Vox Popoli

Bob Prechter began his lecture with an overview of basic Elliott Wave theory. Five waves in impulse wave, odd waves trend, even waves corrective. Three waves indicate countertrend. He talked about long term trends being very difficult to reverse and noted that Random Walk theory has been completely exploded by pattern recognition and statistical improbability of traders being successful over the long term. The question is no longer if there are patterns in the financial markets, but if the patterns can be described by Elliott Wave theory or not. Deflation, not hyperinflation… deflation essays available for free download. Inflationists don’t understand impact of debt imploding. I’ve been agnostic, but it’s clear that nothing has played out the way the inflationists projected thus far.

Just to point out that he hasn’t always been bearish, Prechter showed long term history of oil prices from 1859 to 2009. Very good forecasts by Elliott Wave International people from 1993 through 2009 contra those by mainstream forecasters who are obviously doing nothing more than projecting linear trends from the latest turn. Explained why commodity 5th wave blowoffs tend to be bigger and spikier than equity 5th waves. Commodity throwovers tend to cross the long-term channels on both sides. Says we’re now facing the biggest bear market in oil since 1915, which is an extraordinarily contrarian position at the moment. Comment – does this suggest we’re looking at a new energy source or complete economic collapse? I’d hope the former.

Very interesting section on distinguishing finance from economics. Financial charts show no equilibrium prices; sellers are not supply, not producers. The law of supply and demand doesn’t apply. Comment – so freaking obvious in retrospect, can’t believe I never saw this. Just look at the damn charts, idiot! Indicates ABC mechanism is irrelevant whether shifting goods dynamic or limits of demand. Have to write footnote for new book, possibly appendix if time. I ask Prechter when he started thinking down these lines as it’s not clearly articulated in the books or the EWT, he says around 2003-2004. Paper published in academic journal: The Financial/Economic Dichotomy in Social Behavioral Dynamics: The Socionomic Perspective.

Another question about knowledge of Elliott Waves rendering them useless. Prechter laughs. No shortage of evidence that monetary and fiscal authorities not geniuses capable of ignoring political pressure, let alone mass emotion. Scary symmetry between 1921-1929 and 1974-2000 DJIA charts; look almost identical except latter is 3:1 in time and percentage terms. I was thinking 2x, maybe too conservative. Other indicators include dividend yield, P/E, and bond yield/stock yield ratio. All range 2x to 3x higher than 1929. Could have thrown in relative stimulus packages, credit expansion, and bank failures as percent deposits too.

Seemingly off-base call of 2000 top actually looks quite good in terms of Dow/Gold. Dow/Gold went from 1 in 1980 to 42 (actually 43.7) in 2000. Now down to around 10. Nominal dollar Dow confuses things, surprise surprise, as corrected for inflation Dow would have topped at 847 in 2000, not 14k+. Tends to show that appearance of massive modern wealth is mostly illusory, with the perception upheld by technological advances.

About 20 questions, most technical. I only took notes on those I found interesting:

Q1- what would make him bullish? New Dow high in gold terms to reverse Grand Supercycle call. In other words, not bloody likely.
Q2- Best opportunity approaching appears to be SP500 hitting 1k to 1100. V. nice to ride Wave 3 down, but watch counterparties. One can still lose on a winning bet if the losing bank goes under.
Q3- USD strong when market weak. Should continue to fall as rally continues, then strengthen.
Q4- Social mood is the engine of history. Great book title there. Prechter is clearly well-grounded: “Sometimes they say you’re a genius, sometimes they say you’re a complete idiot. The truth is somewhere in between.” Not interested in trader lifestyle, only did the 1984 trading championship to walk the talk. 440% in four months should more than suffice.
Q5- Tops are diffuse, bottoms tend to be simultaneous. Don’t know if that applies to this depression since 1929 tops were simultaneous and bottoms 1931 Japan, 1932 Europe, and 1933 USA.
Q6- When will this rally end? 2nd wave retracements are strong, not enough bulls yet. Should see 95+ before it’s over.
Q7- I ask about gold dollar price being less relevant since also insurance against dollar disappearing and value of X/0 being infinite. Prechter answers math, not so much point. (Yes, X/0=0, but analogy not equation.) Leaves impression that he’s dubious about dollar replacement, but admits store of value beyond market trading could apply since gold most likely replacement when fiat fails. Doesn’t include Dow/Gold chart in monthly updates because traders don’t care, that’s why they’re in the EWT every four months or so.

Excellent lecture, one of the best I’ve seen. Perhaps a bit more theoretical than some of the traders there were expecting, but Prechter’s not afraid to give specifics when asked. Highly recommended, notes don’t do justice to the give-and-take during the last hour.

The Fraters Libertas salute a past prediction and request one for the future:

Finally, we should note that way back in May of 2004 one pundit read the tea leaves correctly by noting that the idea of Franken winning a Senate seat in Minnesota was not as far-fetched as it seemed at the time…. Congratulations to Vox Day for not underestimating the unpredictable nature of the Minnesota electorate. Perhaps he could gaze once again into his crystal ball and tell us what he thinks about Franken’s reelection chances in… 2014. Sigh. There aren’t going to be a lot of laughs over the next five-and-a-half years, are there?

I can only thank the good Fraters, they are too kind. It’s true, there won’t be many laughs over the course of Franken’s term, but it won’t be the new senator’s fault. In fact, Senator Franken may well provide a small sense of comic relief in much the same way that a chimpanzee dressed in a business suit does. The reality is that Coleman’s loss isn’t in the least bit harmful. If Minnesota must bear the burden of seeing its interests “represented” in the Senate by a Jew born in New York City, an outright Democrat is to be much preferred to a pseudo-Republican like Coleman.

In any case, Franken will not be re-elected in 2014. The Democratic Party is going to be blamed for the worsening economic contraction and the huge tailwinds that helped him win office will be transformed into even bigger headwinds. To me, the question is not whether the country turns away from the Democratic Party after six years of their hapless rule, but whether a third party will finally begin to gain sufficient electoral strength to offer a convincing alternative Republican Party.

I doubt it. It’s highly improbable given the complete failure of the American electorate to recognize the two-party shell game. And yet, it’s still more likely than the probability of Obama and his legislative cohorts remaining popular after the failure of the eighth or ninth straight stimulus package. Remember, we’re already hearing rumors of the third one now and few even recognize that we’re in a depression yet, much less the Great Depression 2.0.

Steve Sailer discovers additional evidence in support of his theory:

As I’ve mentioned before, a remarkable fraction of female journalistic output, at least the most heartfelt stuff, consists of demands for society to change so that that particular female journalist would be considered hotter looking.

Despite its grammatical infelicity, I rather liked this quote from the comments there: “It is the nature of a liberal to be shocked by the consequences of their own actions.” I can’t say I encounter much female journalism, though, have to admit, mostly because I don’t attempt to keep up on dead celebrities, teen fashions, or television shows.

Note to female writers: writing about your/women’s issues in X is still sex-related fluff; it’s not equivalent to actually writing about X.

Next week’s reading is Chapter Five. The quiz for it will be posted on Saturday, July 18th.

Men, don’t call yourselves feminists. You’ll regret the consequences.

True, lots of women won’t use the “f-word” because of the negative associations and, arguably, eradicating the “I’m not a feminist, but…” plague among womenfolk is more important than getting the menfolk on board. But for me, personally, if a guy I dated insisted he was not a feminist and refused to identify at all with that label? Well, I’d probably dump him.

This is a hypothetical that really isn’t worth worrying about. First, no man with above-average intelligence who isn’t a gamma male would ever date a feminist in the first place. Second, and probably more important, no man who is attracted to pretty women is even likely to notice a feminist in the first place. One very seldom finds a feminist who rates so much as a 5/10 on the pretty meter. Needless to say, the writer above is no exception. I’m sure all you non-feminist men are shedding tears and committing emotional seppuku at the thought of being forever off this future cat-collector’s list.

If feminists weren’t so disturbingly unattractive to men, they wouldn’t fall so readily for the equalitarian idiocy in the first place. At least, they would require the usual 12-16 years of propaganda that normal women do to obtain even a modicum of mindless equalitarianism. Think about it. What beautiful woman, who has spent her formative years bearing the brunt of instant hatred from most of the girls and women she encounters, is going to give any credibility whatsoever to the basic concept of equality? Equality doesn’t exist in any material, legal, or philosophical sense, and only those who resent the short hand they were dealt see any benefit in propagating the myth.

It’s been said that every twenty years, civilization is invaded by a new set of barbarians that require taming. Ironically, a day after posting about the attack of the mad teacher – he was provoked, as some commenters imagined, although hardly in a manner that could justify bashing someone’s skull in with a weight – I had my own run-in with a pack of six or seven little bastards at a water slide.

These boys were 13 or so and they were showing no respect for the civilized convention known as “waiting in line”. They kept pushing past all the smaller kids and the one or two women in line; when anyone protested one would plaintively claim that they were merely going ahead in order to join his mama. Ha very ha. They did this repeatedly, going up the stone steps and down the slide, until finally they attempted to pass me.

When I told them that there was a line and they could wait like everyone else, the two leaders just smirked and pushed past on either side of me. So, I reached out, grabbed each of them by the back of the neck,and physically placed them behind me on the step below, then turned around and repeated what I’d just said. One of them whined that I should calm down, although I hadn’t raised my voice at all, but he ceased his whining when I calmly explained to him that I was perfectly calm and that if, in fact, I was not calm, I would have already thrown him over the nearby fence to the ground a few meters below.

Based on the widened eyes of the two boys, this appeared to have the desired effect. I was just irritated enough with the little bastards that it’s possible they may have mistakenly perceived I was looking for an excuse to drop the hammer on them, which was not the case. Interestingly enough, the little pack elected to make that their final trip down the slide and they went off to pursue other activities at the park instead. A small victory for the forces of civilization, perhaps, but a victory nonetheless.

Reason #135: When they’re not trying to boff the students, the teachers are trying to kill them:

A science teacher was being questioned by police on suspicion of attempted murder today after a 14-year-old boy was left with serious head injuries after an alleged attack at his school. Peter Harvey, 49, is also being questioned about alleged assaults on two other pupils, believed to be a boy and a girl, also 14.

This also tends to belie the oft-heard, never-proven claim that teaching children science will somehow cause them to magicallyscientifically behave in a more rational manner.

Ambrose Pritchard-Evans is feeling a wee bit less sanguine these days:

Port statistics are revealing. They were a leading indicator before the production collapse in the Japan, Europe, and the US over the winter, and they may be telling us something again. Amrita Sen at Barclays Capital says the number of Baltic Dry ships waiting to berth — mostly in China and Australia — has begun to fall after peaking at 154 in mid-June. The Capesize Iron Ore Port Congestion Index (a new one for me, I must confess) is replicating the pattern seen a year ago just before the commodity boom tipped over.

At 3,100, the Baltic Dry Index is down more than 25 percent from 4,290 on June 3rd. This strikes me as being potentially more significant than all the happy talk and upwardly revised GDP numbers, especially since there’s little ability for speculators to bias the index with their expectations.

It strikes me that something just isn’t computing. The precipitous falls in shipping and steel production appear to be much greater than a mere 4 percent decline in GDP can possibly balance. I am beginning to get the impression that even if California is reduced to Mexican cannibals dwelling in hemp-built huts, the Bureau of Economic Analysis would report it as a modest decline in GDP with a recovery expected later in the year.

Hey, it happens….

Forget the poor guy who just lost his job. The real problem is the terrible pressure to provide for the family this now puts on his working wife!

When she first heard the news, “there was a sinking in the pit of my stomach — and tears,” she says. “It was just devastating. It’s completely outside your power, and now you’re responsible for the entire family,” says Janosek, who like many wives who work, brought in roughly one-third of the family’s income but is now the principal breadwinner. “You worry about losing everything. It’s just overwhelmingly scary — and there are no resources for spouses.” Janosek was able to increase her work hours, and her husband now has some contract work, which has helped — but it hardly solves the problem. “I am still angry about it,” she says.

Stories like this demonstrate what a complete crock the whole equality charade is. Why in the name of Betty Friedan should anyone feel any sympathy whatsoever for a married woman suddenly being handed the same responsibility borne by most married men throughout the entire history of civilization?

It’s rather like the classic joke about The New York Times headline about the world ending: Women and Minorities To Suffer Most.