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John Michael • 9 months ago

First, I have been reading JM for years, and for years he has been promising anti-aging drugs are just around the corner. Sorry, Boomers, but the fountain of youth didn't exist in the 16th Century and doesn't exist today.

Second, if you actually bother talking to people about the jobs available, you find that they're all part-time. What employees want today is to be able to actually work one job to support themselves rather than cobbling together a living from two or three part-time gigs. Every single one of my lunch places has a help wanted sign. When you ask about it for a friend, the manager will be happy to tell you that the position is part-time and completely inflexible. Basically, you have to be available 24/7 to get two or three shifts for 20 hours. By the time you buy clothes for work, arrange transportation and childcare, you're not making any money. Why would anyone work under those circumstances?

Until this dynamic changes, businesses will continue to operate at less than optimal capacities due them refusing to change in the face of a significant shift in the terms of trade.

Quinctius Cincinnatus • 9 months ago

Mr. Mauldin, you need to find (or create) a source for a more reliable CPI than the Fed currently uses. You and Gavkal need to publish this number - which GAVKAL calls the Walmart CPI. (Walmart CPI includes rent, transportation, energy, and food I believe).
The Fed strips out at least two of these metrics (food and energy), and grossly understates a third (according to the Fed, rents have gone up... 2%?)
In other words, convince us, your readers, that the Walmart CPI - is not north of 5% and accelerating. When the 50% of our population that does most of the buying, living, driving of this country feel inflation, the folks who shop at Walmart, THAT's the metric we need to hear. That's more likely to drive our service economy than any other metric.
p.s. It should be a monthly addition to your "Clips that Matter" series as well.

1nycdem1 • 9 months ago

The U.S.: A bug searching for a windshield, perhaps? The metaphor's got to work one of these days...

Jim • 9 months ago

You think their initial reaction to Covid was proper? John wake up this pandemic was in the works for a long time. Agenda 2030, Event 201, Davos agenda, does any of this ring a bell? Gates has been talking about a pandemic for years and the oligarchs know the system is failing. They simply sped up the plan to get rid of Trump. The virus has only killed 30,000 people in the US according to the CDC who has openly admitted the other 94% of the deaths were from pre=existing conditions. The world population meter shows that 2020 had the same average amount of deaths worldwide as the previous 5 years. The whole thing was a scam plain and simple and absolutely nothing needed to be done.

disqus_p6hJ2yoKYN • 9 months ago

If I had a nickel for every time I've been told by a scientist or doctor that a new therapy was five years away, only to never have it appear 20, 30, even 40 years later, I'd be a billionaire by now. Investor beware. At the very least, it takes forever just to prove these things are safe, many times which they aren't.

Fred • 9 months ago

"As noted last week, I met with scientists in Palm Beach last weekend to talk about new antiaging medications, and their data blew me away."
I find it hard to think of anything that would be worse for the world than extending life span. The first problem is this would almost certainly only be available to the wealthy. I can't think of a better way to further polarize our society. If this was available to all equally any even larger problem would appear. Society cannot afford to have people live even longer. The boomers will already deal a severe financial blow to this country with their medical & nursing home care costs. Add ten years and see what happens. Boomers staying in the work force longer would not be welcome from the generations that follow.
If these alleged new therapies only improve health but not lifespan they would be welcome at a reasonable cost with universal access. What are the odds of that?
Not matter how smart or necessary we might think we are there is always someone to replace us. Be grateful for the very long lifespans we have already achieved and be prepared to move on when the time comes.

Galynn Ferris • 9 months ago

Everything back ordered. Daily price increases. A wishy washy President. Stagflation. A flood of refugees from a military debacle. The 1970s greatest hits. The only things missing are an oil embargo and ugly cars that won't run. Oh wait. Have you seen the infrastructure bill? Those are coming.

WJMcCarthy • 9 months ago

The "Classics" always come back!

Jeff Kassel • 9 months ago

John makes a lot of predictions but I've got one. America is now a debt Ponzi, financed by a fake bank printing fake money at fake interest rates. Something is going to go wrong; stocks, bonds, crypto and real estate will crash, and John's business will be a lot smaller than he's predicting. We have bubbles everywhere now. Gold, Bitcoin, stocks, bonds, homes, condos, art...and we've got a gigantic debt bubble. What we know about bubbles is they always explode. Central banks in their zeal to avoid downturns have done this to us with magic money, idiotic financial gimmicks and outright fraud. The legal mandate of the FED is stable prices and full employment....we've got neither. In fact their goal is now higher prices because they're trying to inflate our way out of debt. This is the same central bank that told us not to worry about inflation or sub-prime lending. This is the same central bank that's given us 3 crashes since 2000. https://uploads.disquscdn.c...https://uploads.disquscdn.c...https://uploads.disquscdn.c...https://uploads.disquscdn.c...

James Shutiak • 9 months ago

Another great article. John. Much appreciated.

Frank McCraw • 9 months ago

As far as the gist of the general article is concerned, yes, nominal growth has been declining over time over the past three cycles. If one takes inflation into account, the story is far worse. And if one uses non-governmental inflation estimates, such as "Shadow Stats," the picture is quite abysmal. The Fed's 2% "target" is without any legitimate authority. And its ignoring asset price increases (equities, residential), and BLS's subjectively adjusting prices for "hedonic adjustments," and everyday personal experiences with professional services - attorneys, plumbers, etc., "real" growth is deeply negative these days. End The Fed.

Glenn T • 9 months ago

CPI is understated and has been for a long time. ShadowStats probably overstates inflation. If we used the mid-point between the two, we likely haven't any real growth for years and based on total employment stats, we're probably in a recession now or very near it. The economic future does not look good at all and with leadership quality at an all time low, I can't see how we manage this well going forward.

My IT-related biz is doing great - for now - but I'm one of the lucky ones. There are far too many who are not doing well with very limited prospects of it getting better. Inflation is consuming decent wage increases so lower income groups are slowly being eroded and the middle class is in the same boat.

Take away the stimulus money and everyone but the top 10% is worse off. The top 20-10% is probably maintaining reasonably well. That massive cash injection is now gone with no long term benefit. It just paid the bills and fattened Chinese manufacturers and Amazon for a brief period of time.

The only option going forward is more money printing because there is no other way to sustain our broken economic system. Socialists believe this leads to greater wealth and well being and want full blown MMT (money printing). Their plan is to triple down on everything that has failed for the past 30 years. They will be terribly wrong of course.

The crony capitalists can't admit this is where we're at and it's what they created while most real capitalists are afraid to admit this and go along with it to make hay while whatever sun still shines.

The next recession which I believe is imminent will be the catalyst for QE forever and direct debt monetization.

I'm have no idea long this broken model can last before it completely breaks. The clue for me is that everyone now accepts deficits, debt and QE/Debt monetization forever and assumes we will just carry on as before. We don't bother to pretend now.

Everyone is on board now and no one wants to end it because they know the economy blows up if we do so the pundits - the good ones that is - are going along with and don't want to come across as wild-eyed doomsters. Markets up, markets down, Gamestop, crypto, gold, whatever. Just play the investment game, watch the technicals and hope the music doesn't stop leaving one without a chair.

Perhaps that's the contrary indicator: Bob Farrell's rule #9. When all the experts and forecasts agree – something else is going to happen.

Everyone agrees it'll be more of the same and nothing too bad will happen. The next 10 years will look like the previous 10. Maybe a little worse but acceptable for most of us and if we have to throw 20% of the population under the bus to maintain 'a little worse but acceptable' for the other 80% then that's what we'll do.

A mediocre future with low growth future (at least we're growing, right?) is the universal projection and maybe that's the contrary indicator to pay attention to.

Jeff Kassel • 9 months ago

I couldn't have said it better. Real GDP is dropping if you eliminate deficit spending which is mostly transfer payments, not goods or services. And zero rates for almost 14 years distorts the value of anything bought with borrowed money including stocks, crypto and real estate....there are bubbles everywhere. The FED caused them because there's no other place to get a yield except stocks and real estate. When this blows up, as it inevitably will, we'll be looking at Great Depression Part 2.

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Glenn T • 9 months ago

I agree but I've seen all these stats before and they've almost become meaningless. They're interesting and often shocking but the game of extend and pretend just keeps going depsite all these crazy numbers. You listen to the good analysts who will say or imply they didn't think the whole debt-fueled edifice could last as nearly long as it has and they throw throw up their hands in frustration or throw in the towel.

So if none of these extreme stats matter, what does matter?

I can imagine a deflationary future and I can imagine a high or extreme inflationary future. Not sure about hyperinflation...that seems less likely than deflation but who knows. It's hard to imagine stagflation can last very long given the fragile nature of our economy so it will quickly morph into one or the other depending on government response.

I don't know; which is why I've started to think about our collective mindset. Almost all the good analysts and pundits have thrown in the towel, almost all politicians across the spectrum don't even pretend debt matters anymore while mainstreet crosses its fingers and imagines they can have their cake and eat it to. The mainstream media is clueless and useless for the most part and spends most of its time tilting at windmills and inspiring fear and loathing.

Perhaps these are the real trends to pay attention to.

We're living in a collective delusion and it all feels like a house of cards. The economic forest is piled very high with deadwood and debris.

I also think a key difference between today and the past and even 2008-09 is the speed at which central banks can transmit decisions and policies to the market. Pre-2008, CBs could not act as fast as markets could spread contagion. They were unprepared in 2008 and even then, the internet and interconnections between CBs were slower and more limited. The Great Recession forced them to become more connected and they can now react almost as fast as the market can and this has allowed them to extend the game much further than anyone could have imagined. Look at how fast they reacted to reverse repo problems.

Whatever happens will occur so quickly that even CBs can't react fast enough and the 'technicals' will not show us it's coming. Perhaps it will come from shadow banking which no one can quantify or some unexpected political event.

Or maybe we'll just grind through this for years where the lower, middle and even the lower end of the upper classes just get a little poorer each year. Maybe we'll end up like Argentina rather than Venezuela: mediocre forever.

Many compare now to post-WWII where the US government used inflation to eliminate the debt. It's a faulty comparison because the circumstance we're vastly different. The US was ascendant, had good leadership and it had few competitors since the world was economically wrecked.

At this point, even I want to throw in the towel and buy the market which makes me wonder if that is a contrary indicator. I'm a nobody but if everyone who does matter is throwing in the towel as well, then maybe it means something.

Good luck! We're all going to need it.

Tatiana Cuevas • 9 months ago

Hi John, no mention of the massive and impactful OVERREACH announced by Biden this week is troubling. An attack on it's own citizens and businesses. It’s terrifying. The vaccines are proving to be subpar and actually it seems vaccinated people are spreading covid faster and getting healthy people sick. At least delta is like a light flu for most. Natural immunity is showing to be very powerful in our fight against C19. There’s also no mention of the potential BioWar we are in with China, with Taiwan looming, the Afghanistan nightmare withdrawal, the world lockdowns and forced jabs, quarantine camps, vax passports. youremissing a big piece of the pie in this week’s assessment Please write about this in your next letter. Thanks!

disqus_p6hJ2yoKYN • 9 months ago

You could NOT be more wrong, and people like you that are spreading misinformation about vaccines are the very ones prolonging the pandemic. By any historical measure, these vaccines are outstanding and have been like a gift from God. Of course, look how few people got on board when the Ark showed up.

Try doing a little research before you post ignorant crap like that.

Robert Gentry • 9 months ago

While I have been a subscriber for well over a decade and view this resource as insightful it is deeply distressing to me that the author is so blinded by the current narrative of managing the Covid pandemic. The principles laid out in the Great Barrington Declaration authored by and supported by the worlds top epidemiologists and public health experts and practiced by Sweden CLEARLY show how insane a 'vaccinate EVERYONE' as the only path to 'safety' for a virus with a 99.7% survival is insanity. As a primary care physician (37 years in practice) with additional military training in public health I can attest to the soundness of the science behind the Declaration, Given recent data out of Israel and other international sources I believe history will ultimately judge the current vaccine/lockdown/ZERO COVID narrative as a tragic political miscarriage of public health principles. At what point does an intelligent and supposedly competent individual start to question why CENSORSHIP of an honest debate over management of this pandemic is OK? At what point does that individual seek a deeper understanding of the issues at hand that are literally destroying the world economy and peoples lives? I am sad that John clearly has been 'drinking the cool-aid' and seems to be unable to bother to research it.

Jeff Kassel • 9 months ago

Bro, over 650,000 Americans are dead with millions who have permanent disabilities including brain damage. It's a problem that demands action. Vaccines, masks, distancing give us incremental protection. It's not destroying the economy.

Marg Durnin • 9 months ago

I’m surprised that the taxation for this bill is so onerous considering the massive reduction in upper income taxes of a few years ago. And child care and other provisions should expand the labour force. All the investment to shift the economy toward sustainable energy is also crucial for long term climate stabilization and that is a massive value for the future. Having stripped the world of so man6 resources, a shrinking of economies away from excesses is definitely in order.

Spaceman Spiff • 9 months ago

"COVID was nowhere on the radar screen when I wrote that"

The EXCUSE of covid was nowhere on the radar screen.

9-11 was an excuse to remove our freedoms, fight endless wars, for domestic surveillance and for massive government spending without limits.

Covid is being used for the same thing except this time the wars are against our own citizens.

Howard Johnson • 9 months ago

No mention of the debt to GDP ratio? Your data on the weaker expansion phases is evidence of this. The trillions of dollars in government debt is having a smaller and smaller effect of the growth of GDP.

Fred and Joan • 9 months ago

In other words the economic principle of diminishing returns for $$ or efforts expended is in effect.

Bill Thomas • 9 months ago

Does debt to GDP have a meaning when the Fed holds so much of our debt? The Fed has created a huge Ponzi-like scheme that most Americans don't understand, and don't care. If the government ever fails to be able to pay down debt, it will simply monetize the debt paid the Fed, and the Fed will return the cash to Treasury. That vast use of that dynamic was created during the Great Recession (QE), has been used by Japan for 20 years, and is why we truly live in the "Deficits Don't Matter" time period, only this time it's because Americans no longer understand actual investing in things that meet real needs - chips, cars, etc. The Fed activity has caused the rapid rise in home and other asset prices. BTW, the Fed has a third mandate they've dumped from the dialogue, moderate Long term interest rates, which they've instead manipulated to very, very low long term rates through QE. There is a Black Swan lying in all this federal financial manipulation somewhere, I don't know where, and that is not good.

Jeff Kassel • 9 months ago

You're absolutely right. I don't own one share of stock. The FED is now trapped in their debt Ponzi.....a fake bank, printing fake money at fake interest rates to reinflate a fake economy. There's a debt bubble, a bond bubble, a crypto bubble, a real estate bubble, a stock bubble and a bubble in investor optimism. What could go wrong?

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Fred and Joan • 9 months ago

Just like Social Security, which is a Ponzi-like scheme as well, with future benefits tied to a decreasing amount of people paying into the system to support current recipients.

Kinuachdrach • 9 months ago

The Black Swan -- arguably an easily visible glowing White Swan -- is the foolish focus of our politicians & bureaucrats on the Financial Economy, to the detriment of the starved Real Economy.

The carpet bombing of the US Real Economy over the last quarter century has been possible only because of the willingness of foreigners to accept dubious Dollar IOUs in exchange for their Real Goods & Services. When that stops -- and inevitably it will -- import volumes will collapse to the much lower level which can be supported by our exports. Store shelves will be bare, and the US will effectively become a poor underdeveloped country facing a decades-long slog to rebuild the mining & manufacturing base we outsourced to China and beyond.

Mr. Mauldin in one of his better moments wisely recommended investing in businesses, not in stocks. Excellent advice! Especially if the business is one which will be positioned to benefit by contributing to the redevelopment of the USA.

Bill Thomas • 9 months ago

"foolish focus of our politicians & bureaucrats on the Financial Economy, to the detriment of the starved Real Economy."

Ten thumbs up to this comment!!!!

Jeff Kassel • 9 months ago

It won't matter what you invest in, a falling tide beaches all ships.

Bruno • 9 months ago

Hi John,

It would be better if you could avoid the weekly unnecessary vaccine mantra.

"Wonderful vaccines"...seriously?

Tell that to the (officially) tens of thousands dead, and to the millions suffering bad side effects, sometimes permanent.

All that for those who survive the injection to quickly discover that they are barely protected from the disease, and that they will need to get booster shots (Israël is already talking about shot number 4, and prison state Australia is talking about boosters until the end of time).

As the mummy in chief recently said "we need to protect the vaccinated from the unvaccinated".

This tells a lot about the efficiency of the wonderful concoctions.

You obviously have a favorable bias toward big pharma, hoping that they will help you live forever, like the madmen running Google, yet differently (they want to be uploaded into their computers...good riddance).

While it might be interesting to live three decades in one's twenties, there is little interest in living three decades in one's nineties.

The Greek philosopher Plutarch said "medicine makes one dying longer".

This could be updated to "medicine makes one aging longer"...and the already broke pension funds don't need that!

Bruno

Fried in NH • 9 months ago

Bruno. I certainly agree that if we are going to live longer, we want those years to be years of health, not years of mental or physical infirmity. On the vaccine, 'barely protected' is a totally inaccurate description of vaccine efficacy and you a disservice to many (including yoursef) in espousing that. I wish you well and hope that you stay healthy. Getting Covid is no joke.

Bruno • 9 months ago

Getting Covid is no joke...for a very specific range of people.
Getting cancer on the other hand is no joke...for anyone.
Yet, curiously, the world doesn't make such a fuss about the latter, even though it has killed, kills and will keep on killing far more people, in far more dire circumstances, than Covid.
I would take Covid every day over cancer, and the odds of me getting the latter are far higher than getting the former and being seriously sick from it.
Thus I prefer to focus on the main issue rather than on the secondary one.
With regards to the "vaccines", they have killed and injured a lot of people, and the results for the survivors are from being brilliant.
One just needs to look at what is going on in Israel or the UK, for example, to be left wondering.
Meanwhile, in Africa or India, where people treat themselves with "horse deworming" medicine, the results are quite spectacular...

Fred and Joan • 9 months ago

We know of MANY companies in the insurance & agricultural sector who have lost MANY employees from the virus due to the employees foolishness in not becoming vaccinated! We however don`t favor mandates as some people because of allergic reactions to vaccine ingredients or weak immune systems can`t take the vaccines. We know of an entire family of 5 who have been advised by several Dr.s not to take the vaccines because of severe allergic reactions that would happen. We ourselves have been fully vaccinated with the Moderna 2 series vaccine & had no reactions except sleeping real good each day after each administration of vaccine. The companies who have lost valuable employees to the virus are now going to be affected in their business operations. This we feel is going to happen all over the world in the business sector.

Fred and Joan • 9 months ago

The most important factor in health & longevity is diet in accordance to your known genetic background defects.In our case most all of our family has passed away early in their early or late 60`s from cardio problems. Were at 65 & have none as we eat only a plant based diet with no cholesterol added to our diet other than what we make ourselves. We also have an annual C12 metabolic panel test showing what our immune system & lipid levels are so as to adjust diet if needed.Our cholesterol checked our at 193. Our primary care Dr.s nurse called & faxed the results to us & said whatever we were doing was working & to keep at it as our lipids were better than theirs! Med.s many times have too many side effects & just plain don`t work for the long term.

Spaceman Spiff • 9 months ago

I think that is Patrick's input.

Kinuachdrach • 9 months ago

This ignores the elephant in the room -- the Trade Deficit. Because the unsustainable Trade Deficit is just that -- unsustainable. And the way that unsustainability will show up is in a severe decline in the value of the dollar for purchasing imports. That will result in higher dollar prices in the stores (inflation!) and actual shortages.

"... we could see the market explode to the upside ..." We could indeed see the dollar price of certain investments go up -- but that would be merely another expression of inflation.

China & Russia (along with the Taliban) are mocking the US in the aftermath of Biden's disastrous withdrawal from Afghanistan, and former allies from the UK to Taiwan are reconsidering their relationship with the US. External events are going to have a major impact on US internals in the coming months -- more than US politics and the Federal Reserve. It would be wise to start thinking through the implications of that now.

Fred and Joan • 9 months ago

As long as American manufacturers cannot or will not manufacture products that are better made & designed than China or other countries, the imports will continue.An example of this would be a water valve hydrant we just purchased for our farm. The US made & the China made ones were exactly the same $$ but the China made 1 was MUCH easier to operate with 1 hand! We told our supplier we would have paid more for the Chinese made 1 just because it was easier to operate. The US made 1 was only 5 years old & had always been difficult to open / close. We tried several valves of the same US company at several stores & they were ALL harder to open / close than the Chinese made 1 which clearly had better engineering design.

Kinuachdrach • 9 months ago

No -- the imports will continue only for as long as we can afford to pay for them.

And in the long term we have to pay for those imports by exporting products & services of equal value. When we import so much more than we export (as we in the US are doing right now), eventually the value of the dollar versus other currencies will drop drastically. Your excellent Chinese valve will become much more expensive in dollar terms, and imports will decline.

What is different this time from prior economic downturns is that so much of the former US industrial base has been offshored for short term profits. There are no domestic manufacturers of many of the items now imported from China & elsewhere. Things will simply become unavailable. This will cause havoc.

To support Mr. Mauldin's generally upbeat views, this havoc will be very painful -- but after the dust settles and government has been significantly downsized, there will be great business opportunities once again to make in the US those essentials that are now imported from China. Like pharmaceuticals, for example.

disqus_6N99yeW97L • 9 months ago

Too much FoxNews in this dude's life.
The view from Canada and Europe is completely different.

Glenn T • 9 months ago

Too much CBC or BBC in your life perhaps?