Tuesday, April 21, 2015

You can't make it real just by saying so.

Last night after Mr S. got home he asked me what I was thinking about. Since I'm a girl I said nothing. Isn't that what girls do? He replies - really? Because you have your thinking fist on. Immediately I'm like - what? Is that a thing? Then I realized - apparently I do have a thinking fist. Imagine resting your chin on your palm with your fingers covering your mouth. It's totally a thing. The thinking fist usually comes out when I am terrified.

Usually I get super terrified when the media tries to convince me that everything is great. For instance when I got up yesterday I'd read that Halliburton had bad earnings. Then good earnings. Then the earnings were so good that was the explanation of why the market was up so much. I actually spent a little bit of time trying to figure it out and finally gave up only to get my shit together later because they just laid off like 20,000 people. It's not a sign you are doing just fine. It's really hard to tell what is real right now.

Yesterday I read that everyone thought oil was going to repeat the rally of 2009. Which I thought was bullshit because in 2009 China was sucking up all the resources it could. It was the only growth on the planet. Also the oil market freaked me out a bit because it was apparent people in the oil industry seem to be taken by surprise by what was going on. In Silicon Valley maybe one or two companies in a sector misjudge the market - but not the whole sector! It was a huge red flag. If a whole sector does go tards up, you've got bigger problems.

As it turns out, I've been more right than the analysts just by looking at behavior rather than their words. Read: Where are all those peak oil assholes now? From Nov 11, 2014. What if oil doesn't go back up? Jan 29, 2015. And even as far back as Oct 2014 on Captain Capitalism in the comments under she_said. Here I predicted people might not spend their gas savings.

I don't even care about the oil market. I care about houses. Which is why this is a two-fer post. The same influences that make it delusional for the Fed to raise interest rates, are also at play in oil. A frighteningly weak global economy. These are the countries I can pick off the top of my head that are in record low interest rates. India and China are not included, but give them time. They keep lowering their interest rates as well. They just aren't in record territory yet.

South Korea

This makes our dollar stronger because their currency is weak and hurts profits for US companies. I believe there is ZERO the Fed can do to change this factor except for printing to weaken our dollar. I bet every single one of those global companies are tightening their belts internally. Their profits are down. All of the employees in those  respective companies know this and also take small steps to tighten their belts. Who knows how the invisible hand works, but I believe this is the feedback mechanism for the deflationary spiral.

I don't think the oil carnage is over by a long shot because I don't see how those other countries get out of record low interest rates. I don't see how WE get out of record low interest rates. But then, it's always healthy to think you are wrong. I hope I am wrong. I just want to go back to my old life where I don't have to care about this crap all of the time. I'm tired.

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