The Stock Market Last Week: Tip of the Iceberg?

 We have to wonder whether last week's stock market action was the tip of the iceberg. The iceberg is the "Everything Bubble" or the "Super Bubble." Take your choice.

Of course, maybe you don't buy into this Bubble being something special (and "special" not in the good sense). Maybe you're one of the crew that figures we'll get through this just fine - kind of like we did in 2008. Maybe. Maybe the powers that be have steel-tipped boots with which they can kick the can down the road just one more time. Maybe. But if they can't, if the can is already flattened by the repeated kicking since at least 2000 initiated by Alan Greenspan and continued by "The Bernank" and his successor, Ms. Yellen, then we have to consider that the iceberg that sits under all this is awaiting the arrival of all of us passengers on the Titanic.

Look, don't blame me for the drama. I'm sitting here listening to Itzhak Perlman narrating a radio show about the Jewish High Holidays - Rosh Hashanah and Yom Kipur. Much great and beautiful music ranging from buoyant joy to deep anguish and sadness (for our sins), all offered beautifully by various cantors, classical and popular musicians. Having grown up with many Jewish neighbors, this is all striking a chord buried deep in my memory.

That chord rising up from the treasury of my conscious and unconscious now touches my intellect with a warning, in the spirit of Yom Kippur: We have not set things right with God. And what we're witnessing in the markets may be a little whiff of God's Justice. While I'm not Jewish, I'm feeling very penitential. I assure you, I'm a sinner. So if it is Justice we're facing, I, for one, deserve whatever He dishes out.

But that's all nonsense to all you atheists and positive thinkers out there. So let's move on. Besides, the radio broadcast is ending, it's Saturday night and - after a busy week of work trying to absorb what's happening in the financial markets (and our portfolios) and trying to determine what we can do that would minimize the growing losses that eat away at my innards - it's time to lay back and begin an early Sunday respite. Yes, Sunday, the Lord's Day, brings us respite from our toils. And, oh right, Sunday evening officially begins Rosh Hashanah. It all kinds of melds together, doesn't it?

With that, we leave you with some notes taken from the latest offering of one of our Brain Trust. These were published on September 5th. You may see that they contain a certain measure of prescience. The picture isn't pretty. It does seem to lean towards the "iceberg" thing:

- The damn is ready to break in financial markets

- Volatility rest of this year will be enormous

- Re proposed price controls for European energy – Price controls never work – only dry up supply.

- Thinks Fed wants sharp market setback in hopes of quelling inflation

- Re Fed tightening, so far all talk, little action

- Depressionary word economic conditions are about to help Fed to slow inflation. Problem: CBs always overshoot their targets. If they decide a recession is required to undo the inflation they’ve created, they will probably produce a world-wider depression.

- NB: “The future holds numerous threatening disasters as never before since we started our business almost 46 years ago.”

- Expect huge turmoil in the streets by people starving or freezing this winter.

- China in serious recession triggered by a real estate depression. 20 of the largest developers are basically defunct. Loan defaults will bring a banking crisis. Chinese economy teetering – will impact the rest of the world.

- Believes China lockdowns have nothing to do with COVID – It’s to paralyze Western industries by depriving them of critical parts.

- EU committing suicide to punish Russia

- Thinks wars will break out globally; dictatorships will be installed, just as in the 1930s – maybe even in U.S.

- Bulls say weaker economy will lead to lower interest rates, causing the stock market to soar. They got their timing confused, maybe by several years.

- Turmoil just beginning. Stocks fall faster than they rise.