This is the Reader’s Digest condensed market story of the three bears.
Baby bear said “hi” and no one heard her squeaky voice and bought more stocks.
Mama bear got mad and moved in and now has everyone’s attention with the economic destruction she has wrought thus far.
Papa bear is about to wake up from his hibernation and the newbies are about to be introduced into what a real 40-70% market decline looks like where the pain is felt daily and hourly.
The market action which I noted after I landed yesterday afternoon was a nightmare. A decline but with hope at the end with a Dow bounce up of over 100 points off the lows. Technical internals are nightmarish but not of that of a full blown capitulation, volumes were high but not that of a full blown panic, and volume distribution showed that the bulls aren’t quite dead yet, but will soon be steaks to be grilled.
The bigger news is in the commodities market over the past week and America, you ain’t ready for this.
Despite the senile old fool’s blabbering barrel of bullshit last night on inflation, the reality is going to destroy economic growth through the end of 2022 and quite possibly all of 2023. Even the Atlanta Fed is picking up on the consequences of the hyper-stagflationary price action:
But why is this happening?
The United States is on the verge of ANOTHER policy mistake by the beloved insane loser, Jay Powell, the Chair of the Federal Reserve. If he refuses to initiate QT or raise rates, the US Dollar will collapse and inflation will move at en even faster pace blowing the hedonic restrictor plate off and accelerating to 1970’s levels despite attempts to manipulate the numbers.
The biggest impact is from energy and every indication is that oil, natural gas, and unleaded gas prices will crush the consumer on top of food inflation and that doesn’t even reflect input costs which are skyrocketing into the manufacturing and supply chains the average schmuck can not even imagine.
This morning OPEC+ agreed to increase output in April by 400,000 bbls per day, a drop in the bucket compared to current consumption rates globally. The market reacted of course by doing what this morning?
If anyone said oil prices would skyrocket that would be correct. WTI topped $110 and Brent is now above $112. But don’t worry, Senile Joe said he would mumble something to mumble something to get more solar panels installed on poor people’s homes. Yeah, that’s the ticket.
Gold this morning is backing and filling which is fine as the WarFront PPT continues to try to degrade Russia’s financial reserves by attacking precious metals prices and the cryptocurrencies. Meanwhile, watch out for US government or a coordinated Western effort to attack Bitcoin, etc. to “constrict further” the finances of Russian oligarchs.
There is some substantial evidence that this might be true as on several crypto wallet sites, hundreds of new wallets have been opened, including one where 40 wallets were opened in less than an hour with 1000 Bitcoins each (well over $40 million for the math impaired).
Keep your head on a swivel kids and prepare for the insanity to get worse. I am taking some time off today after my morning meeting to meet my brother for lunch and some old friends for dinner. Tonight I shall return with an all new war update as it would appear Vlad may indeed expand the war to global economic and cyberwar plus a new strategy to end the Ukraine War.