You know the moment: The morning’s “throne work” done, the handle is pressed and the efforts of the morning will soon be flushed away.
But the flush is neither instantaneous nor complete in itself.
No. There is a pause as the flapper valve just opens. In its advance, the water in the tank flows downward. And it’s there…the Moment of Coriolis. Before the real flushing out takes hold…
And so we can trace the financial analog to water flow in a number of headlines this morning. We have rotation.
From the tank, we follow what the Financial Times calls “Lex of Arabia”. Let’s “handle this” quickly:
- “David Cameron ‘camped in the desert with Saudi Crown Prince Mohammed Bin Salman’ as he tried to woo him for finance firm Greensill in pursuit of ‘$60m’ pay day.“
- And in an almost American-style “Nothing to see here” we see “Greensill Capital: Minister tells public to ‘just move on’ from accusations of Cameron cronyism.“
- Which then leaves “David Cameron and Greensill Capital: 10 unanswered questions” to be answered.
All of which would be a useful distraction – and a break from gender/race baiting in social media in the U.S. which is monetizing shame at record levels – except that financial engineers are smelling blood in the water.
Because, you see, the tax-chattel of multiple countries will likely – in our experienced view – be bent over as the year goes on. The “phrase that pays” is “Too Big to Fail.”
Greensill? Not big enough to bring out the sharks. Did it serve a kind of “kindling role” however?
Archegos: A Different Matter?
While the markets pretend (early this morning, Dow futures papered down only 20 points early) everything is normal, there are ripples now coming from Archegos. Remember a week or so back we warned of rising 10-year note Treasury rates? When interest rates triple in 6-months, as they have in the 10-year, things tend to break.
- “Credit Suisse Buybacks at Risk as Analysts Tally Archegos Losses“
- Which in turn was driven by “Credit Suisse and Nomura warn of losses after Archegos-linked sell-off.”
- But the real cornerstone of stock bubbles is the level of denial that gets bandied-about. Take the once-rational Germans: “German stocks hit record high as Credit Suisse’s Archegos-linked tumble continues.“
Don’t look now, but we actually track the gathering madness as saw the U.S. back-screen boyz dumping in assets to puff up the market last week when the prequel rumbles to this began late in the week.
If you’re not seeing how this is playing, follow along:
- Last week, Europe and Asia both started looking weak because of Greensill and, perhaps, pre-rumbles about the U.S. fund.
- When the Euro markets closed, the G20 (who have to keep the Musical Chairs tune going) likely encouraged member banksters to dump in money hand over fist.
- Which then timed the (well played, pre Passover) rally Friday, but which didn’t go much of anywhere in follow through Monday.
- Although the Dow was up Monday, our broader view (weighting tech equally) actually declined because of the slow-motion “Coming to Jesus” that’s been going on in the tech sector.
Which leaves us today wondering how the G20 will play this. We’re waiting on Housing numbers as we write this, but a major miss in Housing (like someone’s not going to feel effects of rising rates eventually?) or a big miss in the ADP Employment data tomorrow, and one level could be knocked off the global financial house of cards.
So Here’s A Useful Mental Model
Think of the market makers as being crooks. They operate a casino and pass around stories about how rich every one of their customers gets. The U.S. Fed is a counterfeiting ring that rolls trucks (24-7) into the crooked casino. Sometimes via their offshore proxies, other times with re-po’s, and other times by simply doubling the M1 money supply.
Technical Note: They can double M1 and not trigger inflation (except, inconveniently in the 10-year note) because we are still locked in pernicious deflation. Counterfeiting works when no one is “looking at the Money” which is why the Fed is chicken-shit about laying out M1, M2, and M3 anymore. Some of those “suckers in the casino” might catch on.
Congress, realizing that it’s all going to blow over, is also passing out money (and herding people toward the casino) and did you see the latest funny-money scam in the wings? There are already reports the Biden administration is planning yet-another check in 2021!
Which then does two things: First, it’s not really an answer to what ails us. Because as the Washington Post points out “When every new dollar goes to old debt, families wonder whether stimulus will end poverty.” Don’t worry: It won’t. The rich need their servants and we’re the unter-klassen of classical economics. The other thing it does? “New Yahoo News/YouGov poll: Stimulus checks and COVID optimism raise Biden’s approval rating to highest level yet.”
Yessir: Joe Buy’ed ‘Em. Both.
Both Are Phony
On presidential stim checks, ANYONE giving away TRILLIONS will be popular. Although, if smart, they would leave before the tab gets served. But that’s how politics works: Scam and scram.
The other Big Phony is Covid progress. No. The disease is still there, back growing again, and (duh) probably a knock-on of Spring Broken, and this sets up a new annual virus industry (shoot if it makes you feel good). “A Third Vaccine Dose or Boosters Could Turbocharge Pfizer Shares.” And soon, everyone will be forced into compliance with “the beast” with an American health passport. Slick, huh?
But it gets even better: There’s talk now of a global Covid treaty. See:
- “Global leaders call for a pandemic treaty — but U.S. and China remain silent.”
- “Covid-19: World leaders unite to call for pandemic treaty, saying: ‘No one is safe until we are all safe’.”
This last is particularly jingoist (and statistically stupid, but you know me: huff the whiteboard marker and stay on point): We’re getting a ONE WORLD GOVERNMENT installed, whether we like (or SEE or NEED) one or not.
This circles back to economics because financial engineers see the patterns already which is why the next financial collapse will be a GLOBAL too big to fail and it will further enchain even MORE tax chattel to pay for their own overlords.
It is – by God – a graceful effing plan, ain’t it? Yet there is lies.
A global treaty on gravity if this doesn’t fly…
For the strategic worrier: “Russia Stages Fresh Military Drills in the Arctic.”
Need an artificial PPE crisis again? Try “U.S. to Seize Gloves After Finding ‘Sufficient’ Evidence of Forced Labor: Live Updates.” Why they don’t fine the company and leave the gloves in the supply chain boggles…but at 72 maybe I get to wear the addled label.
Somewhat useful: “Google Maps adding new features, including augmented reality.”
No longer pertinent: Suez Canal: Ships begin sailing through cleared waterway so the media monetization of that story will roll down.
Off to brew a cup and await Housing Data.
Write when you get rich,