China is the Next Goldilocks Economy to Fall

The first time I heard an economy called "Goldilocks" was in 1999, right before the dot-com bubble burst in 2000. I heard it again in 2005 and all the ways to 2007, right before the meltdown started. And it is happening again! JP Morgan just put out a report saying China is a Goldilocks Economy. Can the end be far away? 

I have earlier cautioned on Chinese statistics. They count GDP differently than we do - when budgeted or shipped, not spent or sold. Much of their apparent demand for commodities is stockpiling not production. It was not that hard to call the end of their secondary top last August. 

I hear wistful Liberals decrying how hard our Democracy is and wishing we could just make things happen like China does! They wonder why China can stimulate and we can't. Well, Obama could have gotten the stimulus he wanted through, so there is no one to blame for the bad one passed than him. And he could have focused on fixing the financial sector rather than chasing progressive fancies like healthcare reform, for free! Even SNL is laughing at that, now. No one is talking of bending the cost curve anymore. Instead, they are saying his political fortunes would be better served if the travesty of a bill were to fail. 

Maybe the problem lies in our fantasies about China, not our bitches about the US. Barry Ritzholz first laughed off the bogus Chinese stats, but now he is not so sure: "China expert Gordon G. Chang (author of The Coming Collapse of China) is more than skeptical — he has the data to question much of China’s growth miracle." In sum, real stats like gasoline sales are flat, belying the claimed 8%+ growth. 

The amount of stimulus by China is huge as a percent of GDP compared to the US, and they may not be getting that much for it. Those wistful Liberals may think it is ok to slosh around excess money, since it adds to an abstract "aggregate demand" and should help fill the gap of a drop in private consumption and investment. Where the excess ends up matters, however, especially if it lands in a whole passel of malinvestments, such as Ghost Cities being raised in China with nothing productive in them. Or, the US favorite for malinvestment, a horrific housing bubble, which may be emerging in China again. (For a contrary view, click here.) Eventually the piper has to be paid.

Now the cracks have begun to form. The Bank of China is over-extended, giving it no safety net from a hiccup. The hangover from binge lending may apply to all the top Chinese banks. Their plans for bolstering their balance sheet sent Asian markets tumbling at the same time as Dubai defaulted. Ouch. 

I suppose wistful Liberals think it will be easy for the command economy to bolster their banks, but one of the best analysts of the China scene argues otherwise: 

The low deposit rates mean that Chinese savers are effectively being taxed to replenish bank capital.  ... Chinese households are bearing a pretty hefty share of the cost of China’s investment-led boom, and it is these same households whose surging consumption will be necessary to absorb the increased production resulting from the investment boom.

Given the increased financial burden being placed on them, I doubt that they will be able to do so. After all, it is because of lesser versions of these same policies in the past that the enormous gap between production and investment exists in the first place. And if they cannot raise their consumption sharply to absorb all this additional excess production, the banks will be stuck financing rising inventory and unprofitable companies.  It’s a vicious circle.

There is no easy way to resolve this problem ... .

The Big One for China may be an entirely unexpected Black Swan: the Chinese going into a trade deficit. The argument is that the US will go into a double-dip next year, reducing the pull of exports out of China, and China will begin to tip over into a trade deficit as their consumers choose spending over low-rate savings to bolster the banks. Compounding this might be Japan hitting the point of no return, where they no longer can fund their out of control public spending deficit without raising rates and also sliding back down. China may be forced to devalue their currency, an event so contrary to expectations it will confound markets and drive the US Dollar up. 

Before then, a continued weak Dollar would also undo the Chinese stimulus. Karl Denninger reports that a 10% drop would reduce the value of reserves by 3x (Y1.5T) that China is spending on the stimulus (Y586B). Ouch again. 

Whens something cannot go on, it won't. The assumptions of the Goldilocks Chinese Economy seem doomed to be shown to be as false as such claims were shown to be in prior bubbles. 

What is it about a bubble that the pundits miss, and instead of seeing what is really happening, causes them to gush over the very conditions that are driving the bubble just as it is about to burst?

Comments

[indy]

save martinarmstrong.org-help save this man

[indy]

save maritnarmstrong.org-save this man

[Hockthefarm]

I'm not sure who Martin L Gross is, but hopefully he is a nut. Some how I doubt it.

Check out his discussion on FSN titled National Suicide using the URL below:

http://www.financialsense.com/

Hock

[joe]

"I hear wistful Liberals decrying how hard our Democracy is and wishing we could just make things happen like China does!"

Pray tell, where exactly did you hear that?

Joe

[DG]

joe,

Thomas Friedman wrote an editorial to that effect in the NY Times a few weeks ago. Since the Times is a darn-near perfect reflection of "conventional wisdom" on the Left, I can see why Yelnick would write what he wrote.

[John Smith]

I have been harping about China going under for about 3 years now. I just could not see how anybody could be offering everything under the sun for below cost and somehow survive. Plus China has an enormous problem with its people. They have thousands of riots every year. China is a command control economy. The people on the top could not figure out that by letting the yuan appreciate they might make the people richer and they will have more buying power. They instead decided to enslave them. Its to late now. Just as it is for Japan.

[joe]

DG - come on. Do you really think liberals "wish it could be like China" - do you really believe that? On the basis of a Friedman editorial in the NYT of all things?

China is likely to implode though - and if it does it will probably end in a pretty bloody national war.

Joe

[DG]

joe,

There is a significant segment of the Left that is just fine with more centralized planning and less laissez-faire. I don't think one has to read Friedman as the "gospel" of the Left to realize that. And, having read Friedman over the years, it's hard to deny that he represents a pretty mainstream Leftist contingent, as does the NYT as a whole.

Read it yourself, don't take my word for it:

http://www.nytimes.com/2009/09/09/opinion/09friedman.html?_r=1

[joe]

DG - "more centralized planning and less Laissez-faire" approaches do not add up to wishing for a China model. It also seems to me that whenever the subject of China comes up on the left it is considerably more in the context of Tibet - and China has serious enemies on the left on that score.

At certain times of crisis in our history the country clearly has "pulled back" from from pure capitalist approaches - as FDR did in the 30s but equally Lincoln did in the 1860s.

[joe]

DG or anyone watching this tonight -

On Wednsday there was a very big single purchase of vix calls - 28,000 contracts - one deal. Then on Friday there was significant buying in vix calls with 30-40 strikes. It looks like "someone" knows something is about to hit the fan - to me - and very soon.

You guys seeing the same thing in this??

Joe

[DG]

DG - "more centralized planning and less Laissez-faire" approaches do not add up to wishing for a China model. It also seems to me that whenever the subject of China comes up on the left it is considerably more in the context of Tibet - and China has serious enemies on the left on that score.

Yes, and I'm sure one can find Friedman editorials on the China-Tibet issue. However, the one I linked clearly shows him praising China's one-party rule in economic matters. You asked where Yelnick got the idea from and I provided a link. If you want to dispute Yelnick's interpretation of what the editorial says, that's clearly your right. Seems silly to deny that the link says what it says, though.

September 9, 2009
Op-Ed Columnist
Our One-Party Democracy
By THOMAS L. FRIEDMAN

Watching both the health care and climate/energy debates in Congress, it is hard not to draw the following conclusion: There is only one thing worse than one-party autocracy, and that is one-party democracy, which is what we have in America today.

One-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages. That one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century. It is not an accident that China is committed to overtaking us in electric cars, solar power, energy efficiency, batteries, nuclear power and wind power. China’s leaders understand that in a world of exploding populations and rising emerging-market middle classes, demand for clean power and energy efficiency is going to soar. Beijing wants to make sure that it owns that industry and is ordering the policies to do that, including boosting gasoline prices, from the top down.

Our one-party democracy is worse.

[DG]

On Wednsday there was a very big single purchase of vix calls - 28,000 contracts - one deal. Then on Friday there was significant buying in vix calls with 30-40 strikes. It looks like "someone" knows something is about to hit the fan - to me - and very soon.

You guys seeing the same thing in this??

Joe

Looking at the SPX Weekly chart, we did the first thing I'd like to see to consider a change in trend, which is make a lower low after a lower high on a Weekly basis. However, the same thing happened twice in October, so, while it's a good set-up to use for a good risk-reward trade, it's not a guaranteed winner.

I think there are no shortage of time-bombs for the economy and markets, that's for sure. Yelnick does a great job of cataloging them here.

[joe]

I agree with your chart reading. I agree with you about yelnik - his posts are thought provoking.

I do not recognize any e-patterns lately - what ever it is must be fairly rare - I do recognize serious monies flowing into those vix conracts though. I did not see that kind of buying in October of those calls.

It is a very strange market out there right now - I don't remember anything like this I have ever seen before.

Joe

[Wavist]

I wouldn't say he's praising one-party rule as much as implying that autocracy is superior to democracy, although that's what you meant, why he would also seem to suggest that having more parties involved in government would be better than either system is a little incoherent though considering his dislike for protracted debates. Disapproval of laissez faire or democracy is not Liberal though it's the opposite, Liberalism is belief in free markets and individual liberties and all that.

[john donson]

1. A huge purchase of VIX calls is also a huge sale of VIX calls.

2. I listened to about 30 seconds of that Martin guy. If you needed more than that, he AND you are nuts.

3. Those Martin Armstrong newsletters are rambling and bizarre. If he has something to say, he should say it clearly. Unless he's trying to appeal to the magical mystery tourists. Which I suspect he is.

4. I wonder if there might be some tax-related selling soon after new year's. After all, 2009 looks to be a very solid year in many asset classes.

[joe]

If there is any tax selling it has to happen before the end of the year for 2009 income taxes.

[donson]

Joe, some people don't want to sell this year because they have profits. They'd rather wait until after Jan 1 so they can delay the taxes a year.

[DG]

Disapproval of laissez faire or democracy is not Liberal though it's the opposite, Liberalism is belief in free markets and individual liberties and all that.

Posted by: Wavist | Sunday, November 29, 2009 at 05:44 PM

Not in the US, at least not any longer. Our "conservatism" is more of the kind of "classical liberalism" you describe here. We don't have real "conservative Tories" here in the US, primarily because we don't have a traditional aristocracy for the Tories to represent.

[joe]

Tax selling - to me anyway - is to sell positions with losses to offset gains made during the year.

[DG]

I do not recognize any e-patterns lately - what ever it is must be fairly rare

The pattern I've been tracking since mid-August is one of Neely's new patterns, so anyone not at least familiar with those structures would be very unlikely to have the same wave count as I have had. While rare in the past, I've been seeing these patterns a lot since the March lows, at varying degrees. They are formed on the base of a Triangle, i.e. 5 Corrective segments, but don't have the "thrust" out of the pattern that a Triangle has and then require one more segment after the failed thrust, for a total of 7 Corrective segments.

[Cary Lloyd]

I think most people agree but donson
isnt talking about that

hes talking about nervous people selling jan 1

[graspthemarket]

DG I have a different idea on a count than you...

The Russell 2000 appears to be tracing out 5 waves down from the top on October 19. This chart shows the bottom of wave (1) that began on October 19, and top of wave (2) (the high on November 23). The rally that began on November 2 was a complex countertrend pattern. The first part of the countertrend was an ABC zigzag followed by a three wave move to the X low on November 13. The second part of the countertrend move traced out a triangle marked by ABCDE. You can see the labeled chart along with some other markets here: http://www.graspthemarket.com/elliottwave/20091130a.php

[joe]

Grasp - your count on the R2K - makes a lot of sense.

The DJIA - no counts are working. Maybe DG is right, I don't know much about Neely - maybe there is a 7 part corrective wave sequence - maybe it works on that basis, but I don't see it.

You know the DJIA futures are starting to give back most of the gains it made tonight. I'd say this (mostly because I have been watching vix call accumulations lately) - that if the Dow opens up tomorrow I'd be looking for an entry to sell it. Usually this is where elliot is the most helpful to me - unfortunately it is not working for me here.

I am short - I did pull back some on friday close (mostly because mondays seem to go up almost every time lately) but I have a feeling this is a big week.

[Wavist]

Most countries are split between Socialists and Conservatives of one sort or other, Australia alsodoesn't have a old style Conservative party and traditionalists there are Liberal, in so far as Aussies are traditionalists anyhow. America has never really gone for Socialism although it's striking how similar the incumbent is to European social-democrats perhaps times are changing. I recall a debate in which George Bush called his opponent a Liberal from Masechusetts sp? which didn't seem intended as a compliment, I think it was in reference to his views on abortion or somesuch. Aside from secularism what do American Liberals generally campaign for if they don't believe in Liberalism?

[joe]

I slightly disagree - America has gone "socialist" when needs arose that required them. FDR pushing through social security and unemployment insurance for example was certainly seen so at the time (and still is by many). As to being more central state controlling - one can look at the war production boards in WWII or even something as simple as what happened to Willies Jeep - how the government took their design and simply ordered larger auto companies to build them - not very capitalist friendly - and clearly central planning driven.

And this is not an isolated case - almost identical things happened in the Civil War.

Point being, the history of our country clearly shows that at certain critical times the state will use measures they deem necessary to meet a particular threat. It is proper that they do so - to make these changes in times of crisis to protect the republic itself - and if some measures exceeded some peoples belief in the constitutional readings of the time
were always present - it was also known in those rough periods of our history that the constitution was not a suicide pact (as one of the justices of the supreme court once said).

Joe

[Hockthefarm]

By THOMAS L. FRIEDMAN

"Watching both the health care and climate/energy debates in Congress, it is hard not to draw the following conclusion: There is only one thing worse than one-party autocracy, and that is one-party democracy, which is what we have in America today."

I think TLF's first point is that for major issues that will shape our future, we are a one party country and have been for a long time. And his choice of autocracy over democracy must surely stem from watching Congress during the Dubya era. They accomplished sfa, nada, no legislation to speak of.

"One-party autocracy certainly has its drawbacks. But when it is led by a reasonably enlightened group of people, as China is today, it can also have great advantages. That one party can just impose the politically difficult but critically important policies needed to move a society forward in the 21st century. It is not an accident that China is committed to overtaking us in electric cars, solar power, energy efficiency, batteries, nuclear power and wind power. China’s leaders understand that in a world of exploding populations and rising emerging-market middle classes, demand for clean power and energy efficiency is going to soar. Beijing wants to make sure that it owns that industry and is ordering the policies to do that, including boosting gasoline prices, from the top down."

Here I think TLF is referring to the fact that China's political future is uncertain at best, and will evolve considerably as a middle class develops. I believe a top down economy has its advantages when building infrastructure and creating systems for efficient production of goods and services. Their government is just packed with Engineers. Flights into and throughout China were seamless on my recent trip. My return through O'hare was a gut wrenching mess. I'll never clear customs there again. It was like everyone's cranium was 3 inches thick.

I'm not saying that China won't have its problems (they may be worse than during our own transition when we passed England)but my own feeling is that once a critical mass of wealth develops in China, democracy will follow. And it can happen in a generation. So I don't think TLF was trying to compare iron fisted autocracy with enlightened early Greek Democracy (which we do not have any way). As Noam Chomsky put it, fuctionally, our president is very much like the Queen of England.

"Point being, the history of our country clearly shows that at certain critical times the state will use measures they deem necessary to meet a particular threat. It is proper that they do so - to make these changes in times of crisis to protect the republic itself"

Great, now I'm scared chitless.
Hock

[twitter.com/DrBubb]

"Since the Times is a darn-near perfect reflection of "conventional wisdom" on the Left..."
The Times slogan is : By, for, and about J--- / Nope. I shouldn't say that, it would sound prejudiced. So I will just agree, it is by, for, and about the Left Wing, in American politics. Even Martin Gross might agree with that.

[twitter.com/DrBubb]

"I have been harping about China going under for about 3 years now. I just could not see how anybody could be offering everything under the sun for below cost and somehow survive."

I live in China. Hong Kong, actually. What I see here looks much more sustainable than what I see in the US, or in London where I used to live.

Do any of you reading this, think the US real wealth has even a small chance of increasing in the years to come? I could see that happening in China and HK, with this part of the world almost certain to gain on the US in the years to come.

I suggest you make a trip to HK and China, and see fot yourselves. Else, you may make a huge mistake.

[Pat]

Another example of the left crying out for a more centralist,dictatorial approach - in a recent interview in the UK, Gore Vidal, having derided conservatives as fascists, he talks about Obama...

“Maybe he doesn’t have one [a wider vision] not to imply he is a fraud. He loves quoting Lincoln and there’s a great Lincoln quote from a letter he wrote to one of his generals in the South after the Civil War. ‘I am President of the United States. I have full overall power and never forget it, because I will exercise it’. That’s what Obama needs — a bit of Lincoln’s chill.”

http://women.timesonline.co.uk/tol/life_and_style/women/the_way_we_live/article6854221.ece

[DG]

DG I have a different idea on a count than you...

The Russell 2000 appears to be tracing out 5 waves down from the top on October 19. This chart shows the bottom of wave (1) that began on October 19, and top of wave (2) (the high on November 23). The rally that began on November 2 was a complex countertrend pattern. The first part of the countertrend was an ABC zigzag followed by a three wave move to the X low on November 13. The second part of the countertrend move traced out a triangle marked by ABCDE. You can see the labeled chart along with some other markets here: http://www.graspthemarket.com/elliottwave/20091130a.php

Posted by: graspthemarket | Sunday, November 29, 2009 at 09:03 PM

grasp,

I don't think that initial move down was a 5-wave move. I base my statement on Neely's Essential Impulse Construction Rules in Chapter 5 of Mastering Elliott Wave. I urge you to check out that chapter. It has saved me many thousands of dollars by helping me recognize where there is and is not an Impulse wave. Differentiating between Impulsive and Corrective waves is absolutely the most important skill for any wave analyst.

Also, I don't think that Zigzag works, because the wave-B of a Zigzag should take more time than wave-A.

http://www.neowave.com/qow/qow-archive-411.asp

More broadly, a Double Combination as wave-2 is unlikely because Double Combinations shouldn't get fully retraced, since the mere fact that a Combination has occurred, rather than a correction consisting of a single structure, indicates market strength, when the correction occurs upward (and weakness when downward). To have a Double Combination followed by a wave-3 doesn't fit the implicit logic of the structure. This is covered in Chapter 10 of Mastering Elliott Wave.

[yelnick]

Joe, building on your point about socialism during crises. Let's not call it socialism, but more simply: the public gives great latitude to a President during a crisis, then withdraws it when the crisis abates. During the crisis unconstitutional things may be done, nut they get pulled back after. Lincoln, Wilson and FDR are good exemplars. Obama's mistake is he hijacked a real crisis to push a progressive agenda on false crises (healthcare education, global warming), and the public is already pulling back. Obama seesm on track to be a massively failed Presidency.

[yelnick]

Hock, my wistful liberal friend said: would you rather be run by a nation of lawyers or a nation of engineers? He is of course tracking mainstream libs like TLF.

I really appreciate the posts you and DG and others have done pointing out the lib love of autocrats. In college I knew folks in The Movement to create the Glorious Socialist Revolution in Amerika. They used to point to the Soviets, then China, and when I was in college, Cuba. Eventually Sweden! Pathetic. Now back to China! Sad. Obama is their scion.

[joe]

Obama "on track to be a massively failed president"

Those kinds of things were said about FDR too when he pushed thru Social security - about Johnson when he pushed thru medicare.

I'd give the guy more than a few months before making that assesment if I were you. I'd at least give him credit for the fact that the US didn't fall into a black hole in March - and that we did not is pretty amazing.

He is pushing multiple agendas. Maybe its just that the guy can walk and chew gum at the same time too.

Joe

[yelnick]

Joe, I agree a couple of years can be a long time in politics and Obama can reverse things. But I do not give him credit for March; that lies on Bernake's shoulders for providing massively liquidity to stem the fall of finance. There is nothing Obama did that affected March. His Stimulus hadn't even started

[joe]

Maybe so -

Yelnik are you looking at whats going on in options the last few days?

Its not just the vix anymore - look at AIG - it is very strange. Many many puts for december are going out here - way out of the money puts.

Joe

[yelnick]

Joe, saw this http://www.stocktiming.com/Monday-DailyMarketUpdate.htm which noted a spike in VIX on Friday. VIX spike means premiums for options have gone up. I will check into the story you mentioned. This could be year end cleaning up.

[Hockthefarm]

Well, there is always hope!

U.S. vs. ‘The Narrative' of jihadists
By THOMAS L. FRIEDMAN
New York Times
Nov. 29, 2009, 9:25PM

What should we make of Maj. Nidal Malik Hasan, who apparently killed 13 innocent people at Fort Hood?

Here's my take: Hasan may have been mentally unbalanced — I assume anyone who shoots up innocent people is. But the more you read about his support for Muslim suicide bombers, about how he showed up at a public-health seminar with a PowerPoint presentation titled “Why the War on Terror Is a War on Islam,” and about his contacts with Anwar al-Awlaki, a Yemeni cleric famous for using the Web to support jihadist violence against America — the more it seems that Hasan was just another angry jihadist spurred to action by “The Narrative.”

What is scary is that even though he was born, raised and educated in America, The Narrative still got to him.

The Narrative is the cocktail of half-truths, propaganda and outright lies about America that have taken hold in the Arab-Muslim world since 9/11. Propagated by jihadist Web sites, mosque preachers, Arab intellectuals, satellite news stations and books — and tacitly endorsed by some Arab regimes — this narrative posits that America has declared war on Islam, as part of a grand “American-Crusader-Zionist conspiracy” to keep Muslims down.

Yes, after two decades in which U.S. foreign policy has been largely dedicated to rescuing Muslims or trying to help free them from tyranny — in Bosnia, Darfur, Kuwait, Somalia, Lebanon, Kurdistan, post-earthquake Pakistan, post-tsunami Indonesia, Iraq and Afghanistan — a narrative that says America is dedicated to keeping Muslims down is thriving.

Although most of the Muslims being killed today are being killed by jihadist suicide bombers in Pakistan, Iraq, Afghanistan and Indonesia, you'd never know it from listening to their world. The dominant narrative there is that 9/11 was a kind of fraud: America's unprovoked onslaught on Islam is the real story, and the Muslims are the real victims — of U.S. perfidy.

Have no doubt: We punched a fist into the Arab/Muslim world after 9/11, partly to send a message of deterrence, but primarily to destroy two tyrannical regimes — the Taliban and the Baathists — and to work with Afghans and Iraqis to build a different kind of politics. In the process, we did some stupid and bad things. But for every Abu Ghraib, our soldiers and diplomats perpetrated a million acts of kindness aimed at giving Arabs and Muslims a better chance to succeed with modernity and to elect their own leaders.

The Narrative was concocted by jihadists to obscure that.

It's working. As a Jordanian-born counterterrorism expert, who asked to remain anonymous, said to me: “This narrative is now omnipresent in Arab and Muslim communities in the region and in migrant communities around the world. These communities are bombarded with this narrative in huge doses and on a daily basis. [It says] the West, and right now mostly the U.S. and Israel, is single-handedly and completely responsible for all the grievances of the Arab and the Muslim worlds. Ironically, the vast majority of the media outlets targeting these communities are Arab-government owned — mostly from the Gulf.”

This narrative suits Arab governments. It allows them to deflect onto America all of their people's grievances over why their countries are falling behind. And it suits al-Qaida, which doesn't need much organization anymore — just push out The Narrative over the Web and satellite TV, let it heat up humiliated, frustrated or socially alienated Muslim males, and one or two will open fire on their own. See: Nidal Malik Hasan.

“Liberal Arabs like me are as angry as a terrorist and as determined to change the status quo,” said my Jordanian friend. The only difference “is that while we choose education, knowledge and success to bring about change, a terrorist, having bought into the narrative, has a sense of powerlessness and helplessness, which are inculcated in us from childhood, that lead him to believe that there is only one way, and that is violence.”

What to do? Many Arab Muslims know that what ails their societies is more than the West, and that The Narrative is just an escape from looking honestly at themselves. But none of their leaders dare or care to open that discussion. In his Cairo speech last June, President Barack Obama effectively built a connection with the Muslim mainstream. Maybe he could spark the debate by asking that same audience this question:

“Whenever something like Fort Hood happens you say, ‘This is not Islam.' I believe that. But you keep telling us what Islam isn't. You need to tell us what it is and show us how its positive interpretations are being promoted in your schools and mosques. If this is not Islam, then why is it that a million Muslims will pour into the streets to protest Danish cartoons of the Prophet Muhammad, but not one will take to the streets to protest Muslim suicide bombers who blow up other Muslims, real people, created in the image of God? You need to explain that to us — and to yourselves.”

H

[yelnick]

Hock, great comment! Let me add that even the NYT is now criticizing Obama's foreign policy, especially with the Arabs. His very apologies on Arab soil offends them, since one is not supposed to criticize the home or family on a stranger's doorstep.

On your Narrative, what happens when we put radical Muslims into US jails next to disaffected prisoners?

[Hockthefarm]

sci·on (sn) KEY

NOUN:

A descendant or heir.
also ci·on (sn) KEY A detached shoot or twig containing buds from a woody plant, used in grafting.

Yikes!
Hock

[Hockthefarm]

"On your Narrative, what happens when we put radical Muslims into US jails next to disaffected prisoners?"

Great insight. Like trying to put a brush fire out with gasoline.

I am (sadly) really ignorant when it comes to the ME.
Intuitively though, there is something wrong when vast resources are held by a few dozen people. That may be the proper point to begin an analysis.

Great board,
Hock

[joe]

"On your Narrative, what happens when we put radical Muslims into US jails next to disaffected prisoners?"

I'd think they would be treated by most prisoners somewhat like child molesters - and have an equally short life expectancy.

[joe]

How about this observation on the S&P - it seems to have very heavy resistance at just below 1100. The dollar seems to have a good floor just below 74.50.

Each are at the edges of their respective ranges.

Since Wednsday of last week there has been pretty significant options activity that suggests a big move coming shortly. And generally, the TA does not look good for equities in any event.

Of course it is had a similar picture for months now - with no wave count that has worked that I see. The only real difference now is that there are some strange actions in vix and some select stock options.

This about sum it up - or does someone see something I am missing?

Joe