Category Archives: Rogues and Rascals


While a little of the massive cash pile that resulted from the Fed’s monetization of Treasury debt has been whittled away, there’s more than enough left to continue to encourage the manic speculation that we’ve seen in recent years. A week ago yesterday, Thursday, January 5, Bed Bath and Beyond (NYSE: BBBY), a past favorite of meme stock traders, told investors that ”there is substantial doubt about the Company’s ability to continue as a going concern.”

The stock closed that day about 30% lower, at $1.69. The following day, Friday, it closed another 23% lower, at $1.30 – fair enough for a company that had just issued a bankruptcy warning. But starting on Monday, the meme stock traders started a bull run and took BBBY along for the ride. On Thursday – yesterday –  the stock touched 5.87, a 350% gain from last Fridays’s close. Today, it closed at 3.66, a 180% gain from its low close and a 52% gain from its pre-news close.

This is not investing. This is the kind of speculative frenzy that is generally called “froth.” As in “frothing at the mouth” or “rabid.” “Froth” is at tops, not bottoms.

Edit: Just noticed that Bitcoin is back over $20K. Despite the continuous drumbeat of frauds, hacks, rug-pulls, SEC lawsuits, defaults, bankruptcies etc. Another sign of speculative fever.

Edit: I guess it is everywhere. “Lotto Madness” is back. Two months after a record-breaking $2 billion jackpot, another winning ticket, sold in Maine, is worth an estimated $1.35 billion. Odds of a jackpot-winning ticket: 1 in 302,575,350.

Something Is Rotten

Dr. John Campbell, who does a daily medical video, commented today that the real reason for China’s opening was not the white paper protests, but the reality that infections were already soaring. According to Dr. Campbell, people were bribing the labs or the lab employees in order to obtain a negative test, which then enabled the testees to go about their daily lives without restriction. However, they were spreading infection, which gave the virus a strong head start long before the Dec. 7 opening date.

Of course, this, if true and I certainly find it plausible, renders the PCR test requirement for travel to the US useless as it can easily be faked.

Here We Go Again

Having concluded that he could not control the spread of whatever Covid variant is raging in China, Xi is sending untested people abroad to ensure as best he can that the rest of the world shares China’s misery. Just as he did with the Wuhan outbreak. Italy reports that more than 50% of arriving passengers from China are infected. The southern border must be closed as well as the other ports of entry.

Edit: The Biden administration announced that, starting Jan 6, arriving passengers from China must have a clean PCR test within the previous 48 hours. Fat lot of good that will do. This is China. Everything is fake. There are strong suspicions that testing labs have been receiving government money, not only not performing the testing but creating outbreaks to increase demand.

Pyrrhic Victory

The “omnibus” spending bill is being rushed through the Senate and then Congress. Both sides are claiming “wins” in the bill. It will add another trillion dollars to the federal debt. Where are the “wins” for the rest of us?

Labor Pains

The Bureau of Labor Statistics produces a monthly report which is largely based on two telephone surveys, the establishment survey and the household survey. The establishment survey covers businesses and produces an estimate of the number of jobs, which makes the headlines. The household survey produces estimates of the number of employed persons and the unemployment rate. 2022 to date has featured a record and growing discrepancy between the two reports. Of course, a discrepancy is normal as a result of individuals holding multiple jobs, but this year has been exceptional.

However, the Philly Fed produces a quarterly revision of the employment estimates based on the QCEW, the Quarterly Census of Employment and Wages which covers more than 95% of employers. The most recent revisions, for 2Q2022, revealed that headline job growth was 10,500, consistent with the household survey, rather than the 1,047,000 reported by the BLS, The discrepancy between the BLS estimates continues in the rest of the year to date so it is reasonable to assume that the job growth during that period was also a mirage.

Bullish analysts have seized upon this report to justify an early “pivot” by the Fed. This fails to be convincing because the unemployment rate and average hourly wages continue to show a very tight labor market, reported layoffs notwithstanding. What is does show is that Biden’s boast of job creation was BS, just like pretty much everything he boasts about.

Just Wondering

Sam Bankman-Fried (SBF) is speaking and tweeting liberally in an apparent attempt to convince people that the collapse of FTX was just an innocent mistake or carelessness. SBF was the second largest contributor to the Democrats in the last election, and the Democrats are doing everything they can to protect him. Is that because if they fail to do so, his contributions will be proceeds of a crime and not only call the legitimacy of the election into question, but be required to be returned to the millions from whom they were stolen?

Housing Collapse Redux

Take a look at this chart:


That is a collapse in process. An unprecedented collapse in modern times. Perhaps 1346-53 showed something similar. It will take 4-6 months to work its way into the hard data, but it is coming. Recall Stephanie Pomboy’s observation that in July of 2008, inflation was at 5.6%. By July of 2009, it was at -2.1%. There’s a Fed pivot of some kind. Now look at John Hussman’s pivot chart:

Bears follow pivot

Which clearly shows that the real bear market will follow the pivot. Then contemplate another of Hussman’s charts which shows the potential losses from here:

Potential Losses

Now look at the international context. China has its own housing bubble collapse going on, to say nothing of choking its economy with a stupid Covid strategy because a dictator like Xi cannot admit error. Europe is seized with political correctness, internal division over immigration from Africa and an energy catastrophe. Oh and there’s a proxy war with Russia going on and another with China waiting in the wings, to say nothing of a demented President. Just don’t choke on that turkey.


The Democrat machine swings into action to preserve Sam Bankman-Fried from any consequences from the collapse of FTX. I can scarcely believe the nerve of these people, but after all this is the Hillary Clinton tradition. Add this to the list of howls of outrage. The New York Times Confirms SBF To Speak Alongside Zelenskyy, Yellen,

Lehman II?

The second-largest crypto exchange, FTX, has halted withdrawals and appears to be bust. Formerly valued at $32 billion, one must assume that it is now worth a lot less than that. The largest exchange, Binance, negotiated a non-binding bailout agreement and then withdrew it after a look at the books. I wonder if this is crypto’s Lehman moment? The time when the fantasy meets hard, cold reality?

Edit: FTX has/had more than five million customers worldwide. The Miami Heat’s home stadium, named FTX Arena, will be getting a new name. Porn movie producers Bang Bros. tweeted that their 2019 $10 million bid for the naming rights was still good, and they added that they promised that a lot fewer people would be f***ed.


The world is disintegrating. Trust has been lost, both within countries and between countries. Without trust, economic relationships cannot operate.


China is a poor country, despite the glitz and glamor of its big cities and its showpiece infrastructure, with a per-capita annual GDP of about USD 11,000.

Chairman Xi presented his plan for world domination at the opening of the party congress. Not going to happen, sir. Your country is an economic and social house of cards that is in the process of collapsing. The housing market, investment of choice for the masses, is a bubble bursting and desperate local governments are even buying their own land use rights from themselves or one another because retail buyers have left the building. So to speak. Your Covid-zero policy has shaken the people’s faith in the benign CCP, while wreaking destruction on millions of small businesses. Unemployment is high and rising, college graduates cannot find jobs. Biden’s withdrawal of support for your semiconductor industry has condemned it to a bleak future without the production technology that your people cannot build. Export demand from the rest of the world is shrinking fast. Sir, your country is likely heading for a deep economic depression and social turmoil. This will further weaken China’s positioning for the world hegemony which you desire.

United States

In the USA, we live in a world now that George Orwell and Aldous Huxley would readily recognize. The state has commandeered the legacy media, as well as the new social media, to not only put out the “progressive” state’s version of reality but to identify, spy on, ostracize and  punish critics and dissenters.

President Biden, your “progressive” policies are not working. Democrat-run inner cities are being abandoned to crime and homelessness. Illegal immigrants are flooding in without any prospects for employment or training. You are continuing to feed the inflation which is mostly damaging the people you claim to represent. Your support for expansion of NATO triggered the invasion of Ukraine, with severe economic and social consequences.

You and your Democratic predecessors, notably Hillary Clinton, have created a deeply divided society, with those who have drunk the purple Kool-Aid and accept the state’s lies and propaganda on one side, and those with a more traditional view of reality on the other. Neither side trusts the other, respects the other’s views, or is willing to compromise. Both sides are preparing for more direct conflict as the sporadic clashes increase in frequency and severity. This is a recipe for a failing state with extremism on both sides. Negative economic consequences are to be expected.


Neither China nor Europe are democracies – by design. The architects of the European Union claimed that, since democracy had enabled Hitler, it could not be a part of the EU’s structure. As a result, bureaucrats who suffer no consequences for their failures and care little for the fate of the citizenry run the EU. Ursula van der Leyen is no less of an autocrat than Xi. Deep rifts have emerged as democratically elected governments have resisted the orders of the bureaucrats. These rifts are between rich north and poor south as well as conservative east and “progressive” west. It is only a matter of time before a second country leaves the EU, and that will spark a rush for the exits.

The coming winter is going to be hard, as the bureaucrats’ energy policy has been disastrous. Immigration policies have resulted in shocking increases in crime, with many countries reporting zones where the police dare not go in fear for their lives. Mario Draghi’s “whatever it takes” has left a legacy of irresponsible debt, as in the USA. As  interest rates increase, this is going to be a huge problem

Russia and Ukraine

Russia’s invasion of Ukraine has no winners. Regardless of the outcome, the invasion is an economic disaster for both of them. Their economies depend heavily on the export of commodities, such as food, energy and metals. The volumes of these commodities are large, and their absence are also a problem for the countries that have come to depend on them.


I could go on, but it is time to recognize that the future is not bright. Economies will get worse. Much worse. Be careful out there. Don’t focus on the narrative of the “Fed pivot.” The Fed is irrelevant.