Putin: The Master of Europe

The US Can’t Defeat The Houthis, Let Alone Russia [Morning Reckoning] January 11, 2024 [WEBSITE]( | [UNSUBSCRIBE]( Putin: The Master of Europe Asti, Northern Italy January 11, 2024 [Sean Ring] SEAN RING Good morning Reader, The Emperor is naked, and the world can’t unsee it. Last week, in this very space, I wrote about how a bunch of goat herders from the Arabian Peninsula had halted world trade. As I sit here on Wednesday night, one of Zero Hedge’s headlines reads, “[US Warship Directly Targeted In 'Largest Ever' Houthi Red Sea Missile Attack]( I don’t know what’s funnier: these tribesmen showing up the world’s allegedly most potent military or the media trying to pin it on Iran to draw the US into World War III to save Israel’s (turkey) bacon. And if I’m writing about Yemen, what does Russia have to do with it? Strap yourself in; we’re going for a wild ride. [2024 Will Be The Year of AI]( The coming second wave of AI could change your life and your finances starting in 2024. This is why our team of experts went live to show you what you need to do to prepare before it profoundly impacts you and your wealth in the coming months… And to reveal THREE tiny AI stocks set to explode during AI’s Second Wave. [Click here for all the details.]( [LEARN MORE]( The Houthis and the Wider Middle East Paging Lloyd Austin… Paging Lloyd Austin. The US SecDef managed to get a four-day stay in a hospital without President Biden knowing anything about it. But then again, if President Biden were in the hospital for four days, he wouldn’t know it. The USG is rudderless, leaderless, and listless amid a possible world war into which the bureaucratic Deep State, sitting safely behind their desks, is riding pell-mell. NATO — the US, really — is getting its ass kicked in Ukraine. Russia is grinding down, ever so slowly, what’s left of the Ukrainian army (and its male population). And what happens next? Hamas gets drugged up and commits atrocities in southern Israel that would make Attila the Hun blush. This tragic mistake — Hamas doesn’t think it was a mistake, of course — allows Israel to open the throttle on the Palestinian population. Or so they thought… The court of public opinion stepped in. Ludicrous Ivy League graduates called for not just Israeli but for Jewish blood. Their fellow students’ blood, no less! But this isn’t isolated. Other than the notable exception of India, the Global South sides with the Palestinians. And many in the West, not just spoiled brat Harvard students, also side with them. The US and Israel look increasingly isolated. That wasn’t how this was supposed to go. But it seems that the only place you can find a “coalition of the willing” is on the back of a milk carton. And then, out of absolutely nowhere, the Houthis - as in, and pronounced like, “Who these?” — start firing rockets at any ships carrying anything to Israel, blocking the Bab Al-Mandeb strait and choking off the Suez Canal. Next, shipping companies, at the behest of their London maritime insurers like Lloyd’s, canceled Suez routes, sailing around the Cape of Good Hope like a moonwalking Vasco da Gama. Egypt reels from the lost revenue, nearly 2% of its GDP. Prices rocket for shipping, the extra time, and the extra fuel. Inflation grins down on us like Arnold in The Terminator, saying, “I’ll be back.” Now, the US has to send in carriers to scare off the camel riders. Does that work? Nope. Just reread today’s headline. We really must be thankful China doesn’t want to invade Taiwan. Because the Emperor isn’t just naked. He’s playing naked Twister without having showered for weeks. Russia is Unbeatable in Europe Reader, I’d like to welcome you to the new Europe. The US is no longer the master of a collection of vassal states here. Russia now holds all the cards. Europe could never really afford US liquified natural gas (LNG) at 4x the cost of Russian pipelined gas. The sanctions the EU mindlessly imposed on Russia are the direct cause of Germany’s deindustrialization and Italy’s nearly quadrupled energy costs. Other European countries similarly suffer. Sure, it’s nothing compared to Ukrainian lives, you may think. But this war was unnecessary — and unwinnable — from the beginning. I wonder if Boris Johnson feels guilty for stopping a peace treaty between Russia and Ukraine in 2022. And this stupid war hasn’t just cost Europe money. It cost America its empire. Once the USG seizes the $300 billion of Russia’s currently frozen assets, its prestige and reputation for honesty and fairness will also be gone. As reported by [The Duran]( negotiations between Russia and the West involve Russia's demand for the four regions of Ukraine and solid protections for Russian speakers. Putin will likely insist on the presence of Russian troops in Ukraine, leading to a potential future without a Ukrainian state and a disastrous outcome for Ukraine. In other words, the Russians are playing hardball, while the US just wants to save face. Putin is Europe’s new master now. Start the Uranium Enrichment! Take a bow, Rick Rule. He was long uranium and uranium stocks long before this announcement. But he saw it coming. As seen in [Reuters]( The U.S. is seeking bids from contractors to help establish a domestic supply of a uranium fuel enriched to higher levels for use in a next generation of reactors, a fuel currently only available in commercial levels from Russia, the Department of Energy said on Tuesday. I’m sorry. From where? Russia. Did you say “Russia?” Yes. Yes, I did. Again, from [Reuters]( "It's a chicken-or-egg sort of process," Jon Carmack, the department's deputy assistant secretary for nuclear fuel cycle, said in an interview. Carmack said the government needs to invest enough money to show initial demand for producers, so they will build capacity, apply for licenses and get HALEU plant design and construction projects underway. Do you mean to tell me that the US was dependent on Russia for its enriched uranium? Yes. If you read this [Rude Awakening piece]( from nearly two… friggin’... years… ago, you knew all about this. Hilariously, according to [The Wall Street Journal]( in an article from 2022 cited in the Rude above, The U.S. has met Russia’s assault on Ukraine with economic penalties targeting Russia’s financial sector and a ban on oil imports into the U.S., but so far, uranium has avoided sanctions.The U.S. relied on Russia and its allies Kazakhstan and Uzbekistan for about 46% of its needs in 2020, according to the U.S. Energy Information Administration. Your country is run by smooth-brained dipsticks who majored in basket weaving. But Try to Stay Upbeat Yes, the world is going to hell in a handbasket. But don’t sell stocks, gold, or crypto right now. Really? Here’s where we get positive. You can be right. Or you can get rich. Choose the latter. Sure, Seanie. But how? One fantastic way to start is to learn how to trade from a genuine pro. My colleague, Greg Guenthner, is an expert trader and chartist. He can teach you how to read a chart and interpret it. Matt Insley, our fearless leader here at Paradigm Press, interviewed Greg, or “Gunner,” as we call him, about crypto and AI stocks. You can watch the video on the [Paradigm Profits]( YouTube channel by clicking below… And make sure you’re subscribed by [clicking here](. It’s amazing. I even wrote it up in the [Rude]( yesterday. Gunner covered Bitcoin and Bitcoin miners like MARA, RIOT, CLSK, and HUT. He then turned to AI stocks, discussing industry rockstar NVDA, SMCI, ANET, AMD, and my favorite, PLTR. He went over all the charts step-by-step. I can’t encourage you to [watch the video]( enough. If you decide you “got the Mott’s” to be a sound, competent trader, then head here [to sit for a 2-minute assessment](. (Sean: I just took the test. It literally takes under two minutes.) Gunner’s looking for 50 newbies he can raise to trader status. Maybe that’s you. Maybe not. There’s only one way to find out. You got the Mott’s? Or what? Accept the challenge. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( [Biden’s 2024 Presidential Run Doomed To Fail – Thanks To New Inflation Surge?]( [Click here to learn more]( Biden has given America its worst inflation crisis in over 43 years. But if you think the worst of inflation is over, think again… [A deadly new “Second Wave” of inflation is coming – one which could send the price of food, gasoline, housing and more skyrocketing much higher than they are today.]( Will this new crisis mean Biden’s 2024 Presidential run is doomed to fail? [Click here now to see my urgent warning.]( [LEARN MORE]( In Case You Missed It… The “Disbelief Phase” Is Coming to an End… Greg Guenthner, Editor [Greg Guenthner] GREG GUENTHNER Good Morning Reader, Investors are already pining for the good ol’ days of 2023. Yes, we’re just five trading days into 2024. But it appears Mr. Market’s New Year’s resolution was to pulverize the bulls into a fine powder and leave just about everyone wondering how everything changed so quickly. December trading finished with the S&P 500 and Nasdaq Composite posting their ninth winning week in a row as stocks rode a wave of frantic buying off the October lows. But from the opening bell of the first trading day of 2024 (which frankly feels like a lifetime ago), the market started to get a bit tricky. The initial blow felt a lot worse due to the insane strength of the preceding two months. And if we take the time to zoom out, it’s clear that last week’s steady drop didn’t completely break the market. The S&P 500 registered a loss of just about 1.5%, which just so happens to be its first losing week since October. Meanwhile, the real damage was concentrated in the Nasdaq Composite. The tech-heavy index dropped 3.25%, leaving it just inches away from retesting its July 2023 pivot high. Of course, these facts matter little to traders who were just beginning to buy into the melt-up rally. Recency bias plays a much larger role in investing than most market participants want to admit. We get comfortable with the way things are — and we assume the current conditions will continue forever. Every time a formerly powerful trend abruptly reverses, investors inevitably ask the same question: Why? Were stocks down last week because investors were worried about the attacks on cargo ships in the red sea? Was the market weak because of how analysts were interpreting the latest jobs report or manufacturing data? Or, were investors simply concerned about inflation rearing its ugly head once again in 2024, stopping the Fed from beginning its rate-cut campaign in March? What Happens Next? To be clear, these are all viable concerns that could impact various market sectors, as well as the major averages. But these “why” questions are virtually impossible to accurately measure within market fluctuations. We could debate the various effects of certain news items until we suck every molecule of oxygen from the room. But none of our answers will get us closer to answering a much more important question: What happens next? Fortunately, we can come closer to answering this query (and improve our market timing!) by understanding market structure and how trends typically unfold. First and foremost: Markets rarely move in straight lines. And when they do, these sharp moves don’t end with quiet, sideways consolidations. Instead, you’ll tend to see sharp, sudden pullbacks that catch most investors off guard. That’s exactly what we’ve seen from the market so far this month! The Nasdaq Composite finished lower for five straight sessions. Not a buyer in sight! Every time it looked as if it might catch a bid, sellers stepped in during the late afternoon to drag the formerly red-hot tech names lower. We didn’t even sniff a decent bounce until yesterday. Yields and the dollar also rallied, putting additional pressure on risk assets. The bulletproof Magnificent 7 stocks took a hit. The market even chewed up some of the best under-the-radar snapback performers. Tech-growth names coming out of big bases failed and moved sharply lower. And after breaking out in late December, the small-cap Russell 2000 retreated back into its choppy range. The market’s best out performers from Q4 became deadweight overnight. A New Trading Environment? Despite everything that’s happened so far this month, too many traders are going to be stuck on the same melt-up frequency from late 2023, despite the fact that we’re dealing with dramatically different market conditions than we enjoyed just a couple weeks ago. If it isn’t already finished, the disbelief phase of the rally will end soon. When it does, we’re going to need to be a bit more tactical and cautious on the long side. A weeklong skid isn’t going to tell us much about the market. But how the market bounces from here will certainly dictate how we trade for the next four to six weeks. If we see the leaders such as the semiconductors, tech-growth base breakouts, and other hot names snap back to attention, we can brush this early January action off as some much-needed profit taking. On the other hand, we could see a weak bounce attempt that quickly runs out of steam as these market leaders approach those former highs. This is the kind of action that could lead to choppy trading and more downside heading into February. Anything is possible. But it’s important to work out these potential scenarios so we can work up our trading plans. Instead of eagerly trying to catch falling knives as the market sorts through this rough patch, we need to respect the potential change of environment. First, we shouldn’t blindly chase any stock that looks like it’s breaking out. In corrective markets, most breakouts will either retreat back into their former ranges or fail entirely. You don’t have to dig very deep to find the stocks that failed to hang onto breakout levels last week… Next, we need to watch for bigger rotations occurring in the market. If new stocks and sectors start to catch higher as former highfliers sag, we need to keep up! It’s a simple concept – yet many investors still have problems quickly shifting gears when their old trades quit working. Finally, it can’t hurt to begin searching for cheap puts to purchase if stocks post a re-energized move back to their highs. The market will eventually boil over, and it never hurts to have a little insurance for the next inevitable 5-10% pullback. Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [Sean Ring] [Sean Ring, CAIA, FRM and CMT]( is a former banker and financial educator and is the editor of the Rude Awakening. Sean has trained interns and graduates from Goldman Sachs, Morgan Stanley, Citi, Bank of America, Standard Chartered Bank, DBS (Singapore), the Abu Dhabi Investment Authority (ADIA), Bank Indonesia (the central bank), HSBC, Barclays, RBS, and BlackRock. He knows the global economy is being corrupted by forces that most people can't understand and has used his unique and worldly experiences to help people navigate the markets. [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2024 Paradigm Press, LLC. 1001 Cathedral Street, Baltimore, MD 21201. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. 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