We are willing to let slip through our fingers what she never had to lose. Fo shame!
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Bob Livingston Alerts
Anticipating events to come in the year ahead doesn't involve reading tea leaves or being clairvoyant. It merely requires studying real history, studying real current events (not fake news) and using common sense to make application of the natural progression of things.
The problem is that so many people don't look ahead any further than the end of their noses. Couple that with the fact that most are trapped by conventional wisdom and normalcy bias and steeped in establishment propaganda and you have masses of people who are little more than walking zombies reacting to sights and sounds around them with little thought to long-term consequences.
It's small wonder that most people live paycheck to paycheck. Many were producers and savers, or should aspire to be such, but have been reduced to the crumbs of minimum wage by government regulations, dollar devaluation and socialist claptrap. Yet many also stay either lost in a fog of pop culture or agitated beyond reason by the divisive politics that are fed to us through the mainstream media. They don't know how to look beyond the noise.
My mother used to say that the Lord takes care of drunks and fools. Well, that worked in her day, but it's more complicated now. We have the unprecedented problem of ignorance and mass deception, coupled with poverty and mass malnutrition. These are real problems and they are getting worse.
Exceptions are you, the loyal reader, and may God bless you in this coming year. But also remember that God helps he who helps himself!
Any prudent and wise person who is watching events in the U.S. would know that we are witnessing the last gasp of the elites in their desperate attempt to preserve the present system which is collapsing. The end can't be far away.
There will be no changes to stop the movement of events. Things happen as they are meant to happen. The American people are asleep. All politicians are just kicking the can down the road hoping that they can milk the system a while longer. The fat pensions that they hope for and expect will evaporate with paper money. They are numb to reality.
There is potentially great danger and great hardship ahead. All the government can do is print more money and keep promising everybody everything.
The elite who run the show want to get everything they can out of the system before it collapses. They rely on the fact that not one American in a million suspects that they are gradually becoming impoverished by depreciation of the currency. Depreciation of the currency is warfare by the government against the people. Only a handful of Americans realize what is happening. I feel that you who read these Alerts are aware and concerned and are and have been preparing for survival.
Evidence of the collapse of America is everywhere for those who have eyes to see.
Here's what I anticipate in 2022 and beyond:
Democrats have signaled they are all in on removing guns from the American people, and the Biden administration is willing to issue as many illegal executive orders and use emergency proclamations and "regulations" from the Department of Health to get their way. They are already doing this with "red flag"-type bills and amendments to remove weapons from "dangerous people" and eventually a true bill will pass Congress and be signed by the president. Under "red flag" laws, anyone can report to authorities that a person is potentially dangerous and law enforcement can confiscate his weapons. This is a blatant violation of due process, but the Constitution is meaningless in this day and age. There will also be moves — some successful, some not — to require insurance to own firearms, register to purchase ammo, etc. Economic gun control will continue with banksters and credit card companies squeezing gun and ammo manufacturers and sellers and big tech shutting down any information on weapons-related products. Americans will, by and large, capitulate. There has never been a more dangerous time to your liberties than now.
Big Tech will continue to stifle free speech. Conservative ideas will continue to be classified as "wrong-think" and shadow-banned if not banned outright. This is already underway.
Stagflation coming. It's already begun. Inflation is out of control, since it's the natural offshoot of money printing and artificially low interest rates. But inflation by itself is not so painful if your income is keeping pace. For most American workers and producers, it's not. That's what stagflation is all about — rising prices and stagnant wages. Biden will have to wear it as the market crashes. Another bursting housing bubble and bursting auto loan bubble will usher in another period of high inflation, high interest rates, rising unemployment and stagnant economy. Signals are flashing "Red Alert," and the Fed is fomenting it, as our colleague Brandon Smith has told you repeatedly.
Gold and silver will break out again. As Notes From Underground pointed out recently, "The gold/currency spreads … have been a market response to the looming credibility gap of all central banks in a fiat currency world ... The move to buy the precious metals in the face of rising short-term interest rates is a response to concerns that the central banks have no answers to the trap of forward guidance and its mantra of lower for longer." My friend, there is no precedent for the current supply/demand imbalance in precious metals and even industrial metals. This is an investor's dream, and a saver's, too, where supply inelasticity meets rising demand. I hope that all of you can profit from this, but also, keep some gold as a store of value.
Congress will pass some sort of vaccine mandate, which will be ruled unconstitutional by a federal court but will remain in place until the Supreme Court hears the case. It will just be another collectivist scheme that denies you health freedom.
The gay/trans cult will continue their drive to abject absurdity, and religious and economic liberty will continue to suffer because of it. Transgenderism is a mental disorder treated as science by the leftist social Marxists. According to the American Academy of Pediatrics, about 0.6 percent (1.4 million) U.S. adults identify as transgender or "gender nonconforming." But by the way it dominates society, including gay and trans characters in nearly every TV show and advertisement you see, one would think there are 100.4 million transgenders rather than only 1.4 million.
War on the horizon. Biden pulled our troops out of Afghanistan. But globalists still want war with Iran (as a proxy war with Russia) and while China claims the entire South China Sea territory, its claims are in conflict with Vietnam, Philippines, Taiwan, Malaysia and Brunei, each of which claim some portion of the area. The U.S. doesn't have an official position in either of these conflicts but would likely get involved.
Civil war in America increasingly likely. There is great ideological and cultural divide in America now. Conversation and reconciliation between the two sides seems impossible at this point, and there aren't enough Libertarians to bridge the divide.
Medical privacy gone. Vaccine cards; COVID cards; medical travel passports; judges issuing search warrants allowing police to perform invasive medical procedures from blood draws to cavity searches to surgeries on unwilling people suspected of hiding or using drugs; OSHA performing analysis of health information to look for problems that may be occurring in the workplace that, in their words, "require targeted prevention." And did you know there's a National Center for Medical Intelligence? It's part of the Defense Intelligence Agency. According to NBC news, in order to spy on us, the "NCMI calls upon all sources of intelligence — from communications intercepts to satellite imagery to human source reporting — to seek answers … It also combs open sources, such as social media." Some of the worst public policies imaginable are justified by the political class under the mantra of "keeping you safe" and "for the children."
Yours for the truth,
Ross Rants:
So we are clear, the Rant is NOT an investment letter and nobody should take it as investment advice. It is purely my personal view of the world, and my personal views on the markets and economy. I am just a guy playing tennis in Longboat Key in winter and the Hamptons in summer, commenting on how I see the world go by, based on too many decades of a very varied set of experiences. As I have said many times, you need to make your own investment decisions, and not take the Rant as advice. Although my all in stock market returns have been 34.3%, 31.6% and 27.1% over the past three years, that was more due to just being lucky to be very heavily in the right big tech stocks and HD, and TMO, and 100% in equities, than it was due to any brilliance on my part. While the SPX ended the year exactly where I predicted, 2700-2800, that is no indicator that I will be correct in 2022. There are a lot of major cross currents, both positive and negative, and the black swans are in ecstasy with Biden in the White House. In the words of Rumsfeld, there are many unknown unknowns. Risks are high now. So make your own investment decisions, and just take what I say as no more than one guy’s personal opinion.
Here is how I see 2022 shaping up. I am a bear for the year. As Omicron fades in the next month, it will lead to higher demand, while oil production rises insufficiently to keep gas and energy prices low. Biden is cancelling pipelines and drilling permits, and the US has lost the position it had until 2021, of keeping oil prices low for the past several years. US oil production will no longer be able to meet the needs of the world even though production is moving back up a little. It is not what it could be. Result, inflation will be driven much higher than if the oil companies were allowed to drill as much as they want and pipelines were being built. Killing Trans Canada was very damaging to both the US and Canada. Food prices are going up in January, and wages will rise 5%-6%, along with interest rate rises coming in March. There were almost no layoffs in November. Many view this as good news. I view it as negative because it means labor has the upper hand now which translates to a strong push for higher wages to keep qualified staff. All of the shot mandates has just made the labor shortage much worse, especially in NYC. The mandates are the epidemy of stupidity. The wage price spiral will accelerate. Rents are rising fast, therefore, I cannot see how inflation and higher rates do not impinge on margins, earnings and GDP. Oil is possibly going to rise back up to $85, and maybe will go to over $90. The ability of the US to frack and supply tens of millions of barrels of cheap oil for the past several years is one of the main reasons inflation has defied forecasts and remained low so long. Another reason was due to the Trump tax cuts and deregulation, the economy boomed, and that incented many marginal workers to enter the labor force with no entitlement programs to deter them from working. That is over now. The massive new regulatory regime now being implemented will increase costs even more, and push up inflation even further. The combined factors may possibly create stagflation. While tech is a big help, it is not likely to be integrated sufficiently fast enough to keep productivity rising in line with wage increases. The wage price spiral is happening. Higher inflation is inevitable now which will lead the Fed to raise rates more and faster than they forecast as the year progresses. The end of BBB is a help, but not sufficient to change the general course of inflation. House prices were up 18%, which is unsustainable, especially as the year goes on, and as rates rise, making more of the housing sector unaffordable, especially at the low and middle price ranges. House prices are likely to top out, and maybe even decline at the lower price ranges as rates rise later in the year. Housing is a key sector for the economy, so a slowdown in housing has negative ramifications for GDP. That is coming sometime in 2022.
China is now slowing due to energy shortages, and the real estate sector problems. Condo prices are declining in China, and the glut is not going to get taken up anytime soon as Evergrande is now back in full production and producing thousands more units. They also have labor shortage issues due to the aging population and their one child policies of years ago. Japan is in a major population decline, and the US is in a flat population situation. No population increases in major economies means slower GDP growth. None of these things are positive for the stock market in 2022. Then you add on the gross incompetence of the administration, and you have real risk coming. Hopefully those of you who believed inflation was transitory have finally realized it is here and not going away for a while.
All in, I believe we could see a declining stock market in 2022, and a possible recession later in the year, possibly by Q3. My over/ under are up 5%, down 25%, with down 10% + by Q3 is most likely, but totally uncertain at this time. With the SPX driven by 5-10 stocks, there is underlying weakness to the market which could morph into a broad decline as rates rise and tech stocks decline. Tesla has a big weight in the S&P now, and I believe it may be it might become one of the greatest shorts of all time. Keep in mind that 65% of IPO’s are trading at well below offer prices. SPACs were a bust, Meme stocks are way back down from their highs. As always, it is better to be a fundamental investor, and not one who chases the last pretty girl who walks by. I was wrong in my prediction that the ten year would be at 2.0% by now, but that is going to happen in spring of 2022.
On the other hand, consumers still have a lot of liquidity, they have big gains in their 401K and house values, and so they are in a position to spend. It is unclear, however, how much pent up demand there really is since online shopping is now over 20% of all retail sales, so maybe a lot of the pent up demand for things , as opposed to services like travel, has been met that way. It is also unclear how many people will do a renovation of their house with lumber and other materials rising again, and as contractor pricing has risen a lot, even if you can find anyone to do the work. N the other hand maybe instead of buying a new home at today’s prices they will choose to renovate their current home.
My main concern is inflation will continue to track higher, and the Fed will be wrong again, and have to put through a major rate rise in Q3. Excessive regulation about to be adopted will cause margin squeeze, and the attack on fossil fuels will drive up the cost of oil and so exacerbate inflation even further. The good news is it gives Manchin and moderates more reason to say no to the new version of BBB.
I am not predicting what the market will do, but it is clearly risk off time, and maybe get more liquid time. While I am not predicting a 20% or greater decline, I can see a 5%-10% decline as very likely, and 20%+ as somewhat possible. I think the only thing keeping stock indexes high is that so many have big gains, and do not want to sell and bear the tax hit. Holding cash is normally not a good idea, but if you believe the market will drop 20%, or more, next year, it will make sense to have cash ready to deploy. Do you want to pay 23.8% cap gains tax which is only on the amount of the gain, and have cash to deploy when the market drops, or do you want to watch your whole portfolio drop into the cellar. Cap gains is on the gain only, not on the gross, so the tax hit on the gross amount of dollars may only be a 5% hit, vs a drop in value of 20% potentially. If you have $100 of stock and $25 is the cap gain, then the tax is about $6, or 6% of the total $100 portfolio. If the market drops 20% you are out $20. Keep in mind the SPX was at 22X in 1970, and when inflation flared multiples dropped to 7X. 2022 is not 1970, and Volker I not Fed chair, but you see what can happen if the Fed is forced to raise rates far more than anyone expected. Each person needs to make their own assessment of their individual situation, and make their own individual investment decision. I am just providing my personal view generally. It is possible the market will rise a little in 2022.
Cathy Woods has been a heroine this year with here Ark Fund. Months ago I said she was a flash in the pan like several before her. The fund is down 21% this year but she still has $175 million in funds. Why anyone has stuck with her and why CNBC still regularly reports on her is a mystery to me. If you are a money manager in 2021 and did not earn at least 18% or more you should get out of the business. You could have bought an index fund and done better. She is like Abby Cohen, Mary Meeker and others who were one trick ponies. The real test is can you perform year after year.
Now the White House has floated Sarah Raskin as the vice chair in charge of regulation of banks. She is well known as anti-bank, and has attacked banks as being greedy and full of fault, and under regulated. She is also demanding the Fed intervene with regs on lending to oil and gas companies. One more glaring example of why the Fed is no longer independent. She would be an equal disaster as Cordray. Both are far left puppets of Warren. Biden has also done as expected. To fill the other two empty seats have nominations who are both black and one is a female. Biden touted this as fulfilling his diversity promise, instead of touting their qualifications. So much for quality on the Fed board. As we see the incompetence of his cabinet appointments, it is even more selection based on anything other than qualifications. Granholme knows nothing about the energy business, Budaboy took 2 months of fat the height of the supply shortage crisis, Garland has proven to be just a political hack, the education department has become a subsidiary of the teachers unions, Homeland Security has zero to say on the border, and HHS is nowhere to be seen on the virus. Austin is more interested in CRT than warfighting training, and Gensler is on the attack against everyone. I can’t think of one cabinet member who has any qualifications for the job they are in.
What the radical and Dems seem not to understand is that as they cram down oil production, prices rise, inflation rises, and the lower income people suffer a lot. It seems they just do not care, which is what a top Dem fund raiser has said is the case. In NY State they are likely to pass a bill in January that essentially makes it near impossible to ever evict a tenant unless they just stop paying for a long period, or they are dealing drugs. It will the end of new residential development in NYC, and over time a deteriorating housing stock and lower tax revenue. We have been to this party before in NYC, but the left never reads history, so they just repeat their stupidity again and again.
It is unknown what deal Putin and Biden are discussing, but there will be no invasion. My assumption is Putin pulled out 10,000 troops as step in in response to Biden agreeing to something Putin wants. The call yesterday was a follow on where Biden likely agreed in return to not arm Ukraine and not to move troops. Now we will see on the 10th what the west gives up. This smells a lot like Obama’s red line in Syria and then Putin got him to fold and Syria kept some of his chemical weapons. Germany has gotten itself into a box with gas dependence and was never going to really sanction Russia. My assumption is Putin again played the west with a make believe threat and Biden fell for it again.
The Pentagon is reducing cost of living supplements for the armed forces. Just as inflation is roaring. I guess they need that cash to give to all the illegals coming across the border who get all sorts of government money. We are all told we can’t go anywhere in NYC and CA unless we are fully vaccinated and wear a mask. If you come across the border you don’t even get tested and then you get flown all across the country to spread whatever disease you are carrying. There as a lot of warning that Covid would rear up again as cold weather arrived. So the White House reduced testing supplies. I could go on, but you all know all these things. You can’t make this stuff up, and these people are running the country for three more years. .
Put aside your view of abortion itself, I find it ironic that the anti-vax people who say the government can’t tell me what to do with my body, but some are the same people who say the government can tell a woman what she can or cannot do with her body. Those people need to decide which side of government health mandates they are on. My assumption is SCOTUS will rule that all states must allow abortions until the end of no less than 15 weeks, and after that they will allow any state to impose any rules they wish, or none at all. That will also be how they deal with the TX law for the moment. It will please neither side, which is why I think it is what they will finally decide. Nobody will get all they want, but everyone gets something they can work with. Women still get time to choose, but not to end a viable pregnancy. Some of you will find this unacceptable, but that is what I believe they will rule.
Have a wonderful & healthy 2022
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