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Authored by Doug Kass via Seabreeze Partners,

• Short selling is risky

• Most individual investors would be better off to avoid short selling

• The academic evidence on the effects of short selling on our capital markets is overwhelmingly positive

• Short selling improves the efficiency of security prices, increases liquidity, and positively impacts corporate governance 

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“We don’t like trading agony for money” 

Charlie Munger (in his response to my question when I was the “credential bear” at the 2013 Berkshire Annual Meeting)

Short selling is a risky investment strategy where the investor profits if the stock price drops.

Let’s start with the reasons why most retail investors should not sell short as an offensive (and non arbitrage) strategy:

1. The gravitational pull of stocks is higher over time.  On average, equities return about six to seven percent per year. So, bull markets are a far more frequent condition than bear markets.

2. The reward v. risk in short sales is asymmetric. One can only make 100% on a short, but, in theory, the upside is infinite. (For example, GameStop rose from $20/share to $480/share. Compare that percentage rise to the percentage decline opportunity if GME had gone bankrupt!)

3. If a long goes against you (as the shares decline in price) the position becomes a smaller portion of your portfolio.  However, if a short goes against you (as the shares rise in price) the position becomes a larger portion of your portfolio.

4. Shorts are taxed adversely relative to longs. Longs sold after twelve months are eligible for long term capital gain tax rates. If you hold a short for five years and then cover for a profit – the gain is taxed as a short term gain.

Also consider that “everyone” is against a short — current stock owners, managements, Wall Street sell-side research, investment banks (trying to sell stock to the public), commercial bankers (who are hoping investment banks succeed  in raising capital, thereby reducing their lending risk) and, even, governments which prefer higher stock prices in order to receive higher tax revenues. 

The media doesn’t understand it.  Even Congress doesn’t get it.  After the Game Stop hearings the only conclusions reached were that there should be more restrictions on short sellers even though the shorts were the victims.  That’s just crazy.  Nobody in the hearings focused on how much the manipulative longs made and the pain THEY inflicted on the public.  The financial media doesnt get it either.  For every “short and distort” story, there are literally hundreds of fabricated touts lacking any real analytical basis .

The above factors help to explain why short selling is so difficult and why most should not sell short.  It requires a great deal of “supervision” of positions and price discipline.

I have the investment scars on  my back from my personal experiences in short selling when I was a “yute.”  As a result, I have developed some specific techniques to increase the odds of a profitable short. Let’s briefly examine my core tenets in shorting:

• Avoid shorting valuation. It is my experience that even the stocks with the richest valuations tend to get even richer valuations.

• Instead, find stocks to short whose business landscape (and potential sales/profits) are deteriorating cyclically or secularly relative to consensus expectations. 

• Do not short stocks with high short interest relative to the share float (total outstanding shares less insider holdings) or relative to daily average trading volume. In the main, I steer clear of shorts that represent over seven or eight percent of the float and when short interest represents more than seven or eight days of trading. 

• Short sellers should have stops and risk parameters set before the trade goes on.

• In shorting, err on the side of conservatism.

• On average, short position sizes should be smaller than long position sizes.

• Short position sizes should be weighed against one’s risk appetite and profile. 

Market Benefits of Short Selling

Short selling confers a number of benefits both directly to the capital markets themselves and indirectly to the real economy. Theoretical, academic and empirical studies have shown that short selling improves overall market quality by contributing to price efficiency, improves liquidity, and has corporate governance benefits.  (Historical bans and restrictions on short selling have proved to negate many of these benefits, to the detriment of overall market quality).

Pricing Efficiency

Short selling contributes to the accuracy, efficiency and natural discovery of prices in securities markets, primarily by ensuring that both positive and negative public information about firms are promptly reflected in prices. The 2013 Boehmer and Wu study examined the speed with which public information is incorporated into stock prices, finding that more active short selling leads to faster incorporation of information into prices.

Improving Liquidity

Short selling also positively impacts overall market quality through improvements in market liquidity.  A 2013 Beber and Pagano study examined the liquidity impacts of short selling bans across 30 countries, finding a decline in liquidity when shorting constraints are more severe.

Short selling helps the market to function more smoothly and efficiently.   For example, short selling allows a market maker, hedge fund or liquidity provider to hedge options, swaps, futures, ETFs, etc. This generally results in improved liquidity, tighter spreads between bids and offers and (de facto) in lower effective trading costs.

Corporate Governance Benefits

Short selling also contributes positively to strong corporate governance by serving as an external disciplining mechanism on firm management. In theory, since short sellers are motivated to uncover wrongdoing by management (and then trade on that information through short sales), the probability and speed with which corporate misconduct is discovered increase.  As a result, there is less incentive for management to engage in such misconduct, thus improving the corporate governance of the firm. A 2015 Massa and Zhang study examined the corporate governance impact of short selling – finding that the presence of short sellers does indeed improve the behavior of firm managers. 

Some of the greatest examples of corporate malfeasance and frauds have been discovered by short sellers. Baldwin United, Enron and Lernout & Hauspie are very good examples.

Shorting Strategies

There are many bonafide reasons to sell short away from an aggressive strategy to profit from lower stock prices.

For example, there are numerous hedge fund strategies that profitably incorporate short selling – arbitrage, long/short, etc.

However, most large investors now tend to avoid (non arbitrage) short selling because its hard to short in scale. Melvin Capital’s experience with GameStop will likely further dampen the interest of large hedge funds from short selling.

Given the longer term trend that stocks climb over time, it should be clear that long buying generates wealth.  By contrast, I consider short selling as a means of protecting wealth. 

I use both Index ETFs and individual shorts in my approach to managing money – but almost always stick to my basic core short tenets (above).

Most individual investors, if they short at all, should probably stick to Index ETFs – which are liquid and diversified and not subject to short squeezes (as seen recently in Tilray, GameStop and AMC).

Until recently, longs and shorts have operated on an uneven playing field as the large majority of Wall Street sell-side research has been historically geared towards long buys (and not sales/shorts).  As well, the financial media is geared towards buying not selling or shorting. However, with the broad expansion of social media outlets, this is changing and the field is growing more even.

Finally, it is my experience that when we compare fundamental long buyers to fundamental short sellers  —  short sellers tend to be somewhat more informed and rigorous in their analysis.  Given today’s dominance of passive over active investing, market participants today are less educated about fundamentals than in the past and more educated in price (momentum).  This has, in my view, created an unusual opportunity for short sellers who are willing to brave the formidable headwinds discussed above.

For the more than 500,000 Instacart gig workers fulfilling grocery orders at supermarket chains such as Giant, Food Lion, Costco, among others, the delivery service is exploring ways it can eliminate human workers by employing robots at warehouses, according to a new report via Financial Times. 

Anyone who straps on a mask, or now maybe two or three, and has shopped at a major grocery chain this year have noticed, many of whom, young millennials, running around the stores in green Instacart shirts, fulfilling orders. 

While this innovative delivery service has been nothing but stellar during the virus pandemic, the San Francisco-based startup has been researching ways to automate the picking process. 

“Last spring, Instacart sent out proposal requests to at least five companies that offer robotic systems that would pick goods from purpose-built “dark” warehouses instead of store shelves,” FT said.

Sources said, “Instacart had initially expressed a desire to open as many as 50 robot-driven warehouses across the US in about a year.” 

No deal has been struck with robotics makers to fulfill Instacart’s automation plans. This comes as Walmart and Amazon are entrenched in an e-commerce delivery war where networks of robotic micro-fulfillment centers are being developed around the country. 

The source said there’d been a lack of interest from grocery store players who have caught wind of Instacart’s plans. 

Brittain Ladd, a supply-chain consultant, said Instacart’s ultimate goal is to become an “online grocery retailer and leverage micro-fulfillment centers to fulfill their orders. “

Instacart told FT that human workers would “continue to play an important role” at the company.

“While we have no updates to share today, we’re constantly evaluating our services in deep partnership with the nearly 600 retailers we work with. Instacart’s entire product and model is predicated on being a chief ally to our retail partners.”

We’re committed to supporting our brick-and-mortar partners and continuing to invest in and explore new tools and technologies that support the needs of their customers and further enable their businesses to grow and scale over the long term.”

What’s troubling is that more than half a million people work for Instacart. If a future rollout of Instacart automation is seen, this will undoubtedly result in higher technological unemployment. 

Our advice to readers – if you’re in a low-skilled job that will be heavily impacted by artificial intelligence and automation – now is the time to retain for another job.

Submitted by Christoph Gisiger of TheMarket.Ch

David Rosenberg, Chief Economist & Strategist of Rosenberg Research, worries that the surge in bond yields threatens the economic recovery. He warns of the consequences of today’s massive debt volumes and explains why he spots investment opportunities in the commodity sector and in Asia.

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The temperature is rising. In the US, yields on long-term government bonds have jumped to the highest level since early 2020. Oil prices are rising, and copper is more expensive than it has been in almost ten years – clear signals that markets are bracing for a strong economic recovery.

“Not so fast,” says David Rosenberg. The internationally renowned economist and strategist from Toronto has no doubt that the pandemic will subside. But he also thinks that the post-opening growth spurt in the economy will soon lose steam and structural problems will resurface and reality sets in. “And then, we have to assess how these massive deficits and debts are going to be regressed,” he’s warning.

In this in-depth interview with The Market/NZZ which has been edited and condensed for clarity, the founder of Rosenberg Research explains why he sees attractive prospects for commodities such as oil, gas and copper despite subdued demand. He’s also bullish on US banks. Globally, he sees the best investment opportunities in Asia, where the economy is benefiting from China’s robust growth.

Mr. Rosenberg, one year ago today, the global outbreak of the pandemic triggered the worst market crash since 1929. Since then, the S&P 500 has fully recovered and gained another 15%. What’s your take on the current state of the financial markets against this background?

We are in another massive bubble. Not every single part of the market is in a bubble, but we have speculative frenzies in many pockets. There is not just this view that the central banks are always going to have your back and we have tremendous growth in money supply and liquidity, but there is also this extremely high level of confidence that life is going back to normal starting in the second half of this year. That’s really the primary driver of this tremendous confidence, whether you’re talking about corporate bonds, crypto currencies or the stock market.

To what extent is this optimism justified?

No question, we are going to get to the light at the end of the tunnel, but it’s going to take longer, and timing is extremely important in this regard. In the US, it looks like the vaccine rollout is winning and by a wide margin. But we also have to weigh in the fact that not every country in the world is going to come out of this at the same time. We are a globalized economy, and that’s going to be an impairment. Especially, with respect to the fact that Europe is so far behind which is going to have a big impact on foreign travel and on tourism. Keep in mind: Europe is every bit as large an economic unit in the world economy as the US.

However, the infection numbers are also declining in Europe.

I don’t believe life is going back to normal once we get to the end of the tunnel. There hasn’t been enough thought given on how behavior has been fundamentally altered from this past year of social distancing, travel restrictions and other curbs to movement, working from home. Sure, we are social animals; everybody is going to want to get out and go to bars and restaurants and go on a vacation. But we shouldn’t base our economic forecast on the fact that we’re going to have a couple of quarters of pent-up demand release in these cyclical services. That’s just temporary.

So what does the future look like in your opinion?

We are going through a secular change in behavior. Actually, we’re seeing it already. The market believes that the household sector has all this dry powder to spend. To that I’m saying: not so fast. If you go back to the Great Financial Crisis and look at the wealth shock the households in the United States endured, you can see a pattern that developed in the personal savings rate. This is crucial, because the savings rate is the most important behavior aggregate, the household decision on how much to spend and how much to save on every incremental dollar disposable.

What exactly do you mean by that?

Before the Financial Crisis, the trend average in the savings rate was 4%. In the following decade, the new equilibrium savings rate was 7%. In a $22 trillion economy, that’s a pretty big deal. It can make the difference between the economy growing in the low 2% range and in the high 2% range. So why is it that the last decade was one of the weakest economic cycles of all time despite all the stimulus? It’s because there was, at the margin, a fundamental shift in behavior. Those scars never went fully away. From a human standpoint, this current health crisis is far bigger than the wealth shock from the Financial Crisis. It affects everybody to a varying degree. Based on our work, in the next decade the new equilibrium precautionary savings rate is going to be closer to 10% than 7% – and that’s going to be a deadweight drag on aggregate demand growth for a long period to come.

However, the Federal Reserve and the US government remain committed to massive stimulus measures.

The markets believe we’re going to have a post pandemic party that’s going to last to perpetuity. I’m saying, maybe it lasts for a few months and then reality will set in. And then, we have to assess how these massive deficits and debts are going to be regressed. At the peak of the last bubble in 2007, the level of global debt outstanding was $100 trillion. Here we are at the peak of the next bubble, 13 years later, and it’s over $200 trillion. It has more than doubled from bubble peak to bubble peak. This is a very unstable situation. That’s why we can’t have interest rates rise for any length of time or any meaningful degree. It’s because of the implications from a debt servicing standpoint, and the impact rising rates will have on economic growth, defaults and delinquencies and so forth.

The yield on ten-year Treasuries got another strong push last week, topping 1.3% for the first time since last March. At what level do rising bond yields become a problem?

Nobody is that smart to know when we get to a breaking point. But let me just tell you with a 100% certainty: We’re getting closer to that point, than we were five, ten or twenty years ago. These deficits and debts will get regressed one way or the other. I don’t see how we are going to grow out of them, we’ve already tried that. I also don’t see how we are going to manage to inflate our way out. People don’t realize that the causation runs the other way. They say: “We’re just going to inflate our way out of this debt morass.” But the real problem is that the debt morass is what’s causing the credit multiplier to become impaired, and why we’re having this deflationary circumstance that was prevalent even before the pandemic.

Then again, there are many indications that inflation is picking up. In the USA, inflation expectations have risen to the highest level in more than five years.

Let me put it this way: The level of outstanding debt in the United States today at all levels of society, government, households, businesses, is just about $80 trillion. If the general level of interest rates goes up by 100 basis points and stays there, you’ve just pushed $800 billion or 4% of GDP into debt servicing. The US economy can’t really afford to have bond yields back up more than they already have.

Still, the US economy is expected to pick up steam this year. The Atlanta Fed’s GDPNow indicator signals 9.5% growth for the first quarter.

If bond yields rise because economic growth is accelerating, that’s one thing. But it’s not clear to me that the economy is going to be on a self-sustaining upward trajectory. Right now, it’s just an assumption, and we already know that less than 30% of these stimulus checks are actually going into the real economy. All that is happening is that we are borrowing from future growth; that is the overriding story: Money spent on borrowed money from the government. So we are building up for a “fiscal cliff” of epic proportions in 2022, and very likely a renewed economic downturn. And this means that the backup in Treasury yields will ultimately be reversed and I would not be surprised if the lows get revisited.

What are your expectations in terms of central bank policy?

For at least the balance of this year, central banks are going to do what they have been doing: Ongoing asset purchases and zero percent interest rates. I don’t see that changing. Many economists think that the Fed is going to have to pull the plug earlier than expected. I’m not so sure about that. I wouldn’t be surprised if the central banks are ultimately forced to do more easing as opposed to less. There is a risk that they will have to get even more creative in terms of their policies.

How should investors position themselves in this kind of market environment?

If I’m right and the market is way premature on its forecast, then there is a real opportunity here to go back to long-duration in the Treasury market. In fact, our proprietary bond duration model is flashing green right now after this latest move up in bond yields.

In other words, you recommend betting on long-term US government bonds and high-quality mortgage securities?

Absolutely. This move up in yields has been based on assumptions as opposed to reality. In terms of how you want to be invested, people think that they have to choose between value or growth. To me, it’s not value or growth, because you can actually own pieces of both. I don’t like the airline stocks. Neither do I like restaurant stocks, or theme parks, or hotels. If I want to play the recovery, I would rather do it in a diversified way than in buying single sector stocks. And, as a part of the value trade that is still relatively inexpensive, I would be buying the US banks.

But if yields fall again and the yield curve flattens, wouldn’t that weaken the banks’ margins?

Don’t get me wrong. I’m not saying there is a zero percent chance of some sort of recovery and that we’re going back into a perfectly flat yield curve. We will have a recovery, but it’s not going to be as big as people think. And insofar as you have a recovery in our mindset, you want to have exposure to the banks because they are a prudent, diversified way of playing any sort of recovery. Banks are still trading inexpensively, they generate a cash flow stream, and they pay a solid dividend. Basically, all the things you don’t get with Bitcoin you will get with the banks.

Where do you see further opportunities for investments?

You want to be invested in sectors where there are shortages, and there are several commodities that fit that bill. For instance, the demand outlook for oil is still challenging, but the pandemic caused significant interruptions in the production and storage of oil. It resulted in a drastic cut-back in capital expenditures in the sector. Indeed, the International Energy Agency estimates that upstream oil and gas investments fell 28% globally in 2020. In comparison, during the severe oil market downturn in 2015 which decimated many producers in the US and Canada, these investments fell only 12%. That’s why I believe that energy stocks as well as the debt of energy companies is attractively priced right now. The Oil and gas sector was undervalued and under-owned even before the pandemic, but with collapse in global demand in 2020, it has been even more unloved.

Crude oil prices have seen impressive gains since last fall. However, many investors are convinced that the trend is favor of renewable energies and electric vehicles.

Sure, longer-term, there are significant headwinds from the shift towards renewables, but that’s likely still years away. Bottom line: While the conventional energy space has been valued for extinction the future is one where petroleum products continue to play a major role. In the meantime, amid the current market backdrop where value and yield are scarce, the energy players offer low-cost access to an income stream in a sector where the bad news is likely already priced in.

How do you assess the prospects for commodities in general?

LNG and natural gas in particular have alluring characteristics, too. That’s why you want to have natural gas content and owners of pipelines in your portfolio. What’s more, if we get any sort of infrastructure package in the US, it’s going to have to include a revamp of the electricity grid. Within the commodity complex, there are other areas with clear supply and demand imbalances in favor of the price. Copper surely fits that bill. So you can have my cautious view on the economic outlook and still have a constructive assessment of the commodity landscape based on supply fundamentals.

Unlike oil and copper, gold is currently under pressure. Rightly so?

I own gold not to make a killing but as a ballast in the portfolio, a source of diversification and insurance policy against the gargantuan levels of outstanding liabilities. It’s a hedge against inflation, if we ever get it, and it’s also a hedge against deflation given these destabilizing financial imbalances we have. They’re not that apparent obviously when you look at the markets this year: The junkiest bonds have outperformed the most, and the junkiest stocks have outperformed the most. That’s how you know that we are in a speculative mania. So gold is an insurance policy against things going wrong, especially in a time when most asset markets are priced for perfection. You hope your house doesn’t burn down, but you still have home insurance.

Where else do you spot opportunities?

If my thesis is correct that we’re heading into a future of an elevated precautionary household savings rate, then you want to focus on what people need, not what they want. That’s why I prefer consumer staples over consumer discretionary. More to the point, you want to own companies with an ability not just to deliver growth but also with utility like characteristics. Here, you can actually pick up some quality names in the technology sector. Microsoft is the poster child for that particular viewpoint. It’s a classic growth company that has been re-rated for having utility like characteristics.

What’s your advice for investors looking outside the US?

Asia is where the opportunities are. If you are scanning the world for growth investments with P/E multiples that at least approximately match the growth outlook, you’re better off in Asia than in the developed world. The Asian countries, by and large, have dealt with the pandemic much better than most other parts of the world. Leaving politics aside, you have to face the fact that China was practically the only country in the world whose economy did not contract in 2020. They’re poised for at least 8% growth this year, and a lot of the countries in Asia are feeding off the improvement in Chinese economic growth.

What does this mean for investors?

China is about the only country with the capacity to ease monetary policy in a traditional sense. They did not embark on quantitative easing; they didn’t blow their brains out on fiscal stimulus. So far, they’re actually successfully moving towards deleveraging they’re heavily indebted economy. In contrast, the Fed is perpetuating a situation of survival instead of creative destruction. As a result, 20% of the companies in the S&P 500 are technically zombies, meaning they don’t earn enough cash flow to cover interest expenses. So at the margin, we have a situation where capitalism in America is going on a long-term sabbatical, when at same time, this communist country called China is moving increasingly more towards capitalism.

However, the authoritarian regime in Beijing could take different measures than Western governments to contain the spread of the coronavirus.

That’s true, but the reality is that as strong as China was relative to the rest of the world before the pandemic, it’s that much stronger today. This is going to be a big headache for Joe Biden in terms of how to curb China’s accelerating economic dominance. The irony of ironies is that Donald Trump’s first move as President was to walk away from the Trans-Pacific Partnership which actually would have helped to restrain China to some extent. Now, here we are after Donald Trump just left the White House, and China signs on to a trade deal with most of the rest of Asia that gives China more security of supply. So geopolitical complications aside, China’s growth outlook is very strong and that’s going to feed off into the rest of the region. That’s why one of my principal themes for the past several months has been “go east young man and young woman”.

Anthony Fauci, the nation’s top infectious diseases specialist (and highest-paid government employee), says that while we may still be wearing masks in 2022, those who have received a COVID-19 vaccine may be able to enjoy ‘eased’ public health protocols, according to Bloomberg.

“When you say, wait a minute, if I’m fully vaccinated, and my daughter comes in the house and she’s fully vaccinated, do we really” need the same strict rules? Fauci said during a Tuesday interview with CNN. “Common sense tells you that, in fact, you don’t have to be as stringent in your public health measures.”

That said, Fauci – President Biden’s top medical adviser, said he didn’t want to get ahead of the CDC’s advice, which he said could be forthcoming, and should “relax the stringency of the recommendations,” particularly when it comes to family members who have been vaccinated.

When host Alisyn Camerota asked Fauci whether fully vaccinated people should be able to get together with family indoors, Fauci responded that he would be comfortable with that, but that some of the discussions currently taking place “were not very comfortable.

According to Fauci, however, the CDC wants to “sit down, talk about it, look at the data and then come out with a recommendation based on the science.”

On Monday, Fauci recommended that fully vaccinated people still shouldn’t dine indoors or go to theaters yet.

Watch:

Authored by Charles Hugh Smith via OfTwoMinds blog,

So babble on, Babble-On 7; it won’t change anything. The forces in motion are like tides, and you can’t talk the tide into reversing.

Allow me to introduce the Babble-On 7: the six board members of the Federal Reserve and Treasury chief Janet Yellen. (The Fed board has seven slots but one is vacant at the moment, so 6 + Yellen = 7.)

These seven lackeys of the Financial Aristocracy babble on, endlessly repeating the same disconnected-from-reality fantasies and delusions, apparently on the premise that if they repeat “you can fly, you can fly!” often enough, people will jump off the cliff actually believing the Fed and Treasury gave them super-powers to sprout wings at will.

Alas, denying reality does not stop reality from intruding, typically with great force. The Fed is not all-powerful, and wings will not sprout from believers’ shoulder blades. They will impact the rocks at the bottom of the cliff with the devastating force known as gravity.

The short list of endlessly spewed disconnected-from-reality fantasies and delusions by the Babble-On 7 are:

Fantasy/Delusion # 1.

The Federal Reserve’s policies of free money for financiers and speculators did not cause or exacerbate the skyrocketing wealth-income inequality that is undermining America’s democracy, social order and economy.

If the Fed governors were Pinocchio, their noses would have now crossed the Grand Canyon. Please examine any chart of wealth-income inequality in the U.S. and note how it took off as former Fed chair Greenspan destroyed market discovery of the price of credit and risk, and the Fed chair servants of the Financial Aristocracy who followed (and who were each well-rewarded for their abject servitude) only accelerated and amplified the wealth-income inequality that has fatally undermined the nation.

The chart below reflects how each of the three Fed-inflated speculative bubbles enriched the Financial Aristocracy at the expense of the bottom 90%.

The Fed’s most recent spew of free money for financiers and speculators enriched the billionaires by a cool $1 trillion.

Fantasy/Delusion # 2.

This is not a bubble, it is merely plain old normal investor activity.

At this point, the Babble-On 7’s noses are in the troposphere, threatening low-orbit satellites, as even the most cursory glance at the charts of equities such as Tesla or the Russell 2000 index (IWM) reveal GBOAT: The Greatest Bubble of All Time.

Fantasy/Delusion # 3.

The next trillion will make it all better–and if $1 trillion isn’t enough, we’ll go big and create $5 trillion, $10 trillion, $20 trillion, whatever it takes, to prop up the sad, pathetic distortions that have brought America to the precipice.

Because the one thing Yellen and the Fed Six cannot allow is for those they serve so diligently to lose any of their bubblicious wealth. Since the bottom 90% own near-zero of the nation’s income-producing capital, the karmic collapse of the Fed’s latest and greatest bubble won’t have much of a direct effect on those who actually work for a living–but it will remove the immense hoard of phantom wealth the Fed has bestowed on the financiers and speculators that make up the Financial Aristocracy.

For the Fed, supposedly blessed with god-like powers, cannot eliminate diminishing returns on its delusional tricks. Lowering interest rates to zero–done. The sugar high from the Fed’s spew of trillions is diminishing faster than they can babble on.

The Babble-On 7 would do well to study the meaning of their moniker: Babylon:

Babylon has achieved considerable prominence throughout the ages as a symbol and by-word of wealth, luxury, decadence, vice and corruption. The city owes its fame (or infamy) to the many references the Bible makes to it; all of which are unfavorable.

So babble on, Babble-On 7; it won’t change anything. The forces in motion are like tides, and you can’t talk the tide into reversing.

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Bloomberg reports a train carrying coal collided with an 18-wheeler in Cameron, Texas, Tuesday morning. 

Local television station KVUE said the incident occurred around 7 a.m. local time. 

The Milam County Sheriff’s Office said there was no timing when the fire would be under control. 

Milam County Precinct 2 Commissioner Donald Shuffield said homes in the surrounding area were evacuated. So far, no injuries have been reported. 

A massive fireball erupts after the train smashed into an 18-wheeler. 

More scenes from the incident area. 

Video of the fire has emerged. 

EXPLOSION VIDEO: Ryan Kyburz captured the moments when a fire cloud erupted from the already heavily smoking train and 18-wheeler in Cameron. What we know so far >> https://t.co/dROScKIrrE

**WARNING: Video contains graphic language.** pic.twitter.com/gKV20WLz25

— KCENNews (@6NewsCTX) February 23, 2021

Watch Live: Train collides with 18-wheeler in Milam County, Texas

*This story is developing…