We have some new data to go over: International Trade and Productivity in a sec, but before we launch, let’s consider some things:
- Russia is still moving arms into position opposite Ukraine.
- China is expanding into the Atlantic, may have container missiles, and Taiwan is as good as gone, as we see it.
- Then we have the second-level tensions: Russia getting palsy with India, and the NorKs are too quiet. Japan is rearming, too.
The U.S. Public Debt to the Penny is $28.908 trillion. And interest rates are going up.
To me, the 700-point rally yesterday (and follow-on nonsense at the open) doesn’t pass the “sniff test.” Neither does +350 in the early Dow futures today.
The best the financial lamestream can propose to explain this insanity is poppycock like “Investors reassess omicron (moronic) variant” and such.
Yet. as Linda-at-Law, our Houston tipster notes, COVID omicron variant detected in Houston’s wastewater | khou.com.
None of this has broken our dour mood, around here. We still don’t see a peace & prosperity path to Memorial Day 2022.
About the only concept that makes much sense is bond market disintermediation. Maybe Don Bondi can give us some insights as a comment. But in my simplistic bowl of noodles, the only thing that makes sense is the rally comes as rates rise (lowering the sales price of bonds) and this means hot bond money pretending things are better on the equities side.
Which they are now, but commissions drive, too…
Maybe this is what my friend Rick Akerman might call a “hidden pivot” (Rick’s Picks is a great place for insights into hidden pivot trading. There’s a course on his drop-down menu.)
America’s field position didn’t just get 2% better in the past two days. Yet that’s what the market is pretending. Brandon’s a lost coot, no manufacturing growth here – down last month, total Asia dependence for goods, debt-saturated currency, and war pending on three (or more) fronts: Iran, Russia, Taiwan. EMP, food, and internal division/conflict potential all feature trip wires…
The Biden-Putin call (around 10 AM Eastern) could – in our view – turn into a “buy the rumor, sell the news” kind of market ride. When the call’s done, read the Russian media in equal proportion to the U.S. to spot your “this is where the future goes” midpoint.
Meanwhile: Ukrainian Army receives 44 new Kozak-2M1 armored vehicles. A kind of diesel MRAP. Instead of STFU until the Biden talks, we see how Ukraine’s defense minister warns there will be a ‘bloody massacre’ if Russia invades. Yeah, that’ll help loads; you bet.
Thousand-point rally? Off this kind of happy horseshit? Let’s just say we’re a tad skeptical.
Good Cop – Bad Cop?
Seeing the story India signs trade and arms deals with Russia during Putin’s visit to New Delhi got me to thinking: Could Russia’s warming to India be part of a good cop – bad cop routine China and Russia have planned for the non-U.S. dominated world?
Russia and China have been holding joint naval maneuvers in the past month. But tensions between India and China have been high. Underscored in the recent remarks of India’s external affairs minister Sharpening of Tensions: S Jaishankar Targets China at Indian Ocean Meet. What we see may be carrot and stick, since China is buds with Pakistan as part of their Belt and Road on the one hand, and Pakistan is an adversary of India, on the other.
Should be instructive how strongmen Putin and Xi decide to play out their roles going forward. “Trade you reduced Pakistan pressure for more resource shipments to China…” Which would then install Russia as a “back-up customer” to the U.S. market when we implode internally.
Grim? Not grounds for a thousand-point rally, to my thinking.
Data: Trade and Productivity
Internation Trade, first. Which is a hoot when you remember inbound cargo in L.A. was down more than 7% compared with a year ago when reported last month. Hand me the draft fairytale, please?
Here’s The Big Con:
It looks like the trade deficit improved. BUT the inbound cargo at L.A. was down more than 7-1/2% for this window. So OF COURSE there value of inbound goods would drop, thus lowering deficit growth. Oh my God, people, this is as amazing a hornswoggle as you’ll find on any rodeo circuit.
Our next contestant is the Productivity and Costs report from Labor:
“Nonfarm business sector labor productivity decreased 5.2 percent in the third quarter of 2021, the U.S. Bureau of Labor Statistics reported today, as output increased 1.8 percent and hours worked increased 7.4 percent.
This is the largest decline in quarterly productivity since the second quarter of 1960, when the measure decreased 6.1 percent. (All quarterly percent changes in this release are seasonally adjusted annual rates.) From the third quarter of 2020 to the third quarter of 2021, nonfarm
business sector labor productivity decreased 0.6 percent. This four-quarter rate is the largest decline since the fourth quarter of 1993, when the measure also declined 0.6 percent.
Unit labor costs in the nonfarm business sector increased at an annual rate of 9.6 percent in the third quarter of 2021, reflecting a 3.9-percent increase in hourly compensation and a 5.2-percent decrease in productivity. Unit labor costs increased 6.3 percent over the last four quarters. BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity. Increases in hourly compensation tend to increase unit labor costs and increases in productivity tend to reduce them.”
Mighty sucky downside surprise numbers there.
Tomorrow, we sink into the little news dregs. In fact, we may just snooze until Friday’s Consumer Prices (inflation) report. We know that one won’t be pleasant.
After the data Dow futures were +352. Europe is still up, playing follow-along. Not too many sane folks left, huh?
High Cost of Covid: $17+ Trillion
Being underlined in a new UNICEF/World Bank report out Monday. From the ExSum:
“The global learning crisis has grown by even more
than previously feared: this generation of students now risks
losing $17 trillion in lifetime earnings in present value as a
result of school closures, or the equivalent of 14 percent of
today’s global GDP, far more than the $10 trillion estimated in
2020. In low- and middle-income countries, the share of
children living in Learning Poverty—already over 50 percent
before the pandemic—will rise sharply, potentially up to 70
percent, given the long school closures and the varying
quality and effectiveness of remote learning.”
And that’s before the yoke of ongoing vaccinations to stay alive and employed come along. The “Rent Your Life” business model, indeed.
Is the Bitcoin Mystery Over?
Seems it could be: Miami jury rules in favor of Craig Wright, claimed bitcoin inventor (cnbc.com). So much for Nakamoto, huh? Bitcoin was up to almost $52,000 overnight. It will take a while for the reality of “making up secret numbers” is not “money.”
But neither were tulips.
Real value is usually tangible and of limited supply with goodies like barriers to entry to keep competition at bay.
Earlier this year, e-cryptonews.com reported “According to CoinMarketCap, the total number of cryptocurrencies is 7,812 with a total market cap of $324.716 billion (as of January 20, 2021).”
As we have warned, the only barrier to entry for cryptos is a good line of bullshit and a big supply of fools. Neither of which we’ll run out of, any time soon.
The world is one regional EMP away from collapse of such schemes.
Of course, the democrats love power – even if illegal – as likely in New York makes COVID vaccinations mandatory for private sector. Let’s vote to give ourselves more power…Chinese (or Dutch) parliament style.
The real story is how Covid has made the rich richer: Billionaires’ share of global wealth soars during pandemic. Everything’s a Business Model, as we frequently remind you. Now quarantine yourself and think about it.
Still Monetizing Trump
We were profoundly disappointed to visit the website of The Atlantic today – to see what they had going on – only to see they’ve fallen into the Trump Hate column big-time. With China, Russia, Iran, and resilience of our Food, Grid, and Web getting sketchy, stories like How Donald Trump Could Subvert the 2024 Election along with Tucker Carlson Is Completing the Work That Trump Began, underscore the monetization of division in media.
Not that our chagrin is limited to The Atlantic. Much to be said for stories like The Guardian’s People in counties that voted Trump more likely to die from Covid – study as well.
Our advice to readers remains relatively constant: Use times like this (when big pieces are moving in background) to see who’s monetizing old news and who’s offering a useful look-ahead you can use for planning.
Unless, of course, that’s too scary for you.
Dribs and Drabs
Volcano going off in Indonesia: Indonesia volcano: BBC reporter surrounded by houses buried in ash. Death toll is up to 34 so far.
Tesla has its problems with the SEC probe and such. But here comes a new and potentially Big Challenger: Intel plans to take self-driving car unit public in the U.S. in 2022. If powertrain agnostic and highly advanced on the driving side could make this a really interesting long-term set-up by Intel.
Other than papering-over incipient deflation? Why is the Biden administration increasing the cost of building houses? wonders NPR. At least former president Carter knew how to swing a hammer for Habitat…just saying.
UFO/UAPs as Trans-Dimensional Popups? See the video and judge for yourself at Incredible video shows 12 UFOs ‘flying in formation’ as pilot exclaims ‘that is some weird s**t’ (the-sun.com).
Around the Ranch
Talking to my neighbors around us, we’re starting to think that someone unloaded a whole BUNCH of dogs out here last week. Because? Well, one road over from us a tan colored coon hound was found same day as our stray dogs showed up. Not a good thing at all.
This one (with the blue collar we put on him) is named Blue. His younger pal is Red. Both have white patches on their chests.
There are enough animals turned loose out here we wonder if maybe there isn’t a pet shelter somewhere taking in pets and then re-dumping them. There’s a perversion of the donation business model in there, if I think about it.
The odds of two dogs showing up here and another showing up down the road same timeframe seems less than coincidental to me.
Dogs are behaving fine. But here’s another oddity: After the morning meal they run half a mile down the road to where there’s a pack of 20, or so, dogs. Don’t know if it’s the after-breakfast coffee klatch, or we have a larger problem going on. Sheesh.
Haven’t seen a deer since they showed, however. But, on the upside, no wild boars, raccoons, or possums, either.
Zeus the Cat spent a relaxing Monday afternoon up in the greenhouse with the dogs outside the garden fence. The dogs don’t bother the mailman, fortunately. We’ll see about the UPS deliveries this week.
“Things have gone to the dogs” comes home to roost.
Write when you get rich,