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Gregor Samsa

Gregor Samsa

This site is designed as a “go to” source for traders, investors, policymakers and any interested in markets and the global economy. We provide informed opinion, timely market information, sources, and links.

Articles by Gregor Samsa

Are These The Charts That Spooked Jerome Powell?

5 days ago

#CKStrong

Fed Chair, Jerome Powell finally admitted today, at least, implicitly, there is too much stimulus demand (in the macro context) in the global economy and the Fed will have to accelerate its tapering.

The following charts clearly illustrate the U.S. economy is overheating and is a major contributing factor to inflation. Nominal retail sales and core capital good shipments remain 15 percent above and years ahead of their pre-COVID trend. Think of the trend line as the supply curve.
In hindsight, it is easy to say the global policymakers overshot with their stimulus, but it is certainly better than the alternative and a deep recession/depression.  Just as you and I, policymakers have to make decisions with imperfect information.  Counterfactuals don’t go a long way in

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Why The Majority Is Always Wrong

8 days ago

#CKStrong

Wow, GMM’s Carol K could have given this speech! She is definitely in the three percent the speaker references. The video is well worth your ten minutes. A potential huge return on a ten minute investment.

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How Regulators Lost Control Of Crypto – FT

15 days ago

#CKStrong
Just a quick aside before viewing this excellent video.
Many crypto brokers advertise zero commission trading.  The following is from the firm where I flip around in the cryptic world of Crypto:
Crypto trading has $0 commissions, however they are charged [bid-ask] spreads…When you buy a crypto asset at ____ we charge a “round trip” spread that covers both the buy and the sell. This spread varies depending on the crypto you’re investing in.  —>  [BTC = 0.75%; Dogecoin = 2.9%; Sheba = 2.9%;  Maker = 4.9%]
Any trader who has ever made markets for their customers knows that bid-offer spreads are not fixed, are fluid, and depend on the liquidity and volatility of the asset being bought or sold.  The spread is what the firm is paid for using its balance sheet to provide

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What Is The Metaverse?

23 days ago

#CKStrong

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See also, What the Metaverse Is, Who’s in It and Why It Matters

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Feels Like 1977: Inflation Too High, Money Too Loose

24 days ago

#CKStrong
Bad Grandpa and bad monetary policy. 
Originally posted:  June 13, 2021
This post is a short follow-up to our inflation piece from last night, Inflation In Context: A Liquidity Adjusted CPI Index, which was a bit too wonky, and we don’t think we were clear in making our points.

Again, we are sending all the prayers, positive thoughts, energy, miracles, crystals, and manifestations in the entire cosmos to GMM’s deeply loved Carol K., who continues to fight her multiple-front illness in Boston.  She contributed to this post and may or may not disagree with all the content. 

Inflation And Loose Financial Conditions
Our central thesis of last’s night piece is that inflation is rapidly accelerating, not just due to the “base effect,” and that financial conditions are far too

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The Off The Charts Bull Market

November 5, 2021

#CKStrong
Bezos, Musk, and Branson (BMB) are not the only ones to recently touch the earth’s thermosphere for a brief and shining moment; take a look at today’s stock market valuation.  Note the structural shift, which took place around 1995. Before the mid-1990s, valuations traded in a nonvolatile range of around 50 percent of GDP.   
Lots happened in the 1990s,  the internet, the return of the emerging markets post debt crisis, the rise of China (probably the most important factor), the end of the Cold War, and some massive sovereign bailouts. 
We get the trade, as we do in Crypto, but we do dare ask if valuations can continue to defy gravity, or will they be forced to return to earth – as in revert to the mean valuation — as did BMB?   If so, that would reverse the fears of

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QOTD: There Is Blood

November 4, 2021

#CKStrong

Inflation is way too high given exremely easy financial and monetary conditions.  There will be blood…The Democrats should begin to worry. – GMM,  June 11, 2021

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Going Back To Houston…

November 1, 2021

#CKStrong

Carol K. was slated to be discharged from a Boston hospital this week after a 5 1/2 month stay in isolation from a stem cell transplant (SCT) to treat her Acute Myeloid Leukemia (AML). Her comorbidities — ovarian cancer, kidney failure, pneumonia, and COVID — made the SCT a Hail Mary and longshot against all odds. The SCT grafted, her blasts are down to normal levels and ANC (white blood cell count) are rising rapidly. Unfortunately, last week she was diagnosed with pneumococcal meningitis, probably the result of her recurring bouts with pneumonia and COVID complications. Friday she slipped into a coma and is back in the ICU. Send all you got her way, folks. Godspeed, Carol K.

Since baseball dominated the first 25 years of my life, GMM usually posts a piece on the

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The U.S. Budget Deficit

October 26, 2021

#CKStrong
The U.S. Treasury findly released their monthly statement on Friday, which closed the books on the government’s 2021 fiscal year (October to September).  The deficit came in at $2.8 trillion (12.0 percent of GDP, based on our Q3 GDP estimate) , a bit lower than FY 2020’s $3.1 trillion (14.8 percent of GDP).  Those are some massive deficits, folks. 

U.S. Deficit Larger Than 95 Percent Of Global Economies
In fact, the FY 2021 deficit was larger than Italy and Canada’s economy, bigger than 185 of the 192 country economies in the  IMF’ World Economic Outlook (WEO) database.  Take a look at the peak 12-month deficit of $4.1 trillion in March.  The March deficit would have made the G5. 

Financing The COVID Deficit
How can the U.S. Treasury finance $5 trillion in

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The Neuroscience Of Branding – Big Think

October 24, 2021

#CKStrong   Ready to breach the 1300 ANC level.  You go, girl! 
Fascinating stuff! 

“Powerful branding can not only change how you feel about a company, it can actually change how your brain is wired.
“We love to think of ourselves as rational. That’s not how it works,” says UPenn professor Americus Reed II about our habits (both conscious and subconscious) of paying more for items based primarily on the brand name. Effective marketing causes the consumer to link brands like Apple and Nike with their own identity, and that strong attachment goes deeper than receipts”

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What Are Bond Yields & Breakevens Telling Us?

October 20, 2021

#CKStrong   

Carol K.’s ANC broke above 1200 today.  Absolute Neutrophil Count (ANC ) measures a type of white blood cell that kill and digest bacteria and fungi to help the body fight infections and heal wounds. At a time around Day 0 of her stem cell transplant, it was below 100, which is severe neutropenia and often fatal for cancer patients.   Her fight and grit coupled with the combination of the miracle of modern medicine, deep resources, and all of your support — prayers, positive thoughts and energy, and other — around the world created this miracle.  Thank you so much to all of you.  She will be discharged after a 5 1/2 month hospital stay in isolation in early Novie.  Halle-freaking-lujah!

A very close friend posed the question in this post’s title to me the other day.

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Black Monday, 1987: Inside The U.S. Treasury

October 19, 2021

#CKStrong
Originally PostedOctober 19, 2020
By Liam McPherson

The following exchange took place between President Reagan and reporters after the market close on Black Monday, October 19, 1987.  Leaving to visit the First Lady in the hospital, President Reagan spoke just after the market lost over 20 percent of its value on the day.
Q: What about the market? Tomorrow will it go down again?President Reagan:  I don’t know. You tell me.
Q: Is the market your fault?President Reagan: Is it my fault? For what, taking cookies to my wife?
Q: Reaganomics?
President Reagan:  I just told you. Good Lord, we reduced the deficit over last year by $70 billion. And all the other things I’ve told you about the economy are as solid as I told you. So, no, I have no more knowledge of why it took place

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Hot Retail Sales Not Supply Chain Positive

October 18, 2021

#CKStrong

The market view on Carol K. is starting to consolidate that she just may become is the GOAT of Comeback Kids. What a fighter!  Do you believe in miracles?  Go Neutrophils!

Summary – The market narrative explaining the breakdown in the global supply chain is starting to come together– Some of the rock start pundits are now touting the supply chain is being swamped by too much demand, which has been our narrative since summer– The initial shock came with the 22 percent collapse in point-of-sale demand (we use U.S. retail sales as our global proxy), then an extraordinary 34 percent rebound over a six-month period– The unprecedented volatility in retail sales “bullwhipped” the supply chain and caused mass confusion and panic among upstream suppliers– As the pandemic

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Auto Chip Shortage Causing An INSANE Black-Market

October 18, 2021

#CKStrong
Wow, it’s starting to feel like the old days of exchanging currency on the black market in the men’s bathroom at the Rio de Janeiro airport. 

“The current black market price of a Bosch ESP chip (brake control system) is 4,000 yen, which $625, which is going to add an enormous price to a car and the only possible reason that you’ll be willing to pay this much for a $2 part because it’s the one thing you need to sell your car…this black market price is ludicrous it’s nearly 300 times higher than the normal price…”

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5G Marketing Outpaces Service Reality

October 15, 2021

#CKStrong
The low 5G usage numbers in the one-minute video will surprise.  Has the market mispriced them, either over or under? 

In telecommunications, 5G is the fifth-generation technology standard for broadband cellular networks, which cellular phone companies began deploying worldwide in 2019, and is the planned successor to the 4G networks which provide connectivity to most current cellphones. 5G networks are predicted to have more than 1.7 billion subscribers worldwide by 2025, according to the GSM Association. Like its predecessors, 5G networks are cellular networks, in which the service area is divided into small geographical areas called cells. All 5G wireless devices in a cell are connected to the Internet and telephone network by radio waves through a local antenna in the

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Are “Woke” Central Bankers Transitory?

October 15, 2021

#CKStrong   Bullish on CK,  ANC > 1100!

Can anyone spot which Age was transitory?

Woke Central Bankers 

“We have a generation of central bankers who are defining themselves by their wokeness,” Summers, who is now a professor at Harvard University, said on Wednesday. “They’re defining themselves by how socially concerned they are.”
“We’re in more danger than we’ve been during my career of losing control of inflation in the U.S.,” the 66-year-old Summers, a paid contributor to Bloomberg, said. “We’ve gone even further towards losing it in Britain and I think we’re at some risk in Europe.”  – Bloomberg

I have worked with — not as an employee but more an investor/informal advisor, and, at times, in an adversarial role — with many central banks during my career, including

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Can You Tell The Difference Between AI And A Human?

October 13, 2021

#CKStrong

How do you know if Carol K. or myself are not ChatBots?

The [pandemic] crisis accelerated the adoption of analytics and AI, and this momentum will continue into the 2020s, surveys show. Fifty-two percent of companies accelerated their AI adoption plans because of the Covid crisis, a study by PwC finds. Just about all, 86%, say that AI is becoming a “mainstream technology” at their company in 2021. Harris Poll, working with Appen, found that 55% of companies reported they accelerated their AI strategy in 2020 due to Covid, and 67% expect to further accelerate their AI strategy in 2021. – HBR

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Demand Surge Gumming Up Global Ports

October 10, 2021

#CKStrong

The “surge in demand” is congesting the global container ports. That is, it’s a primarily (though not all, and getting less so by the day, at the micro level) an excess demand issue creating the shortage economy.

Some $10.4trn of global stimulus has unleashed a furious but lopsided rebound in which consumers are spending more on goods than normal, stretching global supply chains that have been starved of investment. Demand for electronic goods has boomed during the pandemic but a shortage of the microchips inside them has struck industrial production in some exporting economies, such as Taiwan. 
…The risk now is that strains in the economy lead to a repudiation of decarbonisation and globalisation, with devastating long-term consequences. That is the

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The Taiwan Strait Getting Hot, Hot, Hot, Hotter…3.0

October 7, 2021

#CKStrong

We are reposting a repost of a piece we did last September. 
Our sense is Mr. Xi is testing and doing the calculus if the U.S.is willing to fight WWIII over Taiwan. 

Taiwan and U.S. officials have expressed alarm over nearly 150 flights near Taiwan in the past week by Chinese military aircraft. The Chinese aircraft have included J-16 jet fighters, H-6 strategic bombers and Y-8 submarine-spotting aircraft and have set a record for such sorties, according to the Taiwan government.  – WSJ,  Oct 7

Taiwan is now the most geopolitically important country in the world in a way that no Middle Eastern country ever was.  Semiconductors are the new oil, and Taiwan produces almost 2/3rd’s of semi global manufacturing. 

Loose Lips, Sinks Battleships
No doubt Mr. Xi was taking

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October Surprise

October 1, 2021

#CKStrong
A nice little factoid to impress at a cocktail or…err…Cannabis party as we usher in the new quarter.
October is here, and in the Northern Hemisphere, that often means the days are flush with falling leaves, chilling weather, and growing anticipation for the holiday season.
The tenth month by our Gregorian calendar, October shares a root with octopus and octagon—the Latin octo and Greek okto, meaning “eight.”
Why is October named after the number eight?
According to the original Roman republican calendar, October was the eighth month of the year rather than the ninth. The Roman calendar was only 10 months long and included the following months: Martius, Aprilis, Maius, Junius, Quintilis, Sextilis, September, October, November, and December. As you can see, January and

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“Culture As An Asset”

September 23, 2021

#CKStrong
Stunning. Hedge funds hoovering up trading cards as an “alternative to equities” with the same passion Brooks Robinson hoovered up ground balls.

This is usually a sign of the endgame for markets, i.e,, the precursor to a bear market. Think the “Great Beanie Baby Bubble” of 1999.

In general, there are two types of assets,

They can be rare—gold bars, diamonds, houses on Victoria Peak, bottles of 1982 Pétrus, Van Gogh paintings, stamps, beanie babies, or baseball cards or
They can generate cash flows over time  – GaveKal
Creating An Illusion Of Scarcity
Scarcity relative to the money stock is what its all about now, folks. 
It probably won’t be long before the Fed has to bailout the baseball card market, no?

Full disclosure,  I do own a Mike Trout rookie card.

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