A Ticking Time Bomb

After Federal Reserve Chair Jerome Powell indicated the bank isn’t finished raising rates, one market expert has warned a crash could come in a matter of days.

"They're playing catch up, and while they were doing quantitative easing in 2021, inflation started to rage and now they're trying to catch up," The Bear Traps Report founder Larry McDonald said on "Mornings with Maria" Wednesday.

"Our 21 Lehman systemic risk indicators that look at equity and credit point to one of the highest probabilities of a crash in the stock market looking out 60 days," McDonald who is also known for writing a best-selling book on the Lehman Brothers collapse cautioned.

The withdrawal of capital from middle-class families has been "spectacular," McDonald argued, as the Fed continues its most aggressive rate hike campaign since the 1980s to crush decades-high inflation. Although the consumer price index has slowly fallen from a high of 9.1% notched last June, it remains about three times higher than the pre-pandemic average.

On Tuesday, Powell stressed on Capitol Hill that the central bank policymakers are prepared to pick up the pace of rate increases, as they’re expecting to go higher than previously thought.  READ MORE...

Boomer Wealth Surging

Many older Americans have reaped an unexpected pandemic bonanza, thanks to a combination of a stock market surge and rising home prices. That good fortune is evident in the St. Armands Circle shopping district in Sarasota, Fla., where visitors stroll past statues of Venus and Dionysus and lunch on Cuban sandwiches and sangria. The number of homes in the area selling for $3 million or more has shot up to 355 so far this year from a pre-pandemic 81 in 2019. And many of the buyers are of retirement age, says Drayton Saunders, president of Michael Saunders & Co., a real estate broker specializing in luxury properties.

A Covid-induced boom in early retirements is exacerbating America’s inequalities, especially along this stretch of the Gulf Coast. Sarasota and its environs are seeing an influx of cash-rich baby boomers and work-from-home professionals that’s pricing younger residents out of the housing market. Some also worry that a bigger senior population may worsen Florida’s historic difficulties in passing taxes for school and infrastructure projects. “They typically vote, and they may not vote for your schools unless their grandkids are in your schools,” says Jerry Parrish, chief economist of the Florida Chamber of Commerce’s research foundation.

Condo complexes facing Sarasota Bay.
PHOTOGRAPHER: ZACK WITTMAN/BLOOMBERG

By 2045 a quarter of Sarasota County will be 75 or older, and community activist Jon Thaxton wonders where the area will find enough care workers—often low-paid and with limited transportation—to staff all the luxury retirement homes “popping up like mushrooms after the rain.” An executive at the Gulf Coast Community Foundation, a civic advocacy group, he sees the coming crisis as a harbinger of a nationwide problem. “Our age demographic just happens to be 15 years ahead of the rest of the country,” Thaxton says. “We might be the canary in the coal mine.”

Homes under construction in Lakewood Ranch, Fla.
PHOTOGRAPHER: ZACK WITTMAN/BLOOMBERG

The obvious health toll notwithstanding, older Americans have largely prospered from government efforts to salve the economic pain Covid has caused. Boomers (born in 1946-64) accumulated more than $1.6 trillion in excess savings in the past two years, almost double what Generation X (born in 1965-80) put away, according to Federal Reserve data. Boomers also saw the biggest overall gain in wealth during the pandemic, with their combined wealth growing by $12.8 trillion, or about 23%. They edged out Generation X by about $100 billion, Fed figures show, but because that younger set has fewer people overall, it realized a larger per-capita wealth gain.  READ MORE...

Yesterday... Today... Tomorrow...

7:30 am Friday to 7:30 Saturday was Yesterday                 24 hours

7:30 am Saturday to 7:30 am Sunday is Today                   24 hours

7:30 am Sunday to 7:30 am Monday will be Tomorrow      24 hours
                                                                                              72 hours

It is within these 72 hours that we consistently live our lives, reflecting, remembering, living, and planning and while many of us live on shorter time frames, this time frame has typically been the norm for Americans.

Yes, it is true that we schedule appointments with Doctors, Dentists, Optomologists, Hair Stylists and plan out birthdays, vacations, Christmas, Thanksgiving, and other holidays in advance of just looking at tomorrow, but other than those exceptions, Americans live in 72 hour or less blocks of time.

For businesses and industries, we look at rolling quarters, that is to day what did we do last quarter (yesterday), what will we do this quarter (today) and what are we planning for next quarter (tomorrow).

Some corporations might look out into the future for 18-24 months but those situations are RARE...

WHY?

• Uncertainty of the future
• Risks associated with doing something based upon that uncertainty
• Doing something means committing resources
• Resources mean:  money, materials, labor, time

Additionally...

1. What many Americans do not know or have associated with this issue is the fact that the STOCK MARKET pays dividends every 90 days.
2. Bonuses are predicated upon stock prices
3. Actions are then predicated upon potential bonuses

In PSYCHOLOGY, this is called CLASSICAL CONDITIONING which means:  reinforce the desired behaviors...

Leaders of Industries are MANIPULATED by Boards of Directors just like children are manipulated by their parents...

I find this amusingly interesting.

Unemployment Increases

More than 5.2 million jobless claims filed according to FOX NEWS this morning making a total of 22 million American Workers are out-of-a-job...

Stock Market has dropped from 28,000+ down to 18,000+ but it now up to 23,000+ which is an indication, at least to me, that our investors believe that our economy will survive...

Stay at home orders have lowered/reduced the spread of COVID-19...

Social Distancing when out and about has prevented others from getting COVID-19...


W  T  F   CHINA???

W  H  O  COVERUP!!!