When the upstart 1-year tries to compete with the long end, you in for a heap a trouble boy.
Yippee-ki-yay.
Tuesday, October 25, 2022
Sunday, October 23, 2022
Sunday morning comedy from CNBC
Detroit, Tulsa, Memphis, and Oklahoma City
Pack the bags, honey! We're moving!
Saturday, October 22, 2022
Friday, October 21, 2022
Thursday, October 20, 2022
The US Treasury crash is epitomized by what's happened to Vanguard's long term Treasury mutual fund VUSTX
The fund is down to $8.36 tonight, 2 cents away from its all time low set on October 19, 1987 at $8.34. That was 35 years ago last night, when the stock market fell 20% in one day.
The 30-year US Treasury back then paid 10.25% on that date. Tonight it pays just 4.24%.
This Vanguard fund, which invests in such securities, year to date has returned -33%. Given the yield discrepancy, it would seem foolhardy to believe that the bottom is in. I wouldn't be surprised if the fund makes dramatic new lows, never before seen.
Meanwhile imagine losing money like that on America's safest of investments.
It's truly appalling and ranks right up there with America losing its AAA status under Barack Obama. I guess it's fitting that it's happening under his former Vice President.
Wednesday, October 19, 2022
This is a bitter anniversary of fear, and a day of loathing
Exactly 35 years ago tonight this fund marked its all time low at $8.34 when stocks crashed 20% in one day, October 19, 1987.
It happened because it was a flight to safety, the US long bond being the safest haven in the world. Prices move inverse to yields. The price crashed because everyone plowed into it, and the yield soared to 10.25% as a result. As such, the all time price low is meaningless for bonds, but full of meaning for stocks.
At $8.49 tonight, however, the price is just $.15 higher than it was 35 years ago, but for an entirely different reason.
In 1987 the price crashed due to stock market fear; in 2022 it's due to bond market loathing, in particular, loathing of existing US debt which pays too little for the risk being taken. At 4.15% tonight, yield on the long bond has a long way to go to credibility. More importantly, the market is SHOUTING that trillions of dollars of existing US debt pays its holders a reprehensible sum.
People should think hard about what that means.
Faith in America hangs in the balance and is found wanting.
The COVID-19 emergency continues to Jan 11 despite Biden saying the pandemic's over in September on 60 Minutes: They keep kicking the can down the road to avoid implications for vaccines
The FDA would have to use the normal process for approving the vaccines, and based on the corners cut to get the vaccines to market, that looks unlikely.
Furthermore, removal of the emergency authorizations would then expose the manufacturers to lawsuits.
I agree with the guy in the last paragraph below.
Expect indefinite emergency use authorization, at least until Republicans take over the federal government in 2025.
The FDA’s ability to issue emergency authorizations for vaccines, drugs and medical devices would not necessarily end when the Covid public health emergency is lifted. These authorizations rely on a separate determination made by the U.S. health secretary under the law that governs the FDA.
But it could become increasingly difficult for HHS and FDA to justify
clearing vaccines and treatments through an expedited process that
shortcuts the normal system of approval when the emergency declaration
is no longer in place.
Trump administration Health Secretary Alex Azar activated the FDA’s emergency authorization powers in March 2020, about two months after first declaring the public health emergency.
“It could affect emergency use authorization, where you couldn’t give these EUAs and so the FDA would have to fully approve the drug,” Gostin said. “It could have enormous knock-on effects that need to be very carefully thought through,” he said of ending the public health emergency.
But James Hodge, an expert on public health law at Arizona State University, said the PREP Act declaration that supports Covid vaccinations at pharmacies and the FDA’s power to grant emergency use authorizations will probably remain in place for years to come.
More.
Hey look, Biden throws another last minute Hail Mary to buy votes with less than 3 weeks to Election 2022!
Biden has cut the emergency reserve from 33 days supply to 20 days, with more cuts to come.
"Wouldn't be prudent". -- Bush 41
Hey look, another inflation trade!
Fewer units sold at higher prices yields . . . profits!
We are at the bottom of this food money chain.
Tuesday, October 18, 2022
Jay Powell is only appearing to be serious about battling inflation
The only thing Jay is doing about inflation is making sure everyone thinks he's doing something about it, while making sure there remains plenty of spread for his pals to trade off it.
Currently the spread is 5.12: Inflation at 8.2 minus an effective funds rate of 3.08. This is a golden opportunity for the banksters and everyone down the food chain until it reaches you. The banks are getting rich off it. Wall Street is getting rich off it. Corporations are getting rich off it. And, of course, the stock market investor parasites are getting rich off it.
You get left holding the bag of all the price increases jacked up under the guise of the general condition.
Three years ago there was no spread: -0.03. Nothing there to exploit.
The banksters LOVE LOVE LOVE this inflation:
Bank of America said Monday that quarterly profit . . . topped expectations on better-than-expected fixed income trading and gains in interest income . . . third-quarter profit fell 8% to $7.1 billion.
The bond market is not happy.In Rama a voice is heard, lamentation, weeping, and great mourning . . ..
Monday, October 17, 2022
Through Oct 14 the traditional 60/40 401k portfolio is down a net 21% in 2022, not counting inflation
Bonds are supposed to perform well as the safe haven asset when stocks fall, reducing the net impact to the portfolio when equities decline.
But not this year!
Bonds have actually crashed on the long end, down even more than stocks, as stocks entered a bear market.
The bond crash is a market statement rebuking the spending those bonds have represented: Not enough return for the risk.
So far the spendthrift Congress remains tone-deaf, leaving it to the Fed to raise interest rates . . . ever so feebly.
No one in his right mind believes raising interest rates 300 basis points is going to have much impact on inflation raging at 800 basis points.
Sunday, October 16, 2022
Saturday, October 15, 2022
You can't get this kind of information just anywhere, and you know why
Wawa shuttering two Philadelphia stores amid city's retail crime surge:
Retail theft is up more than 50% in Philadelphia
Friday, October 14, 2022
Jim Cramer's stupid people who made a lot of money on Oct 13 weren't stupid until today, when they gave it all back, lol
Jim thought the market would tank on the inflation news. Instead it rallied.
But the market took it all back today.
Jim is nothing if not entertaining, as are other market cheerleaders.
Gayed meanwhile fully expected the rally to continue today.
Tonight there is much weeping and gnashing of teeth behind the brave faces.
Thursday, October 13, 2022
Tuesday, October 11, 2022
Payback is a bitch, or why everything sucks
Debt stopped buying economic growth, if it ever did in the first place, way back in 1982, but no one has seemed to notice.
Prosperity based on debt is not prosperity.
Debt draws forward prosperity, and then when you get forward, there's no prosperity there because you already made off with it.
It's like the polar explorer who starved and froze to death because he ate the food caches on the way to the pole instead of saving them for on the way back.
Monday, October 10, 2022
Ben Bernanke wins Nobel Prize in Economics for 495 bank failures under his leadership as Federal Reserve Chair Feb 2006-Feb 2014
The 495 failures were a huge improvement over the 9,000 bank failures during The Great Depression of the 1930s, his specialty of study in the 1980s, experts said under their breath.
Sunday, October 9, 2022
Saturday, October 8, 2022
US homes were at least 84% overvalued in 2021
Rounding out the Unholy Trinity of Big Ticket Asset Inflation, Housing joins Stocks and Bonds in similar overvaluation territory in 2021 at about 84%.
In Feb 2012 when housing bottomed after The Great Financial Crisis, a previous inflation-adjusted Case-Shiller home price index chart no longer updated for present years showed that prices had fallen into the top range of US house prices which had prevailed throughout the post-war from the 1950s to the late 1990s. Mind you, the top range of those inflation-adjusted prices.
Thanks to Democrats and Republicans, including Bill Clinton and Newt Gingrich, the American Dream, the nest of the American future, was turned into a mere commodity in the late 1990s, to be churned in the markets for profit.
Long-suppressed long term interest rates have conspired with commoditization to produce valuations which have exploded, making houses unaffordable as nests, which is why your kid is still living in your basement.
The chart below shows the nominal price figures, on an average annual basis through 2021. The blow-off tops in 2022 are even worse (the index topped 308 in June), and are not shown because the year ain't over, and prices are falling.
At an average index level of 260 in 2021, prices were inflated from 141 in 2012 by about 84%, not far below the overvaluation of stocks and bonds at 90% and higher.
The percentage holding full-time jobs through September 2022 held above 50%, disappointing the ubiquitous advocates of a Fed interest rate pivot
Full time as a percentage of civilian population in September was 50.3%, and for 2022 through September averaged 50.15%.
Not bad, considering.
The Fed will see little evidence in this figure that its interest rate increase policy is harming employment.
Stocks on Friday collapsed after a head fake to start the week to within 1.5% of the 52-week lows set a week ago.
Long term investment grade bonds and US Treasury securities also revisited lows from 9/27/22, coming within pennies of those benchmarks.
30-year yield for UST is back up to 3.86%. It was 3.87% on 9/27. At the beginning of 2022, yield was a paltry 2.01% by comparison.
UK gilts are experiencing the same action despite the Bank of England intervening to buy bonds.
The bond crisis is not over.
With yields soaring across the board no one wants to own the lower paying outstanding issues, which are legion, destroying their value.
But everything in the global economy is based on those, piled up in earnest after The Great Financial Crisis of 2008, and in orgiastic frenzy afterwards during the late pandemic.
Bond yields in 2022 are telling you that they are overvalued by 92%.
Stock market valuation is telling you a similar thing.
From 1938 through 2019 the median ratio of the S&P 500 to GDP is 81. In 2020 we averaged 154, or 90% overvalued.
This is the major deflationary headwind facing the world, the other side of the COVID-19 inflationary shock coin.
Push here, it comes out over there.
Modern central banking cannot escape this conundrum any more than the gold standard could.
The only thing the individual can do in this situation is to owe nothing and save everything, preferably in your hands.
Good luck.
Friday, October 7, 2022
The rentier class at CNBC, FinTwit, Wall Street, is in a panic about Fed rate hikes and just lies this morning about the latest battle: Payrolls beat expectations but CNBC says payrolls slowed
Well yeah, they slowed from 315k, but that was EXPECTED.
The parasites who derive their main livelihood from the returns on financials are in a panic over Fed rate hikes designed to reduce inflation. Whether those will do that or not is beside the point.
This is all about their carry trade.
The Fed has been making cheap money available since December 2002 to restart the stock market and it has hardly stopped . . . until lately. The politics of inflation have finally caused the Fed to pivot on this long-standing policy, and they couldn't be more angry.
The top 10% borrow at cheap government rates and plow the money into private financial products which pay higher rates which the 90% have to pay. They prosper, gloriously, off the difference. But increase their cost of borrowing and you are diluting the gravy train.
Ever since the Fed started raising rates in earnest earlier this year, the rentiers have been trying everything they can to get them to pivot, without success.
This morning the hope was that a really poor employment report would get the Fed to back off, except the 263k figure beat expectations of 250k.
The Fed is likely to stay the course and keep raising rates.
CNBC paints this as slowing in keeping with the rentiers' rhetorical narrative aimed at the Fed, which has a dual mandate to maximize employment and maintain stable prices.
Never mind that the dual mandate is nuts since unstable prices exact a far greater cost on the people than unemployment ever does. Inflation doubling makes everyone pay 100% more for everything indefinitely, whereas unemployment affects fewer and is definitely cyclical.
And never mind the Fed has NO mandate to suppress interest rates, buy securities, and bail out the world.
But I digress.
You are being lied to and manipulated . . . constantly.
Because they can, and it works.
Joe Biden's nuclear war comments are completely irresponsible, but so is just about everything that comes out of his pie hole
He's making matters worse, not better.
He's attributing statements to Putin which Putin did not make, which is the default practice for Democrats when speaking of their opponents.
A lot more is at stake than losing control of the US House and Senate in a few weeks.
Joe's irresponsible remarks risk real catastrophe from a deadly opponent.
Think what you will about Putin, Biden is a fool.
Nobody fucks around with a Biden, he says, the day after Saudi Arabia does just that, telling him to go pound sand.
The whole world knows he's a fool, which is perilous for the rest of us.
Thursday, October 6, 2022
I don't know about you, but my natural gas and electric costs are up 71% from two years ago
Why?. . . natural gas production levels are at
record highs, so we can’t blame a lack of production on this issue. This
is from soaring demand, led in the past two years by the
fastest-growing LNG export market in the world.
Basically a combination of demand for domestic electric power production, demand for LNG exports to Europe because of the Ukraine war, low inventories headed into the winter, and fear.
Prices have quadrupled.
And Biden is considering ending all offshore drilling.
We are so screwed by these Democrat clowns.
Why Have U.S. Natural Gas Prices Soared Since 2020?
. . . natural gas production levels are at
record highs, so we can’t blame a lack of production on this issue. This
is from soaring demand, led in the past two years by the
fastest-growing LNG export market in the world.
59% still pay in cash because the drug dealers don't take credit cards
The cashless economy trend is not necessarily new, but it is gaining momentum, according to new research from the Pew Research Center.
The nonpartisan fact think tank found 41% of Americans say none of their purchases in a typical week are paid for in cash. That’s up from 29% in 2018 and 24% in 2015.
In contrast, 59% of respondents say they still pay for at least some of their typical weekly purchases in cash.
More.
Despite 2015 Paris climate agreement, global reliance on coal grew by about 8%, looks to grow 23% more, shattering Greta's world, lol
The NGOs report said there are currently more than 6,500 coal plant units globally with a combined capacity of 2,067 gigawatts. ...
Urgewald’s Schuecking told CNBC that since the 2015 Paris accord was signed, the global coal plant fleet had seen a net increase of roughly 157 gigawatts. That’s the equivalent of Germany, Russia, Japan and Poland’s coal fleet added up together.
The research found that 467 gigawatts of new coal-fired capacity were still in the pipeline worldwide. And, if realized, these projects would increase the world’s current coal power capacity by 23%. ...
China was found to be responsible for 61% of all planned coal power capacity additions and, perhaps unsurprisingly, the top four coal plant developers were found to be Chinese companies . . .. China Energy Investment Corporation was the world’s top thermal coal producer last year. This was closely followed by Coal India . . ..
I omitted Schuecking's temper tantrum parts of the story, here.
She is, predictably, a German environmentalist wacko who is also against nuclear power. Urgewald is full of crazy Karens just like her who agitate against corporations and try to get individuals like David Malpass of the World Bank fired because they don't mouth the right words like the Paris Climate Accord hypocrites do.
Urgewald is Exhibit A for the prospect of Germans freezing to death this winter.
Wednesday, October 5, 2022
Tuesday, October 4, 2022
Climate emergency: 2022 average temperature in Grand Rapids MI through September was 0.4 degrees F above the long-term average since 1892
Mean average temperature in Grand Rapids MI through September 2022: 51.5F.
Mean average temperature in Grand Rapids MI through September since 1892: 51.1F.
Denmark restarts two coal and one oil power station, Germany restarts three coal power stations
From the story:
Orsted said the order applied to “unit 3 at Esbjerg Power Station and unit 4 at Studstrup Power Station, which both use coal as their primary source of fuel, and unit 21 at Kyndby Peak Load Plant, which uses oil as fuel.” ...
A few days before Orsted’s announcement, another big European energy firm, Germany’s RWE, said three of its lignite, or brown coal, units would “temporarily return to [the] electricity market to strengthen security of supply and save gas in power generation.”
Subscribe to:
Posts (Atom)