Here are some Tweets that caught my eye today.
Heck of a Job
Many say we are in the early stages of a depression. The Nasdaq is 5% away from an all-time high. Those don’t seem mutually compatible. Heckuva Job, J-Po. Now could you brrring back those 35 million jobs and tamp down that ten prrrcent inflation showing in the Chapwood Index?
— Dave Collum (@DavidBCollum) May 18, 2020
35 million people out of work and the Nasdaq is 5% from a record high.
No Depression
“In a part of the interview that did not air, Powell said the unemployment rate could go even higher where it “could easily be in the 20s or 30s,” according to a CBS transcript”
Of all things, THAT stayed on the cutting room floor? A minor detail? REALLY? https://t.co/xTOQJc71MJ
— Danielle DiMartino Booth (@DiMartinoBooth) May 18, 2020
What Happens When the Money Runs Out?
Throw an extra $600 onto #unemployment benefits and send send $1200 checks, and YES, current #financial #conditions will improve as they are making more now than when working. However, what happens when the money runs out???? pic.twitter.com/qnTaLLpJKz
— Lance Roberts (@LanceRoberts) May 18, 2020
GDP Forecast
“Economists continue to downgrade their GDP growth forecasts. The latest consensus estimate suggests that during this quarter, the US economy will shrink by nearly a third.” – @SoberLook
In order to justify #stock #valuations please start using 2023 estimates. pic.twitter.com/NL3gIsJjmV— Lance Roberts (@LanceRoberts) May 18, 2020
More GDP Forecasts
Save for some estimates better than -30% (q/q ann. %), @NewYorkFed Nowcast of -31.1% & @AtlantaFed GDPNow of -42.8% are rough bookends for Wall Street’s Q2 GDP forecasts; which, for list below (updated on rolling basis), have clustered around median of -37% pic.twitter.com/hVCrEoNxYX
— Liz Ann Sonders (@LizAnnSonders) May 18, 2020
Just Imagine
https://twitter.com/NorthmanTrader/status/1262406304502558720
Lie and Truth of the Day
https://twitter.com/NorthmanTrader/status/1262159631113236482
Powell says GDP could drop 30%, but he doesn’t see another Depression.
He did not see GDP falling 30% either.
Powell says GDP could drop 30%, but he doesn’t see another Depression.https://t.co/pZKjLDmxKz
— Daniel Lacalle (@dlacalle_IA) May 18, 2020
The Fed never sees anything coming,
Retail Carnage
Retail carnage continues as @UBS estimates—due to rise of online shopping—nearly 100,000 stores will close over next 5 years @SoberLook pic.twitter.com/D26uD4qZK2
— Liz Ann Sonders (@LizAnnSonders) May 18, 2020
100,000 stores may close. Apparently this does not matter. Nothing does but printing. For now.
Mish
I worry so much for travel, retail, restaurants and entertainment. They have no chance unless we totally beat this virus. How is it that Iceland, New Zealand and Slovenia are so much better than us? Everyone I know refuses to spend despite the openings, including me. I’m saving an absurd amount this year on cancelled travel with groups of friends and family. Too much uncertainty, no confidence.
Think about, the Feds just said they will keep on printing money — market correlation to QE over 90% — its a easy solution (till the violins stop playing). Trump will have the benefit of having seen the stock market high and depression just before his election
Listen to the bell tolling. But yet the DJI jumps almost 1000 points on Monday. Huh??
Facebook Survey Shows 31% of Small Businesses Stopped Operating
May 18, 2020, 8:00 AM EDT
Ha, ha. Consider this. But first put your Malthusian hat on.
All those small businesses gotta be replace somehow. And that means the remaining, public stock businesses are swimming in the dough.
So we’re all good, right?
Overall stock market true value: I’m wondering whether the stock market, now that stocks are very equivalent to money, tries to be a measure of the value of all stuff people have now or will, in time, produce. Net. That is, less what’s converted to heat or rubble in the human-scale future.
How else would you measure the value of humanity?
If you can’t measure such a value, how do you know humanity is doing the right and/or best thing?
How do you measure whether “we” are on the right track?
You still need a unit to account the stock market with, that brings it down to a common understanding. That happens to be money, because an individual can cross relate the price of anything around him with the purported value of a stock. You cannot translate shares in boeing to the price of bread in the supermarket without that common denominator.
Without sound money, you cannot cross relate anything properly, even if the whole market is traded in stocks including your loaf of bread – because the market value between them, the immense amount of possible calculation of exchange, would not be feasible or practical. You want to trade a fraction of a share of boeing for some bread, you have to find out a series of equivalent transactions that tie a boeing share to bread that the market has accepted, and then what ? The baker has a share of boeing that he cannot relate to anything around without similar calculation. So you need that unit, and the unit is money.
You can buy stocks with it in the hope of their being worth a greater share of the money eventually, or you can buy bread, or you can just hold on to it.
By that measure, the “value of humanity” is what can be contributed to society in exchange for money. If people don’t want or like it, humanity does not buy it and so it has little worth.
Not all that is humanity is valued this way, though unfortunately there are always some who will try.
Roger that on money. Something to hold on to when the rest of the world is bobbing up and down in constantly surprising ways. We seem to feel better when we simply define “money” as that which we say doesn’t move. A fixed horizon. No sea-sickness. That sort of thing. And, in the end, it’s more efficient and honest if there is only one “money”.
The thing is, it appears that humanity is heading in to a transition with respect to what “money” is. I figure a zero percent chance “money” will mean the same thing in 2040 as it does now.
Anybody notice the 50%-of-stores-will-die for “Office supplies” in that graph? Anybody notice that their local Office Depot / Staples was a graveyard going in to C10?
My read is one or both of those outfits are doomed soonish. Shorting is not an option for anything but mad money. What’s the alternative best move?
“Shorting is not an option for anything but mad money.”
Historically, investors who shorted stocks in a crisis and won big, discovered that the rules were changed under their feet wiped them out.
Increase the money by orders of magnitude: the only sustainable solution.
Got Gold?
Got stocks?
Gold went down today, stonks went up.
That 10 trillion hasn’t been dropped yet. 3trillion out, 3 in the pipeline, and 3 when we figure out the other 2 didn’t work, round up a bit, and 10 trillion looks very doable. That’s quite a lot of dollars that will be looking for a home.
But how many Trillions in un-realized business profits,and more importantly, Real Estate Equity (commercial and residential) will VAPORIZE in the next 2-3 years? To me it seems that 10T will backfill a deflationary blackhole and not much else.
That won’t stop them from printing another 10 trillion. It’s on now. Nobody even MENTIONS the deficit any more.
Fed can buy the whole Mkt including stocks, bonds, RE ++ with mere 131 TRILLIONS on their balance sheet!
“However, what happens when the money runs out????”
…
Agitation.
Hope everyone paid attention to Kroger ending their “hero pay” bonus to workers (I think it was $2 / hr on top of regular pay). Got blasted by unions … and Kroger backed down a bit and offered bonuses.
A LOT of folks are going to get really used to that $600 a week (on top of regular state UE benefits) … and will clamor for it to continue. All the while many businesses – the foundation of economy – twist in the wind and can’t compete in the pay department.
Great Job Congress
Yup.
The vast majority of those jobs are NEVER going to come back.
The $600/week unemployment will soon morph into $2,400/month UBI.
CoronaBonds!
Hi Bam Man, how is the best way to play this? Hold physical gold and silver? No position in the stock market or ride the momentum? Limit cash for what is needed for transactions? Downsize house to “shelter” proportions? Have house mortgaged on a low fixed rate to the max or no mortgage at all? Thx!
When you have a billionaires club who are making all the profits, socializing any losses, are not paying taxes, and continue to troll the masses with statements about welfare and getting back to work who cares if you get sick and die….Did you think people were going to good with that forever? UBI, welfare, charity, call it whatever you want, people are finally getting it, the monetary ponzi, the free money, the Fed that can endlessly print, and now they think they can get their piece. Things are going to get really strange, prices are going to be all over the map. Eventually deflationary collapse, because eventually the money will get cut off.
Pay off your debts, horde cash, stay healthy, good luck.
Scott Pelley
Degree in Journalism … and it showed.
I always cringe at these interviews where interviewer is clueless and interviewee gets their message out without any pushback.
…
Jerome Powell
First time I’ve watched him closely. Underwhelmed. Way out of his league.
…
Interview
Nary a word on income / wealth disparity. Or debt burdening the bottom 80%. Powell praiseworthy of CARES Act … did not mention any warts at all (of which there are many) … and expects / wants more fiscal (nonsense).
My grind my teeth moment came when Powell talked how fedgov debt needs to be addressed at SOME point when economy humming and UE low, but now is not the time … segues into until 2 months ago economy was on solid footing … held my breath for Journalism major to pipe in with “if economy 2 months ago was great with low UE how come debt issue not addressed the past few years? … rather than running a $trillion deficit in most recent FY?” … but, alas
Almost seems like the media is supporting the wealthy. Or of course maybe the wealthy are supporting the media.
Apples to apples I guess.
Powell’s message last night is “ We got this but…we hope it doesn’t get worse because we may not.”
hmmm … I wonder who owns the media?
Or why did we need QE – whatever they were calling it in the fall and winter?
Tinfoil hat says it is all related but I can’t fathom someone being that evil.
It helps to have a board member of Moderna, Dr. Moncef Slaoui, named as the vaccine czar named on Friday.
The 156,000 Moderna stock options he holds of course is beyond discussion.
Even better. After today Moderna is doing a stock offering. Even they feel that their stock is overvalued, otherwise why sell? It’s insane.
All rise for Our Corporate Anthem
Foxes are running the hen houses!
Sucker bait of mind-boggling magnitude = behavioral economics.
It doesn’t matter whether it was because of ModeRNA (in business for 10 years and nothing approved YET) or Powell saying it will be bad for two years. (BTW When the market collapses, he can say, ‘Well, I warned you.’) Either way, the markets zoom.
Fiat debt, like fiat currency, has created a fantasy world that will persist as long as people believe in the fantasy. Substance and fundamentals no longer matter. Nothing can go wrong because the Fed will save us with more fiat debt.
I’d be interested in knowing what the big investors are doing–wanna bet they are quietly exiting as Robinhood buyers move in for the slaughter.
“Fiat debt, like fiat currency, has created a fantasy world that will persist as long as people believe in the fantasy.”
Period. End of story. Belief is the foundation of society.
I’d be interested in knowing what the big investors are doing–wanna bet they are quietly exiting as Robinhood buyers move in for the slaughter.”
One can keep on riding this ‘Hopium based Fed supported MKT by adding hedges(bear ETfs/MFunds) along the way, proportionately. This is tricky and NOT possible for many. One can play calls/puts on both directions also. In the net, Mkt will keep sliding down, but slowly! (been in the mkt since’82)
There will be series of W recoveries going no where. Big investors can buy options/derivatives to protect their posrfolios unlike the retail. Retail investors are always holding the bag, like 2000 and 2008!
Mish, if congress passes the $3T “HEROES” act and the Fed monetizes the whole damn thing, does that change your view on deflation?
no
Why? 3T is certainly just another one time deal, but how about 300T once the Fed is done?
There’s no limit to how much the Fed can print. If there’s a limit, who’s going to enforce it?
Enough ‘financial farts’ and it starts to smell really bad.
The 21st century definition of inflation:
Inflation: the stench from too much fiat debt chasing stocks and bonds
Who’s smelling this fart? Muppets don’t count
$300T would more than make up for debt destuction, hence lead to inflation. As would $30T, at least for now.
$3T, probably not. At this advance stage of universal national rot, the members of America’s leeching classes which The Fed is propping up, are probably out-destroying what little is left pf production, hence making up for it by burning seedcorn, at a greater rate than $3T/year. Again, at least for now.
At some point, as happened in Venezuela, there simply won’t be enough seedcorn left to steal from productive people and throw on the fire, to make way for the printing which enables the theft. Then, you’ll have inflation.
Exactly. Mish needs to explain deflation in the presence of unlimited Fed intervention. Otherwise it’s meaningless. Sure some companies will go bankrupt like JCPenney, but overall financial asset will be up, not down.
The $3T is merely a ‘3’ and zeroes on a balance sheet. That the price of that $3T is zero (zero interest rates) tells me the entire $3T is a financial fart.
Very little of that will actually go to the filthy poors. The rest will end up in accounts owned by people who already have more money than they could ever spend, and there it will sit.
Apparently, off camera, chairman Powell was overheard saying: the Corona virus saved our arzez, for now.
I don’t see how any of this is Powell’s fault. He actually tried to raise interest rates in order to have enough bullets left. Let’s blame the Fed for not seeing a global pandemic coming. Really ?
Don’t be distracted by the conveniently timed virus. The train was running at full tilt towards the collapsed bridge, months before the quite deliberate overreaction to cover it up.
Absolutely the timing of this bug is far too convenient to be an accident. If it weren’t for this “out break”. So many banking and corporate fat cats would be standing in front of congress begging for bailouts right now…instead they got perfectly “blame-free” money courtesy of the Miracle Microbe.
Jim Sinclair was on Greg Hunter’s USA Watchdog last week saying as much.
In Europe it fits well for some also, it seems to have allowed EU to overcome the barrier of debt mutualisation and direct transfer e.g.
The ECB gets a new lease on asset purchases also, just as previous rounds didn’t meet expectations or allow planned exit, all while the imbalances in EU reached new highs and the whole economy was tipping, including German.
You imagine the outrage if/when it is discovered that a part of the population (those born before 1950 basically) were murdered for this. Unimaginable, but it is known there are people who would do this.
Add to that that some of the staging is very amateurish, particularly the vaccine push and how some national authorities tie into it.
I leave it at that because we are guessing, but personally I only find that perception reinforced as time goes by.
Powell was QEing and lowering rates again back in September. We were about to see another blowout of the FED created everything bubble with or without COVID-19. It gave them a fine excuse though for another massive bailout.
Lowering rates below market rates (what do you think those would be with the risk of a pandemic shutting down most commerce and a universal safe harbor in cash/Gold……?) is The Fed’s fault by definition. Without them, it wouldn’t happen.
And without The Fed having done so, America would still be a country with the resources and wealth to get through a pandemic. Instead of a barren, capital free, idiot ran wasteland; incapable of doing anything at all of value anymore.
So Yes, it is the Fed’s fault. For existing, even if for nothing else.
Was out all night shooting the milky way. On 2 hrs sleep. Going to bed for a while.
Winners of the 2020 BigPicture Natural World Photography Competition
ALAN TAYLOR
MAY 11, 2020 11 PHOTOS IN FOCUS
Entrants in this year’s contest were invited to submit images showcasing the Earth’s biodiversity and showing some of the mounting threats to the natural world. These images originally appeared on bioGraphic, an online magazine about science and sustainability and the official media sponsor for the California Academy of Sciences’ BigPicture Natural World Photography Competition. The organizers were kind enough to share some of the winners and finalists here. The captions were written by the bioGraphic editorial staff and lightly edited for style.
I’m a Snickers guy, myself. More random.