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I’ve been up half the night (since 2AM) trying to figure out why the market is soaring to such crazy heights.
I mean think about it:
- The CV-19 rollout is not going as fast as expected.
- There was a 123,000 job drop in the ADP report for Dec.
- 77-thousand jobs cuts in December.
- Sales are still rolling at Amazon, but in terms of Growth?
- So WHAT the hell is going on?
Then I went looking…carefully noticing how the Federal Reserve has been “loading the dice” in order to continue the normalcy illusion.
In the Fed minutes (out during the protest Wednesday) the Fed balance sheet was up to $7.3-trillion. In addition, what you find in the H.6 Money Stocks more recent update is?
Which really explains two amazing counter-intuitive headlines. The D.C. protest on the one hand (which would cause any sane investor to short the hell out of Amerizuela.
Yet, at the same time, we have stock prices running up to astounding record-highs. Not seen – as I noted in a special market note Wednesday afternoon – “Market Contango and Revolution Roll” – since the 1929 blow-off top.
Yet, people are (demonstrated by the D.C. protests) inclined to stop putting up with it.
Nothing changes, though: Biden was still confirmed as the next president.
OK – got it: Trump hate has become an industry. So the latest media monetization is whether he will be Article 25’ed out with 13-days on the clock. Piece in the Chicago Trib lays out the mechanics of that process.
Of course some media pivoted – allowing their coverage of the protest to insert the race angle: “A mob of almost exclusively white Trump supporters… ” We note this particular media capitalizes Black, in their stories, but not white when making a racial identification. Correctness over equality? See the first paragraph of “BLM Activists See A Big Double Standard In How Police Dealt With Trump Insurrectionists” for an example.
Which has us dropping our reportorial jaw: Are people blinding law enforcement with lasers in Portland, or seizing a police station in the CHAZ (Seattle) not “insurrectionists?” Burning down property of others in various uprisings in the upper Midwest? These things blur with the 72nd birthday at hand next month…
As I said Amerizuela is here… Even the NY Times biz section notes today how Markets Rise Despite the Chaos in Washington.
Yes, Biden is president. Notice how fast they counted and how slow they were on the $2-grand checks? Whatever…can we move on? The system is crooked. Long live the system.
Taking It in Stride
Military (& cyber whiz) warhammer has some useful “chill perspectives;”
“Damned interesting situation in ‘the district’ Wednesday afternoon. What exactly happened and why is a bit complicated and will take some time to sort out, but it was not at all unprecedented in the nation’s history.
“When British colonists were denied representation in Parliament, a full blown 7 year revolution ensued, resulting in these United States being birthed. During Vietnam, organized masses routinely occupied Washington with much violence and chaos ensuing. 1968 was an especially messy year in D.C. after Rev. King was gunned down. Protesters rioted during the ‘68 Democratic Convention in what became known as “the Battle of Michigan Avenue.” For a full and lengthy litany of civil unrest episodes in America, see this Wikipedia entry.
While wrong in many ways, the storming of the Capitol yesterday is one of many episodes of citizen dissent, this one serving notice to the political elite that a sizable percentage of Americans are not at all pleased with how the Covid-marred election proceeded. The legitimacy of an election’s outcome depends upon complete accountability and transparency. Hell, even ‘third world’ nations require voters to dip their fingers in dye to prevent citizens from casting more ballots. The 2020 election ended up being a massive ‘fuster cluck,’ an embarrassment in front of the entire world due to far too many loose ends with early and mail-in voting. The results of the election may well be entirely legitimate, but clear proof and complete faith in the outcome are generally lacking.
These are dangerous times for the republic. I hope and pray our political class ‘on both sides’ realizes the gravity of the current situation and works to rebuild citizen confidence in the system that elects them to office. Nothing less will quench this nascent rebellion. Dialog and eventual concessions are necessary from Democrats and Republicans to foment trust in the election process and in our representative political class. What is not needed is vitriol and childish finger pointing. Joe Biden will be sworn into office on January 20th. Those not happy with that fact must work to insure that subsequent elections for all 50 states (51 if D.C. is added) meet or exceed modern era certification criteria. Those who gloat and taunt over Biden’s victory are every bit as toxic as the most violent of the Capitol occupation forces.”
Question is what the state of the opposition party will be in 2024? Third party time?
Been kicking around the “No Party” whose planks would include:
- Jail time for lawmakers who don’t read every word of what they vote on.
- Two terms in ANY single office.
- Flat-rate income tax over [threshold argued] with no loopies for the richies.
- Government officials get no special retirement.
- All officials have wages docked for less than 40-work hours per week and 2,000 hours per year.
- And Elected Offices are subject to no exemptions for insider trading, all family members must file reports, and….
Well, lots to add, but No Party – let’s get some shit done, for a change.
Income Disparity Matters
We are rabidly supportive of equality. So instead of going into (yet-another) discussion of how hot-buttoning and monetizing of America’s emotions have been the Covid-driven growth industry of late, let’s remain focused on where the problem really lies:
America has Two Classes
Which distills down to Haves and Have-Nots. (We’re all in the latter group…)
We know that Cash sloshing around is up, oh, 50% in the past year. And M2 (cash, time deposits and what-not) are up (*rounding) 25%.
Legacy of Trump?
Here’s h0w Donald Trump’s 2020 legacy year turned out on an inflation-adjusted basis:
- The “Illusion” column is the simple, apparent (nominal) change.
- M2 discount is 24.7% per the H.6 data.
- M1 discount is 51.7% per H.6.
- M3B reconstruct is an “eyeball” of the excellent work shared by John Williams of ShadowStats here. Looked to me like we were around 23% in November and a bit north of 7% last year, so I used an annual increase of M3 (estimated) of 13% as I expect M3 will be around 20% for December.
- Numbers are rounded to whole numbers.
Biggest investment winners of 2020 were Bitcoin followed by Silver. Followed by gold, the S&P, and your home. Cryptos are now a trillion dollar “industry” (if that’s what you call a bunch of “made-up, secret numbers…”).
We can anticipate some reduction of lifestyle based on decreased (after-adjustment) income. But, balancing this off (in part) is the large reduction of commuting expenses. Who needs a flashy ride when you can work naked at home?
Point is, things you own are likely to be key in 2021. Kiplinger noted last month that Federal debt loads in 2021 were likely to be 104% of Gross Domestic Product. That means if every single penny’s worth of work went to paying the debt service on the trillions owed, the hole America’s in would only get 4% deeper in 2021.
Speaking of Cars
I’m not kidding about the savings on commutes: The auto sales out this week made it pretty clear car sales would hit the lowest point in a decade. Although, in the Sun-Sentinel this morning, there’s the “happy-talk” about how maybe the vaccines getting “out there” will bring people back.
We wouldn’t bet on that for a simple reason: If you’re a senior manager (up the hall in them mahogany foxholes) and you have managed to hold down cost-per-square-foot-per-employee this year – maybe even rolled it back a good bit, that’s money that matters on the bottom line.
Sure, there will still be “companies” and many will have staff – sure, sure. But, the number of square feet required is changing as the “gig economy” and the “Covid-lockdowns” are mashing the new American telecommute into a homogenous labor pool.
One of the nice things about the change? Personal appearance will matter less, provided you know how to “Give good Zoom.”
Retail victims keep mounting. Latest is “Bed Bath & Beyond shares plummet as retailer’s earnings fall short; store closures, divestures weigh on sales.” Sure, people are still bathing (at least we hope so, though yah can’t tell on Zoom, right?). It’s just going out to shop is so passé.
Job Cuts Continue, However
Job Cuts just out from H.R. resource Challenger, Gray & Christmas:
Planned job cuts announced by U.S.-based companies jumped to 77,030 in December, up 18.9% from the 64,797 in November, according to a report released Thursday by global outplacement and business and executive coaching firm Challenger, Gray & Christmas, Inc.
December’s total is 134.5% higher than the 32,843 cuts announced in the final month of last year. In 2020, 2,304,755 job cuts were announced, 289% higher than the 592,556 cuts announced in 2019. It is the highest annual total on record, and 17.8% higher than the previous record high of 1,956,876 cuts recorded in 2001.
Third month in a row of rising cuts, isn’t it?
Meanwhile, we’re digesting the latest “Glum and Glummer” for the news industry: “US Newsrooms Lost a Record 16,160 Jobs in 2020, Study Finds…” Maybe its because of news automation. Besides, re-writing press releases is a few steps from rocketry, right?
Next come the weekly New Unemployment claims. The headline writers use “seasonally adjusted” but we use the yellow highlighted actual. (We have this thing about keeping it real):
See how the media quoting the seasonal number understates (real checks to be cut) by 135,000? Repeat after me: Seasonal adjustments is a label for statisticians lying.
Federal numbers tomorrow.
New International Trade #’s
Which will impact even more on the accumulated federal debt…
Dow futures were still up 111 after the number. They must not do drug testing Thursdays…
Thinking and Action Points
Popular Science has a good article on “How to convert text articles into audio (and why you might want to).”
Low Tech Magazine offers “How and why I stopped buying new laptops.” Which struck a cord since I refurbed a $100 used (Vista) laptop last year and made it smoke: Added a 500 GB SSD and Linux…and a new battery. All-in? About $160 for a very fast backup machine. If you try this (so you have a Linux learning platform around) get something with 8 GB ram of you can. Cheap!
Article on Phys.org has us wondering if those yellow driving and UV block glasses might be changing up: “Orange is the new ‘block’: Structure reveals key features that help block excess light absorption during photosynthesis.”
Texas’ marijuana still seems like a longshot. But, Texas medical marijuana operators ‘push but not shove’ to expand state’s limited MMJ program. Boy, I do have back pain and gout…come on guv’nah!
Write when you get rich,