The Ominous Mountain

Real or imagined, natural or self-induced, the obstacles to peace and prosperity look enormous. April 15, 2024 [WEBSITE]( | [UNSUBSCRIBE]( The Ominous Mountain SEAN RING Thursday night, I set off from Asti to Turin, where I’d take the short flight down to Naples. Four months ago, Aussie Trav, Irish Jerry, and I agreed to meet in Italy to make it easier for me to show up. Regrettably, I had missed our last two attempts at a lads’ weekend due to family stuff. So I write with a heavy head this morning, as there was more than enough wine, beer, and limoncello to go around this weekend. And my hotel bed was so soft I barely slept more than three hours at a time. Trav, Jerry, and I embarked on our journey at London Business School in September 2000, a time when the world was simpler. We navigated the complexities of our studies and the evolving global landscape, finally graduating in July 2002. Our shared experiences and the bonds we formed during those years are a testament to our enduring friendship. We talked about many of those complications this weekend, from war in Ukraine and Israel to an incredibly indebted United States government. Those situations and more seem like an inexhaustible mountain of problems crying out to be solved. And then I looked up and saw The Mountain. The Mountain Credit: Sean Ring As we sat high above the harbor, overlooking the fabulous Gulf of Naples, we took in a breathtaking view of Mount Vesuvius. While I was sipping on my Aperol spritz, I was thinking, “How do people live with this?” Reader, when I say, “It’s right there,” I mean it’s right there. If this volcano’s west face collapsed, there would be no more Naples. In the famous AD 79 eruption that buried Pompeii and Herculaneum, Neapolis (“New City,” as Naples was then called) was only spared because the south side of the mountain collapsed, and most of the ash and pyroclastic flows went that way. What’s much less known is that there was a terrible eruption in AD 60. The eruption caused notable destruction and was followed by a series of seismic activities and minor eruptions leading up to the catastrophic event in AD 79. In essence, it took nearly twenty years of smaller seismic events to build up to the main event. Is that what’s happening to us now? [Secret A.I. Facility To Shock The World!]( [This A.I. chip]( looks like any other chip… yet I believe it will play a major role in the artificial intelligence boom. It’s currently being mass-produced by the millions as we speak. And you’ll never believe who’s behind these powerful A.I. chips… [Click here now for the full story.]( [Click Here To Learn More]( Current Events Was the 2008 Financial Crisis the pivotal event or merely a precursor to what might be looming on the horizon? This is the question that keeps me up at night. Since 2009, we’ve experienced the following events: - The European Sovereign Debt Crisis (2010-2015): This crisis was characterized by the inability of some European countries to repay their government debt due to the aftermath of the 2008 financial crisis. The affected countries included Greece, Ireland, Portugal, and Spain. - The Chinese Stock Market Crash (2015): In June 2015, the Chinese stock market sharply declined, resulting in significant losses and triggering concerns about the health of the Chinese economy. - The 2019-2020 Global Economic Slowdown: Several factors cause this slowdown, including trade tensions between the United States and China, geopolitical risks, and the COVID-19 pandemic. The pandemic, in particular, led to a global recession, with many countries experiencing negative economic growth. - The 2020 Oil Price War: A price war between Saudi Arabia and Russia led to a significant drop in oil prices, causing financial stress for oil-producing countries and companies. This event also contributed to the 2019-2020 global economic slowdown. - The Evergrande Debt Crisis (2021): Chinese real estate developer Evergrande faced a debt crisis, with concerns about its ability to repay its debt. This crisis raised concerns about the stability of the Chinese property market and the potential impact on the global economy. Notice something? The United States only drove one of these crises directly. But politically, things have become more complicated, not less. The US is trying to find its way out of Ukraine while keeping face. It’s trying to get Israel to back off the Palestinians and Iran to back off Israel. And we hope the US isn’t trying to start something over Taiwan. And yet, Biden keeps tripping over his own feet. To wit, from [Intellinews]( (bolds mine): The London Metal Exchange (LME) and Chicago Mercantile Exchange (CME) have blocked the trade of aluminum, copper, and nickel produced by Russia, the UK government accounced late on April 12. The move will drive Russia deeper into China’s embrace as Shanghai is now the only major commodity exchange that is still accepting and trading Russian metal. To mitigate the risk of market instability, the government said that the new measures would exempt existing stocks of Russian metal on the two exchanges. These stocks can still be traded and withdrawn without restrictions, providing continuity for market participants. The UK ban is not expected to affect prices in the short-term as there are large stocks of Russian metal in the LME warehouses. This move, part of existing bans, aims to intensify restrictions on prohibited Russian metal exports, thereby curtailing a 'crucial source of revenue for the Kremlin,” the UK said. The key Russian metals of titanium or platinum group metals were excluded from the ban as Russia remains a major supplier of both of the hard-to-find metals. You simply cannot fight inflation with metal bans. All three of those crucial metals will get more expensive. And with this, the stock market has gotten wobbly. Friday was a rough day: During the session, investors drove gold, silver, and copper to new highs before violently selling off. Jared Dillian, author of The Daily Dirtnap, posted this on Friday: Credit: [@dailydirtnap]( I’m hanging onto my gold, silver, and copper miners, that’s for sure. Wrap Up As the sun set Saturday night over Naples, Vesuvius faded to black, and the city came alive with its lights. It was a gorgeous scene, with excellent company and fine wine. But Vesuvius was still there, lurking in the distance. And yet, the sun rose on Sunday, and life continued. Since I was in Naples, I did as the Napolitans do: I ate pizza for breakfast. All the best, Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( Rate this email Like Dislike Thanks for rating this content! Looks like something went wrong. Please try to rate again. In Case You Missed It… Market Wizards’ Humor SEAN RING Since the world is getting serious, I thought we’d lighten things up for this Friday. Here are my top 10 favorite Wall Street sayings. Some are funny, and some are wise. “If it flies, floats, or f*cks, it’s cheaper to rent.” - Marc Rich. This quote is easily my favorite. I’m devastated that no one told me this before I got married. If you ask any plane owner, yacht owner, or married man, they’ll tell you the same thing: there are some things in life that you should rent. “Took the anti-money laundering training. I suddenly have so many side hustle ideas.” - @overheardonwallstreet. How ironic. One of my human resources friends once told me, “The only thing unconscious bias training does is increase conscious bias.” In some parts of the world, sex education increases teenage pregnancy rates. So when I came across this quote, I laughed my ass off. It made complete sense to me. If someone teaches you all about money laundering, you’ll see ways to launder your own money, right? I was just conversing with my mother about moving her money around when she moved to Italy, but my mother’s money is completely clean. Still, moving it from account to account worldwide is similar to how money launderers move cash themselves. "Wall Street is the only place people ride to in a Rolls Royce to get advice from those who take the subway." - Warren Buffett. I first tell private banking graduates never to tell their clients that they will increase their wealth. They protect their wealth and assets, put their money into suitable investments, minimize clients’ tax liabilities, help clients create succession plans, and show clients how to give their money away to charity. That’s it. Forget about increasing clients’ wealth. The clients already know how to do that. “A bull market is like sex. It feels best just before it ends.” - Barton Biggs. As the night is darkest before dawn, the market is the most euphoric right before it crashes. We’ve seen this many times, most notably in 1999, right before the March 2000 NASDAQ crash. The market was positively screaming from 1997 onwards. Most people thought the NASDAQ was a high-yield savings account. It was embarrassing following that rally. The NASDAQ fell from March 2000 until the end of 2003, going from 5,000 to 1,100 points, a nearly 80% drop. Many people don’t remember that because they were either born too late or were there and don’t want to remember. [Florida Man Wields Odd Device on Virginia Farm]( He traveled 1,000 miles away from home… To show you this strange device on a farm in rural Virginia. You won’t know by looking at it, but a secret company behind this strange device could hold the potential to make you rich over the coming years. [Click here to find out how.]( [Click Here To Learn More]( “Given a 10% chance of a 100 times payoff, you should take that bet every time.” - Jeff Bezos. This is an excellent saying because it helps one distinguish between probability and expectation. Most people would look at this and say, “If I only have a 10% chance of making money, why bother?” But if you have a 10% chance to make 100x your money, your expectation or expected value is a 10x gain (10% x 100x). A 10x gain: that’s why you should take that bet every time. “Picking bottoms gets you smelly fingers.” - Unknown. I can’t remember where I heard this, but it’s true: Nobody has ever picked a bottom. No one knew March 2009 would be the bottom of the market. That’s why it’s essential to remain somewhat invested at all times: No one can pick tops or bottoms. “God created economists to make weathermen look good.” - Unknown. Another example illustrates that economists cannot predict anything. I can’t tell you how many years I’ve looked at a January forecast where not a single economist was even close to where interest rates would end up on December 31. It’s embarrassing. Why bother? “There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.” - John Kenneth Galbraith. Galbraith hit the nail on the head with this one. There is no shame in not knowing. Most of us don’t know. Of course, when I write the Rude, I want to be as truthful in the present as possible. And yes, I look forward to using technical analysis, especially the monthly asset class reports. But I don’t know what’s going to happen. I try to guess what’s going to happen. Bloggers like Paul Krugman think they know what will happen in the future. His hero is Hari Seldon of Asimov’s Foundation series. He joined the economic profession to try to predict the future. He is atrocious at it. Krugman is the perfect example of an economist who doesn’t know that he doesn’t know. “It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong.” - George Soros. Before becoming Emperor Palpatine, George Soros was the greatest trader God ever made. He was a wunderkind, an incredible economist with outstanding macroeconomic knowledge. Soros broke the Bank of England in 1992, throwing the UK out of the Exchange Rate Mechanism that would have brought the UK into the Eurozone. Quite frankly, I thought The Queen should’ve knighted him for that. To this day, if you mention Soros’ name to anyone who works at the Bank of England, they will break out into hives. Soros is exactly right about this, though. If you take many small wins and then suffer one colossal loss, you will have a negative return on your portfolio. But you will be okay if you win huge, even once, and suffer many small losses. This is the one bit of advice from George Soros I want you to take. “The most contrarian thing of all is not to oppose the crowd but to think for yourself.” - Peter Thiel. There are many reasons to like Peter Thiel. He’s intelligent, an excellent investor, and a genuine insider. He was one of the first and only people from the Left Coast to support Donald Trump. He is correct about thinking for oneself. Thinking is challenging, which is why nobody wants to do it. Figuring things out on your own is tricky, so masterminds are essential. That’s why learning from YouTube videos is essential. You can create your path by learning how to think on your own. Wrap Up Thank you for indulging me in this catharsis. I hope you learned something and had a laugh along the way. Have a wonderful weekend! All the best, Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. 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