The Morning Line

If you know any kids trying to break into journalism, there are two interesting stories waiting to be developed that have gotten scant attention from the mainstream media, what with all the fuss over a packet of cocaine left in the White House by you-know-who). The first concerns the collapse of America's postal delivery system. We're all familiar with the unofficial motto of the USPS: "Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds," Well, you can fuggeddaboutit, since, these days, it would seem, just about anything can, and does, keep the mail from getting delivered. I discovered this in the worst way when an alimony check that I mailed out on April 24 failed to reach my 'ex' by the first of May.  In fact, it still hasn't reached her, and a subsequent check for the month of June took 16 days to be delivered -- four days late, as it happened. If you are a divorced guy, then you know that few things are as likely to provoke one's former spouse as an alimony check that has failed to arrive when due. Well Fargo, my banker, acknowledged that postal deliveries have been 'slow', but they said there is nothing they can do about it. My solution is to use Zelle for money transfers, even if it, too, has caused problems requiring many hours of back-and-forth on the phone to resolve.   Unfortunately, there is no way to Zelle a card for Mother's Day, Valentine's day or a birthday card, and so one must emply an old-fashioned method to ensure a timely delivery -- i.e., mailing the card three or four weeks in advance. There's no guarantee it will get there in time, but when it doesn't

This promises to be the longest holiday ever celebrated in the U.S., eclipsing even the eight-day festival holidays that frequently pop up on the Jewish calendar. By the time you read this, the Independence Day celebration will be in its unofficial fourth day, having begun in spirit with a pronounced slowdown in the stock market last Thursday. Because the Fourth of July falls on a Tuesday this year, the usual three-day holiday weekend will get stretched by an extra day. Fireworks, barbecues and unsolemn speechifying will remind us that we are celebrating the passage of the Declaration of Independence 247 years ago. A growing number of editorialists will note that 41 of the 56 men who signed the Declaration were white slaveholders, and it is probably only a matter of time before some town in Oregon bans fireworks and other boisterous displays of patriotism, replacing pyrotechnics with a grim minute of silence for the Declaration's failure to deliver freedom to all. Is Independence Day fated to become an anti-holiday, like Columbus Day?  Probably not, and certainly not before gunpowder has been outlawed for 20 or 30 years.  It is unfortunately true, however, that no national holiday can be celebrated these days with the innocence that made them so much fun in the good old days. If you have a neighbor who objects to Blue Angels flyovers and 21-gun salutes, don't let the holiday pass without lighting up a string of Black Cats on her doorstep. Melt-Up Will Continue Concerning the chart displayed above, it is intended as a placeholder to keep my holiday comments from growing stale before The Morning Line changes again next Sunday. It offers a clear picture of the power driving the bull market in one of several key stocks. There are a half-dozen other world-beaters with

Inflation is being crushed from the system by vastly larger forces of deflation that have been lurking for decades. Although we might have expected the trillions in funny money that were force-fed into the U.S. economy during the covid era to have a longer-lasting effect on prices, inflation never had much of a chance. With real and nominal mortgage costs rising, home prices have begun to fall sharply, along with rents, used-car prices, gasoline and even some basic grocery items such as milk and eggs. Real estate is the 800-pound gorilla, though, because it is the chief source of loans that are destined to implode. This is particularly ominous for the commercial sector, since even the sky-high rents that still obtain in New York City, for one, are proving insufficient to service borrowing costs. Residential real estate will not be far behind, however. The median price for existing homes fell 3.1% in May, to a still-pumped $396,100, from a year earlier. We have some catching up to do with Germany, though, where even higher mortgage rates and official recession have caused home values to fall by a record 6.8% year-over-year. The 800-pound gorilla will ultimately be dwarfed by King Kong himself as the biggest cities in America spiral toward economic doom. This will be a key feature of the Second Great Depression, which awaits only an end to the nutty rally on Wall Street to commence. A very run-down San Francisco seems likely to lead the pack, but don't expect New York, Chicago, L.A. et al. to fare much better over the long run.  The cities will collapse economically on three levels:  above  ground (i.e., skyscrapers); at ground level (virtually all amenities, from hot dog carts to concert halls); and below ground (subways, with fixed costs that include $90,000 retirement

When will the rampaging bull run out of steam? A good question, considering how Wall Street has been flouting a slew of good reasons for the broad averages to be at multiyear lows rather than revving up for a shot at new record highs. Two destructive juggernauts in particular are bearing down on the economy with such force that only investors in a far-gone state of madness could contrive to ignore them. For one, an epic collapse in commercial real estate is well under way that will flatten the economy for decades. And for two, the most extreme yield-curve inversion on record is predicting a commensurately extreme recession. Under the circumstances, it would seem logical for traders to short into the stock market's show of bravado. So far, however, this strategy has brought only pain, along with the sight of stubborn bears being carried out in body bags. "This is starting to get out of hand," remarked a bruised and battered Rick's Picks subscriber in the chat room the other day. "What's the latest [Hidden Pivot] for a topping call. At least an intermediate top?"  You can access my precisely detailed response by clicking here, but the bottom line is this: Two bellwether stocks have at least somewhat higher to go before they, and presumably the entire stock market, are ready to keel over from exhaustion. A Setback, then Higher Specifically, MSFT has a 5% rally ahead of it before it reaches a potentially important top, and AAPL an additional 3.6%. These figures are based on Friday's close and differ slightly from the ones given in the recording, a tech analysis session that includes some nifty tricks you can try yourself with put and call options.  The precise price targets for the two stocks lie, respectively, at 360.02 and 191.73.

The Biden Administration can count on Wall Street to celebrate meaningless economic data and bogus GDP growth with steep rallies, even as the visible economy continues to implode. It will become increasingly difficult to ignore signs of impending collapse, however, as anyone who lives in San Francisco could tell you. The city's growing wretchedness is arguably no worse than what you would find in Chicago, Portland, Seattle or L.A., but it seems more appalling because San Francisco, with its cable cars, spectacular scenic vistas, hilly, charming neighborhoods and the world's most beautiful bridge, has always been regarded as a special place. In no song will anyone ever leave his heart in Minneapolis, Boston, Milwaukee or Miami. Labor Market Hubris New York is no better off, with even mighty BlackRock struggling to turn a profit on commercial real estate. Rents are higher than ever, but they haven't kept up with an even steeper rise in the cost of servicing property loans. Nor will they, for the U.S. economy is on the down slope of an inflation/deflation Mt. Everest, so hopelessly burdened by debt as to lie beyond the quack nostrums of Fed policy, let alone capable of regenerating itself with a robust revival. Consumers appear to be tapped out, tech firms are still laying off by the thousands, small businesses are closing at an appalling rate, and the Mother of All Yield-Curve Inversions is predicting a commensurately extreme  recession, Against all these troubles, the spinmeisters would juxtapose the supposed creation of 339,000 jobs in May. Armed with this dubious evidence of economic growth, officialdom is able to speak of a "strong" labor market with a straight face. However, 201,00 of the jobs, or 60%, were in government, health, education, leisure and hospitality, notes economist David Stockman. With growth mainly in low

China’s criminal class, both entrepreneurial and political, know that when you play dirty to win, it pays to distract your prey. Anyone can see that it's working for our communist enemies, and well. That's because they've settled on the one distraction that never fails when it is American men they are trying to manipulate: a large pair of breasts. Who could resist the hottie pictured above? Admit it, guys, we all have a little Eric Swalwell in us -- and even some Hunter Biden if we do lots of drugs. It is that primal weakness that enables China, with a well-drilled army of Fang-Fangs, to extract whatever they need from Americans: top secrets from Congressional files, closely guarded patent information, schematics for high-tech machinery and aircraft, wind-tunnel data, political leverage, money – you name it. The China doll in the photo calls herself Amy, but the image is more likely a digitally enhanced avatar for some ordinary looking man or woman who spends his or her days toiling in a Guangzhong basement. "Amy" approached me on Hinge, an internet dating site that, like all such sites, is a rat’s nest of scammers. The site, and most others, tolerate and even encourage fake sexpots like her because they are great for business. What Breasts? Now, Amy could not have known that your editor will always be more attentive to a woman’s gams than her breasts, no matter how large or shapely. However, she evidently had been prepared for this and came equipped with a supposed degree from Oxford University and a job with a high-powered real estate development company in Miami. She's a jet-setter, too, making frequent trips to Singapore to carouse with friends, play golf and browse the racks at Surrender. Early in our text conversation (we never actually talked

Microsoft's bullish rampage last week added to already strong evidence that the stock market is headed to new records highs.  The shares of the software leviathan's shares not only jackhammered through granite resistance in the form of the midpoint 'Hidden Pivot' shown in the chart, they ended the week decisively above it. This technical telltale is almost never wrong, as Rick's Picks subscribers could attest. When a stock fist-pumps through the midpoint 'Hidden Pivot' and then stays above it for even a short while, the rally is all but certain to reach the 'D' target -- in this case 430.58. That would equate to a 30% rally from current levels, putting MSFT 80 points above the old all-time high at 349. If the Dow Industrials were to achieve a relatively modest gain of 20% over the same period, they would be trading just shy of 40,000 -- substantially above the record 36,952 achieved in the early days of 2022. Previously, I wrote that similar wilding sprees in Chipotle and AAPL were pointing to the same outcome: new all-time highs for the broad averages. With a third world-beater joining the list, an enticing bet on new all-time highs has become even juicier. This is despite the fact that the radically inverted yield curve the financial system just weathered has never been wrong in predicting a recession. Factor in a collapse in commercial real estate that appears inevitable, as well as a wave of bank failures that even Janet Yellen is expecting, and it would seem that stocks are facing a perfect storm of deflationary forces. So how come your editor, a hard-core bear's bear, thinks stocks are just now lifting from the launching pad?  Very simply, because the market is a rabid beast, inured to all logic, common sense and caution.

Maybe. Yeah, right. A headline here just two weeks ago implied that stocks were about to go bananas: Why a Permabear Is Certain We're Going Much Higher.  Hubris aside, this was based on the very bullish chart of just one stock, Chipotle (CMG). It had just crossed the $2,000 threshold and appeared -- still appears -- bound for a rendezvous with a Hidden Pivot target at $2,739 that lies $600 above Friday's close. Some might question the logic of using a projection for a single stock to make a prediction about the stock market as a whole. I am confident that my method, more intuitive than factual, will prove superior to the benighted, self-serving blather coming from the likes of Jim Cramer, various talking heads on the financial news shows, and from Wall Street shills who get paid by the word to tell us why we should be bullish. These mongers of gladness will always try to connect the stock market's performance with supposedly objective facts tied to the economy and corporate earnings. Unfortunately, and has been demonstrated time and again, this is like trying to predict the behavior of a sea snake by analyzing the contents of the ocean. And in case you haven't noticed, the "facts" that the talking heads cite unrelentingly are used almost solely for one purpose: to justify buying stocks at any price, no matter how grim the economic outlook. (And it is indeed grim, with little doubt that a collapse in commercial real estate is imminent, accompanied by a potentially catastrophic wave of bank failures.) Vaporous 'Wealth' None of which argues that stocks cannot continue to climb heedlessly. It's not as though it takes bullish buying or even real money to make this happen. To the contrary, most of the big rallies occur on

[Editor's note: The following commentary draws parallels between today’s bond market environment and the last great bear market in bonds, which bottomed in 1981. It went out last month to clients of my friend Doug Behnfield, a financial advisor and senior vice president at Morgan Stanley Wealth Management in Boulder. Long-time followers of Rick's Picks will be familiar with Doug's unconventional thoughts on the markets, since they have been featured here many times before. I have always referred to him not only as the smartest investor I know, but one of the smartest guys. I am grateful to him for allowing me to share his insights with you. The charts are my own, since they reproduced better than the ones that accompanied Doug's letter. Also, the photo of the annual Pamplona stampede is an emphatic touch of my own, since I share Doug's very contrarian bullishness on Treasury debt. RA ] Lately, I have been telling the story of my experience leading up to the all-time high in long-term Treasury bond rates that occurred in late 1981. I was kind of a rookie, having started at Merrill Lynch in late 1977 (at age 22). 30-year Treasury bond yields peaked at 15.25% in September 1981 and by then, 6-month CDs were paying 18.5% and the yield on the Merrill Lynch Ready Assets Trust money market fund was pushing 20%. Bond yields had rocketed from 10% to 15% over about 15 months so 30-year Treasury bond prices were down 35% compared to mid-1980. The reason rates got so high was attributable to steeply rising inflation and determined rate hikes by the Volcker Fed to put a stop to it. Back then CPI inflation had reached almost 14%. It was driven mostly by demand coming from an army of emerging Baby Boomers forming