Fear! Inflation Expectations Grow To 2.11% As Fed Prints (Bitcoin Backs Off High As US Dollar Rallies)

President-elect Joe Biden is scaring the world to death with his $11 trillion spending fantasy coupled with his $2 trillion Covid stimulus package. And The Federal Reserve has a lot of printing to do to pay for Biden’s spending fantasies (that Speaker Pelosi will undoubtedly approve). All has led to US inflation expectations to rise to 2.11%.

Bitcoin has finally backed-off its meteoric rise just as gold has backed-off its meteoric rise back in July.

Bitcoin rose with Fed money printing but backed-off as money printing slowed. Note: The rapid rise in money printing was pre-Biden and largely due to Covid and government shutdowns.

Bloomberg Galaxy was down 7.5% on Friday while Bitcoin is down slightly today. ZCash is the big loser today with Monero as the only gainer.

But with Biden’s prodigious appetite for spending other people’s money, we can see fear in the eyes of taxpayers.

Gold And Silver Fall, Big Banks Rise As Democrats Expected To Gain Super Majority In US Senate (10Y Treasury Note Yield Rises Above 1%)

Just like 2009 when Obama was elected President and the Democrats had a super majority in Congress. If the Senate if split, VP Kamala “Fweedom” Harris is the tie-breaker. Hence, Democrats will have a super majority. = UNCONTROLLED FEDERAL SPENDING!!!

Gold and silver fell as Democrats took the lead in the two Senate elections, and big banks rose.

Even tech-heavy NASDAQ fell on the prospect of a Democrat super majority in Congress.

Meanwhile, the US Treasury 10Y yield broke through the 1% barrier.

UPDATE as of 11:30 AM EST with 10 year Treasury Note price (green)

UPDATE: As least silver is rising a bit after slumping.

The Dow rose 2% on the prospect of uncontrolled government spending. Gov’t contractors delight!

US New Home Sales Down 11% In November, But UP 20.8% YoY

US new home sales plunged 11% in November (hello, it’s NOVEMBER!!).

But new home sales rose 20.8% YoY (even though the YoY rate is falling).

The median price for new home sales fell slightly in November,but with historically low existing home sales I expect new home sales to increase in 2021.

Roaring Twenties? No End in Sight for Blank-Check Companies (SPACs)

Yes indeed, 2020 was an unusual (aka, dreadful) year. Covid-19 (which almost killed me), the Porkulus Bill (Covid bill combined with Omnibus spending bill) $900 billion coronavirus relief bill and $1.4 trillion government funding measure slipped through Congress with few reading it, watching sports on TV with almost none one in attendance, the Buffalo Bills in first place, etc. Now we have the SPAC revolution.

(Bloomberg) — There are four letters that sum up 2020’s equity market: S-P-A-C.

Special purpose acquisition companies, or SPACs, went from a back-of-the-shelf financial vehicle to one of the biggest segments of initial public offerings, with a record $78 billion raised in the U.S. this year, according to data compiled by Bloomberg. That exceeded the combined total of SPACs in all previous years and made up about 45% of this year’s record $177 billion IPO volume, the data show.

Blank-check companies, as SPACs are also known, will continue to shake up not only equity markets but also mergers and acquisitions in 2021, dealmakers predict. Still, the flood of SPACs searching for acquisition targets — plus the new ones being raised every day trying to woo investors — could create a challenging dynamic.

“I still think it’s going to be a very, very robust market in 2021,” said Niron Stabinsky, Credit Suisse Group AG’s head of SPACs. “ECM volumes are incredible, which is a function in part of the strong performance of the equity markets in general. At some point it is inevitable that things will cool down and you will see volume slow.”

Credit Suisse alone is preparing to launch seven to eight new SPACs in January, he added.
Credit Suisse was the No. 1 SPAC underwriter, followed closely by Citigroup Inc., while Goldman Sachs Group Inc. was the top adviser on mergers involving SPACs, according to data compiled by Bloomberg.

The unprecedented surge in SPACs was fueled in part by a hunt for alternative investments that was spurred by the coronavirus pandemic. It also sprung from a renewed debate over whether the traditional IPO process left money on the table for companies going public. Direct listings had emerged as one way to address that concern, but SPACs became the resounding answer in 2020.

But don’t worry. Wall Street still has IPOs. Particularly for Chinese firms.

NASDAQ has a nice summary of SPACs.