Wheels Are Coming Off as Stock Market Set to Tank; U.S. Government Debt Will Surpass $37 Trillion Before the Next FOMC Meeting

Gains on the major indices Thursday evaporated in the last half hour of trading, sending the S&P, Dow, and NYSE Composite tumbling into the red. Only the NASDAQ, because it is the biggest bubble in stock market history, remained positive, though it slid 125 points, giving up more than 2/3rds of its gains.

Through Thursday, stocks were on track for a losing week. The Dow is down 795 points (1.87%) for the week. The NASDAQ has dropped 285 points (1.49%), the S&P is off 116 (1.95%), and the NYSE Composite is down 369 points (1.85%).

Anybody who was thinking, "Well, that's OK. Stocks are back close to their all-time highs," and planning to spend the three-day weekend with friends and family (usually mutually-exclusive groups) might want to think again.

At about 7:40 am ET, President Trump posted a message on X or Truth.com saying that Apple would have to pay a 25% tariff on all iPhones made outside the United States. He also posted that starting June 1, the EU would have to pay a 50% tariff on all exports to the U.S., as trade talks have apparently broken down.

While these developments may be somewhat of a surprise, they're not the sole cause of futures falling off a cliff. Trump's tweets are merely cover for what's really causing what looks to be a watershed event on Friday. The real cause of the carnage about to take place is multi-faceted, and all of it is negative. Here's the short list:

• Russia is not going to negotiate on a cease-fire or truce of any kind in Ukraine. It's over. Russia will continue to advance, taking Kiev, and then all of Western Ukraine.
• The U.S. government is chock full of criminals. Senators and House representatives have all taken bribes and kickbacks from Ukraine, drug companies, and anyone else with a handful of cash. The U.S. congress has been looting the Treasury for decades.
• Japan's nearly five decades of self-funding and self-loathing are about to end. The country is fully owned by the Bank of Japan (BOJ), which has issued bonds in their fake, fiat currency, the yen, since 1982. Compared to the U.S. dollar, it's garbage. Compared to real money, gold and silver, it's about as useful as toilet paper. The Japanese economy is sunk.
• Actual patriotic Americans - those who mostly voted for Trump - are outraged over a variety of issues. House members refused to make the cuts imposed by Elon Musk's DOGE team permanent. Federal court judges have thwarted every executive order that President Trump has issued. Food prices remain high. Gas prices are rigged. Americans, who rightfully understand the depth of corruption in Washington, D.C., state capitals and even local governments, have had enough and are beginning to take matters into their own hands. Some refuse to pay taxes. Many more are armed to the teeth, awaiting an actual uprising, an insurrection, against the corrupt federal government.
• Gold and silver price suppression is beyond the pale. A gold:silver ratio over 100 was the last straw, exposing the scandalous price-rigging designed to keep the U.S. dollar afloat.
• BRICS and other nations are shedding U.S. Treasuries, swapping out for gold, which will become a Tier 1 asset for American banks on July 1. The U.S. dollar, euro, and pound are close to being rejected and thrown into the dustbin of history along with all other failed fiat currencies.

That's only the beginning. Illegal immigration, blacks acting like savages are ignored by a controlled media which delivers propaganda rather than honest news reporting. Left-leaning journalists lied about the 2020 elections, Joe Biden's health, Trump's connection to Russia, COVID, and much, much more.

The wheels are coming off the wagon, folks. Your three-day Memorial Day weekend is going to be ruined by a stock market crash. Even if it doesn't materialize today, it will. Everything connected to Wall Street, finance, and your life savings is being unraveled. Those in power, at the Federal Reserve and in government, know that the current trajectory is unsustainable. It's about to come apart at the seams.

With markets about to open Friday, stock futures remain depressed. Dow futures: -525; NASDAQ futures: -380; S&P futures: -82.

The United States government creates just less than $5 billion in new debt per day (realistically, it's about $4.76 billion). You can check it on the US Debt Clock, which is a fairly accurate, real-time run. It's kind of mesmerizing, so it's not advisable to watch the spinning numbers for maore than a few minutes at a time.

Those wishing to estimate when the U.S. government will hit a specific target, say, $37 trillion or $40 trillion, can do the math on a simple calculator. $4.76 billion a day adds up to somewhere in the range of $145-148 billion in your typical month, a little less for April, June, September, and November, which only have 30 days, and February, thankfully, only has 28 except in leap years.

So, when will the U.S. government be $37 trillion in debt? In about 24 or 25 days. Debt accumulation does not take weekends or holidays off; it just keeps running, as any thieving banker would so desire.

Today being the 23rd of May, the timeline for turning over another TRILLION would be Monday, June 16, right before the next Federal Reserve FOMC meeting (Tuesday-Wednesday, June 17-18). It would be some seriously sweet irony if the debt clock clicked over to $37 trillion when the FOMC policy announcement is made at 2:00 pm ET on Wednesday, and even better if it happened during Chairman Powell's press conference. Steve Liesman from CNBC could cough up a question as it ticks past the magic number, like, "Chairman Powell, the U.S. debt just surpassed $37 trillion. Is this a level of debt you consider sustainable?"

Of course, that would never happen. At least not in the near future. But, someday, somebody is going to question just how much debt is too much. Some economists believe it's already too much, becoming an increasingly troublesome burden when the Debt/GDP ratio surpassed 100%. That happened right around the end of 2012 according to the graph below.

The free-spending during the COVID era pushed the ratio to a record high of 132.81, and it appears the Fed got a little worried, and it started coming down. After all, everybody wants their money back, right? However, the way this is going, since the U.S. didn't implode at 100% Debt/GDP or 120%, we should be fine when it hits 130% or even 150%. Of course, by then, a gallon of gas will cost $6, bread will be $8 a loaf and an acceptable minimum wage will be about $25 an hour to flip burgers or paint houses.

Does anybody actually want to live like that?

Apparently, our overlords in Washington D.C. (Den of Criminals) think we can manage. So, print more! Who needs austerity and balanced budgets when you have magic computers that can conjure up billions in fresh dough in seconds?

The point is, if the U.S. government was a business, they'd be bankrupt. Since they're not, no bankruptcy. The Fed can just buy up any bonds they float out there if nobody else is interested. Ad infinitum.

On its current trajectory of increasing the debt by $100 billion every 21 days (see what I did there?), it will take another 630 days to reach $40 trillion, or, about 21 months. See you all back here in February, 2027. It ought to be a real kick.

For now, Happy Memorial Day.

At the Close, Thursday, May 22, 2025:
Dow: 41,859.09, -1.35 (-0.00%)
NASDAQ: 18,925.73, +53.09 (+0.28%)
S&P 500: 5,842.01, -2.60 (-0.04%)
NYSE Composite: 19,564.71, -43.10 (-0.22%)

Markets Slide on Interest Rate Fear; House Moves Forward on Big, Beautiful Bill; Bitcoin Makes New High Above $111,000

You know markets are in trouble when the one thing that has no intrinsic value - bitcoin - is the only "asset" making gains. Bitcoin reached a record high above $111,000 earlier this morning.

It is at this point that sly Wall Street insiders are parking their money in bitcoin, awaiting either the next greater fool to buy their crypto at a higher price or until the latest market swoon occurs, ready to swoop in and snatch up stocks on the cheap.

The people who claim the stock market is nothing but a giant, rigged casino are on the right track.

You also know that when markets are troubled, gold and silver get sold off, as they are this morning. Gold is down 0.66%, at $3,393.10, and silver is off 2.20%, at $32.91. Six hours ago, an ounce of silver was worth a dollar more - $33.91. Why the sudden change? Could there be fraud afoot? It's laughable to believe anything about the precious metals markets on the COMEX are even remotely legitimate. The volume on contracts traded in a week represent more than is mined in a year.

Everybody plays along until they don't. When the tide goes out, the riggers at the CME, LBMA, COMEX, the Exchange Stabilization Fund (The ESF is an emergency reserve fund of the United States Treasury Department, normally used for foreign exchange intervention.), and the Federal Reserve will be found to be lacking in moral principle, and, worse, marketable collateral. The Fed is a counterfeiting operation and the ESF helps to ensure that nobody gets a fair shake against the nighty U.S. dollar.

Wednesday's steep slide midday was the result of rising interest rates due to a very poor auction of 20-year bonds. Market participants outside of the Fed itself and its primary dealers - Bank of America, Goldman Sachs, JP Morgan and the rest of the usual suspects - aren't apparently in the mood to finance the U.S. federal government for the next 20 years at anything less than a five percent return. It's actually somewhat amazing that figure isn't much higher, like eight or 10 percent, given that the moondogs on Capitol Hill haven't the least bit of sense about cutting back on spending, reducing the deficit, or downsizing the government.

Moody's, about a decade too late, downgraded the U.S. government's rating from AAA to AA1, again, somewhat laughable. The government can't even pay its own bonds back. It rolls them over and adds the balance to the "national" debt. There's nothing national about the so-called national debt. It's the government's debt. American citizens actually owe nothing of that $37 trillion bag of notes, yet they'll be the ones paying the price for the government's waste, fraud and abuse. Americans pay every time they buy a loaf of bread, put gas in their car or take out a mortgage. Americans have been put through the wringer of inflation for so long even the slightest relief from their self-imposed debt slavery seems like a holiday.

Nothing practically any western government says or does matters these days. They're full of empty promises and horse manure. They have nothing more to offer than propaganda - "Russians are coming to rape your wives and eat your children" - and the economics of the welfare/warfare state. "We pay you to consume, so shut up while we blow up the rest of the world."

In less than two months, the 17th BRICS Summit will be held in Rio de Janiero, Brazil (July 6-7), which is, incidentally, less than a week after gold becomes a Tier-1 asset for not just central banks, but commercial banks as well. The BRICS are moving on without the Western nations. They don't need them. They don't need many more 10, 20, or 30-year treasury bonds, not anything close to the estimated $1.3-$1.7 trillion Treasury will be issuing over the next three quarters.

President Trump is walking a very fine line with his "big, beautiful budget." His core supporters backed him because they thought he would work toward downsizing the federal bureaucracy and balancing the budget. The omnibus bill currently moving through the halls of congress does neither. Instead the bill approves as much, if not more, spending than the last Biden budget, complete with a deficit of close to $2 trillion. At least the bill - which made it through the House by a single vote Wednesday night - extends the 2017 Trump tax cuts rather than eliminating them. How kind of our superiors!

The American people still don't like it much, and, so it seems, neither do bond investors.

Suitably, an hour before the equity markets open, stock futures are down and sinking deeper into the red.

Tough luck. This is as good as it's going to get.

At the Close, Wednesday, May 21, 2025:
Dow: 41,860.44, -816.80 (-1.91%)
NASDAQ: 18,872.64, -270.07 (-1.41%)
S&P 500: 5,844.61, -95.85 (-1.61%)
NYSE Composite: 19,607.80, -334.40 (-1.68%)

Sentiment Turns More Negative as Target Fails on EPS; Stocks Appear Ready for Another Trip Lower; Gold, Silver Recovering

This is a fluid situation.

Just when people begin to believe the worst is behind them - as in the recent market swoon, blamed on tariff fears rather than simple, obvious overvaluation - the next shoe will drop. The evidence is very clear based on recent developments, or, in the case of Ukraine and the Middle East, the lack of them.

The U.S. economy is currently at a standstill. Europe is pushing on a string while tilting over the edge of solvency into a bottomless abyss of taxes, cultural disorientation, and unfundable liabilities. Most countries in the European Union suffer from what Margaret Thatcher once expressed, "The problem with socialism is that you eventually run out of other people's money."

European governments want to start borrowing like its wartime, especially Germany and France. The UK, scarcely outside the "union" is already on the same path. More money for weapons development to defeat the oncoming Russian horde that does not exist anywhere but in the minds of politicians means less for social programs and more into the pockets of corrupt leaders and their associates.

In the U.S., President Trump's attempts to right the ship of state before it capsizes is being thwarted on three sides: congress, mainstream media, and the courts are all opposed to allowing the administration to function as it should. For its own part, the success of President Trump's first few months is being overstated. Deportations number less than 100,000, if even that amount. NBC News reported that ICE deported 11,000 migrants in February and just over 12,300 in the first four weeks of March.

For those unfamiliar with mathematics, at a wildly optimistic rate of, let's say, 50,000 a month, it would take 20 months to deport 1,000,000 illegals. Being that there are more than 10 million - and some estimates say there are as many as 30 million - it would take 200 months, or, 16 years and nine months, at a rate of 50,000 a month to clear the deck of all 10 million. In other words, "ain't gonna happen."

Thus far, Trump's plan to "Make America Great Again" has been more rhetoric than reality. Those Middle East deals he helped craft between sheiks and emirs and titans of US technology companies was a quick study of corporatocracy in action, not to be confused with corporatism or even fascism, the term most often linked to the idea of combining the force of major corporations and the state. The term "fascism" has multiple meanings, depending on the source, making the expression by historian Ian Kershaw that "trying to define 'fascism' is like trying to nail jelly to the wall," appropriate.

In any case, seeing Trump traipsing around the Mideast with an entourage of tech billionaires sends somewhat the wrong message to ordinary American citizens, and possibly an even worse on to the rest of the world. It also plays right into the hands of the liberal mass who see Trump as a potential dictator and denier of people's rights. So far, big tech companies have benefitted the most from the Trump administration's policies, the middle and lower classes, not so much.

What can be said of President Trump is that at least he appears to be trying to fix decades of poor policy decisions made by bureaucrats and politicians in the federal government's labyrinthine bureaucracy. His combative, unorthodox methods are a welcome relief from the usual off-putting by the elected and unelected Washington elitists.

Meanwhile, his "big, beautiful bill," sometimes being referenced as "B3," might better be described as a "bollocks budget boondoggle," complete with trillion dollar excess for defense, a 65% increase in funding for Homeland Security, but also an extension of the tax cuts from 2017, which are st to expire, saving middle class Americans an average of $1,700 per year. There's a lot in the 1000-page bill, including changes to Medicaid requirements, welfare, energy policies and an increase to the SALT deduction for state taxes, up to possibly $40,000 from the current $10,000. Congress seems to be focused on this last provision, hoping to pass the bill by Memorial Day, which is a bit early this year, Monday, May 26. Time is running short if congress expects to achieve that goal.

In Australia, the newly-elected government is seriously considering legislation that amounts to taxation on unrealized capital gains, a proposal that looks like a test case for WEF world population control policies.

In earnings news, Target (TGT) reported Wednesday morning, with this:

First quarter SG&A* Expense and Operating Income included $593 million in pre-tax gains from the settlement of credit card interchange fee litigation.

First quarter GAAP EPS was $2.27 compared with $2.03 last year. Adjusted EPS1, which excludes the gains from litigation settlements, was $1.30.

*SG&A: Selling, General, and Administrative Expenses

The press release was focused on small positives, like better digital sales, a partnership with Kate Spade, and increased volume on Easter and Valentine's Day (duh!), rather than the ugly reality of a year-over-year 36% EPS decline.

Serious investors aren't buying it. Target stock is down more than six percent in pre-market trading.

Lowe's (LOW) reported this morning, citing net earnings of $1.6 billion and diluted earnings per share (EPS) of $2.92 for the quarter ended May 2, 2025, compared to diluted EPS of $3.06 in the first quarter of 2024. Once again, though the EPS beat Wall Street estimates, it was lower than the previous year, a pattern seen all-too often over the past three quarters from a wide variety of publicly-traded companies.

Still, there are buyers for everything, though sentiment may be turning a bit bearish again. Lowe's shares are slightly positive prior to the open.

Gold was bid up over $3,300 and silver above $33 overnight, while WTI crude oil continues to flirt with higher prices, heading for $63 per barrel this morning. The price of crude is vastly overpriced. If anything, trading in oil the past few months has suggested a price for WTI crude should be closer to $45 than $70 and gas prices in the U.S. should be well below $3.00 nationally, while the average gallon of gas in America is currently at $3.16, according to Gas Buddy.

With markets due to open within minutes, futures are presaging a sizable drop on the bell. Dow futures are off 360, NASDAQ futures are -145, S&P futures down 38.

Beware the snake oil salespeople telling you the danger has passed. It appears to be just getting started.

At the Close, Tuesday, May 20, 2025:
Dow: 42,677.24, -114.83 (-0.27%)
NASDAQ: 19,142.71, -72.75 (-0.38%)
S&P 500: 5,940.46, -23.14 (-0.39%)
NYSE Composite: 19,942.21, -32.88 (-0.16%)

Markets Stall as Ukraine Talks Yield Nothing Substantive; President's Spending Bill Reconsidered in House; Home Depot Rises on Earnings Miss

Stocks took the path of least resistance on Monday, rising slightly in a dull, pointless session.

There was little excitement over President Trump's two-hour phone call with Russia's President Putin, even though both participants expressed positive sentiments. The fact of the matter is that neither of the three-sided coin that is the U.S., Russia, and the Ukraine have flipped their positions.

Russia maintains its positions from 2024, insisting negotiations focus on root causes, adding that the four partially-captured regions belong to Russia along with Crimea.

Contacted after the Trump-Putin call, Ukraine's de facto leader, Zelenskyy, reiterated that the besieged country would not cede territory to Russia.

For its part, the U.S. continues to fund Ukraine, deliver arms and provide intelligence.

Despite the happy talk, nothing has been accomplished in a series of false starts. No side seems capable of making concessions, which is perfectly understandable from the Russian angle, since they are winning the war on the ground. The conflict will likely continue until Russia accomplishes its well-defined goals and takes the four oblasts that are officially part of Russia, secures the Crimean peninsula and ousts Kiev's leadership.

Even though there seems to be a concerted effort toward a non-military solution, nothing of substance is being achieved. Russia has likely prepared a summer offensive, holding off presently until all sides retreat from negotiations. The war will continue as it serves all involved - plus most of Europe - politically.

To Wall Street, Ukraine is a back-burner issue. Developments have little, if any, impact.

In the Senate, the GENIUS Act, regulating stablecoins, has moved out of committee and towards a cloture vote by the full Senate. It would need a 60-vote majority to go to the floor for final passage. At this point, amendments can be considered. Being hailed as a necessary step to safeguard users of stablecoins (pegged to the U.S. dollar), there isn't much meat on the bones of the bill.

Essentially, stablecoin issuers will also be held to bank-like standards regarding anti money-laundering requirements, sanctions compliance, and requirements under the Bank Secrecy Act, so, nothing really new, other than the usual grandstanding by both parties, acting like the bill is necessary. Mostly, it allows congress to erect another means of moving money and another shield against scrutiny by the public in its endless looting of U.S. taxpayers.

Now that stocks have recovered all of the losses from the tariff trauma, the next leg higher figures to face some difficulty. It should be noted that all of the major indices had backed off from previous highs prior to April 2nd's tariff announcement. Trump has been and will be used by the press as a scapegoat for any further market declines, should any occur. Since it's the business of Wall Street to continue moving stock prices higher, there may not be the need for any excuses.

Case in point is this morning's earnings release from Home Depot (HD). The home-improvement retailer reported higher revenue - up 9.4% year over year. However, earnings per share declined nearly five percent to $3.45, missing the $3.59 estimate. Those results imply an unhealthy margin squeeze, taking in more money but producing less profit.

Pre-market, shares of Home Depot are rising, up more than two percent, proving, yet again, nothing matters in this market other than perception and the ability of big money to dominate trading. Ring-a-ding-ding.

With little else to base trading upon, expect some flattening out in Tuesday's session, possibly even losses. The 10-year treasury note yielded more than 4.5% for a brief period on Monday. As soon as it was tamped down below that level - around noon - stocks began to churn a little higher. Markets are stalled out until something breaks in one direction or the other. Algorithmic trading relying on headlines needs something more than the usual status quo to make headway.

An hour before the opening bell, futures are relatively flat. Dow futures are -17; S&P futures are -14; NASDAQ futures, -83.

Gold is moving higher, having found a base around $3,200. Silver is reacting as well, at $32.75 on the COMEX. WTI crude oil is holding steady at $62 per barrel, a level unlikely to hold for long as OPEC heads for production ramps in June.

U.S. government debt continues to grow unabated as the House attempts to move forward with the President's outline for fiscal 2026 spending plans, which include an estimated $1.5 trillion deficit. Nothing has changed except a few of the players; more noise-making from Capitol Hill forthcoming.

At the Close, Monday, May 19, 2025:
Dow: 42,792.07, +137.33 (+0.32%)
NASDAQ: 19,215.46, +4.36 (+0.02%)
S&P 500: 5,963.60, +5.22 (+0.09%)
NYSE Composite: 19,975.09, +41.03 (+0.21%)

WEEKEND WRAP: Stocks Explode Higher; Gold Continues Decline; Treasury Market Stressed on Moody's Downgrade; Bitcoin Stalls

Owning stocks over the past few months proved that it pays not to panic. Major averages are back to about even for the year after torrid trading to the upside in four of the last six weeks. Shorts have been, as it's said, carried out on stretchers, the negative point of view replaced by giddy acceptance of the new narrative inspired by President Trump and his deal-making travels throughout the Middle East.

Who knew reshaping the nature of global commerce could be accomplished in less than six months?

Stocks

The gains on major indices were outlandish, especially on the NASDAQ (+7.15%), outdone by the Dow Transports, which were up 1119.01 (+7.97%) on the week. Over the past month, stocks have moved from well below their 50 and 200-day moving averages to just above them on the Dow, S&P, NASDAQ, and NYSE Composite. Only the moribund Dow Transports are still slumping, but, if this week signaled that investors simply will not tolerate bear markets for more than a few weeks, then expect the transportation sector to continue rallying.

At the current pace, stocks should be challenging all-time highs within weeks. At least, that's how it appears to be going. Only congress (not to mention the horde of activist federal judges), in its own sad manner, seems capable of derailing the Trump agenda for a "golden age." The House Budget Committee failed to move Trump's preferred "big, beautiful bill" to a full vote, with five Republicans joining all 16 Democrats on the committee, defeating it in a 21-16 defeat for the MAGA crowd.

The bill has more than its share of lumps, from outsized budgetary funding for defense to cuts in social programs. It's far less than perfect and will need tweaking and probably some arm-twisting. Congress seems capable of and perfectly happy to keep with its habit of overspending and working with continuing resolutions rather than passing an actual budget. If anything can torpedo positive momentum on Wall Street, congress is surely equal to the task.

Otherwise, it's not just Trump making deals. The big news this week was Dick's Sporting Goods acquiring Foot Locker, the deal expected to close in the second half. The merger agreement was unanimously approved by the boards of directors of both companies. Foot Locker shareholders can opt for either $24 in cash or 0.1168 shares of Dick’s common stock for each share of Foot Locker common stock, the companies said in a statement.

The stream of first quarter earnings has become but a trikle, with Home Depot, Lowe's and Target the major companies reporting this week. Here's the rundown:

Monday: (before open) Ryanair (RYAAY), Compugen (CGEN); (after close) Trip.com (TCOM)

Tuesday: (before open) Viking Cruise Lines (VIK), Home Depot (BD); (after close) Palo Alto (PANW), Viasat (VSAT), Toll Brothers (TOL)

Wednesday: (before open) Baidu (BIDU), Medtronic (MDT), Lowe's (LOW), Target (TGT); (after close) Urban Outfitters (URBN), American Superconductor (AMSC)

Thursday: (before open) Advance Auto Parts (AAP), BJ's Wholesale (BJ), Analog Devices (ADI), Ralph Lauren (RL), TD Bank (TD), Williams-Sonoma (WSM); (after close) Autodesk (ADSK), Workday (WDAY), Ross Stores (ROST), Lionsgate (LION), Intuit (INTU), Deckers (DECK).

Data is on the light side this coming week, with April new and existing home sales likely to be the most impactful release.

Treasury Yield Curve Rates

Date	1 Mo	1.5 mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
04/11/2025	4.37	4.35	4.38	4.34	4.35	4.21	4.04
04/17/2025	4.36	4.35	4.38	4.34	4.35	4.22	3.99
04/25/2025	4.34	4.37	4.36	4.32	4.32	4.22	3.95
05/02/2025	4.38	4.36	4.34	4.33	4.41	4.26	4.00
05/09/2025	4.37	4.36	4.34	4.34	4.40	4.28	4.05
05/16/2025	4.37	4.36	4.34	4.37	4.42	4.30	4.13

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
04/11/2025	3.96	3.98	4.15	4.32	4.48	4.91	4.85
04/17/2025	3.81	3.82	3.95	4.13	4.34	4.82	4.80
04/25/2025	3.74	3.76	3.88	4.06	4.29	4.75	4.74
05/02/2025	3.83	3.82	3.92	4.11	4.33	4.81	4.79
05/09/2025	3.88	3.85	4.00	4.18	4.37	4.86	4.83
05/16/2025	3.98	3.95	4.06	4.24	4.43	4.92	4.89

Spreads remained high, with full spectrum reaching an unprecedented level of +52 while 2s-10s remained elevated at +45. There's still stress in the system, manifested by the rising 10-year note yield, the highest in five weeks and daringly close to the "make or break" level at 4.50%. Likewise, the 30-year note yielding close to five percent indicates the rather obvious preference of risk assets (stocks) over treasuries and other fixed-income instruments.

Animal spirits have been once again released from cages on Wall Street, the speculative fury for stocks pressuring the bond market. In the current atmosphere, rate cuts might be more wishful thinking than anything else.

Adding to pressure on long-dated maturities was Friday's U.S. debt downgrade from AAA to AA1 by Moody's, joining Standard & Poor’s, which downgraded the U.S. to AA+ from AAA in August, 2011, and Fitch Ratings, which cut the U.S. rating to AA+ from AAA, in August, 2023.

If it was even possible, the treasury yield curve continued to flatten, with a complete spread of just 0.94% between the low (3-year, 3.95) to the high (30-year, 4.89%). Should the U.S. federal government continue running massive deficits, as opposed to showing ANY fiscal restraint, rates will continue to rise as investors take flight from the supposed "risk-free" trade in U.S. treasuries.

Spreads:

2s-10s
9/15/2023: -69
9/22/2023: -66
9/29/2023: -44
10/06/2023: -30
10/13/2023: -41
10/20/2023: -14
10/27/2023: -15
11/03/2023: -26
11/10/2023: -43
11/17/2023: -44
11/24/2023: -45
12/01/2023: -34
12/08/2023: -48
12/15/2023: -53
12/22/2023: -41
12/29/2023: -35
1/5/2024: -35
1/12/2024: -18
1/19/2024: -24
1/26/2024: -19
2/2/2024: -33
2/9: -31
2/16: -34
2/23: -41
3/1: -35
3/8: -39
3/15: -41
3/22: -37
3/28: -39
4/5: -34
4/12: -38
4/19: -35
4/26: -29
5/3: -31
5/10: -37
5/17: -39
5/24: -47
5/31: -38
6/7: -44
6/14: -47
6/21: -45
6/28: -35
7/5: -32
7/12: -27
7/19: -24
7/26: -16
8/2: -08
8/9: -11
8/16: -17
8/23: -09
8/30: 00
9/6: +06
9/13: +09
9/20: +18
9/27: +20
10/4: +5
10/11: +13
10/18: +13
10/25: +14
11/1: +16
11/8: +5
11/15: +12
11/22: +4
11/29: +5
12/6: +5
12/13: +15
12/20: +22
12/27: +31
1/3: +32
1/10: +37
1/17: +34
1/24: +36
1/31: +36
2/7: +20
2/14: +21
2/21: +23
2/28: +25
3/7: +33
3/14: +29
3/21: +31
3/28: +38
4/4: +33
4/11: +52
4/17: +53
4/25: +55
5/2: +50
5/9: +49
5/16: +45

Full Spectrum (30-days - 30-years)
9/15/2023: -109
9/22/2023: -99
9/29/2023: -82
10/06/2023: -64
10/13/2023: -82
10/20/2023: -47
10/27/2023: -54
11/03/2023: -76
11/10/2023: -80
11/17/2023: -93
11/24/2023: -95
12/01/2023: -105
12/08/2023: -123
12/15/2023: -154
12/22/2023: -149
12/29/2023: -157
1/5/2024: -133
1/12/2024: -135
1/19/2024: -118
1/26/2024: -116
2/2/2024: -127
2/9: -117
2/16: -103
2/23: -112
3/1: -121
3/8: -125
3/15: -109
3/22: -112
3/28: -115
4/5: -93
4/12: -87
4/19: -77
4/26: -70
5/3: -85
5/10: -87
5/17: -94
5/24: -99
5/31: -83
6/7: -92
6/14: -113
6/21: -103
6/28: -96
7/5: -101
7/12: -108
7/19: -103
7/26: -104
8/2: -143
8/9: -131
8/16: -138
8/23: -141
8/30: -121
9/6: -125
9/13: -117
9/20: -80
9/27: -80
10/4: -75
10/11: -58
10/18: -54
10/25: -38
11/1: -18
11/8: -23
11/15: -10
11/22: -12
11/29: -40
12/6: -23
12/13: +18
12/20: +29
12/27: +38
1/3: +38
1/10: +54
1/17: +41
1/24: +40
1/31: +36
2/7: +32
2/14: +32
2/21: +31
2/28: +13
3/7: +24
3/14: +25
3/21: +23
3/28: +26
4/4: +5
4/11: +38
4/17: +44
4/25: +40
5/2: +41
5/9: +46
5/16: +52

Oil/Gas

WTI crude oil closed out the week in New York trading at a price of $62.49, versus last Friday's 61.06. Two weeks ago the closing price was $58.38, which was the lowest level since February, 2021. Oil's gain on the week appears to stem from an oversold condition. Oil futures are in backwardation, the forward price of the futures contract is lower than the spot price, implying high inventory levels. With production increases by OPEC+ about to take effect in June, future prices are understandingly lower through January, 2026, bottoming out at $59.99.

Futures prices are reflecting what global markets are currently broadcasting: no global recession, no supply chain chaos, low inflation, happy talk all around. The "good times" narrative has taken hold of most markets.

Gas prices simply refuse to come down. Retailers apparently respond immediately to gains in the price of oil, slowly to declines, as the lows from two weeks ago barely registered. The national average was $3.12. Demand being inelastic, oil companies and retailers rely on a mobile consumer for profits.

Gasbuddy.com is reporting the national average for a gallon of unleaded regular gas at the pump at $3.17, up seven cents from last week.

The high price remained the province of California at $4.88, up seven cents on the week. Mississippi retained the low spot at $2.65. The only other state reporting a fuel price under $2.70 is Tennessee ($2.68). Louisiana is right at $2.70, followed by South Carolina ($2.73) and Alabama ($2.74). In Oklahoma, the price is $2.78. Texas, $2.79; Arkansas, $2.80. Florida's foray below $3.00 lasted less than a week. It's currently $3.02.

The Northeast continues to be led by Pennsylvania ($3.29). New England and East coast states all range between $2.88 (New Hampshire) and $3.10 (Maryland). Prices are overall slightly higher than last week.

Midwest states are led by Illinois ($3.36), the price a nickel lower than last week. Kansas ($2.83) is the lowest, followed by Kentucky ($2.88) and Missouri ($2.91) Indiana drivers are paying $3.19, a substantial increase from last week's $3.07. Similarly, Michigan's prices rose from $3.05 last week to $3.18 currently.

Along with California, Washington is the only state above $4.00, higher, at at $4.31. Oregon ($3.91) and Nevada ($3.89) are seeing higher prices this week as well. Arizona appeared headed for sub-$3.00, down to $3.26 last week, bouncing back up to $3.40. Neighboring New Mexico is a relative bargain at $2.92, though that's 14 cents higher than last week. Idaho and neighboring Utah were the most stable, at $3.24 and $3.25, respectively.

Sub-$3.00 gas is found in fewer states this week than last, with just 21 hitting the mark. Prospects of lower gas prices for American drivers seem to be fading along with fear of recession.

Bitcoin

This week: $103,888.10
Last week: $104,416.70
2 weeks ago: $95,497.28
6 months ago: $91,546.89
One year ago: $66,680.90
Five years ago: $9,177.64

Bitcoin has stalled out in a range of $102,000 to $104,000, possibly reflecting the holdup in the U.S. Senate of the GENIUS act, which failed to break out of committee two weeks ago. There is supposedly a cloture vote upcoming, possibly as early as Monday, according to sources close to Senate majority leader John Thune. The bill, sponsored by Tennessee Senator Bill Haggerty, who probably knows more about gambling than crypto-currencies, provides "safeguards" for consumers (AKA: more furious fleecing).

Senators Kirsten Gillebrand (NY) and Cynthia Lummis (WY) are also vocal supporters of the bill. Democrats and a handful of Republicans previously sent the bill to failure over concerns of conflicts of interest and insider dealing, a topic upon which most legislators on Capitol Hill are intimately familiar. The humor is not lost on cynics over the name "GENIUS" in the bill, as Senate IQs are generally well below what would be considered higher intellectual levels.

The usual talk about bitcoin breaking further upwards towards $200,000 and beyond has been tamped down as regulations on what was originally hailed as "new money" or "21st century gold" move bitcoin and all the other garbage in the crypto-universe closer to the mainstream. Wall Street loves it, which is, in itself, a good reason to dis-engage from speculation on imaginary digital currencies.

Precious Metals

Gold:Silver Ratio: 98.84; last week: 101.25

Per COMEX continuous contracts:

Gold price 4/20: $3,341.30
Gold price 4/27: $3,330.20
Gold price 5/2: $3,247.40
Gold price 5/9: $3,329.10
Gold price 5/16: $3,205.30

Silver price 4/20: $32.54
Silver price 4/27: $33.34
Silver price 5/2: $32.18
Silver price 5/9: $32.88
Silver price 5/16: $32.43

Gold suffered a massive markdown in the futures and at spot. Futures fell by nearly $125 on the week, the result of Wall Street's mood change from bearish behavior to a renewed bullish outlook. If interest rates remain high and the U.S. economy perks up, gold is likely to stagnate if not decline further.

The opposite might be said of silver, which lost just 45 cents on the week, a minuscule decline compared to gold, sending the gold:silver ratio below 100 and towards something more realistic. Because of its properties as an industrial metal as opposed to gold's strictly monetary function, silver might gain as gold declines over coming months.

This is not to say that either metal is overvalued. It's more a perception that the U.S. dollar will regain strength as the Trump agenda begins to be clarified and gradually implemented. It would not be a stretch of imagination to see gold at $3000 and silver at $38.50, implying a GSR in a range of 76-79. While that's still degrees of magnitude higher than historical precedents of 12 to 16, it is worthy of consideration. Silver has been the most undervalued commodity for decades, though re-industrialization on a global level might change the math and the attitude in the futures market. A return of silver as a medium of exchange being highly unlikely, it remains a relatively inexpensive means of storing value.

While there was recently a mini-rush into gold at the retail level, recent price fluctuations may have put the kibosh on projections for $4000 or even $5000 gold over the near term. Central bank buying - or the lack thereof - will tell the true story of where gold's price is headed. Silver seems headed on its own path.

Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping):

Item/Price	Low	High	Average	Median
1 oz silver coin:	36.21	43.49	39.77	39.63
1 oz silver bar:	38.00	44.95	40.40	40.00
1 oz gold coin:	3,348.90	3,457.99	3,404.60	3,413.78
1 oz gold bar:	3,335.78	3,410.32	3,367.75	3,368.62

The Single Ounce Silver Market Price Benchmark (SOSMPB) fell sharply through the week, to $39.95, a $1.87 decline from the May 11 price of $41.82 per troy ounce.

WEEKEND WRAP

Seeing is believing, and passive investors will be seeing some healthy gains in their portfolios shortly. Playing along with any narrative du jour is looking like the new normal, good, bad, or otherwise.

At the Close, Friday, May 16, 2025:
Dow: 42,654.74, +331.99 (+0.78%)
NASDAQ: 19,211.10, +98.78 (+0.52%)
S&P 500: 5,958.38, +41.45 (+0.70%)
NYSE Composite: 19,934.06, +149.37 (+0.75%)

For the Week:
Dow: +1,405.36 (+3.41%)
NASDAQ: +1,282.18 (+7.15%)
S&P 500: +298.47 (+5.27%)
NYSE Composite: +614.86 (+3.18%)
Dow Transports: +1119.01 (+7.97%)

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