First Real Estate, Then Oil, Next is Food

The quantity of USDs in circulation has been growing at an accelerating rate since the JFK/LBJ Guns and Butter program. The bill came due when Nixon came along. One option was to cut spending and raise taxes to pay off the debt. Nixon took the other option and closed the gold window giving rise toContinue reading “First Real Estate, Then Oil, Next is Food”

Peak Population – Sow the Wind, Reap the Whirlwind

Chris Hamilton of Econimica shared two graphs reproduced above that summarize all we need to know about macro trends (see https://econimica.blogspot.com/2021/04/ever-fewer-people-need-ever-more.html). You don’t need the usual “talking head” on Squawk Box, or “insights” from some economist to explain the role of “economic slack”. It’s simple physics: wage-generating population (and, households), and money stock. All thereContinue reading “Peak Population – Sow the Wind, Reap the Whirlwind”

Dot Com 2.0

Per Tyler Durden: https://www.zerohedge.com/markets/non-profitable-companies-implode-amid-flashbacks-dot-com-crash At the start of February, when the dual short squeezes of option gamma and WallStreetBets meme stocks were all the rage, a chart from Goldman indexing non-profitable tech companies was making the rounds across Wall Street desk; it showed the sector’s tremendous ascent since the Fed’s panicked response to the covidContinue reading “Dot Com 2.0”

Hot Money, Unraveling Economy

On St. Patrick’s Day, Charles Hugh Smith succinctly summarized the melt-up of the US economy (https://www.oftwominds.com/blogmar21/dead-money3-21.html) In the era of widespread prosperity in the 1960s and 1970s, the velocity of money ratio remained in a band between 1.7 and 1.8, moving up toward 2 in the inflationary late 70s as it made sense to tradeContinue reading “Hot Money, Unraveling Economy”

Another Week, More Repo Madness

As discussed in Bloomberg: https://www.bloomberg.com/news/articles/2021-03-08/u-s-bond-traders-stung-by-selloff-eye-inflation-data-auctions “The 10-year and 30-year auctions on Wednesday and Thursday will be closely watched as litmus tests, with weak demand likely adding fuel to bearish sentiment,” TD Securities Inc. rates strategists Gennadiy Goldberg and Priya Misra in New York, wrote in a note to clients published Monday. “Note that the cheapeningContinue reading “Another Week, More Repo Madness”

Hull Breach

Tim Knight (Slope of Hope) enumerates the support breaches: https://slopeofhope.com/2021/03/index-omnibus.html#more-194173 With the giant reversal taking place today, let’s take a fresh look at some important indexes, in alphabetical order. First is the $COMP, the Dow Jones Composite. This cracked through its trendline on Friday, but it has sprung right back above it. We’ll see ifContinue reading “Hull Breach”

Chris Whalen on the 2025 Correction

When we compare Weimar Germany a century ago to Oligarch America today, it’s easy to get a sense of deja vu. So how does this play out? As always, Chris Whalen can explain: https://www.theinstitutionalriskanalyst.com/post/the-great-correction-of-2025 In this issue of The Institutional Risk Analyst, we focus on the global tendency toward inflation even as economists insist thatContinue reading “Chris Whalen on the 2025 Correction”

Monetary Politburo News

The “Martens” at Wall Street on Parade weighed in today on the dynamics of endless money creation: https://wallstreetonparade.com/2021/02/wall-street-sends-a-message-to-the-fed-we-have-run-out-of-places-to-stuff-your-treasuries/ The practical dynamics. As in “where all this sh___ goes” dynamics. Recall we have a monetary politburo for all sorts of reasons you likely heard before – bankers want to offload their liquidity risk onto the public,Continue reading “Monetary Politburo News”

27% of Household Income now comes from the Government

USBEA Personal Income and Outlays: https://www.bea.gov/news/2021/personal-income-and-outlays-january-2021 Let’s think in terms of a good news/bad news joke. Personal income increased $1,954.7 billion (10.0 percent) in January according to estimates released today by the Bureau of Economic Analysis (tables 3 and 5). Disposable personal income (DPI) increased $1,963.2 billion (11.4 percent) and personal consumption expenditures (PCE) increasedContinue reading “27% of Household Income now comes from the Government”

ZB – Free Fallin’

But what’s more important is that it is dropping while picking up velocity while realized volatility is also dropping. Connect the dots McFly. Or, let Evil Speculator do it for you: https://evilspeculator.com/the-pressure-cooker/ Mmm num ba deDum bum ba beDoo buh dum ba beh beh Pressure pushing down on mePressing down on you, no man askContinue reading “ZB – Free Fallin’”