NYC Journal

Losses have moderated a bit, still a bad day for the markets.

I find it remarkable that there are buyers bidding up the indexes.

An analogy to the inflation and shortages was made to the pandemic, but this time it was purposely performed. The economic slowdown and the inflation basically was purposely recreated.

I for one don’t need anything from China. My IPAD still works.

The thing is that during the pandemic food prices rose 25% over 4 years. There are health consequences from high food prices and eating a poorer diet.

Unlike families with children, I can regulate and limit my expenditures, but with kids a family needs to consume and spend.

The baby boom created a consumer economy, and also a major economic expansion that endured decades, but now an economic crunch along with immigration restrictions will severely limit population growth. An aging population also will slow down productivity.

So the future is very limited…

A large dumpster was put in place yesterday at the vacant house. Today I saw the owner of the house drop off a migrant worker who is emptying the accumulated refuse from replacing the two-car garage hip roof. The worker I suspect is an illegal immigrant.

Fact is that farms and the construction industry relies on this cheap labor.

So while “Maggie” and I are somewhat insulated, the basic American family with kids will be highly burdened by high prices and inflation.

These tariffs are like a huge tax increase, and the people who voted for this did not realize that in fact it is.

The Federal government is expected to collect 400 billion dollars via these tariffs. Businesses, individuals, and households will be paying for this. No surprise to me. The only way to avoid paying this new tax is not to consume.

We get a lot of our food from Mexico, so indirectly now food is taxed via tariffs. I’ll be forced to pay-up.

I just signed up for a $300.00 bowl of soup and bread for Maggie and me to support our local food pantry. Our friend Cynthia does a great job for the homeless in Peekskill. These are sad times…

Cal
 
A lot of people are paying the price today, and the inflation, shortages, and real effect of tariffs have not set in yet.

As our friend Robert says and posted not only here in the U.S. but around the world.

Americans and households burdened with high debt will get crushed like ants when the shoe really drops.

The insight that Phil revealed is likely foreclosures on homes.

I don’t think anyone knows how bad this could get.

This is just the beginning of the end.

Cal
 
Senario: Will the big three make a car for the working masses? A car that is a compact, durable, affordable, that is fuel efficient to take the place of say Honda’s or a Toyota Corolla.

Also how will the big three come up with the money to design and build such a vehicle?

How much time would it take to step up production?

Where will the steel and aluminum come from?

Will Americans be too poor to buy a new compact car? Will they have jobs? What if they lost their house?

I see too little too late…

For me, I’m likely good for a decade or more with a 2015 Audi A4 with 52K miles on it, but I’m retired. The A4 is a luxury compact. On long trips I exceed 27 MPG doing 70-75 MPH.

When it comes to say a decade or more out, perhaps 15 years, the bad taste in my mouth that tastes like shXX, makes me want to pay the premium or tariff to buy say another German car. Call me spiteful.

The big three favored big profit margins on SUV’s and trucks. They gave away the easy dollars by utilizing mass production, providing domestic jobs, and meeting the needs of many Americans.

Peekskill is a blue collar working class city. I see mostly Toyotas and Hondas. This market share was given away by the big three. Shame on them.

Cal
 
Oil is in the $66.XX range. It dropped $5.00 today.

Earlier it tipped under $66.00, $65.98, but a trigger point would be below $65.00. Pretty much right around the 52 week low.

Anyway’s, below $65.00 is a trigger point that points toward a crash and a hard landing. Might be a leading indicator for the markets. In other words a collapse in oil demand translates into a collapse in the economy, and perhaps even the world economy.

Oil demand will collapse when the world realizes it is in a recession for certain. I don’t think economists or the powers that be understand that a world recession is underway. We are at a tipping point or a threshold. Watch oil prices.

Hard to see any alternative except an eventuality.

Bad policy worsened the Crash of 1929 and made/created the Great Depression. We are living in a great recreation of that era.

I frame the Pandemic as being like the Crash of 1929, then protectionism and later tariffs rooted that era into the Great Depression. Bad policy…

The “Greater Depression” awaits.

Cal
 
Day 4 and no hot flashes. I was told they usually begin 2-3 days after injection.

It seems that when undergoing radiation treatment that I need to maintain a sustained full bladder for 15-20 minute intervals. Coffee which is a bladder irritant I abuse to help me train my bladder for treatment.

Seems like I’m toning up, but I don’t think I’m loosing any weight. Muscle weighs more than fat, and I visually see less flab, the little that I do have.

So far no noticeable side effects from the chemical castration.

“Maggie” is starting a strength building program also to exploit the after-burn. She thinks her belly is getting too big, and the extra weight is effecting her mobility. She realizes she sits too much as a product of writing.

I guess I’m really a journalist. I’m kinda obsessed with the markets right now. I am seeing a lot of things I saw happening in 2007-2008.

OPEC BTW is also trying to up production. This is a bad time to increase supply. Today’s $5.00 drop has not happened since 2022.

Cal
 
The big three indexes are already deeply in the red. DOW pre-market is down 1200 points, and all and all it looks like the three indexes will start with a haircut of about 3% to begin the trading day.

Likely more circuit breaker stops will happen to slow the free-fall. Could be another 2 1/2 trillion dollars of wealth disappears today, but usually the panic builds and builds until there is a capitulation of sorts. Today is more likely to be bigger loses than yesterday.

Then there is the weekend… Worry will stew and my guess is Monday has the possibility where a lot of losses get locked in.

Last night likely some stop-loss limits were set. Smart money might be putting in buy orders at low prices on Monday to catch “the falling knife.” These stop-loss and buy orders “float” until they get triggered.

I had mentioned Warren Buffet. He is sitting on a pile of cash. He is not buying the dip now, he is waiting for the capitulation that likely will happen next week, but these are tricky unprecedented times, and timing a market bottom is very difficult.

Now JP Morgan says there is a 60% chance of a recession this year. Finally some sense is made. The switch from 40% to now 60% from the “professionals” is big. Understand they have a bias and an interest to promote.

My thinking is that there will be a world wide recession.

At a 7% and 13% daily loss there is a 15 minute delay in trading, but at a 20% daily loss trading gets halted. Understand how markets have trigger points.

Cal
 
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Calzone said:
Losses have moderated a bit, still a bad day for the markets.

I find it remarkable that there are buyers bidding up the indexes.

An analogy to the inflation and shortages was made to the pandemic, but this time it was purposely performed. The economic slowdown and the inflation basically was purposely recreated.
Click to expand...
I had written this paragraph mostly earlier, and the draft was kept:
Markets wise I have a cynical and bearish opinion: I still find it slow in our End (Europe). It's still a single digit correction at the moment and pretty much stretch the graphs, some of our indexes are still positive YTD, 1y. So, just a beginning.
Yesterday evening GMT+1 it was interesting to read economic and markets newspaper basically containing the panic "keep buying, ADC your indexes, opportunity times!". Investor opinions of "not that bad". Today it does not seem so contained.
Calzone said:
I had mentioned Warren Buffet. He is sitting on a pile of cash. He is not buying the dip now, he is waiting for the capitulation that likely will happen next week, but these are tricky unprecedented times, and timing a market bottom is very difficult.
Click to expand...
I will keep an eye on that. But adjusting for the european markets. Got some cash savings and will attempt to time the next weeks and ADC a bit, for very long term investments.

Phil_F_NM said:
I still can't believe it has come this far, and the schadenfreude part of me is now more serious and actually hoping that the capitalist industrialists who will just as soon destroy the world, will move to depose the party so they can get back to making money. I just don't want to be in a country in a state of internal armed conflict. Already did that and barely escaped. I don't know if I can handle another go; but if it be that over fascist rule, then down the tyrants. The pendulum of politics always continues to swing towards justice.
Click to expand...
Sadly of course the plain citizen is set to suffer. Capitalists with cash will profit from the markets, but also good that pressure is set on Musk and others showing that not everything can be purchased.
Paraphrasing something that was quite impactful from my short law courses when I studied business: Laws reflect moral values, a fine is set to correct something wrong. Whereas in economics a fine is just a cost. Even basic models just "plug externalities" into them.

I think it's a systemic lost opportunity not to frame steady state and degrowth economics as a possibility, though the basis of our current systems are a constant growth.
 
Please take note the conflict between the downplaying of tariffs, and the promotion of a soft landing that has gone on for an extended time.

The notion of a U.S. recession because of tariffs has been downplayed. Also the possibility of a world recession, but here we are.

No surprise here. Eyes wide open…

Recognize the bias from the Banksters, economists, and those involved in finance. They are insiders who know the truth and the history lessons, but they conceal and do not reveal what is pretty much evident.

BTW see how a Master’s degree in journalism can be of value here. News is what drives the markets.

Expect Monday to be an evil day…

In 5 minutes the non-farm payroll will get revealed…

Cal
 
My spin on the jobs report is that the 1/10th of percent increase in unemployment is a more important number than the jobs created.

The 900 announced lay-offs from the company that is Dodge/Chrysler/Jeep, and others can very quickly revise or neutralize the spin that the larger then expected number of jobs created rather quickly. Of course these announced layoffs were not counted.

On the other hand the amount of people continuing to collect unemployment to me is a more reliable number. It shows and indicates the trend of increased unemployment.

So on one hand the headline says the job market is strong because of new job creation, but the fact is unemployment is increasing.

To be truthful I was expecting a stronger drop at the open, but the day is young.

Cal
 
Jerome Powell, the Lawyer, kinda pleaded the 5th by saying it is too early to have any position on rate cuts or hikes.

Pick your poison: cut rates to mitigate high unemployment, but fuel and ignite worsew inflation; or hold steady or even raise rates to combat inflation, but live with very high unemployment as a facet of the economy.

No real good choice, and because the FED is already “behind the curve” and at best tamed inflation aonly a bit by lowering it into a moderate range.

In my book inflation is the bigger target. Then again I’m retired, so I have a bias.

Cal
 
My spin on the FED seems to be prevailing. A headline is that there is more worry about a recession than inflation. Without a commitment from the FED or any “FED Speak” the markets are thinking the statement that standing pat for a while means-translates to a lack of rate cuts to stimulate the economy if and when a recession hits.

Imagine interest rates remaining where they are and no FED “put” to rescue the market or help stimulate the economy. A recession could be a deep one, and then consider a world recession to compound things.

So we are at around 1600 points down on the DOW, so another 2.5 trillion in wealth evaporated. I suspect that today’s sell-off will accelerate nearer the close. Right now it is 1:00 PM around lunchtime. Today could get uglier before the day is over.

Then right around 5100 on the S&P where we are close to now is a threshold of support. When that gets breatched, maybe towards the close, a surge of a sell off will happen on the S&P, and that likely will spillover to the other indexes.

The trap-door will kinda fully open. Look out below. It might take a while before there is impact with the ground. On a high diving board, about 35 feet, by the time you hit the water you are doing 35 MPH.

We are kinda at that 35 MPH, but in a free-fall terminal velocity is about 100 MPH. We are not there yet. Hope you have a parachute. This is no “E” ticket ride at Disney…

Cal
 
Ouch… Today was an ugly day for the markets. If you think today is bad, wait till Monday… I thought the close would be bad, but not this bad.

The NASDAQ officially entered into a bear market. The Russell 2000 Small Cap index is already in a bear market, and the S&P is flirting with one.

All three indexes are down over 5% at the close, and the S&P nearly 6%. The selling is not over, and if you think this is bad usually a weekend after the previous two days will lead to an even bigger sell-off Monday.

The dumb move now is to sell, and you should of had a well diversified portfolio like the 20-20-20-20-20 portfolio I outlined that Jared Dillion developed that is designed for events that are undergoing.

20% real estate; 20% cash; 20% commodities like gold and oil; 20% equities; and lastly 20% bonds. Pretty much even with the bad two days, and February’s 2.5 Trillion hit you would not be down so much.

Anyways after a weekend of worry Monday will highly likely be mucho bad and evil. Monday’s open will be a horror.

How bad is it that Apple, one of the “Magnificent Seven” is close to forming a “death cross” where a shorter term moving average hits a longer-term moving average.

Can you say, “Kaa-Boom?” Apple going nearly into a death cross in two days is like a nuclear explosion. Wealth got vaporized. Monday likely will be a fully formed death-cross.

I imagine many people’s retirement went away. Even wealthy people are not so wealthy anymore.

There is more evil to come… Also with so much destruction going on it will take a lot of time for any recovery, especially since it kinda was a bubble that the Orange House popped.

Without flow of capitol will compound things or any recovery.

Cal
 
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