Turbulent times - will be with us for awhile, regardless of Monday's forecast turn reversal from down-to-up as I outlined in my brief weekend comments from the hospital. I doubt the market's endurance with this move will be as strong as my heart's (to be amusing) persistence, but it's very timely.

Pixabay

Current action faces many variables everyone is aware of, although one result of either the war or the Chinese COVID-lockdowns, is not adequately realized it seems by markets (or governments). And that's the risk of 'revolution' in China or famine in many parts of the 3rd world, both due to lack of grains coming for this Summer, or from the drought, which is ancillary to all the other issues.

This morning I mentioned the real start of the Chinese Communist Party back in the 1920's was for awhile an undertone in British-dominated Shanghai. The indigenous Chinese were discouraged from getting into certain businesses as well as social levels. As resentment was rising, they leaned toward early CCP orientation, not because they loved socialism, but to gain economic stature.

At least that's my take, which also ponders today's Shanghai citizens growing frustrated (and hungry) at being 'locked-in' with Orwellian control dwarfing any other 'COVID-19' control measures (perhaps Australia or Spain were toughest) in the earlier days of the pandemic. One big difference is nobody 'welded-in' their doors, nobody put fences around their apartment blocks, and nobody did tear gas them just for going to get food to their families. At least not for long.

What I'm suggesting, and it's probably wishful thinking, is that prolonged crazy politics from Beijing not only unwind what had been prior years of the 'commie capitalist' (as I liked to term Mainland China's regime) phenomenal growth but endanger it's future gains. They might become Emersonian in spirit.

Decades ago as a kid, I did a term-paper on Ralph Waldo Emerson, based on 'faith, admiration and sympathy', and struck on the note of 'ambition and care' based on the heart beating stronger upon envisioning worthy goals (of course I'm not reflecting on my own cardiac rhythm, which is fine now given a lot of work 'before' the first warning sign is something life-threatening). My theme at the time was that 'when the heart doesn't strive for better or to do better, there is not so much to live for... it becomes goals'. So it has been for China, many years ago they discarded 'actual' communism, and if their tough COVID stance cannot be contested with getting jailed or beat-up, well, people might find they have had enough of the CCP, not just CCP virus. Probably wishful thinking.

As Beijing now has lots of new COVID cases, rumors are rife that the CCP will lock-down the capitol city too. That provoked panic buying and hoarding food, and the hubris of their government's declining to acknowledge how worthless their vaccine is (probably because they profiting by exporting it too... Mexico, Brazil and others as examples), as well as failure to cut a deal with Biontech (BNTX) of Germany (Pfizer's (PFE) partner), is symbolic and concerning. The people might just demand access to treatments that actually work..

This also tells us that new sub-variants of COVID may well not be protected by 'base levels' of vaccine, and thus COVID could expand in Latin American too in theory. So, either a new multi-variant vaccine gets developed fast, China gets humility and makes a deal, or they get licensing rights for the Pfizer pill that I believe works fine for most, if they catch COVID and take it within two days. By the way, a push to finally educate Americans 'more' about Pfizer's pill starting.

If China does not, the stagflation 'they' have will exceed our own, and famine will become part of the scenery, even without considering the ramifications of a continued Russian war in Ukraine. It also 'might' agitate enough prominent people in Shanghai to ignite a 'revolution' that unseats the CCP hierarchy.

Indirectly related, a failure to end the Ukraine war in a timely manner results in several things: famine in much of the 3rd world that depends on Ukraine and Russia for grain, a coup to unseat Putin, which may already have been known and laid the foundation for the 'witch hunt purges' Putin has already initiated.

Today I read an interview with a prominent retired Russian Army General who is Chairman of all the retired military and police in Russia (an Association). In a very candid interview he reflects on his year's negotiating with NATO and of course the U.S. in Brussels, and surprised that the first response to Putin was to offer negotiations, while Putin threatened. He even said 'generals are least of all to want wars that politicians start, and if they win the politicians take the credit, and if they lose, the Generals take the heat and blame.'

First of all I hope that General survives the week. Second of all I commend at last a document that purports to represent a majority of retired general officers and police commanders, and it was apparently spearheaded by the FSB (the modern KGB) also indicating disapproval of the decisions Putin is making.

For me a most realistic comment was a statement suggesting that continuing the war will result in Russia's de-legitimization until Putin is replaced, and that Putin needs to bite his own bullet and realize he'd be on-trial for war crimes. I also noted reference to what happens 'if' Putin uses tactical nukes in Ukraine.

The Russian General said NATO would cripple -if not eviscerate- Russia in 15 minutes, and instead of renewed Empire, Russia as a large state would cease to exist. This last part made me ponder the legitimacy of the interview text, as I suppose our CIA could not have written it better to undermine any insanity or supporters of Putin.

What happens from it? Maybe nothing immediately, new assassinations might loom, or the best case would be actually eliminating Mr. Putin. The comment was made that Russia's Chief of General Staff might not take an order from a madman, and that Putin has no concept of the need for professional people to govern the country. It was so strong to be suspect, but if it's real it's the sign we need for hope this useless war could be brought to an end by Russians themselves.

Meanwhile we do not have a rebound from deep oversold in the S&P (SPX), just the rebound we expected, and overall may see more. However, remember most of the technical crowd will just look at charts or de-emphasize the narrowness of the leadership. So the weaker stocks capitulated long ago, and the stronger are generally rebounding within corrections, but all the variable risks remain in terms of the expensive stocks, and conflated guidance prospects ahead. Also you don't have to make an orthodox low (mass selling and panic) because of the bifurcation, so bottoming-processes can accordingly also be variable, at the same time forecast rebounds remain within the bearish context outlined.