At least for the time being, the price cuts over at Tesla appear to still be working. That’s because the company’s total shipment of vehicles from China increased 13% sequentially in February, to 74,402 units, according to preliminary data released by China’s Passenger Car Association.

Tesla shares are up almost 2% in pre-market trading on the result. 

While Tesla was able to buck overall declining trends in China’s auto market over the last several months, in February it had the broader trend at its back. Bloomberg reported on Friday morning that China’s new energy passenger vehicle wholesales were up 30% sequentially.

Additionally, the note pointed out that competitor BYD also experienced significant growth in the month, with 193,655 unit sales versus just 88,283 the year prior. 

Tesla shares had slumped during the back half of this week, as the company’s mid-week investor day failed to provide enough short- and mid-term operational details to excite Wall Street. News outlets on Thursday morning called the presentation “underwhelming” and light on short-term specifics. 

Of note was the lack of specifics relating to how the company would be expanding its product lineup, which has begun to stagnate over the last several years. 

Recall we reported last month that the company’s strategy of cutting prices to stoke demand appeared to be working when the company sold 66,051 vehicles in China in January, up from 55,800 in December. 

At the time, the company was reportedly planning to increase output at its Shanghai plant – bringing its run rate back toward where it was in September 2022 – in order to continue meeting the demand from price cuts on its best selling models. 

Tesla had suspended operations at its Shanghai plant for a portion of December. The EV maker was expected to halt production – as we noted in a previous article – but continued swirling questions about demand had surfaced after the company shut down operations at the key location earlier than expected. Back on December 9th we wrote that the company was shutting down operations due to upgrades at the plant and waning consumer demand.

Authored by Jon Wolfenbarger via The Mises Institute,

Over one hundred years ago, Austrian economist Ludwig von Mises discovered what causes the boom-bust business cycle.

As Mises explained, the boom is caused by central and commercial banks creating money out of thin air. This lowers interest rates, which encourages businesses to borrow this newly created money to fund capital-intensive investment projects.

The bust is caused when the money creation process slows. It is then that businesses discover there are not enough scarce resources to complete their projects, so these projects must be liquidated to allow for labor and other resources to be allocated to where they are most desired by consumers.

As a result, not only does the boom-bust business cycle cause tremendous short-term hardship, but it also lowers long-term living standards by wasting scarce capital. This is another application of the economics fact that “there is no such thing as a free lunch.” The only way to keep the boom-bust business cycle from recurring is to prevent banks from creating money out of thin air in the first place.

This explanation of the business cycle is known as the Austrian business cycle theory, in honor of Mises and those who further developed his groundbreaking theory.

One of his best students was economist Murray N. Rothbard, who summarized the theory as follows:

When the government and its central bank encourages the expansion of bank credit, it not only causes price inflation, but it also causes increasing malinvestments, specifically unsound investments in capital goods and underproduction of consumer goods. Hence, the government-induced inflationary boom not only injures consumers by raising prices and the cost of living, but also distorts production, and creates unsound investments. The government is then faced repeatedly with two basic choices: either stop its monetary and bank credit inflation, which then will necessarily be followed by a recession which serves to liquidate the unsound investments and return to a genuinely free-market structure of investment and production; or continue inflating until a runaway inflation totally destroys the currency and brings about social and economic chaos.

As Rothbard noted, governments and banks have a choice: either slow down their money creation and cause an economic bust, or accelerate their money creation and cause hyperinflation.

Thus, money supply growth holds the key to forecasting the boom-bust business cycle.

Money Supply Is Now Declining in the US

Rothbard defined the best measure of money supply, which we call Austrian money supply. It is shown in the chart below and is calculated as M2 less small time deposits and retail money market funds (since they cannot be spent on demand) plus Treasury deposits with Federal Reserve banks.

We placed red arrows on periods when money supply growth slowed before prior recessions (shaded gray). We also placed a red arrow on the current 2.2 percent decline in the money supply, which is likely to cause a recession this year. This decline follows the enormous 40 percent increase in money supply due to the Fed’s covid response in 2020 (green circle), which caused the highest inflation in forty years.

And Money Supply Growth Is Also Slowing in All Other Major Economies

Unfortunately, central banks around the world have followed the Fed’s boom-bust monetary policies.

The following chart shows Europe’s M1 money supply growth is slowing rapidly and approaching zero.

China’s M1 money supply growth is also slowing, although at a less dramatic pace, as shown below.

M1 money supply growth is also slowing in Japan, as the following graph shows.

Lastly, as this chart shows, Brazil’s M1 money supply is also declining, along with that of the US.

Leading Economic Indicators Point toward a Global Recession

Due to the broad-based slowdown in money supply growth over the past year in the major economies of the world, global leading economic indicators are falling into recessionary territory.

For example, the Organization for Economic Cooperation and Development (OECD) composite leading indicators for the Group of Twenty (G20, the twenty largest economies in the world, including the US, Europe, China, Japan, Brazil, India, Australia, etc.) have fallen to levels only seen during global recessions, as shown below.

Conclusion

Global recessions tend to be more severe than recessions confined just to the US since there is no major country in the world to serve as a growth engine to help revive the global economy. Based on the message currently being sent from money supply growth and other leading economic indicators, now is the time to prepare for the bust phase of the boom-bust business cycle.

As if the world needs another trigger-ready hotspot and conflict theatre to open up, the US and South Korean forces on Friday announced the largest joint military drills held on the peninsula in a half-decade.

“The 11-day exercises will start March 13 and will include simulations as well as live demonstrations in the sea and air, and on land, U.S. Forces Korea and the Republic of Korea announced on Friday,” The Hill reports based on official statements. The statement from the allied militaries actually directly called out “aggression” from the north, which is likely to result in a fierce reaction from Pyongyang.

“Freedom Shield is designed to strengthen defense and response capabilities of the Alliance by focusing within the exercise scenario on things such as the changing security environment, DPRK aggression and lessons learned from recent wars and conflicts,” the joint statement said

The Kim Jong-un regime has previously called such drills a “rehearsal” for invasion, and has responded to recent ones by ramping up short to medium range missile tests.

According to The Hill, multiple side exercises will accompany the main one, “Also, troops will engage in another joint drill called Warrior Shield FTX, which will see air, land, sea, space, cyber and special operations exercises.”

“The last major drill of comparable size that the U.S. and South Korea held in the Korean peninsula was Foal Eagle in 2018,” The Hill notes. The announcement came on the same day that the US continued long-range bomber flights over regional waters:

On Friday, the two militaries also conducted a combined air drill with at least one American B-1B long-range bomber and South Korean F-15K and KF-16 fighter aircraft, South Korea’s ministry of defense said in a statement. The aim of the drill was to practice coordination as well as demonstrate Washington’s “extended deterrence” against North Korean threats, the ministry said.

More big US-South Korea military drills.

Both sides announced they’ll hold a drill, dubbed “Freedom Shield,” from March 13-23.

Also, a US B-1B long-range strategic bomber today participated in a joint air drill with South Korean F-15K and KF-16 fighters. Video via @ROK_MND: pic.twitter.com/tXb0sPAw9P

— William Gallo (@GalloVOA) March 3, 2023

The North Korean foreign ministry has in response called on the US to withdraw these plans and to halt all joint training, while removing military assets from the peninsula. Pyongyang warned that if the US continues its “hostile and provocative practices” – this will be interpreted as an act of war. 

Authored by Jonathan Turley,

A new lawsuit is garnering attention in Washington where a white law student has sued Howard University’s School of Law for racial discrimination.

Michael Newman alleging the school maintains a “hostile education environment.”

The complaint names Law Dean Danielle Holley as well as other Howard officials in addition to the university as a whole.

Newman joined the freshman class at Howard in the fall semester of 2020 and remained there for two years. 

He was expelled in September 2022. He alleged that he suffered “depression, anxiety and suicidal thoughts” as a result of “public ostracism, vilification and humiliation” due to his race.

The complaint is particularly detailed in what Newman alleges was Holley’s role in this hostile environment.

It alleges that Holley told him that the school owed him no First Amendment rights as a private institution and denied that using terms like “King Mayo” and “mayonnaise” were in any way racial epithets.

He claims that Holley told student to avoid interacting with him and advised him to avoid further discourse with students.

Global Head of Diversity Recruiting Reggie McGahee allegedly told Newman he had become the most hated student he had seen during his time at Howard.

Newman was targeted by students after he posted thoughts on an online forums following a symposium featuring an African-American speaker in the run-up to the 2020 election.

Newman asked a professor if there could be further dialogue on “whether: (1) Black voters didn’t question turning to government for solutions, and (2) reliably voting for the same party every election disincentivized both parties from responding to the needs of the black communities.”

The response was highly negative and Newman was removed from at least one of his group chats for the class.

Another flashpoint occurred after a student searched Newman’s social media posting and found a famous picture of a slave baring his badly scarred back with the caption, “But we don’t know what he did before the picture was taken.” 

Newman explained that this was a posting against police brutality and an attempt to rebut claims that victims must have done something wrong to justify such a reaction.

Newman faced racial slurs as the “mayo king” and “white panther.”

Other students claimed that the “controversies” caused by his exercise of free speech was producing stress and inhibiting their learning.

When Newman attempted to explain his views in a four-part letter, it was labeled a “manifesto” and resulted in Newman’s removal from a second class-wide group chat.

Holley is accused of secretly recording at least one meeting with Newman and publicly denouncing Newman’s views in a public forum as “disturbing in every sense of the word.” She allegedly blocked him from using several functions to try and speak up in his defense, even disabling the chat function and turning off his camera.

Holley and Newman filed complaints against each other. A law school panel sided with the dean, but the complaint alleged that his complaint was never adjudicated.

Holley is correct, if as alleged, she denied the governance of the First Amendment over her actions or those of her school. Howard is a private, not a state, school. However, the university guarantees free speech protections for both students and faculty, even though the university has been repeatedly flagged as hostile to free speech due to its speech code. It is ranked 93rd on free speech rights.

Moreover, as Dean, Holley should be striving to assure free speech protections for all students as the very foundation for higher education. That is particularly true at a law school that should be instilling the values of free speech that define not just our country but our profession.

Every market period has a distinct bogeyman for when a trade doesn’t go your way. As we recently noted, “8 years ago, every most hated rally was “explained” with HFTs; 4 years ago it was gamma. Now it’s 0DTE.”

8 years every most hated rally was “explained” with HFTs; 4 years ago it was gamma. Now it’s 0DTE

— zerohedge (@zerohedge) February 5, 2023

Having previously discussed the issue of zero-day-to-expire options (we profiled 0DTE first in late 2022 in “What’s Behind The Explosion In 0DTE Option Trading“, and more recently here “Why 0DTE Is So Important, And Why The VIX Is Now Meaningless“), the face of this new fear has recently been JPMorgan’s Marko Kolanovic who warned that these ultra-short-term options could lead to ‘Volmaggedon 2.0’.

As we noted here, however, Bank of America’s derivatives gurus were quick to dismiss this fearmongering, who explained that “a closer study of intraday trade-level data suggests reality is more nuanced” than that laid out by Kolanovic.

Specifically, the performance of intraday momentum strategies has stabilized in recent months, a development that the team attributed to an increase in options selling.

In other words, the market is not the one-sided monolith that will set the stage for an incident such as the rout in February 2018. 

“The 0DTE space has likely absorbed the initial demand impulse but has also drawn in more sellers,” BofA strategists wrote.

However, these contracts, with shelf lives shorter than 24 hours, have exploded since mid-2022 to as much as 50% of trading volume, at times causing derivatives to amplify moves in underlying assets.

As Bloomberg reports, that’s unquestionably made the task of figuring out the market’s collective thinking on the economy an especially futile exercise of late.

In a study by JPMorgan Chase & Co. in November, strategists including Peng Cheng found that the market impact from those trades can vary from a drag of as much as 0.6% to a boost of up to 1.1%.

“These big swings like yesterday were a great example,” Jim Bianco, founder of Bianco Research, said in an interview on Bloomberg TV.

“We have to be ready for this idea that, ‘hey, look, the market’s up 1%. What does it mean? Wait an hour, it’s now down on the day. Wait an hour, it’s back up on the day.’ That’s where I think that the 0DTE options are really starting to play. It’s the market that’s confusing a lot of people.”

Despite all this concern, history shows the merit of owning 0DTE “lottery tickets” despite paying inflated vols…

Incidentally, it’s the lottery ticket aspect of 0DTE why, as we first revealed last week, 87% of all same-day options traded one Tuesday of last week finished at zero point zero value.

• 83% of 1 day calls expired at a zero (585k was total volume)

• 91% of 1 day puts expired at a zero (620k was total volume)

BofA concludes by noting that while 0DTE options could – in theory – be “weaponized” in the future to exacerbate intraday fragility and/or mean reversion, “thus far the evidence presented above suggests that SPX 0DTE option positioning is more balanced/complex than a market that is simply one-way short tails.”

Translation: those waiting for 0DTE to spark the next market crash may want to not hold their breath.

But fear remains, as Bloomberg points out that getting a handle on what the craze may mean is complicated by the enormous volume of the options marketplace, the short lifespans of these trades and uncertainty about just who is using them.

“When you get big disruptions like that, you always get people that say, ‘you know, you got to watch out because you’re going to create a big problem,’” said Malcolm Polley, president and chief investment officer at Stewart Capital Advisors LLC.

“I don’t think they really fully understand because we’ve never really seen this phenomenon before.”

But, Brent Kochuba, founder of SpotGamma, does fully understand this ‘new phenomenon’.

His view is simple – the explosive rise of 0DTE options has actually acted as a positive market force.

He conducted a study on the impact of the activity via a measure known as delta, or the theoretical value of stock required for market makers to hedge the directional exposure resulting from options transactions.

From the start of 2022 to mid-February this year, positive 0DTE delta was tied to market rallies, a sign that short-dated calls were mainly being used to place wagers on stock rebounds.

“0DTE does not seem to be associated with betting on a large downside movement. Large downside market volatility appears to be driven by larger, longer dated S&P volume,” Kochuba said.

“Where 0DTE is currently most impactful is where it seems 0DTE calls are being used to ‘buy the dips’ after large declines. In a way this suppresses volatility.” 

In fact, 0DTE appears to have lowered differences between intraday volatility and close-to-close volatility…

George Patterson, chief investment officer at PGIM Quantitative Solutions, got a whiff of that retail urge recently when some friends’ teenage kids asked him questions about 0DTE options.

“0DTE options trades are yet another fad for retail investors, who view these as lottery tickets,” Patterson said.

There is one other aspect of the market that 0DTE options have impacted. The recent decoupling of VIX from the equity underlying has some market participants questioning the value of the ‘Fear Index’ given that so much of the options volume is now missing from the index calculation (which is based on only S&P 500 options expiring 23 to 37 days).

Although a look at short-dated VIX (9d – so still notably beyond the 0DTE expirations) suggests little systemic difference…

Nevertheless, as Nomura cross-asset strategist Charlie McElligott, the less controversial issue is that 0DTE options add yet another layer of noise to intraday markets, noting that “US equities are such an untradable mess right now,” as the battle between bulls eying a “no landing” and bears warning over “higher for longer” rates pushes more and more into short-dated, highly-levered trend-following ‘lottery tickets’ via 0DTE.

Authored by Bruce WIlds via Advancing Time blog,

Mortgage rates have doubled over the past year and this has hit housing affordability hard. How much housing prices will retrench is still up in the air. Consider the whole premise housing prices in America are about to fall like a stone may be overdone. Hard economic times could very well take a greater toll on the price of intangible assets and paper promises than on things like housing.  

Whether a person is better off renting or buying is often directly linked to rental rates that are related to cost. Feeding into what a landlord charges are things such as taxes, insurance, maintenance, utilities, and a slew of fees. If landlords cannot make money, they exit the business and the number of housing rental units is reduced. This puts a bottom under the market and/or drives rents higher. Yes, a lot of new rental units are coming online but how easy will it be to rapidly fill them with good tenants? Simply filling a unit at a huge discount or with tenants that want a new unit but fail to pay or tear the hell out of it does not work. 

What many renters fail to consider is that landlords have far more to risk than tenants. It is the kiss of death to lower your standards just to fill units up. Doing so simply destroys a property’s reputation while creating a slew of evictions, costly turnover, and an explosion in maintenance costs. Adding to this ugly path forward is the fact our costly legal system has lost its teeth when it comes to collecting on small claim judgments.

Much of the problems we see in housing stem from a lack of starter homes and new small houses at a reasonable cost. Several reasons exist for this situation. First and foremost is that builders and realtors like bigger more exotic homes because that is where the money is. Another factor is zoning, this includes tightening rules and restrictions in plotted additions. These are often intended to keep standards and values high. People are seldom excited to see less expensive homes being built in their area. 

Millennials Have Been Locked Out Of Buying Because Of Affordability 

The cost of shelter has skyrocketed and the face of housing ownership is changing.

Over the last several decades starter homes have become a thing of the past. This has created a shortage of low-cost housing that will put a floor under housing prices. The areas where housing will drop the most are areas where prices have increased the most with the bigger most expensive houses taking the brunt of the hit. This is partly because they cost more to maintain and are more heavily taxed.

Low-Interest Rates Have Pushed Prices Higher

The decision of the Fed to buy mortgage-backed securities years ago added to soaring prices and the mess we face today. Buyers are out there, many are speculators and inflation believers, these buyers are circling each new listing like hungry sharks. They are driven by the idea interest rates will soon fall and they will be able to refinance. If rates drop prices are likely to soar again. This could put a strong floor under most of the housing market. 

One problem causing an issue for those looking at the low end of this market is that lenders have little interest in making small dollar loans because they are less profitable. This means these properties are often picked up by cash buyers. Many of these now go to big players that at times may buy without looking at the property but simply have it inspected by a company that sends them a report. Others are sold on contracts that often give the buyer little protection. 

As stated many times in previous articles here at AdvancingTime, it could be argued the government holds huge responsible for many of America’s housing problems. Our government makes the rules by which builders and landlords must play. This includes some of the factors I have moaned about in the past, a big one is that roughly 80% of new apartment construction has been for the high-end luxury market. 

The government has its finger prints all over the housing sector and also causes problems for renters. This is because its policies avoid dealing with the growing number of tenants that are irresponsible. In short, Government housing cherry-picks the best of the low-income renters providing them with very low rents and nice apartments while dumping the worst of these renters on the private sector. This makes housing more expensive for the rest of the population.

The number of units being built during inflationary times with higher interest rates also plays into this market. Who buys homes greatly depends on who can afford them and how these buyers envision the future unfolding. In short, if buyers think prices will continue to rise this is very supportive of higher prices.  

And then, there is the decision of the Fed to buy mortgage-backed securities years ago, this has added to soaring prices and the mess we face today. Following 2008, big money from Wall Street got behind a move to have Fanny Mae and other big lenders bundle foreclosed properties. Selling them in packages eliminated and locked out small concerns and individuals from participating in buying. In recent years, a small but mighty group of corporations have purchased hundreds of thousands of homes. 

These Wall Street funded corporations are just one of the forces shutting people out of the home-buying market and locking them into being perpetual renters. When it comes to financing, short of some government giveaways to certain segments of the population, Wall Street has a huge advantage over individuals. This is why even though managing the renting of individual houses is challenging, Wall Street may not retreat from the task. It is important to remember this is about the real rate of inflation.

Not only have institutional buyers with deep pockets hijacked some markets by buying whole neighborhoods but the market is changing in other ways. The U.S. housing market has become a speculative investment and now homebuyers are competing with I-Buyers that have lots of low-cost capital. An I Buyer is an “Instant Buyer” in the real estate industry who uses data-driven online home value assessment tools to determine what your house is worth and then makes you an offer.

Returning to the subject of inflation and the benefits of buying tangible assets as a way to protect ones buying power, as it becomes more obvious inflation is only going to get worse, those that can afford to buy houses will continue to do so even at higher prices. The point is, we should not be surprised if housing prices prove far more resilient in a slowing economy than many experts think. In an inflationary environment, these houses fall into the category of a tangible asset capable of earning a positive return. Few investments meet this criteria and those that do will be in strong demand. 

Note, housing prices are much higher in many parts of the world. One thing for certain, it will be interesting to see what happens next. Before you just assume housing prices are going far lower consider who will be buying those units that come available. All of what you have read above feeds into why those homeowners that have a low-interest rate mortgage may not be in a hurry to sell their home if they are not in distress. Expect how people handle their investments in the future to play a huge factor in future housing values.

Authored by ‘BTCCasey’ via BitcoinMagazine.com,

The Treasury’s statements explore the potential forms and implementations of an American CBDC…

The U.S. Department of the Treasury has released comments from Undersecretary for Domestic Finance Nellie Liang on the “Next Steps to the Future of Money and Payments,” addressing CBDCs and the approach the American government is taking to their potential implementation.

The original Treasury report released in September 2022 described the formation of a CBDC working group that would advance work on a CBDC. Liang’s remarks confirmed the formation of that group.

“One of the central tasks for the CBDC Working Group is to complement the Fed’s work by considering the implications of a U.S. CBDC for policy objectives for which a broader Administration perspective is helpful,” Liang said.

“To give you a sense of how we are pursuing this work, I will describe our approach to thinking about CBDC options, the policy questions we are attempting to answer, and the kinds of recommendations we hope to develop.”

Highlights from this description include a look at the potential forms that a CBDC could take, the potential for a separate retail and wholesale CBDC and the possible core features of the CBDC.

Also discussed is the idea that a “potential U.S. CBDC, if one were created, would best serve the United States by being ‘intermediated,’ meaning that the private sector would offer accounts or digital wallets to facilitate the management of CBDC holdings and payments. In terms of technology, a retail CBDC might involve a different architecture compared to a CBDC that is intended solely for wholesale use.”

In his piece for Bitcoin Magazine, Mark Goodwin described how Bitcoiners may have “spent so much time looking for CBDCs, we missed the private-entity stablecoin monster right in front of our eyes.”

The Treasury’s released remarks suggest that a CBDC may well come on the backs of private entities, with major incentives to participate. The United States has gotten serious in regards to its consideration of a CBDC. And all this just as legislation has been introduced by Republican lawmakers that would “prohibit the Federal Reserve from issuing a CBDC directly to anyone.”

Although this bill may not have much of a chance of passing, notable is the specific angle of preventing a Federal CBDC, potentially leaving free those “intermediated” by private parties.

The remarks also described how a CBDC is one of many directions for the government to take, another being real time payment systems. The Federal Reserve, according to Liang, “has indicated that it expects to launch the FedNow Service this year, which will be designed to allow for near-instantaneous retail payments on a 24x7x365 basis, using an existing form of central bank money (i.e., central bank reserves) as an interbank settlement asset.”

This would differ from a CBDC in that it would utilize an existing form of central bank money versus the new form a CBDC would introduce, in addition to a potential new set of payment rails.

Regardless of the path that the Treasury takes, new payment systems are seemingly on the horizon for the United States. 

Wagner Group is heavily involved in fighting to capture the eastern city of Bakhmut, and its head, Yevgeny Prigozhin, has said at this point the strategic city on Donetsk Oblast is “practically surrounded”. 

Prigozhin issued a video message to Ukrainian President Volodymyr Zelensky on Friday. Donned in military fatigues, he urged for the order be given for Ukrainian forces to retreat in order to save soldiers’ lives. “Units of the private military company Wagner have practically surrounded Bakhmut. Only one route (out) is left,” he said. “The pincers are closing.”

⚡️Wagner forces walking around Bakhmut this morning showing an RIA reporter the destroyed bridges.

They say that almost all the bridges in Bakhmut have been destroyed by Ukrainian forces. pic.twitter.com/WMlOhjY4mo

— War Monitor (@WarMonitors) March 3, 2023

Wagner has further claimed that the Ukrainians have destroyed the majority of bridges leading in and out of the city center.

Commenting on the aforementioned video by Wagner’s leader, Reuters describes another scene as follows:

The camera panned to show three captured Ukrainians – a grey-bearded older man and two boys – asking to be allowed to go home. From visible buildings, Reuters determined the footage was filmed in Paraskoviivka, a village 7 km (4.3 miles) north of the centre of Bakhmut.

As we reported earlier this week, Zelensky and his top aides have lately issued statements appearing to pave the way for a ‘strategic withdrawal’ – or in reality a retreat – as better-armed and numerically superior Russian forces have the city almost completely encircled.

Russian firepower has also been relentless and reportedly greater in supply with Volodymyr Nazarenko, a deputy commander in the National Guard of Ukraine, telling a public radio station in a fresh statement that fighting has been occurring “round the clock”.

“They take no account of their losses in trying to take the city by assault. The task of our forces in Bakhmut is to inflict as many losses on the enemy as possible. Every meter of Ukrainian land costs hundreds of lives to the enemy,” he said.

Kiev has used the devastating scenes out of Bakhmut to press its Western backers for more artillery shells and heavier weaponry immediately. “We need as much ammunition as possible. There are many more Russians here than we have ammunition to destroy them,” Nazarenko said.

In a Pentagon briefing Thursday, Air Force Brig. Gen. Pat Ryder told reporters the US is still seeing “intense fighting near Bakhmut.” 

⚡️Wagner force’s confirmed to be crossing the bakhmutka river pic.twitter.com/ugTfNPK3Ix

— War Monitor (@WarMonitors) March 3, 2023

“Russian forces and Wagner [Group] mercenaries continue to press their attacks around Bakhmut, and Ukrainian forces continue to hold the line,” Ryder said. “It remains a very fluid situation.”

But again, all signs are pointing to a likely retreat already being in progress. The below unverified footage was first published on Thursday…

⚡️Unconfirmed video reportedly showing a Ukrainian unit withdrawing from Bakhmut this morning. pic.twitter.com/2Irgf3Rp8P

— War Monitor (@WarMonitors) March 3, 2023

On Tuesday for the first time the Ukrainian presidency’s office began significantly shifting its rhetoric. “So far they’ve held the city, but if need be, they will strategically pull back because we’re not going to sacrifice all of our people just for nothing,” Zelensky aide Alexander Rodnyansky conceded earlier.

Since then, Zelensky has admitted the extreme difficulty of the situation, as he’s likely moment by moment mulling giving the order for withdrawal. The Kremlin will see in Bakhmut one of the single and most strategic victories of the war so far, and it will likely open up momentum and will be a key logistics hub for pacifying all of the Donbas.

And yet for now, Ukraine’s military is still sending signals it’s trying to hold out its positions…

Ukrainian Commander of Eastern Forces Col. Gen. Oleksandr Syrskyi visited troops in Bakhmut today, proving there’s still a road into the city. He said Russians increasing forces, including units of Wagner & regular army. “Intense fighting in and around the city.” via Land Forces pic.twitter.com/vbG7MTd83k

— Christopher Miller (@ChristopherJM) March 3, 2023

But without doubt the overwhelming momentum is in Moscow forces’ favor at this late stage.

Authored by Lance Roberts via RealInvestmentAdvice.com,

Gen Zers, according to a recent Magnify Money survey, are overly optimistic about being wealthy. In fact, according to the survey, they are THE most financially optimistic generation. To wit:

“Nearly three-quarters (72%) of Gen Zers believe they’ll become wealthy one day, making them the most financially optimistic generation.”

But, interestingly, that optimism, as noted by the firm’s executive editor, is “more than just youthful optimism.”

“We are surrounded by extremes of wealth and poverty, and I think younger folks naturally gravitate to the more positive extremes. What’s more, the concept of investing is so much more accessible today, and I know many Gen Zers believe they can harness the power of the market to build wealth.” – Ismat Mangla

Interestingly, Gen Zers are optimistic they can use the stock market to build wealth. Unfortunately, that hasn’t worked out well for the generations before them.

Since 1980, there have been three major bull market cycles. The first started in the mid-80s and culminated in the Dot.com bust at the turn of the century. The early 2000s saw the inflation of the “real estate” bubble heading into the 2008 “financial crisis.“ We live in the third “everything bubble” fueled by a decade-long push of monetary and fiscal interventions.

However, 80% of Americans are still not “wealthy after these three major bull markets.”

That is according to some of the most recentsurveys and Government statistics:

• 49% of adults ages 55 to 66 had no personal retirement savings in 2017, according to the U.S. Census Bureau’s Survey of Income and Program Participation (SIPP).

• The latest Federal Reserve Survey of Consumer Finances found that the median savings in Americans’ retirement accounts were $65,000.

• Less than half of those surveyed saved $100,000. Not enough to support a median retirement income of around $40,000 a year. 

• One in six say they have saved nothing. A third currently makes NO contributions. 

•  80% of people expected to see their living standards fall in retirement. 10% feared they wouldn’t be able to retire at all.

Will it be different for Gen Zers in the future? Unfortunately, it likely won’t be for the same reasons that using the stock market to build wealth didn’t work for the generations before them.

80% Of Americans Aren’t Wealthy

According to the Magnify survey, Gen Zers defined “being wealthy” by several measures:

Most surveyed define “wealthy” as living comfortably without concern about their finances. As shown below, that goal has eluded all but the top 20% of income earners.

While 72% of Gen Zers believe they will be wealthy, the net worth of the bottom 50% of Americans has remained relatively unchanged since 1990. While the middle 50-90% of Americans have seen an increase in net worth, it has not been enough to keep up with the “standard of living,” which, as discussed previously, continues to push Americans further into debt.

“The current gap between savings, income, and the cost of living is running at the highest annual deficit on record. It currently requires roughly $6,300 a year in additional debt to maintain the current standard of living. Either that or spending gets reduced which is the likely outcome as a recession becomes more visible.” – The One Chart To Ignore

Another Magnify Money survey supports this bit of analysis by showing that roughly 50% of working Americans live “paycheck-to-paycheck,” meaning they have no money left after expenses. While that was common among those making less than $35,000 annually (76%), 31% of those making more than $100,000 experienced the same.

The critical point is that it is hard to count on the stock market to build wealth when you don’t have excess savings with which to invest.

The Stock Market Won’t Make You Wealthy

Generation Z, born between 1992 and 2002, was between 5 and 16 years old during the financial crisis. Such is important because they have never truly experienced a “bear market.” Any advice they might have received from financial advisors suggesting caution, asset allocation, or risk management was repeatedly proven to underperform the market.

“Ha….Boomers just don’t get it.”

However, since they became old enough to open an investment account, they have only seen a “liquidity-driven” bull market that fostered a generation of “Buy The F***ing Dip “ers.

However, while the lack of savings was one of the key points in “The One Chart To Ignore,” the other key point, and why 80% of Americans didn’t build wealth, is that “markets don’t compound returns.“

“There is a significant difference between the AVERAGE and ACTUAL  returns received. As I showed previously, the impact of losses destroys the annualized ‘compounding’ effect of money. (The purple shaded area shows the “average” return of 7% annually. However, the differential between the promised and “actual return” is the return gap.)“

While 26% of Gen Zers think that investing in the stock market and 19% in Cryptocurrencies will be their ticket to financial wealth, a lot of financial history suggests this will not be the case.

While Gen Zers are very optimistic they will be wealthy in the future, a mountain of statistical and financial evidence argues to the contrary. Will some Gen Zers attain a high level of wealth? Absolutely. Roughly 10% of them. The remainder will likely follow the exact statistical breakdown of the generations before them.

The reasons for that disappointing outcome remain the same. If investing money worked as the mainstream media suggests, as noted above, then why, after three of the most significant bull markets in history, are 80% of Americans so woefully unprepared for retirement?

The crucial point to understand when investing money is this: the financial market will do one of two things to your financial future.

1. If you treat the financial markets as a tool to adjust your current savings for inflation over time, the markets will KEEP you wealthy. 

2. However, if you try and use the markets to MAKE you wealthy, the market will shift your capital to those in the first category.

Experience tends to be a brutal teacher, but it is only through experience that we learn how to build wealth successfully over the long term.

How Money Really Works

It isn’t just about investing money. There are also vital points about the money itself.

1. Your career provides your wealth.

You most likely will make far more money from your business or profession than from your investments. Only very rarely does someone make a large fortune from investments, and it is generally those that have a business investing wealth for others for a fee or participation. (This even includes Warren Buffett.)

Focus on your career, or business, as the generator of your wealth.

2. Save money. A lot of it.

“Live on less than you make and save the rest.” Such sounds simple enough but is exceedingly difficult in reality. Given that 80% of Americans have less than $500 in savings tells the real story. However, without savings, we can’t invest to grow our savings into future wealth.

3. The true goal of investing money is to adjust savings for inflation.

As investors we get swept up into the “casino” called the stock market. However, the true goal of investing is to ensure that our “savings” adjust for future purchasing power parity in the future. While $1 million sounds like a lot today, in 30-years it will be worth far less due to the impact of inflation. Our true goal of investing is NOT to beat some random benchmark index by taking on excess risk. Rather, our true benchmark is the rate of inflation.

4. Don’t assume you can replace your wealth.

The fact that you earned what you have doesn’t mean that you could earn it again if you lost it. Treat what you have as though you could never earn it again. Never, take chances with your wealth on the assumption that you could get it back.

5. Don’t use leverage.

When someone goes completely broke, it’s almost always because they used borrowed money. Using margin accounts, or mortgages (for other than your home), puts you at risk of being wiped out during a forced liquidation. If you handle all your investments on a cash basis, it’s virtually impossible to lose everything—no matter what might happen in the world—especially if you follow the other rules given here.

6. Whenever you’re in doubt, it is always better to err on the side of safety.

If you pass up an opportunity to increase your fortune, another one will be along soon enough. But if you lose your life savings just once, you might never get a chance to replace it. Always err on the side of caution. Always ask the question of what CAN go “wrong” rather than focusing on what you “HOPE” will go right.

Investing money in our future is not as simple as much of the media makes it seem. We all want to be able to under-save today for tomorrow’s needs by hoping the markets will make up the difference. Unfortunately, there is no magic trick to building wealth.

The process of saving diligently, investing conservatively, and managing expectations will build wealth over time.

It’s boring. But it works.

No matter your age, it’s not too late to start making better choices.

Six months ago, a series of explosions caused damage to Russia’s undersea Nord Stream gas pipeline. The pipeline’s future has been uncertain due to rising tensions between Moscow and Washington, particularly with an anticipated spring offensive in Ukraine. Earlier this year, there were discussions about the possibility of repairs within a year by the German energy company Uniper. However, sources now tell Reuters that Russia plans to “seal up” the pipelines. 

Russia’s Gazprom, a state-controlled oil company, constructed Nord Stream 1 and Nord Stream 2, which consist of two pipes each. These pipelines were designed to transport 110 billion cubic meters of natural gas annually from Russia to Germany via the Baltic Sea. 

In September, three of the pipelines were severely damaged by explosions, resulting in ruptures. One of the Nord Stream 2 pipes remained intact. 

Although Gazprom has stated that repairing the damaged pipelines is possible, two sources told Reuters that Moscow does not expect relations with the West to improve sufficiently in the near future to warrant the pipelines being repaired. 

In January, outgoing Uniper CEO Klaus-Dieter Maubach, which was Russia’s top gas customer before pipeline flows were reduced, said Nord Stream could be repaired within a year. But that’s not politically popular in the EU as countries race to find supplies elsewhere. 

However, the Russians aren’t abandoning Nord Stream. Sources said even though repairs might not be imminent, there is a plan for conserving the pipelines “for possible reactivation in the future.” This means that Gazprom would seal the ruptured ends of the damaged lines and coat the insides with an anti-corrosion lubricant. 

The possibility of reopening Nord Stream might come if Europe’s ability to offset Russian gas supplies fails. A source said this might push Europe back to buying cheap gas from Russia. 

Meanwhile, the investigation into the Nord Stream explosions at the end of September continues amid accusations from Moscow that Western intelligence services are “hiding something.”

Famed journalist and Pulitzer prize winner Seymour Hersh, who for decades was a star reporter writing for The New York Times and New Yorker, published a bombshell report on his Substack last month about the US sabotaging Nord Stream under the guise of a military exercise in 2022. 

In recent Senate testimony, US Under Secretary of State for Political Affairs Victoria Nuland praised the Nord Stream sabotage act. 

At a Senate hearing, top US diplomat Victoria Nuland celebrated the Nord Stream 2 pipeline bombing:

“Senator Cruz, like you, I am, and I think the administration is, very gratified to know that Nord Stream 2 is now, as you like to say, a hunk of metal at the bottom of the sea.” pic.twitter.com/KS5OM4N165

— Aaron Maté (@aaronjmate) January 27, 2023

… and then there’s this. 

⚡️#BREAKING Russia will not allow the West to “blow up gas pipelines” again — Lavrov

— War Monitor (@WarMonitors) March 3, 2023