The Ross Rant™ ©Joel Ross 2022 Part I
Biden completely blew the opportunity to lead the world and deal with the nation’s serious problems, but he just repeated all the same old campaign rhetoric of 2020. A grand opportunity missed, and bad news for the world. Zelensky must feel on his own now. There are covert things the CIA and special forces can do to change the war, but Biden is not doing them. Genocide will result.
When the BLS releases its jobs and unemployment report this week it will look good, but don’t be fooled. There are some in Wall St who go on TV and say the economy is great, and Ukraine does not really matter to the stock market, and some even said Monday the market has hit bottom. That is pure BS, or ignorance. While jobs have returned, and consumer spend was up nicely in February, inflation is likely going up from here, not down. Oil is now over $110, and going up a lot more since Biden is not going to change his policies. The administration in the past week has shut off expansion of drilling, new LNG terminals and new pipelines. In the face of Ukraine, the stupidity of the administration policies is beyond belief. Food prices are going to soar in the next few weeks as wheat and corn are now going up by the daily limits every day. These are the key ingredients to many foods. With oil so high, transportation costs will rise, and that flows right into consumer prices eventually. We are nowhere near solving the trucker shortage problem. So the Fed will be faced with a slowing economy and rising inflation. Do they raise rates to kill inflation, or not raise much to help a declining economy which will happen soon. With the declines in the stock market and rising rates combined with rising home values, housing has to turn down over the next few months. The combination of all of this will cause further declines in the stock market and stagflation. This is not a year to expect higher stock prices, and unless the administration does a major reversal of policies, next year will be no better. I remain 50% in cash and oil stocks which offset any losses in my core portfolio of stocks like APPL, MSFT, TMO and AMZN. Those, and a few others, will grow well no matter what happens since they do not depend on oil, supply chains, labor shortages, nor do they get impacted by inflation. While APPL does import phones and chips, it will be fine. Risk off for a long time, and don’t get lured in by the Wall St pundits who don’t seem to understand what is really happening. If your broker says buy mutual funds or annuities, or if they say buy bonds, find a new broker or money manager. This is a time to hunker down. The small group of top investors with whom I communicate regularly thinks the range off of the high of 4800 on SPX, could be down to 3840 (down 20%), to up to 5100 by year end. That is a 32% differential. In short, even the smartest guys have no idea where the market goes from here. Their true thoughts are all over the map. So don’t feel bad if you are confused. My own view remains be conservative and wait to see how Ukraine and the Fed unfold. There are huge factors which could move the market in either direction. The big winners will be those who lose the least this year.
During WWII, the Dow did:1942 +10%, 1943 +16%, 1944 +15%, 1945 +30% It peaked in Feb 1946 then dropped. The situation today is very different. Back then there was no QE, and no 0 interest rates, no $6 trillion of transfer to individuals and small business-spending went to build weapons and pay soldiers, there was no pandemic lockdown causing huge increases in savings, and the Fed was not buying trillions of bonds. There was also not inflation at 7.5%. In 1941, we were not far from the severe recession of 1937, so the upside may well have been the recovery from the depression years. The public was mostly lacking in savings, and not part of the stock market. There were no 401K plans.
There is no way to know how all of this ends. Putin, by all accounts from people who seem to know, has isolated himself, and has become delusional. A better description is very dangerous. He will not stop until he is either defeated, killed by his own inner circle, or he completely wins in Ukraine, which he cannot. He will just continue to pour in more troops, and step up the level of weapons he will use. The next step up is thermobaric rockets and bombs which are huge bombs that can kill anything in a very wide radius far beyond a normal bomb. Use of these is a war crime. He already used one this week. Some have speculated he might even try to use a very small nuclear weapon. The fact that sane, objective experts are even speculating about that, is really scary. Obviously we have no way to know what he will do, nor if his generals will go along with such things, but the risk exists. Putin will demand to win this at any cost. Now he has threatened Sweden and Finland. They may now join NATO. He is an almost exact duplicate of Hitler and Stalin now. A friend of mine who is close friends with the deputy NYT bureau chief in Moscow reports that she said Russians are shocked at what Putin is doing and they do not understand it. See below for another report from Moscow. Maybe someone will succeed in killing him. Some doctors and intel people speculate that his puffy face suggests he is on some sort of cancer drugs or steroids for something. Nobody knows, but there is speculation from his facial appearance that there is some sort of serious health issue.
Biden completely blew the opportunity to lead the world and deal with the nation’s serious problems, but he just repeated all the same old campaign rhetoric of 2020. A grand opportunity missed, and bad news for the world. Zelensky must feel on his own now. There are covert things the CIA and special forces can do to change the war, but Biden is not doing them. Genocide will result.
When the BLS releases its jobs and unemployment report this week it will look good, but don’t be fooled. There are some in Wall St who go on TV and say the economy is great, and Ukraine does not really matter to the stock market, and some even said Monday the market has hit bottom. That is pure BS, or ignorance. While jobs have returned, and consumer spend was up nicely in February, inflation is likely going up from here, not down. Oil is now over $110, and going up a lot more since Biden is not going to change his policies. The administration in the past week has shut off expansion of drilling, new LNG terminals and new pipelines. In the face of Ukraine, the stupidity of the administration policies is beyond belief. Food prices are going to soar in the next few weeks as wheat and corn are now going up by the daily limits every day. These are the key ingredients to many foods. With oil so high, transportation costs will rise, and that flows right into consumer prices eventually. We are nowhere near solving the trucker shortage problem. So the Fed will be faced with a slowing economy and rising inflation. Do they raise rates to kill inflation, or not raise much to help a declining economy which will happen soon. With the declines in the stock market and rising rates combined with rising home values, housing has to turn down over the next few months. The combination of all of this will cause further declines in the stock market and stagflation. This is not a year to expect higher stock prices, and unless the administration does a major reversal of policies, next year will be no better. I remain 50% in cash and oil stocks which offset any losses in my core portfolio of stocks like APPL, MSFT, TMO and AMZN. Those, and a few others, will grow well no matter what happens since they do not depend on oil, supply chains, labor shortages, nor do they get impacted by inflation. While APPL does import phones and chips, it will be fine. Risk off for a long time, and don’t get lured in by the Wall St pundits who don’t seem to understand what is really happening. If your broker says buy mutual funds or annuities, or if they say buy bonds, find a new broker or money manager. This is a time to hunker down. The small group of top investors with whom I communicate regularly thinks the range off of the high of 4800 on SPX, could be down to 3840 (down 20%), to up to 5100 by year end. That is a 32% differential. In short, even the smartest guys have no idea where the market goes from here. Their true thoughts are all over the map. So don’t feel bad if you are confused. My own view remains be conservative and wait to see how Ukraine and the Fed unfold. There are huge factors which could move the market in either direction. The big winners will be those who lose the least this year.
During WWII, the Dow did:1942 +10%, 1943 +16%, 1944 +15%, 1945 +30% It peaked in Feb 1946 then dropped. The situation today is very different. Back then there was no QE, and no 0 interest rates, no $6 trillion of transfer to individuals and small business-spending went to build weapons and pay soldiers, there was no pandemic lockdown causing huge increases in savings, and the Fed was not buying trillions of bonds. There was also not inflation at 7.5%. In 1941, we were not far from the severe recession of 1937, so the upside may well have been the recovery from the depression years. The public was mostly lacking in savings, and not part of the stock market. There were no 401K plans.
There is no way to know how all of this ends. Putin, by all accounts from people who seem to know, has isolated himself, and has become delusional. A better description is very dangerous. He will not stop until he is either defeated, killed by his own inner circle, or he completely wins in Ukraine, which he cannot. He will just continue to pour in more troops, and step up the level of weapons he will use. The next step up is thermobaric rockets and bombs which are huge bombs that can kill anything in a very wide radius far beyond a normal bomb. Use of these is a war crime. He already used one this week. Some have speculated he might even try to use a very small nuclear weapon. The fact that sane, objective experts are even speculating about that, is really scary. Obviously we have no way to know what he will do, nor if his generals will go along with such things, but the risk exists. Putin will demand to win this at any cost. Now he has threatened Sweden and Finland. They may now join NATO. He is an almost exact duplicate of Hitler and Stalin now. A friend of mine who is close friends with the deputy NYT bureau chief in Moscow reports that she said Russians are shocked at what Putin is doing and they do not understand it. See below for another report from Moscow. Maybe someone will succeed in killing him. Some doctors and intel people speculate that his puffy face suggests he is on some sort of cancer drugs or steroids for something. Nobody knows, but there is speculation from his facial appearance that there is some sort of serious health issue.
