Did you read the Fed notes when they came out Wednesday afternoon? No? (Can’t blame you, there’s a real life going on elsewhere…)
Anyway, the VBD (Very Big Deal) of it is the Fed is worried in their rate talks about the impact of tariffs which will be along in just over a week say recent reports. Having pointed out to you the inflationary risks of a new set of tariffs on inbound (from ‘not here’ goods), this part of the Fed minutes was key. Because the Fed isn’t clear internally which way things are going to break:
“However, other factors were cited as having the potential to hinder the disinflation process, including the effects of potential changes in trade and immigration policy as well as strong consumer demand. Business contacts in a number of Districts had indicated that firms would attempt to pass on to consumers higher input costs arising from potential tariffs. In addition, some participants noted that some market- or survey-based measures of expected inflation had increased recently, although many participants emphasized that longer-term measures of expected inflation had remained well anchored. Some participants remarked that reported inflation at the beginning of the year was harder than usual to interpret because of the difficulties in fully removing seasonal effects, and a couple of participants commented that any increase in reported inflation in the first quarter due to such difficulties would imply a corresponding decrease in reported inflation in other quarters of the year.”
If you have trouble napping today, click here to read more.
As many of our Readers know, the Fed alleges to be a “leader” but in reality they are “trend followers” and – when not being semi-political (lowering rates too far, which we told you about price to the Second Coming (of Trump), they were sucking up to the socialist coup that had been mismanaging things.
In our view, Trump, DOGE, and (kicking and screaming) even a few Republicans are coming around to common sense. But, oddly we figure, no democrats have been “taken to the wall” (or jail) yet. But give it time.
The Ebbinghaus Learning Curve
As we have discussed, though mainly in the subscriber newsletter (Peoplenomics.com, a whopping $40/year for the high-rollers), we have been conducting slow motion research on something we call the Ebbinghaus Curve. There’s a mini paper on it here.
The idea comes – like market peaks and bottoms – in stepwise fashion.
- First, the daily stock or index hits an all-time high or low.
- The next day, the 2-day moving average comes along to join the party.
- Then the 3-day catches on, begins to join what’s becoming a Bull or Bear circus.
- And then all the averages track in a general direction reversing the previous trend.
- The Ebbinghaus part refers to the long-ago scientist (Hermann) who defined the “forgetfulness curve.” Basically saying “the more time passes, the less pain you will remember.” At least, it works that way in nominal Life; applying to things like divorce, medical calamities (if you recover, anyway) car accidents and even minutia like speeding tickets when young.
- Ebbinghaus got past the ‘big singular events’ idea and looked at how CVC-trigrams (nonsense arrangements of letters) because that gave better insights into human forgetting. Oh yeah, CVC= consonant-vowel-consonants. Made up things to remember. I found it remarkably similar to stock symbols, but that’s another discussion.
- Which I then distill down to looking at markets not only as Aggregates but also as “Ebbinghaus surfaces”.
With Orientation over, let’s review what the Ebbinghaus surface (comprised of a semi-log assortment of moving averages of a single index out to 42-days, looks like.
What you see *(look at the far left circled area and then the right-most one) is that we occasionally see the advance of an index stop – flattening out – and then declining.
Now fast forward to this afternoon and tomorrow. And let me toss one more thinking lever into the mix. It’s called “Prospect Theory” and the Wiki on it goes like this:
“Prospect theory is a theory of behavioral economics, judgment and decision making that was developed by Daniel Kahneman and Amos Tversky in 1979. The theory was cited in the decision to award Kahneman the 2002 Nobel Memorial Prize in Economics. (Apparently, I didn’t win it that year…)
Based on results from controlled studies, it describes how individuals assess their loss and gain perspectives in an asymmetric manner (see loss aversion). For example, for some individuals, the pain from losing $1,000 could only be compensated by the pleasure of earning $2,000. Thus, contrary to the expected utility theory (which models the decision that perfectly rational agents would make), prospect theory aims to describe the actual behavior of people.”
My (nutter-in-the-woods) theory adds a third lever because between them (in combination) Ebbinghaus and Prospect theory form a topology reminiscent of a Class B amplifier in electronics.
“A “Class B push-pull” refers to a type of amplifier circuit where two transistors are used, each amplifying only one half of the input signal cycle (positive or negative), effectively “pushing” and “pulling” the output waveform to create a complete signal, resulting in high efficiency but potentially introducing crossover distortion if not carefully designed; this configuration is often used in audio power amplifiers due to its power-saving benefits.”
Simplified and de-brained for the masses?
Oh, and in our view, much of the rally into the close Wednesday was possibly covering ahead of options and the ETFs squaring up.
From a month ago, on this date, our Aggregate has gone from 50,935.37 to 52,613.17. Call it a 3.3 percent gain based on early futures.
We don’t offer financial advice now to play in the Street. 76-years into Life, I’ve made far more net worth banking on inflation of assets while debt saturates the economy. So I’m probably not the one to listen to…
Golden, Are We?
The Trump team is doing a hell of a job jawboning down inflation. But reality is a bitch sometimes and no hiding from it. Tariffs will increase domestic prices. Like with Smoot-Hawley in the (first, for now) Depression, the road to hell is paved with good intentions.
My pal the Major and I were talking about the paradoxical nature of perception this week. He observed “The road to Heaven feels like hell. While the road to Hell feels like Heaven…”
Which gets me to ( a discussion of vodka) noticing Gold futures priced within $30 of $3,000 an ounce overnight and silver almost up to $34.
The reason this matters (bigly and hugely) is long-time gold bugs have heard all the (never-quite-proven) stories about American gold being leased, re-leased, and re-re-leased to give quarter to the paper gold forces that have kept prices sequestered in the basement for so long. Or substituted with gold-plated tungsten bars or spirited off to the gnomes of Zurich, or….well, there’s a list.
But you can almost smell the smoke (which means fire might be around) when reading Elon Musk Eyes Fort Knox As Next Target—What We Know About Its $400 Billion Gold Supply from two days ago. And the follow-up overnight in Trump Says He Will Check Amount of Gold Stored at Fort Knox.
Musk, hopefully, has read the rumors of “plated tungsten” which is nearly the same molecular weight. And so a “drill audit” on a sizable sample should answer a lot of questions. And maybe – just maybe – put some rumors to rest. Or, impanel a grand jury and a forensic audit team to find the crooks in office past and present…
Philly Fed and UI Filings
Working up to the grind, then: Got the Philly Fed report in hand:
“The diffusion index for current general activity fell from 44.3 to 18.1 in February but remains above its long-run nonrecession average (see Chart). Almost 41 percent of the firms reported increases in general activity this month (down from 51 percent last month), while 23 percent reported decreases (up from 7 percent); 35 percent reported no change (down from 41 percent last month). The indexes for new orders and shipments also declined but remained elevated relative to their long-run averages: The new orders index dropped 21 points to 21.9, and the shipments index fell 15 points to 26.3.
Also the weekly UI filings:
And the Impacted states detail:
Which leaves options (indexes today, equities tomorrow). And a mention of crypto: Which at $97,383 this morning sure looks like a double top – and my, what a rhyme on the Ebbinghaus model, huh?
The Newser Geezer’s Unmentionables
There “ain’t shit we can do about these” except maybe groan a bit.
End of Imperial Capitalism? Jeffrey Sachs to Tucker Carlson: We Just Had ‘The Most Important Day for Peace in Maybe Decades’. Yup. There’s a reason we call ’em (DEMS) the War Party. (Hat tip to subscriber JD for catching it…) Clinton founded the Deep State???!!! (10-min vid but damn good.)
What ever happened to the Global Warming, swimming in Midtown lies? Partial answer: Get ready for coldest winter EVER: Artic blast to bring in -50F temperatures breaking records in 27 states. Well, at least climate extremism is intact, yes sir…
And say, speaking of climate monetization, did you notice? DOGE Finds $2 Billion in Taxpayer Funds Earmarked for Stacey Abrams-Linked Group
Whiners on the Left just hate what Elon Musk is doing: DOGE Proves Our Tax Money Has Been Stolen, Looted & Wasted. President Trump Should Announce Suspension of Tax Day on April 15th…a National Tax Holiday…Reparations to Taxpayers…and Lie Detector Tests…
What’s this>>> Republicans have learned how to law-fare back? Republican Moves To Impeach Obama Judge Who Restricted DOGE Access To Treasury Payment System.
Rogan’s reality check is pretty good,too: JOE ROGAN: EVEN AFTER EXPOSING USAID FRAUD, MAINSTREAM MEDIA CAN’T SAY ANYTHING POSITIVE ABOUT TRUMP “The divisions in our culture are insane—completely counter to what America should be. This division isn’t natural. It’s set up by world leaders, the media, and the people
Also out: Russia claims Europe backed Trump hate in 2020 to swing the election to Biden: Megatron on X: “JUST IN: Putin: “All European leaders directly interfered in the US election campaign against Trump, even to the point of insults”
Another day in the saddle, huh? Lifestyle Beats Genetics on Path to Premature Death, Study Finds.But boredom kills, too…so there’s a balance to be struck.
Around the Ranch: Two Freezes from Spring?
We have always like “Alternative Measures of Reality.”
As a young (once upon a…) reporter and news director of KOL and then KMPS, there was a Seattle Times Business Writer whose work was just awesome: Richard Buck.
One of his prize concepts was a “Cost of Nothing” index, I seem to remember. He took all those “minimum monthly charges – so populi;ar with utilities – which punish people for being thrifty – and he built an Index. I seem to recall it was around $40 a month. But God knows what it is today.
Pappy and I talked about the lack of mental/financial acuity which was just taking hold – in concepts that linked water bills, for example, to sewer bills. Theory is that if you got the water, it would have to go somewhere. Only later in life would I return to an “honest gravity septic system” on moral grounds. (My pee will kill fish and poison the world’s oceans if not contained, properly.)
Schools, regrettably, have not begun to teach the great wisdom of Buck’s alternative views in finance. It’s still dollars and time.
But you can learn a lot from (literally) “working for bread.”
A.I. gives us the measuring stick:
- “In 2024, the retail price of white pan bread in the U.S. reached an all-time high of $1.91 per pound, notes Statista.
- In 2022, the average price of white bread was $1.70 per pound, which is $1.88 when adjusted for inflation.
- In 2021, the average price of white bread was $1.52 per pound, which is $1.87 when adjusted for inflation.
- In 2020, the average price of white bread was $1.45 per pound, which is $1.80 when adjusted for inflation.
- In 2019, the average price of white bread was $1.30 per pound, which is $1.68 when adjusted for inflation.
Our current “loafing” on social security comes to about 2,251 loaves per month. Not too many people actually think this way, however. If you did, you’d be working for a lot fewer eggs per month, lately.
Come to think of it, my friend Wild Bill the Broadcaster who lives out on the Washington coast, is one of the few other people I have run into in life who was capable of unplugging “dollars” and substituting whatever matters at the moment (like gallons of gas, or pounds of steak, or….). Sometimes, people would look at him in disbelief that things could be measured in other than Dollars.
Still, among the intellectual elite there are alternative measures. Which I don’t mention often because who (other than me) has worked out the “cost per wipe of Cottonelle” for example.
We have other non-traditional metrics. Progressive costs us 50-cents a mile (roughly) for car insurance. We squeak by seniorhood only able to insure a fleet of 80-90 cars a year.
Anyway – long ago, I was planning to write Buck a fan letter thanking him for his brain-freeing concepts in the Cost of Nothing Index. So finally, I got around to it.
Let me see – I think the column was in ’79, or so. So to here (.) its 523 words over 46 years. Which pencils out to 11.37 words-per-year.
Which is? (Terrible pun alert!) about a Buck’s worth.
The pseudo-serious financial point is? Time is not linear. But in the wilds north of Palestine Texas, the last freezes on this side of Fall will be tonight (23) and tomorrow night (31).
So as we can figure it, only two freezes until spring.
Write when you get rich, realizing that metric can be presented as dollars, heartbeats, steak dinners out, or loaves for the loafer class. (Want me to write another Buck’s worth?)
George@ure.net
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