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Bad Consumer Sentiment; Pandemic, Phase II in Progress

The User's Profile davefairtex February 13, 2022
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It was another new eight-year high for the master resource this week.

Oil did sell off on Tuesday, but made it all up and then some with Friday’s big rally. On the week, crude rose +1.52 [+1.67%] to 92.33. Oil remains in a strong uptrend. Every dip has been bought for the past three months.

As Chris pointed out in his much more detailed analysis behind-the-paywall, oil in storage is steadily declining; eyeing Chris’s chart, storage is maybe 410 mb, while demand is roughly 22 mb/day. That’s 18 days of supply. That said, the “high” for storage is roughly 27 days of supply. The US doesn’t have a lot of oil in storage.

There is also oil in the SPR; Grandpa’s Handlers have decided to sell it off, unfortunately. The SPR is down 50 million barrels from when Grandpa took power in 2021, and is now at 587 mb, or 26 days of demand. The Handlers are either absurdly stupid, or they’re working for “someone else” – perhaps someone who would prefer that the Plebes stop using fossil fuels tout de suite.

The US field production of crude continues to recover; it seems as though the shale tank isn’t quite empty yet. We are still 1.5 mbpd below the pre-pandemic production peak.

We care about oil because it is used in literally everything; nothing moves, or gets dug out of the ground, or harvested, and then delivered to stores, without oil being involved. No oil, no civilization.

The Russia-War-Risk indicator – Palladium – also gave off an interesting (slash worrisome) signal on Friday. Palladium was on track to close down for the week, right up until about 13:30 on Friday afternoon. In less than 10 minutes, palladium shot up $160. What was the cause?   Which breathless, war-salivating announcement from the Biden-Handler White House caused the jump?  No idea. I don’t have a timestamped news feed. But whatever the statement was, it was meaningful enough to move prices. Palladium remains in a daily downtrend – but a weekly/monthly uptrend. The low OI levels suggest that Wall Street is not eager to go short at this time.

My read: “increased concern, but the outcome is still uncertain.”  Palladium remains below its recent highs.

Gold moved higher for most of the week, up +52.30 [+2.89%] to 1861.57, breaking out to a new multi-month high on Friday. Most of gold’s Friday rally came after that market-moving event at 13:30. I couldn’t help but notice the decline in OI on Friday’s rally. Normally OI moves higher as banksters go short when prices rise. On Friday, OI dropped. It looked like a bunch of shorts bailed out as price blew past the previous high set in January.

What was a very choppy gold market over the past six months (my poor model couldn’t figure out direction at all) has now become much more predictable. Open interest remains low, which is generally a very positive sign. This is especially exciting with gold nearing the November high.

SPX rallied for the first part of the week, then sold off on Thursday and Friday, ending the week down -1.82%, below all 3 moving averages, and in a daily chart downtrend. Sector map was neutral – but interesting: worst performers were tech [-3.04%], REITs [-2.80%], and Big Tech [-2.68%], while energy rose [+2.14%] as did materials [+1.05%]. It is important to remember that in every decline, some sectors do much better than others. This sector map seems to suggest pandemic is ending (tech & big tech matter less – people will do more real things), while shortages remain (energy & materials). The plunge in REITs (and utilities: -2.16%) signal higher rates ahead. The drop in discretionary [-2.17%] suggests the consumer isn’t so happy.

These are the clues I get from the sector map.

Where does SPX go from here?  Under the covers, there will be a sector rotation play along with an overall market move. Sector map is projecting: no pandemic, rate increases, shortages in commodities, and unhappy consumers. The drop below the 200 MA is a bad sign, but as Wolf Richter likes to say, things don’t go to heck in a straight line.

Usually anyway.

One more look at risk: crappy debt. It is typically a good “tell” as to where things are headed – a coal-mine canary. JNK holds the debt of the most fragile, weak  over-indebted members of the corporate world. Think of them as “companies with lots of co-morbidities.”

Crappy debt fell -1.38% on the week, a new 16-month low. The crappy debt plunge is showing no signs of stopping. We see 2-3 day rallies, followed by new lows, rinse-repeat. This started right around Christmastime in 2021. This is what a real downtrend looks like.

In a downtrend, the idea is to “sell the rallies”; in an uptrend, you “buy the dips.”  JNK is in a strong downtrend right now. It suggests SPX has further to fall. That said – part of the story with JNK’s decline is also about rising rates.

Here’s a model I don’t drag out too often: the 1-year yield. This series goes back to 1962. The model actually resolves really well. You can see the model picked up the change in rates in the fall of 2021, and boy have they moved higher. Come to Papa! You can now get 1.14% on your 1-year treasury bonds!  The model is forecasting even higher rates ahead.

And the 10-year yield: this model isn’t quite as accurate, but it isn’t too bad. It is showing higher rates ahead for the 10-year also. Just this week, the 10-year rose +11 bp to 2.04%. Last time rates were here was back in 2019.

This week’s economic reports were:

  • CPI: headline +0.65% m/m [+7.8% annualized], expected +0.5%, prior +0.5%. The inflation series, which has had a lot of inflation removed from the series since the 1980s, is at 40 year highs.
  • Mortgage Applications: headline -8.1%, prior +12.0%. That’s bad for the housing market.
  • Consumer Sentiment: headline 61.7, expected 67, prior 67. Consumers are very, very pessimistic. Incumbents are very unlikely to win re-election when consumer sentiment is this low. However – according to this paper I read – consumer sentiment also tends to rise mysteriously right as elections approach, sentiment peaks on the date of the election, and then it drops afterwards. Its almost as if consumers are somehow convinced by the ruling class that “things are going great” right before they vote. Or something.

That consumer sentiment number – from University of Michigan – is the worst in 10 years. Last time it was in the low 60s was 2008-2010.

This will be an important number to watch. Could it decide elections?  Definitely.

Notice how strong the consumer sentiment number was at the start of 2020? Based on that number, the Bad Orange Man would have cruised to victory in November of 2020. But then – “something happened.”  And now we’re stuck with President Grandpa. And all the Handlers. Such as Handler Ron Klain, former advisor to the World Economic Forum’s Global Health Security project, as well as the WEF’s Ending Pandemics project. Now Handler Klain has blessed America with “global health security”! Don’t you feel more healthy and more secure? I know I do. And Klain is the whole reason the pandemic ended! He learned just how to do it from Klaus & Company.

“Get vaxxed! Get boosted! Wear two masks! Hide in the basement! Mask your children! Science!!”

Thanks Ron. Thanks, WEF.

Maybe we could replace WEF former advisor Klain with a Trucker. Then Grandpa could focus on Scranton and how he drove a truck himself, and instead of whispering creepily about “getting vaccinated”, he’d talk about Freedom. Ok, not gonna happen, but a guy can dream, right?


Now for the news that caught my eye

We need receipts!

Insider Sales for Stephane Bancel

Stephane Bancel, CEO of Moderna, deleted his twitter account. He also sold (appx) 8% of his total MRNA shares since 2020-11-12. His MRNA position valuation: roughly $3.5 billion.

When a CEO deletes his twitter feed, that isn’t exactly a vote of confidence for the company’s product. Hmm. Maybe time to take a short position. [Not financial advice!]


Ed Dowd, former Blackrock Guy, is studying earnings call transcripts of major insurance companies, looking for “excess deaths” clues. Here’s a fragment from one – Aegon, the owner of TransAmerica:

… the increase in the, let’s say, the excess claims expectation is simply a consequence of COVID. I mean, we are expecting this point in 2022 something like 300,000 US population deaths for – related to COVID-19. And it’s quite a staggering number relative to where we are today. So it just say, it’s a COVID factor.

Ed was curious – what’s a “COVID factor?”  And what does “related to COVID-19?” mean?   Clearly if it were just COVID, they’d say COVID. But “related” to COVID-19?  What might that be?

Aegon Insurance Q4 puzzling questions that perhaps an intrepid journalist should pursue


And another tweet from Ed. Here he shows the percentage increase in death claims in Q4 2021 vs Q4 2019. These are huge changes. It wasn’t just that one company. It is a whole bunch of them.

Summation of Major Insurance company corporate group policy Loss Ratios (Death Claims) Q4 rate vs 2019 rate

Unum $UNM +36%

Lincoln $LNC +57%

Pru $PRU +41%

$RGA +21%

Hartford $HIG +32%

MetLife $MET +24%

Looks like the vaccine deaths are an open secret inside the Life Insurance biz. They are keeping silent. Presumably, they are owned by BlackRock, Vanguard, and the Oligarchy, so they can’t say anything.

Ed also believes that PFE yanking its baby COVID19 shot authorization is a huge tell. He actually used the phrase: “longs should run, not walk, for the exits.”

There are many, many more highly informative and insightful tweets on his Gettr feed. [FD: I personally have a small short PFE position.]



Doctor Who Helped Discover Omicron Says She Was Pressured Not to Reveal It’s Mild

Speaking to Germany’s Welt newspaper, Dr. Angelique Coetzee, who is currently the head of the South African Medical Association, said that during discussions with European officials, she was told not to say that Omicron patients presented milder symptoms than prior COVID-19 variants.

“I was told not to publicly state that it was a mild illness. I have been asked to refrain from making such statements and to say that it is a serious illness. I declined,” she told Welt in response to a question about her initial discussions about Omicron with European officials.

First of all – Yay Dr. Coetzee!!  She was one of the good people. Second – hmm…I wonder why the European Officials would do this?  Maybe they were WEF Young Global Leaders?

I need some new conspiracy theories. As they say – mine are all coming true.


Fauci Hints at When All COVID-19 Restrictions May Finally End in US

“…we are looking at a time when we have enough people vaccinated and enough people with protection from previous infection that the COVID restrictions will soon be a thing of the past.”

In the interview Tuesday, Fauci also suggested that booster shots may not be needed for all Americans.

“It will depend on who you are,” he said. “But if you are a normal, healthy 30-year-old person with no underlying conditions, you might need a booster only every four or five years.”

So let’s see. 1) basically don’t get a booster if you are young and healthy, and 2) natural immunity works. Pope Fauci, speaking Ex Cathedra. Last month’s Excommunicable Offense is in this month’s Encyclical. Science!

Fauci is tiptoeing away from the PFE and MRNA shots. That PFE document dump is coming out soon. Fauci needs to be five miles away before that happens. “Vaccines? So what are these ‘vaccines’, anyway?”


Internal police probe finds beating of a Trump supporter who died ‘objectively reasonable,’ report

Video footage reportedly taken after Boyland fell unconscious shows D.C. Metro Police Officer Lila Morris beating Boyland with a steel baton and what appeared to be a wooden walking stick.

Morris can be seen on bodycam footage picking up either a walking stick or tree branch, raising the object over her head and striking Boyland several times in quick succession before being pulled back by other officers.

Boyland’s friend, Justin Winchell, who had traveled with her to the capital that day, cried out for police and protesters to help.

“She’s gonna die! She’s gonna die!” Winchell pleaded. “I need somebody! She’s dead!”

The D.C. medical examiner determined that Boyland died of an accidental overdose of Adderall, an explanation that her friends and family have not accepted. Boyland’s father says his late daughter had been taking the prescription medication for a decade.

I didn’t realize Adderall was administered by repeated blows with a stick while prone. Must be a relatively unpopular prescription. “Yes, the medicine works, but the bruising I get is terrible.”

The video footage was appalling. I couldn’t finish watching it. I found nothing “objectively reasonable” about it.

If this event is any guide, when power changes hands in the House in November – this event, and the thousands of hours of undisclosed footage – could be absolutely explosive. Potentially anyway.


CNN analyst backtracks after calling for Canadian truckers to have their tires slashed

Juliette Kayyem denies promoting “vigilantism” after calling for hostile action against protestors


Summary of Terrorism Threat to the U.S. Homeland

“…continued calls for violence directed at U.S. critical infrastructure; soft targets and mass gatherings; faith-based institutions, such as churches, synagogues, and mosques; institutions of higher education; racial and religious minorities; government facilities and personnel, including law enforcement and the military; the media; and perceived ideological opponents.”

So let’s see. Trucks = “critical infrastructure.”  Slash tires = “calls for violence.”  Truckers = “soft targets.”  Vaccine mandate protesters = “perceived ideological opponents.”

If it walks like a duck, and it demands that tires-be-slashed like a duck…where are you, DHS?


US expects Russia to invade Ukraine next week

The Biden-Handlers pray every night before they go to sleep that Russia will invade the Ukraine. And if Russia doesn’t, they’ll poke and prod and hector Russia until it finally gives in, and does so. After all, the Handlers desperately need something to distract from the domestic disaster at the polls coming in November.

Polls always rise during wartime. “Don’t change horses in mid-stream.”


DHS warns police of U.S. trucker protests around Super Bowl, State of Union

My guess: the FBI is scrambling right now, trying to construct a set of false flag operations which result in “violence,” which will be amplified by the media, implicating (FBI) Truckers in the event.

I have an idea: How about “Defund the FBI” – and replace them with social workers.

Whoops. I think I just became a Domestic You Know What.


Dr. Naomi Wolf Laments the Authoritarian Reaction to Parisian Protests and Gives Warning for Future

Naomi Wolf attempts to project ahead “a few moves on the chessboard” @ 1:40:

  • Canadian police are “moving in on the truckers.”
  • Her prediction: some very violent & shocking images – some real, some fake – communicated in order to terrify citizens.
  • WEF planned ahead for a period of resistance. “There are gonna be riots, food shortages, chaos.”
  • It is dangerous to imagine we’re still in a democracy. We are not. We are in a tyrannical regime.
  • They were trying to create detention camps, where they can “hold you without charge or trial if you’ve been exposed to a ‘blood-borne illness.’”
  • Free democracies are an aberration – they need constant vigilence.
  • There is a global war on democracies.
  • You’re going to see shortages – they’re going to be blamed on the truckers.
  • Connect with your local farmer; relearn how to hunt & fish; they are going to wait for us to starve, and blame it on the truckers.
  • You are going to see horrifying images: those cops are posing.
  • Every tyrant that tries to control a democracy counts on this “shock & awe period” in which people are disoriented – and that’s a very dangerous period.
  • This is a wag-the-dog-moment. Obviously.
  • The White House has lost control over the American People, the White House cannot secure its northern border, the Southern border is wide open, commerce is at a standstill; what would you do if you were advising this administration?
  • “Let’s beat the drums of war.”
  • The Pfizer data is going to come out; its going to be bad; it’s a “mass murder event.”
  • That’s why all these countries and places are scrambling to lay down a paper trail: “it’s NOT US!” (c.f. The “Bloomberg” Johns Hopkins report saying lockdowns didn’t work.)

A sobering analysis. Is she too pessimistic in her projections? Her real-time analysis is definitely right on.

If there’s one video to watch – it is this one. 12:58.


So to recap – the situations in play:

  • Surprise rate increase on Feb. 14 – the risk assets may be selling off in anticipation of the event.
  • A likely “consumer spending/shortages” recession – driven by consumer sentiment & falling retail sales.
  • Wag The Dog War with Russia – you can just smell the Biden-Handler desperation for a distraction.
  • One of many vaccine bombshells reaches the public (DOD database, PFE document release, Insurance companies, Kirsh and his embalmer “strange clot” interviews).
  • The large number of vaccine injured people – and their relatives – finally start to realize what has happened to them. And who did it. And they get upset.
  • Possible planned shortages – blamed on the Truckers. In this scenario, they’ll wait for us to starve. This should definitely cause a market crash also.
  • Possible False Flags/Shock & Awe Video Images coming soon – another (WEF-inspired?) Tyrannical Regime terror strategy, to stop us from protesting.

Pandemic, Phase II: In Progress.