Markets around the world are mixed this morning. In Shanghai was down 1.9% but the Hang Seng was off only 0.3% and the Nikkei was up about 3/4′s of one percent. Go figure. Same kind of confounding inputs out of Europe, too, where the French and German markets were down more than one percent and some have noticed that it almost looked like a mini flash crash. But that was way early, so you might want to click here for some more recent data.
Of course some are bound to blame the Chinese rate hike over the weekend which seems to have rattled some markets, but I’m guessing seasonal selling may factor in, too.
This weekend, despite promises to myself to avoid obsessive-compulsive writing, I nevertheless cranked out Peoplenomics reports on Saturday and Sunday, too.
The main thing to think about is the relabeling of the long-term chart (which you can see here [bottom of this page]) and in it, you can see why there’s a fair chance that as soon as the present rally falters (upper right small circle) which ought to happen when the gain is equal to the small lower circle, then we should be off to the races for some serious downside action.
More important, is that is my change in the numbering which shows P1 (primary wave one down) from the All Time Highs in 2000, dragging into 2003, and then P2 (the Housing Bubble Rally) lasting until 2007. It’s there we begin – if my thinking isn’t cockeyed – P3 down and under this scenario, the collapse from 2007 down to the March 2009 lows was only the first act of what should be three, but more likely five, big movements down in coming months and years.
Such a thing wouldn’t be out of place, and as I told subscribers, it would set up a late winter to summer ‘false flag’ event of some kind in order to social engineer the public away from realizing that this is the Depression all over again, and that all the warring in the sandbox is just the CCC and Works Progress Administration with a rifle in lieu of a shovel?
Admittedly, that sounds pretty ‘out there’ but if you look at the available evidence, the facts sure could be lined up that way.
Not like it’s just me, lining things up like this: My friend Gonzalo Lira asks the same thing in a column he posted last week “Has American Military Spending Really Been a Form of Keynesian Stimulus?”
Back to point, this is the time of year when a lot of investors scramble to get hold of IRS Publication 550, Chapter 4, which is arguably one of the more important publications IRS puts out because it handles things like the Cost Basis of investments and even more to the point are the “wash sale” rules, laid out here.
Once upon a time – in the ancient history, people would sell a stock that was down for the year and time things so that the transaction settled before year end. Then, having locked in a ‘paper loss’ they’d enter the same position again in the new year.
IRS – long ago seeing this as a dodge – plugged that loophole with its wash sale rules.
On the other hand, if you were short a particular index (like I am) that happened to be a ‘triple bear ETF’ could you exit that trade and move to a ‘double bear ETF’ instead and claim a loss? Not going to offer an opinion, because I don’t do tax consulting, thank you.
Still, since a lot of stock transaction are three days to settlement I figure today and tomorrow could be interesting, to see if we get any spiking in volume in stocks, and similarly, since options are one-day settlement, on up through Thursday in options.
This isn’t the item that will be driving the market. The Case-Schiller/S&P 20-market real estate report comes out tomorrow morning – and it’s one of the key data items I’ll be watching for the week, since ‘as goes housing’ so goes much of America’s confidence and spending. Not to be confused with The Conference Board’s Consumer Confidence numbers…they’ll be out on Tuesday.
It’s A LEI
Speaking of the Conference Board, they released their European Leading Economic Index this morning:
The Conference Board Leading Economic Index® (LEI) for the Euro Area increased 0.7 percent in November to 114.3 (2004 = 100), following a 0.3 percent increase in October and no change in September.
Long as we’re on topic, their chart of EU LEI looks like this:
Which leaves me wondering this: If LEI-EU has been in such a glorious upswing, how come the rioters in (pick your favorites here) Italy, Greece, Belarus, Ireland, and who knows where else, aren’t ‘getting it’?
If you scrolled down to the US chart here, you’ll also see that LEI (US) has been screaming ahead of both the Coincident Indicators and local economic reality, as well, so something’s bound to catch up one of these days.
Blaming the Weather Reports
If you look at all the media coverage under the word “blizzard” in a Google News search this morning, you might be surprised. Almost 2,300 stories about the fact that it’s snowing on the East Coast.
This is winter, right?
Still, rather than blame layoffs, ending unemployment, missing house payments and the like for the last minute drop in retailing, you guessed it: Blame the snow.
Warming Up Korea
China Daily is reporting that new South Korean marine drills of the live fire sort will be going on from today through year end near the North Korean border.
The interesting part of the article quotes the JoongAng Daily says the US has decided to send the carrier USS Ronald Reagan into the region. The US Navy website shows only two carriers underway today and the Reagan is not among them.
Then there’s president Lee Myung-bak who is promising ‘relentless retaliation’ if the North tries anything. I can hear your thinking already: “Surely, another Nobel Laureate in the making.”
Speaking of Laureates…
Debka reports president “Obama no longer backs Palestinian state within 1967 borders“. That’s almost sure to touch off more violence in the region. Man of What?
Windy City Politics
Bill Clinton is planning to campaign for former Obama chief of staff Rahm Emanuel, who’s running for mayor in Chicago although his residency may questions persist with talk of an appeal of last week’s decision allowing Rahm to run reportedly in the works…
Riot of the Day
Depending on report either 110 inmates, or 43. were involved in a riot at a private prison in Arizona. That’s about 60-70 (not very exciting) miles southeast of Phoenix.
See Spot? NO???
Another items out of this weekend’s Peoplenomics that you need to be aware of especially with all this weather stuff:
“…there was this note from a ham radio friend in yesterday’s column:
“Hey George, 6 days in a row for no sunspots. Wonder how that will play out. More Global Warming I am sure.”
That promoted a reader to send this:
The link will take you to the “Virtual Philosophy Club” and a post titled “Sunspots – Prediction of new “Dalton Minimum”. Space Weather reports only two small sunspots this morning, so things are getting quiet…
Toss in a few more volcanoes popping off and we could well be in a wholly different world than the one we’re in now. Hope you’ve got food. Bring your own wooly mammoth.
(continues below ad)