• News

    The Impending Taper, and Boosters: A Strategic Blunder

    Weekly Market Update 20 August 2021
    by davefairtex

    Sunday, August 22, 2021, 7:16 AM

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.

Source

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.

Source

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.

Source

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.

Source

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.

Source

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.

Source

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.


Source

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.

Source

“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.”

Source

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.

Source

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!”

Related content
» More

19 Comments

  • Sun, Aug 22, 2021 - 9:16am

    #1
    Nate

    Nate

    Status: Silver Member

    Joined: May 05 2009

    Posts: 570

    8

    great summary Dave

    The “US” chose this outcome. Why? Maximize chaos? Import a bunch of new “workers” and/or “voters”? Deliberately destabilize America?

    “The US will not be the sole superpower. A handful of countries will dominate.” And: “10 held by H for the Big Guy.”

    In the past we have talked about the world's strongest military in effect means the world's strongest currency.  China has to love the way this is unfolding.  Did they write the script for this?

    Login or Register to post comments

  • Sun, Aug 22, 2021 - 3:31pm

    #2
    Canuck21

    Canuck21

    Status: Gold Member

    Joined: Aug 10 2020

    Posts: 753

    2

    Pfizer chart

    At the end it looks like a hypodermic needle.

    Login or Register to post comments

  • Sun, Aug 22, 2021 - 5:02pm

    #3
    Primary Care_MD

    Primary Care_MD

    Status: Bronze Member

    Joined: May 14 2020

    Posts: 118

    2

    Are we headed for a repeat of the 2008 GFC? Or will this one be a lot worse?

    [Pt.1] NEW DATA ON GLOBAL RESET: Vulnerability & Risk Increase Exponentially…by LYNETTE ZANG

     

     

    Login or Register to post comments

  • Sun, Aug 22, 2021 - 6:29pm

    Mysterymet

    Mysterymet

    Status: Silver Member

    Joined: May 23 2020

    Posts: 350

    3

    Compared to the 2008 GFC

    This next one is going to make the 2008 GFC look like a speed bump in the economy.

    Login or Register to post comments

  • Sun, Aug 22, 2021 - 9:23pm

    #5
    davefairtex

    davefairtex

    Status: Member

    Joined: Sep 03 2008

    Posts: 2671

    11

    GM recalls EV due to fire risk

    So after two fires (a "severe adverse event rate" of 1:36,500), the remedy from GM is to stop manufacturing new cars, and to recall all the cars of that model that they've produced.

    https://www.cbsnews.com/news/gm-recalls-chevy-bolts-fire-risk/

    The company last month told owners of 2017-2019 model year vehicles to park outdoors and not charge them overnight after two vehicles repaired in the earlier recall caught fire.

    The GM recall announced Friday adds about 73,000 Bolts from the 2019 through 2022 model years to a previous recall of 69,000 older Bolts. GM said that in rare cases the batteries have two manufacturing defects that can cause fires.

    Do we think GM would have taken this action if they a) had no product liability, and b) there were mandates requiring everyone to buy one?

    Two fires = recall all the cars!

    Some products are more equal than the others.

    Login or Register to post comments

  • Sun, Aug 22, 2021 - 9:58pm

    #6
    nordicjack

    nordicjack

    Status: Platinum Member

    Joined: Feb 03 2020

    Posts: 1311

    6

    Re GM recalls

    Do we think GM would have taken this action if they a) had no product liability, and b) there were mandates requiring everyone to buy one?

    Dave,  when you make this argument, it is quite compelling.  and I believe it would stand up in court.  It does really put it into perspective the lack of human safety when we are talking huge money and lack of liability.     Somehow, the auto companies still remember the ford pinto dearly.  But big pharma could give a shit about any of that.

    Login or Register to post comments

  • Sun, Aug 22, 2021 - 11:15pm

    #7

    Jim H

    Status: Bronze Member

    Joined: Jun 08 2009

    Posts: 1528

    5

    BTC $50K

    It's baaaaaackkkkk.........

    Login or Register to post comments

  • Sun, Aug 22, 2021 - 11:29pm

    #8

    sand_puppy

    Status: Member

    Joined: Apr 13 2011

    Posts: 1928

    2

    Sunday night is a good time for BTC

    I have noticed.

    Login or Register to post comments

  • Mon, Aug 23, 2021 - 7:46am

    #9
    VTGothic

    VTGothic

    Status: Gold Member

    Joined: Jan 05 2020

    Posts: 730

    2

    BTC on the runway

    I do not think we'll see $50,000 btc again, ever, once we clear this runway and the plane takes off - which could be confirmed this week. (Finally.) Even a future cyclical retracement is not likely to get this low, given the steadily growing institutional investments and the retail custody-via-traditional-banking demand that NYDIG is now facilitating.

    On-chain analyst Will Clemente noted that a large bid stepped in early Thursday when btc dropped into the mid-40K range, and continued driving price on Friday. He anticipated $50,000 price over the weekend (and was just barely right; btc levelled up to $50k around 11:30 Sunday night). He's expecting to see more bids for higher prices continue this week. If so, it points to the end of the long, dry sideways action and the start of the second leg on this cycle's bull run.

    In my mind, Sept 7, when btc becomes legal tender in El Salvador, is a nice "purchase  by" target for anyone wanting to get in or top off before this fall's run. (I'll keep weekly dollar cost averaging all the way up.)

    Incidentally, anyone who put their spring 2020 $1200 stimulus check into btc has now seen it grow to over $9000 (using April 15, 2020 as the investment date). Source.

    Login or Register to post comments

  • Mon, Aug 23, 2021 - 8:35am

    #10
    davefairtex

    davefairtex

    Status: Member

    Joined: Sep 03 2008

    Posts: 2671

    6

    ultimatums

    Man if there's one thing I've learned in the markets, it is this: never give ultimatums to instruments that I'm long.

    "Bitcoin will never see $50,000 ever again."

    That's really just begging for it to drop to $5000, just to cause you trouble.  Which is what markets love to do best.

    I know.  Bitcoin is different.  It isn't a financial instrument, like all of the other items manipulated by Wall Street.  Bitcoin wouldn't do that to us!  Never in a million years!

    Uh huh.  🙂

    Login or Register to post comments

  • Mon, Aug 23, 2021 - 8:41am

    VTGothic

    VTGothic

    Status: Gold Member

    Joined: Jan 05 2020

    Posts: 730

    2

    Poking the Bear!

    Heh. I kinda thought I'd hear from JAG on that one! (Is he even still around? I miss him.)

    Login or Register to post comments

  • Tue, Aug 24, 2021 - 1:36am

    #12

    Jim H

    Status: Bronze Member

    Joined: Jun 08 2009

    Posts: 1528

    5

    TSLA

    A rare non-Covid post on my part.  I didn't watch the TSLA AI day announce, but I did happen to watch Lex Fridman's awestruck Youtube review of the implications of TSLA AI day.  Let's just say that I will be talking to my Edwards broker about moving some of my long term investment over to TSLA tomorrow.  Why?

    Well, at the end, Lex can tell you himself.  The bottom line is that I no longer think of TSLA as a car company - they are an AI automation company.  They are full stack - their DOJO project has resulted in one of the most compact, scalable, energy efficient supercomputer architectures yet.  Yes, TSLA did that... not IBM.  The supercompute supports the self-driving AI and this is being done not in image space, but in 3D vector space.  They have innovated at every level in the stack AND they are ready to support an explosion of applications beyond cars.  The sky is (literally) the limit.

    Decide for yourself, but Lex, an MIT professor and AI researcher, is not prone to hyperbole;





    Login or Register to post comments

  • Tue, Aug 24, 2021 - 1:56pm

    #13
    davefairtex

    davefairtex

    Status: Member

    Joined: Sep 03 2008

    Posts: 2671

    1

    Testing Ivermectin

    I had a thought.  For those who wonder if their Indiamart Ivermectin actually works -  and I'm definitely one of these people - perhaps we could test it out in real-world situations.  What might that be?

    Supposedly ivermectin kills lice.  What else might it kill?  Ants?  Some other bugs?  Worms?  Seems as though we might be able to find some critters, and run an experiment.  Powder a pill that we know works, douse the poor critter with the powder, and see what happens.  Then use the "unknown" pill.  See if the same thing happens.

    Perhaps someone with more insight into how Ivermectin works, and on what sorts of critters it works on, could weigh in here and provide some guidance on which critters we might be able to select?

     

    Login or Register to post comments

  • Tue, Aug 24, 2021 - 2:21pm

    #14

    000

    Status: Bronze Member

    Joined: Dec 10 2013

    Posts: 300

    1

    "Help America's Investors, Get Vaccinated TODAY"-POTUS

    And here is his rationale he used if you didn't see the speach.





    Do you think he's going to walk it back. No news org I've watched even noticed.

    "do it for the economy, do it for the poor investors, do it for the system that wants you dead with a profit margin"

    Login or Register to post comments

  • Tue, Aug 24, 2021 - 3:08pm

    Rick

    Rick

    Status: Bronze Member

    Joined: Jul 19 2020

    Posts: 62

    0

    testing Ivermectin

    while testing consider it is so cheap to make why would anyone need to counterfeit

    Login or Register to post comments

  • Tue, Aug 24, 2021 - 4:03pm

    blackeagle

    Status: Bronze Member

    Joined: May 16 2013

    Posts: 262

    0

    re-testing

    shortages of raw materials, high demand and greed... three good reasons

    Login or Register to post comments

  • Fri, Aug 27, 2021 - 9:12am

    #17
    Mysterymet

    Mysterymet

    Status: Silver Member

    Joined: May 23 2020

    Posts: 350

    4

    AI in industry

    Tesla is not unique in developing AI based technology for industry. They just like to brag. Plenty of companies are working on it. The thing is that the companies that are working on it generally do not discuss it outside their company. We have an internal AI based system for our NDT 4.0 / industry 4.0 application but unless you work for the company at this location you will never hear about it. Heck our own CEO just found out about what we were doing on this a few months ago and we’ve had an operational system since the end of 2018. Its like fight club and we all know the first rule of fight club...

    Login or Register to post comments

  • Fri, Aug 27, 2021 - 1:48pm

    #18
    davefairtex

    davefairtex

    Status: Member

    Joined: Sep 03 2008

    Posts: 2671

    2

    do tell

    I like AI.   Care to give us a hint?  🙂

    Login or Register to post comments

  • Sat, Aug 28, 2021 - 7:49pm

    #19
    richcabot

    richcabot

    Status: Bronze Member

    Joined: Apr 05 2011

    Posts: 349

    0

    AI example

    Here's an example from the electronics manufacturing industry.  They use AI to find bad jets in a 3D printing application.

    https://www.nano-di.com/ame-webinars?wchannelid=ux0e2lug43&wmediaid=80mv5vjwoe

    Login or Register to post comments