An American Bull While China’s Shot

The US bull market runs rings around China’s waning markets. [The Rude Awakening] February 13, 2024 [WEBSITE]( | [UNSUBSCRIBE]( An American Bull While China’s Shot [American Bull] [Sean Ring] SEAN RING For years, my friend and colleague Jim Rickards has been talking about the weakness of the Chinese economy. With all that talk, China’s stock markets reflect that purported weakness. [In an editorial]( for the Pinko Paper - that’s the FT, Brussels’ mouthpiece - Stephen Roach, a faculty member at Yale and former chair of Morgan Stanley Asia, writes: It pains me to admit it, but Hong Kong is now over. A city I once called home and have cherished as a bastion of dynamism has had the world’s worst-performing major stock market over the past quarter of a century. Since the handover to China in 1997, the Hang Seng index has been basically flat, up only about 5 percent. Over that same period, the S&P 500 has surged more than fourfold; even mainland China’s underperforming Shanghai Composite has far outdistanced the Hong Kong bourse. Here’s the Hang Seng (Hong Kong’s index): [HK index] And the Shanghai Composite: [Shanghai index] These charts are so ugly that you’d have to tie a pork chop around them to get a dog to play with them. Contrast this with the major US markets: [Spx, Nas, russel] These may be hard to see, but that’s the SPX, Nazzie, and Russell 2000. They’ve all been in uptrends since November. After reading Roach’s piece, my good friend and Hong Kong hedge fund manager, H, had this to say: This is interesting. The issue is that we are taught to value markets according to Western metrics. However, Asia does not follow that. Look no further than property. Had you bought a property, had a business you'd be doing well. If you had bought shares in the same then you'd have gone sideways. The West is equities. Asia is bonds and hard assets like property and land. In addition, I do not think Hong Kong will rebound unless the mainland reverses course. I would be the first to buy the moment the big guy announces stimmies for China and reverses its policy. As the adage goes, the time to buy is when the government panics. Right now they are not panicking. The question is, if China’s and America’s economies are so interlocked, why is the American stock market outperforming China’s? Here are three possible reasons why. [Biden Admin Furious Over This New “Alternative” Currency]( Take a close look at this photo: [Click here to learn more]( [What you see here is a new “alternative” currency that’s taking America by storm…]( One which could ruin Biden’s CBDC plans. It’s already popping across the nation… including Utah, New Hampshire and Nevada. [If you’re worried about Biden Bucks then you must watch this short 2-minute video that breaks down how this “alternative” currency works…]( [Click Here To Learn More]( An Object in Motion Tends to Stay in Motion Reader, let’s welcome Ingy Chart - allegedly her real name - to the Paradigm Press team. She’s our new research analyst and provided the charts below. The market has gone up since November. That doesn’t mean it’ll go up forever. But it’s fair to assume it’ll continue in the near future. While the charts will look overbought to some, it’s the fourth year of the Presidential election cycle - typically good for stocks. You’ve also got a Federal Reserve with some dry powder for once. By midyear, the Fed should be cutting rates to give the flailing Democrat campaign some cover. [Returns] Credit: [The FT]( According to the chart, the S&P 500 would hit about 5,650 in twelve months if it were just an average return. Our target is 6,000. Momentum can be a powerful market determinant. Credit Spreads are Tighter Than a Clam’s Bottom Since we didn’t suffer a technical recession - how can you when the government overspends by $2 trillion - Mr Market thinks one won’t happen now. Note: the credit spread we refer to here is Moody’s Baa (S&P: BBB) corporate bond yield minus the 10-year UST yield. The difference or “spread” between the two is the premium you receive for default, maturity, and yield curve risks. [Credit] Credit: [AO Wealth]( These spreads are historically low or “tight,” meaning investors don’t require much premium to invest in these bonds. That means investors feel safe. America’s AI Advantage Look at the below chart. First, CAGR is the compound annual growth rate. In everyday parlance, if we say a stock is earning 10% per year, that’s a compound annual growth rate. TSR is total shareholder returns. TSR includes income in the form of dividends and capital gains (and losses). [CaGR] Credit: [McKinsey & Company]( Notice the “x” after the bolded numbers. That means leaders in AI in the insurance sector outperform laggards by 6.1 times as measured by CAGR, not 6.1%. Wow. So here’s another clue, or golden nugget. When looking for companies to invest in, make sure they’re among the leaders in their sector for AI. That should help them outperform as a company and you as a shareholder. Wrap Up The upshot is that the US stock market is roaring, and I hope you’re participating in the rally. China’s stock market is a damp squib compared to what’s happening in the States. For now, at least, we have momentum, investor confidence, and AI on our side. As English Cavalier poet Robert Herrick once wrote, “Gather ye rosebuds while ye may!” And have a great day! All the best, [Sean Ring] Sean Ring Editor, Rude Awakening X (formerly Twitter): [@seaniechaos]( In Case You Missed It… Trump to NATO: No Pay, No Play [The Donald] [Sean Ring] SEAN RING [A conveniently edited video of The Donald’s campaign rally in South Carolina]( is circulating on social media and in the mainstream. It’s reignited the “Trump is a Russian agent” nonsense that’s been disproven time and again. It’s also led the neocons and the left to question his fitness as a commander-in-chief. Quite frankly, anything that he says leads to tired old handwringing among his enemies. Let’s have some fun at the expense of the MSM, neocons, and warmongering democrats. What the Clip Says For the creatively cut clip, this was the part of the speech that made it out to everyone: One of the presidents of a big country stood up, and said, “Well sir, uh, if we don't pay and we're attacked by Russia, will you protect us?” I said, “You didn't pay? You're delinquent?” He said, “Yes, let's say that happened.” “No, I would not protect you. In fact I would encourage them to do whatever the hell they want. You got to pay you got to pay your bills… And the money came flowing in… and Henry would know this… If I said yes, I will, you don't have to pay yes, I will. Most politicians have said to that [question], “Yes, we will protect you under any circumstances.” Well, then, they're never paying up. I said, “No, no, you have to understand. You don't pay your bills. You get no protection.” The critical part of this clip is, “And the money came flowing in.” Trump was merely bragging, as he often does, about his negotiation skills - and he was right to do so. Of course, now America looks like the mafia. But let’s face it: NATO is a funnel for European money to American weapons dealers. War is a racket, as Smedley Butler once wrote. The Whole Enchilada [For context, let’s add in the beginning and the end, that would have been included in the networks’ cut if they wanted you to have the full story]( “They want to give like almost a hundred billion dollars to a few countries. 100 billion! And I said, and I'm telling you this. This is breaking news. We have breaking news. I said, “Why do we do this? If you do, you give them, not a hundred billion. You give it to them as a loan. It's called a loan: give them the money, and if they can pay it back, they pay it back. If they can't pay it back, they don't have to pay it back because you know they've got some problems. But if they go to another Nation, they drop us like a dog, like a female drops a mail after a date because he doesn't like her… Right, if that happens to our country, then very simply, we call the loan, and we say we want our money because we give money, and then they go to another side as an example. Let's say we give all this money. We were already into Ukraine for over $200 billion, and they could make a deal with Russia in the next three weeks, and all of a sudden, they don't want to deal with us anymore. We've given hundreds of billions of dollars, and why are we at over $200 billion and the European nations are if you add them up. It's a very similar size economy. They're $25 billion. [Sean: this is incorrect; they paid $250 billion - DJT corrects himself later.] So we're at 200 plus, and it affects them much more. We have a thing called an ocean between us, right? Affects them much more, but we're at 200. They're 250. I did the same thing with NATO; I got them to pay up. NATO was busted until I came along. I said everybody's going to pay. They said, “Well, if we don't pay, are you still going to protect us?” I said absolutely not. They couldn't believe the answer and everybody… you never saw more money pour in. The Secretary-General, Stoltenberg, was - I don't know if he is anymore - but he was my biggest fan. He said all these presidents came in, they'd make a speech, they'd leave, and that was a bit, and they all owed money, and they wouldn't pay it. I came in, made a speech, and said you got to pay up. They asked me that question. —BEGIN AIRED CLIP — One of the presidents of a big country stood up, and said, “Well sir, uh, if we don't pay and we're attacked by Russia, will you protect us?” I said, “You didn't pay? You're delinquent?” He said, “Yes, let's say that happened.” “No, I would not protect you. In fact I would encourage them to do whatever the hell they want. You got to pay you got to pay your bills… And the money came flowing in… and Henry would know this… If I said yes, I will, you don't have to pay yes, I will, most politicians have said to that [question], “Yes, we will protect you under any circumstances,” well, then they're never paying up. I said, “No, no, you have to understand. You don't pay your bills. You get no protection.” — END AIRED CLIP— It's very simple. Hundreds of billions of dollars came into NATO, and that's why they have money today because of what I did. And then I hear that they like Obama better. They should like Obama better. You know why? Because he didn't ask for anything. We were like the stupid country of the world, and we're not going to be the stupid country of the world any longer. We're not going to be. Got bad under this guy, so he now wants to send him 50 to 60 billion dollars. I have to say one thing. I think the greatest salesman ever in history is Zalensky, and I like Zalensky because, during the hoax… you know the impeachment hoax? They said I made a threatening phone call to him. And when they asked him, he said, “No, it wasn't threatening.” It was a very nice call. He could have played to the bandwagon. He didn't do that. He told the truth, so I like Zalensky. But that war's got to end. We can make a deal on that war… one of the things we're going to do. [Could You Spot These 2 AI Investing Traps?]( Here’s something no one else will tell you about artificial intelligence. Investing in AI… is BS. Almost every investor out there is falling into [2 AI investing traps](. And they’re going to lose their shirts. Before you spend one nickel on AI… [click here to see tech genius James Altucher’s urgent warning to investors](. [Click Here To Learn More]( Takeaways In the context of the entire clip, it’s clear Trump doesn’t want to disband NATO. In fact, he makes himself out to be NATO’s biggest fundraiser. He wants each member country to pay 2% of GDP, as mandated. To be clear, every country in NATO can afford this. They choose not to pay it because they’re too busy bribing their voters with goodies. Trump was playing hardball with them, but they paid up. And let’s remember, four years of Trump was four years of peace. By the end of his rant, he was clear he wants the Ukraine conflict over with something Vicky Nuland and her neocon ghouls won’t countenance. It’s clear he’s a “peace through strength” kind of guy. Wrap Up If Trump gets back in, I’d be looking at aerospace and defense stocks. Because far from toning down the weapons building, we’ll probably get loads of orders from Europe. In the meantime, the SPX is over 5,000, the Nazzie is just below 16,000, Bitcoin is just below $48,000, gold closed at $2,038 on Friday, and the VIX is under 13. The politics are crap, the economics are sluggish, but the market is rocking. Participate. All the best, [Sean Ring] Sean Ring Editor, Rude Awakening Twitter: [@seaniechaos]( [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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