Stock Market Notes

For reference see previous stock market comments below.
http://quillian.net/blog/stock-market-now-to-year-end/ 10-19-17 This forecast was right on target.

http://quillian.net/blog/being-right-about-the-stock-market/ from 10-29-17 Here I made no specific forecast as to direction. The general scheme of things unfolded about like I said they would.

If the stock market was not being rigged and managed I could not make as accurate of posts as I am writing.

One of the major points made on 10-10-17 was that moving into November there would be news so good folks could not stand it. That panned out. About the time I said it would happen, the news came out. Certain tech stock had fantastic earnings reports. Accounting laws are not being enforced so there is no telling what the earnings really were. The market responded but it all fizzled out, though the FANGs and some others have not lost much value.

As expected, when the German elections came out contrary to what is good for stocks, markets reacted.  As expected, the central banks stepped in and made the day positive for stocks. Since then things have cooled off.

I am not that good of a securities analyst. I am second to none in understanding human behavior concerning economic issues. Smart people actually do have flaws in their reasoning. They go to the well once to get water. It works out so they do the same thing again. They do it over and over again and won’t stop until it stops working. They may not stop then. Most of their success occurs because through political power they get situated above the law. The only reason I got these things right is that I understand, they will do what they always do.

I see signs that deep state cooperation network is falling apart. Folks in high places are turning against one another. I still don’t have a time table but I re-entered the market last week buying a modest portfolio of mostly 3X bear ETFs. These are 1. TECS bearish FANGS 2. TZA bearish small caps 3. BIS bearish pharmaceuticals. I also bought bearish ETFs on most of the indexes.

I don’t give financial advice. I do reveal the trades I make. I don’t use stops because I am not a sucker. I don’t short these days. Any broker you use exposes all of your trades to the high frequency trading firms. With stops you become their food. In a non managed market stops make sense. If a small trader shorts a stock, that means to the manipulators there are thousands like you. This information is used in the same way we all used to use odd lot statistics to determine what small traders were doing. The smart thing to do was to take the opposite side of the market. The manipulators these days take it a step forward. They will run your stop and make sure you lose.

The positions I took last week are fixed. I will not sell for a considerable period of time. I am betting the market will collapse. I cannot accurately say when that will happen but I have a degree of confidence it will be pretty soon. These are the first positions I have taken in about five years.

I am still mostly in cash. I understand the risk I am taking. There is no guarantee I will be right. I suspect the political arena is changing enough that the central banks will not be able to buy outright to the degree they are doing so now. Are friends of the FED operating at a profit? I have no way of knowing for sure but I suspect they are struggling despite the constant assistance they get for carrying the FED’s water. These are not patriots. When getting advance information from the central banks is no longer profitable, they will cut and run. They will probably switch sides and go bearish for the crash. Without the devotion of their friends I doubt the central banks can hold the market up. Volume is not only light. Very few long term holdings are being sold off. That will change.

I am back in the game. This is not advice. It is just what I am doing. I have been doing this type of thing for most of my life. I might lose. Anyone who copies me will lose if I do.

 

 

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Fantasy Free Healthcare

The American public is too insecure to accept a free market healthcare system. Under the system in place now, you may have noticed that goodwill has completely disappeared. The healthcare system consists of patients as commodities and generic doctors. A visit to your doctor includes blood work and about seven minutes of the doctor’s time. If a condition cannot be diagnosed by a doctor glancing at any abnormal blood work statistics you are out of luck. Insurance companies give your medical information to pharmacies. Pharmacists now function as telephone solicitors, calling customers to suggest drugs for your condition. Because of lobbyist written healthcare laws, the whole system has turned into a feeding frenzy. Enormous premiums are charged for health insurance and there really is no insurance at all. What you are really buying is an expensive payment management system.

Why has goodwill disappeared? Goodwill is optimized in a free market system. Goodwill on the part of sellers is the only way to keep customers. The further away a market is from being free market the less goodwill there will be. In a completely managed healthcare market like that of the U.S. goodwill disappears completely.  Doctors are having to see many more patients to maintain the income and lifestyle they are used to. To keep from losing ground, they must run patients through their practices like cattle are run through chutes when they are vaccinated.

Are American’s happy? You would think they would not be but mostly they just go with the flow and don’t complain. . Medical errors are now the sixth leading cause of death in the United States. Citizens have given up most of their rights to sue in civil court. Tort reform has left folks with very few was to right wrongs. It is now open season season on patients. When a whole population does not object to being fleeced, there is not much that can be done in terms of changing the system. If that changes, there are better alternatives. Even in a single payer system patients would generate a little more utility out of a visit to the doctor.

The plan I am going to suggest is better than single payer. It is not as good as would be a complete free market system but citizens would die before they would opt for that. Certainly others have thought of this system. It is so simple that it would be impossible for it to be otherwise.

Assuming Americans insist that government be part of the healthcare system, this is the best way to do it. First it must be acknowledged that no bill written by lobbyists is going to do anything other than take the public to the cleaners. Lobbyists write bills to do exactly that. That is a lobbyists job.

Issue everyone in the country a plastic card to use in buying medical services and prescription drugs. Card holders would pay doctors, hospitals, labs and pharmacies with the card. Patients would be billed on a sliding scale. This would cost far less then the enormous premiums patients are force to pay for health insurance policies.  Doctors and others would have no way of knowing who pays what percent of their bill. That way there would always be a free market influence. No bureaucracies would be involve in managing patient’s behaviors or other things bureaucracies normally do. Very rich people would have to pay their entire bill. With government involved in healthcare this is the least costly and most efficient method.  There is no such thing as a free healthcare system.

How would doctors be paid? They would end up being paid according to their utility to society. That is ultimately how incomes are determined. Some would do better than others. I believe on balance they would come out ahead. Even though in the beginning most would opt to keep things the way they are. Their costs would be reduced. They would make a living treating patients. Certainly medicine requires a certain aptitude. I would guess a doctor would get a lot of satisfaction from healing people. They would have time to do just that. I would never want to be a doctor. I would not enjoy spending my days doing what doctors do. Most doctors would probably not enjoy being an economist. It is great that people are called to do different things.

The key to having a good health care system is passing a lobbyist free law. That is very difficult since all bills are now written by lobbyists. Lawmakers are basically paid with campaign contributions to do what lobbyists tell them to do. The kind of law I am suggesting would have to be written by a group of citizens and there would have to be a way to coerce lawmakers to vote on it and pass it. That is where the difficulty lies.

 

 

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Money Transfer Engines

Institutions leaders and humans beings are defined a certain way and unwary naive economists base their work on these definitions. Because I am fantasy free, my work is based on how leaders and institutions and people actually function.

The Federal Reserve is defined as a necessary institution critical to the performance of the economy and the wellbeing of society. In actual practice, the only thing the Federal Reserve does is serve as a money transfer engine. Money is transferred from all who have little or no political power to others who are powerful enough to dictate government policy.

Keynesian Deficit spending is defined as a necessary practice useful in stimulating the economy when aggregate demand is lacking. Governments do not make economic decisions although they are deemed as doing so. Governments only make political decisions. The result is that that deficit spending does not stimulate the economy. Deficit spending, like monetary policy serves as a money transfer engine. Deficit spending entails giving contracts to and supporting businesses which pay with political contributions for the results they want. The wealth transfer is permanent. Any resulting increase in economic activity is only temporary. Deficit spending interrupts the out with the old and in with the new principle that free market economics is based on. As time goes on the nation’s resources become more and more mis-allocated until a crash occurs.

Human beings are popularly defined as close to divine to having a high natural intrinsic value. In close relationships that definition may hold. In the aggregate it does not hold at all. People are deemed to be unique, freedom loving and independent minded. In actual practice it doesn’t work that way at all. Freedom is treated like an asset and is traded for comfort and reassurance.  The notion that government is like a benevolent parent providing for everyones needs is too comforting to reject. Government as a whole ends up serving primarily as a money transfer engine. All bills on which congress votes serve to rig one market or another. The public naively believes government performs according to the definition that is given.

Many wonder why the upper one tenth of one percent have such a high portion of the nation’s wealth. I have just explained why.

 

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Amazon and Fascism

By Jean Taylor
In recent years the public has begun to resist the practice of local governments using tax revenues to support various private businesses such as professional sports teams, but Amazon is putting them all to shame. The link below describes some of the outrageous proposals Amazon has received to entice Bezos in the decision about the location of the second Amazon headquarters. Any doubts about the merger of big business and government should be easily dispelled.

The San Antonio City Council recently took some heat over declining to make a bid for Amazon’s new facility, but it was clearly the right decision.

https://www.seattletimes.com/business/amazon/this-city-hall-brought-to-you-by-amazon

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The Evil Institution of Patriotism

Morality is the source of goodness whereby citizens take up arms against invaders and and right wrongs. Moral people protect their country from evil doers at home and sometimes in foreign lands. Morality is what causes people to do what is right on behalf of others by putting themselves in danger.

Patriotism is the force that causes the unwitting to take up the causes of psychopaths, rob other countries of their riches and enslave whole countries. The Germans who gave their lives for Germany during WWII were possibly history’s greatest patriots. The forces which defeated Hitler called themselves patriots but they were really just moral people doing what the moral thing under critical circumstances.

American citizens have mostly fought as patriots furthering the aspirations of evil leaders who had no morals at all. Napoleon’s troops were patriots. Caesar’s soldiers were patriots. Even though the troops who landed on Normandy call themselves patriots. they were actually just moral people doing what was right to turn back evil. Confederate soldiers fighting for the south were patriots.

Today all over social media, folks are calling themselves patriots. What that means is they will support and fight for any evil cause their leader asks them to. They virtue signal calling themselves patriots but they are really volunteering to support their country in the exercise of evil.

Patriotism is not what is needed. It is a destructive force. Morality is a better choice. Saying “The end justifies the means.” really means,  “we are going to use evil to get what we want.” Saying “The means determines the end.” is a way of conveying the message, “We are going to do what is right regardless of the consequences.” “We are going to do the moral thing and that will guarantee the best possible outcome.”

Sometimes doing what is moral, is the reason for taking up arms. If arms are taken up for any other reason it is out of patriotism. So, what is moral? That is a great philosophical question and can be the source of endless debate. It it turns out to be a tough question, fine it can be hashed out. Normally what is the moral thing to do is completely obvious.

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No Moore No More

Notice the sudden absence of new Roy More  women stories today. There is still time to round up more women. The election is still a while off. Why discontinue the assault? Where did the story go?

The story goes when it hurts the detractors as much as it does Roy Moore. As I mentioned in the last article the presidency, senate and congress are 100% filled with sociopaths acting out of self interest. The people trying to get rid of Roy Moore have no higher morals than he does.

If the Roy Moore’s critics were candidates for sainthood they would redouble their efforts. Since they are sociopaths acting solely in line with self interest, they have discovered the return fire is more destructive to them than what they are dishing out is to Roy Moore. There are just to many of Moore’s critics who grab women themselves and use belligerence to get anything else they want. Use women grabbing stories to get rid of Roy Moore and that might make it hard to get away with the practice when they want to do it. Who would be willing to give up doing these things with impunity?

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Anti Moore Republicans

Government is not a truth seeking institution. Government is not a place where issues are decided on the basis of fairness.  Lawmakers primarily serve themselves and only pacify constituents.  Government is the place where folks with the most money and power go to impose their will on the public. Americans are at a great disadvantage because almost 100% believe representatives are working on their behalf.

Politics is the world’s most competitive activity. It is so competitive only citizens with highly unlikely personality characteristic  are able to win elections.  Of course ordinary citizens belief the leaders they support are “just like us.”

Senators and congressmen on both sides of the isle have ongoing agendas delivering results to powerful people who literally pay them for results. A candidate like Roy Moore will hinder their efforts. I know little about Roy Moore. Lawmakers in office know him far more better than I do. He is obviously someone who will make the job of delivering the results lobbyists require of his peers more difficult. That is why members of his own party are trying to get rid of him.

Make no mistake. Roy Moore is a sociopath just as are his detractors. Any person high up in government has likely done as many anti social things as Moore has done. Who knows what Roy Moore is guilty or not guilty of? That doesn’t matter. The people trying to get rid of him don’t care about morals. Anything that he did many years ago has been dug up for the express purpose of keeping him out of the Senate. Morality is a concept that is understood in Washington but it is not used. Someone else’s immorality is only used as a means to an end. Morality is not used as a normal part of the governing process.

 

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The Economics of Doing What is Right

Natural law never fails. Natural law gets in the way of people getting what they want. Mostly people can’t tell the difference between what is right and what they want. So, natural law never enters the picture. The communist system was built upon the notion that the end justifies the means. Under communism, there never has never been a positive outcome. Perhaps the envisioned end is not possible if the means is immoral.

Natural law states that the end result is completely dependent upon the means employed. A reoccurring theme in all of the worlds religions is that an immoral beginning guarantees a negative outcome. Judaism and Christianity are big on that idea.

Communist countries have never been alone in trying to get positive results out of immoral initiatives. The end justifies the means, whether stated or not, is part of virtually every government program and initiative. It is the means employed that causes positive or negative outcomes.

What is the right thing to do? Sometimes that is a hard question to answer but usually it is not. Doing what is right in the present moment usually does not have an immediate benefit. Mostly those who do what is right are at a disadvantage in the present moment. Using the “end justifies the means” logic has some advantages up front but in a little time the costs outweigh the benefits.

Why do so many government initiatives turn out badly. The means of achieving the initiatives are immoral. It really is as simple as that.

I really do love math and statistics. Unfortunately those tools have little value in studying economics.

 

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Source of Trump Bashing

Thinking without the handicap of viewing everything through the prism of fantasy greatly increases a person’s ability to instantly pinpoint the source of what would otherwise look like odd behavior.

Surely you have noticed that the democratic party has no leader, no issues and no identifiable agenda. The rank and file keep themselves busy by coming up with anti Trump sound bites. Trump is a racist? He is said to be a racist, homophobe, misogynist, xenophobe, fascist and any other word his critics barely know the meaning of.  Trump is none of these things but in the mean time he is doing many things that will harm the country for years to come. So, why call Trump names and try to undo the election when he is vulnerable on genuine issues?

Observe without indulging in fantasy and the answer is obvious. People vote for and support candidates who validate the fantasies their constituents live by.  Fantasy tells us that there are ways government can force others to like and respect what and who people are even when the mass of society is highly unimpressed. People seldom die in the name of freedom. People are very likely to die defending their fantasies. When fantasies are threatened people panic and turn against who ever is perceived as the instigator. This is the source of the Trump angst.

A winning candidate will validate all who engage in bizarre behavior and promise government will do for them all kinds of things government has no way to do. Oddly, Trump got elected without doing these things.  Who would naturally be the most offended by Donald Trump? It would be the Hollywood crowd. They make fortunes creating fantasies for people. Want to be well liked? Find someone who is wrong, tell them they are right. Then shower them with constant praise for believing a mountain of mindless notions. When candidates do that they get voters for life.

 

 

 

 

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The Coming Impoverishment of Medical Doctors

Years ago when I drove a taxi to support my family I picked up a British physician at the Medical Center Hospital in San Antonio. He was well known in the United Kingdom. He was in the U.S. teaching doctors something. He told me that he had been invited out that evening to fraternize with some American doctors. He just went back to his hotel and explained he didn’t have the money to keep up with his American colleagues.

For many decades Americans have been told that healthcare in the United States was the best in the world. But it isn’t anymore. Medical school has been dumbed down considerable even though it is still hard to get into. The average physician collects rent these days far more than he sees patients. There is just not enough profit in seeing patients to justify the time it takes. Doctors scan the results of blood tests, ultra sounds and other tests looking for conditions that are profitable to treat. Healthcare has completely left the realm of free markets.  Medical errors are the 6th leading cause of death in the United States. If a patient has a malady that doesn’t show up on a standard test, it is not going to get treated. Free markets are the soul source of good will in an economy. Any other system comes down to economics by force. In a government run healthcare system there is no goodwill. It is an every man for himself system. Doctors have commodities for patients and patients have generic doctors.

Doctors are important but they have less and less utility to society with every passing day. Combine the constantly declining value of a U.S. physician’s services with higher incomes than doctors in other countries and you have a guarantee that their incomes here will decline. For many decades healthcare professionals have benefited from government promoting healthcare and paying patient expenses. What has changed? One of the shortcomings of rigged markets is that the benefits go to those with the most political power. In terms of political power, health care professionals are starting to lose out. Benefits from lobbying efforts now now enrich mostly those at the corporate level and higher. In many cases, doctors are at as much at a disadvantage as their patients. Since doctors have lost political power, government is paying them as little as possible for the services they provide. They try to make it up in volume. Time with a patient is 15 minutes max and more like 7 minutes when possible.

In economics, reality gaps are always temporary. When education levels are declining here and the same level of professionals are payed much less elsewere, the reality gap will close. How will it close? We don’t know but it will work like magic. The explanation will come after it happens. The question is like asking, how will water seek its own level?

Of the U.S. healthcare dollar, insurance companies take a huge portion. It is not really insurance in a classical sense. It is an expensive payment management system. Certainly U.S. doctors will eventually start cultivating cash business. Insurance for patients is expensive beyond any estimation. As it is, a cash customer is charged more than three times what a doctor is payed by an insurance company. The modern health insurance company is a child of government, offers no value and extracts countless unnecessary dollars out of the population.

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