The Morning Line

Twitter and bitcoin share a key similarity in that their success while it lasted was just hubris. Realize that both were birthed by a virtual medium capable of monetizing turds if there is any discoverable demand for them. Cardi B's megahit single Wet Ass Pussy was proof of this. Twitter proffered turds in the form of members-only censorship that took delight in defecating on the Bill of Rights, particularly the First Amendment. But it took Elon Musk, with unlimited quantities of f**k-you money, to put a number on Twitter: $44 billion. Unfortunately for him, nearly all of it was for 'good will' that appears to have vanished. Nor is he likely to be consoled when it is discovered that the dark secret of Twitter's overwrought ex-employees is that they can start a Twitter of their own with just a few mill, a rackful of servers and a dozen high school dropouts working from home, paid $20/hour to code. Cute Little Bird So what are the notoriously spoiled workers so disgruntled about? Leave it to an apparent millennial sympathizer reporting for The Wall Street Journal to excuse them with a high-minded quote uttered by no one in particular: "Employees said Mr. Musk pushed people to work well over 40 hours a week, but said they didn’t feel there was a compelling vision to justify it." A compelling vision? Yeah, sure.  And exactly what lofty end did they see themselves serving under Jack Dorsey, Orwell's darkest nightmare masquerading as a little blue birdie? Stay tuned to the blogosphere for more dithering on this and other topics of scant interest to folks who live in the real world. What should please the company's make-believe workforce in any event is that Musk set an intergalactic record for overpayment.  If Twitter had changed hands for,

[The following guest editorial was written by David Isham, a real estate investors from Northern California and long-time Rick's Picks subscriber.  RA] Gold Loses Status as Haven, declared a headline in the Wall Street Journal on September 22.  Two days later gold fell to $1629, the lowest daily close in more than two years; then it began an ascent that has continued to this day. A case of yet one more cover-story curse signaling a major trend change?  Quite possibly. The backdrop for gold's rise is a commodity bear market that dragged along for 48 years but which appears to have bottomed in 2020 with a false breakout in the CRB Index. False breakouts often signal trend reversals, and so far this indicator seems to be working. The commodity bull has unfolded with enough vigor, seemingly, to last for a decade or longer. As for gold, it recently began to show signs of life following a steep selloff begun last March. The GDX:GLD ratio that tracks the relationship between mining stocks and the price of gold looks like it is breaking out, with miners outperforming bullion. This is usually an early sign that the precious metals market is about to shift into high gear. Still Plenty of Time Because gold and silver can be expected to make their biggest percentage gains near the end of their respective bull markets, there is still time to board the train and start accumulating. Before this bull market has run its course, I expect gold to hit $10,000 per ounce, and silver $350. A barrel of oil will be quoted at $250, and the HUI Gold Bugs Index, currently trading for around $275, will be trading north of $1,200. Furthermore, the implosion of crypto is very bullish for junior miners, since speculative money will

Economics, the “dismal science,” has taken quite a beating in the current election cycle. Last week, Joy Reid, MSNBC’s rising-star bimbo, tried to convince viewers that the word “inflation” has no meaning outside the academy and the newsroom. “Most people who would never use that word in their lives are using it now because they’ve been taught it [by the Republicans.]" Oh, really? Perhaps she has a more accurate word to describe the cause of soaring prices for nearly everything since Biden ostensibly took charge? A network headline the same day evinced further confusion on the subject: White House Disputes Recession Fears. Although it’s Biden’s prerogative to try to control the narrative, he risks alienating even Democrats with such outrageous spin when the plain truth is staring us in the face. For the first time in more than a decade, middle-class Americans have been tightening their belts and cutting back on essentials, and 81% of them say they are either somewhat dissatisfied or very dissatisfied with the economy. Despite this, the recession debate, such as it is, has been going on for quite some time and continues to this day. You could even argue that Biden appears to be winning on points. Eggheads, pundits and other credentialed dissemblers recruited by the mainstream news media to take a bullet for the team have been dependable recession deniers. And even Chase president Jamie Dimon, who should know better, speaks of recession as a “possibility” in 2023. All of them should harken to the observations of Matt Barnes, a Rick’s Picks subscriber who noticed the U.S. economy slipping into recession early in the second quarter. He would know, since he’s in the shipping-pallet business, as good a mine canary as you could have for discerning a drop-off in economic activity. A Silent Crash

The thimble-riggers who control Apple shares have done a brilliant job holding the stock market aloft. Ingeniously engineered short-squeeze rallies in the world’s most valuable stock have helped sustain the illusion that the U.S. economy will somehow muddle through a deepening recession that is still disingenuously described by Biden and his economists as a ‘rough patch’. Unfortunately, factors that are about to bring the stock market and the economy crashing down are firmly in place and inured to happy talk. This is notwithstanding the carnival-midway shenanigans of trade-desk mechanics who are paid not merely to exploit big moves in stocks, but to create them. This they accomplished last Thursday in AAPL to spectacular effect. The company is entering the most challenging retail environment it has faced in more than two decades, but you’d never know it from the way Apple shares faced down a brutal gauntlet of analysts last week that earlier in the day had mauled two FAANG stalwarts, Amazon and the company formerly known as Facebook. With 2023 shaping up for them as a bust, their stocks plunged by 21% and 25% respectively in mere minutes. Apple couched its after-hours announcement more delicately, but only a fool would have ignored the devastating impact that simultaneous recessions in the U.S., Europe and China are about to have on iPhone sales. Fools Rush In Unsurprisingly, enough fools evidently did overlook the deep-purple clouds to provide AAPL’s handlers with perfect conditions to short-squeeze the stock 15% overnight, leaving it significantly higher than before the news. This will give Wall Street a couple more weeks of breathing room to distribute stocks, since, with earnings for the most important corporate giants out of the way, the impact of downbeat reports from hundreds of other, much smaller companies will be muted. The effectiveness of

The seemingly strong rally that ended the week merely balanced out three days of bland weakness that had preceded it. In the S&P 500, the upthr ust steepened by the hour but ultimately failed to surpass any important prior peaks. The bear seems out to challenge bulls and bears alike with its obviousness. For one, most of the larger trend moves of the past two months have been reversals off price spikes outside regular hours. And for two, middling ABCD patterns in stocks and futures are finishing at their 'D' targets with predictable regularity. That sums up last week's kabuki in the E-Mini S&Ps, when they head-butted the 3777.00 'D' target of a large 'reverse pattern" repeatedly, only to die a hair short of it at the bell. Docile Sellers Sellers have been particularly docile for more than a month, allowing DaBoyz to twiddle their thumbs until optimal short-squeeze conditions surfaced. Sometimes news was the catalyst, although there seems to be no such thing as bullish or bearish news -- only news to spike the market whichever way seems most opportune at the time. Friday is DaBoyz' favorite day, when half-hearted selling is easily reversed with rallies that gain momentum as the day wears on. That's because no one wants to go home short over the weekend on a day when bears have looked anemic. And so it goes for a bear market that seems destined to become the granddaddy of them all: weeks-long stretches of price action so tedious and haphazard that predicting a Sunday evening opening, or the reaction to Fed 'news' or to earnings announcements, has become a coin toss even for diligent chartists. All bear markets have a touch of Frankenstein in them, but this one's nasty sense of humor promises to be something to endure.

The spread between permabulls and permabears is at an extreme these days, even for October. This is the month when pessimists' hopes are highest that an epic bear market will correct dangerous excesses that have been building up in the financial system for more than 50 years. A presumptive and welcome side effect of such a crash is that it would reset things in accordance not with the designs of nefarious plotters, schemers and conspirators who meet every year in Davos, but in a more natural way that inflicts pain on borrowers and financial evildoers more or less in proportion to their sins. We permabears should be careful what we wish for, however, since deep hardship affecting the broad middle class, the poor and even the very affluent could persist for a long time -- perhaps a decade or more as occurred after the Crash of 1929. It is particularly troubling to consider that it took a world war in which 50 million people died to end the Great Depression rather than persistent fiscal and monetary meddling by the government. Anyone who thinks the Fed will ultimately lift us from the economic abyss into which we are about to descend should recognize that it is the banksters who will have put us there. The Death of Wokeness Meanwhile, it is unsurprising that some top technical forecasters disagree vehemently over what lies just ahead. One who sits in the pantheon of chartists says that, for cyclical reasons, the stock market is about to embark on a major rally. A colleague achieved instant success -- soon to become notoriety? -- with his own cycles-based forecast calling for a crash starting this week and continuing until the November election. Although I fear that a severe crash is coming that will tip the U.S.

A pen-pal from the world of very high-tech inventions is a self-described 'collapsitarian'. He wrote me recently to say he enjoys these weekly screeds for their relentlessly glum insightfulness. (For your information, he is 50% in cash, 25% in gold, and 25% short stocks.) Longtime readers will know that I seldom shout 'The Sky Is Falling!!' in a headline. Rather, the not-so-great news is dispensed matter-of-factly in the final sentence or two, where you are admonished to reef the sails, batten the hatches and retreat below. And if the vessel should pitchpole, leaving one badly shaken and crawling on the galley ceiling, what then?  Prepare for the 100-foot rogue wave yet to hit is about all I can advise. That's what I see coming, "probably" sooner rather than later. The disaster seems all too likely to arrive in the form of an unscheduled bank holiday that touches off a fatal spasm of debt deflation. I often reiterate in that final paragraph, matter-of-factly, that deflation is inevitable because, well, because it is. I've been writing about this-- some would say bloviating -- for long enough to have annoyed more than a few readers. One was upset about a particularly gloomy column I'd written 25 years ago for the San Francisco Examiner. He told me he managed $250 million and asked what qualified me to predict such a scary future. I responded by critiquing some minor errors of grammar and punctuation in his email. He shut me down with an unexpected reply. It turns out the $250 million was his personal money, and English was just one of six languages he, a cosmopolitan Iranian, spoke fluently. Our subsequent exchanges became increasingly friendly, and I never even asked how he'd fared with the enormous stake he'd amassed in Nokia. The Broken Clock Others

[Louie Piro, my barber when I lived in Mountain View CA shortly before Google arrived, became a multimillionaire with a simple investment strategy. I thought of him the other day when a Rick's Picks subscriber wondered aloud in the chat room which investments are most likely to prosper in the recessionary hard times that Americans will soon face. The subscriber evidently favors the shares of gold companies that pay dividends. My own choice comes straight from Louie's playbook: Invest in utility companies that serve growing populations and that have good dividend histories. Thus did Louie's initial, $100 stake in a Nevada purveyor of water and power seed the wealth the haircutter was to amass over the next 50 years. Following is his story, as told in a column I wrote for The San Francisco Sunday Examiner 25 years ago. I have published it here before, but it seems more relevant than ever now, as investors try to figure out which stocks will be favored by the flight to safety that could come at any time. Louie's remarkable saga holds promising investment implications as we watch Californians, New Yorkers and other blue-state refugees flee economically doomed regions of the country for better lives in Florida, Texas, Utah, Tennessee and a few other states that are not so heavy-handed in the way they regulate businesses, schools, commerce and free speech . RA ]  If there is a single word to sum up the success of investor Louis Piro, that word is "dull." Piro has never made a killing on a stock. He doesn't play hunches and he runs from hot tips. He says he passed up Pfizer not long ago because its shares were too pricey even before impotent men started flocking to their Viagra pill for a cure. Nor will Piro

Yields on 10-Year Treasury Notes, currently at 3.70%, are likely to hit 4.90% before they level off. It is hard to imagine an increase of such magnitude not disrupting the U.S. and global economies severely. America is already in a recession that looks all but certain to deepen before we hit bottom in a year or two. And yet the Fed keeps tightening, leaving little doubt with last week's 75-basis-point rate hike, the third in four months, that Powell & Co. are hell-bent on crushing consumer inflation that has been rampaging for two years. The Open Market Committee must have known that our teetering economy, a super-heated real estate sector and a vaporous stock market would implode if they merely talked about raising rates. However, for the first time since Volcker's 1980s heyday, the central bank has actually walked the walk, surprising everyone by pushing up administered rates a total of 275 basis points since last May. This has sent borrowing costs soaring, including mortgage rates that have more than doubled from the sub-3% levels that obtained toward the end of 2021. Under the circumstances, it is surreal for politicians to be splitting hairs over whether the U.S. is in a recession. Only in comparison to the disaster that is coming could the current economy be described, as Biden is wont to do, as holding its own. The stock market has come down hard, so far without the kind of climactic selling we might expect at a bottom. This has taken a little of the steam out of inflation, albeit mainly via falling gasoline prices that reflect a global economy in a state of imminent collapse. But the broadly falling asset prices that lie just ahead eventually will trigger waves of bankruptcies so destructive and relentless that we'll wish we