Long Wave Economics is one of the most engrossing pastimes in the Universe. That’s because there is always a new way to look at things. Conventionally, the Kondratieff Wave (spelled Kondratiev by revisionists who haven’t read thee earliest translations, such as those by the American Economic Society circa 1933 where the Kondratieff spelling is used) is between 48 and 64 years in length.
Thing is, there are cycles other than Kondratieff. Strauss & Howe get to one in The Fourth Turning: An American Prophecy – What the Cycles of History Tell Us About America’s Next Rendezvous with Destiny. The view is more to social than economic mood swings, but the views merge into whole cloth in real-time.
Another theory – one I worked with Ehor Mazurok to evolve back in 2000-2001 is the notion that there’s a regular cycle of currency collapse and replacement,. Running 83.5 years (ideally, but with 10-years of wiggle-room) the dinner plate is set when 95 percent of the purchasing power of a currency has been replaced by debt. The wiggle is due to central bank interventions along the way.
The thumbprint of the Fed this week hints they may be trying to normalize markets around current levels. In the H.6 Money Stocks report, we notice that in an earlier “sliding time window” – to the end of October (table 1) – the print rate of M1 – cash and equivalents – was annualizing at 1.7 percent. Last week, for the sliding window ending Dec. 10, we were shocked to see them mashing the “pedal to the metal” raising the M1 short-term print rate to 5.0%.
Here today (table 2) and looking at data through Dec. 17, we see the easy-money has dropped back to 4.7 percent annualized. A good clip, but not the kind of market-decline inducing rates of earlier this year. As the late Marty Zweig cautioned “You don’t fight the Fed.”
When we line up the data from 1929 and compare it with a broad measure like the S&P 500 futures, we can expect a decent pop – perhaps lasting into the New Year. However, thereafter things are dicey at best since the Fed – like angels and demons – work in mysterious ways.
For today? Out of the woods, but as the highlight indicates, is it only a pause in the music or is dancing the Declining Blues still in fashion?
Sadly, a short-term return to pseudo-normalcy may be just that. (You get to pick whether it’s pseudo or short-term, lol.)
Since Japan and China were up overnight, and since the European markets were trading up almost 1.7-percent, we could (as a member of my friend’s Church of the Almighty Basis Point) look for something near a 1.7-percent gain in the US, shortly.
That’s because in our global aggregated view, there’s only so much money in the world and, like schools of fish, it seems to swim one way and then the other. Today, the fish want to head up.
Aggregates reveal the state of things only on weekends when all markets are closed and near the end of the month when the biggest of the fish have to settle up with the banksters.
A parallel is seen between mafioso’s giving a stake to junior mobsters running a “numbers racket” to fund them, and how money-center banks fund the high-frequency trading operations – a specially-dispensated kind of numbers racket in and of itself. Overlooked by regulators because when a crime happens fast enough, it stops being a crime.
At least if you’re getting payoffs in the form of political clout and contributions… in which case, fast skimming is just fine in the Big Casino down on the Street…
As we see it, market volatility is probably due to “dueling skimmers” trying to fake one-another out. Algo delight?
Speaking of the Mob…
We forgot to mention that Wednesday was Dawood Ibrahim’s birthday. (If you find yourself asking “Who?” the answer follows from Wikipedia:
“Dawood Ibrahim Kaskar ( born 26 December 1955) is a Mumbai underworld criminal mobster, drug dealer, and designated terrorist, originally from Dongri in Mumbai, India. He currently resides in Dubai and heads the Indian organized crime syndicate D-Company which he founded in Mumbai in the 1970s. Dawood is wanted on the charges of murder, extortion, targeted killing, drug trafficking, terrorism and various other cases. He was designated as a global terrorist in 2003 with the head money of US$25 million.”
By our reckoning, had he not gone into organized crime, he would have made a splendid banker.
Gangs (other than the republicans and democrats) have become a dad fact of life – living as most do on the profits from things government’s not willing to let “free” people make up their own minds on. The result? MS-13 gang members charged in shooting death of Houston teen: report.
I see stories like this and wonder how many trillions in tax revenue we’ve forgone in order to dance the make-up-crimes dance? As we’ve written before, crime does pay…and very, very well. It’s just that most people don’t count cop, prosecutor, and judge salaries (plus their benefits plus tax-backed retirements) in their accounting!
Speaking of birthdays (which Elaine and I stop counting at 70), Stan Lee (of comic-book fame) would have been 95 if he hadn’t passed last month on the 12th.
And this is Denzel Washington’s birthday. 63 if I’ve figured out this damn calculator. I’ve made a note to hit Amazon tonight to watch a few Denzel Washington movies. Great actor. Top shelf. Equalizer was excellent. Crimson Tide...wonderful movies.
Government Vs. Idiots
The mail still showed up yesterday and the Social Security checks landed. BUT, we will have to do without the advance trade report due out from Census today because of the goobermint shutdown. (Our headline isn’t intended to denigrate Idiots who – unlike goobermint – generally don’t hold civilian populations as tax hostages.
Shall We Go Trend Hunting?
We see evidence of more digilante’s mounting up. Or, are they more properly seditionistas? Read Anti-Trump Oakland mayor insists she ‘did the right thing’ in tipping off illegal immigrants about ICE raid if you’re not tracking.
Responsible pet ownership seems to have been swamped by “killer breed” promoters. Two pit bulls are shot dead after attacking homeowner, guest and responding deputy, reports say. DogBite.org says 74% of fatal dog bites in 2017 (29 dead) were pit bulls. Inexcusable.
Facebook revelations just don’t stop: Facebook’s massive, secret rulebook for policing speech reveals inconsistencies, gaps and biases. Mean like shadow banning conservative viewpoints, and such?
And the Mueller investigation may last longer than the Ice Age, the rate things are going. The latest glacial movement: “Mysterious ‘nude selfie’ said to be in Mueller’s possession, lawyer for Russian firm asserts in court filing.”
So, who’s the selfie of? Hmmm…
Well, this certainly has been fun. The Dow futures have dropped back a bit (+90) with 90-minutes to the open.
Off to chow-down so drop by for moron the ‘morrow…