Housing Due, L4L vs. HFL, the A.I. Bubble

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We will post the Case-Shiller/S&P/CoreLogic Housing data when it crosses.  Usually have it up by 8:15 AM Central, or so.

L4L versus HFL

While we’re waiting for the Housing report (we’d expect it to be hot), the strategic economic issue facing America is what to do with persistent inflation. Under more normal economic conditions – meaning without a Pandemic and associated die-back and spending impacts, not to mention the lockdowns – has the Fed done the right thing now holding rates high?

The concept of L4L (lower for longer) was articulated by former Fed chief Ben Bernanke, who is about the best-schooled Fed chief we could have had in attempting to navigate away from economic Depression.  You should read his book sometime (here).

The problem we’re now in is the matter of HFL – higher for longer – which comes as a consequence because money got cheap and people? Well, the will spend if given incentives.

Overnight, Michelle Bowman, one of the Fed’s brightest governors on rate policies was at a conference in Japan where some interesting remarks were delivered in “The Federal Reserve’s Balance Sheet as a Monetary Policy Tool: Past Lessons and Future Considerations:”

“Recently, the FOMC voted to slow the pace of securities runoff by around half beginning in June.15 In its Plans for Reducing the Size of the Federal Reserve’s Balance Sheet released in May 2022, the FOMC noted that it would eventually slow and then stop securities runoff when reserve balances are somewhat above the levels it judges to be consistent with ample reserves to ensure a smooth transition to ample-reserves levels.16 Aggregate reserve levels currently stand at around the levels at the start of balance sheet runoff in June 2022, and there are still sizable balances in the overnight reverse repurchase agreement (ON RRP) facility. In light of these conditions, I would have supported either waiting to slow the pace of balance sheet runoff to a later point in time or implementing a more tapered slowing in the pace of runoff.17

While it is important to slow the pace of balance sheet runoff as reserves approach ample levels, in my view we are not yet at that point, especially with still sizable take-up at the ON RRP.18 In my view, it is important to continue to reduce the size of the balance sheet to reach ample reserves as soon as possible and while the economy is still strong. Doing so will allow the Federal Reserve to more effectively and credibly use its balance sheet to respond to future economic and financial shocks.

As balance sheet runoff proceeds, however, it will eventually be appropriate to stop runoff as reserves near an ample level.”

While reading her remarks, and considering the CME FedWatch tool, which doesn’t see a rate change at the session we are 15-days away from (5.25-5.50 percent 99 percent likely) we can almost see what is coming.

After the June 12 rate decision, we can now begin to see the outlines of a Fed rate cut at either their July 31 rate decision (33% odds around the ranch) or more likely, a drop at the September 18th rate decision (66%).

I have to hand it to Jerome Powell, it’s all setting up for the market to have a rate reduction either mid-summer, or early fall, and that will give the economy one more “golden goose” just ahead of the election.

Purely coincidental, we’re so sure, from a nonpartisan banker-controlled economic system.  Once the market figures out “the play” for a rate drop ahead of the election, new stock heights should be notched which Slow Joe will take the bows for.

Bet me?

The A.I. Bubble

Who better to answer the question that an A.I.?  So, we asked Microsoft CoPilot “Are stocks related to A.I. in a bubble?”

    1. Top AI Stocks:
      • Some of the top-performing AI-related stocks include:
        • NVIDIA Corp (NVDA): NVIDIA has been a pioneer in AI, developing software, chips, and AI-related services since 2012. Its stock has seen significant growth.
        • Procept BioRobotics Corp: This company creates medical robotics solutions for urology, including an alternative to surgery called Aquablation therapy.
        • AeroVironment Inc. (AVAV): A leader in automated aircraft, AeroVironment designs pilotless planes, unmanned ground vehicles, and weapons systems.
    2. Mixed Opinions:
    3. Investor Concerns:

In summary, while AI stocks have seen impressive gains, caution is advised. Diversification and thorough research remain crucial for investors. Remember that stock markets can be unpredictable, and bubbles can burst unexpectedly.

Which put s us where, exactly in terms of market cap?

Here’s a snapshot of TSMC’s market cap history over the years:

    • 2024: $829.87 billion (up 53.86% from the previous year)
    • 2023: $539.38 billion
    • 2022: $386.31 billion
    • 2021: $575.93 billion
    • 2020: $488.12 billion

Which then lines up with other A.I. related players like this:

For comparison, here are the market caps of some other notable semiconductor companies:

    • Intel (INTC): $130.77 billion
    • NVIDIA (NVDA): $2.618 trillion
    • Texas Instruments (TXN): $181.34 billion
    • Analog Devices (ADI): $115.37 billion
    • Applied Materials (AMAT): $182.89 billion

Somehow, that looks like about $4-trillion of Market Cap.  To put this into perspective, then, A.I. as an industry is worth more than all of England.  It’s twice the GDP of Russia.  It’s Bigger than India and about the size of Japan’s entire GDP.  Bigger than a country that’s home to Honda, Nissan, Toyota and outfits like Sony and… This will be a ginormous bust when it comes.

Just not today.

Last Ounce of Bounce?

That’s our view now that the market looks to have been checked by the upper trend line in our Aggregate view of stocks.

17-more such charts on the Peoplenomics report tomorrow.

The “Israeli Mistake”

We pause while Clif High takes a bow – as the exact phrase that has been in his predictive linguistics work (halfpasthuman.com) is now all over headlines. Israel PM Netanyahu acknowledges ‘tragic mistake’ after Rafah strike kills dozens of Palestinians.

While the reaction is still coming in, UN terms Rafah carnage ‘most cruel abomination’ – Mehr News Agency for example – we think stories like Israeli tanks reach central Rafah as outrage grows over deadly strike will overshadow reports that the Israeli cabinet agrees to stop Rafah invasion.

Two comparatives here:  Stopping the offensive with tanks in central Rafah isn’t “stopping the invasion.”  Neither is Israel deploys remote-controlled combat vehicles in Rafah.  While 50-dead in Rafah is a lot, it’s about the body count of murders in Chicago in a single month. (Source).  While Chicago has “only” 177 homicides (so far) this year, every good cop shop reporter knows the highest months for homicides are May through August.

Heaping It On

War isn’t ending.  In Ukraine Dangerous development: NATO blinds the command and control system of Russia’s nuclear forces – Kiev bombs strategic radars. the understandable subheading asks, “Is NATO taking steps for a nuclear first strike?”  Who, Us?”

Biden needs a war and this “don’t switch Presidents in mid-stream” in order to win re-election.   If Ukraine doesn’t go well, the U.S. has weapons on the way, as one network put it.  And the War fears are fanned in China is preparing huge armada of civilian vessels to invade Taiwan. When this sinks into the Bubble Investors – that A.I. has supply chain issues ahead – then we expect a stock market collapse, but not until after “show elections”‘ which is what the Corporate Party is lining up for your compliant behavior this fall.

When we read how Joe Biden opposing UK and France’s plans to rebuke Iran’s nuclear advances, it just screams to us that the Corporate Party has other plans for their October Surprise.  Or the headlines about Rafah as the “Israeli mistake” are just a “prequel to something larger.” We can’t say bespoke fears that “Obama puppet m aster Obama wants a nuclear Iran” are wrong, either.

Nobel Peace Prize for…Musk?  Tesla urges suppliers to make car parts out of China and Taiwan amidst escalating tensions. If it works, and China can see it has more to lose by fighting, great.  We just look at Biden’s need for conflict as a risk to Tesla supply chains.  Delicate balance Musk is attempting.

No wars? Then how about election lockdowns and “leader Joe” in office?  You see, Disease-X is still in our future.  It’s Not Over. The World Health Organization Vows To Get Their Pandemic Treaty Passed WHO Director Tedros Adhanom Ghebreyesus “We will try everything — believing that anything is possible — and make this happen because the world still needs a pandemic treaty” Nigel Farage.

Messes in the Masses

You’ll get a charge out of this: Monday’s Energy Absurdity: Pete Buttigieg Explains Biden’s $7.5 Billion EV Charger Boondoggle.

Kangaroos hop this week: Why a Hung Jury Is Likely in the Trump Case – PJ Media. Now let’s model out the Kangaroo agenda here.  Get a hung jury, then have another trial to interfere with Trump campaigning.  Because a conviction would – as we told you before, return Trump to the White House.  Others are getting it, too, like, Kash Patel: “If they jail Donald Trump, he’s going to win overnight.” I’m just waiting for the democrats to launch a 24/7 Trump Hate Channel. Might pencil out, the way America’s imploding.

The best of Monday Woke Pokes: End Wokeness on X: “HAHAHA HOLY SHLIT. Rep. Ilhan Omar and Rep. Cori Bush just deleted their Memorial Day tweets after revealing they have no clue what it is. https://t.co/EsuGYAF6xS” / X

Around the Ranch: Some Summer Ahead…

We are now in summer. Not astronomically, but psychologically.  The period from now through Labor Day is “easy pickings” for news writers.  It is, after all, it’s now 161-days to the November 5th election.  It’s 22 days until the next Federal holiday, Juneteenth.  But this one doesn’t comply with the Monday Holidays Act, so no three-day weekend.  NatGeo has a good backgrounder piece here.

The Fourth of July is 37-days ahead. That’s a Thursday, no Monday either, but millions will turn that one into a four-day weekend. Labor Day is 97-days from now, September second. This, being a Monday, is a lot easier to deal with.

Although Year’s Day is considered the deadliest day for drunk driving, with a 116% higher chance of fatal drunk driving accidents compared to other days, the Fourth, St. Patrick’s Day, and Christmas are also breathalyzer prime time.

Between hangovers, and cardiologists promoting low-dose (87 mg) baby aspirin, America consumes somewhere north of $350 million a year as measured by aspirin sales.

This completes our post-holiday orientation: Hydrate, medicate, and take the day off.

Read HamTalk Saturday, ShopTalk Sunday, and ShopTalk Monday if you missed ’em over the weekend.

(Write when you wake up)

George@Ure.net

25 thoughts on “Housing Due, L4L vs. HFL, the A.I. Bubble”

  1. Please with the Clif High Israeli Mistake:

    Isn’t that the “Israeli heinous and execrable deed” first published in 2007.

    https://theageofdesolation.com/nostradamus/2024/04/07/the-israeli-mistake-my-original-version/

    Nostradamus Sixain XXXIV (31)
    Princes and Lords will all make war against one and other,
    First cousin, brother against brother,
    [L’Arby/Arab League] finished by the happy Bourbon,
    The Princes of Jerusalem very agreeable,
    To committing the heinous and execrable deed,
    They will feel the effects of the bottomless purse.

    Geez!

      • Understandable… I don’t sell three word memes.

        “They [Israel] will feel the effects of the bottomless purse.” (US AID/EU Driven Woke Support)

        I think we now know what that means.

        Did Clif’s prediction cover that?

        • Cliff started talking about this back around 2001ish but didn’t assign a date to it at that time as I recall … I would need to review his actual reports from that time to verify.

          Had you published anything that early?

  2. When thinking about the Feds BS runoff (pun intended) I am reminded that Jim Rickards originally estimated the full QT effect as being the equivalent of 200 basis points on the Fed Funds rate.

  3. ‘First strike’

    With the help of A.I. setting up an international incident right now might be easy to do.

    Get A.I. to contact as much Russian leadership as possible indicating a First Strike is imminent and offer money/land in New Russia to defect/stand down before the strike happens.

    The ruse could be loosely based similarly to the last Iraqi invasion when the ‘States told Iraqi leadership to stand down because the force is overwhelming and they’ll die anyway.

    ‘Take the money now or be tortured later’.

    Have A.I. setup a fake .gov department with simulated everything using Internet phone numbers w/D.C. area codes.

  4. Nostradamus’ predictions for 2024, the real one, have already been released. To these are added those of Kushal Kumar who claims to be the new Nostradamus.

    The ‘new’ Nostradamus on World War III in 2024: the imminent prophecy…

    Bing Translator – Italian to English

    A prophecy about the near future of the world came from Kushal Kumar, a self-described astrologer: the new Nostradamus. There is talk of World War III again and, according to the alleged seer, this event would be quite imminent.

    The global geopolitical situation is tense between the war in Ukraine, the Middle East conflict between Israel and Palestine and tensions also between the US and China with the Chinese military encirclement of small but productive Taiwan. In such an unstable context, many are speculating about an expansion of the fighting that could involve other states around the world. And here is Kumar has launched his prediction: on June 18, 2024, the Third World War will break out.

    https://www.virgilio.it/video/nostradamus-terza-guerra-mondiale-kushal-kumar-179798

    • June 18, 2024 is … 170th day of the year. There are then 196 days left in 2024. 25th Tuesday of 2024. on the 25th week of 2024 (using US standard week number calculation). 92nd day of Spring. There are 3 days left till Summer. Birthstone for this day: Alexandrite, Pearl, & Moonstone.

    • June 18th is also a Tuesday
      I can find no holidays for that date.
      One website stated that they are still pushing to make June 18th the “Day Of The Horse”.

  7. Was about to get out of my trade this morning [ DJIA – options/puts ]., as it seemed to have stalled at down 50pts.., decided to hang in there [ MACD said down.] – moved my stops up really tight…, and wait.
    Glad I did.., DJIA now down 300.., about to close this one out.

    i

  8. (“Pete Buttigieg”)

    is that the A@$H %$e that couldn’t make it to Ohio train derailment.. if he’s posting he must be off of vacation finally..did he ever wander over to deal with that or is he still to busy to care..

    • ohio “entrained” derailment – fixed it for youse. that was DS “message” last year as to what was coming…east palestine = toxic- movie filmed before event as well..

      like the stabbing in Moscow, Idaho – really Moscow, Idaho?? farther out in the boonies than youse r.

      FalseFlags = the Attacker Attacks themselves.comes frm british empire, pirates caught on and started running union jacks and other countries official flags on their pirate ships..what was good for the Goose, is good for the Gander.

      Up next for the students of conspiracy science – The Coca Cola Conspiracy – new flavors to savors !
      > maui blast – see lahina
      >starspangled – see baltimore bridge
      > liberty – see NYC soonly…

      On lighter note – USA is only providing the zionist apartheid nation $10 million dollars a DAY, so they can build some walls to keep the SEMITES out. At that grand ?

  9. re: Belgian Waffles
    feat: Further Adventures of Tintin in Flanders Fields

    Folks,

    Who would’ve thought it? The Belgian Waffle was apparently introduced to America in 1962 by way of the Seattle World’s Fair.

    Today, on the 84th anniversary of the end of The Battle of Belgium, frequent flier and President-for-life-of-the-Ukraine-War Zelensky visits the Royal Palace of King Philippe in Brussels. Flemish Belgian public broadcaster VRT notes that the Belgian ethnic Algerian Defence Minister will deliver to Ukraine its entire remaining fleet of 30 F-16 fighters between now and 2028 as they are retired from the Belgian Air Force for new F-35s. Interestingly last September “The Belgian Times” quoted the Defence Ministry offering guidance that the F-16s were at that juncture unsafe to gift Ukraine as being at the end of their structural integrity design lifespan…

    https://www.brusselstimes.com/683743/first-belgian-f-16-to-be-decommissioned-after-8000-flying-hours-52-remain

    One imagines bridges have been mended between the Belgian Defence Minister and Mr. Zelensky since the former attended a Crimean festival in 2021 named after a Ukrainian-Marxist-Bolshevik revolutionary curated by a daughter of President Putin.

    https://www.pravda.com.ua/eng/news/2022/07/20/7359115/

    Fear not! Respite is at hand with DJ George for those defending from assaults to mind and common sense. Here we go from Zelensky to Abba with a 50th anniversary flashback in time to the lovely seaside resort of Brighton, UK-
    “Waterloo”.

    https://youtu.be/4XJBNJ2wq0Y

  10. I have a hunch. I read ( Hal Turner website ) that Biden is going to have a press conference after the Trump verdict.
    I think that Biden , possibly , is going to issue a Pardon to Trump. It would shock the world and be a MASSIVE PR COUP for the Democrats. He would give it ” in the interest of peace , national unity and moving forward ” .
    Think about it , Trump’s only strategy has been to attack and critisize ,,, what would he do after a Pardon ? Attack ? He would look ungrateful and pathetic regardless of whether he would be right or wrong. Biden comes off as the hero and Trump the Chump. It cuts the legs out from under Trumps campaign , greatly reduces any MAGA riots or demonstrations at the Democratic Convention and creates even more chaos in the Republican Party.
    Sure , some Democrats would be mad at Biden but they are still going to vote for him. No loss there. Biden the ” Peace Maker “, rising above political interests for the sake of the Nation. Trump ??,, modern day version of Nixon.
    Beautiful , just beautiful.

  11. LOL ’24/7 Trump Hate Channel’ next they’ll be having everyone stop what they are doing to gnash and wail at Donald Trump for 2 minutes every morning.

  12. Fear:

    It is near-dusk. I’m driving down the road, blind (because I’ve stripped all the gear out of the Expi to re-install it properly), headed east, when the atmosphere turns that sick orange-yellow.* I look in the rearview and see a really sharply-delineated precipitation line — Then the trees part, and I see another sharply-delineated angular line in the mirror, several hundred yards north of the first line. I glance back every few seconds for a couple minutes, notice the “precip lines” are darkening, the fucker is tracking down the center of the road upon which I’m traveling, and it’s growing in size.

    Is it gaining on me, or simply growing in size?

    I don’t know, can’t tell, and I’ll be damned (perhaps literally) if I stop to gauge things out — so I tromp the go-pedal.

    10 minutes later, the second one shows up in front of me at 11:00. It is not on the ground, but the vortex is at least a half-mile wide.

    A few minutes after that, I reach an Interstate and turn at right angles, headed south.

    I don’t know where the third one was (there may have been four.) I know I set the cruise on 74, and a few minutes later was going 92. Then the crosswind hit and I had to back off to 45. I got on the back door of a semi and stayed there, even as the crosswind tried to relocate me (and that 18 wheeler) to the median’s ditch. I stayed there for 13 miles, then got off and rode out 20 minutes of horizontal rain in a Culver’s parking lot.

    I can not count the number of people who have expressed a desire to “ride along” when I’m storm-spotting. They think it would be exciting, or something. It is incredibly boring, 99.5% of the time. Tonight was that “other half a percent” and it was definitely exciting, but not fun in the least.

    * That sick orange-yellow: As folks who live in OK,KS,AR,NE know all too well, when a tornado begins to lift earthen debris, if the Sun is still above the horizon it will shine through the debris and color our perception of the atmosphere, to where it appears [to be] a kind of orange-yellow, or orange-yellow-gray. When your atmosphere appears this sick color, and it becomes dead-calm, you’re about to have a bad day, so it is something of which to be aware…

    • I experienced a tornado at age 5 that traumatized me for life. I get the terrors trying to watch storm chasers. I would be cowering in a basement… or culvert. Yes, I remember the yellow sky and dead calm. We went outside to watch that grey-black wall approaching. Our house survived. Neighbor farms were leveled. Funnel passed 100 yards from our house. You are a braver soul than I, going out in that storm.

  13. “The “Israeli Mistake”
    We pause while Clif High takes a bow – as the exact phrase that has been in his predictive linguistics work (halfpasthuman.com) is now all over headlines. Israel PM Netanyahu acknowledges ‘tragic mistake’ after Rafah strike kills dozens of Palestinians.”

    I’ll give Clif credit for the phrase, but I believe Stu got there first with the concept…

    The Israelis hit a military target with a precision munition. Unbeknownst to the IDF, the target happened to be setting on a Hamas magazine. It was the detonation of the munitions in the magazine which created the carnage, not the IDF shelling, per se…

    Again, I would ask:

    Is the “Israeli mistake” the result of an IDF action, or the result of the IDF stopping short of achieving a mission goal?

    Probabilistically speaking, either is equally-likely, so how would (could) we know?

    • Pure Unadulterad israhellie BULLSHIT -per se.

      I dont have the words, vocabulary to describe Ure level of evil, Cockroach DNA is it?

      Precision munitioning a tent in an open air prison, full of Women and Kids ? Ure a sick F justifying any of that evil.

      always the same excuses from the darkness that is christian zionism/zionism, always.

      how much you get from APIAC ? for spewing foul shit while defending irahells False Flag on Pallies and consequent outright THEFT and Piracy of natural resources, while slaughtering thousand of Women Kids?
      I know its the other way around – question should have been, How much you Donating to AIPAC annually?

      • re: “Spartacus”, 1960
        feat: The 3rd Servile War

        BCN,

        I might mention that actions of two frontline protagonists in The Third Servile War perhaps served to bless the English language with words like “decimation” and “crass”. However, neither of them crossed the Rubicon.

    • Given the propensity for Hamas to set up shop in the middle of civilian schools, hospitals and encampments, it’s not at all surprising to see lots of civilian casualties when IDF hits the bad guys. The reaction of the MSM then favors Hamas and lays the blame on Israel, exactly as Hamas planned. Works every time.

      • Seen any “bad guys” in postmortem reviews? When you do they are called out – which is pretty rare.

        Most highly surveilled piece of real estate on planet. Seeded with Controlled Opposition (hamas)..far beyond an APARTHEID – it Is and Has been IN-Human conditions in Gaza for years.

        Excusing GENOCIDE is a karmic transaction in your Life.

        Splains alot – doesnt It?

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