“The Literal Price of Freedom”

Jon Stewart is back on TV, talking bollocks. [Morning Reckoning] February 22, 2024 [WEBSITE]( | [UNSUBSCRIBE]( “The Literal Price of Freedom” Asti, Northern Italy February 22, 2024 [Sean Ring] SEAN RING Good morning Reader, My goodness, I didn’t have that on my Bingo card. I had just written last week’s [piece for the]( Reckoning]( about opportunity cost. And yet, there was Jon Stewart, back on television in all his glory, getting it completely wrong. I actually smacked my head when I heard his nonsensical outburst. Of course, if it’s an outburst nowadays, it’s usually about Tucker Carlson. And what did Stewart say with respect to Carlson’s report on Moscow’s supermarkets? There is a hidden fee to your cheap groceries and orderly streets. Ask Alexey Navalny or any of his supporters. NEWS REPORT CUTS IN: In Vladimir Putin's Russia, political repression is everywhere. And hundreds have been arrested for daring to honor Navalny so publicly. Right, because the difference between our urinal-caked chaotic subways and your candelabra'd beautiful subways is the literal price of freedom. My God, he was serious. Let’s use the rest of this Reckoning to take apart Stewart’s ridiculous assertion. [ SELL-OFF WARNING ]( [The stock market is entering a cycle of HISTORIC manipulation.]( Prices have surged recently… But when this trend reverses – and trends always do… Millions of investors could be on the wrong side of [a historic “pump-and-dump”.]( That’s exactly what I believe is happening behind the scenes – Wall Street is propping the market up. And within the next week or two… I believe we are going to see a historic selloff. [Click Here To Learn Why]( [LEARN MORE]( Opportunity Cost First, let’s review the definition of opportunity cost. From last Thursday’s Reckoning: Opportunity cost is an economic concept that refers to the potential benefits an individual, investor, or business forgoes when choosing one alternative over another. In simpler terms, it's what you give up to do something else. This idea is crucial because it helps people understand the actual cost of their decisions, not just in terms of money but also in terms of forgone opportunities. Opportunity cost is about trade-offs. But since when did freedom have to be traded for clean subways? If Stewart had his head up his ass any further, he’d puncture his pancreas. First, let’s look at the simple logical errors he made. The Logical Errors False Equivalence Freedom encompasses many aspects of life, not just the physical state of public transportation. Linking a specific issue, like subway cleanliness, to such a broad concept as freedom creates a false equivalence. It implies that any inconvenience or discomfort experienced in pursuing freedom is inherently justified, which is not necessarily true. Unclear Causality Stewart implies that dirty subways are a direct consequence of freedom. However, this causality is unclear and debatable. Many factors contribute to the cleanliness of public spaces, including funding, infrastructure, and cultural norms. Attributing it solely to freedom ignores these complexities. Ignores Alternatives Intentional or not, Stewart suggests there is a binary choice between having dirty subways and sacrificing freedom. This is a false dichotomy. There are likely solutions and strategies to improve the cleanliness of subways without compromising core values like freedom. Dismissive of Concerns Framing the issue as "the price of freedom" is dismissive of legitimate concerns about the state of public transportation. It can downplay the impact of dirty subways on commuters' health, comfort, and overall experience. But if these logical arguments don’t do it for you, let’s look at real-world reasons why big city subway systems are toilets. Budgetary Constraints Limited Resources Many subway systems, such as New York City's MTA, face significant budgetary constraints. Funding is often allocated to critical infrastructure repairs, safety improvements, and operational costs, leaving less available for cleanliness and maintenance. Prioritization In cities like Chicago, where the CTA operates buses and trains, budget allocations must cover many needs, sometimes prioritizing system expansion or technological upgrades over cleanliness. Political Challenges Bureaucracy and Red Tape Political bureaucracy can slow down or complicate efforts to allocate funds efficiently. In cities like San Francisco, competing political interests and regulatory hurdles can delay the implementation of cleaning initiatives. Funding Battles Public transit agencies often rely on city, state, and federal funding, leading to complex negotiations. For instance, Los Angeles's Metro system has faced challenges securing consistent funding streams, impacting its ability to maintain and clean its facilities. Logistical and Operational Issues High Usage Subway systems in densely populated cities like NYC experience extremely high usage, making constant cleanliness a challenge. The sheer volume of passengers can quickly undo cleaning efforts. Homelessness and Social Issues Cities like Portland and Seattle have faced challenges related to homelessness and social issues within their transit systems. These issues can contribute to cleanliness problems, as transit stations sometimes serve as shelters for the homeless population. Let’s look at some specific reasons. Specific Examples NYC's MTA Despite efforts to increase cleaning frequencies, the MTA struggles with maintaining cleanliness due to its vast size, aging infrastructure, and the need to balance cleaning with keeping the system operational 24/7 because keeping the system operational 24/7 is damn near impossible. Chicago's CTA The CTA has initiated several cleanliness programs but faces challenges due to its extensive network and the need to prioritize funding for safety and operational improvements. San Francisco's BART BART has faced criticism for cleanliness and maintenance issues, made worse by budget shortfalls and increased demands on the system. Los Angeles's Metro LA Metro has made strides in improving cleanliness through increased funding and new initiatives but still needs help with its expanding network and balancing various priorities. Portland's TriMet and Seattle's Sound Transit Both systems grapple with the impacts of urban homelessness, social issues on cleanliness, and the need to allocate limited resources across expansive transit networks. Wrap Up If only Jon were so indignant about his government starting but not ending its wars. If only Jon were angry at his fellow citizens for pooping in the subway. But Jon decided to kill the messenger instead. The question remains: Why shouldn’t anyone, not just Tucker Carlson, wonder why America can’t do better than Russia? Why do most Americans accept that their big cities are dangerous, third world shitholes? Why aren’t our cities better governed? Is moving out the price that has to be paid for cleanliness? Because dirty subways aren’t the price of freedom, Jon. They’re the price of corruption, priorities, and belligerence. All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( [A.I. 2.0 to Open a Brief "Wealth Window"?]( [Click here to learn more]( Genius investor James Altucher is predicting a new generation of A.I. will create a brief "wealth window" in America. It could make crypto look like pocket change . [Click here now for more details]( . [LEARN MORE]( In Case You Missed It… Up Next: A Mag 7 Massacre? Greg Guenthner, Editor [Greg Guenthner] GREG GUENTHNER Good Morning Reader, The market’s finally flattening out. The S&P 500 stumbled into the red on Friday, posting its first losing week since Jan. 2. No, large-caps aren’t falling off a cliff (the weekly loss for the S&P clocks in at a little less than half a percent). But we’re starting to see some cracks in the foundation following the melt-up move that began in early November. Last week, we reviewed how to react when the market enters a pullback phase. Certain stocks and sectors (I’m looking at you, semiconductors) have become frothier than an $8 latte. As we’ve said for what feels like ages now, we could see a 5-10% market drop trigger if these overextended stocks settle down and reverse. It’s a fact – pullbacks like these can happen several times a year. Just don’t tell the throngs of speculators who will no doubt panic at the first sign of an actual market drawdown. It’s only been three months since everyone was convinced stocks were headed for a crash. But the melt-up rally has wiped the herd’s hard drive clean. As far as many speculators are concerned, everything is back to normal. Stocks only go up… If you’ve been around the block a few times, you’re probably more than a little worried over the market action we’ve seen so far this year. After all, the signs of bubbly action are all around us: parabolic rallies, historic squeezes, and insane earnings reactions are starting to pile up. It feels like 2020 all over again. In order to get a feel for just how deluded the speculator class has become, I grabbed my hazmat suit to skim the Wall Street Bets Reddit community and a few other stock trading message boards. As you can probably guess, the YOLO speculators are back to their old tricks. But instead of GameStop and AMC shares, they’re slinging options on semiconductor stocks and other tech names. The action this week centers around NVIDIA Inc. (NVDA) earnings, which are set to hit the wire Wednesday after the closing bell. Most of the comments I saw were written by posters who’ve already loaded up on NVDA calls – sometimes light years out-of-the-money. But to my surprise, there were also a few bears mixing it up with the long and strong crowd. No one has any way of knowing how the Street will react to NVDA’s earnings. But I’m willing to bet that we’ll see some volatility after the numbers come out Wednesday night. After all, we’re dealing with a major market leader that’s up almost 50% year-to-date. And while shares did slow their ascent last week, the stock still has yet to post a fat red candle since its breakout above $500. A couple of important points to consider when analyzing this chart: First, we need to acknowledge that the bulls have been dead right about NVDA (and other big tech/semiconductor plays). The early 2023 rally off the lows and subsequent breakout at $500 in January have added up to an astounding 380% rise. That said, I don’t think betting against this stock outright is a solid trading plan. We have to respect the trend – it’s one of the strongest on the market! At the same time, NVDA shares are technically overbought. At the very least, we should expect some retracement or longer consolidation period following the extension off the $500 breakout level. Again, this isn’t a call for an all-out crash. But a sharp move lower – even a temporary one – would help relieve some of the pressure. That said, the Wednesday NVDA earnings release could be the market-moving event of the week, if not the entire month. Other high-flying semiconductor stocks have already started to lose steam, with the VanEck Semiconductor ETF (SMH) finishing lower the previous two sessions. If the flagship stock is unable to impress, we have to assume the other names in the group will also come under pressure. What About the Magnificent Seven? Everyone’s been talking about the popular “Mag 7” mega-caps dominating the tape so far this year. Yet as we enter a period of seasonal weakness, the bears are beginning to pick off these unstoppable stocks one by one. Tesla Inc. (TSLA) was the first to fall from grace, breaking from the group after reporting disappointing earnings in January – which led to an ugly drop of 25% to kick off the first quarter. TSLA isn’ the only one of the big boys having trouble keeping up these days. Apple Inc. (AAPL) has been a choppy mess for the past six months. It’s down nearly 3% year-to-date and remains well off its highs – even as semis and other tech names dominate the tape. Its Feb. 1 earnings announcement failed to generate any excitement – and the October lows could easily come back into play should the stock continue to slip this week. Alphabet Inc. (GOOG) also failed to rally the bulls with its earnings report in late January. The stock remains nearly 8% below its highs and is threatening to go red for the year following a failed post-earnings rally attempt. Pay close attention to these and other Mag 7 names as NVDA earning approaches. They could offer an excellent opportunity to bet on some short-term downside action that might catch the herd off guard. 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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