Have You Had Your Alpha Waves Today?

  • Societal upheaval and sunspots: Science spots a link
  • But what’s the relationship between sunspots and stocks?
  • End-of-week rally… Lyft’s lofty levels… Brexit blowup…
  • Chances of a Fed rate cut this year now 2-1, and here’s why
  • Europe ignores Washington’s Huawei orders
  • More signposts on the road to “de-dollarization”
  • Has The 5 lost its mojo? Readers weigh in

time stampScience might be about to uncover a cause-and-effect link between sunspots and human conflict — wars, uprisings, revolutions and so on.

In short, more sunspots, more conflict.

We should rewind a bit. On a sleepy summer day three years ago, we mused at length about the possible connection between sunspot activity and “mass excitability” — as theorized by the 20th-century Russian researcher Alexander Chizhevsky.

“Chizhevsky,” according to his Wikipedia entry, “proposed that not only did geomagnetic storms resulting from sunspot-related solar flares affect electrical usage, plane crashes, epidemics and grasshopper infestations, but human mental life and activity.”

He studied sunspot records and compared them with riots, revolutions and wars in Russia and 71 other countries going back nearly 2,500 years. “He found that a significant percent of what he classified as the most important historical events involving large numbers of people occurred around sunspot maximum.”

Of course as we pointed out at the time, correlation doesn’t equal causation. Wet sidewalks don’t cause rain and all that.

Nor did Chizhevsky posit a mechanism by which sunspots, and the geomagnetic storms they create, make people go more berserk than usual. He was just making an observation.

time stamp But hold on: Researchers have just published a study that “offers convincing evidence that changes in Earth’s magnetic field can suppress alpha waves in the human brain,” according to a report from SpaceWeather.com.

As a thought experiment, the article invites you to “Close your eyes and relax. Daydream about something pleasant. In this state your brain is filled with ‘alpha waves,’ a type of electrical brainwave associated with wakeful relaxation.

“Now try it during a geomagnetic storm. It may not be so easy.”

Or so suggests a research team at the California Institute of Technology. As the article explains, “The researchers built an isolated radiofrequency-shielded chamber where participants sat in utter darkness for an hour. As magnetic fields shifted silently around the chamber, participants’ brain waves were measured using electrodes positioned at 64 locations on their heads.”

If you’re curious how they pulled it off, here’s a schematic from the Caltech team…

Cube diagram

Results? “In some of the 34 participants, alpha brainwaves decreased in power by as much as 60% in response to the shifting fields. Additional runs of the experiment showed that the effect was reproducible…

“Remarkably, participants who experienced the changes reported no awareness of them. It appears to be a completely unconscious effect, never rising to the level of a conscious interruption.”

time stamp So it’s really possible that people are more likely to be “spoiling for a fight” when the sun is crackling with solar flares.

Certainly that’s what anecdotal evidence has pointed to since Chizhevsky’s time. Here’s a NASA chart of sunspot activity from 1985 through the fall of 2017. There’s a steady 11-year cycle of peaks and valleys. Notice the peak in 1990 coinciding with Saddam Hussein’s invasion of Kuwait, and the 2001 peak coinciding with the Sept. 11 attacks. (Earlier peaks came in years like 1968, with its assassinations, the Tet Offensive and the Democratic convention debacle in Chicago.)


As you no doubt also notice, the most recent peak around 2012 was much weaker than the previous two. Indeed it was the weakest in a century. Outside of perhaps the Arab Spring and Occupy Wall Street, there was no major upheaval near the time of that peak, and thank goodness for that.

Now we’re approaching the bottom of the current solar cycle. As we write this morning, there’s been a four-day stretch of no sunspots at all.

small sun image

Look, Ma, no sunspots! [SDO/HMI image via SpaceWeather.com]

Hmmm… Imagine how much worse the current social tensions in America might be right now if the sun were shooting solar flares in Earth’s direction day after day.

Then again, the next peak is due in just four more years. Let’s all hope it’s another weak one…

time stamp If you’re wondering whether sunspots and “mass excitability” somehow translate to the economy and the markets, the answer is probably not.

It was an American economist, Edward Dewey, who brought Chizhevsky’s work to Western audiences in the 1940s and ’50s. In more recent years a handful of finance bigwigs like Paul McCulley — who helped run the bond trading giant Pimco in its heyday — have also latched onto sunspot study, suggesting that peaks in the solar cycle coincide with peaks in the stock market.

That might have proven true with dot-com mania peaking shortly before the sunspot max of 2001… but otherwise the linkage is more shaky.

Likewise, certain stock market bottoms have coincided with solar minimums — i.e., 2009 and 1932 — but it doesn’t occur in a reliable 11-year pattern.

The independent newsletter operator Tom McClellan — who does extensive work with both charts and cycles — has looked into the relationship and concludes it’s “not very usable for investing or trading purposes.” Sorry…

time stampThe stock market appears set to end the week on an up note, a move the mainstream is attributing to a new round of U.S.-China trade talks.

At last check the Dow and the S&P 500 are both up about a half percent, the Nasdaq about two-thirds of a percent. Bonds are selling off, pushing yields back up; the 10-year is at 2.43%. Gold remains stuck in neutral a few bucks below $1,300.

  • The big market buzz surrounds the IPO of the ride-hailing firm Lyft — which the company priced yesterday at $72 a share. After the usual morning shakeout, LYFT opened just before lunchtime at $87.24. Euphoria much?
  • As we write, British Prime Minister Theresa May’s blueprint for Brexit has gone down in defeat for a third time. (Really, is anyone surprised?) No one knows what’s going to happen next and the pound is in danger of breaking below $1.30
  • The big economic numbers today come from the Commerce Department’s “income and spend” report. The wonks are still trying to catch up from the partial government shutdown in January, so not all the numbers are in yet. But the picture that’s emerging this morning is one of weak consumer spending and inflation that’s still short of the Federal Reserve’s 2% target.

Thus, traders in fed funds futures are now pricing in a 64% probability the Fed will cut interest rates before year-end.

time stamp On the “de-dollarization” watch, we see European leaders once again ignoring a diktat from Washington.

For months the United States has been strong-arming other governments to ban the Chinese tech giant Huawei from building out 5G wireless networks in their respective countries. Washington is convinced Huawei’s gear is laced with spyware.

On Tuesday, European Union leaders said, Thanks for the advice, but we’re going our own way. The European Commission directed its member governments to share data on 5G security risks and come up with countermeasures by year-end… but it pointedly decided against shutting out Huawei.

The timing is interesting. The decision came the same day Chinese President Xi Jinping was meeting in Paris with French President Emmanuel Macron.

Macron invited German Chancellor Angela Merkel and European Commission President Jean-Claude Juncker to come join them, a turn of events diplomats describe as “unprecedented.”

world leaders

Springtime in Paris, autumn for the U.S.-European relationship?


When it was over, the French and Chinese governments issued a seven-page joint statement that seemed directed in part at Donald Trump — affirming their support for the Paris climate change accord, the Iran nuclear deal and the World Trade Organization.

They also signed a deal for China to buy 300 Airbus aircraft for a sum of $33.7 billion — nearly as much as France’s trade deficit with China. Those are planes the Chinese won’t be buying from Boeing.

time stamp Increasingly it looks as if Washington is making European leaders choose between the United States on the one hand… and Russia and China on the other.

Events like this week make clear the United States isn’t the default choice.

The trajectory was in place even before Trump came along. Trump’s just giving it an extra push. History might look back on Trump leaving the Iran nuclear deal last May — an agreement whose signatories include Germany, France, Russia and China — as the watershed event.

More than once we’ve cited the French finance minister’s remark at the time about how the dominance of the U.S. dollar and the global reach of U.S. sanctions make Washington “the economic policeman of the planet, and that is not acceptable.”

Russia and China are doing their utmost to pursue “de-dollarization.” If the Europeans get on board, it’ll be game over. Maybe not right away, but eventually.

Meanwhile, Huawei just announced revenues topping $100 billion in 2018 despite D.C.’s anti-Huawei campaign. At least for the moment, the company thought it significant to note the milestone in U.S. dollars. But for how much longer?

time stamp To the mailbag: “In response to the reader who said The 5 isn’t what it used to be…

[Your editor holds his breath…]

“I have to thank you for providing a resource for unbiased actual news. It is only here that I became aware of what’s gone on in Venezuela and Kashmir and many, many more places. If it weren’t for you, I would probably think that Mueller reports and Comey hearings were news and not just an MSM soap opera.

“I like my subscription service but the real reason I became a lifetime subscriber is because I knew I would always want to get The 5. Keep up the good work!”

time stamp“I haven’t noticed a decline in The 5 over the years,” affirms another. “I often learn a thing or two, I come back pretty much every day and I am often entertained — Emily’s goofy style, in particular, gives me a fair share of chuckles on the days she helms The 5.

“Keep up the good work. I definitely feel I’m getting my money’s worth!”

time stamp“Your content definitely isn’t what it used to be,” counters a third.

“Sorry, I can’t really pin it down for you what exactly. Like your reader that said he used to read it every day and now he doesn’t, I feel exactly the same.”

time stamp We turn to a Platinum Reserve member of several years standing for more specifics…

“I do miss some of the flavor of the old 5 (or 6 or more, according to periodic complainers). Even as a busy business owner, I always found time to read it, particularly to fill me in on the actual important news since I can’t stand the drivel from the talking heads on TV and avoid that and newspapers like a jungle plague.

“Not only was The 5 Min. Forecast succinct, but it was actual news — not someone’s agenda slanted just so. And it was very often stuff you wouldn’t hear anywhere else — unless it became so obvious that other sources eventually had to say something. I’m certain a number of Agora editors wore out their hazmat suits wading through the garbage every day to dig out the useful nuggets in those years.

“In a different vein, more of Agora’s original libertarian roots used to leak through, which I considered a plus. I recall the spinoffs that took place from time to time when the more

political content was isolated in new and separate publications. Perhaps there were too many complaints from more recent college graduates championing Modern Monetary Theory and myriad other related radioactive waste.

“The move to other formats could have been OK, but various editor changes in those publications also got a little off the mark in fairly short order. And The 5 lost some of its soul.

“You asked, so I’m just telling it like it is.”

The 5: We appreciate the candor.

But in chewing on your critique we’re still grasping at air trying to identify something we can do to keep you more in the fold.

We still aim each day to unearth “the story no one else is telling,” as our founder and fearless leader Addison Wiggin exhorts us.

It’s true there’s been turnover among our cast of characters over the years, even as the team has expanded. That’s the case with any publisher, really.

Our attitude toward politics remains contemptuous. Two years ago as I lunched with Addison, he said, “The worst thing Donald Trump has done is he’s gotten people interested in politics again.”

Really, is there any doubt?

That’s an increasingly lonely position in a world where it seems everyone is choosing up sides that both look unpalatable from here. Socialism versus nationalism? Globalism versus nativism? Include us out.

We’ll leave it there for today and pick up the discussion again next week. Thanks for chiming in…

Have a good weekend,

David Gonigam

Dave Gonigam
The 5 Min. Forecast

P.S. One of our most popular presentations this year is also one of our most sensitive.

So sensitive, we ask readers to put their initials on a nondisclosure form before they can view it.

It’s not legally binding. It won’t store your information. We just ask that you not disclose what you learn to anyone else.

Are you game? Access here.

Dave Gonigam

Dave Gonigam

Dave Gonigam has been managing editor of The 5 Min. Forecast since September 2010. Before joining the research and writing team at Agora Financial in 2007, he worked for 20 years as an Emmy award-winning television news producer.

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