DHUnplugged #610: Rule #1 – Never Do This

Floating a 75bps hike - late Monday that is what the Fed is doing in hopes of moving faster to just pull the band-aid off. Crypto collapse - bad things happening in the space this week. Mortgage applications drop off a cliff as the Fed is expected to pump up the volume... PLUS we are now on Spotify and Amazon Music/Podcasts! Click HERE for Show Notes and Links DHUnplugged is now streaming live - with listener chat. Click on link on the right sidebar. Love the Show? Then how about a Donation? Follow John C. Dvorak on Twitter Follow Andrew Horowitz on Twitter Warm Up - BAD MARKET - Rule #1 - Never tell people they cannot have their money - Food Wars? Big Problems - WSJ Floating 75bps trial balloon! - NEW WORD! Market Update - Down 6-10% last 5 days (US Markets) - Smoked on Rate hike fears - Coins eviscerated, disemboweled - Another Project (Celsius) bites the dust - BEAR - YTD SP 500 -21%m NASDAQ -31% VIX up 89% - Natural Gas PLUNGES Recap of last Week - Wild Stuff AGAIN - Crypto Crashes - HARD - Celsius - Bitcoin slumped 14% on Monday after major U.S. cryptocurrency lending company Celsius Network froze withdrawals and transfers citing "extreme" conditions, in the latest sign of the financial market downturn hitting the cryptosphere. - Etherium whacked as well as the entire space - Once again - machine/algo/quant driven blow ups that were levered - Binance suspended withdrawals for a time being on Monday - due to logjam - RULE # 1 - NEVER TELL PEOPLE THEY CANNOT GET THEIR MONEY Coin Question - Can Binance and Coinbase halt and under what circumstances? Tuna Fish - Robert Kiyasaki - Rich Dad/Poor Dad said great as investment for inflation - 2 things - 1) Lame discussion 2) Ripped me off of my idea - Tuna great bunker food and currency Explain? - World Bank - Food Crisis is coming - Fertilizer costs up BIG - Lots of Fertilizers from Russia and Belarus (amongst other places)" - Low plantings due to high cost of fertilizer = less food = higher prices and the journey continues - US gov't reportedly encouraging ag and shipping companies to buy and carry more Russian fertilizer in a measure to ease spiraling food costs More Food - or is it China feud? - Pork Wars - Smithfield Foods Inc., which is a unit of China's WH Group, it will cease all harvest and processing operations in Vernon, Calif., in early 2023. - "Smithfield is taking these steps due to the escalating cost of doing business in California," the company said. The move is part of an overall effort to reduce its sow herd in the Western U.S., including Utah. It's also "exploring strategic options" to pull out of its farms in Arizona and California. - Lots of layoffs - Maybe just making statement about states with high costs? Rates and Markets - CPI comes in at 8.6% on Friday - all hell breaks loose - Big moves in food and other core numbers, - WSJ floats 75bp idea for coming meeting (current rate hike assumption is for 50 bps) -  MONDAY 3PM - The 2-yr note yield has surged to 3.42% while the 10-yr note yield has jumped to 3.36%, eliminating the spread between the two as market participants sense an aggressive rate-hike path will lead to slower growth, and possibly a recession, in coming months. - Thought - Maybe market will like that Fed is getting this done faster - instead of letting this drag out (thought of market participants) -- Many presume that markets can rally on this type of move ---- HOWEVER - takes time to absorb this kind of move in markets - could actually cause panic More Rates - Last week - 30 year mortgage 5.5% - This week 6.35% - Mortgage applications dropped 50% YoY Tesla - Bigger problems - Production at Tesla Inc's Shanghai factory is on track to fall by over a third this quarter from the first three months of the year as China's zero-COVID lockdowns caused deeper disruptions to output than Elon Musk had predicted. - Last week,