On December 2, I was one of the panelists for a seminar at Chicago’s Union League Club entitled” Charting Your Courses:  A Roadmap of Healthy and Happy Aging.” This was the eight of 10 sessions. The topic was Legacy. This is approximately what I said:

“At your memorial service, no one will be interested in how much money you earned, how big your house was or if you drove a Mercedes. Your Eulogy and Legacy will depend on what kind of life you led and the values you pass on to others by example, as a role model. Last week I attended my great granddaughter’s baptism. She represents the 6^th generation of my family in which I have been influenced by or will influence; starting with my grandmother Mary born in 1875 who I shared by bedroom with until I was 10 (that’s the way it was done in the 1940’s), my mother Charlotte, me, my daughter Susan, her daughter Ellen and her daughter Charlotte who should live past the year 2100.  That is 225 years of ‘association of influence’ in my one lifetime.

There are values that have been passed down to me, which that I am hopefully passing on to my family’s future generations: Love, Compassion, Kindness, Empathy, Tolerance, Forgiveness, Honesty, Loyalty, Generosity, Gratefulness, Patience, Persistence, Resilience and a Sense of Humor.  I have also written a 5 page message to my grandchildren outlining my values called the ‘Eight Fold Way’ and I have written a one page message to be read at my Memorial Service titled ‘I’m dead, get on with your life.’

I am also trying to pass on my Legacy to the outer world. My father was an entrepreneur and taught me how to be an entrepreneur and write my own pay check by creating a business that would outlive me. My daughter Susan followed in my entrepreneurial footsteps and is now handing her business over to her daughter Ellen.  I have also use my entrepreneurial skills to create some new  non-profit advocacy organization. I am proudest of being one of the founders of IMBA (International Bicycling Assertion) and Friends of the Cook County Forest Preserve.

I am presently engaged in doing research and interviews worldwide about living longer and better with my friend of 50 years Bill Langelier. We are also having some fun by riding pedal assist trikes in the US and foreign countries. So far we have over 325 interviews from 19 countries and have posted them on our website called Tour de Longevity.com. Bill is actively applying what we have learned to the senior living facilities he owns in California. We are also applying what we have learned by writing a book about increasing lifespans and health spans and suggesting changes that lead to a healthier lifestyle.”

Carl M. Birkelbach

Predictions for 2024

My latest prediction: 2024 could be a very dangerous year for the stock market, because of the uncertain situation in US politics. The stock market hates uncertainty. What if Biden get sick? What if there are
riots because of the Trump court cases. What if Trump is elected and found guilty and announces as president  he will pardonens himself and all the others. Will Truth and the Law will no longer matter? What if China becomes more unstable? What if more banks start failing as they  take over unwanted worthless commercial real estate? Also the stock market is ending the year 2023 at an all time high, led by only 7 stocks. Very vulnerable.

Dow 37,385  to 30,000    NASDAQ 14, 992 to 11,000   S&P 500  4,754 to 3,000

Why is the Stock Market doing so Well Now?

All of my negative predictions have become a reality and still the stock market makes new highs. It is puzzling and frustrating. Maybe, since retirement, I am no longer in touch with “Wall Street?” Anyway here is my opinion and view: 1) I predicted that US debt, which INCREASED FROM $7 TRILLION TO $20 TRILLION during the Obama Administration,(to combat the 2008 Bush economic debacle) would be terrible for the country.  It was, but nobody seemed to care that all the money went to save the banks, while 11 million people lost their  homes. The US could have simply guaranteed the mortgages and the money could have been used for national health care and eliminating US poverty.  2) I predicted that the Trump Administration and the Republican Party was good at winning elections, but had little interest in running the government.  (Even though candidate Trump promised he would“pay off the US debt in eight years”) My dire prediction turned out to be true, as Trump reduced taxes for the rich, which raised the US debt from $20 trillion to $28 trillion. Once again, progressive‘safety net’ measures were ignored and the rich grew richer and the poor got poorer and the stock market went up.  3) I predicted that Covid 19 would paralyze the economy, mainly because President Trump was ignoring its severity and proper precautions (masks and immunization). Over 1 million people died and yet the stock market went up as the Biden Administration fought off the effects of the slowdown in the economy with more US debt, increasing it from $28 trillion to$31 trillion. We have spent all our $ bullets and only Corporate America
and the super-rich have won. (Five US families have more wealth than the bottom
40%).Too much of this sort of winning, by raising debt can be costly, like households that
may end up eventually losing its ability to find buyers for its debt.

We could have used this money  to give every american free healthcare, end poverty and  provide free collegege for all who qualify.

4) I predicted that  banks were in trouble. They were, but the US government guaranteed the deposits. (See how easyit is to help the banks, but not the homeowners). There is still a problem with
the banks but it is temporarily being ignored. 5) I have been predicting that there is economic trouble in China. Suddenly everyone is writing about it (Economist Magazine, the Wall Street Journal
and the NYT). Still the stock market goes up. https://www.cnn.com/2023/08/21/economy/china-economy-troubles-intl-hnk/index.html 6) I have been warning that empty commercial office space will eventually hurt the banks and therefor the whole US economy. See a 9/1/2023 NYT article, ‘All That OfficeSpace Belongs to Someone.”https://www.nytimes.com/2023/09/01/business/office-vacancies-gural-gfp.html Although more office workers are back at their desks than a year ago,
attendance at office buildings in New York, Boston, Atlanta, Chicago, San
Francisco and other cities is well below pre-pandemic levels. As leases come up
for renewal, companies are often opting for smaller offices, leaving landlords
with millions of square feet in vacant space. More space is expected to hit the
market in the coming months as leases expire and more than
100,000 technology workers have lost their jobs. According to a
recent study by business professors at Columbia and New York University, the
value of U.S. office buildings could plunge 39 percent, or $454 billion, in the
coming years.

Dow 37,385     NASDAQ 14, 992   S&P 500  4,754

Carl M Birkelbach

4/27/2023

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Mr Birkelbach does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Mr.Birkelbach , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Why is the Stock Market doing so Well?

All of my negative predictions have become a reality and still the stock market makes new highs. It is puzzling and frustrating. Maybe, since retirement, I am no longer in touch with “Wall Street?” Anyway here is my opinion and view: 1) I predicted that US debt, which INCREASED FROM $7 TRILLION TO $20 TRILLION during the Obama Administration,(to combat the 2008 Bush economic debacle) would be terrible for the country.  It was, but nobody seemed to care that all the money went to save the banks, while 11 million people lost their  homes. The US could have simply guaranteed the mortgages and the money could have been used for national health care and eliminating US poverty.  2) I predicted that the Trump Administration and the Republican Party was good at winning elections, but had little interest in running the government.  (Even though candidate Trump promised he would“pay off the US debt in eight years”) My dire prediction turned out to be true, as Trump reduced taxes for the rich, which raised the US debt from $20 trillion to $28 trillion. Once again, progressive ‘safety net’ measures were ignored and the rich grew richer and the poor got poorer and the stock market went up.  3) I predicted that Covid 19 would paralyze the economy, mainly because President Trump was ignoring its severity and proper precautions (masks and immunization). Over 1 million people died and yet the stock market went up as the Biden Administration fought off the effects of the slowdown in the economy with more US debt, increasing it from $28 trillion to$31 trillion. We have spent all our $ bullets and only Corporate America and the super-rich have won. (Five US families have more wealth than the bottom 40%).Too much of this sort of winning, by raising debt can be costly, like households that may end up eventually losing its ability to find buyers for its debt.

We could have used this money  to give every american free healthcare, end poverty and  provide free collegege for all who qualify.

4) I predicted that  banks were in trouble. They were, but the US government guaranteed the deposits. (See how easyit is to help the banks, but not the homeowners). There is still a problem with the banks but it is temporarily being ignored. 5) I have been predicting that there is economic trouble in China. Suddenly everyone is writing about it (Economist Magazine, the Wall Street Journal and the NYT). Still the stock market goes up. https://www.cnn.com/2023/08/21/economy/china-economy-troubles-intl-hnk/index.html 6) I have been warning that empty commercial office space will eventually hurt the banks and therefor the whole US economy. See a 9/1/2023 NYT article, ‘All That OfficeSpace Belongs to Someone.”https://www.nytimes.com/2023/09/01/business/office-vacancies-gural-gfp.html Although more office workers are back at their desks than a year ago, attendance at office buildings in New York, Boston, Atlanta, Chicago, San Francisco and other cities is well below pre-pandemic levels. As leases come up for renewal, companies are often opting for smaller offices, leaving landlords with millions of square feet in vacant space. More space is expected to hit the market in the coming months as leases expire and more than 100,000 technology workers have lost their jobs. According to a recent study by business professors at Columbia and New York University, the value of U.S. office buildings could plunge 39 percent, or $454 billion, in the coming years.

 What if?

My latest prediction: 2024 could be a very dangerous for stock markets, because of the uncertain situation in US politics. The stock market hates is uncertainty. What if Biden get sick? What if there are riots because of the Trump court cases. What if Trump is elected and found guilty and announces as president  he will pardonens himself and all the others. Truth and the law will no longer matter? What if the debt limit is not raised? What if China becomes unstable? What if more banks start failing as they  reposed unwanted commercial real estate? Also the stock market is ending the year at an all time high, led by only 7 stocks. Very vulnerable.

What if the Fed is raising inters rates too fast and too high? As I said in ISL #743,  (with the Dow at 35,000), the reason that I believe the stock market is ready to resume it downside trend and turn into a true ‘Bear Market’ are many, but the main one is that the Federal Reserve is depending on higher interest rates to stop inflation. My worry is that the ‘cure’ may kill the patient. Also, I believe that investors should be worried as the Federal Reserve quickens the pace at which it removes one of its primary pandemic supports, quantitative easing, or QE.

The Fed’s balance sheet ballooned from a little over $2 trillion in early 2008 and $4 trillion in 2020, to a peak of nearly $9 trillion 2022. While QE brought investors back to the stock market and inflated stock prices, it also helped stoke inflation. Now, the Fed is reversing course through quantitative tightening, or QT, pulling back its support for financial markets while it raises interest rates to quell inflation. Investors should worry that the quickening pace of the Fed’s pullback could become too much for markets to bear, undermining the safety and reliability of the Treasury market.

If demand for Treasuries can’t keep pace with the supply, it could pull bond prices down. This could put banks and may BBB rated business in trouble .Prices move in the opposite direction to bond yields, a measure of borrowing costs. Higher Treasury yields would put more pressure on borrowers and investment portfolios already grappling with the Fed’s campaign to lower inflation by raising interest rates. I am worried that we are putting Q.T. on top of these rate hikes and it will have consequences that could push us into recession or worse.

Trouble in China!

As predicted in ISL #744, there is trouble in China. The Chinese Hang Seng Index has hit a new 10 year low. Also the China’s Consumer Confidence Index is at a record low. Something is wrong!  Is this supposedly successful fast growing super-giant in trouble? I have said so for some time. And if so, what are the economic global implications? In the September 17, 2022 edition of the Economist Magazine this was the headline on the finance and economics section “China’s Ponzi-like property market is eroding faith in the government. Its meltdown could scarcely come at a worse time for Xi Jinping.”

For decades the property industry has been symbolic of China’s rise. Private entrepreneurs have made vast fortunes. Average people have witnessed their net worth soar as home values trebled. Local governments have filled their coffers by selling vast tracts of land to developers. An astonishing 70% of Chinese household wealth is now tied up in real estate. To undermine trust in this model is to shake the foundations of China’s growth miracle. With sweeping covid-19 lockdowns and a crackdown on private entrepreneurs, this is happening on many fronts. But nowhere is it clearer than in the property industry, which makes up around a fifth of GDP. New project starts fell by 45% in July compared with a year ago, the value of new home sales by 29% and property investment by 12%.

The effects are rippling through the economy, hitting furniture-makers and steelworkers’ alike. The result is a crunch. China’s developers need to sell homes long before they are built to generate liquidity. Last year they pre-sold 90% of homes. But without access to bonds and loans, as banks cut their exposure to the property sector, and with sales falling, the Ponzi-like nature of the property market has come into full view.

Evergrande’s China’s largest real estate firm)shares fell 79% on August 28^th, after resuming trading following a 17-month suspension, wiping out $2.2 billion of the company’s market value. An effort to restructure its offshore debts, intended as a model to follow, missed an end-of-July deadline. At least 28 other property firms have missed payments to investors or gone into restructuring. Confidence in China’s economic foundations could cross a threshold, beyond which it becomes far more difficult to recover.

World debt $226 trillion up from $74 trillion in 2019

The market rise was due to low interest rates, quantitative easing, cheap oil and unprecedented growth of debt. Simply put the market went up to far. Now, high inflation, interest rates and gas prices and the war in Ukraine are worrying investors. Last year, we observed the largest one-year debt surge since World War II, with global debt rising to $226 trillion as the world was hit by a global health crisis. Debt was already elevated going into the crisis, but now governments must navigate a world of record-high public and private debt levels, new virus mutations, rising inflation and falling stock and real estate markets. Borrowing by governments accounted for slightly more than half of the debt increase, as the global public debt ratio jumped to a record 99 percent of GDP. Private debt from non-financial corporations and households also reached new highs. My concern is in the world’s ocean of corporatedebt, worth $226 trillion up from $74 trillion 2019. US corporate debt has climbed during the same period from $18 trillion to $30 trillion. Two-thirds of non-financial corporate bonds in America are rated “junk” or “BBB”, the category just above junk. The growth in debt has now stopped, because suddenly bankers are worried and interest rates are high and going higher

US federal debt to GDP was in 1980  34.5%, 2000 57.9% and in 2021 100%+

The US Federal debt is over $30 trillion dollars and is growing. US Federal spending is $6.2 trillion and tax revenue is $4.2 trillion ($12,000 per person) for a $2 trillion deficit.  $30 trillion is a debt of $243,000 per tax payer and $91,000 per tax citizen. The US federal debt to GDP was in 1980 34.5%, 2000 57.9% and is about 100% today. The unwritten rule is anything above $100% is dangerous! Total US and State debt to GDP is 142%. ANNUAL INTEREST ON DEBT; $450 BILLION AND IS RISING AS INTEREST RATES GO UP. Here is the scariest statistic: OTC Derivatives are $600 trillion (10 TIMES WORLD GDP). $600 trillion is at about the same level that caused the 2008 trouble in the banking system.

THIS TIME ITS DIFFERENT by Carmen Reinhart

All economic disasters are a surprise and can start with something as simple as the SVB failure and escalate! Don’t’ forget the classic THIS TIME ITS DIFFERENT by Carmen Reinhart: It tells the story of eight centuries of Financial Folly. Each time after a catastrophe, (such as the Great Depression or 2008), economists agree that it could never happen again. Who could be so stupid as to let 10 banks control 70% of the US assets (too big to fail) and allow all the US economic growth go to the top 1%, while eighty people own 50% of the world’s wealth?

Dow 34,837     NASDAQ 14,031    S&P 500 4,515

Carl M Birkelbach

9/2/2023

Troubles with Commercial Real Estate Signals a BIG Problems

With the pandemic almost over, children back in school many businesses are encouraging employees to return to the office. The companies that own big office buildings were hoping that the nightmare of the last two years is over. However, things not have gotten better, they have gotten worse. Remote work and rising interest rates are dealing a double blow to office landlords, with potentially grave consequences for the national economy.

Commercial Real Estate value down 39%?

Although more office workers are back at their desks than a year ago,  attendance at office buildings in New York, Boston, Atlanta, Chicago, San Francisco and other cities is well below pre-pandemic levels. As leases come up for renewal, companies are often opting for smaller offices, leaving landlords with millions of square feet in vacant space. More space is expected to hit the market in the coming months as lease expire and more than 100,000 technology workers have lost their jobs. According to a recent study by business professors at Columbia and New York University, the value of U.S. office buildings could plunge 39 percent, or $454 billion, in the coming years,

New York City as an example

Let’s take a look at the New York commercial real estate market as an example of how bad things are.  Rising interest rates have intensified concerns that the New York City office market, the largest in the country and a pillar of the city’s economy is at  risk. Low occupancy rates and falling property values and higher borrowing costs could increase the odds of a recession nationally and a budget crisis for the city. In the latest snapshot of New York City’s largest office landlord, SL Green Realty Corporation revealed that more of its properties lost tenants during the first months of 2023. Shares of SL Green and two other publicly traded office landlords in the city, Vornado Realty Trust and Empire State Realty Trust, stocks are all trading near their lowest level since the pandemic started. SL Green’s stock has fallen 76 percent since early 2020. Vornado is trading at its lowest territory since 1996. Empire State Realty, which owns the Empire State Building, is near its record low. Collectively, $17 billion of their market value has been erased since the pandemic started.

Urban doom loop.

According to a recent study by researchers at Columbia and New York Universities, the value of New York City office buildings could tumble $48.75 billion in the coming years. This would hamper a vital source of the city’s tax revenue. In addition, office workers in the city make about 75 percent more in annual salaries than the rest of the private sector (according to the Office of the State Comptroller) and their absence from the office every day deprives a host of local businesses of their spending. Stijn Van Nieuwerburgh, a real estate professor at Columbia University’s business school, has warned that New York City faces an “urban doom loop” sparked by remote work. While the current commercial real estate downturn shares similarities with previous declines, including periods in the early 1990s, after the Sept. 11 attacks and during the 2008 financial crisis, this drop has a new twist: The lower demand for office space appears permanent.

Trouble in commercial real estate = trouble for banks = trouble for the economy

Large banks like JPMorgan Chase and Wells Fargo have increasingly warned that a heap of commercial loans are coming due by the end of 2024 — estimated to amount to $1.5 trillion nationwide — and that  companies may struggle to repay or refinance them. More than two-thirds of all commercial real estate loans are held by small- and medium-size banks, prompting concern that regional banks might be unable to withstand a wave of defaults if landlords cannot pay off loans. Some analysts have forecast a dim future for city centers, likening the crisis to the slow death of many American shopping malls.

Conclusion

The banking crisis, that started with saving the regional banks such as SVB, is not over! I believe there is another shoe to fall, as expressed above. The banks have not yet felt the affect of the crash of commercial real estate prices on their loan portfolio. Defaults will come as a surprise to most investors, just as did the crash of CMO market.  Most economic disasters are a surprise and can start with something as simple as the SVB failure and escalate! Don’t’ forget the classic THIS TIME ITS DIFFERENT by Carmen Reinhart: It tells the story of eight centuries of Financial Folly. Each time after a catastrophe, (such as the Great Depression or 2008), economists agree that it could never happen again. Who could be so stupid as to let 10 banks control 70% of the US assets (to big to fail) and allow all the US economic growth  go to the top 1%, while eighty people own 50% of the world’s wealth?

FOR MORE, SEE ISL #742 (summarized below)

Trouble in China There is trouble in China. The Chinese Hang Seng Index  hit a new 10 year low in 2023. Also the China’s Consumer Confidence Index is at a record low. Something is wrong. Confidence in China’s economic foundations could cross a threshold, beyond which it becomes far more difficult to recover.

World debt $226 trillion up from $74 trillion in 2019. My concern is in the world’s ocean of corporate debt, worth $226 trillion up from $74 trillion 2019. US corporate debt has climbed during the same period from $18 trillion to $30 trillion. Two-thirds of non-financial corporate bonds in America are rated “junk” or “BBB”, the category just above junk. The growth in debt has now stopped, because suddenly investors are worried and interest rates are high and going higher

US federal debt to GDP was in 1980  34.5%, 2000 57.9% and in 2021 100% The US Federal debt is over $30 trillion dollars and is growing. It took the US from 1789 to 2016 to get to $15 trillion and only 6 years for it to double. With the spending of that kind of money, we could have eliminated US poverty and given health care for all. Now, we are just stuck with the problems, in addition to the debt! Total US and State debt to GDP is 142%. ANNUAL INTEREST ON DEBT; is $450 BILLION AND IS RISING AS INTEREST RATES GO UP. Here is the scariest statistic: OTC Derivatives are $600 trillion (10 TIMES WORLD GDP). $600 trillion is at about the same level that caused the 2008 trouble in the banking system. And now there is talk in Congress to let the US default on its debt. When you play with fire, you can get burnt!

Our DOWNSIDE PROJECTIONS ARE: a DOW of 28,000 to 27,000, NASDAQ 9,000 to 8,000, S&P-2,900 to 2,700. Don’t fight the Fed!

Dow 33,614,     NASDAQ 12,078    S&P 500  4,108

Carl M Birkelbach

4/27/2023

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Mr Birkelbach does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Mr.Birkelbach , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

A BANK FAILURE

Is this an isolated incident or the begging of a new economic disaster?

The Silicon Valley Bank on Friday became the biggest American bank to fail since the collapse of Washington Mutual in 2008. At the height of the global financial crisis, in 2008, the implosion of Washington Mutual, as well as the investment banks of Lehman Brothers and Bear Stearns, was followed by a system-wide failure of banks. To avoid an economic collapse, a big government bailout was initiated by the government and paid for by the tax payers,  This started the US debt  soaring by the trillions. From 2008 to 2015, more than 500 federally insured banks failed. The big question bothering investors today, is. this indicative of ‘the canary in a coal mine,’ or is this just an isolated incident?

It’s unclear whether the collapse of Silicon Valley Bank (SVB) will spread to the broader industry. SVB was best known for its lending to technology start-ups and it had $209 billion in assets at the end of last year, making it the nation’s 16th-largest bank. But that is still small in comparison with the top three BIG banks, which hold some 50% of total bank assets and have a much more diversified business model and customer base. But SVB and other Regional Banks (see 10 troubled banks below),  do not have the same regulatory oversight as the BIG banks, as in 2018 President Trump signed a bill that lessened scrutiny for many regional banks. If some of the smaller regional banks continue to fail, this could be the beginning of a surprising sequence that will topple an economy, which has been built on escalating debt.

Likely Conclusion

I believe there will be no big immediate fallout from this SVB failure.  On the short run. there will be a Federal Rescue Plan of some kind. However, on the long run, every CEO’s competency can now be questioned, if he puts the company’s money in a Regional Bank. ( Roku will have to wait to obtain any part of its almost $500 million dollars.) This run to pull money out on SVB was caused by a ‘Twitter’ panic post, which could happen again to any Regional Bank. In my opinion, in the long run, the SVB failure will cause further consolidation to the 5 largest Big banks .This will not be good for the Regional Banks or the health of the US economy. What happened to the Saving and Loan Banks, Community Local Banks, Regional Brokerage firms and non-bank owned Brokerage Firms and Mutual Funds??? All gone!  Wall Street wins + Main Street looses = An eventual economic disaster!

All economic disasters are a surprise and can start with something as simple as the SVB failure and escalate! Don’t’ forget the classic THIS TIME ITS DIFFERENT by Carmen Reinhart: It tells the story of eight centuries of Financial Folly. Each time after a catastrophe, (such as the Great Depression or 2008), economists agree that it could never happen again. Who could be so stupid as to let 10 banks control 70% of the US assets (to big to fail) and allow all the US economic growth  go to the top 1%, while eighty people own 50% of the world’s wealth?

It is the Fed (KISS)

As I said in ISL #743,  (with the Dow at 35,000), the reason that I believe the stock market is ready to resume it downside trend and turn into a true ‘Bear Market’ are many, but the main one is that the Federal Reserve is depending on higher interest rates to stop inflation. My worry is that the ‘cure’ may kill the patient. Also, I believe that investors should be worried as the Federal Reserve quickens the pace at which it removes one of its primary pandemic supports, quantitative easing, or QE.

The Fed’s balance sheet ballooned from a little over $2 trillion in early 2008 and $4 trillion in 2020, to a peak of nearly $9 trillion 2022. While QE brought investors back to the stock market and inflated stock prices, it also helped stoke inflation. Now, the Fed is reversing course through quantitative tightening, or QT, pulling back its support for financial markets while it raises interest rates to quell inflation. Investors should worry that the quickening pace of the Fed’s pullback could become too much for markets to bear, undermining the safety and reliability of the Treasury market.

If demand for Treasuries can’t keep pace with the supply, it could pull bond prices down. This could put banks  and may BBB rated business in trouble .Prices move in the opposite direction to bond yields, a measure of borrowing costs. Higher Treasury yields would put more pressure on borrowers and investment portfolios already grappling with the Fed’s campaign to lower inflation by raising interest rates. I am worried that we are putting Q.T. on top of these rate hikes and it will have consequences that could push us into recession or worse.

See how the Fed’s actions to raise interest rates had a devastating effect on SVB:

What Happened at Silicon Valley Bank?

As interest rates have risen, many banks have become more profitable, because the spreads between what they earn on loans and investments and what they pay for funding has widened. But there are always exceptions; flush with cash from high-flying start-ups, SVB bought huge amounts of bonds more than a year ago. Like other banks, SVB kept a small amount of the deposits on hand and invested the rest with the hope of earning a greater return. That had worked well until the Federal Reserve began raising interest rates last year to cool inflation. At the same time, start-up funding started to dry up, putting pressure on many of the bank’s clients, who then began to withdraw their money. To pay those requests, SBV was forced to sell off some of its investments at a time when their value had declined. In its surprise disclosure on Wednesday, the bank said it had lost nearly $2 billion.

SCB showed contracting margins over the past year. A Warning Sign:

10 Banks to Worry About

So now, the question is, which other banks might face pressure because their net interest margins have contracted, or because their margins have only expanded slightly. Below is a list of the 10 banks showing contracting margins over the past year, or the smallest expansions of margins:

TAKE A LOOK AT ISL #729 ABOUT BANK STOCKS ( AN EARLY WARNING 3/14/2020)

“As stated above I worry about defaults on corporate debt and loans.  What worries me most is the collapse of many bank stocks, such as Deutsche Bank (DB), HSBC Holdings, (HBC1.BE), Credit Swiss (CS) and Barclays PLC (BCS). Credit Swiss is down from 78 in 2007 to 8.16. My 25 year charts doesn’t show the stock ever being so low! Barclays was as high as 55 in 2007, now 5.40.That’s a 35 year low! DB was as high as 149, now 5.97. Each rally is met with another new low! What are these falling bank charts telling me? Trouble!”

FOR MORE, SEE ISL #742 (summarized below)

Trouble in China There is trouble in China. The Chinese Hang Seng Index has hit a new 10 year low. Also the China’s Consumer Confidence Index is at a record low. Something is wrong. Confidence in China’s economic foundations could cross a threshold, beyond which it becomes far more difficult to recover.

World debt $226 trillion up from $74 trillion in 2019. My concern is in the world’s ocean of corporate debt, worth $226 trillion up from $74 trillion 2019. US corporate debt has climbed during the same period from $18 trillion to $30 trillion. Two-thirds of non-financial corporate bonds in America are rated “junk” or “BBB”, the category just above junk. The growth in debt has now stopped, because suddenly investors are worried and interest rates are high and going higher

US federal debt to GDP was in 1980  34.5%, 2000 57.9% and in 2021 100% The US Federal debt is over $30 trillion dollars and is growing. It took the US from 1789 to 2016 to get to $15 trillion and only 6 years for it to double. With the spending of that kind of money, we could have eliminated US poverty and given health care for all. Now, we are just stuck with the problems, in addition to the debt! Total US and State debt to GDP is 142%. ANNUAL INTEREST ON DEBT; is $450 BILLION AND IS RISING AS INTEREST RATES GO UP. Here is the scariest statistic: OTC Derivatives are $600 trillion (10 TIMES WORLD GDP). $600 trillion is at about the same level that caused the 2008 trouble in the banking system. And now there is talk in Congress to let the US default on its debt. When you play with fire, you can get burnt!

Our DOWNSIDE PROJECTIONS ARE: a DOW of 28,000 to 27,000, NASDAQ 9,000 to 8,000, S&P-2,900 to 2,700. Don’t fight the Fed!

Dow 31,909,     NASDAQ 11,138    S&P 500  3,861

Carl M Birkelbach

3/11/2023

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Mr Birkelbach does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Mr.Birkelbach , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

YES, I AM BEARISH AGAIN!

The Investment Strategy Letter #739 May 20, 2022 predicted a big drop in in the Dow with its title of “TIME TO LIGHTEN-UP ON ANY FURTHER MARKET RISE.” In June 2022 the Dow was at approximately at 37,000 and then fell to 30,000 and has since then managed to rally to about 34,500. As I said in market letter #741 in June, “Expect Rallies.”  During the same period the S&P dropped from 4,800 to 3,500 and the rallied to 4,000; whereas the NASDAQ fell from 15,300 to 13,100 and is now at 10, 900. I NOW BELIEVE THE RALLY IS OVER AND THE MARKET IS READY TO RESUME ITS DONSIDE ‘BEAR MARKET’ THAT BEGAN LAST SUMMER. Our DOWNSIDE PROJECTIONS ARE: a DOW of 28,000 to 27,000 (Now 33,866), NASDAQ 9,000 to 8,000 (Now 10,876) S&P-2,900 to 2,700 (Now 3,951). Don’t fight the Fed!

The reason that I believe the stock market is ready to resume it downside trend and turn into a true ‘Bear Market’ are many, but the main one is that the Federal Reserve is depending on higher interest rates to stop inflation. MY worry is that the ‘cure’ may kill the patient. Also, I believe that investors should be worried as the Federal Reserve quickens the pace at which it removes one of its primary pandemic supports, quantitative easing, or QE.

The Fed’s balance sheet ballooned from a little over $2 trillion in early 2008 and $4 trillion in 2020, to a peak of nearly $9 trillion now. While QE brought investors back to the stock market, it also helped stoke inflation. Now, the Fed is reversing course through quantitative tightening, or QT, pulling back its support for financial markets while it raises interest rates to quell inflation. Investors should worry that the quickening pace of the Fed’s pullback could become too much for markets to bear, undermining the safety and reliability of the Treasury market.

If demand for Treasuries can’t keep pace with the supply, it could pull bond prices down. Prices move in the opposite direction to bond yields, a measure of borrowing costs. Higher Treasury yields would put more pressure on borrowers already grappling with the Fed’s campaign to lower inflation by raising interest rates. I am worried that we are pilling Q.T. on top of these rate hikes and it will push us into recession or worse.

Gridlock In Washington

I was surprised to see in today’s New York Times an editorial by Bret Stephens and David Brooks entitled “The Party’s Over for Us. Where Do We Go Now?” For decades, conservative values have been central to Bret Stephens’s and David Brooks’ political beliefs, and the Republican Party was the vehicle to extend those beliefs into policy. But in recent years, both the party and a radicalized conservative movement have left them feeling alienated in various ways. Now, with an extremist fringe seemingly in control of the House, the G.O.P. bears little resemblance to the party that was once their home. To quote from the article, “When people get on a bad path, whether it’s drinking or gambling or political or religious fanaticism, they tend to follow it all the way to the bottom, at which point they either die or have that proverbial moment of clarity. I’ve been waiting for Republicans to have a moment of clarity for a while now — after Joe Biden’s victory, or Jan. 6, the midterms, Trump’s dinner with Kanye West. I had a flicker of hope that the Kevin McCarthy debacle last week would open some eyes, but probably not. Part of the problem is that so many Republicans no longer get into politics to pass legislation. They do it to become celebrities. The more feverish they are, the better it sells.”

If these two stalwart Conservative Republicans have lost faith in the Republican Party, it appears there is no hope for a government that works for the people it serves. As James Madison said, “If there be no virtue in the electors there can be no virtue in the elected.” We are indeed in trouble as a man like George Santos serves in the House of Representatives after lying about everything in his resume. I am reminded of a session on June 9, 1954, when Senator Joseph McCarthy hunting Communist in the government when an amazed television audience looked on as Joseph Welch responded with the immortal lines that ultimately ended McCarthy’s career: “Until this moment, Senator, I think I never really gauged your cruelty or your recklessness.” When McCarthy tried to continue his attack, Welch angrily interrupted, “Let us not assassinate this lad further, Senator. You have done enough. Have you no sense of decency?”

I am very concerned. I believe as do Stevens and Brooks that “a successful democracy needs a morally healthy conservative party — one that channels conservative psychological tendencies into policies to check heedless progressivism while engaging productively with an evolving world.” I believe in the core values of old-fashioned democracy, faith in the goodness of people, human rights, the rule of law, free speech, political compromise, the political process itself. I believe in building things up, not just tearing them down. For the next two year, and maybe even longer, I believe the stock market and the country will suffer as the government falls into gridlock and disarray and maybe even defaulting on its debt..

World debt $226 trillion up from $74 trillion in 2019 (worth repeating from  ISL #742)

The market rise was due to low interest rates, quantitative easing, cheap oil and unprecedented growth of debt. Simply put the market went up to far. Now, high inflation, interest rates and gas prices and the war in Ukraine are worrying investors. Last year, we observed the largest one-year debt surge since World War II, with global debt rising to $226 trillion as the world was hit by a global health crisis. Debt was already elevated going into the crisis, but now governments must navigate a world of record-high public and private debt levels, new virus mutations, rising inflation and falling stock and real estate markets. Borrowing by governments accounted for slightly more than half of the debt increase, as the global public debt ratio jumped to a record 99 percent of GDP. Private debt from non-financial corporations and households also reached new highs. My concern is in the world’s ocean of corporate debt, worth $226 trillion up from $74 trillion 2019. US corporate debt has climbed during the same period from $18 trillion to $30 trillion. Two-thirds of non-financial corporate bonds in America are rated “junk” or “BBB”, the category just above junk. The growth in debt has now stopped, because suddenly bankers are worried and interest rates are high and going higher

US federal debt to GDP was in 1980  34.5%, 2000 57.9% and in 2021 100%

The US Federal debt is over $30 trillion dollars and is growing. US Federal spending is $6.2 trillion and tax revenue is $4.2 trillion ($12,000 per person) for a $2 trillion deficit.  $30 trillion is a debt of $243,000 per tax payer and $91,000 per tax citizen. The US federal debt to GDP was in 1980  34.5%, 2000 57.9% and is about 100% today. The unwritten rule is anything above $100% is dangerous! Total US and State debt to GDP is 142%. ANNUAL INTEREST ON DEBT; $450 BILLION AND IS RISING AS INTEREST RATES GO UP. Here is the scariest statistic: OTC Derivatives are $600 trillion (10 TIMES WORLD GDP). $600 trillion is at about the same level that caused the 2008 trouble in the banking system.

Dow 33,916,     NASDAQ 10,881    S&P 500  3,957 

Carl M Birkelbach

1/11/2023

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Mr Birkelbach does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Mr.Birkelbach , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

Turmoil in the markets

After the big drop in June 2022, the Dow managed to rally from about 30,000 to about 34,000. As I said in our last market letter #741 in June, “Expect Rallies.” Our DOWNSIDE PROJECTIONS of a DOW 28,000 to 27,000 (High 37,000 – Now 30,700), NASDAQ-10,000 to 9,000 ( High 37,000 – Now 11,400) S&P-2,900 to 2,700 (High 4, 800 – Now 3,855) are being revised downward as follows: DOW 26,000 to 24,000, NASDAQ 9,000 to 8,000, S&P 2,800 to 2,700

Bond Market back at risk

In Mondays (9/12/2022) New York Times Business Section, 75% of the page was taken up by an article about going back to the office. At the bottom of the page, taking up 10% of the page, almost unnoticed, was an article titled . “Fed’s Fading Support Puts Bond Market Back at Risk.” With a sub title “Declining liquidity in Treasuries could end up causing turmoil.” What’s this all about and how come everyone isn’t talking about this? Shouldn’t investors be worried about the world’s largest and most important government bond market, as the Federal Reserve quickens the pace at which it removes one of its primary pandemic supports, quantitative easing, or Q.E.

When the global economy crashed in 2008 and in early 2020 when the corona virus pandemic hit, markets went into free fall, the U.S. Treasury market, the $25 trillion bedrock of the global financial system broke down. Sellers struggled to find buyers, and prices whipsawed higher and lower. The Fed stepped in, devoting trillions of dollars to steadying the market. In response to market turmoil in the early stages of the corona virus pandemic in 2020, the Fed unleashed the full force of its firepower, buying mortgage bonds and government debt in huge quantities, in a move known as quantitative easing, or Q.E. By becoming the buyer of last resort, the Fed helped restore confidence in markets, and trading in Treasuries began to recover.

The Fed’s balance sheet ballooned from a little over $2 trillion in early 2008 and $4 trillion in 2020, to a peak of nearly $9 trillion now. Stability also brought investment back to the stock market, enriching investors and helping stoke inflation. However, now, the Fed is reversing course through quantitative tightening, or Q.T., pulling back its support for financial markets while it raises interest rates to quell inflation. Investor’s should worry that the quickening pace of the Fed’s pullback could become too much for markets to bear, undermining the safety and reliability of the Treasury market.

Ralph Axel, an interest rate strategist at Bank of America, wrote in a research report last week. He sees emerging strains in the Treasury market as “the single greatest systemic financial risk today,” with the potential to do more damage than the housing turmoil that preceded the 2008 financial crisis. Oh my! The sheer scale of U.S. government debt also plays an important role. The Treasury market has doubled over the past decade, to around $25 trillion (some say it’s $30 trillion), as the government’s financing needs have grown. All that debt needs to be bought by someone, and not just the Fed.  In a May report the Fed noted a worsening of liquidity and said that “the risk of a sudden significant deterioration appears higher than normal.” We have been warned!

If demand for Treasuries can’t keep pace with the supply, it could pull prices down. Prices move in the opposite direction to bond yields, a measure of borrowing costs. Higher Treasury yields would put more pressure on borrowers already grappling with the Fed’s campaign to lower inflation by raising interest rates. I am worried that we are piling Q.T. on top of these rate hikes and it will push us into recession or worse.

Trouble in China!

There is trouble in China. The Chinese Hang Seng Index has hit a new 10 year low. Also the  China’s Consumer Confidence Index is at a record low. Something is wrong!  Is this supposedly successful fast growing super-giant in trouble? I have said so for some time. And if so, what are the economic global implications? In the September 17, 2022 edition of the Economist Magazine this was the headline on the finance and economics section “China’s Ponzi-like property market is eroding faith in the government. Its meltdown could scarcely come at a worse time for Xi Jinping.”

For decades the property industry has been symbolic of China’s rise. Private entrepreneurs have made vast fortunes. Average people have witnessed their net worth soar as home values trebled. Local governments have filled their coffers by selling vast tracts of land to developers. An astonishing 70% of Chinese household wealth is now tied up in real estate. To undermine trust in this model is to shake the foundations of China’s growth miracle. With sweeping covid-19 lockdowns and a crackdown on private entrepreneurs, this is happening on many fronts. But nowhere is it clearer than in the property industry, which makes up around a fifth of GDP. New project starts fell by 45% in July compared with a year ago, the value of new home sales by 29% and property investment by 12%.

The effects are rippling through the economy, hitting furniture-makers and steelworkers’ alike. The result is a crunch. China’s developers need to sell homes long before they are built to generate liquidity. Last year they pre-sold 90% of homes. But without access to bonds and loans, as banks cut their exposure to the property sector, and with sales falling, the Ponzi-like nature of the property market has come into full view.

Evergrande, the world’s most indebted developer, defaulted in December. An effort to restructure its offshore debts, intended as a model to follow, missed an end-of-July deadline. At least 28 other property firms have missed payments to investors or gone into restructuring. Confidence in China’s economic foundations could cross a threshold, beyond which it becomes far more difficult to recover.

In the US, I have seen prices skyrocket in Summit County Coronado. This was due to its location, which is only a hour from Denver, it’s 5 ski Hills, low temperature and humidity during summer, its vacation atmosphere, recreational alternatives and a good place to work, if you don’t have to go to the office. Just 4 months ago there was no availability. Nobody was selling but new building was progressing quickly. Now, with higher interest rates, people are being forced back into the office and with overbuilding, prices have dropped some 25% and dropping. Suddenly everyone wants to sell. Such is how fragile public confidence is. I draw an analogy to the stock market here. At the top nobody wants to sell, but panic selling once started, is hard to stop.

World debt $226 trillion up from $74 trillion in 2019

The market rise was due to low interest rates, quantitative easing, cheap oil and unprecedented growth of debt. Simply put the market went up to far. Now, high inflation, interest rates and gas prices and the war in Ukraine are worrying investors. Last year, we observed the largest one-year debt surge since World War II, with global debt rising to $226 trillion as the world was hit by a global health crisis. Debt was already elevated going into the crisis, but now governments must navigate a world of record-high public and private debt levels, new virus mutations, rising inflation and falling stock and real estate markets. Borrowing by governments accounted for slightly more than half of the debt increase, as the global public debt ratio jumped to a record 99 percent of GDP. Private debt from non-financial corporations and households also reached new highs. My concern is in the world’s ocean of corporate debt, worth $226 trillion up from $74 trillion 2019. US corporate debt has climbed during the same period from $18 trillion to $30 trillion. Two-thirds of non-financial corporate bonds in America are rated “junk” or “BBB”, the category just above junk. The growth in debt has now stopped, because suddenly bankers are worried and interest rates are high and going higher

US federal debt to GDP was in 1980  34.5%, 2000 57.9% and in 2021 100%

The US Federal debt is over $30 trillion dollars and is growing. US Federal spending is $6.2 trillion and tax revenue is $4.2 trillion ($12,000 per person) for a $2 trillion deficit.  $30 trillion is a debt of $243,000 per tax payer and $91,000 per tax citizen. The US federal debt to GDP was in 1980  34.5%, 2000 57.9% and is about 100% today. The unwritten rule is anything above $100% is dangerous! Total US and State debt to GDP is 142%. ANNUAL INTEREST ON DEBT; $450 BILLION AND IS RISING AS INTEREST RATES GO UP. Here is the scariest statistic: OTC Derivatives are $600 trillion (10 TIMES WORLD GDP). $600 trillion is at about the same level that caused the 2008 trouble in the banking system.

Dow 30,606,     NASDAQ 11,347    S&P 500 3,844 

Carl M Birkelbach

9/16/2022

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Mr Birkelbach does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Mr.Birkelbach , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com

EXPECT RALLIES;

DOWNSIDE PROJECTIONS; DOW-28,000 to 27,000 NASDAQ-10,000 to 9,000 S&P-2,900 to 2,700

OMG A BEAR MARKET?

Since our SELL/SELL ISL #740 market letter of December 2021, the Dow has fallen from our suggest sell at 36,000 to 31,400, the NASDAQ from our suggested sell at 16,000 to 11,400, S&P from our suggested sell at 4,500 to 3,900, More importantly some 50% of NASDAQ stocks like First Solar are down 50% and 10% of NASDAQ stocks like Netflix are down 70%.  Also we suggested the sale of Bitcoin at $57,000, now $30,000. After 13 years of continuous up market, the new generations of investors expect an instant rebound to new highs. Not this time.

World debt $226 trillion up from $74 trillion in 2019

The market rise was due to low interest rates, cheap oil and unprecedented growth of debt. Now, high inflation is due to  low interest rates  and high gas prices are due to the war in Ukraine. With debt, we observed the largest one-year debt surge since World War II, with global debt rising to $226 trillion as the world was hit by a global health crisis and a deep recession. Debt was already elevated going into the crisis, but now governments must navigate a world of record-high public and private debt levels, new virus mutations, and rising inflation. Borrowing by governments accounted for slightly more than half of the increase, as the global public debt ratio jumped to a record 99 percent of GDP. Private debt from non-financial corporations and households also reached new highs. My concern is in the world’s ocean of corporate debt, worth $226 trillion up from $74 trillion 2019. US corporate debt has climbed during the same period from $18 trillion to $24 trillion. Two-thirds of non-financial corporate bonds in America are rated “junk” or “BBB”, the category just above junk. The growth in debt has now stopped, because suddenly bankers are worried.

US federal debt to GDP was in 1980  34.5%, 2000 57.9% and in 2021 127%.

The US Federal debt is over $30 trillion dollars and is growing. US Federal spending is $6.2 trillion and tax revenue is $4.2 trillion ($12,000 per person) for a $2 trillion deficit.  $30 trillion is a debt of $243,000 per tax payer and $91,000 per tax citizen. The US federal debt to GDP was in 1980  34.5%, 2000 57.9% and in 2021 127%. The unwritten rule is anything above $100% is dangerous! Total US and State debt to GDP is 142%. ANNUAL INTEREST ON DEBT; $450 BILLION AND RISING AS INTEREST RATES GO UPHere is the scariest statistic: OTC Derivatives are $600 trillion (10 TIMES WORLD GDP). $600 trillion is at about the same level that caused the 2008 trouble in the banking system.

This Time it’s Different,

See the book, This Time it’s Different, Eight Centuries of Financial Folly, by Carmen Reinhart and Kenneth S. Rogoff. This book is one of my favorites. It tells the story that each time after a catastrophe, such as the Great Depression or 2008, economists agree that it could never happen again. Who could be so stupid as to let debt go to 127% of GDP and let six banks control 70% of the US assets (too big to fail) and allow all the economic growth to go to the top 1%, (and then give them tax cuts creating huge budget deficits), while eighty people own 50% of the world’s wealth? Reinhart tells about lessons from history, to show us how little we have learned and that we should prepare for future economic challenges, which are bound to happen again.

The Federal government should sponsors a ‘Retirement Savings Fund’

If you read my blog page titled “In a time of universal deceit, telling the truth is a revolutionary act” which is a quote by George Orwell; you will see that I believe that the Financial Industry has not truly fully disclosed stock market risk to the investing public.  Instead the Financial Industry gives the false advice that, “on the long term, the stock market will always recover.” Keynes has a famous quote that states “in the long run, we will all be dead.” The point being, if you are older and depending on the stock market for retirement, the stock market may not recover from any decline, in time for when you need the money.  During the period between 2000 and 2008 the stock market went down more than 50% twice, which was devastating for people who were retiring or sending their children to college. If you invested in the Dow in 1998, it wasn’t until 2011, that you got your money back. Therefore, in full disclosure, I believe I should tell investors that investing in the stock market is dangerous and that most people, ‘the average American,’ should treat stock market investing only as a speculation and not as a form of savings. Simply stated, most people should not gamble with their savings in the stock market. It is like feeding anchovies to the sharks,

I would like to see the Federal government sponsor a ‘Retirement Savings Fund’ that guarantees a 3 ½% return. (The rate would go up if the Fed fund rate goes higher). A Federal government sponsor a Retirement Savings Fund is needed. It would really help with the average American and their saving planning and keep the ‘average investor’ out of the stock market.  This would make retirement planning a lot easier and safer.

HSI -Hang Seng China Index at a 10 year low

To the word China is the biggest growth story in history with annual GDP growth above 6% per year. Since 2012 the US stock market the Dow have gone from 12,000 to 36,000 and the NASDAQ has gone from 3,000 to 16,000. Yet the Chinese HSI index is at 20,120, below its level in 2012 at 21,000. Why? Is it because the authorial Chinless communist party has been too careless with it ‘s  loans to its insider corporations? Is it because their vaccinations don’t work and the country is in lockdown?  Something is wrong in China and I don’t believe current world stock markets  reflect the risk to world markets.

DOWNSIDE PROJECTIONS; DOW-28,000 to 27,000 NASDAQ-10,000 to 9,000 S&P-2,900 to 2,700

Dow 31,236,     NASDAQ 11,388    S&P 500 3,900 Expect rallies, but eventually new lows!

Carl M Birkelbach

5/19/2022

ADDITIONAL INFORMATION IS AVAILABLE UPON REQUEST
Mr Birkelbach does not offer investment advice, but merely his own personal opinion. This report has been prepared from original sources and data we believe reliable but make no representations as to the accuracy or completeness. Mr.Birkelbach , his affiliates and subsidiaries and/or their officers and employees may from time to time acquire, hold or sell a position in securities. Past performance is no guarantee of future success. Upon request, we will supply additional information. CarlBis@aol.com