It’s fun to be a bear

Bears are very nice, as long as you are nice to them. ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ ‌ February 7, 2023 |  [View Online]( |  [Sign Up]( It’s fun to be a (perma)bear “Bears are very nice, as long as you are nice to them.” –Karl Lagerfeld Oh, to be a bear. Pack on a few pounds in the fall. Hibernate in winter months. Lots of little critters to eat when you finally wake up. (Source: Mark Basarab) You’ll recall, the terms “bull” and “bear” enter [the traders’ lexicon]( fashioned after the way each animal approaches its adversary. Bulls charge straight forward like they’re going to gore a matador’s red cape. They miss their mark more often than not. Bears, on the other hand, maul everything in sight… Why? To protect their cubs? We digress. It’s hard to argue recession or hardship when markets are in full bull mode. From this morning’s Financial Times: “Investors pile into market rally as economic slowdown risk ebbs. The improving outlook boosts demand for riskier assets as ‘fear of missing out’ (FOMO) returns.” To argue for recession seems like you are rooting for the worst. Maybe you don’t want to be that guy… the killjoy, or the “permabear,” as they are known in the financial newsletter industry. Maybe you just want to get the narrative right. Our buddy, JC Parets, published this warning in his All Star Charts email yesterday: (Source: All Star Charts) Historically, February is not a good month for stocks. Parets calls it the post-New Year hangover. The only other dependable anomaly is the month of September. While the financial press is ready to crown Fed chair Jerome Powell as the second-coming of Paul Volcker, we remain skeptical. Will Jay P be able to engineer the illusive ‘soft landing’ for the economy? Will he skillfully avert a recession? Then declare “all is right in the world,” followed by a mic drop? We’ve written this before. Not only last week with the title “When Good News is Bad News,” or “Climbing a Wall of Worry,” but also every year the credit cycle boomed and busted since we started writing back in the last millennium. POWERED BY BRENTWOOD RESEARCH CONTINUED... Frankly, I never understood the term perma-bear. Is it meant to be an insult? Last week, on a whim we dug up a story written in Time Magazine naming me as a member of “The Armageddon Gang” along with Peter Schiff and Michael Panzner. It was 2007 on the cusp of Bear Stearns meltdown… and the august Lehman Brothers went out of business due to their exposure to mortgage backed securities. “If you agree with Wiggin,” Justin Fox wrote at the time, “then former Federal Reserve Chairman Alan Greenspan's legendary ability to pilot us past market jitters and avert major economic dislocations is something not to be praised but to be condemned. Among the doom crowd, Greenspan's decision to slash interest rates as the stock market plummeted in 2001, which fueled the last leg of the real estate boom, is seen as his gravest error.” “Greenspan's successor Ben Bernanke,” Fox continued to snarl, “is if anything even more reviled.” Fox: Bernanke’s sin was committed in 2002 when, as a member of the Federal Reserve Board but not yet its chairman, he declared that among the tools the Fed had at its disposal to fend off deflation was one that he termed equivalent to a "helicopter drop of money." Without occasional, and painful, unravelings of debt and speculation, debt and speculation inevitably get out of hand. It's a stark, almost Puritan way of looking at the world, and it has been out of step with economic reality for the past quarter-century. But that doesn't mean it always will be. Despite looking at length down his nose, Fox actually got our critique right. A year later, the tone with which the financial media wrote about us, uh, changed slightly.  And yet, Bernanke, then Yellen after him, propped the market up for more than a decade with near zero interest rates that let companies buy back shares at basically zero interest, driving up their own share price and inflating their value artificially. This year, we’re choosing to hibernate with one eye open. Our slumber dreams remind us: what goes up must come down. “I hate to sound like an MMT'er,” write reader ND Williams after watching [this week’s Wiggin Session]( with Richard Duncan, “But does ‘debt’ really matter?” Mr. Williams continues: The future is infinite. So why can you not borrow from the future indefinitely. And if there is no more future, well then does the debt even matter? Yes, more federal reserve notes in circulation drives down the notes value, but debt and repayment of that debt works as a great motivator for progress. It’s not money that makes the world go round, but debt. We all get up to work to pay off our debts (rent, or any monthly bill, is just a yearly debt contract).  So, really, what is the problem with debt? I think people look at governments and corporations like they are people. But people die. Government and Corporations are just secure contracts. They do not die. Theoretically, they are ageless. Thus they have the ability to borrow forever. A luxury mortals do not have… That’s exactly what Richard Duncan describes in his new book “Money Revolution”; how the American economic system mutated from “capitalism” to “creditism.” Endless debt and money printing is a hard pill to swallow for old school capitalists for at least one good reason: it puts an inordinate amount of power in the hands of a small number, i.e. Fed and Treasury officials. Duncan's response: in JP Morgan's time he had to bail out the government twice, in the money panics of 1893 and again in 1907. Morgan was tired of being the lender of last resort for the government, so he advocated for the Federal Reserve and a more liquid bond market. We went from an inordinate amount of power in the hands of a few capitalists to a few government functionaries. For me, it leaves innovation and entrepreneurship at the behest of the money lenders, be they big banks or big government. Something’s up. It’s not the markets. And it's not a conspiracy. It’s no longer a question of market analysis because the market is completely untethered from fundamentals. At some point, this house of cards will fall. And while we wait for something to happen, Mr Duncan and ND William’s infinite debt will continue to compound. How long will this current market optimism last? It’s a good question to ask if you’re trying to manage your own money. Bank of America analysts seem to think investors are at risk of sleepwalking into a selloff. “The US stock rally has already gone too far,” the BoA strategists say. “Investors face brutal declines if economic growth crumbles in the second half of the year.” So it goes, Addison Wiggin The Wiggin Sessions P.S. “Wait! More government spending? This guy is nuts! Do not invite him back,” viewer Matt M comments on YouTube. While I admire your gusto, I’ll have to push back a little. Like I said in yesterday’s P.S. you’ll see we differ on some of the finer points of our conclusions. Debate, as they say, is the soul of democracy. [You can watch my conversation with Richard Duncan here.Â]( POWERED BY BRENTWOOD RESEARCH [The Seven Simple Laws of Inflation, a guide]( Adam Baratta’s new book Seven Simple Laws Of Inflation looks into how and why he thinks inflation is the #1 issue plaguing the global economy. More than climate change. Adding fueling to the fire of politics. He set up a Wiggin Sessions special offer. You can find your copy [here](. [Click here to watch the latest Wiggin Session on YouTube now!]( [The Wiggin Sessions on YouTube]( Wiggin Sessions on Spotify]( Wiggin Sessions on Apple Podcasts]( Wiggin Sessions on Facebook]( Wiggin Sessions on Twitter]( Wiggin Sessions on Instagram]( Wiggin Sessions on LinkedIn]( The Daily Missive from The Wiggin Sessions is committed to protecting and respecting your privacy. We do not rent or share your email address. 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