just as long as the trade war continues. The incentive to move grows proportionally to the increase in tariffs levied.

    Some would look at this as a win win.

  9. I think I may have said a payback instead of buyback when referring to how a large percentage of the corporate tax cut was being reinvested. my bad!

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