The loss of human life is tragic. When out of the ordinary, its pain seems more acute. The coronavirus is causing more than loss of life. It will be the nail in the coffin for many aspects in our society. Not only did it change March Madness into the "Silent Spring," but the effects of the disease has effected all our sport leagues and activities. It has disrupted houses of worship. It puts all interactions under a new glass of stress and worry. It could get worse. What if mail is stopped? What if hospitals close due to dangers of their air quality and safety? What if truckers stop delivering which forces grocery stores to close? The possible ramifications are endless and terrifying. Enough said.
4.4%
is the figure that the labor department says where our unemployment jumped too. This is totally wrong. It is totally short of the truth. We know and I know from past experience. Back in 2008 I got laid off from work. I didn't even know where the unemployment office was located in Florida. I found out that claims can be done by phone. Problem was you never got through to file your claim. Eventually, I filed a claim through the internet. I lost three weeks of payments, and by the way, even when the claim is complete, there is a waiting period.
Today, it is worse because most states have cut back on services like the unemployment office. Many, like in Florida, have also cut back on the length of receiving payments. This was done by the anti-union, anti-worker, Governor Scott. Sadly, this poor excuse for a human is now their state senator.
In addition, all unemployment claims are only done now-a-days through the internet. Millions of Americans use their public library for internet connections. Even if some of these people get through to begin their claim, time allotments cut short their application procedure. These poor souls are in limbo. These people as well as many others have no way to register their claim in a timely manner. There are countless jobs that are described as self-employment. They are not being counted. What about poor waitresses? They only make $2.13 per hour. What kind of unemployment check will that amount too? Un-documented immigrants will not be able to get a tax relief check. How will they exist? The real percentage of the unemployed is triple what the government reports. The questions are endless, the ramifications are terrifying. Enough said.
Where this is going...
We all should know by now that retail in America has been suffering since the emergence of the PC. Our national government has allowed commerce on the internet to be free of a sales tax. This is the heart of the problem for brick and mortar locations. E-commerce has a built-in sales advantage from 6% or more over shopping centers and malls. This is why retail is dying a slow razor blade death...until now. The CORVID-19 is the death poison. The end is close for the ten businesses that are in this piece. The sad truth is almost all retail will be forced to close stores and consolidate to limit debt. The ones that I have assembled are on their last breath. Sadly, I must inform you in conjunction with our unemployment picture that retail accounts for 52 million jobs. The virus has caused anchor mall giants, Macy's, Nordstrom, Apple and Nike to close all their stores. This will kill more malls. Simon Properties, the biggest mall landlord is closing 200 of its shopping centers. Every week new news is more bad news and more of the same. You could pray that on Sunday, we not only remember His rising from the dead, but with Him, all is possible. Maybe He will eradicate the virus from our air. Thank you, Father.
10 on Death Watch
1) J. C. Penny: too much debt, closing stores which means less revenue for debt service.
2) Ascenta: parent of Ann Taylor. Already closed Dressbarn before virus, predict more losses &-Rev.
3) Stage: was looking good with acquisition of Gordmans, now too much debt and no revenues.
4) Express:based in malls, stores closed due to virus. No revenues, was already losing to e-commerce.
5) Francesca's: closed all locations, no revenues and out of cash.
6) Stein Mart: was already selling assets before virus. Now, it is offering itself and no takers!
7) Container Store: $14 million in cash. $64 million in assets. $300 million in debt. Do the math!
8) GNC: already lost in battle with-commerce. $859 million in debt which it cannot service.
9) J. Jill: women's apparel - closed all stores. No revenues, but still owes rent, utilities and debt.
10)Tailored Brands: A.K.A. Men's Wearhouse. Closed stores, but it is still willing to pay employees.
Beautiful gesture, but it will not last as liabilities is in excess of credits.
The above is part of the on-going crisis which is retail in America. I remind you that no expert correctly predicted the unemployment rate, not even Sabastian. However, Sebastian was correct in calling out Amazon for their phony hiring ad. It was learned last week that Amazon fired employees who sought to unionize the warehouse jobs or anyone who complained about health safety aspects. The collapse of retail in America has many ramifications with endless and terrifying possibilities. Enough said!
Wednesday, April 8, 2020
Wednesday, April 1, 2020
The End of Capitalism
April Fools...
if there is one, it is on us for believing that we have free and open markets.
The famous economist / immigrant from Germany by way of Austria to America, Joseph Schumpeter
stated, "Capitalism will use 'creative destruction' to move its economy forward. His insights were on the money. Governments should not fear a downturn due to this interruption because a new and better way is in the works. This is how a modern economy operates. The problem now government is run by egos who cannot fathom losing their position for any reason, most of all, an economic one. They have turned to socialist ideas as opposed to allowing the national forces of capitalism to function.
What it means...
It means that new technology, new ideas will destroy a segment of the economy as the new replaces the old. One year vinyl records were the thing. The following saw the addition of the 8-track. Then, this was destroyed by the cassette. This is how a free open market operates. It is harsh. No one says life is easy. Weak government leaders facing unemployment choose diversions. LBJ chose Vietnam. Today, government protects big corporations. This is socialism by any other name.
Enter the Socialist
When socialist come to power in different nations, they used their ideology to the economy. If any company is an important producer that offered jobs, it had to be protected. This protection covered any and all aspects from taxes and tariffs to regulations, permitting and subsidies, if necessary. This is how most of the world operates. It is why American corporations are at a disadvantage when it comes to selling, especially exports. State sponsored companies have their nation behind them to back them up. In the US the only segment of our society that could say that is banking. Banking has the Federal Reserve watching its back. This is the first germ of socialism in America. The rest of us are on our own.
Enter lobbyists
They convinced enough heads to protect agriculture. Then, the collapse of the auto industry got enough votes to lend Chrysler money to survive. This saved jobs and fortunately, Lee Iacocca was running that firm. He fathered our greatest auto, the Mustang and he saved the company while he was in control. Our problem is that we don't promote people like him to positions of power. Anyway, the use of socialist ideas are used so many times, our real free, open market is in name only. The losing streak of our capitalist system can be viewed through any segment of our economy.
It is most visible in the slow decay of our manufacturing. This segment is losing is in the competition with state sponsored entities. These are well paying jobs and the loss is reflected in our shrinking middle class. When you add the creative destructiveness of the internet, which is destroying our retail along with the stupidity of our Congress and government, another 15 million jobs are at risk. Things are adding up in the wrong column. Then, the onslaught of immigrants who seek any type of employment(read low-level wages). They are in competition with unemployed US citizens which makes things worse. We can see the effects in the wealth gap, homelessness and poverty. All these negatives are on the rise. Oh yeah, real wages have remained stagnant since 1973. Tax cuts only help the rich and endanger the nation with the hidden burden of debt. This is the present US economy.
Enter CORVID-19
The virus and ways to limit its effect has created a nightmare for our economy. This is not a creative destruction. but an invisible weapon of mass destruction(WMD) to the economy. The government was forced to do something. The problem for America is republicans only seek to help big corporations which is in their ten commandments. The democrats at one time was the working class choice. Today, they only seek power for their egos with no real ideas to help workers or citizens. If they protect workers, they fear criticism of protectionism. If they halt immigrants, they lose Hispanic votes. It is all about votes. They have no real values or ideas. Both political parties rely on excess fiscal spending as their political norm. The stimulus package will come and go just like the virus, but the debt will remain. It could get worse as new stimulus packages are on the table. This is the real disease. It spreads like the interest it generates. It is becoming unrepayable. The Federal Reserve is a bankrupt mechanism. The only reason that it cannot default is due to the fact that it can print more to any previous printing. Someday, the world will look at it like the Weimar Republic or Zimbabwe with its trillion dollar note. It will end ugly.
if there is one, it is on us for believing that we have free and open markets.
The famous economist / immigrant from Germany by way of Austria to America, Joseph Schumpeter
stated, "Capitalism will use 'creative destruction' to move its economy forward. His insights were on the money. Governments should not fear a downturn due to this interruption because a new and better way is in the works. This is how a modern economy operates. The problem now government is run by egos who cannot fathom losing their position for any reason, most of all, an economic one. They have turned to socialist ideas as opposed to allowing the national forces of capitalism to function.
What it means...
It means that new technology, new ideas will destroy a segment of the economy as the new replaces the old. One year vinyl records were the thing. The following saw the addition of the 8-track. Then, this was destroyed by the cassette. This is how a free open market operates. It is harsh. No one says life is easy. Weak government leaders facing unemployment choose diversions. LBJ chose Vietnam. Today, government protects big corporations. This is socialism by any other name.
Enter the Socialist
When socialist come to power in different nations, they used their ideology to the economy. If any company is an important producer that offered jobs, it had to be protected. This protection covered any and all aspects from taxes and tariffs to regulations, permitting and subsidies, if necessary. This is how most of the world operates. It is why American corporations are at a disadvantage when it comes to selling, especially exports. State sponsored companies have their nation behind them to back them up. In the US the only segment of our society that could say that is banking. Banking has the Federal Reserve watching its back. This is the first germ of socialism in America. The rest of us are on our own.
Enter lobbyists
They convinced enough heads to protect agriculture. Then, the collapse of the auto industry got enough votes to lend Chrysler money to survive. This saved jobs and fortunately, Lee Iacocca was running that firm. He fathered our greatest auto, the Mustang and he saved the company while he was in control. Our problem is that we don't promote people like him to positions of power. Anyway, the use of socialist ideas are used so many times, our real free, open market is in name only. The losing streak of our capitalist system can be viewed through any segment of our economy.
It is most visible in the slow decay of our manufacturing. This segment is losing is in the competition with state sponsored entities. These are well paying jobs and the loss is reflected in our shrinking middle class. When you add the creative destructiveness of the internet, which is destroying our retail along with the stupidity of our Congress and government, another 15 million jobs are at risk. Things are adding up in the wrong column. Then, the onslaught of immigrants who seek any type of employment(read low-level wages). They are in competition with unemployed US citizens which makes things worse. We can see the effects in the wealth gap, homelessness and poverty. All these negatives are on the rise. Oh yeah, real wages have remained stagnant since 1973. Tax cuts only help the rich and endanger the nation with the hidden burden of debt. This is the present US economy.
Enter CORVID-19
The virus and ways to limit its effect has created a nightmare for our economy. This is not a creative destruction. but an invisible weapon of mass destruction(WMD) to the economy. The government was forced to do something. The problem for America is republicans only seek to help big corporations which is in their ten commandments. The democrats at one time was the working class choice. Today, they only seek power for their egos with no real ideas to help workers or citizens. If they protect workers, they fear criticism of protectionism. If they halt immigrants, they lose Hispanic votes. It is all about votes. They have no real values or ideas. Both political parties rely on excess fiscal spending as their political norm. The stimulus package will come and go just like the virus, but the debt will remain. It could get worse as new stimulus packages are on the table. This is the real disease. It spreads like the interest it generates. It is becoming unrepayable. The Federal Reserve is a bankrupt mechanism. The only reason that it cannot default is due to the fact that it can print more to any previous printing. Someday, the world will look at it like the Weimar Republic or Zimbabwe with its trillion dollar note. It will end ugly.
Wednesday, March 25, 2020
Odds and Ends: March 2020
- Americans are, "satisfied with not less than the best in airplanes and plumbing but accepts the second rate in politics and culture," according to the 1954 book, Age of Conformity by Alan Valentine.
Has nothing changed in the 60-plus years since those words appeared before us? Sadly, it has gotten worse. Politician's spout ideas based solely on how many votes will they garner. President Trump realized that he lost the confidence of America with his first brush with the danger of the virus. He was smart enough to pass the baton to Doctor Fauci. The good doctor realizing the preparation period was missed, advised "keeping a distance" and ending all gatherings of more than 10 people. His heeding's are being followed in states that are suffering the most viral cases. Weak minded reporter's and politician's seeking some insight so that they can be the first to call the end to the virus, keep pestering Dr. Fauci to give a date in defeating this new disease. Thank God, he is a man of integrity. He is too kind to these shills. He never loses his cool no matter how self-serving the question. Compare that to President Trump's lack of control and lack of clear thinking with a reporter questioned him on the same theme? By the way, the democrats are no better. They all want to appear that they have our best interest at heart. They really are seeking to buy your vote in this election year.
By passing $2 trillion plus in stimulus, they will all take bows. What will they do when this fails?
Real Problem
is the lack of truth and facing reality by the people in command. In many cases of contagious flu's, there is a second appearance of the disease after the first known cases hit society. This happens in the following Autumn or Winter. This aspect has not even been forthright in the discussion. However, these same leaders know this possibility. This is why there is a sudden rush to help the economy as more and more businesses and places where people are congested are being ordered to close their doors until the virus passes.
As usual the same help formulas are on the table as in the past. This is the real problem.
Privatize the profits; socialize the losses.
This is what our government does in a crisis. All the complaints over the 2008 financial crisis about bailing out the banking industry while at the same time, this industry was foreclosing on their customer's homes was brushed aside during the crisis. Then, the democrats used this republican answer to defeat them in that election year. They promised redemption. We are still waiting as not one white collar person went to jail. Industry after industry went to the government with the "tin cup." If I may, I will paraphrase the famous poem at the doorway to America. It is sad, but true. Industry after industry used free cash flow to buyback their shares. They bought at the highs (idiots) while at the same time, these CEOs did not replenish their workers pension funds. I believe their should be a law which says, every corporation has the right to do buybacks, if it wants too with shareholders money, however those actions can only be put into effect after all their obligations are met like pension requirements, like a serviceable debt ratio like saving for a rainy day. At the moment the airlines and hospitality businesses are very vulnerable. They were the first to get in line before Congress. Did you know that airlines spent 96% of their free cash flow since 2009 on buybacks? Boeing spent 74% on them. Now, both demand help. Their poem goes like this:
Our industry is tired, our poor workers are huddled enmass.
Give me billions to recoup as workers are yearning, fearing
eviction at their door; this wretched disease is making them
homeless. This tempest-tost is dimming my lamp and will
force me to close my door.
Did not the bankers say the same thing in 2008? Whatever the outcome to meet this crisis by government, the price will come back to crush us in the near future. The debt will explode to a point where all nations will seek to end the dollar as the world's reserve currency. The IMFs ego seeks the power that will appear due to this awaking. China's ego will surface. A compromise will leave the US in a basket of currencies. It will be the first step in the end as our reign as the number one nation in the world. The inflationary effects of this possibility will crush the value of the dollar. It will cause a terrible inflation to our economy. It could get worse with the return of stagflation. The only solution is to distance our nation from China immediately. End all trade. Delist all Chinese firms from our stock exchanges. We do not need to invest in a nation which seeks to displace ours. Put excessive tariffs on all US firms making their product in China. Give all importers a six month notice before implementing this extreme measure. In this way, they can arrange to replant here in America or seek a new supply chain, preferably with Europe or South America. The bottom line is this: China graduates 3-million plus new engineers every year and the US only adds 200,000. Even though we are way more creative than China, the odds favor that one in a million can create a major advantage to a nation that is still communist at heart and in addition, they will still steal our intellectual advances with no conscience. This is the real disease!
My Mom use to say...
there is good and bad in all kinds. The Chinses doctors practice the code, "Do no harm." They have been forthright in providing knowledge about the virus and their techniques in fighting this disease. It is a shame that their government leaders do not adhere to the medical code.
non sequitur...means does not follow.
Apparently, among all of the outsourced labor and product is medicine. Guess who exports most of the US supply in this category. That's right-China. You know, when I was back in high school and in Latin class, I use to say to myself, why am I here? I'll never use this stuff." Well, I used it here. After I stated a shout out to the Chinese doctors, I added this other down beat notation.
By the way our nation graduates lawyers. This puts one against another with money the driving force. This is why our government does not work. They are all lawyers!
Negative interest rates
are coming as all nations central banks have cut interest rates. This is why the dollar is advancing. This has a two prong effect. Our exports will shrink, but our citizens won't notice because prices will decline as we import everything. Nation's awaken to the realization that the dollar is in deep trouble.
After the crisis passes, a meme will surface to create a new world trading currency because civil unrest will develop everywhere as citizens realize that negative interest rates make money worthless.
The first hurdle will be with the ECB and Germany. The German high court is scheduled to meet to determine if the ECBs purchase with QE is legal?
JOBS!!!
When the government has asked you to stay home in order to avoid getting sick or passing sickness, Amazon posts a job hiring of 100,000. This shows how devious this company is in its thinking. They realize that their people may stay at home. They need bodies in their warehouses. They put pressure on their employed workers by declaring in undeclared terms that they could be replaced. This playbook goes back to the early industrial revolution in our nation. Men were fired at textile firms and replaced by women for attempting to go union. When women realized the same perspective as the men, they were fired. They were replaced with children who were treated like slaves. Oh, yeah,
Amazon fears that union talk will surface, especially since workers are at home and they could talk online. The topic of health care will be one of the workers concerns.
Independence?
is questionable in the US. The word has no strength. I am using the word with reference to government agencies. President Trump is fearing the public's reaction and his bid for re-election will be severely hurt when states collect their unemployment claims this week. He publicly asked them not to be accurate and to delay the count so the weekly unemployment does not set a new all-time record to which will cause the public to lose confidence in the president. How can it not set a record? The hospitality industry alone employs over 15 million citizens. He even added to this idea by suggesting that their be limits on the health care limits of staying at home. He believes we can wear a mask and get back to work?!
He hopes by Easter Sunday. As for the preliminary results for unemployment claims-there was no winner in the pool. No one came close as the number exploded past 3,2 million claims...and counting.
First it was...toilet paper
then, it was food. Now, it is cash, Banks are already limiting withdrawals.
The list is long. The effects powerful. The truth hurts.
Hotel occupancy fell 61% after the first week in March.
Retail sales were actually up 6%. Nothing like hoarding to boost for a day, but the future?
Movie and Box Office will be a disaster, Broadway leads the list by closing until the flu passes.
Consumer comforts like dining out and leisure activities are down and mostly out.
None of this is good for workers and the rest of us, but one thing is certain. Whatever help the government provides is like a forward pass. The receiver will always be the banks as they hold loans and mortgages on all of us. Like I said last week (no one listens) give everyone a holiday so no one has to pay a loan, rent or mortgage. Let the banks feel a month of pain and like the old saying, "If you owe the bank $1,000, you are in trouble. If you owe the bank billions, they are in trouble." They received the bailout in 2008, let them bailout the nation and save the government from destroying the currency and a future economic crisis. Gold is beginning to show the damage fiat governments is doing to the dollar and currencies in general. This is a slow awakening, but the cast on the dye has been set.
Has nothing changed in the 60-plus years since those words appeared before us? Sadly, it has gotten worse. Politician's spout ideas based solely on how many votes will they garner. President Trump realized that he lost the confidence of America with his first brush with the danger of the virus. He was smart enough to pass the baton to Doctor Fauci. The good doctor realizing the preparation period was missed, advised "keeping a distance" and ending all gatherings of more than 10 people. His heeding's are being followed in states that are suffering the most viral cases. Weak minded reporter's and politician's seeking some insight so that they can be the first to call the end to the virus, keep pestering Dr. Fauci to give a date in defeating this new disease. Thank God, he is a man of integrity. He is too kind to these shills. He never loses his cool no matter how self-serving the question. Compare that to President Trump's lack of control and lack of clear thinking with a reporter questioned him on the same theme? By the way, the democrats are no better. They all want to appear that they have our best interest at heart. They really are seeking to buy your vote in this election year.
By passing $2 trillion plus in stimulus, they will all take bows. What will they do when this fails?
Real Problem
is the lack of truth and facing reality by the people in command. In many cases of contagious flu's, there is a second appearance of the disease after the first known cases hit society. This happens in the following Autumn or Winter. This aspect has not even been forthright in the discussion. However, these same leaders know this possibility. This is why there is a sudden rush to help the economy as more and more businesses and places where people are congested are being ordered to close their doors until the virus passes.
As usual the same help formulas are on the table as in the past. This is the real problem.
Privatize the profits; socialize the losses.
This is what our government does in a crisis. All the complaints over the 2008 financial crisis about bailing out the banking industry while at the same time, this industry was foreclosing on their customer's homes was brushed aside during the crisis. Then, the democrats used this republican answer to defeat them in that election year. They promised redemption. We are still waiting as not one white collar person went to jail. Industry after industry went to the government with the "tin cup." If I may, I will paraphrase the famous poem at the doorway to America. It is sad, but true. Industry after industry used free cash flow to buyback their shares. They bought at the highs (idiots) while at the same time, these CEOs did not replenish their workers pension funds. I believe their should be a law which says, every corporation has the right to do buybacks, if it wants too with shareholders money, however those actions can only be put into effect after all their obligations are met like pension requirements, like a serviceable debt ratio like saving for a rainy day. At the moment the airlines and hospitality businesses are very vulnerable. They were the first to get in line before Congress. Did you know that airlines spent 96% of their free cash flow since 2009 on buybacks? Boeing spent 74% on them. Now, both demand help. Their poem goes like this:
Our industry is tired, our poor workers are huddled enmass.
Give me billions to recoup as workers are yearning, fearing
eviction at their door; this wretched disease is making them
homeless. This tempest-tost is dimming my lamp and will
force me to close my door.
Did not the bankers say the same thing in 2008? Whatever the outcome to meet this crisis by government, the price will come back to crush us in the near future. The debt will explode to a point where all nations will seek to end the dollar as the world's reserve currency. The IMFs ego seeks the power that will appear due to this awaking. China's ego will surface. A compromise will leave the US in a basket of currencies. It will be the first step in the end as our reign as the number one nation in the world. The inflationary effects of this possibility will crush the value of the dollar. It will cause a terrible inflation to our economy. It could get worse with the return of stagflation. The only solution is to distance our nation from China immediately. End all trade. Delist all Chinese firms from our stock exchanges. We do not need to invest in a nation which seeks to displace ours. Put excessive tariffs on all US firms making their product in China. Give all importers a six month notice before implementing this extreme measure. In this way, they can arrange to replant here in America or seek a new supply chain, preferably with Europe or South America. The bottom line is this: China graduates 3-million plus new engineers every year and the US only adds 200,000. Even though we are way more creative than China, the odds favor that one in a million can create a major advantage to a nation that is still communist at heart and in addition, they will still steal our intellectual advances with no conscience. This is the real disease!
My Mom use to say...
there is good and bad in all kinds. The Chinses doctors practice the code, "Do no harm." They have been forthright in providing knowledge about the virus and their techniques in fighting this disease. It is a shame that their government leaders do not adhere to the medical code.
non sequitur...means does not follow.
Apparently, among all of the outsourced labor and product is medicine. Guess who exports most of the US supply in this category. That's right-China. You know, when I was back in high school and in Latin class, I use to say to myself, why am I here? I'll never use this stuff." Well, I used it here. After I stated a shout out to the Chinese doctors, I added this other down beat notation.
By the way our nation graduates lawyers. This puts one against another with money the driving force. This is why our government does not work. They are all lawyers!
Negative interest rates
are coming as all nations central banks have cut interest rates. This is why the dollar is advancing. This has a two prong effect. Our exports will shrink, but our citizens won't notice because prices will decline as we import everything. Nation's awaken to the realization that the dollar is in deep trouble.
After the crisis passes, a meme will surface to create a new world trading currency because civil unrest will develop everywhere as citizens realize that negative interest rates make money worthless.
The first hurdle will be with the ECB and Germany. The German high court is scheduled to meet to determine if the ECBs purchase with QE is legal?
JOBS!!!
When the government has asked you to stay home in order to avoid getting sick or passing sickness, Amazon posts a job hiring of 100,000. This shows how devious this company is in its thinking. They realize that their people may stay at home. They need bodies in their warehouses. They put pressure on their employed workers by declaring in undeclared terms that they could be replaced. This playbook goes back to the early industrial revolution in our nation. Men were fired at textile firms and replaced by women for attempting to go union. When women realized the same perspective as the men, they were fired. They were replaced with children who were treated like slaves. Oh, yeah,
Amazon fears that union talk will surface, especially since workers are at home and they could talk online. The topic of health care will be one of the workers concerns.
Independence?
is questionable in the US. The word has no strength. I am using the word with reference to government agencies. President Trump is fearing the public's reaction and his bid for re-election will be severely hurt when states collect their unemployment claims this week. He publicly asked them not to be accurate and to delay the count so the weekly unemployment does not set a new all-time record to which will cause the public to lose confidence in the president. How can it not set a record? The hospitality industry alone employs over 15 million citizens. He even added to this idea by suggesting that their be limits on the health care limits of staying at home. He believes we can wear a mask and get back to work?!
He hopes by Easter Sunday. As for the preliminary results for unemployment claims-there was no winner in the pool. No one came close as the number exploded past 3,2 million claims...and counting.
First it was...toilet paper
then, it was food. Now, it is cash, Banks are already limiting withdrawals.
The list is long. The effects powerful. The truth hurts.
Hotel occupancy fell 61% after the first week in March.
Retail sales were actually up 6%. Nothing like hoarding to boost for a day, but the future?
Movie and Box Office will be a disaster, Broadway leads the list by closing until the flu passes.
Consumer comforts like dining out and leisure activities are down and mostly out.
None of this is good for workers and the rest of us, but one thing is certain. Whatever help the government provides is like a forward pass. The receiver will always be the banks as they hold loans and mortgages on all of us. Like I said last week (no one listens) give everyone a holiday so no one has to pay a loan, rent or mortgage. Let the banks feel a month of pain and like the old saying, "If you owe the bank $1,000, you are in trouble. If you owe the bank billions, they are in trouble." They received the bailout in 2008, let them bailout the nation and save the government from destroying the currency and a future economic crisis. Gold is beginning to show the damage fiat governments is doing to the dollar and currencies in general. This is a slow awakening, but the cast on the dye has been set.
Wednesday, March 18, 2020
What's the Buzz? What's the Happening?
Sad, but true
Whenever an economic crisis appears, governments are quick to respond. They will grandstand to make the most of the situation. It does not matter how the crisis began like in this case as a health issue. It will eventually effect the economy which is a politician's cue. There are economic packages all over the world.
Germany already had the playbook written. This virus just opened the pages. The UK along with Europe will shrug off criticism by throwing blame. The first deflection was on the US for stopping airline travel to and from Europe. In the US we will get the same old same old. The democrats blame the republicans and visa versa. The Chinese saved their economy by telling banks and other receivables that no bills will have to be paid for six months. You can do this with a state sponsored economy. The EU, UK, China, Australia and the US central banks all cut their interest rates. They are saying, "You need money. Here it is."
This is all they know and their actions never address real problems. Their actions will explode government debt and corporate debt. There will be other consequences like another serious crisis to our oil and gas industry. In 2019, according to Haynes and Boone, there were 208 oil and gas producers who accumulated over $122 billion in debt. Oil service firms racked up another $66 billion in debt. With falling prices the charts say that oil could touch $26 a barrel again. No one makes any money with that price. Layoffs and cut budgets are coming in a big way along with dividend cuts. President Trump announced that the government will buy oil to restock the national reserve. This won't be enough. The year ahead looks worse.
In addition, there was 42 energy bankruptcies in 2019 as well as 21 oil service bankruptcies. More are coming!
Specious ideas
I think the US leads in this category, although every nation uses a crisis to enrich the rich. What their governments announce is the spin. They seek to trick you like a magician with misdirection. Their solutions is really "corporate welfare."
The US is legislating a package of stimulus to counter the coronavirus. President Trump will preach that he is helping citizens with the payroll tax holiday. This will put more money into workers pockets. This is misleading and lying. Dear Reader, the payroll tax is social security. The employer must match the workers contribution. This action saves the company money. Yes, the worker will take home a bigger check, however that same worker will lose long-term. The worker has already adjusted his living to his income. Yeah, the next few weeks will give that person some relief, but the same worker will lose his earned income for the year under social security. When that worker retires, he will receive less in all the years of retirement due to calculations. Workers will lose the year 2020. The company gets a windfall that accountants will find a way for that money to be tax free. The wealthy get more. The payroll holiday is skewed to the employer not the employee.
The other big idea is to give direct cash, possibly $1,000 to every household. This is from the old playbook and it is used as an election bribe to win the populous over. President Trump is behind this 100%. Why not? The economic ramifications of the virus could cause him the election.
People will suffer, but they will manage. This policy will explode the national deficit. Politicians will always remind citizens that everyone is guilty over the debt. It gives them a good escape clause, as everybody is equally guilty. Well, here at Evolution, we know the real guilty party is the military under the Pentagon.
Anyway, who gets most, if not all that check money? The banks. Here is an idea that I like: A rent/mortgage free month. The government tells banks who always gets government help, to allow everyone a holiday for 30 days. This way there is no explosion of debt. Everyone gets a free pass which is truly charitable. Can I get an amen, brother?
In China the no bill paying will help all, but the help is skewed to the big exporters rather than small stores doing business in market places. How can you compare the saving of a few thousands of dollars to millions and possibly billions in large exporters?
In the US the democrats will cite the paid leave. They will seek to buy votes in November. The republicans will counter with the payroll tax holiday for the same reason, and another bonus. They promise to return to a strong economy when the virus passes with warm weather. They both lie!
There will be hidden bonuses for employers for paid leave. The economy as shown in my weekly articles is a pick and choose winners with more losers than winners. Our homelessness indicates the failure of our economy for all Americans.
Back to the blame game
In the worse example, this is making waves in social media in China. Speaking from his foreign ministry post, Zhao Lijian says the US Army started the coronavirus. It appears that 300 US military athletes were in Wuhan at the same time the virus started. I guess you can get away with this horrific lie when the first warning of the virus was by a local Wuhan doctor who was not only suppressed by the state communists, but died healing the sick due to the COVID-19 disease.
Year of the Rat...
Since we do most of our trading with China and for China doing business with the US has had the most positive effect on China, I feel that some cultural exchange is in the mix. Under the Chinese zodiac, this is the year of the rat. In America, a rat is associated with the worst in human actions, an animal that transmits disease and it is associated with poverty. Under the Chinese signs, it is considered prosperous. If we are to develop our relationship to the positive, then our cultural mixes are needed. So, under American thinking of what a rat resembles, Mr. Zhao Lijian is the leading contender for Rat of the Year!
Another Zhao in Fed's Clothing
In a flagrant bid to expand power during this crisis came from the Boston Governor and a voting member of the Federal Reserve. Eric Rosengren said, "We should allow the central bank to purchase a wider range of securities or assets." This is still another example why I say, "End the Fed!"
Another contender...
goes to the Norwegian Cruise Line who had their sales-people tell potential customers that there was no fear in cruising because the "warm climate:" kills the CORID-19 flu. The cruise line sails in the tropics. Funny, Singapore is a warm climate city and the virus hit the city-state extremely hard. Can't wait for the first lawsuit against the cruise line by a passenger getting sick on their ship.
Whenever an economic crisis appears, governments are quick to respond. They will grandstand to make the most of the situation. It does not matter how the crisis began like in this case as a health issue. It will eventually effect the economy which is a politician's cue. There are economic packages all over the world.
Germany already had the playbook written. This virus just opened the pages. The UK along with Europe will shrug off criticism by throwing blame. The first deflection was on the US for stopping airline travel to and from Europe. In the US we will get the same old same old. The democrats blame the republicans and visa versa. The Chinese saved their economy by telling banks and other receivables that no bills will have to be paid for six months. You can do this with a state sponsored economy. The EU, UK, China, Australia and the US central banks all cut their interest rates. They are saying, "You need money. Here it is."
This is all they know and their actions never address real problems. Their actions will explode government debt and corporate debt. There will be other consequences like another serious crisis to our oil and gas industry. In 2019, according to Haynes and Boone, there were 208 oil and gas producers who accumulated over $122 billion in debt. Oil service firms racked up another $66 billion in debt. With falling prices the charts say that oil could touch $26 a barrel again. No one makes any money with that price. Layoffs and cut budgets are coming in a big way along with dividend cuts. President Trump announced that the government will buy oil to restock the national reserve. This won't be enough. The year ahead looks worse.
In addition, there was 42 energy bankruptcies in 2019 as well as 21 oil service bankruptcies. More are coming!
Specious ideas
I think the US leads in this category, although every nation uses a crisis to enrich the rich. What their governments announce is the spin. They seek to trick you like a magician with misdirection. Their solutions is really "corporate welfare."
The US is legislating a package of stimulus to counter the coronavirus. President Trump will preach that he is helping citizens with the payroll tax holiday. This will put more money into workers pockets. This is misleading and lying. Dear Reader, the payroll tax is social security. The employer must match the workers contribution. This action saves the company money. Yes, the worker will take home a bigger check, however that same worker will lose long-term. The worker has already adjusted his living to his income. Yeah, the next few weeks will give that person some relief, but the same worker will lose his earned income for the year under social security. When that worker retires, he will receive less in all the years of retirement due to calculations. Workers will lose the year 2020. The company gets a windfall that accountants will find a way for that money to be tax free. The wealthy get more. The payroll holiday is skewed to the employer not the employee.
The other big idea is to give direct cash, possibly $1,000 to every household. This is from the old playbook and it is used as an election bribe to win the populous over. President Trump is behind this 100%. Why not? The economic ramifications of the virus could cause him the election.
People will suffer, but they will manage. This policy will explode the national deficit. Politicians will always remind citizens that everyone is guilty over the debt. It gives them a good escape clause, as everybody is equally guilty. Well, here at Evolution, we know the real guilty party is the military under the Pentagon.
Anyway, who gets most, if not all that check money? The banks. Here is an idea that I like: A rent/mortgage free month. The government tells banks who always gets government help, to allow everyone a holiday for 30 days. This way there is no explosion of debt. Everyone gets a free pass which is truly charitable. Can I get an amen, brother?
In China the no bill paying will help all, but the help is skewed to the big exporters rather than small stores doing business in market places. How can you compare the saving of a few thousands of dollars to millions and possibly billions in large exporters?
In the US the democrats will cite the paid leave. They will seek to buy votes in November. The republicans will counter with the payroll tax holiday for the same reason, and another bonus. They promise to return to a strong economy when the virus passes with warm weather. They both lie!
There will be hidden bonuses for employers for paid leave. The economy as shown in my weekly articles is a pick and choose winners with more losers than winners. Our homelessness indicates the failure of our economy for all Americans.
Back to the blame game
In the worse example, this is making waves in social media in China. Speaking from his foreign ministry post, Zhao Lijian says the US Army started the coronavirus. It appears that 300 US military athletes were in Wuhan at the same time the virus started. I guess you can get away with this horrific lie when the first warning of the virus was by a local Wuhan doctor who was not only suppressed by the state communists, but died healing the sick due to the COVID-19 disease.
Year of the Rat...
Since we do most of our trading with China and for China doing business with the US has had the most positive effect on China, I feel that some cultural exchange is in the mix. Under the Chinese zodiac, this is the year of the rat. In America, a rat is associated with the worst in human actions, an animal that transmits disease and it is associated with poverty. Under the Chinese signs, it is considered prosperous. If we are to develop our relationship to the positive, then our cultural mixes are needed. So, under American thinking of what a rat resembles, Mr. Zhao Lijian is the leading contender for Rat of the Year!
Another Zhao in Fed's Clothing
In a flagrant bid to expand power during this crisis came from the Boston Governor and a voting member of the Federal Reserve. Eric Rosengren said, "We should allow the central bank to purchase a wider range of securities or assets." This is still another example why I say, "End the Fed!"
Another contender...
goes to the Norwegian Cruise Line who had their sales-people tell potential customers that there was no fear in cruising because the "warm climate:" kills the CORID-19 flu. The cruise line sails in the tropics. Funny, Singapore is a warm climate city and the virus hit the city-state extremely hard. Can't wait for the first lawsuit against the cruise line by a passenger getting sick on their ship.
Wednesday, March 11, 2020
Industry's Crashing
- "Beware the Ides of March!"
- W. Shakespeare
The effects of the coronavirus into the US stock market has begun to become a disaster. I will not mention certain industries like the aircraft builder, Boeing. They have there own unique problem. I won't include steel producers for the same reason. Both of these producers had problems long before the virus. Steel has the tariff issue. I will select two that effects many others. As I state in my unpublished work, "All things are connected."
OIL
This is the most important commodity. It is in a bear market. More on that projection in a moment. OPEC failed with its meeting with top producer, Russia to cut production. Russia is basically saying, "I need to worry about surviving. We need to get whatever revenues we can get."
Russia gets 37% of its revenue from oil.
Saudi Arabia gets 65% of its revenue from oil.
"Whenever oil spikes too high or falls too low, we will have a recession," is words that Sebastian lives by. As my readers know, I believe in charting with the input of fundamentals along with the volume of shares traded to get a clearer picture. At the moment the charts are all scary to the negative in the oil industry. If you look at the XLE, energy sector fund, it was $61 in January 2020. It is now $42.50. It fell on high volume of over 61 million shares. Not good. It got slaughtered on "Bloody Monday" of this week.
If you look at the two top US oil firms, the picture is the same. The fundamentals say that we produced too much oil prior to the virus worries. The virus is adding to the shrinking in demand. No one wants to risk being in a controlled environment that is crowded like planes, trains and buses. Cruise ships are breeding grounds for a flu and they had other problems like food being tainted. Firms are cancelling sailing trips. These and many other reasons like school closings, factory work being suspended have all taken a bite out of the demand for oil. A closer look...
XOM was $83. in April 2019. Today, it is $47.69. Bear territory. It trades where it was in 2000.
CVX was $127. in July 2019. Today, it is $95. Both pay a good dividend, but still in bear mode.
By the way as mention in previous articles, dividends will be cut like Occidental Petroleum did on Tuesday. Its dividend went from .79-cents down to .11-cents.
How about a global giant?
BP was $45. in April 2019. Today, it is $31. It fell on high volume.
All of the above will continue to feel pressure as the commodity price of oil falls even further from $41. Oil blasted through its test of the low at $44. Now, the next level is $36 with the all-time low of $26 on the horizon. Not good. On Monday oil busted through the $36 barrier to touch $32. Terrible!
Airlines
I have already mentioned the virus fears have hurt the travel industry. It is not necessary to mention all the various firms. Keep in mind that travel agencies will also feel the pain like Expedia and Priceline. With that said, I will concentrate on the most important and most used-airlines.
Planes are flying with many vacant seats and even though fuel prices have declined, the other fixed costs along with debt weigh heavily to their bottom line. A closer look...
AAL was $35. in July 2019. Today, it is $15.
DAL was $63. in July. Today, it is $45.
JBLU was $21. in February 2020. Today, it is $13.
HA was $31 in February 2020. Today, it is $17.
All these airlines are in bear territory. Both of these industries are tied to banking. Sometimes, conditions of loans are related to a firms stock price. This adds more fear to the market as new worries begin to surface. This is why the Federal Reserve tried to calm the market with a big surprise rate cut. If you go back to their playbook, Alan Greenspan did the same technique. Problem: central banks throughout the world have fired all their ammunition. Negative rates are growing again. Banks will seek other capital controls. Stock brokers will increase margins. This action could cause more selling. Always notice the volume in down or up bounces. It indicates strength of conviction in a worried market. The next quarterly earnings will be another disaster, but the shills will say, "Buy the dip!" Other shills will stress central bank stimulus like is happening in China like is pending in UK. On Tuesday Boston Fed member, Eric Rosengren made the first pitch even before the baseball season. He said, "We should allow the central bank to purchase a broader range of securities or assets." This is also looking to expand a corrupt bureaucratic agency. Still another reason to End the Fed!
In past articles I have informed my readers of the peril in the US retail market. This has been going on since the advent of the internet. In addition, the restaurant industry has suffered for many reasons. One of the most central is also the most important aspect in real estate-location. The retail problems centered around malls and their collapse effects other stores in malls and within the immediate area. This is your restaurant playing field. They have build the stores, but no one comes. Keep in mind the industry has a 37% failure rate. I have assembled a list that was on the brink of joining the Dodo bird long before the virus. This flu is the nail in the coffin. This aspect won't help the stock market.
Fuddruckers: owner is selling.
Joe's Crab Shack: location, virus.
Papa Murphy's: competition. Who wants to make it, after going out to get it?
Checker's: food code problems.
Ruby Tuesday: weather and virus along with mall locations.
Home Town Buffet: already entered in bankruptcy for the third time.
Red Robbin: competition and location along with menu pricing.
Steak 'n Shake: time has passed.
Friendly's: see above.
Howard Johnson's: hard to believe this firm had over 2,000 stores and now, one.
Marie Callenders: under funded, virus, menu.
Golden Corral: I like this place, but not enough other people.
Perkins: menu, competition.
Baja Fresh: management.
Quiznos: already entered into bankruptcy.
O'Charley's: mall locations.
Bar Louie: entered into Chapter 2.
Applebee's: over expansion, menu changes and location.
Hooter's: sadly, time has passed.
Sbarro: mall locations.
Boston Market: competition and menu choice.
Carrabba's Italian Grill: parent cutting funding-money going its other restaurants.
Krystal's: moving into bankruptcy.
Chipotle: consolidating after back streak of problems. Fifty-fifty chance.
Jack in the Box: competition, pricing.
All these chains could fold. This could send unemployment higher to which could start another contagion to the economy that would be even more deadlier than the virus. Next earning season will be a disaster. Not good.
- W. Shakespeare
The effects of the coronavirus into the US stock market has begun to become a disaster. I will not mention certain industries like the aircraft builder, Boeing. They have there own unique problem. I won't include steel producers for the same reason. Both of these producers had problems long before the virus. Steel has the tariff issue. I will select two that effects many others. As I state in my unpublished work, "All things are connected."
OIL
This is the most important commodity. It is in a bear market. More on that projection in a moment. OPEC failed with its meeting with top producer, Russia to cut production. Russia is basically saying, "I need to worry about surviving. We need to get whatever revenues we can get."
Russia gets 37% of its revenue from oil.
Saudi Arabia gets 65% of its revenue from oil.
"Whenever oil spikes too high or falls too low, we will have a recession," is words that Sebastian lives by. As my readers know, I believe in charting with the input of fundamentals along with the volume of shares traded to get a clearer picture. At the moment the charts are all scary to the negative in the oil industry. If you look at the XLE, energy sector fund, it was $61 in January 2020. It is now $42.50. It fell on high volume of over 61 million shares. Not good. It got slaughtered on "Bloody Monday" of this week.
If you look at the two top US oil firms, the picture is the same. The fundamentals say that we produced too much oil prior to the virus worries. The virus is adding to the shrinking in demand. No one wants to risk being in a controlled environment that is crowded like planes, trains and buses. Cruise ships are breeding grounds for a flu and they had other problems like food being tainted. Firms are cancelling sailing trips. These and many other reasons like school closings, factory work being suspended have all taken a bite out of the demand for oil. A closer look...
XOM was $83. in April 2019. Today, it is $47.69. Bear territory. It trades where it was in 2000.
CVX was $127. in July 2019. Today, it is $95. Both pay a good dividend, but still in bear mode.
By the way as mention in previous articles, dividends will be cut like Occidental Petroleum did on Tuesday. Its dividend went from .79-cents down to .11-cents.
How about a global giant?
BP was $45. in April 2019. Today, it is $31. It fell on high volume.
All of the above will continue to feel pressure as the commodity price of oil falls even further from $41. Oil blasted through its test of the low at $44. Now, the next level is $36 with the all-time low of $26 on the horizon. Not good. On Monday oil busted through the $36 barrier to touch $32. Terrible!
Airlines
I have already mentioned the virus fears have hurt the travel industry. It is not necessary to mention all the various firms. Keep in mind that travel agencies will also feel the pain like Expedia and Priceline. With that said, I will concentrate on the most important and most used-airlines.
Planes are flying with many vacant seats and even though fuel prices have declined, the other fixed costs along with debt weigh heavily to their bottom line. A closer look...
AAL was $35. in July 2019. Today, it is $15.
DAL was $63. in July. Today, it is $45.
JBLU was $21. in February 2020. Today, it is $13.
HA was $31 in February 2020. Today, it is $17.
All these airlines are in bear territory. Both of these industries are tied to banking. Sometimes, conditions of loans are related to a firms stock price. This adds more fear to the market as new worries begin to surface. This is why the Federal Reserve tried to calm the market with a big surprise rate cut. If you go back to their playbook, Alan Greenspan did the same technique. Problem: central banks throughout the world have fired all their ammunition. Negative rates are growing again. Banks will seek other capital controls. Stock brokers will increase margins. This action could cause more selling. Always notice the volume in down or up bounces. It indicates strength of conviction in a worried market. The next quarterly earnings will be another disaster, but the shills will say, "Buy the dip!" Other shills will stress central bank stimulus like is happening in China like is pending in UK. On Tuesday Boston Fed member, Eric Rosengren made the first pitch even before the baseball season. He said, "We should allow the central bank to purchase a broader range of securities or assets." This is also looking to expand a corrupt bureaucratic agency. Still another reason to End the Fed!
In past articles I have informed my readers of the peril in the US retail market. This has been going on since the advent of the internet. In addition, the restaurant industry has suffered for many reasons. One of the most central is also the most important aspect in real estate-location. The retail problems centered around malls and their collapse effects other stores in malls and within the immediate area. This is your restaurant playing field. They have build the stores, but no one comes. Keep in mind the industry has a 37% failure rate. I have assembled a list that was on the brink of joining the Dodo bird long before the virus. This flu is the nail in the coffin. This aspect won't help the stock market.
Fuddruckers: owner is selling.
Joe's Crab Shack: location, virus.
Papa Murphy's: competition. Who wants to make it, after going out to get it?
Checker's: food code problems.
Ruby Tuesday: weather and virus along with mall locations.
Home Town Buffet: already entered in bankruptcy for the third time.
Red Robbin: competition and location along with menu pricing.
Steak 'n Shake: time has passed.
Friendly's: see above.
Howard Johnson's: hard to believe this firm had over 2,000 stores and now, one.
Marie Callenders: under funded, virus, menu.
Golden Corral: I like this place, but not enough other people.
Perkins: menu, competition.
Baja Fresh: management.
Quiznos: already entered into bankruptcy.
O'Charley's: mall locations.
Bar Louie: entered into Chapter 2.
Applebee's: over expansion, menu changes and location.
Hooter's: sadly, time has passed.
Sbarro: mall locations.
Boston Market: competition and menu choice.
Carrabba's Italian Grill: parent cutting funding-money going its other restaurants.
Krystal's: moving into bankruptcy.
Chipotle: consolidating after back streak of problems. Fifty-fifty chance.
Jack in the Box: competition, pricing.
All these chains could fold. This could send unemployment higher to which could start another contagion to the economy that would be even more deadlier than the virus. Next earning season will be a disaster. Not good.
Wednesday, March 4, 2020
Symptoms Worse Than Virus
Everyone is talking about the virus. I understand that no one wants to risk sickness with a chance at death. However, this is just a version of a flu in flu season. Dear Reader, we have a flu season every year. People catch it. Some will die. This is a part of living. In China there is presently 90,000 cases, but less than 3,000 have passed. The global communities ratio is similar. It is good to be aware of dangers, but we have more serious threats in our present economy and environment.
Malaria
Now, that is a dangerous bug. It kills over 40,000 people each and every year. Be thankful that this sickness does not mutate into a more global danger. With that said, the present fears caused by the corona bug will cause supply chains to suffer. There are many small companies in China that could collapse. This could have a chain reaction more dangerous than the virus. Even if the Chinese government intervenes and they will, it will take time to ramp up production. Many items are seasonal. Those orders will not be needed, however the repercussions of lost product will hit bottom lines in all corporations throughout the world. The next earning season will be a disaster. It will create new fears. These worries will show up in the stock exchanges.
Vaccines
President Trump's reply to this virus crisis shows the weakness in him and the GOP. When it comes to doing something for American citizens, the republicans fall on their face. Our nation is blessed to have some outstanding talent like doctor Anthony Fauci. He was willing to help, but conflict with the government policies makes him a no show. Instead we get the vice-president. Why, you ask? Because republicans cut health care. We don't even have a group of doctors at the CDC to answer any alarms like this virus. We put all our money into the wasteful hands of the military. If anything, this point should remain in the media. It should be a central issue in this election year. Then, there is also no money for our environment or pollution. This is where the money and government should be.
Symptoms
Because of the apparent ramifications of the virus to supply chains and production, other related needs like oil and equipment will not be needed or go into delay. This will show up in bottom lines. This is why stock exchanges throughout the world are declining. Pressure will be put on central banks to address the needs of firms to which many will not be able to comply with their debt, payroll, etc.
But...
this is a big butt, central banks have already provided cheap money. They have set their interest rates at historical lows. Negative rates are already present in many nations. What to do?
Capital controls...
will be coming along with a host of other regulations. Governments and central banks are hoping that the flu will pass. They will preach a V-shape recovery. They will say, "When the warm weather comes, the economy will roll again."
Meanwhile, regulations against cash will come into play.
Believe it or not: Australia has proposed a law that gives a $25,000 dollar fine and two years in jail for anyone who makes cash transactions of $10,000 or more. This is stealing your economic independence. The law will be sold to prevent money laundering, tax evasion and terrorist. What they are doing is limiting your financial options while the same government is deep in debt. This type of contagion is spreading to all debt laden fiat governments. By the way the US 10-year note broke its record low at 1.31% to form a new record low of 1.00%. Negative rates are on the horizon. The next low should test .23%. This is fatal to everyone's economic freedom. It tells you that the Federal Reserve is a failure like we maintain at Evolution. We expect the Fed to make an announcement about cutting rates again in the very near future. It came sooner than we even realized on Tuesday. They cut a half point. Debt is there only remedy. It is all they know. The debt to GDP ratio will climb.
This has been expressed before by Evolution, but it is more clearer to you, End the Fed!
Other signs...
Even if the economy does do a V-shape correction, the damage has been done. The writing on the subways walls are being fulfilled just as JFL said that the interest rate lows will be tested. He now says that the recent lows in the market will also be tested. As for the prophecies on the walls, they may be hard to see. Why, you ask? Because there will be homeless sleeping against them.
This is another example of GOP cuts that effect US citizens. The Dept. of Urban Housing claims that there are only 500,000 homeless in the US. People, California alone has 250,000. The Department of Education tallies show that they have 1.3 million students who are homeless within our school system. Stats are misleading and wrong, especially if a republican is head of the department. Not that the democrats are any better. When President Obama was signing the stimulus package, he basically gave away taxpayer's money to the rich. He offered troubled banks to investors with government protection. This makes the investment risk free. These banks were bought by greedy people like Wilbur Ross and Steven Mnuchin to which both work for President Trump. These two were the leaders in foreclosing on homes. They both became billionaires by taking citizens homes. They have no conscience.
The stats on homelessness keeps growing with public awareness. The city of Dallas has had back-to-back 9% growth in homelessness. San Francisco's homelessness grew by 30% in 2019.
All of the above and many more are the reasons why America needs a new third political party. The cornerstone purpose should be a US that has less military and no foreign entanglements. The other main aspect should be to protect US workers. If a firm outsources production, then put tariffs on that product. It is no longer American. In a related aspect immigration should be limited until our economy works for all Americans. When we can read the writing of new prophets on the subway walls, then we can allow immigration. As it stands now, immigrants are competing for low wage jobs to which does not provide enough income to be able to exist in our culture. Homelessness reflects this contagion.
Malaria
Now, that is a dangerous bug. It kills over 40,000 people each and every year. Be thankful that this sickness does not mutate into a more global danger. With that said, the present fears caused by the corona bug will cause supply chains to suffer. There are many small companies in China that could collapse. This could have a chain reaction more dangerous than the virus. Even if the Chinese government intervenes and they will, it will take time to ramp up production. Many items are seasonal. Those orders will not be needed, however the repercussions of lost product will hit bottom lines in all corporations throughout the world. The next earning season will be a disaster. It will create new fears. These worries will show up in the stock exchanges.
Vaccines
President Trump's reply to this virus crisis shows the weakness in him and the GOP. When it comes to doing something for American citizens, the republicans fall on their face. Our nation is blessed to have some outstanding talent like doctor Anthony Fauci. He was willing to help, but conflict with the government policies makes him a no show. Instead we get the vice-president. Why, you ask? Because republicans cut health care. We don't even have a group of doctors at the CDC to answer any alarms like this virus. We put all our money into the wasteful hands of the military. If anything, this point should remain in the media. It should be a central issue in this election year. Then, there is also no money for our environment or pollution. This is where the money and government should be.
Symptoms
Because of the apparent ramifications of the virus to supply chains and production, other related needs like oil and equipment will not be needed or go into delay. This will show up in bottom lines. This is why stock exchanges throughout the world are declining. Pressure will be put on central banks to address the needs of firms to which many will not be able to comply with their debt, payroll, etc.
But...
this is a big butt, central banks have already provided cheap money. They have set their interest rates at historical lows. Negative rates are already present in many nations. What to do?
Capital controls...
will be coming along with a host of other regulations. Governments and central banks are hoping that the flu will pass. They will preach a V-shape recovery. They will say, "When the warm weather comes, the economy will roll again."
Meanwhile, regulations against cash will come into play.
Believe it or not: Australia has proposed a law that gives a $25,000 dollar fine and two years in jail for anyone who makes cash transactions of $10,000 or more. This is stealing your economic independence. The law will be sold to prevent money laundering, tax evasion and terrorist. What they are doing is limiting your financial options while the same government is deep in debt. This type of contagion is spreading to all debt laden fiat governments. By the way the US 10-year note broke its record low at 1.31% to form a new record low of 1.00%. Negative rates are on the horizon. The next low should test .23%. This is fatal to everyone's economic freedom. It tells you that the Federal Reserve is a failure like we maintain at Evolution. We expect the Fed to make an announcement about cutting rates again in the very near future. It came sooner than we even realized on Tuesday. They cut a half point. Debt is there only remedy. It is all they know. The debt to GDP ratio will climb.
This has been expressed before by Evolution, but it is more clearer to you, End the Fed!
Other signs...
Even if the economy does do a V-shape correction, the damage has been done. The writing on the subways walls are being fulfilled just as JFL said that the interest rate lows will be tested. He now says that the recent lows in the market will also be tested. As for the prophecies on the walls, they may be hard to see. Why, you ask? Because there will be homeless sleeping against them.
This is another example of GOP cuts that effect US citizens. The Dept. of Urban Housing claims that there are only 500,000 homeless in the US. People, California alone has 250,000. The Department of Education tallies show that they have 1.3 million students who are homeless within our school system. Stats are misleading and wrong, especially if a republican is head of the department. Not that the democrats are any better. When President Obama was signing the stimulus package, he basically gave away taxpayer's money to the rich. He offered troubled banks to investors with government protection. This makes the investment risk free. These banks were bought by greedy people like Wilbur Ross and Steven Mnuchin to which both work for President Trump. These two were the leaders in foreclosing on homes. They both became billionaires by taking citizens homes. They have no conscience.
The stats on homelessness keeps growing with public awareness. The city of Dallas has had back-to-back 9% growth in homelessness. San Francisco's homelessness grew by 30% in 2019.
All of the above and many more are the reasons why America needs a new third political party. The cornerstone purpose should be a US that has less military and no foreign entanglements. The other main aspect should be to protect US workers. If a firm outsources production, then put tariffs on that product. It is no longer American. In a related aspect immigration should be limited until our economy works for all Americans. When we can read the writing of new prophets on the subway walls, then we can allow immigration. As it stands now, immigrants are competing for low wage jobs to which does not provide enough income to be able to exist in our culture. Homelessness reflects this contagion.
Wednesday, February 26, 2020
Odds and Ends: February 2020
Virus and the Economy
Apple became the first company to mention supply concerns due to the virus from China. They expect this to hurt their bottom line in this quarter. Apple was soon followed by many other firms. There are too many to list, however a case in point will give you a better understanding of the situation.
Home Depot: The home project store announced that the virus is having a big impact on this quarter's earnings and future outlook. Home Depot lists 114 Chinese firms that supply items the store needs for their shelves.
Two ways to view...
The list of suppliers to produce a product is fascinating, however it tells me the extent of lost jobs to just China due to outsourcing. This is why there is a shrinking middle-class and a overall lowering living standard in the US. It makes easy to understand the growing, large financial deficits to China and elsewhere. It tells me that our strong commercial firms provide little to our standard of living. It explains why California which could be considered the eight largest nation by terms of GDP and although the richest state in our so-called richest nation, saw homelessness grow by 30% in 2019 in their world tech leading bay area of San Francisco. California also leads the nation with one-forth of
all homelessness in America. They are the canary in the cage. This is the direction the US is headed. Renting eats up one-half of income and homes are unaffordable. We live paycheck to paycheck with one stumble and homelessness is on the horizon.
I stated a lot of points in the above sentences. Let me digress.
Under GDP, the US is the richest nation in the world. However, if one used another standard for evaluating like standard of living, the US falls to number 22 on the scale. This is the scale that counts. The two political parties in America are at fault. Outsourcing is allowable in a free enterprise. My point is that once you export and seek to re-import under your brand name, that is a no-no. You should be taxed with tariffs to protect American workers and standard of living. This is how I view the foreign supply chain.
Speaking of the supply chain. In China the absentees of workers is hurting these firms. Apparently, they are living from order to order. With no orders being filled and no money coming into the coffers, many are on the brink of collapse. Who knew?
Then, there is the other side. Shareholders would disagree with me. Of course, their self-interest for greed forgets the effects to the nation. If they protested outsourcing, well, that is one thing, but they didn't. You reap what you sow.
By the way just 10% of the nation own 84% of all stocks. A rising stock market does not help the 90% of us. The Federal Reserve in providing cheap money only helps the status quo. This is not economic prosperity, it is economic distortion!
10-Year Note
Just broke the all-time low of 1.31%. Sebastian called it. Heading towards negative rates. The Fed and fiat is a failure! End the Fed!
Another virus
Anytime that you speak of the Fed and central banks, you could get ill due to their financial virus. However, here I am referring to another kind of virus which is happening in India. This is a religious virus. Last week Muslims and Hindus' tolerated reach other. Now, they throw stones at each other. They fight, burn, and kill each other. The Indian government will shut down the internet in hopes that this procedure will kill the virus. They say this is to stop incendiary talk and pictures. This is true. It is also true that it is a way to stop democracy when governments are tyrannous.
Space X
is back in the news. They say that they may begin space travel by 2021. Their latest rocket into orbit will help to form a new wi-fi internet address. The point is to lower internet fees and make it available to everyone in the world. Sounds nice. We'll see says the blind man.
Gold tidbit
In the last quarter of 2018 central banks purchased more gold than ever-a record. In 2019 gold purchases by central banks came in second to 2018. One note: Canada, a commodity nation and gold producer, has a central bank that owns no gold. How about that!
By the way, everyone knows that China tries to keep their gold purchases a secret, but even with all the accumulations, they will have to continue buying for another decade to have the foundation to supplant the US dollar as the world's reserve currency. Of course, there are other ways this could happen among them is the IMF. That would be a sad day for the US, its citizens, including me.
Getting back to what is considered a good economy and one that is not. Jeffrey Winters wrote a book, "Oligarchy." He offers this question in it: what happens to a majority when feel that they never will rise out of their lower standings unless they win with a lottery ticket?
He found throughout history when the economy only works for a few and money is concentrated that society begins to despair and eventually collapses. It could be due to war to which they lose or a revolution commences. Not good, especially because it sounds like the present US.
Who's next?
Amazon just cut 1300 small delivery firms. This is the way Amazon grew in the first place. They have already dropped Fed Ex and UPS because those two could not live up to Amazon's standards. The problem with Amazon is the standards keep evolving higher and higher. If the same officers in the company were doing the work that they demand, nothing would be delivered. When the small firms matched the standards that Amazon wanted, Amazon created a new level like one day delivery. This will end badly for Amazon. They will seek to form their own delivery service, but their leadership will kill employee incentive. Hopefully, a union emerges and they put the kibosh to unrealistic standards. Even robots breakdown for repair!
On the positive side, this is a leap year, Try to use the extra time for something good for yourself and others. Let's make our little world a nice place to live like in Carolina the other day. With their professional goalies both hurt in a game against Toronto, the only one capable of the position was the 42 year old Zamboni driver, Ayres. He offered to play. He suited up. The refs allowed him. Who says the refs suck? These refs are great! He gave up two goals, but blocked Toronto's last eight shots to secure the victory. This was not the Stanley Cup, but a beautiful moment in life. Well done! Go Canes! Never thought that I would say that being a Notre Dame fan.
Apple became the first company to mention supply concerns due to the virus from China. They expect this to hurt their bottom line in this quarter. Apple was soon followed by many other firms. There are too many to list, however a case in point will give you a better understanding of the situation.
Home Depot: The home project store announced that the virus is having a big impact on this quarter's earnings and future outlook. Home Depot lists 114 Chinese firms that supply items the store needs for their shelves.
Two ways to view...
The list of suppliers to produce a product is fascinating, however it tells me the extent of lost jobs to just China due to outsourcing. This is why there is a shrinking middle-class and a overall lowering living standard in the US. It makes easy to understand the growing, large financial deficits to China and elsewhere. It tells me that our strong commercial firms provide little to our standard of living. It explains why California which could be considered the eight largest nation by terms of GDP and although the richest state in our so-called richest nation, saw homelessness grow by 30% in 2019 in their world tech leading bay area of San Francisco. California also leads the nation with one-forth of
all homelessness in America. They are the canary in the cage. This is the direction the US is headed. Renting eats up one-half of income and homes are unaffordable. We live paycheck to paycheck with one stumble and homelessness is on the horizon.
I stated a lot of points in the above sentences. Let me digress.
Under GDP, the US is the richest nation in the world. However, if one used another standard for evaluating like standard of living, the US falls to number 22 on the scale. This is the scale that counts. The two political parties in America are at fault. Outsourcing is allowable in a free enterprise. My point is that once you export and seek to re-import under your brand name, that is a no-no. You should be taxed with tariffs to protect American workers and standard of living. This is how I view the foreign supply chain.
Speaking of the supply chain. In China the absentees of workers is hurting these firms. Apparently, they are living from order to order. With no orders being filled and no money coming into the coffers, many are on the brink of collapse. Who knew?
Then, there is the other side. Shareholders would disagree with me. Of course, their self-interest for greed forgets the effects to the nation. If they protested outsourcing, well, that is one thing, but they didn't. You reap what you sow.
By the way just 10% of the nation own 84% of all stocks. A rising stock market does not help the 90% of us. The Federal Reserve in providing cheap money only helps the status quo. This is not economic prosperity, it is economic distortion!
10-Year Note
Just broke the all-time low of 1.31%. Sebastian called it. Heading towards negative rates. The Fed and fiat is a failure! End the Fed!
Another virus
Anytime that you speak of the Fed and central banks, you could get ill due to their financial virus. However, here I am referring to another kind of virus which is happening in India. This is a religious virus. Last week Muslims and Hindus' tolerated reach other. Now, they throw stones at each other. They fight, burn, and kill each other. The Indian government will shut down the internet in hopes that this procedure will kill the virus. They say this is to stop incendiary talk and pictures. This is true. It is also true that it is a way to stop democracy when governments are tyrannous.
Space X
is back in the news. They say that they may begin space travel by 2021. Their latest rocket into orbit will help to form a new wi-fi internet address. The point is to lower internet fees and make it available to everyone in the world. Sounds nice. We'll see says the blind man.
Gold tidbit
In the last quarter of 2018 central banks purchased more gold than ever-a record. In 2019 gold purchases by central banks came in second to 2018. One note: Canada, a commodity nation and gold producer, has a central bank that owns no gold. How about that!
By the way, everyone knows that China tries to keep their gold purchases a secret, but even with all the accumulations, they will have to continue buying for another decade to have the foundation to supplant the US dollar as the world's reserve currency. Of course, there are other ways this could happen among them is the IMF. That would be a sad day for the US, its citizens, including me.
Getting back to what is considered a good economy and one that is not. Jeffrey Winters wrote a book, "Oligarchy." He offers this question in it: what happens to a majority when feel that they never will rise out of their lower standings unless they win with a lottery ticket?
He found throughout history when the economy only works for a few and money is concentrated that society begins to despair and eventually collapses. It could be due to war to which they lose or a revolution commences. Not good, especially because it sounds like the present US.
Who's next?
Amazon just cut 1300 small delivery firms. This is the way Amazon grew in the first place. They have already dropped Fed Ex and UPS because those two could not live up to Amazon's standards. The problem with Amazon is the standards keep evolving higher and higher. If the same officers in the company were doing the work that they demand, nothing would be delivered. When the small firms matched the standards that Amazon wanted, Amazon created a new level like one day delivery. This will end badly for Amazon. They will seek to form their own delivery service, but their leadership will kill employee incentive. Hopefully, a union emerges and they put the kibosh to unrealistic standards. Even robots breakdown for repair!
On the positive side, this is a leap year, Try to use the extra time for something good for yourself and others. Let's make our little world a nice place to live like in Carolina the other day. With their professional goalies both hurt in a game against Toronto, the only one capable of the position was the 42 year old Zamboni driver, Ayres. He offered to play. He suited up. The refs allowed him. Who says the refs suck? These refs are great! He gave up two goals, but blocked Toronto's last eight shots to secure the victory. This was not the Stanley Cup, but a beautiful moment in life. Well done! Go Canes! Never thought that I would say that being a Notre Dame fan.
Subscribe to:
Posts (Atom)