The Phony Record High in Stocks

We’ll post the Housing Price Index (C/S HPI) as a separate post when it comes out, so drop by about 8:15  Central for that. Couldn’t sleep, so up early, venom about market hype being our first topic du jour.

Aggregate Index Calls BS

1998, or so, I began to develop an Aggregate Index.  Reason?  Single Market Indices are terribly misleading.  Which is why you can have the Techs up one percent on a day when the down’s down a quarter-percent.  The “truth” is somewhere in-between.

While the hyping-heads are trying to sell the last few remaining suckers the idea of “investing in stocks” because they’re a “good idea” let’s look at the so-called record highs.  I write down all the data at the close and you know what it looks like?

Can you see the problem?  Can you feel my pain, brothers and sisters?

I stick my fingers in my ears when the fin-chans are on.  The eyes looking only at numbers and even these are not to be trusted.

Inflation Covers the Lie, Too

The second way Big Lies (about new “record prices”) is covered is by failing to mention INFLATION.

The problem with inflation is no one can really agree what it’s doing, ergo, trying to hold a meaningful conversation with an iPhone bauble-head becomes pointless.

One measure is the latest YoY *(year-on-year) measure in the Consumer Price Index.  Sure, what the hell.  Here it is:  1.7% before “adjustments.” (Which shouldn’t be needed for YoY matching periods, but simple statistics don’t exist, so let’s go with that, shall we?

July 24 of this past summer the Dow Industrials closed at 27,269.97.  The close yesterday?  27,090.72. No cigar.

The S&P at that time was 3,019.56.  But yesterday the S&P closed at 3,039.42.

But before the S&P people celebrate, we have the matter of 96 days of continuing inflation to consider.  We could argue what portion of 1.7% annual to use.  We could ruse American-style “banker’s rules” (based on a 360 day year) (0.266%) or the more honest 365-day year (0.263%).

OK, you win!  The honest one it is:  Yes the S&P – even on an “inflation-adjusted” basis made a record as soon as it passed 3,027.51

OR Did It?

If we were investing in UHD TV’s or Apples, such an index might be “realized” by looking at just this data.  Bus  stocks are financial instruments and  they are prices based on how “easy” money is.

Let’s look at M2 back during the week when the previous market highs were set in July.  M2 then?  (4 week, unadjusted rate) $14,821.3 billion.  In the latest week (closest to now)? $15,072.9.  1.6975%

Yes, the four-week rolling M2 is lofting skyward on a 6-month basis of 7.6% annualized, but that’s another discussion about MUM –  making up money.

For now what matters is the old record S&P 500 in July – that 3,019 number – would need to bust through 3,070.81 on a close.  Of course, no practicing economist could come right out and be so cynical as to think a HUGE three-month DOUBLE TOP is possible. Chart me!

We’ll update this tomorrow on (our high roller) $40/year subscribers -only site.

You will have to forgive me, is the point, if I seem a bit grouchy about the hype festival.  “Now that stocks are at record highs, the Fed is a risk that could stop the rally…” headlined one of the fin-chans.  Figured all that out without help, did they?

Even a damn fool wouldn’t trust anything on television about this market.  I know – because I am one.

Ahead of the Curve

(Or, the more things change, the more they stay the same…)

Demise of medical cannabis markets might be much ado about nothing.  Unless you’re a prescribing doc who’s whittled a few scrips to stay alive in the malpractice insurance eats everyone’s life world.

Where’s Boeing Going?  Look for clues today and see the NYT’s DealBook: What to Expect When Boeing’s C.E.O. Faces Congress Today.

If you have Bitcoins, or you’re a true believer in blockchains, might want to consider the implications of Google claims quantum computer completed 10,000-year task in 200 seconds.  In the coming A.I. rev, there is no privacy, no security either.

Meantime, anyone up for ChiCoins? China Prepares to Launch Its Own Digital Currency as Facebook’s Libra Languishes.

And several readers have reported that snow has already hit their locations – a bit earlier than normal – whatever the hell that is, anymore.  Winter storm advisories are up from Montanna, down through Wyoming and Colorado, even down to Armadillo (sic) Texas with a touch of Okielahoma and into Western Misery.

On the Califires, the Weather Service at press time was reporting

“The combination of strong offshore winds with very dry conditions and fuels will continue to lead to dangerous fire weather conditions across parts of California. A number of wildfires are currently burning across the state, including the Kincade fire (largest in the state) and Getty fire (west side of Los Angeles). Critical to extreme threats are likely to persist through mid to late week. Read More >

We continue with the early Luddite view that it’s not climate, it’s weather..but who listens to old men who’ve gone to the woods to hide from digital madness?

Prime Eats on the Fly

Elaine went to the story t’other day and came home to report her feet hurt.  She was pushing the cart around the store for a couple of hours because she actually shops.  That is, she looks at labels, looks for GMOs to avoid, reads ingredients, unit costs,. nutrition, preservatives, salt levels, and all that.

Then in the vegetable department, there’s a chat and a thorough search to see which heads of Romaine are freshest.  A chit-chat at the deli counter, where the in-store baked turkey is sliced (#4 thick, please) as is the Organic roast Beef for Mr. CompuButt.  The  eat department is fun, talking to  Kevin and Caleb, sharing adventures and eventually a 1-1/2″ thick porterhouse is cut for me…  All this takes time.  It’s a social outting, local news foray, and environmental change measuring all rolled into one.

But shopping is undergoing radical surgery.  Daughter #2 has been using Amazon Fresh up in the Seattle area for years and loves it.  Two ofour food purveyors offer to do shopping for us…and we’re going to give it a go.

Just today we noticed that Amazon makes grocery delivery service free for U.S. Prime members, too. Got it!  Except, we can’t get deliveries like that out here. We can’t get cell service, either, but that ain’t all bad, esp. with 5G coming out to cook even more ears…

Since both Wal-Mart and have local outlets that can reduce the visit to the store from a 4-5 hour multi-mission adventure quest down to one hour we’re going to try it a few times.  It’s almost a half-hour each way into town, or back.

Elaine’s looking forward to our pending experiments and experiences and promises comments on how it works.

But in today’s work-your-butt-off all the time world, nice that online shopping is making progress.  Something we can sink our teeth into, for sure.

Readers are welcome to comment on how it’s working for them, since we do have concerns about whether personal shoppers will really get the same “pick of the litter fresh” and no dented cans, that we do.

Write when you get rich,  Or full.

38 thoughts on “The Phony Record High in Stocks”

  1. George,

    I wrote about this yesterday in regards to California’s fire problem, but I realized this morning that I missed the mark (no, no THAT Mark). At the root of it, California’s wildfire problem is the ‘fire triangle’. For those unfamiliar, that’s equal combinations of heat, fuel and oxygen arranged in a triangular diagram /_\. The variable that most state’s successfully manage through controlled burning and other techniques is fuel (undergrowth). That’s the same reason George keeps his 40 acres well maintained…so his damn house doesn’t burn down. So, the question here is, what’s your problem California? Get with the program and stop with the drama.

    We’ve toyed with the same idea of using Amazon’s and other chain’s shopping service, but it has never quite felt ‘right’. I like the idea in principal, but with mine and Mrs MAJ’s busy schedules we still like to do our own shopping. I think that there’s a certain therapeutic quality to it. That’s especially so for the Mrs. Currently, we’re in the middle of another cross country move that’s taking us a relatively short drive from George’s neck of the woods, so time (and patience) are in even shorter supply. It may be time to revisit that option.

    My last note is more of an observation on financial markets. This isn’t something I’ve recently considered, but more of a long term, persistent gut feeling. One reason that I read the blog here is that it’s a great place to pick up new and useful information, especially in financial matters. So, my observation is thus: the daily fluctuations in markets, if you read the financial news, is always due to something along the lines of “stocks slip as investors are worried about this company or surprise revenue drives markets higher”. Case in point, this morning’s headline from the WSJ market page is “Global Stocks Slip as Investors Look Ahead to Earnings.” Every single day there’s an equivalent headline. My gut tells me this is all B.S. and that somebody is steering this in order to make money. Not just a little money, either. A metric sh*t ton of money. Who knows, maybe I’m wrong and all this is basically driven by the things that are reported on and random events. Not being an expert or even anything approaching the level of ‘shade tree’ investor, I’ll defer to the judgement and gentle guidance of George.

    • I’ve never quite gotten the hang of short term investing in the stock markets. Perhaps it’s my own failure to grok value of simple data entries rather than real items, and many charts still look like tea leaves to me. Creating real value seems to be a better bet given the time and angst involved in financial assets.

      I’m wondering if the logic behind the brokerages going to “no fee trading” is to amp up transactions so they can pull all their profits from front running! Thoughts are welcome – there has to be a business model here somewhere.

    • Maj is sort of on to something. Years ago somebody ran a photo of GS’s ceo guzzzling champagne with with Bloomberg’s head and both looking like they are having the time of their lives. It isn’t much of a stretch to imagine Goldman’s former head trader(then ceo) feeding stories to Bloomberg or getting the scoop first. When you think about it, paying for premium news doesn’t get you faster, better news; it just gives someone a head start on those that don’t pay. Or you could think of it as pro traders paying to have market moving news delayed for small traders (small timers can’t justify the cost of news for the size of their trades) ,which places the big traders in the position of unloading their position on the small traders as news filters out.

      I don’t know if you noticed, but within the last few years, hedge funds would have their lawyers deliver investigative reports to the SEC after they had shorted the hell out of a stock. A presser and report copy would also go to all the financial publications. Hedgie managers also seem to get busted a lot for insider trading.

      During the libor rigging time frame, a GS manager was caught sending an email to his trading desk. The gist was an order to manipulate a price, don’t spend a lot of money doing it, and don’t give anyone a #*@%***!# trade.

      What I take away is:
      Pro traders are risk averse bean counters that won’t do anything without an edge over others.
      By the time news is out, usually the entire market has been moved to account for it. The pros are unloading which explains those large abrupt movements followed by flat.
      Pros don’t like retail traders. With cause, probably. If pros are wrong or not first to move on a market moving event, they face a barrage of small trades going against them.
      Most profitable trades work best when there is a loser on the other end. Any trade is probably against someone who is better informed, equipped and more ruthless. More probably automated trade skimming.

      • MAJ is on to something. Go read the reader comments to articles in Marketwatch. Most of them are griping about the authors cranking up stories to fill webspace. I subscribe to the Washington Post (hush, all of you!). I read it online and get the news today. My wife prefers the paper copy and reads the news a day late. She’s always amazed about how informed I am, LOL!

        You want real time information, you have to pay for it. And we can’t afford it.

    • If you go back and look at some of the revelations that emerged during the market turmoil of about 10 years ago, you can see how (and who) was manipulating the markets. A couple of quotes summarize the article:

      “HFT rigging helps explain how Goldman Sachs earned at least $100 million per day from its trading division, day after day, on 116 out of 194 trading days through the end of September 2009. It’s like taking candy from a baby, when you can see the other players’ cards.”


      “High frequency trading firms now account for 73% of all U.S. equity trades, although they represent only 2% of the approximately 20,000 firms in operation.”

      The above was a 2010 article by Ellen Brown (J.D)

      These sorts of scams have continued to evolve, as you can see from another article last year where Goldman Sachs made $200 million in one day.

      Consequently, everyone is trading and investing in a completely rigged market. That’s ok if you understand it. However, if you are expecting a free market, then you are going to be disappointed – and fleeced. What’s the quote about if you have to ask “who is the Patsy?”

    • “That’s the same reason George keeps his 40 acres well maintained…so his damn house doesn’t burn down. So, the question here is, what’s your problem California? Get with the program and stop with the drama.”

      Amen MAJ…..

      My father always said proper Woodley managment.. he always said a bird should be azz ble to fly unhampered through the limbs of a tree.
      Clean them up..prune them and keep the underbrush cleaned up..

    • Since I began watching market news, over 25 years ago, I cannot think of a single headline regarding an upturn or downturn of either an entire market or a single vehicle, which wasn’t accompanied by a CYA-type “damage control explanation.” This contributed to my conclusion that the HoC (house of cards) should’ve come tumbling down with the dot-com crash, and why I marveled (and still do) at the tightrope-dance Bush43 and Greenspan did in the early 2000s.

      Everybody in “finance” knows that the HoC is going to crash eventually, but no one wants to go on record, uttering a negative word which might allow the stock-shufflers and politicos to point a finger at them, as “THE INDIVIDUAL who caused the collapse…”

  2. Top O the Morning Elmer!
    At least the FUD is consistent, disingenuous and tiresome.

    Q computers does not provide detailed answers – but they do distort human perceptions of local time/space order in the geographical areas surrounding the installation sites..”Mandela Effects” /strangeness.

    As the BTC.N sees it – once the FED goes to Zero or Negative – they will have Obsoleted themselves into the Dustbins of history.

    Cyrpto and Blockchain R the future of Money – who needs or wants the bankers/Slavers or their phony Script.

    Millennial’s are all about Scarity – the exact opposite of FIAT Currency’s.

    They love us soo much they are “Printing” MOAR USD/$ every single day – Overnight Repo’s & Term Repos ..just for the kind- generous- warm- openhearted-Evil Banksters – No USD/$ 4 U Slaves!

    & No Bitcoin 4 U !

    Where the hell is the new Spartacus when you need him..?

    • Comrade!

      Why have you not downloaded the Xuexi Qiangguo “Study and Strengthen the Nation” app, Apple’s most popular download in Mainland China? It includes instruction on blockchain matters as well as sharing the precious thoughts of President-for-Life Xi. Resistance to group think is futile. Join the collective now while it’s still voluntary.

  3. Grocery delivery out here at the ranch is nonexistent. Zon Prime is handy for staples and such but you are on your own, meaning your own garden or hoophouse, for the fresh produce. Up in town my 96 Year old uncle who still lives in the home he bought with my aunt just after he came back from WW2 and drives his Corvette when he wants to has been relying on a regional grocery chain that offers home grocery delivery. Been pretty handy for most grocery needs except for beer which is why he keeps the Corvette. There have been exceptions in that he has had a couple of the delivery people “who don’t seem to like their jobs that much” and got a little rough with fragile items like eggs and cookies. A phone call to the store is all it takes to get the items replaced but I have a personal concern for his safety with someone who is enough of an ass to take out their employment frustrations on a package of cookies.


  4. George, great article in WSJ this am, “Delivery Shoppers Clog Aisles” about FreshPlus shoppers (one hour delivery! Mario Go-Karts in Whole Foods Markets!). Apparently making life miserable for leisurely consumers actually doing their own shopping, how twentieth century. I use FreshPlus as well as InstaCart, have been happy with the results, damned addictive for lazy slugs like me.

  5. George

    ” In the coming A.I. rev, there is no privacy, no security either.”

    In my military life I used One Time Pads for various duties.

    They cannot be decoded unless you have an identical pad and the correct overlay stencil. Perhaps people will resort to using one time pads as a pointer to already stored info. That would break the path that any A.I. system would follow to discovery your info.

    Just a half baked idea, but maybe a future reality.

    Time for that second cup of coffee!

    • Swiped from wackypedia:

      “Quantum computers have been shown by Peter Shor and others to be much faster at solving some of the difficult problems that grant asymmetric encryption its security. If quantum computers are built with enough qubits, and overcoming some limitations to error-correction, traditional public key cryptography will become obsolete. One-time pads, however, will remain secure. See quantum cryptography and post-quantum cryptography for further discussion of the ramifications of quantum computers to information security. “

  6. Comparing how Trump [redacted under site responsiveness and related to the topic rules. The issue of the comment was political and not responsive to the post today…sorry!]

    • Let your readers be the judge George. It was a good and relevant video that we must see to put real words from real people into perspective. This isn’t a reporters account of an event. It is the event, the words and the clown Cosplay of our President.

      • Mark, please try to follow my logic here because there are several billion items on the web that can meet the good and relevant label and I need to keep myself (as site content here) somewhat limited to a narrower range that All Things Considered. So, I redacted out the POLITICAL nature of your post.
        My site is NOT about politics, except insofar as it relates to the narrow range of items that will have an immediate impact on the economy. Videos any more than one day old are of little interest.
        Also, the site here is not a democracy. We don’t put everything to a vote. It’s a republic – after a fashion, run by a benevolent dictator (me).
        Readers who would like to hear more of your political views (or mine for that matter) are welcome to comment, but my sense is that people come here for new ideas, not to see where the band wagon is presently double-parked.

    • A good question. It probably depends on a particular store’s delivery area. Most deserts are formed by lack of commerce in an area — either unprofitable or too dangerous, or crazy zoning laws. I live in the Washington, D.C. metropolitan area. We have communities that are begging for grocery stores, and in my particular case, the stores are all localized and the housing is the sprawl around them. I have several grocery stores within two miles of me, but I have to drive about 5 to start seeing a variety of restaurants. Crazy.

  7. I use Walmart and they do all my shopping for me it is AMAZING and what I have found is that the produce is fresher than what I see on the shelves when I go in and the meat is the same way. It is way fresher than if I had gone in a shopped around. I think that they must gather meat and produce from product that isn’t put out on the shelf yet. I love that it has cut my shopping down to a 10 minute pick up time and I can get my other errands completed and be done early in the day. I haven’t tried anywhere else I live in rural eastern Oregon so the drive to Walmart is an hour but I get all my shopping and errands done much quicker.

  8. “But shopping is undergoing radical surgery. Daughter #2 has been using Amazon Fresh up in the Seattle area for years and loves it. Two of our food purveyors offer to do shopping for us…and we’re going to give it a go.”

    We all tend to complain too often, but our world is the way it is because individuals have chosen it to be that way. ;-((. e.g. (We complain about wars yet are eager to produce the means for it!!).

  9. I noticed new “shop on line” signs at our fav grocery store and told wifey it sounded great to order on net, pay and just stop by to pick up.
    She: They’ll pick rotten old lettuce to get rid of it.
    Me: No, they’ll pick the freshest out of the back room so they don’t mess the displays.
    She who speaks last: They’ll pick rotten old lettuce out of the back room.
    He who writes last: It is less work to pick the best head of lettuce in the store than to get business back from a customer with rotten lettuce. They will go with the good stuff.

    We always forget something on the shopping list and some days it seems like everyone else in the store goes catatonic in the middle of the isle. I gotta try it at least until the scewups start. Maybe not butcher or deli though.

    I noted a pleasant young lady on this shopping trip that appeared to be picking multiple orders in her cart. That was probably 4 people that didn’t block me on the way to the jalapeno stuffed olives.

  10. Hi George et al.,

    Cannabis, the essential oil of cannabis, is illegal. (Also known as Rick Simpson oil.) Possibly because it’s effective in the fight against cancers.

    Another effective and much cheaper route is fenbendazole. That is until those idiots in big pharma removes it or it’s made illegal by their congressional/FDA lackeys.

    More info on fenbendazole research Joe Tibbens and Dr David Williams article: A Cure for Cancer in Plain Sight.

    The CEO’s & their board mbrs should be held for crimes against humanity for patient farming and withholding life saving information.

    Patient farming-providing products that keeps the patient using prescription medications. For example: beta blockers can cause diabetes. That’s just one of many.

    Although not cannabis related but an irritation why is fetal tissue put in vaccines? See

    Thanks George for all you do. Your an inspiration!

    • Cannabis oil from marijuana is legal in 10 states. It is available in most legal dispensaries up and down all western coastal states. From hemp…it is legal everywhere…but is not nearly as effective. The kind I Use has small amounts of THC is a miracle cure and I use it as a replacement for ibuprofen. It’s available as drops and topical use. The topical products help heal wounds and relieve pain after a hard workout.

      • @MARKX

        here is a little ‘crow’ to consume with your cannabis oil……

        Tesla Discloses US Revenues Collapsed 39%. Americans Sour on its Cars, Pent-Up Demand Exhausted
        Death of the DollarEconomyNewsNWO TyrannyPolitics
        October 30, 2019 0
        by Wolf Richter, Wolf Street:

        This is a holy-cow moment.

        This morning, Tesla filed its Form 10-Q quarterly earnings report with the SEC, a moment when no one was supposed to pay attention after the surprise quarterly profit that had caused such a hullabaloo last week. The 10-Q provides a pile of additional detail that Tesla is not required to disclose in its promo-laden earnings report that was primarily designed to downplay its first year-over-year revenue decline since the Financial Crisis.

  11. Like you, I have a 30 minute drive into town where the nearest Walmart is located. But the really big, well-planned shopping trips are 130 miles to the Kona side where the warehouse store is located, for those big (storage) items. That trip happens only a few times a year. But I still don’t think I would want anyone doing my shopping for me. It’s the thrill of the hunt. And discovering they don’t have something you hoped for, it is time to improvise on the fly and ‘shop’ for something different.

    Delivery? I only count on the Postal service out here in the jungle. I once had a freight delivery that was a month overdue and got traced to the trucking warehouse in Hilo where it languished. Seems none of the local ‘city’ drivers were brave or willing enough to take my delivery 20 miles out here to the boonies… despite a clear street name and address. “I don’t know where that is.”

  12. I see it as one more step in controlling the food supply to the masses. In a few decades all your food will be delivered,, no choices, you will eat, what they feed you, when they feed you, and how much they feed you ,,,CORPORATIONS (NON-HUMANS) seek only to own you, like a bovine in a feedlot

    I see our food supply narrowing down to fewer and fewer corps.
    and the cattle rejoiced in trading freedom for security

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