Financial topics

[Higgenbotham]

** 05-Feb-2021 World View: Madness and folly

Republican Senator Bill Cassidy, who earlier this week was one of just six in his party to vote that the trial should continue, threw up his hands when asked if he had expected Saturday’s vote on witnesses.

“Shelby says he’s seen three of these and this is the craziest,” he said, referencing Senator Richard Shelby whose 34-year tenure included the 1998 impeachment of former Democratic President Bill Clinton and Trump’s first impeachment trial.

The move spurred further conflict in the narrowly divided Senate and could stymie efforts by Democratic President Joe Biden to confirm cabinet members and move past the controversies surrounding his predecessor by pushing forward with his own legislative agenda on COVID-19 relief and economic revival.

The Senate floor appeared chaotic during and after the vote. Senators clustered together in apparent confusion and Senators Ron Johnson and Mitt Romney engaged in a heated conversation.

“This is more than unfortunate,” Johnson said later. “It’s just going to inflame the situation.”

Democratic Senator Dianne Feinstein, asked whether an agreement on witnesses might be worked out promptly, said: “It doesn’t look that way.”

https://www.reuters.com/article/us-usa- ... SKBN2AD0AE

[John]

** 13-Feb-2021 World View: Effect of impeachment trial on the stock market

> My understanding of Trump's defense Friday is that logical
> argument for "incitement to riot" is not proven. Could this be the
> reason for the market jumping up? If yes, is this because violence
> is now less likely?

This paragraph is bizarre on multiple levels. First off, I don't even
know what violence you're talking about. Second, there's no threat of
violence that would affect the stock market. Third, Trump's lawyers
clearly defeated the accusations in more ways than one, including no
proof of "incitement to riot," and on several constitutional grounds.
No minds were changed, which means that Trump is on track to be
acquitted.

The Democrats have been hyping violence as much as possible, and the
media have been pouring it on in lockstep. I assume you get your
information from the BBC, which depends on a great deal of money it
gets from PBS, which is controlled by the Democrats. The BBC white
house reporter Gary O'Donaghue hates Trump so much that you can almost
see the vitriol and hatred oozing out of his pores when he's talking.
But he's starting to smile sweetly now that he's talking about Biden.
So when you listen to the BBC, keep in mind that you're listening to
Democratic Party talking points.

I suspect that the connection you're making between "violence" and the
stock market is an allusion to something that happened in South
Africa. Perhaps you could comment on that.

It's true that the news about the impeachment trial caused the market
to go up on late Friday, but that had nothing to do with violence,
despite what you hear on the BBC.

The market went up because the defense lawyers thoroughly eviscerated
the case against Trump, which meant that no minds were changed, which
meant that the trial would end quickly with an acquittal, which meant
that the Senate would be able to move quickly on the "Covid relief
bill," which would pour $1.9 trillion into the stock market bubble,
which would boost stocks. So the market went up in anticipation of
all that printed money.

However, things have changed in the last two hours, since everyone has
been caught by surprise that the Senate has voted to continue the
trial and call witnesses. No one was expecting this, and it throws
everything into chaos. This whole impeachment is a left-wing circus,
and apparently the reason that the impeachment lawyers from the house
suddenly decided to call witnesses at the last minute is because their
radical left-wing allies were screaming at them on Twitter to do so,
rather than acquit Trump.

The Republicans didn't want witnesses, so that the trial would end
quickly. But they're now going along with this because they can call
their own witnesses, particularly Pelosi, who apparently knew in
advance about the planned attack but did nothing about it, even
rejecting Trump's offer of National Guard troops because she didn't
like "the optics."

So as I'm typing this, analysts are using the phrase "buyer's remorse"
to describe what many Senators are feeling for this vote to call
witnesses, because if they do, then the trial will probably last a few
more weeks, and nobody knows how it will end.

Now getting back to your original question about the stock market, I
would expect the market to fall on Monday if the trial is extended,
because that would delay the "Covid relief bill."

[John]

Update at 12:56 ET: They just agreed not to call witnesses, so the
trial will probably end on Monday.

[Higgenbotham]

"The nutshell is this: the old line economy stocks just don’t work because they have earnings and eventually rising interest rates impact earnings. New economy stocks have no earnings, so investors don’t see a need to exit."

– Wall Street analyst on CNBC, early March 2000, said with a perfectly straight face


Nothing so animates a speculative herd as a parabolic price advance in an asset detached from any standard of value.

“On Wall Street, urgent stupidity has one terminal symptom, and it is the belief that money is free. Investors have turned the market into a carnival, where everybody “knows” that the new rides are the good rides, and the old rides just don’t work. Where the carnival barkers seem to hand out free money just for showing up. Unfortunately, this business is not that kind – it has always been true that in every pyramid, in every easy-money sure-thing, the first ones to get out are the only ones to get out. We’ve seen two-tiered markets before: most prominently in 1929, 1968-69, and 1972. Even at those pre-crash extremes, the S&P never sold above 20 times record earnings. The market clearly faces problems at a multiple of 32. Technology stocks will ultimately fare worse. Over the past 5 years, the revenues of S&P 500 technology companies have grown at a compound annual rate of 12%, while the corresponding stock prices have soared by 56% annually. Over time, price/revenue ratios come back in line. Currently, that would require an 83% plunge in tech stocks (recall the 1969-70 tech massacre). The plunge may be muted to about 65% given several years of revenue growth. If you understand values and market history, you know we’re not joking.”

– John P. Hussman, Ph.D., March 7, 2000

https://www.hussmanfunds.com/comment/mc210201/

As has been stated before, it is price that convinces the herd, not real data.

Price convinces.

Probably worth repeating.

I've compared the current Wall Street bubble to a carnival, but wasn't aware Hussman had made that same comparison in 2000.

At no time, ever, in the history of the world has an economy or population grown in excess of 3% per year compounded for an entire working span of a long human lifetime, except exactly during the entire working span of Warren Buffett's long life. And he thinks this is normal? Normal growth in an ecological or human system is far below 1%.

It is a carnival atmosphere and Buffett is the head barker. CNBC is a media outlet devoted to airing the views of carnival barkers.

In the graph of world population below, the world population was 600 million in the year 1700 and 150 million in 200 BC. It grew 4 fold over 1900 years. On the graph I show exactly how to calculate the compound annual growth rate from those numbers. The compound annual growth rate over that long time span is less than 1/10 of one percent. Moving backward in time previous to 200 BC, it's probably even less.

(600/150) raised to the power of (1/1900) is 1.00072989. The percentage growth rate is then that number minus 1 multiplied by 100, or 0.072989 percent compound annual growth.

Looking at a more recent part of the graph, the compound annual growth rate of world population from 1700 to 1900 was 0.49%.

Between 1900 and 1950 it was 0.87%.

Only since the end of World War 2 has world population grown in excess of 1% per year, ever, and now it is slowing back down to sub 1%.

Can a stock market, which is dependent on economic growth, rise in the face of zero population growth? I don't think it can even exist, much less rise. World stock markets in fact barely existed before world population began to rise at rates greater than 1% after World War 2.

Hussman is attempting to stand back and take a big picture view. It may not be big enough. But Jeff Bezos thinks humans will colonize space and number in the hundreds of billions.

[Higgenbotham]

In the Fed press conference of a couple days ago, the first question to Powell was about Gamestop, and he declined to answer.

I'm not super interested in Gamestop, except for one thing. I want to see some extremely close scrutiny of whether Powell did anything in the slightest to aid the hedge funds that got into trouble with Gamestop.

When I say I'm not super interested in things like Gamestop, that's the truth. I'll comment on it, but it's just noise in the big picture except for what it can tell us about when the stock and bond market bubbles will break. Same with Bitcoin.

What I'm super interested in is when this stock market bubble is going to break for good. It's really the only reason I post. When this stock market bubble breaks, that will be the real game changer. There will be a world before the stock market bubble breaks and a much different one after.

Which reminds me of something John referenced years ago: The Bubble That Broke the World by Garet Garrett

[John]

** 13-Feb-2021 World View: The bubble that broke the world

> Which reminds me of something John referenced years ago: The
> Bubble That Broke the World by Garet Garrett

** Garet Garrett's 1932 book The bubble that broke the world
** http://www.generationaldynamics.com/pg/ ... 071009.htm

[richard5za]

** 13-Feb-2021 World View: Effect of impeachment trial on the stock market

> My understanding of Trump's defense Friday is that logical
> argument for "incitement to riot" is not proven. Could this be the
> reason for the market jumping up? If yes, is this because violence
> is now less likely?

This paragraph is bizarre on multiple levels. First off, I don't even
know what violence you're talking about. Second, there's no threat of
violence that would affect the stock market. Third, Trump's lawyers
clearly defeated the accusations in more ways than one, including no
proof of "incitement to riot," and on several constitutional grounds.
No minds were changed, which means that Trump is on track to be
acquitted.

The Democrats have been hyping violence as much as possible, and the
media have been pouring it on in lockstep. I assume you get your
information from the BBC, which depends on a great deal of money it
gets from PBS, which is controlled by the Democrats. The BBC white
house reporter Gary O'Donaghue hates Trump so much that you can almost
see the vitriol and hatred oozing out of his pores when he's talking.
But he's starting to smile sweetly now that he's talking about Biden.
So when you listen to the BBC, keep in mind that you're listening to
Democratic Party talking points.

I suspect that the connection you're making between "violence" and the
stock market is an allusion to something that happened in South
Africa. Perhaps you could comment on that.

It's true that the news about the impeachment trial caused the market
to go up on late Friday, but that had nothing to do with violence,
despite what you hear on the BBC.

The market went up because the defense lawyers thoroughly eviscerated
the case against Trump, which meant that no minds were changed, which
meant that the trial would end quickly with an acquittal, which meant
that the Senate would be able to move quickly on the "Covid relief
bill," which would pour $1.9 trillion into the stock market bubble,
which would boost stocks. So the market went up in anticipation of
all that printed money.

However, things have changed in the last two hours, since everyone has
been caught by surprise that the Senate has voted to continue the
trial and call witnesses. No one was expecting this, and it throws
everything into chaos. This whole impeachment is a left-wing circus,
and apparently the reason that the impeachment lawyers from the house
suddenly decided to call witnesses at the last minute is because their
radical left-wing allies were screaming at them on Twitter to do so,
rather than acquit Trump.

The Republicans didn't want witnesses, so that the trial would end
quickly. But they're now going along with this because they can call
their own witnesses, particularly Pelosi, who apparently knew in
advance about the planned attack but did nothing about it, even
rejecting Trump's offer of National Guard troops because she didn't
like "the optics."

So as I'm typing this, analysts are using the phrase "buyer's remorse"
to describe what many Senators are feeling for this vote to call
witnesses, because if they do, then the trial will probably last a few
more weeks, and nobody knows how it will end.

Now getting back to your original question about the stock market, I
would expect the market to fall on Monday if the trial is extended,
because that would delay the "Covid relief bill."

I overlooked the Covid relief bill because its always been my understanding that the market knows very well that Trump would be acquitted. It was going to happen anyway and how does a few days or a couple of days make a material difference?
The underlying thinking on the potential violence was that if Trump was logically shown to be guilty, without a scrap of doubt, and then acquitted it would cause outrage across a segment of the population larger than BLM, and including some of the middle class that we saw previously on the George Floyd matter.

You watch out for an inflamed middle class because they are articulate and good organizers and if sufficiently incensed are the over throwers of existing order. I have realised that America is a very violent society with military effective populations holding extreme views at both poles, and these have quite large numbers of people; not a small number of lunatics more easily controlled. So I wondered if it was a relief to the market when the defense shredded the case.

There are many categories of protests, riots, and insurrection but two common ones coming under the headings of 'food riots' and a "sense of loss, denial and outrage". Read the Elizabeth Kubler Ross model if you are not familiar with it.
The situation in South Africa pre 1994 was black protests and riots and military activity against the apartheid government. Since then its a growing hatred of whites because of unfulfilled promises and whites (and Indians) still controlling the economy. (White Monopoly Capital is a favourite expression) Since 1994 excluding crime, violence has been black on black against foreigners many illegal (it looks like half of Zimbabwe arrived in South Africa)

Am I still bizarre on multiple levels?

[John]

** 14-Feb-2021 World View: Covid-19 relief bill

> I overlooked the Covid relief bill because its always been my
> understanding that the market knows very well that Trump would be
> acquitted. It was going to happen anyway and how does a few days
> or a couple of days make a material difference?

All I was saying was that the market going up on Friday
afternoon was not because of the threat of violence, because there
was no threat of violence at all, except as hyped by the Democrats.
There is renewed antifa-blm violence in Portland, but that's far
from Washington DC.

The market went up on Friday afternoon because it appeared that the
trial would end quickly, and then the Senate could take up the
Covid-19 bill. As I understand it from various analysts, as things
stand this bill still has many hurdles, and won't pass before
mid-March. There are still many issues that are unresolved -- minimum
wage, bailing out NY, Cal and Illinois, etc. -- and these issues could
delay the bill further. And if the impeachment trial had been
extended, then the passage of the bill could have been delayed
further, not just a day or two but more likely a month or two.

[aeden]

GIC is one of the most evil and fraudulent scams of the 21st century.
It is a FACT that EV’s actually cause 10x more pollution and destruction to the environment compared to new fossil fuel cars.
The World Economic Forum actually publicly admitted that EVs are a total fraud in this expose.... https://www.weforum.org/agenda/2017/11/ ... er-energy/

https://www.youtube.com/watch?v=H8R9vz94uXU no approximate trigger effect or date.
Stuck at and in barbell strategy. Stay out of water all the boats will drop.

If you cannot see yet it your already finished.
Only 14 state attorneys generals begin to even see it.
We are only one year into the six year decimation process.
Few ever had a clue on that.

[Higgenbotham]

Better than what I posted in 2014 (and re-posted yesterday).

Fine print on lower left: "0.04% was the average population growth rate between 10,000 BCE and 1700"



https://ourworldindata.org/uploads/2019 ... 0-2100.png