These are times that our grandchildren will hear-tell about. Because we are now in process of working through the biggest financial bubble since at least the South Seas Bubble and, arguably, Tulip Mania (1632-1637).
Is this an Economic Bubble?
The answer, at least to us, is hell yes! Let’s look at one asset class – stocks – and see how this bubble matches up with the 1929 blow-off and collapse:
We need to consider why the market is going up. New tech? Nope. Higher job growth? YGTBFKM, right? On the ass-end of a pandemic-driven economic train wreck? Not hardly…
The main driver the apparent stock price rise is the federal reserve simply making up humongous amounts of paper money. They are able to pull this off because all global economies are in the same pickle: More debt – and they keep piling on more anyway.
While I was dozing off – babysitting Elaine in a hospital room – this amazing insight came to me: We know that large singular bubbles collapse with predictability. But, what would happen if you could collapse serial bubbles.
In other words, rather than stoking a bubble in one asset class, you had…oh, say a dozen, or more. Could that develop as a semi-stable economic modality?
I started to tick through what’s in a bubble right now:
- Stocks (oh, duh)
- Cryptos (NSS)
- Big City real estate
- Government size and tax burdening
- News-driven hysterias (Trump, climate, woke idiocy, yada, yada)
- Social media…
In short, how many concurrent “bubbles” would it take to create artificial stability based on synthetic growth?
If real estate got into trouble, could the stock bubble “save the economy?” Or the combo of stocks and government, and Cryptos….the mind reels.
Apparently over at ZeroHedge, too. The Dystopian Bubble: George Orwell Meets Charles Mackay.
Reality’s a Hard Master
There are many ways to look at a market, but here’s a wild-guess as to where we may be right now:
As you can see, in the wave count (upper right) we still have some “room to move” to the upside.
And no one wants to be the first to yell “Fire!” in this crowded theater.
In fact, did you see where Fed Boss J. Powell made a splash by saying ix-nay to rate increases unless there’s a “real” spike in inflation?
If you search what Mr. Fed is saying, though, it seems very similar to the problem we have been yelling about for months: You can’t have “real” economic growth without a lot more people working.
Power goes so far as to call for a “war-time-like” efforts to create jobs.
Don’t want to sound jerkish about this, but feels like Powell is trying to get a head-start on the next economics mini-crash, to us. Remember, the Bank of England voiced fears about the picture in late March to April of this year.
Still, that’s some ways off. Got out the research and looked again. Calendar days from bubble top to crash even is usually 55-57 days which means around 37- trading days. 47-trading days in the 1929 event, but they had some Saturday sessions back when. On the calendar it was 56-days top to bottom.
Thursday April 8, 2021 is – using this view of things – the earliest we could put in a collapse bottom.
We will do some “rate of declines” work for subscribers this weekend.
Today’s Jobs Data
Number of people filing new claims?
In the week ending February 6, the advance figure for seasonally adjusted initial claims was 793,000, a decrease of 19,000 from the previous week’s revised level. The previous week’s level was revised up by 33,000 from 779,000 to 812,000. The 4-week moving average was 823,000, a decrease of 33,500 from the previous week’s revised average. The previous week’s average was revised up by 8,250 from 848,250 to 856,500.
Our usual complaint NSA is more honest that SA numbers. And this doesn’t count real people who have run out benefits…
Key with all these job numbers if the 6.3% estimate of unemployment is likely way low because people have run out of benefits. Congress doesn’t task Labor with reporting uncomfortable data like real unemployment.
Statistically, we run into paradoxes, too: How would you categorize a “sex worker” for example? Z’at really work? (IRS would argue “taxable event” but “workers” could argue “gifts…” (The mind reels, I’ve gotta catch up on my sleep.
Short Takes – the Hysteria Review
Republican’s Screw up – Again: Talking about a third party? Wait! What about the Tea Party? Not to bitch-n-moan, but why not fix the broken? They are acting too much like government: Can’t solve the problem? Make up more bureaucracy. Or, in the GOP’s case: Divide for easier conquering! (SFB decoder: FB is “for brains…”)
Janis Joplin-style medicine: “Shoot if it makes you feel good…” Application note: The EU’s flawed vaccine rollout will stymie growth in 2021, new forecast reveals.
It’s doesn’t improve our view of the Schemer, but did you see where Senate Majority Leader Schumer’s marijuana reform push embraced, but stiff challenges await? Dope on dope? Does God hisself make errors with plants? Government trying to “tariff the Garden of Eden” is – to us – highly offensive.
Oilman2 has been warning for years that “Depletion never sleeps.” And now that Joe Biden is blowing-up American energy independence to keep his deals with Globalists and jerk America into another Obiden Iran nuke blackmail, Shell says its oil production has peaked. Tisk, Tisk. Another take on it in The era of peak oil has already arrived for this energy giant.
Commie uprising in Portland just won’t stop. Like a bad case of crabs – trying to break down the doors of the Portland Police Association. Of course the crooked mainstream buries shit like this. Since this is obviously a “peaceful protest” to the “woke-joke.”
Then, speaking of commies – how about the crooked media trying to paper-over AOC in “Fact Check: Did Alexandria Ocasio-Cortez Deny Claiming Ted Cruz Almost Had Her Murdered?” (They get to mostly true but what contorted BS…seriously.
And we couldn’t help but notice ex Fed Chief Allan Greenspan’s wife apologizing to Ted Cruz. Try NBC’s Mitchell apologizes after wrongly correcting Cruz Shakespeare reference. I’m so old, I remember when “news” was not just a raggedy-ass collection of opinion splices dumbed in high def…
Around the Ranch: Getting Hip
Good news – and bad – about Elaine’s hip surgery.
The good: It was done Monday. Though, apparently, since no one called us to give us the time (blame Super Bowl?) right after Monday’s column, we put on our Speed Racer / Thunder Road skills to run up to Tyler, TX early Monday.
Operation (scheduled for 8 AM) rolled at 9 AM, instead. A couple of hours later, Elaine was back in a recovery room. There was a hairline crack (top of femur), so she is on weight-bearing restrictions for several weeks.
The pain is gone, too. Except, we discovered she had a very bad reaction to coming down from the meds. There goes her chance to become a drug addict! (Something about “conspiracies” which then morphed into thinking we were on a cruise ship, instead of in a hospital room. Getting aggressive with staff, etc…). “Alexa, play some Miles Davis…”
With rest, food, and some walking exercises, the anesthesia effects wore off, so I got her home Wednesday (sorry about missing the PN column Wed.!). I’ve been playing a hybrid role of man-servant, cook, physical therapist, chambermaid, and so forth. Clock’s ticking today, since we are expecting our second “blizzard” of the year here in East Texas this weekend.
On the docket? Pharmacy run, top off food stocks, and iron out the home health agency which needs to confirm they are “in network” before I get them to come out. Always the paperwork…sheesh. But, in healthcare, if you don’t nail down coverage up front…
Oh, and in addition to the walker and such, we’re now proud owners of a bedside commode. Whee! Are we having fun, yet?
LBNL (Last But Not Least)
Here’s additional evidence re-proving that there’s no intelligent life on Earth, after all: Pigs can play video games with their snouts, scientists find.
Of all the issues in the world…this one?
Off to make breakfast for my impatient: Bit of coffee, half a croissant ham and cheese, orange juice, banana, milk, multi-vitamin.
Moron the ‘morrow’ and: Write when you get rich,