The current U.S. government is so off the charts we need to give you the definition,
Kakistocracy is a system of government that is run by the worst, least qualified, and/or most unscrupulous citizens. The word was coined as early as the seventeenth century, but gained significant use in the first decades of the 20th century to criticize populist governments emerging in different democracies around the world. – Wiki
Source: Pinterest
Very interesting video.
We are not sure about the Skyscraper Index because the current economic situation is so unique. We do suspect unless a COVID vaccine hits the market soon, the work from home/exit to the ‘burbs transition will accelerate and office buildings and related commercial real estate investments are going to continue to be in a world of hurt.
As the global economy sputters in the wake of the coronavirus pandemic, some economists are looking to city skylines for clues to the future. But skeptics argue that the so-called skyscraper curse, which holds that big buildings spell big financial trouble, is at best fanciful. Video by Raymond Schillinger
Sources: Thornton, Mark, Skyscrapers and Business Cycles (May 31, 2012): https://ssrn.com/abstract=2071293
Barr, Jason and Mizrach, Bruce and Mundra, Kusum, Skyscraper Height and the Business Cycle: Separating Myth from Reality (July 1, 2014): https://papers.ssrn.com/sol3/papers.c…
Willis, Carol, Form Follows Finance (1995): https://books.google.com/books?id=8IT…
Great interview with Michael Novogratz, Galaxy Digital founder, CEO, and chairman. He sounds exactly like the global macro heads at GMM. His money quotes from the July 8th CNBC interview should sound very familiar to our readers.
Click here to view the video
Lex Rex
The literal meaning of the two words is “Law King” . . . which as Rutherford explained ( and was imprisoned for what he said and came close to losing his head for it) . . . means the King (or man) is not the supreme Law
Chief Justice John Robert’s majority opinion on the Court’s ruling on President Trump’s tax returns is a must read, folks. Click on the link to read it in full. Patriots will not be disappointed.
TRUMP v. VANCE, DISTRICT ATTORNEY OF THE COUNTY OF NEW YORK, ET AL.
Two hundred years ago, a great jurist of our Court estab- lished that no citizen, not even the President, is categori- cally above the common duty to produce evidence when called upon in a criminal proceeding. We reaffirm that principle today and hold that the President is neither abso- lutely immune from state criminal subpoenas seeking his private papers nor entitled to a heightened standard of need. The “guard[ ] furnished to this high officer” lies where it always has—in “the conduct of a court” applying estab- lished legal and constitutional principles to individual sub- poenas in a manner that preserves both the independence of the Executive and the integrity of the criminal justice system. Burr, 25 F. Cas., at 34. – Chief Justice John Roberts
This election is looking more like a Democratic tsunami than simply a Blue wave. President Trump, mired in some of the lowest job approval ratings of his presidency, is trailing Biden by significant margins in key battleground states like Pennsylvania (8 points), Michigan (9 points), and Wisconsin (9 points). He’s even running behind Biden in his firewall states of Florida and North Carolina. — Cook Report
The U.S. stock market is very expensive and narrow, led by large-cap tech with S&P500 range-bound between 3233 and 2965, a 9 percent range, closing today at the upper 1/3rd of that range. Not a fan, and a dangerous market, in the opinion of the GMM macro heads.
However, as our stock-picker extraordinaire, Coach Carol, says you “gotta ride this gravy train as long as it’s running.” Nobody calls the top, nor the bottom, or knows the future.
Her long-term perspective as an investor is uniquely coupled with the discipline of a trader as we watch her practice the mantra,
“Cut Your Losses Short & Let Your Winners Run”.
Her performance in her personal portfolio speaks for itself. She has, however, been raising a lot of cash recently.
Key Levels to watch (underlined):
Upside – 3165.81 and 3184.15
Downside – 3142.93, 3130.01, 3109.33, 3103.77
Hat Tip: @Not_Jim_Cramer
Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around. – Milton Friedman
Hat Tip: Joe Calhoun @JoeCalhoun3
Anyone dare to take a crack on the idea lying around that will be/has been taken up during this crisis?
Hint: I just bought a book on the topic that is still lying around that I need to take up and read. It should also put significant downward pressure on the following chart.
We have always maintained that to reopen the economy was a false choice unless the public had confidence the virus had been contained.
The U.S. is losing control of the COVID crisis due to the colossal failure of leadership by the Administration. Sure, deaths are way down but they lag the new case count by around two to four weeks. If the market rally is based on the lower death count, then it should be a short lived rally.
The weekly seasonality in the data must have to do with how it is reported.
Look at the date of this Tweet.
If the economy is “reopened” next week, will the stock and bond market bubbles reinflate? Will the unemployment rate move back to below 4 percent?
Very unlikely. False hopes and false choices will result in disastrous consequences.
If people are afraid that the invisible enemy is still among us, the economy has zero hope of recovering and the country should prepare itself for a long drawn out recession or even depression. Forget about productivity, which is the ultimate driver of long-term economic growth.
Only if most of the public has confidence COVID-19 has been dealt a fatal blow can a robust economic recovery even be considered a possibility. – Is America Already Waving The White Flag?, GMM, March 23rd
The U.S. could have done so much better yet here we are morphing into a failed state and a Third World Country. We needed a national plan to reopen and strong leadership at the Federal level but only got, at best, mixed messaging and political polarization.
None, nada, just more Potemkin noise, the hallmark of this administration, coupled with massive gaslighting. It’s up to the Governors now to get it right and land the plane.
The Trump campaign strategy now seems to be keep whiping up the base and try to even…wait for it…. gaslight death. Don’t think it is gonna work on both counts. – GMM, April 21st
Baseball Players Not Even Comfortable
Here’s Mike Trout, who is on his way to becoming the GOAT of baseball.
Buster Posey of the Giants,
Listen to Sean Doolittle of the Washington Nationals,
Sounds like baseball may not even happen this year. Sad.
Where will the country be without their circuses?
What Is a Failed State?
People use this expression to indicate a political entity whose government has ceased to perform most or all of its basic functions. Such a condition can result from civil war, untrammeled corruption, natural disaster, or some combination of those and more. The Fund for Peace, which has been working on such issues for more than 70 years, lists four criteria to identify such a country:
- “Loss of control of its territory, or of the monopoly on the legitimate use of physical force therein
- Erosion of legitimate authority to make collective decisions
- Inability to provide public services
- Inability to interact with other states as a full member of the international community”
I’ve always thought of such fallen lands (sometimes given a fatal shove by my own government) as far-away places. Countries like Libya. The Fund for Peace identifies that beleaguered and now fractured nation, where rival armed forces compete for primacy, as the one in which government fragility has increased most over the last decade. The present chaos began when the United States and its NATO allies stepped in militarily, precipitating the overthrow of autocrat Muammar Qaddafi, with no particular plan for the day after.
Then there’s Yemen, where Washington’s support for the intervention of Saudi Arabia and the United Arab Emirates only exacerbated an ongoing civil war, whose civilian victims have been left to confront famine, cholera, and most recently, with a shattered healthcare system, the coronavirus. And before Libya and Yemen, don’t forget the Bush administration’s disastrous 2003 invasion of Iraq, which damaged that country’s physical and political infrastructure in ways it is now, 17 years later, starting to dig out of.
So, yes, I’d known about failed states, but it wasn’t until I read “We Are Living in a Failed State” by George Packer in the June 2020 Atlantic magazine that I began to seriously entertain the idea that my country was bouncing down the same flight of stairs. As that article’s subtitle put it: “The coronavirus didn’t break America. It revealed what was already broken.” – Common Dreams
The U.S. leaders thought they could gaslight science and the virus, Canadian pols respected science and it shows in the data. The Canucks were not influenced or led by the “Jesus Is My Vaccine” nonsense.
Canada is now only seeing a few hundred new cases per day versus over 50K in the U.S., which is a factor of 223x. Rather stunning considering the U.S. has a population of only 8.7x that of Canada.
By the way, GMM is proud to have a Canadian citizen on board. One of the smartest, most rational, and commonsensical persons we know. The Canuck was a big influencer in our warning about the strategy of the U.S. leaders back in April,
The Trump campaign strategy now seems to be keep whiping up the base and try to even…wait for it…. gaslight death. Don’t think it is gonna work on both counts.
We have to get this right, folks. Listen to the scientists and F the politics. — The Plan Is, There Is No Plan, GMM, April 21
Good stuff from Dictionary.com. Looks like John Adams was two days early in his forecast on the date of the celebration. Fortunately, he wasn’t trading S&P options, where timing is everything.
The history of Independence Day was also/still is very complicated by America’s legacy of slavery, which appears we are finally addressing as the touch of leadership is slowly passed to a generation of younger Americans. The great American social reformer, abolitionist, orator, writer, statesman, and free slave Frederick Douglass’ powerful July 4, 1852 speech, “What to the Slave Is the Fourth of July.” seems just as appropriate for today as it did almost 170 years ago.
Providentially, America is still a relatively young nation,
There is hope in the thought, and hope is much needed, under the dark clouds which lower above the horizon. The eye of the reformer is met with angry flashes, portending disastrous times; but his heart may well beat lighter at the thought that America is young, and that she is still in the impressible stage of her existence. May he not hope that high lessons of wisdom, of justice and of truth, will yet give direction to her destiny?
…Great streams are not easily turned from channels, worn deep in the course of ages. They may sometimes rise in quiet and stately majesty, and inundate the land, refreshing and fertilizing the earth with their mysterious properties. They may also rise in wrath and fury, and bear away, on their angry waves, the accumulated wealth of years of toil and hardship. They, however, gradually flow back to the same old channel, and flow on as serenely as ever. But, while the river may not be turned aside, it may dry up, and leave nothing behind but the withered branch, and the unsightly rock, to howl in the abyss-sweeping wind, the sad tale of departed glory. As with rivers so with nations. — Frederick Douglass, July 4, 1852
Bet you didn’t know the following, we sure didn’t.
The federal government of the United States officially designates “Independence Day, July 4” as a “legal public holiday.” Independence Day is also widely referred to as July 4, July 4th, the Fourth of July. Data indicates that, of the terms, Independence Day is most common, but keep in mind that is likely because many other countries around the world observe their own independence days, marking when they became independent from a foreign power. That said, Independence Day is widely known in specific reference to the US’s national independence.
The term Independence Day is recorded as early as 1790, but the term Fourth of July, in reference to the US independence, is found as early 1779. Of course, the Independence Day/4th of July commemorates the events of July 4, 1776, when the Second Continental Congress adopted the Declaration of Independence, which declared the Thirteen Colonies to be free and independent of England.
The Second Continental Congress, which formed after the start of the American Revolution in 1775, voted to declare their independence (sovereignty) on July 2, but the Declaration of Independence, the document largely authored by Thomas Jefferson explaining this vote, was adopted on July 4th. When the Founding Fathers actually signed the document, however, remains disputed. American independence from the British monarchy was secured in 1783, marking the end of the American Revolution in 1783.
After the July 2 vote, John Adams famously wrote to Abigail, his wife:
The second day of July 1776, will be the most memorable epoch in the history of America. I am apt to believe that it will be celebrated by succeeding generations as the great anniversary festival. It ought to be commemorated as the day of deliverance, by solemn acts of devotion to God Almighty. It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bells, bonfires, and illuminations, from one end of this continent to the other, from this time forward forevermore.
Indeed, Americans commemorate their independence this way—but on July 4th, of course.
While celebrations of the 4th of July have taken place since 1777, it wasn’t until 1870 (referred to as the fourth day of July as a holiday for the District of Columbia) that it became a federal holiday—unpaid for federal employees until 1938. In 1781, Massachusetts was the first state to officially recognize the holiday.
Why are we emphasizing the word federal (vs. state and local) here? Because the US does not observe any national holidays mandated by the federal government, although the 4th of July is, in effect, celebrated like an official national holiday. The US Embassy in the UK provides a helpful explanation here:
Technically, the United States does not celebrate national holidays, but Congress has designated 10 “legal public holidays,” during which most federal institutions are closed and most federal employees are excused from work. Although the individual states and private businesses are not required to observe these, in practice all states, and nearly all employers, observe the majority of them.
Remarkably, both Thomas Jefferson (the US president who enslaved the most people) and John Adams (one of the few of the early presidents who didn’t) both died on July 4, 1826.
The 4th of July is traditionally celebrated with fireworks, barbecues, festivals, and other public events, including readings of the Declaration of Independence. Due to the patriotic nature of the holiday, it often involves red, white, and blue decorations (after the US flag), as well as tributes to American troops and government institutions. On the 4th of July, many people get to enjoy a day off from work to enjoy a long weekend or vacation.
Americans may wish one another (or be wished by residents of other countries) as Happy Independence Day, Happy July 4th, Happy Fourth of July, or simply Happy 4th. The 4th of July appears throughout popular cultures, such as in the films Born on the Fourth of July (1989, based on a 1976 autobiography by Ron Kovic) and Independence Day (1996).
The 4th of July, however, remains a complicated holiday given the history of slavery in the US. The Declaration of Independence famously observes: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” But that freedom, equality, and independence was not granted to Black people, who were enslaved and oppressed. Frederick Douglass powerfully addressed this painful paradox in his 1852 speech, “What to the Slave Is the Fourth of July?” In it, Douglass memorably remarks:
What have I, or those I represent, to do with your national independence? Are the great principles of political freedom and of natural justice, embodied in that Declaration of Independence, extended to us? and am I, therefore, called upon to bring our humble offering to the national altar, and to confess the benefits and express devout gratitude for the blessings resulting from your independence to us? – Dictionary.com
Global Macro Monitor 