The US stock markets ended their rousing rally this week with renewed joviality and good cheer, since the popular delusion is flourishing momentarily that a bottom is in and ‘good times are just ahead.’ I don’t want to sound like a gloomster, but I seriously doubt it. As I pointed out in Friday’s report, it will take a couple of days over Dow 7,404 to make a believer out of me. In the meanwhile, I’ll just sit back and let others play the game of ‘catch falling knives’. I still expect lower prices before the bottom is in, if for no other reason than there hasn’t been enough real fear expressed yet.
Part of the week’s index hallucination may have been based on the theory that a global recovery could get underway in short order; something the World Bank told the G-20 meeting not to be so focused on. Instead, they’re saying fix the broken banking system and then eye growth.
One other thing of note from the WB’s Robert Zoellick: He’s also warning about dangers of ‘protectionism‘.
This strike me as a curious thing indeed, since there has been essentially no protectionism anywhere in sight yet we have still screwed the pooch, so to speak, with rampant globalism. Zoellick and other globalists still point to the 1930′s events while failing to acknowledge that Smoot didn’t happen until the country was already deep in depression.
I’d argue that outsourcing most of America’s core manufacturing (and a lot of services too, like computer help desks) to places like India, has actually contributed to the decline we’re now in. The globalists won’t mention that, however, since the straw man of ‘protectionism’ has worked so far and being able to work the wage rate differentials between countries has been hugely profitable, which in turn generates cash, which in turn greases the skids of politics, but I suppose you have that figured out already; it’s impolite, of course, to give voice to it. A little honesty goes a long way…often, too far, in fact.
Seems to me that Zoellick isn’t thinking things through or is speaking up on behalf of those who are desperately defending the present paradigm which we agree needs some serious retooling, but that’ll be at the hands of the next generation…or two, or three…at the present rate. The PTB don’t like change; unless they can make a buck at it, of course.
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About the only people about, who aren’t completely nuts, are Canadians. They have somehow managed to develop some resources, preserve some environment, install national healthcare, a workable retirement system, and all this without crushing their banking system to the point where they were able to tell the G-20 the obvious: “Canada says US, Europe banking systems need repair.” Gee, who’da thought?
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So, come Monday, the reality (or some variant thereof) of the G-20 meeting and a whole slug of numbers will test whether the markets have really developed a little spine, or if this is nothing more than a flash-in-the-pan; fool’s gold, and a good running of the shorts. I’m inclined to suspise this last.
Monday we will get capacity utilization from the Fed. Utilization, that is, of what little the globalists haven’t outsourced as their deification of ‘free trade’ only works as long as they can find someone, somewhere, who will do work cheaper than you.
Tuesday we get building permits and Producer Prices. Come Wednesday, there’s the Consumer Price Index to deal with. Next come the weekly unemployment numbers on Thursday along with leading economic indicators.
My best guess is that the market will still work lower until the first week of April. Good Friday falls on April 10 this year and a bottom in the preceding week is my dart-of-the-day, but that’s not investment advise. You go throw your own darts.
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Speaking of Easter, and since this is Saturday morning and a bit more mellow than a week day, I keep forgetting to mention that a late Easter means in some states, the fresh water fishing season will be delayed this year. It’s traditional in many states to have the opening day of fresh water season the weekend after Easter, on the theory that (amazingly) there are some who’d find a fighting rainbow trout at the end of a 9-foot handmade bamboo fly rod a more rousing experience than a good sermon. No accounting for folks behavior faced with such choices, so that’s why some states save us from ourselves and the trout for an extra few weeks this year.
Our favorite family freshwater lake opening day spot up north was often so crowded that Pappy once said he might be able to ‘walk on water’ from one side of the lake to the other.
Hard to explain the joys of fly fishing and ‘single-egging’ for trout to a bass fisherman, though. The main difference seems to be that lake fishing for trout is an early morning, coffee and sandwiches affair, while bass fishermen seem content to sleep in, wait till they can buy cold beer on their way to the lake.
Where was I? Oh yeah…not going fishing this year, so no gear to check, but no doubt millions will be. Read a study once that claimed fishing is a sport enjoyed by well over 50% of the population at some point in life and presumably a fair number of those are counting the days till the weekend after Easter.
With Friends Like This Department
If you were expecting some kind of breakthrough in diplomatic relations with Iran, you might put your feet up and rest a spell: Iran is pushing OPEC this weekend to cut oil production and push prices back up. Maybe they haven’t noticed that there’s a global recession trying to turn into a Depression underway, or perhaps they haven’t figured that the sooner the recovery gets rolling, the sooner they will have pricing power again; sometimes you just gotta throw a log on the fire before you get heat out of it.
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Speaking of oil, a big spill of it in Australia turns out to be 10-times worse than first thought.
Rounding Up Food and What Else?
We’re watching with more than passing interest the reports that “Obama sets steps to toughen food safety regulation” because food safety is one thing, but the agri-biz backed, power-grabbing moves, like HR 875 seem more the product of a chemical-farming/life patenting lobby’s latest wet dream, if you read accounts of how it could destroy family farms and end farmers markets.
Government’s answer to all problems is invariable more government. And since lobby groups actually run the country, I should probably hold my tongue. But between the shadow government and their checking writing lobbyist pals, I sure haven’t seen much ‘change’ from the Obama folks, except the power-grab for basic rights seems to have stepped up. I can hardly wait for the next attack on the Second Amendment from this crowd…
More Layoffs Ahead
Up to 26,000 teachers have received tentative layoff notices in California. Someone kinda missed that in the all the banker saving, didn’t they?
Around the Ranch: Goats, Computers, Clients and Taxes
If you read the blog-formatted version of this site, which seems a silly thing to do but some readers insist on it, you may have noticed that Friday’s note was not posted due to the interruption of my normal routine by the arrival of a pair of goat twins born to “Sugar” and a set of triplets born to “Tinkerbelle”. While that was going on, our billy “Dick Chinny” (for his fine beard, of course) was being an insistent interrupter, and of course this had to happen in a driving rainstorm. And it was then that we noticed the small hole in the barn roof was leaking a fair bit, so that meant up on the roof to make repairs. And it was raining enough to get flood warnings posted in our area.
All of which would have been fine & manageable, except that at about then my ‘big pipe’ onto the internet went down so we went from 5 MB of top speed and 3-hops from the backbone down to our satellite back-up system which is 750 KB down and only 56 KB up along with a mule train to the backbone. Sort of like getting out of a sports car and walking, or maybe crawling. And even that would have been fine, except that due to the aforementioned heavy rain, the satellite connection was up and down due to the thickness of the cloud cover. Satellite uplinks work best when the sky is clear.
Eventually, things got settled down and I got to working on various client projects just in time to get a call from my consigliore, a tax attorney who must have known I was about to segue into working on the tax nightmare, to tell me he had spied a new word somewhere on the net which describes America’s new economic model. Ready for it?
Wealthfare
The rest of the day went better: Elaine’s birthday present (cool new laptop) arrived which meant four hours of configuring to rip the useless pre-installed software off and get my own favorite spyware and cookie manager installed (www.maxa-tools.com), amongst other things.
Today, life on the ranch may (or may not) get back to normal. There are still five more mothers in waiting, ready to drop kids…our herd seems destined to swell to over two dozen by the time my son gets here for a visit next week, and a tower crew is on hot standby to climb the 300 feet up to make repairs on our custom microwave link. I can hardly wait.
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Strange thing this morning: Zeus the cat is eyeing me in a funny way…keeps looking at the keyboard. It’s almost like he wants to get at my computer. Boy, I must be imagining things.
What’s Really Causing This Depression
In 1938, the federal government held a series of hearings into the causes of the Great Depression of the 1930′s. And, no surprise, the outcome of the hearings that made it into the history books was the Keynesian version of things which in effect said that “more government intervention and better intervention” was the ‘right’ course for government. Of course, since telling an already big government that more government was needed, this was very much like pushing drinks at a drunk. There was, however, a much deeper cause of the Great Depression – which I’ll explain in a moment, championed by sound economic professionals, who just didn’t preach the right Gospel to the big government choir. In case you haven’t noticed, the ‘bailouts’ that have been passed have about zero job creation power; 3.5 million admits the Obama administration, of of these, some will be counted if jobs are just ‘saved’ – making accountability all but impossible. But, in case you haven’t noticed, the “more government mantra” of the 1930′s is being replayed in spades today. But what’s really causing this Second Depression may come as a surprise to you…and it’s not the move to make District of Columbia residents income tax FREE… But it’s sorta related…
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“Live on $10,000″ Updated
What? You haven’t ordered the ebook “How to Live on $10,000 a year — or less”? Suit yourself. We’re all going to live it shortly, anyway. I just thought you might like a heads up by reading about how to do it before you get pink-slipped. But, suit yourself OR visit www.liveontenthousand.com or, click one of the following button:
Yep – still possible. I also took a bit of additional material that was pertinent from recent issues of Peoplenomics and included them. The whole thing runs about 65 pages, but it gives you a vision of how to not only live on the aforementioned dollar amount, but also how to migrate up the economic foodchain if you make a little more than that and do some active savings… Click here for the page with more details on it.
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Last week’s report is here. For back issues of this site, click here. (Goes back to 1997!)
