War and Peace – With a Side of Put Options

Tolstoy I am not. Although we seem to have a gambling streak in common, I remain confused just what a “non-violent and spiritual anarchist “ is.  But I do have a good grip on the gambling side, which is why tomorrow morning’s Peoplenomics report will be so interesting.  I developed something called “The Trading Model” which was designed to keep your 401-k or saving from being run over and tossed in the ditch.

Still, we have to admit the title “War and Peace” is a pretty novel way of framing the morning’s news, especially because it’s Tolstoy’s homeland that is warning of civil war if Ukraine uses force to put down the Eastern uprisings which will (unchecked) cede more of the former Ukraine back to Russia.

War in never civil, even if that’s the term.  And by now, you have likely read James Dunnigan’s works on war, what goes into them and so forth.

The hell of it is that  I’m pretty sure that Donetsk will fall, say next week, and that should put us in a position to rally from pending lows (specific targets tomorrow) back up before the Russian moves on the whole of Europe ramp up in May, if I have anticipated their timing right.

This morning, the market is not taking the news particularly well.  After killing 166 points in the Dow Monday, another loss seems likely today, and into next week’s options expiration at which time U know who will be buying up armloads for the next cycle (May).  I generally don’t play options anymore, but when news events and history seem to lay out a path to “rob the bank” with limited risk, it’s a WTF decision.

War isn’t the only thing weighing on the market this morning.

The Federal Reserve’s Consumer Credit (it’s really debt, but in banking it’s always about me, me, me, and the me in this case is creditors) Report that came out yesterday.  Revolving credit card use is cratering again, going down at an annualized rate of 3.4%.  Sure, there was some improvement in non-revolving debt, but that was from things like student loans.

See footnote #7 and the gain under major types of credit by holder to “federal government” over here.

I’ve said before – but it bears repeating – that in a real recovery, the consumers is doing something besides buying cars, borrowing money to pay taxes, and scrimping to pay HUGE healthcare premiums.  The real solution is found is barring credit card companies from charging delinquent people more than regular interest – knock off this 30% whack on the pee-pee stuff that jams people down into debt and just fattens up the banks stress test line and ultimately just grows the divided between the haves and the have-nots.

I know this is dirt-simple and should be apparent, but it seems to be beyond the grasp of more than 500 Fools on the Hill or the guy down the Pennsylvania Avenue from them.

Hence, this morning’s outlook:  People are buying gold because they don’t trust a) Russia and b) the US.

Of course, there is the falling tech angle, too.  This is making headlines in places like the Financial Times.  Of course, if you had read my March 27th report (A “Social Decline” in Motion?) you would not be the least bit surprised.

Thus, we fearlessly forecast an S&P that could hit 1,751 within a week or two, (or Friday) which could jam gold up to the $1,375  range, or maybe even higher.  Fear is predictable.

This is a great time to be thinking like a financial doctor:  If this morning’s headlines are the symptoms, what would the patients be doing to self-medicate?  Cutting debt, buying gold, holding breath would be a fair stab at it, I would think.

And since no one in Washington can stand up to the K-Street Mafia, Bankster Division, there will be no real reform of punitive/oppressive lending practices, and, as a result, the cycle of boom and bust, not to mention class divisions at the human level, will only continue to get worse.

From the longwave economic perspective, we’re at the tail end of falling interest rates and as yesterday’s chart showed, this is when the odds of financial discontinuities is highest – when interest rates are nearly zero.  Think about negative interest rates for a second…and mull it over.

With that as a backdrop, it’s no wonder KGB judoka are warming up their irons to strike.  Sound-bite media are paving the way and superficial analysis isn’t the work of the devil, but it may help the sons of Lenin a good bit.  An under 35-state department and leftovers of the Bushistas and PNAC aren’t likely to help, much, either. 

So the close (shortly?) under S&P 1835 should take us down tdo our next trading target.  Give it a week or two, and let’s see how it plays.  Economics and war is just like golf, with just slightly different ballistics.  Tee time, as always, is 9:30 Eastern.

More after this…

(We’re always prepared to celebrate something around here…)

Sun, Grand Crosses, and Jittery Times

One of my biggest worries is that NASA has become a political football, of late.  Not only has the US decided to tank relations with Russia, but the “Oh, D’oh!” moment comes from the fact that we no longer have a way to get astronauts into space without relying on the Russians for lift.

imageSo it’s in this kind of “caught in our own thinking” and budget drops, that we eagerly wait each month for the Solar Cycle Projections, knowing that if any more cuts come to NASA they could start dropping important data, like this monthly chart.

The reason this is key?

Large solar flares happen on the backside of the solar progression (11.something years) and so we’re now in the high risk period.

Line that up with an astrological Cardinal Grand Cross, (details part 1, and part 2) and while we’re at it, let’s also serve up this year’s four blood moons starting next week, and you have a greatly simplified explanation for why my inbox is filled up with emails like this one:

“Got a creepy feeling about this Friday —

Flash crash on Friday???
I got a creepy feeling.  A couple of 11’s, a 22 and a 13.  And of course the Grand Cardinal Cross next week with the influence of Uranus being found in the disappearance of MH370 (that also = a 22 and a 13), and multiple earthquakes making the nightly news.”

Like the old saying runs, as above, so below.  Just keep Robin Landry’s 1,740 S&P level circled as an interesting intermediate stopping point.

In the meantime, the alignment of Earth, Mars, and the Sun today does lead to an increased chance of earthquakes, worry others.

MH370 Search Claim

China’s Xinhua news agency is going wall-to-wall on the MH370 debris story claiming their patrol ship Haixun 01 was first to hear the pinger.  We’ll see…

Island Fever’

The Senkaku’s are back in the news…those being the small islands in the East China Sea where Japan has laid claim.  None of which would matter except that the world is running out of oil, and there’s oil under those reefs and so it is a really BIG deal.

So much so that the US and China are now trading a war of words, as chronicled in this NY Times article.  But the Chinese are going “Russian hard” with the West saying no territorial compromise, no way

When a defense minister says something like that, one ought to pay attention to the implied peril of blowing it off…

Another One Bites the Dust Dept.

The synchronistically named Ouachita Citizen has broken a story about congressman Vance McAllister kissing a staffer… Look for this to cause an uproar in Louisiana politics. Word is the staffer got fired…bigger questions are a) who released the video and b) what did McAllister know and was this another “honey pot” deal?

Tax Freedom Day

Is April 21 this year.but it would fall on May 6th if the federal borrowing binge were included.  Which means what?  (the highlight is a hint)

imageTax Freedom Day is three days later than last year due mainly to the continuing economic recovery, which will boost federal tax revenue collected through the corporate, payroll, and individual income tax.

Americans will spend more on taxes in 2014 than they will on food, clothing, and housing combined.

Americans will spend 42 days working to pay off income taxes, 15 days for excise taxes, and 11 days for property taxes. Click here for a full breakdown.

Americans will pay $3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.5 trillion, or 30.2 percent of the nation’s income.

Another day older, and deeper in debt (chorus).

Now, just to make sure you don’t get out of line once the tax bill is paid, we now have national security systems to make sure you don’t start to thinking outside the box.