This website is primarily about longwave economics, it’s application to living the “strategic life” and – with any luck, skill, daring, or some combination thereof, making a few bucks along the way. Over the last two weeks, I’ve managed to see my once phat gains for the year evaporate to around 10% YTD which while better than banking both dollars, is certainly nothing to write home about.
But I have a plan to turn that around with the possibility of a “last chance rally” which may take the Dow up to new highs, or, more likely, at least pop things above the present Dow trend channel, maybe as high as over 13,000 by the end of this newly minted month.
The usual disclaimers, of course, apply: This is not investment advice – just my ramblings about how to play the situation with the often-repeated phrase “I change my mind more often than folks change underwear.”
The weekend movement on raising the debt ceiling (there is no other choice, unless you want to bring up the curtain on Depression 2 right now – and in a very in-your-face kind of way – has led to some predictable reactions.
Gold has fallen back somewhat, a predictable result, but I expect only short term. Then there were Asian stock markets where the “end of the world” fading a bit resulting in a 1? percent pop-up in the Japanese market and about a 1 percent rise in China.
Ditto, same-o, Euro land, where the FK&L’s (Frogs, Krauts and Limeys or French, Germany’s and British if you’re more PC proper-like) were up nicely, while gold had dropped, at one point, down to $1,610./90 on the Kitco charts; an indication perhaps that the flight to safety might be a little overdone if the world really isn’t ending until tomorrow.
Thus, a reasonable person might consider the long side of things, at least while the relief rally develops (if it does) and then reenter short positions later in the week, or, after the cyclical firmness that often leads in to options expiration on the 18th/19th.
Or, you can sit on your wallet and was for “unexpected consequences” and for those, we might look in the direction of Europe.
Heavy Data Week
About the only thing on the calendar today of any weight is the Institute for Supply Management’s purchasing index. Most are expecting about 51 on that with 50 – or above – meaning the economy is in good shape.
It’s not, however.
Word is out of China this morning at their (somewhat analogous) manufacturing index is down to 50.1 – which is only a tenth of a percent from being in Economic Grim Reaper country and, since you-know-who is their biggest client, that could signal further weakness ahead.
Not to put too fine a point on this, or rub salt in, or anything like that, but the Baltic Dry Index is down to just 1,264 this morning on the Bloomberg site, and since this is an indication of ocean shipping demand, might want to clean out under the bed in coming weeks: You need to hide under it as fall arrives.
I don’t put much weight in the monthly construction spending report since it can be all over the board with demand wonky due to high inventory levels.
Tuesday, the comedy reruns begin with the appearance of the Personal Income figures. Auto sales are a more serious thing.
Wednesday’s Challenger and ADP jobs data will likely show the return of layoff plans to some degree. An early indicator in this morning’s headlines is the report that HSBC (bank) is planning to axe 30,000 jobs globally.
Again, no salt in the wound intended, but in Peoplenomics this weekend, I demonstrated how – since the peak in the Housing Bubble circa 2008, we have seen America’s real standard of living drop 2½ percent.
If you haven’t doubled your meds, or started pouring doubles by Wednesday night, there’s hope you’ll be able to cope with Thursday’s data on Factory Orders and the weekly employment data gracefully.
But come Friday, the unemployment rate – one of the biggest indicators or all – will be out and I’m betting on it showing no improvement, but that’s not to say the nominal numbers won’t be acceptable down on the Street.
Reason being there are several ways to jigger them which most people don’t have the attention span to follow: First, the “workforce” number can be zapped within some measure. By claiming more people are not really looking for work, that can help a good bit. then, by adding imaginary jobs through the CES Birth/Death model, another tenth or fifth can be tacked on. Since the CES Birth/Death model only has a single annual confessional (January) this one is a good bet to watch.
January of this year, the CES Birth/Death model dropped 339,000 jobs but since then has remained (suspiciously?) positive.
Last, but not least, we’ll dissect the Consumer Credit numbers in next Saturday’s Peoplenomics column, but it’s often a discussion of whether three strands or a double-laid braid is the right stuff to be using on consumer debt nooses.
This may sound like a lot of words and details or a boring sort, but when you open your wallet and find it doesn’t buy food, these things will become very, very pertinent.
Most of the rest of America will be sidelined with non-essential developments, sold as “news” but not disclosed as having little to do with eating regularly. being healthy, or having loving family. If you have that, you’re rich, so the rest of the morning’s headlines may be sampled in true infotainment fashion.
War in September/October?
Having sampled a little “follow the money” logic, we now move on to considering how the PTB will spin the collapse of the US /Global economy into something which can be blamed on a “New Demon” which we’ve been watching develop as Iran is being set-up to take the fall.
One of the relatively “easy” tells (as in poke face giveaways) is that the US now has seven carriers at sea including the USS George H.W. Bush (CVN 77) – 5th Fleet which means in the Persian gulf area.
We’ll be watching today ships underway (presently 53%) and the locations of the Amphibious Warfare Ships (LHD’s) for further hints. But, if you see two or three LHD’s head toward the Gulf, it’ll be time to check the potassium iodate supplies again.
The events of 9/11 and the subsequent war-frenzy whipped on Iraq (which didn’t have anything to do with the events of 9/11 as is now commonly acknowledged) was a fine prototype: The PTB can bring the world to the brink of Depression 2 recognition and spin it away with a deft fall]-guy event.
Wouldn’t want to be planning tourism in the Middle East this fall, thanks.
Out at the naval fringe: A curious claim that a Chinese nuclear sub has been involved in an accident near Dalian on the 29th and radiation may have been released. Don’t know how real this is, but here’s the source, machine-translated by Google.
While we wait for the Euphoria Bubble to burst, them Grinchly guys at Moody’s are saying when comes down to it, no one’s debt plan really works but that won’t even phase the free-lunch crowd cheerleading assembly.
Pomp-pomps and sheep? A free lunch we can believe it? Have I inadvertently put Ipecac Syrup in my coffee? Emetic Monday. But wait! It gets even better…
EXCLUSIVE: From our Indonesia Bureau
What the Hell are UN Bux?
We start off with normal/routine traffic between me and Bernard Grover, ace chief of our Indonesia Bureau: Bernard, now thinking he’s Plucky Percell, got to telling me about something he ran across in his part of the world which are called UN Bux. And, since my news nose knows news, and I have never heard of such things, I pressed him for details. And I didn’t like what I learned and you may not, either:
“For illustrative purposes only, I have roughly recreated an UNbux. It’s close enough that if you saw one, you’d recognize it instantly. (NB-the image file is a re-creation and NOT a scan of the real thing…I wasn’t allowed to do that)
They come in sealed boxes of 1 million face value. Each box has a serial number and a receipt that goes with it. The contents are registered and the numbers are sequential. There are a number of restrictions on where and how they can be used. In order to use them, it must be with an authorized entity, and the box must be presented still sealed, with receipt and passport of the bearer. HOWEVER, there appears to be a well-established sub-market for these things. They are usually stolen, or obviously not being used according to the restrictions.
There is a chemical that cleans the UN logo off in about 30 seconds without a trace, even under blacklight. It’s very expensive. Enough to clean 5 million UNbux runs in the neighborhood of $350,000. The process is fairly straight-forward. You rub the notes around a bit and the blue ink vanishes. You then wash the notes in clean water and iron them for that ‘just banked’ look. Obviously, if you can raise the cash to clean a box of them, then you can use the cash to buy more chemical (by the way, ants love the chemical, so it must be fairly innocuous and there’s very little odor to it).
Only one catch, it’s very hard to spend them, because even if the UN stamp is cleaned off, the serial numbers are still registered, somewhere. Moving onesies and twosies through money changers wouldn’t present much problem, until enough of them started showing up and certain parties started getting curious. However, moving a pile roughly two feet square and 10 inches thick is a bit more problematic.
I looked high and low on the internet, but can find nothing about these. My friendly neighborhood economic hitman (former World Bank) knows plenty about them and keeps a few as souvenirs. They are handed out as ‘aid’ and to fund certain ‘activities.’ The batch I saw had come from a certain south Mediterranean hot-zone. I leave it to your imagination as to whom they were given.
I’ve actually held 4 notes and seen an envelope with a couple thousand bux. I watched three of them get cleaned. It was all terribly interesting and I’ve been looking into the matter for two weeks, but as far as I can tell, UrbanSurvival will be the first public mention of UNbux that I can find.
So now we start to place a few bets: Like is this where some of those missing trillions have gone? Hmmm…
Say what you will about Texas, the Republic is on top of things with a computer scheduled to perform a marriage this past weekend.
Next thing you know, robolawyers will be used for divorce and we see mass unemployment implications therein.
Next, we could see preachers going by the wayside: Officiating at a funeral could turn into someone’s laptop saying (in one of those cutesy computer voices “The End.”
Why taken to its logical conclusion, Congress would be put on eBay and the presidency virtualized, along with virtual and hacked elections.
Oh, wait, all that stuff is already going on. Sorry, I must have work up in a semi-dream state this morning. You know – the one where the world is not completely frigging crazy?
Bury Data, Kill Japan
While the US MainStreamMedia continues sleeping through the aftereffects of the Fukushima disaster, if you click over to this YouTube video, just out, and hit the ‘closed caption’ button, you’ll soon learn that what the MSM corpmedia is burying is that the Japan mess has about the same radiation release as 20 Hiroshima-sized bombs and that whereas radiation from a bomb drops to 1/1000th of initial levels in one year, the radiation from the power plan disaster will only decrease to 1/10th in a year.
So when we say we’re Fuk’ed, we’re not just talking about the power plants, we’re talking the corporate-controlled media which is hiding the grim & ugly dirty secret about long term radiation impacts.
‘Course if we’re all dead anyway, I don’t suppose it matters…
I don’t suppose you look at the live stream of earthquake data, but if you do, take a peek here and tell me if you don’t see an unusual amount of black from ink pens…
We are standing by for the monthly earthquake data crunch expected tomorrow, or so…
(more after this…)