Might be a day to look up when walking past stock brokerage firms in NYC… I spent a good part of the weekend laid up in bed with gout thinking about the most likely financial developments ahead for the next year so I could do some personal planning. Lots of unknowns out there, including those nagging solar questions which we get into in the “Coping” section, plus the normal choppiness that comes in a presidential year.
What I came to, as a working conclusion, is that yes, we could get a Carrington-sized event in December, like Patrick Geryl wrote about Friday, alright, but what is the sequence of things that would require only a partial devastation of Earth. It’s not much prettier than Patrick’s work, but it seems (optimistically or intuitively) more likely.
What set me off on this line of thinking as item #1 today with markets set for a serious decline at the open, is noticing that in Robin Handler’s Options Signal Service newsletter, Robin has added this note:
“I expected 2012 to be a good year for the markets. The trouble starts in 2013…”
The task each of us is born into is sizing up the future – however we do that – and then making plans how best to cope with that particular vision – and then acting on it, sometime when things are counter-intuitive.
One way to do this is a simple “polling of experts” using the widest range of futurists you can think of and trying to spot common elements in their forecasts, and from these, plan for a “probable future” curve highest around that point. A good tool for this is the “Delphi Method” used by educators, Bell Canada, and others. The definitive books, if you can find it, is Delphi Method : Techniques and Applications (about $50 if you get lucky…).
So with regard to where we will be in 2013, some of the expert opinion I consider includes:
Clif’s linguistics which show major problems in March 2013.
Robin Landry’s view that there is a chance the markets could be held up until the election this November, but that doesn’t preclude going down to another low from right here, to set a base at the 4th wave of one greater degree.
Robin Handler’s view that we really have to worry about 2013 since the financial astro picture hasn’t been so bad since the 1930′s.
On a more conventional note, recognizing that the US debt rating is sliding over time and although only one firm has it down to AA, but there’s the likelihood coming into focus that S&P and Fitch and/or Moody’s will also slide down US debt ratings since we now have as much (or more) debt than annual gross domestic product.
And then there’s Patrick Geryl’s work that points to trouble in December of 2012.
The kind of scenario that would fit the largest number of these outlooks/forecasts, if you go into a soft martial arts kind of stare would be something like this:
Markets in the US will do a brief swan dive, down to perhaps the Dow 12,300 level, but that decline would then set up a base for one more run of the post 2009 low rally to new all-time highs in the markets by mid to late summer, and perhaps even into the election period.
Once the election if over, things then look pretty well “topped out” although the market could then go into a last-gasp perhaps into the first week or two of January 2013.
What would be troubling the market would be that some damage would have been done to infrastructure in the southern hemisphere to do a large EMP/CME event spawned by the Sun, but it would take several weeks for the true extent of the damage to be appreciated, so here’s when market “overshoot” happens.
From there, we firm on a an utter collapse – 1929 style or worse since it would be global – which would take place 55-days from the peak.
So say the market put in its high on January 18th of 2013 (option expire that day) than you’d add 55-trading days, so the end of the financial world would then show up about March 13 or 14…the 15th of March 2013 being an options day, too.
This may seem like fanciful thinking, but having a kind of “global overview” helps to put bumps in the road – like the declines coming this week – into better perspective. The real fight, seems to me, is over whether one more good run can be had from the markets, but to do that, we need to drop down a goodly amount to hit a rising trend line around Dow 12,500. In my Aggregate Index, presently 11,053, the battle line today about be about 10,200, but since it’s a climbing trend line, the turn might be around 10,500. Still, that would be about a 5% decline in most market averages before we head up.
Of course, if that level fails to hold, then the game is all over before summer’s out, and whoever “wins” the election will have the ugly task of cleaning up financial collapse, but seems to me the more “normal” decline-sets up rally” track is slightly favored…but I guess we shall see.
There are a number of items which are coming to roost in markets this morning. One factor will no doubt be reconciliation of the Friday Jobs Report, which wasn’t worked out last week because of Good Friday.
Then there’s the report that inflation in China was up 3.6% year-over-year in March, but the good news here is that this is likely to keep gold firm for a while, since inflation is gold’s best bud.
My 38¢ worth of investment dough is in cash right now. I’m gonna kick back and see if the line in the sand (around Dow 12,300-12,600) holds. If it does, then one more big up is on the way. If it doesn’t then the long way down count leaves plenty of room for money-making on the way to a retest of the 2009 lows…but if thing get that bad, even those might not hold.
Frankly, I think the 12,500 Dow level is likely to hold though, and so strange as it seems, I’m feeling bullish.
CPI figures due out on Friday may be a mover…depending on how much the market falls today, of course. Might be ready for a bounce by then.
The Golden Choke Collar
This is one of those behind-the-scenes things which isn’t much publicized: it’s the problem of what happens when the IMF has a deal (securitized, presumably by a country’s assets) and there’s a change of government. Can a new government simply tell the IMF to “go stuff it?” When you think about it, if the assets pledged are in the country being loaned the money money, who’s gonna go play the role of Guido and Luigi for the banksters?
War Watch: Hardening Positions
What the Obama administration is doing publicly is telling Iran and everyone else what it expects in upcoming talks.
What’s evident from seeing there are now three aircraft carriers in the 5th fleet is the underlying message “We ain’t kidding on this stuff…”
Meantime, the violence in Syria is reportedly spilling over into Turkey...
Sheriff’s Under Attack
What could be a national trend-setter is popping up in Delaware where the son of Veep Joe Biden, Delaware attorney general Beau Biden, is informing county commissioners that their sheriff’s no longer have arrest powers.
Sheriff’s, who’ve been in the peace-keeping business since before the American Revolution, might have a limited shelf-life, since in populous areas, there is tremendous overlap with local police departments. I’ve seen local officials trying to cope with the complexity of this watching the teeter-totter balance of power between the LAPD and the Los Angeles County Sheriff’s office, for example.
True, in urban areas there may be overlap, but in areas like the East Texas outback, there are hundreds of thousands of square miles where there is no city, and I rather expect Texans who live in the wide-open-spaces would like someone to show up when they dial 9-1-1. But in New York City?
You see the overlap issue. But beyond this is something else: The balance of power. The federal government may be able to dominate one set of local police departments, but sheriffs with some gumption? Like sheriff Joe Arpaio, just naming one that comes to mind… Well, the broad question comes down to would elimination of sheriff’s authority in incorporated (city) areas remove an important balance spring in how American law enforcement operates?
I’ll leave that to others, but a fine question to ponder, indeed.
Mike Wallace of “60-Minutes” at age 93. Tribute edition of the show is next weekend…
More after this…