We don’t hold the opinion that markets are “rigged” per se. Only that they are highly inter-active complex systems which are loosely coupled and that there are “factions” of the PowersThatBe which are always trying to “game” one another to their own advantage. Some of the parties might be considered drug money, gold bugs, anti-golders, West, East, and so forth. With enough billions, there are some faction members who are in more than one club…so it gets complicated.
Nevertheless, here we are at the end of another quarter this morning and the immediate problem for Wall Street is keeping the “game” going for a while longer. If the quarter ends on a particularly bad note, people will get their 301(k) statements in a few weeks (lately half-priced 200.5(k)’s often) and if things get too bad, out will come cash values and more money will flow into government bonds and prepper goods, and another leg down in the Big Game will be at hand.
But the complexity is immense. Loosely coupled, sure, but on the sidelines the US Fed is churning out $40-billion a month in QE-Infinity to keep implosion at bay. And, if you look at last night’s Money Supply figures (H.6 report here) you will see that the 3-months annualized printed money increase for plain old cash is up 15.4 percent while M2 (with includes additional deposits) is up 6.5%.
This has tremendous impact on how the global money sleight-of-hand works: Since if you had $100 at the beginning of this year, you would need considerably more – perhaps $110 to buy groceries because of rising prices you experience at the grocers.
A cynic over Wheaties could take the S&P 500′s 2011 year ending number (1,257.6) and multiply it times the annual rate of increase of M1 (15.4%) and wonder whether it is coincidence that the implied M1 inflation level of the S&P (1,451.27) isn’t somehow related to yesterday’s close nearby of 1,447.15?
Surely, it’s can’t be that easy can it?
Loosely coupled complex systems are interesting in that they may experience wide short-term fluctuations, but over time they tend to land (on average) somewhere close to the vicinity of their aggregated inputs over time.
I assume you have a life and don’t have time for the finer strains of economic nuances. but the Thursday GDP figures contained this gem:
“Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.3 percent in the second quarter of 2012 (that is, from the first quarter to the second quarter), according to the “third” estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 2.0 percent.”
The homework study for the weekend is simple: An essay of 300 words (or less) explaining how a country can print 15,.4% more cash while growing its economic outputs by 1.3 percent and still differentiate itself from Greece, Spain, Ireland, or the other bankrupted states of the EU is due Monday.
There is one restriction on our homework assignment: Two word answers like “We’re screwed!” are unacceptable. Same holds for three-word essays like “We’re totally eff’ed.”
OK, homework handed out we move on to the Joke du Jour: The Personal Income and Expense report because after we get through the boilerplate like this part:
“Personal income increased $15.0 billion, or 0.1 percent, and disposable personal income (DPI) increased $12.5 billion, or 0.1 percent, in August, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $57.2 billion, or 0.5 percent. In July, personal income increased $18.5 billion, or 0.1 percent, DPI increased $15.4 billion, or 0.1 percent, and PCE increased $45.4 billion, or 0.4 percent, based on revised estimates. “
We get down to the meat and potatoes of it – the [alleged] personal savings rate:
“Personal saving — DPI less personal outlays — was $444.8 billion in August, compared with $492.2 billion in July. Personal saving as a percentage of disposable personal income was 3.7 percent in August, compared with 4.1 percent in July. “
Since we know the number of people are actually working (142.101 million) we can quickly figure savings…$3,130 per worker for the month…which is still so far out of the realm of in touch I have to ViceGrip myself. Even spread over all Americans, it’s $1,415 last month in savings.
I once prided myself on my storytelling and joke-making skills, but I admit now, I’m only an amateur compared to what passes for reality coming out of Washington.
Markets to slide, now forward for a couple of weeks…possibly to the election.
SuperTax in France
How about a 75% tax on the super-rich of France? Makes no difference to offshored money and people can buy citizenships elsewhere easy enough…if you’ve got the dough and the go…
Before we get to people worrying about one world government, first thing ought to be a uniform international tax rate, but the PTB won’t (can’t) EVER let that happen, so it’s all a charade for fun and exploitation of “the peeps.” (We be the peeps.)
Golly, Mr. Pre-Body
Now that we’ve been through a cartoon session at the UN and the dark of the moon is what, two weeks off? We can start to see the “body count” stories arise as another marker of how close the Iran/WWIII flare may be.
Time Magazine has been studying the issue in “How many civilians would be killed in an attack on Iran’s nuclear sites?“ But there’s something besides a raw number to be thinking about.
Stories like this could be viewed by Ure breakfast table cynic as a way of preconditioning people to accept what’s coming.
While we wait around for a new web bot run from Clif, it seems a possibility that whatever comes along late spring of next year could all be an outgrowth of something he’s labeled in past reports as “the Israeli mistake.”
One could postulate a sequence of events whereby Israel strikes, the US backs them, but this opens up multiple fronts in the Mideast which then festers until an ultimatum comes sometime next spring. Failing that, global powers may decide that it’s time to pull the plug on the West and so an alliance of China and Russia could simply pop off EMP devices, driving the US and Europe back into the stone age, leaving the Russians and Chinese to carve out their own deals with the narcodollar factions and the militant Islamists while the West wonders how to recover from the late 1800′s.
This is NO prediction that such a course of events WILL occur, but it does serve to remind us that predatory finance needs some proximate cause other than inbred moral bankruptcy to blame for its own abject failures. Putting ink to paper and calling it money may not seem like moral bankruptcy at first, but compound the interest on that for 100 years?
And no one is really ready: I doubt one in 500 has adequate food stocks, personal self defense items, and medical goods to last.
An EMP event would essentially wipe out the play-dough which passes for money stored in digital systems. It’s just a logical pathing and extrapolation of current events which could arise from the short-term expression of self-interests by the various parties. Remember: Loosely coupled complex systems.
It’d be interesting to hear what goes on in the scheduled Mitt Romney-Netanyahu phone call today, but I didn’t get invited.
The report out that NASA’s r/c rover on Mars as found remains of an ancient streambed is hardly a surprise. Details of the discovery may be found here.
The idea that humans may have some Martian genetics in them is not as far-fetched as sci-fi might imply…and those stories of The Flood and such, well, they may be just socialized (and well-marketed) memories of actual events.
Stepping on the Beast’s Tail
When the government wants to deal with someone, one of the most tried and true methods is to get them talking and…once that’s done….it’s easy enough to concoct complex enough conversations to eventually entrap someone into a misstatement which can then be turned against them claiming it was “lying to officialdom.”
Thus, it’s with some interest you may wish to read the account of Nakoula Nakoula’s hearing and bust for probation violations, since he’s the dude who supposedly did the anti-Muslim film which has set off such a stir.
Periodically, I mention the James Duane video on YouTube, “Don’t talk to the cops” since, as I’m fond of repeating: You mouth will get you into more trouble than it will ever get you out of…”
Waiting on Quakes
No, the 6.4 this week up in the Aleutians is not the “hit” but while we wait for bigger things to come (possibly this weekend) there’s an interesting quake study out under the headline “Rare great earthquake in April triggers large aftershocks all over the globe...”
Sun popped off with a flare this morning: “A C3.7 flare occurred in the vicinity of NOAA AR 1577 on Sept. 27, 2336 UT (peak time). It triggered both a weak proton event (>10 Mev protons) whose level is near the threshold of 10 pfu at the moment, and a fully developed halo CME as observed with LASCO C2 data. “
Beijing Blows Bo
Out of Party? Outta luck for Bo Xilai who is facing prosecution on corruption charges now. I can hardly wait to see if Bo can recover in Teflon Don-fashion. The headline would be “Bo-Back.” Give it a while….
More after this…