Trump has been musing about the need for America to get back to work by Easter...about three weeks from now. Many are pillorying him - accusing him of ignoring sound medical and public health advice.
These people are right! This is not a man who thinks objective, professional advice is worth anything if it conflicts with his merest whims!
But I think Trump kind of has a point this time.
The world's economy cannot just go on a complete shut down for three or even two months. If we do this, the damage to the foundations of our economic life would be profound and could last for years and years, causing permanent damage.
I think people assume that this crisis means that we will be "off" for a while, then go back to normal.
The vast majority of people do not understand that if this lasts more than a few months, what they think of as "normal" will be gone.
Do you think you will just return to dining at your favourite small restaurant after this event?...that establishment likely won't exist.
Will you be off to buy a brand new car after this?...get ready for the lowest prices you have ever seen, offered by companies that are not long with this world.
Will you travel after this?...many of your favourite tourist destinations will be permanently closed.
Are you looking forward to spending your money as you had previously?...expect massive tax increases as governments struggle to finance the massive debt they are taking on to meet the crisis, and to pay social benefits to millions of newly unemployed persons.
To try to mitigate this economic disaster, something like a return to "semi-normal" may likely be widely recommended, soon.
A return to "semi-normal" could see anyone over the age of 60, and with underlying medical conditions remaining mostly in self-isolation.
Others could slowly reintegrate back into normal life, with everyone taking a very wide range of new and semi-permanent precautions to continue to deal with COVID 19 until a vaccine is ready and distributed....wearing masks and gloves; sanitizing all surfaces; and continuing "rationale distancing"; still largely working from home and staying away from others where possible.
CAVEAT!! If COVID 19 mutates further, and becomes even more dangerous, then all bets are off! Welcome to the COVID 19 Depression!
Again, one thing should become clear soon - we cannot just shut down the planet's economy and start it up again a few months later.
As the real implications of this become clearer, I think we will try to get things going again. Expect us to try to go from "social distancing" to "rationale distancing" soon.
Wednesday, 25 March 2020
Monday, 23 March 2020
Market Next?
Well, the shorts have paid....
The market will try to get ahead of the recovery.
I think we will have a huge rise soon as this market will be seen as oversold...time to dump all shorts, and move to a long position...
HFU...taking a small position soon.
The market will try to get ahead of the recovery.
I think we will have a huge rise soon as this market will be seen as oversold...time to dump all shorts, and move to a long position...
HFU...taking a small position soon.
Wednesday, 18 March 2020
Trump V Biden I
Well, it looks like it will be Trump v Biden in November.
Both of these men have their limits...
Trump's are obvious...relentless liar, favouring the Big Lie over the Unvarnished Truth every time he has had a chance to decide between the two of them; difficulty with objective reality that he doesn't like; preference for dividing his country as opposed to uniting it as a path to success; massive conflicts of interest, and likely criminal behaviour in office; inability to take professional advice; the fact that he is Putin's bitch.
Biden has some serious limits as well...very questionable dealings by his son in Ukraine while Biden was VP; ownership of much of Obama's legacy, which is mixed at best; and Biden's tendency to come across like he has Alzheimer's disease from time to time.
I think Pence will be dumped by Trump soon. Pence's slavish, 100% devotion to Trump will not be seen as good enough by a man who demands 125%!
And, crucially, both Trump and Biden are OLD! There is a very real chance neither of these men will finish their time in office if they win.
Their respective advanced ages will be a primary consideration by voters in November, so the presidential election may come down to who they choose as running mates.
Trump will likely choose a right-wing lunatic to replace Pence; basically, a mirror image of Trump...Giuliani, or maybe Trump's daughter?
In contrast, Biden has undertaken to choose a female running mate (...no, it will not be Trump's daughter.) I think that if Biden chooses Kamala Harris, who is very effective and articulate - as a former prosecutor, she is the perfect attack dog against Trump - he will win this in a landslide.
Think about a subdued repeat of Obama-mania.
MANA! MANA!*
*"Make America Normal Again"
Both of these men have their limits...
Trump's are obvious...relentless liar, favouring the Big Lie over the Unvarnished Truth every time he has had a chance to decide between the two of them; difficulty with objective reality that he doesn't like; preference for dividing his country as opposed to uniting it as a path to success; massive conflicts of interest, and likely criminal behaviour in office; inability to take professional advice; the fact that he is Putin's bitch.
Biden has some serious limits as well...very questionable dealings by his son in Ukraine while Biden was VP; ownership of much of Obama's legacy, which is mixed at best; and Biden's tendency to come across like he has Alzheimer's disease from time to time.
I think Pence will be dumped by Trump soon. Pence's slavish, 100% devotion to Trump will not be seen as good enough by a man who demands 125%!
And, crucially, both Trump and Biden are OLD! There is a very real chance neither of these men will finish their time in office if they win.
Their respective advanced ages will be a primary consideration by voters in November, so the presidential election may come down to who they choose as running mates.
Trump will likely choose a right-wing lunatic to replace Pence; basically, a mirror image of Trump...Giuliani, or maybe Trump's daughter?
In contrast, Biden has undertaken to choose a female running mate (...no, it will not be Trump's daughter.) I think that if Biden chooses Kamala Harris, who is very effective and articulate - as a former prosecutor, she is the perfect attack dog against Trump - he will win this in a landslide.
Think about a subdued repeat of Obama-mania.
MANA! MANA!*
*"Make America Normal Again"
Monday, 16 March 2020
COVID 19 and the Stock Markets
COVID 19 is causing a massive world-wide recession.
We don't get GDP numbers until well after the time period that these numbers cover has ended, so the numbers for GDP during the pandemic are not available yet. When they are published, they will cause the stock markets world-wide to essentially collapse.
The world's central banks have been cutting rates to combat this impending recession, but it takes months for such cuts to have any effect even on a normally-functioning economy. This is not a normally-functioning economy.
The central bankers should have just left rates where they were, because there will be no one to borrow in this pandemic - they cut rates for consumers who will not be spending, and for businesses
that will not be producing.
This is a group of people who have not had an original thought since Keynes was alive and healthy decades ago.
There are many conspiracy theories afoot at this time. Here is one...
I have to wonder if stock buy-backs, which were keeping the markets afloat since Trump's tax cuts in 2018, have ended while the markets have been in free-fall, and if this has happened at the same time that insider selling has slowed?
Get it....at the very time when buying back shares makes sense - that is when prices are lower so companies can buy back more shares for every dollar they devote to this project - has this buying stopped just as the people who were benefiting most from these buy backs at maximum prices - the insiders who command the same buy backs - have stopped selling because they would be making less money at those lower prices?
If yes, it would essentially prove that those buy-backs were only happening to pump the market to facilitate maximum profits for the insiders who not only put those same buy-backs in place, but who also benefited from them by selling into the resulting bubble.
We shall see...
Stay safe.
This will end and all will be well.
We don't get GDP numbers until well after the time period that these numbers cover has ended, so the numbers for GDP during the pandemic are not available yet. When they are published, they will cause the stock markets world-wide to essentially collapse.
The world's central banks have been cutting rates to combat this impending recession, but it takes months for such cuts to have any effect even on a normally-functioning economy. This is not a normally-functioning economy.
The central bankers should have just left rates where they were, because there will be no one to borrow in this pandemic - they cut rates for consumers who will not be spending, and for businesses
that will not be producing.
This is a group of people who have not had an original thought since Keynes was alive and healthy decades ago.
There are many conspiracy theories afoot at this time. Here is one...
I have to wonder if stock buy-backs, which were keeping the markets afloat since Trump's tax cuts in 2018, have ended while the markets have been in free-fall, and if this has happened at the same time that insider selling has slowed?
Get it....at the very time when buying back shares makes sense - that is when prices are lower so companies can buy back more shares for every dollar they devote to this project - has this buying stopped just as the people who were benefiting most from these buy backs at maximum prices - the insiders who command the same buy backs - have stopped selling because they would be making less money at those lower prices?
If yes, it would essentially prove that those buy-backs were only happening to pump the market to facilitate maximum profits for the insiders who not only put those same buy-backs in place, but who also benefited from them by selling into the resulting bubble.
We shall see...
Stay safe.
This will end and all will be well.
Tuesday, 10 March 2020
Bloomberg...
I was wrong...it happens!
Bloomberg imploded via a spectacular collapse in his first debate from which he never recovered.
He had the cash...he had real experience...he has the connections in the world of America's elite...he knows and understands Trump. He would have beaten Trump, quite soundly.
But Bloomberg is the type of guy who needed to be in charge from the "get go" to be truly effective, and he wasn't.
And...well...that was that!
Biden worries me.
Bloomberg imploded via a spectacular collapse in his first debate from which he never recovered.
He had the cash...he had real experience...he has the connections in the world of America's elite...he knows and understands Trump. He would have beaten Trump, quite soundly.
But Bloomberg is the type of guy who needed to be in charge from the "get go" to be truly effective, and he wasn't.
And...well...that was that!
Biden worries me.
COVID-19 and Worldwide Debt
The planet is awash in debt.
It is also awash in disease...COVID 19 is an epic tragedy in the making. Before it is done, every country on Earth will experience death and a serious recession.
We need a way to dump mass debt worldwide, and to date no one has been willing to honestly deal with this issue - COVID 19 may be a perfect excuse.
As this pandemic unfolds, we may have a chance to launch a general round of debt forgiveness and restructuring:
Without dealing with this situation, a COVID-19 recession could morph into something far worse as the present debt situation worldwide is so serious that it limits our ability to move beyond any pandemic-related economic downturn. This tragedy may be what we need to create the breathing room that is so obviously required.
It is also awash in disease...COVID 19 is an epic tragedy in the making. Before it is done, every country on Earth will experience death and a serious recession.
We need a way to dump mass debt worldwide, and to date no one has been willing to honestly deal with this issue - COVID 19 may be a perfect excuse.
As this pandemic unfolds, we may have a chance to launch a general round of debt forgiveness and restructuring:
- States with massive internal debt could stop paying their bonds when they come due, and pay the interest only instead;
- Countries could cancel debt when they owe money to each other, netting this mutual debt to zero regardless of the related interest rates and risk levels;
- Individuals could be permitted to more easily go into bankruptcy, and start over again; and,
- Personal and public debt worldwide could be restructured effectively lowering interests rates to virtually zero, making management of all debt substantially easier.
Without dealing with this situation, a COVID-19 recession could morph into something far worse as the present debt situation worldwide is so serious that it limits our ability to move beyond any pandemic-related economic downturn. This tragedy may be what we need to create the breathing room that is so obviously required.
Would the bankers of the world let something like this happen?...
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