The Market Radar


We anticipate monitor and comment on market-moving global economic and geopolitical issues.  No dark side brooding, no wanting the world to end, no political rants.  Traders, investors, policymakers, or market observers can’t afford to ignore us.  In one word, perspicacity.

An educated citizenry is a vital requisite for our survival as a free people– Thomas Jefferson

By seeking and blundering, we learn. – Johann Wolfgang von Goethe

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Misplaced Economic Priorities: Too Much Wall, Too Little Main

We are not taking a victory lap yet but we have been warning President Trump’s focus on the stock market was not only bad economics but also a losing political proposition.  Next Tuesday the option expires.

But the juxtaposition of a weak economy with high asset prices that result from low interest rates could provoke public anger, especially if it coincides with unemployment concentrated among poorly paid service-sector workers. – Economist, October 8, 2020

We will get a record-shattering 30 percent plus Q3 GDP release tomorrow but don’t forget the downside-upside asymmetry.  If the economy falls 50 percent, it takes a 100 percent increase to get back to even.

Bad Look

We wrote about the above quote from the Economist way back in our May post, Bad Look Of High Stock Prices & High Unemployment.

The elites, or let’s say the Top 10 percent of households, for example, own 88 percent of stock market wealth.  See our post,  Why The Stock Bull Is A Big Meh For Most Americans.

And a stock market clinging close to its highs with an unemployment rate that has nearly tripled will reopen the wounds of the Great Financial Crisis (GFC) that the “fat cats” were once again bailed out at the expense of Main Street.

…Moreover, a narrative is beginning to take shape that the Trump administration and his Republicans are more of a Trojan Horse for the 1 percent and Greenwich set.  That is, tax cuts for the wealthy and large corporations while cutting social services and healthcare for the middle class and pumping up and bailing out stocks at the expense of Main Street, where the top 10 percent directly hold almost 90 percent of total stock wealth while the bottom 90 percent have only a little over 10 percent.

At the same time, the Trump administration presents itself as sort of a dysfunctional Honey Boo Boo reality show to entertain its base.  Though what some may perceive as a nice circus act but not quite exactly the savior of the working and middle class that many voted for. – GMM, May 2020

401(K)s

We hear a lot these days the term “Trojan Horse” applied to the current administration.  You did hear that here first, by the way.

Trump’s focus on the stock market was misplaced.   He talks about how everyone’s 401k skyrocketing.  Really?

In 2019, the average 401(k) account balance was $92,148, according to Vanguard data.

Each year, the investment company analyzes account data from 5 million retirement accounts. Across these accounts, the typical account balance varies widely by the method used to calculate it — while the average 401(k) savings balance is over $90,000, the median account balance is much less at $22,217, according to Vanguard’s latest data, which was calculated in 2019. – Business Insider

Most people just don’t have much direct exposure to equities even if they have had their 401(K)s maxed out in the FANG stocks.  Moreover,  the median 401k could barely pay a half year’s rent in any decent size city in the United States.

 

Not Feeling It

The bottom line is most people haven’t and don’t feel the stock bull market, if, that is, we are still in a bull market.  The S&P peaked on September 2nd at 3588.11 and is off almost 8.9 percent from the high.

Our post in December, Why The Stock Bull Is A Big Meh For Most Americans, drives this point home.

We will end by paraphrasing one market clown and say this with absolute certainty,

“next week will be a Terrible Tuesday somewhere and for someone.”

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Black Monday, 1987: Inside The U.S. Treasury

By Liam McPherson

The following exchange took place between President Reagan and reporters after the market close on Black Monday, October 19, 1987.  Leaving to visit the First Lady in the hospital, President Reagan spoke just after the market lost over 20 percent of its value on the day.

Q: What about the market? Tomorrow will it go down again?
President Reagan:  I don’t know. You tell me.

Q: Is the market your fault?
President Reagan: Is it my fault? For what, taking cookies to my wife?

Q: Reaganomics?

President Reagan:  I just told you. Good Lord, we reduced the deficit over last year by $70 billion. And all the other things I’ve told you about the economy are as solid as I told you. So, no, I have no more knowledge of why it took place than you have.

Thirty-three years ago today, now infamously known as Black Monday, my grandfather, M. Peter McPherson, was Deputy Secretary of the U.S. Treasury and acting Secretary that day, while Treasury Secretary James Baker was in the air traveling to Europe. McPherson was the most senior Treasury official left in Washington to handle the crisis.

The stock market had already peaked in August after an almost 100 percent rally in the prior two years.  By late August, the DJIA had gained 44 percent in a matter of seven months, raising concerns of an asset bubble, and had become very volatile as interest rates had been rising rapidly since bottoming in September of the prior year.

Similar to 1929, where the stock market peaked in early September, the markets had already begun to unravel, foreshadowing the record losses that would develop that Monday in October.

As the markets around the world began to crash, my grandfather convened with the U.S. Treasury’s Undersecretary of Domestic Finance and the Department Chief of Staff to discuss the government’s appropriate response.  The Dow Jones eventually closed 508 points down, or a 22.61 percent, almost double the historic Crash of 1929, where the Dow fell 12.8 percent in one day.

Government Kicks Into Action

According to my grandfather, the situation demanded that his team put together a plan to calm the markets. The economy was doing fine, and there were no signs of recession.  Real GDP growth came in at 3.5 percent in 1987.

Jitters about the U.S. trade deficit, rising interest rates, and the path of the U.S. dollar during the Plaza Accord are oft-cited as the fundamental reasons that triggered the crash, but nobody knows for sure.  Trees don’t grow to the sky, and neither do markets.  Stocks markets do what stocks markets do, keep their own schedule, and march to their own drummer.

The team’s conclusion at Treasury that day was the market was under severe strain for technical reasons and complicated by the new computerized program trading related to portfolio insurance.  Nevertheless, the steep losses were causing significant dislocations in the financial markets.

Many large firms were under heavy liquidity pressure and were dangerously close to not making their margin calls and on the brink of failure.

My grandfather and his team placed a call to the then-new Federal Reserve Chairman, Alan Greenspan, only two months into the job, to encourage the issuance of a Fed statement that it would do whatever it takes to provide the liquidity to keep markets functioning.

It wasn’t the time to think about the policy’s broader economic implications, such as the potential moral hazard, as the plane was on fire and going down and desperately needed a rescue plan.

It was also clear Greenspan had been thinking along similar lines.

Fed officials drafted much longer statements for release, but Greenspan reasoned that a short, clear message would do the most to stabilize markets.

It is also important to point out that when Secretary Baker arrived in Europe late that day, he immediately began communicating with key finance ministers, such as those from Germany, Japan, France, and the UK to coordinate a global response to the financial crisis.

October 20

Greenspan issued his statement the next morning, October 20,

“The Federal Reserve, consistent with its responsibilities as the Nation’s central bank, affirmed today its readiness to serve as a source of liquidity to support the economic and financial system.” – FRB

In typical Greenspan fashion, the statement was vague in methodology yet resolute in purpose.

The market opened down and continued falling, there were no buyers and it appeared, at one point, the global financial system was headed for a complete meltdown.

“Tuesday was the most dangerous day we had in 50 years,” says Felix Rohatyn, a general partner in Lazard Freres & Co. “I think we came within an hour” of a disintegration of the stock market, he says. “The fact we didn’t have a meltdown doesn’t mean we didn’t have a breakdown.  – WSJ

Then at about 12:38 pm, with many stocks not trading and pressure growing to close the markets a miracle seemed to happen.

With the closing of the Big Board seemingly imminent and the market in disarray, with virtually all options and futures trading halted, something happened that some later described as a miracle: In the space of about five or six minutes, the Major Market Index futures contract, the only viable surrogate for the Dow Jones Industrial Average and the only major index still trading, staged the most powerful rally in its history. The MMI rose on the Chicago Board of Trade from a discount of nearly 60 points to a premium of about 12 points. Because each point represents about five in the industrial average, the rally was the equivalent of a lightning-like 360-point rise in the Dow. Some believe that this extraordinary move set the stage for the salvation of the world’s markets. – WSJ 

The rest, as they say, is history.

My grandfather felt that the Treasury’s phone call contributed to Greenspan’s thinking and as he made the decision to issue a statement to calm the market.  The statement was the most critical event in stabilizing the markets and preventing substantial economic damage to the U.S. and the global economy.

My grandfather spoke about how the simplicity of the message prevented speculation while instilling confidence.  Not unlike ECB President Mario Draghi’s, “whatever it takes” July 2012 speech, which saved the Euro currency, the European banking system, and ultimately the European Union during their debt crisis in 2011-12.

The Birth Of Stock Market Moral Hazard   

Some argue, including one of the regular authors on this website, the Fed’s response to Black Monday ushered in a new era of faux investor confidence and the moral hazard that the central bank will always backstop falling markets.  Thus, forever distorting market risk and real price discovery and contributing to the current boom-bust asset market cycle the global economy now experiences and will be extremely difficult to reverse.

Global Macro Monitor (GMM) often argues, which is not necessarily my own opinion, what was supposed to be a one-off market intervention in 1987 has now become the norm, which monetary policymakers will find it impossible to extract itself from, ultimately resulting in a major market and economic dislocation.  We shall see.

President Reagan’s Confidence And Sense of Calm

During the crisis, President Reagan, whose administration my grandfather served several key roles in, was an excellent communicator and never once conveyed a sense of panic in October 1987.

Though not having a financial background, President Reagan did have a degree in economics and understood the nature of markets and how they coveted a sense of calm and leadership from the government during such a crisis.

The following video is President Reagan speaking to the press at the White House on Black Monday as he is preparing to board Marine One to visit the First Lady in the hospital.

Skip to the dialogue, which starts 5:40 minutes in.

Note President Reagan’s incredibly calm demeanor and sense of confidence after the most massive stock market crash in U.S. history.

Posted in Equities, Equity | Tagged , | 21 Comments

Investing In The Economy Of The Future – Follow-Up

By Carol K. 

Readers may recall my post about the need to be invested in the stocks and ETFs focusing on the future economy. Sectors such as genomics, artificial intelligence, robotics, 5G technologies, and the Internet of Things (IoT).

We presented options among the best performing ETFs invested in these spaces, and I went with the ARK Invest family of actively-managed ETFs.  ARK utilizes an active management strategy because it doesn’t track an index and selects the best-positioned companies in their respective niches.

Skin In The Game

Putting my money where my mouth is, I invested in five of these ETFs in early-to-mid August.  Since, the returns have been spectacular.  Consistent with my market view (see my Monday post),  I’ve taken profits on most of the positions.  My mantra is usually to let my winners run, but we perceive market risk as unduly high, and as they say,

“bulls eat, bears eat, and pigs get slaughtered”

I am a long-term investor but reject the passive and indexing strategy and prefer to “buy low and sell high,” using the Benjamin Graham and Warren Buffett model.

Currently, we at GMM believe the U.S. stock market is extraordinarily overvalued. Coupled with the political event risk, we expect a sharp correction, similar to last March and the 2018 “nightmare before Christmas” downturn, which will allow me to get back into these positions much cheaper.  I am also putting a shopping list together.

Excessive Returns

The following table illustrates the returns on my investments/trades from August 5-11 to October 14-15. These are real money trades, folks, not some hypothetical recommendations by Wall Street talking heads who have no skin in the game.

REITs

I am also holding two other stocks (dividend payers) as a play on the COVID-economy and e-commerce — Real Estate Investment Trusts (REITs) STAG Industrial and Prologis. Both REITs own warehouse properties leased to some of the biggest names in e-commerce, including Amazon, FedEx, UPS, and the USPS.

I began buying STAG in March, which has returned 26.3%,  including dividends.

I also bought my first shares of Prologis (PLD) on September 24, returning 10.5% to date (10/15/20). I expect both names to outperform heading into a holiday season where e-commerce will likely dominate holiday shopping.

STAG has a 4.37% dividend, and PLD’s yield is 2.18%.

Personal Note

In my Monday post, I mentioned my setback in my battle with Ovarian Cancer and how my chemo regimen needed to be changed.  I received some good news yesterday that the new chemo drugs are working.

Thank you so much for all your support, friendly notes, and comments. I have an incredible support group of family and friends, including many of you, which has helped me through this difficult time.  No matter what you are going through, never give up!

Disclaimer: I am not offering financial advice, nor am I a financial advisor. I hold no professional certifications. I do not manage money/investments professionally for third parties and only manage my portfolio and assist family members’ with their investment portfolios.  I am a member of the Global Macro Monitor (GMM) team, with my main focus on stock picking. Information provided in this post is not investment advice, and my conclusions are based on my analysis.  Investors should consider performing their in-depth due diligence before buying or selling securities.

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IMF Warns of Uneven Recovery as Global GDP to Shrink 4.4%

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WOTD: Trumpery

WOTD:  Word for the Day

You can’t make this stuff up.

Trumpery.  Real word.

Can the definition be more apropos to what we see and experience every day?

Hat tip: Chris Cuomo

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QOTD: Only Buy Stocks That Go Up

QOTD = Quote of the Day

Will Rodgers was way ahead of his time.   

His quote defines the group think of today’s marginal buyer with the qualification that stocks always go up.  Well, at least, most of the time as the holding period time horizon expands.

Don’t gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don’t go up, don’t buy it. – Will Rodgers

The Corner Solution End Game

Mr. Rodgers lived and suffered the consequences of the Fed’s grand failure to provide liquidity to failing banks – even the solvent ones — in 1931-32 that caused the U.S. money supply to contract 25 percent and put the “Great” in the Great Depression. 

Now the Fed has swung to the other extreme and seemingly provides liquidity to the markets every time the S&P, say, drops 10 points.   As a consequence, a “muddle through” scenario has been taken off the table, and the end game will be a corner solution, 

Corner Solution

A solution to a minimization or maximization problem where an interior solution is infeasible. –  definitions.net

The U.S. economy is now so dependent on debt monetization and asset price bubbles there is no longer the potential for a soft landing.  It’s either fire or ice, hyperinflation or debt deflation.  We think the former. 

Stay tuned.

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Investing During Periods of Uncertainty & Turmoil

By Carol K.

In this post, I’m not going to talk politics or speculate on which Party wins or deserves to win the Presidency or control of Congress come January 2021. There are plenty of political pundits offering their take on the coming U.S. election, and if you’re like me, you’re exhausted by the non-stop negativity and political games.  The purpose of this piece is to instill a sense of calm and help self-directed investors survive what we at GMM anticipate will be an epic political storm in the coming months.

Political Risk

While there is always increased market volatility around the time of presidential elections, we anticipate unprecedented nastiness, litigiousness, perhaps civil unrest, the likes of which we have never seen in the United States.  If one has remotely been paying attention in 2020, it is evident that neither Party will politely concede and go quietly into the night.

Furthermore, we believe there is a high probability the final results will not be known for several days after election day.  After that, it is highly likely the (apparent) losing Party will surely contest the results through the judiciary.  Unless, of course, the initial voting count comes in so overwhelming for the frontrunner on November 3, it will leave little doubt about the winner.

Markets hate uncertainty. We believe uncertainty will dominate the markets from November 3 until mid-January. It could easily take until mid-November, for example,  to determine who will control several hotly contested U.S. Senate seats that may flip the balance of power from the GOP to the Democrats in the upper chamber. It’s too close to call with any certainty, although the prediction markets are giving the Democrats around a 60 percent chance of a clean sweep.

Long-Term View 

If I could say just one thing as an investor who is “in it” for the long haul, it would be this: historically, time has been on your side, and we have no reason to believe that will change going forward.  Stocks go up, stocks go down, but looking at the trajectory of the U.S. stock market over the past 90 years, as measured by the S&P 500 index, we see a dramatic rise in stock values.

Through wars, depressions, recessions, civil and social unrest, the stock market may be volatile but has remained a great wealth creator for those exercising the discipline and patience to play the long game.

 

Does the President’s Party Affiliation Impact Stock  Returns?

Many investors hold preconceived notions of how stock returns should look under a Democrat or a Republican president, with most incorrectly believing stocks have historically outperformed under GOP presidents. Take a look at the table and charts below for market returns by presidential administration over the past 120 years; you may be surprised, I know I was!

It is essential to keep in context that initial valuation levels matter when new presidents take office.  George W. Bush, for example,  inherited the bursting dot.com bubble, which popped in March 2020.  He then exited the Oval Office with the credit and housing bubble deflating. In both cases, the S&P500 fell around 50 percent.

Suppose the stock market doesn’t correct meaningfully in the next few months, and there is a President Biden. In that case, his new administration will inherit the most overvalued stock market in history, making it difficult for his tenure to be anywhere near the top of the presidential stock market return board.

Embrace Volatility

Compounding the expected volatility surrounding the election, we expect continued fallout from Covid-19 to impact the economy, corporate earnings, and capital markets well into 2021. As of the date of this post, no additional fiscal stimulus funds for individuals, corporations, or small businesses have been approved by Congress as on-going talks between Speaker of the House Nancy Pelosi and Treasury Secretary Steve Mnuchin were abruptly called off by the White House on Tuesday (10/6).  It’s anyone’s guess whether a second stimulus bill will pass and be signed by the President prior to the November 3rd  election but the odds are decreasing by the day.

For long-term investors, volatility and the corresponding market corrections are an absolute gift.  Volatility allows investors to buy stocks for less — often at a 10-20% discount from previous levels or even better, at a nice discount to a stock’s fair market value.

Fair Value

The key is maintaining the discipline to have a well-researched watchlist of stocks ready to go when corrections or volatility hit. One obviously needs to conduct due diligence and develop a good sense of each stock’s fair value.  I like Morningstar’s estimated fair value because their analysts tend to be quite conservative in their valuations and assumptions.

Something I learned the hard way, by losing money or giving up a lot of upside, is when determining fair value, the entry price should incorporate a margin of safety or cushion.   For example, if, say, ABC’s fair value is $70, you may examine it’s beta or it’s cyclicity and decide that a margin of safety of at least 10% or more is appropriate and your desired entry price would be $63 per share or lower.

Many stocks rarely offer a perceived margin of safety because markets place a premium on these stocks for any number of reasons — such as a long-running and well-covered dividend.  Many of the less “sexy” stocks, such as Coca-Cola (K.O.), Pepsico (PEP) or Procter & Gamble (P.G.) trade higher than their expected fair value levels.

High-growth stocks, such as Amazon (AMZN), Tesla (TSLA), Nvidia (NVDA) trade at super high premiums to their book value or trailing 12-month earnings, because of expected future earnings potential merit the sky-high current price-to-earnings (P.E.) ratio.  In other words, the high P.E. ratio is justified given potential explosive future growth.

The Coming Volatility

So then, the expected increase in market volatility we see materializing in the coming months should allow investors to add to existing positions or start new positions at more favorable entry points. This is a good time to carefully look over current holdings and possibly free up some cash if you lack the dry powder to put to work if/when the opportunity arises.

Sectors

Decide which specific sectors you want to be in the near future, run some initial search screens to choose high-quality companies that merit further research. Then, voila, you are ready to construct your “shopping list” with fair values and margins of safety to jump on during the next correction.

Tax Considerations

If you have holdings with outsized profits (in a taxable account), and Democrats take the White House and both houses of Congress, you may want to take some profits by December 31, so your gains will be taxed at preferable 2020 capital gains rates.  I am not a tax expert, just my opinion, and that is what I have been doing.

Quick Update on Previous Recommendations

ARK Invest ETFs: featured in our previous post here:

The ARK Invest family of actively managed ETFs remains on fire.  Cathie Wood and her team have assembled a group of ETFs focused on the future economy, and at the market close on Friday (10/9), her ETFs comprise 5 of the top 10 performing ETFs YTD (leveraged ETFs excluded).

Looking at these returns, especially when compared to the major indices, I think you will agree what many consider a high expense ratio of 75 basis points (0.75%) is well earned by Cathie and her staff.

 

 

 

 

 

REIT Corner

Expected returns for the risk-free bonds are likely to be negative or remain very low for several years, with returns on I.G. corporates only marginally better, which is forcing fixed-income investors to look elsewhere for income.  REITs are an attractive option for income, but in the COVID-19 economy, investors must be very selective as to the type or classification of properties a REIT holds, including the quality of both the properties and, of course, management.

I plan a follow-up to my earlier post on REITs in the coming weeks as my health, and continuing treatment schedule allows.

However, REIT investors must consider that many REITs have cut or suspended their dividends since March when the COVID-forced shutdowns and rent collection woes set in.

Most notably, dividends were affected in the hotel, mall, office, shopping center, and prison REIT sub-sectors.  Hoya Capital Real Estate does an awesome job tracking the current status of REIT dividends on their website, so take advantage of this wonderful resource in your due diligence.

Personal Note

I’ve suffered a setback in my treatment for recurrent Ovarian Cancer; the cancer has metastasized to the liver. My chemotherapy regimen has been adjusted and hopefully will be sufficient so I will not have to undergo surgery.

I am truly blessed to have such wonderful family, friends, and colleagues supporting me in my fight. I couldn’t do it without them!  Special thanks also to my Twitter friends for regularly checking in on me and to Gregor and the GMM staff for entertaining me virtually while I’m receiving chemotherapy treatments. Another fallout from COVID protocols is patients aren’t allowed to have a family member or friends sit with them during treatments, which generally run 6-7 hours.

Disclaimer

The information in this post represents our own personal opinions and are not investment recommendations.  We may or may not hold positions or other interests in securities mentioned in the post or have acted upon what has been written.  

All information posted is believed to be reliable and has been obtained from public sources believed to be reliable. We make no representation as to the accuracy or completeness of such information.

 

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The Great Misread: Secular Lower Prices In Semiconductors

Just a quick note on what we believe has been one of the largest factors, along with globalization to the disinflationary forces over the past 30 years. That is the secular decline in the price of semiconductor prices.  Semiconductors are the basic building block of today’s economy, as was oil during the industrial revolution.

Semiconductor Prices

The price of semiconductors and other electronic components has been declining for more than 30 years as illustrated in the monthly year-on-year price changes in the chart below.

 

Stunningly,  320 of the 368 months since January 1990 or 87.0 percent of the observations, the price of semiconductor and other electronic components have experienced negative year-on-year growth.

Deflation, no.  Relative price changes, yes, brought on mainly by technology and to some extent globalization.

 

The Great Misread

The kneejerk reaction of most economists, including yours truly,  when observing such steep secular declines in prices — down 48 percent over the past 30 years — is to attribute it to collapsing demand.  Not so, with this commodity, however.

The above chart and table below illustrate the rapid and sustained growth in semiconductor production over the past several decades.

Since 1990, for example, semiconductor shipments in the U.S. have grown by 37K plus percent or 21.4 percent annually. Pretty amazing as prices have fallen by almost 5o percent.

Clearly, the positive supply shock of technology and globalization has put downward pressure on the “new oil” of the modern economy, which is a major factor contributing to the macro disinflationary pressures the economy has experienced over the past 30 years.

Here’s to hoping the trend continues but de-globalization and geopolitical instability make us less sanguine, however.

Taiwan, The Most Important Geopolitical Important Country In History? 

Lastly, a little sidebar on the geopolitical and strategic importance of Taiwan as the Straight gets hot, hot, hot.   See here and here.

If Intel falls further behind and leading-edge semiconductor manufacturing becomes concentrated in Taiwan then Taiwan will become geopolitically important in a way that the Middle East never was. Modern semiconductor manufacturing is at least as important to the economy as oil was in the 1970s. But in the case of oil, at least it was available all over the world albeit at higher prices than in the Middle East. Imagine a world where oil only came from one country, and how important that country would have been for the last hundred years. That is what the world would look like if Intel cannot find its footing and continue to manufacture chips at the leading-edge here in America. Taiwan could become by far the most geopolitically important country in the history of the world.themarket.ch

Stay tuned, folks.

Posted in Disinflaton, Semiconductor prices, Semiconductors | Tagged , , | 1 Comment

Meine Fox News: Senicide, The Final Solution?

Good, God!

We have been writing for ten years about the coming “Clash of Generations” but we never, ever, in our wildest imagination believed it would result in an “elderly are expendable” vibe.  Senicide. 

The word “senicide” — meaning the deliberate murder of the elderly — is less well known, though of older provenance. According to the Oxford English Dictionary, it was first used by the Victorian explorer Sir Henry Hamilton Johnston. “The ancient Sardi of Sardinia,” he wrote in 1889, “regarded it as a sacred . . . duty for the young to kill their old relations.” – Boston Globe 

Who would have ever believed it would also have the implicit support of the President of the United States, the oldest ever to sit in the Oval Office nearing the end of his first term. Ronald Reagan was 77 years when he left office.

My 17-year old is more worried and careful about COVID than I because she doesn’t want to get her dad sick.  She is more willing, though not happy to sacrifice hanging with her friends to protect her grandmother and parents.

The senicide vibe should really help Trump with the senior vote, especially in Florida, ya’ think?  The President’s re-election committee must have some real political geniuses.

National Vote 

In the final average of registered-voter polls, Trump led Clinton by 5 points among seniors. His advantage was 6 points among likely voters. These polls are suggesting something along the lines of 25- to 30-point shifts in Biden’s direction…Importantly, I already have noted how this movement among seniors is being seen on the state level as well. In Florida, for instance, where seniors make up around 30% of voters, Biden’s winning with voters 65 and older. Last time around, Clinton lost those voters by nearly 10 points in the final preelection polls.  –  CNN

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Epic Landslide And Blue Tsunami Coming

You Heard It Here First

We suspect a Blue 1980-ish outcome in the popular vote where Trump wins around 41 percent of the popular vote (close to where he is currently polling), which is about the same percentage as President Carter won, but wins a bit more than the six states than Carter did in the electoral college.Global Macro Monitor, April 13

Tax Selling?

If markets were efficient, there should be massive tax selling or front running of the almost doubling of the capital gains tax for the stock ownership class that is coming in a Biden Administration. Not the case. so far, as markets have been nationalized and do not reflect even a speck fundamental value.

The Wall Street cheerleaders always find a way spin everything bullish because their bonus depends on it.

Ridding the world of Trump is good for the world, the country, and my children.

Have no delusions, however, a Biden Administration with Democrats controlling both Houses of Congress will not be kind to Capital. Though the election result will be similar to 1980, the political and economic policies to come will be the polar opposites.

Nevertheless, I still think the tax front running selling is coming in the next few months unless the stock market is signally hyperinflation, which is not a zero probability. The Fed’s relentless propping up of asset markets has created an endgame of what economist’s call “corner solutions.” Fire or ice, hyperinflation or deflation. Brace yourselves.

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