Category Archive: 5) Global Macro

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What’s Your Line in the Sand? The $25 Burger?

2022-12-22

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2022-12-22

The gag reflex kicks in at some point and we walk away because it is no longer worth the price. Everyone has a line in the sand when it comes to inflated prices they refuse to pay. For one Walmart shopper I observed, it was a carton of eggs for close to $10. She announced her line in the sand verbally, with great force and sincerity.

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Weekly Market Pulse: Happy Holidays

2022-12-20

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2022-12-20

We received a host of economics reports this past week; some good, others not so much. The week started with the Consumer Price Index report coming in better than expected at an increase of just 0.1% from the previous month (7.1% from a year ago), compared with respective estimates of 0.3% and 7.3%.

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A Great Madness Sweeps the Land

2022-12-19

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2022-12-19

Those who see the madness for what it is have only one escape: go to ground, fade from public view, become self-reliant and weather the coming storm in the nooks and crannies. A great madness sweeps the land. There are no limits on extremes in greed, credulity, convictions, inequality, bombast, recklessness, fraud, corruption, arrogance, hubris, pride, over-reach, self-righteousness and confidence in the rightness of one's opinions.

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Monopolies and Cartels Are "Communism for the Rich"

2022-12-15

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2022-12-15

What's unfettered in America is "Communism for the Rich" and the normalization of corruption that results from the auctioning of political power to protect monopolies and cartels. The irony of constantly being accused of being a communist is rather rich.

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The Blowback from Stripmining Labor for 45 Years Is Just Beginning

2022-12-13

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2022-12-13

The clueless technocrats are about to discover that unfairness and exploitation can't be measured like revenues and profits, but that doesn't mean they're not real. Economists and financial pundits tend to make a catastrophically flawed assumption.

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Weekly Market Pulse: Envy

2022-12-12

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2022-12-12

Legendary investor and Berkshire Hathaway vice-chair Charles Munger recently stated: “The world is not driven by greed.

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How Things Fall Apart

2022-12-12

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2022-12-12

That's how things fall apart: insiders know but keep their mouths shut, outsiders are clueless, and the decay that started slowly gathers momentum as the last of the experienced and competent workforce burns out, quits or retires. Outsiders are shocked when things fall apart. Insiders are amazed the duct-tape held this long.

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The Monopoly – Labor "Let It Rot" Death Spiral

2022-12-08

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2022-12-08

The only rational response to this reality is to opt out, lay flat and let it rot. In my previous post, The Bubble Economy's Credit-Asset Death Spiral, I described the self-reinforcing feedback of expanding credit and soaring asset valuations and how the only possible result of this financial perpetual motion machine was a death spiral of collapsing debt service, collateral and credit impulse.

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The Bubble Economy’s Credit-Asset Death Spiral

2022-12-06

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2022-12-06

Who believed that central banks' financial perpetual motion machine was anything more than trickery designed to generate phantom wealth? Central banks seem to have perfected the ideal financial perpetual motion machine: as credit expands, money pours into risk assets, which shoot higher under the pressure of expanding demand for assets that yield either hefty returns (junk bonds) or hefty capital gains as the soaring assets suck in more capital...

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This Is of Course Insane

2022-12-01

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2022-12-01

Greed is a powerful motivation to be an ardent believer in the central banking cult. The ideal cult convinces its followers that it isn't a cult, it's simply the natural order of things.In current terms, this normalizes insane behaviors and beliefs. Sacrificing youth to appease the gods isn't a cult; it's simply the natural order of things.

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The "Oil Curse" and Splashy PR Announcements of Oil Production Cuts

2022-11-29

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2022-11-29

It's not just the price of oil that matters: how much disposable income consumers have left to buy more goods and services matters, too. The Oil Curse (a.k.a. The Resource Curse) refers to the compelling ease of those blessed with an abundance of oil/resources to depend on that gift for the majority of state/national revenues.

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Weekly Market Pulse: Currency Illusion

2022-11-28

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2022-11-28

When we think about the challenges facing an investor today, the big problems, the things we worry about that could cause a lot more harm than some interest rate hikes, are mostly outside the United States. China is prominent this weekend because of demonstrations against their zero COVID policies. The Chinese people appear to be pretty well fed up with the endless lockdowns and have finally decided to try and do something about it. Unfortunately,...

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The Uncertainty in China Is Kryptonite to Global Markets

2022-11-28

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2022-11-28

Few seem alive to the potentially consequential financial risks arising from uncertainties evolving in China. One thing we know rather definitively is that markets don't like uncertainty: uncertainty is Kryptonite to markets. Another thing we know is that the events unfolding in China are generating uncertainty on multiple levels.

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There’s No Bottom Until Frenzied Speculation Turns to Dust

2022-11-21

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2022-11-21

Only when speculative sizzle attracts no buyers / marks will the bottom be in. There hasn't been a truly organic bottom in stocks in decades. Fifteen years of relentless central bank manipulation since the 2008-09 Global Financial Meltdown has persuaded punters that central banks will always save us should the market turn down because relentless central bank suppression of interest rates and expansion of liquidity (a.k.a. free money for financiers)...

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FTX: The Dominoes of Financial Fraud Have Yet to Fall

2022-11-20

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2022-11-20

Once assets are revealed as worth far less than claimed, insolvency is the inevitable result. If you haven't plowed through dozens of post-collapse commentaries on FTX, I'm saving you the trouble: here's a distillation of what matters going forward. If you're seeking a forensic accounting of FTX, others have done this work already.

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The IRS Will Tax Less of an Estate in 2023

2022-11-17

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2022-11-17

In 2012, the American Taxpayer Relief Act (ATRA) established, for the first time, a permanent estate tax and gift tax exemption. The exemption is the amount an individual can pass on at death without paying estate taxes. The legislation set the exemption at $5 million per person, indexed for inflation.

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2023 Retirement Plan Contribution Limits

2022-11-15

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2022-11-15

Worried about saving enough for retirement? You can put away more next year. The IRS has just announced the new retirement plan contribution limits for 2023. The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan increases to $22,500, up from $20,500.

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Where Crypto Went Wrong

2022-11-15

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2022-11-15

You want to fix the world with finance? Then fix this: wages' share of a financialized, globalized, speculative-bubble dependent economy have been falling for decades. Fix this and you really will change the world. Anything less changes nothing.

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Weekly Market Pulse: Good News, Bad News

2022-11-14

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2022-11-14

One thing I can tell you for certain about last week’s big rally on Thursday and Friday: there were a lot of people who desperately wanted a good excuse to buy stocks. And buy they did after a better-than-expected CPI report Thursday morning, pushing the S&P 500 up nearly 6% on the week with all of that coming on Thursday and Friday.

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Asymmetries, Distortions and Denial

2022-11-14

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2022-11-14

When bubbles pop, it's natural selection at its most unforgiving: "adapt or die," and those who ignore or discount consequential asymmetries will have a very difficult time navigating the triage. After years of relative stability, it seems asymmetries, distortions and denial are playing out in unexpectedly destabilizing ways.

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