Market Commentary
It is time once again for PPIACO – the old-style Producer Price Index dating back to 1913! Indexes aren’t so useful, unless they are translated into “percent change year-over-year”. As with last month, PPIACO y/y change remains around 20%, which is the largest move since Nixon was in the White House, a few years after taking the US off the gold standard (“temporarily”) back in 1971.
The events happening today are just as dramatic as what Nixon caused in 1971. This, then, is the reality of “build back better.”
And yet – how is gold doing? This week gold fell -41.41 [-2.26%]. Gold is now back below all 3 moving averages and in a downtrend. Its almost as if the inflation is transient. Or maybe it is something else.
Silver fell too, dropping -1.03 [-4.15%], also moving back below all 3 moving averages, although silver avoided dropping back into a downtrend – at least in the weekly timeframe anyway. The OI remains quite low – the banksters still don’t want to be short silver. I think that probably means something too.
Here’s an odd note – copper did well this week, up +0.10 [+2.31%], and remains in an uptrend. Why is this odd? The “other metals” did quite poorly: palladium was crushed [-11.94%], and platinum fell also [-6.94%]. See the OI in copper below – it is also quite low. Banksters don’t want to be short copper either.
One possible framing: internal combustion (PA,PL) = bad, electric motors (HG) = good. Maybe?
Equities had a difficult week, with SPX off -76.85 [-1.69%], and the weekly swing high print was quite bearish. It wasn’t enough to pull SPX into a weekly downtrend just yet, however. And the sector map looked confused. In a standard “recession” sector map, discretionary & financials lead the market lower, but this week it was REITs and sickcare – an odd combination.
Most of the damage to SPX happened on Friday. My guess: the market was sniffing out the domestic economic effects from President Grandpa’s “OSHA vaccine mandates for people working in 100+ person companies” – which was not announced until after market close. But – guaranteed – the well-connected banksters knew about the details in advance.
Bonds were little changed this week, crappy debt edged slightly lower [-0.18%], crude moved higher [+0.75%] – along with copper, the master resource was one of the few things that did not seem to be affected by the prospect of a mandate.
News that Caught My Eye this Week
[OMG!! That sounds awesome!!]Fact check: Over-the-counter vitamins not proven to treat, prevent COVID-19
A Cleveland Clinic study found melatonin reduced the chances of a positive COVID-19 test. But the study was observational, and it did not prove the supplement had any benefits for treating COVID-19.
Dr. Chris D’Adamo, director of the Center for Integrative Medicine at University of Maryland’s School of Medicine, said while more studies are needed on COVID-19 and dietary supplements, “there is already compelling evidence” that supplements including quercetin appear to reduce the severity of a COVID-19 case.
However, experts note that the authors in the two papers have potential commercial conflicts of interest. And clinical trial data on quercetin is lacking.
David M. Aronoff, director of the division of infectious diseases at Vanderbilt University, told MedPage Today in July 2020 that preclinical data demonstrated antiviral activity. But Aronoff said quercetin “should be subjected to rigorous clinical study and not recommended for use outside of clinical trials.”
First, Vanderbilt University received $20.8 million from the BMGF over the last 10 years, mostly via “Global Health.”
Second, it is fortunate for their readers that USA Today has unnamed “experts” that are making sure the readers don’t get harmed. After all, Big Quercetin and Big Melatonin – and their commercially conflicted paper-writing shills – will say anything to pump up the sales of their $10-$30 COVID treatments. As a result, these $10-$30 compounds should not be used without rigorous study, and since there has been no Big RCT (although there have been some excellent small ones), we must therefore ignore these compounds until such time as a Big RCT gets run. Real Science = a Big RCT. [Except for cloth masks. No Big RCT required. They work! Trust us because – common sense.]
Formula clear?
Related: there were the following not-so-subtle nudge-links all through the article:
Lost your vaccine card? How to prove you’ve been vaccinated
Fact check: Pfizer’s coronavirus vaccine is FDA-approved; cigarettes are not
Fact check: 590% jump in poison control calls about ivermectin seen in Texas
Fact check: Comparing Pfizer vaccine approval to cigarettes, alcohol is wrong
Photo – shows syringes filled with the Johnson & Johnson vaccine at a mobile vaccination site in Miami.
How vaccine mandates have been used in schools, military, COVID-19.
Our fact-check work is supported in part by a grant from Facebook.
Photo – COVID: Treating patients, unvaccinated at Naples community hopsital as delta variant surges
Medical staff said they’re exhausted and losing patients with people who still refuse to take coronavirus seriously and avoid getting COVID vaccine.
Kinda makes you wonder if USA Today gets any cash from PFE/MRNA & CDC to promote vaccines. Not that this would be a “conflict” or anything. Perish the thought.
Here’s my shot at reframing MSM headlines I saw on Friday:
Unvaccinated Spouses Die Hours Apart After Being Hospitalized for COVID, Leaving 7 Kids Behind
“I’m like stressing to everybody in my family, [they have to] be vaccinated because I can’t do this again,” she told Fox 2 News. “Covid is taking too many people.”
ALT: Spouses Tragically Die After Being Denied Treatment for COVID19.
“I’m like stressing to everyone in my family – don’t rely on the deadly NIH/FDA ‘guidance’, only going to hospital when your lips turn blue – treat the viral infection early, at home, with antiviral medicines that we know that work; that way you won’t leave your children without parents!”
Jacksonville TikTok maker shares vaccination plea before dying of COVID-19
“I did not get vaccinated. I’m not anti-vax. I was just trying to do my research,” Blankenbiller says. “I was scared and I wanted me and my family to all do it at the same time.”
ALT: Yet Another Tragic Victim of CDC/NIH/FDA Regulatory Capture and NTFY”
“I didn’t realize that my high BMI played a part in COVID19 severity; I also had no clue that early outpatient treatment could possibly have saved my life. I feel so upset at the national ‘health’ organizations that kept this information from me and my loved ones. Why would they do this to us?”
Why indeed.
Researchers at Georgia State University and Emory University have developed an intranasal influenza vaccine using recombinant hemagglutinin (HA), a protein found on the surface of influenza viruses, as the antigen component of the vaccine.
They also created a two-dimensional nanomaterial (polyethyleneimine-functionalized graphene oxide nanoparticles) and found that it displayed potent adjuvant (immunoenhancing) effects on influenza vaccines delivered intranasally.
Posted: May 04, 2021 by Roni Peleg
Say, that graphene oxide sure looks like interesting stuff. Especially for vaccines. Makes you wonder.
USPS Not Covered by Biden’s COVID-19 Vaccine Mandate: Spokesman
“The COVID-19 vaccination requirements included in the White House executive order issued on September 9, 2021, for federal employees do not apply to the Postal Service,” a spokesman for the U.S. Postal Service, or USPS, told The Epoch Times in an email.
“Maintaining the health and safety of our members is of paramount importance. While the APWU leadership continues to encourage postal workers to voluntarily get vaccinated, it is not the role of the federal government to mandate vaccinations for the employees we represent,” the union said.
The fact that President Grandpa’s no-exceptions mandate doesn’t allow for prior-COVID infection – and skips the post office entirely – tells you all you need to know about this “health” mandate – namely, that it has nothing to do with health. What might it be about?
- Rewarding friends (who like vaccination) and punishing enemies (who don’t). Increasing us-vs-them.
- A backdoor way to purge the Federal bureaucracy of possible “insurrectionists.”
- An unconscious, outward manifestation of the increasingly authoritarian edicts from Oligarchy: “Do it because I freaking say so.”
- Yet another sociopathic vax-marketing nudge to increase vax uptake; President Grandpa’s “advisors” know they’ll lose in court, but a not-insignificant number of people will be terrified/coerced into getting the shot in order to avoid losing their jobs. It’s a no-lose move from that standpoint.
- Weaken the US militarily (“the US will not be the sole superpower”). If you are going to invade a nearby island, it would help to be flying against vax-injured pilots. And/or some number of experienced (insurrectionists?) pilots will just up-and-quit. So a win-win.
Late Breaking News:
The Sunday Times has just reported that Boris Johnson is giving up on the idea of vaccine passports or making businesses check vaccine status.
Other data show that only about 25% of deaths in Britain are among the unvaccinated – and that vaccinated people over 40 are actually MORE likely to get Covid than the unvaccinated.
Holy crap. Big news. How will President Grandpa’s advisors react? After the self-inflicted Afghanistan debacle crushed their poll numbers…how desperate will they be? They only exist in power as long as President Grandpa remains in office. That’s presumably because Vice President Giggles will have more of a mind of her own, and she will come with her own set of flacks.
Boy are things getting interesting.
My overall takeaway on the “vax mandate arc”:
- It provides some hints at what is to come. The more reliant on system you are, the less control you will have going forward. “They” will exploit your every vulnerability in order to coerce you into doing what they want. If you are heavily in debt and have no cushion, you will feel as though you have no choice. They will continue to use every lever you give them to control your actions. At least until they cross some Rubicon – which we won’t be able to identify until after it happens.
- Our “elected leaders” – both sides of the aisle – appear to be co-opted by the same group that is eager for all us all to take the shot. Which, because “prior covid” isn’t included as an exemption, cannot possibly be about “health.”
Here’s another easy/hard framing:
- Addiction/obesity/vitamin deficiency/inactivity/ultra-processed foods/remdesivir: easy
- Vax mandate exemptions/supplements/”unapproved” COVID treatments: hard
“Your body, your choice – unless you are doing something with your body they don’t approve of, in which case – your body, their choice.”
And now for an arc about recent events in China. I wrote this arc, because I keep hearing things trickling in that seem individually interesting, but until now I did not block out the time to make sense of it all. That, and sometimes it appears that the CCP is running things in the West. Certainly, it appears as though every single wishlist item the CCP might have [w.r.t. the US] is being delivered by President Grandpa as rapidly as possible – for “some” reason. Are the CCP our new owners?
China, from the outside, looks monolithic and unstoppable – that’s what the CCP would have you believe. And yet…it turns out they have some huge multi-generational structural issues that are looming over society. A lot of things are happening. What are the issues? What are the impacts? How will these issues be resolved?
Data showed a fertility rate of 1.3 children per woman for 2020 alone, on par with ageing societies like Japan and Italy. The shrill alarm for China’s policymakers is that the world’s second-biggest economy may already be in irreversible population decline without having first accumulated the household wealth of G7 nations.
Urban couples, particularly those born after 1990, tend to value their independence and careers more than raising a family despite parental pressure to have children.
“Having a kid is a devastating blow to career development for women at my age,” said Annie Zhang, a 26 year-old insurance professional in Shanghai who got married in April last year.
“Secondly, the cost of raising a kid is outrageous (in Shanghai),” she said, in comments made before the 2020 census was published. “You bid goodbye to freedom immediately after giving birth.”
In China, parents expect their children to take care of them in retirement. Or, under the one-child policy, their child. That’s a massive burden for an Only Child. Parents control education choices, job choices, marriage, children – everything. Kind of like the CCP controls the population.
Related:
China’s declining population and its new three-child policy
The central government abolished the one-child rule in 2015, allowing all married couples two children. Last week it announced they could have three.
So far the policy reversals have done little to arrest the fall in birth rates. Many Chinese families choose to have only one child because the perceived costs of raising children are too high. And many women are choosing not to have babies because structural inequalities at home and in the workplace make pregnancy and childrearing an unwelcome choice.
Germany and Japan look worse. But not much worse. And it looks like it isn a “policy” that drives one-child any longer. It is economics.
Why Evergrande’s Debt Problems Threaten China
The real estate developer Evergrande once binged on debt. Now the music has stopped, investors are panicking and experts are warning of an imminent failure.
The ratings agency Fitch said this week that default “appears probable.” Moody’s, another ratings agency, said Evergrande is out of cash and time. Evergrande is faced with more than $300 billion in debt, hundreds of unfinished residential buildings, and angry suppliers who have shut down construction sites. The company has even started to pay overdue bills by handing over unfinished properties.
… China’s property market is slowing and there is less demand for new apartments. This week the National Institution for Finance and Development, a prominent Beijing think tank, declared the property market boom “has shown signs of a turning point,” citing weak demand and slowing sales data.
Much of the cash that Evergrande has been able to drum up has come from presold apartments that aren’t yet completed. Evergrande has nearly 800 projects across China that are unfinished, and as many as 1.2 million people who are still waiting to move into their new homes, according to research from REDD Intelligence.
It doesn’t look like Evergrande did anything specifically wrong – they are a homebuilder at a time when new home demand is slowing. I’m going to claim they’re a Coal Mine Canary. Its fine to binge on debt in an uptrend. Once the top is in, that strategy blows up.
China halts private equity fund investment in residential property
China is halting private equity funds from raising money to invest in residential property developments, turning off the spigot on one of the last stable funding resorts for the struggling sector, Bloomberg reports.
Looks like the CCP is taking action which will lead to Evergrande’s destruction. Why? Possibly: to prop up prices, by reducing supply. Will it work? It might just be too late.
These Chinese Millennials Are ‘Chilling,’ and Beijing Isn’t Happy
Five years ago, Luo Huazhong discovered that he enjoyed doing nothing. He quit his job as a factory worker in China, biked 1,300 miles from Sichuan Province to Tibet and decided he could get by on odd jobs and $60 a month from his savings. He called his new lifestyle “lying flat.”
He titled his post “Lying Flat Is Justice,” attaching a photo of himself lying on his bed in a dark room with the curtains drawn. Before long, the post was being celebrated by Chinese millennials as an anti-consumerist manifesto. “Lying flat” went viral and has since become a broader statement about Chinese society.
Mr. Luo’s blog post was removed by censors, who saw it as an affront to Beijing’s economic ambitions. Mentions of “lying flat” — tangping, as it’s known in Mandarin — are heavily restricted on the Chinese internet. An official counternarrative has also emerged, encouraging young people to work hard for the sake of the country’s future.
“After working for so long, I just felt numb, like a machine,” Mr. Luo said in an interview. “And so I resigned.”
Mr. Ding thinks young people should work hard for what they love, but not “996” — 9 a.m. to 9 p.m., six days a week — as many employers in China expect. Frustrated with the job search, he decided that “lying flat” was the way to go.
“To be honest, it feels really comfortable,” he said. “I don’t want to be too hard on myself.”
To make ends meet, Mr. Ding gets paid to play video games and has minimized his spending by doing things like cutting out his favorite bubble tea. Asked about his long-term plans, he said: “Come back and ask me in six months. I only plan for six months.”
The pressure to work “996”, to prepare to take care of your aging parents – by yourself – must be incredible. And, for the Only Child, it may be an impossible task.
My guess: the CCP’s “genius” pandemic response (lockdown!) was probably the root cause, with the young adults realizing that “tangping” was actually a whole lot better than being a 996 work-slave. A monster unintended consequence. “I don’t really need that bubble tea after all.”
How do you play video games for a living? You spend time to collect items, and then sell them to other players for small sums of real money. A friend of mine does this.
And on that note:
Three hours a week: Play time’s over for China’s young video gamers
The new rules, published on Monday, are part of a major shift by Beijing to strengthen control over its society and key sectors of its economy, including tech, education and property, after years of runaway growth.
The restrictions, which apply to any devices including phones, are a body blow to a global gaming industry that caters to tens of millions of young players in the world’s most lucrative market.
They limit under-18s to playing for one hour a day – 8 p.m. to 9 p.m. – on only Fridays, Saturdays and Sundays, according to the Xinhua state news agency. They can also play for an hour, at the same time, on public holidays.
CCP: No Lying Flat (tangping) For You!
Good luck with that one, CCP. How exactly do you force people to work – if they decide they would just prefer to opt out instead? I think the genie is out of the bottle.
China rips high actor pay, ‘effeminate’ styles
The Chinese Communist Party wants broadcasters in the country to make sure actors are more manly — and that artists are toeing the party line.
The notice also said programs depicting “effeminate” behavior and other “warped” content should be prohibited, as well as shows centering around scandals, displays of opulent wealth and “vulgar” celebrities, according to Reuters.
Chinese authorities have previously criticized male actors who wear heavy makeup and project a feminine image, arguing that they should be setting an example of traditional manliness for Chinese boys, Reuters notes.
The “cute boy” actors lined up well with a “one child” policy, was neutral for the two-child policy, but doesn’t line up at all with a three-child policy. Likewise, ostensible signs of wealth are to be discouraged. Wealth inequality is fine, as long as nobody sees it on a daily basis.
Next up: 1) outlawing South Korean Boy Bands, 2) gay will become illegal.
A view on the CCP’s most recent actions through the socialist lens:
- Chinese anti-trust authorities ordered the giant internet corporation Tencent to give up its exclusive music licencing rights and fined it over its acquisition of China Music in 2016
- The online food delivery company Meituan lost $40 billion of its market value after the state regulators opened an investigation into its “suspected monopolistic practices,” alleging that it was forcing restaurants to use its app exclusively, to the detriment of its rivals
- The Chinese government announced new regulations on July 23 for the online education industry, banning IPOs and forcing companies to operate as non-profit bodies
… the regulatory efforts to rein in the sprawling tech empires reflect fears in ruling circles in Beijing about the country’s extreme social tensions and mounting economic and financial crisis.
These concerns found expression late last year when Xi announced that 2021 would mark the beginning of a “new development phase” that would prioritise “common prosperity,” national security and social stability over unrestrained growth.
Visible wealth inequality is dangerous to stability. It is no longer acceptable to appear disgustingly rich. Plus – a second Oligarchy is a threat to CCP rule. They’ve seen what has happened in the West, and they certainly don’t want that to happen to them also.
My sense:
Population decline + high cost of raising children + pressure from taking care of aging parents (by yourself!) + large wealth inequality + 10 years of debt-funded property bubble + 669 workweek + lockdown unintended consequence => “tangping” => falling housing demand => a bubble pop just ahead.
In addition, the CCP is trying to fix their self-inflicted demographics disaster with their usual finesse – just ten years too late.
It is popular in China to buy apartments via debt as a form of savings. It is clear that actual demand has really fallen off. The cause seems multi-faceted. But when property values actually start to drop…things will get ugly. In a big hurry too. This might drive crypto prices higher – with crypto the best/only way for capital to flee.
I don’t know the timing of when all this happens, but I suspect this series of issues are what the CCP is really focused on. It is an existential threat to their hold on power. They are making a flurry of changes to try and address the situation.
Ultimately, this suggests to me that they are probably not so focused on the US, or the West. They are turning inward. As a result, the CCP is – probably – not our “new owner” after all.
Word of the Day: Mandate of Heaven.
The post A Copper Mystery, Bubble Pop in China? appeared first on Peak Prosperity.
from Peak Prosperity https://ift.tt/3z5VYuo
