Since I’m in semi-retired mode – with a million projects going on here, some of which needs to be done before nukes fly – this will be a very direct summary of events to kick off your day.
War Just Ahead
Covering up the global financial systems implosion is not going very well.
A number of scapegoats and distractions have been wheeled out: Covid (and checks) and now war in Ukraine (and checks) all trying to get the financial system past the long-wave economic interest rate cyclical bottom.
The idea of many learned people – including former Fed Boss Ben Bernanke (who I admire greatly) – was that if you wanted to defuse a deflationary depression, all you would need would be (famously) “helicopters dumping money.”
Where Bernanke – and other great economics, like Keynes for example, in the previous Depression – go wrong is with the basics.
The purpose of an Economic Depression is to destroy savings. Where Bernanke’s logic went south is that money-dumps actually increase savings (because things like home values (due out in a few minutes in part 2 of this morning’s rant). It doesn’t destroy concentrated wealth, but that’s exactly why simplistic solutions like the WEF’s bullshit “Great Reset” are easy to pass off as “answers.”
It simply isn’t. Theft? Environmental Communism on a Global Scale with its own party apparatchik? Well, sure, there is that, of course. The whole Woke Movement is merely a cover op for the loser socialists to “shame and blame” their way into power. We are a country of suckahs to dignify it.
The problem – along shortly – is that in effort to dominate the end-stage of Globalism, the U.S. (and Europe) are trying to line up resource and both Russia and Ukraine are “hot dates” on Resource Night.
Economic Cycles Work
I am not a financial advisor. Nope. Just a beat-hardened long-time reporter with a good ability to spot bullshit masquerading as “news.”
BUT somewhere in the MBA program late 1990’s, I really got into cyclical and longwave economics. And some of America (and Canada’s) best minds shared views on the University of Colorado Long Waves group.
If your theory and reality didn’t match ex-freaking-zactly, this was about the most brutal peer-review you could get. My consigliere (tax attorney and CPA) was one of the brightest minds there and super-deep in his own cycles work.
Back in 1979, his work had already identified the “power rolls West” movement. Where, following the 1930’s Depression, power rolled to the USA. China is likely next.
That was the good news. The bad is that we’d have a war in Asia after the next Depression. Which we are quickly moving through.
Hiding Depression in Plain Sight
As demonstrated following the Internet Bubble collapse (2000-2004) the financial industry will kill its own children to save its own backside. When some $5-8 TRILLION in market cap collapsed, Wal Street simply changed up its pitch and sold Blue Chips and mainstream companies for a while.
The Tech Wreck wasn’t so bad, was it? Except that misleading accounting called EBITDA largely ignored the real income and real profits problem in lieu of the holy grail of finer code.
My reaction was to evolve a “BS Lite” Aggregate Index to smooth out some of the lying by the Street. It was a very useful reality check at the bottom of the Housing Bubble Collapse in March of 2009.
Since then, we’ve been on a drink the Kool-Aid roll.
That is, until last November 8th. Then our Aggregate Index peaked.
This goes as far as the early futures pricing today – a couple of hours ahead of the open.
The large, shaded area (with the biggest “1”) is our problem.
See, we also developed a simple Elliott Wave ranging spreadsheet.
Because since Elliott is somewhat predictable, once we can nail down the first move of a wave, then we can estimate where it will terminate, generally in a C or 3, or an E or 5th wave.
Here’s what our Peoplenomics subscribers get updated a couple of times a week: (Pay attention to the yellow arrow I scrawled in for you…)
At the whiteboard (after a few dutiful huffs on the marker) the explanation would be:
“We have been in a major Bull market since 2009. All Bull markets end. This one appears to have topped on November 8th 2021.
Since that time, we did a 5-wave decline. Which in the top chart is the major 1 down. Presently, odds are fair that we are in a Wave 2 Rally.
We have already completed a 50 percent retracement from the high-to-low bottom, and we are above, so making a run at a Fibonacci point six-one-eight retracement.
Worse, though, once we are done with the 2-UP that we’re still in, the Wave 3 down will be strong and violent. With the odds of a 50-percent market wipeout, even with massive intervention – by the end of THIS YEAR.”
The End of Wave 2 UP? Gas War
Which could come as early as next week.
Russia is demanding payment for its gas sold to Europe in Russian Rubles.
Europe is balking, talking poor, and acting like what aristocratic erudite entitled pricks do: They think the Russian gas is theirs.
When payments for April Gas are not made in Rubles, Vlad Putin (despot, nut, or whatever the Western-corporate owned media is selling him as) is simply going to turn off the gas. He’s on a “show me the money.” And that ain’t slow Joe’s paper.
Conveniently, we have the Ukraine “Kindling War” already smoking.
While the West’s media runs stories like Russian death toll rises to 17,000 as Putin’s forces fail to make any ‘significant’ progress, we’re keeping tabs on another story as a possible “canary in the coal mine” pre-indicator: Putin cowering ‘in bunkers amid fears of nuclear war’.
While the war in Ukraine has already been costly, there has been a lot of economic firewalling. Sure, energy prices are up, and that means fertilizer (which requires natural gas to make and diesel to deliver) will push food prices.
But it’s not a “big enough” problem to destroy most people’s savings and “till the ground” for another generation, or three, of growth.
So, what we could expect? Some upside action – as we drive toward that point six-one-eight retracement. And then, off goes the gas Sunday or Monday.
Already showing up says Robin Handler’s Options Signal Service which headlined in their overnight run “April 4th +/- 1-day continues to look like something is going to happen. It is more than just bitcoin. “
NATO will find a no-fly pretext, and by the end of next week, the reason for the Russians “going to ground” might be clear to America’s woke townies with their heads rectally held clinch.
We’d just as soon Putin give away free gas, Europe ends its bureau/aristocratic mindset, and Biden learns to check himself.
Absent that, we’re eyeing short side entry levels when we see how this blow off finished for the week.
Lemme see: Risk of nuclear war, finishing the filtered air garden room… I’m, having a hard time figuring out what’s most important in all this.
Which Big American City will be the first to Default? New York has 454K fewer jobs from pre-pandemic era, new federal data shows (nypost.com). We told you townies this would be along. (My two-cent win ticket is on Chicago with place tickets for Seattle…)
Speaking of Lori Lighthead; Lori Lightfoot has secret detail of 70 cops protecting her as crime in Chicago spirals | Daily Mail Online.
Also, in today’s Daily Mail Google billionaire Eric Schmidt has PAID the salaries of staff inside Biden’s science office. So where did the budget money go?
But mainly, today is about market hype: Stock futures rise as Dow and S&P 500 aim for 4-day winning streak (cnbc.com).
ATR: The Major Adventure 3
If you’re joining us in process, last week my lifelong buddy, the Major and his doctoring (ex Captain) wife, were in Mexico. Then Wednesday, her appendix exploded.
Emergency stitchery in PV (laparoscopic) and a planned flight home Friday. But then an A320 glitched out, so another night in Mexico.
Finally, back in the States late Saturday, she was back into the ER Sunday. Monday, a couple of drains were installed to get out excess fluid from the abdominal cavity and her breathing should have returned to normal overnight. It was poor and low O2 because of the fluid pressures…
So do keep her in your prayers, another few days. We’ll keep you posted on her recovery.
One other healthcare note: Yes, G.A. Stewart knows his website https://theageofdesolation.com is down. But, he’s in surgery today, as well (add him to your prayer list, please) so he will fix it as time and health permit.
Check back in a few minutes for the Housing report.
Ahead of them, Dow futures were up nearly 300 – heading for that ideal 0.618 from the lows on the 13th of this month. Go Dow! Go Brandon! Go Jerome!
Write when you get rich,