- After the storm passes and calm appears, beware the passing eye.
- JFL
We can learn a lot from nature and especially, hurricanes. Today, we have the technology to know when the whirlwind will approach. We also know there is a calming eye in the center of the storm. The real danger is in the second wave: heavy rain, gusting wind and possible tornadoes.
In life, we take many things for granted. No one expects a heart attack. No one saw the disaster of Biden in the debate with Trump. Where am I going? Sebastian called the pullback and JFL sees a second wave of inflation on the horizon. The first indicator...
Shipping Prices
They continue to rise. They are approaching $10,000 for a 40-foot container. The rate has doubled since Februray. This will effect all imports and your wallet. One might ask, can it get any worse? It can. Early in the pandemic, prices reached $16,000 for a small box. Ouch! Watch the Shanghai Container Freight Index. A price of $8,100 is normal for the trip from Shanghai to the West Coast (US).
National Rent Cap?
Biden wants a bill to cap rents at 5%. We ask, "Isn't the Feds inflation rate 2%? Why isn't the cap-rate target 2%? In any event, housing which is not included in the phony Fed matrix inflation formula, continues to rise. Speaking of rising...
5X Multiplication Table
The fast food workers in California and elsewhere protested for a raise from minimum to $10. Then, the meme was $15. Soon, it was $20 as is the case in California. Full-time help is on the decline as owners cut hours. With the new protest for $30 per hour, how much will a burger cost? How many will go out of business or leave the state? We know firm that is leaving, Tesla.
You can thank the Federal Reserve for destroying the purchase value of the dollar for the mess in fast food, housing everywhere, food on the table, taxes and insurance come to mind. Can you understand our meme? End the Fed!
Greed and Outsourcing
John Deere is set to layoff a large number of workers. They cry costs, as they quietly move production to Mexico. The company made $10 billion in 2023. The CEO clears $26 million. Those workers helped to make the company standout, but basic greed wins the day. Where are the protective tariffs to keep jobs in America?
Retail Catastrophe Continues...
Red Lobster has entered into bankruptcy. Many more stores will close. They are not alone. Rite Aid is closing more units as well as Stop ' Go. Dollar Tree and its affiliate, Family Dollar no longer sell items for a buck or less. The floor is $1.25 and still that is not enough. The end is coming or a dramatic change as they announce 1,000 stores will be shuttered. The unemployment numbers will soon rise. This effect seems to affect banking too. The industry continues to close more branch banks to cut costs.
Sebastian's Call
He told us long ago that the US economy is in stagflation. The stock market refused to believe. Last week, we saw the first realization of what stagflation means and the outlook from it. Nasdaq dropped. It showed a 3-Black Crows pattern. In candelstick charting, three down days in arow form the pattern. It is important to view the size of the candels. They were big and similar. This suggests a strong follow through to the downside. With that said, black crows generally have a bounce that comes close to the last high, but it does not breach it. Then, the express elevator goes down. By the way, the transports showed a similar pattern. Put your stops in...Oh, yeah. Political news will be an instint market changer.
FLASH: JFL wrote this piece on Saturday and the Biden news will show its effect on Monday, Tuesday, Wednesday, etc. until the next bombshell plays out. Political news is a market changer.
Sebastian says the worse type of pullback will be the razor blade cut of continuous down days. If the market has a big sudden drop, that might be the end of this movement. Peace.
