THE BIG FAT #BUBBLES UNWIND CONTINUES!

We think these reminders are quite appropriate at this time. This brutal bear market looks to become more apparent as the S&P closed on its closing low Friday as just about everything has turned down. We suspect you are going to hear a lot about the somewhat dormant VIX real soon as the many recognize that all the calls for a bottom on a daily basis do not have an understanding what we are dealing with. There is now potential for a give up phase. A give up phase is normal in bear markets.

We said 2 years ago and every time we are asked:

“90% of the coins will drop 90% with most going to 0.” We cannot begin to tell you and will not repeat the hate mail we receive on just this. We continue to be amazed with all the touts with smiles on their faces as they lose a ton.

“There will be an unwind of all the deficit spending and the $30 trillion of printed money around the globe by the whims of a few who have no oversight or accountability. Because of this, there are no more garden variety bear markets. The next one will be a doozy!”

“Massive bubbles are being created everywhere in a ton of “hunks of junk” and all the “hunks of junk” will pop in ways unimaginable. Marijuana, SPACs, 3D, meme stocks, no sales Biotechs, ridiculously priced IPOs, electric vehicle start-ups, battery start ups, air taxi start-ups…yes air taxis, coins, coins, more coins, coin-related hunks of junk, solar cells, NFTs, sports collectibles….and lastly will be the HOUSING market!”

“Everyone needs to read “Extraordinary Popular Delusions And The Madness Of Crowds!”

“The biggest bubble is in the bond market because that is where Powell , creating money out of thin air, interfered with the free flow of money. In the bond market, the biggest bubble is the junk bond area. Jay Powell just does not believe in free markets. He doesn’t trust a market that has been just fine on its own for 100+ years. He is playing God with something he just doesn’t understand. He is only good at creating another credit card with a higher credit limit to pay for his last credit card.”

“In all the years leading up to Bernanke’s money printing, federal debt was $10 trillion. Since Bernanke, started the money printing party, in just 13 years, another $20 trillion of debt was foisted onto the backs of an unwary public.”

“We cannot even keep up with all the numbers sloshing around but $3 billion is added to our debt each day. We repeat $3 billion is added to our debt each day. We cannot imagine what happens if interest rates continue to soar!”

“Central banks have become too big. Central banks have become the market. Just remember, central banks are just a few people who have absolutely no understanding of the real world and markets. They are reactive, not proactive. And of course, their only answer to every question is easier money or more printing of money out of thin air. We need to get back to the time where what mattered most is earnings and sales growth and not what one man is going to do next with conjured up money!”

“Jay Powell is going to cause a bust. This will be the outcome of a central bank, printing unimaginable amounts of money-induced asset boom.”

“Jay Powell is now the equivalent of going to a doctor for a broken right arm and the doctor puts a cast on your left arm!”

SO…just about all the bubbles have gone bust…and we mean bust. Many of those frothy and speculative, bubbled up areas have stocks down in the 70s, 80s, 90s. As of 2 weeks ago, 6% of the NASDAQ was down 90%, 22% of the NASDAQ was down 75% and over 50% of the NASDAQ was down over 50%. On the next leg down, it will get worse.

If you want to know why TECHNOLOGY is getting hammered, just remember that TECHNOLOGY STOCKS, on average, were up 14-fold in 13 years. This is not a typo. We suggest markets have finally recognized that’s a wee bit too much. Even with the recent drop, still up 11-fold.

Of course, we have not mentioned the other distortion we started mentioning over 18 months ago and that is soaring inflation. Again, $30 trillion of printed money around the globe fronted by Mr. Inflation himself, Jay Powell, massive amounts of deficit spending and finally, Russia invading Ukraine adding fuel to the fire, has done the trick. To this day, as expected, Powell is miserably failing as again, his only M.O. has been easy money. As of this writing, one would think inflation was at 2% as he still sits at less than 1%. This is utter economic and financial malpractice that we have never seen before. THE PROBLEM…even if he raises 0.75% this week (that’s our bet), he will still be half of where the 2 year note yield is and just above the 3 month t-bill yield at about 1.4%. He is actually forced to tighten into a recession.

We say with no joy that we do not understand how the masses are not calling for Powell’s and Yellen’s removal and replaced with people that actually have a clue and will actually fight the crushing inflation that they lit the fuse on. We are certainly not going to get any help from an administration that spends every waking moment trying to divert blame onto anything and everything that breathes or moves even though all evidence says inflation started way in advance of the scumbag from Russia’s invasion. This administration is about as impotent and ineffective on the economy as we have ever seen and there has been some bad ones. Amazingly, their main answer continues to be higher taxes on any number of entities. Sure…that will work!

Nothing personal. We take no joy in any of this. We are really nice people.We would rather be singing the praises of our leadership. But reality is reality. They really do not have a clue. They really do not have any understanding of what they created as they played God with unchecked and unimaginable amounts of conjured up money for too long. They really thought they were omnipotent. But debt, deficits and fake money always and we mean always ends badly. And who are the victims? We are. They will eventually leave their posts and get $250,000 for speeches to Wall Street whom they made flush for so long. There is a reason so many in DC are retiring. They know what they have created and now they get the hell out of Dodge.

We walk into the week into what we consider one of the worst backdrops we have seen in ages. A central bank now forced to raise rates markedly just to play catch up…and into a recession. We suspect Mr. Powell will be pulling a lot of Ralph Kramden “homina homina homina” in his presser this week. And yes…do not believe those that think a recession could come around in 23. It is here now. And we do not need another drop in GDP for the call. Just look at consumer sentiment at record lows, gas prices averaging $5, inflation in the 8s (really in the teens), mortgage applications falling off a cliff, a savings rate that is plunging and credit card usage that is skyrocketing. Yet, Miss Yellen said she doesn’t see a recession on the horizon and doesn’t understand why consumers are so pessimistic. Feel better now?

If we sound pissed, blame it on the Rangers who gave away a series they should have won.