Trump as the New Hoover

by

The futures are showing the Trump rally has at least an other half day, or so, and it could go higher.

Periodically, I share the following long-term view of the economy, updated twice weekly for our Peoplenomics.com subscribers:

This brings me to the financial discussion points of the morning:

    • · Gaps tend to be filled.
    • · What goes up…
    • · Trump is the 1920’s Hoover analog.

    The details then:

    When you look at the S&P one-week chart over here, you can see that there was a large gap open on Monday.

    One of the axioms of trading aggressively is that often-times, but not always, gaps like this will be filled.

    What that means in practical terms is that while I entered my short position this week too early, I might be able to still make money on the position by holding on until the decline to fill the gap takes place.

    This brings me to the second point: What goes up always comes down in markets if you’re willing to wait long enough. There is no particularly hurry to exit, at least just yet, because there is what MAY be this historical analog and under this view, we could still pull back down to even as low as the January/February level.

    This gets me to the historical analog part.

    Odds are looking to me increasingly like the notion we had the the Peoplenomics.com site a number of months back (Trump as Hoover II) could be coming to pass.

    The key part of history to understand is that Herbert Hoover assumed office in March of 1929. That means that he had 186-calendar days before the stock market actually peaked.

    In other words, his first 100-days were pretty good.

    I’ll save the rest of the date line-up and specifics for subscribers this weekend, but I would recommend that even if $40 bucks a year is too much, that you flip $5 bucks to support Wikipedia.

    Then read everything you can about the Great Depression and the election of Herbert Hoover and the basics of the Roaring Twenties (the TV show with Dorothy Provine is a simple way to learn).

    Things are different now, sure. Back in the last Depression the daily OMG came from flappers. And the modern analog there may well be the LBGT movement.

    And prohibition?

    Sh*t dude, the national marijuana legalization battle…our Modern Prohibition replay, right?

    It’s all there, all in-your-face and you have to be truly dense not to see it.

    Another key: Commoditization was key. Prices were low and consumption was high.

    Stock prices were at absurdly high prices then, and going higher, I figure another six months (at least) from here. And did you happen to catch the remarks – what last week? – of former U.S. Budget Director David Stockman?

    Look, he’s no fool so yes, once we get the final decent correction before the run at the ultimate top, we have no problem playing the long side of this puppy aggressively.

    But when we being to line up with history next year and the S&P is up in the 2,300-2,500 range (and we’re counting out winnings) it will then to be time to load up on the short side.

    The chart above may not be perfect, but there are some hard times coming – but not just yet.

    Part of the reason? The current fiscal budget will run until next October and the shape and priorities of that new budget will be what shape not only the economy, but it will limit the president and congress ability to manage the initial declines.

    In the meantime, the Fed will continue to live “in a box” because if they raise rates the economy will implode and if they don’t then the Roaring part of this modern analog will roar a good bit longer.

    Then Next Political Crisis

    With an up week likely, I have been scanning for news items that could rock the national confidence a bit and might give us one more pretty good decline (to fill gaps) as the market may be a better forecaster of human events than most people realize, at least if you line up the historical and modern events correctly.

    Do I have a suspect in mind? Sure, a couple of them in fact.

    It is already starting. The attack on the Electoral College. Move-on.org, which I think (could be wrong) gets Soros money (another sore lefty loser) is again demonstrating how good hearts, but weak brains work.

    “And to the Republic for which it stands….”

    Say what?

    Oh, yeah, miss that did yah? We live in a democratic republic which is different that the direct-mob rule of a pure democracy.

    This is something the Founders agonized over for a whole decade before striking the right balance. It’s why we have an Electoral College instead of the “direct popular vote” mantra.

    What the well-intended (but simple) don’t understand is that pure majority rule always turns into a lynch mob that will appropriate all assets to their own use.

    In a sense, “democracy” is what worked as a rallying cry for the Bolsheviks. Except – as always happens in such mobs – leaders come along and seize control inside and there goes the notion of democracy.

    It happened with Lenin, with Stalin, and so on. What people don’t seem to grasp is that Obama-Clinton was our direct path to the socialist/communist take-over/take-down of America had it been allowed to continue.

    Direct popular vote sounds good (and it ought to be a money-making for Move-on. But, as a practical matter, Electoral College decisions are what we have exactly to prevent “the mob” from running away with all aspects of normalcy.

    You see, the mob consists of coordinated special-interests. The Climate crowd will throw in with the BLM crowd, the voting illegals crowd, the bleeding hearts, the stricter zoning, the bigger government spending crowd…and next thing you know, we have managed to transition into a collapsing democracy of vertical interest demagogues.

    No thanks.

    The Founders and the Constitution are what America – the only grand melting pot that has worked in world history – is all about.

    And at some point, when – as I predict it will – the simpletons and youthful dumbkopfs manage to whip up violence, which is surely their path now that president Trump has been chosen – the leaders of any such violence should be arrested and charged with “inciting to violence.”

    Just like that Baton Rouge cop who has sued one of the BLM activist/leaders for inciting, we have a pretty good system of law that is designed to keep domestic peace and tranquility.

    The spoil-sport, sour-grapes, whiners ought to go back to their worker hovels and think about making something productive for America rather that promoting the continuation of division that the election decided.

    We are NOT a democracy. We are a Constitutional Republic.

    And revolutionaries too dumb to get it should get an education and get back to work like the rest of us.

    Violence in the Streets, Then?

    Perhaps: We are watching the somewhat garbled coverage of a shooting spree in Seattle last night involving five victims.

    The reason I say “garbled” is that the shooting took place at a convenience store, not the nearby anti-Trump rally.

    Another example of MSM making things up to make things happen? It wouldn’t surprise us in the least, of course.

    Next Suspect?

    Once we get past the Move-On stuff and media possibly “connecting” dots that aren’t there?  Who is suspect #3?

    Well, then we would have to put up China in our economic lineup.

    There, state media – the Chinese government owns it – is warning Trump against isolationism and is calling for a status quo.

    The problem the Chinese have internally is they are trying like crazy to build a powerful middle class, like the one that just flexed in the U.S. elections this week. And the one thing they can’t afford would be a huge decrease in their output to the United States. A huge – or sudden – shift in U.S. supplying manufacturing would toss China into a recession, and that’s the kind of thing that leads to wars.

    Suspect #4: Russia

    There is no doubt that president Lame would like to use his last 70-days to whip the U.S. into greater involvement in the war in Syria.

    But on the other side, remember that Russian fleet we were telling you about a couple of weeks ago? The one that sailed down past the U.K. and then turned left into the Med and is now around Tartus, their naval base of operations in Syria, courtesy of president Assad?

    Well, a report over here says the Russians now have their naval pieces in place and they are ready to take to the skies and I’m not so sure they won’t go a little “push-button warfare” with their cruise missiles.

    Suspect #5: The Super Moon Quake

    ‘Hasn’t happened, yet. But as I told you last week, we have to be ready both at the personal prepping level and psychologically, for a major quake because this year is ending with three Super Moons in a row.

    The link between Sun-Moon-Earth alignments was covered a good bit this summer. And example here.

    But not everyone lives “five minutes in the future” like UrbanSurvival readers and Peoplenomics.com subscribers.

    People not so blessed with a “look-ahead view” of Life will no doubt be “shocked” with a 7.5 to 8+ quake happens – perhaps in the next month or two – but that just sure as hell could cause a massive decline in the markets, especially if it happens to be in an economically sensitive area like the U.S. West Coast.

    Today?  Rally to Continue

    Not really any big metrics to model until next Tuesday when the retail sales figures come out. Already, though, just talking informally to our UPS and FedEx drivers, they tell me that the word on the street is that now that the election is over, people are de-pressurizing a bit from all the stress and will open their wallets a good bit for Christmas this year. They are anticipating a LOT of work and we might even see a pop in November car sales.

    Consumer prices come out next Thursday along with housing starts.

    But I expect a lot of people – like Elaine and I – who have been looking at possible moves have been watching to see how rational states are in their presidential choices and how they are working the modern-Prohibition analog problem (marijuana).

    The election this week should give comfort to Arizona people nervous about owning property in La Raza target real estate on the one hand, but suffering the pain of no weed to dull things up a bit. Florida, though? Well, still good home prices down that way, but plain terrible summers.  Best weather Pappy ever found in the US seems to have been Hilo.  I’m just not fond of living atop volcanoes, myself.

    Back to markets, the futures are up a hundred, but whether the gains will hold, or is some of our “suspects” will soften the week and keep our trading model short or in cash…well, that’s what Friday is about.

    Oh-oh… I hear my table saw calling so time to go build cabinets for the guest quarters…

    Write when you feel like it…I do.

    George@ure.net

    28 thoughts on “Trump as the New Hoover”

    1. Very interesting comparison, so does this imply we could be looking at another Great Depression in the near future? It seems to me that even without Trumps winning the election that is inevitable anyway. So what to do about it? Well, it seems investing in precious metal is what will save us according to the know-it-all economists. So along those lines I have invested in the most precious metal there is – LEAD. For me it is in the form of 3,000 rounds of .22 LR Hollow Points and 150 rounds of .38 Special Wad Cutters for my Colt handgun. Since you can’t eat gold and silver or even barter it after the SHTF, at least you can defend yourself with it, and kill wild game for food. Any thoughts on this?

      • New reader? Which of these will your lead help with – especially after a few weeks? Food, Shelter, Communications, Energy, Environment, Transportation, Finance? Go to https://urbansurvival.com/coping-prepping-for-the-zombie-apocalypse/ and scroll down to “Prepping – For What?” and read down to “That is the grown up prepper mindset.” Better yet – subscribe and hang around a while — there’s a great group of people here. [I’m a subscriber but I have not been compensated for this in any way. It was entirely voluntary. And – I approve this message. (sorry – had to add that). :-)

    2. All of the drug selling states have much to fear if Trump nominates Christie to become his AG.Christie,has refused to back legalization here in NJ,and has stated that if he were elected President,he would enforce the Narcotics laws against such states defying them,partially because their against the law and partially to extract revenge against the Feds not allowing NJ to take sports bets.

      Sales of small cars may boom next year as the lower income people are removed entirely from the tax rolls,something the talking heads never mentioned during the campaign.

      • Conventional wisdom seems to suggest that Christie may be tapped for Sec/State and Rudy Giuliani for A/G… whatever that’s worth. I have read that some of Giuliani’s success in NYC was due to the fact that he worked both sides of the law in many of his prosecutions, so at least he’s experienced – so to speak!

      • There should be something that is done to keep people away from the draw to use the drugs. I guess it is as strong a pull as any other animal instinct we have – such as sex, alcohol, food, etc. Lots of politically correct stuff, lots of “trophies for everyone” competitions and too much fear of getting hurt has limited the outdoor play we all did as kids. Drugs are a natural next step – you play by altering your mind rather than running endorphines through the system by running, jumping and biking. My drug as a kid was two-wheels. Dirt bikes, bicycle racing, enjoying the outdoors, travelling to races (carpooling, keeping costs down), meeting new people. A lot of kids cannot afford even that level of expense and end up spending their $10-20 pocket money on some drugs rather than an entry to any sort of sporting event that they can participate in. I think our Government wants this type of “kept consumer”. Sell them name-brand junk foods and keep the drugs flowing so they don’t rise-up and challenge the status quo. And those that do rise-up, they sell them credit cards and student loans to keep them working “for” those who supply those drugs (the coins and bills that they feed into the system to appease us).

        Let them eat cake – and give them bread and circuses. Then everything will be fine. Nascar anyone?

      • I thought that republicans favored small government, personal freedom, free markets (not black markets) and states’ rights. Oops, that’s conservatives like me not republicans

    3. “It’s why we have an Electoral College instead of the “direct popular vote” mantra.” No George, it’s NOT why we have an Electoral College.
      If you have studied history, you would know that representatives were elected to go to Washington because the average man didn’t have transportation/communication to do so. that is why they elected someone to represent them, and travel all those miles to Washington. (On horseback).

    5. George – I was thinking about the following quote when I read your comparison of today to the 1920’s, the long term cycles and the Electoral College.

      “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years. These nations have progressed through this sequence: From bondage to spiritual faith; From spiritual faith to great courage; From courage to liberty; From liberty to abundance; From abundance to selfishness; From selfishness to apathy; From apathy to dependence; From dependence back into bondage.”

      -Alexander Fraser Tytler

      • You must be better at retrieving crossbow bolts or making your own bolts than I am. Now, with a sling shot you can usually find an acorn or small stone lying around you can use.

    7. 11/22/16 Earthquake in Santa Ana. 7.8 in size from my data read. Best dart and i have been seeing it in the language for over 2 months.

      Also the big difference in Hover and Trump is that Hover was on the Gold Standard. What was the interest rates in 1929?? Im looking at a 5th wave up, from my data read. Which is waaaay too unconventional for anyone to understand… even me. Lol

      Take it for what it is worth… but i did predict Trump’s victory back on 04/18 at 10:05pm. Quite verifiable.

      Off to do something with myself. Have a good day.

    8. As volcanos go, this one is the gentlest one on earth. A little ‘hula’ quake 2 or 3 mag. now and then as things settle. Here in Puna, 20 miles south of Hilo, we get 150 inches of rain a year, and things GROW.

    9. My grandson called me late last night as he was watching the Seattle protest from the deck of his fifth floor apt.
      The thousands were beginning to surge through neighborhood streets that he could see, along with helicopters, patrol cars etc.
      No violence that he could view from his deck.

      What confuses me at this juncture, having seen
      recently re-posted (2014-16)articles in this ‘blue’ state of legally permitted gun owners protesting I-591/I-594 gun legislation as unconstitutional, (burning their permits) fully allowed by law enforcement at the rally (they too were in agreement?).
      Hence confusion-
      Trump once announced that he ‘packs’.
      Ok we all know where he stands on this issue.
      Hillary continuously called for support of the UN gun control legislation and process.
      Okay we know where SHE stands with the issue.
      WA as a blue voter state obviously went to the gun controller Clinton side yet-
      There was a ‘call’ at Seattle city hall after the election by a council woman to stand up and protest the election results, which of Clinton had won might take away their guns for good; burned permits and all along with other liberties, jobs, hope for a prosperous future with self determination.

      Mayhaps this was just another attempt nationwide by the Veritas disclosed “Ducks on the ground” hired for Hillary in order to arouse civil unrest during many pre-election stumps/rallies for Trump?
      Who is kidding whom?
      Yes, roughly half the nation was divided between the two candidates so half would wake up disappointed as you’ve posted.
      I have to wonder where the provocateurs still get their paychecks and to what end?
      How long will it continue and what will it change?
      I am all for getting back to a sane ‘Merica, yet I welcome change- positive that is.
      Let’s bring back jobs, prosperity, and dignity.

    10. ” It’s why we have an Electoral College instead of the “direct popular vote” mantra.” NOT…We have an Electoral College because when it was created, most men didn’t have the ability to go there or communicate with Washington themselves. So they elected a representative to go there on horseback. George, please take a remedial course in U.S. History !!!

    11. On the dawn of the morning after the unprotected and the undesirables started to take back our Nation from the sacred cows of the political class, I was unable to sleep.

      I came to loath the power and veracity of the Fourth Estate the first year I could vote. I spent a Saturday liberty afternoon attending a Goldwater event in San Diego. When I returned to the ship and watched the evening news, I was appalled to see how bits of his speech had been clipped and spliced out of context. It made him appear to be a raving maniac.

      I have been a skeptic since that day, wary of the power of entrenched politicians and the mainstream media. I supported Trump from day one, but I knew the powers that be would never let him succeed. He didn’t stand a chance against the power of the professional politicians of both parties, Wall Street, and the mainstream media. I did know that the power of the printed press was dying and that the alternate media spawned by the power of the internet was growing, but I thought it would not be able to make a difference.

      Early this morning, my tears flowed, as I watched this great man make his acceptance speech. The American people, those of us, mostly in flyover country, have spoken to the “elite”, and said it’s time to drain the swamp. I’m thankful that the fears I’ve carried for my grandchildren have been reduced.

      George, you are part of the new media that helped make this groundswell a reality. Thank’s for all you do.

    14. The argument for an ongoing “bull market” is still out there on the CNBC and other pumping shows. If a new presidency lowers corporate taxation, that’s fine and may improve earnings once, but then annual compares are based on the first year.

      Taxes cannot change until laws can be crafted and voted on. That means no time prior to at least end of Q1 of 2017 and at worst Q1 of 2018 if they hold it until the next Govt fiscal year starts in Oct 2017.

      For me, the melt-up is based on an unknown of “what if he does some good?” They won’t sell the market off until he starts proving he’s really a numbskull But if he does some good – market will stay up pretty well into your range of 2300-2500.

      I keep selling puts under the market and taking the low-road but those buying stock should still be careful as they assume what is yet to come.

      Depression mainly happens as we automate peoples’ jobs out of existence while people keep trying to pay for college and countries like China keep encouraging more babies with their new two-child policy or India keeps pushing for larger families as money flows into their borders.

      George’s lifestyle of homesteading is what I think many should do – but so many cannot as they live out their lives in an apartment near a city which cannot sustain people if anything ever goes wrong. And what I don’t know is how people will keep paying for apartments as their jobs get marginalized. My neighbors around me all have kids in their 20s living at home in the suburbs. I think that along with Vancouver crazy housing prices, Silicon Valley losing its trust-fund status again (as with the internet bubble) and people facing a realistic future of “let’s build something real” rather than “more web sites” – I can see why $CAT and other industrials are growing in value. I wouldn’t want to be long the “cute technical companies” like FANG stocks, Tesla, Solar companies, etc for the next few years. I think if we can get our young guys off the couch and working again, American can actually build some actual “things” again. Heck, flag-men get paid $20-30 an hour around me and yet they have a hard time finding people to do those type of jobs.

    15. My solution to the electoral college is to apportion electoral votes in the same ratio as the popular votes for each state. No winner take all states. I know Maine does that.

      It really makes sense because you look at a post election map and it could make someone think that we have two separate countries – a red one and a blue one. I think that visual alone harms our cohesiveness, the us, in the USofA. In reality there probably isn’t a single voting precinct that didn’t have votes cast for both candidates.

      Let’s apportion electoral votes the same we that We The People vote.

    16. As the Simpsons TV show correctly predicted Trump as president, maybe we should check if they said anything about a market crash LOL

      • Watch the clip carefully, it show President Lisa with her advisor displaying a downward arrow chart, then she says: “the country is broke”…

        There’s also another episode with Trump on an escalator…I couldn’t make sense of it…

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