We will be posting in two parts this morning – this being the first. Housing will be out from Case-Shiller/S&P/CoreLogic (and whoever else has a hand in it) in a few minutes. As – they say in Europe – Czech back.
Funny Money Rocks
For those slow-on-the-draw with Excel, the Feral Reserve’s H.6 Money Stocks report of last week may seem the most boring number in the Universe right not. But, when the print rate of M2, not-seasonally-adjusted is almost doubling when you annualize the most recent one-month gains (171% annualized), the reason for the stock market to “go ballistic” this morning is pretty obvious.
I expect ANY HARD ASSET WILL RISE – for a while. Stocks, Housing, tools, almost anything you can think of has a good reason to scream skyward. The stock prices are just an indicator of how “Made-Up Money Leaks.”
Strange Attractor Theory
I mentioned this a while back to subscribers to our Peoplenomics website. There is almost a Strange Attractor phenomenon being revealed in how we’re Replaying 1929. Take a look:
(As Ure huffs the whiteboard marker to start the week….)
You’ll see three yellow boxes. I call ’em “trading boxes” because I’m a dim-witted soul who doesn’t like long Elliott Wave count descriptions. There’s a green circle, upper right, and that’s where the punch bowl is loaded for this morning.
The “Strange Attractor” part?
We figure the Fed has spent some trillions of Digi-Dollars trying to keep the economy from imploding which it should have done long-ago. That’s why the dollar is worth less than 4-cents compared to the purchasing power it had in 1913, for example. It’s debt-logged.
Now, notice in the chart we are almost up to the red “line in the sand” which has been acting the Strange Attractor role.
We offer the opinion that while the Fed has managed to “save the day” they are facing a much larger problem: They need to “save the year.”
Which is why the Future is up in the air. The “goal line stand” 500-Dow points, or so up from here will not only define whether you can gift some college to the grand children. It will also determine if colleges will even be around.
Long weekends offer a break to contemplate the Big Picture stuff in Life.
One I’ve played in is higher education. We know that there’s plenty of OpenCourseWare from places like M.I.T. When comes right down to it, the whole notion of going to an over-priced post-secondary school is toast.
All we need is a “national competency test” and colleges would go bust overnight. All that saves them are accrediting agencies that essentially believe you can’t get knowledge except with a student loan. Horse-pucky, o’course. ALL accreditation means is a good “we’re holy academics” charade to get federal loans.
Ever notice how schools magically inflate costs? You can read a 99-cent book on Kindle. But if it’s a (bow down, now) TEXTBOOK, the book is suddenly $100-$200 dollars!!! How do them ankles feel?
The biggest threat to misnamed “higher ed” is YouTube.
The Education Scam
The lockdowns just rolled it out where it might be seen. No classes in person?
Same with massively expensive K-12 public education. Home schooling with online lectures and activities works fine. So why do property taxes need to go up astronomically to fund schools? When parents are supervising recess for their home-schooled darlings? Writing checks for computers and ISP’s… Especially when “the system” delivers near- zero-cost digital content?
Sure, sure…there’s a place for teachers. Tutoring the slow…fine. But remember, Yoda didn’t have the ‘young Walker’ fill out a promissory note on his home to dispense wisdom. Teach kids to read, support their natural sense of curiosity…
Yet that’s what happens when the world doesn’t have the good sense to work on worthwhile projects (recovering “magic” – like telepathy and honing psi skills – and lost ancient knowledge, purifying and improving our hearts…). Go really colonize a planet instead of 3-companies wasting equal resources each, I mean WTF? When do we become a cooperative culture?
The momentum of the crooked games inflates into the stratosphere. Ergo, this morning’s futures prices.
Dead and Dying
The CV-19 deaths continue to mount up. So does the politicking over what’s a medical problem.
One outcome? Cash goes out of style says an article in Fortune: “The post-pandemic customer experience will be cashless.”
Another? OK: As is typical in all Depressions, fashion stops being a growth industry. And see here: “Gucci slashes ‘stale’ seasonal fashion shows.” Who needs clothing at home… I mean with good HVAC, right?
And if you don’t drive as much, do you really need to pop 50-big for a new set of wheels? No sir. “Aston Martin CEO Steps Down As 007 Carmaker Hits Skids.”
Others will follow. But they will be the “too big to fail” because absent a Big Useful Goal, governments at all levels will have no option but to keep funding the old, worn-out broken paradigm.
Bigger problem for government? All this deficit spending means they will have to raise taxes and that, in turn, means you will be paying through the nose for things like property taxes shortly in order to pay retired public employees, which is the closest thing to a class of royalty you can find in America.
Not saying it’s wrong, but if 30% of Americans lose their jobs, where’s the 30% cut in government? No, the PLAN is to keep government growing through programs that divide the population (race, gender, climate, you know the list) all the while pretending there’s a point to continuing what’s broken.
Gotta love it.
Just Out: CFNAI
Chicago Fed National Activity Indicator:
Say, you don’t think that’s a problem, do you?
“Led by declines in production- and employment-related indicators, the Chicago Fed National Activity Index (CFNAI) fell to –4.19 in March from +0.06 in February. All four broad categories of indicators used to construct the index made negative contributions in March, and three of the four categories decreased from February. The index’s three-month moving average, CFNAI-MA3, decreased to –1.47 in March from –0.20 in February. Following a period of economic expansion, an increasing likelihood of a recession has historically been associated with a CFNAI-MA3 value below –0.70. “
Nothing to see here. “Playing through…”
What Can You Buy?
Honestly, not very damn much. Reason? If you already own a home, you can sit back and if you can keep your Jones in check, all you need to do is wait for inflation and use the cheap money to become debt-free.
If you can lock-in a dream home at 2-3% interest and inflation of 15% and higher is ahead, you really will be able to pay off your note with “cheaper money” in the future.
Companies and pension funds have the same problems you do, except they’re trying to find where the hell to put all the “made up money” sloshing around. Did you see where “Swiss banking giant UBS to launch venture capital fund targeting fintechs?” Oh God…is this desperation, or what? A bank setting up a fund to invest in new financial technologies…tell me they are brighter than this?
No, sorry, seems not. Continuation bias – inertia – is the order of the day. System cracking up? Let’s do more, more, more….
Still Times Are Good – Today
Though there are troubling reports around the fringe. “Singapore Warns Of Worst Economic Contraction Since Independence.”
OK, and the nursing home industry may be DOA since as CNN headlined it “The world sacrificed its elderly in the race to protect hospitals. The result was a catastrophe in care homes.”
OK, and so what if UN Says Both Koreas Broke Armistice In DMZ Shooting…a war in Korea would be a nice change-up.
I get sick of climate peddling stories like “Human activity threatens billions of years of evolutionary history, researchers warn.”
You can safely bet we’re all completedly hosed when it’s more important to “safe the Mary River turtle” than to stuff the at home gene splicing and disease making industry back in a bottle.
Especially since SkyNews reports “Coronavirus may have been a ‘cell-culture experiment’ gone wrong.”
You really need to watch that report because it makes the strong case (which we’ve held to on purely statistical grounds) that The Virus is a bioweapon.
Kind of like arguing about whether the detonation of a Nuke was accidental or on purpose, except unlike radiation which cools over time, no sign of cooling on the pandemic front.
Medical Not Political
The heart of “What’s broken” here: While a past head of CBS news says the media’s seriously left-leaning now and will do anything to screw Trump, what is a core MEDICAL problem has been cranked into a POLITICAL FOOTBALL and everyone’s fumbling the mental acuity play.
We’ll go collect a few zero’s in the market in coming months, but our focus here is prepping for the downside further along. Because while you can find happy-talk bullshit stories like “For Economy, Worst of Coronavirus Shutdowns May Be Over” in the Big Business Press, the logical extension of data is a downward spiral.
In the last five days globally, 23,444 people have died of the virus and 625,719 news cases have been confirmed. And this is on early data for today….
If you’re not STILL in serious defensive mode, we’re sorry to advise that you may not have what it takes to be a long-term survivor.
As we see it, there’s been an accidental bioweapon released and because of how this one works (slowly) the long-term die-off is only getting started. That’s not political…just the statistical inference.
Denial in the face of statistics is deadly. This is Russian (ne Chinese) Roulette. A few more cylinders, but are you in that big a hurry to pull the trigger?
Pay heed to stories like “‘I’m looking for the truth’: States face criticism for COVID-19 data cover-ups.” Yep, may be worse than reported. China doesn’t own that play.
Welcome to a Monday on Tuesday – write if you get time…