Category Archives: Financial markets

Why This Recession Is Different, by Charles Hugh Smith

Posted on September 12, 2022 | Leave a comment

This different recession is going to be a depression. From Charles Hugh Smith at oftwominds.com:

All of these are structural dynamics that won’t go away in a few months or years.

Let’s explore what’s different now compared to recessions of the past 60 years.

1. Deglobalization is inflationary. Offshoring production to low-cost countries imported deflation (product prices remained flat or declined) and boosted corporate profits.

Deglobalization will increase costs and pressure profits.

Just as cleaning up the environmental damage of rampant industrialization imposed costs on the U.S. economy in the 1970s that generated stagflation (inflation and stagnant growth), reshoring essential supply chains will impose costs, pushing prices higher.

Everything costs more in developed economies due to their high wages and social costs (pensions, healthcare, disability, etc.), high taxes, strict environmental standards and extensive regulations.

Consumers will pay more as supply chains are onshored / secured.

2. Energy will cost more. The price of oil and natural gas will fluctuate and could drop significantly as global demand drops, but in the long run the easy-to-access energy has been depleted and all energy will cost more.

Consumers will pay more regardless of where the goods and services come from

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Here It Comes, by James Howard Kunstler

Posted on September 10, 2022 | Leave a comment

Count the unvaxxed as lucky indeed. They’re not eligible for the new round of bivalent boosters, which were never tested on humans. Only the vaxxed get to line up. From James Howard Kunstler at kunstler.com:

Labor Day is in the rearview mirror and the long, sickening slide into we-know-not-what (but it can’t-be-good) commences! Well, there are a few things we know, but only in the shaggy outlines because the folks who are supposed to inform us — the news media, the public health gang — like to keep the real action behind a scrim of unicorns cavorting through a rainbow-lit candyland. Of course, we are not all the idiots they want us to be.

Here’s one thing we sort of know: you-all vaxx-happy Wokesters are about to have a new BA-5 bivalent booster laid on you. The Darwin Award season has been extended at least another six months! You’ll be glad to hear it’s been tested in a trial involving eight lab mice, and quickly approved by our FDA. The bad news is that all eight mice got Covid. The worse news is that the booster was wildly inconsistent in producing antibodies among the eight identical mice, meaning the ultimate effect on their immune systems is a crap-shoot — but, hey, they’re only mice.

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Inflation: State-Sponsored Terrorism, by Jeff Diest

Posted on September 8, 2022 | Leave a comment

Inflation is theft, which makes it criminal. It takes money from the productive and stealthily transfers it to the government and its cronies. From Jeff Diest at mises.org:

I. Introduction

Remember the quaint old days of 2019? We were told the US economy was in great shape. Inflation was low, jobs were plentiful, GDP was growing. And frankly, if covid had not come along, there is a pretty good chance Donald Trump would have been reelected.

At an event in 2019, my friend and economist Dr. Bob Murphy said something very interesting about the political schism in this country. He said: If you think America is divided now, what would things look like if the economy was terrible, if we had another crash like 2008?

Well, we might not have to imagine such a scenario much longer.

If you think Americans are divided today, and at each other’s throats—metaphorically, but more and more literally—imagine if they were cold and hungry!

Imagine if we had to live through something like Weimer Germany, Argentina in the 1980s, Zimbabwe in the 2000s, or Venezuela and Turkey today? What would our political and social divisions look like then?

Ladies and gentlemen, we live under the tyranny of inflationism. It terrorizes us, either softly or loudly. I suspect it will get a lot louder soon.

As the late Bill Peterson explained, “Inflationism, in today’s terms, is deficit-spending, deliberate credit expansion on a national scale, a public policy fallacy of monumental proportions, of creating too much money that chases too few goods. It rests on the ‘money illusion,’ a widespread confusion between in­come as a flow of money and income as a flow of goods and services—a confusion between ‘money’ and wealth.”

Inflationism is both a fiscal and monetary regime, but its consequences go far beyond economics. It has profound social, moral, and even civilizational effects. And understanding how it terrorizes us is the task today.

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Posted in Banking, Debt, Economics, Economy, Financial markets, Governments, Taxes

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The Clowns of Winter Harry the UK Down, by Tom Luongo

Posted on September 5, 2022 | 1 comment

The British have a new Prime Minister who may be an even bigger bozo than Boris Johnson. From Tom Luongo at tomluango.me:

All I hear is that lonesome sound
The Hounds of Winter
They harry me down
— Sting

By a narrow margin Boris Johnson’s clownish Defense Minister Liz Truss will become the next Prime Minister of the United Kingdom. She doesn’t have a lot of time to put together a government lest the U.K. have to suffer through yet another general election.

Truss, by virtue of her full-throated support for Ukraine against Russia, was the choice of those Tories committed to maintaining the UK’s relationship with the US, leaving it nominally more independent from the European Union.

Davos man-child Rishi Sunak, the darling of the Remainers of City of London the true hounds of winter here, failed to overtake Truss in the end. What started as a Davos-style decapitation of Johnson, who rightfully deserves to be jailed for his undermining Russian/Ukrainian peace talks in April, ended with the female version of him in office.

While I’d like to say I’m happy to see Davos lose another major conflict in Europe, empowering the US neoconservatives is not a win here. In the end, the deep ties between the US and UK intelligence and military services won out in the Tory leadership battle.

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Posted in Economy, Energy, Financial markets, Geopolitics, Governments

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Stock Selloff, Collapse of Cryptos, Meme Stocks & SPAC/IPO Zombies Bringing Day Traders Back into the Labor Force? By Wolf Richter

Posted on September 3, 2022 | Leave a comment

The Wall Street party is over and some who thought they had gotten rich quickly are now looking for real work. From Wolf Richter at wolfstreet.com:

Interesting stuff happening in the labor market, suddenly.

Employers added 315,000 workers to their payrolls in August, and 1.13 million over the past three months – solid growth.

Households reported that the number of working people in regular jobs or self-employed jumped by 442,000 in August, after having been essentially flat for months. There have been indications that aggressive hiring by employers pulled some self-employed workers out of self-employment and onto regular payrolls. Hence the sharp increase in payrolls and the more slowly growing overall number of working people.

Wages rose again, but a tad less sharply. The number of unemployed people actively looking for work ticked up from July, but July had been the lowest level since the year 2000 at the peak of the dotcom bubble.

The biggest movements were the jumps in the labor force, in the labor force participation rate, and in the prime-age labor force participation rate, a welcome turn in a labor market pressured by demand for labor and labor shortages.

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It Will Happen Suddenly, by Jeff Thomas

Posted on August 29, 2022 | Leave a comment

Our impending collapse will happen quickly. From Jeff Thomas at internationalman.com:

As the Great Unravelling progresses, we shall be seeing many negative developments, some of them unprecedented.

Only a year ago, the average person was still hanging on to the belief that the world is in a state of recovery, that, however tentative, the economy was on the mend.

And this is understandable. After all, the media have been doing a bang-up job of explaining the situation in a way that treats recovery as a general assumption. The only point of discussion is the method applied to achieve the recovery, but the recovery itself is treated as a given.

However, as thorough a distraction as the media (and the governments of the world) have provided, the average person has begun to recognise that something is fundamentally wrong. He now has a gut feeling that, even if he is not well-versed enough to describe in economic terms what is incorrect in the endless chatter he sees on his television, he now senses that the situation will not end well.

I tend to liken his situation to someone who suddenly finds all the lights off in his house. He stumbles around in the dark, trying to feel his way. Although he can picture in his mind what the layout of his house is, he is having trouble navigating, often bumping into things. This is similar to the attempt to see through the media and government smokescreens during normal times.

But soon, as his government undergoes collapse, he will be getting some bigger surprises. He will find that the furniture has inexplicably been moved around. Objects are not where they are supposed to be, and it is no longer possible to reason his way through the problem of navigating in the dark.

Many of those who observe the daily news reports are beginning to figure out that they are being fed misinformation. Many are beginning to recognise that neither political party truly represents them or, for that matter, is even concerned for their welfare.

These folks are now navigating in the dark.

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The End is Nearing: A World Slowly/Openly Turning Away from the USD, by Matthew Piepenburg

Posted on August 28, 2022 | Leave a comment

The U.S. is managing to throw away a colossal advantage it held in global affairs: the world’s reserve currency. From Matthew Piepenburg at goldswitzerland.com:

With the USD losing influence, it would be the understatement of the year to say that we live in interesting times, for we certainly do.

But despite the inevitable attacks of appearing sensational, un-American or just plain cynical, I feel a more appropriate phrase boils down to this:

“We live in dishonest times.”

Below, I bluntly address the “Fed pivot debate,” the “inflation debate” and the USD’s slow global decline in the setting of a now multi-FX new normal in which gold’s historical bull market has yet to even begin.

These views are not based on biased politics, but honest economics, which for some odd reason, ought to still matter.

Let’s dig in.

The New Normal: Open Dishonesty

I recently authored a report showcasing a string cite of empirically open lies which now pass for reality on everything from the CPI inflation scale to the Cleveland Fed’s +1 real interest rate myth, or from official unemployment data to the now comical (revised) definition of a recession.

But a more recent lie from on high comes directly from the highest of all, U.S. President Joe Biden.

Earlier this month, Biden waddled to his podium and prompt-read to the world that the US just saw 0% inflation for the month of July.

Oh dear . . .

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Posted in Banking, Business, Currencies, Debt, Economy, Financial markets, Geopolitics, Governments

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Beware Of Markets Full Of Fool’s Gold, by Egon von Greyerz

Posted on July 14, 2022 | Leave a comment

There’s fools’ gold, and then there’s the real thing. From Egon von Greyerz at goldswitzerland.com:

Fool’s Gold comes in many guises, whether it is in fake paper money, Ponzi investment schemes, fake and manipulated gold derivatives, Bitcoin or just fake gold discoveries in Uganda, all of which are discussed in this article.

‘The tendency of an inconvertible paper money is to create fictitious wealth, bubbles, which by their bursting, produce inconvenience.’ – Lord Liverpool 1810 (UK Prime Minister 1812-27)

The elegant and understated courtesy of the English is well known. “Inconvenience” is for an early 19th century aristocrat what a modern Englishman today would call “bloody mess.“

Confucius described this trait already 2,500 years ago:

“The noble-minded are calm and steady. Little people are forever fussing and fretting.” – Confucius

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Twitter Just Lost Its Last Chance To Remain Relevant, by Tyler Durden

Posted on July 10, 2022 | Leave a comment

The Twitter story has been extensively covered so SLL has ignored it. However, this is a unique and first-rate analysis of Twitter, Big Tech, and the implications of Elon Musk’s abandoned bid for the company. From Tyler Durden at zerohedge.com:

After months of drama, it would appear the fate of social media giant Twitter has been decided, and the result is an inevitable path to the internet graveyard.

Many people will question the notion that Twitter could ever actually bite the dust, but they are probably unfamiliar with the company’s dismal performance as of late.  The reality is, Elon Musk’s potential buyout was their last chance to stay afloat; now that Musk has exited the deal, they face a continued and steady decline into irrelevance like many other Big Tech companies before them.

While it’s possible that Musk’s decision is merely a play for a reduced sale price, it’s probably safe to assume there is not going to be a purchase anytime soon.  This sets a chain of events in motion that bode very poor for Twitter given their track record the past couple of years, but first let’s consider the current situation.

While the initial argument from Twitter execs will be that Musk “waived” his rights to change the original deal and thus he is required to buy regardless, his waiver does not extend to his rights to review Twitter’s claims about their user base.  The deal itself was predicated on Twitter giving honest assessments of the percentage of users that are actually bots (fake accounts).  Twitter initially claimed that bots only made up around 5% of users; it would appear that Musk has discovered this to be false, and this is the position his lawyers have asserted through the SEC.

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Posted in Business, Financial markets, Investing, Politics, Technology

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China Queues Up to Join the Davos Beatdown, by Tom Luongo

Posted on July 7, 2022 | Leave a comment

The Davos set is intent on destroying Europe, and it looks like they’re doing a pretty good job. From Tom Luongo at tomluongo.me:

The headlines are full of abject terror that Germany’s vaunted industrial base can collapse, and with it the banking sector, if Russia pulls all natural gas supplies.

Of course, this is exactly what the EU said they wanted, and the question now is will they get it, to quote H.L. Mencken, “good and hard.”

So, finally, after destroying their own economy, the politicians in Europe are considering the right question, “Did we do this to ourselves?”

The Euro’s collapse this morning to a new twenty-year low below $1.03 is answering a resounding, “Yes. Yes you did.” I’m sure the board at Uniper, now staring at a $9+ billion bailout after Vice-Chancellor Robert Haebeck and the rest of his Green/Neocon zealots destroyed their investment in the Nordstream 2 pipeline, would agree with the market.

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Posted in Banking, Business, Financial markets, Foreign Policy, Geopolitics, Governments, Politics, Propaganda

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