Cucumbers vs. Grapes: Stocks Go Up as the Economy Goes Down

Finance U Public Finance U
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Originally published at: https://peakprosperity.com/cucumbers-vs-grapes-stocks-go-up-as-the-economy-goes-down/

The twin pillars of a stable society are Reciprocity and Fairness. Both are being deeply challenged this year as the Fed’s magic money machines( and possibly the government owns a few as well, according to Elon Musk) shower rich stock market rewards on the

If you are not familiar, this ~3-minute video on the effect of rewarding some Capuchin monkeys with grapes while others get cucumbers is both funny and highly instructive.

I strongly recommend everyone watch it, and regularly feature it in my talks. Why? Because the current leadership in DC and at the Federal Reserve has so completely lost touch with the basic principles contained within the video that they are now openly and actively creating the conditions that could result in political and cultural tremors far beyond anything we’ve experienced so far.

Our system of money is deeply and structurally unfair. But it’s the only one we’ve got, which is why Paul Kiker and I sit down weekly to discuss the trends and the data. Whether we think the game is rigged (and it is) for certain outcomes – or not – it’s the game we’re forced to play.

With SNAP benefits running out on Nov 1st (this podcast was recorded on Oct 31st – Happy Halloween!), there’s both a chance for more social unrest as well as some liquidity tremors as food suppliers and distributors face a sudden demand shock.

Next, the bottom 90% of the country is really struggling, while the top 10% is doing great. The term for this is a “K-shaped economy” with the top arm of the “K” representing the top 10% and the bottom arm the bottom 90%. Some do very well simply by virtue of already owning the assets the Fed is pumping higher (grapes for them!) while everybody else gets to subsidize that via higher inflation (moldy cucumbers at best).

The recession signs are more and more pronounced, with Kraft reporting a sudden decline in sales, Chipotle turning in terrible earnings, and Indeed’s job postings falling off a cliff, all of which combine into this chart showing that 80% of the US is already living in a recession.

But the Fed keeps goosing the ““markets”” and the Terrific Ten stocks keep reporting spectacular earnings, and the party carries on.

It’s gotten so extreme that even Bloomberg is now putting out the sorts of graphics that Paul and I have been discussing for months.

How much longer can this all continue? Nobody knows. Which is why having a risk-managed portfolio and a strategic plan are more important than ever.

Near the end of this podcast, Paul describes the process he takes everyone through, beginning with an initial get-to-know-each-other phone call, followed by a financial review and planning session, and then finally a third recommendation session.

Every person or couple is unique in their family details, life stage, and resources, which is why Paul and his team spend so much time figuring each client out to ensure there’s a good fit (both ways). In a world of numbers, Paul seeks to ensure he and his team know the people.

To arrange an initial phone call, just go to Peak Financial Investing, fill out the simple form, and someone from Paul’s team will reach out within 48 business hours to arrange the meeting. It’s that simple.

https://peakfinancialinvesting.com/

 

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Oh boy, that 500mn Blackrock fraud is staggering. It should be on front page of every mainstream media to show shame. Competition and “smaller guys” are needed as clearly touch is loose in big ones. This starts to smell Enron again.

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Question about that Paul’s chart in background: did it bring down any governments at the time? Some king who perhaps overleveraged and got burned in bubble?

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Bumbled into this one couple days ago, seems independent folks doing analysis of markets (Ed and Scott).

https://profgmedia.com/podcasts-markets/

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I know I’m a heartless bastard, but if the system cannot survive without bread and circuses, the system should not survive. (regarding SNAP)

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I spent some time recently reading in a reddit group about poverty. Reading story after story about people who are in absolute despair and at the point of suicidal ideation over being at the brink of homelessness despite having two in the family working plus side gigs was disheartening.

One man living in a hotel room with his elderly mother works 50 hours a week after having dealt with a lengthy illness of his own. Many suggested he move into an apartment but that would require owning a car and taking on insurance if he even had the funds to make the transition. He walks to work, grocery store etc.

Another young couple are both somewhat disabled but not enough to draw disability. They both work full time and most of their minimum wages go to renting a place they share with a third person. They are slipping further behind as prices increase and don’t think they will qualify for food stamps since they both work. One needs dental work desperately, neither has insurance for that, auto insurance is going up on the car they share. They are giving up their last luxury of going out for a coffee drink once a week. They have been in this place for years and are wondering if it’s worth it to keep trying.

Even the cucumbers are getting hard to come by, and the capuchins are getting restless.

I am of the mindset that if two people in a unit, whether married, or friends, roommates, are working full-time or more they should be able to rent a clean place to live, with basic heat and a functioning kitchen and functioning bathroom. In many places in the USA the lowest price housing is more expensive than what two minimum wage jobs can net.

Everyone wants starbucks, and lunch joints and bars and grills and target and Walmart but no one wants housing that the employees of such can afford anywhere near them.

Perhaps we need to spend less money worrying about Russia and Ukraine and spent it one some large affordable apartment blocks here in the USA.

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Everything you see, I’m seeing similar (not quite as dire, but every now and then I will see a couple push a shopping cart into the woods, and I presume they never emerge unbroken)…

I would agree about spending less money in Ukraine and now Venezuela… but we don’t need to spend it on affordable apartment blocks. We need the Fed to unwind all of its mortgage-backed-securities in the span of a month, damn the consequences of the price action, because the price action of propping up the market has already been lethally toxic to our society.

Things need to change, but sometimes the change is not “we need to do something” but rather “we need to stop doing this destructive behavior”. Government-backed affordable housing will end as well as government grocery stores.

The (admirable, virtuous) compulsion to help is what the government is relying on to continue to suck us dry.

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That I would rather see billions wasted here than abroad, was part of my point.

I meant to be more more specific and should have said Soviet style apartment blocks as I was trying to be ironic in that we are knee deep in the business of countries that are shedding the very system we invite.

Either way, we have an increasing group of working poor in this country and they are falling instead of climbing through hard work. Most gov programs are sort of an all or nothing and getting a bit of help is harder to come by, if one has enough willpower to stay employed while struggling. It must be especially hard in areas where undocumented folks are being given the very assistance working poor citizens would benefit greatly by receiving only a fraction of.

It’s only a matter of time and we hear from these folks. The spring is being wound.

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The Headlines:

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Beneath the surface:

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Got hard assets?

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R.I.G.G.E.D.

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It may just be my imagination, but it seems there’s been an increase in RV’s out in the desert early this winter. Not only an increase, but newer and better cared for unit. There’s always an underclass of junk trailers, and in fact one area is jokingly referred to as tweaker alley, filled with people suspected making and using meth. Getting into December and January will really be the telling tale.

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I keep an eye out for unrestricted parcels in my and the surrounding areas.

For several years now they have been getting snapped up for higher prices than expected. There are a lot of people “downsizing” to what I call McHomesteads. Often these are a gravel driveway and RV pad. A well, and septic, a metal building and sometimes a pole barn to park the RV under. Part timers might do without the well and septic and use a potable water delivery to a tank and a black water tank collection by a septic company. They often have chicken coop and gardens and fruit trees etc being planted.

It could be that people in RVs are getting all into homesteading or it might be that people are getting out of cities and taking their homes equity and building a debt or nearly debt free lifestyle so they can have fun while they are able.

I can certainly see where parking on federal land would be an option many would take while they can. It’s not one I would plan for long term.

You can buy subdivision land for half per acre what you pay for unrestricted acres. People want the places where they can park an RV or Tiny or Shabin and are willing to pay double.

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Kind of us. We rent a lot in a MI campground with a park model trailer, doubled in size, and we own a RV lot in AZ, with an accessory building(s) and a 5th wheel. By govt definition, we are “homeless”. Living in the desert doesn’t appeal to me, but a lot of people make it work. I often wonder what they do with their black tanks, I don’t see any signs of them dumping… but maybe they just dig a daily hole.

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Wow! The topic is really about all American values and taking comfort in blindness to the point of being unwilling to see. "Diversity"of values trumps common values has been the siren song of late. But, whose values should be used to spend national income and whose values used in the justice system? Whose values in commerce, etc.?
When a nation state loses its homogeneity of values it loses its sense of self. Whose values is this “we” and “our”? Wide open immigration in the US and Europe has put us into this situation.

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I am planning to build a small shed that will have a shower and lav on one side and a willow feeder type toilet on the other.

I don’t want to attract “the man’s” attention and it recently occured to me that a deer stand is the perfect cloke.

There is already a deer stand / shelter with a floor and upper ventilation on a property I bought recently. I will start with it. I will soon be given back what’s left of an old RV and will drag it out there and “hide” it in a clearing in the woods below my pasture. In this way the place will offer a hunting retreat or respite for very little out of pocket expense.

If you are not familiar with a willow feeder , the guy who started the Permies community is an advocate. I had used something similar in a smaller scale and it works.

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The rotation out of Japanese government paper and into “anything else” continues at a historically notable clip:

https://x.com/SuburbanDrone/status/1984392600191660286

https://x.com/GlobalMktObserv/status/1978906297140404344

https://x.com/RhoRider/status/1981215595543876053

This looks a lot like Armstrong’s “loss of faith in all things sovereign being portated into private and corporate assets.”

I expect this to enter the ‘all at once stage’ at some point within the next year.

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Is this true, or a projection of internal desires?

Stability, in my experience, is achieved via a kind of self-reinforcing family-level paranoid surveillance culture.

This is not a rejection of your analysis, only an observation that stability and a certain kind of social tyranny seem to be best buddies, historically.

Perhaps stability is not what we seek?

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Man, this gold bubble sure looks ominous:

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This whole thing reminds me strongly of Yeltsin’s Russia after the collapse of the Soviet Empire — a slow-motion train wreck.

And now TPTB are resuming nuclear testing. Does the world system have a death wish?

Oh the humanity…

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