While our favorite bond trader down in Houston floats out from the 20-inches of rain down that way (only 6-inches here at the ranch), we have to wonder if my long-discussed Ure’s Discontinuity is arriving.
Here’s how it works:
1. In normal times, the decision to invest in a complex one. Bonds offer the assure of a long-term return while stocks are not so sure, but they offer more of an upside.
2. In “non-normal” times – like nowadays – the decision is different. Pretty much everything except stocks, sucks.
Real estate is going up at the rate of inflation, but the Fed is printing faster than inflation, so the only gains in purchasing power will be in levered real estate. Which is less fun than you might think, because so many people are already in trouble with personal finances (Thanks, Obamacare!) and rising energy costs and the like, that they may not have the flexibility to pay higher rents in the future.
When you take it all in, you can see how a deflationary spiral works, too. People used to buy things “before prices went up” but the consumer calculation is flipped: “Wait and the price will come down, or – for the same money – you will get more features.” \
Bonds were once an option, but most of the good yields have already been “called” (bought back) so what’s left is low-yield and that sucks. If you have a 3% bond and the Fed is printing at 6.2% more per year, tell me where the joy in that is?
Gold is nice – so long as the Fed is printing, but when we get into the depths of the Greater Depression, the most likely move of the Fed won’t be to repeat the confiscation of gold and silver (as happened then), but instead, the Fed is likely to call ALL NON-ELECTRONIC BANKING ASSETS. In other words, if you don’t have it in an electronic trackable system, you will likely be forced into the system. Might even put the crypto-currencies in it, too, but we shall see…
Sure, you can think about other collectibles. But take guns. We know people who have made modest fortunes, on paper anyway, by investing in things like classic Thompson submachine guns. But now there is a new anti-gun push coming for a $1,000 gun tax.” Taxing a Constitutional right? Well, sure, why not. I mean “it’s only a “piece of paper” right?
Putting money in the bank used to make sense, but when comes down to it, the corporate banksters have taken the bloom off that rose, too.
You can put money in a passbook savings account and what will you get? A whole whopping 0.01% at one of the biggest national Banks of America when we looked. Maybe that lights your fire, but it sure doesn’t mine.
So when it comes down to it, we are – I think – possibly on the cusp of a breakout that will push us into a 1928-1929-like bubble as shown in our tracking work on the www.peoplenomics.com side of this operation.
So now we come to the unraveling this morning and it begins to appear as though an upside breakout might happen, in which case my January call for new all-time highs in May might turn out to be spot on.
When I checked, the Dow futures were up about 60 points, the S&P was up 10 and change, but the eye-opener was the Techs which were up 33-something and 3/4th’s of one percent higher. If there is even a ghost to the old saw that “Techs lead the way” they need to get to the party, pronto.
This is by no means “in the bag” yet.
There is a New York Primary today where the Donald leads the other.
The NY Post this morning is running an article on how Donald Trump botched a 9/11 tribute and instead “thanks the heroes of 7-Eleven.” Still, with a double-digit lead over other, and the press about this morning’s gaff, we have to expect Trump will win in NYC and as this Reuters story suggests, “rewrite the political map.”
In the meantime, I’ll be watching volume on both the S&P and Dow. If there is a breakout to the upside, then volume needs to build. Maybe it will, maybe it will wait to become conviction until after next week’s Fed meeting.
This morning, about the only news is Housing Starts:
“The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for March 2016:
Privately-owned housing units authorized by building permits in March were at a seasonally adjusted annual rate of 1,086,000. This is 7.7 percent (±1.2%) below the revised February rate of 1,177,000, but is 4.6 percent (±0.9%) above the March 2015 estimate of 1,038,000.
Single-family authorizations in March were at a rate of 727,000; this is 1.2 percent (±1.1%) below the revised February figure of 736,000. Authorizations of units in buildings with five units or more were at a rate of 324,000 in March.
Privately-owned housing starts in March were at a seasonally adjusted annual rate of 1,089,000. This is 8.8 percent (±11.1%)* below the revised February estimate of 1,194,000, but is 14.2 percent (±11.7%) above the March 2015 rate of 954,000.
Single-family housing starts in March were at a rate of 764,000; this is 9.2 percent (±10.3%)* below the revised February figure of 841,000. The March rate for units in buildings with five units or more was 312,000.
Privately-owned housing completions in March were at a seasonally adjusted annual rate of 1,061,000. This is 3.5 percent (±13.3%)* above the revised February estimate of 1,025,000 and is 31.6 percent (±15.2%) above the March 2015 rate of 806,000.
Single-family housing completions in March were at a rate of 734,000; this is 0.3 percent (±11.5%)* below the revised February rate of 736,000. The March rate for units in buildings with five units or more was 316,000.
It is still true that buying your own home is best investment most people every make. I mean besides a wedding license to the right person.
One More Thing
About half of the studies published in so-called “scientific journals” is likely crap.
First Things Magazine has a grand article in which they found something like 65% of the published findings of new “discoveries” simply aren’t so.
The article is titled “Scientific Regress” and you need to set aside some time to read it.
I’ll be making a copy for my primary healthcare doc.
You might want to bookmark the suspect drugs list: http://www.agingbraincare.org/uploads/products/ACB_scale_-_legal_size.pdf
Of course, you won’t find the pharmaceutical companies blasting this out…