The Dow will lift through 20,000 DOW on emotion. The data shows for example, that housing in the USA adjusted downward 22% or the largest seasonally adjusted fall downward following recent FED RATE INCREASES. We reported the uptick in mortgage sales was artificial – a windfall profit to banks – created by the ANTICIPATION of the rate increase or the market scrambling to BEAT THE RATE INCREASE. Then came the fall we predicted.
Year-end retail sales will flood the market with data. The 6.7% year to date gain in overall retail sales at the close of 2016 will drive ANTICIPATION for more of the same. There will not be more of the same, however. We see the market spinning up and then volatility with corrections spinning down. We have cautioned our readers not to lose money in the mix.
If you’re a small business you’re good. Focus on GROWTH in 2017. The market is going to return – following a decade of Central Bank floodgates pouring currency into the market space – to INFLATION. If you keep pouring money ( easing ) into the world money lakes as Asia and the EU are STILL DOING and only our FED is pulling back from – does one have the FOR CERTAIN rising tide of inflation. Money is worth fewer goods are worth more and labor rises to keep pace.
The Fed is trying to control run away global inflation like Venezuela is experiencing today – the worst possible pain upon a people from failed economic policies of a communist nation – the only and always the predictable outcome. Communism is a failed economic model that is actually insane to install over a people in the modern world. The math is in. the results and data are in. Communism is the most competitive form of economics created super elite classes worse than capitalism related to general upward mobility.
Politics leading economics is always a failure in any system.
Economics leading politics is always a winner in any system.
I’m not sure the best form of government is not a Dictator system like the UAE which is obviously more efficient for its people overall. It is possible a democracy in a digital age where informed people vote directly on their own laws might be a new model of a system that would work but is untested. Cooperative Capitalism expressed globally within all systems of politics would improve the economics for all peoples of the world. CEO SPACE advocates and presents examples of the system rule for Cooperative Capitalism for small-mid size and institutional organizational leadership. For thirty years we have been home to the COOPERATIVE CAPITAL revolution. My son Jason said, Dad, your going to get a NOBEL prize for your work…..about 300 years after your dead. You’re too far ahead of the world today …but they’ll catch up….they’ll catch up Dad. Because your data is correct.
Today we have a market emotionally driven to crush that 20,000 number. Speculative computer software places bet all the way up the rope line and all the way down the rope line. Volatility created by insane peaks, creates more profits for the software.
We have seen the largest outflow of funds from say BLACKROCK in their history. This flow out has been large money moving from human managed funds, active fund management, into software managed funds, or passive ETF funds. Over a trillion has been moving from active to passive.
I have cautioned the cause of a sustained liquidity SUPER CRASH is going to be the unregulated ETF global market space of software – ill-conceived to operate when givens under the software are removed – and in the new world of contagion and system panic, HUMAN SHOCK ABSORBERS are missing. Look ma – no hands and me”m driving. The crash is coming will be a SHOCK and a SURPRISE to those too big to jail at the top – who you paid to create this monster phone market space without regulatory oversight.
I’ve lobbied for a decade that without the GREATEST GLOBAL REGULATORY RE-THINK TO REIGN IN UNWANTED SPECUATLION AND DARK POOLS ETF TRADING AND SHADOW BANKING SPECULATIONS the market is a casino of greed, price manipulation, speculation and software controlled trading without human involvement. One nation’s software against another – one institution’s software against the other. The change in the digital market has taken hold so rapidly the regulatory agencies over these global markets have LOST ALL CONTROL. Control of law. Control of tools. Control of expertise. Control of understanding the digital spiral. IN a single decade the markets have morphed into a VIRTUAL REALITY CASINO and the regulatory community is stuck under a house of 1930’s rules and laws when few homes had a phone, no one had TV, there was no internet at all, no computers, no smart or wireless phones, the fax had not been invented, the telegraph was largely in use. Mail informed investors. Laws were as a body of regulatory framework written a century ago before the Digital Age. Upgrades to those laws failed to secure:
- Funding to upgrade staff expertise to supervise digital globalized trading.
- Laws that work over the G 100 space versus in a single blue sky nation.
- Penalties for abuse which are clear
- Speculation laws that make speculation criminal
- Elasticity laws that assure the agencies of oversight keep pace with innovation
The PHILOSOPHY of law making institutionalizes agencies. As they are institutionalized their focus is always INWARD. Inward focus seeks to preserve powers and authorities that exist today and which are understood today. Outward focus occurs typically when there is a crisis forcing an RE-THINK of the old system model which has become broken.
The G 100 regulatory model of our economic system of trading is broken. In a decade rampant speculation now manipulates price for profits beyond any nation influence or control. The software creating this spiral into SUPER CRASH is unable to manage constipation when liquidity evaporates from a contagion event. The nature of the casino capitalism software is to feed on the CONTAGION making it so much worse. Human breaks or shock absorbers in ACTIVE FUNDS are being destroyed in record insolvency and closing down of 1000’s of human management funds for ETF passive software managed funds.
Profit differences expressed as market efficiencies are actually SOARING RISK versus soaring security. The market has moved from active and human controls for the first time in history – the first time since Rome and Greece – first time EVER – to technology or Artifical intelligence – software unaided by humans – controlling the trading of the market. We have left the age of communism, central planning, competitive capitalism and a form of feudalism economics, into the new age of CASINO CAPITALISM.
The GREAT LIE is that the passive ETF software driven casino will preserve wealth. It will not. The spiral is the spiral in global systemic RISK. For a time the software will bid up profits. As this is all new history no one can predict the outcome or the time frames with any accuracy.
Eventually, a DEBT TRIGGER to the decades of credit abuse, will institute a DEFAULT DOMINO. The DEFAULT DOMINO ( contagion ) will spread in hours not days across the digital landscape. Markets will become illiquid. Markets will freeze up. Markets will close daily as trigger losses are experienced daily. The ETF market will create the largest human loss of wealth in record history to date.
Failure of NATIONS TO COOPERATE versus COMPETE to fix this core problem against which all other problems of politics and economics pale to insignificance. WITHOUT A NEW DIGITAL REGULATORY FRAMEWORK FOR ALL NATIONS the CASINO CAPITALISM of the present will become a death spiral to the system at core.
Today the movies show intelligent software taking over humans and attacking humans. The intelligent software is more likely to be by a nation and represent a digital act of financial and economic warfare. Read about this from hard data in Kevin Freeman’s best-selling work THE SECRET WEAPON. It is not science fiction it is your own recent history being reported to you.
Casino capitalism IS the problem.
There is no fix because no leader accepts responsibility to lead into solution from the core problem. Plus everyone is making so much money temporarily inside the casino.
I think the DEBT DOMINO will be triggered in the EU or in China. I think the likely time frame is Spring of 2017 to Spring of 2018 – 24 months at the outside. We are reaching the end of economic elasticity.
As you share these details you can secure families in your circles at all levels of play to a safer future.
I’ve opted to suggest cashing out of markets at the all time high and forgetting about the next high in the casino. Move assets to insurance diversified investing as the last human managed market space on earth that has more human’s over money than any market remaining – the more safe shock absorber to park wealth and move wealth forward in time at the highest economic rates of profit permitted outside the casino. The only noncasino market left really in my opinion.
Or stay in the CASINO. Put your hands up as you create the roller coaster next high and scream your ass off on the way down.
So in early 2017 I see the market going up and breaking 20,000 DOW based on multiples that are insane and over pricing that is insane within a software dominated emotionally propelled SUCKERS RALLY.
The correction that follows will catch many by surprise while those inside the casino make fortunes up or down and the little folks get slaughtered.
Bets against the most aggressive AI state in the world software to software are silly bets unless you own your own software of equal measure. Intelligence ( which is an oxymoron for financial software ) is evolving. The software AIA’s believe they are creating riskless risk.
The problem in the casino falls in these areas:
- Greed without oversight regulations – never historically works well.
- Greed is a conflict of interest to market normalizations.
- Assumptions made by AIA software planners fail to assume economic history
- Liquidity lock up is not considered in writing the software with no solution inside
- Software code limits trading to rule sets other software trigger creating unintended consequences to death spiral markets into liquidity evaporation
When liquidity freezes markets stop.
The world moves to recession or depression.
Today that is almost instant in potential.
Now consider it took 2000 years to evolve modern global markets of the post world war period the most sophisticated human prosperity markets of all human history. It has taken only ten years to ramp up the greatest new market space ever seen in human history, software managed global price manipulation and speculation ( casino capitalism ) outside regulatory oversight of nations made possible by software and site of trading to most friendly exemption laws. The laws are local the trades are in the wild wild west the CLOUD. No regulation in the CLOUD. Nations have lost control of the digital market space which has become a VIRTUAL REALITY CASINO for the elite class of nations.
Nations that permit an ONE TRILLION DOLLAR stock buyback of stock in a single year of time to manipulate share price versus invest the ONE TRILLION in economic foundation and growth has become a CASINO CAPITALISTIC NATION like it or not.
The depression laws to contain GREED were all removed by the US Congress in Dec 1999 in the last three hours of congress before the Holiday break by UNANIMOUS VOTE. The law was so specific it federally prohibited the states from reintroducing the regulations at a state level to contain greed and reign in the digital casino.
GREENSPAN. No Fed Chairman has failed the world more than Alan Greenspan in his own lifetime. WE are hopefully he will reside with Milton Freidman as the FATHERS of CASINO CAPITALISM – a wrong-minded direction we never needed to travel into.
But that will be for the history writers to decide. I’m just an economist.
So Volatility is coming and you should get ready for a SPRING SURPRISE. We have said the first shock will take place before the Jan 20th swearing in. We’ll see if I’m right.
Meanwhile, the FOOLS RALLY is in full bloom – dive in with your miracle grow. Buy into the CASINO mantra – what goes up will always continue to go up and up and up and you can not lose money in high risk investing …you can’t. It’s all managed by software I mean my god your safe as a bank…..or are you? Or is the bank safe?
Make a decision – knowledge is power and SHARE the TRUTH.
Berny Dohrmann – Giving it to you in 2017— January 4, 2017