gone with the wind
market vibes
January 14…)
“My pet, the world can forgive practically anything except people who mind their own business" Rhett Butler.
In the news
PPI today CPI tomorrow
Bloomberg and Reuters say China might sell TikTok to Elon Musk. At the moment, there's no confirmation, but this is how it begins. Valuation guesstimates are between $40 and $50 billion. A few weeks ago, Musk mentioned buying MSNBC. Fwiw, Musk is going to occupy an office in the White House.
The situation in LA remains fluid and severe, with strong winds expected through Wednesday; $250 to $275 billion in damages, 24 dead, and 10,000 structures over 60 square miles are forever gone. I am surprised at the void of humanity in news coverage, which has been exculpatory and focused on blame. What about the people? Just sayin’.
In finance, the yield on Japan’s 40-year bonds made an all-time high last night.
In the Markets
Tremors of uncertainty ripple through stocks and crypto this morning. High interest rates lure trillions to the dollar for yield and safety. The FOMC faces a moot lose-lose quandary on January 29, and catastrophic losses yet unknown await us in California.
Nothing of this magnitude has happened in our time, I think. The earthquake causing the great fire in 1906 in San Francisco lasted four days and crashed the economy. However, markets are discounting more than the fire. They are discounting the limited ability of the government to bail out the 5th largest economy in the world, wage an endless war, and refund $7 trillion in debt in the next 12 months.
Meanwhile, as 30-year yields hit 5%, most of the nation's depository custodial reserves are in the very same bonds backstopped by the Fed in March 2023. A dovish print on PPI is welcome, but it won’t write checks.
Let’s get started with gold:
