Tuesday, March 24, 2020

My phone must have been on "Do Not Disturb" this morning

Did you get your personal phone call from the President and the Vice-President this morning?  Oh, I guess we're on the same "too small to call list" because apparently after the market fell on Monday despite historic intervention from the Federal Reserve, the President and Vice President held a private call with hedge funds and investors this morning. Shortly, there after stocks were up 5% and 8 hours after that they finished their best day since 1933 up (11%).

Hmm, since I have a daughter in AP US History, perhaps I should ask her what was happening the US in 1933 (Hint: it starts with Great and rhymes with Impression)?

Markets: 
Again, I hate technical analysis because it reduces investing to a simplified game of who can draw the straightest line.  HOWEVER, the vast majority of the market is being run with some input by technicians.  Today, was an important milestone because the markets not only soared, they ended above a level that previously would have been resistance (there was a monster trade by someone at 3:55 which threw just enough gas on the fire to hold above these key levels - almost like someone was trying influence the market).

So, now this is where it gets dangerous, things are playing out in days that used to take weeks or months or years.  However, since we've cleared this initial hurdle, stocks have nothing to hold them back.  Since, they fell so far, so fast, the bounce back might be ridiculous.

To continue with my analogy from this morning, if the market is a ball dropped from the Empire State Building which bounced sharply higher off the wing of an airplane now it might get caught in a NYC updraft and act like a paper airplane soaring higher. 

The risk is that people won't see this for what it is - a vicious bear market rally - and instead will mistake it for the all clear to jump back in.  Remember, gravity will eventually win out and this is a dedicated traders market.  This is not a healthy market at all, despite what you'll hear on the news. 

My belief is that this bounce is going to be the one that really wipes out a lot of investors.

Stats of the day:
2007-2017 - $10 Trillion in new debt
2017 - $1.5 Trillion tax cut
2019 - $1 Trillion deficit
2020 - $6 Trillion bailout

This is how countries go bankrupt.

The bailout:
Unfortunately, this bailout is going to happen. I'll keep shouting at anyone that will listen, that this is straight up theft, but it won't matter.  A former Goldman employee is going to direct some $500 billion to corporations and we the taxpayers get to pay an Administrator - shocker, that will be some combination of Wall Street banks - a $100 million fee to disperse the money. 

Oh, and we don't get to find out where it goes or what it was used for. 

This is banana republic-level corruption.  Somali warlords are looking at this and saying, "Why didn't we think of that?".

*If anyone has a contact at Tedra Cobb's campaign, send them my way at blantier2@gmail.com. I would love to help her craft a message that will adequately explain why Americans in NY-21 get to send more and more of our tax dollars to support failed corporations while our families struggle in the North Country.

* Companies taking bailouts can still layoff workers. It just asks that they keep employees to the "extent possible". 

Overheard at Giantmegasuper Corp "Well, we could keep Jack and Jane on the third shift, but I really was hoping to boost the bonus pool for the C-level executives so I guess it's just not possible to keep them.  Whoopsie!"

* Companies have no restrictions on stock buybacks, so everything they did to enrich themselves and make their companies vulnerable to this downturn??? Yeah, just keep doing that. #SMH

Industries that have the strongest lobbyists are about to rob the American people while wearing an N95 mask.  This crisis is the cover they are using to steal from your children and grandchildren.  We can't stop it but we can remind them that their jobs are on the line in November (www.house.gov and www.senate.gov).

Covid19:
The idea of "Open for Easter" keeps getting pushed by the White House.  I can't state this any clearer:

The best estimate I've seen is that if we continue what we are doing right now - 1 million Americans are going to die from Covid19.  Opening things back up on Easter probably triples that number, are you okay with 3 million citizens dying so that you could go to Easter Brunch at the Cracker Barrel?

When you start seeing these arguments made that we have to do this for the sake of the economy, maybe take note of the fact that there are virtually no economists or actual healthcare experts suggesting this approach.

Gallows humor of the day:
Airlines: $50 to bring your bag
Airlines: $14 for a sandwich
Airlines: Oh, you want your legs to "fit"? $75 each way.
Airlines: Want to pick a seat? $50.
...........
Also Airlines: Ah, remember all those good times. Hey, can you just mail your income taxes directly to us at United/American/Delta?  Thanks. That's be $5 for clicking "open" on this message.

Cheers!

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