On Politics
The Stress of Losing Billions
Up until the WallStreetBets crowd short squeezed Melvin Capital for a $7 billion loss, Robinhood had it made. But losing billions is stressful. And when your product blows up your customer the clucking that follows comes hot and heavy.
A surprise revival of business at Game-Stop… [PT]
The Lure of Easy Money
Right now happens to be an attractive time to do something stupid. What’s more, everyone is doing it. Maybe you are too. Stock valuations and corporate earnings growth no longer appear to matter. Why not buy an S&P 500 index fund and let it ride? Or, better yet, why not buy shares of Nvidia?
NVDA, weekly, over the past 6 years. The stock really started to take off after the 2016 election surprisingly brought an administration to power that was willing to cut taxes and roll back regulations. This vastly improved the competitive position of US-based companies in the world and boosted their profit margins. Other favorable narratives accompanied the rise of NVDA and other tech stocks specifically, such as the cryptocurrency mania and the increase in demand fostered by the pandemic. Add to that the biggest driver of them all – an unprecedented exercise in money printing by the Fed and other central banks – and a bubble for the ages emerged. And that is where we now are: in the greatest stock market mania of all time. [PT]
Autographing Funny Money
The United States Secretary of the Treasury bears a shameful job duty. They must place their autograph on the face of the Federal Reserve’s legal tender notes. Here, for the whole world to witness, the Treasury Secretary provides signature endorsement; their personal ratification of unconstitutional money.
Janet Yellen – first she got to print a lot of funny money, now she gets to autograph it. The Titanic meanwhile finds itself in uncharted waters and rumor has it that there may be icebergs lurking not too far from here. [PT]
Full Commitment
This week provided additional confirmation that America is fully committed to a program of currency destruction. Decades of terminal intelligence have gotten us to this special place. We will have more on this in a moment. But first some words on being fully committed.
Say hello to the provider of bacon… lots of bacon, in this case. [PT]
Prophet of Doom
In 1976, economist Herbert Stein, father of Ben Stein, the economics professor in Ferris Bueller’s Day Off, observed that U.S. government debt was on an unsustainable trajectory. He, thus, established Stein’s Law:
“If something cannot go on forever, it will stop.”
Herbert Stein, looking worried about the budget deficit. [PT]
Consumption without Production
“Every man is a consumer, and ought to be a producer”, observed 19th century philosopher Ralph Waldo Emerson. “He is by constitution expensive, and needs to be rich.”
Ralph Waldo Emerson (May 25, 1803 – April 27, 1882), who inter alia opined on consumers and the need to not only consume, but also produce. The latter activity has recently become even more severely hampered than it already was. And yet, government is spending like a drunken sailor. [PT]
Lockdown Disaster
It has been a rough go for California Governor Gavin Newsom. Late last week it was revealed that the state Department of Public Health had tickled the poodle on its COVID-19 record keeping. Somehow the bureaucrats in Sacramento under-counted new corona-virus cases by as many as 300,000.
Governor Newsom gesticulating his way through the pandemic… [PT]
Insulting the Captive Audience
This week, while perusing the Federal Reserve’s balance sheet figures, we came across a rather curious note. We don’t know how long the Fed’s had this note posted to its website. But we can’t recall ever seeing it. The note reads as follows:
“The Federal Reserve’s balance sheet has expanded and contracted over time. During the 2007-08 financial crisis and subsequent recession, total assets increased significantly from $870 billion in August 2007 to $4.5 trillion in early 2015. Then, reflecting the FOMC’s balance sheet normalization program that took place between October 2017 and August 2019, total assets declined to under $3.8 trillion. Beginning in September 2019, total assets started to increase.”
Directly below this note is the following chart:
Total assets of the Federal Reserve since 2008 – never-ending expansion (shaded areas indicate recessions) [PT]
A Really Neat Bridge
But, Mousie, thou art no thy-lane,
In proving foresight may be vain;
The best-laid schemes o’ mice an’ men
Gang aft agley,
An’ lea’e us nought but grief an’ pain,
For promis’d joy!– Robert Burns, To a Mouse, on Turning Her Up in Her Nest With the Plough (in extract), 1785
Installation of the final cable support pipes on the Gerald Desmond bridge replacement. Here is a drone video of the project. [PT]
Photo by Scott Varley
Deep-Seated Racism and Happy-Smiley Hypocrites
In Delhi, people of the northeastern part of India, who have mongoloid features, are derogatorily called “chinky.” It is not unusual for men in Delhi to stop their cars to proposition a random girl from the northeast for a sexual encounter, assuming her to be “loose.”
Indians’ ignorance about the geography of their own country, their irrationality, superstitions and bigotry have been fertile ground in these days of Covid-19. People from the northeast have faced massive problems based on the assumption that they are carriers of the virus. They have been refused services at shops and have been thrown out by landlords.
Indians from the northeast being denied entry into a shop
A Failure to Integrate Values
The only region in the world that has proactively tried to incorporate western culture in its societies is East Asia — Singapore, Japan, Hong Kong, South Korea, and Taiwan. China, which was a grotesquely oppressed, poor, Third World country not too far in the past, notwithstanding its many struggles today, has furiously tried to copy the West.
Famous Greek philosophers: their thoughts are a cornerstone of Western culture. [PT]
Containment Fail
We want to share a few observations about the growing COVID-19 epidemic, based on what we have seen so far. It has been obvious for a while now that the attempt to contain the spread of the virus has essentially failed. Ever since case numbers started to soar in South Korea, Italy and Iran, it was clear that hopes that the outbreak would remain confined to China were misplaced.
Doubleplus-ungood micro-organism COVID-19 looking for cells to infect