Wednesday, April 08, 2020

"The world is my expense,

The cost of my desire..."

Sleep Now in the Fire - RATM

Tomorrow we will get our third straight historically significant initial jobless claims.  The average estimate is for 5 million new claims but I think it may actually be less than that due to flaws in the filing system.  Computerized filing in a number of states failed this week so while the real number of jobless claims may be north of 5 million, the reported number may come in lower at 4 or 4.5 million. 

Regardless, let's talk perspective - if it's 4 million, that will put the total jobs sucked out of the economy in 3 weeks at 13.9 million.  That would be 60% more jobs lost than in the great recession of 2008 in 3 WEEKS.  It would also mean that of the 20 million jobs or so created since 2010, roughly 70% of them were vaporized in 3 WEEKS.

If history has taught us anything in the past 2 weeks it's that the stock market does not care about jobs or the economy.  The stock market is its own virtual reality game playing tic tac toe against itself.  By the end of tomorrow, going into the holiday weekend, we might have lost 14-15 million jobs in our economy and stocks will be up 40-45% from their lows.  The stock market is not the economy and the sooner people in Washington realize that the better we'll all be.
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The curious case of Staples
This perfectly sums up the state of "capitalism" in the US.  Staples is a failing office supply retailer that was bought by a private equity firm in 2017.  Last year as result of some complicated financing the private equity firm who originally contributed just $1.6 billion of the $6.7 billion acquisition - paid itself a $1.3 billion dividend while the business at Staples continued to collapse. 

Fast forward to March of 2020 - the virus shutters most retail in the US and Staples sent a letter to their landlords yesterday basically telling them to pound sand.  They said they aren't paying rent for April and made no guarantees about May.  Look, the commercial landlords of Staples aren't your average Joe and Jane but when you live in a world where financial engineers can steal from a company and then a year later ignore basic lease agreements well, I don't think it's going to end well for anyone.

* It's worth noting that the financial genius running our giant slush fund for corporations - Treasury Secretary Mnuchin - well, his claim to fame is that he decided putting Sears and Kmart together would be a brilliant move.  He was able to extract a lot of money out of those companies (like the owners of Staples) before they both collapsed in a heap. Nice work if you can get it.
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Quotes of the Day - Snarky edition
via @QTRResearch - a little hyperbolic but these are extraordinary times
 "Stocks have recovered 44% from the lows and all it took was the annihilation of our currency, a full on nationalization of all businesses, an embarrassing declaration to the rest of the world that our Central Bank is beholden to stocks & a sly introduction to both martial law & total corporate Marxism!"

via @BradHuston
"Why are we screaming higher today?  Because the lead socialist dropped out the presidential race when we're doing socialism for billionaires hand-over-fist to save the stock markets owned primarily by the 1%."

@NorthmanTrader
"Markets rally as the threat of socialism has been averted.
Now let’s return to our regular program of Fed bailouts, stimulus packages, $3.5 trillion deficits and free money for everyone."
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Daily Dose of Humor
via @mommajessiec
"I don’t know who needs to hear this, but now is not the time to try on your skinny pants."

via @wittysassbasket
"I'm intermittent feasting"

via @simoncholland
"Y’all, I don’t think we would have made good pioneers."

Cheers!

*PS thanks again to everyone that's come back and sharing the blog.  You can click the Facebook or twitter links below to share it. 

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