Apocalypse Fatigue

It's been a rough month.

Our 25-year-old bird is sick. We took her to the emergency vet. She stayed overnight. We think she ate part of her cage. Ingested some metals. She's prone to seizures and these were the most violent we'd ever seen. Feathers and blood everywhere. Not good.

Took her to her regular vet for a followup. She was terrified and escaped their control long enough for even more feathers and blood. Ouch.

We've set up a hospital cage for her made out of a large plastic storage container drilled with holes and filled with towels. It's treating her well so far.

Meanwhile, we ordered a new large steel cage for her. We were fortunate to find one on sale, because they are not cheap. There are SO many out of stock right now. It was originally supposed to be delivered two days ago but there was a delay due to a train derailment. I kid you not. It arrived today and we put it together. Fortunately, that went well. She's not ready for her new and improved home, but it will be ready when she is.

In other news, it's not been a great month for the stock market. I'm still up 10% since I bought back in December, even with today's tobacco stock selloff. The decision to diversify out of utilities is still holding up well. Utilities are not reacting well at all to the rise in the 10-year yield. Had I stayed entirely in utilities, the gains would be cut in half. On a brighter note, still doing better than the 30-year Treasury bond. By. A. Wide. Margin. A 0.37% increase in yield x 30 years is roughly an 11% loss.

No more VPU specific reports. It's only 20% of my IRA now (and my IRA is a relatively small part of my net worth), so my motivation to track it closely just isn't there any longer.

Cabin fever is becoming apocalypse fatigue. Since 2020, it’s starting to feel like we're in the "what can go wrong, will go wrong" era. My hoarding tendencies are on high alert, with each new "out of stock", "shortage", "supply chain disruption", and "Covid" story adding to the personal drama. The drama is real. Any resemblances to the many fine disaster movies I often enjoy are hopefully entirely coincidental, military soldiers driving gasoline tanker trucks in Great Britain notwithstanding. *cringe*

And lastly, my posting frequency will most likely be somewhat reduced in the coming weeks. Looking to take a break. I will definitely continue to post trading updates, not that I have many trading plans. I’m comfortable with what I own. The next purchase will probably be more savings bonds at the start of the new year.

U.K. Savers Miss Out on Giant U.S. Dollar Rally

I only bring it up because...

October 17, 2016
MarketWatch: U.S. investors miss out on giant U.K. stock rally

The U.K. stock market is white-hot right now, with FTSE 100 trading near record highs. But unfortunately for foreign investors, the sharp drop in the British pound would have erased all of their profits, and then some.

As a U.S. saver, I'll try not to beat myself up over missing that giant white-hot nothingburger opportunity.

Hey! U.K. savers! Today only, will sell you a dollar for just $1.01! Buy as many as you want! Who knows? Might be more rally left!! We may be printing them as fast as we can but we still can't meet demand!

Bad Mark. Bad! Bad! Apologies to any U.K. savers who follow this blog.

A Modest Proposal?

Wikipedia: A Modest Proposal

Swift suggests that the impoverished Irish might ease their economic troubles by selling their children as food for rich gentlemen and ladies. This satirical hyperbole mocks heartless attitudes towards the poor, as well as British policy toward the Irish in general.

Although child-care costs are soaring since 2009, tuition and fees at 4-year public schools are up 71% in the last decade, and real median household income has generally been falling since 1999, that sort of satirical "modest proposal" hyperbole could never happen in America!

As seen at Whole Foods:

Facebook: "Boneless Skinless Children's Thighs"

From the comments:

A Modest Proposal?

D'oh! I stand corrected. The rich gentlemen and ladies? Let them eat cake our children! ;)

New Poll Says 71% of Americans Believe Economy Is Rigged

June 28, 2016
71% of Americans believe economy is 'rigged'

The poll asked a simple question: Which of the following comes closer to your opinion on the economic system in the U.S. People could select between three options:

1. The economic system is rigged in favor of certain groups 2. The economy system is fair to all Americans 3. Don't know

That is most certainly not a simple question. You've given me the option of saying it is rigged, that we live in a perfect utopia of fairness for everyone, or to claim ignorance. A simple question would be:

Do you believe the economy is rigged?

1. Yes
2. No

And even then it would be biased. Why am I asking about a rigged economy in the first place, unless somebody thinks it is?

Don't need a poll to know that life isn't always fair. I once saw several raccoons chase down a cat behind a neighbor's fence. Didn't see the end result but I could hear it. I will say this about the raccoons though. At least they didn't try to convince the cat that their subprime structured investment vehicles were of the highest quality! That's something I guess.

September 4, 2013
Survey says: Polls are biased

Pollsters took a stark look into the mirror Tuesday, seeking to explain how a new survey found that three quarters of Americans say most polls are "biased toward a particular point of view."

Can we actually trust a poll that says 75% can't trust polls? Perhaps another poll is needed to find out. I know just the person to do it.

Jimmy Kimmel's Lie Witness News


Will you be watching President Obama's planned 4th of July confederate flag burning with the last surviving members of the Tuskagee Airmen and the Wu-Tang Clan?

Hard to laugh, but harder not to! Hahaha!

Polls. And people wonder why Brexit was such a surprise?

The Dumbest Financial Mistake That Jim Cramer Can Ever Remember Seeing

June 27, 2016
Cramer Remix: Brexit is the dumbest financial mistake I’ve ever seen

Please allow me to refresh his memory.

March 12, 2009
The Worst Moments Of Jim Cramer's Career

6. "The Winners of the New World".

On February 29th, 2000, Jim Cramer gave his "top 10 stocks" that are "going to make it in the New World".

This turned out to be a phenomenally bad list that would have incinerated the portfolio of any investor who was following along and buying. The ten stocks were:

SVNX, ARBA, ISLD, EXDS, INSP, INKT, MERQ, SNRA, VRSN, VRTS

Ouch.

Avoid everything but tech in 2000, he said. It is by process of elimination that he picked his top 10, he said.

Apologies to those who followed his advice, and then keep reliving those painful memories here. Shame on me. It seems that I've got winners of the new world permanently etched on my brain. Never seems to get old. At some point I just need to drop it though, and instead concentrate on the other nine worst moments of his career.

Bad Mark. Bad! Bad! ;)

Nearly Lost in the Brexit Shuffle: Our Durable Goods Falling Knife

Click to enlarge.

Get out the party hats. Sigh.

Source Data:
St. Louis Fed: Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft

Kiplinger and Time vs. Lloyd and Harry

June 20, 2016
Kiplinger: 3 Most Dangerous Myths of Retirement Planning

The asset-allocation rule is outdated. It suggests that you decrease the stock allocation of your portfolio and increase your share of so-called safe investments (such as bonds or certificates of deposit) as you age. The rationale was two-fold: 1) As you age, you have less time to grow your money or to recover from a loss, and 2) the "safer" investments are safe, yet provide better returns than inflation.

However, times have changed since the rule first came into style. These days, people are living much longer, and bonds and CDs are not as rewarding as they once were. Following this rule for your retirement plan in current times could put you in the danger zone of outliving your portfolio. Not an ideal plan obviously!

We know that bonds and CDs will not be as rewarding as they once were. It therefore seems very dangerous to assume that stocks will be as rewarding as they once were.

4 days later:

June 24, 2016
Time: 3 Tips for Retirement Investors in a Post-Brexit World

2. Review your asset allocation. This is not the time to start tweaking your portfolio. But you do want to make sure that you asset mix fits your goals and risk tolerance. If you are finding it difficult to sit through this kind of market volatility, you may want to ratchet down your stake in stocks. But don’t sell during the crisis—instead direct future contributions to bonds and cash. (And if you’re nearing retirement, you should already be doing this.)

Kiplinger steers retirees into stocks right before stocks crash. Time steers retirees into bonds right after stocks crash.

As a team, they're making Dumb and Dumber look like an Oscar-worthy drama this week. ;)

Brexit: Soros vs. Cramer

June 20, 2016
The Brexit crash will make all of you poorer – be warned

Too many believe that a vote to leave the EU will have no effect on their personal financial position. This is wishful thinking. It would have at least one very clear and immediate effect that will touch every household: the value of the pound would decline precipitously. It would also have an immediate and dramatic impact on financial markets, investment, prices and jobs.

June 22, 2016
Cramer: Brexit fears are totally overblown

Even if the United Kingdom votes to leave the European Union, Jim Cramer simply refuses to believe that it will be a momentous or terrifying event.

Even all the way across the great pond, American S&P 500 futures are currently down 5%. Score one for George Soros.

Surveys, Surveys, Surveys

May 24, 2016
Most Americans Wouldn't Join a Clinical Trial, Survey Finds

TUESDAY, May 24, 2016 (HealthDay News) -- Just four in 10 Americans have a positive impression of clinical trials, a new survey finds.

July 27, 2015
Survey Response Rates

Internal surveys will generally receive a 30-40% response rate (or more) on average, compared to an average 10-15% response rate for external surveys.

Of the one in ten who respond well to surveys, four in ten respond well to clinical trials. Good to know.



Those who have never seen this British sitcom have missed out on one of the greater joys in life! :)

Why Congress Has Such a Low Approval Rating

What's considered normal in the United States, is actually considered humor in the United Kingdom. :)

Try Fast-Acting Detfogiv™ to Cure Your Permanent Depression!

August 4, 2015
Greece needs wide debt relief to avoid permanent depression, thinktank warns

Greece’s economy will suffer fresh damage from the austerity measures demanded by its creditors and will remain stuck in permanent depression unless it receives substantial debt relief, one of the UK’s leading thinktanks has warned.

Side effects from not taking the medication include nausea, upset stomach, itching, rashes, dry mouth, internal bleeding, loss of muscle tissue, bone loss, hair loss, liver failure, renal failure, heart failure, and/or bank failure. Discontinue not taking the medication if not allergic to permanent depression. Take with alcohol. Keep away from childish creditors. Seriously. Keep away from them. They will be so f%^king mad at you!!

Detfogiv™! For a brighter tomorrow! Today!!

Satire Stealth Technology Is Finally Here

One and only one of the following two articles is intended to be satire. Can you tell which one without clicking on the links? I'll give you a hint. One is from CNBC and the other is from America's finest news source.

June 9, 2015
Experts Say Best Option Now Is Keeping Nation As Comfortable As Possible Till End

Residents say that letting the U.S. pass peacefully is better than having to watch it linger on in agony like the United Kingdom.

June 9, 2015
Jack Ma thinks World War III will be a good thing

It will not, however, pit countries against each other, but instead will see the likes of China and the U.S. teaming up to defeat societal ills.

The Sarcasm Report v.192

UK Interest Rates Will Rise Sixfold!

I hope I got your attention, because this is serious stuff. It has huge implications for global savers, of which I am one.

December 20, 2010
The Telegraph: Interest rates 'will have to rise sixfold in two years'

Interest rates will have to rise almost sixfold over the next two years to cope with rising inflation, business leaders have warned.

Yeah, I know it was written in 2010. Doesn't make it any less true in 2014 though!

UK Interest Rates Will Rise Sixfold!

March 11, 2014
Interest rates could rise sixfold in three years

Interest rates will rise six-fold by 2017 as Britain’s economy becomes one of the fastest growing in the developed world, the Bank of England Governor said on Tuesday.

It's been nearly 8 months. I assume that we're well on our way!

October 28, 2014
Keep interest rates low for longer, says Bank deputy

No! No! No! Where's the progress? What the hell is going on?!!

The Great Recession had led to more workers accepting lower pay in real terms, Sir Jon said. “There appears to be little evidence of real wage resistance – the sharpness of the recession and the years of austerity that have followed it, appear to have caused a shift in the psychology of UK workers,” he said.

Aha! So it is the workers who are shafting the savers! They are the ones responsible! I knew it! Surely the workers who are also savers must realize what they are doing to themselves. Why won't they stop? This changes everything!

The conundrum of the sixfold UK rising interest rate theory is a riddle in a mystery wrapped in an enigma. There is no way any optimist who is bullish on the global economy will ever figure it out! I therefore suggest that we turn to Japan for guidance. Since their real estate and stock market bubbles burst in the early 1990s, they have not been known for their optimism.

Japanese Interest Rates Will Rise Sixfold!

October 31, 2014
Sony says half-year loss balloons six-fold to almost $1.0 billion

TOKYO: Sony said Thursday its net loss for the April-September period ballooned to nearly $1.0 billion, as the embattled electronics firm continues to struggle in the cutthroat smartphone business.

Well, I sure jumped the gun on that one. Sorry about that. I saw "six-fold" in the headline and immediately pulled the rising interest rate theory trigger. I give up. So what do the analysts have to say? I'm done trying to analyze this on my own. We need their guidance!

But analysts have warned that the impact of the weak yen is fading, and the industry giants had more work to do on reinventing themselves.

Thanks analysts! What would we do without your warnings?

Mere moments later...

October 31, 2014
Yen slammed by BoJ easing, falls to near-seven year low

(Reuters) - The yen plunged to a near seven-year low against the U.S. dollar on Friday, putting it on track for its worst day in 18 months, after the Bank of Japan shocked financial markets with an aggressive easing of its monetary policy.

Shocking the financial markets I can understand. But the analysts? That's their job. That's why they get paid the big bucks. It makes no sense! That's why I have no choice but to turn to the USA to know what is really going on. This is a market I can understand! This is a market I can analyze! Genius! So what do I think?

American Interest Rates Will Rise Sixfold!



I am confident that we can eventually see a sixfold increase in the 3-month treasury bill yield. That would bring us back to early 2014 levels. I can't say when it will happen. Too many people have mistakenly placed a rigid time frame on the sixfold increase in interest rates. Not my style!

So what will this mean if and when it eventually happens? Well, it's obviously a huge difference with huge implications! If you have $10,000 to invest, it can mean the difference between earning a paltry $1 in annual interest and earning a whopping $6 in annual interest! Note the sixfold increase! It's gonna happen someday! We just need to strengthen up the entire global economy first! How hard can *that* be? Mwuhahaha!

This concludes the sarcasm report. Hope you enjoyed Halloween!

See Also:
Sarcasm Disclaimer

Source Data:
St. Louis Fed: 3-Month Treasury Bill (One Year Chart)

Breaking News: United Kingdom Declares Perpetual War on Savers!

Halloween, 2014
Osborne Starts Paying Off World War I Debt 100 Years On

About 218 million pounds ($349 million) of undated debt paying 4 percent a year will be redeemed at par on Feb. 1, Osborne said today.

The United Kingdom seems to think that interest rates will stay below 4% for a considerable time. Using Fed Speak, what would a "considerable time" be? Well, the math says something on the order of infinity. These were "perpetual" bonds after all.

But hey, savers need to think long-term. Don't forget to brace for that rising interest rate environment on long bonds once a nearly infinite number of years have passed!

It seems like only yesterday that we were discussing this perpetual bond in the comments of this blog. Oh, wait. It was yesterday.

At the moment the perpetual Gilt, "War Loan", pays 3.81% p.a. It's "perpetual" in the sense that unless HMG uses its right to "call" it, it runs for ever, or until the end of the UK, whichever comes sooner. - dearieme, October 30, 2014

Excellent use of quotes around the word perpetual! Nicely played, dearieme!

WWI is the "gilt" that keeps on giving! - Stagflationary Mark (me), October 30, 2014

I stand corrected. Perpetual war broke out! Hahaha! Sigh.

I really must apologize to the Japanese savers. They must know I'm joking. Perpetual war clearly broke out in the early 1990s.

And let's not forget about the USA!

August 15, 2013
The Long-Term Death of Real Yields

Click to enlarge.

1. The world war on savers will continue until morale improves.
2. Morale is not likely to ever improve.

Perhaps that's what makes me a permabear.

Jeremy Siegel's Optimism Revisited

February 2, 2011
Risks abound with inflation-linked bonds (Jeremy Siegel)

Purveyors of this pessimism stress that the future rate of economic growth in developed countries looks bleak.

On the contrary, I believe that the long-term outlook is bright.

Click to enlarge.

As seen in the chart, the interest rate on the 10-year TIPS has fallen nearly 2% since Jeremy Siegel warned us that real yields would go higher.

This leads me to conclude that risk abounds in believing that the long-term outlook is bright.

Despair.com: Despair

It's always darkest just before it goes pitch black.

Update:

July 25, 2012
Mish: UK GDP Disaster Far Worse Than It Looks; UK Growth in 2012 "inconceivable"

Presented that way, UK GDP does look like a disaster.

Would it have been pessimistic to argue that the future rate of economic growth in the UK looked bleak? Or would that have been considered realism?

See Also:
More Dangerous Advice from Jeremy Siegel

Source Data:
FRB: Interest Rates
U.S. Treasury: Interest Rates

100 Years of Debt

Click to enlarge.

Let's extrapolate that out to the year 2100.


Click to enlarge.

Got 100-Year Loan?

March 13, 2012
Government Plans for 100-Year Loans

The Treasury is planning to take advantage of Britain's historically low interest rates by taking out loans which will not be repaid for 100 years or more.

Genius!



Source Data:
St. Louis Fed: Total Debt / Wages

Coming Soon to a Country Near You?

June 2012
Full-Service Restaurants in the UK: Market Research Report

Annual Growth 2008-2013: -4.5%

How Bad Can It Get?

May 29, 2012
United Kingdom Debt Management Office: Press Release

The United Kingdom Debt Management Office (“DMO”) announces that the re-opening by syndicated offering of £4.0 billion nominal of 0⅜% Index-linked Treasury Gilt 2062 has been priced at £116.520 per £100 nominal, equating to a gross real redemption yield of 0.040%.

Here's what $100 would look like after 50 years of 0.04% real growth.



Note that I am not counting taxes.

The Sarcasm Report v.105

June 2, 2011
UK consumer recovery slowest in 180yrs

“The only sustainable recovery is the kind of recovery that rebalances away from consumer demand and towards external demand,” said one Treasury aide.

Awesome idea!

So here's the plan that might not only save the UK, but the entire global economy as well.

We'll set up a new country on the moon. I suggest Moonistan. Right now Moonistan has no ability to create its own products. That means that the entire world can sell to them. Just picture all that external demand!

We'll send them goods and they'll send us back Moonbucks. As we begin to accumulate Moonbucks we can simply reinvest them in Moonistan's public debt. It isn't like we'll need to spend them.

In theory, we should probably station a guy up on the moon to control the country of Moonistan.

In practice, we could probably just station a guy in the Cayman Islands . All that really matters is that someone somewhere accepts the goods and sends us Moonbucks in exchange.

I know this can work. It's actually based loosely on the Chinese economic miracle model.

Genius!

What happens to the goods you might ask? Great question.

In theory, we should probably ship them up to the moon and store them for the future citizens of Moonistan.

In practice, we could probably just dump them right in the ocean off the Cayman Islands.

The Sarcasm Report v.100

I wanted the 100th report to be something special. I have to tell you that I was more than a bit concerned that it would not live up to expectations. A major source of sarcasm stress has been lifted from my shoulders though and I have the Bank of England Governor Mervyn King to thank. My hat is off to you sir!

May 2, 2011
BOE’s King Says Higher Interest Rates Would Exacerbate Debt Woes

“The economic consequences of high-level indebtedness now would become more severe if rates were to rise,” King said yesterday at a committee of the European Parliament in Brussels.

I've run some simulations of this effect on the back of a candy bar wrapper. It turns out that he might actually be onto something here. From what I can see, if you double your debt while also doubling the interest rates on that debt then it can actually make you feel like you've been @#$%ed four times over. I'd post the stick figure chart but I don't think it is suitable for all family members.

“The problem of leverage, the sheer volume of debt in the economy, is still very large and this poses massive macro- economic challenges,” King said. “I think these macro-economic challenges will last many years.”

Someday we will look back on King's words and consider him to be one of the twin Nostradamuli* of our modern era. I don't know what they are paying him, but it clearly isn't enough.

COMMENTS ON ‘RISK AND UNCERTAINTY IN MONETARY POLICY’ BY ALAN GREENSPAN, AEA ANNUAL CONFERENCE, 2004 - Mervyn King

Greenspan argues that asset prices are not targets in themselves, but they are an important part of the transmission mechanism. I agree. In the United Kingdom, we have also had to deal with our fair share of large movements in asset prices during recent years - a 20% rise in the effective exchange rate in the late 1990s and, more recently, house prices rising at more than 25% per annum. This, of course, is in addition to the rapid rise and fall in equity prices during the past five years. Recent Bank of England policy has arguably been similar to that of the Federal Reserve, which is described by Greenspan as ‘mitigat[ing] the fallout when it occurs’. It is hard to forecast asset price movements accurately or to identify asset price ‘bubbles’.

Alan Greenspan & Mervyn King: Price Line Mitigators!



* I was not sure how to pluralize Nostradamus. I opted for using botulus to botuli as a guide. I wanted this analysis to appear to be at least as scientific and objective as central bank policies. As an added bonus, who doesn't like botulism? You can always mitigate the fallout when it occurs. Right?