Economists do not Try to Forecast the Business Cycle
QUESTION: Marty, it was fantastic to meet you in Berlin and the conference really opened my eyes. Can’t wait for the sneak preview of the Trader level in Socrates. The Investor level is amazing providing a long-term outlook written by the computer. Your staff said the computer was writing daily trading reports in the Eighties, but you never told people it was the computer back then.
This brings me to the Bloomberg interview of Larry Summers who was still arguing against a rate hike before yesterday. The interesting point was his admission that economists cannot forecast the business cycle as you said at the conference. Why do they not even try and then hold up the silver cross and hope you go away?
BR
ANSWER: Traditional Economics is incapable of forecasting for to start with, economists have no real world experience. It takes a trader to even see that there are patterns with markets and by no means are they some random walk if you use technical analysis, Elliott Wave, Gann, or whatever. Each type of analysis, other than fundamental, begins with the realization that this is not some random walk of a drug through the park. That theory of Random Walk was developed to explain their inability to forecast. You might as well say who knows if the sun will appear tomorrow, it is too complex to try to figure out how the havens move. There are too many planets and stars to track.
All the turning points in the Economic Confidence Model which it has forecast in my lifetime alone, even to the precise day, demonstrates that there is no such thing as a random walk. Yes there is complexity masquerading as chaos within which there are definitive patterns. Even the Maya discovered time. They studied the heavens as did the Babylonians. Economists seems to be unable to observe patterns and then claim anyone who does must be the devil. This is illustrating that social sciences, even if you dare call them a science, are living in the Dark Ages and you burn at the stake alive anyone who disagrees.
Keep in mind that if you can forecast the economy, then you alter politics. How can politicians run for office vowing to alter the future if they cannot manipulate the business cycle? Communism and socialism have failed because they attempted to alter human nature to manipulate the business cycle. Most modern Economists all accept as a general rule that they can manipulate society and the economy. Therein lies their self-interest and this is why they do not even want to examine what we have revealed exists. I do not care if we are not 100% correct. Being better than 50/50 consistently is impossible as pure luck or coincidence..
As for the pretense that 100% of the people would make reality take place if you could forecast is absurd because they would all act the same. The evidence of proper management is the story of Joseph from the Bible warning the Pharaoh there will be 7 years of plenty and 7 years of drought.There will always be two forces as in politics. This is an excuse why not to try. If we assume there will always be plenty and no cycle, then we are plain stupid as a society.
Some schools are starting to teach the Economic Confidence Model. It is the way to the future.
The Agenda Behind Global Warming
There are those who claim that the UN is behind the global warming scam to create a one-world government. If we turn it down a notch and follow the money, we find a bogus agenda to raise taxes substantially in the name of the environment. I have reported that NOAA, the agency responsible for collecting this data, has refused to reveal their data. NOAA has been caught manipulating the data and changing history all to set the agenda for a massive tax increase. Every real scientific investigation disproves global warming and shows that we are heading into a cooling phase.
In this context, it is interesting to note that an important meteorological satellite (NOAA 16) reportedly broke apart on November 25. The Joint Space Operations Center (JSpOC) of the American forces noticed at 15:41 ET “an unknown number of related objects” that circled the suddenly destroyed NOAA 16 satellite.
According to the report, there was no collision. Now, they are claiming that the questionable satellite responsible for the data collection has broken apart due to a defective battery. This is perfect timing, just like the 9/11 attack on the Pentagon to kill the investigation into $2 trillion missing from the defense budget or the attack on WTC7, which was not even hit, but magically collapsed with all our evidence documenting every bank manipulation from when it began. This convenient destruction of the satellite will prevent anyone from investigating the global warming data manipulation that is being used to massively increase your taxes in the years ahead. Eliminating cash and moving the election ensures that everyone will pay for the real crisis — the sovereign debt crisis & the collapse of socialism.
This weather satellite was brought into orbit in 2000 and should operate for at least many years. The NOAA used the satellite in June 2014 until they then replaced it because of a “critical anomaly” decommissioned.
This year, however, the satellite blew up with another satellite: the satellite number 13 of the weather satellite program of the U.S. Armed Forces Defense Meteorological Satellite Program (DMSP). There also, they claimed that the explosion destroying the weather satellite was due to a faulty battery.
Is this just a coincidence, or is this part of the agenda?
German Violence Against Asylum Seekers Doubles
It is truly amazing how disconnected the politicians in Europe are from the people they dictate to these days. There is a rising trend attacking asylum seeker’s accommodation in Germany. Of course there are other types of crimes also targeting the refugees and those who have been helping them. By mid-November, there were 1610 crimes recorded, which are associated with the “accommodation of asylum seekers.” Compared to last year, the number was 895.
Riots in Netherlands Against Refugees
Riots are erupting also in Netherlands against the massive influx of Refugees. As one reader wrote:
I just want to send you an example of civil unrest on a small scale. In the Netherlands this evening there were riots in a small town called Geldermalsen. Geldermalsen has 27.000 inhabitants. The reason for the riots is that they want to have a center for refugees in Geldermalsen. During the talks about the center (1500 refugees) on a municipal level, the riots started.
The problem with refugees is that there is no discussion possible with government or socialist people. If you are against refugees, then you are a racist according to them. Well, and then this happens.
Can the Fed Limit the Fallout Globally?
QUESTION: Dear Marty,
No one EVER asks about the consequences of emerging market debt in the global economy.
No one EVER asks about the consequences of emerging market debt in the global economy.
Ms. Yellen stated today they are aware of out interconnectedness and are taking measures to control the fall out. Really? Can they?
When will we start to see the bond market implosion in Europe?
Your thoughts about this?
Best,
TD
ANSWER: The Fed has held back the last two times because of pleas about external forces. I have been warning that central banks have lost their SOVEREIGNTY. The Fed had “no choice” but to raise raise for the US economy is their responsibility. They cannot tell Congress they have failed to act because of emerging markets have borrowed half the amount of US debt since 2007.
The Fed cannot limit the fallout. This is a massive debt crisis at the Sovereign level. It’s just time. All our models are warning to strap yourself in tight. This ride will pick up velocity come March. For now, beware of the DEFLATIONARY collapsed.
Market Talk December 16, 2015
An impressive performance overnight in Asia saw the Nikkei back above the 19k level with the 20k psychological target the next barrier. Europe wanted to soldier on upwards but ahead of the FED’s announcement is always a hesitant trading period. Most dealers were on hold awaiting this evenings announcement and although everyone thought it was a done deal there is always that sector of doubt.
So, late this evening the Fed Reserve finally raised rates for the first time in nearly 10 years. The new target rate moves from 0-25 percent up to 25-50percent with most participants expecting a majority of the trading around 0.375%. the US Bond market saw the 2yr note trade above 1% (an increase of around 5bp on the day); whilst 5’s and 10’s rose 5 and 3bp respectively. This puts the spread between US/Germany at +161bp (with Bunds yielding 0.62%). Interestingly we saw the 30yr note close on the 3% level, a rise of just 4bp on the day.
So, late this evening the Fed Reserve finally raised rates for the first time in nearly 10 years. The new target rate moves from 0-25 percent up to 25-50percent with most participants expecting a majority of the trading around 0.375%. the US Bond market saw the 2yr note trade above 1% (an increase of around 5bp on the day); whilst 5’s and 10’s rose 5 and 3bp respectively. This puts the spread between US/Germany at +161bp (with Bunds yielding 0.62%). Interestingly we saw the 30yr note close on the 3% level, a rise of just 4bp on the day.
The DOW had been expecting this move for a few days now and so reacted with a rally built-in. The DOW closed +156 points (+0.90%), S+P up 30 points (+1.45%) and the NASDAQ +75 points (1.52%).
Oil despite a relief rally yesterday returned to heavy selling pressure closing with WTI at $35.74 (-4.90%) and Brent at $37.60 (-2.9%). What is interesting again is the spread ($1.86 now) between the two contracts narrowing again as the price depreciates. Gold saw a brief rally also today u[po the FED’s announcement closing +$14 at $1076 per ounce.
Currencies markets has seen the USD gain attention yet again with the DXY (US Dollar Index) closing +0.20% at 98.40. Gains were made against core with the Euro and GBP both flirting once again with the 1.09 and 1.50 levels. In the UK the Governor of the BoE Mr Carney has been stating that there will be no rate hikes unless the data dictates it is time. The outlook does not look pretty for cable.
Fed & its Rate Hike
As we have warned, higher interest rates are NOT BEARISH but BULLISH for the market. Anyone who dares to peek under the rug at history for past performance will see U.S. stocks rally with higher rates. A simple correlation ALWAYS reveals rates rise with bull markets and decline in bear markets. Just nuts the way these people talk up these events. So the Federal Reserve announced it is raising its key policy rate for the first time in nearly a decade in a vote of CONFIDENCE in the economy rather than negative which has been indoctrinated in the minds of the vast majority by the talking heads for decades brainwashing everyone including the press.
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