Waiting for the Rally

We are sure to get some kind of rally today and it should have legs and get us back up to the 1,900 level on the S&P.

But things aren’t looking pretty right now.  The Dow lost another 200 points Monday and after being up +50 earlier, it looks like a +12-pointer may be all that can be summoned.

What’s worse?  I don’t see things getting much better any time soon.  Robots and software are on their way to ruin 33% of jobs by 2025.

Although the Fed has done a near-perfect job of massaging money and lending over the past 10-years, you’ll also remember my railroad bridge story.

Your what?”

The railroad bridge story (which I borrowed) goes something like this:  In the Great Depression, the economy didn’t grow fast enough to keep up with the massive changes in technology.  So when a certain level was reached, the economy (like a train) went off the bridge across the canyon of Recession and that (along with a drought) turned things into Depression.

This time is no different, except that the Fed has been lowering rates and doing anything else that comes to mind in order to build an economic bridge over the chasm of recession that began in earnest with the Housing Bubble debacle of 2008-2009.

And they’re still building today’[s bridge as fast as they can, but the train is almost here.

The problem is that not enough people are “buying it.”  We have to wait until tomorrow, but the short version of what’s going on is that you can’t keep growing a recovery when people don’t spend more than they make.  So if tomorrow’s retail numbers disappoint, remember where you heard it first.

Japan was down 2 1/3% overnight.

I’ve been researching the whole matter of negative growth coping strategies and we’ll get into that in tomorrow’s Peoplenomics report, but I can tell you up front that capitalism that works so well under stress (like a high growth, unbounded world) works terribly when it comes time to reverse things and slow the economy.

The good news is that with options expiration this week, we should see things pop up a bit for a few days, but come next week, you might want to keep the barf bowl near the computer.

I loved Hoola Hoops, but it wasn’t an industry.  Social media is not an industry, either.  It’s just taking people a little more time to find out that the written version of CB Radio will fade, over time, too.. 

Just like Tulips during Tulipmania.  It’s just a matter of when.  But not yet (we hope):  Options week should save us until next Monday.

Oil: Who’s Screwing Who?

OPECers are becoming split on the Oil Limbo – also known as “How low can you go?

The Saudis are hinting at $80.  Oil is under $85 at this hour.

They want to screw Russia and Iran.

But – this US wet dream of cheap oil – this has its downsides.  Like driving Russia into the arms of China and, did we mention, increasing the odds that Russia could lash out against the West in Ukraine or any of their other proxy states?

Oh, yeah, it’s reassuring that 170,000 troops are being sent home from the Ukraine front, but don’t the Russian military vehicles have brakes?

Quiet Ebola Day

We shouldn’t have a new case in the US until about this weekend.  Nevertheless, Drudge had 14 Ebola headlines up earlier.

Our China Spy Story?

I think I mentioned this may start to pop this week (thanks to Grady at our www.nostracodeus.com site for drilling into the data on this).

Looks like Malaysia would like to invite US spy flights to drop by and refuel and such.  The problem is that will piss off

China (even more) which is not exactly smart given that they are now the world’s largest economy.

The Chinese are still buying America (with our own bonds, which is really cute, when you think about it…)  Their latest acquisition, the Waldorf hotel in NYC should be a nice showpiece demonstrating how to play rich uncle.


I like it when I see a story like “20 extremely dumb celebrities.”  Hell, I can almost hear the lawsuits flying…

Absent real news (and since I didn’t sleep worth a hoot last night) I’m going back top bed and wait for some real news to wander by…