Independent Ideas on the Economy, Financial Markets, and Investing

Who Else Bought BlackRock’s LDI Swindle Products?

Posted on October 7, 2022 by MN Gordon

Finding and filling gaps in the market is one path for entrepreneurial success. The first to tap into an unmet consumer demand can unlock massive profits.

But unless there’s some comparative advantage, competition will quickly commoditize the market. Profit margins will decline to just above breakeven.

“You should either be first or be better than your competition.”

We don’t know who the original source of this often-repeated business advice is. Like most advice on the subject, it sounds smart while not being all that useful.

From our experience, finding and filling gaps in the market, and being better than the competition, is extremely difficult. Even the most successful entrepreneurs fail more than they succeed. And success in one endeavor doesn’t guarantee success in another.

Anyone who has ever developed and marketed a new product from concept through sale knows how difficult it is to achieve profitability. For every good idea there must be a hundred bad ones. Continue reading →

Posted in Government Debt, MN Gordon | Tagged bank of england, blackrock, larry fink, ldi, public pension funds | 24 Comments

Why Bonds Are Behaving Like Risky Assets

Posted on September 30, 2022 by MN Gordon

“When the [credit] delusion breaks, people all with one impulse hoard their money, banks all with one impulse hoard credit, and debt becomes debt again, as it always was. Credit is ruined.”

– Garet Garrett, 1932, A Bubble that Broke the World

Down, Down, Down

Third quarter 2022 ends today [Friday]. We’re entering the year’s home stretch. Thus, we’ll take a moment to observe where money and markets have been, so we can conjecture as to where they’re going.

To begin, United States stock markets are in an epic battle between bulls and bears. For most of the year, the bears have been delivering heavy blows. But the bulls have not taken their punches lying down. Here’s a quick review of the three major U.S. Indexes…

After peaking out on January 4, 2022, at 4,814.62 the S&P 500 declined 24.46 percent to an interim bottom of 3,636.87 on June 17, 2022. The DJIA fell approximately 19.71 percent over this time.

The NASDAQ’s decline commenced on November 22, 2021, at a peak of 16,212.23. It then cascaded to an interim bottom of 10,565.14 on June 16, 2022, for a top to bottom decline of 34.83 percent. Continue reading →

Posted in Government Debt, MN Gordon | Tagged collapse, DOW, NASDAQ, S&P500, treasuries | 17 Comments

Facing Down a Wrath of Biblical Proportions

Posted on September 23, 2022 by MN Gordon

“The LORD sends poverty and wealth; he humbles and he exalts.” – 1 Samuel 2:7

Holy Roll

An enterprising entrepreneur did a comedic graphic of Federal Reserve Chairman Jerome Powell captioned: “IN JPOW WE TRUST.”

You may have seen it.

The image shows Powell flamboyantly wearing a preacher’s robe and making an esoteric hand gesture with his right hand. His face is grimacing like he’s passing a kidney stone.

His left hand holds up what appears to be an outwardly facing bible. The scriptures are sparse and hardly legible. But if you zoom in you can make out important prophecies like, “STOCKS ONLY GO UP,” “RECESSION CANCELLED,” “MONEY PRINTER GOES BRRRRRRRR.”

An American dialect of French is also used in several instances to express what happens to market bears and those who short stocks. It’s the sort of thing best reserved for locker room talk. Continue reading →

Posted in Economy, MN Gordon | Tagged biblical proportions, business cycle, collapse, interest rate, jerome powell | 30 Comments

Central Planners of the World, Unite!

Posted on September 16, 2022 by MN Gordon

Federal Reserve Chair Jay Powell wants a swift decline in the rate of consumer price inflation. He isn’t getting what he wants.

According to the Bureau of Labor Statistics, consumer price inflation, as measured by the consumer price index (CPI), increased at an “official” annualized rate of 8.3 percent in August.

This exceeded Wall Street’s consensus expectations of 8.1 percent. What’s more, it crushed investor hopes a ‘Powell pivot’ would come sooner rather than later. On Tuesday, the Dow Jones Industrial Average (DJIA) crashed 1,276 points on the news.

Powell, a central planner, wants consumer price inflation to be about 2 percent. Instead, he’s got something that’s over 400 percent higher. What’s going on?

If you want to understand what’s up with raging consumer price inflation and Fed monetary policy, you must understand this. Right now, in the United States as in most of the world, we have a scam currency that’s controlled by central planners. Specifically, we have what Karl Marx envisioned in Plank No. 5 of his Communist Manifesto:

“No. 5. Centralization of credit in the hands of the state, by means of a national bank with state capital and an exclusive monopoly.” Continue reading →