investmentwatchblog--2020-04-26--The Market will tank around October/November

No one understands the market , but there are some very broad rules of thumb that the market tends to follow .
One of them is that the market tends to go down with uncertainty more than anything else .
You can take the recent dips : One came when a single drug was found to maybe not be super effective against COVID , and another happened when Oil went into a freefall .
The market recovered fairly quickly , but the dips had less of a real-world impact than the uncertainty surrounding them .
I know we joke that @ @ @ @ @ @ @ go up , but the reason the “ priced-in ” memes have some weight is because the bad news is already accepted , and the world banks have tapped their cheat codes to prop things up .
The thing is : banks can ’ t solve all the real world problems .
Things Banks Can ’ t or Won ’ t fix even with Infinite Cash Oil was another domino in the collapse , but why did the banks not just use cash to fix it ?
Because the problem wasn ’ t @ @ @ @ @ @ @ doesn ’ t just buy space to keep oil , and buying oil doesn ’ t do shit if you don ’ t have a place to put it or people to consume it .
In theory they could just dump it in the ocean or burn it , literally burning the cash they used , but they won ’ t do that .
They would just as soon let the whole thing work itself out while pumping money into the market .
Commodities are much more difficult to manipulate because you ’ @ @ @ @ @ @ @ and takes physical space and actual labor to produce .
My point is that there are things that infinite cash can not address , and if they are addressed ( e.g .
burning oil bought with infinite cash ) , you ’ re probably going to see your dollar become useless anyway .
There ’ s an economic breaking point where you will Sophie ’ s choice the market vs real-world issues , and the Fed has already shown it will chose the market .
A lot of places in the US are @ @ @ @ @ @ @ appear to be working .
The thing is : COVID isn ’ t going to just disappear .
No one expects it to , but the way things are playing out , we are likely going to see a significant deceleration of cases in the next several weeks .
The result will be a political nightmare to keep things closed .
Wait until someone suggests cancelling Football and the South will start a civil war .
So , given the path we seem to be taking , expect it to be politically adventageous @ @ @ @ @ @ @ range .
This will see people get sick , but we ’ re going to likely sacrifice Nana to the Economy god “ for the good of the country.
” What will happen , then , around October ?
A couple things : One is that the virus may have more staying power with cold weather .
It will now be mostly dispersed in the population rather than isolated to a few hot spots , and with the globe open again , it will have a chance to come back harder than before @ @ @ @ @ @ @ “ priced-in.
” But , there are two things that are likely not “ priced-in : ” Constantly being compared to COVID is the fucking flu .
I ’ m not going to go into detail as to why the comparison isn ’ t really relevant , but flu season is basically baked into society .
I can tell you that hospitals , at times , get pretty crowded when it comes to the flu .
Certain seasons can hit critical care units pretty hard .
You can ’ t predict how bad @ @ @ @ @ @ @ I can guarantee you that this season is shaping up to be a humdinger .
You thought COVID was bad ?
Combine it with a peaking flu outbreak .
Suddenly you have a resurgent COVID running in with the flu , and all sorts of speculation is going to happen with “ how bad is flu season going to be this year ?
?
” Congress has shown its hand in doing what they have always done : giving money to people who really don ’ t need it , and leaving workers @ @ @ @ @ @ @ getting the crumbs .
Right around election time , the state of the country is going to likely be at the forefront of discussion .
If we ’ re open for a few months by then , there will be bitching about closing for no reason , and accusations that we opened too soon .
This bitching will likely be marbled into other discussions for how their massive stimulus bills benefited X people when they should have gone to Y people .
The result is that congress , around October/November , will likely @ @ @ @ @ @ @ , even if the need arises .
If COVID went to zero tomorrow and the global economy reopened , there is likely going to be a chain of events that would happen in fairly rapid succession : First , the historic unemployment levels will likely be very slow to reverse .
Many have already stated here that businesses are very likely to use this time to “ trim the fat.
” What better opportunity to cut staff than to simply not rehire them ?
This lag is going to be exacerbated by the @ @ @ @ @ @ @ scared to add more expenses to their books after the recent downturn .
This hesitance will snowball as service industries are likely going to have a significant drop in customers with people still hesitant to gather in large groups .
The spending power of the populace will continue to drop and businesses that were expected to bounce back , won ’ t .
This is likely not going to be addressed by the Fed because it will be at the worker level .
It would have to be addressed by Congress , who @ @ @ @ @ @ @ hesitant .
So , what does this all mean ?
Uncertainty .
You have an economy that just reopened , a virus that will start coming back , the flu season starting , a congress that had diamond hands , an unemployment ATH which is not rapidly reversing , and to top it all off , you have the election .
All of this isn ’ t even accounting for possible commodity collapses , interruption of supply chains , and already collapsing shipping industries , all of which are likely going to peak @ @ @ @ @ @ @ .
The only way the Fed can keep the Market afloat long-term is to literally nationalize stocks , at which point you should probably just invest in Gold .
TL ; DR : Uncertainty breeds crashes+Volatility .
We ’ re comfy now with the idea that we will return to normal in a few months , but a lot of sparks are in front of us that are likely to start new fires .
Disclaimer : This information is only for educational purposes .
Do not make any investment decisions based on the @ @ @ @ @ @ @ own due diligence .

by VictorVaudeville
Understanding The Market
No one understands the market, but there are some very broad rules of thumb that the market tends to follow. One of them is that the market tends to go down with uncertainty more than anything else. You can take the recent dips: One came when a single drug was found to maybe not be super effective against COVID, and another happened when Oil went into a freefall. The market recovered fairly quickly, but the dips had less of a real-world impact than the uncertainty surrounding them.
I know we joke that bad news means green because stonks only go up, but the reason the “priced-in” memes have some weight is because the bad news is already accepted, and the world banks have tapped their cheat codes to prop things up.
The thing is: banks can’t solve all the real world problems.
Things Banks Can’t or Won’t fix even with Infinite Cash
Oil was another domino in the collapse, but why did the banks not just use cash to fix it? Because the problem wasn’t cash, it was physics. Cash doesn’t just buy space to keep oil, and buying oil doesn’t do shit if you don’t have a place to put it or people to consume it. In theory they could just dump it in the ocean or burn it, literally burning the cash they used, but they won’t do that. They would just as soon let the whole thing work itself out while pumping money into the market.
Commodities are much more difficult to manipulate because you’re dealing with something that is real and takes physical space and actual labor to produce.
My point is that there are things that infinite cash cannot address, and if they are addressed (e.g. burning oil bought with infinite cash), you’re probably going to see your dollar become useless anyway. There’s an economic breaking point where you will Sophie’s choice the market vs real-world issues, and the Fed has already shown it will chose the market.
Understanding the Virus
A lot of places in the US are getting itchy to reopen as our measures appear to be working. The thing is: COVID isn’t going to just disappear. No one expects it to, but the way things are playing out, we are likely going to see a significant deceleration of cases in the next several weeks. The result will be a political nightmare to keep things closed. Wait until someone suggests cancelling Football and the South will start a civil war.
So, given the path we seem to be taking, expect it to be politically adventageous to open the country in the June-to-August range. This will see people get sick, but we’re going to likely sacrifice Nana to the Economy god “for the good of the country.”
What will happen, then, around October? A couple things: One is that the virus may have more staying power with cold weather. It will now be mostly dispersed in the population rather than isolated to a few hot spots, and with the globe open again, it will have a chance to come back harder than before. This is something that is likely “priced-in.” But, there are two things that are likely not “priced-in:”
The Flu Congress
The Flu
Constantly being compared to COVID is the flu. I’m not going to go into detail as to why the comparison isn’t really relevant, but flu season is basically baked into society.
I can tell you that hospitals, at times, get pretty crowded when it comes to the flu. Certain seasons can hit critical care units pretty hard. You can’t predict how bad the flu will be year-to-year, but I can guarantee you that this season is shaping up to be a humdinger. You thought COVID was bad? Combine it with a peaking flu outbreak. Suddenly you have a resurgent COVID running in with the flu, and all sorts of speculation is going to happen with “how bad is flu season going to be this year??”
We are primarily funded by readers. Please subscribe and donate to support us!
Congress and their shitty stimulus
Congress has shown its hand in doing what they have always done: giving money to people who really don’t need it, and leaving workers the honor of footing the bill after getting the crumbs.
Right around election time, the state of the country is going to likely be at the forefront of discussion. If we’re open for a few months by then, there will be bitching about closing for no reason, and accusations that we opened too soon. This bitching will likely be marbled into other discussions for how their massive stimulus bills benefited X people when they should have gone to Y people.
The result is that congress, around October/November, will likely be super hesitant to approve more stimulus, even if the need arises.
A Perfect Storm
If COVID went to zero tomorrow and the global economy reopened, there is likely going to be a chain of events that would happen in fairly rapid succession:
First, the historic unemployment levels will likely be very slow to reverse. Many have already stated here that businesses are very likely to use this time to “trim the fat.” What better opportunity to cut staff than to simply not rehire them? This lag is going to be exacerbated by the fact that businesses are going to be scared to add more expenses to their books after the recent downturn. This hesitance will snowball as service industries are likely going to have a significant drop in customers with people still hesitant to gather in large groups. The spending power of the populace will continue to drop and businesses that were expected to bounce back, won’t.
This is likely not going to be addressed by the Fed because it will be at the worker level. It would have to be addressed by Congress, who I just mentioned would likely be politically hesitant.
Back to the Market
So, what does this all mean? Uncertainty.
You have an economy that just reopened, a virus that will start coming back, the flu season starting, a congress that had diamond hands, an unemployment ATH which is not rapidly reversing, and to top it all off, you have the election.
All of this isn’t even accounting for possible commodity collapses, interruption of supply chains, and already collapsing shipping industries, all of which are likely going to peak in the future despite being disrupted now.
The only way the Fed can keep the Market afloat long-term is to literally nationalize stocks, at which point you should probably just invest in Gold.
TL;DR: Uncertainty breeds crashes+Volatility. We’re comfy now with the idea that we will return to normal in a few months, but a lot of sparks are in front of us that are likely to start new fires.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.


investmentwatchblog--2020-04-26--Deflation Debate Heats Up in Bond Market Ahead of Fed Meeting

Bond investors are starting to debate whether the U.S. is heading into a deflationary spiral , even after trillions of dollars of stimulus to offset the pandemic-driven hit to growth .
This year ’ s collapse in oil prices and the drumbeat of staggeringly weak economic data are putting the question front and center as the Federal Reserve meets this week .
The central bank is expected to sit tight for now and assess the programs it ’ s rolled out in the past month to calm markets , while reiterating a commitment to do more as needed .
But @ @ @ @ @ @ @ stuck at best around half of the Fed ’ s target for the next decade , the risk of falling prices is creeping into money managers ’ calculus .
For Fred Marki at Western Asset Management Co. , it comes down to the pace of economic recovery and the availability of testing and medical advances .
Although the firm anticipates activity will start to revive , for now it favors areas it sees as having factored in the risk of falling prices and earnings , including investment-grade company debt .
“ We think @ @ @ @ @ @ @ of restrictions that will allow activity to pick up in the third quarter , ” said Marki whose firm manages $ 460 billion in mostly fixed income .
“ We do not expect a multiyear deflationary era ; rather , we expect deflation to be seen just over the course of the next year.
” Ten-year breakeven rates , a proxy for the market ’ s average inflation expectations into 2030 , have stabilized after slumping in March to the lowest since early 2009 , following a brief spell below zero .
They @ @ @ @ @ @ @ up from as low as 0.47 % last month .
The Fed targets 2 % inflation and its favored gauge has missed the mark for much of the last eight years .
Data this week are expected to show the measure slipped to 1.3 % in March , the lowest since November .
The deflation debate is crucial for investors .
The experience of Japan shows policy makers may struggle to reverse the phenomenon of dropping prices should it occur in the U.S. That dynamic could reignite the rush into Treasuries and drive @ @ @ @ @ @ @ at Oanda Corp. “ Crippling demand is going to persist over the next year despite everything done to stabilize the economy , ” said Moya , a senior market analyst .
When the Fed slashed rates to near zero at an emergency meeting March 15 , policy makers pointed to below-target inflation and the need to lift prices as one reason for the move .
This month , Fed Vice Chairman Richard Clarida said policy makers “ have the tools to keep the economy out of deflation.
” Days later , St. Louis @ @ @ @ @ @ @ s hard to get a good read on inflation at the moment , but there ’ s some risk of deflation .

Bond investors are starting to debate whether the U.S. is heading into a deflationary spiral, even after trillions of dollars of stimulus to offset the pandemic-driven hit to growth.
This year’s collapse in oil prices and the drumbeat of staggeringly weak economic data are putting the question front and center as the Federal Reserve meets this week. The central bank is expected to sit tight for now and assess the programs it’s rolled out in the past month to calm markets, while reiterating a commitment to do more as needed.
But with market-based gauges showing investors see inflation stuck at best around half of the Fed’s target for the next decade, the risk of falling prices is creeping into money managers’ calculus. For Fred Marki at Western Asset Management Co., it comes down to the pace of economic recovery and the availability of testing and medical advances. Although the firm anticipates activity will start to revive, for now it favors areas it sees as having factored in the risk of falling prices and earnings, including investment-grade company debt.
“We think that there will be a sufficient relaxation of restrictions that will allow activity to pick up in the third quarter,” said Marki whose firm manages $460 billion in mostly fixed income. “We do not expect a multiyear deflationary era; rather, we expect deflation to be seen just over the course of the next year.”
Ten-year breakeven rates, a proxy for the market’s average inflation expectations into 2030, have stabilized after slumping in March to the lowest since early 2009, following a brief spell below zero. They’re now around 1.1%, up from as low as 0.47% last month.
The Fed targets 2% inflation and its favored gauge has missed the mark for much of the last eight years. Data this week are expected to show the measure slipped to 1.3% in March, the lowest since November.
We are primarily funded by readers. Please subscribe and donate to support us!
The deflation debate is crucial for investors. The experience of Japan shows policy makers may struggle to reverse the phenomenon of dropping prices should it occur in the U.S. That dynamic could reignite the rush into Treasuries and drive yields below zero, said Ed Moya at Oanda Corp.
“Crippling demand is going to persist over the next year despite everything done to stabilize the economy,” said Moya, a senior market analyst.
When the Fed slashed rates to near zero at an emergency meeting March 15, policy makers pointed to below-target inflation and the need to lift prices as one reason for the move.
This month, Fed Vice Chairman Richard Clarida said policy makers “have the tools to keep the economy out of deflation.” Days later, St. Louis Fed President James Bullard said it’s hard to get a good read on inflation at the moment, but there’s some risk of deflation.
www.bnnbloomberg.ca/deflation-debate-heats-up-in-bond-market-ahead-of-fed-meeting-1.1427240


investmentwatchblog--2020-04-26--Mutated Strains of COVID-19 up to 270 times more powerful

This thing is a stealth bomber .
First , a long incubation period and asymptomatic spread .
Then it starts out as “ just the flu , bro.
” Now it ’ s causing clotting disorders and limb amputations .
This is a bioweapon boys and girls , and it ’ s just getting started .
Coronavirus has mutated into at least 30 different strains new study finds The study was carried out by Professor Li Lanjuan and colleagues from Zhejiang University in Hangzhou , China and published in a non-peer reviewed paper released on website medRxiv.org on Sunday .
@ @ @ @ @ @ @ from 11 randomly chosen coronavirus patients from Hangzhou , where there have been 1,264 reported cases , and then tested how efficiently they could infect and kill cells .
More than 30 different mutations were detected , of which 19 were previously undiscovered .
“ Sars-CoV-2 has acquired mutations capable of substantially changing its pathogenicity , ” Li wrote in the paper .
The team discovered that some of the mutations could lead to functional changes in the virus ’ spike protein , the South China Morning Post reported .
Spike protein is @ @ @ @ @ @ @ attach itself to human cells .
Li ‘ s team infected cells with COVID-19 strains carrying different mutations , of which the most aggressive strains were found to generate as much as 270 times as much viral load as the weakest strains .
The aggressive strains also killed the human cells the fastest .

This thing is a stealth bomber. First, a long incubation period and asymptomatic spread. Then it starts out as “just the flu, bro.” Now it’s causing clotting disorders and limb amputations. This is a bioweapon boys and girls, and it’s just getting started.
Coronavirus has mutated into at least 30 different strains new study finds
The study was carried out by Professor Li Lanjuan and colleagues from Zhejiang University in Hangzhou, China and published in a non-peer reviewed paper released on website medRxiv.org on Sunday.
Li’s team analyzed the strains from 11 randomly chosen coronavirus patients from Hangzhou, where there have been 1,264 reported cases, and then tested how efficiently they could infect and kill cells.
More than 30 different mutations were detected, of which 19 were previously undiscovered.
“Sars-CoV-2 has acquired mutations capable of substantially changing its pathogenicity,” Li wrote in the paper.
The team discovered that some of the mutations could lead to functional changes in the virus’ spike protein, the South China Morning Post reported. Spike protein is the protein that the coronavirus uses to attach itself to human cells.
Li ‘s team infected cells with COVID-19 strains carrying different mutations, of which the most aggressive strains were found to generate as much as 270 times as much viral load as the weakest strains. The aggressive strains also killed the human cells the fastest.
We are primarily funded by readers. Please subscribe and donate to support us!
www.jpost.com/health-science/coronavirus-has-mutated-into-at-least-30-different-strains-new-study-finds-625333
h/t Dr. Daniel Jackson


investmentwatchblog--2020-04-26--FBI Director Wray Pushed To Withhold Exculpatory Evidence In Flynn Case

The truth is coming out and Gen. Flynn will be vindicated .
EXCLUSIVE : Source Says FBI Director Christopher Wray Pushed To Withhold Exculpatory Evidence In Mike Flynn Case By CHRISTIAN DATOC | April 24 , 2020 ( Daily Caller ) – Federal Bureau of Investigation Director Christopher Wray fought to prevent exculpatory evidence from surfacing in the case of President Donald Trump ’ s former National Security Advisor Michael Flynn , a source with direct knowledge of the situation tells Daily Caller .
New court documents were filed in Flynn ’ s case Friday containing the aforementioned exculpatory evidence @ @ @ @ @ @ @ .
Flynn ’ s attorney , Sidney Powell , announced the new filing on Twitter .
She has repeatedly accused the FBI and Justice Department of hiding evidence in the case .
“ This afternoon , the government produced to Mr. Flynn stunning Brady evidence that proves Mr. Flynn ’ s allegations of having been deliberately set up and framed by corrupt agents at the top of the FBI , ” Powell wrote in an additional filing .
“ The government has deliberately suppressed this evidence from the inception of this prosecution—knowing there @ @ @ @ @ @ @ “ Since August 2016 at the latest , partisan FBI and DOJ leaders conspired to destroy Mr. Flynn , ” she continued .
“ These documents show in their own handwriting and emails that they intended either to create an offense they could prosecute or at least get him fired.
” Powell claimed that more exculpatory evidence in the case will surface in the future… Apr 24 # BREAKING The government just provided the # Flynn defense with remarkable new & long withheld BRADY evidence .
Letter below just filed .
Stay tuned @

The truth is coming out and Gen. Flynn will be vindicated.
_____
EXCLUSIVE: Source Says FBI Director Christopher Wray Pushed To Withhold Exculpatory Evidence In Mike Flynn Case
By CHRISTIAN DATOC | April 24, 2020
(Daily Caller) – Federal Bureau of Investigation Director Christopher Wray fought to prevent exculpatory evidence from surfacing in the case of President Donald Trump’s former National Security Advisor Michael Flynn, a source with direct knowledge of the situation tells Daily Caller.
New court documents were filed in Flynn’s case Friday containing the aforementioned exculpatory evidence, commonly referred to as Brady Material. Flynn’s attorney, Sidney Powell, announced the new filing on Twitter. She has repeatedly accused the FBI and Justice Department of hiding evidence in the case.
“This afternoon, the government produced to Mr. Flynn stunning Brady evidence that proves Mr. Flynn’s allegations of having been deliberately set up and framed by corrupt agents at the top of the FBI,” Powell wrote in an additional filing. “The government has deliberately suppressed this evidence from the inception of this prosecution—knowing there was no crime by Mr. Flynn.”
“Since August 2016 at the latest, partisan FBI and DOJ leaders conspired to destroy Mr. Flynn,” she continued. “These documents show in their own handwriting and emails that they intended either to create an offense they could prosecute or at least get him fired.”
We are primarily funded by readers. Please subscribe and donate to support us!
Powell claimed that more exculpatory evidence in the case will surface in the future…
READ MORE:
dailycaller.com/2020/04/24/fbi-director-christopher-wray-fought-to-withhold-exculpatory-evidence-mike-flynn-case/
Sidney Powell
@SidneyPowell1
Apr 24
#BREAKING The government just provided the #Flynn defense with remarkable new & long withheld BRADY evidence. Letter below just filed. Stay tuned.
@realDonaldTrump
@Techno_Fog
@seanmdav
@seanhannity
@ProfMJCleveland
@BarbaraRedgate
@JosephJFlynn1
@lofly727
@GoJackFlynn
h/t fist


investmentwatchblog--2020-04-26--The reason why stocks were heading up for past 3 weeks – Blackout period of mega caps

The Securities and Exchange Commission ( SEC ) has set rules to ensure that employees are not at a disadvantage during a blackout period .
The SEC prohibits any director or executive officer of an issuer of any equity security from purchasing , selling or otherwise acquiring or transferring securities during a pension plan blackout period.2 In addition , the SEC has established rules requiring the issuer to notify the director or executive officer when imposing a blackout period.3 The purpose of these rules is to prevent insider trading that could otherwise occur during the period when changes are being @ @ @ @ @ @ @ material information about a company has not been made public and has been traded on .
This is because the information gives those having this knowledge an unfair advantage .
However , the financial security of employees who are unable to make changes during a blackout period may be jeopardized .
Therefore , SEC regulations stipulate that employees must receive advance warning about the occurrence of blackout periods Disclaimer : This information is only for educational purposes .
Do not make any investment decisions based on the information in this article .
Do @ @ @ @ @

by nats7798
The Securities and Exchange Commission (SEC) has set rules to ensure that employees are not at a disadvantage during a blackout period. The SEC prohibits any director or executive officer of an issuer of any equity security from purchasing, selling or otherwise acquiring or transferring securities during a pension plan blackout period.2
In addition, the SEC has established rules requiring the issuer to notify the director or executive officer when imposing a blackout period.3
We are primarily funded by readers. Please subscribe and donate to support us!
The purpose of these rules is to prevent insider trading that could otherwise occur during the period when changes are being made. Insider trading is illegal when material information about a company has not been made public and has been traded on. This is because the information gives those having this knowledge an unfair advantage.
However, the financial security of employees who are unable to make changes during a blackout period may be jeopardized. Therefore, SEC regulations stipulate that employees must receive advance warning about the occurrence of blackout periods
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.


investmentwatchblog--2020-04-26--A Harvard medical professor is now a billionaire after his early stake in Moderna soared 17,000%

• Timothy Springer , a medical professor at Harvard University , saw his net worth pass the $ 1 billion threshold this week as his early stake in the biotech firm Moderna soared , Bloomberg reported Wednesday .
• The professor invested $ 5 million in the company early on , and the stake ’ s value has since swelled to more than $ 800 million , Bloomberg said .
• Moderna shares have more than doubled in the year to date as its experimental coronavirus vaccine moved to human trials and received more than $ 400 million in funding @ @ @ @ @ @ @ , a Harvard University medical professor , is now worth more than $ 1 billion after his early stake in the biotech firm Moderna skyrocketed through 2020 , Bloomberg reported on Wednesday .
The company ’ s experimental coronavirus vaccine is among the few to have advanced to human trials .
Springer invested $ 5 million in Moderna before it went public in 2018 , and the firm ’ s success means his stake ’ s value has ballooned 17,000 % , to more than $ 800 million , according to Bloomberg .
@ @ @ @ @ @ @ , and investors minted extraordinary gains in the biotech sector as the coronavirus outbreak escalated to a severe pandemic .
Those with stakes in Moderna saw their net worth surge the most , followed by those invested in Novavax and Gilead .

Timothy Springer, a medical professor at Harvard University, saw his net worth pass the $1 billion threshold this week as his early stake in the biotech firm Moderna soared, Bloomberg reported Wednesday.
The professor invested $5 million in the company early on, and the stake’s value has since swelled to more than $800 million, Bloomberg said.
Moderna shares have more than doubled in the year to date as its experimental coronavirus vaccine moved to human trials and received more than $400 million in funding from the US government.
Timothy Springer, a Harvard University medical professor, is now worth more than $1 billion after his early stake in the biotech firm Moderna skyrocketed through 2020, Bloomberg reported on Wednesday.
The company’s experimental coronavirus vaccine is among the few to have advanced to human trials. Springer invested $5 million in Moderna before it went public in 2018, and the firm’s success means his stake’s value has ballooned 17,000%, to more than $800 million, according to Bloomberg.
We are primarily funded by readers. Please subscribe and donate to support us!
A small group of scientists, executives, and investors minted extraordinary gains in the biotech sector as the coronavirus outbreak escalated to a severe pandemic. Those with stakes in Moderna saw their net worth surge the most, followed by those invested in Novavax and Gilead.
markets.businessinsider.com/news/stocks/moderna-stock-bet-turns-harvard-professor-into-billionaire-amid-virus-2020-4-1029123653


investmentwatchblog--2020-04-26--[DD] My take on Amazon’s earnings and why it makes sense to write options

It ’ s no secret that Covid-19 has helped Amazon in almost every way .
Practically every facet of their business has benefited , including : Everyone .
EVERYONE already knows this .
That ’ s evident by their stock ’ s ytd ( 27 % ) relative to S & P ’ s ( -13 % ) performance .
It ’ s priced in .
I don ’ t care if they beat any estimate by 10 % , 30 % , 50 % , it will not move the stock ’ s price after earnings .
Here ’ @ @ @ @ @ @ @ is temporary .
Whether or not it kung flu comes back in the fall is frivolous .
Eventually , Covid-19 will cease to exist and people will return back to their normal lives ( including Amazon ) .
What WILL drive Amazon ’ s price post earnings is future guidance .
How many prime subscribers do they plan on keeping ?
What percent of new customers can they retain ?
etc .
This is going to be the deciding factor .
What do companies/politicians/ANY performance measured individuals consistently do in regards to predicting @ @ @ @ @ @ @ .
This should be self explanatory .
Why would you not set yourself up for greater , “ unforeseen ” success ?
Amazon is going to do just this .
Keep in mind I ’ m not saying that Amazon is going to purposefully give themselves negative guidance , but they will not give skyrocketing guidance , either .
Amazon currently has an IV percentile of 53 % .
The premium on their options is very high considering they ’ ve reverted back to their mean , and then some .
For those @ @ @ @ @ @ @ ( selling ) options , high IV is your friend .
My pals would be the first to tell you that IV is overestimated by around 20 % .
Without getting into to much detail this means that historical volatility ( i.e .
realized , or ACTUAL volatility ) is less than what was implied .
This tells us that buyers are “ overpaying ” and sellers have greater odds of profitability .
During the last 6 out of 8 earnings , AMZN has only moved 4 % or less .
This earnings @ @ @ @ @ @ @ ’ m not here to tell you if Amazon is going up or down , but I will say that it won ’ t have a huge movement .
I will not be giving any specific plays ( I will say that I am selling a straddle later on the week when IV will most likely rise ) .
My entire point of my post was that option sellers are going to be the winners here , while any buyers are going to get destroyed .
Disclaimer : This information is only for @ @ @ @ @ @ @ investment decisions based on the information in this article .
Do you own due diligence .

by Toblet
It’s no secret that Covid-19 has helped Amazon in almost every way. Practically every facet of their business has benefited, including:
AWS
Online shopping
Streaming service
Increase in prime members
Increase in Whole foods deliveries
Everyone. EVERYONE already knows this. That’s evident by their stock’s ytd (27%) relative to S&P’s (-13%) performance. It’s priced in. I don’t care if they beat any estimate by 10%, 30%, 50%, it will not move the stock’s price after earnings. Here’s another little known fact: Covid-19 is temporary. Whether or not it kung flu comes back in the fall is frivolous. Eventually, Covid-19 will cease to exist and people will return back to their normal lives (including Amazon). What WILL drive Amazon’s price post earnings is future guidance. How many prime subscribers do they plan on keeping? What percent of new customers can they retain? etc. This is going to be the deciding factor.
What do companies/politicians/ANY performance measured individuals consistently do in regards to predicting their future outlook? They underestimate it. This should be self explanatory. Why would you not set yourself up for greater, “unforeseen” success? Amazon is going to do just this. Keep in mind I’m not saying that Amazon is going to purposefully give themselves negative guidance, but they will not give skyrocketing guidance, either.
Options on AMZN
Amazon currently has an IV percentile of 53%. The premium on their options is very high considering they’ve reverted back to their mean, and then some. For those of you who are new to writing (selling) options, high IV is your friend. My pals would be the first to tell you that IV is overestimated by around 20%. Without getting into to much detail this means that historical volatility (i.e. realized, or ACTUAL volatility) is less than what was implied. This tells us that buyers are “overpaying” and sellers have greater odds of profitability.
We are primarily funded by readers. Please subscribe and donate to support us!
During the last 6 out of 8 earnings, AMZN has only moved 4% or less. This earnings will not be much different. I’m not here to tell you if Amazon is going up or down, but I will say that it won’t have a huge movement.
I will not be giving any specific plays (I will say that I am selling a straddle later on the week when IV will most likely rise). My entire point of my post was that option sellers are going to be the winners here, while any buyers are going to get destroyed.
tl;dr sell options
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.


investmentwatchblog--2020-04-26--$FCFS. Long pawn shops. DD inside.

$FCFS. Long pawn shops. DD inside.

no strike or exp given low liquidity .
sorry boys , this is a boring , plain old stock play i have a lot of notes but just going to hit the highlights here , i welcome any thoughts from anyone who knows the industry tho .
— it ’ s a very simple one : customers are given short-term ( 30 – 60 days ) loans based on the assessed value of a product which they post as collateral ( jewelry , electronics , guns , whatever ) .
these loans are super expensive ( good for pawn shop @ @ @ @ @ @ @ unpaid , the collateral is sold at a ~40 % markup ( great margins ) .
— High unemployment and economic uncertainty will increase demand for pawn loans as consumer credit availability shrinks in a recessionary environment .
— credit risk is extremely limited given modest LTV , 100 % collateral loans , and 30 – 60 day credit terms ( vs. months – years for subprime lenders ) .
also , collateral from unpaid loans turn to high-margin retail sales — credit risk is really just inventory pricing risk — $ FCFS @ @ @ @ @ @ @ and 36 % from 2019 high and is poised to break out of ATH in the next few years .
however , there ’ s more room to fall short-term given uncertain timing of reopenings w/r/t COVID-19 , liekly additional stimulus , and continued moratoriums on debts/bills/other consumer liabilities — the stock has been punished in the face of gov ’ t stimulus , which has reduced demand for pawn loans , and COVID-19 fears .
however , long-term , demand for pawn loans should come back strong and 98 % of stores @ @ @ @ @ @ @ YTD performance has been great .
retail sales are up 30 % in April ( !
! )
, granted , mostly from products for working-from-home and gaming consoles and the like — pawn loan business is super high margin and should increase in share as subprime lenders tap out — positive SSS through ’ 08 crisis and incredible stock performance coming out of it — historically a very good operator and integrator .
some of the stats on the CashAmerica acquisition are great ( e.g.
, retail margins at those stores increased @ @ @ @ @ @ @ .
this company is very big on inorganic growth so this is really important — ample liquidity ( $ 80mm cash , $ 200mm available under RCF , highly liquid inventory ) and significant debt capacity under existing credit agreement — these guys love their share buy backs , and the debt documents are pretty generous in allowing buybacks .
program has been temporarily suspended , expect it to come back strong mid-to-post recession ( if not sooner… ) — pawn shop market is highly fragmented , low brand equity , low barriers @ @ @ @ @ @ @ a shit ) — regulatory risk as socialism becomes more popular and negative sentiment towards consumer predatory practices grows — more stimulus + continued moratoriums on bills reduces demand for pawn loans .
i see this as very short term tho .
— LatAm and FX risk .
Most LatAm stores are really in Mexico , a market i admittedly don ’ t know well .
the plus side on FX is most foreign cash is re-invested locally , it just translates to lower earnings in USD TL ; DR : companies that @ @ @ @ @ @ @ well in a recession Disclaimer : This information is only for educational purposes .
Do not make any investment decisions based on the information in this article .
Do you own due diligence .

by Goldmans_Sach
no strike or exp given low liquidity. sorry boys, this is a boring, plain old stock play
i have a lot of notes but just going to hit the highlights here, i welcome any thoughts from anyone who knows the industry tho.
business model
— it’s a very simple one: customers are given short-term (30 – 60 days) loans based on the assessed value of a product which they post as collateral (jewelry, electronics, guns, whatever). these loans are super expensive (good for pawn shop), and if they’re unpaid, the collateral is sold at a ~40% markup (great margins).
thesis:
— High unemployment and economic uncertainty will increase demand for pawn loans as consumer credit availability shrinks in a recessionary environment.
— credit risk is extremely limited given modest LTV, 100% collateral loans, and 30 – 60 day credit terms (vs. months – years for subprime lenders). also, collateral from unpaid loans turn to high-margin retail sales — credit risk is really just inventory pricing risk
— $FCFS is down 25% from YTD high and 36% from 2019 high and is poised to break out of ATH in the next few years. however, there’s more room to fall short-term given uncertain timing of reopenings w/r/t COVID-19, liekly additional stimulus, and continued moratoriums on debts/bills/other consumer liabilities
— the stock has been punished in the face of gov’t stimulus, which has reduced demand for pawn loans, and COVID-19 fears. however, long-term, demand for pawn loans should come back strong and 98% of stores actually continue to be open.
what i like
— YTD performance has been great. retail sales are up 30% in April (!!), granted, mostly from products for working-from-home and gaming consoles and the like
— pawn loan business is super high margin and should increase in share as subprime lenders tap out
We are primarily funded by readers. Please subscribe and donate to support us!
— domestic units are not mall-based
— positive SSS through ’08 crisis and incredible stock performance coming out of it
— historically a very good operator and integrator. some of the stats on the CashAmerica acquisition are great (e.g., retail margins at those stores increased from 33% to ~40%). this company is very big on inorganic growth so this is really important
— ample liquidity ($80mm cash, $200mm available under RCF, highly liquid inventory) and significant debt capacity under existing credit agreement
— these guys love their share buy backs, and the debt documents are pretty generous in allowing buybacks. program has been temporarily suspended, expect it to come back strong mid-to-post recession (if not sooner…)
what i dont like
— pawn shop market is highly fragmented, low brand equity, low barriers to entry (but also who gives a shit)
— regulatory risk as socialism becomes more popular and negative sentiment towards consumer predatory practices grows
— more stimulus + continued moratoriums on bills reduces demand for pawn loans. i see this as very short term tho.
— LatAm and FX risk. Most LatAm stores are really in Mexico, a market i admittedly don’t know well. the plus side on FX is most foreign cash is re-invested locally, it just translates to lower earnings in USD
TL;DR: companies that make money off poor people will do well in a recession
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.


investmentwatchblog--2020-04-26--House prices don’t fall, even though nobody is buying. Kinda like stocks?

The coronavirus pandemic has dampened the spring homebuying season by nearly every measure—but buyers still might not find the discounts @ @ @ @ @ .
Of the nearly 3,000 agents surveyed by the National Association of Realtors ( NAR @ @ @ @ @ 20 , 64 % said buyers expect a decline in home prices , with the @ @ @ @ @ a drop between 5 % and 10 % .

by nudedirection
The coronavirus pandemic has dampened the spring homebuying season by nearly every measure—but buyers still might not find the discounts they’re looking for.
We are primarily funded by readers. Please subscribe and donate to support us!
Of the nearly 3,000 agents surveyed by the National Association of Realtors (NAR) between April 19 and 20, 64% said buyers expect a decline in home prices, with the largest share of those predicting a drop between 5% and 10%.
preview.redd.it/agq20o3ax3v41.png?width=1567&format=png&auto=webp&s=6070baef7ac7e173f34feb988964708935001ce4


investmentwatchblog--2020-04-26--U.S. economy to reopen in May and June and then ‘really bounce back,’ Mnuchin says, but others are t

U.S. economy to reopen in May and June and then ‘really bounce back,’ Mnuchin says, but others are thinking fall

The U.S. economy will start to recover in the third quarter after a period of reopening in May and June , Treasury Secretary Steven Mnuchin said Sunday .
“ As we begin to reopen the economy in May and June , you ’ re going to see the economy really bounce back in July , August and September , ” Mnuchin said in an interview on Fox News Sunday .
The trillions of dollars in government spending “ will have a significant impact ” to spur growth , he said .
“ As businesses begin to open , you ’ @ @ @ @ @ @ @ of the economy rebound.
” Mnuchin noted his forecast is based on assumptions about how the pandemic proceeds .
Reopening will have to be balanced with increased testing , he said .
Many experts don ’ t think there will be a quick recovery , often referred to as a V-shaped rebound .
Billionaire Barry Diller , the chairman of Expedia Group , EXPE , +5.05 % scoffed at suggestions the economy would recover this summer .
“ Anyone who thinks this economy is going to bounce…it can ’ t .
The damage @ @ @ @ @ @ @ ” Diller said on CBC News ’ “ Face the Nation.
” He said early September would be a better guess of when employees start to return to work .
Bank of America CEO Brian Moynihan , who also appeared on “ Face the Nation , ” was more upbeat about the outlook .
Moynihan said the bank ’ s internal data suggest consumer spending has ” leveled off ” in recent days and is starting to grow in certain areas after plunging in March and earlier this month .
“ That actually @ @ @ @ @ @ @ economy opens up in pieces and safely , you ’ ll see that consumer spending continue to grow which will help fuel the U.S. economy , ” Moynihan said .
This is a result of the government ’ s stimulus programs , he said .

The U.S. economy will start to recover in the third quarter after a period of reopening in May and June, Treasury Secretary Steven Mnuchin said Sunday.
“As we begin to reopen the economy in May and June, you’re going to see the economy really bounce back in July, August and September,” Mnuchin said in an interview on Fox News Sunday.
The trillions of dollars in government spending “will have a significant impact” to spur growth, he said. “As businesses begin to open, you’re going to see the demand side of the economy rebound.”
Mnuchin noted his forecast is based on assumptions about how the pandemic proceeds. Reopening will have to be balanced with increased testing, he said.
Many experts don’t think there will be a quick recovery, often referred to as a V-shaped rebound.
Billionaire Barry Diller, the chairman of Expedia Group, EXPE, +5.05% scoffed at suggestions the economy would recover this summer.
“Anyone who thinks this economy is going to bounce…it can’t. The damage that is being done is catastrophic,” Diller said on CBC News’ “Face the Nation.”
We are primarily funded by readers. Please subscribe and donate to support us!
He said early September would be a better guess of when employees start to return to work.
Bank of America CEO Brian Moynihan, who also appeared on “Face the Nation,” was more upbeat about the outlook.
Moynihan said the bank’s internal data suggest consumer spending has” leveled off” in recent days and is starting to grow in certain areas after plunging in March and earlier this month.
“That actually provides some hope that, as the economy opens up in pieces and safely, you’ll see that consumer spending continue to grow which will help fuel the U.S. economy,” Moynihan said.
This is a result of the government’s stimulus programs, he said.
www.marketwatch.com/story/us-economy-to-reopen-in-may-and-june-and-then-really-bounce-back-mnuchin-says-2020-04-26


investmentwatchblog--2020-04-26--Have you read this before, Ancient viruses never observed by humans discovered in Tibetan glacier

Ancient viruses never observed by humans discovered in Tibetan glacier Melting ice from climate change could release the pathogens into @ @ @ @ @ said , calling it a “ worst-case scenario.
” Ancient unknown viruses found locked in @ @ @ @ @ melt could unleash them China ’ s melting glacier draws millions of tourists and scientists @ @ @ @ @ out from the fog above the Baishui No 1 Glacier in southern China as a @ @ @ @ @ ice , flying past Chen Yanjun as he operated a GPS device .
More projectiles @ @ @ @ @ of ice that scientists say is one of the world ’ s fastest melting glaciers @ @ @ @ @ , ” the 30-year-old geologist said .
“ The first rule is safety .
”

Ancient viruses never observed by humans discovered in Tibetan glacier
Melting ice from climate change could release the pathogens into the environment, one researcher said, calling it a “worst-case scenario.”
www.nbcnews.com/science/environment/ancient-viruses-never-observed-humans-discovered-tibetan-glacier-n1120461
Ancient unknown viruses found locked in China glacier ice and a melt could unleash them
– just like real-life Fortitude
We are primarily funded by readers. Please subscribe and donate to support us!
www.thesun.co.uk/tech/10802005/ancient-unknown-viruses-chinese-glacier/
China’s melting glacier draws millions of tourists and scientists’ fears..A loud crack rang out from the fog above the Baishui No 1 Glacier in southern China as a stone shard careered down the ice, flying past Chen Yanjun as he operated a GPS device.
More projectiles were tumbling down the hulk of ice that scientists say is one of the world’s fastest melting glaciers.
“We should go,” the 30-year-old geologist said. “The first rule is safety.”
www.scmp.com/news/china/science/article/2169531/chinas-melting-glacier-draws-millions-tourists-and-scientists
AC


investmentwatchblog--2020-04-26--KEVIN WILLIAMSON: States Should Not Receive Bankruptcy Protection.

Mitch McConnell believes he has hit upon a solution for states that are upside-down on their pension obligations and other financial commitments : “ I would certainly be in favor of allowing states to use the bankruptcy route , ” he told Hugh Hewitt on Wednesday .
“ It ’ s saved some cities , and there ’ s no good reason for it not to be available.
” Eventually , the political problem becomes a math problem , with the states obligated to spend more money than they have or can borrow .
Even the Supreme Court of Oklahoma @ @ @ @ @ @ @ .
The most likely way forward — the only plausible way forward short of gutting the Constitution — is for states to engage in a long , painful , disruptive negotiation with their creditors , their pensioners , and other interested parties .
There will be endless lawsuits , unpopular budget cuts , unpopular tax hikes , and much else that is designed to make no one happy except for the lawyers .
( The lawyers always get paid . )
But these are the decisions the democratically elected representatives of the people @ @ @ @ @ @ @ and they will have to live with them .
Call me an optimist , but : The more it hurts , the less likely they are to repeat the error .

via nationalreview
Mitch McConnell believes he has hit upon a solution for states that are upside-down on their pension obligations and other financial commitments: “I would certainly be in favor of allowing states to use the bankruptcy route,” he told Hugh Hewitt on Wednesday. “It’s saved some cities, and there’s no good reason for it not to be available.”
* * * * * * * *
Eventually, the political problem becomes a math problem, with the states obligated to spend more money than they have or can borrow. Even the Supreme Court of Oklahoma cannot produce blood from a stone.
The most likely way forward — the only plausible way forward short of gutting the Constitution — is for states to engage in a long, painful, disruptive negotiation with their creditors, their pensioners, and other interested parties. There will be endless lawsuits, unpopular budget cuts, unpopular tax hikes, and much else that is designed to make no one happy except for the lawyers. (The lawyers always get paid.) But these are the decisions the democratically elected representatives of the people of the several states have made, and they will have to live with them.
Call me an optimist, but: The more it hurts, the less likely they are to repeat the error.


investmentwatchblog--2020-04-26--China Is Preparing for War – A Well Written Paper

Is China preparing for war ?
April 20 , 2020 There ’ s a reason Beijing is aggressively pursuing a policy of total national self-sufficiency Considering what we know of colonial history , there is little room for doubt that China is at a pre-colonial stage .
States at this stage attempt to centralise domestic power under a strong leader , dominate global supply chains and monopolise industry , all the while expanding abroad to secure natural resources .
China is aggressively pursuing total national self-sufficiency , and the question arises as to why .
My conclusion is that China @ @ @ @ @ @ @ not limited war .
The kind that seeks to rebalance the world order , tipping it in her favour by replacing the US as the dominant global power .
Historically , major conflicts have arisen when the leading global power is challenged by a rival , a problem known as the Thucydides trap — and China is expected ( by some metrics ) to overtake the United States as the world ’ s largest economy this decade .
China is on a war footing .
While the Covid-19 outbreak has exposed some grave @ @ @ @ @ @ @ relations with Beijing , the depths of our problem are only just beginning to dawn on us .
Fuelled by our desire for ever cheaper goods , the world has collectively sleepwalked into a supply-side dependency on the People ’ s Republic .
The gamble had been pitched as a trade-off .
China was expected to evolve democratic norms and embrace relations with the international community , while we got richer from globalisation .
But we have been played .
Whether it ’ s clothing and factory-fashion , personal protective equipment or hardware @ @ @ @ @ @ @ goods today rely on a ‘ Made in China ’ supply-chain .
At the same time as it was busy taking control over our manufacturing , China was busy cloning western software , via her lackadaisical respect for international copyright rules .
And while the world relies on China for hardware , China avoids software dependency on outsiders by creating substitutes : TikTok to replace snapchat , Weibo instead of Twitter , WeChat & RenRen for Facebook .
Indeed , there is an alternative Chinese version for almost any platform… .

Is China preparing for war?
April 20, 2020
There’s a reason Beijing is aggressively pursuing a policy of total national self-sufficiency
Key Premise from Article –
Considering what we know of colonial history, there is little room for doubt that China is at a pre-colonial stage. States at this stage attempt to centralise domestic power under a strong leader, dominate global supply chains and monopolise industry, all the while expanding abroad to secure natural resources. China is aggressively pursuing total national self-sufficiency, and the question arises as to why.
My conclusion is that China is preparing for war: total, not limited war. The kind that seeks to rebalance the world order, tipping it in her favour by replacing the US as the dominant global power. Historically, major conflicts have arisen when the leading global power is challenged by a rival, a problem known as the Thucydides trap — and China is expected (by some metrics) to overtake the United States as the world’s largest economy this decade.
unherd.com/2020/04/china-is-preparing-for-war/
China is on a war footing. While the Covid-19 outbreak has exposed some grave political miscalculations behind decades of international strategic relations with Beijing, the depths of our problem are only just beginning to dawn on us.
We are primarily funded by readers. Please subscribe and donate to support us!
Fuelled by our desire for ever cheaper goods, the world has collectively sleepwalked into a supply-side dependency on the People’s Republic.
The gamble had been pitched as a trade-off. China was expected to evolve democratic norms and embrace relations with the international community, while we got richer from globalisation. But we have been played.
Whether it’s clothing and factory-fashion, personal protective equipment or hardware parts, too many of our manufactured goods today rely on a ‘Made in China’ supply-chain. At the same time as it was busy taking control over our manufacturing, China was busy cloning western software, via her lackadaisical respect for international copyright rules.
And while the world relies on China for hardware, China avoids software dependency on outsiders by creating substitutes: TikTok to replace snapchat, Weibo instead of Twitter, WeChat & RenRen for Facebook. Indeed, there is an alternative Chinese version for almost any platform….
AC


investmentwatchblog--2020-04-26--The Economic Bust Wasn’t Caused By A Virus

On February 10 the stock markets were at all-time highs , with the Dow 30 at almost 30,000 .
The unemployment rate was at an all-time low and interest rates around most of the world were at all-time lows .
With interest rates near zero for an entire decade , the value of stocks , bonds , real estate , land , and virtually any asset was artificially inflated .
As a result , total household net worth doubled , increasing from $ 60 trillion to $ 120 trillion !
People were saying that things were too good to be @ @ @ @ @ @ @ finances at the gym to people embarking on unlikely business projects , and business owners being shocked when told it would not last , and even record-breaking skyscrapers .
Things were too good to be true .
Now the popular refrain is that the coronavirus caused the economy to collapse .
The government shut down the economy , putting people out of work .
so there has been less consumption .
Whole industries have been shuttered .
The unemployment rate has skyrocketed , increasing by more than 10 percent in the last couple @ @ @ @ @ @ @ see how politicians , the media , and even real people see this coronavirus situation as causing the economic collapse .
A caused B .
This in turn created the supposed need for trillions of dollars in subsidies , bailouts , and unemployment benefits .
Plus the Federal Reserve would have to inject many more trillions of dollars to bail out every aspect of the financial industry including junk bonds and student loans .
All of this is false in the sense that A did not cause B .
A , the coronavirus @ @ @ @ @ @ @ economic crisis ; it merely triggered it , causing it to occur earlier than it would have .
It may have also accelerated the collapse , and will likely deepen the trough of the crisis in business cycle terms .
In other words , the economy was weak , not strong .
The fundamentals were weak , not strong .
Balance sheets were weak , not strong .
This weakness could be clearly seen when President Trump began to publicly attack Federal Reserve chairman Jerome Powell for raising interest rates by 2 percent @ @ @ @ @ @ @ the stock market and his reelection chances .
The stock market thrived when interest rates were negative when adjusted for price inflation .
However , when Powell pushed the inflation-adjusted rate to near zero , stock markets stalled and all political hell broke loose .
Let ’ s get back to the economic fundaments prior to the coronavirus .
We are all consumers , so , starting with the consumer we find that , as a whole , consumers had a great deal of debt and not much in the way of savings @ @ @ @ @ @ @ increase savings after the housing bubble crisis .
The personal savings rate , which had fallen to 2 percent before the previous crisis ( the housing bubble ) , had now risen to 7 percent but was still well below the 10+ percent that was normal when we on the gold standard .
The main villains behind a depressed savings rate are inflation and taxation on interest income .
One-third of American households have zero savings and 60 percent have less than $ 1000 .
In effect , the Fed and the Treasury @ @ @ @ @ @ @ risk .
Consumer debt is now more than double the amount prior to the last crisis , student loans are now more than $ 1.6 trillion , and the combined consumer credit of households and nonprofits is over $ 4 trillion .
And , of course , this debt is not evenly distributed across the population , as some people have enormous debts relative to their ability to pay and some have none .
Before the virus , the labor market was also a mess despite a record low unemployment rate .
There @ @ @ @ @ @ @ unfilled and millions of college graduates who could not get jobs in their desired fields , but who were instead working as waiters and bartenders and living at home .
One of the biggest villains here is student loans , which encourage too many teens into college and put them on unproductive career paths .
The other big factor distorting the labor market is the Fed and its monetary policy .
The unpreceded decade-long zero interest rate policy has caused a massive business cycle .
Here , by artificially causing malinvestments , the @ @ @ @ @ @ @ in high demand and distorted income distribution as well .
In general , the Fed ’ s interest policy has increased the demand for very highly skilled workers such as electrical engineers , biochemists , and patent attorneys with graduate degrees .
The increased demand for these types of labor has increased wages and distorted the distribution of incomes .
These types of workers are necessary to produce such things as new iPhones , software platforms , computer chips , and pharmaceuticals , all of which require a significant amount of work by @ @ @ @ @ @ @ the distortions in the labor market is to take note of the number of job openings .
In December 2019 the number of openings was 7.3 million , the highest number since it began to be counted in 2000 .
One of the reasons I suspected an economic crisis was around the corner was that this number stopped climbing and began to fall noticeably , before it recently plummeted .
Meanwhile , the unemployment rate for recent college graduates had been 41 percent and about one-third of all college graduates are underemployed , @ @ @ @ @ @ @ a college degree .
Remember , total student loan debt has skyrocketed to $ 1.6 trillion .
These are all signs of a badly distorted labor market .
The too much debt/too little savings distortion can also apply to businesses and corporations , especially financial institutions .
Some corporations have plenty of cash , such as Apple .
It was so flush with cash that they started giving dividends to their shareholders .
But more telling is the problem of corporations using cash to buy back shares in their own company instead of @ @ @ @ @ @ @ recent wave of mergers and acquisitions .
Apparently , the Fed ’ s zero interest rate policy has driven the marginal return of capital so close to zero that corporations have resorted to these types of financial manipulations in an attempt to increase profits .
In summary , despite stellar numbers in the stock market and an all-time low unemployment rate , the US economy was already headed for an economic crisis .
Prior to this economic crisis , we could clearly see that many consumers could barely pay their bills and had @ @ @ @ @ @ @ The labor market was also badly distorted , with highly skilled markets booming , a record number of job openings , and massive numbers of recent college students unemployed or underemployed .
Finally , the corporate market was also distorted , with firms using atypical financial manipulations such as share buybacks and mergers to increase profits .
The viral pandemic merely triggered or revealed what was ultimately going to happen .

by Mark Thornton via Mises
On February 10 the stock markets were at all-time highs, with the Dow 30 at almost 30,000. The unemployment rate was at an all-time low and interest rates around most of the world were at all-time lows.
With interest rates near zero for an entire decade, the value of stocks, bonds, real estate, land, and virtually any asset was artificially inflated. As a result, total household net worth doubled, increasing from $60 trillion to $120 trillion!
People were saying that things were too good to be true. Everything from giggling about personal finances at the gym to people embarking on unlikely business projects, and business owners being shocked when told it would not last, and even record-breaking skyscrapers. Things were too good to be true.
Now the popular refrain is that the coronavirus caused the economy to collapse. The government shut down the economy, putting people out of work. so there has been less consumption. Whole industries have been shuttered. The unemployment rate has skyrocketed, increasing by more than 10 percent in the last couple of weeks.
It is easy to see how politicians, the media, and even real people see this coronavirus situation as causing the economic collapse. A caused B. This in turn created the supposed need for trillions of dollars in subsidies, bailouts, and unemployment benefits. Plus the Federal Reserve would have to inject many more trillions of dollars to bail out every aspect of the financial industry including junk bonds and student loans.
All of this is false in the sense that A did not cause B. A, the coronavirus, did not cause B, the economic crisis; it merely triggered it, causing it to occur earlier than it would have. It may have also accelerated the collapse, and will likely deepen the trough of the crisis in business cycle terms.
In other words, the economy was weak, not strong. The fundamentals were weak, not strong. Balance sheets were weak, not strong.
This weakness could be clearly seen when President Trump began to publicly attack Federal Reserve chairman Jerome Powell for raising interest rates by 2 percent, which he rightly thought would hurt the stock market and his reelection chances.
The stock market thrived when interest rates were negative when adjusted for price inflation. However, when Powell pushed the inflation-adjusted rate to near zero, stock markets stalled and all political hell broke loose.
Let’s get back to the economic fundaments prior to the coronavirus. We are all consumers, so, starting with the consumer we find that, as a whole, consumers had a great deal of debt and not much in the way of savings.
There was certainly an effort to increase savings after the housing bubble crisis. The personal savings rate, which had fallen to 2 percent before the previous crisis (the housing bubble), had now risen to 7 percent but was still well below the 10+ percent that was normal when we on the gold standard.
We are primarily funded by readers. Please subscribe and donate to support us!
The main villains behind a depressed savings rate are inflation and taxation on interest income. One-third of American households have zero savings and 60 percent have less than $1000. In effect, the Fed and the Treasury have needlessly put millions of households at risk.
Consumer debt is now more than double the amount prior to the last crisis, student loans are now more than $1.6 trillion, and the combined consumer credit of households and nonprofits is over $4 trillion. And, of course, this debt is not evenly distributed across the population, as some people have enormous debts relative to their ability to pay and some have none.
Before the virus, the labor market was also a mess despite a record low unemployment rate. There were millions of jobs that were going unfilled and millions of college graduates who could not get jobs in their desired fields, but who were instead working as waiters and bartenders and living at home. One of the biggest villains here is student loans, which encourage too many teens into college and put them on unproductive career paths.
The other big factor distorting the labor market is the Fed and its monetary policy. The unpreceded decade-long zero interest rate policy has caused a massive business cycle. Here, by artificially causing malinvestments, the Fed changed what types of jobs are in high demand and distorted income distribution as well.
In general, the Fed’s interest policy has increased the demand for very highly skilled workers such as electrical engineers, biochemists, and patent attorneys with graduate degrees. The increased demand for these types of labor has increased wages and distorted the distribution of incomes.
These types of workers are necessary to produce such things as new iPhones, software platforms, computer chips, and pharmaceuticals, all of which require a significant amount of work by patent attorneys.
Another way to view the distortions in the labor market is to take note of the number of job openings. In December 2019 the number of openings was 7.3 million, the highest number since it began to be counted in 2000. One of the reasons I suspected an economic crisis was around the corner was that this number stopped climbing and began to fall noticeably, before it recently plummeted.
Meanwhile, the unemployment rate for recent college graduates had been 41 percent and about one-third of all college graduates are underemployed, meaning that their job does not require a college degree. Remember, total student loan debt has skyrocketed to $1.6 trillion. These are all signs of a badly distorted labor market.
The too much debt/too little savings distortion can also apply to businesses and corporations, especially financial institutions. Some corporations have plenty of cash, such as Apple. It was so flush with cash that they started giving dividends to their shareholders.
But more telling is the problem of corporations using cash to buy back shares in their own company instead of investing in productivity. Another was the recent wave of mergers and acquisitions. Apparently, the Fed’s zero interest rate policy has driven the marginal return of capital so close to zero that corporations have resorted to these types of financial manipulations in an attempt to increase profits.
In summary, despite stellar numbers in the stock market and an all-time low unemployment rate, the US economy was already headed for an economic crisis. Prior to this economic crisis, we could clearly see that many consumers could barely pay their bills and had virtually no savings to rely on. The labor market was also badly distorted, with highly skilled markets booming, a record number of job openings, and massive numbers of recent college students unemployed or underemployed. Finally, the corporate market was also distorted, with firms using atypical financial manipulations such as share buybacks and mergers to increase profits. The viral pandemic merely triggered or revealed what was ultimately going to happen.


investmentwatchblog--2020-04-26--Documentary about Social Control, Manufactured Consent, Science and Education that examines the hist

Documentary about Social Control, Manufactured Consent, Science and Education that examines the history, the philosophy and the pathology of elite ruling power.

“ The driving source in society is not love , its fear ” This film is about the rise of @ @ @ @ @ of human beings under modern hierarchical systems.
” The film includes original interviews with : @ @ @ @ @ , Rebecca Lemov ( World as Laboratory ) , Christopher Simpson ( The Science of @ @ @ @ @ ( The McDonaldization of Society ) , Morris Berman ( The Reenchantment of the World @ @ @ @ @ ( Dumbing us Down ) , Alfie Kohn ( What does it mean to be @ @ @ @ @ others .

“The driving source in society is not love, its fear”
This film is about the rise of mechanistic philosophy and the exploitation of human beings under modern hierarchical systems.” The film includes original interviews with: Noam Chomsky, Howard Zinn, Rebecca Lemov (World as Laboratory), Christopher Simpson (The Science of Coercion), George Ritzer (The McDonaldization of Society), Morris Berman (The Reenchantment of the World), John Taylor Gatto (Dumbing us Down), Alfie Kohn (What does it mean to be well educated?) and others.
We are primarily funded by readers. Please subscribe and donate to support us!
h/t Facts-Over-Opinion


investmentwatchblog--2020-04-26--The Press is Deliberately Trying to Hurt People for Political Change?

People are starving because of this nonsense of locking down the entire nation .
Many live paycheck to paycheck .
@ @ @ @ @ less .
The total population in Florida is 21.48 million people .
The total cases @ @ @ @ @ .
This is about one-third of the death rate from the flu .
Why is @ @ @ @ @ keeping people locked down ?
Many just see this as the leftist papers refusing to @ @ @ @ @ a result , this is all just political .
I would understand if we were @ @ @ @ @ killed 30 % of the population .
This comes out to 0.0000498 % .
The @ @ @ @ @ from car crashes in Florida last year was 3,224 .
We are facing an exaggerated @ @ @ @ @ people and destroying their jobs in hopes of overthrowing Trump .
Plain & simple !
@ @ @ @ @ accountable !

by Martin Armstrong
People are starving because of this nonsense of locking down the entire nation. Many live paycheck to paycheck. The leftist media could care less. The total population in Florida is 21.48 million people. The total cases were 30,533 with 1,046 deaths. This is about one-third of the death rate from the flu.
We are primarily funded by readers. Please subscribe and donate to support us!
2018 27 3,082 2017 29 3,040 2016 22 2,807
Why is the media so intent upon keeping people locked down? Many just see this as the leftist papers refusing to tell the truth and as a result, this is all just political. I would understand if we were facing some serious diseases that killed 30% of the population. This comes out to 0.0000498%. The number of people who die from car crashes in Florida last year was 3,224.
We are facing an exaggerated media storm intent upon hurting people and destroying their jobs in hopes of overthrowing Trump. Plain & simple! The press should be held accountable!


investmentwatchblog--2020-04-26--Why The Oil Industry Can No Longer Rely On China

The global oil sector is reeling from a combination of negative oil prices , storage overload , demand destruction , and calls for a renewable energy revolution in the post-COVID-19 era .
US and European oil market analysts appear to be pinning their hopes on a rebound in oil demand from Asia .
Even international financial institutions , such as the IMF , WB , ECB and OECD indicate that the future of economic and energy demand growth is inextricably linked to the future of China and , increasingly , India .
OPEC oil and gas producers , after decades @ @ @ @ @ @ @ rerouting their investments and oil and gas strategies to capture these markets of the future .
Before COVID-19 , China was already a key global center for trade , investments and geopolitical influence .
While some critical reports have been warning about the worrying economic and financial situation of China , mainstream investors and operators still had the country as their top investment target .
Growing concerns about Beijing ’ s geopolitical aggression in the South China Sea and the negative impact of its One Belt One Road initiative were not enough to @ @ @ @ @ @ @ economically with the Asian giant .
Arab OPEC producers weren ’ t immune to China ’ s influence either , with over 50 percent of their overall investments going to the country .
China , the argument goes , would always be a vital partner due to its huge population and growing political-economic reach .
Then came COVID-19 .
The unexpected implications of this global pandemic had only previously been discussed in thinktank reports and Hollywood horror films .
Nobody , it seems , thought it would ever become a reality .
Now @ @ @ @ @ @ @ fallout from this transformative disease is far bigger than most people think .
The true extent of the damage caused by COVID-19 is yet to be seen , mainly due to the trillions of dollars of government support that has been given to businesses .
But geopolitical relations and trade routes have already changed drastically .
China ’ s web of influence is now unraveling as it has become clear just how dangerous it is to rely so heavily on just one country for international trade and security .
The lack of resilience @ @ @ @ @ @ @ when it comes to production and trade , is going to very negatively impact China in the coming years .
A new resilience based on a diverse economic system will be needed to confront and mitigate future international crises or pandemics .
For oil producers , especially the Arab OPEC producers and Russia , relying on China to consume a majority of their future production is a dangerous game .
Just as US shale is far too heavily reliant on Cushing storage and paid the price when WTI prices crashed into negative territory @ @ @ @ @ @ @ have been hit hard by Chinese demand destruction .
The next development , one that is already visible within major OECD countries , will be to rethink future investment projects or current financing schemes , and set up new non-Chinese production centers or bring industry and production back home .
This may sounds like Trump ’ s ‘ America First ’ policy , but it is seen by European parties as a necessary to counterweight to the ever-growing influence of China .
A Make Europe Great Again ( MEGA ) policy , based @ @ @ @ @ @ @ already gained traction .
The automotive , chemical and medical sectors are reconsidering their relationships with China .
Discussions are clearly on the table to bring production facilities back home or to set up new ones in India , Egypt or other places , where high-tech , high education levels , and low costs are also available .
OPEC ’ s strategists should also take a step back and look beyond China when it comes to economic interests .
A restructuring of production , supported by geopolitical , financial and operational issues , @ @ @ @ @ @ @ damper on oil and gas supplies and demand in the Tiger State .
OPEC and Russia should assess the options that OECD countries , supported by others , are considering regarding the restructuring of their China policies .
New emerging regions will be needed to increase the resilience of the global economy .
This transformation will rapidly and dramatically influence future energy demand trade flows .
Saudi Arabia , UAE , Qatar and Kuwait , must consider this before they are confronted by a fait-a-compli .
COVID-19 has transformed international relations , nationalism @ @ @ @ @ @ @ of two of the largest economic power players in the world , the USA and the EU .
If it fails to act , OPEC ’ s oil and gas future will hit hard by lower Chinese demand .
The oil cartel needs a new resilience-focused approach to its economic policies .
The future of oil and gas demand will not be focused purely in China , and any nations with an interest in the industry should start to plan for that future now .

By Cyril Widdershoven
The global oil sector is reeling from a combination of negative oil prices, storage overload, demand destruction, and calls for a renewable energy revolution in the post-COVID-19 era.
US and European oil market analysts appear to be pinning their hopes on a rebound in oil demand from Asia. Even international financial institutions, such as the IMF, WB, ECB and OECD indicate that the future of economic and energy demand growth is inextricably linked to the future of China and, increasingly, India.
OPEC oil and gas producers, after decades of prioritizing Western economies, have been rerouting their investments and oil and gas strategies to capture these markets of the future. Before COVID-19, China was already a key global center for trade, investments and geopolitical influence. While some critical reports have been warning about the worrying economic and financial situation of China, mainstream investors and operators still had the country as their top investment target. Growing concerns about Beijing’s geopolitical aggression in the South China Sea and the negative impact of its One Belt One Road initiative were not enough to dissuade nations and global conglomerates from engaging economically with the Asian giant. Arab OPEC producers weren’t immune to China’s influence either, with over 50 percent of their overall investments going to the country. China, the argument goes, would always be a vital partner due to its huge population and growing political-economic reach. Then came COVID-19. The unexpected implications of this global pandemic had only previously been discussed in thinktank reports and Hollywood horror films. Nobody, it seems, thought it would ever become a reality. Now that it has, the major potential fallout from this transformative disease is far bigger than most people think.
The true extent of the damage caused by COVID-19 is yet to be seen, mainly due to the trillions of dollars of government support that has been given to businesses. But geopolitical relations and trade routes have already changed drastically. China’s web of influence is now unraveling as it has become clear just how dangerous it is to rely so heavily on just one country for international trade and security. The lack of resilience in the global economic system, especially when it comes to production and trade, is going to very negatively impact China in the coming years. A new resilience based on a diverse economic system will be needed to confront and mitigate future international crises or pandemics. For oil producers, especially the Arab OPEC producers and Russia, relying on China to consume a majority of their future production is a dangerous game. Just as US shale is far too heavily reliant on Cushing storage and paid the price when WTI prices crashed into negative territory as Cushing hit capacity, Arab producers have been hit hard by Chinese demand destruction.
We are primarily funded by readers. Please subscribe and donate to support us!
The next development, one that is already visible within major OECD countries, will be to rethink future investment projects or current financing schemes, and set up new non-Chinese production centers or bring industry and production back home. This may sounds like Trump’s ‘America First’ policy, but it is seen by European parties as a necessary to counterweight to the ever-growing influence of China. A Make Europe Great Again (MEGA) policy, based on shortages of Chinese products, has already gained traction. The automotive, chemical and medical sectors are reconsidering their relationships with China. Discussions are clearly on the table to bring production facilities back home or to set up new ones in India, Egypt or other places, where high-tech, high education levels, and low costs are also available.
OPEC’s strategists should also take a step back and look beyond China when it comes to economic interests. A restructuring of production, supported by geopolitical, financial and operational issues, outside China will directly put a major damper on oil and gas supplies and demand in the Tiger State.
OPEC and Russia should assess the options that OECD countries, supported by others, are considering regarding the restructuring of their China policies. New emerging regions will be needed to increase the resilience of the global economy. This transformation will rapidly and dramatically influence future energy demand trade flows. Saudi Arabia, UAE, Qatar and Kuwait, must consider this before they are confronted by a fait-a-compli. COVID-19 has transformed international relations, nationalism has returned to influence the economic policies of two of the largest economic power players in the world, the USA and the EU. If it fails to act, OPEC’s oil and gas future will hit hard by lower Chinese demand. The oil cartel needs a new resilience-focused approach to its economic policies. The future of oil and gas demand will not be focused purely in China, and any nations with an interest in the industry should start to plan for that future now.
By Cyril Widdershoven for Oilprice.com


investmentwatchblog--2020-04-26--Bank of China Clients Said to Have $1 Billion Losses on Oil Bet [Bloomberg]

Don ’ t feel too bad losing 98 % on USO , Bank of China is a lurker too .
Bank of China Ltd. ’ s estimate for the carnage to retail investors from the collapse in a product linked to U.S. crude oil futures has surged 11-fold to more than 7 billion yuan ( $ 1 billion ) as it consolidated reports from its nationwide network , according to people familiar with the matter .
The lender ’ s estimate of losses to customers across China increased from about 600 million yuan in the middle of last week as @ @ @ @ @ @ @ 10,000 outlets , said the people , asking not to be identified discussing a private matter .
The number isn ’ t final and subject to further changes as the lender examines the data from its branches , one of the people said .
The losses stem from the bank settling May West Texas Intermediate contracts that underpinned its “ Crude Oil Treasure ” product on April 20 at minus $ 37.63 a barrel , leaving Bank of China customers caught in the middle of oil ’ s unprecedented collapse below zero .
@ @ @ @ @ @ @ protest the lender ’ s handling of the contract rollover and to demand it shoulder some of the losses .

Don’t feel too bad losing 98% on USO, Bank of China is a lurker too.
Bank of China Ltd.’s estimate for the carnage to retail investors from the collapse in a product linked to U.S. crude oil futures has surged 11-fold to more than 7 billion yuan ($1 billion) as it consolidated reports from its nationwide network, according to people familiar with the matter.
The lender’s estimate of losses to customers across China increased from about 600 million yuan in the middle of last week as more information was gathered from its over 10,000 outlets, said the people, asking not to be identified discussing a private matter. The number isn’t final and subject to further changes as the lender examines the data from its branches, one of the people said.
The losses stem from the bank settling May West Texas Intermediate contracts that underpinned its “Crude Oil Treasure” product on April 20 at minus $37.63 a barrel, leaving Bank of China customers caught in the middle of oil’s unprecedented collapse below zero. Hundreds have taken to the Internet to protest the lender’s handling of the contract rollover and to demand it shoulder some of the losses.


investmentwatchblog--2020-04-26--This article helped me understand a little as to why the market is rallying. Wish I knew this before

This article helped me understand a little as to why the market is rallying. Wish I knew this before buying puts on SPY – “Amazon’s $1.2 trillion market value, in fact, now accounts for more than 40% of the entire value of the S&P 500 consumer-discretionary sector.”

Why isn ’ t the stock market much lower ?
This question is occurring to plenty of observers right now , given the apparent contrast between economic realities and equity performance .
A pandemic-driven economic catastrophe of unprecedented speed has cost more than 26 million jobs , which to many seems unreflected in an S & P 500 index that ’ s up 29 % from its low a month ago , down a mere 16 % from a record high and resting near levels from late summer 2019 – a time when we were at full employment and record @ @ @ @ @ @ @ Street are remarking on this perceived Wall Street-Main Street disconnect .
Cantor Fitzgerald strategist Peter Cecchini last week argued , “ The equity market just isn ’ t getting the joke .
Three factors make this rally appear somewhat ridiculous because the likely extent of the slowdown will be severe relative to historical experience for three reasons : 1 ) a pandemic whose duration is unknowable , 2 ) an oil shock whose impacts on earnings will be deflationary , and 3 ) an already fragile economy as indicated by an inverted yield @ @ @ @ @ @ @ Credit Suisse ’ s Jonathan Golub notes the S & P 500 has been at the current 2800 level a couple of times in recent years , comparing the fundamental context for each visit .
When the S & P traded here in both January 2018 and March 2019 , forecast earnings over the next year were appreciably higher ( meaning stocks now look more expensive ) and credit spreads are much wider now ( suggesting a riskier environment ) .
Only when comparing valuations on the profit projections two years out does @ @ @ @ @ @ @ line with the prior stops at 2800 .
And it ’ s probably fair to assume that today ’ s consensus forecast calling for 2021 earnings growth well above 2019 levels is unadjusted for the full realities of the economic shock underway .
Certainly , the trillions in Federal reserve asset buying has helped enable the rally in risk assets that has lifted equities off their lows and bolstered valuations .

Why isn’t the stock market much lower?
This question is occurring to plenty of observers right now, given the apparent contrast between economic realities and equity performance.
A pandemic-driven economic catastrophe of unprecedented speed has cost more than 26 million jobs, which to many seems unreflected in an S&P 500 index that’s up 29% from its low a month ago, down a mere 16% from a record high and resting near levels from late summer 2019 – a time when we were at full employment and record corporate profitability.
Even some on Wall Street are remarking on this perceived Wall Street-Main Street disconnect.
Cantor Fitzgerald strategist Peter Cecchini last week argued, “The equity market just isn’t getting the joke. Three factors make this rally appear somewhat ridiculous because the likely extent of the slowdown will be severe relative to historical experience for three reasons: 1) a pandemic whose duration is unknowable, 2) an oil shock whose impacts on earnings will be deflationary, and 3) an already fragile economy as indicated by an inverted yield curve and already contracting loan volumes.”
Credit Suisse’s Jonathan Golub notes the S&P 500 has been at the current 2800 level a couple of times in recent years, comparing the fundamental context for each visit. When the S&P traded here in both January 2018 and March 2019, forecast earnings over the next year were appreciably higher (meaning stocks now look more expensive) and credit spreads are much wider now (suggesting a riskier environment).
Only when comparing valuations on the profit projections two years out does today’s market look roughly in line with the prior stops at 2800. And it’s probably fair to assume that today’s consensus forecast calling for 2021 earnings growth well above 2019 levels is unadjusted for the full realities of the economic shock underway.
We are primarily funded by readers. Please subscribe and donate to support us!
Certainly, the trillions in Federal reserve asset buying has helped enable the rally in risk assets that has lifted equities off their lows and bolstered valuations.


investmentwatchblog--2020-04-26--Markets are engaged in a key battle between the worst evolving fundamental picture in our lifetimes

New bull market ?
No .
Unproven .
New lows to come or a retest ?
No .
Unproven .
Markets are engaged in a key battle between the worst evolving fundamental picture in our lifetimes on the one hand , and the largest set of liquidity injections in history .
A looming $ 3.7 trillion deficit , a Fed balance sheets on a path to $ 10 trillion , zero rates as far as the eye can see and even calls for negative rates in the US with no plan or vision to ever extract ourselves from this future @ @ @ @ @ @ @ record debt , record unemployment are not a recipe for organic growth .
Far from it .
But let ’ s chase record liquidity injections .
The footprints of these liquidity injections can be found in the distortions in asset prices versus the fundamentals .
And this is what this market right now is all about , the three pillars : Fundamentals , liquidity and technicals .
Last week we saw a correction off of the key monthly 2oMA pivot ( Just One Chart ) , this rejection produced a 170 handle correction @ @ @ @ @ @ @ announcements on the side of the Fed on Thursday evening , and a new stimulus package by Congress to the tune of nearly half a trillion dollars and the correction was again saved , but has so far produced lower highs .
This is what it takes .
Ever more intervention .
But hopes for a structural quick recovery are misplaced .
Recovery yes , but back to where we were ?
Hardly .
For a run down on the macro picture I encourage you to watch these two interviews belie if you @ @ @ @ @ @ @ , my own take on things on the macro view via ABC in Australia this week : And second , this take from Mohammed El-Erian on the cognitive failure that is taking place in markets right now : The liquidity injections can ’ t fix the economy , all they can do it goose asset prices above their fundamental worth .
Next week will be an important week in markets : A key new Fed meeting next week , what will they think of now ?
And of course we have month end @ @ @ @ @ @ @ right in front of Sell in May ?
In addition , the big 5 mega cap tech stocks that have carried this entire market on the way up last year ( and are again doing so now ) will report earnings and speak to outlooks .
Be clear without these 5 stocks the entire index picture would look far worse than it now appears : Be the massive divergence in equal weight vis a via $ SPX : Or be it relative index performance ( since the January 2018 highs ) : The @ @ @ @ @ @ @ stocks only are masking the extent of the damage inflicted on markets .
The bull market remains unproven .
Bulls need to prove their case by getting above key resistance levels and then defend these areas as support .
Without capturing these levels this rally here looks to follow the historic script of a bear market counter rally .

by northmantrader
New bull market? No. Unproven. New lows to come or a retest? No. Unproven. Markets are engaged in a key battle between the worst evolving fundamental picture in our lifetimes on the one hand, and the largest set of liquidity injections in history. A looming $3.7 trillion deficit, a Fed balance sheets on a path to $10 trillion, zero rates as far as the eye can see and even calls for negative rates in the US with no plan or vision to ever extract ourselves from this future growth sapping venture. Record deficits, record debt, record unemployment are not a recipe for organic growth. Far from it. But let’s chase record liquidity injections.
The footprints of these liquidity injections can be found in the distortions in asset prices versus the fundamentals. And this is what this market right now is all about, the three pillars: Fundamentals, liquidity and technicals.
Last week we saw a correction off of the key monthly 2oMA pivot (Just One Chart), this rejection produced a 170 handle correction on $ES, then more liquidity announcements on the side of the Fed on Thursday evening, and a new stimulus package by Congress to the tune of nearly half a trillion dollars and the correction was again saved, but has so far produced lower highs.
This is what it takes. Ever more intervention. But hopes for a structural quick recovery are misplaced. Recovery yes, but back to where we were? Hardly.
For a run down on the macro picture I encourage you to watch these two interviews belie if you haven’t seen them:
Firstly, my own take on things on the macro view via ABC in Australia this week:
We are primarily funded by readers. Please subscribe and donate to support us!
Laugh with me at my buzzcut, cry with me at the reality of the situation we're all confronted with. Good conversation with @ElysseMorgan, thanks for having me on! Full interview from this morning:t.co/YiJFyhkdfO — Sven Henrich (@NorthmanTrader) April 22, 2020
And second, this take from Mohammed El-Erian on the cognitive failure that is taking place in markets right now:
Listen closely. @elerianm gets it and he is on it. t.co/KoqABYnP0U — Sven Henrich (@NorthmanTrader) April 23, 2020
The liquidity injections can’t fix the economy, all they can do it goose asset prices above their fundamental worth.
Next week will be an important week in markets: A key new Fed meeting next week, what will they think of now? And of course we have month end with motivation to perhaps mark up stocks right in front of Sell in May? In addition, the big 5 mega cap tech stocks that have carried this entire market on the way up last year (and are again doing so now) will report earnings and speak to outlooks.
Be clear without these 5 stocks the entire index picture would look far worse than it now appears:
Be the massive divergence in equal weight vis a via $SPX:
Or be it relative index performance (since the January 2018 highs):
The largest liquidity injections in history and 5 stocks only are masking the extent of the damage inflicted on markets. The bull market remains unproven. Bulls need to prove their case by getting above key resistance levels and then defend these areas as support. Without capturing these levels this rally here looks to follow the historic script of a bear market counter rally.