The Stress of Losing Billions. Up until the WallStreetBets crowd short squeezed Melvin Capital for a $7 billion loss, Robinhood had it made. But losing billions is stressful. And when your product blows up your customer the clucking that follows comes hot and heavy.

The Lure of Easy Money. Right now happens to be an attractive time to do something stupid.  What’s more, everyone is doing it.  Maybe you are too. Stock valuations and corporate earnings growth no longer appear to matter.  Why not buy an S&P 500 index fund and let it ride?  Or, better yet, why not buy shares of Nvidia?

Autographing Funny Money. The United States Secretary of the Treasury bears a shameful job duty. They must place their autograph on the face of the Federal Reserve’s legal tender notes. Here, for the whole world to witness, the Treasury Secretary provides signature endorsement; their personal ratification of unconstitutional money.

Lockdown Disaster. It has been a rough go for California Governor Gavin Newsom. Late last week it was revealed that the state Department of Public Health had tickled the poodle on its COVID-19 record keeping. Somehow the bureaucrats in Sacramento under-counted new corona-virus cases by as many as 300,000.

Insulting the Captive Audience. This week, while perusing the Federal Reserve’s balance sheet figures, we came across a rather curious note.  We don’t know how long the Fed’s had this note posted to its website.  But we can’t recall ever seeing it.

Coming and Going Like a Wildfire. Second quarter 2020 came and went like a California wildfire.  The economic devastation caused by the government lock-downs was swift, the destruction immense, and the damage lasting.  But, nonetheless, in Q2, the major U.S. stock market indices rallied at a record pace.

Post Hoc Fallacy. On Tuesday, at the precise moment Federal Reserve Chairman Jay Powell commenced delivering his semiannual monetary policy report to the House Financial Services Committee, something unpleasant happened. The Dow Jones Industrial Average (DJIA) didn’t go up. Rather, it went down.

Historic Misjudgments in Hindsight. Viewing the past through the lens of history is unfair to the participants.  Missteps are too obvious.  Failures are too abundant.  Vanities are too absurd.  The benefit of hindsight often renders the participants mere imbeciles on parade.

World Class Entertainer in the Cross-Hairs. Christmas is no time to be given the old heave-ho.  This is a time of celebration, redemption, and excess libation.  A time to shop ‘til you drop; the economy depends on it. Don’t get us wrong.  There really is no best time to receive the dreaded pink slip.  But Christmas is the absolute worst.  Has this ever happened to you?

Addicted to Spending. There are many falsehoods being perpetuated these days when it comes to money, financial markets, and the economy. But when you cut the chaff, three related facts remain: Uncle Sam needs your money. He needs a lot of your money. And he needs it bad!

Beta-driven Fantasy. The decade long bull market run, aside from making everyone ridiculously rich, has opened up a new array of competencies. The proliferation of ETFs, for instance, has precipitated a heyday for the ETF Analyst. So, too, blind faith in data has prompted the rise of Psychic Quants… who see the future by modeling the past.

Planning on Your Behalf. Watch out! At this very moment, professional economists of all stripes are making plans on your behalf. They are dreaming and scheming new and innovative ways to spend your money long before you have earned it. While you are busy at the gristmill, grinding away for clients and customers, claims are being laid upon your life.

Conflict and contradiction. These were two of the main themes reverberating around the world of centralized monetary planning this week. On Tuesday, for instance, a novel and contradictory central banker parlance – “reserve management purposes” – was birthed into existence by Fed Chair Jay Powell. We will have more on this later on. But first, to best appreciate the contradiction, we must present the conflict.

Extrapolating The Recent Past Can Be Hazardous To Your Wealth. “Those who cannot remember the past are condemned to repeat it,” remarked George Santayana over 100 years ago.  These words, as strung together in this sequence, certainly sound good.  But how to render them to actionable advice is less certain.

The Recline and Flail of Western Civilization and Other 2019 Predictions. “I think it’s a tremendous opportunity to buy.  Really a great opportunity to buy.” – President Donald Trump, Christmas Day 2018. Darts in a Blizzard. Today, as we prepare to close out the old, we offer a vast array of tidings.

Stars in the Night Sky. The U.S. stock market’s recent zigs and zags have provoked much squawking and screeching.  Wall Street pros, private money managers, and Millennial index fund enthusiasts all find themselves on the wrong side of the market’s swift movements.  Even the best and brightest can’t escape President Trump’s tweet precipitated short squeezes.

All is now bustle and hubbub in the late months of the year. This goes for the stock market too. If you recall, on September 22nd the S&P 500 hit an all-time high of 2,940. This was nearly 100 points above the prior high of 2,847, which was notched on January 26th. For a brief moment, it appeared the stock market had resumed its near decade long upward trend.

Schemes and Shams. Man’s willful determination to resist the natural order are in vain.  Still, he pushes onward, always grasping for the big breakthrough. The allure of something for nothing is too enticing to pass up.

Daylight extends a little further into the evening with each passing day. Moods ease. Contentment rises. These are some of the many delights the northern hemisphere has to offer this time of year. As summer approaches, and dispositions loosen, something less amiable is happening. Credit markets are tightening. The yield on the 10-Year Treasury note has exceeded 3.12 percent.

This week brought forward more evidence that we are living in a fabricated world. The popular story-line presents a world of pure awesomeness. The common experience, however, falls grossly short. On Tuesday, for example, the Labor Department reported there were a record 6.6 million job openings in March. Based on the Labor Department’s data, there were enough jobs available – exactly – for the 6.6 million Americans who were actively looking for a job. What a remarkable feat!

Prices rise and prices fall. So, too, they fall and rise. This is how the supply and demand sweet spot is continually discovered – and rediscovered. When supply exceeds demand for a good or service, prices fall. Conversely, when demand exceeds supply, prices rise.

More is revealed with each passing day. You can count on it. But what exactly the ‘more is of’ requires careful discrimination. Is the ‘more’ merely more noise? Or is it something of actual substance? Today we endeavor to pass judgment, on your behalf.

One of the unspoken delights in life is the rich satisfaction that comes with bearing witness to the spectacular failure of an offensive and unjust system. This week served up a lavish plate of delicious appetizers with both a style and refinement that’s ordinarily reserved for a competitive speed eating contest. What a remarkable time to be alive.

“Things sure are getting exciting again, ain’t they?” The remark was made by a colleague on Tuesday morning, as we stepped off the elevator to grab a cup of coffee.

What are the chances of Federal Reserve Chairman Jerome Powell being wrong? The chances he’ll be wrong on the economy’s growth prospects, the direction of the federal funds rate, and inflation itself? Our guess is his chances of being wrong are quite high.

Jerome Powell, the new Chairman of the Federal Reserve, just completed his third week on the job. He’s hardly had enough time to learn how to operate the office coffee maker, let alone the all-in-one printer. He still doesn’t know what roach coach menu items induce a heinous gut bomb.

Down markets, like up markets, are both dazzling and delightful. The shock and awe of near back-to-back 1,000 point Dow Jones Industrial Average (DJIA) free-falls is indeed spectacular. There are many reasons to revel in it. Today we shall share a few. To begin, losing money in a multi-day stock market dump is no fun at all. We’d rather get our teeth drilled by a dentist. Still, a rapid selloff has many positive qualities.

United States Secretary of Treasury Steven Mnuchin has a sweet gig. He writes rubber checks to pay the nation’s bills. Yet, somehow, the rubber checks don’t bounce. Instead, like magic, they clear. How this all works, considering the nation’s technically insolvent, we don’t quite understand. But Mnuchin gets it. He knows exactly how full faith and credit works – and he knows plenty more.

The common thread running through the collective minds of present U.S. stock market investors goes something like this: A great crash is coming. But first there will be an epic run-up climaxing with a massive parabolic blow off top. Hence, to capitalize on the final blow off, investors must let their stock market holdings ride until the precise moment the market peaks – and not a moment more. That’s when investors should sell their stocks and go to cash.

The world is full of bad ideas. Just look around. One can hardly blink without a multitude of bad ideas coming into view. What’s more, the worse an idea is, the more popular it becomes. Take Mickey’s Fine Malt Liquor. It’s nearly as destructive as prescription pain killers. Yet people chug it down with reckless abandon.

Most things come easier said than done. Take President Trump’s posture on trade with China. Trump doesn’t want a bigger trade deficit with China. He wants a smaller trade deficit with China. In fact, reducing the trade deficit with China is one of Trump’s promises to Make America Great Again.

American consumers are not only feeling good. They are feeling great. They are borrowing money – and spending it – like tomorrow will never come. On Monday the Federal Reserve released its latest report of consumer credit outstanding. According to the Fed’s bean counters, U.S. consumers racked up $28 billion in new credit card debt and in new student, auto, and other non-mortgage loans in November.

The New Year is nearly here. The slate’s been wiped clean. New hopes, new dreams, and new fantasies, are all within reach. Today is the day to make a double-fisted grab for them. Without question, 2018 will be the year in which everything happens exactly as it should. Some things you will be able to control, others will be well beyond your control.

Good cheer has arrived at precisely the perfect moment. You can really see it. Record stock prices, stout economic growth, and a GOP tax reform bill to boot. Has there ever been a more flawless week leading up to Christmas?

The political differences of today’s two leading parties are not over ultimate questions of principle. Rather, they are over opposing answers to the question of how a goal can be achieved with the least sacrifice. For lawmakers, the goal is to promise the populace something for nothing, while pretending to make good on it.

There are many things that could be said about the GOP tax bill. But one thing is certain. It has been a great show. Obviously, the time for real solutions to the debt problem that’s ailing the United States came and went many decades ago. Instead of addressing the Country’s mounting insolvency, lawmakers chose expediency without exception. They kicked the can from yesterday to today.

Governments across the planet will go to any length to meddle in the lives and private affairs of their citizens. This is what our experiences and observations have shown. What gives? For one, politicians have an aversion to freedom and liberty. They want to control your behavior, choices, and decisions. What’s more, they want to use your money to do so.

“Inflation is always and everywhere a monetary phenomenon,” economist and Nobel Prize recipient Milton Friedman once remarked. He likely meant that inflation is the more rapid increase in the supply of money relative to the output of goods and services which money is traded for.

Simple Classifications. Let’s begin with facts. Cold hard unadorned facts. Water boils at 212 degrees Fahrenheit at standard atmospheric pressure. Squaring the circle using a compass and straightedge is impossible. The sun is a star.

One of the fringe benefits of living in a country that’s in dire need of a political, financial, and cultural reset, is the twisted amusement that comes with bearing witness to its unraveling. Day by day we’re greeted with escalating madness. Indeed, the great fiasco must be taken lightly, so as not to be demoralized by its enormity.

The Dow’s march onward and upward toward 30,000 continues without a pause. New all-time highs are notched practically every day. Despite Thursday’s 31-point pullback, the Dow is up over 15.5 percent year-to-date. What a remarkable time to be alive. President Donald Trump is pumped! As Commander in Chief, he believes he possesses divine powers. He can will the stock market higher – and he knows it.

The True Believer.How is it that seemingly intelligent people, of apparent sound mind and rational thought, can stray so far off the beam? How come there are certain professions that reward their practitioners for their failures? The central banking and monetary policy vocation rings the bell on both accounts. Today we offer a brief case study in this regard.

Bleeding the Patient to Health. There’s something alluring about cure-alls and quick fixes. Who doesn’t want a magic panacea to make every illness or discomfort disappear? Such a yearning once compelled the best and the brightest minds to believe the impossible for over two thousand years.

No-one Cares. “No one really cares about the U.S. federal debt,” remarked a colleague and Economic Prism reader earlier in the week.  “You keep writing about it as if anyone gives a lick.” We could tell he was just warming up.  So, we settled back into our chair and made ourselves comfortable.

“Rule one: Never allow a crisis to go to waste,” said President Obama’s Chief of Staff Rahm Emanuel in November of 2008.  “They are opportunities to do big things.” At the time of his remark, Emanuel was eager to exploit the 2008 financial crisis to raid the public treasury. With the passage of the American Recovery and Reinvestment Act in February 2009, Emanuel’s wish was granted.

Clear thinking and discerning rigor when it comes to the twisted state of present economic policy matters brings with it many physical ailments. A permanent state of disbelief, for instance, manifests in dry eyes and droopy shoulders. So, too, a curious skepticism produces etched forehead lines and nighttime bruxism.

A new milestone on the American populaces’ collective pursuit of insolvency was reached this week. According to a report published on Tuesday by the Federal Reserve Bank of New York, total U.S. household debt jumped to a new record high of $12.84 trillion during the second quarter. This included an increase of $552 billion from a year ago.

Based on the simple reflection that arithmetic is more than just an abstraction, we offer a modest observation. The social safety nets of industrialized economies, including the United States, have frayed at the edges. Soon the safety net’s fabric will snap. This recognition is not an opinion. Rather, it’s a matter of basic arithmetic. The economy cannot sustain the government obligations that have been piled up upon it over the last 70 years.

“Better than Goldilocks” “Markets make opinions,” goes the old Wall Street adage.  Indeed, this sounds like a nifty thing to say.  But what does it really mean? Perhaps this means that after a long period of rising stocks prices otherwise intelligent people conceive of clever explanations for why the good times will carry on.  Moreover, if the market goes up for long enough, the opinions become so engrained they seek to explain why stock prices will go up forever.

On a warm Friday Los Angeles morning in spring of 2016, we found ourselves standing at the busy corner of Wilshire Boulevard and South Figueroa Street. We were walking back to our office following a client wire brushing for events beyond our control. But we had other thoughts on our mind.

What Constitution? One of the many downfalls of being the United States Secretary of the Treasury is the requirement to place one’s autograph on the face of the Federal Reserve’s legal tender notes. There, on public display, is an overt record of a critical defect.  A signature endorsement of a Federal Reserve note by the Treasury Secretary represents their personal ratification of unconstitutional money.

All remaining doubts concerning the place the U.S. economy and its tangled web of international credits and debts is headed were clarified this week. On Monday, Mark Yusko, CIO of Morgan Creek Capital Management, told CNBC that:

Many of today’s economic troubles are due to a fantastic guess. That the wealth effect of inflated asset prices would stimulate demand in the economy. The premise, as we understand it, was that as stock portfolios bubbled up investors would feel better about their lot in life.

Disproportionate Rewards. The International Monetary Fund reported an unpleasant outlook for the U.S. economy on Wednesday.  The IMF, as part of its annual review, believes the U.S. economic model isn’t working as well as it could to generate shared income growth.

Dear Mr. Dudley, Your recent remarks in the wake of last week’s FOMC statement were notably unhelpful. In particular, your explanation that further rate hikes are needed to prevent crashing unemployment and rising inflation stunk of rotten eggs.

Mass Infusions of New Credit. “The bank is something more than men, I tell you.  It’s the monster.  Men made it, but they can’t control it.” – John Steinbeck, The Grapes of Wrath. Something strange and somewhat senseless happened this week. On Tuesday, the price of gold jumped over $13 per ounce. This, in itself, is nothing too remarkable. However, at precisely the same time gold was jumping, the yield on the 10-Year Treasury note was slip sliding down to 2.15 percent.

One Ear to the Ground, One Eye to the Future Treasury yields are attempting to say something. But what it is exactly is open to interpretation. What’s more, only the most curious care to ponder it. Like Southern California’s obligatory June Gloom, what Treasury yields may appear to be foreshadowing can be somewhat misleading.

It’s been a long row to hoe for most workers during the first 17 years of the new millennium. The soil’s been hard and rocky. The rewards for one’s toils have been bleak.For many, laboriously dragging a push plow’s dull blade across the land has hardly scratched enough of a rut in the ground to plant a pitiful row of string beans. What’s more, any bean sprouts that broke through the stony earth were quickly strangled out by seasonal weeds.

Somehow, former Federal Reserve Chairman Ben Bernanke found time from his busy hedge fund advisory duties last week to tell his ex-employer how to do its job.  Namely, he recommended to his former cohorts at the Fed how much they should reduce the Fed’s balance sheet by.  In other words, he told them how to go about cleaning up his mess.

We stepped out on our front stoop Wednesday morning and paused to take it all in. The sky was at its darkest hour just before dawn. The air was crisp. There was a soft coastal fog. The faint light of several stars that likely burned out millennia ago danced just above the glow of the street lights.

Economic nonsense comes a dime a dozen. For example, Federal Reserve Chair Janet Yellen “think(s) we have a healthy economy now.” She even told the University of Michigan’s Ford School of Public Policy so earlier this week. Does she know what she’s talking about?

“May you live in interesting times,” says the ancient Chinese curse. No doubt about it, we live in interesting times. Hardly a day goes by that we’re not aghast and astounded by a series of grotesque caricatures of the world as at devolves towards vulgarity. Just this week, for instance, U.S. Representative Maxine Waters tweeted, “Get ready for impeachment.”

Something both unwanted and unexpected has tormented western economies in the 21st century. Gross domestic product (GDP) has moderated onward while government debt has spiked upward. Orthodox economists continue to be flummoxed by what has transpired.

What will President Trump and Japanese Prime Minister Shinzo Abe talk about when they meet later today? Will they gab about what fishing holes the big belly bass are biting at? Will they share insider secrets on what watering holes are serving up the stiffest drinks? [ed. note: when we edited this article for Acting Man, the meeting was already underway]

There was, indeed, a time when clear thinking and lucid communication via the written word were held in high regard. As far as we can tell, this wonderful epoch concluded in 1936. Everything since has been tortured with varying degrees of gobbledygook.

The U.S. dollar, as measured by the dollar index, has generally gone up since mid-2014. The dollar index goes up when the U.S. dollar gains strength (value) against a basket of currencies, including the euro, yen, pound, and several others. Conversely, the dollar index goes down when the U.S. dollar loses value.

“You boys know what makes this bird go up? Funding makes this bird go up. That’s right. No bucks, no Buck Rogers.” – Gordon Cooper and Gus Grissom, The Right Stuff (film). Things are looking up for the United States economy in 2017. You can just feel it. Something great is about to happen.

Jack Ma is an amiable fellow. Back in 1994, while visiting the United States he decided to give that newfangled internet thing a whirl. At a moment of peak inspiration, he executed his first search engine request by typing in the word beer.

Today’s a day for considering new hopes, new dreams, and new hallucinations. The New Year is here, after all. Now is the time to turn over a new leaf and start afresh. Naturally, 2017 will be the year you get exactly what’s coming to you. Both good and bad. But what else will happen?

Swing voters are a fickle bunch. One election they vote Democrat. The next they vote Republican. For they have no particular ideology or political philosophy to base their judgment upon.

Despite the best efforts of the bulls to make history happen, they’ve been unable to ‘git-r-done.’ At the time of this writing, the Dow is facing another bout of arrested development; it has yet to notch 20,000 for the very first time.

Juiced, Stimulus, in a general sense, is something that causes an action or response. A ringing alarm clock may prompt someone to exit their slumber. Or a fist to the gut may force someone to gasp for breath.

These days everything must be smart. There are smart cities, smart grids, smart policies, smart TVs, smart cars, smart phones, smart watches, smart shoes, and smart glasses. There’s even something called smart underwear. Before long everything around us will be so smart we’ll no longer have to do one critically important thing. We’ll no longer have to think; smart algorithms will think for us. What’s more, the possibilities for not thinking are seemingly limitless.

Some Monday mornings are better than others. Others are worse than some. For one Amazon employee, this past Monday morning was particularly bad. No doubt, the poor fellow would have been better off he’d called in sick to work. Such a simple decision would have saved him from extreme agony. But, unfortunately, he showed up at Amazon’s Seattle headquarters and put on a public and painful display of madness.

“Myths and legends die hard in America,” remarked Hunter S. Thompson in The Great Shark Hunt, nearly 40-years ago. These great myths and legends of America died long ago. Freedom. Liberty. Independence. Limited representative government. Sound money. Private property rights. All getting more and more replaced by regulation.

Corporate life in America these days is fraught with tedium. First the MBAs imposed their silly six sigma processes and reduced workers to mere widgets. Then the regulators went through and squashed out any fun that remained.

The American populace counts down to Election Day with impatient intent. Will their party man occupy the White House come January 21, 2017? Or will their party woman occupy a federal prison cell? These are questions that only the good wisdom of time can answer. Here at the Economic Prism we watch with indifferent curiosity. We don’t think either candidate’s worthy of high office. But we’re eager to know the election outcome, nevertheless.

“Markets make opinions,” says the old Wall Street adage. Perhaps what this means is that when stocks are going up, many consider the economy to be going great. Conversely, when stocks tank it must be because the economic sky is falling.

Several ill-defined economic data points were unveiled this week. Namely, the Labor Department’s July consumer price index report. According to the government data, on whole, consumer prices for the month didn’t change one iota. In reality, the CPI is so distorted and disfigured it doesn’t really tell us much that’s useful. Empirical experience and common sense are much better indicators of inflation and deflation. What’s more, you don’t have to assign a number to it.

Finding and filling gaps in the market is one avenue for entrepreneurial success. Obviously, the first to tap into an unmet consumer demand can unlock massive profits. But unless there’s some comparative advantage, competition will quickly commoditize the market and profit margins will decline to just above breakeven.

Mad as a Hatter. Somewhere, someone first said “bull markets don’t die of old age.” We suppose this throwaway phrase was first uttered in a time and place much like today. That is, in the midst of a protracted bull market where stock prices had detached from the assets and earnings of companies their shares represent claim to.

Hyperventilating Minds “What has been will be again, what has been done will be done again; there is nothing new under the sun,” explained Solomon in Ecclesiastes, nearly 3,000 years ago. Perhaps the advent of negative yielding debt would have been cause for Solomon to reconsider his axiom. We can only speculate on what his motive would be.

Asset Price Levitation One of the more preposterous deeds of modern central banking involves creating digital monetary credits from nothing and then using the faux money to purchase stocks. If you’re unfamiliar with this erudite form of monetary policy this may sound rather fantastical.

Consequences of Central Bank Policies The existing capital stock continues to be frittered away at the expense of savers and retirees. Nonetheless, central bankers don’t give a doggone about it. This, after all, is one consequence of roughly eight years of near zero interest rate policy.

  Winners and Quitters Vince Lombardi, the famous American football coach, once said, “Winners never quit and quitters never win.”  Maybe he meant that winners overcome obstacles to reach their goals while quitters give up and fall short… or somethin…

On Wednesday, Janet Yellen pressed on the broken buttons again. After the two day FOMC meeting, the Fed Chair announced they’d continue pressing the federal funds rate down to just a ¼ to ½ percent – effectively zero. What type of insanity is this?
If she keeps it up, and whole thing doesn’t implode, the yield on the 10-Year Treasury note could also slip below zero…along with the hopes and dreams of three generations of retirees.

  Beyond Human Capacity Distilling down and projecting out the economy’s limitless spectrum of interrelationships is near impossible to do with any regular accuracy.  The inputs are too vast.  The relationships are too erratic.   The economy – comple…

  Seven Year Achievement   “Read the directions and directly you will be directed in the right direction.” — Lewis Carroll   See? It’s easy Janet! Just read the directions! Illustration credit: Walt Disney   U.S. consumers are at it again.  After a s…

  Tesla Goes Fishing Tesla Motors is up to something remarkable.  But what it is, exactly, is unclear.  According to the Tesla Motors website, the company’s mission is: to accelerate the world’s transition to sustainable transport.   Tesla Model 3: t…

The fundamental problem facing today’s economy is the barefaced contempt governments the world over have for the free exchange of goods and services and private stewardship of property.
What it is government’s think they are doing with their destructive fiscal and monetary policies is unclear. But what is crystal clear is the scrambled disorder modern day economic policies have wrought.

  Hazards and Benefits Rubbernecking at the economic train wreck of central planners is not without hazard.  A strained collar and dry eyes, for instance, are common perils.  So, too, is the lasting grimace of disbelief that comes with the roll-out o…

The Fed’s monetary policies have made funding share buybacks and dividend payments with borrowed money an attractive management tactic. In the face of stalling business prospects, these short-term gimmicks can make business operations appear healthy.

  Stampeding Animals The mass impulse of a cattle stampede can be triggered by something as innocuous as a blowing tumbleweed.  A sudden startle, or a perceived threat, is all it takes to it set off.  Once the herd collectively begins charging in one…

  Intel Employees Get RIF’d Dark storm clouds gather along the economic horizon.  They multiply ominously with each passing day.  The recovery, weak as it has been, has run for nearly seven years.  Now it appears to be sputtering and stalling out.   …

What’s up with U.S. consumers? They seem to have come to their senses at the worst possible time. They can no longer be counted on to push economic growth up and to the right. Specifically, they’re not spending money on stuff.A little public service on etymology: “Double whammy” was reportedly first used in a 1941 Oakland Tribune article related to boxing. It means a devastating blow, setback or catastrophe. In today’s economy, it often means “good summary”.

  Faux Growth Recovery Nearly 7 years have elapsed since the official end of the Great Recession.  By now it’s painfully obvious the rising tide of economic recovery has failed to lift all boats.  In fact, many boats bottomed out on the rocks in earl…