Is There a New Dotcom Bubble?

[Juan]

German inflation at 7.4% in March. Crazy.

Germany reports higher than expected inflation


This is what the ECB is doing:

Interest rates should be over 7% at the Eurozone and they are at a ridiculous level. Real interest rates are negative in Europe, taking into account inflation is going through the roof.

I will rather spend my money on Easter vacation haha, before the ECB renders it completely worthless...

Lagarde and Guindos should be fired. They are a disgrace for all Europeans. The way they are running the ECB is just criminal.

 

[Juan]

OPEC has announced another output reduction. Oil prices are going to rocket, fuelling further inflation.

 

[Juan]

Another "billionaire's fantasy" that finally collapsed:

Virgin Orbit files for bankruptcy protection in US

 

[Juan]

Taxation needs to be redesigned. Companies like Apple barely pay and there are individuals shelling out over 50% of their salaries as income tax. Ridiculous.

Profits at Apple's subsidiary in Ireland rise to $69bn | Apple | The Guardian

 

[Juan]

FED members must be lying as always... Let's see what the "market" thinks when interest rates reach 7%.

 

[Juan]

Dumping fuel for an emergency hard landing:

SoftBank moves to sell down most of its Alibaba stake

Japanese investor makes $7.2bn from forward sales of shares in Chinese ecommerce group as lucrative partnership wanes.

 

[Juan]

Those useless EU politicians and central bankers, dragging their feet when raising interest rates, NOT tackling inflation, ignoring regulation, wasting taxpayer's money. What a disgrace.

In the EU anything takes DECADES to be done.

Brussels prepares to strengthen regime for struggling banks

Move aims to safeguard taxpayers' money in event of lenders failing.

 

[Juan]

Let's see how big is the mess with junk debt + derivatives this time:

US regulator calls for greater scrutiny of hedge funds after bond turmoil

SEC chair Gary Gensler says 'once in a generation volatility' highlights risks from shadow banking sector.

 

[Juan]

In Europe, the great lie goes on...

Prices are still through the roof while the ECB does absolutely NOTHING to contain inflation. Sugar is up 75% in one year. The price of milk has doubled. The price of eggs and fresh vegetables have rocketed.

Olive oil costs 6 euros per litre (on SALE) in Spain, the world's largest olive oil producer.

Interest rates should be over 10% by now, and they are at a ridiculous 3% overall...

 

[Ed209]

In Europe, the great lie goes on...

Prices are still through the roof while the ECB does absolutely NOTHING to contain inflation. Sugar is up 75% in one year. The price of milk has doubled. The price of eggs and fresh vegetables have rocketed.

Olive oil costs 6 euros per litre (on SALE) in Spain, the world's largest olive oil producer.

Interest rates should be over 10% by now, and they are at a ridiculous 3% overall...

We've been over this numerous times. They can't go that high because the economy wouldn't take it. The crash in 2008 should have been the start of the rebuilding process, but instead, the banks got together and decided the best way out of their mess was to print exorbitant amounts of fake money and to pretend that everything was ok. All they did was delay the shit storm until another day - because they didn't fix anything - and now we've wasted 15 years of potential rebuilding doing nothing.

The banks can't cope with the lack of liquidity and so the FED undone pretty much all of its QT in one stroke which completely undermines its integrity. They should have let SVB and those other banks fail. Why are they still bailing out bad businesses at the worlds expense? We know why, it's a rhetorical question.

I continue to back crypto-based solutions over the overwhelmingly crooked banking system, and I still maintain that there will be a financial revolution. It just depends if governments allow it to happen, because if they don't, then we can no longer say that we live in a democracy. Some countries will try to force CBDCs onto the people taking away even more freedoms and rights.

 

[Ed209]

Gary Gensler gets annihilated here. His position is now surely untenable.

 

[Ed209]

Can he hear himself speak? He is clueless.

 

[Juan]

The banks can't cope with the lack of liquidity and so the FED undone pretty much all of its QT in one stroke which completely undermines its integrity. They should have let SVB and those other banks fail. Why are they still bailing out bad businesses at the worlds expense? We know why, it's a rhetorical question.

Bailing out those banks will allow central banks to drive interest rates higher for longer. Central banks are never going to withdraw all the printing they did during QE, but at least now we can expect higher rates.

I think the FED will get close to 7%. Inflation is totally out of control and there's second round inflation in the US as a result of big pay increases.

 

[momus]

I'm not sure crypto is an answer, and the harm that token mining does to the earth is ridiculously bad. The whole idea that raising interest rates somehow slows down the economy, decreases demand for services and leads to lower prices doesn't make sense to me in these post COVID-19 times. Why would that happen? The Fed has already raised their rates several times this year and it has had no effect on inflation.

We currently have a lot of supply issues w/ many goods. That gets blamed for a lot price hikes, but it hasn't decreased demand for goods or services either. If some particular grocery items go up, people will switch to a similar product that hasn't gone up as much and still spend as much money as they ever did. If gasoline goes way up, people will car pool or take transit. The Fed is trying to shoot down a constantly moving target that remains in front of them.

 

[Ed209]

Bailing out those banks will allow central banks to drive interest rates higher for longer. Central banks are never going to withdraw all the printing they did during QE, but at least now we can expect higher rates.

No, the whole thing was a charade. They told the world they would be tightening, but at the first sign of trouble, they undid the vast majority of QT that was done in a year in two weeks. The Fed lost any integrity it had left and gave a very clear signal to the markets that at the first hint of trouble, they will print. It was their duty to let those banks fail and to let everything readjust via market forces. Their interaction put everything back to square one and made it clear that there is no QT.

The US is slowly losing its reserve status as many countries have ceased trading in dollars, and US bonds are no longer attractive because investors are largely buying emerging markets such as Brazil and Singapore (because they offer a good yield). The US was always seen as the safe bet in times of trouble, but with an inverted yield curve, this is no longer the case as people are now losing money. If they struggle to attract investors then it will become increasingly difficult to fund their massive deficits every year, and with another debt ceiling looming, it's looking very bleak.

The Fed funds rate, as it stands, is putting significant pressure on the banking system to the point that depositors are withdrawing their money at a record rate. Some have deemed this a bank walk.

I'm not sure crypto is an answer, and the harm that token mining does to the earth is ridiculously bad.

It's significantly greener and more efficient than the current system. It's so good that the central banks themselves are using DLT to issue their CBDCs. Do you object to that, or is it ok when they do it?

The vast majority of the shitcoin useless projects will die off once there's a proper regulatory framework in place. The question you need to ask is why are they delaying this? Gary Gensler and co are royally screwing people over and you can't see it. Do not swallow the misinformed propaganda that is out there. It is largely driven by the bankers as they want to keep you enslaved within the current system.

 

[Juan]

Macron has said the EU should take distance from the US and get closer to China, which makes a lot of sense. It is time to choose the tech suppliers that can deliver the best and the most cost effective solutions... and this is in many cases Chinese Tech, Huawei etc.

 

[Ed209]

This clip of Robin Williams in 2009 made me laugh. Nothing has changed, and he is exactly right.

 

[Juan]

Another serving of US corruption:

At least 9 members of US Congress sold bank stocks amid turmoil last month

Last week "woke" Time magazine featured a Democrat saying oil drilling in Alaska was "ecological". And that the oil industry got "greener" and that drilling is very welcome.

This is a crazy world indeed.

 

[Juan]

Is Ocado going to close down in the UK?

 

[Hardwell]

Is Ocado going to close down in the UK?

Not closed down entirely, they've just closed down one of their biggest warehouses to move into a more automated warehouse. Of course there's been a massive drop in profits since lockdown, which is to be expected now that people are going to physical supermarkets. Providing M&S stay in partnership with Ocado and don't start their own venture like Waitrose, then I don't see too many issues for Ocado in the future.

 

[Juan]

Not closed down entirely, they've just closed down one of their biggest warehouses to move into a more automated warehouse. Of course there's been a massive drop in profits since lockdown, which is to be expected now that people are going to physical supermarkets. Providing M&S stay in partnership with Ocado and don't start their own venture like Waitrose, then I don't see too many issues for Ocado in the future.

I find the Ocado concept interesting, but very risky. When there's a robot collision inside their automated warehouses, they lose a ton of money very fast, and orders cannot be serviced either.

 

[Ed209]

The regional banks in the US are going from bad to worse. The policymakers knew this would happen.

First Republic's stock has fallen 50% as deposits have shrunk by over $100b. This is an ongoing issue across all banks.

 

[Juan]

FRC -33%. Amazing.

 

[Ed209]

The Yuan has now overtaken the US dollar as the most used currency in Chinese cross-border transactions. This is the first time this has happened in their history.

A strong Yuan will affect their exports as they have always artificially kept it low to keep themselves competitive to help drive their economy. It will be an interesting dynamic going forward, but the dollar is continuing to weaken under the strain of the current federal funds rate.

Their risk of a default increases as their bonds are now seen as trash. It puts them in a bad situation: they can continue to fight inflation or risk a systemic collapse. Do they raise one more time and then pause for the rest of the year, or do they start cutting in the not-to-distant future?

It will be interesting to see how the rest of this year plays out.

 

[Juan]

The regional banks in the US are going from bad to worse. The policymakers knew this would happen.

First Republic's stock has fallen 50% as deposits have shrunk by over $100b. This is an ongoing issue across all banks.

If I told you what's left in my bank account... Haha... I took all the money out!

And most people in Spain are either taking cash out and keeping it home or purchasing sovereign debt, public debt. It is safer to buy the Bund (keeping it until maturity) and be a creditor of Germany than keeping money deposited in the bank.

 

[Juan]

At least the competition regulator in the UK does its job. In the EU those competition bureaucrats are just useless. I remember that Margrethe Vestager that was giving press conferences the whole day but never got anything done, and all the fines levied on Big Tech were never paid, as they were reversed in court.

Microsoft's $75bn gaming gambit on the brink after Activision deal setback

 

[Juan]

Next bank in line to collapse.

It's progressing at the right pace for another bankruptcy: USD 150 million of market capitalization gone in less than 20 minutes

 

[Ed209]

This comment that was reported after yesterday's FOMC made me laugh:

• The Federal Reserve approved its 10th interest rate increase in just a little over a year and dropped a tentative hint that the current tightening cycle is at an end.

They hinted that the tightening cycle may be at an end. What tightening cycle? They pretty much undid it all, lol. You cannot have a goal to extract extreme excesses of liquidity (which was put there by them in the first place), and then put it all back again. It's laughable.

The way things are going, the money printers will soon be back up and running again.

 

[Juan]

An image that speaks by itself:

 

[Juan]

Unsold Tesla inventories: