We have to laugh at the mainstream media (again). While the bmajor news headlines Wednesday involved the biggest-ever one day gain for stocks, there’s been a distinct lack of context in many reports.
While indeed the Dow 30 rose 1,086 points, it’s also significant to use that very early futures were pointing to a 400 point give-back today, If it happens – and who’s to say? – it MIGHT leave the Dow within 100 points of last Friday’s close and that was below where the Dow closed last Thursday.
Not following? It has been a week of arguably violent up-side and down-side action which, to our way of thinking, is very much in-keeping with the times.
My latest Crackpot Theory holds that when the division between people on secular issues becomes extreme (like who’s president, perhaps?), then market’s too, begin to become wildly divided as well.
This rounds out to three more important questions to be asking right now since our 2019 “Word oof the Year” may be volatility – and not just in markets. We could be facing Volatility In Everything. (VIE): Why, even the Federal government can’t keep it’s lights on… So we ask:
1, Is this market action being driven by humans or algorithms? We have been asking this question since late summer when I discovered a “heartbeat to the market.” And that may be evidence algorithms of behind the steering wheel, in my view.
2. The second question, logically following, is “Who’s making the money?” The answer is the Owners of the winning alogorithms – IF (and it’s just a theory for now) that’s what we are seeing in markets – “dueling algorithms.”
4. But it’s the third question that matters most: “Where does all this lead?”
Damned if I know…but whatever is going on is a global phenomenon. Maybe when we get 7-billion odd people on a single planet there’s a natural tendency toward spiritual cannibalism.
Take Japan where earlier this week the Nikkei was down 5 percent and then overnight is bounced up 3.88%. If there are algos are work, they are not just playing in the US. Something global is emergent.
The problem with even thinking about percentages – like in Japan – is that they are inherently misleading.
Start with a $100-bill. Now lose 10%. OK, down to $90-bucks, right? But suppose you MAKE 10%. Are you whole? No. 10 percent of 90 is 9 and if you add that to your $90 bucks you’re only at $99. Asymmetry is something we don’t think much about, but in times like these, such acuity is useful.
A 10% loss requires a 11.11… percent gain to even things out. No telling how this market will end “evening out.”
None of this is “Surprising”
UrbanSurvival.com had a very significant birthday a couple of weeks back. I’ve been meaning to mention it:
We turned 20-years old on the web. Officially, our first “capture” by the WayBack Machine of the Web Archive was on December 13, 1998, those the first posting went up on Dec. 8, 1998
We were warning you then – and we repeat the warning again here today – that the Nation stands at risk of another economic Depression of the same scale – or worse – than the 1929-1943 window.
I don’t mention our core philosophy very often, but it has been a useful guide over the years and has kept “our wits about us” when less reliable guidance would have gone a bit over the edge.
“There are two ways to live Life: One is for maximum gain. The other is to live to reduce the risk of Loss.”
I’m pretty sure few people think this way. Since when there are 7.7 billion people, most see the only way “to the top” is on the “backs of others.” I think of it as the peopled version of the Tower of Babel.
Sorry to say,the world has gain 1.7 BILLION people since we began our writings here. We made a conscious decision to move to a scarcely populated part of Texas knowing that eventually, even the Outback here would fill up. And the signs of development are popping up all around us. But, it’s still where people run a bit more thinned-out that we expect fewer will be interested in climbing over us.
How to Hide a Depression
Several readers have asked lately “Is this an inflationary or deflationary economic Depression Ure sees coming” – or words to that effect.
The answer is “It’s too early to tell BUT how about Neither?”
Studying economics as I have for more than 20-years, there’s something of a rhyme to Report from Iron Mountain possible.
In that book, written some claim as a spoof on “think tanks” of the Vietnam War era, the participants allegedly deconstructed war into its purposes. Eventually, it all came down to “control of populations” and who gets the reins.
Much the same can be said of Grand Economic Depressions. We have seen some where the outcome was mainly Inflationary – and the case of the Wiemar Republic – where people needed wheelbarrows of money because prices went up hourly – are examples. I’m a Zimbabwe Dollar Trillionaire, too – hyperinflation is a more common event than most realize.
The other possibility is the deflationary collapse into Depression and the American Great Depression stands are one of the poster children. But, there are plenty of other periods such as the Long Depression. The Wikipedia entry is quite revealing:
“The Long Depression was a worldwide price and economic recession, beginning in 1873 and running either through the spring of 1879, or 1896, depending on the metrics used. It was the most severe in Europe and the United States, which had been experiencing strong economic growth fueled by the Second Industrial Revolution in the decade following the American Civil War. The episode was labeled the “Great Depression” at the time, and it held that designation until the Great Depression of the 1930s. Though a period of general deflation and a general contraction, it did not have the severe economic retrogression of the Great Depression
Which related to Iron Mountain how?
Suppose that the purpose of a Depression is NOT to inflate or deflate a currency underpinning an economy. What IF the purpose is a hell of a lot more sinister? That would include keeping people under control along with keeping people poor to control their rate of resource burn.
In which case – and there’s some evidence to support this line of thinking – the “Modern” and “well-managed” Depressions could be almost invisible in the short-term. The effect of the Slow-Motion Depression that I believe we’re in right now may only be seen when comparing disposable family resource on a per hours worked basis.
In the 1950’s, a vast majority of US households (with very few exceptions) involved couples raising 2.3 children and one wager-earner working outside the home. Today, everyone has to work. On a “loaves of bread per day” or percent of house payment per day basis, we have made backward progress since 1960 which was really a time of Peak Prosperity. The liberally supported Sexual Revolution destroyed marriage and that resulted in wholesale family and personal disasters going through the roof.
The two political parties are complicit, too. They’re all bought and paid-for by corporate interests represented by the “K-Street Mafia” which is why it seems like “nothing gets done.” It doesn’t – and that’s the plan. The social clamps are going on. If you have a mortgage or don’t have a well and a garden, congratulations – you’ve signed up for “total trust in The system.” You sure about that?
How about we note that gold is going up (Around $1,275 now) and if this was a deflationary depression ahead, it ought to be going down. Oil should be breaking towards $20 bucks, too. But, if it were REAL inflation, gold would be sailing over $2,000 and Oil would be bound for north of $200. No, the Fed is playing the economy like a fiddle.
Which gets me to the thought problem: Are we just be “slow boiled frogs” who are having our total savings drained out as a long-term financial blood-letting? In the end – when you behold things this way – we all end up renting our lives from the government which, in turn will exact whatever toll they feel like exacting.
The function of a Depression is the destruction of savings or its confiscation.
For now, it’s not clear to everyone, yet. And it’s not a “done deal” in America. But, as we discussed recently on the Peoplenomics side of the house, it ain’t a big leap from credit scores to the wrongheadedness of social credits – a cockamamie theory cooked up by an engineer who didn’t understand economics. Being philosphizers rather than actualizers, socialists wallow in this kind of swill. It becomes the basis for a digital aristocracy and we already see the formation of that on the web with the digilantes of correctness.
But that’s what we have for now: A carefully scripted move toward global governance of 7.7 billion slowly boiled frogs who will wake up too late, not realizing that a carefully applied ointment of deflation here but inflation there will poison us all– leaving us to all become “subjects of the State” over time. With the super-libs taking the House, and already the deification of the FDR over-reach in the works, we can see how useful collapsing personal net worth will be…perhaps never to be seen again.
A low-burn-out of democracy…driven by people’s inability to live below their means and save for their own futures.
Evidence in Headlines
This is the context of our view of the “day’s moving pieces” in headlines.
Liberal billionaire apologizes for funding ‘false flag’ effort to link Kremlin to Republican in Alabama Senate race. (What? No jail for anyone in all this? Oh…a liberal! Of course! What fools we were…not that Robert Mueller would do anything since his crew is mostly what? See how hopelessly screwed we are?)
And in the finance of cocaine, did you see where Venezuela cocoa growers fear new pest: the government?
OK, so much for today’s whine… off to find out if buddy Coy up the road ever got his lights back on from the big storm through here last night. 4″ of rain in the gauge in about 8-hours and almost no sleep due to the thundering that came with it…
Perchance to nap before moron the morrow?