Everything, Everywhere, All at Once

Week ended October 27, 2023, interesting news items to look at this week were:

1. Everything, Everywhere, All at Once: I took the title from a film where Michelle Yeoh won best actress in the Oscar in 2023. The movie depicted a beleaguered wife and mother fighting enemies in a multi parallel universe. (Fig. 1).

In real life, Joe Biden and the Anglo American Elites all perfectly fit in that character role. Former Defense Secretary Bob Gates described the current situation in the White House is one of overload. “"There's this gigantic funnel that sits over the table in the Situation Room. And all the problems in the world end up coming through that funnel to the same eight or 10 people. There's a limit to the bandwidth those eight or 10 people can have." (Fig. 2).

(i) The hubris of starting wars but don’t know how to finish: A Chinese study showed that from the end of World War II to 2001, among the 248 armed conflicts that occurred in 153 regions of the world, 201 were initiated by the United States. (Fig. 3).

For those who care to read the details, the link is attached.   https://english.news.cn/20220902/735703a45cfd458791179d4c0a80e727/c.html . If I update the figures above to the October 2023, then there would be 263 armed conflicts of which 207 were initiated by the United States up. No enemy could have so weakened the United States than the Americans themselves.

(ii) High Sounding but Hollow Initiatives that seldom bears fruits:War on Drugs, War on Terror, Arab Spring, Trans-Pacific Partnership, Make America Great Again, Build Back Better, Freedom of Navigation, Quad 4, India-Middle East-Europe Economic Corridor and on and on. Every few months there would be a new program, new budgets on borrowed money but we seldom see daylight or return on investments.

(iii) National Security trumps all other considerations but there is not enough money to finish a border security wall. Police departments are defunded. Laws on theft and robbery not enforced. Homeless tent enclaves that extend for miles. Rebellions within and rejection by 85% of Global Population against Hegemony and Neo Colonialism, yes, it is indeed Everything and Everywhere, All at Once.

2. No Boots on the Ground but bombs are dropped in Syria: (Fig. 4).

As usual, U.S. officials have blamed Iran for the attacks, even while conceding they don't have evidence that Iran ordered them. Whilst all eyes are focused on Gaza, Ukraine is quickly sidelined. A tell tale sign is Wapo’s CIA article to recriminate the many blunders of Kiev and being distanced by the Spy Master. (Fig. 5)

3. The Poison Chalice of High US Interest Rate Barrier Wall: As global dedollarization gathered pace, the hope of financial market punters for a Fed pivot fades. For the time being, the high interest rates has put a check against large funds flow out of the US. Figures released last week by the Treasury Department showed foreign portfolio investment in US hit a low in Sep 2022 of $22.7 trillion and rebounded to $25.9 trillion in August 2023. But still there was a reduction of $1.7 trillion (50% from Europe, 30% from Asia and 20% ROW) from beginning of 2022 to August 2023. (Fig. 6).

To meet such withdrawal obligations, US investments abroad have to be similarly liquidated within the corresponding period, by $1.38 trillion (47% from Europe, 25% from Asia and 28% from ROW) (Fig. 7).

The Net Investment Funds Flow is shown in (Fig. 8).

Whilst the turbulence is unpleasant, I need to post a red alert to the composition of the funds flow. Out of the $1.7 trillion pulled from the US, 71% was equity, 24% from Corporate and Agency Bonds and 5% from US Treasuries. Within the 5% reduction in Treasury holdings, there was a large swing away from long maturities in favour of short term bills. In one word, long term productive capital in US is in an exponential decay. Major derivatives dealers are now running for cover and expect 2024 to turn into a disaster of epic proportions with cascading loan defaults, bankruptcies and bank runs. This week a repeat of large deposit withdrawals as in March with the Silicon Valley Bank episode rekindled. (Fig. 9)

How then would Central Banks react when the dike breaks, run the printing press hot as if there is no tomorrow but for the time being they are keeping their gun powder dry. Everything, Everywhere, All at Once.

This week’s financial markets:

A. Stock Market: (Fig. 10): Dow closed at 32,417 for the week, a drop of 710 points or -2.1%, S&P 500 -2.61% and NASDAQ -2.70%..

The perennial problem of war and disappearing liquidity kept the stock market on the edge. Apple Inc. -1.52%, Nvidia -1.8%. JP Morgan -5.23%, Citibank -3.39%.

B. Debt Market: (Fig. 11): USGG10YR ended the week at 4.845%, a drop of 7 basis points.

 Bond prices dropped again mid week to push yield on YR10 to 4.998% before a large correction of the stock market provided some distractions to the bond sell off.

C. Commodities and Precious Metals: Trading results for the week: (Fig. 12) Bitcoin (+14.99%), Rubble (+1.60%), Uranium (+1.42%), Gold (+1.28%), JPY( +0.15%), Rmb (-0.02%), Eur (-0.30%), GBP (-0.30%), Silver (-1.15%), SPX500 (-2.61%), NASDAQ (-2.70%) and Oil (-3.75%),.

In preparation for a Spot Bitcoin ETF, Bitcoin was bid up and getting ready to stuff innocent investors with illusions of a quick profit. Of course the narrative is a different tone, portraying as a safe heaven for a failing fiat currency. Beyond the smoke screens and mirrors, Uranium and gold performed well and silver was shorted again to arrest a declining USD.

^{2Timothy 3:1}  But know this, that in the last days perilous times will come: ²  For men will be lovers of themselves, lovers of money, boasters, proud, blasphemers, disobedient to parents, unthankful, unholy, ³  unloving, unforgiving, slanderers, without self-control, brutal, despisers of good,⁴  traitors, headstrong, haughty, lovers of pleasure rather than lovers of God, ⁵  having a form of godliness but denying its power. And from such people turn away!