- Faith is the antidote for fear. The anodyne for doubt.
- Clay Harrison
Never a Dull Moment
The biggest and quietest murmur on Wall Street is the financial condition of Blue Owl Capital (OWL). Money flows are exiting at a rapid pace. The firm cannot cover the demand. So, they instituted restrictions. This is exactly the unprepardness with the use of leverage that causes a run. The stock looks like a train wreck. It was over $20 last July. Last Friday, it was $10.55 and falling on strong volume. Not good. We are talking about a lot on money at stake. This is not just in the US. In the UK, the firm MFS is having what Jamie Dimon calls a "cockroach" problem. Money is flowing out. We have heard about First Brands and their problems. They announced that they are selling an auto parts supplier that makes product for Ford. Not good. In addition, you can add Appolo Private Credit to the dangerous list. They announced last week that they are down-grading loans on their books.
Politics Hits Commerce
The AI firm, Anthropic had a verbal argument with the US Dept. of Defense or as it is now called, Department of War. They will not allow the military the blueprint (code) of their AI tool. They fear that the militay will use it for harm. We agree in peacetime, but not in a war period. If you recall, the military and the government took over our nuclear program after private citizens developed the atomic bomb. Then, they allowed the Russians to steal the code. Military intelligence is a joke. However, someone is always looking for a buck. Open AI has offered to work with the DoD with their AI tool.
Keep in mind that last year Amazon had a 13-hour outage. What does this have to do with the above, you ask? Well, the outage was caused by their AI program. It just deleted everything and it said that everything needs to be done over. Get this! The AI did this on its own with no human supervision. Do we want this type of supidity running our military? Desk generals and idiots!
Subtle Change
On April Fool's Day, India will no longer use the London Bullion Market for evaluation of the price of gold. They will use their domestic spot price. In a related aspect, Eric Sprott, the leading authority on precious metals and mining says that banks have lost control of this market. The history of that control was to short silver, however the West is losing the market to the Eastern market. He also predicted that silver will fall to a 50 to 1 ounce of gold ratio. It has too many uses.
Some Fear, Some Hope
The fear was in Saturday's news. The US and Israel bombed Iran. Iran retaliated. Secretly, China is hoping that Iran uses its latest missle that it gave to Iran. It is designed to sink an aircraft carrier. This is very bad. Not good. It gets worse. President Trump thinks that he can engineer a war just like the idiots at the Fed think that they can engineer an economy. He says the war/conflict will last between 4 and 5 weeks. Even if cooler heads prevail and the hostility ends in that time period, the lingering attitude of hate will fester like after our Civil War. This is the type of the misuse of our military that causes the thinking that resulted in 911. The only winner is the owner of cemeteries.
The good is Russia declared a ceasefire around Ukraine's nuclear plant that had been bombed. The danger of another Chernobyl is very present. Crews will attempt to correct the damage. We pray that they succeed. By the way, Chernobyl was a former Ukraine city.
Market
The three indexes were all down for the month of February. The dollar remained in the 97 range. Sadly, our call was correct. With the open conflict with Iran, the dollar rose in a flight to safety, however the bounce was not great. The dollar has resistance at 100. Crude spiked, but it could not pierce its resistance at $77. We see a greater fall in price coming. Peace.
