2022-06-30
Gold At Supports
The End of the Baizuo
Before we talk about the image of our future, I would like to draw your attention to the patterns of long-term socio-economic and political development. We – I mean a group of scientists from the Academy of Sciences who work in long cycles of economic and social development-first of all, we managed to foresee this particular war in 2022. Back in the 14th year, it was clear that the challenge that we faced and the result of which was reunification with the Crimea, will necessarily affect the entire Russian world, including the territory of Ukraine. I even published a book, "The Last World War: The United States Starts and Loses."Somewhere, what we see today was absolutely and almost precisely formulated, including the number of Ukrainian Armed Forces and the role of the Americans and the British in this occupation of Ukraine, as well as the cultivation of Ukrainian Nazism. All this was predicted almost to the last detail. We are continuing our research. According to which the peak of the confrontation falls on 2024. This is the forecast that my colleague gave 10 years ago, even before the current military operation and even before 2014. And then there were no new political seven-year cycles.
Why 2024 and why are we in such a situation of hybrid warfare? The fact is that the modern period is characterized by two simultaneous revolutionary events. The first is the technological revolution, which used to be talked about a lot. It is called differently, we say that it is a change of technological structures. And always this change in technological patterns occurs through the economic depression, which in this cycle began in the world in 2008 – with the beginning of the global financial crisis.
After the collapse of the Soviet Union, which was the first to fail to meet the demands of scientific and technological progress, we now see the collapse of the United States. The United States is no longer a world leader. In an attempt to overcome the global financial crisis by pumping money, the United States eventually led the situation to the breakdown of the entire financial system and increasing inflation, which is already reaching 30% at enterprise prices.The bit about China and India reminds me of how I'd like to see credit reformed. There should be unlimited credit, as the market can bear and with no bailout provision, for self-extinguishing debt. That is, companies should be allowed to take on unlimited amounts of debt provided they pay it back, as in borrowing to repay funds is illegal. If a company borrows to build a factory, profits from the factory must repay the debt. Consumer credit is outlawed. Mortgages would have to be strictly regulated if they are allowed to exist at all.We saw the self-discrediting of the American system in the last presidential election, which was virtually rigged. America is not a more attractive image. In addition, compared to China and India, which have been doing brilliantly over the past 15 years, both the US and the EU, despite a fourfold increase in the monetary base, have not been able to embark on sustainable economic development. The efficiency of the Western management system — here, if we take the efficiency - the money issue is 20-25%. Only every 4th or 5th euro that is issued gets into the manufacturing sector.
In China and India have developed a fundamentally different management system that combines strategic central planning with market competition, where the state plays a dominant role in organizing money circulation and provides private businesses with unlimited access to money if this leads to an increase in public welfare.
All forecasts show that by the end of this decade, the old world economic structure will be reduced by more than half by now, and the core of the Asian accumulation cycle - China, India, Indochina, Japan, and Korea - will already be absolutely dominant in all macroeconomic indicators.
This process is irreversible, but the closer this obvious transition is, the less forces remain in the core of the old world economic system, the more aggressive they become. This is where the same hybrid warfare mechanism that the British used in both World War I and World War II works. We called them hybrid wars because they were fought over territory.
The piece also compares Chinese, Russian and Western concepts of profit and goal of the economy. It is a fair criticism of the West that is now extractive in its pursuit of profit, but this is also a result of the planned diversity. By making the country diverse, it breaks communities that are tied by religion, ethnicity and so on. The link between worker and owner is severed. The owner doesn't care for your welfare because he doesn't have to, but also because in many cases, he isn't you. He is, effectively, a foreigner. Whereas is homogenous communities, one can still find smaller scale industries that treat their employees like their family. The piece touches on this:
That is, the main ideological vector is the deprivation of people of any collective identity. National identity, gender identity. In general, the human identity even. People begin to perceive themselves as anything-cyborgs, animals, plants.The future is going to be more religious, whether it moves in a Christian socialist direction or in a Christian capitalist direction:Dehumanization is underway, and this kind of posthuman material is embedded in easily manipulated and artificial intelligence, replacing ideologues, in general, imposing their own behavior models on this posthuman world and forcing people to behave as the world's artificial oligarchic management needs.
The question is, what should be the ideology here? Obviously, it should be based on traditional values. In short, this should be the image of Christian socialism that has already been largely vulgarized in Europe. With the understanding that we have not only Christian socialism, but also Islamic socialism, Buddhist socialism. I would call this ideology a socially conservative synthesis. A combination of traditional moral values that grew out of the great religions, with the demands of social justice, the social state and the development state.Russia is very open about what they are opposing. As I said many years ago at the start of Russiagate, I can see how Baizuo would imagine an alliance between Russia and a subset of right-wing Americans because we share the same enemy. And many who were anti-communist, but not anti-Russian, have been horrified by the U.S. conduct towards Russia since the fall of the Soviet Union. An era of great change is underway. Decades are about to be compressed into years.
IICS Recession Call Looking Good, Getting Ready to Call a Tradable Low
The latest Atlanta Fed reading says it might be a great call:
I have had a rough month trading as the market chopped from bull to bear, but I think the tradable low is really taking form now. I'm almost totally long except for some doom puts on utilities (XLU). I still have XLC on, short oil, long TLT and looking to go long biotech again in size. I went long NQ with a call overnight, sold out in the morning and got back in near the low of the day.I don't know if the low is in yet, and if I'm wrong, the low could be 10- to 20 percent lower from here. Yet, I'm a skittish bull here.
That said, let's go to the charts.
It has been a brutal couple of days in the market, but IBB has held its 50-day MA.
XLC still holding for a potential bullish squeeze. TLT looking good here, but not out of the woods yet. Here's USO, the crude oil ETF. It is at support. XLU has a very bullish candle. Dumping that position as I type.Must Read: Missouri Market
The 3-month treasury yield is only pricing in about a quarter point here.
Back in June, the market suddenly priced in 50 more bps in the span of 3 days, coincident with the stock market plunging. My sense is the market could suddenly price it in again. If it doesn't price that hike in, it's possible a market crash would cause a Fed pivot. A potentially bullish (for stocks) condition exists, but it only becomes bullish in fact once the Fed pivots, once the market has the confidence enough to price the pivot in, or after all the selling ahead of a pivot completes. I'm thinking the stock and bond bulls have an edge right here.The spread between the 3-monnth and 1-month treasury has also been widening. Last time it was this volatile was around the 2008 crisis.
The U.S. 1-month yield is down to 1.06 percent. It is effectively pricing in a 50 bps cut from here. It has been lagging most of the hiking cycle since March by about a quarter point. The bond market is very much in a Missouri mood. (For foreign readers: Missouri is the Show Me State.)The Long and Short of It: Crash Time
The Universe Speaks: Seattle Genetics
With coronavirus, I see far too much panic these days. It's partially why I think the long-side will see incredible short-term gains. This sounds nuts even to me, but I think the market is primed for 15-20% upside in one day if there's a combo of good news and a short-squeeze. I'm becoming less confident in this forecast though. Monday might be the breaking point.The Fed would announce its bailout and away the markets went. Yuan did not depreciate as expected, but here we are again with yen tumbling and the yuan would follow if it keeps going...crisis points keep rhyming and all the prior crisis points have been contrarian buy points...
Biotech is another rhyme. It was bouncing around long-term support levels. I posted on ABBV, BLUE and SGEN right as the bottom was coming in. I checked in on SGEN again yesterday and look here:
I have an alert on the resistance line. Perhaps it will break before the broader market rebounds.Bears Strike Overnight, NQ Megaphone Gets More Mega
2022-06-29
Why the Stock Market Boom Was Fake in One Image
There is a slight general rise in unhappiness, with fluctuation, after the 2000 peak in mood. Vast amounts of money creation and manipulation of finances, economics and information have gone in to keeping the illusion of a stable, prosperous and happy populace alive. Reality is now bursting in. Equities will give up all of their gains since 2000. There will be incredible backlashes on policy. First abortion, but soon gay marriage and anti-sodomy rulings could be overturned by SCOTUS. By themselves meaningless because powers will devolve back to the states, but my hunch is states will also go in for new bans. Open borders will give way to mass deportations. WWIII is already on the docket. The past 40 years or so of "progress" will be erased in under 10 years. The economic collapse will fuel a political and cultural backlash that will echo for decades. This won't be like the 1980s reaction to the 1970s, this will be cultural evolution in a different direction. Think religious revival, collapsing divorce rates, much higher fertility rates, anti-diversity/assimilation policies, manufacturing onshored, etc.
Restoration Hardware CEO is Back With Another Warning
ZH: US Consumer Implodes As RH Cuts Guidance For 2nd Time This Month, Warns Of Cratering Demand
Well, fast forward to today when moments ago RH - aka Restoration Hardward - just pulled a Snapchat and just three weeks after the company with the outspoken CEO saw its shares tumble after it guided lower for Q2 and the full year despite sold Q1 results, RH just cut guidance again with CEO Gary Friedman saying that “the deteriorating macro-economic environment has resulted in lower than expected demand since our prior forecast, and we are updating our outlook, particularly for the second half of the year.”The economy is imploding and RH is first in line because they report weeks before the rest of the market, plus have high exposure in the housing market. While the past week or so have been focused on technical warfare between bulls and bears, the macroeconomic picture is rapidly deteriorating. It's a matter of if, not when, the Fed pivots now, and from what level of SPX. After the pivot, then we'll get confirmation on whether a cyclical turn to inflation is underway or not.Taking into account the macro-economic conditions and our current business trends, RH provided the following outlook for the second quarter and full year, which assumes demand will continue to soften during the remainder of fiscal 2022:
Fiscal 2022 net revenue growth in the range of (2%) to (5%), with adjusted operating margin in the range of 21.0% to 22.0%.
Previously the company had seen revenue growth of 5% to 7% and operating margin of 23.0% to 23.5%, so a huge hit to both the top-line and profit margins.
For Q2, RH sees net revenue growth in the range of (1%) to (3%), with adjusted operating margin in the range of 23.0% to 23.5%. The second quarter outlook remains unchanged versus our prior forecast due to faster backlog relief offsetting lower than expected demand.
Friedman's catastrophic forecast continued, “With mortgage rates double last year’s levels, luxury home sales down 18% in the first quarter, and the Federal Reserve’s forecast for another 175 basis point increase to the Fed Funds Rate by year end, our expectation is that demand will continue to slow throughout the year.”