This weekend in Peoplenomics (our premium subscription offering) some insight into how gold is thrashing about – losing nearly $40 bucks on Thursday. T’ain’t no big deal – yet. Sunday a look at one of the chart techniques to get some interesting insights into how bubbles bubble – and when’s time to “Git Outa Dodge‘. No, I’m not selling that one gold coin I bought at $265 just yet, if that’s what you’re thinking. In fact, my commodities guy JB has been buying the low points of the dip.
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What drove the gold up yesterday was in large part the strengthening of the US dollar. As I’ve noted several times we’re in a market where strong dollars equal weak gold. Since we’re in the midst of triple witching which again commodity guy JB says seems lately like it’s been more and more a chance to buy at short-term lows. An interesting theory he’s got going, although not investment advice – if he’s right, then we might not see another low in this area until mid March of 2010.
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One thing that may help is the Bank of Japan saying ‘it won’t tolerate deflation‘. True, it’s sort of like saying “I won’t tolerate gravity’ but down in the bond pits there’s a kind of any slogan in a storm.
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“What we really needed.” said a large brain friend of mine, “Was a stimulus of about 1.5% of GDP to kick start the economy. instead, what we got was about 1/2 of 1% spread over 2-years and that’s not going to do it…” Some mention of Krugman’s prescription in there somewhere, too, but it’s early and the coffee hasn’t kicked in yet.
“Look at China – they did a 1½% stimulus and they got back-to-back quarters of growth…”
OK, so I go look at China and what’s the first headline I see? “China property stocks drop most since August on Curbs“. Seems that when the Keynesians turn on the presses there’s a tendency for bubbling in real property (anything tangible that’s an inflation hedge). Still, seems he’s right about jumping out of a recession-verging-on-depression.
I figure we won’t see much meaningful stimulus until we get closer to the 2010 elections and the slapstick government of the checkbook republic figures out that the “Vote ‘Em Out” movement has legs. Maybe then we’ll get more thank pork & arrows…but thick-headedness is endemic.
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I haven’t don’t my monthly Port Summary issue for this month, so shall we mosey down to the docks and get a reality check on the so-called ‘recovery’?
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Long Beach: Year to date cargo is down 18.7% compared with last year. Let’s hear it for the stimulus package!
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Port of Los Angeles: Loaded inbound was down 11.84% for November and overall for the calendar year is down 15.13%.
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Port of Oakland: Down 9.9% YTD but November say a 3.4% gain.
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Port of Seattle: Up 15.1% in November, but still down 9.7% overall year-to-date (YTD). International inbound was up 34.4% in November, but is still down 10.7% YTD – way I figure it is replacement parts for things that are breaking.
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Port of Tacoma: Down 19.8% YTD.
I would reveal the Port of Portland’s latest, but they haven’t posted November operating results yet, although October YTD was down 37.8%.
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I have this really, really simple economic viewpoint: When we see outfits like “Shell shipping Houston jobs overseas” and at the same time port jobs are on the endangered list because of a continuing fall in cargoes both inbound and outbound, what does that tell you about “The myth of Globalism”? Maybe something like “It’s imploding!”?
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Corporate globalism at one point seemed like a good idea; it allowed the US to export some of its least desirable industrial operations to third world and emerging countries. But a little bit of risk avoidance led to a lot of abuse such that now IT departments are being exported (still) and the US finds itself in relations like those with Indonesia tied to exploitive marketing like tobacco outfits. As a result, you and I can be ‘outsourced’; such that we’re competing with least-cost workers worldwide and to the extent that corporations have no moral strictures to deal with, regular humans in the US fall victim. The confidence bubble burst, housing collapses, and government wrings its hands yet fails to recognize the larger design pattern issues.
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To be sure, there are those who argue that folks like me are ‘alarmists’ and ‘doom-sayers’ yet the Ports data speaks for itself.
The next data point that should come into view by mid-January will be that Christmas this year was smaller than last. “Retail sales figures disappointing for November” headlines a report out of the UK this morning. Yet optimism is being served up even this morning about the domestic picture with stories like “Super Saturday Expectation High for U.S. Retailers“. Stories about how “Chain stores avoid deeper holiday discounts” sound hopeful, but as always I’m asking “Where’s the beef”?
If gold’s got a secret it may be something as simple as this: We needed a larger stimulus with less pork &arrows to pull us out of our economic quagmire and congress has failed for the sake of political expediency. Gold knows that inflation will necessarily come along at some point, but the recent price action reveals the powerful forces of deflation are still lurking as revealed in the Ports data.
Of course all this is subject to change because linguistically we’re due to see global context beginning to change in the next few weeks…so be watching watch closely as we go from reindeer dropping presents to bulls dropping something a little different and expect us to swallow it.
Merry Healthcare
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Think what you will about healthcare, I’m distinctly unimpressed with Christmas week legislation like…oh, just for example…The Federal Reserve Act which was passed on December 23, 1913.
Seattle Housing to Drop?
Follow my logic on this: “Ryanair ends talks to by 200 Boeing 787′s“ Seems to me that would soften longer term Boeing employment in the Puget Sound area which in turn oughta to ripple into housing prices in 2010.
Climate? Say Wen
“Obama, Wen offer no new emissions cuts at summit” comes the AP report this morning.
Meantime, multiple readers (both) have sent in notes suggesting that “Ain’t Universe got a sense of humor dumping snow and blizzard-like conditions on the climate conference?” Communists and socialists were out marching earlier this week…wonder if they’ll be out in the snow?
The Pen is What?
Mightier than the sword, you say? Wrong: Not this year. “Journalist deaths hit record (68) in 2009: report“. So much for killing the messengers…
Seasonal Dysfunctionality Department
“Drunk 4-year-old steals Christmas presents.“ Quite a tale and commentary on families falling apart this time of year.