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Non-Tech : Kirk's Market Thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Fiscally Conservative who wrote (13321)	3/13/2022 12:04:55 PM
From: robert b furman	Read Replies (1) \| Respond to of 26788

Hi Fiscally, I believe you are correct. What I also believe is many a family will have too much of their disposable income left at the gas pump. Every recession (excepting the Covid shut down) has been preceded by an energy spike up in price (by a multiple starting at 2-3 as low and 8 to 10 as high). These price spikes have always happened when OPEC+ has had pricing power. That is the key! The short but sweet taste of inexpensive energy and and a beyond normal growth in time duration. also coincided with the shale oil revolution. It does not escape me that the green revolution intends to destroy fossil fuel production via ESG virtues and carbon taxes at the cost of more expensive alternatives, that by the way do not move the needle as far as reducing a country's carbon footprint. The European experiment into renewables has been a harsh lesson - now being vacated by once again embracing nuclear and natural gas as green - EVEN in Germany! The fact remains that the one country not signing The Paris Climate Agreement is the only country that has achieved a reduction in carbon footprint - THE UNITED STATES OF AMERICA!. Those two facts should well be guiding lights, yet we have an administration headed towards destroying both of our rather brilliant moves regarding energy emphasis and carbon reduction. The current administration's opposing positions are being taken mostly/only because they were successes of Trump. That's a poor reason! and I cleaned it up a lot! If this continues, we're staring a recession in the face not too far down the road. My perception of many American families, is they live stretched on a budget. The gas pump doubling their monthly expense structure will result in an unfolding of financial strength. I've been down this road too often! My first indicator will be big SUV's and 4X4's and luxury diesel trucks will be traded in, in quantity. Every recent buyer will be upside down and max out a big line of credit for a smaller car (financed at a higher interest rate). My younger partner who is the dealer of a Dodge Ram Jeep dealership says 35 to 45 percent of his sales are folks buying a 3/4 ton truck with a Cummins diesel in it. They roll out with $1700 monthly payments (for 60 to 72 months). With diesel at 6 to 7 bucks and the monthly gas credit card bill of $500 to $600, it won't take long and the writing will be on the wall. They'll come in looking at a small SUV, want to trade and be $5000 to $10000 upside down and end up with the same payment (with a higher interest rate). That's when the repo's and throwing the keys on their salesmen's desk start happening. Then the banks will begin repossessing those who are behind in their payments and I'll see them come through the auctions. That's a fairly early signal that exposes those who have no assets to shift and pay down the debt. That'll be time to quickly sell all tech, and position in cash and commodities. In truth I'm half way there already. We ARE being led by incompetent, vindictive fools who don't know a good thing when they've seen it! There is a cost to that, and the American public is beginning to get the taste. It will be a long three years! This November CAN NOT COME QUICK ENOUGH FOR ME. I fear it will be too late. Expectations of growth and better earnings for American corporations is hard to envision with the exception of Defense industry and Fossil Fuel industry upstream, mid stream, and downstream companies ( Midstream may be the safest). It's not pretty out there! The slow bleed of disposable income has undeniably begun. I have no vision of this energy crisis being transitory even in the longer term. What will tame it , is a global recession. Partially due to commodity constraints and partially due to an inventory overbuild. Buy the time we get it corrected to full bore production recovery, the consumer will have lost there disposable income to inflation of all things, energy and food. I have a Wisconsin friend who is a large Dairy farmer. Plants a lot of acreage and milks a lot of cows. He sent me a message on facebook showing his notes comparing 2021 to 2022 regarding fertilzer components. Nitrogen, Potassium, phosphorous, and urea. The smallest increase in price was 76% and the highest was 117%. That will impact all farmers og all types of crops. You can bet he'll plant all of his land, as he is well capitalized, but the input costs of his milk will be substantially higher - perhaps 20 to 25 percent? not sure. Just know that corn crops, cabbage crops, carrot crops, wheat crops, barley crops, soy bean crops are all experiencing the same expenses. That's already built in and yet to be impactful. Bob