The Ross Rant™ ©Joel Ross 2023
Now there finally is a probable debt deal after a lot of wasted time by the Dems. This all could have been avoided if the White House and Schumer had acted like responsible adults, and had sat down with Kevin 90 days ago. They completely misread his ability to get a bill passed, and they misread the voters desire to stop their responsible wild spending. The spike in inflation made a real difference for voters who get it that you can’t just keep spending with no consequences. Whatever you may think of the final bill, Kevin did a great job given he is working within the constraints of a bunch of idiots and crazies on both sides, and having to get a bill approved. He can’t dictate to the Dems. He can’t just declare victory. He can’t fire members. He cannot just walk away from the table. There are at least 4 members who will vote no regardless of what Kevin does. That gives him a one vote margin of Republicans on any vote. On the other side there are 100 or so real crazy idiots in the Progressive caucus who are so stupid it defies imagination. They have zero understanding of economics, financial market forces, geopolitics and just about anything else, but the White House listens to them. Then we have a president who is very weak and unaware of what day it is, who goes out of DC in the midst of this. In the end, the bill will pass both houses, but not without a lot of ridiculous theater on both sides, and a press that makes a lot more of the theater than there really is. Kevin accomplished a lot even if many think they wanted a lot more.
We all wanted a lot more but time was up and a deal had to get done. Until the Republicans control everything in 2025, there are severe limits on what is achievable now as a first step, and can get the votes. Recall how it worked in 1994-95when Newt was able to incrementally get to a balanced budget and other key things like welfare for work, which seems to be against the perverted ideology of the left. It is an iterative process. Getting to what is really needed is a process over time. The market will react well, but that will change after the economy slows further as the year goes on. The chance of another 25 by the Fed in June is now 65% in my view, with another 25 in July a 40% possibility. There are not going to be any cuts this year. The ten year will reach, or go over 4%, and the 2 year will reach, or exceed 4.75%.
If you buy short term Treasury bills, and just roll them over, you will get higher yields as the bills roll over. At least for a while. Then it will be time to lock in the two year. Treasury has a massive need to sell a lot more bonds to cover the deficit no matter what bill passes on the debt ceiling. Inflation is not yet dead. The Fed has enough cash coming in that it sends to the Treasury to pay the bills for a while longer than what you are hearing. Bottom line-Congress is made up of a lot of stupid, naïve, and uninformed members who really have no understanding of the real things happening in the economy and monetary system. The economy is in trouble regardless of what talking heads say on TV. Risk off now. Only 6 stocks are driving the market up. Most are down. Hunker down now. The world’s central banks are stocking up on gold to the highest level in history.
None of my very sophisticated friends who I talk to regularly understand what is really happening. Oil should be up, gold is up, most stocks are down, the Fed is still raising due to low unemployment. Job losses are the last step in a recession and now many CEOs are touting how they are cutting staff to save cost. Various indexes don’t make sense. Most of us are in cash, Treasuries, oil, gold and a few big tech stocks. Don’t get sucked into thinking we are in a bull market. The releases from SPR were partly designed to help keep inflation in the EU down until the energy shortages could be relieved.
The economy is in a decline now, and not going to head up anytime soon. There is a massive bubble around AI now. Any company that can claim any sort of relations to AI, claims they are an AI business. If you are invested in NVIDIA or Broadcom or one of the hot stocks, consider taking profits now before the bubble bursts, as it surely will soon. This is a classic bubble response we have seen before over decades. The indexes and other classic measures are all disrupted by the Covid shut down then flood of cash and zero rates into the system. Nothing is making a lot of sense right now. The recession is here in some sectors and is going to get worse.
Commercial real estate is not collapsing, other than office. Retail signed new leases at the just concluded ICSC which is the key annual shopping center conference. Retailers are looking forward to openings in 24 and 25 now, and are assuming the economy will be headed back up by the time they actually open new stores. Industrial-meaning warehouse distribution, as well as factories development, is still positive. Multi is still signing new leases at a reasonable rate and rents are not collapsing, although they are weaker in most markets. Other types of real estate are still holding up OK for the moment. In summary, real estate is not yet creating a new crisis, but we need to see how this plays out over the next 6 months as rates continue to climb, and as office loans go into default.
CRE is not going to take down the banking system as we saw in 2008, nor like the S&L crisis of 1989-91. It is very different this time. There will be loan losses, and some real problems, but other than office, they will be mostly manageable barring some major recession, which is less likely now. Don’t let the talking heads on TV and online create a big worry for you. Many of them just want attention
Here is what the market has really done- the S&P is up 9.5%, but if you take the equal weighted S&P, which is a better measure, it is down .1% for the year. The Russell is up only .7%. A lot of small company stocks are down a lot. It is all about tech and AI. Tech index is up 34% and they are a huge weight in the S&P index, which is why the equal weight index is a much better measure. I have a few top tech stocks, but otherwise cash, T Bills, gold, and oil. It has been reported that APPL/NFLX/AMZN/META/MSFT/TSLA as a group have accounted for 120% of the SPX increase this year. That is called a tech bubble. That tells you the stock market is not really up -only a few top tech names are making the market. Don’t get all excited that the stock market is on a upward roll. It is just a few stocks outweighing the rest.
Here is what really went on in Bakhmut. The Russians took advantage of the Zelensky decision to fight for Bakhmut. They sent in the expendable Wagner prisoner troops to do the fighting and dying, and to kill or wound as many Ukrainians as possible, thereby wearing down their ability to carry out their spring offensive. They succeeded, and at the same time saved their 300,000 regular troops from the fight. The Wagner forces were expendable cannon fodder. So now Ukraine has lost an unknown number of combat experienced fighters, and has a lot of green band (new recruits). The Russians have 300,000 fresh troops to counter the Ukrainian offensive. Bakhmut was a horrible blood bath for both sides, but for the Russians to lose tens of thousands of former prisoners was not a problem for Putin. Meantime, the Russians have had time to build up massive defensive lines in other areas making an offensive by Ukraine much more problematic. Russia lost a lot of men and equipment, but they have a lot more than Ukraine, so they can afford to lose fighters more than Ukraine can. This is a true war of attrition, and of Putin betting that the US and EU will grow tired of the cost of helping Ukraine. He does not care how many troops he loses. There are always more cannon fodder in Russia when you have a dictator who does not care how many die.
The next month will be very telling. Ukraine is in serious shape regardless of what you hear. The offensive may go badly. How this all ends is very uncertain. Victoria Nuland is the one really making policy for the White House on Ukraine. She has made a mess of it. We have another major Biden foreign policy disaster.
Erdogan winning is bad for everyone. The Turkish economy is now in serious trouble as the currency is tumbling. Inflation is out of control. It is hard to know whose side he really is on, and he just causes problems. How he got elected is questionable. There was video on BBC on Sunday of him openly handing out cash to voters. The world is worse off today due to this election.
Toyota, which has been the only real innovator for autos, is in the lead again to possibly have the answer to ending EV’s It is a hydrogen powered engine that is efficient and totally clean. There is no big battery, no lithium or nickel, and so none of the mining issues. They are now close to perfecting the technology, and being able to produce hydrogen powered hybrid cars. If they succeed, as they are very likely to do, then GM and Ford and VW will have a real problem. The Toyota car is likely to be another hybrid, and so oil will not go away.
Fact that is buried by the media. The rush to build wind turbines has led to numerous failures, and now the turbines, which can be 750 feet in some places, are falling down, blades are falling off and the turbines are failing around the world due to manufacturing and engineering errors in the rush to build them. And they want us to depend on wind energy.
There seems no lack of woke insanity in women’s sports. Just because a male dresses like a girl does not make him female. Soon all of the first-place finishers in women’s sports will be men dressed like women. You would think all of the women’s rights groups would be screaming, but gay women seem to think they prefer to back gay men than back straight women. The sports ruling bodies seem to think they need top be woke instead of protecting the athletes they are representing. This shows how sick this whole trans thing has become. And now the teachers union thinks it has a right to control the decisions oof a young child instead of the parents. Who the hell do they think they are-God. And now Kohl’s joins the club of out of touch CEO’s with their version of gay stuff. It is amazing to see this from a retailer especially after Target got pounded for the same lack of understanding of who your customer really is.
A little review of Dem promises that never get fulfilled or go sideways: defund the police-now that crime has skyrocketed in these cities, they are refunding the police, reparations-sounds like a winner for Dems until blacks in CA now demand payment as they are also doing across the country and in Congress-77% of blacks now believe they are entitled to get reparations, and now demand to know where is my check--Oh, but you mean you think we need to come up with the cash we do not have and cannot get-didn’t you understand this was just an election ploy, -sanctuary cities- come and we will welcome you and care for you- no, we meant only a few of you, not the thousands now showing up -you all need to go elsewhere, we have no room for you and never really wanted you here, -boycott the All-Star game-the black bar and retailers lost a lot of potential income in Atlanta, -San Francisco boycotted 22 states that did not share their trans policies-that cost the city so much it rescinded it, -you do not need to work to get your entitlements-uh there seems to be a little problem of we don’t have the money for this, -forgive student debt- seems the court thinks this is illegal, and besides we can’t afford it, -if you are homeless you are welcome here to live on the street, and we will even give you a tent and allow open air drug markets-but please stop using the sidewalk as your toilet, - it is OK to steal up to $950 from a store with no consequences -you must have needed that stuff, but please stop stealing so much that the stores are all closing down and so now we have nowhere to shop for necessities and the taxpaying citizens are leaving,-what do you mean that you think just because you are a parent you think you have some right to know what your kid is doing about gender-only the school can know because we are the ones in charge of your child now-yeah some kids are now screwed up and committing suicide as a result, but that is your fault, -the border is closed-what is your problem just because your kid died of fentanyl, -so we have a massive deficit-the answer is to spend more so we can buy more votes,-we need to stop climate change so we are prohibiting gas stoves and driers- oh except for some famous chefs who need gas to cook properly, and no more gas for utilities-so what if the cost of electricity is much higher and there are a few blackouts. You people are just too dumb and MAGA to understand what great things we Dems are doing for our constituents and the nation. Oh, and buying votes also.
Watch Tim Scott. He is the candidate who has adopted 15 weeks limit on abortion. Polls show it has become a key issue for moderates and independents.
Fauci is lawyered up now. The lawsuits are coming over the vaccines and lockdowns etc.
Now a school district in CO had decreed students are to be taught capitalism is bad, and needs to be eliminated. This is official policy. If you think this is absurd stupidity, you have it right. The main student speaker at CUNY law school in NYC said we need to get rid of the police, military, and prisons among a bunch of other garbage she demanded. She then launched into a raging anti-Semitic diatribe. She is from Yemen and is lucky to be here, and likely has her tuition paid for, but then she tears down everything American and Jewish. The law school posted the hate filled speech online. This is a direct result of the far left ideology being taught in universities. The students graduate, some become teachers and this is what they have been indoctrinated to believe. It is why I keep pushing my political friends to hold hearings on academic freedom, and lack of free speech on campus. The students graduate with the left wing mantra that whites are all racists and capitalism is bad, and anyone who disagrees needs to be shut down and attacked as a racist. You need to stop donating to these universities and start demanding they get back to being free thinking academic institutions. The term racist has now replaced Communist of the Joe McCarthy era. It is the exact same false labeling to try to destroy people. Then there is the case of the pregnant nurse in NYC at Bellevue who paid for her rental bike to go home. A group of black teen thugs tried to claim it was their bike rental and tried to take it from her. They filmed it to look like she was taking their bike, and so the hospital fired her immediately for acting racist before they knew anything about what actually happened. Then her lawyer produced her receipt for the bike rental and suddenly the story disappeared, but she had to pay a lawyer, and is now tarred with this false claim. It is unclear if the hospital apologized and rehired her. This, on top of the false charge against the subway Marine, is what things have come to in NYC, and other cities and institutions. There was just a case in NYC where a jury awarded a black woman who was fired for being late 47 times in 10 months $11 million because she claimed they just used her constant lateness as an excuse to fire a black woman. Now we have a Supreme Court justice who claims she cannot define woman. We are reliving the Scopes trial of 1925, when the teacher was arrested for espousing Darwin’s theory of evolution. Woke is the exact same sort of false religious type ideology as William Jennings Bryan espoused. Where is Clarence Darrow now? Or maybe the Salem witch trials are a similar analogy. This has to stop. It makes Joe McCarthy looks like an amateur at destroying people.
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Another Update on the 2020 Georgia Election Probe...And It's Not Good
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Steady at the helm!
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