Category Archive: 5) Global Macro

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The Only Way to Get Ahead Now Is Crazy-Risky Speculation

2021-04-23

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2021-04-23

Security Brokers and Dealers, 1960-2020
It's all so pathetic, isn't it? The only way left to get ahead in America is to leverage up the riskiest gambles. It's painfully obvious that the only way left to get ahead in America is crazy-risky speculation, but nobody seems to even notice this stark and stunning reality. Why are people piling into crazy-risky bets on speculative vehicles like Gamestop and Dogecoin?

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If You Don’t See Any Risk, Ask Who Will “Buy the Dip” in a Freefall?

2021-04-20

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2021-04-20

Nobody thinks a euphoric rally could ever go bidless, but as Greenspan belatedly admitted, liquidity is not guaranteed. The current market melt-up is taken as nearly risk-free because the Fed has our back, i.e. the Federal Reserve will intervene long before any market decline does any damage.

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Weekly Market Pulse: The Market Did What??!!

2021-04-19

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2021-04-19

One of the most common complaints I hear about the markets is that they are “divorced from reality”, that they aren’t acting as the current economic data would seem to dictate. I’ve been in this business for 30 years and I think I first heard that in year one. Or maybe even before I decided to lose my mind and start managing other people’s money. Because, of course, it has always been this way.

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America’s Fatal Synergies

2021-04-19

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2021-04-19

America's financial system and state are themselves the problems, yet neither system is capable of recognizing this or unwinding their fatal synergies. why do some systems/states emerge from crises stronger while similar systems/states collapse?

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What’s Taboo? Everything Except Greed

2021-04-16

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2021-04-16

OK, now I get it. Take a couple tabs of Euphorestra and Hopium, and stick to talking about making money in the market. Greed won't offend anyone. So I started to tell my buddy about my new screenplay idea: "There's a global pandemic, and when they rush a bunch of vaccines to market, then...."

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The Middle Class Has Finally Been Suckered into the Casino

2021-04-15

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2021-04-15

The Fed's casino isn't just rigged; it's criminally unstable. The decay of America's middle class has been well documented and many commentators have explored the causal factors. The bottom line is that this decay isn't random; the income of the middle class isn't going to suddenly increase at 15 times the growth rate of the income of the top 0.1%. (see chart below) The income of the top 0.1% grew 15 times faster than the incomes of the bottom 90%...

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The “Helicopter Parent” Fed and the Fatal Crash of Risk

2021-04-14

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2021-04-14

Margin Accounts at Brokers and Dealers, 1960-2020
All the risks generated by gambling with trillions of borrowed and leveraged dollars didn't actually vanish; they were transferred by the Fed to the entire system. The Federal Reserve is the nation's Helicopter Parent, saving everyone from the consequences of their actions.

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Is a Cultural Revolution Brewing in America?

2021-04-13

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2021-04-13

The lesson of China's Cultural Revolution in my view is that once the lid blows off, everything that was linear (predictable) goes non-linear (unpredictable). There is a whiff of unease in the air as beneath the cheery veneer of free money for almost everyone, inequality and polarization are rapidly consuming what's left of common ground in America.

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Weekly Market Pulse: Nothing To See Here. No, Really. Nothing.

2021-04-12

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2021-04-12

The answer to the question, “What should I do to my portfolio today (this week, this month)? is almost always nothing. Humans, and especially portfolio managers, have a hard time believing that doing nothing is the right response….to anything…or nothing. We are programmed to believe that success comes from doing things, not not doing things.

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Real Dollar ‘Privilege’ On Display (again)

2021-04-08

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2021-04-08

Personal Income, 2014-2021
Twenty-fifteen was an important yet completely misunderstood year. The Fed was going to have to become hawkish, according to its models, yet oil prices crashed and the dollar continued to rise. Both of those things were described as “transitory” by Janet Yellen, and that they were helpful or positive (rising dollar means cleanest dirty shirt!), but domestically American policymakers’ clear lack of conviction and courage about that rate hike regime...

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Don’t Be the Victim of These 20 IRA Mistakes

2021-04-06

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2021-04-06

Hey! It’s just an IRA. What is there to know? You put money in and it’s a tax deduction, you get to take it out after 59 ½ without paying a penalty, and at 72 the IRS makes you take some out. What else could there be? In reality, there’s a lot more.

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Weekly Market Pulse: Buy The Rumor, Sell The News

2021-04-05

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2021-04-05

There’s an old saying on Wall Street that one should “buy the rumor, sell the news”, a pithy way to express the efficient market theorem. By the time an event arrives, whatever it may be, the market will have fully digested the news and incorporated it into current prices. And then the market will move on to anticipating the next event, large or small. What prompts this review of Wall Street folk wisdom is the most recent employment report.

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What’s Changed and What Hasn’t in a Tumultuous Year

2021-04-05

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2021-04-05

Inequality is America's Monster Id, and we're continuing to fuel its future rampage daily. What's changed and what hasn't in the past year? What hasn't changed is easy: 1. Wealth / income inequality is still increasing. (see chart #1 below) 2. Wages / labor's share of the economy is still plummeting as financial speculation's share has soared. (see chart #2 below)

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Our “Wealth”: Cloud Castles in the Sky

2021-04-04

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2021-04-04

Buyers know there will always be a greater fool willing to pay more for an over-valued asset because the Fed has promised us it will always be the greater fool. I realize nobody wants to hear that most of their "wealth" is nothing more than wispy Cloud Castles in the Sky that will dissipate in the faintest zephyr, but there it is: that which was conjured out of thin air will return to thin air.

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The UFO/Fed Connection

2021-04-02

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2021-04-02

M2 Money Stock, 1960-2020
Perhaps the aliens' keen interest in Earth's central bank magic and its potential for destruction results from a wager. You've probably noticed the recent uptick in UFO sightings and video recordings from aircraft of the extraordinary flight paths of these unidentified objects.

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Health, Wealth and What Kills Most of Us

2021-03-29

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2021-03-29

If health is wealth, and it most certainly is the highest form of wealth, then we would be well-served to take charge of our health-wealth in terms of what behaviors we can sustainably modify.

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Spending Here, Production There, and What Autos Have To Do With It

2021-03-17

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2021-03-17

US Retail Sales, 2016-2021
While the global inflation picture remains fixed at firmly normal (as in, disinflationary), US retail sales by contrast have been highly abnormal. You’d think given that, the consumer price part of the economic equation would, well, equate eventually price-wise.

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Stimulus Addiction Disorder: The Debt-Disposable Earnings Pyramid

2021-03-16

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2021-03-16

The Debt - Disposable Earnings Pyramid
One glance at this chart explains why the status quo is locked on "run to fail" and will implode in a spectacular collapse of the unsustainable debt super-nova.. For those who suspect the status quo is unsustainable but aren't quite sure why, I've prepared a simple chart that explains the financial precariousness many sense.

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Looking Past Gigantic Base Effects To China’s (Really) Struggling Economy

2021-03-16

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2021-03-16

China Industrial Production, 1999-2021
The Chinese were first to go down because they had been first to shut down, therefore one year further on they’ll be the first to skew all their economic results when being compared to it. These obvious base effects will, without further scrutiny, make analysis slightly more difficult.

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