While the once-in-a-century market onslaught caught the masses off guard, not all missed the indicators of what lay ahead. Even during times of uncertainty a few forerunners had insight on the game:
Central bankβs use a textbook play, artificially amplifying βdemandβ through numerous government stimuli and injections (Sound familiar? 2008 financial crisis. Ding! Ding!).
As per expectation, the masses go into a dumping frenzy. CNBCβs Jim Cramer along with many other popular βfinance-advisorsβ are forced to tactlessly offload in attempt to cover their positions. Contrary to these βcommonersβ, one with foresight could predict this to an absolute percentage.
All the while, going against the herd of the common understanding and insecurity, I was advocating and building an indestructible portfolio on the premise of only going long. Which was dramatically against Street consensus.
There Will Be Blood
Right now, something incredible's happening in the markets.
Prices are moving at a velocity to the will of gravity.
Here, gravity is βdemandβ.
On March 26th, the Market Messiah foresaw the following about oil....
This statement needs to be taken literally. i.e. the lack of demand would distort the present price of oil relative to the future.
What's even more interesting is when time elapses. As May oil contracts transition to June, prices are also getting sucked into the vortex of gravitational pull. Or lack of demand.
Taking a peek at the current crude oil futures contracts - you can see a net difference of +2,000 trades. That's more buyers than sellers, based on a total volume of 676k MTD. This has stabilized as we are still early in the month. Yet, we must closely monitor the net difference of trades going into the next month of expiration dates.
The repetitive nature of falling demand demonstrates that for markets, 'time is a flat circle'.
Flat means events are an eternal recurrence per Nietzsche - until the inelastic turns elastic. This will cause massive booms and busts.
The Relationships
For the last 2 years, whilst most were enjoying the smooth ride of a βdependableβ market, I had intuition and followed the white rabbit. Gathering insight from many spectrums, I relentlessly delved into all matters regarding the effects of major boom and bust cycles.
Instinctively I knew that understanding this craft would yield fantastic results.
Here's an excerpt of what was said to S&P Global...
'"... When probed [...] about how the index could possibly factor in future global destabilizing events which impact commodities, [I] pointed out that miners' underlying commodity prices are "a reflection of both past, present and future, but also a reflection on demand."
(S&P Global Market Intelligence, 28 Sept 2018)
You can see the producers early this year made the call to reduce expansion in lieu of a decline in demand. In this case, supply is rapidly outstripping demand.
Something Like a Global Phenomenon
A global demand contraction is occurring as we speak. This type of phenomenon having occurred only once or twice before in human history is affecting literally everything! Understand that a lot of things are pegged to $UPP.
Assets higher up the risk curve (those with greater detachment from the $UPP) are taking the brunt. As a result of low or non-existent investment inflows and outflows, multiply if not all countries are experiencing shrinking GDP βs. Countries heavily reliant on $UPP are condemned to reach into FX reserves, leading to eventual depletion. And last but not least, oil is sliding back into the ground, a true omen and global phenomenon.
This confluence of events is the catalyst of a big bang.
Try to fathom, Chinese issuance of dollar bonds $UPP make up nearly 70% of corporate debt in Asia (ex. Japan). Also, within the next 12-24months, $13 trln $UPP is needed to service all global debt. $13,000,000,000,000 $UPP (Twelve Zeroβs) in the next 12- 24 months.
Where will all these βBenjaminβsβ come from?
Simply put, many EM fund managers (higher up the risk curve, more detached from the $UPP and seemingly more detached from reality) are trying to convince us that their markets are slated to be the next superpowers, rationalising low-levels of βaccurateβ #COVID19 death counts.
The Street is focused on globalist propaganda as it pays to do so - for them.
These are unprecedented times, the more fortunate (including those reading this) are in house arrest whilst the less fortunate are going into actual poverty; no shelter, no food.
The economic implications are long lasting.
This is the true nature of reality.
One postulateβsβ¦
...Alas!
The Gardenβs of Eden exist! All signs point to the open economies of Sweden and Taiwan. Iβm focused on the essentials there.
Investors Beware
Observe, from the bottom of the 9th innings on the global business cycle is where frontier and emerging markets predictably make their all time highs. These are what the one callβs βlate bloomersβ. They are also late on recoveries. Will speak on the closed capital account economies aka casinoβs soon!
A more astute investor knows that he is able to capture a similar out-burst growth by pre-emptively going lower down the risk curve and following market leaders (generally those with higher credit ratings).
This can be realised when evaluating US debt against the halt in all βM2 velocityβ money stock. As proven time and time again, the higher the credit ratings, the greater the home runs! Even within the Empire.
Airplanes Flying Over Flat Circles
The Oracle of Omaha (Warren Buffett), understands the concept that βtime is a flat circleβ in relation to markets and especially its relevance to the airline industry.
*Take note, high risk curve folk
Warren Buffet demonstrated this by accepting the nature of an unforeseeable demand in the industry for at least 3-4 years from now.
And although at a βlossβ, through a grandmaster move of exiting out of the industry the sage was able to kill two birds with one stone. The first, he was able to reignite grounded airplanes through public and private injections. The second, he was able to save himself from the public scrutiny of being intertwined with these bailout while sitting comfortable on over +$137 Bln in cash. Check mate!
This is another testament to the moving down the risk curve and going long on dollars $UPP.
P.S Bombs Away!
Another lower risk proxy in the field of aviation worthy of mention can be found by studying the military-industrial complex (MIC) and aerospace defence contractors. Our nations are at perpetual war. Β This represents ongoing demand of military βdefenceβ instruments by the deep states.
These types of plays have what you call in poker, more βoutsβ as oppose to the atypical commercial airliners.
P.S. You are reading this whilst the nation is in a military lockdown.
The Streaming Revolution
We are all witnesses to the streaming revolution.
Revolutions, commonly acknowledged as violent and radical overthrows of a current established system of governance, have forever been entangled with the evolution of man and are just the natural course of things.
First and foremost, one cannot be poor or be a pauper to start a revolution. If a populous is constantly worried about their physiology, safety and wellbeing, they will not have enough esteem to ensue.
In the past, only members of the elite and nobles had the capabilities to instigate revolutions to justify perceived injustices. Revolutions are not pretty, they subsequently lead to state bankruptcies, loss of confidence in the monarchy or recognised power and destabilisation of society. The weak and fragile scatter, only returning once the dust settles.Β
Fast forward toΒ today. There is a new kind of revolution occurring βright before our very eyesβ, that only those that pay attention can see (or shall the I say watch?).
Snow white & the 7 Dwarfs, The Little Mermaid, The Lion King. Yes! Thatβs right! We are referring to the old mouse that Disney $DIS built.
Their cruises, theme parks and theatrical releases are being sucked into a giant timeless vortex not even Aladdinβs Genie can save them. The only thing that is keeping Disney operating now is their streaming service.
And in come the new elite and nobles of $NFLX Netflix with a spare $1bln in new debt issuances. They must act swiftly, mobilise resources and setup a mousetrap to catch Disneyβs $DIS long-established tail.
Another act of rebellion worth noting is Spotify.Β
Industry expert Bob Lefsetz, βOn Spotify, the largest streaming service by subscriptions, cumulative streams of the top 200 U.S. songs have fallen in recent weeks tumbling 28% from the weekΒ ending March 12Β to the weekΒ ending April 16Β to the low point for the year so far. The drop-off is especially pronounced, given that those weeks saw new album releases from major streaming artists including J Balvin, the Weeknd, Childish Gambino and Dua Lipa. Meanwhile, catalog music - songs more than 18 months old - have been on the rise and hit a high for the year in the week endedΒ April 9, accounting for 63% of total audio streams, up from 60% the week endedΒ March 12, according to Nielsen/MRC.β
These numbers confirm what the I have been preaching.
Just take a quick look at the list of top earnings of deceased artists.
Legacy content in terms of streaming and traffic, is behaving like Grade-A real estate.
Netflix and Spotifyβs latest quarters are confirming this continuing trend.
The future belongs to those who believe in higher aesthetics, streaming and content.
This is the revolution and time is a flat circle.
The latest podcast can be found here:
Spotify: http://spoti.fi/2xccqiV
Apple: http://apple.co/2W0vSHP
Google: http://bit.ly/3eTzc06