Baizuo Self-Owned Again: Inflation Erases Stimulus Checks

It takes a special kind of stupid to believe printing money is way to get out from under a problem caused by too much money printing, unless you're the person in debt who wants to dump the cost onto unsuspecting poor and middle-income people.

CNBC: Economists warn of inflation inequality as poor get slammed by rising prices

A recent analysis by the Penn Wharton Budget Model found that low- and middle-income households spent about 7% more in 2021 for the same products they bought in 2020 or in 2019. That translates into about $3,500 for the average household.
The government sent checks to individuals and families and those checks do not cover the rising cost of goods and services caused by sending out those checks in the year they sent the checks. The inflation isn't finished yet. By the time the inflation is done, poor and middle income workers will have seen their standard of living crushed by Baizuo policies. Adjust for inflation next year and most families may be spending at least $4,000 to $5,000 more for the same goods and services they bought in 2020, but they won't have stimulus checks to offset. Thus the average Ameican will see their living standard plummet in 2022.

The only way to stop the inflation is to stop inflating. If you care about low and middle-income workers, they already pay very little in taxes. Wage increases are the best way to boost their living standards, and that could be accomplished by reducing low skill immigration, deporting illegal aliens and instituting protective tariffs that reduce the advantage held by countries who do not protect the environment, have low labor standards, and so on. Make it more profitable to build factories in domestically. Then wages will rise and the economy will boom too as more economic activity takes place onshore.

Federal Reserve Reduces Balance Sheet to End 2021

The Federal Reserve reduced its balance sheet by $33 billion last week, bringing the one-month increase down to $107 billion. They were supposed to buy only $90 billion in December. Below is a chart of weekly changes inthe Fed's balance sheet along with weekly changes in the S&P 500 Index.

Palladium Loses Support Again

Update: Palladium did not lose support. The chart had changed to arithmetic from logarithmic.

Palladium fell below the trendline from the 2016 low again.

Nasdaq hasn't followed yet.

Evergrande Changes Terms of Wealth Product Redemptions

MSN: Cash-strapped China Evergrande revises payment plan for wealth unit investors
China Evergrande Group on Friday dialled back plans to repay investors in its wealth management products, in a move that highlights the deepening liquidity squeeze at the property developer that has failed to meet its offshore debt obligations.

Evergrande, whose $19 billion in international bonds are deemed to be in cross-default by rating agencies after the developer missed a deadline to pay coupons earlier this month, did not pay offshore coupons due earlier this week.

The developer has been scrambling to raise cash by selling assets and shares to repay suppliers and creditors.

Chinese coverage here: 恒大财富突然调整兑付方案!回笼资金不理想终止原方案 来看最新方案

New Year, Same Story: China Crackdown on BigTech Finance

More of the same is coming for BigTech companies trying to push into the financial sector.

January 2021: PBOC Vows to Step Up ‘Prudential Oversight’ of Online Platforms

December 2021: 重磅!央行开始动手了,哪些主播被禁止卖金融产品?

Improve the Internet financial supervision system

The central bank and other relevant departments pointed out the three major necessity for the formulation of the "Measures" in the drafting notes.

The first is to implement the Party Central Committee's decision and deployment on anti-monopoly and preventing the disorderly expansion of capital.

With the vigorous development of the digital economy, social production and lifestyles are changing from production-oriented to demand-oriented, and customers and data resources have become important means for implementing monopoly in the era of digital economy.

Some Internet platform companies take advantage of online scenarios and reach customers to conduct financial business by participating in financial institutions or cooperating with financial institutions. There are some violations in the marketing of financial products, infringing on the rights and interests of financial consumers, and repelling and restricting fair competition. There is an urgent need to formulate policies and systems to regulate the online marketing of financial products.

The second is to protect the safety of people’s property.

Judging from the practice of Internet financial supervision in recent years, problems such as selling illegal financial products to financial consumers or inducing financial consumers to buy financial products that do not match their financial status and risk-bearing capacity are more prominent, which infringes on the people’s property safety .

Preventing and disposing of related risks are related to the vital interests of financial consumers. We must strengthen the supervision of financial institutions and Internet platform companies from the source link of financial product marketing.

The third is to improve the Internet financial supervision system.

In recent years, financial management departments have continuously explored and strengthened the supervision of online marketing of financial products. Relevant behavioral norms and management measures are scattered in the regulatory systems of Internet loans, Internet insurance, Internet fund sales and other fields. At present, there is still a lack of relatively systematic and unified supervision. Management System.

In addition, the Internet platform cooperates with financial institutions to carry out financial services, mainly to provide financial product marketing and customers' personal credit information services. The newly issued "Credit Investigation Business Management Measures" has included personal credit information services in the scope of supervision, and further measures are needed. Strengthen the supervision of online marketing and complete the system puzzle.

The reporter noted that the chaos of Internet marketing has already aroused the attention of regulatory authorities. In the past two years, the Beijing Banking and Insurance Regulatory Bureau, Chongqing Banking and Insurance Regulatory Bureau, Qinghai Banking and Insurance Regulatory Bureau and other local regulatory bureaus have issued consumer risk warnings on related chaos in the fields of Internet insurance insurance, insurance live marketing, and financial consumption on Internet sales platforms.


Some poor guy passed away, may he rest in peace. He happened to have tested positive for the omicron variant of SARS2. Cue the insanity:

Social Mood is Extremely Negative: Crashing Mormon Fertility Edition

Mormon fertility has been collapsing.

Eternal Anglo: Mormon Fertility: 6 indicators

There are a few things I've been "wondering" about Mormons and their famously-high fertility since I saw this report which said the white fertility in Utah fell below replacement-level in 2017. So I queried the data for 3 representative geographies: the first obvious one being Utah (the Mormon Mothership) but Utah is pretty multicultural these days so you can't get an accurate picture of what's happening with the Mormons just by looking at Utah. Two much better geographies are Utah County, Utah (home of Brigham Young University) and Bonneville County, Idaho (neighbor of Brigham Young University - Idaho). These two yuge 99% Mormon universities make both of these counties nearly Mormon-monocultural so they should be great indicators of the current fertility rate in the Mormon community. Here are the results:
Mormons are known for having larger families. For fertility to crash in the past decade-plus, a force large enough to overwhelm entrenched religious and cultural customs must have emerged.

Looking at things such as transgenderism, political polarization, secession and so on, the stock market is the only indicator that isn't screaming "great depression." I invoke Goodharte's Law: when a measure becomes a target, it ceases to be a good measure. The Federal Reserve has been targeting equity markets since 2008, hence stocks have ceased to function as a mood indicator. Speculative mood around the markets are probably still positive. It makes people happy to see their account values rise, but it isn't reflective of what's happening in society. The ruling class also seems to be clueless because they are perhaps too wrapped up in stock prices. Both President Trump (ceaselessly) and President Biden have invoked daily fluctuations in stock prices as justification for their policies. As discussed here and elsewhere, the stock market is the Fed's balance sheet.

Something has to give eventually. Maybe sunshine and rainbows suddenly emerge in the culture, and everyone is suddenly hapopy with the ruling class again. Or maybe stock prices (or their real value) sink into an abyss from which they cannot escape, and the ruling class joins them soon after.


Coffee looks like it wants to head south for winter.


Baizuo Will Freeze Themselves

Earlier this month, I posted Baizuo World is Collapsing. The topic was New England freezing itself in winter thanks to very low IQ energy policy. The topic is getting more coverage now.

New England is an Energy Crisis Waiting to Happen

The great irony of the situation is New England sits only a few hundred miles from the most prolific natural gas producing region on Earth – the Appalachian Basin. According to the US EIA, if the region were a standalone country it would have been the third largest natural gas producer in the world in the first half of 2021, behind only Russia and the rest of the US. And yet, by refusing to build the necessary pipeline infrastructure, New England has opted out of sharing in this critical domestic bounty. If any thought leaders from the region are reading this piece, the Doomberg team put together this handy guide to solving your regional energy problems:
America is going to win a National Darwin Award courtesy of the Baizuo. Coronavirus and the defund-the-police-induced soaring murder rates are only the open salvos in the chaos coming if the country doesn't figure out a way to do a cultural U-turn.


I like the action today. I drew a "possible H&S" horizontal line at the shouler top and so far it has held. Not a forecast ine, only there for reference.


Dow Broke Above 1929-2000 Line

Bullish? Dow went above the resistance line formed by the 1929 and 2000 tops.

Twitter is a Publisher

You'd think people would learn, but we are treated to endless stories of "so and so was banned from Twitter today." Twitter is a publisher, as is Facebook. You can be kicked off Twitter for the same reason Tucker Carlson would be kicked off the NYTimes website. You are not promoting their narrative! They have editorial discretion, which they characterize as "misinformation," but it really means you have opposed their editors. Yes, this means Twitter is legally liable for everything on their site because you do not own you Twitter account nor do you have editorial discretion. If you do not want censorship, there is Gab. For those into capitalism and crypto, there is Twetch.

Speaking of Twitter, it too has formed the deaded h-pattern that will either be a bear trap or lead to the next collapse in the stock price. At this point, it is a borderline worthless company. Everything good about it can be cloned. Competitrs such as Gab and Twetch are emerging. It's like MySpace before people realized MySpace was dying, the place people go because "everyone else" is there.

Prediction: Twitter will be purchased sub-$10. Nearly all the staff except for useful engineers will be fired by the acquirer.

March Rate Hike Odds Approach 65 pc

JPow screwed you Brandon! Too bad your backup pick is even worse when it comes to inflation.

Vaccinate Children for Liability Protection

Yuan Tracks Former Resistance, Volmageddon When?

Sometimes this happens: a security breaks a trendline, but then keeps following it for a time. USDCNY is moving in a bearish direction, but I still expect a reversal because the Chinese economy cannot handle a strong yuan.
For myself, I closed my long USDCNH futures about a week ago and bought FXI puts instead. FXI has drifted below support. I plan on going back into CNH, but they may hold off on letting it fall until after the Olympics. I expect yuan depreciation will be part of a market panic though, because I expect a new leg higher in DXY when that unfolds.
BTC is also retesting a minor short-term line.



VIX has been crushed, but looking at individual stocks, volatility has been high. If individual stock volatility remains high, weak stocks could crack quickly. If the pattern holds, IDXX could be below support again well before monthy options expiry in January. Not necessarily the best example of this, but I view IDXX has a relatively strong stock with wide institutional ownership. If this is weak...

Nuke the NextGen Economy

A "NextGen" economy ETF. double top in place and it failed at resistance.
Notable: this isn't only a bunch of aggressive tech stocks. There are a bunch of those holdings, Coinbase is tops at 2.23 percent of assets, but here's as many holdings as I can fit with a screen shot. Lots of "blue chips" too:
Generally, I don't likefunds with lots of filler stocks. I remember a nanotech ETF from PowerShares (now Invesco funds) that had a bunch of stocks like IBM and GE in the top holdings. I want pure plays if possible. In this case, not being a pure-play is a plus for BLCN because it'll probably hold up better in a bear market. However, what's interesting about the portfolio is how it might be a better representation of investor exposure in tech. There's a double-top in place with a target of $36, below the blue trendline. If BLCN is going down clsoe to 20 percent, the weaker stocks in the portfolio will be dropping 30 to 40 percent.

The 2020s Boom Meme Was a Psyop to Dump on Bagholders

Inflation is destruction. This is not a price increased caused by China entering the WTO and expanding like crazy. This isn't even a boom powered by the Chinese government building high speed rail everywhere. It's economic destruction caused by tricking people into investing in homes, businesses and stocks despite not having the cash flow to sustain it. They were fooled by the inflation into thinking growth was underway. 2022 is the year people learn they can't afford it. It's going to be the year of bankruptcy. The Federal Reserve and USG deserve 100 percent of the blame.

Ugly Adobe

As I go through charts, it's looking like Tuesday was trash day.

The Federal Reserve Runs Most Aggressive QE With Claims At Historic Lows

The Fed bought $140 billion in assets in December because unemployment? 4-week moving average of initial continuing claims:
Here are the initial claims. Even worse for the Fed's insane policies: they're below the prepandemic low.

$140 Billion Buys a Lot of Credit Risk

Did credit risk suddenly collapse in late December? The BofA Option Adjusted High Yield Spread:

Bear Trap or Next Leg Down Incoming?

Biotech was green earlier today and then reversed.
Biotech was a decent short at the horizontal yesterday, but who knows how it will finish the year. More interesting are some of ARK's holdings that haven't gotten off the mat. I already posted SQ earlier today, that is one. TWLO and SE are two more. roKU and U don't look particularly strong either. The question is bear trap or weakness? Given I think the rally will run out of steam, I lean bearish.
This one isn't in Cathy's portfolio, but looks ready to go.


Horizontal goes through the June 2019 high.
This is a slighlyy different line, from a still-open gap in 2015 and through the 2019 high.

Bearish as Ever

The market is approaching the conjuntion of a line formed by the 1929 and 2000 tops and a line formed between the post-QE1 top and QE2 top. The latter line served as resistance for the tapering of QE3 and for the current QE 4 taper, as this line has held since the Fed announced the taper (despite increasing QE!)
Could I be wrong? Of course! But right here, I'm as certain as I can ever be in the markets that the Federal Reserve will, however temporarily, follow through with a taper and rate hikes for a time. If not, then I'd rather own crude oil futures than the S&P 500.

Assuming I'm more right and the Fed somehow loses control in the next downturn, or is unable/refuses to intervene because some combination of the U.S. dollar, crude oil and interest rates prevents them, then I expect a low somewhere below the 2000 level. Similar to the 2s10s ratio chart I've posted before, I see the market waves since 2018 as created by the failure of the Federal Reserve. It painted itself into a corner by doing QE for far too long. There was a meltup in 2018 that caused the bank to think it was safe to reduce its balance sheet. Then it chickened out after a 20 percent correction. Then in panicked in September 2019 and started up repos again. Then came the early 2020 when the pandemic probably interrupted another topping process. It then created the largest move yet.

Going back to the start of QE in December 2008, the stock market has moved in lockstep with the Fed's balance sheet except between November 2016 and January 2018 when the Fed's balance sheet was stable and the Trump tax cuts boosted corporate profits. After that, the stock market and Fed balance sheet "reattached" and have been linked ever since.
Take an extremely simplistic view of the market and assume all S&P 500 gains that tracked the Fed's balance sheet are unsustainable and will be lost, that leaves about 100 percent return for the S&P 500 Index from its December 2008 level, which projects to arond 1800. I suspect a test of the 2000 and 2007 highs, closer to 1500, could mark the low for a real bear market. I therefore expect a bear market low would be around 1500 to 2000 on the S&P 500, or a 58 to 67 percent decline in the nominal S&P 500 Index.

Bearish BTC Puts

These two remain my favorite targets for bearish crypto.
These ones will trade in the same direction as the above two:

Set Phasers to Short

Haven't had to trim this one yet.


Energy Again