Despite my injuries (some improvement – thanks, drug!) the morning SitRep ended up being two large piles of  yuck.  No, make that glop.

In one pile went a ton of stories (BLM, NFL, brandishing, and so forth.  In the other went the  Jerry McGuire  stuff (“Show me the money!”).

Say, that’s not a particularly hard editorial choice for the  neoclassical monetarist,  is it?

M1 – Markets to Pause

Normally, the annual high in the stock market comes in mid to late August.  Some years (1929) it’s the first week of September, but mainly  we’re possibly getting close.

The reason for this thinking is in one of our  Peoplenomics charts of the Aggregate Index.  We have had two “active counts” going of this rally (from the late March lows).  One of these was a five-wave advance count.  The other was an A-B-C bounce from the March lows.

While that was momentarily breached Wednesday, it wasn’t a “Big Deal” because when you back out the 31% jacking-up of the money supply since the lows, we’re  really likely only in the 70-75% retracement area.

Now, that’s a controversial position to take.  But, it’s coldly logical and supported, especially now, by the data.

You want money?  Let’s see what the Making Up Money crowd at the Fed has done, shall we?

There’s a certain “understanding” that comes from staring at the data long-enough:  You can see that in the past 13-weeks, the money supply (m1) being up 92.7% annualized can be divided into four quarters.  So (without firing up the spreadsheet) if we take 92.7% annualized…divided by four… how much should the market be up – just on monetary inflationary pressures – since March 23?

Oh, 23%, or thereabouts.

But the 6-month (divided by 2 for a quarterly rate – taking some liberties with math here – means the quarter rate could be expressed as 28.55%.  OR, we could run with the Fed’s 33.4% annual number each of these?

19,418.67 (the March 23 Aggregate) times 23% says some the low our Aggregate ought to be 23,884.94.  Or, if we look at the six-months (turned into a quarterly) that would target 24,962 on the Aggregate.  While the annual rate would suggest 25,904.51.

Nice Theory, But…

What was the actual Aggregate close Thursday?   

28,707.71 which is 98.789% of the February 19th previous all-time high.  To put it politely, there’s an implied “Rational Investor” question that screams for an answer:

Are things better off now than they were February 19th?

No, of course not.

For one, the stock market had a 31% wash-out since.  And all the GDP numbers globally scream that GDPs will be down anywhere from 4 to 12 percent for this year and there will not be a global snap–back next year.  Trump’s in trouble, virus criticism rages, masks don’t make a happy public and on it goes…

Honestly, the difference between the “pure monetary rally range” and the actual is likely accountable by direct Fed intervention (which may not show in M1) and because we have a lot of people staying home, and trying to make a living day trading.  Which makes for a good deal of “puffery” in markets (in our view).

Since Thursday was options expiration for some index options, we’d expect lower at some point today, so the specialists can pick-up stock to cover at lower prices, and then go on to afford that house with a pool in the Hamptons.

Set all this aside now, as one “pile of glop.”

Pile #2:  The CV-19 Glop

The picture didn’t change overnight.  We’re still going to hit 14-million cases globally on Sunday.  And, if you haven’t been paying attention, the cases are now going up at a “million a week” rate.

Since we have 7-1/2 weeks to Labor day, we take 14-million for this Sunday, add 7-million to that, and remind you that 21-million cases is a kind of “low-ball” estimate for the holiday weekend.  Love to be wrong on this, but I won’t be.  Especially with “Brazil hits 2 million coronavirus cases and more than 76,000 dead.”

My son, a firefighter/EMT up in Washington state, reports there are now 16-firefighters in his dept. who may have been exposed, so here comes another round of testing.  (We heard a rumor the chief has our outlook forecasts, that I’ve been periodically sending G2, up on his wall…The department acquired an additional aid buggy (perhaps) based on some of those numbers.  It’s now getting a real workout…)

Whether schools open – or not – is likely to one a hot topic going forward.  We’re refer you to Colleges Prepare to Test Thousands of Students for Covid-19 as a starting point.  School taxes with no “school?”

And then there’s the One Percenter’s trying to feather their own nests as European Union leaders say they are far apart on COVID-19 bailout deal.

I think it was Reader Ray who pointed out the disingenuousness of the “millionaires calling for higher taxes” on the rich.  They could, just get off their asses and send in extra dough to IRS.  He think’s there’s a PR play going on among the Richie Rich types and I can think of a lot of reasons why they’d want to deflect criticism…

A Word from HR

Notwithstanding, when you see stories like “Mark Meadows calls Fauci’s 1918 flu comparison ‘irresponsible’” to run the people through your personal HR filter I looked ’em up and I tend to weigh my assessment of such headlines on the basis of source creds.  So in the case of Fauci, his educational background:

“Fauci attended Regis High School in Manhattan’s Upper East Side, where he captained the school’s basketball team and graduated in 1958.[9][5] He then went to the College of the Holy Cross, graduating in 1962 with a Bachelor of Arts degree in classics with a pre-med track. Fauci then attended medical school at Cornell University Medical College where he graduated first in his class with a Doctor of Medicine in 1966.[6] He then completed an internship and residency in internal medicine at the New York Hospital-Cornell Medical Center, now known as New York Presbyterian/Weill Cornell Medicine.”

And in the case of his critic, Trump Chief of Staff Mark Meadows:

“Meadows attended Florida State University for one year in 1977–78.[2] Meadows incorrectly claimed to hold a Bachelor of Arts from the University of South Florida for many years in his official biography maintained by the Office of the Historian of the U.S. House of Representatives. In actuality, he graduated from the University of South Florida with an Associate of Arts.”

I don’t know about you, but this is not a particularly difficult HR (decision support) call for us to make.

Trump has a continuing (and really serious) HR issue!

Now, toss in the Marxists horning in on the death of George Floyd, and stories like how Redskins result: Another culture war win for corporate America and the media elite, and you quickly come to what we call “The Gradient.”

That’s the “area between news story themes” and that’s where the future sort of oozes from.

Example?

Take the story “California faculty union demands free tuition for black students, removal of armed campus cops.”  What the faculty leftists are doing is demanding more racism. (When you check race, that’s racism, right?)  They seem to be operating on the theory (never proven, as far as I know) that “two wrongs can make a right.”

Show me some data!  People are people – when you bring up race – melanated or otherwise – that’s racism.

And it’s in Colorado, as well:  “UC Boulder: Holding the values of the Black Lives Matter movement is “non-negotiable condition of enrollment.”  You’re kidding, right? So a school endorsing racism?

Understand this clearly:  Equality – as I was brought up – means literally color-blindNot color checking GMAFB.

Marxists are all about making up more wrongs…and that’s where America is today…and its a freaking mess.

Ah…the Phony Culture War...

The liberalista (corporate media and left of there) are selling the notion of “culture war” but it’s not.  We’ve long-held that this is simply what digital insurrection looks like.  Since we’ve never seen it before, we had to call it something, right?

One of our long-time contributors on military affairs is a recently retired former “oak leaf cluster” fellow, deeply involved in the digital warfare front.  I value his perspectives on things like phony “culture warfare” especially when it’s spill-over from Me-2 crap on socialist media…

“Two Princeton profs are arguing the ‘cancel culture’ mentality should apply to the Democrats and their own unsavory moments in American history.

Should add to their list of horrific aggressions Harry Truman’s order to drop A-bombs on Hiroshima and Nagasaki during the summer of 1945. Since an estimated 200,000 non-combatant Japanese civilians died and untold thousands more were irreparably maimed by the blasts, current cancel culture standards demand that Truman and his bevy of Democratic party associates should all be erased from the pages of U.S. history. Ban the entire party. Erase it!

A better alternative exists: just cancel the #*@%! cancel culture.”

And so – with its clothes ripped off – all but the most stupid can see “cancel culture” for what it is:  Marxist historical revisionism.  Forget the past (like the implosion of the Soviet Union, Stalin’s killing more people than Hitler, and so on) and you, too, can set up a bad government and become a two-bit dictator.  See Venezuela for details.

Coming soon to a country near you?

DigiWar

Speaking of digital warfare, did you see where “Twitter hack, outage shut down National Weather Service accounts during severe weather, tornadoes across Midwest?”

Housing Starts

Just out from Census:

Someone ask for a side order of context?

  • Privately-owned housing units authorized by building permits in June were at a seasonally adjusted annual rate of 1,241,000.  This is 2.1 percent (±1.2 percent) above the revised May rate of 1,216,000, but is 2.5 percent (±1.7 percent) below the June 2019 rate of 1,273,000.
  • Privately-owned housing starts in June were at a seasonally adjusted annual rate of 1,186,000.  This is 17.3 percent (±11.0 percent) above the revised May estimate of 1,011,000, but is 4.0 percent (±9.1 percent)* below the June 2019 rate of 1,235,000.
  • Privately-owned housing completions in June were at a seasonally adjusted annual rate of 1,225,000.  This is 4.3 percent (±12.2 percent)* above the revised May estimate of 1,174,000 and is 5.1 percent (±11.9 percent)* above the June 2019 rate of 1,166,000.

After the data, Dow futures were up 150.  We’d still like to see a pullback later but who knows?  Maybe we’re not the only ones to realize we’re in “million cases a week” territory…

ATR:  Leg’s better, thanks…

Lots of red light later, the ham string pull is much-improved.  And the gout is quieting down a bit.

Still hot as blazes here in the Outback and we’re now in the 45-Days of Hell until September gets here.  We can hardly wait.

Write when you get rich,

George@Ure.net