Month: May 2021

Authored by Sven Henrich via NorthmanTrader.com,

Markets continue to be engaged in a very subtle battle for control. Having just witnessed another minor pullback of 5% or so here in May one can certainly argue it’s business as usual in 2021. New highs every month, some smaller pullbacks in between and then off to new highs. Basically the 2013 script.

The latest pullback however came at a point of a critical pivot: The 2020 trend. Would it be saved again, or would there be technical damage inflicted that could foretell a long overdue correction to come following the largest rally of our time?

For context I highlighted the critical junctures of this battle in a video last week:

What happened last week? Markets again bottomed and engaged in another furious multiple up gap driven rally coinciding with the Fed expanding its balance sheet by a whopping $92B during the same week:

Based on this chart pullbacks only come when the Fed temporarily stops expanding or slightly reduces the balance sheet.

New highs follow once the Fed’s balance sheet makes new highs.$SPX is in essence a Fed balance sheet tracker. pic.twitter.com/Hon168jtiy

— Sven Henrich (@NorthmanTrader) May 24, 2021

So yes, business as usual and if this program retains its control new highs should be expected once again.

Indeed, yesterday $SPX was again trading within 1% of all time highs. Some correction.

Further supporting the notion of new highs coming yet again is one signal chart, that of $NYSI, which sees the slow stochastic nearly max oversold, which is ironic considering the market only had a 5% pullback:

The most oversold reading of its kind in 2021.

In context of the quarterly chart such an oversold reading seems utterly laughable:

The historical track record for $SPX trading entirely outside its upper quarterly Bollinger band is extremely scant.

One example I found was in 1997:

That example resulted in a quarterly 5 EMA reconnect the following quarter. Note in today’s market environment the quarterly 5EMA has not been touched this year yet and is currently sitting at 3746.

Another example of extreme disconnect above the quarterly Bollinger band was just before the 1987 crash:

That year too saw 2 quarterly 5 EMA disconnects in the first half of the year only for the crash to offer a rebalancing of extended prices.

The only other example I found was in the 1950s:

That extension example also produced a quarterly 5 EMA reconnect the following quarter.

Bottomline here: All history suggests a reconnect coming and continuing to chase new highs in context of price entirely above the quarterly Bollinger band is risky in context of all history.

Yet, a Fed continuing to insist on running QE at twice the size of the annual US military budget may indeed continue to suspend history as markets apparently are content to simply track the Fed’s balance sheet.

Still there is something else to consider in context of the recent trend challenge. It’s all very subtle and as of yet unproven, but nevertheless one could make the following case: That the trend actually did break last week and recent strength simply constitutes a back test of the trend:

A stretch to make that case you say? Perhaps as there is no evidence of rejection still.

Yet, let me offer two recent examples of similar behavior.

The first example is $NDX in 2018:

An uptrend that broke with little initial follow through. Indeed what we witnessed was a period of 15 days hugging and back testing the broken trend line before markets then rolled over in earnest an ended in a 20% correction on $SPX.

The second example is February 2020:

Here too we witnessed a relentless uptrend in tight price ranges, then a trend break in January 2020 that was initially ignored and followed by a series of back tests of the broken trend line.

Both in 2018 and 2020 these charts produced marginal new highs giving the appearance of business as usual when they instead turned out to be a major selling opportunities.

Also of note: The final rallies tagging the broken trend lines were marked by low volume and steady ascents and tight price ranges. Basically exactly what we are seeing currently. None of this proves a repeat is imminent, but it suggests the possibility exists. Based on the 2018 and 2020 examples this chugging along the broken trend line could last anywhere from 10-15 days. If there is to a repeat this leaves room for marginal new highs still first and the process to continue into early June or a rejection could of course occur at any time.

When will we know if these structures apply? Once there is a confirmed rejection below last week’s lows for the trend break would be validated then.

The target if it were to come to fruition? Frankly lots of possibilities. From a basic monthly 5 EMA reconnect, to a daily 100MA-200MA reconnect and even a quarterly 5 EMA reconnect.

For reference: The monthly 5 EMA is at 3987 at the moment, the daily 100MA is currently at 3972 offering confluence support, the 200MA at 3731, the quarterly 5EMA at 3746 also offering confluence support. Both zones could set up for long bounce rallies. In 2013 a reconnect to the 100MA in June of that year was the extent of major corrective activity in that year.

If the Fed remains in full control I suppose there is nothing to worry about, if these 2018 and 2020 chart patterns now seemingly repeated in 2021 have any relevance then current market strength and/or any potential marginal new highs may turn out to be a major bull trap. We’ll know more in the next week or two.

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Several of Jeffrey Epstein’s alleged co-conspirators, including recruiters, sexual partners and friends are set to drop the dime on Ghislaine Maxwell at her trial later this year, according to recent court filings analyzed by the Daily Mail.

Prosecutors announced in the filing that materials presented at trial will include ‘any co-conspirator statements,’ which the Mail says is a “major sign that one of Epstein’s inner circle has turned state’s witness.” What’s more, they agreed to turn over ‘the identity of any unindicted co-conspirator’ nine weeks before the trial, which is set to begin in November.

Meanwhile, Maxwell admitted in a filing seeking to dismiss the case that one accuser was “encouraged to recruit other females to provide massages to Epstein.”

The filings strongly indicate that some of the four women who were named as potential ‘co-conspirators’ under Epstein’s sweetheart plea deal in 2008, under which he served just 15 months in jail for having sex with children, could face off against Maxwell in court.

The women in question have been accused of being Epstein’s ‘recruiters, groomers, sexual partners and friends’ and have almost always pleaded the fifth amendment when questioned during depositions.

They are Sarah Kellen, 40, who is accused of having a rolodex of women she would call up for massages at Epstein’s mansion in Palm Beach, Florida.

Lesley Groff, 53, is said to have been Epstein’s executive assistant for 20 years and said in a 2005 interview that she had such a tight bond with him ‘I know what he is thinking’.

Nadia Marcinko, 35, is alleged to have taken part in sexual encounters with underage girls and has been described as Epstein’s on-off girlfriend.

Adriana Ross is a former model from Poland in her 30s who allegedly helped to organize Epstein’s massages. -Daily Mail

In a late Friday night court filing, prosecutors and Maxwell’s defense submitted their own preferred timetables and logistics for the trial. According to prosecutors, materials during the trial “will include testifying witness statements, which themselves will also include any co-conspirator statements about which witnesses may testify at trial.”

Prosecutors “only intend to introduce co-conspirator statements either through the testimony of witnesses or in the exhibits, which will be marked before trial,” and will include documentary statements about co-conspirators “e.g., emails between Epstein and any number of thousands of persons,” per the filing.

More via The Mail:

The material will include documentary statements about co-conspirators ‘e.g., emails between Epstein and any number of thousands of persons’, the government said.

The few emails that have been made public in relation to Epstein have emerged from a defamation case brought by Epstein victim Virginia Roberts Giuffre against Maxwell.

The case was settled but a federal judge has ruled that the documents should be made public and they are being released in batches.

Among the emails was one from Epstein to Maxwell on January 24, 2015 after Giuffre accused her of recruiting and grooming her for Epstein to abuse.

Epstein tells Maxwell: ‘You have done nothing wrong and i woudl (sic) urge you to start acting like it. go outside, head high, not as an esacping (sic) convict. go to parties. deal with it’.

Maxwell’s correspondence with Prince Andrew was also made public and shows him asking about Giuffre.

If the alleged co-conspirators do give evidence it promises to be one of the most dramatic moments of Maxwell’s trial.

Kellen has been accused of being Epstein and Maxwell’s top lieutenant

She flew 350 times on Epstein’s private jet, known as the ‘Lolita Express’, and has been seen in photographs on his private island in the Caribbean.

Epstein victim Sarah Ransome has said that ‘it was Ghislaine and Sarah Kellen that showed me how to please Jeffrey’.

Kellen is now married to Nascar driver Brian Vickers and has rebranded herself as an interior designer under the name Sarah Kensington.

When approached by reporters outside her home in New York’s Lower East Side last December, Kellen said: ‘I’m no monster. I’m a victim of Jeffrey Epstein. I was raped and abused weekly’.

Marcinko’s personal story is disturbing and Epstein once bragged she was his ‘sex slave’ who he had bought from her family in the former Yugoslavia when she was 15.

She reinvented herself as a pilot who ran a company called Aviloop selling discount flying lessons under the name ‘Global Girl’.

Groff was Epstein’s personal assistant in New York and Ransome has claimed that she spoke directly to her including once emailing that she Epstein requested that she lose weight to maintain her slim figure.

Maxwell, 59, has denied it all. 

Via Christophe-Barraud.com,

In March, housing prices growth accelerated, rising at the fastest pace since at least 2013. The trend is likely to remain strong in the coming months raising pressure on Fed to taper MBS purchases in the second half of the year.

Housing Prices Growth Kept Accelerating In March…

In March, a measure of housing prices in 20 cities rose at the fastest pace since December 2013, boosted by low mortgage rates and limited inventory. As I expected, on a YoY basis, the S&P CoreLogic Case-Shiller index (20-City Composite) surprised upward and rose 13.27% in March (up from 12.0% in February). In the meantime, the S&P CoreLogic Case-Shiller index of national property values climbed 13.19% YoY, the biggest jump since December 2005. The increase followed a 12.04% gain in February.

This trend was confirmed by other indexes. As a matter of fact, the CoreLogic House Price Index for March grew by 11.27% YoY (up from 10.28% YoY in February). It was the fastest increase since March 2006. In addition, the FHFA (Federal Housing Finance Agency) purchase-only price index rose 13.9% YoY in March (the largest increase on record and up from 12.4% YoY percent in February).

… Raising Pressure On Fed To Taper MBS Purchases In H2

Even though housing prices growth will slow this summer (due to unfavourable base effects, a rebound in inventory and the end of foreclosure moratorium and mortgage forbearance), the trend should remain robust.

Why is the Fed buying cascades of mortgage bonds, when there is a complete melt-down in housing supply and a complete melt-up in housing price action.

It is simply just CRAZY!

More in our weekly -> https://t.co/Q7zkfYGL0r pic.twitter.com/jCttLMbd1w

— AndreasStenoLarsen (@AndreasSteno) May 23, 2021

In this context, I think that the debate concerning MBS purchases from the Fed will gain traction in the coming months. It will result in tapering before year-end. Fed Chairman Jerome Powell could be tempted to flag the move at Jackson Hole conference during the summer.

It may not feel like it, but the market is pretty much dead: as we noted last night, Tuesday’s consolidated volume just tumbled to the lowest of 2021, while total options volume yesterday was 540,000, which was less than Christmas Eve and also the lowest volume of 2021.

What’s going on here?

Well, according to Nomura’s Charlie McElligott, the “chokeheld” market is acting frozen because it is “stuffed to death on options Gamma”, with a ton of vol selling seen so far this week particularly in single names, whether via covered call overwriting and put underwriting, as well as due to “perpetual SPX strangle selling“, coupled with the ongoing slow bleed of of VIX ETN longs monetization into the latest “inflation scare” vol spike. Some more details:

SPX gamma is $7.4BBN, which ranks 52nd %ile, while $Delta is +$264.8B, or 78%ile; Gamma vs Spot flips down at 4,103 vs 4,199 ref so we have a ways to go before we go negative gamma

QQQ Gamma is +$530MM, or 93rd %ile, while Delta is +$5.7B, which is 81st %ile; Same as with SPX, QQQ Gamma vs Spot flips “waaaay down” at 328.37 vs 334.10 ref

Picking up on this “gamma gravity” tractor beam, our friends at SpotGamma also look at the current snapshot of SPY gamma, shown in the chart below, which highlights a very large amount of gamma tied to the 420 level. And with SPX having a similar chart, the takeaway is that 420/4200 area has a big pull and it will likely take some options rolling or decay for markets to pull away.

The Combo Strike charts are shown here in which you can see the thick band of resistance from 4211-4230 which is why SG  has suggested it as a high gamma resistance “area” as per resistance “strike”.

That said, should spoos somehow get knocked lower and breach the gamma gravity, SG cautions that there is a “void” that has formed below 4175. It would take a break of 4160, at which point gamma changes quite sharply down to 4055. According to SpotGamma, this sharp gamma change would act as “volatility fuels” and would likely lead to a fast move to 4055 if 4160 breaks.

Hypotheticals aside, the one place where there is some potential action now is small caps: as McElligott notes, IWM is worth watching for chase-y moves, as it remains extremely short gamma and short delta vs spot, and is also an extremely sensitive and potentially price-binary to any surprise with tomorrow’s US data, as a pure-play “cyclical value”/”reflation” proxy.

And with both implied (VIX has slumped again this week) and realized vol again collapsing (SPX 5d realized from 28.1 on 5/14/21 to today’s 10.8), Nomura estimates that Vol Control was a large buyer yday at +$7.2B of SPX (91ST %ile 1d add), which will likely continue in the weeks ahead if daily moves remain “insulated” as per the current long Gamma long Delta environment (i.e. daily 50bps +/- daily change would be +$21.5B over 2w / +$56.6B of exposure to buy back over the next 1 month).

Adding to the bullish narrative, the CTA model similarly shows an addition of +$12.7B of Global Eq “net exposure” over the past 1w (almost entirely on the Nasdaq flip back to “+100% Long” signal), with Russell continuing to “chop” around its signal on a smaller notional position, but it too would go back to “+100% Long” on a close above 2208.

McElligott’s summary punchline: “the US Equities Vol space has seen an important inflection this week, as SPX upside Call Skew has finally caught a semblance of “bid” (1m now 50th %ile rank from 21st %ile last Friday on 2Y lookback horizon), while downside Put Skew comes off the boil (2w down to 80th %ile yday from 91st %ile last Friday).”

Via Greg Hunter’s USAWatchdog.com,

Money manager and economist Peter Schiff says all the debt and money printing by the Fed will, ultimately, get down to one thing and that is the U.S. dollar. 

The Fed has been getting away with this turbocharged money creation policy since the last financial meltdown in 2008.  In 2021, the consequences of “money for nothing” are finally kicking in.  Schiff explains,

“The inflation crisis and the dollar crisis . . . are a much bigger economic event that will have a much greater impact than the 2008 financial crisis.  I have been warning about the consequences of all this money printing for years and years.  Now, finally, you are really starting to see that.  The government has been able to bury the amount of inflation they have been creating because of the CPI (Consumer Price Index).  The CPI doesn’t really capture the degree that prices are going up.  So, it creates a false sense of confidence that we haven’t had inflation, but now prices are rising so rapidly that even the government’s doctored CPI number can’t hide it. . . . We are getting these huge price increases across the board.”

How worried should people be about all the Fed money printing?  Schiff warns,

“The Fed says there’s nothing to worry about.  Inflation is just going to magically come back down.  We are still going to be at 2% inflation.  So, we can keep the printing presses going with the pedal to the metal, and we are going to have these huge deficits.  We are going to print all this money, and there is nothing to worry about.  Well, you better worry!  This crisis will be much worse than 2008, and unlike 2008, nobody’s getting a bailout.  The reason the Fed could do the bailouts is the Fed could print the money to fund the bailout.  The next crisis is the dollar that is going to be in crisis. The dollar is going to be crashing, and they can’t bail anybody out from a dollar crash because all they can do is print more dollars, which will just accelerate the collapse of the dollar.”

The warning is simple.  Schiff says, “This is a completely dysfunctional economy that is going to collapse when the bottom drops out of the dollar.  I think that crisis is close at hand.”

In closing, Schiff points out,

“Gold and silver are very cheap.  Everything is in a bubble except gold and silver because gold and silver are real money. . . . We are going to see all these bubbles deflate in terms of gold and silver.  The price of stocks, real estate and crypto currencies are all going to come way down in terms of gold and silver. . . . Get your gold and silver, physical coins, buy that now while you can still get it.  In the future, not only are the prices going to go way up for the metal, but the premium on the coin is going to go way up in addition to that.”

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with money manager and economic expert Peter Schiff, founder of Euro Pacific Capital and Schiff Gold.

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JPM CEO Jamie Dimon has softened his stance on bitcoin as his firm works to build its own crypto business, but in hindsight, it’s becoming increasingly clear why he initially opposed crypto and threatened to fire any bankers caught dabbling in it. Years later, the crypto boom has enabled an entire cohort of Wall Street bankers to walk off the job.

The other day, there were reports about a Goldman Sachs MD who decided to retire after raking in millions of dollars with dogecoin. Now, Bloomberg is reporting that two former Credit Suisse traders (and longtime friends) have struck it rich with Three Arrows Capital, their own private crypto investment firm that is worth billions of dollars.

While their former CS colleagues (whose friendship dates back to high school) are being scapegoated for the Greensill implosion and Archegos blowup, twin scandals that cost the bank billions of francs, Kyle Davies and Su Zhu, now 34, have earned their own massive pile of “f*ck you” money, all thanks to crypto, Bloomberg said.

Davies and Zhu attended high school together, then studied at Columbia University in New York before joining Credit Suisse as derivatives traders in Tokyo. After three years at the Swiss bank, they quit and launched Three Arrows Capital to begin trading traditional currencies in emerging markets.

“It was a very inefficient market, and that’s where we got our start,” Davies said.

Within three years, they went from working in their San Francisco apartment to hiring about 35 people and trading 5% to 10% of all local emerging market currency volumes, he said.

They diversified into options, equities and crypto after “bigger and better firms came in and were better than us” in FX emerging-markets trading, Davies said. By 2018, the firm concentrated exclusively on crypto.

Their Singapore-based company now runs a fund, DeFiance Capital, that invests in decentralized finance, betting that these businesses will “eat traditional finance over the next decade,” according to the group’s website. Investments include InsurAce, which provides insurance services, and CDEX, a cryptocurrency swap platform.

Of course, they’re not the only Wall Street veterans who defected to embrace crypto. The number of former Wall Street titans turned crypto devotees has grown considerably: there’s Dan Morehead of Pantera Capital and Mike Novogratz of Galaxy Digital.And of course Aziz McMahon, the Goldman MD we mentioned earlier.

Recent filings showed Three Arrows owned 5.6% of Grayscale Bitcoin Trust, one of the earliest funds to allow traders to gain exposure to bitcoin via their brokerage accounts. That stake alone would have made them billionaires, though its valuation has fallen considerably in recent weeks.

Kyle Davies and Su Zhu

The Grayscale stake made Three Arrows the largest shareholder and would have been worth as much as $2.1 billion in April. The trust’s shares have since tumbled 43% following Musk’s announcement this month that Tesla would suspend accepting the digital currency for purchases of its electric cars because of “rapidly increasing use of fossil fuels for Bitcoin mining” and regulatory clampdowns from China.

On a side note, Zhu has offered a word of caution to their fellow crypto billionaires: don’t talk about your crypto wealth. It can only cause problems.

Definitely, would esp urge crypto billionaires to turn down forbes list ranking questionnaires / interviews

No point getting involved, just say “no comment” like I do https://t.co/3ddhRc30lX

— Zhu Su (@zhusu) January 25, 2021

Asked about where he sees long-term value in crypto right now, Davies said ethereum seems like a solid play. “We have been long crypto for a while,” Davies said. “We’ve not always been long Ethereum, in fact we’ve been short for periods of time, too. What’s the best way to beat Bitcoin right now? Well it’s just to own Ethereum. The ultimate goal of my book is to outperform Bitcoin.”

By Michael Every of Rabobank

Oy Gestalt!

There isn’t a lot of direct interest to report on markets today, so I am going to take a small/big segue to cry “Oy Gestalt!” The phrase “Oy gevalt!” is a step up from “Oy vey!” as a cry of deep frustration. “Gestalt” is a school of psychology which emphasizes we need to perceive entire patterns or configurations to solve a problem, sometimes summarized with the adage, “the whole is more than the sum of its parts.” So let’s cry “Oy gestalt!” at what is going on around us.

US President Biden is to meet Russian President Putin in Geneva on 15 June to try to reset relations. This is a U-turn from the Democrats’ Russia obsession – but that’s just domestic politics; comes after Biden called Putin “a killer” – but that’s just domestic politics and bad diplomacy; after a Russian hack on a US oil pipeline, and the skyjacking of a jet; the latter came a few days after the US allowed Russia to complete the Nord Stream 2 gas pipeline to Germany, despite experts saying is not in its long-run interests; and as the WSJ says “Russian Military Seeks to Outmuscle US in Arctic”; a US General warns of Russia and China filling the US void in the Middle East; and the Global Times says “China, Russia eye fixing ‘global disorder’ amid US withdrawal”.

Geostrategically, this summit is a logical attempt at a ‘reverse Nixon’ to move Russia away from China, which is clearly seen as the #1 problem for the US. But in the 1970s, the power differentials between the US, USSR, and China were very different to today. The US could offer China Western markets and FDI: what can it give Russia today they may not already be close to achieving (with China) anyway? Is the US pushing back on NS2, or in the Arctic, or on Ukraine, or in Central Asia, or the Middle East, or Africa? No, it is retreating – while making no effort to create a new pan-European umbrella to try to shift Russia back westwards to a retirement in St Tropez.

As part of the US China-centric Cold War approach, Congress is deliberating a USD52Bn package that could, according to the Commerce Secretary, build 7-10 new semiconductor plants in the US. This is the kind of hi-tech on-shoring required for ‘resilience’ – but it’s small beer compared to what South Korea has planned, and they are still located next door to China and Russia. Moreover, where are the critical components to build the US semiconductors going to come from? These key inputs are increasingly located in territories or facilities friendly, owned, or in China and/or Russia, which are both rapidly expanding their geopolitical footprints. The same is true for green tech inputs, from solar panels to electric car batteries.

There is broad recognition in the US of the need to address deep-rooted inequality, expressed via ‘Buy American’, which Covid-19 has also shown is essential for vaccines, medicines, and medical equipment. However, the entire supply chain may need to shift, from raw materials to components, in order to be able to achieve this political and geostrategic goal. Private businesses are not going to front-run such a disruptive, expensive process unless the state lays down guidelines they can see are going to last. This means new trade relationships and/or physical infrastructure.

Think of China’s Belt and Road: is there any doubt in the mind of anyone involved that China means long-term business with the logistics that allow it to lock in physical supplies of key commodities in a hub-and-spokes model? And if it has the bulk of supply of critical inputs, how can it not then have the bulk of the manufacturing capacity too? Where does that leave US, EU, and UK hopes to ride green tech to a more self-reliant, more socially-equal future?

This brings us back to the more immediate market focus of the inflation/deflation debate. There is obviously a lack of joined-up thinking at play, which is why we have record US job openings and a very low labor participation rate. But how many central banks understand that as they concern themselves with economic justice at home, with echoes of ‘the class struggle’, and the fight against the climate crisis, that part of their ability to achieve these national goals may be directly linked to a very different kind of struggle going on abroad – over future supply chains and the finite resources needed for “Levelling up” and a “Green New Deal”? Few enough that it is worth crying “Oy gestalt!”

Central banks used to understand geopolitics. The Fed and BOE were more than aware of what was going on in WW2, and what needed to be funded, and which supply chains were required to make sure the Allies won. But outside such obvious episodes, central banks were created specifically to fund major national conflicts – not to target inflation or jobs. The assumption was that if you won the war, the jobs would flow; inflation could be worried about later, while the deflation of not having enough gold or silver would be averted. More commercially, think of the US hunt for powerful natural phosphate guano, which saw the States seize 100 islands in the Caribbean and Pacific in the 19th century to ensure enough supply to fuel their growing agricultural economy – which helped keep US food prices low, and to sculpt the global balance of power we see today.

In short, the gestalt view is that dealing with Western inequality is needed to prevent the pillars of liberal democracy from cracking. Here we have broad agreement. This requires abandoning parts of the neoliberal international economic consensus to onshore more production and jobs. Here too we have broad agreement. That requires making supply chains more ‘resilient’. Again, there is consensus here. However, in a Cold War environment where everyone wants to do the same thing, this means forcing an entire nexus of supply chains to come home; and the raw materials at the end of it; and the physical infrastructure to get it there safely. There is little recognition of this uncomfortable mercantilist truth – yet. But if you don’t do the above, then dealing with inequality via more stimulus can only end up in supply-push inflation that kills consumer demand and worsens inequality; or at least in a larger trade deficit that worsens inequality.

Of course, building that infrastructure and directing/controlling supply chains involves a lot more than polite committees passing resolutions. Or guano. It’s raw realpolitik. And it’s expensive. But then again, so are endless stimulus packages, and getting this big picture view wrong. Yet selling this kind of change to countries not used to it is difficult. Try telling the EU it needs to do a lot more than rolling its sleeves up if it wants to have true “open strategic autonomy” as one example. And a new outwards policy focus needs a change in the inwards one too. As the White House pushes for transformative economic and cultural change, the Financial Times today already carries an editorial arguing “Biden may have to choose between cultural and economic radicalism” because “history shows that Americans can only tolerate so much change at any given time”. Try selling those voters the message that the US has to build its own muscular Belt and Road when it cannot agree on building any roads at home.

A lot more change will be seen regardless, because others are already playing this game. And imagine if this spike in supply-chain driven inflation gets worse and isn’t transitory. Imagine if it is or isn’t covered by wage growth. And imagine if we then get deflation to follow. ”Oy gestalt!”