WEEKEND WRAP: World Has Pretty Much Gone Mad; Recession Indicators Increasing; Gold:Silver Ratio above 91; Oil Down Six Straight Weeks

Last Sunday's Weekend Wrap floated the idea that uncertainty reigned over the stock market (and world markets) and opinions ranged from dire predictions of economic collapse to rosy projections for continued gains.

A week and a few earnings reports, reactions, and economic numbers later, there appears to be at least a little more clarity. Though there's far from consensus, the indications are for a slowing U.S. and global economy over the upcoming six to 18 months.

Nvidia's earnings report and forward projections, although positive, failed to satisfy the hunger of analysts who are eyeing what they believe may be a peak in AI-related infrastructure spending. While there will continue to be sufficient demand for Nvidia's chipsets and related gear, it's not growing at a fast-enough pace to justify the sky-high price of the company's shares. Thus, the morning after Nvidia's fourth quarter and full year release, the sell buttons got pushed, hard, sending shares down eight percent on Thursday with a knee-jerk buy-the-dip reaction Friday, along with the rest of the battered and beaten NASDAQ.

On Thursday, the second estimate of 2024 4th quarter GDP was released, revealing the economy grew at 2.3%, in line with expectations and revised slightly higher (less than 0.1%) than the first estimate. With inflation still running at 2.5% or better, this is not an inspiring number. Further, the Atlanta Fed's GDPNow tracker was stunningly revised from 2.3% to -1.5%. The researchers cited the contribution of net exports to first-quarter real GDP growth falling from -0.41 percentage points to -3.70 percentage points while the nowcast of first-quarter real personal consumption expenditures growth fell from 2.3 percent to 1.3 percent.

Though the Atlanta Fed's projections are sometimes off the mark, they are usually close to reality and remain closely-watched indicators. If the 1st quarter comes in at a negative number, as they are forecasting, that would signal a recession, at least the beginning of one. Some commentators believe the U.S. entered a recession in 2024, some say it's even worse, in the belief that economic data was widely skewed to the positive for political reasons throughout 2024. Adding to the argument that the economy is being squeezed is the housing correction and mini-recession underway in the Washington D.C. metro area, thanks to Elon Musk's DOGE and President Trump's commitment to eliminate fraud, waste, and abuse in the federal government. Eliminating half a million to one million government jobs and possibly just as many in government contractors is bound to have a chilling effect on the entire area and spread to other parts of the country as a domino effect.

Alongside the layoffs and firings at the federal level, the Trump administration's efforts to identify and deport illegal aliens will also contribute to a slowdown in consumer spending. A country can't simply lose a couple million people without it having some negative effect, and that condition is more or less nationwide, though the hardest hit will be border states like Texas, Arizona, Florida, California, and New Mexico.

It won't end there however. Over the past four years, illegals have poured into states that either identify as "sanctuaries" or have Democrat or liberal Republican governors, or both. New York, Illinois, Colorado, Nevada, and others harbor high numbers of illegals. The process of rounding up and removing illegals is an ongoing effort that will take years and result in a drop in population overall, but, eventually will be a net positive. Before that, though, there will be a good deal of pain spread around.

The January PCE index released on Friday was positive in terms of inflation, though the argument has already shifted from fighting inflation to fighting dis-inflation or deflation in terms of the economy contracting. The Fed's two-plus years of diddling around the edges while inflation roared to as high as nine percent have had some effect, but other factors, especially unemployment and lower fuel prices, will make inflation disappear at a much faster pace than any Fed rate hikes could possibly hope to achieve. The Fed won't have to raise rates, as some fear they might. Instead, worry should be over whether the Fed will embark upon rate cuts as the economy stumbles into recession.

January durable goods orders minus transportation (mostly Boeing) were flat and up just 1.6% on an annualized basis. Consumer confidence, per the Conference Board, fell sharply in the latest survey.

Among the more useful indicators could be the Dow Jones Transportation Average, which was down seven consecutive sessions until Friday's 223-point gain left it just below its 200-day moving average. At week's end, the Transports were up 0.57 year-to-date, the Dow up 3.05%, S&P up 1.24%, and the NASDAQ down 2.40%.

Real economic conditions are beginning to come into better focus.

Stocks

The NASDAQ got buried this past week, down 3.47%, despite the reaction rally on Friday. The Dow and NYSE Composite were winners, the S&P lost just less than one percent, but there was structural damage with intraday lows at the worst levels in six weeks on the Dow and S&P. The NASDAQ barely escaped falling into correction, the lows at levels not seen since mid-November (3 1/2 months) and the index sitting just above its 200-day moving average.

Stock investors are worried about tariffs and the effects of government downsizing and deportations. Short term, none of these are positive for the general economy. Consumer credit is also a worry not being given enough attention. Consumer spending leveled off during the holidays and hasn't shown any potential for recovery. Housing is overdue for a correction and the recession that was politically forbidden under the Biden administration will bloom fully under no-nonsense Trump.

Tech stocks are exhibiting weakness and capital flight. Advisors are recommending energy, utilities, and various other safety plays. Conditions, which have been changing day-to-day, are causing severe choppiness, but a gradual tendency to the downside overall. The weeks ahead will be dominated by questions of how long and how deep the recession will be, once it arrives (it may already have begun). With the White House dominating the media, those voices cryng for Fed rate cuts are being drowned out. The word "stimulus" may become more commonplace, but the general attitude from the Trump administration is that everybody will share the pain and bailouts are not a solution.

Full year and fourth quarter earnings reports are slowing to a trickle, but some big retailers announce this week:

Monday: (before open) Sunnova (NOVA), TG Theraputics (TGTX); (after close) Emergent Biosolutions (EBS), Nuscale (SMR), GitLab (GTLB)

Tuesday: (before open) AutoZone (AZO), Target (TGT), Best Buy (BBY); (after close) Ross Stores (ROST), Nordstrom (JWN), Crowdstrike (CRWD)

Wednesday: (before open) FootLocker (FL), Abercrombie & Fitch (ANF; (after close) Lending Tree (TREE), Victoria's Secret (VSCO)

Thursday: (before open) JD.com (JD), Kroger (KR), BJ's Wholesale (BJ), Cracker Barrel (CBRL), Burlington (BURL); (after close) Gap Inc (GAP), Hewlett Packard Enterprise (HPE), Costco (COST), Broadcom (AVGO)

Friday: (before open) Algonquin (AQN), Genesco (GCO), .

The week ahead begins with ISM purchasing Managers Report on Monday and ends with Friday's February Non-farm payroll data. There's some chance that the NFP number will be a negative one with most estimates figuring a slowdown from January's 143,000 to possibly a range of 50-75,000. In between, ADP will set out February private payroll data on Wednesday with possible hints toward the "official" BLS figure and Challenger, Gray, and Christmas puts out its February hiring data.

Treasury Yield Curve Rates

Date	1 Mo	1.5 mo	2 Mo	3 Mo	4 Mo	6 Mo	1 Yr
01/24/2025	4.45	N/A	4.36	4.35	4.32	4.25	4.17
01/31/2025	4.37	N/A	4.37	4.31	4.33	4.28	4.17
02/07/2025	4.37	N/A	4.38	4.35	4.37	4.30	4.25
02/14/2025	4.37	N/A	4.38	4.34	4.35	4.32	4.23
02/21/2025	4.36	N/A	4.38	4.32	4.34	4.30	4.15
02/28/2025	4.38	4.37	4.38	4.32	4.32	4.25	4.08

Date	2 Yr	3 Yr	5 Yr	7 Yr	10 Yr	20 Yr	30 Yr
01/24/2025	4.27	4.33	4.43	4.53	4.63	4.91	4.85
01/31/2025	4.22	4.27	4.36	4.47	4.58	4.88	4.83
02/07/2025	4.29	4.31	4.34	4.42	4.49	4.75	4.69
02/14/2025	4.26	4.26	4.33	4.41	4.47	4.75	4.69
02/21/2025	4.19	4.19	4.26	4.35	4.42	4.69	4.67
02/28/2025	3.99	3.99	4.03	4.14	4.24	4.55	4.51

The 6-week bill has been added to the treasury stack this week. There's not much difference in yield between it and 1-and-2-month bills, so no surprise there. Yields on everything after the 4-month bill fell this week as money managers fled to the safety of fixed income.

The biggest moves were at the furthest out, as the yield on the 30-year fell 16 basis points to 4.51%. The 10-year dropped even more, 18 basis points, to a low of 4.24, the lowest since December, but hardly significant. The two-year dropped below 4.00% for the first time since October though the entire structure remains historically flat, suggesting stagnating conditions, also not surprising.

The spread on 2s-10s was slightly elevated by two basis points to +25. Full Spectrum returned was flattened from +31 to +13, narrowest since the dis-inversion mid-December.

When borrowing costs at any duration is one to two percent above the inflation rate, something's got to give and it's probably going to be manifested in lower rates across the board as inflation becomes dis-inflation and probably deflation. Money is about to get tight.

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

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

Oil/Gas

WTI crude oil prices continue to fall, from $77.37 at the New York close on January 17, to $74.60 on January 24, to $73.81 on January 31, to $71.06 on February 7, $70.56 on February 14, $70.25 on February 21, and finally, down to $69.95 at the New York close this Friday. Six consecutive weeks of falling prices by a cumulative 10 percent should have convinced enough people that the price of oil is not going back up any time soon. But, there are stil bulls in the oil patch.

WTI bottomed out at $68.48 on Wednesday and made a mini-comeback late in the week. It may have a further rebound in the weeks ahead, but they will be temporary only as the price of energy meets "drill, baby, drill", oversupply and slack to falling demand.

Gasbuddy.com is reporting the national average for a gallon of unleaded regular gas at the pump has begun falling at a faster pace, manifesting the lag time between the oil price and that of refined product. This week it's down to $3.06, from $3.13 a gallon last Sunday morning. The price of gas nationwide should continue falling for the next four to six weeks, longer if oil prices continue to slide, which they should.

California remains on top, though down a nickel from last week, at $4.75.

Pennsylvania fell four cents, to $3.31, the Keystone State remaining the longtime price leader in the Northeast. New York is a distant second at $3.13, followed closely by Vermont, $3.14. Connecticut ($3.06) and Massachusetts ($2.99) saw small price drops. Maryland is back down to $2.97. New Jersey is at $3.01.

Illinois was down five cents, to $3.18. Ohio ($2.76) and Indiana ($2.83) were down the most in the Midwest over the past two weeks.

Texas ($2.59) overtook Mississippi ($2.62) as the lowest in the country, just slightly better than Oklahoma ($2.63) this week. Louisiana is at $2.66; South Carolina, $2.68, followed by Kentucky ($2.70), Arkansas ($2.72), and Alabama ($2.73) Tennessee ($2.74), and North Carolina ($2.75). Georgia ($2.92) and Florida ($3.06) completes the low-cost SouthEast region. Kansas, Missouri, Nebraska, and Iowa range from $2.80 to $2.88.

Sub-$3.00 gas can now be found in three more states than last week. At least 29 U.S. states have prices under $3.00.

The West continues to suffer the highest prices in the country. Arizona ($3.40) was off just a penny. Oregon dropped a mere one cent, at $3.73, while Nevada dropped five, down to $3.77. Washington was stable at $4.12, joining California in the tiny club of mainland states at $4.00 or higher. Utah ($3.00) was down, and Idaho ($3.13) fell five cents.

Bitcoin

This week: $94,335.26
Last week: $95,900.56
2 weeks ago: $97,022.45
6 months ago: $59,123.20
One year ago: $63,043.77
Five years ago: $8,902.84

Bitcoin has not been over $100,00 since February 4 and this week got taken to the cleaners, dropping below $80,000 for the first time since early November. However, Sunday morning, out of the blue, the crypto-clip joint saw to it that the price would rise nearly $10,000 in less than three hours. If you bought bitcoin at 5 or 6:00 am ET at $85,500 or $86,000, gold mine! Instant profit, all because the President spoke glowingly about crypto on Truth Social and announced a Crypto Summit at the White House, scheduled for Friday, March 7.

Will it last? Probably not, unless BlackRock wants it to stay up there or go higher. Such a clown show, which is why all talk about a bitcoin strategic reserve should be disregarded as fluff. With price fluctuations like these, bitcoin can never be a reliable store of wealth unless the human race intakes copious amounts of stupid injections. Maybe they already have.

Precious Metals

Gold:Silver Ratio: 91.23; last week: 89.84

Per COMEX continuous contracts:

Gold price 2/2: $2,809.30
Gold price 2/9: $2,886.10
Gold price 2/16: $2,893.70
Gold price 2/23: $2,949.60
Gold price 3/2: $2,867.30

Silver price 2/2: $32.24
Silver price 2/9: $32.19
Silver price 2/16: $32.65
Silver price 2/23: $32.83
Silver price 3/2: $31.43

Gold and silver took some corrective medicine, if only because they had been out-performing stocks (and still are). Even after last week's blood-letting, gold is up 8.57%, silver ahead 7.49% year-to-date.

As performance metrics go, it's probably going to get better for precious metals as compared to stocks. Everything may go down, but PMs will go down less. This could be an opportune time to nibble a little. Prices may go back up just as easily as they could decline. However, those who think gold is a bargain under $2,900, might want to check out the gold:silver ratio of 91.23. Don't just sit there, buy more silver!

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:	34.56	49.00	41.17	40.14
1 oz silver bar:	37.50	49.00	41.86	40.44
1 oz gold coin:	2,912.54	3,099.40	3,017.20	3,034.81
1 oz gold bar:	2,900.00	3,034.40	2,993.59	2,997.82

The Single Ounce Silver Market Price Benchmark (SOSMPB) was relatively stable over the course of the week, posting $40.90 on Sunday morning, a drop of 14 cents from the February 23 price of $41.04 per troy ounce.

WEEKEND WRAP

After the White House spat with the little dictator (Zelenskyy) on Friday, DOGE continuing to slash and burn, the House putting up a bloated budget outline, first quarter GDP estimates signaling recession, and stocks taking some big dives, has the White House shown any fiscal discipline? Not yet.

Waiting an hoping is not a strategy. Trump is walking a tightrope.

At the Close, Friday, February 21, 2025:
Dow: 43,840.91, +601.41 (+1.39%)
NASDAQ: 18,847.28, +302.86 (+1.63%)
S&P 500: 5,954.50, +92.93 (+1.59%)
NYSE Composite: 20,028.19, +220.04 (+1.11%)

For the Week:
Dow: +412.89 (+0.95%)
NASDAQ: -676.73 (-3.47%)
S&P 500: -58.63 (-0.98%)
NYSE Composite: +146.65 (+0.74%)
Dow Transports: -47.87 (-0.30%)

Fed Fave PCE Index Shows Janaury Drop, Inflation Controlled; Deflation Becoming More of a Worry; Nvidia Sparks Market Sell Off

Splat!

That's the sound of Nvidia falling off its high valuation. Despite reporting strong fourth quarter and full year revenues and profits - the kind over which most companies would be thrilled - Wall Street wasn't all that impressed on Thursday, sending shares of the chip-maker spiraling lower by 8.48% by the closing, dragging the rest of the NASDAQ to its fourth shockingly-large loss so far this year.

First there was the warning shot January 27, as NASDAQ shed 613 points, followed by the 438-point blood-letting last Friday. This week has been more of the nightmarish, monster-in-the-closet kind with a 238-point drop on Monday, another loss of 260 Tuesday and Thursday's 530-point liquidation. There appears to be more to come as investors scramble to find safe havens, of which there are few.

Simply put, Nvidia was, and still is, overvalued. Fourth quarter earnings of 0.89 per share beat estimates and were well ahead of year-ago EPS of 0.52. The problem is, with trailing earnings for the last four quarters of 0.61, 0.68, 0.81, and the most recent, 0.89, full-year EPS is 2.99, and with the stock trading even at the lowered price of 120 after Thursday's rout, the price:earnings ratio is still rich at 40.13.

Sure, earnings are growing, but analysts see a slowdown coming as spending on AI has likely already peaked and Nvidia, being the main beneficiary of big tech AI mania, is not likely to be able to maintain margins over the next year, to say nothing of the following three, five, or ten.

Two years ago, Nvidia stock could be bought for less than $25 per share. Peaking at $147 in November, that constituted a two-year, six-bagger, which, in anybody's portfolio, is damn good. It seems the days of stocks just rising no matter the current economic conditions are pretty much over. Buying the dip has gone out of fashion. Investors are looking now more for protection rather than profits and stocks like Nvidia and some in the high-flying tech sector are feeling some pain.

Just in the past month, Microsoft (MSFT) is down nearly 10%, Taiwan Semiconductor, -5.83%, Alphabet (GOOG), -12.13%. Say what you like about Elon Musk, but his car company, Tesla (TSLA) is down nearly 30% in the past 30 days.

The slowdown is here and it seems to be accelerating. Selloffs have a way of snowballing, as more investors get scared off what they thought were safe plays, money-makers, and leveraged speculation, and head for the hills. Judging by recent activity and current economic data, this seems to be only the beginning of a deeper drop, all of which will be blamed on President Trump and his damned tariffs (which, BTW, haven't even been imposed yet) and Elon Musk's DOGE downsizing, which continues to gain momentum.

While the S&P peaked just days ago, the Dow's last all-time high was December 4 (45,014.04), and the NASDAQ's December 16 (20,173.89). The NASDAQ is approaching correction territory and could hit the magic number (18,156.10) of a 10% drop as early as Friday, um, today.

There just doesn't seem to be much in the way of risk appetite presently.

On a weekly basis, it's looking pretty sorry, though not necessarily dire. Through Thursday's close the Dow has been resilient, down just 188 points. Ny comparison, the S&P is worse off, with a loss of 151 points (2.5%), The NASDAQ has been knocked for a loop, down 979 points, or a cool five percent.

Overnight, Bitcoin's descent continued, with the vapor-coin's value dropping below $80,000. Bitcoin bought near the peak over $100,000 recently - when all the crypto world was calling for Bitcoin $200,000 or higher - has lost at least 20% since February 4, the last time it surpassed the thousand-century mark.

While financial media will be making commentary about inflation and the "Fed's favorite inflation gauge" the PCE index Friday morning, nobody really cares at this point. Despite inflation registers like PCE, CPI, and PPI have been trending higher for the past few months, the scare is in the opposite direction. It's hard to have inflation when people are losing jobs and the business cycle is turning over, a recession looming quite large.

When the January PCE Index was released an hour prior to the opening bell showing January personal income up 0.9%, but spending down 0.2%, Fed officials breathed a sign of relief, patting themselves on the back for having finally rung inflation out of the system and keeping themselves from becoming completely irrelevant.

On an annualized basis, the PCE price index for January increased 2.5 percent. Excluding food and energy, the PCE price index increased 2.6 percent from one year ago.

Of course, the Fed had little to nothing to do with the new measurements. Rather, the new sheriff in town, President Trump, managed to make so many people so uncomfortable that they refused to spend, despite having more money.

Stock futures failed to exhibit the euphoric leaps higher such an announcement would have produced months ago. The major concerns today are not inflation and rising prices, but dis-inflation, deflation and recession. In that context, market players shouldn't be at all pleased and stock futures reflected the prevailing "yeah, but" attitude.

Truth of the matter is that the Fed is irrelevant. Moving short term overnight rates a quarter of a point every few months does little if anything to move the inflation/deflation needle in either direction. The focus of Trump and Treasury Secretary Bessent is on the 10-year note, the benchmark treasury upon which most financial decisions are made. On that front, the administration is doing the job the Fed cannot. Since Inauguration Day, January 20, the dollar has been strong, sending demand for the 10-year note soaring, with yield dropping from around 4.60% to around 4.25%. That, for now, is a fair comfort zone.

With the PCE Index data a lagging indicator, deflationary pressure is probably degrees greater than what the market is perceiving. Gas prices are coming down and food prices are at best stable. Anecdotal evidence suggests consumers balking at higher prices and retailers dealing with oversupply, forced to liquidate some items at lower levels.

It's looking a lot like 2022.

At the Close, Thursday, February 27, 2025:
Dow: 43,239.50, -193.62 (-0.45%)
NASDAQ: 18,544.42, -530.85 (-2.78%)
S&P 500: 5,861.57, -94.49 (-1.59%)
NYSE Composite: 19,808.15, -124.70 (-0.63%)

Welcome to Bubble-land; Nvidia Results Confirm Extended AI Spending; Unemployment Up, Bitcoin, Gold Down

It's Official!

The Stock Market bubble will not be derailed by President Trump, DOGE cost-cutting, Pam Bondi's Release of the notorious Epstein Files, or even rising jobless claims. It's unstoppable. Prepare for all-time highs on the NASDAQ and S&P within days or weeks.

Nvidia (NVDA), the maker of ultra-fast processing chips needed to fuel the AI craze, reported fourth quarter results that were blowout positive. The company announced revenue in the quarter rose 78%, and full fiscal-year revenue for Nvidia rose 114% to $130.5 billion.

As far as guidance, Nvidia said it expected about $43 billion in first-quarter revenue, slightly higher than estimates, which help push the stock two percent higher in pre-market trading.

Elsewhere, Salesforce.com (CRM) continued its unprecedented streak of underperformance, missing on the revenue side and issuing disappointing guidance. Shares are down 2 1/2 to three percent prior to the open. Never daunted, traders pushed this nonsense company and its p/e ratio of 48 to a high of 361 in early December. As of Wednesday's close, CRM was trading at 307.33 and is expected to fall further, proof once again that it's never a good idea to buy high and sell low.

As the bubble proceeds - the current Shiller PE Ratio of 37.55 is down slightly, but still in range of the most recent bubble high of 38.58 from 2020.

Unemployment claims were released this morning as usual, with the number of initial claims coming in at 242,000, the highest since last October. Incidentally, jobless claims in the D.C. metro area surged past 2,000 in the latest reporting week, up from around 600 at the start of the year. DOGE seems to be working at eliminating slackers and no-shows from the federal workforce.

Bitcoin dropped to a low of $83,576 overnight, the lowest the granddaddy of crypto coins has been since November 11. Since completely fake money can't seem to find a bottom, traders on the COMEX seem to believe that other forms of money, such as gold, should not be priced as high as they have been recently.

Thursday morning saw gold dip back below $2,900. Silver seems to be holding its own for a change, down slightly, just above $32/ounce.

Oddly enough, amid the euphoria, stock futures took a dive just before 9:00 am ET.

Not to worry, however, as fake money, artificial intelligence (AI), and not working from home appear to be winning strategies.

At the Close, Wednesday, February 26, 2025:
Dow: 43,433.12, -188.04 (-0.43%)
NASDAQ: 19,075.26, +48.88 (+0.26%)
S&P 500: 5,956.06, +0.81 (+0.01%)
NYSE Composite: 19,932.85, +8.80 (+0.04%)

As Trump, Musk, Bondi, Patel, et. al. Clean Up Washington, Recession Is a Likely Outcome; Wall Street Ramains Optimistic

Elon Musk, via DOGE, recently sent an email to about two million federal employees, asking them to essentially make a list of five bullet points on what they accomplished at work last week, so I thought I'd take a stab at it. Bear in mind, I am not a gevernemnt employee. I run my own operation, ergo, I don't have a boss.

Here goes:

• Wrote five articles and posted them to Money Daily
• Wrote five college basketball "Player of the Day" articles, uploaded pics of the players, posted to idleguy.com.
• Prepared five daily quizzes for the Daily Idler at idleguy.com and posted them.
• Worked on various pages for upcoming March issue of idleguy.com
• Continued to build out online store at Downtown Magazine. Added 20-30 pages. Posted a number of magazines for sale.
• Researched how to build "ladder" navigation bar, implemented it in store.

Oops, that's six.

Ok, it took me about 2 1/2 minutes for those six, and, if you've ever run your own business, you can understand that I could have kept going. I did a lot more than just those six things, which, actually, are about 30 or 40 things.

The point of Musk's email was probably not to see what everybody was doing all week but to see how many did not respond. He suspects many government "jobholders" are fake, the workers non-existent, and the money being paid to whomever constitutes fraud. He's probably right, though just how right is a scary prospect. The number of no-show jobs could be hundreds of thousands, though I suspect it will amount to maybe 70-150,000 total. At least I hope it's a small number because the stories coming out of DOGE and D.C. have been fairly disturbing, in a manner that leads people to believe their tax dollars - in addition to all the money the government borrows - is being wasted in a very large way.

My point is different. It is about work ethic and accountability. Federal workers need a boss or manager to tell them what to do, how to do it, when to do it, etc. In my situation, I have built accountability into my "job." If I don't write my three daily pieces, nobody else will and my readers will notice. I will lose readers and money. Same goes for the monthly idleguy.com commitment and building out the online store (long overdue, sorry).

Perhaps government work should be restructured. Instead of unions negotiating automatic annual pay raises and congress rubber-stamping them, government jobs should come with incentives and penalties. Do good, high quality work, get a bonus. Slack off, no raise, probation, possible firing, for the most egregious, loss of pension. Reform of the federal government is long overdue. President Trump received a mandate (twice now) to fix the broken system in Washington and beyond. Having the world's richest man overseeing efforts that will root out the waste, fraud, and abuse is a godsend.

Complain all you like about Elon Musk, but he's not getting paid to do this. Besides, were he on the payroll, what would his salary be? $150,000 a year. $250,000? A couple of million? Any amount would likely be a bargain, but Musk, not needing the money, does it for free because he knows it is the right thing to do and he knows how to do it. Americans are fortunate to have a two verified genius businessmen working for their benefit. The complainers are people who don't see the problem with $36 trillion of debt, workers who aren't required to even show up, and members of congress who win elections as middle class and emerge after a few years as multi-millionaires. Those who complain are the status quo who have been getting their palms greased for years, even decades. They're the problem, not President Trump or Elon Musk or J.D. Vance, Tulsi Gabbard, RFK Jr., Kash Patel, Scott Bessent, or Pam Bondi.

Trump was sent by the people to fix the system and he's assembled a team to do just that. The problem, when all is said and done, is that unemployment in the D.C. metro area is going to skyrocket, money previously going to workers, contractors, anybody with a hand out, is going to dry up and it will snowball from there. Fewer dollars circulating though the economy - a lot fewer - will likely precipitate a recession. How mild or severe it becomes depends on how deep is the rot in D.C. and how deeply Trump, Musk, et. al. carve it up. One might suspect that cuts to the general grifting system will be quite severe.

And that's why Wall Street is nervous. An economy slowly grinding down before it is rebuilt isn't exactly a blueprint for profits. People will limited means tend to spend less. Unemployed people spend even less and the U.S. economy is dependent on people not just spending, but spending more every month, every quarter, every year. With hundreds of thousands of government workers out of a job and possibly millions of illegal aliens sent packing, tons of money that was being spent isn't going to be any more. It's coming. Count on it. The bright side is that once all the rot is ripped out, loafers fired, endless regulations rolled back, Americans can actually start doing what they do best, innovating and creating new businesses to take advantage of new opportunity. America is not known as "land of opportunity" for nothing. It's everywhere, and with government and hordes of slack-jawed rule-writers out of the way, it will be widely available.

Bottom line, there is likely to be a recession and it is likely to be deep but probably not long. It has probably already begun and will last maybe through the end of this year or into the first half of next year. That's when the fun begins. Prosperity, jobs, innovation, opportunity. It's all there.

Meanwhile, Wall Street remains spooked because they're focused on the here and now, on the immediacy of profits, and stocks are obviously a little pricey. There seems to be only one way stocks can go now unless Wall Street's biggest players want to extend and pretend until nobody can deny the economic condition. If so, the rush for the exits will be a stampede, a crash. It's probably better that Wall Street continues to be in denial and the decline is slow and gradual. As the case may be a 30-40% correction isn't going to happen overnight. Give it six months to a year. Then buy back in. What do you think Warren Buffett is going to do with his $350 billion war chest? For now, he's waiting, but, rest assured, the old man knows his stuff and he'll be buying at or near the bottom.

So far this week, markets have been a bit messy, but help is on the way. Lowe's (LOW) and AB InBev (BUD) reported before the open and both stocks are sporting 4-5% gains pre-market. Advance Auto Parts (AAP) reported earnings that beat consensus but issued iffy guidance, sending shares marginally lower.

Elsewhere, Instacart (CART), reporting after Tuesday's closing bell, missed fourth quarter estimates and offered downbeat guidance for the first quarter. Shares are trending down about 10%. Intuit (INTU) topped expectations, returning $3.32 per share. The stock price is rising pre-market, up eight percent. First Solar (FSLR) announced fourth quarter earnings of $3.65, short of estimates, but the stock is trading four to five percent higher.

After the bell, Nvidia (NVDA) and Dow Component SalesForce (CRM) report, so Wednesday looks to have great expectations.

WTI crude got hammered lower on Tuesday, dropping as low as $68.75, with more room to fall. Back in September, it bottomed at $65.75, and, even though that may have been politically-motivated, all indications point to lower oil prices ahead.

Bitcoin plunged to a low of $86,468 on Tuesday, recovered a bit overnight but is falling again this morning ($87,338.03)

Gold lost ground on Tuesday, currently around $2,925, with silver just above $32. Stock futures, expectedly, are soaring.

At the Close, Tuesday, February 25, 2025:
Dow: 43,621.16, +159.95 (+0.37%)
NASDAQ: 19,026.39, -260.54 (-1.35%)
S&P 500: 5,955.25, -28.00 (-0.47%)
NYSE Composite: 19,924.05, +64.85 (+0.33%)

Everything Is Up in the Air; Bitcoin, Crypto (Vaporware) Plunging; Diversifying Asset Classes May Make Sense for Most

OK, markets have entered the phase of denial called "fake it 'til you make it." In other words, nobody has a single clue about the future of stocks, bonds, commodities, currency, nations, anything.

Anybody who purports to "knowing" what's ahead is either a reincarnation of Nostradamus or is smoking some powerful weed and isn't sharing it with anybody (bogarting).

Nothing in the current climate is quantifiable. Maybe some company dividends will still be delivered on their quarterly schedules, but stock prices - having been bid into the stratosphere over years of neglect and misappropriation - may wipe out any profits one may have from those same dividends. Maybe not. Stocks could go parabolic and too the moon or beyond.

Honestly, at this point, nobody knows. Everybody's guessing.

One thing that seems likely is the absolute chance at a major pullback or correction in stocks if only because the market dislikes uncertainty, and uncertainty is all that there is currently.

Diversifying into assets other than stocks and fixed income may be sensible, lest we are reminded again that the most prolific and successful investor of our age, Warren Buffett, is sitting on some $350 billion in cash. He's obviously waiting for chips to fall so he can pick them up on the cheap.

Real estate, precious metals, energy, transportation would provide a good mix, but there's no guarantee any of them may appreciate or even hold their value except maybe gold and silver, their gains simply a symptom of crumbling currency value.

The publication, Fast Company, posted the musical question this morning, "Crypto crash: Why are Bitcoin, XRP, DOGE, and TRUMP prices plunging today?"

Answering their own question with two possible reasons (poor form, chaps) the magazine's response was, "Concerns over tariffs and the recent breach of a crypto exchange may be fueling a decline not seen since President Trump's election victory in November."

Sure, tariffs, like that would affect bitcoin. A recent crypto breach may be closer to the correct answer.

How about this: They're all fake, worthless slush funds for criminals and government officials (same thing) hiding ill-gotten loot. Bitcoin, Trump-coin, Doge, etc. are simply vaporware. Anybody putting actual money into these fictions other than for a quick profit on speculation is an idiot. Plain and simple. None of these crypto-currencies (a rather loosely-used term) are worth anything. Nada. Nothing. And the market is beginning to reflect that reality. All of Bitcoin could vanish in a millisecond. Same with the other alt-coins, fraud-coins, stable-coins. Seriously, they have no value whatsoever.

Bitcoin plunged below $90,000 this morning. In case anybody thinks that's a big deal, stick around for the dive below $80,000 and deeper.

With the opening bell a half hour away, stock futures are up. Dow futures are +110; S&P futures +2; NASDAQ futures (oops) -9.

Monday ended badly, so today, best wishes.

At the Close, Monday, February 24, 2025:
Dow: 43,461.21, +33.19 (+0.08%)
NASDAQ: 19,286.93, -237.08 (-1.21%)
S&P 500: 5,983.25, -29.88 (-0.50%)
NYSE Composite: 19,859.20, -22.33 (-0.11%)