I've got crabs...

and everyone wants them. Especially the druggies.

Author

Tim Vollans
January 16, 2024 ā€¢ Estimated Reading Time: 8 minutes

āš” The Spark
Iā€™ve got crabsā€¦

And EVERYONE wants them

When everythingā€™s political, itā€™s literally more fun to talk about crabs.

Once again, weā€™re asking you to question everything you read. Not because we care (we do). Just, like for your own sanity and stuff.

Itā€™s more important than ever. In Broken Brexit Britainā„¢ you canā€™t even get high to feel better because thereā€™s a shortage of drugs now...

Alright. Fine. The articleā€™s about legal drugs. Panic over!

Now, if you, as a person with a functioning brain, already understand that political decisions arenā€™t as important as people like to pretend, then surely there must be a rational explanation for this drug shortage situation.

And there is!

Crabs

You what? Nobodyā€™s had those since body hair was declared illegal by Big Porna.

Nah. This is about the South Carolina horseshoe crab. ING explains:

The supply of medicine worldwide often relies on chemical wizardry, rare materials, and deeply convoluted supply chains. And nothing illustrates the complexity more than the fate of the South Carolina horseshoe crab.

Bear with us. The blood of this unfortunate creature is the only non-synthetic source of limulus amebocyte lysate, LAL for short.

It's a substance that detects endotoxin, a deadly chemical that is produced by bacteria.

The pharmaceutical industry uses this crab blood to ensure the safety of all kinds of medicines, from vaccines to insulin, along with implanted devices, such as heart stents.

ING

You probably see where this is goingā€¦

The crabā€™s blood is used to test ā€œmore than half of injectable medicines and implanted devicesā€ for safety.

Basically, no endotoxin, no problem.

The massive & sudden demand for Covid vaccines meant massive demand for Horseshoe Crab blood, causing a shortage which hasnā€™t been recovered as yet.

However, this isnā€™t JUST a Covid issue. Medical supply chains have been fragile for some timeā€¦

And a desperate shortage shows us just how fragile supply chains in this sector are.

This fragility, along with increasing global demand and lower prices in Europe than in the US, explains the persistent drug scarcity in Europe.

ING

Itā€™s a massive issue, and as this excellent report highlights, thereā€™s no quick fix.

šŸ§  The Big Brain
THE stock pick for when mania kicks off

History doesn't rhyme it repeats or something

Markets are getting very excited about rate cuts. Theyā€™re coming. The only doubt is the timing. 

So, weā€™ve started looking ahead at stocks that could really benefit once central bankers do what they do best, and reopen the monetary floodgatesā€¦

Pro Premium Members: click here to read.

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šŸ’” The Lightbulb
Calm down. It wonā€™t be a recession

ā€œIt Will Just Feel Like Oneā€

Where to even start with thisā€¦

Right, earlier this week, in reality is whatever we say it is, we covered a massive historical study of economic sentiment influencing economic outcomes.

Basically, how we feel, on mass, about the economy and the future manifests in our behaviours, which leads to real world outcomes.

Itā€™s entirely plausible that we can talk ourselves into recession - we are not rational creatures:

Consumers who are nervous about their future employment or worried that an imminent stock market correction would wipe out a substantial chunk of their savings might be reluctant to make big purchases and take on new debt.

The resulting fall in consumption would then lead to an economic contraction that validates consumersā€™ worst fears.

If these economists are right, and it really begins to feel like a recession out there, thatā€™s bad news.

Then again, by the time it feels like a recession, surely you have to see your neighbour lose their job, or sign a bunch of ā€œsorry youā€™re leavingā€ cards, just generally experience something that feels ominousā€¦

So, if people still have jobs, but economic growthā€™s slow, then thatā€™s just a return to the pre-pandemic economy, not a recession.

And it probably wonā€™t feel like one unless thereā€™s a jobcession.

What? I canā€™t make economics up but everyone else can?

In any case, we canā€™t trust what people say. The so-called ā€˜soft dataā€™ (mainly surveys) has a built in, and increasing, negativity biasā€¦

Brent Donnellyā€™s on the money here:

Regardless of how individuals and companies feel about their own prospects, social media, MSM, and political strife make everyone think that everything is bad, all the time.

Itā€™s not just the low-quality, biased information that dominates the media ecosystem now due to warped incentives, itā€™s the sheer volume of it. This started in 2008 and got worse after 2020.

Soft data may have some minor utility on a relative basis (comparing 2022 to 2023, for example) but saying ā€œISM is below 50, ruh rohā€ probably doesnā€™t work anymore.

Everything needs to be rescaled lower to recalibrate for persistent malaise. Empire State -43.7 lol. 

I am not dissing the unease people feel; I feel it too.

Iā€™m just saying that soft economic data doesnā€™t work as well in this regime as it does in a regime where the American spirit is healthy.

Sentiment and the nominal economy have decoupled and there is no guarantee they will recouple any time soon.

If todayā€™s Empire State reading is accurate, general business conditions in NY manufacturing are worse right now than they were around the Great Financial Crisis.

Doesnā€™t ring trueā€¦

I mean, the March 2009 report was FULL of negativity.

Todayā€™s report. Not so much. Manufacturers are even turning (cautiously) more upbeat about the future, certainly more than they were in Decemberā€¦

But itā€™s meaningless. Just feelings & vibes that donā€™t match up to the prior worst reading ever.

Which is probably why we sit here with markets not caring about the future impending job losses, even though ā€˜everyone saysā€™ theyā€™re dumb not to care and should be pricing in some pessimism.