Authored by James Howard Kunstler via Kunstler.com,
As the empire deliquesces into a fetid slurry of economic failure, we stand ankle deep in the rising swamp waters witnessing the futile battle of the giants, Walmart and Amazon.
In the world of giant bond funds, imitation of trades just may be the sincerest form of flattery.
Just two days after DoubleLine's Jeff Gundlach told Bloomberg and CNBC that he was taking profits in high risk assets, including corporate profits, building a buffer and loading up on VIX as a surge in volatility was his "highest conviction trade" (and correctly so, as just one day later VIX soared from 10 to 17), that "other" bond titan, Pimco said it was doing precisely the same.
A tough week for crude oil, which tumbled after algos tagged $50 stops yesterday following the biggest gasoline inventory build in 7 months. While the US oil rig count has stopped rising in the last few weeks, production continues to hit cycle highs stalling prices, but the Saudis are not giving up on their incessant jawboning - hinting that "deeper cuts" are still on the table.
US oil rig counts rose by 3 to 768 last week - it has fallen 3 times in the last 7 weeks and is practically unchanged in the last 2 months...
The Fed is becoming increasingly trapped: despite the FOMC's "best intentions" to telegraph that the economy is improving with the unemployment rate at a paltry 4.3% - because otherwise it clearly wouldn't be hiking, right - CPI has now missed consensus estimates for 5 consecutive months, and what worse, the biggest historical driver of inflation in recent years, shelter and rent inflation, appears to have peaked and is now declining. Worse, wage inflation is nowhere to be found, much as one would expect from a bartender and waiter-led "recovery."
How fast the fortunes of the world's richest shift: just two weeks ago, when AMZN hit its all time high on July 27, its CEO Jeff Bezos briefly surpassed Bill Gates as the world's richest man for the first time ever, despite growing rumors and rumblings of regulatory pushback against Amazon which is rapidly emerging as the biggest monopoly threat to established legacy industries.