Interim Market update Jun 21, 2022

[Eric]

I would beg to differ we will go on record to state that the USA peaked in March and now it's all downhill.

I'm going to say that the US probably peaked as a country in 2000 and has been trending slightly down since with big spikes down under the three Obama administrations.

[SOL]

I would beg to differ we will go on record to state that the USA peaked in March and now it's all downhill.

I'm going to say that the US probably peaked as a country in 2000 and has been trending slightly down since with big spikes down under the three Obama administrations.

In that sense, I can't argue with you. I was referring to the point of no return in terms of being the big dog or in charge of the World. It has lost the title of the World's Policeman. The new Bric Currency is going to be a stronger challenger in the years to come. Things are moving really fast.

[Budge]

Investing is not about timing the bottom but trying to get into stocks you always wanted to get into at mouth-watering levels

isn't the bottom or close to the bottom usually when you're able to get in at mouth watering levels ?

No one knows when the bottom is in. So pay attention to the masses and then add in some TA. To buy close to the bottom one has to buy when fear levels are soaring but its nigh impossible to time the exact bottom

Karl Denninger has a blog piece today titled "Don't fear the Recession". It's about how to run a business in good times and bad. Wisdom that can be applied to investing and life in general:

""Oh nos, there's a recession coming!"

CHEERS, say I.

What, you say? You must be nuts! People lose their jobs in a recession and the economy stinks!

Oh, so what's going on right now doesn't stink? Sky-high gas prices and a 50% inflation built into the PPI which has yet to work itself through the system -- and won't for at least another year even if all the crazy policies stopped now? Of course it does.

The only reason to fear recessions and higher interest rates is if you, or your firm, is over-levered. To put not so fine a point on it you cheated to obtain what you claim as "prosperity" and now you're staring down getting caught out while both unprepared and having done stupid things.

Key to this is that you did the stupid things.

What was the smart thing to do in such a time?

Live below your means and sock back capital during the good times.

Why?

Because then you have it, and its yours, when the bad times come -- which means you get to pick on the people who did stupid things and, by doing so, get far ahead and you didn't have to cheat in order to do so."

And the money quote:

"In business you make your money when you buy things, not when you sell them."

https://market-ticker.org/akcs-www?post=246182

[harryg]

There are some a pretty drastic oversimplifications in some of the foregoing, and of course currency markets are manipulated like any other, particularly over the short term.

There is a difference between intelligently questioning the western mainstream narrative and believing that everything reported is false and that any contradictory view must therefore be correct.

I reckon that Russia is raking it in at the moment due to high energy prices (mainly selling to the EU, despite 'sanctions' [which made the prices higher - you couldn't make it up]), and the money is staying in Russia because you're not allowed to take it out. Also, Russia can't import so much because of sanctions, so that builds up reserves.

This is not to say that I doubt the long-term ascendancy of Asia.

In other news, we have so far survived the latest "Danger to Life" warning, the second in three days
https://uk.news.yahoo.com/uk-weather-th ... 13838.html

[SOL]

There are some a pretty drastic oversimplifications in some of the foregoing, and of course currency markets are manipulated like any other, particularly over the short term.

There is a difference between intelligently questioning the western mainstream narrative and believing that everything reported is false and that any contradictory view must therefore be correct.

I reckon that Russia is raking it in at the moment due to high energy prices (mainly selling to the EU, despite 'sanctions' [which made the prices higher - you couldn't make it up]), and the money is staying in Russia because you're not allowed to take it out. Also, Russia can't import so much because of sanctions, so that builds up reserves.

This is not to say that I doubt the long-term ascendancy of Asia.

In other news, we have so far survived the latest "Danger to Life" warning, the second in three days
https://uk.news.yahoo.com/uk-weather-th ... 13838.html

Well said if everything were simple, everyone would be rich and that would last for five minutes before they all became poor again.

Everything can and is manipulated, so if you look at it from that angle, then everything is normal. Let's assume before nothing was manipulated, now everything is manipulated, and the manipulation or over-manipulation leads to a type of normalcy. A topic for another day.

The Ruskies were paying quite a bit high amount of interest on deposits I think if you got in right after the sanctions you could have locked in 20 to 21 per cent.

Then there is the Russian mindset, they have all coalesced around the narrative it's them against us, so this means that even when they are allowed to freely pull out foreign currency the majority of the are going to opt to leave it in the banks or possibly even convert it to rubles.

This is a huge topic, however, we can summarize by saying that the foundation for a different tomorrow has been laid. A better tomorrow that's a different story I will only believe it when I see it and when I see it won't be tomorrow it will be today or yesterday if fail to spot it on the same day.

[Yodean]

There is a difference between intelligently questioning the western mainstream narrative and believing that everything reported is false and that any contradictory view must therefore be correct.

This is not to say that I doubt the long-term ascendancy of Asia.

This is a very good point. People tend to get polarized to a particular narrative about a specific issue, especially when emotions are involved.

Although I am bullish TIMI-BRIC in the long-term, it will take a lot of time to gain ascendancy, likely a decade or more. Lots of betrayals, backstabbing, etc. during that period between supposed allies, I suspect.

There's also Putin's health to consider ... thus far, he's done really well as a leader in challenging circumstances, but I'm not sure what will happen to Russia once he leaves the stage, which I suspect will happen sooner (<5 years?) than most suspect.

Speculation on my part, but I think there will be a lot of infighting when Vlad is gone ... and whoever takes over won't be as good a leader of Russia as Putin has thus far shown to be.

[Yodean]

From my (biased) perspective, there were some grumblers that took a shot of the west's kool aid, and some price gouging of things already in stock.

Indeed, with much less (legal) foreign imports into Russia atm, how are them oligarchs gonna get the Prada and Louis Vuitton handbags to placate their numerous, much younger, and nubile mistresses?

This is a potential disaster in the making, for Russia.

[SOL]

From my (biased) perspective, there were some grumblers that took a shot of the west's kool aid, and some price gouging of things already in stock.

Indeed, with much less (legal) foreign imports into Russia atm, how are them oligarchs gonna get the Prada and Louis Vuitton handbags to placate their numerous, much younger, and nubile mistresses?

This is a potential disaster in the making, for Russia.

Middlemen are already stepping in and coming up with workarounds. Stuff will go to Kazakstan or Armenia and then be shipped from there. Russians are ingenious at finding ways to circumvent things. Prices will be higher but then as more people get into the game, prices will stabilize.

Btw Scott is there a gap between the official rate for the Ruble and the black market. For example now in the DPR you can get 20 roubles extra for dollars just because it's generally harder to get them. So if the same is not true in Russia then it's a good gig for the nimble. They can head to Rostov and quickly cross into the Lugansk, get more for your dollars, head back to Russia and change them at a lower rate.

[Yodean]

Btw Scott is there a gap between the official rate for the Ruble and the black market. For example now in the DPR you can get 20 roubles extra for dollars just because it's generally harder to get them. So if the same is not true in Russia then it's a good gig for the nimble. They can head to Rostov and quickly cross into the Lugansk, get more for your dollars, head back to Russia and change them at a lower rate.

Good arbitrage opportunity ... suspect there will be plenty of these. Usually are, in warzones. Avoid the bombs and bullets, would be wise.

[Eric]

isn't the bottom or close to the bottom usually when you're able to get in at mouth watering levels ?

Sol already answered but I will add that most people get so obsessed with trying to catch the exact bottom that they miss the opportunity all together. Sol's point is that it's better to get in within 20% of the bottom and make huge gains than it is to miss the opportunity completely. As he is so fond of saying: "pigs get slaughtered".

[Expert]

No one knows when the bottom is in. So pay attention to the masses and then add in some TA. To buy close to the bottom one has to buy when fear levels are soaring but its nigh impossible to time the exact bottom

thanks for the clarification.
in the last market update from June 16, it said "Another update will be sent over the next 4-6 days. It will contain at least one play in the Neon Gas sector, a component that is vital to the semiconductor industry."

do you know when it will be sent out ?
thanks again

[SOL]

Btw Scott is there a gap between the official rate for the Ruble and the black market. For example now in the DPR you can get 20 roubles extra for dollars just because it's generally harder to get them. So if the same is not true in Russia then it's a good gig for the nimble. They can head to Rostov and quickly cross into the Lugansk, get more for your dollars, head back to Russia and change them at a lower rate.

Good arbitrage opportunity ... suspect there will be plenty of these. Usually are, in warzones. Avoid the bombs and bullets, would be wise.

Via Rostov, your chances of getting hit are very low, from there to Lugansk it is heavily fortified with Air missile defence systems. A better option would be to go from Rostov to a smaller town called Alchevsk. However you need to be Russian or from the LPR to enter that zone, No outsiders allowed unless you are with the press and they clear you.

[Yodean]

For example now in the DPR you can get 20 roubles extra for dollars just because it's generally harder to get them.

This discrepancy is an example of why I am hesitant to declare the ruble as a winner, even temporarily ... until the ruble trades openly and freely - not fixed by the Russian Federation, for all intents and purposes - we won't really know how strong the ruble is, relative to King USD.

If and when oil prices come down, Russia will also make less money selling to China and India, etc. A strong ruble also hurts Russia's exports.

The ruble atm reminds me a bit of when I was a kid and went to a video game arcade whose games only accepted tokens specific to that arcade ... you have to buy those tokens to play the games there. The video arcade sets the price of the tokens. So if you want to play the games there, you have to buy the tokens first, with fiat.

However, if you keep the tokens without using them at that specific arcade, they are basically worthless for any other purpose, once you leave that arcade.

arcade = Russia

token = ruble

Of course, right now Russia has the popular video games. We'll see how long this lasts ... ossified kleptocracies generally don't become bastions of pure capitalism overnight.

But yeh, I am bullish on the East, in the long-term.

[Tactical Bob]

The video game arcade token analogy-Brilliant!

[Yodean]

The video game arcade token analogy-Brilliant!

Thanks. The true strength (or lack thereof) of the ruble will be revealed when it trades openly, and somewhat more freely, on the open markets.

Also, it seems that besides selling lots of oil-gas to China and India, the Angry Bear is starting to sell some of its gold reserves to the former as well - at a significant discount.

This could be construed as a sign of weakness.