Whether you love, hate or indifferent to the new president and administration, it doesn’t matter. For when it comes to business – politics is only about legislation passed and how one is going to navigate the aftermath.
So, it’s in that light I want to make mention of something the entirety of the mainstream business/financial media et. al. seem completely oblivious to, and that is – the coming, inevitable “Great Reset.”
And no, not the one that fills the digital pages (i.e., conspiratorial intrigue) of most media sites, rather, another that’s far more stealthy and patiently waiting for the last opportune moment to suddenly run and scatter, doing anything and everything it can to protect itself from what it knows is the inevitable, which is: A complete re-balance and repositioning of the “markets” globally, hence my borrowing the moniker “Great Reset.”
As I type this on Tuesday, before the U.S. “markets” open, the overnight futures market are poised to, once again, make new, never-before seen in human history, lifetime highs. The one day blip on Monday aka: an out of the blue 60 point drop in the S&P 500™ culminating in mere minutes that would normally give pause to any veteran trader, is now looked at as I iterated prior i.e., just a “blip.”
My advice would be: Do that at your own peril, for I believe it to have been a false start to an already pre-set hair-triggered re-balancing algorithmic program/programs that are going to affect these “markets” more like a light switch being turned off rather, than a rheostat for the coming re-balance. Why?
Because the stimulus proposals (i.e., magic money tree shaking) are going to be dwarfed in comparison to the coming economic stagnation and more that is being signed into law by executive action daily, along with the, once again, flip flopping of both Dr. Fauci (e.g., masks don’t work to now we should wear two!) along with president Biden’s own. i.e., the virus emergency is now going to go on for months further, and, there’s nothing anyone can do about it. Or said differently: lock-downs for longer.
Whether one thinks all the new orders are just fantastic or fantastical – it does not matter. Businesses will need to begin adjusting (read: jettisoning even more workers, along with office space, retail space and much, much more) as further executive orders and legislation comes forth. The shuttering of the Keystone Pipeline is just one example, but (and it’s a very big but!) it’s the so-called “first signal” of the entire fossil fuel industry. i.e., it’s the first casualty and far from the last. Not to mention, it’s where a lot of high paying jobs and infrastructure needs are filled. Now?
That silence you hear is that short interlude right before the vacuum and its great “sucking sound” of lost revenue (see: tax base) gets started in earnest. And this is just one of many.
Although the above is what many might call “a big one.” There are others that appear smaller yet actually are just as hampering. e.g., A new $15 minimum wage.
Although that currently is grabbing all the headlines, again, whether you’re for it or against, it doesn’t matter, if it becomes law it is – what it is. Period.
Businesses will have to either comply or close. Full stop. Yet, what has not been grabbing the headlines is the proposal that all businesses, regardless of size, (i.e., from one employee, full or part-time) will be mandated to give up to three months, paid, sick time and leave to any employee whether contracting Covid or, caring for others.
Just what does one think that will do if enacted to any remaining small or medium sized businesses in this environment? Hint: more additions to the already growing dystopian theme park known as the “Plywood Badlands.”
The current thought process running over the “markets” is “The Fed. has their back, so buy, buy, buy, then buy some more!” That works till it doesn’t. And what I would like to remind many of is something that took place in early 2017 after Mr. Trump was inaugurated.
The “markets” went straight up on both the calculations and understanding of just what the proposed tax cuts would do to the reporting metrics of the “markets.” e.g., p/e ratios, etc. etc.
All during that time, no matter what the Fed. said in response to raising rates, balance sheet reduction and more – said “markets” couldn’t be stopped from propelling higher.
Even when it appeared all through the process that the passage of said “cuts” looked like it would not pass (I was one that held that assumption) they rose and rose, because if they did – the valuations would be justified in the eyes of Wall Street.
And then they passed – and the Fed. was left on its own with what it felt was “the right path.” And it’s been backtracking and throwing not just the kitchen sink, but the entire kitchen, along with its credibility trying to sure it up ever since. Need I remind you of “autopilot?”
This week is probably one of the most important earnings reporting weeks of the new administration, because once any positioning for upside is captured, the “markets” will then need to address the old environment with a new administration and try to calculate what position the economy will be in three months from now. And it is this same “Fed” that may be powerless to get in front of it and subdue it, just like they were in 2017. Only this time – it would be in the reverse.
Think about the implications if that premise is only one quarter accurate.
Not to beat an old saw, but it needs to be said: What you are seeing currently in the “markets” is the need for money to be exposed (i.e., in and at play) to earnings reporting. It can not be “on the sidelines” as they say. But once the reporting is over? Everything, repeat, everything is up for grabs and available for repositioning. e.g., a reset.
Remember: most things pulled forward (i.e., new work from home spending) has now been, as they say, “pulled forward.” Will there be as much going forward to justify where we are now? How will the new executive orders along with more proposed legislation impact the economy over the next three months? It’s a compelling question that needs to be addressed, because there is a group of people armed with algorithmic plans and enablers that are right now calculating just that. It’s the when and where of that execution process that needs to be on the watch for.
And that critical junction for acute awareness is now. So don’t take things for granted. Things can change not only rapidly, but mercilessly so. Be prepared or at the least, be on your guard, for your business and/or livelihood may depend on it.
And for those that may be reading here for the first time and think “This guy is blowing smoke and doesn’t have a clue!” I take no issue with that, because I’ve been wrong many times. But when I’m correct? It seems I’m the one that is proven correct in the end when all the so-called “smart-crowd” saying this that and the other thing are shown to the ones that didn’t have a clue, and were doing nothing more than front-running a narrative.
Oh, yeah, and probably charging exorbitant amounts for all that “insight.”
I’ll just put up a few “pictures” from the current unfolding smart-crowds latest and you can decide for yourself if maybe I just might know a bit more than most will give credit for. To wit:
On Dec 30th I made a on the record prediction for Bitcoin™, then just weeks later it did the following…
And this is today, again, to wit:
As always, we shall see.
© 2012 Mark St.Cyr
Note: This is not trading or investing advice of any sort. This commentary is for “big picture” discussion purposes only. Please read, or re-read the “About This Site” page for any questions or clarifications.