Trying Not To Be Too Distracted - Especially Now!

Distractions always worm their way into our lives, don't they? Few of us have the mental and emotional discipline to remain aloof from all that swirls around us. But we may want to put our collective shoulders to the plow and begin turning the soil of the past. We may need to become more aloof.

Last time we recalled The Fourth Turning, the book that provides a roadmap to our current state of affairs. Well, it wasn't written as a roadmap for us today. It was really presenting the cycles the two authors believe describe a "Big Picture" to better understand what has transpired in the past, what's going on now, and what we can expect in the future. Lots to chew on in all of this.

But chewing might be a good idea now. As we've tried to communicate for a while now, we're in the thick of things now. Chaos has prevailed in a way few of us might care to remember. Indeed, the frightening chaos of the days of the financial crisis of 2007-2008 has long slipped the memory of the vast majority of us. Crisis? What crisis? We would do well to try to recall what really transpired in those days. It might give us a taste of what may be coming our way now.

Not to beat a dead horse, but the whole 4th Turning thesis, to the extent that it has accurately described that past, and to the extent that such past behavior can more or less accurately map out the future, is telling us that that the worst it yet to come before the best will come. Succinctly, it's telling us that the 4th Turning that began around the 2008 financial crisis has built up now to its crescendo. And the next few years will see events - and the chaos that will characterize those events - build up to a point none of us can know in its particulars. Some trigger or trigger will set off the fire and it will spread.

And with this week's "surprise" announcement of a Trade War hiatus with China we may be especially challenged in our struggle against distractions. Is this latest round of "deal-making" more than distraction? We just don't know. 

The facts: For 90-days, the extreme tariffs are lifted, although tariffs do remain in place. So goods, heretofore sitting in Chinese container ships apparently will now rush across the Pacific. The almost empty docks on the West Coast will apparently soon be humming with activity again. Stores which may experience some empty shelves will, one assumes, fill up.

For now.

What happens when the 90-days runs out? This we don't know. There was no specific agreement reached for the longer term. Just this hiatus.

In a typical example of the chaos that has been sewn in recent months, we've read encouraging words from a trusted source that this could be a game changer. This said in a positive light. So perhaps the stock market's shot to the moon after the hiatus announcement would be the start of something even bigger. Our source even went so far as to note that if this is so, then the bear market in stocks would be the shortest ever, accompanied by various statistics.

Frankly, while this source typically provides a good source of advanced technical analysis of market action, along with wise, experience-based insight into what's happening in the financial and economic world, it got a bit fuzzy and confusing. While not always correct, it's rare that the analysis is in any way fuzzy or confusing.

And sure enough, with that, there was the presentation of a flip side: The stock market is still historically overvalued, not the condition of a market on the cusp of a Bull Market run. The economy still struggles, with no preponderance of signals that indicate a turnaround.

This same source has written of a deteriorating Chinese economy for a number of years now with the result that it is in a Depression. It described how dire the situation was, that Xi was on the cusp of being overthrown, even that the discontent with the current situation could be the death knell of the Communist Party.

Add to this the theory that a Chinese economic disaster would spill across the oceans and continents of our world dragging everyone else down, perhaps even to the same "Depression" levels.

So has all this disappeared with the hiatus and potential agreement to reduce tariffs?

Best guess is that this source is at this point, in the midst of the same chaos we're all feeling, and may simply be prudently hedging its bets. It even recognized it had been caught flat-footed by the hiatus announcement and stock market burst. It's a professional service with a long history of relatively accurate and always interesting, even helpful analysis of what's going on in the economy and markets. But we suspect even with its history of success and the experience that makes it worthy of a good read, it's struggling a bit to keep head above water and keep on breathing while the waves of chaos wash over it.

It's almost - but not quite - at a point where reliable, honest, non-conflicted sources that have been helpful over the years have become yet another distraction.

In the end, we're all in a kind of great Ship of Fools sailing through the Great Sea of Chaos. With the pummeling winds, cresting waves, thunder and lightening all swirling around us, we can do worse than to seek shelter from the storm.

If you're a trader, you may think this could be the ideal environment to make a bundle - assuming you're on the right side of the market through all its gyrations. But for us chickens who eschew active trading and rely instead of keeping our assets diversified in some reasonable configuration, it's better that we don't react to what have been a cascade of distractions. Look again at what we're holding and decide if it's worthy to withstand whatever outcomes may ensue in the coming months. Even better, look to see if it can bear up under the final stages of a Fourth Turning that - if the theory holds up - will bring an even greater chaos as the "order" of the world under which most of us have spent our lives now changes into something new and different. What that might be, who really knows for sure?

Which brings us back to simply doing our best not to be too distracted - especially now.