The Morning Line

For nearly a year, I've promoted the idea that the post-covid bull rampage would end when Microsoft shares hit $430. They effectively achieved that benchmark on Friday with a pre-dawn print at 428.95 that gave way to a $16 plunge. If this was not THE top, it certainly felt like A top, and a potentially important one. However, before we draw any conclusions, let's see if the selloff gets legs, since we don't want to underestimate the power of a market that has been in the grip of mass psychosis since October. If there were any doubt about this, consider how stocks have rallied into the Fed's decision to stay tight even after investors had deluded themselves into expecting aggressive easing in 2024. Originally I'd picked Apple as our infallible bellwether, because it is the most valuable company in the world, and because its shares are so heavily owned by institutions. But so are Microsoft's, with a key difference:  Although iPhone sales are poised to implode in the severe economic downturn that's coming, Microsoft is unlikely to feel much pain even in the hardest of times. That's because revenues from Microsoft 365 will continue to flow from more than 60 million subscribers, regardless of the economy's condition. The company's earnings are nearly bomb-proof, and that it is why it is arguably the best stock in the world to own, as well as the most important stock to follow. When it is rising strongly, the broad averages cannot fall; if it falls, it will take the broad averages with it. What If? However, the technical picture is not complete without considering the very bullish chart of the S&P 500. It says that before the 15-year-old bull market ends, the S&Ps are likely to hit 6118.34, a 20% gain from current levels.

Bitcoin mania looks likely to blow itself out at somewhat higher levels. The bitcoin ETF chart above suggests buyers will encounter significant resistance at 64.95, a Hidden Pivot target that lies 5% above Friday's closing price. If this impediment gives way easily or is exceeded for two consecutive weeks on a closing basis, however, you can expect more upside to the alternative target at 70.35.  That's fully 14% above these levels, and although that might seem to portend a powerful move, especially if it occurs in a matter of days, it would probably come as a huge disappointment to countless bitcoin fanatics who have been weaned and nurtured on predictions of $100,000 or more. I doubt we'll see anything like that, especially since the shitballs who control bitcoin, Black Rock chief among them, will have reaped more than their directors could spend in a thousand lifetimes if it climbs 'only' another 14% . It is for their benefit that regulators approved bitcoin ETFs in the first place, making the cryptocurrency affordable to riff-raff who had been priced out of the market even at its bear-market low near $15,000 in January 2023.  Fractional ownership, including with leveraged options, made it possible for kids who were collecting Pokemon cards just a few years ago to become players in the global casino. Virtual Tulips It's hard to imagine how high tulip-bulb prices would have climbed if Dutch teenagers had had access to virtual tulips in 1637, when the mania peaked. We are going to find out, though, when the crypto blowoff sputters out, as all manias eventually do, for lack of greater fools. In the meantime, here's a link to a recent interview I did with Howe Street's Jim Goddard. It explains why bitcoin would be more reasonably priced at $1-$2 instead of

The endgame inched closer to singularity last week with rigged rallies in stocks that had rightfully been given up for dead.  There was the more than doubling in the price of Beyond Meat, for example.  Until last week, shares of the veggie-burger upstart seemed content to scuddle sideways on a tortuous path to death. At $7 a share, the stock had lost 97% of its value since peaking at $240 after its 2019 debut  When it was apexing, Wall Street incited the usual wack-jobs into believing that meatless burgers were the food of the future. Cattle ranchers parried this nonsense with a campaign that emphasized why real meat was better for you. They needn't have worried, however, since most people had already discovered that real meat also tastes a lot better. Carvana is another stock to have received premature last rites from Rick's Picks. Consumer complaints about the used car dealer had been piling up mountainously, like grievances against the airlines, causing the stock to pancake from $376 to under $4.  Its clever handlers managed to waft it back up to $40, which eventually became a launching pad for an undeserved pop last week to $80. Watch for freaked-out shorts to continue covering their bad bets in the weeks ahead, giving the stock an artificial boost before it finds well-deserved obscurity in the low teens during the next recession. Two Kinds of Sardines Even so, if Carvana had just one Pontiac Aztek or an AMC Gremlin sitting on a lot, the company's intrinsic value would exceed that of the world's entire supply of bitcoin. This inconvenient fact seems not to have deterred speculators from bidding up BTC to $64,000 last week, where it sat poised to take on the all-time high at $70,000 recorded in November 2021.  We expect the

So much for the wall of worry!  Optimists and visionaries supposedly climb it while ignoring troublesome signs that leave most investors on the sidelines, paralyzed with fear. Last week, as soaring shares of Nvidia tugged stocks higher around the world, speculators swarmed the wall like cockroaches gorging themselves on dried beer, glue and animal feces. Do insects ever pause to worry? More likely is that even the dark shadow of a size 14 shoe descending on their wretched banquet would not quiet the feverish din of a hundred thousand mandibles crunching away. And so it is these days on Wall Street, scene of an epic wallow that is far removed not just from worry, but from reality. The so-called Magnificent Seven -- we have always referred to these stocks, more appropriately, as the Lunatic Sector -- all by themselves created more than a trillion dollars of 'wealth' in just the last week or so.  This occurred when stocks took volumeless leaps on earnings announcements whose details, whether bullish or bearish, were of scant concern. No one maintains any longer that this is rational behavior. But leave it to Wall Street's hype machine to tell us that earnings eventually will catch up to the craziness. Really? Celebrate This! The megastocks have gone vertical at a particularly unsettling time.  Commercial real estate is collapsing, government is doing most of the hiring, brutal price increases for nearly everything have crushed middle-class purchasing power; and borrowers, led by the U.S. Treasury, will need to refinance more than eight trillion of debt this year at significantly higher rates. To make matters worse, inflation is poised to take off again, in part because of higher costs incurred by shippers avoiding Houthi missiles in the Suez. Under the circumstances, it is far more likely that the next

[Globalism has peaked, says my colleague James Howard Kunstler, and with it a trend toward corporate bigness that has all but extinguished quality and vitality from the marketplace.  Bloated corporatism is about to come crashing down, he says, in a process of creative destruction that will allow us to rescale the economy so that it better serves our needs as individuals.  With his permission, I have reprinted his most recent essay, Think About It, from Clusterfuck Nation.  On Amazon, here's a selection of his brilliantly insightful books, many of them bestsellers  RA ] *** “It’s not enough to be against globalism or the WEF, we have to also be for something better.” — Tom Luongo, Gold, Goats ‘n Guns Mr. Luongo makes an important point. I want you to think about this: There is a reason that the WEF-Globalist cabal is losing the battle to control and dominate the rest of us. They are trying to power straight into the opposing currents of reality. Above all, they seek to centralize power and decision-making. But the world is moving in the opposite direction. All of the WEF’s aims founder on the macro trends unspooling in history. The rising rule for human affairs now is that anything organized at the giant scale is going to wobble and fail. There will not be any world government run by the creatures of Davos or Brussels, or Washington DC, or any other place that the grandiose imagine would be their seat of global power. It’s not going to happen, so you can stop worrying about it. But you’d better prepare for what is happening: everything in our world wants to get smaller, slower, finer, and more local. Anything that opposes these trends is pissing into the wind. Since every activity we humans practice has to

However high stocks climb, there will always be an earnest, bespectacled egghead on Wall Street ready to tell us why shares are likely to keep on rising. Here's Yung-Yu Ma, chief Investment officer for a firm called BMO Wealth Management and a finance professor at Lehigh University: “A better economy, healthy profits and lower inflation,” he avers, are what have powered the stock market to its fourteenth gain in the last 15 weeks (a feat last accomplished 52 years ago), Better, healthier and lower than what? one might ask.  If Mr. Yung is comparing the U.S. economy to that of Venezuela or West Virginia, then he is more or less correct: We are living in a relative economic paradise. But at what cost?  It has taken $2.5 trillion in fiscal stimulus to keep the U.S. out of statistical recession. This sum unfortunately has not slowed the commercial real estate market's inexorable drift toward collapse. The coming plunge is certain to be steep, since more than $1 trillion in commercial mortgage loans will have to be refinanced over the next two years, at significantly higher rates and with property values already eroding dramatically. To add force to the incipient downturn, layoffs are growing not just among world-beaters like Amazon and UPS, but in Silicon Valley. It is hardly reassuring that an ostensible offset -- a supposed 353,000 jobs created in January  -- came mainly from a sector that produces exactly nothing: government. Permabulls Nervous Small wonder, then, that the stock market's unjustified rise should have begun to worry even permabulls. Like the rest of us, they understand that the revelry has to end sometime, probably sooner rather than later. It is foreseeable that a top in the market will bring these illusory boom times to a halt, pushing the economy --

Here are a couple of headlines concerning the economy that appeared atop Bloomberg's front page on the same day last week. Taken together, they could make one's head spin. First the happy news: IMF Lifts World GDP Outlook on U.S. Strength. But here's the article just beneath: UPS to Cut 12,000 Jobs. A case of schizophrenia on the copy desk -- or were they just trying to be provocative? Since no mainstream news outlet save USA Today out-cheerleads the economy (and crime-infested Gotham) more obnoxiously than Bloomberg, we can assume that the UPS layoffs were simply too important to bury on an inside page. The company is one of America's biggest employers, and its ubiquitous delivery trucks are a visual bellwether for the economy -- so much so that it would not exaggerate to say, "As UPS goes, so goes the nation." Amazon has been laying off as well, but it is predictable that both stories will ultimately get less ink than Facebook's whoopee-cushion leap Thursday triggered by an earnings beat and some other smiley-face 'surprises' from Zuckerberg.  The glorified advertising firm's shares tacked on an instant $66 after the close, adding a reported $200 billion to the global ledger and $50 billion to Zuckerberg's s piggy bank. We've discussed these wild but frequent effusions before, and how they contribute enormous sums to the 'wealth effect' without altering the economy in any real or constructive way. Sure, a few of the big winners will reward themselves for all their hard work by buying ocean-going yachts and Lamborghinis in crazy colors. But most of the money will get plowed right back into the market, the better to pump still more gaseous wealth into a handful of stocks held unto death by portfolio managers. A Dollar Krakatoa Actually, even hydrogen has more

[This week's commentary was written by David Isham, a longtime Rick's Picks subscribers from Northern California who has been investing in bullion since he was in grade school four decades ago. RA ] Although gold appears to have broken out of a triple top and recently hit fresh all-time highs at $2152, the gold miners are trading at the same prices they were 20 years ago. I believe this strange disconnect is going to change this year, since gold is finally starting to outperform the CRB commodities index, oil in particular. Because energy makes up 60% of a mining company's costs, this implies the miners are about to become more profitable. Every bull or bear market has three phases -- accumulation, manipulation and distribution. We are in the accumulation phase now, where smart money is accumulating gold mining shares for the coming, multiyear bull market. Next will come the manipulation phase, also known as 'The Judas Swing'.  Aptly named for Judas’ betrayal of Jesus, in the stock-market world it is defined as a false move preceding a real move in the opposite direction. Telltale Sign One of the telltale signs that the miners have embarked on a new bull market will be a show of relative strength if the price of physical gold drops significantly in the months ahead. If mining stocks don't fall as much percentage-wise, gold investors should take encouragement, since the rise that follows will mark the likely resumption of the long-term bull market begun nearly two decades ago.  Finally, there will be a distribution phase where miners go parabolic and the public jumps in belatedly, buying stocks at or near the top. No one can say for sure how deeply gold will correct before it turns to embark on a spectacular run-up, but I wouldn't be

When forecasting stock prices, it helps to view the market as a crazed creature driven by fear, greed, and most of all, stupidity. Of course, everyone but the "theme"-obsessed chimpanzees who purport to manage your money understands that the stock market's heedless ascent into horrifying news is rock-bottom stupid.  In this case, the very bad news coming is already known: Treasury borrowing over the next twelve months will dwarf anything that has ever been attempted before. "The volume to be financed in U.S. Government debt is staggering, historically unprecedented, and absolutely impossible," writes my colleague Jim Willie. Nearly $1.6 trillion will be needed to finance outlays for fiscal year 2024, and an additional $7 trillion of maturing debt must be rolled, much of it into paper of shorter duration.  "That comes to around $800 billion per month, when $100 billion has been difficult on a monthly basis," Willie notes. It will occur at a time when sovereign buyers of U.S. debt, particularly China, have been dumping T-bonds. The extremely heavy auction calendar portends a sharp rise in interest rates that threatens to crush corporate earnings, create a tsunami of bankruptcies and trip the U.S. economy into deepest recession. The shock of it would be made worse by the brazen statistical lies The Guvmint has fed us concerning GDP growth, hiring and the supposed health of the economy. All have been egregiously overstated in an election year, gobs of bright lipstick on a pig. Triggering 'Stupid'  This grim picture, in contrarian fashion, appears to have triggered the 'stupid' factor into overdrive, sending stocks soaring on Friday as though the U.S. and global financial picture were just peachy. How long can this gusher of mass hysteria last?  Once again, I turn to a chart of Microsoft shares for the answer. It still