Redditors Claim Chipotle To Announce Pay Increases To Address Labor Shortage
Thanks to the robust vaccine distribution and more and more states easing pandemic restrictions, on top of a labor shortage sparked by the Biden administration’s generous stimulus checks disincentivizing people to work while collecting free money from the government, restaurants large and small are grappling with a lack of workers.
“When it comes to recruiting workforce, in January, 7 percent of restaurant operators rated recruitment and retention of the workforce as their top challenge; by April, that number had risen to 57 percent,” Riehle told The Epoch Times.
“With fewer people in the workforce, the stimulus supports still in place, worker safety concerns, the need for caregivers to remain at home, and much greater competition with other industries for workers, operators are returning to pre-pandemic recruitment techniques for hiring,” he said.
The latest restaurant chain to experience a possible labor shortage is Chipotle. Unconfirmed reports on Chipotle Mexican Grill r/ Chipotle have cited moderators of the Reddit forum are deleting posts about an alleged conference call on Friday addressing pay raises set to be announced Monday. The plan is to increase the pay of workers to address the labor shortage.
“Just to let y’all know chipotle is warning everyone to take down posts about the new announcement or you can get fired, they’re doing a press release Monday and until then they want everyone quiet,” one Redditor said.
“We’re getting performance reviews and raises of up to two dollars,” a Redditor said.
The potential rise in wages comes as others on the social media platform reported, “some stores in California and Florida are not even opening, entire teams quit.” In a thread below, someone said, “my location in Ohio isn’t even open on mainline most days just because we’re short-staffed, not even because of covid.”
Another person said: “Same, and I’m also in SW Ohio, Cincinnati area. All stores around here are having a lot of issues getting new workers.”
Someone else mentioned the Friday conference call: “We were just told in a conference call this morning about pay raises. Everyone is getting about 1-3 dollars more and starting rates for new hires; FOH will start at 15-15.50 and BOH will be 15.50-16 in Southern California. Apparently, there will be a big press conference on Monday.”
All of the comments above are from Reddit and are unconfirmed. Still, what people are saying (sounds like some are current and former employees) is that Chipotle is being forced to raise its wages to attract workers from the sidelines to squash a labor shortage that has materialized at stores across the country.
… and what does this all mean for patrons? Higher menu prices, of course, Chipotle will likely pass on the costs.
So much for that “transitory” inflation spike, Federal Reserve members keep squawking about… Maybe inflation is here to stay.
“There are few ways in which a man can be more innocently employed than in getting money,” is an insight the famed biographer James Boswell attributed to Samuel Johnson.
Clients of the late Bernie Madoff, however, might take issue.
Over four decades, Madoff, acclaimed as the greatest fraudster of them all, ran a Ponzi scheme that swindled 40,000 people, including his closest friends, out of $65 billion.
But if “getting money” is among the most innocent of callings, America has more than its fair share of the goodly people who excel at it.
According to Forbes’s 35th annual ranking of billionaires, last year witnessed a population explosion. Some 660 new billionaires were added to the number for a total of 2,755.
And more than one in every four billionaires is an American.
According to Forbes, the richest man in the world is Jeff Bezos, founder of Amazon and owner of The Washington Post, with $177 billion.
Last year was the fourth in a row that Bezos led the list. His wealth exceeds the entire GDP of almost 150 nations.
Directly behind Bezos, at No. 2, is Elon Musk, chief executive of Tesla, whose wealth rose to $151 billion.
Numbers 4 and 5 were Bill Gates, co-founder of Microsoft, with $124 billion, and Mark Zuckerberg of Facebook with $97 billion.
“As a class billionaires added about $8 trillion to their total net worth from last year, totaling $13.1 trillion,” says the Washington Post.
“The United States had the most billionaires, at 724, extending a rapid rise in wealth that hasn’t happened since the Rockefellers and the Carnegies roughly a century ago. China, including Macau and Hong Kong, had the second highest number of billionaires: 698.”
This tripling of the wealth of the world’s billionaires and 30% increase in their number came during a year when America and the West endured the worst pandemic in a century and worst economic collapse since the Great Depression.
“While most of the world’s wealthiest people prospered during the pandemic, thanks in part to stock prices,” writes the Post, “millions of Americans grappled with job loss, food insecurity, debt, eviction and poverty.”
Query: Where was the outrage?
In previous times like these, where the rich got richer and the poor and working class rode the rails, we would have heard the excoriations of economic populists and echoes of TR’s “malefactors of great wealth” and FDR’s “forces of entrenched greed.”
But Forbes’ report of the population explosion among billionaires in 2020 passed seemingly without protest.
The dogs did not bark. Why not?
One reason: Whatever one may think of Bezos, Amazon, in 2020, was indispensable for delivering food and medicines to tens of millions of Americans who, given the “lockdowns,” depended on such deliveries for survival. You don’t castigate people providing your food and medicine.
Also, today’s billionaires’ boys club has come to understand how to make its astonishing wealth acceptable, by ingratiating themselves with their old ideological enemies.
Set up a tax-exempt foundation, fund it with billions of dollars, invite in liberals to sit on the board, and, at munificent salaries, to run it and distribute its income to liberal causes. The way to diminish leftist resentment at huge piles of private wealth is to give them a cut.
No wonder Elizabeth Warren’s wealth tax went nowhere.
However, they did it, America’s most successful capitalists have learned the lesson some previous generations of capitalists did not – how to preserve their wealth, privilege and economic power and avoid such derisive terms as “capitalist pig.”
Yet, of greater interest, and import, is that the China of the new Great Helmsman, Xi Jinping, a one-party Communist dictatorship, coexists with hundreds of Chinese billionaires.
What would Marx, Lenin, Stalin or the Mao of the Revolution that triumphed in 1949, who put his country through the Great Proletarian Cultural Revolution of the 1960s and 1970s, say of Chinese oligarchs and plutocrats, each of whom possessed at least a billion dollars in wealth?
Politically, China remains under an ever-tightening Communist rule.
But today, there are inequalities of wealth between the working poor and middle class, and the well-to-do and rich, that would have been anathema to the revolutionaries who founded Communist China.
Is China running a capitalist economy to generate the wealth to consolidate Communist Party control of the nation and grow China’s economic, military and geostrategic power until China displaces America as the first power on earth? So it would appear.
One wonders: Has China found the formula for global ascendancy that eluded the Soviet Union of Stalin, Khrushchev and Brezhnev?
Use state capitalism and market incentives to build the economic wealth that can be translated into the growth to enable China to ascend to a level of power where it is indisputably the first nation on earth?
Are the Chinese billionaires the geese laying the golden eggs for the Chinese Communist party? Is Communist doctrine being updated to accommodate the most successful Communist country of them all?
Clocks Ticking On Colonial Pipeline Restart: “After 72 Hours… It Gets Really Tough”
While cyber-attacks have disrupted the operations of other energy assets in the U.S. in recent years. this weekend’s theft of Colonial’s data, coupled with the detonation of ransomware on the company’s computers, is by far the largest and most impactful.
As we detailed earlier, the hackers who caused Colonial Pipeline to shut down the biggest U.S. gasoline pipeline on Friday began their blitz against the company a day earlier, stealing a large amount of data before locking computers with ransomware and demanding payment, according to people familiar with the matter.
Bloomberg reports that the intruders are part of a cybercrime gang called DarkSide, took nearly 100 gigabytes of data out of the Alpharetta, Georgia-based company’s network in just two hours on Thursday, two people involved in Colonial’s investigation said.
Aside from the inevitable sabre-rattling ‘blame Russia’ policy prescriptions that are likely imminent, the biggest concern for the ‘average joe’ American is – what will this do to gas prices?
“Restarting the pipeline is easy if no actual damage was done to it,” said McNally, who now runs Rapidan Energy Group, a consulting firm in Washington.
“The question is whether the attack was limited and contained and it didn’t cause any physical damage to it.”
But others are less sanguine.
The attack was on “the brains of the system,” according to Niyo Pearson, an oil and gas adviser for Cynalytica, a cybersecurity firm. “It controls the settings on the pipeline, what the pressure is, remote operation of valves,”
And that means, as Bloomberg reports, trying to restart the flow of gasoline without that capability would require Colonial to send people to various facilities along the length of the pipeline, and the expertise needed to operate under those conditions is limited, he said.
A key concern at present is meeting product demand in the U.S. Southeast, which is especially dependent on the Colonial system, people familiar with the situation said. The Northeast can secure gasoline shipments from Europe, they said, but it will come at an increasing cost the longer the pipeline stays shut.
“The longer it lasts, the more bullish it will be for refined products on the East Coast,” said Warren Patterson, head of commodities strategy at ING Groep NV.
“This will likely also drag European product prices higher, as we see more waterborne cargoes needing to go into the U.S. East Coast to meet the shortfall.”
In the meantime, Bloomberg reports that fuel producers including Marathon Petroleum Corp. are weighing alternatives for how to ship their products to the Northeast in case Colonial isn’t restored quickly. Traders and fuel shippers are seeking barges and other vessels to deliver gasoline that would have otherwise been shipped on the pipeline, according to people familiar with the matter. Others are securing tankers to temporarily store gasoline in the U.S. Gulf in the event of a prolonged shutdown, the people said.
“The Colonial outage comes at a critical juncture for the recovering U.S. economy: the start of the summer driving season,” ClearView Energy Partners said.
“We therefore think lawmakers could begin a ‘blame game’ immediately, and a sustained disruption that leads to a significant pump price spike could increase prospects of domestic policy interventions.”
The clock is ticking… “If they can restore their systems in 72 hours — or even a week — they’ll be in good shape,” Cynalytica’s Pearson said. “It gets really tough after that.”
There are new disclosures from Hunter Biden’s laptop that offer an added perspective on his dealings with Chinese figures, including Patrick Ho, secretary general of Chinese oil giant CEFC, who was later indicted and has been connected with Chinese intelligence. The emails and pictures relate to the young Chinese assistant supplied to Hunter who makes revealing statements about the fluid expense accounts and level of support given Hunter by the Chinese. I have read through the new messages and I am not clear about the relationship with the young aide who tells him that she still has his dog tags in her New York apartment. However, the new emails include details on how Biden was paid and the fluidity of the accounts established by the Chinese.
There is much on the Internet suggesting that the 29-year-old Chinese-American assistant, JiaQi Bao, was an effort by Chinese intelligence to create a sexual relationship that could be used to influence Hunter and ultimately his father — much like the scandal involving Rep. Eric Swalwell’s intimate relationship with an alleged Chinese spy. It is not clear that Biden had any intimate relationship with Bao.
The first of the emails from Bao appear to be dated shortly before the arrest of Ho in November 2017 and after the business partners were stepping back from the company and associations including the one with Bao. It is not clear if Biden was told at that point that he needed to wall off Bao and others connected to the company, but he does not appear to respond to the emails.
The emails take on a certain stalking quality as Bao repeatedly seeks to resume the association by stressing that she wants to be his friend. She also repeatedly references some misunderstanding that he might have about her. (At one point, she tells Biden that she does not want him to view her as “a messed up bad girl.”). She also states in later emails that she tried to reach out to Hunter on various communication systems or platforms to no avail. She says that she wants to have a relationship as a friend, but it appears that Hunter was not responding to those entreaties.
My greater interest remains in the fluidity of Hunter’s financial dealings, the references to mass transfers to him or his uncle, and the role of Ho who American intelligence has long tied to the Chinese government and intelligence services. In the emails, Bao offers possible talking points in dealing with the election and opposing research on Trump including Trump’s alleged links to a Chinese-owned Florida “prostitution parlor,” an ironic attack point given the photos of Hunter with alleged Chinese prostitutes. (Biden admits in this book that apart from his intimate relationship with his late brother’s widow, Hallie. the “other women I’d been with during rampages since my divorce were hardly the dating type.”).
Bao’s emails discuss Chinese accounts that appear to have cash available to Biden to use at his discretion. One section is titled “Keep As Much Money As You Can” and encourages Biden to drain accounts that are just sitting their with cash, including ramping up his expenses. The references indicate the easy availability of the money from the Chinese during a period when Hunter admits to be being continually drunk and engaged in sexual and narcotic excesses.
Again, in fairness to Hunter Biden, there is no response from him and the emails come across as a former assistant trying to reestablish a relationship and regain his confidence. However, it gives an insight into these accounts and how Biden could pull expenses from the company.
The enterprise itself seemed to quickly collapse but Biden received a huge amount of money without an evidence of substantial work on his part. Indeed, Biden admits that he was still a crack addict during this period and the photos show him passed out and doing drugs as well as sexual trysts with various women, including possible prostitutes. Gao herself expresses concern over Hunter’s abuse of alcohol: “One of my New Year’s Wishes is that you could drink less… I will do anything and everything to make you happy so that alcoholic beverages’ widely believed mythical function as a stress reliever won’t be an excuse for indulgence!”
Hunter recently admitted that during this period he was “[d]rinking a quart of vodka a day by yourself in a room is absolutely, completely debilitating” as well as “smoking crack around the clock.” (Indeed, the dog tags in Bao’s apartment were from Biden’s short stint in the Navy before being discharged for drug use). However, the Chinese wanted to pay him millions as their business adviser and assigned Bao as his assistant.
This brings us back to Ho and the ongoing investigation of Hunter Biden. Biden has insisted that the investigation is solely focused on tax issues and he will be cleared. That may be true. However, we know that these transactions were flagged by federal authorities including claims over possible money laundering. As an attorney, I would be very concerned if my client was transferring such large amounts of money from these accounts. The items discussed by Goa include her listing of Hunter’s expenses as including payment to the Yale Club in May 2018 totaling $16,578.69. It is not clear which account that money came from. However, she notes that she is “not sure if the accounting department will let this go.”
There is a legitimate question of why a company closely connected to the Chinese government and possible Chinese intelligence would be giving millions to Hunter and his uncle. Hunter’s laptop shows that he transferred about $1.4 million of funds from his company Owasco to his uncle’s consulting firm between 2017 and 2018.
Hunter and Joe Biden’s brother Jim partnered with CEFC in 2017 but the enterprise collapsed the following year when Ho was arrested and later convicted of bribery in a US federal prosecution.
The continued lack of interest in those connections by most of the media is astonishing and part of a continued blackout of virtually any scandals and possible crimes connected to Hunter. I feel the same way about the continued investigation of Rudy Giuliani’s efforts in the Ukraine. There is a legitimate media interest in whether laws were broken or whether Trump associates lied about these efforts. My problem is that the media has overwhelming and continuing interest in one (Giuliani) and little interest in the other (Biden). Both raise serious questions that should be fully investigated and disclosed for the public.
Disney Caught Indoctrinating Employees With Critical Race Theory, “White Privilege” Checklist
According to newly leaked employee training manuals, the Walt Disney Company has been pushing “Critical Race Theory” (CRT) on its employees, including lectures on race and white privilege, and how America was ‘founded on systemic racism.’
According to the trove of documents leaked by a whistleblower, Disney’s “diversity and inclusion” program called “Reimagine Tomorrow” as become “deeply politicized and engulfed parts of the company in racial conflict, according to city-journal.org.
The core of Disney’s racial program is a series of training modules on “antiracism.” In one, called “Allyship for Race Consciousness,” the company tells employees that they must “take ownership of educating [themselves] about structural anti-Black racism” and that they should “not rely on [their] Black colleagues to educate [them],” because it is “emotionally taxing.” The United States, the document claims, has a “long history of systemic racism and transphobia,” and white employees, in particular, must “work through feelings of guilt, shame, and defensiveness to understand what is beneath them and what needs to be healed.”Disney recommends that employees atone by “challeng[ing] colorblind ideologies and rhetoric” such as “All Lives Matter” and “I don’t see color”; they must “listen with empathy [to] Black colleagues” and must “not question or debate Black colleagues’ lived experience.”
Disney claims that America has a “long history of systemic racism and transphobia” and tells employees they must “take ownership of educating yourself about structural anti-Black racism” and “not rely on your Black colleagues to educate you,” which is “emotionally taxing.” pic.twitter.com/eSSxpPvvFF
In another module, called “What Can I Do About Racism?,” Disney tells employees that they should reject “equality,” with a focus on “equal treatment and access to opportunities,” and instead strive for “equity,” with a focus on “the equality of outcome.” The training also includes a series of lessons on “implicit biases,” “microaggressions,” and “becoming an antiracist.” The company tells employees that they must “reflect” on America’s “racist infrastructure” and “think carefully about whether or not your wealth, income, treatment by the criminal justice system, employment, access to housing, health care, political power, and education might be different if you were of a different race.” –city-journal.org
To enact this radical training agenda, Disney sponsored the creation of the “21-Day Racial Equity and Social Justice Challenge” in partnership with the YWCA. It begins with information on “systemic racism” and demands that participants accept that they have “all been raised in a society that elevates white culture over others.”
The lesson then shifts to “white privilege,” in which employees are asked to fill out a white privilege “checklist” with options that include “I am white” , “I am heterosexual” , “I am a man” , “I still identify as the gender I was born in” , “I have never been raped” , “I don’t rely on public transportation,” and “I have never been called a terrorist.”
Next, participants are asked to complete a “white privilege checklist”: “I am white,” I am heterosexual,” “I am a man,” “I still identity as the gender I was born in,” “I have never been raped,” “I don’t rely on public transportation,” and “I have never been called a terrorist.” pic.twitter.com/hcTVp9Tnz1
Participants then learn about “white fragility,” and are made to complete an exercise called “How to Tell If You Have White Fragility.”
In it, white employees are taught to interpret their own beliefs such as “I am a good person, I can’t be racist,” and “I was taught to treat everyone the same” as evidence of one’s own internal racism and white fragility.
Disney claims that America has a “long history of systemic racism and transphobia” and tells employees they must “take ownership of educating yourself about structural anti-Black racism” and “not rely on your Black colleagues to educate you,” which is “emotionally taxing.” pic.twitter.com/eSSxpPvvFF
At the end of the 21-day challenge, participants are told that they must “pivot” from “white dominant culture” to “something different” – and that “competition” and “power hoarding” come from predominantly white leadership. What’s more, “individualism” , “timeliness,” and “comprehensiveness” are “white dominant” values which “perpetuate white supremacy culture” and should be rejected.
Did you get that? Simply being on time to things is perpetuates ‘white supremacy culture.’
In the same collection of resources, Disney also recommends that employees read a series of how-to guides, including “75 Things White People Can Do for Racial Justice” and “Your Kids Are Not Too Young to Talk About Race.” The first article suggests that white employees should “defund the police,” “participate in reparations,” “decolonize your bookshelf,” “don’t gentrify neighborhoods,” “find and join a local ‘white space,’” and “donate to anti-white supremacy work such as your local Black Lives Matter Chapter.” The second article encourages parents to commit to “raising race-consciousness in children” and argues that “even babies discriminate” against members of other races. A graphic claims that babies show the first signs of racism at three months old, and that white children become “strongly biased in favor whiteness” by age four.
Finally, as part of an initiative labeled “CEO sponsored priorities,” Disney has launched racially segregated “affinity groups” for minority employees, with the goal of achieving “culturally-authentic insights.” In the original launch, the Latino affinity group was called “Hola,” the Asian affinity group was called “Compass,” and the black affinity group was called “Wakanda.” The racial affinity groups, also called Business Employee Resource Groups (BERGs), are technically open to all employees but in practice have become almost entirely segregated by race, with the occasional exception for white “executive champions” who attend on behalf of corporate leadership. “The thing that this company does very well is they know politics, so they leave many things unspoken,” said one employee, a racial minority, who also claimed the affinity groups are intended to be racially segregated spaces. “I don’t think anyone has necessarily even tried to attend something that they would discover that they’re not welcome at.” –city-journal.org
One employee told City Journal‘s Christopher F Rufo that the political environment at the company has intensified in recent months, and that there are “almost daily memos, suggested readings, panels, and seminars that [are] all centered around antiracism.”
The company is “completely ideologically one-sided” and actively discourages Christian and conservative employees from expressing their views.
“I attended several [training sessions] at the beginning just to see what the temperature of the discussion would be and to gauge if I would be able to bring up my own objections in a safe way—safe meaning for my career. And I’ve continually gotten the unspoken answer: ‘no,’” said the employee. “It’s been very stifling to feel like everyone keeps talking about having open dialogue and compassionate conversations, but when it comes down to it, I know if I said one thing that was truthful, based on data, or even just based on my own personal experience, it would actually be rather unwelcomed.“
I’ve made my position very clear, in a world of digital money and accelerating technology there is room for both assets as stores-of-value for different types of investors and taking a ideological position for either is stupid as well as arrogant.
Like all things, there are reasons why putting all of your eggs in one basket in markets as cocked-up and purposefully manipulated as these is simply bad asset management. Risk is, ultimately, not someone else’s problem no matter how much Wall St. tries to convince of this otherwise.
Risk is your problem.
The gold and crypto communities have been at each other’s throats for months now, as bitcoin continued rallying off the Coronapocalypse low from last March while gold peaked in August and has ground out a truly demoralizing eight-month bear market.
The envy coming from Gold-Only bugs has them missing one of the great opportunities for wealth creation in anyone’s lifetime. You don’t have to love bitcoin to make money from it. Just like you can hate Facebook but own its stock and cash it in when it’s too expensive versus another asset, say… I don’t know? Gold?
But that inverse relationship is finally changing. Bitcoin and gold are getting back into phase. And it’s right on schedule.
Gold double-bottomed a few weeks ago in the $1670 area and since then a number of small announcements gave it some spine, mostly coming from China — allowing its commercial banks to import up to 150 tonnes of gold. That stabilized the price while at the same time Bitcoin has been building a new base between $48,000 and $64,000.
Consolidation is the word of the day. Both bullish but coming off of different recent trends.
Gold is the standard by which all store-of-value assets is judged. Those that make their living hanging on every word from the Fed are looking at their traditional cross-asset valuation models, seeing U.S. real interest rates rise and had no interest in bidding up gold.
To many of them this bitcoin thing isn’t a real market. Cryptos are a tulip bubble and no one serious takes it seriously. They rightly see the insane situation in Dogecoin and simply have zero frame of reference for what’s going on out there.
Humans are really good at a few things and one of them is rejecting outright something more than one standard deviation away from their previous experience. Dogecoin is something even us veteran crypto advocates look at and shake our heads.
For the past six months however, that perception has slowly changed as one big institution after another bows to bitcoin’s strength and the demand for it. On the best of days those of us in the crypto space have a hard time keeping up with the speed of adoption and the proliferation of new investment products, aspirational projects etc.
So I don’t blame these guys for looking at a sagging gold price and thinking the central banks still have things well in hand. They’ve been telling us inflation is tamed and the recovery is coming as we pull out of the lockdowns. Bitcoin may have been screaming otherwise, but gold wasn’t, so you go with what you know, right?
And then that narrative collapsed.
Today’s horrific jobs report finally revealed the reality behind the recovery narrative. 266,000 jobs. Not nearly 1 million. As Zerohedge points out, a 3.7 sigma miss.
To make matters worse, revisions to the February and March’s data nearly wiped out April’s net gains.
Reality slapped everyone in the face. Gold spiked, bonds were bid. The dollar dumped and everyone is looking at the Fed going, WTF Powell?
The reason there is no jobs recovery is because the U.S. government, on the orders of The Davos Crowd are paying people to stay home. Why work when you can live rent-free in someone else’s house protected from eviction?
Why work when the government will pay you nearly as much to stay home?
This jobs report validates everything libertarians and Austrian economists have been saying about minimum wage laws for two generations and turned it into a cartoon. Moreover, this is happening while cost-push inflation for real goods is running far ahead of whatever heuristically-adjusted nonsense they call the CPI says.
The numbers coming out of the equations may be right but the assumptions behind the equations are wrong.
That’s been the “Gold-Only” Bug’s argument and it’s also the Bitcoiners’ argument.
I’ve said this before, it’s a GIGO economy. Garbage in equals garbage out until you finally stop believing the garbage isn’t foie gras. Look up Rene Girard’s Memetic Collapse and you may finally realize who important today’s jobs report was.
And because of that all of a sudden those guys who thought real yields were somehow positive are now radically revising their models based on real world data which says the exact opposite. As such, gold has quickly left $1800 in the rearview mirror and should now be one its way back to the August all-time high.
Today there is now the slowly dawning realization by so many big name money managers that both the Gold Bugs and the Bitcoiners may have been right all along. Gold and bitcoin are the safe havens from central banks and government operatives hell bent on changing the rules of the economy completely.
They are now coming out and complaining about stimulus and support screwing up the labor market. Job openings are at record levels while the Biden administration continues trying to keep everyone at home rather than go back to work.
1. Pay people not to work.
2. Cite weak employment as reason for more stimulus.
This is The Davos Crowd’s Great Reset in real terms. This was all part of the plan, folks. Supply chains of basic goods and services are breaking down all over the place and still these people want to keep us locked in our homes until we all get their DNA-altering jabs against COVID-19 which we’re still supposed to be scared of.
That narrative is more unbelievable than the plots of most stuff you find on PornHub for pity’s sake.
That narrative is used to justify, in effect, Universal Basic Income and the destruction of risk capital as an asset class. Let’s just give everyone new digits without backing and send them out to buy another two-liter of Woke-a-Cola Classic, order a cardboard pizza, Netflix and chill.
While denying the reality that in places where there are no mask mandates and no lockdowns the COVID-19 numbers are irrelevant. At this point we are trying to tease signal out of noise. Every day more and more people are tired of it while the corporations who were promised a rose garden by Klaus Schwab continue to try to force everyone to accept masks, social distancing and vaccine passports as the New Normal.
But that New Normal is quickly morphing from The Great Reset to the Great Rejectas the revolt against this, frankly, adolescent view of humanity is fought by enough people to ensure its abject failure from here out.
In fact, that’s the whole purpose of human endeavor, to turn today’s dreams into tomorrow’s reality. It doesn’t matter which tools we use to get us there, only that we use the right tool for the right task at the right time. Gold’s Achilles’ heel has always been its lack of yield which allowed the central planners to destroy its ability to keep its network of users from collapsing. Once that was achieved divorcing the derivatives, national currencies, from it was child’s play.
Today bitcoin is assisting gold find its place back into the world’s monetary system. It’s helping accelerate the realization by a critical mass of people that those in charge hate us, and only want us around if we kowtow to them as digital serfs in a dying world. They believe they can leave us behind by walling us off the gifts of their world.
But those gifts are shackles, of the mind, body and spirit.
Meanwhile the “Gold Only” Bugs are still hunkered down while the Bitcoiners and those with a foot in both camps are building new alternatives to the digital serfdom of The Davos Crowd.
Returning to a world of real ownership and custody begets a world of responsibility and discipline. Bitcoin and cryptocurrencies have, like all other technologies, the capacity to become corrupted and that’s why gold should always be there to keep us in line.
As The Great Reset unravels and the central banks’ fail to outcompete bitcoin and cryptos, there will come a day where today’s gold reserves, which they control, become the last line of defense for governments intent on maintaining control. And that’s when things really get interesting.
Another ‘Mystery Explosion’ Has Hit An Oil Tanker Off Syria’s Coast
An oil tanker off Syria’s Mediterranean port of Banias has been hit with an explosion Sunday, resulting in a fire on board which was reportedly extinguished soon after.
There were reportedly no casualties, but subsequent photographs showed large plumes of black smoke rising above the tanker, which may have been engaged in offloading its cargo. The ‘mystery’ blast comes after a series of alleged Israeli covert attacks against both Iranian and Syrian ships believed engaged in “sanctions-busting” activity related to Washington-led anti-Assad measures.
However, Syrian state media was quick to call it a “technical fault” which “took place in one of the engines of the oil tanker near the coast,” according to the description.
Journalist and Syria analyst Danny Makki quipped in the wake of the incident, “This comes amid a sharp and unexpected rise in engine malfunctions in ships near the Syrian coast” – strongly suggesting that it appears anything but a mere engine accident.
The oil tanker was widely reported as being empty of its cargo at the time of the blast and fire.
Due the increased frequency of Israeli attacks on Syria as well as Iranian and Syrian vessels, which also in recent months have occurred in the Red Sea, a number of online commentators were quick to speculate this new tanker incident was the result of a drone or other aircraft attack…
REPORTS: UK-US-EU-armed drone attack on oil tanker off the coast near a Russian base and by one of Syria’s largest oil refineries at Baniyas, threatening a Mediterranean oil spill.
“While the market remains in a very tight range, the ‘money flow’ sell signal (middle panel) is reversing quickly. Importantly, note that the money flows (histogram) are rapidly declining on rallies which is a concern.”
This past week, market action was sloppy as investors are finding fewer reasons to push stocks higher. Friday’s very disappointing jobs report provided some catalyst as the Fed is assured not to reduce monetary support anytime soon. However, despite the push, the overall conviction was lacking.
Notably, the “money flow buy signal” seemed to cross; however, we need some follow-through action on Monday to confirm. As shown, the uptick in money flows did allow us to add some exposure to portfolios in holdings we had taken profits in with the previous “sell” signal.
Again, we do want to see confirmation that the breakout above the consolidation range can hold. The last breakout failed, so, again, we do need “follow-through” to confirm buyers are indeed back. Notably, the MACD “sell signal” in the lower panel remains, which suggests upside likely remains limited at this juncture. If the “buy signals” align, we will have a much higher level of conviction about higher prices.
Overall, the market trend remains bullish, so there is no need to be overly defensive. Just a regular process of tweaking risk and managing exposures is all that portfolios require for now. Such is what we have recommended over the last several weeks, so we are now in a position to take advantage of a short-term bullish move.
For the rest of this week’s message, we will go into deeper detail on the issues I discussed in the latest “3-Minutes” video:
Inflation, and Margins, and
Over the last few weeks, we have seen numerous companies report stellar earnings growth. Yet, the market has failed to reward the good news as stocks get sold off. As the chart below shows, it has not been just a few select isolated cases.
There are a couple of reasons for this.
The first is that earnings guidance has not been “exuberant.”Many companies are starting to express concerns over inflationary costs (including labor) and weaker future demand as stimulus fades. Secondly, the problem with earnings in the near term is that most earnings improvement has come from expanding net margins.
That massive boost to net margins came from the economic shutdown. With reduced workforces, a shift to lower-cost “work-from-home,” and increases in productivity through technology, the surge in margins is not surprising. However, as the economy “reopens,” that tailwind to earnings will fade quickly. The rise of inflationary inputs, increased employment, and potentially higher taxes will shrink net margins dramatically in the quarters to come.
Such also suggests that analyst’s extremely optimistic earnings revisions will likely need to shift down as well. If the market is indeed sniffing out an “earnings peak” short term, it could be increasingly difficult to justify currently high asset prices and valuations.
Here is the problem for investors currently. Given analysts’ assumptions are always high, and markets are trading at more extreme valuations, such leaves little room for disappointment. As shown, using analyst’s price target assumptions of 4700 for 2020 and current earnings expectations, the S&P is trading 2.6x earnings growth.
In other words, is the recovery all priced in? The bond market thinks so.
“As shown, the correlation between rates and the economic composite suggests that current expectations of sustained economic expansion and rising inflation are overly optimistic. At current rates, economic growth will likely very quickly return to sub-2% growth by 2022.”
Not surprisingly, given the substantial rise in asset prices, the ratio of stocks to bonds (S&P Index / Bond Total Return) surged to a record high. It is worth noting that previous stock/bond ratio peaks have coincided with corrections and bear markets.
Importantly, as discussed here, indicators like stock/bond ratios, valuations, and fundamentals all suggest low returns over the longer term. However, in the short-term, the next few weeks or months, there is very little correlation.
It will be the Federal Reserve that controls the near term.
The Fed May Not Like What It Gets
Over the last couple of weeks, both Fed members and Treasury Secretary Janet Yellen floated “trial balloons” that it may be time for the Fed to start lifting rates. The latest comments came from Dallas Fed President Robert Kaplan when he noted the Fed is likely to achieve its “substantial progress” metric as the economy recovered faster than expected.
“The Fed is again suppressing rates but should be using the massive liquidity injections and economic recovery for hiking rates and taper bond purchases to prepare for the next downturn.”
Over the next couple of months, there will be an evident surge in inflation, which the Fed wanted. However, that surge in inflation may come in a lot “hotter” than they anticipated. If that occurs, bond yields will jump higher, effectively “tightening” monetary policy very quickly.
“The Fed has been very articulate in the message they are sending, and as I mentioned the last time, they are placating the equity market. But at the same time, daring the bond market to push rates higher. If the Fed gets its wish of higher inflation, it will push long-term rates significantly higher from here, and there is no way for the equity market to combat that.
The problem is that the market already is trading at its most overvalued levels vs. the 10-year since the mid-2000s when all of this low rate policy began.The higher stocks and yields move, the more overvalued the equity market grows, and the more dangerous it becomes.” – Mott Capital Management
Maybe More Than Just Talk
While the Fed continues to push the narrative, they “aren’t even thinking about thinking about tapering,” the recent “trial balloons” from both the Fed and Treasury may suggest differently. More importantly, as Mott concludes:
“While it sounds all fine and great for the equity market now, it won’t be if rates get just a little bit higher. Powell clearly made the correct call at the March meeting, buying himself another six weeks, but with a slew of economic data coming in the next few days that will show a lot of inflation, he may find the next six weeks harder to endure.”
While the “bullish mantra” has continued to be, correctly, keep buying dips as long as the “Fed Goes BRRRRR,” there is a rising possibility the “printing presses” may need to be turned off. The Fed faces the problem and understands that if inflation runs hot, interest rates will rise. When that happens, it isn’t just the equity market that comes under pressure. Every market built on debt from houses to automobiles, credit markets, mortgage markets, and consumer credit is at risk.
Of course, the biggest issue of all is when the reversal in equities occurs. That reversal will ignite the leverage that now extends into levered ETF’s, cryptocurrencies, options, and a myriad of other speculative investments.
In other words, the Fed got trapped between continuing to suppress interest rates or deflating the most significant asset bubble in financial history. While the hope is that the Fed can do it in a controlled manner (a soft landing), the Fed’s past attempts have been less than successful.
As we noted last week,
“Another reason we don’t expect a lot of upside to markets because the recent “consolidation” failed to work off any of the overbought conditions. Notably, the market remains more than 5% above its 50-dma, which is historically extreme. Such gets corrected, usually through a price decline or a consolidation.”
Our “sell signals” have kept us somewhat underexposed to equities and slightly overweight cash. However, the deterioration of “money flows” concerns us and aligns with hedgefund liquidations over the last several weeks.
Given the more extreme selling pressure and the current short-term oversold condition of the market, we have begun nibbling at exposures that we like. There is also a reasonable expectation we will start to see the major tech companies pick up a bid as managers look for positions with lots of liquidity as we head into the weaker summer months.
As shown, we are continuing to run a “barbell” approach to portfolios by overweighting our inflation sectors and underweighting our deflation sectors relative to the benchmark. (60/40 index) We have a very short-duration bond portfolio, which is why our “cash” is overweight. (Primarily 1-3 year duration holdings)
Once we get the next “buy” signal, we will adjust our weightings accordingly, but for now, we remain comfortable with our exposures. We continue to “tweak” the allocation as needed to adjust for risk as our intermediate-term concerns remain.
“The worst thing anyone can do is to extrapolate to the future. As Bob Farrell once said: ‘When all the experts and forecasts agree, something else is going to happen.’ The consensus has never been more lopsided, and that is reflected in asset allocations that heavily weight stocks relative to bonds.”
“It’s A Hustle”: Dogecoin Demolished After Musk SNL Snafu
Once upon a time Saturday Night Live was a celebration of acting talent, of impromptu creativity and most importantly, of humor, which is why it launched the careers of too many comedians to count. Alas, over the past few decades, SNL lost its way, and become preachy podium for virtue signaling poseurs, for status quo apologists and for countless people who reveled in the “uniqueness” of their identity politics yet can’t cobble together a simple joke if America’s Universal Basic Income depended on it. It’s also why over the past few decades the viewership of SNL collapsed and countless Americans forgot about the show. Well… many got a stark reminder last night when millions turned on SNL for first time in years (or ever) only to be immediately reminded why they never watched it anymore: yet another catastrophically boring, uninspired and trite attempt by a cast of talentless hacks to be funny yet failing miserably.
And then there was Elon Musk.
The world’s 2nd richest man was the main reason why an entire generation of young Dogecoin “traders” turned on SNL for the first time in their lives…. only to see their favorite joke of a cryptocurrency (which it is by definition) demolished after weeks of breathless buildups for what Elon Musk had in store. Unfortunately, as with most things Musk, the action was all in the fervent anticipation of the main event… which turned out to be a fiasco.
Having surged to a record high of 73 cents (making it the fifth most valuable cryptocurrency) on Saturday ahead of the show, it started to drop as soon as Musk took the microphone….
… or properly promote his favorite joke of a cryptocurrency. It ultimately dumped as low as 42 cents at of 8:05 a.m. ET…
… a 35% decline in 24 hours and a disappointment for all those who had expected that Musk’s SNL appearance would be the catalyst that pushes the “dog” above parity with the dollar. Or, as Baird’s Michael Antonelli put it, “bad jokes and no funny memes leading to a Doge crash absolutely makes sense to me. It’s like an earnings miss but for a new era.”
Bad jokes and no funny memes leading to a Doge crash absolutely makes sense to me. It’s like an earnings miss but for a new era.
So what about the overhyped Musk appearance? It was, in a word, forgettable, his opening monologue flat and boring, which perhaps can be chalked up to Musk’s disclosure that he had Asperger’s, although once again Musk had some trouble with reality – he said he was the first person with Asperger’s to host the show, which is false: Dan Aykroyd was…
… in which Musk incorporated his first Dogecoin reference, a throwaway line from Musk’s mother, who joined him onstage and asked if her Mother’s Day gift would be Dogecoin; Musk replied that it would be. Clearly unhappy with the angle Musk had chosen, just minutes later the doge faithful proceeded to dump the currency, which fell 25% to 50 cents from 66 cents at the start of the show.
Leading into the episode, Alameda Research trader Sam Trabucco (who said in a previous Tweet that he was “studying the typical SNL episode structure to try and understand when a DOGE mention would be the most natural”) speculated that if a joke or mention didn’t come in Musk’s opening monologue, it would be “all over.” And despite getting a very brief mention during the monologue, traders still responded quite negatively.
What he did next did not help: when Musk was asked repeatedly during the “Weekend Update” segment to explain what Dogecoin is. After reciting multiple facts about the cryptocurrency in the character of a “financial expert”, he was asked if Dogecoin was a “hustle.” He responded, “yeah, it’s a hustle” after previously claiming that Dogecoin “the future of currency, it’s an unstoppable financial vehicle that’s going to take over the world.”
Meanwhile as Musk was sweating before the live audience as well as on YouTube (NBC chose for the first time ever to live-stream the episode on Youtube) Barry Silbert — the founder and CEO of Digital Currency Group, the parent company of crypto investment vehicle company Grayscale — announced a public short on DOGE via the FTX exchange. In a series of follow-up Tweets, he revealed that the position was $1 million in size, and that any proceeds or remaining funds after closing the short would be donated to charity.
Okay $DOGE peeps, it’s been fun. Welcome to crypto!
But the time has come for you to convert your DOGE to BTC
As dogecoin was routed, so was the rest of the crypto space, with bitcoin sliding more than 2% to as low as $56,500 while most altcoins were also dragged lower.
Perhaps sensing that his vastly overhyped appearance would lead to turmoil for dogecoin, on Friday Musk tweeted a that cryptocurrencies are “promising, but please invest with caution” linking to a video that showed him talking about the merits of crypto, particularly Dogecoin. That followed months of Twitter posts from Musk about Dogecoin, all of which exuded praise and snared millions of his easily impressionable followers into buying the “joke.”
That said, despite the overnight tumble, Dogecoin is still up more than 16,000% in the past year and while Musk has been among its biggest boosters, fans also include Mark Cuban, Snoop Dogg and Gene Simmons.
May is on its way, and the old investment saw, “Sell in May and go away,” will be tested once again. Jared Blikre, writing for Yahoo Finance, provides the history behind what may or may not be good advice.
“The full axiom was originally, ‘Sell in May and go away, and come on back on St. Leger’s Day,’” he explains.
“It has its roots in the City of London. Financial professionals would go on holiday in May for approximately four months to escape the summer heat and return for the St. Leger derby in mid-September.”
While we’re told there’s a pent-up demand for travel, people’s phones and trading apps will still be close by, begging for attention in the summer sun. Robinhood and Coinbase alerts won’t hide from the weary traveler parked under an umbrella, toes in the sand, piña colada in hand.
Dogecoin will not get the hell out of Dodge this summer. The cryptocoin, created as a joke, is surprisingly not obscure. My newest doctor and I, while he drained the goo from a ganglion cyst on my wrist, discussed the trading action of dogecoin after I mentioned I had done some work on booms and busts.
As I write, Dogecoin is up after Elon Musk, who will add Saturday Night Live guest host to his resume on May 8, called himself “the dogefather.” Musk’s Tesla shares continue to defy logic and gravity, but could the coming guest-hosting gig signal a market top, at worst, or a reason to sell in May, at least?
DOGE, created by software engineers Billy Markus and Jackson Palmer, was also discussed at dinner the other night, when a couple, who admitted they have no idea what they’re doing, said with a shrug, “Yeah, we’ve each doubled our money in a few months trading stocks.” Nothing as exotic as DOGE, but reopening plays like cruise line and airline shares.
Kevin Duffy, proprietor and author of the Coffee Can Portfolio newsletter, provides thirteen rules for investing, not speculating. Number 12 is, “The retail investor is always late to the party.”
To the sensible and experienced, it seems late indeed.
But is piling into US dollars, made less worthy each day by the Powell Fed, a good idea?
The US central bank now has a climate change mandate, in addition to full employment. Soundness of the currency used to be top of mind for central bankers, but that horse left the Eccles Building long ago.
“Climate change and the transition to a sustainable economy also pose risks to the stability of the broader financial system. So a second core pillar of our framework seeks to address the macrofinancial risks of climate change,” Fed governor Lael Brainard said recently.
With Brainard, Jerome Powell, and Treasury secretary Janet Yellen focusing on the climate, the M1 money supply has gone parabolic, from just over $4 trillion in February to $18.6 trillion in March.
This is right out of Gideon Gono’s playbook. The once governor of the Reserve Bank of Zimbabwe, said, among many outrageous things, “There is a positive correlation between the drought and inflation.”
So there you have it. And you thought monetary policy and climate were mutually exclusive. I wrote on mises.org in 2010,
“Forget about money printing. Inflation is all about the weather, lack of support from other nations, and political sanctions. In Governor Gono’s mind, he has had nothing to do with the hyperinflation in his country. ‘No other [central-bank] governor has had to deal with the kind of inflation levels that I deal with,’ Gono told Newsweek. ‘[The people at] my bank [are] at the cutting edge of the country.’”
Gono took his job in 2003 with that nation’s inflation rate at 619 percent per year. Five years later, in mid-November 2008 the inflation rate peaked at 79,600,000,000 percent per month.
Maybe we should head toward DOGE this summer, after all.