Taking Stock --- Week of 9/28 to 10/02, 2020

Monday, September 28, 2020

Green Arrow Up

DJI30 index at the close   —-   27,584.06   +410.10 (+1.51%)

The Index opened at 27362, up 188 points, and within 5 minutes reached 27632, up 458.  There was a slow climb to the hi of 27723, up 549 before 1:00, then it was mostly sideways for the next 2 hours.   The lo to hi span was 360 points.

Last week I cited 27500 as a benchmark, stating that a continuous rise above that level could cast doubt on the idea that the main thrust is down.  That level was breached, but not in a convincing manner.  Today’s hi, 27723, is 12 points short of a .618 retracement of the loss from the 9/16 hi to the 9/21 lo.  So nothing has happened - yet - to refute the idea of a downward impulse.

At the hi, the Index did pop out of the trading channel on the chart I drew last week - but, again, only by a little.  There’s no room there for a sideways move, so I expect tomorrow’s action will either validate the channel or refute it.

Closings -

9/28/18 - 26458

1/02/20 - 28869

8/28/20 - 28654

9/29/20 - 27584

NYSE Internals -

A/D = 2585 = 5.45

A/D Vol = 4.67

New Hi/Lo = 49/10

Tuesday, 9/29/20

Reddish Arrow slightly down

DJI30 Index at the close   —-   27,452.66   -131.40 (-0.48%)

The index opened at 27560, off 24 points.  It gyrated a bit, then hit a hi of 27606, 22 points into the green, before 10:00.  It then went into free fall, losing 268 points as it hit a low of 27338 just before noon.  It slowly climbed back up to 26566 at 2:30, before a jagged 114 point slide into the close, with a 78 point drop from a temporary hi in the last 11 minutes.  The lo to hi span was 266 points, the smallest since 8/28..

I could have called this a sideways move, since the change is less than 0.5%. Yesterday, I said, “There’s no room there for a sideways move, so I expect tomorrow’s action will either validate the channel or refute it.”  This was a clearly down day - but by such small margins: 117, 24 and 131 points, respectively for the hi, lo, and close - that these values really did just hug the channel border and avoid a strong sense of either refutation or validation.  So I’ll kick the can one day down the road and say we should expect something more conclusive tomorrow.  

Reading Elliott waves in real time is always a dicey proposition, and I’m not very good at it anyway, but what the hell - he goes.  As i see it now, the main thrust is down in a 5 wave pattern.

Wave 1 down from the 9/03 hi of 29299.35 to the 9/10 lo of 27447.08 was a drop of 1752.27 points.

Wave 2 [countercurrent] up ended at the 9/16 hi of 28364.77, covering 917.69 points  a retracement of 52.37%.

The next wave down ended at the 9/24 lo of 26537.01, covering1827.76 points.  This could conceivably be a complete wave 3 down, since it is larger than wave 1.  But this is only by a tiny margin, so I think it’s more likely that wave 3 is subdividing and this is subwave i of 3 down.  That would make yesterday’s hi of 27722.6 the top of subwave ii, with a retracement of 1185.59 points, or 64.87%  If this is the case, subwave iii of 3 will unfold over the next several days, and it will be scary.  A drop of over 2500 points will likely occur, bottoming in the low 25000s as a best case.  A 3000 point drop to the mid 23000s would not surprise me.  After that subwave iv up and subwave v down would follow.  And, even scarier, this could all be wave 1 down at a higher level of trend.

Don’t hold my feet to the fire on this - I’m just an amateur, and this a field where the experts remind us that these expectations are probabilistic not deterministic.  So I will be watching with anxious anticipation.  A strong turn upward will cause a complete re-evaluation.

All the indexes has similar contours today, though the NASDAQ was choppier.  They were all off a fraction of a percent.

Closings -

9/28/18 - 26458

1/02/20 - 28869

8/28/20 - 28654

9/29/20 - 27553

NYSE Internals -

A/D = 1114/1900 = 0.59

A/D Vol = 0.37  The total volume of 700.7 million share was the lowest since I started keeping track in on January 20.

New Hi/Lo = 56/11 = 5.09

Wednesday, September 30, 2020

Green Arrow Up

DJI30 Index at the close   —-   27,781.70   +329.04 (+1.20%)

The index opened at 27514, up 62 points, and quickly shot up to 27672.  It then climbed more slowly hitting the hi of 28026, up 574, before 2:30.  It then dropped rapidly, hitting 27592 an hour later.  From there, it was a choppy rise into the close.

I didn’t expect a significant increase, but this was clearly up day, and not by small margins — 421, 173 and 329 points for the hi, lo and close.  Fortunately, I weasel-worded my prediction yesterday, giving myself an out if the index went up. So, now there are two possibilities.  One is that the index is headed back up, possibly to new highs.  To get there requires sustained increases. The first hurdle is the 9/16 hi of 28365, less than 350 points above today’s hi.  After that it’s the 9/03 hi of 29199.  Beyond that, the sky’s the limit.

The other possibility is that a counter-current wave is still unraveling.  Today’s hi is a 81.5% retracement of the fall from the 9/16 hi. This is an extreme retracement but that seems to be the way things go in 2020.  The channel I drew was violated in a way that can’t be ignored.  I’ll see what to do about it in the next few days.

Closings -

9/30/18 - 26458

1/02/20 - 28869

8/28/20 - 28654

9/30/20 - 27782

NYSE Internals -

A/D = 160/1462 = 1.14

A/D Vol = 2.27

New Hi/lo = 70/14 = 5.00

Thursday, 10/1/20

Yellow Arrow Sideways.

DJI30 index at the close   —-   27,816.90   +35.20 (+0.13%)

The index opened at 27941, up 159 points, and rose to the day’s hi of 28041, up 260. Over the next hour if fell to 27760, 22 points in the red.  It hit 27950 about a half hour after that.  It was then mostly sideways until 2:00 when there was a sharp drop to 27669, the day’s lo, 112 points in the red at about 2:15.  It rose to 27860 at 3:00, then fell to 27720 at 3:45, followed by a rise of about 100 points into the close. The lo to hi span was 372 points.  

This is a clearly up day, with the hi, lo, and close up by 15, 152 and 35 points, respectively.  This is pretty anemic, though, and after the early morning surge, the Index fell the rest of the day - though not in monotonic manner.  This might have been the last gasp of the counter-current move.  But who knows?  

I’ve been expecting clarification most of this week, and it’s not presenting itself.  Broad brush, it’s been sideways since mid-September. The market finds its own way. 
 

Closings -

10/01/18 - 26651

01/02/20 - 28869

09/01/20 - 28646

10/01/20 - 27817

NYSE Internals -

A/D = 2079/958 = 2.17

A/D Vol = 1.32

New Hi/Lo = 78/22 = 3.55

Friday, 10/02/20

Red Arrow Down

DJI30 Index at the close   —-   27,682.81   -134.09 (-0.48%)

The index opened at 27536, off 280 points.  It immediately dropped to 27383, off 434. There was a sharp rebound that topped out at 27700.  If bounced around from that level down to 27500 until noon, then abruptly rose to 27820 at 12:20. It hit the hi of 27861, 45 points above water just before 1:30.  It dropped to 27700 a half hour later, rose to 27840 at 2:30, then slumped a bit, rose a bit and dropped over 120 points in the last half hour.

There was a lot of up and down, with a couple brief bobs into positive territory. The lo to hi span was 478 points.  This is a clearly down day, with the hi, lo and close off by 180, 286 and 134 points, respectively.  The lo was about 30 points above the 55 day EMA.

This could be the end of the counter-current move — maybe.  It will take a drop below 26500 to confirm that the major move is down.  It will take a gain above 29200 to confirm that the major move is up 

Today’s jobs report was positive, but weak.  Covid Karma has entered the White House.  Millions have used up their savings and might be facing eviction soon.  This is the economy collapsing at its base.  We do live in interesting times.

Closings -

10/02/18 - 26774

01/02/20 - 28869

09/02/20 - 29101

10/02/20 - 27683

NYSE Internals -

A/D = 1904/1117 = 1.70

A/D Vol = 1.81

New Hi/Lo = 67/37 = 1.89

Taking Stock - September 21-25, 2020

Monday, Sept 21, 2020

Red Arrow Down

DJI30 at the close   —-   27,147.70   -509.72 (-1.84%)

The index opened at 27485, off 173 points. That was the day’s hi.  There was an immediate drop to 27165, off 492.  By 11:30 it reached the day’s lo of 26715, a stunning loss of 942 points in a little over 2 hours.  From there it galumphed along, staying under 26870 until after 3:00 when it climbed up 178 points to the close.

From Friday’s hi of 27945 to today’s lo of 26715 is 1232 points. The day’s span is 770 points.

I’m not a great Elliott wave reader, but this is how it looks to me.  The drop from the 9/03 hi to the 9 /11 low was 1751 points. This was wave 1 down at some level of trend.  The 9/16 hi was the top of a wave 2 recovery of [amazingly] 916 [!] points.  This exceeded the 50% retracement level by 41 points, or 0.14%.  How much accuracy do we need?  Wave 3 down is now in progress.  It is never the smallest, and is often the largest.  So it will span more than 1751 points.  A target magnitude of 1.382 x 1751 = 2420, landing at 25945 is not unreasonable.  However, it could be much lower.  After that comes another recovery in wave 4, then wave 5 down to a longer term lo.

If that holds, a wave 4 retirement of 50% would top out at 27155.  Then if wave 5 = wave 1, then the lo would be at 25403.  The net drop from the 9/03 hi of 29199 would be 3796 points.  This is all speculative, and probably optimistic.

The main indexes were all in the red all day.  The SP500 had a similar contour to the DJI, and finished off 1.16%. The NASDAQ was down early, but finished strong to only be off 0.13%.  The Russell 2000 took a real beating.  It fell hard early, then was flat most of the day, finishing off 3.35%.  

On Thursday I said this about the indexes, “if the fragmentation resolves into coordinated downward motion, the results could be painful.”  i also said a DJI break below 27000 would confirm a downward trend. It finished 148 points above that benchmark, but was almost 300 under at the low.  I suspect the partial recovery in the late afternoon is a counter-current sub-wave, and the decline will continue tomorrow or Wednesday.  If I’m correct, this would be a 3rd wave of a 3rd wave, and those declines are brutal.  Back in March - not so very long ago - it bottomed just above 18000.

 
Closings -

9/21/18 - 26744

1/02/20 - 28869

8/21/20 - 27930

9/21/20 - 27148

NYSE Internals -

A/D = 443/2623 = 0.17

A/D Vol = 0.12

New Hi/Lo = 19/41 = 0.45

A. D. 536 - A Terrible Year Leading Into A Terrible Century

You think 2020 is bad?

You're right.  It's a terrible, horrible, no good, very bad day.

But A.D. 536 was worse.

Taking Stock - Mid-September edition

 A week's worth of my market musings.

Monday 9/14, 2020

Green Arrow Up

DJI30 Index at the close   —-   27,993.33   +327.69 (+1.18%)

The index opened at 27719, up 53 points, and immediately jumped up to 27875.  It reached a hi of 28064 before 10:30.  After that it was mostly sideways. It reached the final hi of 28086 a 1:00 and again 10 minutes before the close, with a dip in-between to 27915 before 3:30. In the last 10 minutes there was a 46 point drop into the close.

The lo to hi spread was 367 points the smallest since 280 on 8/31.  The 10 day average is 554.  

The up-down-up contour of the last four days might be an a-b-c counter-trend move in a downward impulse.  If so, this could go on into a more complex pattern, or turn sharply down tomorrow.

The alternative possibility is a continuing increase from the 3/23 bottom, with the potential of a new all time high. The very strong NYSE Internals today are consistent with this view, but the last time this happened on 7/15 there was no follow through.

Closings -

9/14/18 - 26155

1/02/20 - 28869

8/14/20 - 27931

9/14/20 - 28018

NYSE Internals - Strongest since 7/15, an unremarkable day with a 379 point span and a 228 point gain, closing at 26870. 

A/D = 2448/591 = 4.14

A/D Vol = 5.59

New Hi/Lo = 60/12 = 5.0

Some Seeking Alpha articles I want to save

Socks are overbought 8/28/2020

Value preference

S&P500 Structural Flaws

Intel 8/27/20

2020 isn't 1920

It's not the FED 8/26/20

Best Blue Chips for Dividends 9/14/20

High Dividend Yields 9/17/20

More dividend plays. 9/21/20

Still more Dividend Plays - Div 1st approach 10/16/20

Taking Stock

I post an update of the Dow Jones Industrials every business day on my Face Book page. Yesterday's was long and, I think, meaningful, so I'm reposting it here.

Monday, July 13, 2020 Yellow Arrow Sideways
DJI30 Index at the close —- 26,085.80 +10.50 (+0.04%)

The index opened at 26226, up 150 points. It spent the next half hour between 26240 and 26330, then started rising, hitting a hi of 26525 at 11:30 on the way the daily hi of 26639 at 1:45.

Except for a brief bounce of about 100 points between 2:30 and 3:00, the rest of the day was down. The image of an avalanche springs to mind. The lo - a mere 42 points below the close - occurred only 4 minutes before the end of trading. The day’s total span was 595 points, and it all occurred after 1:45.

This was a dramatic reversal in the last 2 hours. I actually felt hopeful around lunch time Today’s hi was the highest since the pop above 27000 from 6/05 to 6/10. A glance at Graph 1 shows that recent action is now the second sideways move of more than a month’s duration since the 3/23 lo. This does not look like any kind of impulsive upward move.

The red and orange horizontal lines represent the Fibonacci .681 and .786 retracements of the drop from the Feb 12 hi to the March 23 lo.

Graph1 - two sideways moves

The only practical alternative view is that this is an unusually long and extraordinarily complex counter current move - the the main thrust being down, shown in Graph 2. The Index is moving into a trend line wedge where something will have to give pretty soon.



Graph 2 - Into the Wedge

In Graph 2, the peak on June 8 defines the top border of a potential down-sloping channel from the 2/12 hi that is a stunning 10684 points wide. If this concept has any validity, it could lead to an ultimate lo far below the 18214 reached on 3/23. 

In 1929, the Index lost something like 89% of its value. Can you imagine the DJI30 Index bottoming at about 3000? It needn’t be that extreme to be devastating.

The 3/23 local bottom represented a loss from the 2/12 top that was within 50 points of a Fibonacci 38.2%. A 50% loss would put the Index at 14784. A 61.8% loss would bottom at 11295. Other potential support levels are in the regions of 1600, 1500 [support/resistance levels from 2014 -16] 14165 [the 2007 all time hi] and around 13000, 11000 and 10000 - support/resistance levels from 2010 to 2013. These things are shown in the third Graph, labeled Trend From the 2009 Bottom.


The Fibonacci 61.8% loss at 11293 is in the broad range of round number support from the last few of those mentioned. So the range from 10000 to 13000 is a reasonable target for the ultimate low, which could happen this year or off a few years into the foggy and unpromising future.

 Graph 3 - several possible support levels

The effects of the corona virus on the population and the economy of this country are going to be far worse than what we have seen so far, due to the abysmal denial and mismanagement of donald j trump and his corrupt minion governors in republican controlled states. Some are starting to realize it now, but what they are doing is far too little and far too late. Tragically, this devastation was largely preventable, as a few nations like New Zealand have shown. Even here in Michigan, where Gov. Whitmer has tried to do things right in the face of organized and intimidating armed opposition, we have been trending the wrong way for almost a month. Can you guess why?

Stocks are at an epic level of disconnect from the underlying economy - which is weakening as you read this. When this situation rights itself, the spring-back will overshoot, and probably by a large margin. That will be the time to buy. 



Stay tuned. Pictures at 11000.

Closings -
7/13/18 - 25019
1/02/20 - 28869
6/12/20 - 25605
7/13/20 - 26086

NYSE Internals -
A/D = 1093/1899 = 0.58
A/D Vol = 0.54
New Hi/Lo = 119/6 =19.83

Taking Stock

I've been reporting on stock market activity on my FaceBook page every business day.  I thought yesterday's events warranted a more permanent record, so I'm copying it here.  Today is Good Friday, and the markets are closed.

Thursday, April 9, 2020

Green arrow up
DJI30 Index at the close —- 23,719.37 +285.80 (+1.22%)

The Index opened at 23691, 251 points above yesterday’s close. The high was 24009, and it was approached at 10:00, 1:00 and 1:30. Round number resistance bent, but did not break. The next move was a drop of 500 points to 23504 just before 3:00, followed by a choppy ride into the close. The last move of the day was a gyrating drop of 90 points in the last 25 minutes.

This is a clearly up day, with the hi, lo and close all higher than yesterday’s.

Today’s good news and bad news:

Good - Fed to provide $2.3 trillion to prop up the economy - just what a liquidity fueled, significantly over-valued market needs. 

Covid-19 cases reported to be slowing. We’ll see how well that holds up given, frex - Arkansas and Trump’s great desire to reopen the economy.

Bad - Horrible unemployment numbers, exceeding expectations with over 6 million new claims on top of the over 10 million from the last 2 weeks.
Teenagers spending is off 13% YoY.
Nearly 1/3 of tenants didn’t pay rent this month.

All of this is from the Yahoo Finance news items listed below the stock chart.

 Today’s lo to hi span was 505 points, the lowest since 409 on 2/20. That looked like an outlier at the time, but got swamped from the 24th on. For context, the ten day average then was 207 points. On April Fool’s Day it was 1039. Now it’s 778.

Today’s moves would have looked wildly disjoint as recently as the middle of February. But now it’s the tamest day we’ve seen in 6 weeks. Is this some sort of new complacency? This market is remarkably resilient. And I find that to be frightening.

The breaking news is that with the markets closed tomorrow for Good Friday, the SP500 had it’s best week in 46 years. The Nasdaq had it’s best week since 2008. Hmmm - what happened after that? For the DJI30, it was the best week in 2 weeks! Go figure.



While we’re at it, let’s have a look back 46 years ago to 1974. Context matters. I can’t quickly find S&P data for 1974, but DJI30 should be good enough. The index averaged 4764 in Dec.1973 and 3071 in December 1974, a 46% loss. So that big gain happened in the midst of a brutal bear market and clearly didn’t last long.

But wait - there’s more. The DJI topped at 7785 in Dec ’65 and bottomed at 2145 in July ’82 - a bone crushing 73% decline that took 17 years to play out. So the ’74 bear market was just an episode in a much longer devastating trend that nobody seems to remember today. Here's a link to the chart, and you can play around with the dates, if you’re so inclined.


Historically, most of the largest short term gains - covering a day or a week - have occurred during bear market rallies. These things treacherously offer false hope. I believe this financial exuberance is irrational and the pandemic optimism will backfire horribly. I would love to be wrong.


Stay safe out there. Or, better yet, just stay home.

NYSE Internals
A/D = 2584/422 = 6.12
A/D Vol = 3.52
New Hi/Lo = 12/2 = 6.00

Notes on the graph --

The fine green, blue and red lines indicate daily hi, close and lo values, respectively.
The heavy green line at the top is a projection of the all-time high of Feb12.
The down-slanting channel contains the drop from the all-time high.  It was violated this week, but i kept it for reference.
The horizontal channel indicates sideways motion.  It looked like it was in effect since the bottom on Mar 23. Possibly obsolete now.
The falling blue line is the 233 day EMA.

Encounter with a Bernie Bro

On 3/19, I posted on FaceBook an excerpt from Adam Parkemenko's daily BIG STUFF.  This led to an encounter with a Bernie Bro.

Adam Parkhomenko --

Remember when House Republicans were the worst people in Washington? Well, they’re still pretty awful, the title for worst has been claimed by Mitch and his cronies. Where to begin. Let’s start with Sen. Richard Burr, chairman of the Senate Intel Committee and someone who was busted in a recording obtained by NPR telling rich donors how bad the coronavirus would get even as Trump was telling Americans it was no big deal and it would just go away. Then we have Sen. John Cornyn, who used a racist diatribe to explain why calling it the Chinese Virus isn’t racist. Sen. Ron Johnson, one of the biggest scumbags of the Biden stuff, told his local paper that you just gotta keep it in perspective that a few million Americans might die. And then there’s Rand Paul. And really, ‘nuff said. Under Mitch’s leadership, or lack thereof, the U.S. Senate dragged its feet for days on the action the House took and now Mitch wants to cut Pelosi out of the negotiations. And for reasons we will never understand, there are many Democrats who want to take politics out of this current environment. These people must be new here and have never met a Republican. Like David Axelrod complaining because Democrats are running ads against Trump’s response? Seriously, Axe? Some of those first term capitulations are suddenly making a lot more sense. Trump fucked this up, and he and his party are going to be responsible for the deaths of many Americans. We sure as shit should be talking about that.

The Bernie Bro --

Just more bipartisan fuckfoolery. I'm immured to it, now. What will fall will fall.

JzB --

Both sides are not the same.

BB

They're not?

Could'a fooled me...

JzB

Sure, you can always find an example to validate a point of view. It's cherry picking, and it's not valid. You have to look at patterns of behavior, not isolated incidents. You have to look at policies and their effects.

Seriously, there are differences in any economic or social metric you can think of between when Rs and Ds are in control. And with the Ds it's always better.

Always.

Yes it's true that both parties have too much corporate interest. But that does not mean that they are equal. Frex: BHO had the backing of Wall St in '08, but they largely abandoned him in'12, because they didn't like what he was doing.

BB

Sorry [JzB}...I no longer believe this. I see them as two rival gangs in a kind of "Three families" criminal setup. The third family is the nonpartisan/bipartisan Deep State, which is actually more powerful than either gang. It allies itself with whichever gang seems most likely to continue to succeed in doing its bidding.

We've recently had a little shakeup of that system, because Trump surprised all THREE gangs and essentially took over the Ratpublicans. He is a rogue gang leader, and so far the other two gangs (and whatever parts of his own gang secretly wish him gone as well) have not been very successful in unseating him.

They DO keep trying, though.

We'll see in November...if of course there even IS an election in November. But never fear...we'll someday see who wins and who loses.

But...nothing substantive will change.

It's just the way things work.

Been that way since history began...

BEFORE it began, I'm sure.

It just didn't get written down.

JzB 

Well, you're entitled to your opinion. I've studied these things. Policies have consequences for people's lives, and R vs D policies are drastically different.

My dad told me something ca. 1962, and I never forgot it. Every once in a while, if a crumb falls off the plate, the Democrats might let you keep it. The Republicans won't even do that.

Also, ponder these things -- Would President Gore have ignored the screaming warnings from the intelligence communities like Shrub did - that allowed 9/11 to happen?

Would he have launched an illegal and pointless war against an uninvolved third-party country based on invalid, cooked intelligence?

Would he have cut taxes on the rich while launching this war - something no ruler in the history of the world has ever done?

Would President HRC have ignored the impending Covid-19 situation for months, while denying the reality of it to the American people in the hopes of personal gain?

Would she have signed into law yet another tax cut that benefited only the super rich and did squat for anyone else? And that, by the way, was completely unjustifiable on any economic terms and needlessly blew up the national debt?

Look at the history of criminal indictments in R vs D administration - dozens, maybe hundreds of Rs and a small hand full of Dems.

Look at the Rethug Senators who dumped millions in stocks just before the crash, while publicly saying Covid-19 was no big deal and we'd all be fine. The one from GA even made a huge investment in a tech company that might profit from people working from home. And her husband is Chairman of he New York Stock Exchange.

These are off the top of my head. Policies matter - to you and to me and to the rest of the world. 

Many of the things I listed were earth shaking.

Imagine how different it all would be without 9/11, ISIS, the disaster in Syria . . . Needless wars and ghastly foreign policy blunders have drained us of blood and treasure, and thoroughly destabilized an already fragile middle east.

And Trump and his cronies have gotten richer by many, many millions. To our detriment.

Ignoring these things for the sake of believing in a fictional both-sides-do-it duality might be satisfying in some way that I can't wrap my head around, but it is not an accurate depiction of the world we live in.

Think it over.

BB

You write: "Every once in a while, if a crumb falls off the plate, the Democrats might let you keep it. The Republicans won't even do that."

This in the biggest bakery of all time!!!

And you claim that they are "different?"

Not much more to say. I think that your father's statement pretty well sums up the difference between the two parties.

Minuscule.

Crumbs.

I could argue against every point that you make here.

You are as convinced as are the Trumpsters.

I will say this, though.

Don't worry. You have a lot of company.

JzB

It's pretty damned lame to dismissively hand wave away a long list of actual facts. In case you didn't notice, I put a lot of thought and careful planning into my response. Did you even read past the anecdote? I do commentary like this all the time, because I value the truth. You're welcome.

You could argue - but you don't. That says a lot, right there.

And, btw, comparing me to Trumpers is a blatant insult, because I actually fucking think things through; and I deeply resent it. You haven't done anything to earn the right to an attitude quite that superior.

If I'm convinced of something, it's because I've done the leg work to uncover actual facts and data. Years of technical training, along with my natural inclinations, lead me to make data-driven decisions. I have 463 posts on my blog with the tag "economics" and have actually put a bit of serious thought into some of them, with real graphs and detailed analysis.

What IS similar to Trumpers - and right wingers more generally - is a casual disregard for facts and data, with no attempt at rational discourse. I've experienced this hundreds of times. It's depressing as hell.

My posts are public on purpose. I welcome disagreement.

Note that it moves the discussion along in a more constructive way when the disagreement actually makes some sort of sense.

Prove to me that I'm wrong, and you will have done me a favor. The operative word here is PROVE.

But do it tomorrow. You've kept me up unit midnight, and I'm gong to bed

Think it over. Seriously.

BB

I am not going to even TRY to "prove" what I am saying to you.

The proof will be in the pudding.

We'll see what happens if Biden is elected with a majority in both houses. Or without.

Or if Trump remains.

Or...if some other outcome happens.

Gore?

HRC?

Bill Clinton?

Bush II?

Obama?

ALL willing supporters of the Permanent War state that has decimated this country on all levels and has simultaneously been the single most polluting environmental set of events of the last 30+ years. And all complicit in the selling of the country's industrial strength to the highest bidders, a sale that has totally wrecked the economies of the working class/middle class.

Biden?

Just another tool of the globalist corporate system for his entire career.

And yes, I did read your posts.

All of them.

I will read them no more.

Save your energy.

And at that point, he blocked me.  There was no attempt to engage any of my points, just spouting an extended sequence of naked assertions.

I'll concede that the Dems are far too close to big business and especially big finance.  And, to be sure, the history of humanity in a nutshell - always and everywhere - is the exploitation of the many by a small wealthy, privileged elite. But the mere fact that there are disturbing similarities between the two parties does not mean that there aren't also deeply significant differences. Our own history over that last hundred years, and especially the most recent decades, demonstrates that dramatically.

Unhealthy Inequality

This is from 7 1/2 years ago.

Imagine how much worse things are now.

Against Economics

I wrote my impressions as I read this article.  H/T to my old virtual friend Nanute.

Since some time in the 80’s we’ve had the great stagnation.  Presumably less volatility [and low inflation,] but at the cost of slower average economic growth.  Yet we had the recession of 2001, which was bad enough, and then the great recession of ’08 - from which we have yet to recover.  So - in my view - it has not at all been worth it.



As I see it, inflation is a resultant, not a cause.  It’s the result of a healthy, growing economy - and therefore - at the very least - not a bad thing, per se.  When conservative economists voice their concerns about inflation, it seems like there is always the implicit but unmentioned specter of hyper-inflation lurking over their shoulder.  Except under very rare and special circumstances, that is not a concern.  But I think Hayek was deeply influenced by that fear, and  passed it on to his acolytes.



What we have now is economic disparity similar to that of the 1920’s.  This gets worse every day, as more money flows into the hands of the wealthy and hyper-wealthy.  It then gets hidden in a tax dodge, often off-shore; diverted into non-value-added speculative financial tail chasing; or, maybe worst of all, used to buy another senator.  This does exactly nothing to promote a healthy, prosperous economy.



Put a dollar in a poor person's hands and it gets into the productive economy immediately, because s/he has unmet needs.  This is not rocket science.

Several years ago, one of my Angry Bear colleagues - I’ve forgotten who - put forth the idea that economics as an intellectual discipline was invented to mainly justify the existence of a dominant wealthy class. I’m not sure that’s exactly correct, but following orthodox economics in our post-capitalist world seems to have the effect of increasing wealth disparity. 

I also believe that nobody really understands either money, nor inflation.  The classicists, neoclassicists, monetarists, Austrians, Keynesians, neo-Keynesians, market monetarists and MMT guys all have different ideas of how money works. They can’t all be right, but they can all be wrong. 

The empirical reality is that austerity impoverishes, and government spending leads to some relative level of prosperity.  What do we do to get out of recessions and depressions?  Spend, spend, spend.  I wonder why that works?

But, alas, wealth and power are fungible, and the rich cannot resist the urge to buy control of government and then seek to enforce policies that further favor their already exalted positions.  So we get things like austerity and low inflation.  Another thing that’s happened over the last 40 years is the dismantling of unions.  Only government and unions have the power to stand up to capital.  So capital has suborned government and pretty much destroyed unions.

Interestingly, the author posits that, contrary to orthodoxy, central banks don’t control the money supply; they control interest rates.  I’m on record saying they don’t even do that. The blow back I got on that was mainly that they set expectations, and interest rates follow.  Not only does this seem like magical thinking - or, at least dog-wagging, I also wonder whose expectations?  How many people are even aware of central banks, let alone what they can or cannot do?

I’m writing this as I read, and see my thoughts have gotten a bit ahead of the author.  But I’m happy to see we are in broad agreement.  Especially about the disastrous effects of austerity.  So why do we repeat this same error so many times?  The author has the answer buried in parentheses: “tight-money policies (which benefited creditors and the wealthy)”

Interestingly, he then goes on to criticize what I was harping about several years ago - that when reality differs from an economic model, economist go with the model and deny reality. The basic assumption that people are reliably rational actors is absurd on its face.  It is completely indefensible.  Yet, on that foundation, the entire edifice of scholarly economics rests. 

And here is my favorite quote from the article — “lunatic premises lead to mad conclusions.”  This, by the way, is also the fundamental flaw of libertarianism - but I digress.



Aha - some competition for my favorite quote: “Secondly, if shares are always correctly priced, bubbles and crises cannot be generated by the market….” Or even the types of 1500 to 2000 point CORRECTIONS [!] we’ve seen three times in the DJI30 index, just this year.

I share the pessimism of the article’s last paragraph.  But for what might be a slightly different reason.  As I suggested earlier, the rich control the government.  The difference between Republicans and Democrats in this dimension is a matter of degree, not kind. It took the Great Depression to bring about the New Deal reforms that led to America’s golden age.  But it also brought on World War II.  The current economic conditions are closer to those of 90 years ago than most people are aware of, or willing to recognize. And there is certainly no dearth of international tensions.

So, there might be a light at the end of this tunnel we’ve been digging for 3 or 4 decades. But the journey to the other side - if we can even get there - is likely to be long and very painful.

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More Right Wingery

So a nice right wing lady had this to say about my characterization of the right-wing mind.

 Why not write a book? your "great" analysis is lost here. So what? "Reality" is in the eye of the beholder and your reality is different than mine. "Magical thinking" is saved for progressives that insist that Socialism will work, even as Venezuela starves it's people and hospitals have no drugs. there is no magical thinking within my reality....the fact you even write about it is crazy! Give me an example of Conservative magical thinking----😝

I am not making this up.  She really did say: "Reality" is in the eye of the beholder and your reality is different than mine. 

My response:

If my great analysis is lost on you, it's because you aren't willing to do the hard mental work of acquiring information, digesting it, and using rational thought processes to drive your conclusions.

We all have opinions. A rational, thoughtful person puts some effort into having those opinions correspond as closely as can be achieved with actual observable reality.

Magical thinking is the notion that thinking, believing, or hoping for something makes it true, irrespective of evidence.

Examples of conservative magical thinking:

The unregulated free market is the best market - there is "an invisible hand."
Tax cuts for the rich help the economy.
Tax cuts pay for themselves.
Every other aspect of supply-side trickle down economics.
Having a business man run government will give the best results - because he's NOT a politician.
A Border wall is a solution to immigration and/or smuggling issues.
Mexico will pay for the wall.
Man's action can't affect climate because God is in control.
More broadly, all climate change denialism.
God chose Bush and/or Trump to be president.
White race superiority.
Trade wars are good and easy to win.
Alliances are easy to form and maintain.
Tariffs imposed here are paid for by other countries.
Vaccines cause autism.

But you summed it up perfectly, yourself: "Reality is in the eye of the beholder and your reality is different than mine."

As if your subjective notions and opinions are just as good as my facts, data and empirical observations. That is magical thinking in a nutshell.

Thank you for proving my point.

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Right Wingery

I've been engaging right wingers in various contexts for over a decade now. Here is my view of how their minds work - and it's stereotypical: you see the same things over and over and over.

The foundation for their belief system is fear and a deep negativity.

Their world view is based on -
- ignorance
- prejudice
- reality denial
- magical thinking

This is supported by cherry picking favorable bits of data and information, while ignoring the larger picture -- epistemic closure. The flip side is steadfastly holding on to ideas that are demonstrably not true - the entire genre of ridiculous conspiracy theories.

Their technique of argumentation is -
- deny
- delay
- distract
- deflect

Hence their tendencies toward what-about-ism, changing the subject and personal attacks.

They manifest all this with the trifecta of right wing behaviors -
- projection
- an often stunning lack of self awareness
- tone deafness to irony

Be on the look out for these things. It is how they always operate. Because when when facts, data and all the other aspects of reality are not on your side, what else are you going to do?