Market Update
The metals are mostly in a downtrend, but there are hints of a reversal in silver. The silver Open Interest is showing signs of the “wash and rinse” cycle ending – silver’s OI hasn’t been this low since mid-2020. Silver’s (single candle) reversal bar looks reasonably strong. Silver’s friend copper is more clearly breaking higher; copper’s OI is also near a 1-year low as well. And after getting chopped in half in 10 weeks, lumber too may be putting in a low. It is possible that the modest “commodity correction” has run its course.
The “not-so-transient” inflation thesis remains intact. My inflation gauge: the PPI (Producer Price Index), which has been around since 1913. This month it was up +1.79% m/m, or an annualized 21%, with y/y change: 19%. Last time we were here? 1976.
Note that behind the scenes, the Fed is engaging in reverse repos (36B) almost as fast as they print money. The Fed Giveth, and in the same moment, The Fed Taketh Away. I see this as them ending the printing campaign, while pretending not to do so. Who wants a market crash before everyone’s ready for it?
After dipping a bit, SPX is once again making new highs. This is probably helped by the slowly rising dollar (which suggests capital inflows from overseas), as well as a confirming rebound by crappy debt. Call it mild risk on.
Items that caught my eye this week:
Uncle Sam is arranging free transport for illegals coming across the border, presumably to avoid them piling up in camps in Texas. The whole “Kids in Cages” thing was embarrassing, and this is how they’re avoiding it. Sure, free plane flights (paid for by You and Me) are maybe a bit more expensive than a mass holding cell on the Texas border, but importing a bunch of new workers who won’t complain is well worth the cost.
Vaccine effectiveness is declining rapidly in Israel, which has served as the country-level clinical trial for mass vaccination.
Currently, Israel says the shot is:
- 39% effective against infection
- 41% effective against symptomatic COVID.
- 91% effective against serious illness.
Little known fact: anyone can run for Speaker of the House – it doesn’t have to be a member of Congress, that’s just the convention. The Speaker is 3rd in line to the Presidency. Rumor is, the Bad Orange Man is thinking of applying for the slot. In the background, I hear the MSM cheering. Their audiences have dropped by more than half since El Hombre Naranja Malo was exiled to Florida. How could this play out Well let’s say those vote audits revealed some shenanigans in some Congressional races…probably won’t happen, but, you never know.
“The right” is now learning what “the left” learned back in the 70s: the FBI loves to stage crimes, and then arrest people for “committing” them. Back in the 70s, Hoover called it “COINTELPRO” and the op was run on black people. Today, Wray calls it “white supremacy”, and the op is run on white people. In reality, the FBI appears to be just the enforcement arm of the Oligarchy – one reason I’m am disturbed by the thought of a defunded “local” police, and increased funding for “Federal” police.
https://news.yahoo.com/group-accused-plotting-kidnap-michigan-144724252.html
The unelected Italian PM – Mario Draghi, former ECB chair – has just mandated the use of a vaccine passport. Of course, no mention was made of immunity from prior infection. Get the shot or else! I guess Mario is “doing whatever it takes” once more. So how exactly did he get to run Italy again?
The new measure forces people to show proof of vaccination if they want to engage in any of a wide range of day to day activities like eating indoors at restaurants. It also makes getting the jab compulsory for healthcare workers.
Up-and-coming Artist Hunter Biden is planning a schmooze session with his potential art buyers prior to the sales. Price tag for the apparently high-demand art items: “up to” $500,000. Related: “The president has established the highest ethical standards of any administration in American history, and his family’s commitment to rigorous processes like this is a prime example.”
Curiously, the tone of the CBS piece on the story was actually mildly critical. Is this the start of a new trend?
https://www.cbsnews.com/news/hunter-biden-artwork-for-sale-meeting-buyers/
Pizza-lover, and long time political operator Tony Podesta has signed on to be a lobbyist for Huawei. Nothing says “I love my country” like working for the CCP.
https://www.politico.com/news/2021/07/23/huawei-hires-tony-podesta-500649
So the moratorium on evictions and foreclosures will end July 31st. Does that herald a flood of evictions and foreclosures and – gulp – downstream bank failures? No signal for that outcome from stock prices. FHA has signed up for “loan mods for everyone” – of payment terms, but I’m guessing, not balances. Will that be enough? Maybe that reduces the impact. But I still think there will be defaults, for folks with lockdown-destroyed businesses who have just lived in their homes for free for the last year or so. They’ll have to sell. I mean – I think. This is one “grey swan” on the very-near-term horizon. I’m going to be watching the “Mean Home Sale Price” series (381k, highest value ever) for signs of “too much supply.” No sign of that at all yet.
Under the COVID-19 ALM program, eligible borrowers get a minimum 25% reduction in their monthly mortgage payment’s principal and interest portion.
The COVID-19 ALM program is automatic: servicers must review eligible borrowers for this option and provide loan modification documents that will significantly reduce the borrowers’ monthly payments. Borrowers don’t need to contact their lender or servicer to get this modification.
Finally – it now looks as though we’re going to get those boosters we’ve been waiting for, to extend (for another six months) the protection of the shots that were administered over the last six months. Of course, normally your tetanus shot lasts for 10 years – but that’s the Old Normal. Shots every six months – that’s the New Normal.
While the article is written in a relatively “soft” tone (“we forgive you, vaccine-companies-who-can-do-no-wrong, for your failures”), the headline picture – a man with an armful of multi-colored syringes – conveys an entirely different, much more alarming tone. “You will need 20 shots to be safe”, it seems to suggest. Is Pharma starting to lose MSM?
Vaccine manufacturers have been warning for months that some Americans could require booster shots as soon as September.
https://news.yahoo.com/biden-officials-see-booster-shots-090012247.html
Related: a humor break. Alex Berenson has been preparing for this moment for quite some time:
Attention citizens! Your Dept. Of Pandemia wishes to report that it is retiring the word “booster.” Henceforth, citizens shall refer only to “bonus vaccines.”
JANUARY 2022: BIDEN BLAMES BOOSTER-HESITANT FOR FIFTH WAVE, GOVERNMENT ANNOUNCES FREE PAID SIDE EFFECT WEEK
MODERNA STOCK HITS $3000 AS REST OF MARKET COLLAPSES. “TRUST THE SCIENCE,” FAUCI TELLS RAND PAUL.
https://twitter.com/alexberenson
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