Man Plans and G-d Laughs!
So in retrospect, in 2015, not a single person got the answer right to ‘where do you se yourself 5 years from now?’
Where you gonna be in 2020?
Stuck at home for almost the entire year!
But you are a fortune teller and are so smart you should’ve rolled your dice in the ever exploding bubble of a stock market.
Oh, that’s right, you did! 😉
(Credit Photo: Andy Blumenthal)
Look folks, Pinocchio’s nose is getting longer by the minute.
The market continues on a tear, even while the economy is heading in the other direction.
I know people have been conditioned to buy on the dips, but I’m not sure that applies while we’re in the middle (or maybe still just in the beginning) of a pandemic that has claimed 286,000 lives in just over 2 months (and that’s with a global shutdown)!
Somehow, there is a notion that when things start to reopen that all the problems will just magically go away, including the $3 trillion we just added to our national debt, all the bankruptcies being declared, and all the job losses that are becoming permanent.
If you believe this, perhaps you’d like to buy the Brooklyn Bridge.
The greater fool theory is alive and well. 😉
(Credit Graphic: Andy Blumenthal)
I believe this photo best summarizes where we are with the Coronavirus stock market.
As they say:
Don’t count your chicken before they hatch.
This market has gotten way ahead of itself and the pending economic realities of the Coronavirus and the consequences of the trillions of response fund debt.
Remember:
– The virus does not yet have a vaccine, and it is mutating and may become even more virulent!
– The deaths continue to soar in the U.S. with now over 75,000 dead in just two months.
– The deaths involve much pain and suffering both for the victim and his/her grieving loved ones.
– The unemployment is at all time highs since the Great Depression.
– Companies are starting to move from temporary layoffs to permanent firings and contraction, and many eventually to bankruptcy.
– Profitability and gross domestic product are way down and may be even worse in the next quarter.
– Price Earning ratios are around their 10-year highs even looking out toward a possible 2021 recovery.
– Restarting the economy does not mean a return to what was as the extreme trauma from the pandemic, shutdown, and social distancing rebalance us to a “new normal.”
– A second and third wave of Coronavirus may be as bad or even worse than the first.
– The two biggest global economies of the U.S. and China are facing a deteriorating and toxic relationship.
– The lingering $3,000,000,000,000 that we just added to our National Debt is going to increasingly strangle our future economic outlook.
– The election is in November and brings increasing instability and likely volatility.
In summary, the term used by former Fed Chairman, Alan Greenspan of “irrational exuberance” seems like a gross understatement when it comes to our current stock market.
Get ready to see the froth come painfully off this drunken market–these eggs are about ready to crack. 😉
(Credit Photo: Andy Blumenthal)
Day G-d’s knows what of being locked down for this global Coronavirus outbreak.
I am soooo SICK of Coronavirus!
It’s time to slay this Covid-19 and get this world back to normal.
Sure, I am extremely grateful for every day of health and certainly not to be in the lousy hospital.
But life has got to be about more than Coronavirus.
It’s not Armageddon, but slow water torture or death by a thousand cuts.
The repetitiveness is mind-numbing, repulsive already.
The news is boring, snoring everyone to tears.
The fear is morphing into unintended complacency.
The “rescue plan” everyone knows is more pork barrel politics.
The wild gyrations of the stock market is nonstop ticker tape Vegas style.
Even the grocery and toilet paper hoarding has got to have an end in sight.
It’s not that Coronavirus isn’t serious and important, but what about everything else in the world.
Can we start to give some attention to life again? 😉
(Credit Photo: Andy Blumenthal)
Please see my new article in The Times of Israel called, “I Want What I Want.”
There are four types of greed/jealousy:
We can be slaves to our egos, emotions, and desires, or we can seek to control them and be better than mere animals. We have a soul, a conscience, and the Torah, so the choice should be clear even if not always easy.
(Source Photo: Andy Blumenthal)
There always seem to be another mania.
From the Tulips Mania in 1637, when a tulip went for more than 10x what a skilled workman earned in an entire year!
To Cryptocurrency in 2018, which is down about 80% from its $20,000 peak losing $700,000,000,000.
In between, we had the gold rush, the great depression, the tech/dot-com bubble, and the housing/mortgage crisis, and many more I am sure.
There seems to always be something for people to get excited about in an “irrational exuberance” type of way, as former Federal Reserve Chair, Alan Greenspan put it.
Is it boredom, big dreams, unadulterated greed, the desire to “get rich quick” and easy, the belief that you’ve discovered the Holy Grail or is it just people being stupid.
Either way, we have a way of getting ourselves in trouble, some “losing their shirts.”
Not sure who said it, but there isn’t an easy fix to your life.
There are small and big problems, and then there is you trying to fix them (with G-d’s help).
As to bitcoins and tulips, they ain’t worth what you think they are. 😉
(Source Graphic: Andy Blumenthal with photos from Pixabay).
Someone challenged today about the number 613 (mystical, holy number of commandments in the Torah).
They said, “I would argue that you can pick any 3 digit number and get the same results.”
They went on asking that it be “No variations in sequence, no breaks between numbers, no mathematics.”
So here is perhaps an answer from Heaven–check out the closing change down in the S&P 500 today: Exactly 6.13!
You’re turn. 😉
(Source Photo: Andy Blumenthal with attribution to CNBC)
I took this photo in the mall on New Years Day–yes, the stores were actually open on the holiday.
And Macy’s was having a blowout sale with racks and racks of “80% Off Original Price[s].”
We were laughing saying what’s next–99% Off and then even 100% off!
So you think the economy is healthy with fire sales like these on the very first day of the new calendar year–when we still have another 364 days to make our year end sales quotas…
With turbulence around the globe brewing from Iran, Syria, Russia, North Korea, Yemen, Sudan, Nigeria, ISIS, and more…anyone care to say (pending) crisis.
How about commodities–my bet–that are in the toilet (and have been for years now)–do you really think no one needs iron, aluminum, nickel, lead, cooper, potash, oil, gas, coal, diamonds, and gold anymore?
Then the Wall Street Journal warned again today about the overall investment marketplace, asking “How do you invest when everything is expensive? [at 25 times cyclically adjusted earnings–now that’s a fancy term]?
We’ve been down this road before in the bubble bursts and recessions of 2001 and 2008.
Is now really the time for the Federal Reserve to be raising interest rates (and what a nifty ripple effect that will have in both slowing our economy down and raising our interest payments on our already ballooning $18 trillion national debt)?
Oh, technology to the rescue again and again…it’s possible with everything from virtual reality to robotics and artificial intelligence on the cusp…or maybe not this time around. 😉
(Source Photo: Andy Blumenthal)
So I don’t know how I feel about this or maybe I do.
The Wall Street Journal reports today that from the 10 largest companies by market capitalization:
1) The top 3 are technology companies
– Apple $679B
– Alphabet (Google’s Parent) $489B
– Microsoft $422B
2) Moreover, a full 5 (half) of the top 10 are technology companies
That includes the 3 above and the other 2 below:
– Facebook $288B
– Amazon $280B
As a technology person, I am thrilled at the impact that IT has on our society.
We are no longer the same thanks to our Apple iPhones, Google Search, Microsoft’s business tools like Outlook, Office and SharePoint, Facebook’s social networking, and Amazon’s online shopping.
But to think that these information capabilities outweigh by value everything else in society that we need as people is somewhat astounding.
For example, the other 5 of the top 10 companies are:
– Exxon Mobil (Oil and Gas) $346B
– Berkshire Hathaway (Insurance, Utilities, Clothing, Building Products, Retail, Flight Services) $340B
– General Electric (Power and Water, Oil and Gas, Energy Management, Aviation, Healthcare, Transportation) $298B
– Wells Fargo (World’s Largest Bank) $280B
– Johnson and Johnson (Pharmaceuticals) $278B
So when you add these behemoths up–this is what we have:
The 5 top technology companies are worth $2.158T
Vs.
The top 5 traditional companies from all the other industries combined are worth only $1.542T
Net it out:
The largest representative IT companies are worth $616B or 40% more than the other major companies combined.
(In fact, just the top 3 IT companies at $1.56T are worth more than the top 5 other companies at $1.542T.)
Sure IT growth has been on a tear for the last couple of decades and we love everything futuristic it brings us.
But isn’t it a little scary to think that the companies that meet all our other needs from food, clothing, shelter, medicine, transportation, energy, finance, retail, etc. isn’t worth more to us than just the IT alone.
Perhaps adding it up from a value perspective just doesn’t add up in a real life perspective.
I love technology and want more and more of it, but man does not live by technology alone. 😉
(Source Photo: Andy Blumenthal)
Interest rates have been near zero since the recession of 2008.
That supposedly to stimulate the economy.
However, aside from a stock market bubble again, not sure we have a much stimulated economy.
We have a false low on the unemployment rate, while the the true percentage of the labor force working is the lowest in almost 40 years!
Moreover, manufacturing is down almost 40% from the 1979 peak with a loss of over 7.2M jobs.
Commodities are at firesale prices as demand is sluggish and there is short-term oversupply.
And innovation is facing a global slowdown.
So people are out of work, we’re not making things, demand is depressing prices, and even ideas are few and far between–not too rosy a picture, regardless of what some politicians may have you believe.
Let’s not forget that we have an over $18 trillion federal debt, and this is projected to grow ever greater as we borrow to fund social entitlements such as social security, medicare, etc.
In this scenario, why would the Federal Reserve ever want to raise interest rates?
Well, if they don’t raise rates, then they can’t lower them later again when the economy really stalls out and goes into deep recession.
Hence, this is seen as a tool for their financial toolkit–and if there are no tools with which to manipulate the economy, then there is no need for a (neutered) Federal Reserve.
But think for a second what happens when the Fed raises rates, it’s going to slow the economy even further than the chug chug chug economy that we are already dealing with.
Maybe even more important, it will raise the amount of interest payments we must folk over on the trillions of dollars of debt we owe.
Simply put, when we raise interest rates, we pay more interest on our already astronomically high national debt, and this pushes our national deficit up even higher as we borrow more to pay the interest on the previous debt.
If you did this with your credit cards, you’d probably be looking at the equivalent of debtor’s prison sooner or later.
Rather than feed the Fed’s toolbox with interest rate bumps and drops, why not keep rates low as long as they can stay low, reducing our interest payments, and curtailing our national deficit and debt.
What about the stock bubble…that’s a lesson investors will be learning about in their own good time–it’s the stock market, stupid. 😉
(Source Photo: Andy Blumenthal)
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