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May 2, 2022 - 12:12:23 PDT
We all know (except for Biden apparently) that inflation is up 8.5% YoY as measured by the change in the Consumer Price Index (CPI). However, the CPI change doesn’t fully capture what is crushing Americans’ pocketbooks. Here is a brief update on where we stand prior to the upcoming Federal Reserve Open Market Committee meeting on May 4th.
The Federal Reserve is poised this week to accelerate its most drastic steps in three decades to attack inflation by making it costlier to borrow — for a car, a home, a business deal, a credit card purchase — all of which will compound Americans' financial strains and likely weaken the economy.
May 2, 2022 - 12:00:41 PDT
The selloff in U.S. stocks has a lot further to go, according to one of Wall Street’s most vocal bears. Most Read from BloombergBiggest Treasury Buyer Outside U.S. Quietly Selling BillionsEnd of Easy Money Brings a $410 Billion Global Financial ShockStocks Push Toward Lowest Level in Almost a Year...
But with the exits closing for investors in startups, fresh money flowing into these companies is getting scarcer, as investors are getting pickier and more prudent, and a bevy of startups will run out of funding, and then that’s it for them.
We are all prone to believing the recent past is a reliable guide to the future. But in times of dynamic reversals, the past is an anchor thwarting our progress, not a forecast.
US Rep Adam Kinzinger (R-IL) has introduced an authorization for the use of force against Russia bill in the US House, allowing President Biden to take the country to war with the nuclear-armed country in the case of a bio/chemical/nuclear attack on Ukraine. What about the danger of false flags?
China’s People’s Liberation Army (PLA) on April 20 revealed two new missiles intended to increase its ability to overwhelm the defenses of U.S. Navy ships that help deter Chinese Communist Party (CCP) aggression.
China stepped up its rhetorical support for Russia, defying the U.S. and other nations who want Beijing to condemn Moscow for the war in Ukraine.
May 2, 2022 - 08:45:48 PDT
Beijing is very worried about the potential effects of sanctions on China's vast holding of foreign assets, but the fact that they weren't able to come up with any solution shows the extent to which China is locked into a structural problem.
Beijing's prodding may have reversed much of the week’s equities market pain, though I doubt positive sentiment will return anytime soon. Crisis steps were less impactful elsewhere – notably with bank CDS and the renminbi. Things are “breaking” in China – deflating Bubbles, “Covid zero,” faith, confidence and even mental health.
If the S&P declines 70% then we can discuss cheap Both fiscal and monetary policy goosed earnings. That is why Shiller uses CAPE (cyclically-adjusted PE) ratios and Hussman uses MAPE (margin-adjusted PE) ratios.
ISM Manufacturing Disappoints, Employment Tumbles, Inflation Shows "No Signs Of Relenting"May 2, 2022 - 08:33:51 PDT
There is certainly nothing in this report that would slow The Fed's plan to unleash hawkish hell on markets.
Consumer spending habits are starting to shift as inflation rises and people emerge from the pandemic.
Food Banks Are Serving More People Again as Inflation Squeezes Budgets: WSJMay 2, 2022 - 08:28:44 PDT
Higher costs and supply-chain problems are straining organizations as they look to meet rising demand
Can the World Feed Itself? Historic Fertilizer Crunch Threatens Food SecurityMay 2, 2022 - 08:26:36 PDT
For the first time ever, farmers the world over — all at the same time — are testing the limits of how little chemical fertilizer they can apply without devastating their yields come harvest time. Early predictions are bleak.
“I’ve never seen such a convergence of pins, with such an overvalued stock market.” Join Mike Maloney for the 4th Episode of his ‘Bubble Update’ series. This time he examines the general stock markets and explains why he believes the coming bust will be more like the 1929 crash than any other.
"The US Destroyed Trust" Jim Rickards Says "The World Is Turning To Gold"May 2, 2022 - 06:21:35 PDT
Rickards says, “The current crisis is not like 2008 or even 1929. The New Depression that has emerged from the COVID pandemic is the worst economic crisis in U.S. history..."
Inflation, and specifically stagflation, makes investing more challenging. Stagflation is when inflation is high, but growth is low or negative.
The result is that global inflation forecasts are being revised upwards for next year, while growth expectations are deteriorating. If these come to pass, it will mean an erosion of business profits and households’ purchasing power for longer, with high inflation affecting lower-income households the hardest. “It may not be exactly like the 1970s,” says Luigi Speranza, chief global economist at BNP Paribas Markets 360, “but it will still feel like stagflation.”
China’s Economy Appears to Be Stalling, Threatening to Drag Down Global Growth: WSJMay 2, 2022 - 06:10:53 PDT
Throttled by Beijing’s zero-tolerance approach to Covid-19, China’s economy is facing a spell of slower growth. Economists are toying with the term “recession” to describe it.