Wednesday Oct 18, 2017
Check ou the graph on the back page of Section Two of today's WSJ. Spencer Jakab shows how each ten year slice of DJIA history ended badly in its
7th year, as in 1987. The glaring exception is this year. Bob Prechter has mapped out an elaborate Fibonacci metric suggesting the market has completed multiple Elliott Wave Patterns, we should be looking for a top. At Insiide Track, Eric Hadik concludes the markets are at a Gann time and price conjunction worthy of a top.
Yet the markets keep on chugging along. Even articles in the WSJ admit the market is over priced.
I have been preparing a talk for the annual San Antonio CPA Continuing Education day. I will present examples of how understanding social mood can help predict accounting regulation or the failure to pass GAAP IFRS convergence . I will also show how a socionomic analysis of political mood would have warned John Stumpf at WFC he was walking into his demise before Congress claiming responsibility but not accountability
I am always looking for some image to demonstrate the power of linking social mood to social action. And this week I spotted one.
A New York restaurant is offering a $24 cup of coffee.A pound of the raw beans runs to the hundreds of dollars. A California coffee shop raises the ante to $55!. What does this tell us? There are at least two messages here. The buyer is feeling expansive and more than willing to indulge in a personal perk. And the second, is that apparently, the buyer is confident that the money will continue to stream in to finance such a purchase. Notice the elaborate contraption used table side to prepare the uber priced treat.
Bugatti is marketing a car for over $2 million. The WSJ continues its Mansion Real Estate section on Fridays. Now the Starbucks $4 latte has been taken to new levels.
Such behavior is common in frothy markets. During the last tech boom in Austin, $12 glass of wine with lunch was common, In the late stages of the 1970s oil boom in West Texas one company began using Cadillacs as company cars. In her book on Enron, Mimi Swartz noted that the presence of too many exotic sports cars in the company parking garage was a danger signal.
I give up on attempting to call a top here. And it may be that Trump's roll back of regulations and promise of tax cuts, along with higher interest rates is sparking new confidence in the economy. Emerging markets are higher world wide.
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