Bad Stats To Look Up...

United States of America:

58 Million unemployed

Capital One:

1.05 Billion

1.3 Billion

918 Million

Wells Fargo:

2.4 Billion

Bear Stearns.

Lehman Brothers.

Those Blithering Idiots! (Or If You Prefer, The Fed...)

Look, The Fed is enemy number one of sound monetary policy, while Congress and the President are enemy number one when it comes to rational fiscal policy. So, that's the setup. But it gets worse: this time it's different they'll tell you but, of course, it ain't -- just like it wasn't any different in 2000, 2008 or during the recent ill-fated marijuana stock run up and ultimate crash and burn.

You simply can't repudiate the business cycle: that means booms followed by busts, followed by booms, period. It also means that balance sheets count ahead of anything else: you know, those quaint metrics otherwise known as revenue, free cash flow, profits, earnings and dividends. That's what is supposed to drive markets, not artificial sugar high injections of counterfeit money made up out of thin air by The Fed. 

Point is, liquidity is lunacy in horrible fiscal times like today but liquidity makes markets go up until they don't and then it's crash time. Three things have propelled these markets to all-time highs: nightly cash injections, a zero interest rate policy by The Fed and deflation. That's what works, even when it shouldn't.

But sooner or later, fiscal and monetary insanity blows up in your face: Lebanon and now Turkey are but the latest examples where hyperinflation has taken hold, the currency is getting obliterated and money is pouring into the markets and gold purchases. That's always the pattern just before the big bust. Just ask Venezuela, Argentina or Zimbabwe. 

Dominos succumb to inflation, then to hyperinflation and more often than not stagflation. And so goes the currency. Watch out should the EU be next, not to mention the UK. 

Meanwhile, the unprecedented imbeciles at The Fed have a solution for everything: they want to move to increasing inflation in the economy even above a traditional Fed benchmark of 3% and guess what happens then? They can only do that by gradually raising interest rates and that will kill the stock market but good. (See the last round of Fed interest rate hikes that if you yawned, you missed it.)

Absolute monetary insanity. But remember that The Fed's specialty has always been killing off economic expansions so why should this time be any different? As sure as I'm breathing, it won't be.

 

  

Judgment Day: Tuesday, September 8, 2020.

 A lot of you think the presidential election will be decided on Tuesday, November 3, 2020 -- and you'd be wrong -- the presidency will be decided in the week of September 8 through 11 when both the Senate and the House of Representatives will be back in session.

The spoilers are respectively named Pelosi and McConnell. Either or both of them will sink their own prospective presidential candidate if they do not reach a funding extension agreement for Americans who are in financial difficulty and hurting badly in the wake of this unofficial Depression.

I get it: Pelosi wants to spend more than Trump wants and McConnell less. What else is new? It's not like Pelosi and McConnell just feel off the political turnip truck. They know that perception is the ultimate gateway to political reality and that means if both Houses can't make it in conference, then both chambers are done as dinner.

Those in pain, regardless of their political affiliation, will vote and will have punishment in mind for those who did not deliver for the American people during a period of severe economic hardship. So, get your asses in gear and make it happen otherwise Democrats lose the House and Republicans the Senate. That's cold, hard, political reality baby, as they throw the bums out in droves absent meaningful recovery legislation on this subject.

Meanwhile, Trump can't lose, provided he can expeditiously get the money out under Executive Orders recently signed by the President. People in dire financial straits don't spend their time arguing whether it's enough, etc. They take whatever they can get to help keep them afloat economically and they remember who sent them the money.

Of course, it's likely unconstitutional but no one gives a flying fuck about that. That's Washington, D.C. inside baseball. Put another way, if Congress can't get its act together and Trump manages to funnel the money out through Treasury, or some other source, then Trump beats Biden in November.

It's that clear. However, if Trump can't ultimately deliver, then Biden takes him to the cleaners in a heartbeat. Keep an eye on that ball. It'll tell you shortly all you need to know about who more than likely wins in November. 

 

 

South China Sea: The New Sarajevo.

Well, it's about time that the U.S. and Chinese Defense Secretaries have that long overdue chat -- you know, the one to avoid the kick off of WWIII in the South China Sea. They talked for an hour and a half and they better do much more if they want to avoid war. 

We've already witnessed China's military clashes with Indian troops, not to mention her repeatedly threatening Taiwan. They also had some unsettling words for Japan and the Philippines.

Meanwhile, the United States has been stoking the fire for years in Hong Kong, courtesy of the CIA, in hope of slowing detaching the SAR from the mainland. And who can forget about trade wars and economic sanctions. 

So, things aren't exactly peachy and they risk getting much worse in the short term. National security threats are the latest black swan, likely to replace the previous one, known as COVID-19.

Even Trudeau would have trouble getting this genie back into the bottle. As a result, we'll have to watch this situation evolve one day at a time -- and pray that events don't mindlessly spiral down as they did in 1914. 

Please keep peace in your prayers.

   

What COVID-19 Taught The World.

COVID-19 is above all else a human tragedy. It will leave in its eventual wake a legacy of suffering and death. That's its legacy for healthcare systems across the globe.

But far more ominously, it has also taught the world a horrific lesson, one based on the mass dispersion of biological agents. With COVID-19, we saw it play out on an international scale with deadly consequences. Like with MERS and SARS, we saw Corona viruses in action accompanied by deaths.

However, world powers also found themselves in the midst of a strategic opportunity to war-game the release of bio-agents in preparation to taking it to the next level.

In English, it now becomes a reasonable assumption that the next World War will be kicked off by way of biological terrorism perpetrated by nation-states. That's a solid, effective, low-risk maximum first strike. In effect, COVID-19 has been the Mother of All Non-Intentional Test Runs with countries such as China, Russia, the United States and Israel paying close attention to this dry run, if you will.

I'm not among those who see the origin of COVID-19 entirely in nature, given its failure to dissipate in warm-weather climates but nor am I a proponent of the deliberate release theory. Like American intelligence agencies, I strongly suspect a sloppy and accidental release from the Level 4 Wuhan lab. It goes without saying that I don't regard Chinese COVID-19 statistics as entirely legitimate or wholly reliable. I think we can safely assume that the Chinese death rate is at least multiples of what has been officially reported.

To conclude, I hope that the better angels of human nature ultimately prevail in this tense and seriously deteriorating geopolitical environment. Otherwise, God help us all.

  

Is This Still Harper's Party?

All will be revealed later this month when we choose our next leader. What is the membership thinking and will they still take their cues from Harper?

Is Harper genuinely neutral or does he have skin in the game? Conversely, is one candidate the next Wynne, lining up impressive and unexpected support as a capital one deal-maker? Is the fix already in on your second choice?

We'll find out soon enough. What I want is a leader finally capable of wiping the floor with this Prime Minister. What about you?

Remember that winning is not only everything, it's the only thing. The rest is for serial political losers.