Most of you probably know what this past week was like in market land. Enormous swings up and down. The NASDAQ losing 2K points from its high just 14 sessions ago. Entire indexes giving up all their 2021 gains.
Shortly after the open on Friday, things went south again. The NASDAQ peeled off another 350 points, the DOW plunged red by another 200+ the S&P was blood red by 40. It was another slaughter day. Until….
Most of you probably know what this past week was like in market land. Enormous swings up and down. The NASDAQ losing 2K points from its high just 14 sessions ago. Entire indexes giving up all their 2021 gains.
Shortly after the open on Friday, things went south again. The NASDAQ peeled off another 350 points, the DOW plunged red by another 200+ the S&P was blood red by 40. It was another slaughter day. Until….
(Reuters) - The recent run up in yields on longer-dated U.S. Treasury securities reflects improving expectations for the U.S. economy, St. Louis Federal Reserve President James Bullard said on Friday, adding that he is not eyeing a specific level of yields that might concern him.
The 10-year U.S. Treasury note yield - which rose above 1.61% on Friday - is just returning to the level consistent with the six months before the pandemic, he said, characterizing it as “still quite low level of yields.”
Echoing Fed Chair Jerome Powell’s comments from a day earlier, Bullard said he would be concerned by disorderly behavior in the Treasury market. “Something panicky would catch my attention, but we’re not at that point.”
But he wasn’t done. In what would serve as the catalyst to reverse all that blood red on the indexes, he had a lot to say. Let’s look at some of it:
BULLARD: COMMODITY PRICE JUMP DOESN'T EQUAL SUSTAINED INFLATION
BULLARD: LOOKS LIKE WE'RE GOING TO HAVE ROBUST ECONOMY IN 2021
BULLARD: WOULD BE CONCERNED BY DISORDERLY TRADING
BULLARD: WE'RE NOT AT THAT POINT
So let’s just chat about what this idiot just said, especially the one about commodity price jumping doesn’t equal sustained inflation. Pardon my language here folks but… bullshit.
It’s truly mind boggling when on the VERY SAME DAY that CNBC ran a 15 minute segment concerning rising car prices, Bullard comes out with his BS.
The story goes, that because of the rise in the price of steel, copper, aluminum, etc, the cost to produce a vehicle has increased by over 1,000 dollars. So, to make up for that, new car prices have hit an all time high. The amount needed to finance these new cars has hit an all time high.
I don’t much like getting lied to, neither do you. But in market land and with our central bankers, we get lied to daily. Powell was just on two days ago saying that he still needs to see more inflation, they always say they need more and it’s still well below their 2% target.
More lies. Every one of you knows that the cost for real, tangible, 3 dimensional products is rising. You know your fuel, is soaring. Groceries soaring, insurance soaring. The Chapwood index comparing prices in 50 American cities, for 500 commonly purchased goods, show between 8 and 12% annual gains over the past 5 years.
Yet the Chair of the Federal Reserve will look yo...
Over the past few days, I have been looking hard at the miners and shaking my head at the beatings they’ve endured recently. Some truly wonderful mining and streaming operations, have had their stocks cut to the bone. It’s crazy. I think we could very well be looking at at least a nice bounce in the mining area.
“This alone gives gold and other commodities a generally inverse relationship with the USD.”
But nominal rates don’t necessarily sync with inflation. As Tiggre explains, a nominal 1% interest rate is actually negative if inflation is greater than 1%. “This is why gold and nominal rates can rise together during times of higher inflation.”
So, from up here in the cheap seats, it seems to me that Amazon and other major companies have the scale and scope to work out insanely cheap rates with UPS, so they can offer “free shipping,” while the “retail” guy gets to make up for all the money they’re losing on Amazon.
Here’s the thing, though: the federally funded weekly payments ($600 last year, $300 this) — like state UI benefits — are taxable by the IRS at a minimum.
Most states tax UI benefits as well. Of the 40 states that tax income, only five — California, New Jersey, Oregon, Pennsylvania and Virginia — fully exempt UI benefits.
This is the first time in my 25+ years of writing that I ever endorsed looking into pennies and OTC’s. But things change and right now the landscape is still rich in this sphere. Don’t go overboard, don’t get pie in the sky ideas. Just look around the area, and if you find something interesting take a small shot. This atmosphere won’t last forever, so it’s now or never.
Well that one resonated with a ton of people, and I want to take the liberty to post up some of the more interesting responses. I think you’ll find them interesting. Then I’ll post up some links that were sent to me that make for good reading.
When I was growing up, let’s say in the 60’s and 70’s, almost every day we’d hear about things that were no good for us to eat. On TV the commercials were pushing “fake butter” because real butter will gunk up your arteries, but this processed “scientific” stuff was better for you.
It wasn’t even a couple days and Unknown was calling again. I answered it again, saying that I don’t have and never have had a line of credit via paypal. But he was persistent. He said that in 2018 I opened this line of credit, he had the correct email address, and said that I even made several payments, before stopping payments in late 2019.
As Congress nears debate on another round of stimulus/relief aid for American households, businesses, state and local governments, schools, Covid vaccination delivery, and more, I thought it would be instructive to see how the direct aid sent as part of Stimulus 1.0 was spent.
A new report from the IRS shows that the first round of economic impact payments (or stimulus checks) primarily benefited households earning less than $100,000.
This is good news.
So here we are, where everyone from staff at the White house, to old dinosaur Wall Street denizens, to SEC members to brokerages, are all trying to figure out what to do with these upstarts. It’s really quite funny to watch.
Policymakers’ goal of rolling out vaccines fast and evenly is clear — to erase volatility in the bond market and make debt the cheapest it’s ever been to discourage saving and encourage investment.
Their hope rests on the premise that cheap cash motivates companies to invest and hire as rising asset prices make people more confident and ready to spend.
The inevitable side effect, obviously, is even more risky asset volatility as investors chase returns around the world.
First off, what is inflation? We all recognize it as increasing prices when we buy things. The spinner heads will tell you that no, according to the dictionary, inflation is an increase in the money supply. So let me ask, do we have the dictionary description of what inflation is? Let’s see:
Normally characterized by slow, steady growth, the U.S. money supply has grown 20% from $15.33 trillion at the end of 2019 to $18.3 trillion at the end of July.
Well dang! It looks to me like there’s been a quite hefty increase in the money supply, what says you? You agree?
As you know, the performance of gold responds to the interaction of demand and supply, which, in turn, is influenced by the interplay of four key drivers:
All day every day, all we hear about is Bitcoin, and how exciting it is. How more and more people are adopting it. Well, as I wrote a few weeks ago, I missed the whole boat on Bitcoin. The idea of it being anonymous was attractive, but the idea that I couldn’t hold it in my hand, had to rely on “wallets” with passwords, and the fact that I think they can indeed shut it off if they want, told me, I didn’t need it.
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