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Wednesday, February 7, 2018

Stocks and Bondage

stilton’s place, stilton, political, humor, conservative, cartoons, jokes, hope n’ change, stock market, crash, glitch, plunge, nunes, memo, manipulation

Is it just us, or does the timing of the wild, stomach-churning chaos in the stock market over the past few days seem awfully convenient for those anxious to distract Americans from the near-coups attempted by Democrats, intelligence agencies, and media outlets?

Following release of the Nunes memo, concerned citizens were just starting to dust off their pitchforks and fill up their tar-and-feather barrels, when suddenly the market dropped faster than Bill Clinton's pants.

Did some highly-placed, highly-funded person or persons know exactly what and when to sell to send automatic trading computers into a cyber-stampede "flash crash?" We don't know, and we have no proof - but then, the idiot who wrote the "Fire and Fury" book about Trump doesn't have proof of anything either, and he got a bestseller out of it! At least the stuff that we're making up is plausible!

According to the head of the financial department here at Stilton's Place, the company retirement fund  (and we quote) "took it in the nuts" on Monday. Fortunately, on Tuesday some of the painful swelling went down...although it may still be weeks before our portfolio can again ride a unicycle without agonizing pain.

Normally, we'd look at such a "rogue wave" financial event as being a fluke rather than a blatant manipulation. But now that we've gotten a look at the breadth and depth of the attempted manipulations during the last election, we're apt to be a little more suspicious than usual.

BONUS: COULDA BEEN A CONTENDER

We were hard pressed to decide which image of "Hillary the Spider" to use for Monday's post. Eventually we went with the one we liked best, but we think this more abstract version also has merit enough to deserve posting for the art lovers among you...

If she'd won, we'd currently be papering public walls with these in the dark of night.

32 comments:

James Daily said...

Why do I have a sneaking suspicion that somebody shorted a basket full before the 600 drop and doubled down before the 1500 drop? Yea, I'm a conspiracy nut as their are just too many coincidences above my pay grade. Sorry Stilt about your nuts. With the market in the stratosphere all fluctuation will be greater than ever before, especially since little trading is done with humans anymore.

Sortahwitte said...

Yes, our "little nest egg" fell off the shelf, too, in the great big slide. My wife, Sioux, and I are already retired, so the cheese and the simoleans are pretty binding. I can't consider returning to work because of some rude remarks that were foolishly said out loud.

We are celebrating 50 years of marriage this summer and are taking a wonderful trip to celebrate. She's going to Hawaii and I'm going to Minnesota. Just kiddin' hon!
Love you bunches!

Joseph ET said...

Love being lucky. My IRA took a hit like everyone else. We are at that age that we MUST make withdraws from the IRAs and that is done automatically each month. So, our money came out on Thursday before the drop and deposited to our checking on Friday. I watched the market most of the day on Monday and near the end of the trading day I deposited that money into our investment (money) fund which was down about 8 %. Both funds moved up today. Nice. ☺

Fred Ciampi said...

We hatched our nest egg when I retired and moved and paid cash for a new house as our other home was under water and we had to short sell. Pisser. Luckily we can live on our SS and my Marine disability. Yay. And once in a while I take on a consulting gig. Now, where's my 'shine?

Fish Out of Water said...

Given the revelations of the past several weeks, if the "resistance" has been behind this, color me unsurprised.

Fish Out of Water said...

....and I prefer the second version of the poisonous spider aka the twice failed, avaricious, pathological serial liar and venal grifter presidential candidate . The face shows her malevolence far better than the Monday post.

Mark Matis said...

Do note that the Federal Government runs the Thrift Savings Plan:
https://en.wikipedia.org/wiki/Thrift_Savings_Plan
as the retirement system for federal employees. Think they might be able to cause some entertainment with $500 billion in assets? Think they might still be full of Chimp acolytes? Quelle surprise!

And that does not even touch the central bank collusion against President Trump. The Fed and the rest of that swill are playing directly and indirectly in every market around the world.

Davos and the Bilderbergs to rule them all!

Geoff King said...

I do not follow the Stock Market, but figured the insane rise since Trump became President would eventually have to end and correct itself.
In my opinion, a better distraction to the memo fiasco would be Elon Musk putting a Tesla car into space with a robot driver. This seems to be getting very little coverage in the media, when it should spark the imagination of everyone.
Here is a live feed from the red convertable in space:

https://hypebeast.com/2018/2/spacex-falcon-heavy-tesla-roadster-space-livestream

Stilton Jarlsberg said...

@James Daily- I'm really not declaring that there was a conspiracy behind the market drop, but I am saying that the more we find out about the very real conspiracy to get Trump, the easier it becomes to give credence to all conspiracy theories. Meanwhile, the market is so overvalued at the moment (in my ignorant opinion) that volatility is natural. And painful.

@Sortahwitte- Wow, congratulations on that upcoming 50th anniversary! Mrs J and I still have a way to go to hit that landmark, but we're catching up with you as fast as we can!

@Joseph ET- Well played, sir! Assuming the market doesn't do another nose dive today or in the near future. We live in butt-puckering times.

@Fred Ciampi- Sounds to me like you're doing just fine. And congrats on getting the occasional consulting gig - that option's not open to me because no one really wants my opinion on anything. Except here, of course. And for free. (grin)

@Fish Out of Water- Exactly. At this point, neither assuming conspiracy nor rejecting conspiracy is quite the right move: rather, we now need to be skeptical of everything.

And regarding the Hillary image, I sort of prefer today's version too. Truth be told, there's a great filter program at Dreamscopeapp.com that lets you upload images and turn them into surprisingly impressive artworks. The problem is that it may take 24 hours or more for them to render your image and such was the case here. I didn't get to finally look at this red, white, and blue nightmare until I'd already gone to press with the previous post.

@Mark Matis- Excellent point. Many have pointed out that in the midterms, Republicans are hoping to run on the strong economy. So what might the deep state want to sabotage before those elections?

Chuck Baker (Macon) said...

I apologize in advance for being long winded, but I think we need some perspective here.

The market hit its low point in the last few days on the 6th at @24,137 (so far). Yes, that is a whopping drop of $2,012 since the close on January 31. But putting in perspective, that $24,137 was still $760 higher than the close on 9/30/2017, and $4,273 higher than the close on 1/31/2017 (a year ago). The day Trump was elected, the DJIA closed at $18,333 and the next day, it rose 257 points. From the election in November 2016 to the end of January 2018, we've enjoyed an incredible 15 months of up-up-up, with the DOW up 5,804 points (from election day to the LOW on 2/6): that's a 31.66% increase ... in 15 months.

Yesterday, it bounced back 567 points to 24,912.77 which puts us UP 193.33 points for the year (the 2017 close was $24,719.22). Not bad at all for 1 month and 7 days into the year. During the last full year of the previous administration (2015), the DOW was DOWN 398 for the year (can't count 2016 as the last full year because the election in November pushed the markets much higher that they would have gone otherwise, IMHO).

Thanks to Quantitative Easing, the market rose very nicely (overall) under the previous administration, but for all the wrong reasons. The government was printing money to pay off debt (bonds). With interest rates near 0% the only place for the money to reasonably go was the market. So, from Feb 2009 (the low for the DOW at $7,063 - it was at $12,690 prior to the 2008 crash) until election day in 2016, the DJIA went up 11,280 points (up 5,653 from before the crash). Since the election, it has climbed at an incredible rate, but for a completely different reason: optimism. We've even had an interest rate increase (my online savings is now paying me 1.4%. It had been hovering around 0.7% and .8% for years. Even my credit union savings is now up to 0.65% when it had been stuck between 0.35% and 0.45% for years.

So, from April 2008 to November 2016, the DJIA rose 5,653 points. From November 2016 to the close on January 31, 2018, the DOW rose 5,804 points. February has certainly started out rough, and nobody likes a roller-coaster market, but try to hang on.

As the effects of lower taxes, business growth, and REAL unemployment drops (not just the lefts method of, "hey, if we don't count 'em they don't exist.") but an actual increase in the percentage of the eligible workforce actually working, we're going to see real economic growth ... until the pendulum swings left again (God help us ... we may not survive that even one more time).

For now, I do believe what we are seeing is market manipulation to distract the masses from the revelations of the released memo long enough for something else to take over the news cycle. Move along. Nothing to see here.

Stilton Jarlsberg said...

@Geoff King- Holy cow! I just looked at the link for the "car in space" and it's AWESOME! I love the "Don't Panic!" sign, too.

John Canfield said...

Since we are now card carrying certified old people, I moved from 60/40 equities/cash or cash equivalent to 50/50. We are very fortunate to have a few years of living expenses in the cash or cash equivalent column so we basically don't care about market swings. It goes down, it goes up, it goes down, it goes up (no I'm not referring to Bill Clinton.)

Rob said...

The whole car in space is great! Right out of the movie "Heavy Metal" and the "Don't Panic" was icing on the cake.
Watching the two rockets land back where they started makes my day!

James Daily said...

When I retired in April 2006, we moved our 401Ks to me son's company. He deals in bonds so I haven't owned a stock in years. Yea, it doesn't make much, about 6% a year but wife and I were more concerned with preservation than growth and he has done a fine job. When I was trading stocks I worried quite a bit not knowing what move to make. It was a guess because I was not privy to what the giants were doing. In addition, doing taxes was a mental hernia even when a professional did the job. We set a goal of how much we wanted when we retired and we actually doubled that. That meant doing without and living well within our means, like in the same house for 40 years, no new cars but used vehicles so we didn't take the drive-out hit, live debt free. Well worth the sacrifice.

John Canfield said...

@ James Daily: Talk about mental hernia, I held AT&T stock when it divested into seven operating companies. Then I had shares in seven more companies; trying to figure the cost basis for the stocks was a nightmare (this is when I did my own taxes.) I sold all of that as soon as possible and started to have a CPA do our taxes. Now our wealth manager manages the portfolio and they do our taxes. :-)

I don't own individual stocks any longer, my eight or nine funds are doing quite well and almost always outperform their peers.

We have been debt free for maybe 20 some odd years, it's a great and liberating state.

Alfonso Bedoya said...

I've been through such brief panics...in the late 70s, late 80s and when Obama was elected. It taught me a lesson: when such opportunities present themselves, BUY, don't SELL. The sudden drop was not recessionary, and in an economy that has become so positive since Trump's election,(re his regulatory reforms activity, his luring corporations back to the U.S, etc.), there is no reason to believe that the market is healthy for at least this year. Buy stock in quality well-run companies and do your DD (due diligence) and daily homework. It makes the difference in one's being a speculator and an investor.

Alfonso Bedoya said...

Almost forgot: Dial up a website for investors: Seeking Alpha. It's free.

Fish Out of Water said...

@ Stilton Jarlberg

Regarding the twice failed presidential candidate and avaricious, pathological serial liar and venal grifter , I remembered and dug up this passage from a book, The Distant Mirror, written by the late historian, Barbara Tuchman about a similar character from the 14th Century, Charles of Navarre (aka Charles the Bad)

" With that exception, by the end of 1378 Charles of Navarre had lost all his estates in Normandy. Walls and fortifications were razed so that his strongholds could not again be held by enemies of France. In the south, the seigneury of Montpellier, his last possession in France, was taken from him by the Duc d'Anjou. Scotched at last after thirty years of compulsive plotting, Charles of Navarre was left to live out a destitute and friendless decade in his mountain kingdom so much too narrow for his soul. So might Satan have been penned in a sheepfold." pp. 346,347

John the Econ said...

Although conspiracy theories are fun, I'm going to come right out and say that I don't think the recent stock market drop is the result of any deep-state conspiracy to distract us from the memo and/or sink Trump. We've had a near-non-stop run-up of around 30% since Trump won in November of 2016. 30% in a mere 15 months. That's a lot. And certainly not sustainable indefinitely. A correction was inevitable. In fact, a 5% correction now is certainly better than a bigger correction later. I wish it was possible to know just when they happen, but I at least know they are inevitable.

If there was anything that triggered it, it was likely the non-re-appointment and retirement of former neo-Keynesian Fed Chair Janet Yellen. Like her cheap-money predecessor, she was hesitant to raise interest rates. (Cheap money is what was responsible for the market run-up during the Obama era, where the largely hibernating economy alone didn't justify it) There's little doubt that now after over a decade, interest rates will now be allowed to return to something more closer to normal, which will lessen the likelihood of runaway inflation and be good news for savers but will also represent a pull from the markets.

And I am more than happy to take a 5% haircut on the 30% I've made over the last 15 months. Remember, if you're going to make money in the stock market, you have to look long. The money I'm investing today I don't expect to be pulling for 15 to 20 years. A lot can and will happen in between. But the longer the window, the greater likelihood that you will compound well.

And I love corrections! It's when I get to buy from the Chicken Little types who are freaking out and are desperate to sell to me cheap. I was buying Monday afternoon. I'm already several percent up since then. I only wish that tax reform had included a capital gains rate cut.

Emmentaler Limburger said...

@STilton and @GeoffKing: The Don't Panic sign MAKES it! THAT is the genius of the thing - I mean, aside from seeing the thing burn up in the Mars atmosphere if it ever DOES make it there. (And what are these flamethrowers they speak of? Hmmmm.)

And thank you to Chuck Baker for the calm analysis. You are correct, sir, that we are still FAR, FAR better off than where we started from, even just a year ago. Have an extra gold grickle from me.

The new Hildebeast rendering is much better - even if I think so only because left leg #4 looks like it is clad in one of her pantsuits with something near the second joint that looks like a shoe...

Oh, and it doesn't take much effort to suspend my disbelief that some nefarious leftist billionaire (Tom Steyer, anyone? Soros? Gill? Bloomberg?...) or a big leftist/Deep State-controlled fund couldn't be intentionally shaking ripples in the picnic blanket. The question is: is this a coincidence, conveniently stealing the public's view from the horror which is the democrat party's machinations, or is it a "test firing" for something much more disruptive? I don't believe in coincidence; however, the potential within that second possibility is sobering, to say the very least.

Rod said...

We've seen similar unexplained rapid fire drops and recoveries AND I'm convinced it's being manipulated; there are just too many hissy fits like this to explain other ways.

One way to avoid, maybe: What if Trump just shut up. Do what he's doing; but stay quiet. But when also you consider them to be buying opportunities the tantrum backfires. It's also early in the month; I'm thinking much of this will be history by the time the EOM statement even come out. The market is a long term thing; and this is no big deal except for more disgust at "deep state" practices.

Old Cannonballs said...

Re Hillary the Spider: she's so ugly that both versions of the cartoon are sick-making (as the bright young things in England used to say in the 1920s), or as Dorothy Parker once said of Shirley Temple, "She makes me want to fwow up."

Igor said...

Stilton, "Just because you're paranoid does NOT mean they're not out to get you"!!

I too wondered about the timing...

Also, the picture of (s)H(r)illary for today is my preference.

JustaJeepGuy said...

I don't think he was a believer in a "Heaven", but if he were Douglas Adams would be laughing his a$$ off at the screen on the Tesla. There oughta be someone in the passenger's seat of that car, too. Yes, a hitchhiker...

Stilton Jarlsberg said...

@Chuck Baker (Macon)- Excellent discussion of what's been going on in the market. Thanks!

@John Canfield- Getting older definitely has an effect on what financial advisors laughingly refer to as your "risk tolerance." The idea of losing half your savings and waiting 10 years for the numbers to come back up doesn't seem like a great option when you don't know how long you'll be around.

@Rob- The car in space is one of the coolest things I've seen in awhile. I love the combination of whimsy and high tech. And wow - watching those rockets land?! Flat out amazing and puts other rocketry programs to shame. Which reminds me - now that Obama's gone, is "Muslim outreach" still NASA's top goal?

@James Daily- As asset management strategies go, few work as well as frugality. We've lived the same way, never spending beyond our means even if it meant hanging on to old cars, old furniture, etc. And wow, you're nailing a 6% annual return on bond investments? Sounds pretty good to me!

@John Canfield- When I first started nervously investing, there was some strategy about splitting your money between various blue chip stocks. One of my purchases was AT&T, which subsequently had the bottom fall out. Same with General Motors. And I forget the other purchases, but they certainly didn't go anywhere interesting. I now have only a few individual stocks, and a Vanguard index fund which just mirrors the market. Which hasn't been bad this year (until the past few days).

@Alfonso Bedoya- Wise words. Buy low, sell high is obviously the goal...but it can't happen unless you have the courage to buy when prices drop. Not that I've had the nerve to do any bargain hunting recently!

@Fish Out of Water- Wonderful quote, but I'd actually like to see Hillary the Bad under lock and key.

@John the Econ- I wasn't actually positing a market manipulation so much as commenting on how easy it is to suspect conspiracies when considering the other very real conspiracies we currently see unfolding. Your breakdown on what's really going on is excellent. To a great extent, the market has risen over the past year like a hot air balloon...with Trump supplying the hot air. It's been a great run, but you can only sustain such numbers for so long when powered by mere optimism.

And yes, I wish there had been a nice capital gains cut for small investors in the tax reform.

@Emmentaler Limburger- The car in space and (especially) the landing rocket engines show the clear difference between private and public enterprise. Musk got the job done for less money and actually racked up style points. Some things - like space exploration - are too important to remain in the hands of bureaucracies.

And I agree that it's frightening to consider the possibility of an enemy power hacking our stock market. Or domestic enemies, for that matter.

@Rod- Yep, this market fluctuation could be 100% normal. Or, uh, not. Who the hell knows anymore? Since Trump's election, I took it for granted that we'd be having a wild ride on many fronts, and I haven't been disappointed.

@Old Cannonballs- Even I'll admit those images of Hillary are disturbingly on the nose. And I didn't start out by thinking "what nasty image can I make of Hillary?" but rather the whole image of her as a spider atop cash popped into my head first; I tend to be a visual thinker.

And how I would have loved to share a few drinks with Dorothy Parker (even though I like Shirley Temple).

@Igor- Truer words were never spoken.

@JustaJeepGuy- I think this is an incredible monument to Adams. And I like to think there's a towel in the glove box.

Gee M said...

42.

Stilton Jarlsberg said...

@Readers- I have no new insights on the subtleties of the economic systems we've discussed above, other than that I'm taking a total ass-reaming again today. Clan MacGregor, anyone...?

John the Econ said...

If you live the stock market day-to-day, you won't survive it. (Sober, anyway)

If you take the long view, you're still up around 25% if you were in when Trump was elected. If you take the longer view, (say, January 2009) you're up 300%.

I'll gladly take a 5% hit on a 30% gain. What was the yield on your money market account during that window?

I'm also heavily invested in dividend-paying ETFs, so actually my return is much better that 30%.

If you aren't prepared to take and wait to recover from a 10% correction at any unexpected moment, you don't belong in the market. I am talking a 15 to 20 year window.

During the 2008 meltdown, I was buying when the Chicken Littles were liquidating and arguing that America was literally over and it was never coming back. Why did I do this? Because everything was on sale, and if America was in-fact "over", then it didn't really matter; My money in the bank would just be figures on a ledger and in reality would be worth little more than that same money in a stock portfolio.

Just ask any Venezuelan how much their money in the bank is worth.

Actually, I'm having a bit of fun with the Obama fanbois at the moment. As I have repeated here countless times over the last decade, the bulk of the stock market run-up during the Obama era wasn't due to any spectacular performance by either the Obama Administration or the economy in general. Was was almost exclusively due to a flood of cheap dollars printed by the neo-Keynesians brain trust at the Federal Reserve and quantitative easing. Instead of helping "main street" as Keynesian theory said it should, these trillions of dollars flooded to Wall Street, and with business really not interested in sticking its neck out with the "phone and pen" administration looking for things to regulate and tax, this money instead was used to bid up the price of equities. This was awesome for "the rich" and those well vested in equities; not so much for the rest of America where the poor and unsophisticated keep what spare dollars they have in shoeboxes or savings accounts that were now paying 0.001%.

It was never the stated intention of the neo-Keynesians to keep interest rates at near-zero for so long. But that's the fatal flaw with Keynesian theory; politically, there's never "the right time" to restore "normalcy", so it never happens. Since these people knew that the Obama economy that endlessly struggled just to touch 2% was too fragile and would likely sink to near zero, or worse, into a technical recession, they didn't dare raise rates. Every time signaled an intention to, there was a new excuse not to; usually some natural or non-natural disaster or political crisis somewhere was usually enough) They certainly weren't going to do it during Obama's last year, since growth was then struggling even more at 1.5%, and those who were smart enough to be honest to themselves knew that it would be a gift to the GOP, no matter who ended up being the candidate.

So now we're over a year into the Trump era, growth has repeatedly surpassed 3% and may be as high as 5% in coming quarters. The Fed again signals a commitment to raising rates, and guess what? This time, people believe it! Fewer cheap dollars to fuel bidding up equities becomes a reality, and the market begins to adjust.

So in effect, this confirms what I've been saying all along that the Obama miracle, so much as it was, was, in fact, a mirage made of imaginary money.

John the Econ said...

The fun for me is shoving it in the faces of Progressives who've argued for the last 7 years that the rise in the market since 2008 was great and due to Obama's genius when the fact was that the only people who made out great during the Obama era were, in fact the hated rich and Wall Street. They tried to take credit for the "Trump Bump", when, in fact, the run up post-Trump was due less to Trump than it was due to eviction of the meddlesome "pen and phone" people from the White House. Regardless of what happens on Wall Street this month, people still feel freer to conduct business than they have for a decade. Trillions of dollars being hoarded overseas is being repatriated. Regardless of their 401Ks, millions of Americans will have thousands of more dollars in their pockets.

So yes, the market is going to be painful for awhile. However, I feel better about the economy than I have in ages.

Stilton Jarlsberg said...

@John the Econ- I agree with everything you're saying (I'm crazy, but not stupid) but am still suffering. A fair amount of my retirement fund is in individual stocks which don't necessarily mirror the DOW...and in the past week, I've taken one helluva lot worse than a 5% haircut. More like a 20% (or more) Brazilian wax with no painkillers.

That being said, I don't think either the sky nor our economy are falling...rather, we're starting to see a bit of "reality" kick in. Nice ride while it lasted, but damn...sure wish I'd sold an assload of stocks a week ago (wry grin).

John the Econ said...

@Stilton, you know from a conversation we had years ago that I hesitate to give investment advice since I am not a "financial industry professional" and because I don't want the responsibility for other people's investment well-being. (If I'm going to be responsible for that, I should be paid) But I will give two pieces of advise:

A) Assume the opposite of whatever Paul Krugman says in the New York Times.

B) Consider ETFs (Exchange traded funds) which spread risk over a large portfolio of stocks, so that a decimating hit on a single company does not decimate you. In fact, most of my money is in a half-dozen ETFs for various industries, sectors and/or strategies. I only own a few stocks for single companies that I follow very closely because I am familiar with the industry and/or trends. My favorites ETFs are from Vanguard. Lowest risk finds track the entire market, or you can invest in particular industries, or in companies that pay large dividends, etc. The older you get, the more spread out you should be.

Good luck tomorrow.

Stilton Jarlsberg said...

@John the Econ- Excellent and legally non-binding advice (grin). I'll look into ETFs, assuming I have anything left to invest soon (kidding, I hope). I never really intended to be too reliant on individual stocks, but a couple of them - and ONLY a couple of them - really took off and so became overbalanced in my portfolio. But not so much so that I wanted to sell them off (though I've done a bit of that over the past year).