Giant Day

Some days nothing happens.  Many for that matter. Or it’s the drip drip drip of attrition of small events one tries to blow up as huge cataclysms… as in portraying it as the Earthquake of the year…

THEN, there are days everything changes.

Right now, we have the WEIC bills shuffled into a different committee in the Senate, creating speculation they may be shelved, never to see the light of day.  They passed the House. This is important for all of Wilmington.  I was telling some school kids what it was about, and their eyes got HUGE!  (They had no idea)…   But it is the first change in New Castle’s School Districts boundaries since the famous Court desegregation settlement.  It has great impact on property values in Christina District… Woo Hoo!  No more thugs! That becomes the place to raise your kids. Red Clay’s housing prices begin their grand longterm slide… Pike Creek is a great neighborhood, but we now got thugs from Wilmington in our schools.

Secondly, we have the Democratic sit-in for common sense gun legislation… Going on 24 hours, this is amazing stuff.  We’ve had sit ins before, and the same outrages being social media’d regarding Paul Ryan, also took place when it was Republicans protesting and Democrats controlled the House… The Democrats even turned off the lights; the Republicans have not gone so far yet…. But this is destroying the Republican Party… Seriously, it is a wonder if it will be around November 11th.  We have Democrats demanding a vote on gun laws that will save lives… They may not win the vote, (there are a lot of Republicans) but they are demanding a vote… Obviously the Republicans don’t want a vote which will cause them to get attacked by both sides… I mean,… who wants to be attacked by both sides?

But unfortunately, I wasn’t able to pay attention to either of these… Today (yesterday) was the Brexit Vote.  Most of you don’t know what that is or what any implications of that might be…  Let us say:  global economic collapse.  Remember it was the collapse of Lehmann Brothers, one single firm, that triggered the Depression (falsely called a Recession) of 2008.

If that was a rogue wave, this is a tidal wave… While you slept, Britain lost 120 billion pounds sterling of net worth. most of it in a minute.  Their banks are down on the stock markets by 25%… You may wake up to the resignation of their Prime Minister.  Housing rentals stocks are now down 40%… Overall at this writing, the FTSE  is down 5%.. The German exchange is down 5%.. American futures are down 5%…

No one knows how it will end.  It could be the end and wipe out all wealth which means we are in for a long bitter and hopeless recovery.  Or we may, pull a save and people will relax. The answer depends on where the fear line lies, and that is something no one can know…. That is the line over which if collapse passes, emotions take over decision making and a free for all occurs…

So before you go in to work today, pour yourself a glass and raise it to “Yesterday”:  a normal day that may be the last normal day you’ll remember for the rest of your life.

Cheers. 🙂

 

Late August Bump, Means Historical Fall Crash

This trend has been consistent. A surprise bump in August puts fear in investors. Then when the third quarter’s financial reports come out after September 30th, with roughly 2/3’rds not meeting projections, on one day in October, every one at once decides to pull out…

That is the problem.

Currently there is no better market across the globe, which is why our stock market has had its good run… But when Treasuries at low percentages look better than stock market negatives, it does make good sense to switch…

Which is nothing new… The only problem is when everyone does it at the same time… It creates an hubris where stocks have no value and their plunge becomes intense…

You may have heard… today opening plunged 1100 points… Today, August 24th, 2015, marked the end of the largest running bull market on record… Good news is that it’s up 950 points… So if you’d already been sitting outside the market and jumped in this morning… this was a good day.. so far..

But that can’t happen forever and if the market had dropped 3300 instead of 1100 that 950 of available reserves would do nothing…

For six weeks we will stumble around and the stocks will slowly rise and bounce back, but the “skittish index” has just now shot through the roof…

When the 3rd Quarter reports emerge, and if they are over 50% below expectations… Get ready…

There is far less resiliency in the middle class now than there was in 2008-2009 “Republican Caused” Depression. And today there are far less Democrats in the House and Senate to approve any bailout which means the majority now think like Romney: let markets correct themselves,keep government out. Herbert Hoover said the same thing in 1929.

The good news is that by wiping out a good portion of the stock market’s profits which 99% now goes to the 1%, is that the middle class now achieves more equity than anytime since before Ronald Reagan. … when it does become more equitable, we need to instill policies that keep it equal like we did in 1932-1933…. Change the rules so that as wealth is re-created, 50% is given to the labor side of the equation, and 50% goes to the capitalist side of the equation…

Taxing more is the simplest and most effective way to achieve that. It worked very well once before.