Paralyzed

“It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.”
– Franklin Delano Roosevelt

One of the key features of the time we live in is paralysis.  Uncertainty creates risk aversion, since risk is much more difficult to calculate.   After a few years living like this and people start to live day to day.  It eventually becomes “survival mode” when tomorrow becomes very difficult to imagine.  The result is nothing – and that often comes even when one person is calling the shots, let alone a system based on consensus among many.

The evidence is all around us that something unusual is happening.  Change is coming faster and in ways that are not often talked about adequately.  The economy is not simply recovering the way it has after any other post-war recession.  What should we do?  FDR had it right – try something and see if it works.  If that goes against every instinct you have right now, you’re not alone.  But let’s see if we can convince you that there are, in fact, some things that point to very different actions than we’re all used to.
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Yellen’s Dashboard – Update

Another quarter has come, and it arrived with good news on jobs. The stock market didn’t tank right away, but most investors agree that the daze of puffed-up valuations for everyone are over. The consensus seems to be that rather than a general fall, investors will have to be more selective and careful. This is consistent with an economy that is changing and gradually turning over, ahead of the next Big Thing that will propel a real bull market in coming years.

But where do we stand with respect to Yellen’s Dashboard – those key economic indicators that Fed Chair Yellen said she’d be watching for movement where there has been so little over the past few years? We don’t have all the data to fill in where 3Q14 stands, but we have most of it. And it all looks good. Which is to say bad, if you’re so minded, because it really does look like the Fed is going to raise rates.

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Pop!

The big test for the stock market comes with the release of unemployment figures, which probably has already occurred if you are reading this after 3 October. If unemployment comes in at better than last month’s 6.1%, what is also expected this month, there will be a serious problem for the stock market.

How is that? Do rich people only prosper when the working stiffs are suffering? The short answer is “no”, but the long answer is “yes”. It shouldn’t be set up that way, but the fragile bubble at the end of a 3 year long expansion in the S&P500 is kept aloft partly by Fed Action – and that comes to a halt as good news trickles in.

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Thanksgiving and Dia de la Raza

October is a good month for holidays in North America.  At the end of the month we have the collision of the Celtic Samhain with the Aztec / Spanish Dia de los Muertos which swirled into Halloween.  But in the middle is the difficult holiday, the one where we celebrate the connection of this continent with the rest of the world.  And the three brother nations of this continent have their own ways of marking it.  This is a repeat from 2011, updated.

To our North, in Canada, the first Monday after October 12th is  Thanksgiving, this year on the 13th.  To our South, in Mexico, the 12th is  Dia de la Raza.  Our brother nations here in North America have found things to celebrate in the early days of Autumn, but here in the USofA we have nothing but the pseudo-holiday Columbus Day – something we’ve tossed over our shoulders and given up on.

This may be a measure of our ability to get anything together.

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