Fears of a US debt default are rising, but  investors remain untroubled as the low Vix shows.

Cost of insuring US debt  

 Code of Ethics

Policy blunder:

Food Price Inflation

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• Many more Americans now are going hungry than at the peak of the pandemic aid. Some 24.6 million adults didn’t have enough to eat in early April versus 16.7 million the same month two years ago, the Census Bureau estimates.
• And Republicans are seeking new restrictions on food aid and cuts to safety-net programs as a price for raising the debt ceiling. 

Quick Overview is up to date

Notes Today: 

• The world’s largest battery manufacturer CATL has announced a new “condensed” battery with 500 Wh/kg which it says will go into mass production this year." Batteries with 400 Wh/kg energy density  could enable competitive commercial airplanes. 

• China raised its gold holdings by about 8.09 tons in April, according to data from the State Administration of Foreign Exchange on Sunday. Total stockpiles now sit at about 2,076 tons, after the nation increased reserves by about 120 tons in the five months through March.

• The U.S. self-reported rate of mental health distress is similar to Canada’s (27%) and Sweden’s (24%). And yet… Annual gun homicides: Canada: 300 Sweden: 60 United States: 15,500 It’s the guns.

• Meanwhile:  Texas has banned more books than *any* state in America.

US debt to US GDP ratio = Problematic Zone..

• Only possible Solution: grow GDP (working harder/smarter and or more people working) "and" raise taxes - see below. Top "marginal" rate in 2022 = 37%
• Take a moment and compare the two charts, and you’ll quickly see when the ratio started to go in the wrong direction -(correlation)

Now this from ChatGPT  (Chat Generative Pre-trained Transformer): 

There are several ways that a country can lower its debt to GDP ratio: Increase economic growth: When a country's economy grows, its GDP increases, which can help to reduce the debt to GDP ratio. This can be achieved through measures such as increasing productivity, investing in infrastructure, and promoting trade.

Reduce government spending: By reducing government spending, a country can reduce the amount of debt it accumulates and improve its debt to GDP ratio. This can be achieved through measures such as cutting back on unnecessary programs, reducing waste, and streamlining government operations.

Increase tax revenue: By increasing tax revenue, a country can reduce its reliance on borrowing and improve its debt to GDP ratio. This can be achieved through measures such as increasing tax rates, broadening the tax base, and cracking down on tax evasion.

Sell assets: Another way to reduce debt is to sell government assets such as land, buildings, and state-owned companies. This can generate revenue that can be used to pay down debt and improve the debt to GDP ratio.

It is important to note that reducing the debt to GDP ratio often requires a combination of these measures, as well as other structural reforms aimed at promoting long-term economic growth and stability. Additionally, the specific strategies used to address debt and fiscal policy will depend on a country's unique circumstances and political context.

 Circle of AI life:

YoY, US Money supply  diminishing  at fastest pace since the 1930s

Notes Today: 

• Tension is building over the US debt ceiling, spurring investors as far away as Asia to prepare for the worst

• Global sea surfaces hit record temperatures this April...strong El Niño event appearing in the next few months looms over us...

• Currently, our planet contains eight billion humans. It also contains 33 billion chickens. 

• @VodafoneGroup: Our partner @AST_Spacemobile (ASTS) has completed the first two-way voice call using the Bluewalker 3 (#BW3) satellite 🛰️ 🌠It’s the first time anyone has achieved a direct voice connection from space to everyday cellular devices. A next major step in mobile communications.
• With @AST_SpaceMobile, we've been testing the first-of-its-kind space-based cellular broadband network, with mobile phones. See what AT&T engineer, Suja John, says about our future. #ConnectingChangesEverything

 

 

Ongoing solar storm  hits G4-levels

Some weather frogs are predicting a 62% chance of an El Nino event developing during the May-July timeframe. 

• If it does develop it implies a drier/warmer than normal US corn/soybean belt. 
• While Brazil and Argentina could be wetter than normal.
• Drier and hotter in southeast Asia
• Should Soybean production come in some 3% below current estimates the stock / usage ratio would drop to about 3.4% 

•  Now this from Chat GPT: I'm sorry, as an AI language model, I don't have the ability to predict future events with certainty. However, I can tell you that El Niño events are difficult to predict with a high degree of accuracy. El Niño is a climate phenomenon that occurs irregularly and can vary in strength and duration. It involves changes in ocean temperatures in the equatorial Pacific and can have significant impacts on global weather patterns. While there are some indicators that suggest the possibility of an El Niño event this year, it is impossible to say for certain whether one will occur. It's important to note that even if an El Niño event does occur, its impacts can vary depending on its strength and other atmospheric and oceanic conditions.
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FT: Deaths in China outstripping births for first time since 1960s

Is the headline curse about to diminish Apple?

Notes Today:

• Floridians will be able to carry concealed guns without a permit under a bill DeSantis signed Monday. This will allow anyone who can legally own a gun in Florida to carry one without a permit or training, nor will a background check be required.
• An estimated 26% of Americans ages 18 and older -- about 1 in 4 adults -- suffers from a diagnosable mentaldisorder in a given year. Many people suffer from more than one mental disorder at a given time. In particular, depressive illnesses tend to co-occur with substance use and anxiety disorders.

It is dangerous, “Spock says, “to be ill-informed about facts.”

 

Later

 

S&P 500 Stocks making new 52 week highs (6)

Activision Blizzard Ord Shs	84.39	ATVI.O
Copart Ord Shs	71.43	CPRT.O
Darden Restaurants Ord Shs	152.58	DRI
Hershey Foods Ord Shs	247.86	HSY
Mondelez International Ord Shs Class A	69.04	MDLZ.O
Regeneron Pharmaceuticals Ord Shs	820	REGN.O

 

Quick Overview is up to date

 

Notes Today: 

• In America, a gun is stolen from a car every 15 minutes. Thanks to lax gun laws like permitless carry, firearm thefts from cars are up 225% in the past decade, and are now the largest source of stolen guns, which then become ....  

• American consumers are one step closer to being able to buy chicken grown in bioreactors.

• After the government intervened at SVB, some are wondering if accounts at all banks are implicitly guaranteed. If so, what function does private banking serve? 

• Permit less carry bill passes Florida House, firearm training requirement removed.

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Why is money moving out of bank deposits? – explanatory chart..

 

Notes Today:

• Moody’s sees risk that US banking turmoil can’t be contained. Well, that does not sound very good. 

• WSJ: Elon Musk’s Twitter is now a gigantic $13 billion in debt due to advertisers fleeing to “protect their brands” from Twitter’s toxicity. 

• Yet another crypto dude, Do Kwon, is charged with fraud by US Prosecutors in New York. Could Munger be right and crypto is just an open sewer, full of malicious organisms?

Notes Today: 

• US FED raises interest rates for ninth time in a row despite recent banking turmoil. Recognizing "serious problems" in a small number of banks.

• Trump thinks perp walk in front of cameras might be "FUN." 

• A new paper argues there’s another way to hold big oil accountable for climate damage: trying companies for homicide. 

• Ford is about to break out big EV losses for the first time. Ford will begin reporting its financial results by business unit, instead of by region. The changes amount to the most detailed look yet by any legacy automaker into finances behind EV business. 

Very Interesting Chart:  

Periods When to Make Money

Via https://twitter.com/AlessioUrban  retweeted

Menthor Q@MenthorQpro

This chart is crazy, made in 1875 by Samuel Benner showing periods of panic, good time to sell assets and good times to buy. Mind blowing that he predicted so many events. Really telling. Don’t have the source someone sent it to me.

 

S&P 500 stocks making 52 week highs (3)

ANET.K	Arista Networks Ord Shs		163.26
MKTX.O	MarketAxess Holdings Ord Shs		389.77
NVR	NVR Ord Shs		5503

Notes Today:

• UBS's $3.3 billion buyout of CS met with a big yawn in the S&P futures market so far.

• Warren Buffett's Berkshire Hathaway Inc (BRKa.N) has stepped up its pace of stock buybacks, repurchasing more than $1.8 billion of its own stock this year.

Gold over the previous hump, only just..

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Latest Dow Theory prediction

3/19/2022 Samll change in Dow Theory Prediction:

   Returning to bullish view if

   DJIA closes above 34581 "and"

   DJTA closes above 15587

 Quick Overview is up to date

A Four-Decade Secret: One Man’s Untold Story of Sabotaging Carter’s Re-election

“History needs to know that this happened,” Mr. Barnes, who turns 85 next month, said in one of several interviews, his first with a news organization about the episode. “I think it’s so significant and I guess knowing that the end is near for President Carter put it on my mind more and more and m
ore. I just feel like we’ve got to get it down some way.”

Better late than never!

Notes Today:

• Trump claims he ‘will be arrested’ on Tuesday in New York criminal case..

• After a pretty epic and  awful 12 months, crypto evangelists are enjoying a moment – what could go wrong?
• First Republic Bank (FRC) was cut to junk by S&P Global  and Fitch
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• Reminder: Under Trump, banks  with less than $250bn in assets (SVB -FRC) werefreed from the tightest regulatory scrutiny.

International Criminal Court Issues Arrest Warrant for Putin for War Crimes

The States Parties to the Rome Statute

 

Notes Today:

 

• Pornhub acquired … Ethical Venture bought them. No joke!

• Credit Suisse is exercising an option to borrow $53.75 billion (CHF 50 billion) from the Swiss National Bank - to stay afloat. 

• Goldman raised US recession probability to 35% on banking stress – I would put it a bit higher 50%? 

• March 16 (Reuters) - Bankrupt cryptocurrency exchange FTX made transfers of about $2.2 billion to company founder Sam Bankman-Fried through related entities, the company's new management said. (Btw, why is this dude  out on no money down bail? - remarkable)

• The Baltic Exchange’s main sea freight index, tracking rates for ships carrying dry bulk commodities, snapped its 19-session winning streak on Thursday, weighed by weakness in the capesize and panamax segments. 

  The overall index, which factors in rates for capesize, panamax and supramax shipping vessels, lost 43 points, or about 2.7%, to 1,560 – its biggest dip since Feb. 15. 

  The capesize index lost 128 points, or about 6.1%, to 1,976. 

  Average daily earnings for capesizes, which typically transport 150,000-tonne cargoes such as iron ore and coal, decreased $1,066 to $16,387. 

  Dalian and Singapore iron ore futures slumped on Thursday, along with steel benchmarks in China as sentiment soured, mirroring a broader risk aversion triggered by fears of a banking crisis.  (Helllenic Shipping)

 

 Vacant US office space

 

Notes today:

• Deploying regulators: Treasury department reviewing us bank exposure to credit swiss..
• Credit Swisse: Today’s 24% share price decline eclipses even the worst days of the Global Financial Crisis of 2008. (weekly chart)
• Probability of default is 47% - so says the market (CDS).

"There is never just one cockroach in the kitchen" Warren Buffett 

With more cockroaches making an appearance, could gold perhaps  take out the previous hump?

Regulators have been warning for some time of the myriad crypto risks seeping into the mainstream banking system, comparing them directly to the $1.3 trillion subprime mortgage market that incentivized greed, exploited regulatory arbitrage and eventually led to the 2008 economic meltdown. 

 

Notes today:

Lawrence H. Summers on CNN: SVB committed one of the most elementary errors in banking: borrowing money in the short term and investing in the long term. When interest rates went up, the assets lost their value and put the institution in a problematic situation. 

Quite true Larry, however borrowing short and lending long is what banks always do and have always done - it’s the only thing banks seem to know how to do. (see banking and commercial real estate)

Perhaps the Fed (and the regulation opposing dudes) could make sure that all banks have a risk manager in "place" (and not  across the country away from the rest of SVB’s top fools) that understands duration and conceivably even understands how to hedge a bond portfolio. Perhaps someone could point these risk managers to the futures exchanges.

This stuff is learnable. 

• In a case that starkly illustrates the deadly consequences that the US’s permissive gun culture has on the country’s youth, a three-year-old girl accidentally shot her four-year-old sister to death in their Texas home late on Sunday, according to authorities.

• Biden approves controversial Willow oil drilling project in Alaska.👎

 

Notes today:

• Recession may arrive sooner than anticipated..

• First Republic (FRC) down more than 60% in premarket trading as measures taken by regulators so far fail to calm investors.

• Silicon Valley Bank's depositors are helped, equity and bondholders are being wiped out. 

• Signature Bank (crypto scheme focused) closed by regulators ..

• Former board member 

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• Ayn Rand  - not so popular in silicon valley today.. But no worries, welfare for adherents,
  hypocrites and frauds -  continues...

• The decision of the Swiss authorities to destroy decommissioned but fully operational and not obsolete air defence systems instead of deliver/sell them to Ukraine is like a decision to destroy bread amid famine. It is way more than just coldness or lack of empathy. It is cruelty. Sergej Sumlenny @sumlenny

• The Russia situation:
• Artist:
  @Patbagley
  
  
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