Monday, August 1, 2016

Tough Times For People Are Beginning To Appear

See-saw trading marked the first day of August, traditionally one of the quietest times for traders, so excuse your author for not offering a great deal of commentary as the "dog days" wear on through the hot month.

Stocks were up and down without direction. Japan's fiscal stimulus, largely expected to consist of some form of "helicopter money" (i.e., central bank largess via government spending and/or handouts), and, while there were some measures designed to prop up the poor and stimulate spending, it's more likely that - like everything else the BOJ has attempted the past 25 years - the plan will backfire because Japanese people are more concerned with squirreling away cash for rainy days than spending to keep the government promise of prosperity and growth.

It's the same all over the world. Governments and central banks have themselves painted into a not-so-agreeable corner, flanked by negative interest rates on one side, stagnant growth prospects on another, and a phalanx of QE, ficsal irresponsibility, crony capitalism, global income insecurity, and political instability dropping from the ceiling and oozing up through cracks in the floor.

While the political and business hoi poloi continue preaching the narrative of rosy economic successes, the average people have had enough of being lied to, cajoled and insulted by appeals by the financial authorities to their better interests, which, in truth are in nobody's good interest.

A couple of possible scenarios might emerge from the continuing diddling by the Fed and their crony central banker kin. One is that extreme lawlessness reigns, as laws are multiplied beyond the system's ability to prosecute them, or, political forces morph into ugly totalitarianism.

A good bet might be a hedge between the two, as both are already emerging in various forms, everywhere from dictatorships like the one evolving in Turkey, right down to the tin-horn generals at local levels who attempt to enforce zoning and municipal codes on wary citizens.

If there appears to be unease in every neighborhood, it's because below a calm surface is a boiling pot of anger, resentment, fear, and distrust.

Dow Jones Industrial Average
18,404.51, -27.73 (-0.15%)

5,184.20, +22.06 (0.43%)

S&P 500
2,170.84, -2.76 (-0.13%)

NYSE Composite
10,730.20, -55.31 (-0.51%)

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