1. Over the Last 8 Years Global Central Banks Bought $260B Gold vs. $60B Treasuries

In a podcast with Grant Williams, Gromen said that over the last eight years, global central banks have bought about $260 billion worth of gold, compared to $60 billion in Treasurys. “So there’s been this very slow, but steady and recently accelerating move toward the away from this dollar system that broke in 2005, through 2008 to this system that looks a lot like what was proposed by [John Maynard] Keynes 80 years ago,” he says.

www.marketwatch.com

This chart is showing gold vs. 10 year U.S. treasury….Gold clear break-out of 2 year sideways channel.

www.stockcharts.com

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2. The Russian Ruble Under Putin.

James Eagle  https://www.linkedin.com/in/jameseagle/

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3. The High Yield Bond Default Rate Plummeted to Lows

Does this signal the start of the next distressed cycle? No one knows. What we do know is that a record amount of non-investment-grade debt is outstanding in the U.S. – over $3 trillion at the end of 2021 (see Figure 5). So there are plenty of leveraged companies out there that are only one idiosyncratic event away from being an actionable target for special situations investors. And in an imperfect world, that’s something you can count on happening over and over and over again.

Figure 5: U.S. Leveraged Debt Outstanding Has Ballooned

Source: S&P Global Leveraged Commentary & Data

Oakmark Research

The Roundup: Top Takeaways From Oaktree’s Quarterly Letters – 1Q2022 (oaktreecapital.com)

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4. 30 Year Mortgage Averaging 4% Nationally

www.stockcharts.com

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5. Coffee -17% Correction in one month

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6. Gas Production from American Shale Already at New Record

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7. Annual Venture Capital Funding Shatters All Records…..100+ Unicorn Births Every Quarter

https://www.cbinsights.com/research-new-normal-in-venture?utm_source=linkedin&utm_medium=paid&utm_campaign=marketing_linkedin-retargeting_2022-02&utm_content=venture-persona&li_fat_id=162b6558-85f3-469c-8bc9-c67862048b5c

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8. Housing Supply is Coming…Housing Starts Hit 16 Year High

This pushed Housing Starts to their highest SAAR since June 2006 as Permits pulls back from similar highs…

Source: Bloomberg   from zerohedge  https://www.zerohedge.com/personal-finance/us-housing-starts-surged-16-year-high-feb

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9. Poland Mobilizes Overnight to Take in 2m Refugees

Warsaw rolls out the red carpet for refugees

Nearly 3 million Ukrainians have fled the country since Russian forces invaded. Most of them—roughly 1.8 million—have arrived in neighboring Poland, and as many as 300,000 have settled in the capital, Warsaw. For context, it’s as if the entire city of Pittsburgh moved to Warsaw in just three weeks. They’ve received a hero’s welcome. The city’s government, businesses, and citizens mobilized remarkably fast and have opened 22 shelters in the city, enrolled nearly 2,800 Ukrainian children into its school system, donated food, and coordinated volunteer counselors and translators. Still, Warsaw and the rest of Poland are bursting at the seams, and they won’t be able to sustain what has become the fastest-growing refugee crisis in Europe since World War II on their own. Some services in bigger Polish cities are reaching capacity and officials are asking organizations like the UN to help spread out incoming Ukrainians. “The West has to wake up and send a strong signal that they [refugees] are welcome, not only in Poland and Romania and Slovakia, but everywhere,” Warsaw Mayor Rafał Trzaskowski told CBS. Big picture: Some aid workers have highlighted the difference in treatment for the current refugees with those who’ve previously arrived in Europe from Middle Eastern and African countries.—MM

https://www.morningbrew.com/daily

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10. Luck and Executive Function–How belief in being lucky can have everyday benefits.

KEY POINTS

• Belief in oneself as lucky can have consequences for self-efficacy.
• Beliefs in oneself as unlucky can have consequences for the way we use our problem solving abilities.
• The question now might be which came first: seeing oneself as unlucky, or executive dysfunction?

There is a difference between the way luck is defined in the laboratory and the way we talk about it in everyday life. Many of us see luck as an individual characteristic we each possess, part of the set of characteristics that makes each of us unique. One of the most interesting results to come out of the psychology labs that have been investigating luck is a change in the assessment of the consequences of believing in luck.

It used to be that social and cognitive psychology saw belief in luck as a characteristic of people who had an external locus of control, and that external locus of control was associated with poorer mental health (depression, anxiety, and helplessness). Externally located people believed that what happened to them was the result of some force outside of their own abilities. This led to the idea that believing in luck was unhealthy because it requires that you see yourself as unable to control or influence what goes on around you.

Recent research is changing this view of luck and luckiness. Seeing luck as a characteristic of your “self,” as something that makes you unique in the world, may actually be beneficial. Research has shown that believing that you are a lucky person may be an indicator of good mental health because it is associated with a personal characteristic whose power is often overlooked—hope.

Liza Day and John Maltby have been studying our belief in luck and what it might be doing for us. In 2005, they conducted two studies that examined the relationship between believing in good luck, optimism, and hope. They first asked a very large set of undergraduates to take a series of paper-and-pencil tests that measured these three characteristics. They found that the stronger the belief in hope was, the more optimistic the person was, and the more they believed that their goals could and would be achieved. They also tended to feel confident that they would be able to find a way around any obstacles that might appear along the route toward achieving their goal. Hope, in particular, turned out to be the best predictor of how much the students believed in luck.

Then they asked another set of students to think about a real and important life goal, and to then rate how confident they were that they would be able to achieve that goal, how hopeful they were, and how much they thought luck might be necessary in achieving that goal. Their results showed that belief in good luck was particularly important when we’re coming up with a plan to achieve a goal.

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Seeing luck as a personal characteristic was associated with hope, optimism, and generally good mental health. So, does seeing yourself as unlucky have the opposite set of consequences? Do you also see yourself as hopeless, pessimistic, anxious, and depressed?

It turns out that the answer is…not exactly. Maltby et al., hypothesized that believing in your own unluckiness would have consequences for the way executive functions are used. Executive functions are mediated by our frontal lobes and include planning what to do next, coming up with alternatives when our first plan doesn’t work out, organizing what we know, switching from solving a problem in one way to solving it in another, and inhibiting an incorrect response.

Maltby and colleagues measured belief in personal unluckiness, optimism, self-efficacy, belief in the irrational in general, and executive functions. They found that the stronger one’s belief in personal unluckiness was, the weaker one’s belief in self-efficacy and the lower the levels of optimism were. People who saw themselves as unlucky also tended to be introverted, were more likely to hold irrational beliefs in general, were more difficult to get along with, and were less likely to try new things.

They asked their volunteers to take part in a task that tested their ability to switch from one problem-solving strategy to another, an aspect of executive function known as switching. The more unlucky a participant saw him- or herself as being, the worse their ability to switch from a simple task to a complex one.

Then, they asked participants to try their hand at the Stroop task designed to measure another aspect of executive functioning—the ability to suppress or inhibit a response. Participants saw three different kinds of stimuli appear on the screen, in random order. Congruent stimuli (where the word and the color of the ink the word was presented and matched—the word “pink” in pink ink for example), neutral stimuli, and incongruent stimuli (the word “pink” presented in green ink).

For most of us, reading is an automatic behavior, and we do it very well. In the Stroop task, you are asked to report the color of the ink and to ignore the word. This is much harder to do. It takes longer and we make more mistakes because we have to inhibit our natural, over-learned tendency to read the word. That inhibition is an executive function.

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The more unlucky people believed themselves to be, the longer they took on this task and the more mistakes they made. Seeing yourself as unlucky apparently made it even harder to suppress the reading response.

Maltby et al., went on to measure several other aspects of executive function and their relationship to believing oneself to be unlucky and concluded that people who saw unluckiness as a personal characteristic didn’t do well on these executive function tasks.

Seeing oneself as unlucky didn’t directly lead to depression and anxiety, but it was paired with a tendency toward executive dysfunction. The question now might be which came first: seeing oneself as unlucky, or executive dysfunction?

Barbara Blatchley Ph.D.  https://www.psychologytoday.com/us/blog/what-are-the-chances/202109/luck-and-executive-function?collection=1172589

1. Stocks After a Bad Quarter and Bad Month ..What Happens?

Wealth of Common Sense Blog

After Bad Quarter

After Bad Month

Some Thoughts on Bear Marketsby Ben Carlson  Some Thoughts on Bear Markets (awealthofcommonsense.com)

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2. Data Spanning 82 Rate Hike Cycles Forward Returns Following Rate Hikes

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3. VIX—11th Consecutive Days Over 30

From Dave Lutz Jones Trading–Yesterday was the 11th consecutive day the VIX will close >30.  LPL notes Eventually it’ll close <30 and when it does, that could be a good sign. Here are the longest streaks ever and what happened next for stocks. Down a year later only once.

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4. Emerging Markets ETF….Right Back to 20 Year Sideways Box

www.stockcharts.com

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5. Seven Fed Rate Hikes for 2022 are now Fully Priced in…….

United States: Seven Fed rate hikes for 2022 are now fully priced in. The chart below shows the futures market’s expectations for rate increases (in addition to the 25 bps hike this month).

Source: The Daily Shot

https://dailyshotbrief.com/the-daily-shot-brief-march-15th-2022/

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6. TIPS vs. AGG YTD

In a big inflation year TIPS still negative returns but outperforming bond index….Chart is showing TIPS vs. AGG (bond index)

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7. HACK ETF….Cyber Security

HACK ETF -23% Correction from Highs

www.stockcharts.com

Top Holdings ETF.COM

https://www.etf.com/HACK#overview

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8. WSJ-Saudi Arabia Considers Accepting Yuan Instead of Dollars for Chinese Oil Sales

Talks between Riyadh and Beijing have accelerated as the Saudi unhappiness grows with Washington

By Summer Said Followin Dubai and Stephen Kalin Follow

Saudi Arabia is in active talks with Beijing to price some of its oil sales to China in yuan, people familiar with the matter said, a move that would dent the U.S. dollar’s dominance of the global petroleum market and mark another shift by the world’s top crude exporter toward Asia.

The talks with China over yuan-priced oil contracts have been off and on for six years but have accelerated this year as the Saudis have grown increasingly unhappy with decades-old U.S. security commitments to defend the kingdom, the people said.

The Saudis are angry over the U.S.’s lack of support for their intervention in the Yemen civil war, and over the Biden administration’s attempt to strike a deal with Iran over its nuclear program. Saudi officials have said they were shocked by the precipitous U.S. withdrawal from Afghanistan last year.

China buys more than 25% of the oil that Saudi Arabia exports. If priced in yuan, those sales would boost the standing of China’s currency. The Saudis are also considering including yuan-denominated futures contracts, known as the petroyuan, in the pricing model of Saudi Arabian Oil Co. , known as Aramco.

Surge in Oil Prices Could Drive Inflation : Surge in Oil Prices Could Drive Inflation Even Higher

Russia’s attack on Ukraine helped push the price of oil to over $100 a barrel for the first time since 2014. Here’s how rising oil costs could further boost inflation across the U.S. economy. Photo illustration: Todd Johnson

It would be a profound shift for Saudi Arabia to price even some of its roughly 6.2 million barrels of day of crude exports in anything other than dollars. The majority of global oil sales—around 80%—are done in dollars, and the Saudis have traded oil exclusively in dollars since 1974, in a deal with the Nixon administration that included security guarantees for the kingdom.

https://www.wsj.com/articles/saudi-arabia-considers-accepting-yuan-instead-of-dollars-for-chinese-oil-sales-11647351541

Saudi Aramaco Chart…Sideways in 2021 spikes this year

https://www.google.com/search?q=aramaco+stock&rlz=1C1CHBF_enUS898US898&oq=aramaco+stock&aqs=chrome..69i57j0i10i433j0i10l4j69i60l2.3033j1j7&sourceid=chrome&ie=UTF-8

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9. Senate passes bill to make Daylight Saving Time permanent

The Senate passed a measure that would make Daylight Savings Time permanent across the U.S.

Why it matters: If the legislation clears the House and is signed into law by President Biden, it will mean Americans will no longer have to change their clocks twice a year.

The details: The bill—the Sunshine Protection Act co-sponsored by Sen. Sheldon Whitehouse (D-R.I.) and Sen. Marco Rubio (R-Fla.)—was passed by unanimous consent.

• It would make Daylight Savings time permanent in 2023.

The big picture: Health groups have called for an end to the seasonal shifting of clocks, a ritual first adopted in the U.S. more than a century ago.

• At a house hearing last week, health experts cited sleep deprivation and health problems as negative effects associated with changing clocks.
• Nearly two-thirds of Americans want to stop changing their clocks, according to a 2021 Economist/YouGov poll.

What they’re saying: “No more dark afternoons in the winter. No more losing an hour of sleep every spring. We want more sunshine during our most productive waking hours,” Sen. Patty Murray (D-Wa.) said on the Senate floor after the passage of the bill.

But, but, but: In the 1970s — the last time Congress made Daylight Savings Time permanent — the decision was reversed in less than a year after the early morning darkness proved dangerous for school children and public sentiment changed.

What’s next: Rep. Vern Buchanan (R-Fla.) will be leading a letter to Speaker Pelosi calling for immediate House passage of his bill, the Sunshine Protection Act, Axios has learned.

https://www.axios.com/daylight-saving-time-bill-senate-e391d97a-1a88-40eb-a42f-f8eb30f32136.html

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10. Lessons From the Rise and Fall of ARK

By Jack Forehand, CFA, CFP® (@practicalquant) —

Fundamental value investors like me tend to get jealous when a new growth investor comes on the scene and generates huge returns. We go through various stages of denial as we watch their returns far exceed our own. We point out the overvaluation of their holdings. We predict that there is no way the returns can continue. And then we cap it all off by breaking out the word “bubble” to describe the holdings in their portfolio.

Two things are typically true of this process we go through. First, we are typically correct in the long run, as no investor can sustain 30%+ returns forever. But we are also almost always very early in making these calls, and a large portion of the growth manager’s returns come after people like me are saying the returns just can’t possibly continue.

In the same way this process played out with the Janus Twenty fund back in the day, it also played out in recent years with ARK. But if you think I will be taking some sort of victory lap in this article, you would be mistaken. Even after ARK’s flagship ETF has fallen 65%, its returns still exceed the returns of many value guys, myself included. So no victory lap is warranted. But I do think there are some lessons all of us can learn from what happened here that we can apply to our own investing.

Here are the five main lessons I have taken from the rise and fall of ARK.

[1] Valuation is Not a Short-Term Timing Tool

It was easy to look at the valuations across ARK’s portfolio throughout its rise and to use words like “ridiculous” and “unsustainable”. And by any traditional valuation standards, they were those things. But one of the biggest lessons I have learned in investing is that valuation is useless as a short-term timing tool. There is no level of overvaluation that tells us anything about the returns of a stock, or a fund, over the next year, or even the next two.

But that doesn’t mean we can just throw valuation completely out the window.

[2] Valuation Does Matter – Eventually

While valuation might not help us in the short-term, it is much more useful when it comes to predicting long-term expected returns. At one point, the ARK Innovation ETF’s portfolio had a median Price/Sales over 20. If you look at the long-term returns of a basket of those types of stocks, the word bad doesn’t do justice to how terrible it is. That doesn’t mean there won’t be stocks that will do well within that basket (we will get to that in a minute), but on average, ultra-high valuation stocks are not a good long-term investment

[3] A Great Company is Not Necessarily a Great Stock

Take a look at this chart.

If I told you this is a chart of a business that has performed very well in the 20+ year period the chart covers, you would likely tell me I am crazy. How could that happen with a stock that was flat for 20 years?

I don’t know if you guessed the company, but this is a chart of Cisco Systems. Over the period covered by this chart, Cisco has grown its sales and earnings substantially.

So why did the stock go down?

It is all about expectations. We recently had Michael Mauboussin on our podcast to discuss his book “Expectations Investing: Reading Stock Prices for Better Returns” (which he co-wrote with Al Rappaport). The idea they present in the book provides us with the answer as to why we could see a chart like the one above for a company that performed well. The answer is that the expectations that were embedded in Cisco’s stock price in 2000 were so high that even the very strong performance of its business since then was not enough to meet them. There are many similar examples of this idea throughout history.

There is a very real possibility that some of the companies within ARK’s portfolio will end up being great companies. But there is also a possibility that it won’t matter for investors who bought the fund at the valuations it traded at in the beginning of 2021 because the embedded expectations were just too great.

But that doesn’t mean that the story of Ark has been written yet and the ending will have to be a bad one.

And this leads to my next point.

[4] Growth Investing is About the Few, Not the Many

I mentioned earlier that growth stocks as a whole don’t perform well. But that is only half the story. The other half is that the best individual performers in the market typically come from the growth group. Growth investing is a process of finding diamonds in the rough. Amazon and Google, for example, are two stocks that have had massive runs, but have spent the vast majority of those runs living inside the expensive bucket.

With a focused fund like ARK, if one or two of those diamonds are in their portfolio and they can hold on to them, it can easily make up for all the other names that don’t do well. So even though many value guys like me want to write ARK off, the story hasn’t been completely written yet.

And this brings me to my final point.

[5] A Strategy is Only as Good as an Investors’ Ability to Stick With It

One of the things that has impressed me about ARK’s shareholder base during this 50%+ decline is that for the most part they haven’t sold. The fund has had outflows, but they are nothing like what you would expect for this level of decline.

If the ARK story has a positive ending eventually, whether that ending is also a good one for its shareholders will be a function of their ability to sit through these major drawdowns. And doing that is complicated by the fact that there is a good chance the ending won’t be a good one. As we sit here today, there is certainly a chance ARK will never recover its current losses and the fund will be a poor investment going forward. Value guys like me will tell you that chance is a pretty good one. But if we are wrong about that, it will be the ability of the ARK shareholder to endure that wild ride that will allow them to tell us I told you so.

The Future of ARK

However this story ends, I can promise you that the ending will look obvious to those on one side or the other in hindsight. If ARK goes on to suffer more major losses, value guys like me will talk about how we saw it coming all along. If not, the other side will wonder how we couldn’t have seen how obvious the growth potential of ARK’s portfolio companies were. But either way, I think there are timeless lessons all of us can take from this – even if those lessons are coming from a disgruntled value guy.

Jack Forehand is Co-Founder and President at Validea Capital. He is also a partner at Validea.com and co-authored “The Guru Investor: How to Beat the Market Using History’s Best Investment Strategies”. Jack holds the Chartered Financial Analyst designation from the CFA Institute. Follow him on Twitter at @practicalquant.

https://blog.validea.com/lessons-from-the-rise-and-fall-of-ark/

Found at Abnormal Returns Blog  www.abnormalreturns.com

1. Yield Curve Watch…Yield Curve Inversion is the Most Respected Indicator of Recession

Curve Flattening Toward Inversion

ByNikos Chrysoloras, Jess Menton, and Thyagaraju Adinarayan https://www.bloomberg.com/news/articles/2022-03-12/recession-risks-are-piling-up-and-investors-need-to-get-ready?sref=GGda9y2L

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2. Commodity ETF…..COMT -15% Correction

www.stockcharts.com

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3. In 2 Year Period…Gasoline Futures Hit All-Time Low and All-Time High

@Charlie Bilello  There Is No Impossible in Markets

Two years ago the entire world was shutting down and Gasoline futures hit an all-time low.

Last week, they spiked to an all-time high, surpassing the previous high from 2008. If someone told you this would happen two years ago, you would have said that was impossible. But as we have learned time an again: there is no impossible in markets.

With gasoline futures hitting new highs, it wasn’t long before prices at pump would follow. By the end of the week, the average price of gasoline in the US had hit $4.33, surging past the prior high of $4.11 from 2008.

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4. Canada by far the Leading Supplier of U.S. Oil

From Dave Lutz at Jones Trading

We also have IEA, OPEC Monthly Market Reports and OpEx for April Crude this week

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5. Euro Stock Sales Much Worse than Covid Crash

European Equity Exodus:  European equities (understandably given direct geopolitical risk, not to mention indirect/direct economic + financial spillover risk) have been *heavily* sold… much much worse than during the pandemic panic.

Source: @MikeZaccardi

https://www.linkedin.com/pulse/weekly-sp500-chartstorm-13-march-2022-callum-thomas/?trk=eml-email_series_follow_newsletter_01-hero-1-title_link&midToken=AQFjhnSMpoKQvw&fromEmail=fromEmail&ut=0hFzdcGG6pVW81

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6. Chinese Tech Stocks Full Dot-Com Crash

Jim Bianco Research

Chinese Small Cap ETF Hitting Covid Levels.

www.stockcharts.com

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7. Corporate Bond Funds Seeing Double Digit Losses

Investment Grade Bond ETF….LQD -10.5% from highs

FPE Preferred ETF -9%

www.stockcharts.com

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8. Coinbase Breaks to New Lows …Down Double Bitcoin ETF

Coinbase -35% YTD vs. BITO (Bitcoin ETF) -15%

www.yahoofinance.com

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9. Rental Nation….Affordability of U.S. Homes Hits New Lows

Affordability of New Homes in U.S. Resumes Decline in 2022

Source: Political Calculations

From Barry Ritholtz Blog https://ritholtz.com/2022/03/10-monday-am-reads-341/

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10. What is the West?

GEOPOLITICS -Morningbrew   What is ‘The West’?

 

When reading about the war in Ukraine, you’ve probably come across the term “the West” to describe the coalition of governments opposing Putin’s invasion. But what does the West actually mean? For an answer, let’s get an assist from the brilliant Russia scholar Stephen Kotkin. In an interview with the New Yorker published this weekend, Kotkin gave his definition of the West, and it’s certainly better than anything we could come up with: “The West is a series of institutions and values. The West is not a geographical place. Russia is European, but not Western. Japan is Western, but not European. ‘Western’ means rule of law, democracy, private property, open markets, respect for the individual, diversity, pluralism of opinion, and all the other freedoms that we enjoy, which we sometimes take for granted. We sometimes forget where they came from. But that’s what the West is. And that West, which we expanded in the nineties, in my view properly, through the expansion of the European Union and NATO, is revived now, and it has stood up to Vladimir Putin in a way that neither he nor Xi Jinping expected.” The entire interview is packed with insights on the current situation. https://www.morningbrew.com/daily

America the generous: U.S. leads globe in giving

• Erica Pandey, author of Axios What’s Next

Axios on facebookAxios on twitterAxios on linkedinAxios on email

From Axios Finish Line, here’s a stat to savor: America was the world’s most generous country this past decade, according to the Charities Aid Foundation’s World Giving Index, which surveyed 1.3 million people in 125 countries.

• Not only do we give money, but 72% of Americans help strangers and 42% of us volunteer.
• We grew more generous during the pandemic: 2020 and 2021 donations each topped 2019.

Why it matters: This cuts across religion, region and age, with nearly 60% of Americans giving money last year. Average donation: $574.

Trend to watch: There’s a big surge in people setting up Facebook and TikTok fundraisers in lieu of birthday presents. You might roll your eyes at the exhibitionist dimension of public giving … but it beats the alternative.

• Facebook says birthday fundraisers bring in hundreds of millions of dollars a year. Top beneficiaries include St. Jude Children’s Research Hospital, the Alzheimer’s Association, the American Cancer Society and No Kid Hungry.
• Try it.

An even newer, real-time wave to surf: Booking an Airbnb stay in Ukraine — not to visit but as a way to send money to a family in need.

• Last week, 61,000 nights were booked at Airbnbs in Kyiv and other cities — 34,000 of them by Americans.
• Try it.

Tip to go: Be careful when giving. These four sites, all recommended by the Federal Trade Commission, let you verify whether a charity is reputable:

• BBB Wise Giving Alliance.
• Charity Navigator.
• CharityWatch.
• Candid.

And remember, if you want a deduction, you can make sure the charity qualifies by hitting the IRS Tax Exempt Organization Search.

Editor’s note: This story originally published on March 8.

https://www.axios.com/america-charitable-giving-stats-ukraine-0764185a-164a-4dde-a8b0-c6bbc09f83ea.html

Axios on facebookAxios on twitterAxios on linkedinAxios on email

1. Capitalism vs. Communism…5 Year S&P +76% vs. Russia -76% (closed)

TikTokers enlist. The White House has briefed the most influential TikTok stars on the war in Ukraine so they can be better informed when talking about the conflict to their millions of followers, the WaPo reports. Over in Russia, the government is paying Russian TikTok influencers to post pro-Kremlin narratives about the war, according to Vice.

Brittney Griner-Considering the acquittal rate in Russia is less than 1%, it could require some high-level political wrangling. But so far, US officials said they’re trying to stick to strictly legal channels.

https://www.morningbrew.com/daily

www.yahoofinance.com

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2. AGG-Bond Index About to Close Below 200 Day Moving Average.

AGG sitting on 200day long-term weekly chart

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3. Streaming Wars Slammed Stocks…

NFLX -51% and breaks to new lows

ROKU -72%

IQ -90% Netflix of China

www.stockcharts.com

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4. Streaming Listening

SPOT -58%

TME -90%

www.stockcharts.com

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5. Follow Up to my Russian Economic Summaries Last Week…Capital Group Adds Some More Clarity.

Capital Group 

Exposure to Russia looms large for Europe, less so for the world

Sources: Capital Group, IMF World Economic Outlook, MSCI, RIMES. As of December 31, 2021. GDP figures are annual. “Emerging and developing Europe” includes Albania, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia, Hungary, Kosovo, Moldova, Montenegro, North Macedonia, Poland, Romania, Russia, Serbia, Turkey and Ukraine. Exposure to equity indexes reflects the percentage of index market value represented by Russian companies within listed indexes.

https://www.capitalgroup.com/advisor/insights/articles/investment-impacts-war-ukraine.html?sfid=1988901890&cid=80683121&et_cid=80683121&cgsrc=SFMC&alias=A-btn-LP-2-CISynCTA

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6. Europe Stopped Producing Natural Gas and Russia Filled the Gap

WSJ Editorial Board.

https://www.wsj.com/articles/a-lesson-in-energy-masochism-europe-natural-gas-russia-vladimir-putin-11646170129

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7. Midterm Election Years History

From Dave Lutz at Jones Trading…Midterm years see an average peak to trough correction of 17.1% – 12.4% so far this year feels uncomfortable, but need to remember this is normal in midterm years.  The good news is a year later stocks are up more than 30%, LPL notes

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8. Vanguard REIT Index…50day thru 200day to Downside.

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9. NFTs Became a $40 billion Market in 2021….Ethereum Dominates NFT Transaction Volume

Financial Times

According to the Financial Times, while only a niche group of crypto enthusiasts were aware of NFTs in 2020, the landscape quickly exploded in 2021. By the end of 2021, almost $41 billion was spent on NFTs, according to global data.

A research analyst, Mason Nystrom, said a major reason for the NFT market growth was the demand buyers had to purchase art that aligned with their “digital identities”.

List of NFT Stats click link

https://findstack.com/nft-statistics/

https://delphidigital.io/

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10. Why Always Being Busy Negatively Affects Your Self-Development

ByDan Western 

More and more often people are finding themselves busier than they can handle;

And this, far from being something which is treated as worrying, is actually seen as favourable. It’s almost a badge of honour to be able to say to people that you have been too busy to eat/sleep/have a social life/be a human being.

Too many people are falling into the trap of thinking that being busy to the exclusion of everything else in their lives is a good thing.

We are now becoming more and more aware of how bad it actually is; and research is being done into how to combat it and ensure that everybody takes some time for themselves. Rather than being busy all the time and finally burning out at the end of it all.

Why Always Being Busy Can Be Bad for Self Development

Being busy and stressed all the time isn’t good for your body or your mind – it can have negative effects on your life and your health in particular.

This article will look at the ways in which being busy can be detrimental to you overall.

1. Creativity Killer

You might think that this should be obvious – being too busy can kill creativity.

Researchers who carried out a simple word association test: found that the people who were busier and had more on their minds were less creative in their answers than people who were at their leisure.

It was found, more specifically, that people who had more to remember had their replies stripped back to the most statistically common answers. Whereas people who had very little to remember were able to come up with less stereotypical responses.

This was not a function of them having less time than was necessary for the task. Even with plenty of time, the group with lots to remember still could not progress beyond the simplistic answers they gave.

This effect is what many people have found in the real world as well as in the lab; and understanding what it has done and is doing to our creativity is vitally important for changing things.

Having too much on your mind is something which can blunt creativity; and so stop you from either advancing or expanding on your current career. If you want to continue to move forward and see where your path can take you, losing your creativity can be devastating.

2. Wrong Priorities

If you are too busy, it can actively keep you from moving forward with your life. I have been experiencing this myself recently. Actively being kept from moving forward with my plans and my life in general.

Creativity needs some mental head-space for it to really thrive. If you are too busy, it can keep you from looking at other possibilities and other thoughts; and keep you on one particular path rather than trying to diversify and see what really works for you.

Being so busy that your creativity is stifled is what can lead you to prioritise the wrong things, something which can be bad overall.

When you are too busy to think, you can be too busy to truly see what is going on; and sometimes that means you can miss things that you would not otherwise miss: other creative opportunities, other jobs which will push you beyond what you are doing now.

3. No Time to Track Progress

Being busy can stifle you by keeping you from seeing where you are. Many people, especially as they get older and more established in their careers; have a particular way they want their career to go. And they have specific milestones set that they want to look out for, to help them get there.

Being too busy can keep you from tracking your progress, and therefore can keep you from truly advancing in your aspirations.

Ideally, every step you take in your career should be focused on how it can help you proceed to the next stage. Even if you are planning on staying at that level for a while. if you are too busy, you can feel unable to truly think beyond what you are doing; and about how to reach the next part of your plan.

This can mean you end up stuck in one particular level for a long time. Perhaps even so long that the opportunities you were going to take advantage of, have gone completely by the time you get around to them.

4. You Aren’t Working to your Potential

When you are very busy, you will find that you are simply moving from one task to the next; there is usually very little thought put into each individual work-piece, because there is simply no time to put the effort in.

When people are busy, they don’t have the time to add any extra flair to their work that creativity might otherwise give.

Being too busy means that you are focused on getting as much work done as possible. But that does not mean that the work being done is your best work. You are at your best when you can actually take the time to breathe, and to look over your work at your leisure.

Not only will that help you improve generally; it’s easier to see mistakes when you aren’t rushing. You will find that you are able to bring so much more to the table when you aren’t rushing.

5. You Put Your Health in Danger

Working this hard is bad for your health. It is bad for everything else, but particularly for your health. If you work this hard, you will find yourself cutting back on sleep, proper food, and a proper social life.

Having no space to stretch your creative muscles, or to go on to other things, is detrimental overall; because you have sacrificed food and sleep for stress and overwork which is ultimately in the service of very little.

Sub-par work is all that most people have to show for their efforts after a long period of overwork.

Summary

This article has not covered all of the effects of overwork. But it has covered enough to hopefully make people think twice before they willingly accept being in a position of having too much work to comfortably do; while also having to sacrifice every semblance of a normal life to get everything done.

Too much work is bad for creativity especially, as there is no room for anybody to think beyond what is absolutely necessary for their work.

https://wealthygorilla.com/why-always-being-busy-negative/

1. History of U.S. Consumer Spending on Energy

Dave Lutz Jones Trading

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2. Russia Minimal Impact on U.S. Economy and 1.5% of Emerging Market Index

LPL Research

https://iplresearch.com/2022/03/03/economically-and-financially-russia-doesnt-matter-as-much-as-you-might-think/

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3. Visual Guide to European Memberships

A Visual Guide to Europe’s Member States- Anshool Deshmukh

https://www.visualcapitalist.com/a-visual-guide-to-europes-member-states/

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4. Percentage Who Have Confidence Putin Will “do the right thing”…..

Pew Research  Greece and Singapore 55%???

https://www.pewresearch.org/fact-tank/2021/06/14/few-across-17-advances-economies-have-confidence-in-putin/ft_21-06-10_viewsofputin_01/

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5. McDonalds $50m a Month from Russian Sales.

MCD -16% from Highs

www.stockcharts.com

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6. Stitch Fix –Covid Favorite Long Name….-86% from Highs

www.stockcharts.com

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7. Gasoline Drops -10% in One Day….After 15 Year Breakout on Chart

-10% Intra-day yesterday

15 Year Breakout Before Yesterday Sell Off

www.stockcharts.com

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8. Job Openings Double Number of Unemployed Americans.

https://cms.zerohedge.com/s3/files/inline-images/job%20openings%20vs%20workers_0.jpg?itok=IWjvoZr2

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9. The Russian Ware and Crypto by Morningbrew

ByStephanie Forshee

 

The Russia-Ukraine war is a critical moment for crypto (morningbrew.com)

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10. Contrarian Edge Vitaliy Katsenelson Grew Up in Russia

Vitaliy N. Katsenelson

https://contrarianedge.com/

Dear Matt, Feel free to share it with your friends. -Vitaliy

Drawing is by my brother, Alex Katsenelson. Prints available on ArtistUSA.com.

 

This is part 3 of my ongoing series on the Russian war with Ukraine. You can read part 1 here and part 2 here (available in English as well as a Russian translation). Part 4 is forthcoming. To everyone that suggested a charity helping embattled Ukraine: thank you. This country needs all the help it can get. You can find the list of charities here, as well as at the bottom of this email. There is a good chance I will be coming to Houston and Dallas on or near March 14/15. We’d like to organize a reader get-together around then in either or both cities. If you’re close by and would like to attend, please email Barbara at pa@imausa.com.

 

War in Ukraine: Part 3 – The Future of Russia

 

“Putin cannot bring the Soviet Union back together, but he can bring back breadlines.” –Ian Bremmer

 

Sanctions will likely have a very significant impact on the Russian economy. Unlike previous (2014) sanctions, which were toothless and slow to have an impact, these went straight for the jugular of the Russian financial system, possibly crippling it overnight. The Russian central bank had to raise rates to 20%, banks stopped giving out loans, and the ruble collapsed. The Russian economy is likely going to be engulfed in inflation, the magnitude of which it has not seen since the early 1990s. Russia has been cut off from the West overnight. Russia has turned into a toxic pollutant on corporate ESG checklists. Even Coca-Cola is leaving Russia. The thinking in the West is that the Russian people will revolt against their dictatorial ruler, and this will bring an end to the war. In addition, the sanctions should in theory deprive Russia of the economic oxygen it needs for Putin to be able strengthen the Russian military and put an excruciatingly high price tag on future wars. Will sanctions bring an end to Putin? Sanctions have a checkered history. They didn’t get rid of Castro in Cuba or the Kims in North Korea. It took more than a decade for sanctions against South Africa in the 1980s to bear fruit. Sanctions in the past have been an effective stick that was turned into a carrot when both sides came to the negotiating table. But the world has never seen sanctions like this. Ironically, these sanctions may give Putin even more power. How? To control the masses, Putin tells them what to think. How does he manage that? In 2014, I was perplexed by how the Russian people could possibly support and not be outraged by Russia’s invasion of Eastern Ukraine. But I live in Denver, and I read mostly U.S. and European newspapers. I wanted to see what was going on in Russia and Ukraine from the Russian perspective, so I went on a seven-day news diet: I watched only Russian TV – Channel One Russia, the state-owned broadcaster, which I hadn’t seen in more than 20 years – and read Pravda, the Russian newspaper whose name means “truth.” I wrote a lengthy article on this topic – you can read it here. An excerpt: In my misspent youth, I took a marketing class at the University of Colorado. I remember very little from that class except this: For your message to be remembered, a consumer has to hear it at least six times. Putin’s propaganda folks must have taken the same class, because Russian citizens get to hear how great their president is at least six times a day. We Americans look at Putin and see an evil KGB guy who roams around the country without a shirt on. Russians are shown a very different picture. They see a hard-working president who cares deeply about them. Every news program dedicates at least one fifth of its airtime to showcasing Putin’s greatness, not in your face but in subtle ways. A typical clip would have him meeting with a cabinet minister. The minister would give his report, and Putin, looking very serious indeed, would lecture the minister on what needs to be done. Putin is always candid, direct and tough with his ministers. [In Part 1 of this series I discussed how Russians love their leaders to death. Russian TV is an unending informercial for Putin. Russians get huge helpings of Putin-love for breakfast, lunch and dinner.] I’ve listened to a few of Putin’s speeches, and I have to admit that his oratory skills are excellent, of J.F.K. or Reagan caliber. He doesn’t give a speech; he talks. His language is accessible and full of zingers. He is very calm and logical. [I’ve heard that isolation during the pandemic had an impact on him and he lost some of his eloquence over the last few years.] I have to confess, it is hard not to develop a lot of self-doubt about your previously held views when you watch Russian TV for a week. But then you have to remind yourself that Putin’s Russia doesn’t have a free press. The free press that briefly existed after the Soviet Union collapsed is gone – Putin killed it. The government controls most TV channels, radio and newspapers. What Russians see on TV, read in print, and listen to on the radio is direct propaganda from the Kremlin. Before I go further, let’s visit the definition of propaganda with the help of the Oxford English Dictionary: “The systematic dissemination of information, especially in a biased or misleading way, in order to promote a political cause or point of view.” I always thought of the Internet as an unstoppable democratic force that would always let the truth slip out through the cracks in even the most determined wall of propaganda. I was wrong. After watching Russian TV, you would not want to read the Western press, because you’d be convinced it was lying. More important, Russian TV is so potent that you would not even want to watch anything else, because you would be convinced that you were in possession of indisputable facts. Russia’s propaganda works by forcing your right brain (the emotional one) to overpower your left brain (the logical one), while clogging all your logical filters. I know exactly what I am going to hear back from some of my fellow Americans. They are going to say: Don’t you think Americans are brainwashed by Fox News, MSNBC, CNN, and other news outlets? There is no question in my mind that American news is more biased today than ever before. But there is a difference between bias and what is happening in Russia. At least by watching different news outlets and reading different newspapers, Americans can triangulate to the truth. Most importantly, the US government doesn’t tell networks what to say. The editor of The Washington Post doesn’t have to worry about a trumped-up charge if he writes a scathing article about Biden. In Russia there is only one media voice and that is the voice of the government. All other voices were silenced by the government. The government has zero accountability. Think of Watergate, Irangate, and other “gates” scandals – they could never happen in today’s Russia. I never appreciated the free press as much as I do now. The free press shines a light on government actions. It provides a much needed feedback loop between government and the public. Over the last few days things have gotten tremendously worse on this front. Russia passed a new law: If you call this war with Ukraine a war, not a “special operation” or publish any views that contradict stories put out by the Ministry of Defense (i.e., create “fake news”) you can get up to 15 years in prison. Providing assistance to foreign organizations that oppose the war (sorry, “special operation”) with Ukraine will be considered treason, which may result in up to 20 years in prison. Needless to say, most independent local and foreign news organization immediately closed their doors. Since the invasion, Facebook, Twitter, and other social media have also been blocked in Russia. In other words, Russia turned into China overnight. Today, cognitive dissonance between reality and what the government says rose to a comical level. A day after the Russian government passed the aforementioned laws, Putin gave a speech, where he said (I am loosely translating): In Russia, our people are expressing their views about what they like or don’t like about the situation in Ukraine. But there, in Ukraine, those who express the same opinions as the liberal part of our citizenry are grabbed from the street and shot. They are just simply shooting them. In Russia, our liberals are protesting. In Ukraine they just kill them without due process. Remember, this speech was given just a day after he passed a law that you can get up to 15 years in prison for calling a war a war. Here is another example of how official Russian news has little resemblance to reality. I went to Pravda, clicked on the first article I saw, and read: “The Ministry of Defense has repeatedly stated that no missile, artillery, or air strikes are carried out by Russian forces on the cities of Ukraine; and the civilian population will not suffer during the operation, since its purpose is solely to disable the military infrastructure.” Ruins of apartment buildings that have been destroyed by Russia artillery are figments of our imagination. Who do you want to believe, the Russian Ministry of Defense or your lying eyes? Here is another example: a message on Instagram by a Ukrainian young man: My dad works as a security guard in a monastery near Nizhny Novgorod [Russia]. He is a deeply religious person and congratulates me on all church holidays. Yesterday I wondered why my father did not call (the war is the same) and called him [my]self. I told in detail about what was happening – my father replied that this was nonsense, there was no war, and the Russians were saving us from the Nazis, who were making human shields out of civilians. I could not believe when I read this. I wanted to see if it was true on my own. I was already in a WhatsApp group chat with my classmates with whom I went to middle school in Russia. This is what they told me: Russia was forced into this war. It is getting rid of neo-Nazis in Ukraine. The Russian Army is liberating Donbas and Lugansk from Ukrainian genocide. Their admiration for Putin was at a new high. (The stories I read that Putin’s popularity is hitting new heights seem to be true.) At the end of the conversation, I was convinced that they are brainwashed, and they were convinced that I am brainwashed. We had no common reality to stand on. None. We all agreed that we don’t want people to die on either side. They were convinced that the civilians who are dying in Ukrainian cities are killed not by Russian artillery and rockets but by neo-Nazis and Banderovtsi (Ukranian nationalists) shooting and bombing their own people. (The war in Donbass and Lugansk and neo-Nazis are a very important topic that I’ll have to discuss separately, hopefully in the next part.) These folks I went to school with, played in the snow with, and even had crushes on a couple of them. They are kind, good people, but Putin’s TV has completely zombified them. As one of my friends said, they have Russian TV on their brains. (Of course, there is another possibility: that I am zombified and am completely oblivious to that fact.) People in Russia are brainwashed beyond what any Westerner can possibly imagine. They live in their own version of the Truman Show, in an alternate reality that is deeply divorced from the world outside their dome. This point is paramount: Control of the media allows Putin to completely deform and carefully craft his version of the truth. And this is why I am worried that sanctions may not be as effective as we hope. I heard from my junior high school friends a line that I’ve seen in other places: “We are in the middle of a war. We have to finish that war.” This war has further solidified Putin’s position. He presents the sanctions as the West’s aggression against Russia. It seems that zombified Russians have given him a blank check on the pain they are willing to endure and the lives of their kids they are willing to lose. This may change as the body count continues to climb and parents realize that their children who today are not picking up the phone are lying dead in the fields of Ukraine, and that sanctions from the West will continue to inflict tremendous pain on the Russian economy. This brings me to the next point. Russia’s next chapter looks very dark. Not everyone is zombified in Russia. A few of my school friends reached out to me privately and expressed their disgust with the war. They did not want to voice their opinions in public. Even when we talked on WhatsApp, despite WhatsApp’s claim of end-to-end encryption, they were still concerned that they might be listened to. These are not a paranoid people, but people who know the ugly Russian history and who are acutely aware that the punishment the newly passed laws carry punishment for being labeled an “enemy of the state” or a “collaborator with the enemy” (yours truly) is 15 years rotting in prison. Let’s zoom in for a second on Russia’s dark history. Until the late 1980s, Joseph Stalin was a Soviet hero who led the Soviet Union in defeating the Nazis. You could often see Stalin’s portrait hanging in classrooms right next to Lenin’s. My father told me that when Stalin died in 1953 the whole country cried, including him (he was 20). It was one of the saddest days of his life. After perestroika and glasnost in the late 1980s, we were shocked to learn that the evilness of Stalin, the father figure we admired so much, was fully on par with Hitler’s. Stalin killed 20 million people, while 27 million people died in WWII. (I don’t claim to know the validity of the precision of either number. It’s irrelevant; both men killed millions of people). Stalin also eliminated the leadership of the Soviet Army, which made Soviet losses in WWII greater. The Stalin regime was oppressive. If you were called an “enemy of the people” there was no due process; you were guilty and you were either shot or sent to a gulag, where you’d die from inhuman working conditions and hunger. In fact, a lot of magnificent Soviet infrastructure was built by slave labor (“enemies of the people”). Today, Putin’s government is rewriting history. Stalin is back in vogue again. He is glorified as a leader who united the country, and you start seeing new statues of him popping up across Russia. In 2014 Russia passed a law that prohibits criticism of Soviet activities during WWII (and thus of Stalin). Putin wants Russians to forget their history so he can repeat it. I vividly remember my mom’s terrified face in the early 1980s when a guest at our dining table or my father said something that was not supportive of government policy. If it leaked to authorities, my parents would not have gone to the gulag, but they could have lost their jobs. I never thought I’d see fear of criticizing the government again in Russia. But it’s back. This is why my friends who don’t have a TV in their heads were afraid and did not want to speak up in my classmate WhatsApp group. In less than two weeks since the beginning of the Ukraine war, with the passing of the new laws, Russia made an enormous leap back towards 1937 and an oppressive Stalin-like regime. While Ukraine, thanks to Russia, went back to 1941, as women and children started dying from artillery and rocket bombings. The situation in Russia will get worse. Mothers will realize they have lost their children in Ukraine, and sanctions will cause enormous unemployment, breadlines, and maybe even hunger. People will start speaking up more – and the Stalin-era oppression will likely come back in full swing. The country will suddenly be swarming with “enemies of the state” and gulags will be back in vogue again. There is talk in the media that the oligarchs and upper echelons of the government may revolt against Putin. If you are thinking about this, so is Putin. I don’t know what probability to put on this; I don’t think anyone knows. Whatever you think that probability is, I’d reduce it by half. In the meantime, though, this war is lasting longer and going worse than Putin expected. Putin has the time to continue the war, because Russians are either brainwashed and supporting the war or being arrested the second they voice their displeasure with the war. My biggest concern, since there is no feedback loop by which to accomplish the goal of “freeing the Ukrainian government from drug addicts and Nazis” (I kid you not, Putin’s words) and basically replacing the Ukrainian government, Putin will resort to the strategy he employed to win the war in Chechnya – he leveled Chechnya’s cities. A silver lining here is that it is usually the young people who don’t “have a TV in their heads,” as they watch less Russian TV, spend more time on social media (I never thought I’d be thankful for social media), and are more aware of what is going in the West (no, NATO was not about to invade Russia). The army is full of young people, and maybe Russian soldiers will continue to surrender or, even better, become the source of dissent. Unfortunately, to my shock, this war is more popular in Russia than I ever thought it would be. Maybe by the time you read this it will already be over, but I doubt it. Putin is under little pressure to conclude it, and, as my middle school friends said, “The war has already started; we have to finish it.” The thinking part of the populace, who understand what is going on and are against the war, are going out onto the streets and protesting or are too afraid to do so. As of this writing, more than 2,000 peaceful anti-war demonstrators have been arrested. Any appearance, even a pretense, that Russia is a democracy is gone. The mask is off. Post Script: As I was working on this article, though it is about Russia and Ukraine, I realized how lucky we are in the US. With all our problems we still have a fully functioning democracy. We have a free press. It is biased, but it is free. Without a free press we will have tyranny. I really did not appreciate that as much as I do now. Also, I realized the beauty of our federal system. Russia is almost destined to oscillate between democracy and authoritarian control. It is very large country with a very diverse population that has different value systems and cultures. When you try to govern it from the top, you quickly discover that you have little control. In the early 2000s, at Putin’s request, Russia switched from locally elected governors to Putin-appointed governors, consolidating power not at the state level but at the top, with Putin. Putin’s argument was that local governors were corrupt. In truth however, the only way to govern Russia and preserve democracy is to have a US-like system. The federal government provides basic services –defense, interstate police (FBI), the legal system, etc. The majority of decisions are made on the local and state levels, based on the needs and values of those entities. My Russian school friends and I were reminiscing about our school years. We started asking, “Where is this person? What happened to that one?” Sadly, we discovered that close to 15-20% of our class has died. None of them were even 50 years old. Most died under 40 from alcoholism. The demographic crisis is real in Russia. There are fewer people alive in Russia than when Putin took office 22 years ago. Next: I’ll discuss neo Nazis in Ukraine.

 

List of Ukraine Charities: