Daily Economic Update: March 4, 2025

Markets in Turmoil? Almost There…

A couple more days like yesterday and we’ll get the obligatory CNBC “Markets In Turmoil” special. Stocks took a beating—thanks to Trump’s 25% tariffs on Canada and Mexico.  The S&P closed down ~1.5%, the Nasdaq ~2.6% and the Russell 2K took the worst with a move down ~2.8%.   

Tariffs on Maple Syrup & Tequila? Time to Crowdfund This Blog

Setting aside the impact to equity markets, maple syrup, chips, salsa, guacamole, and tequila, these are basically the necessary ingredients that go into fueling the writing of this blog. With these tariffs, maple syrup and tequila are now luxury goods. If this blog disappears, check LinkedIn—I’ll be crowdfunding my supply chain. I’m going to have to start a GoFundMe page on LinkedIn to be able to sustain my writing..... Watch me get canceled on LinkedIn for not posting a motivational quote with my fundraiser—‘Tariffs took my tequila, but I rose above!’.

Memecoins to the Rescue? Asking for a Friend

Who am I kidding, whatever problem tariffs cause, I’m fairly confident that a strategic cryptocurrency reserve is of course the answer, right?  Can we just mint a new made in America, TariffCoin, get Dave Portnoy to trade it and throw it in the reserve at an inflated price? Does that juice GDP? Asking for a friend. 

ISM Data: The Stagflation Special

In data yesterday the ISM manufacturing printed lower than expected at 50.3, barely holding onto expansion, with falling new orders, falling employment and rising price components, a whiff of stagflation there, all attributed to, you guessed it, tariffs.  Normally, I’d joke that we don’t make anything here anyway—but at this rate, even jokes about manufacturing might get hit with tariffs.

GDPNow: From Growth to Growth Scare
If you’re into data and use data to forecast GDP, like the Atlanta Fed’s GDPNow (which is just a mathematical model), the recent data hasn’t been inspiring.  As such the Atlanta Fed’s GDPNow, is now -2.8%, which is pretty ugly considering it was over 2% a few weeks ago.  “Growth scare” - If Q1 GDP drops near -3%, shouldn’t we be in full panic mode?

Gold’s Up, TIPs Are In: Stagflation Survival 101

Maybe hoarding gold is the right economic play after all, it was up 1.3% on the day.  Somewhat more seriously TIPs tend to perform well in a stagflation environment as real rates fall and they outperform nominals in such a scenario.

The Fed Cares About Inflation… Kind Of

Inflation isn’t sitting this one out either. We heard from the Atlanta Fed head, Alberto Musalem at NABE, he’s out there worried about rising inflation expectations. “I perceive the risks to inflation as skewed to the upside and am watching near- and longer-term inflation expectations carefully.”  At least someone at the Fed cares about inflation, but with the “growth scare” narrative taking hold, it will be interesting to see if markets pull forward pricing of a Fed rate cut from June into May.

Don’t look now but the 2Y yield is back under 4%, at 3.96% and the 10Y currently feels like it’s a long way from the 4.80% we saw earlier in the year, sitting at 4.16%.

On Deck: Fed Speak & a Prime-Time Address

On the day ahead we’ll hear from NY Fed Williams and we get some quasi State of the Union address in the evening.

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XTOD’s:

XTOD: Current situation:  1. The S&P 500 is falling like a global trade war has begun  2. Oil prices are falling like we are heading into a recession  3. Gold prices are rising like inflation is on the rise  4. Bond prices are rising like inflation is declining   5. Crypto is falling like risk appetite has collapsed  6. Tech stocks are falling like DeepSeek is back  Are you ready for the most volatile market in history?

XTOD: Strategic Bitcoin Reserve makes as much sense as Strategic Baseball Card Reserve.

XTOD: The US imported about 80% of the potash used to fertilise American farms from Canada, according to government data

XTOD: Bitcoin 2010: f-the govt. f-Wall Street. Independent money!  Bitcoin 2025: f-yeah govt. f-yeah Wall Street. We want $100k!  What really happened in between? This isn't monetary adoption, nor is price a sign of progress toward it. This is an admission it's all about price regardless of everything else.  So sad. So much potential wasted.

XTOD: Warren Buffett: "If you're going to do dumb things because a stock goes down, you shouldn't own a stock at all."  "Some people are not emotionally or psychologically fit to own stocks — but more of them would be if [they understood that] you're really buying part of a business."

XTOD: “Not life, but a good life, is to be chiefly valued.”    — Socrates

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Daily Economic Update: March 3, 2025

“Have you said ‘thank you’ once? I mean I write this blog everyday and  “..have you said thank you?” in the comments, by carrier pigeon…”what you’re doing is very disrespectful”.  Or was that my recap of the latest on the U.S. efforts to help broker peace in Ukraine.

I started last week with a call to action, share this blog! At that time I also provided ChatGPT’s unbiased review, which you can read here.  It’s only fair that I let Grok provide its review to start this week, right?  Here’s what Grok had to say: “Need a financial fix that doesn’t bore you to death? Where is Edward Quince? at edwardquince.blogspot.com is your spot. It’s got smart, humble takes on markets, Fed moves, and whatever’s hot—tariffs one day, AI the next—all wrapped in satire that hits like a well-timed punchline. Plus, his X Thoughts of the Day pull the wildest bits from the internet’s hive mind. Guy’s been at it since 2023, and it’s criminally underrated.”

Now that Meta is rolling out a new AI chatbot in the second quarter, I’ll have to get its take on the blog. After all, your opinions don’t matter, in the future AI is going to be doing all the reading anyway.  You think I’m wrong, well “You’re in no position to dictate that. You’re in no position to dictate what we’re gonna feel”

I’m going to need this blog to get a lot bigger and have some advertising or something now that I have to deal with stagflation.  

PCE, GDP and Stagflation?

Stagflation is lower real economic growth coupled with higher inflation and following last week’s PCE data and the latest Atlanta Fed GDPNow reading, the idea of stagflation might not be off the table.  

With respect to the PCE report, the Bureau of Economic Analysis reported a very strong reading in personal income at 0.9%, above expectations, and led by a rise in social security income (thanks to COLA) coupled with solid dividend income.  The personal spending component decreased 0.2%, which was worse than expected, with spending on goods, especially motor vehicles leading the decline.  The price index, or PCE, showed a headline annualized year over year rate of 2.5% and a core YoY rate of 2.6%, both declining from the prior reading, but neither at 2.0%.  

The Atlanta Fed GDPNow printed an estimate of -1.5%, with weak net exports and weak consumption driving their downward revisions.  The net exports component is likely related to tariff concerns.  The U.S. Census Bureau’s Advance International Trade Deficit in Goods was the highest goods deficit in history, which is thought to be importing ahead of tariffs.  Beneath the headlines is data indicating that imports of Gold to the U.S. are a major factor in the widening deficit, the imports of Gold being driven by the chance that Gold could be subject to tariffs and physical Gold could be needed to settle futures contracts.  Those economists who really study the data point to this Gold anomaly and note that net imports of Gold do not feed through to GDP as Gold imports are generally unrelated to U.S. production or consumption which is what is measured in the national accounts.  I guess we’ll see.  GDP estimates excluding this anomaly appear to be trending below 2%.

So if we have sticky inflation readings and lower GDP, that doesn’t sound good, it sounds like Stagflation.

It would seem the answer to all our problems is Productivity, a topic we’ve talked about a number of times on this blog, including at the end of January, but my favorite post on the productivity topic can be found here. 

If the 1970s and 1980s are the analogy, maybe we need advice from that era.  In a 1981, Financial Analyst Journal article authored by the NYSE’s then Chief Economist, William Freund, notes: “The key to licking inflation is productivity, and the key to improving productivity is capital investment.” and “Over the long run, real economic growth can come from only two sources - more worker hours and greater efficiency in output per hour.” and “Economic history demonstrates that modernization of plant and equipment, more efficient production processes and better management have accounted for most of the growth in productivity.” 

So with that said we can queue the discussion on AI.  Where is a lot of capex occurring? AI.  Where is the expected increase in productive processes expected to come from?  AI.  What do you think, is AI the answer to stagflation risk?

Recapping February 2025: Stagflation, Tariffs, AI and The Best of XTOD thinking

1. Tariffs: The Gift That Keeps on Taking (From Your Wallet) Remember tariffs? Those things we thought were going away? Surprise! They're back, and this time they're "reciprocal," which apparently means they're just as annoying, but now with a fancy label. News of pausing tariffs on Mexico briefly made the market feel good, because nothing says "economic stability" like a temporary reprieve from added costs on everything you buy. It’s like finding out your root canal is only going to be delayed a week. 

2. The Fed: Guardians of the Galaxy or Just Really Confused? The Federal Reserve, or as I like to call them, the Powell Rangers, continue to ponder the age-old question: to cut or not to cut? Will Trump's policies throw a wrench in their delicate dance of rate adjustments? And what about the "dots"? Are they still a thing? One thing is for sure: trying to predict the Fed's next move is like trying to herd cats while blindfolded. You’re better off reading tea leaves.   

3. Economic Indicators: A Choose Your Own Adventure Novel: Jobless claims are up, but is it noise? The Conference Board’s Leading Economic Index (LEI) is flashing warning signs, but who trusts those guys anyway? The internals indicate a consumer base that is pessimistic. It is as if they are all realizing they have to pay back their credit card debt. CPI reports come and go, each one telling a different story depending on who's spinning it. It’s like trying to navigate using a map drawn by a toddler. Good luck with that soft landing!   

4. AI: The Singularity is Near (or Maybe It's Just a Hype Machine): Ah, AI, the magical elixir that's either going to solve all our problems or turn us into paperclips. Are tech companies overvalued because of AI hype? Is Nvidia the next Pets.com? One thing is clear: everyone is talking about AI, but nobody really knows what it is or what it's going to do. But hey, at least it's not boring.  

5. Market Performance & Valuations: This Time Is Totally Different (Until It Isn't): The S&P 500 is hitting record highs! Time to party like it's 1999! But wait, are we in a bubble? Are valuations too high? Is this sustainable? Don't worry, just keep buying the dip. After all, what could possibly go wrong?

And in our February of less than financial topics:

1. George Carlin Quote: Because He Always Tells It Like It Is: “Think of how stupid the average person is and then realize half of them are stupider than that.” Truer words have never been spoken. This explains so much about the stock market, politics, and most of what you see in public. 

2. Dave Portnoy and $Greed: A Cautionary Tale of Crypto and Hubris: Dave Portnoy(@stoolpresidente) created $Greed and bought 357.92M $Greed (35.79% of the total supply). He sold all $357.92M $Greed in a single transaction, causing the price of $Greed to crash by 99%. And he made ~$258K from $Greed. Next, Dave Portnoy created $Greed2 and currently holds 268.25M $Greed2(26.8% of the total supply). Keep your funds safe and be aware of risks! Is anyone really surprised? In the wild west that is crypto, $Greed is actually an apt ticker. 

3. Looking Back at 2025: A Glimpse into the Future (Maybe): Imagine it’s 2035 and you’re looking back at 2025. What do you think is going to be glaringly obvious by then that isn’t obvious to most people now? Will we laugh at our obsession with meme stocks? Will we marvel at the fact that we used to drive our own cars? Will we even be around to look back at all? Only time will tell.  

4. Questions for Self-Reflection: Because Introspection Is Overrated (Just Kidding): What am I working on and why? Who am I spending time with and why? How well am I treating my body and why? Everything else is noise. Okay, okay, maybe there's something to this self-reflection thing after all. But let's be honest, most of us are too busy doomscrolling to actually answer these questions.

5. LinkedIn Observation: When Did LinkedIn Become OnlyFans? A comparison of LinkedIn to OnlyFans, noting the shift from professional networking to engagement-bait posts and self-promotion. Let's face it, LinkedIn is where professional aspirations go to die. It’s a constant stream of humblebrags, vapid motivational quotes, and people you went to high school with trying to sell you something.

So while we wait for AI to solve stagflation, the Fed to master soft landings, and LinkedIn to stop being weird, at least we can all agree on one thing—no one actually knows what’s going on, but that’s never stopped them from pretending

The Week Ahead:

After the S&P 500 sold off by 5% last week on a “growth scare” narrative, we’ll get the February Jobs report as the highlight of the week ahead.

Today: ISM Mfg, Construction Spending

Tue: Fed Williams

Wed: ISM Services, Factory Orders

Thur: ECB Decision, Jobless Claims, Fedspeak

Fri: Jobs Day and Powell at Chicago Booth

XTOD’s:

XTOD: CouplaBeers  https://x.com/i/status/1896078157398098309

XTOD: A portion of your future tax dollars will go towards buying Cardano.  Let that fucking sink in for a second.

XTOD: If only there was a guy who historically issued “toxic converts” who recently issued debt backed by this “store of value” while simultaneously goosing this very “store of value.”

Get the popcorn.

XTOD: Pure Independence  https://t.co/60y4aRauRg

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Daily Economic Update: February 28, 2025

We’ll start with economic data today for the first time in a while.  Jobless claims hit 242K—thanks, Elon, for the DOGE days of firing—and pending home sales dove 4.6% to a record-low index. Weather’s the fall guy, per Millie Vanilli’s greatest hits: blame it on the cold, not the rain, but I’m lip-syncing my way through this mess.

With consumer fears front and center, the 2nd read of 4Q2024 GDP showed consumers hanging in there. The personal consumption component came in at 4.2% with solid spending on durable goods.  Overall the 2.3% real GDP was in line with expectations, but the PCE read in the report showed inflation to be as stubborn as my mother-in-law.  Speaking of durable goods (not mother-in-laws), orders appeared to rebound with vehicles and machinery driving it.  Everyone gets a car, even though auto loan delinquencies are expected to continue to rise.  Don’t worry, we’ll get an updated read on the 1Q2025 GDP estimate when the Atlanta Fed releases their updated estimate today and we’ll see if it confirms what the vampire squid (aka Goldman) believes which is a 1Q2025 GDP under 2% (1.8% is GS current estimate).

In the markets Nvidia and the latest tariff talk weighed on markets.  Remember yesterday when Nvidia didn’t move too much after earnings, well, it decided to move down ~8% today.  The Nvidia vibe shift seemed to be something like cool, you killed it, but not as much as you used to kill it, can the insane growth continue?  Microsoft seemed to weigh on some of the AI sentiment for sure, what does Satya know?  Maybe those who say that history shows the companies that spend early and often in most historical technology infrastructure booms don’t end up being the winners will be proven correct.

Chips and tariffs seem to go hand in hand and today Trump confirmed that 25% tariffs on goods from Mexico and Canada will go into effect next week, but why stop there, we’ll add another 10% on top of the existing 10% tariff on Chinese imports, and the EU is next in line for a 25%.  One minute it’s tariffs come April, the next it’s March, and there’s still “reciprocal tariffs” being floated as well. Is the uncertainty around and the actual imposition of tariffs going to lower growth and demand and is that driving oil lower?  It’s probably part of the answer, along with a strong dollar and expectations for continued U.S. energy output.

We talk about AI everyday, so I asked Grok what I should do in the face of a wobbling job market, looming tariffs and oil prices acting like demand is falling and markets expect the Fed to cut in June.  Grok’s advice: “Buy a toaster, hoard some oil, and pray the tariff fairy leaves us a tax cut under the pillow. Tomorrow’s another circus—bring popcorn.”  I love quoting AI - it’s less unhinged than most economic commentators.

The Fed’s preferred inflation gauge PCE is on the docket today, along with Income & Spending data, but the real action likely comes from Pennsylvania Avenue.  We’ll start the action with the S&P at 5,861, the 2Y Treasury yield at 4.07% and the 10Y Treasury yield at 4.27%.

In a world where tariffs drop faster than Nvidia stock and AI advice is as good as any economist’s, the only safe bet is to keep your popcorn stockpile high.

XTOD: This guy gets it https://pbs.twimg.com/media/Gkv6AFoW8AAOueS?format=png&name=900x900

XTOD: Pam Bondi: "We're releasing the first of the Epstein files tomorrow." 

Americans: "Cool! Then we'll get to read them?" 

Bondi: "Well actually you'll get to see fun little photo shoots of conservative personalities & influencers holding a binder!"

XTOD: Meta plans to release standalone Meta AI app in effort to compete with OpenAI's ChatGPT

XTOD: ok fine maybe we'll do a social app

XTOD: TSLA symmetry 280 to 480 to 280  as glorious as any memecoin chart

XTOD: The best career advice I ever followed.  At every job you have you either earn or learn. Ideally both. The second you stop... you quit.

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Daily Economic Update: February 27, 2025

Let’s face it, your day could have been worse, you could be some guy named Evan who is apparently still dating Mary Kate Cornet.  Don’t worry there is already a Memecoin dedicated to this “news” story - I think it was up 800% at one point.  I can only imagine that Mary Kate Cornet will relocate to the AI generated Gaza with Evan’s dad soon.

The long awaited earnings report from Nvidia showed numbers beat across the board on both revenue and earnings. As of the time of this writing the stock reaction was fairly muted, which was unexpected as reports were that options markets were priced for moves around 10%.  The messaging around Blackwell chips seemed promising and Jensen Huang expressed a sentiment that we’re still in the early innings of AI and that there is still plenty of need for increased compute.  I’d summarize Huang’s case for Nvidia with him stating, “I’m fairly sure that we’re at the beginning of this new era.”  I guess we’ll have to wait a little longer to see if investor’s continue to buy into the growth story or whether the overhang of the Deep Seek story, questions around data center capex and concerns about tariffs will weigh on investor optimism.

Post Nvidia earnings, if you're looking for a reason to be bearish, the yield curve inverted between 3m yields and 10 year yields.  The inversion, where 10Y yields fall below 3m yields, has historically been considered a leading indicator portending a recession.  In this blog we’ve spent a good bit of time discussing the inversion between the 2Y and 10Y, you can find a good link to a summary of the yield curve inversion and recessions in this post.  It’s hard to know the current predictive power of yield curve inversions given the October 2022 inversion failed to predict a recession in the usual timeframe. But as some say, the four most dangerous words in the English language are “This Time Is Different.”

With uncertainty seemingly very high, it might be wise to revisit some of our previous discussions on the topic of “uncertainty”.  You can find a bunch of posts that discuss “uncertainty” here.  Some of my favorite advice around this topic are from Peter Bernstein:

“In making decisions under conditions of uncertainty, the consequences must dominate the probabilities"   And "The more uncertain the outcome, the greater may be the value of procrastination."

Unfortunately, the procrastination advice doesn’t always tend to lead to good business and economic results - business always seems to be injured by uncertainty.  However, the reality is that decisions are always made under uncertainty - being able to think in terms of opportunity cost can sometimes be a superpower.

In economic data the 10.5% decline in new home sales exceeded expectations for a less steep decline. It’s likely high interest rates coupled with high prices are weighing on sales and I wonder if the “great stay” in the labor market is a factor as well.  Of course, when in doubt, you can also blame the weather, which was something a few commentators on the report did.

Fedspeak this week has been uneventful.  The 7Y Treasury auction was solid, printing at 4.194%, which was through where When-Issued was trading.  Foreign demand was solid, but not as spectacular as previous auctions this week. 

If you’ve missed it, Tesla shares are somewhat quietly down ~25% this year. The S&P closed down very slightly at 5,952.  The 2Y yield is 4.08% and the 10Y yield is 4.26%.

With Nvidia out of the way, attention turns to today’s GDP report and tomorrow’s PCE report.

XTOD: Much of investing is avoiding FOMO buying and panic selling.

XTOD: All the alleged details and alleged pictures you need about this alleged story about a girl allegedly named Mary Kate who allegedly slept with her boyfriend’s dad. Allegedly.

XTOD: I shared this note with the Washington Post team this morning:  I’m writing to let you know about a change coming to our opinion pages.   We are going to be writing every day in support and defense of two pillars: personal liberties and free markets. We’ll cover other topics too of course, but viewpoints opposing those pillars will be left to be published by others.   

There was a time when a newspaper, especially one that was a local monopoly, might have seen it as a service to bring to the reader’s doorstep every morning a broad-based opinion section that sought to cover all views. Today, the internet does that job.  

I am of America and for America, and proud to be so. Our country did not get here by being typical. And a big part of America’s success has been freedom in the economic realm and everywhere else. Freedom is ethical — it minimizes coercion — and practical — it drives creativity, invention, and prosperity.   I offered David Shipley, whom I greatly admire, the opportunity to lead this new chapter. I suggested to him that if the answer wasn’t “hell yes,” then it had to be “no.” After careful consideration, David decided to step away. This is a significant shift, it won’t be easy, and it will require 100% commitment —  I respect his decision. We’ll be searching for a new Opinion Editor to own this new direction.  

I’m confident that free markets and personal liberties are right for America. I also believe these viewpoints are underserved in the current market of ideas and news opinion. I’m excited for us together to fill that void.     Jeff

XTOD: Imagine being max long Orange Juice futures and getting smoked -40%, getting shoulder tapped at your job, and then having to go home to your wife and explain why the kids need to move to a cheaper school district.

XTOD: Charlie Munger: "It's hardly a competence if you don't know the edge of it. If you have a misapprehension regarding your own competency, that means you lack competency. You're going to make terrible mistakes."

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Daily Economic Update: February 26, 2025

Do we need a growth scare?  Yesterday, Treasury Secretary Bessent hinted at the brittle footing of the private sector, which has been propped up by excessive government spending. It begs the question: is there a trade-off between short-term economic conditions and long-run fiscal sustainability that might be necessary?  A growth scare could lead to interest rate cuts from the Federal Reserve and lead investors to demand lower returns on their debt investments.  Lower interest rates could reduce pressure on the Federal budget where interest payments have become a growing concern.  “Ferguson’s Law” states that any great power that spends more on debt servicing than on defense risks ceasing to be a great power and the U.S. is currently paying more on debt service than defense. A growth scare in theory could help alleviate inflation both by reducing demand and potentially reducing fiscal-driven inflation.

I remember when Powell said: "Getting inflation sustainably back down to 2 percent is expected to require a period of below-trend economic growth as well as some softening in labor market conditions.".  If you forgot about that, you can read more about it in this post.

But this question and argument has some risky spots. First, didn’t lower interest rates potentially get us into this unsustainable fiscal position?  When rates were low and money appeared “free” didn’t that help to fuel a binge on fiscal spending? While slower growth might lower the interest expense component of the deficit, it would also seem to risk lowering tax receipts and also seeing increased spending through automatic fiscal stabilizers.

Personally, I’m not sure that a “growth scare” is the right answer to solving fiscal problems.

Nonetheless, this discussion reminds me of something we talked about, which was “Fiscal R-Star”.  You can get a quick refresher of that discussion from this post earlier in the year.

The other thing that comes to mind, is that when you cut waste and fraud from any system, do you get a “febezzle” induced recession?  You can read about “Febezzle” here, but Munger’s “Febezzle” describes a situation where an investment manager and investor both feel wealthier due to the illusion of stable financial gains, even though a portion of that income is actually wasteful or illusionary (fraud).  When that waste is uncovered, it all falls apart.  If you apply that concept to government spending, through something like DOGE, you could see the possibility of a similar dynamic.  For example, if you assume it to be true that some government contractors and employees are receiving income from inefficient spending or fraud, those people are consuming and investing as if that income will be permanent. When wasteful spending is eliminated the result could be lower consumption, lower investment and perhaps declining asset prices (like real estate in certain areas).  Of course the idea is that if there truly is wasteful or fraudulent spending then in the long-run the reallocation of labor and capital to more productive uses is a positive. 

If you believe that the fiscal situation is concerning, it is a little scary to think about the last time either political party embarked on policies that were geared towards growth and discipline without a hard external shove. 

In data, Consumer Confidence fell to 98.3 from a previous reading of 105.3, continuing a trend of negative economic surprises.  Pessimism around future labor conditions was highlighted as a concern.  The 5Y Auction seemed pretty good, especially when you consider that yields have been down solidly this week with the 5Y down almost 30bps in the last week..  Again the foreign demand seemed solid.  Home prices continued to rise, though no one seems to actually know who is buying houses these days.  

In politics, tariffs remain the economic topic du jour.  Elsewhere, it appears that the U.S. reached some sort of deal with Ukraine around rare earth minerals and lastly apparently we might be selling citizenship via gold cards. I think that was all, but you never know given the amount of stuff that comes out of the Administration daily.  You’ll have to follow a political blog to keep up with all that in detail.

The S&P posted a 4th straight losing day, closing at 5,955, led by losses in tech.  The 2Y treasury yield is all the way back down to 4.10%, which sounds crazy but the 2Y was under 4% for most of the 4th quarter of 2024.  The 10Y treasury yield is 4.30%, down from a local high of ~4.85%.

On the day ahead my guess is Nvidia earnings will trump the economic data, 7Y auction and the Fedspeak.    We’ll see if the growth scare narrative gains further fuel post Nvidia.

XTOD: The email request was utterly trivial, as the standard for passing the test was to type some words and press send!  Yet so many failed even that inane test, urged on in some cases by their managers.  Have you ever witnessed such INCOMPETENCE and CONTEMPT for how YOUR TAXES are being spent?  Makes old Twitter look good. Didn’t think that was possible.

XTOD: The weakness in today's market and the past few sessions underscore one of my concerns that is rarely discussed in the business media - market structure (i.e. the dominance of passive funds that worship at the altar of price momentum).

It is those (Index and Quant) funds (abetted by unprecedented inflows) when coupled with company buyback programs (they usually buy near highs) that generated the valuation reset (to the 96%-tile) over the last eighteen months.

The bulls, as I have consistently pointed out, ignored the high valuations - favoring the concept of a new paradigm of price earnings multiples. But now, they are all in the same long boat. Those funds know everything about price but nothing about value.

XTOD: They’re literally telling you their playbook and markets are just whistling past the graveyard.  Fed is cutting at least 4 times this year imo. Homebuilders desperately need it.

XTOD: By the time everyone calls it a great business the exceptional returns are usually in the rearview. The time to buy is when it is misunderstood, undiscovered and under-appreciated.

XTOD: “Without courage we cannot practice any other virtue with consistency. We can't be kind, true, merciful, generous, or honest.” — Maya Angelou

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