Why I Look at the Dow First

Armstrong Economics Blog/Economics Re-Posted Nov 28, 2022 by Martin Armstrong

COMMENT: Why do you focus on the Dow over the S&P 500 and others?

ANSWER: New analysts claim that the S&P 500 provides a better picture of the markets compared to the Dow. Although the S&P 500 obviously has a larger catalog, the Dow is a direct reflection of international capital flows. Look toward the Dow to see where big money is moving.

The S&P 500 is domestic-oriented, and fund managers and institutions tend to focus on this index. The NASDAQ typically reflects retail, often tech-heavy, and usually does not peak at the same time. Each index offers a completely different perspective. The Dow Jones Industrials is the big money. You will notice that this index leads the way. It is the first out of a key low because it is typically the foreign capital based on currency. You will also notice the Dow tends to top out first because the big money tends to pull out first also due to currency.

Capital is flowing like never before, and the smart money is on the move. Socrates users have access to our capital flow heat map that shows where money is moving in real time. The USD remains the last safe haven, and money is pouring into the US. Look to the Dow for the best international perspective.

Interest Rates Rise will Not be Slow

Armstrong Economics Blog/Interest Rates Re-Posted Nov 13, 2022 by Martin Armstrong

This interview with FXStreet is from 2015. Some are surprised at the consecutive rate hikes, but our models have been indicating for a very long time that rates would rise rapidly. There would be no soft landing. Central banks maintained artificially low rates for far too long and were backed into a corner. They created a problem long ago, and it will cause pain for “some time,” as Powell usually states, for the situation to be under control.

2022 WEC: In the Dollar We Trust

Armstrong Economics Blog/World Economic Conference Re-Posted Nov 8, 2022 by Martin Armstrong

At the World Economic Conference in 2021, the Armstrong Socrates model predicted that 2022 was going to be volatile and chaotic featuring a strong US dollar, a huge move in interest rates, a major bond market decline, fertilizer and food shortages, as well as escalating geopolitical tensions in Ukraine.

What now? Socrates forecast that 2023 will be more volatile and chaotic, featuring violent moves across all markets as monetary and geopolitical tensions and debt problems intensify.

At this year’s World Economic Conference, November 11-13, Martin Armstrong will talk about what’s next for the US dollar and other currencies, the liquidity/credit crisis, as well as price targets for oil, gold, stocks, bonds/interest rates, and stocks.

Give yourself an “unfair” advantage over the markets by joining us at this year’s conference remotely or in person. Meet Martin Armstrong – have your questions answered and get the best roadmap for 2023 and beyond in the investment business.

Multinational Advertisers Begin Pulling Out of Twitter

Posted originally on the conservative tree house on November 3, 2022 | Sundance

In the prediction section of the recent Twitter discussion {Go Deep} CTH mentioned the reason and unspoken motive behind a prediction that multinational corporations would start to pull their advertising money from Elon Musk.

We are simply in an era where there is no distinction between the WEF guidance for multinational corporations and the instructions toward governments’ they support.  Free speech and freedom of expression are against both their interests.

Multinational corporations are political entities.  The former distinctions between the private and public sector have been purposefully erased.  Evidence can be found in the vaccination mandate and within corporate responses to voter outcomes during elections. {Go Deep}

As predicted, it begins….

(Via Wall Street Journal) – Food company General Mills Inc., Oreo maker Mondelez International Inc., Pfizer Inc. and Volkswagen/Audi are among a growing list of brands that have temporarily paused their Twitter advertising in the wake of the takeover of the company by Elon Musk, according to people familiar with the matter.

Some advertisers are concerned that Mr. Musk could scale back content moderation, which they worry would lead to an increase in objectionable content on the platform. Others are temporarily halting their ads because of the uncertainty at the company as top executives exit and Mr. Musk considers a raft of changes, some of the people said.

Kelsey Roemhildt, a spokeswoman for General Mills, whose brands include Cheerios, Bisquick and Häagen-Dazs, confirmed the company has paused Twitter ads. “As always, we will continue to monitor this new direction and evaluate our marketing spend,” she said.

A Twitter representative didn’t immediately respond to a request for comment.

General Motors Co. paused its spending on the social-media platform last week.

Several ad buyers say they expect the number of brands pausing Twitter ads to rise. They say that the platform isn’t considered a must-buy for many advertisers, with far larger budgets going to tech giants such as Alphabet Inc.’s Google and Meta Platforms Inc., and that pausing makes sense during the bumpy transition under Mr. Musk.

Many executives on Madison Avenue are uneasy with the rash of sudden executive departures from Twitter’s advertising sales and marketing units. Among those who have exited are Chief Customer Officer Sarah Personette, Chief Marketing Officer Leslie Berland, and Jean-Philippe Maheu, Twitter’s vice president of global client solutions. Those executives helped reassure advertisers that their ad dollars were being spent wisely and appropriately on Twitter. (read more)

Fascism was traditionally defined as an authoritarian government working hand-in-glove with corporations to achieve objectives. A centralized autocratic government headed by a dictatorial leader, using severe economic and social regimentation, and forcible suppression of opposition.

That system of government didn’t work in the long-term, because the underlying principles of free people reject government authoritarianism.  Fascist governments collapsed, and the corporate beneficiaries were nulled and scorned for participating.  Then, along came a new approach to achieve the same objective.

The World Economic Forum (WEF) was created to use the same fundamental associations of government and corporations.  Only this time, it was the multinational corporations who organized to tell the government(s) what to do.

The WEF was organized for multinational corporations to assemble and tell the various governments how to cooperate with them, in order to be rewarded by them.   Corporatism was/is the outcome.  The government is now doing what the multinationals tell them to do, and in return the multinationals install the compliant politicians.

Fascism, the cooperation between government and corporations, is still the underlying premise; the World Economic Forum simply flipped the internal dynamic putting the corporations in charge of handing out the instructions.

What results is a slightly modified definition of fascism:

A massive multinational corporate conglomerate; telling a centralized autocratic government leader what to do; and using severe economic and social regimentation as a control mechanism; combined with forcible suppression of opposition by both the corporations and government.

Doesn’t that define our current reality, especially visible in the era of COVID?

The instructions from the multinational corporations to government would be called the “Great Reset“, or as commonly transposed by the government officials receiving the instructions, “Build Back Better”.

 ~ Go Deep ~

Halloween Spending Amid Inflation

Armstrong Economics Blog/USA Current Events Re-Posted Nov 1, 2022 by Martin Armstrong

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The National Retail Federation estimated that 172 million Americans spent $10.6 billion on Halloween this year, or $100 per person. Around $1.2 billion went into costumes for children, not to be outdone by adults spending $1.7 billion on their own costumes. Around $710 million was spent on pet costumes as well. Around 67% of consumers handed out candy, 51% decorated, 47% wore a costume, 44% carved pumpkins, and 26% participated in a Halloween party. Halloween spending is back to pre-pandemic levels, but inflation is to blame.

Food, candy, pumpkins, décor – all of these items cost significantly more in 2022, but Americans are still willing to spend. Candy alone is up 13.1% from last year, surpassing food inflation at 11.2%.

This is foreshadowing for the Christmas season, which historically is the most lucrative time for retailers and a big boost for overall GDP. Around 25% of all retail spending occurs in November and December each year, but many have already begun holiday shopping as stores are forced to offer more appealing sales. Retailers who fail to profit in the remaining months of 2022 will be forced to downgrade their forecasts and re-evaluate their businesses in the current economy. Layoffs and store closures are likely, and many retailers have already halted hiring. Americans do not have more disposable income to spend on the holidays, but those who can are willing to pay inflated prices to participate in age-old traditions.

Steve Mnuchin is Not Pretending, States U.S. Economy is Already in Recession

Posted originally on the conservative tree house on October 26, 2022 | Sundance

A lot of people didn’t like Steven Mnuchin as Treasury Secretary, I did.  Secretary Mnuchin was an inside player, a billionaire himself, who worked for the outside team.  He already had a full bank account and carried ‘f**k-off’ money.   That, combined with Wilbur Ross having the same ability, was exactly what we needed to execute the America-First MAGAnomic resurgence.

The U.S. middle-class saw and felt the benefits.  Economic security is national security, at a nationwide and even individual level.  Mnuchin, Ross and Lighthizer constructed that economic outcome guided by the larger strategy of President Donald J Trump.

RIYADH, Oct 26 (Reuters) – Former U.S. treasury secretary Steve Mnuchin said on Wednesday he believed the United States was in a recession and said this would continue.

Speaking at Riyadh’s flagship investment conference FII, he said: “I think we’ll probably see a peak of 4.5% 10-year rates.”

“I think you are going to see inflation in the U.S. begin to come under control, it will probably be a two-year period,” he added.

He said the U.S. and China must learn to co-exist. He added that the Middle East’s economic issues need to be dealt with regionally. (link)

Major Merger Announced, Kroger and Albertsons Announce Merger Deal Worth $24.6 Billion

Posted originally on the conservative tree house on October 14, 2022 | Sundance 

Not that long ago, I would have said to allow the free market to decide if a merger or acquisition was valuable for the consumer.  However, in the era where massive multinational corporations, investment groups and financial institutions have now used corporatism to merge their interests with government, the massive multinationals need scrutiny.

Two major food retailers, Kroger and Albertsons, have announced their intent to merge into one massive company in a deal valued at $24.6 billion.  The majority stakeholders in Kroger are institutional investors Vanguard ($3.72 billion/11.29%) and Blackrock ($3.02 billion/ 9.17%).   The majority stakeholder in Albertsons is institutional investment group Cerberus ($3.90 billion/28.54%).

In the past few years, food has surfaced as a growing national security issue.  Foreign companies and large multinationals continue to expand their control over U.S. farm production and export U.S. farm products (Big Ag).  A major retail level move like the merger of Kroger and Albertsons creates a weaker competitive environment and gives a larger potential footprint to price control.

CBS – […] Together, the companies will have more than 710,000 workers and operate nearly 5,000 stores, along with roughly 4,000 pharmacies. Kroger, based in Cincinnati, Ohio, operates 2,800 stores in 35 states, including brands like Ralphs, Smith’s and Harris Teeter. Alberstons, based in Boise, Idaho, operates 2,220 stores in 34 states, including brands like Safeway, Jewel Osco and Shaw’s. 

“Albertsons Cos. brings a complementary footprint and operates in several parts of the country with very few or no Kroger stores,” Kroger CEO Rodney McMullen, who will lead the expanded company, said in a statement.

Kroger will pay $34.10 for each share of Albertsons stock, a 19% premium from the closing price on Thursday. As part of the purchase, Albertsons will issue a cash dividend of up to $4 billion to its shareholders, which the companies said is expected to be about $6.85 per share. (read more)

Sometimes bigger is just bigger and more controlling, not better.

That said, with economic volitivity continuing to increase, the food sector is a safe harbor for massive investment shifts.

Russian Oil Revenue Returns to Pre Sanction Levels in May

Posted originally on the conservative tree house on June 16, 2022 | Sundance 

Western sanctions against Russia have been used primarily to obfuscate the cause of western inflation and keep the citizen pitchforks from reaching various government offices.  So far, the strategy -assisted by western media- has been mostly successful.

However, the International Energy Agency (IEA) is reporting that despite the western sanctions against Russia, the Russian energy sector is having no trouble finding customers for its oil sales.  With global oil prices at their highest rates in years, in part driven by the energy policy of the same western leaders who triggered the sanctions, Russia is getting just as much economic benefit as it was before the sanctions regime was triggered.

(EU FINANCE) – Russia continued to rake in oil revenues in May despite a global boycott from companies and most countries following its invasion of Ukraine, a new report has shown.

The International Energy Agency (IEA) said the Kremlin’s oil-export revenues surged to around $20bn last month, an 11% increase from the month before, despite shipping lower volumes.

Its latest monthly report, published on Wednesday, said this takes Moscow’s total revenue for shipping oil and crude products roughly back to levels before the invasion of Ukraine. Russian exports fell by about 3% due to lower oil-product flows, the Paris-based agency estimates.

Meanwhile, crude shipped during the month grew by nearly 500,000 barrels a day compared to the start of the year, largely thanks to higher deliveries in Asia.

“China and India, which have both sharply increased crude oil purchases from Russia, are net product exporters and have no need to lift Russian products,” it said. (read more)

IEA Warns of Possible Gasoline Shortages and Need for Rationing

Posted originally on the conservative tree house on June 1, 2022 | Sundance

Does anyone remember during the Jimmy Carter era when odd/even days on license plates to get gas?  Well, if the International Energy Agency is accurate, and the issue extends into the U.S. as predicted by many industry insiders, we could very well see gasoline rationing once again.

Beyond all the obfuscation, denial and continual pretending, the reason for the gasoline shortages is related to this forcible shift in energy policy that is underway in Europe and the United States.  It’s not a shortage of oil, it’s the new era where the Green New Deal is the policy priority.  The people within the Biden administration do not care about the consequences, Biden is pushed in front of the camera as a useful idiot to take the blame.

Business Insider – The US could see fuel shortages this summer once people start taking their vacations — and Europe could take a particular hit from the lack of supply, the head of the International Energy Agency has warned.

“When the main holiday season starts in Europe and the US, fuel demand will rise,” Fatih Birol told Der Spiegel. “Then we could see shortages — for example, in diesel, petrol or kerosene, particularly in Europe.”

Birol also told the German newspaper that the energy crisis now underway will be more severe and longer-lasting than the oil price shocks of the 1970s, given it’s applying pressure on three fronts.

“Back then it was just about oil,” he said in the interview published Tuesday. “Now we have an oil crisis, a gas crisis and an electricity crisis simultaneously.”

Oil prices spiked in 1973 and 1979 as the Yom Kippur War and the Iranian Revolution interrupted Middle Eastern crude exports. Geopolitical events have hit the market again in 2022, as western nations impose sanctions on Russia over its invasion of Ukraine. (read more)

Joe Biden has no clue what the people running the administration agencies are doing.  Even if he were to ask them, they would simply type something into his teleprompter that he would believe and repeat.  Biden doesn’t care, the entire family is in it for the grift.