DHUnplugged #555: DuhFLATION

Inflation talk is starting to create concern. Wondering if Elon’s SNL appearance was a “Jump the Doge” event.

ARK Investments seeded by ArchEgos – same strategy?

Hacking the US infrastructure – what could be next?

Fed Limericks are Back – PLUS we are now on Spotify and Amazon Music/Podcasts!


Click HERE for Show Notes and Links

DHUnplugged is now streaming live – with listener chat. Click on link on the right sidebar.


Love the Show?
Making some $$ from the Weekly Stock ideas?
Then how about a Donation?




Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter

Warm Up
Back from a big diving weekend in the Keys (Florida: Masks not required unless you are diving)
Keys Packed – Florida clearly the place to be…
Update on the latest key economics
A hack/ransomware shutdown of a key gas pipeline
Looking at lumber prices – housing costs
A Nasty turn of evens for markets today
Announcing the Winner of the Pfizer CTP

Market Update
– Horrible Jobs Report – Missed all Estimates (But excites markets thinking Fed for longer – for a day)
– DogeCoin plunges 30% during Musk’s SNL appearance (Robinhood outage during sell-off) Jump the Doge Event?
– Tech Selling off to start the week – possibly due to ArchEgos?
– DJIA hits a new All Time High – Keeps plowing ahead
– Margin Debt reaches all-time high – lots of leverage in the system
– – Is margin debt being cleaned up – DJIA rolls hard along with “Spec” plays on Tuesday
– CPI out Wednesday – Yields? (Yes, we have DuhFlation!)

Stream and Chatroom
– We don’t mention this often enough – Live at 9PM Tuesdays with listener chatroom (dhunplugged.com)

Musk – SNL
– Publicly announced he has Asperger’s
– A developmental disorder affecting ability to effectively socialize and communicate. Asperger syndrome is a condition on the autism spectrum, with generally higher functioning. People with this condition may be socially awkward and have an all-absorbing interest in specific topics. Communication training and behavioral therapy can help people with the syndrome learn to socialize more successfully.
– Said that Dogecoin was a “Hustle”

Musk/SpaceX – One Day Later
– SpaceX will launch the “DOGE-1 Mission to the Moon” in the first quarter of next year, with Elon Musk’s commercial rocket company accepting the meme-inspired cryptocurrency dogecoin as payment.
– Geometric Energy Corporation announced the dogecoin-funded mission on Sunday, with the statement not disclosing the mission’s financial value.
– “We’re excited to launch DOGE-1 to the Moon!”, SpaceX Vice President of Commercial Sales Tom Ochinero was quoted as saying in the statement released by Geometric Energy. “This mission will demonstrate the application of cryptocurrency beyond Earthorbit and set the foundation for interplanetary commerce”.

Pipeline Hack/Hijacked
– Top U.S. fuel pipeline operator Colonial Pipeline has shut its entire network after a cyber attack, the company said in a statement on Friday.
– Colonial’s network supplies fuel from U.S refiners on the Gulf Coast to the populous eastern and southern United States. The company transports 2.5 million barrels per day of gasoline, diesel, jet fuel and other refined products through 5,500 miles (8,850 km) of pipelines.
– Colonial Pipeline says it transports 45% of East Coast fuel supply.
– Word is that the pipeline will be restarted by close of business tomorrow. (May take a few days to get all running again)

Decentralization – Follow Up (4 Types World Bank)
Political decentralization—giving citizens or their representatives more power in public decision-making.
Administrative decentralization—transfer of responsibility for planning, financing & management of public functions from center to regions.
Fiscal decentralization—ensuring sufficient revenue to regions through self-financing, cost recovery, co-financing, expanded revenue base, fiscal transfer, etc.
Market decentralization—letting the private sector take charge through privatization and/or deregulation “An appropriate balance of centralization and decentralization is essential to the effective and efficient functioning of government. Not all functions can or should be financed and managed in a decentralized fashion.” (*** Democratization Level ***)
– What level of enlightenment do we need for true decentralization? (non autocratic, non-federal)

Question: Can Religion be Decentralized?
– Buddhism?

Could be Big
Celebrity stockpicker and Ark Invest Chief Executive Cathie Wood told CNBC on Friday that hedge fund veteran Bill Hwang had provided seed capital for Ark’s first four exchange-traded funds.
– Archegos Capital Management, the New York investment fund run by former Tiger Asia manager Hwang, was preparing for insolvency as banks involved in financing its trades seek to recoup some of their losses,
– IF seed capital still at ARK, could there be a move to force sales of some positions to recoup bank losses?

FED Chiming In – Ringing Caution Bell
– In its semiannual Financial Stability Report, the central bank said that while the system overall has remained largely stable even through the Covid-19 pandemic, future dangers are rising, in particular should the aggressive run on stocks tail off.
– “High asset prices in part reflect the continued low level of Treasury yields. However, valuations for some assets are elevated relative to historical norms even when using measures that account for Treasury yields,” the report states. “In this setting, asset prices may be vulnerable to significant declines should risk appetite fall.”

Growth vs. Value – Historical View

Growth/Value

IP Waivers?
– President Joe Biden on Wednesday threw his support behind waiving intellectual property rights for COVID-19 vaccines, bowing to mounting pressure from Democratic lawmakers and more than 100 other countries, but angering pharmaceutical companies.
– “This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures,” Tai said in a statement (Biden Trade Negotiator), amid growing concern that big outbreaks in India could allow the rise of vaccine-resistant strains of the deadly virus, undermining a global recovery.

Peloton
– Peloton announced Wednesday voluntary recalls of both its treadmill machines over safety concerns. (stock down hard)
– The announcement marked a major reversal of Peloton’s initial reaction and comes after weeks of discussions with the U.S. Consumer Product Safety Commission.
– In a statement, Peloton apologized for not acting more quickly to resolve the issue after reports of one death and dozens of injuries.
– The recall affects about 125,000 Tread+ machines and roughly 1,050 Tread products in the U.S.
– Peloton has also stopped sale and distribution of the Tread+ and continues to work on additional hardware modifications.
– Handled poorly from the start

How Will This Go?
– Federal Judge Dabney Friedrich struck down on Wednesday the national eviction moratorium, potentially leaving millions of Americans at risk of losing their homes.
– The Centers for Disease Control and Prevention has banned most evictions across the country since September.
– President Joe Biden extended that protection to renters until July.

How many homes can you build with $50,000 of lumber... (H/T Visual Capitalist)

  • Lumber requirements: 6.3 board feet (bd ft) per square foot (sq ft)
  • Median single family house size: 2,301 sq ft
  • Total lumber required per single family house: 14,496 bd ft

Based on these parameters, here’s how many single family homes can be built with $50,000 worth of lumber:

Date* Lumber Price Total Lumber Purchased Total Homes Built
2021-05-05 $1,635 per 1,000 bd ft 30,581 bd ft 2.11
2020-05-04 $343 per 1,000 bd ft 145,773 bd ft 10.05
2015-05-01 $234 per 1,000 bd ft 213,675 bd ft 14.74
2010-05-01 $270 per 1,000 bd ft 185,185 bd ft 12.77

Margin Debt
– Still not as high as a % of market cap as it was in 1999

Margin Debt

 


420 Stocks …

CLICK for list of “Pot Stocks”

Stocks to watch: CGC, STZ, TLRY, CRON, MJ, NBEV

 


Love the Show?
Making some $$ from the Weekly Stock ideas?
Then how about a Donation?



dh_CTPAnnouncing the Winner
CTP for Pfizer

*** NEW INTERACTIVE CHARTS ***

Winners will be getting great stuff like the new DHUnplugged Shirts (Designed by Jimbo) –
PLUS a one-of-a-kind DHUnplugged CTP Winner’s certificate..

CLICK HERE FOR MORE CHARTS ON TRADING VIEW


UPDATE – NEW ETF – Global X Millennials Thematic ETF Challenge!

The top holdings of Global X Millennials Thematic ETF (MILN) include stocks many investors would expect, such as Facebook, LinkedIn and Amazon, which take advantage of the tech tendencies of millennials. But some names might be more surprising like real estate investment trusts AvalonBay Communities and Equity Residential, and Home Depot, which could benefit from millennials moving out of the home of their parents.

We are creating the DH Old Codger Index Portfolio to compete against this new ETF to see how “old school” stocks do in comparison. Companies in our index will include: (updated names as of 8/29/16)

We have the performance summary running (daily and since inception of 5/6/16) – DHOCI vs. Millennials ETF Battle


California – Voter Bribe?
– Per Newsom’s stimulus deal, two out of every three Californians will benefit from a new round of stimulus checks. Millions of poor and middle-class Californians would get tax rebates of up to $1,100.
– All households making up to $75,000 with at least one child, including immigrants in the country illegally who file taxes, would get an extra $500 payment.
– Individuals and households making between $30,000 and $75,000 a year would get a $600 payment.

Fed Limericks

 

JCD Score ()

 


See this week’s stock picks HERE


Follow John C. Dvorak on Twitter

Follow Andrew Horowitz on Twitter


Play