American heavyweight boxing legend Joe Louis was asked about his strategy against a smaller opponent, Billy Conn, who promised to “hit and run” during their fight. Louis answered: “He can run, but he can’t hide”.
The Philippines has enjoyed a nice run of prosperity since 2012 during a period of building turmoil across the globe. But, as I have written many times, the long-term cycle of centuries, the medium term of decades and the shortest of eight years forecast that confidence in government would peak in 2015. Note that the global economic meltdown began in 2007. Government was supposed to fix the problem, and by 2015 it was clear that was not going to happen.
The political meltdown became unavoidable in 2015 and we saw the results in 2016, which will continue through this current year, as elections in the Netherlands, France, Germany and potentially Italy (which must be held not later than May 2018) will create more mayhem.
The turning of the cycles leads to a “war” between those who want more of the same, hoping that this time those policies will succeed against those who want dramatic change also hoping for better results. It is never pretty. The problem for both viewpoints is that everyone gets caught up in the personalities that represent the opposing positions. And the moment you identify with the person, you lose the proper perspective of the policy. People cannot see the forest, because there are too many trees blocking the view.
I wonder how many ancient leaders and shamans were killed when normal cyclical droughts and flooding destroyed the crops.
Since the presidential election, US consumer confidence has soared to the highest level ever recorded. Well, it must be because the nation has a new “High Priest” that the gods favor, and that is why the rains have come to the dry fields again.
All those jobs that the new US president “brought back” to the US are as bogus as the traveling preacher who walks on water across the river. He knows where the river rocks are, and the people want to believe. President Donald J. Trump capitalized on pushing forward company plans that were already in the making.
But the economic chaos that follows the political upheaval is being ignored as usual. The US economy is headed for a recession.
While the new wizard is going to make everything right, the US economy is rolling over right on schedule. Employment growth has turned negative at the 500 largest US companies, the first since 2009. The US goods and services trade deficit for 2016 was the worst going back to 2012. One of the key indicators to watch is average weekly hours. When the economy shifts into recession mode, employers tend to start cutting back hours. The year 2016 witnessed the largest percentage decline in US average weekly hours since 2008.
Automobile sales are a good indication of the US economy. Total sales in January fell 1.8 percent, which is not a big deal, but car sales to ordinary consumers was down 21 percent at General Motors. So who was buying? Government deliveries went up 12 percent.
And for stock-market watchers, the US S&P 500 index has generated an 18-percent annual return, including dividends, since 2009. Understand, this has been against the backdrop of a disintegrating European Union, Chinese currency devaluation, a potential trade war, and a crashing global bond market. Remember, you have to know where the rocks are to walk on water.
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E-mail me at mangun@gmail.com. Visit my web site at www.mangunonmarkets.com. Follow me on Twitter @mangunonmarkets. PSE stock-market information and technical analysis tools provided by the COL Financial Group Inc.