.... hope you didn't.

Nice spike in GME the other day with most of it in the pre-market when you, likely, were either sleeping or not paying attention.  Someone managed to get trades off at $80; as I pen this its trading $34.  That's a 58% loss in two days.  Ouch.

AMC's even worse; it traded pre-market that same day at $13.30; sucks to be you if you're the bagholder on that one because as I write this its trading $5.30.  That is a 60% loss in two days.  Whoever thought that was a "buy" at $13.30..... well, not so much right?

That this sort of reaction still occurs tells me everything I need to know about the general tenor of the market right now.  Despite people claiming there is some sort of "balance" between Greed and Fear, and its on the "Fear" side right now, uh.... no.

The VIX is trading under 13.  That's not fearful -- at all.

Inflation is still running double the Fed's claimed target and yet the S&P tags all time highs.  Uh, no, that's not fear.

Every time I've shaken my head in the "new media" world where everything runs on social media (spamming someone's email is so yesterday) by the violent (usually upside) reactions to this rumor or that, or even worse what is likely someone going through six VPNs to try to bail themselves out of a bad position I think I've seen the "best and brightest" of such insanity and, of course, this means it can't continue.

Then it not only continues -- it accelerates.

Now tomorrow or in a few days (when this publishes) once again these stocks may spike higher.  Does this make them a buy?  No -- it makes them the equivalent of lottery tickets.  They're not being bought because of some material, single-firm change in their operating results or lines of business, that is, because the value of the underlying company has changed.  They're being bought because someone thinks someone else will pay more.

I've often heard that "Wall Street is like a casino" and in some cases that's arguably true.  But a casino has known odds that you can look up or calculate yourself.  21, dice, roulette and similar are all games of chance in that even the most-correct strategy will never result in you having a mathematical advantage.  That doesn't mean you can't win at such a game but it does mean that if you win it is by chance, not by skill.

Poker is the one exception in a casino but the house still maintains a "rake" which is a tax on every pot.  Therefore you not only need to be better than the other players you must be better by enough to overcome the tax.  If you are, however, then over time you can indeed can win in the context of the other players over time (over enough time everyone gets the same number of deuces and aces.)  Thus, assuming a game of skill is of interest to you that's the only choice in a casino.

But now consider two players at that Texas Hold'em table who are able to communicate and collude.  You're going to get destroyed because that is more than enough "tilt" to overcome virtually any skill differential you might otherwise have.  This does happen although casinos make an honest effort to prevent it (its very bad for business if it gets around that this occurs in their card room.)

That's akin to what we have now in equity markets: Not only are people playing games such as what just occurred but what's worse is that some of it may be organized in that there is an allegation out of the Senate that government data was systematically leaked early to certain players in the markets.

None of that is chance or skill -- its cheating.  And as is the case in Vegas its illegal in the markets as well.

As I've discussed for years fines do nothing in situations like this because the parties responsible are never personally forced to disgorge them in an amount that is sufficient to ruin the guilty parties.  Thus only jail is a sufficient deterrent in that prison time has serious deterrent value no matter who wealthy you are.

Don't expect any of that to happen soon though, but at current valuations do be aware that the sort of movements and losses you can easily take if you're on the wrong side of these moves are both wildly exaggerated and, if that Greed factor does turn to Fear they're far more likely to be spikes to the downside.

I don't do this very often, but once in a while I buy something online -- within a few minutes get a call from the people who run the joint, they talk with me, confirm what I want, I get it, and..... I'm actually impressed.

Not just "satisfied" -- impressed.

This is one of those: https://www.cloghog.com/proddetail.php?prod=Gutter-Jet-for-Gas

You have to have a pressure washer and if you have gutters above the second floor an extension wand.  The problem with clearing gutters is that its a five-alarm pain in the neck -- and if they're on a second floor doing it without a bucket truck or scissor lift (and we know nobody rents one of those for that job) can be quite dangerous.  You can pay someone to do it (hope they have Workman's Comp and aren't just a "'Handyman" without it -- you don't want to know what happens if he comes off that ladder onto your concrete driveway from 20' up!) but calling them out once or twice a year gets expensive especially for folks carrying proper insurance.  Not clearing your gutters, if there's evidence they're clogged during heavy rains, is an extremely bad idea as water can back up into the fascia boards and rot them -- then your gutters detach as they're mounted to that wood, you call someone to fix it and discover you're talking about a nastily-expensive amount of work.

If you have a pressure washer and extension wand (e.g. to do the siding on the house or similar) then this job would seem simple, but it isn't.  The reason is kickback -- you need a gooseneck end on the wand to go into the gutter and when you hit the trigger the thrust has a huge moment arm against you on a 15'+ extension wand.  This is very different from the lightly-curved normal end that's on those you're used to; there you can brace against it (which is why most of those have a body harness) but that doesn't work with a gooseneck.  If you actually need the extension at anywhere near its full length I find it completely uncontrollable.

This end for your extension wand absolutely solves that problem -- not helps it -- 100%.  There is zero kickback in any direction when you hit the trigger.

Just make sure your downspout -- if its connected to an underground pipe or similar -- is unconnected and runs on the grass first because everything you sweep is going to come down it.  Yes, it will clear off the matted leaves on the top of the downspout connector and flush what it doesn't down it and out..

They have a patent applied for on this and I can certainly see why.  It's a complete game-changer even for two-story houses.  I have two sections of gutters that animals like to destroy the covers on where I can't get to them without risking my life and thus those two places are subject to trouble every spring.  I've made up a number of home-made adapters and such both for the pressure washer and hoses to resolve this -- one with success, the other not so much.

This thing cleared both in seconds and verification of the one that I usually do with my home-made hose adapter from the deck to run down it, which does work, confirmed that it was entirely-clear including the matted "stuff "from critters over the downspout connection.

Let's do the forward look first, since that's what really ought to matter -- PPI.

The index for final demand less foods, energy, and trade services moved up 0.4 percent in April after rising 0.2 percent in March. For the 12 months ended in April, prices for final demand less foods, energy, and trade services increased 3.1 percent, the largest advance since climbing 3.4 percent for the 12 months ended April 2023.

So much for the forward looking indices relaxing.  Uh, nope.  And what is especially troublesome is that both goods and services moved in unison.

Remember we are a majority-services economy.  People often disregard goods inflation in the pipeline with some level of justification because its simply a smaller piece of the basket and is subject to quite a bit of discounting as you go through the stages of production.  Neither is true for services.

Now there is one piece of the goods side that could be reasonably dismissed, particularly since a large part of it has come back out in the last couple of weeks: Gasoline prices.  Some will point to foods showing negative price changes but nearly all of that is due to fresh and dry vegetables, which are not a large component of the index in any event (nor of most people's diet.)  Natural gas was also down but this is a seasonal thing that is expected; winter is over, so residential gas demand is now nearly all for cooking and water heating, which is the usual pattern -- and leads to lower prices in the spring.

There is a "pig in the python" problem in energy materials in the intermediate table, however, and strongly suggests that the passthrough will wind up in the CPI in two to three months.  That's not good as, of course, that's right into the maw of the summer travel season.  We'll see.

Nothing else really stands out to me beyond ordinary seasonal variation.

Then we have the CPI....

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in April on a seasonally adjusted basis, after rising 0.4 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.4 percent before seasonal adjustment.

The index for shelter rose in April, as did the index for gasoline. Combined, these two indexes contributed over seventy percent of the monthly increase in the index for all items. The energy index rose 1.1 percent over the month. The food index was unchanged in April. The food at home index declined 0.2 percent, while the food away from home index rose 0.3 percent over the month.

Ex food and energy was up 0.3%, which is down one tick from last month.  But all less food and energy is still up 3.6% over the last 12 months which remains close to double the so-called "2% target."

As in the PPI report there was a spike in gasoline which was coincident with the eclipse -- whether that was pure gouging or not I do not know, but it was definitely there and it definitely reflected back into the CPI (as it should have.)  That's a one-off and most of it has come back out already.

But -- both OER and rent were still up wildly strong -- over 5% annualized.  Of course there will be people that really like that idea but facts matter and non-discretionary purchases, with housing among them, don't just have to stop going up at close to triple the so-called target they must actually come down in gross terms.  

What's much worse is that hospital and related services, along with elderly care, are rising at a crazy rate, up at close to 8% annualized and 13.9% for elderly people.  Again I remind you these are compounding figures so for elderly people this means a double in six years.  How anyone thinks that can continue on a forward basis is beyond me -- there's just no money to do that, and its the driver of CMS cost acceleration although the latest Treasury Statement shows slight improvement over last fiscal year.  There is no way to know at present if that's a deferral of payment out of CMS (it might be) or if there's real progress.  We simply need more time to know.

Car insurance continues to wildly spike higher -- up 1.4% this month alone and 22.6% annualized.  That has not resolved, so the idea that this was a "one off" is thus far just plain wrong.

The market seems to love this number -- but I'll take the under on that one.  The IRX ticked up a couple while the 10 year is down materially, further widening the spread which just continues the run of what, on an objective basis, certainly appears to be an illogical Pavlovian response in asset markets.

Come and get it!

Yet another interview with Dennis; we talk about the recent employment reports, inflation and how a huge percentage of the employment "adds" are in places that benefit the employee, of course, but are "parasitic" in terms of the overall economy -- that is, they're costs rather than benefits.

I also comment on the interest rate environment and Fed policy -- and note why the Fed is almost-certain to stay out of the market from roughly July forward until after the election.

We also touch on the personal savings rate, increases in credit card balances and the view that short rates near 5% are "high" (they're not; they're historically normal and in fact balanced -- if inflation was 2%, which it isn't.)

You can get the full interview here!