Market Commentary
This week we saw falling Retail Sales [-1.49% m/m] alongside a rising Industrial Production [+0.93% m/m]. Post-pandemic, Retail Sales had been supported both by rising prices, as well as lots of free money from the government, but this appears to be coming to an end, although in absolute terms it remains strong. INDPRO has almost returned back to pre-pandemic levels. The steadily rising industrial production suggests a reasonably robust economy.
This week, the buck rallied strongly [+1.07%], breaking out to a new 13-month high. The longer-term pattern is a “double bottom”, which would normally suggest that the low is probably in for the dollar. Its hard to imagine this happening with trillions in deficit spending coming soon (Build Back Better – savers & pensioners pay!) – and yet – we heard from the Fed this week (FOMC minutes release on Wednesday) they are kinda-sorta-thinking-about-maybe not printing quite so much. “Most participants noted that, provided that the economy were to evolve broadly as they anticipated, they judged that it could be appropriate to start reducing the pace of asset purchases this year.” That’s “tapering” – perhaps coming within the next six-to-twelve weeks. Less printing would be dollar-positive.
Double bottom signals are usually pretty strong. I think this pattern is signaling tapering in the near future.
Given the sharp rise in the buck, gold actually did reasonably well, which is to say it was roughly flat [+1.19 +0.07%] on the week. This tells you that Gold/Euros rallied [+14.20 +0.93%] – which is the picture of what gold looks like with the currency moves removed. Gold/Euros is back above all 3 moving averages, and is also in a medium term uptrend. That’s a reasonably good performance. Candle print looks positive too.
Unlike gold, silver did not do so well this week, falling -0.74 [-3.12%]. There was a bit of cash-register-ringing on this week’s decline [OI -6k -3.72%]; commercial shorts remain at multi-year lows. Problem is – most of the rest of the commodity complex fell this week too: copper [-5.33%], platinum [-3.45%], palladium – just crushed [-16.64%], and lumber plunged too [-7.35%]. It was really a terrible week for commodities.
Mining shares did very poorly also, dropping [-6.93%] to a new 14-month low. Ouch. When all the stuff you mine plunges in price, your share price doesn’t do so well.
Crude [-6.02 -9.74%] joined the commodity-plunge party, dropping 5 days in a row, and making a new 4-month low. Crude’s downtrend looks fairly strong.
Equities fell following the Fed minutes release on Wednesday, but managed to bounce back by Friday, losing just -0.59% on the week. Sector map, however, was bearish, which wasn’t a good look. Tapering is probably a real thing. VIX rose too, +3.11 to 18.56.
Here’s another interesting data point: the FINRA margin debt fell in July – for the first time in quite a while. Often margin debt stops rising – or actually heads lower – right before a correction. These two series are pretty closely aligned – although Margin is always reported a month behind. The Banksters get these numbers in real time, of course, by monitoring You and Me, so they will see stuff coming before we do. September & October tend to be unfortunate months for equities.
Bonds inched higher this week; the 10-year yield fell -2.8 bp to 1.26%. Yield is in a downtrend – the candle was bearish – which suggests money is moving to safety, at least to some degree anyway. This modestly confirms the “tapering” narrative. Crappy debt also moved lower [-0.18%] – it is in a downtrend. This is a bit of risk off also.
Two more weeks until September, and three more weeks until the next FOMC meeting – their first time to start maybe-talking-about-possibly-printing-less. The plunge in commodities across the board is interesting too. Here’s my “monthly” table – formatting still needs work – but boy, look at the monthly moves in lumber [-33%] and crude [-18.83%]. That doesn’t look much like inflation, does it? Perhaps commodities are sniffing something out.
News That Caught My Eye
Biden seeks to make half of new U.S. auto fleet electric by 2030
BMW (BMWG.DE), Honda (7267.T), Volkswagen (VOWG_p.DE), Ford and Volvo Cars (0175.HK) – which previously struck the California deal – said in a joint statement they support the administration’s EV goal but the federal government must take “bold action … to build consumer demand.”
Biden has called for $174 billion in government spending to boost EVs, including $100 billion in consumer incentives. A bipartisan Senate infrastructure bill includes $7.5 billion for EV charging stations but nothing for new consumer incentives.
That’s a thumbnail sketch of “Build Back Better”: automakers are excited to participate, but only if consumers are bribed to buy their products. Ice cream, lotteries – thousands of dollars in incentives – it is all of a piece. Paid For By You and Me.
Firefighters have to blast 40 times more water at burning Tesla than other cars
“Teslas may take up to 30,000-40,000 gallons of water, maybe even more, to extinguish the battery pack once it starts burning and that was the case here.
“Normally a car fire you can put out with 500 to 1,000 gallons of water,” Austin Fire Department Division Chief Thayer Smith said, according The Independent. “But Teslas may take up to 30,000-40,000 gallons of water, maybe even more, to extinguish the battery pack once it starts burning and that was the case here.”
“There is not any, at this point, any easily obtainable extinguishing agent on the market to deal with these fires. It all goes back to the way the cars are engineered with the battery pack being at the bottom of the car, and encased in a titanium shell, so you really can’t gain access to it, you just have to sit back and pour water on it,” Buck said.
I’m guessing this little nugget wasn’t in the WEF/McKinsey preso on EVs. Is this a metaphor for Build Back Better or what? Its all fun and games, until the Tesla catches on fire.
Note to self: maybe park the Tesla outside.
The Extra $300/Week Unemployment Benefits Encouraged Many to Not Work: Details about the “Labor Shortage” Pile Up
In the 27 states that have ended the extra $300 a week in federal unemployment benefits, paid on top of the regular state unemployment insurance, people are returning to work at a much faster rate than in states where the extra $300 a week are still being paid: this was further confirmed today by the unemployment insurance (UI) data from the Labor Department.
Whoa. So paying people not to work creates a shortage of workers? Who would have thought? It creates inflation too, of course, and shortages – a deliberate creation of the WEF’s “Build Back Better” wealth-transfer strategy – from families, savers, pensioners, and small biz, to the Oligarchy.
Using the same deceitful tactics they pioneered in Vietnam, U.S. political and military officials repeatedly misled the country about the prospects for success in Afghanistan.
And now Oligarchy is saying we have to bring every Afghani to America. Culturally, Afghanis and the West aren’t exactly a match. Rumor has it that Germany discovered this during the last self-inflicted “refugee” crisis. Interactions between males and females are tightly regulated in Afghanistan. And there’s the bacha bazi thing too. What could possibly go wrong if we import hundreds of thousands of them into the US – because, Fall of Kabul? Speaking of which – why did Kabul fall anyway?
“Whoever is in power right now, whoever is really pulling the strings – and I don’t know that – they could do anything they want to change this. And they’re not.”
Logan explained that the Taliban’s main base is not Afghanistan but Pakistan, and that Islamabad is the only regional government with nuclear capabilities. Combining those factors helps explain why there’s no urgency to course-correct in Afghanistan.
She said the U.S. helps fund a good portion if not all of the Pakistani defense budget in terms of military and intelligence services, like the ISI.
“The staggering part to me is that when you hear this debate, “The intelligence agencies failed to see this.” Seriously? The NSA is known as the crown jewel of intelligence collection in the world. There isn’t a digital signature in existence that they don’t collect and store and analyze and have algorithms and everything else to sort through,” she said.
“The idea that they missed this.. You know what it takes to do an invasion like this? You have to stage forces. You have to plan. You have to have meetings. You have to have, you know, weapons that are moving in. They don’t tell you the national security threat posed by letting the cartels come across the southern border, do they? They only have a conversation about one thing, the humanitarian aspect. They never address that.”
Logan posited that the NGIA, which controls government satellites and other armaments, has been watching the Taliban taking control of abandoned U.S. military equipment; bringing it back east into Pakistan.
“The NSA and the [NGIA] are watching this happen in real time,” she claimed.
“And they’re doing nothing to stop it. Why not? So what the Afghans will tell you…is that the United States chose this outcome.”
I found this to be an utterly fascinating analysis by a reporter who was on the ground in Afghanistan for quite some time during the initial 2001 invasion, and who probably has deep contacts within the US military, intelligence, as well as the Afghani community. The “US” chose this outcome. Why? Maximize chaos? Import a bunch of new “workers” and/or “voters”? Deliberately destabilize America?
I hear Xi Jinping laughing in the distance. He gets a new resource colony, AND a destabilized United States.
“The US will not be the sole superpower. A handful of countries will dominate.” And: “10 held by H for the Big Guy.”
First you bring out all of the American citizens. Then you bring out ALL equipment. Then you bomb the bases into smithereens—AND THEN YOU BRING OUT THE MILITARY. You don’t do it in reverse order like Biden and our woke Generals did.
Confirms what Laura Logan was saying. I mean, even the Bad Orange Man has a better clue of how to “declare victory and come home” after 19 years. Kind of curious how the Oligarchy chooses to deliberately inflict this particular “Fall of Kabul” event on America.
We are at the crossover point. Even with the undying support of the MSM – “so what flavor ice cream cone did you choose!” – things are not going well. Are normal Americans beginning to figure out that Build Back Better means wealth transfer and techno-feudalism? Not yet. But this chart does show a steadily building sense of unease. Something is wrong here. They can feel it.
San Francisco’s vaccine mandate requiring bars, restaurants, and gyms to check customers’ vaccination status went into effect starting on Friday, Aug. 20.
“Papiere, bitte”.
Perfect timing San Francisco – just in time for “BOOSTERS!!”
‘We Sent a Terrible Message’: Scientists Say Biden Jumped the Gun With Vaccine Booster Plan
The Biden administration’s plans to make covid-19 booster shots available next month has drawn a collective scream of protest from the scientific community.
“I think we’ve scared people,” said Dr. Paul Offit, director of the Vaccine Education Center at Children’s Hospital of Philadelphia and an adviser to the National Institutes of Health and the Food and Drug Administration.
“We sent a terrible message,” he said. “We just sent a message out there that people who consider themselves fully vaccinated were not fully vaccinated. And that’s the wrong message, because you are protected against serious illness.”
Anyone remember “Two Weeks to Flatten the Curve?” Those who sacrificed for the greater good – those who dutifully took “Two Shots to Save Grandma” are now being told they need “boosters”, thus invalidating their hard-earned “vaccine passports.” That’s how “goalpost-moving” works. And given the “rare” side effects are almost certainly not-so-rare, those who were “thankful to get the shots” (in spite of the damage) will probably be less-than-thankful to be coerced into going through this process every six months.
But here’s the key part: it was the sacrifice of the vaxxers that drove the“other-ness”, which allowed a nearly-perfect division for Oligarchy to exploit – the “sacrifice for Grandma” group, vs the selfish Trumpster anti-science insurrectionists. But now, at one stroke, the brave, caring, follow-the-science “vaxxed” crowd are now dropped right back into the same category as the filthy, selfish, MAGA-hat-wearing insurrectionist anti-vaxxer science-deniers. That’s what “Boosters!!” really means.
As a result, the Plebes really are all in this together once more.
Alex Berenson contact email:
“With this week’s announcement pushing boosters, MANY of the vaccinated see that these mandates will soon threaten their jobs if they refuse 1, 2, or 15 boosters, and exactly 0% of them are interested in getting boosters. This has caused a seismic shift in thinking and attitude in just a few days, and it looks like the vaccinated are joining forces with their unvaccinated colleagues. I have to say, it’s really nice to see.
As I said, the sacrifices of the vaxxed have just been wiped off the board. I believe that’s a pretty big strategic blunder.
I’ll leave you with a chart, along with some taglines that occurred to me:
- “Vax Passports + BOOSTERS!! A Recurring Revenue Model”
- “There is not enough evidence to recommend vitamin D”
- “Some therapies are more equal than the others.”
- “Complete Regulatory Capture.”
- “It’s good to be da king!”
The post The Impending Taper, and Boosters: A Strategic Blunder appeared first on Peak Prosperity.
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