Stocks Worst 6 Months in 50 Years
I called it
My old friend Leo Melamed must be smiling a lot these days. Leo never knew what the “buy” side of a trading card looked like. When I’d go to his office to chitchat, I never heard him utter the word “buy” to initiate a trade. If he was buying, it was “buy ‘em back”.
I know I am a dinosaur since the way I made my living doesn’t exist anymore. Tooting my own horn a little bit. I called this breakdown in both the stock market and crypto. I was a little ahead of myself on the stock market saying the bull was over in August of 2021. I wrote a post about crypto winter in December. You can search through the blog posts to see.
I did it in Jan of 2001 too on Bloomberg Television and they pulled me off the air for being irresponsible. I said the NASDAQ was going to 1500 when it was around 5000 and guess where it went? I was being unprofessional. The credentialed class on Wall Street didn’t want to hear that the dot com bubble was going to burst and was built on air.
Guess what. It’s not over.
Inflation hits businesses and consumers like a bull in a china shop. Crypto was built on hope and the crypto fanboys thought they could defy economics. They never built anything of value. I think crypto can build something of value and hopefully they realize it when they hit bottom.
We haven’t hit bottom. I see many people talking about bottom fishing for great buys right now. They aren’t seeing the same things I am seeing and hearing the same things I am hearing. I see the SPY 0.00%↑ going to 320, and $BTC going to $12k. There will be bear market rallies inside the big break but we ain’t going up because of who has the ear of the President.
This is a great example.
I looked up Biden Advisor Brian Deese’s credentials and background to see what sort of advice Biden was getting. Sure, the President makes the final decision but they hopefully get advice from diverse sources. Hopefully, objective data is being interjected into the analysis. Here is what you can find about Mr. Brian Deese.
Deese was born in Belmont, Massachusetts. He earned a Bachelor of Arts degree in international politics and economics from Middlebury College in 2000 and a Juris Doctor from Yale Law School in 2009.[4] In 2002, Deese was named a finalist for the Rhodes Scholarship, though he was not ultimately selected.[4]
Deese worked as a junior fellow at the Carnegie Endowment for International Peace and as a research assistant at the Center for Global Development,[5] hired by founder Nancy Birdsall, according to The New York Times, where he co-authored the book Delivering on Debt Relief. Later he worked as a senior policy analyst for economic policy at the Center for American Progress, under Gene Sperling.[6]
Belmont, Mass must be a great place to grow up. It’s not middle class.
As of 2020, there were 27,295 residents of the Town of Belmont, and in 2021 there were 17,640 registered voters.[23] In 2020, the racial make up of the town was 69.6% White, 1.9% Black or African American, 0.05% Native American, 18.5% Asian, and 4.7% from two or more races. Hispanic or Latino of any race were 4.7% of the population.[2] Pending the release of the 2020 Census results, in 2010 6.3% of the population were under the age of five, 24.6% were under the age of eighteen, and 15.8% were 65 years of age or older; 53% were female. The median household income was $114,141.[24]
If Deese is a proxy for the kinds of people giving Biden advice, there is no chance we see a turnaround anytime soon.
I doubt seriously that there is a “team of rivals” advising Biden. They all look alike when you read their bios. Most have never built anything in their lives but worked the non-government organization circuit, got placed in a do-nothing position with some private-sector organization that favors Democrats to make it look good, and then went to work in the White House.
Rahm Emanuel (Tiny Dancer) is like that. Do you think he really knows investment banking and all the finance involved with it? Do you think he really ran spreadsheets for Wasserstein Perella to do that merger or was it a cherry given to him by President Bill Clinton for saving his presidency with a good Lewinsky strategy?
Deese has zero practical business experience. He worked for BlackRock, but he got a salary of $2.4MM per year when he worked there. It must be nice. I made $2.4MM one year trading but I had to assume a shitload of risk to do it. The next year I lost $1.2MM. Plus it was my own money and Deese has never risked his own money on anything.
But, damn it, we need a new liberal world order so you middle-class people that didn’t go to the right schools and don’t know the right people be damned.
These people are credentialed. They do well on standardized tests. They know the right people and they are intelligent. But, they are nincompoops. Idiots. Stoopid. Out of touch with reality.
In the old trading pits where I made a living and made my bones, we would have eaten these people for breakfast and “disposed” of them by lunch. They’d have been in tears and I mean that literally. I remember seeing credentialed really smart people lose everything on the floor and cry. Ph.D.’s in finance and economics lost it all. “Parents have dough” is a better Ph.D. than one earned from Harvard if you are on the floor.
If they sat down at the Ardmore Lounge in Villa Park, Illinois, it’s doubtful they could have a meaningful conversation with anyone there.
Don’t be a chumbalone or jamoke. Don’t eat what they are selling.
I have driven across the country twice in the last few months. I have seen it first hand. When I go to the small town I am near, I see it. People are hurting and they are hurting badly. They are being forced to make choices they don’t want to make. High gas and energy prices are the major reason why and the trip to the grocery store isn’t helping either.
Another indicator, and this according to some articles I’ve read, is that over 90 percent of Americans have some side hustle going on, and sure, some folks want to make a little extra cash but many others are doing it to pay the bills. My neighbor does Instacart to earn some cash to pay off her car, and she told me they are having a hard time getting new people to sign on right now because the profit margin is extremely thin and tips are drying up so the bottom line is that you’re barely making minimum wage.
But be of good cheer fine people of Illinois. Our wonderful benefactor-governor has approved every taxpayer in the state to receive $50.00 to help with this nasty inflation. Plus, and please hold on to your seats! They have suspended the 1 percent sales tax on groceries. Don’t spend all that extra wealth in one place.
Good post as usual.
I am a tad more optimistic, and I do not think housing is going to be unduly influenced in the economic issues especially with rents so high and climbing. Location, too, is important.
HOWEVER . . . I own and run a successful and robust military history publishing company. The world in which I swim in infested with left-of-center people. Some authors have become wonderful friends over the years, and they are nice folks, but we do not talk politics. Only books and history.
That said, many BELIEVE Biden. We have a robust social media program, and I rarely scroll around because I am so disgusted when I see what some of my authors and friends write and believe.
Do not be fooled by Biden's low ratings. A healthy number of these people may think the country is on the wrong footing, BUT they still blame the GOP, guns, Trump, Reagan, Coolidge, et. al.
We must work together hard and not get cocky and make sure this November wipes out the Left. And I no longer use Democrats. I call them what they are--Leftists, Socialists, Marxists, etc. They are not Democrats in the American sense of the word.