Friday, August 26, 2016

Marc Faber on Stock 50% Drop and SEA SHA $500 RT

It's happening...  air travel dropping again...  Seattle to Shanghai, Round Trip, Delta, $500! Round Trip! Overcapacity...  dropping prices can be deflation.  Scary changes for some...

Delta Web Site, 26 Aug 16
They are giving away ocean freight too. Both ways!  LCL MOQ FOB tactic for startup and expansion just got easier because it is getting cheaper, both ways.

When matched with Marc Faber's prediction, a rather safe one, of a 50% drop in stock prices,  this is a great time to start up a business.
"The fact is, the market hasn't really been driven by genuine buying, but by stock buybacks, takeovers and acquisitions, and market leadership has been narrowing. It's not that many stocks that have been making new highs. It's quite a narrow growth of stocks that have been very strong," he said.
In fact, market breadth has broadened substantially, and as of Monday's close, 48 percent of the stocks within the S&P 500 have made 52-week highs within the past three months; 6 percent made 1-year highs on Monday alone.
But it's so scary out there! Perhaps, but here is an odd fact: the more the general population fears initiative, specifically business start up, the more people start up.  That is to say, there is a subset of people who see opportunity in change.  They may too fear it, but they get going.

The lower line is the start up nation, no more than 10% of the population at any given time, and no less than 5%, representing the act of starting up businesses.  To move from 5% to 10% is a 100% increase in start up activity. The upper line is the attitude of the general population toward starting up a business.

(< may  create this and many other graphs, update them for the day you read this,  for any country you like) >)

If and when you want an organized approach to start up in small biz int'l trade, on the upper right there are links to courses I offer.

Feel free to forward this by email to three of your friends.


Anonymous said...

Am I imagining things? Prices in my local grocery store for many items have dropped noticeably (I'm on the east coast). The price of ground coffee had a large drop in price here. Is the U.S in deflation?

John Wiley Spiers said...

Beef has shot up here, and my coffee, Cafe du Monde, has gone up about 25% in the last 3 years or so, but I think the Vietnamese grocer who vends it probably had it as a loss leader. An upscale grocer 4 miles away is still twice as much. But there are a couple of problems... the official reports are skewed, and then deflation, like inflation, can be asset class-specific. Obviously the QE experiment has inflated the stock market, and China QE is showing up in Canada and USA real estate markets. So there we have inflation (and desperately need deflation to assist economic recovery.

Again, wrapping the brain around credit deflation (or is it debt deflation, is debt the part that is deflating... losing its value?) is the big question for me. As far as I know, no one has figured this out. All agree negative interest rates is a first in human history. The denouement ought to be interesting. But one do so want a libretto when watching an opera.

I have a piece of paper with MONEY CURRENCY CREDIT DEBT written across the top, and credit broken down by ex nihilo credit and credit. That's as far as I got. Since debt and credit are supposed to balance out, the answer should be there, except currency can be falsified by being debt too. Unh... maybe a accountant could figure out what is going on.

Anonymous said...

Food Price Deflation Cheers Consumers, Hurts Farmers, Grocers and Restaurants
Farm Belt cutbacks hit more businesses even as consumers save big at the grocery store: