Janet Goes to Guangzhou

Posted on April 5, 2024 by MN Gordon

The S&P 500 closed out Q1 2024, up over 10 percent.  But while the S&P 500 was rising day after day one former highflyer was crashing and burning.

The Boeing Company closed out the quarter down over 25 percent.  Still, it wasn’t the worst performing stock in the S&P 500.  That honor goes to Tesla Inc., which declined over 29 percent.

This amounted to $230 billion in lost market capitalization.  Moreover, according to Forbes’ estimates, it contributed to a $55.1 billion decrease to Tesla CEO Elon Musk’s net worth.  And it dropped Musk from the world’s richest person to third, behind French luxury mogul Bernard Arnault and Amazon geek Jeff Bezos.

Short sellers, on the other hand, reaped $5.77 billion as Tesla’s share price cratered.  Still, Brad Gerstner at Altimeter Capital is buying the dip.  He believes Tesla is making “massive progress at an accelerating rate” on its self-driving technology.

In 2015 Musk told shareholders that by 2018 Tesla cars would achieve “full autonomy.”  Will 2024 be the year it happens? Continue reading →

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Does Corporate Greed Cause Inflation?

Posted on March 29, 2024 by MN Gordon

It cannot be said enough.  Inflation starts with the inflation of the money supply.  From there, the excess money and credit chases consumer prices higher.  So, too, it pumps up both stock and real estate market bubbles.

Rising prices then come with a wide range of effects.  Asset owners are enriched as the nominal prices of the things they own inflate.  This also reduces the relative debt burden of the borrowing used to purchase the assets.

Workers, having little but their labors to sell, are impoverished.  Price increases for consumer goods vastly outpace wages.  Retirees on fixed incomes also get shredded, as their monthly allotments do not go the distance.

Consumer debts become more and more difficult to service.  As a greater portion of a person’s paycheck is used for food and shelter, there’s less money available to pay down debts.  For some, debt piles up from month to month, as additional debt is used to make up the difference between wage earnings and rising prices. Continue reading →

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Why the FOMC Wants to Cut Rates

Posted on March 22, 2024 by MN Gordon

Capital follows a wide-ranging lifecycle.  First it is imagined.  Then it is produced.  Later it is consumed.  Ultimately, it is destroyed.  How exactly this all takes place involves varying and infinite undulations over decades and centuries.

One generation may produce wealth.  While the next generation consumes it.  So, too, a doomed generation may inherit an insurmountable debt burden – in the form of mega amounts of government debt – that will dog it to its dying breath.  Ingenuity and resolve will be significantly stifled.

As we understand it, the value in money is in what it represents.  Every dollar of actual money should be derived from a dollar’s worth of wealth that has been produced.  And every dollar of credit multiplied upon that money should imply a dollar’s worth of wealth plus interest that’s in the process of being created.

This is how wealth creation should work in a world where money is sound, budgets are balanced, and bankers stand behind their loans.  The present world, however, rarely works as expected.  Through policies of state sponsored wealth destruction, wealth is extracted from those who created it and then set on fire with systematic efficiency. Continue reading →

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Dollar Debasement as A Matter of Policy

Posted on March 15, 2024 by MN Gordon

Michelle Mack thought she had it made.  The suburban mom was living the high life with her husband and kids in their $3 million mansion in northern San Diego County.

But that was before December 6, 2023.  This was the day police raided her home, put her in handcuffs, took her away in her PJs and slippers, and threw her in the pokey.

Now Mack’s facing 136 felony counts of grand theft, two counts of receiving stolen property, one count of conspiracy and one count of organized retail crime.  Her house, which includes a swimming pool, four-car garage and 31-acre vineyard, is listed for sale at $2.75 million.  This follows a $200,000 price cut.

Over a decade, Mack built an elaborate network of thieves, called the ‘California Girls.’  They shoplifted massive amounts of makeup from stores across America.  Mack then sold it on Amazon dot com for 50 percent off the actual retail price.  In doing so, she brought in $8 million since 2012, and nearly $2 million in 2022 alone.

“Thou shalt not steal,” commanded God to Moses at Mount Sinai. Continue reading →

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