Friday 5 June 2020
JCPenney is closing 154 stores this summer - CNN. A sign that consumers are running out of money due to inflation.
A Dutch restaurant is using robots to implement social distancing — see how it works - Business Insider SA.
AstraZeneca now has capacity to make 2 billion doses of coronavirus vaccine - CNN.
On The FRED chart below the Nasdaq 100 in blue needs to fall 92% to match the nominal economic economic output since the 1990s in red. Investors in the stock market have made more than their fair share out of the economy. That means other people have to lose wealth, such as workers and savers with cash investments. These workers can't support the businesses with their reduced purchasing power. The economy and stock market have grown on debt. If the government wants to print money to inflate the economy up to the stock market level, they have a long way to go. Worker wages will be inflated away to nothing.
Thursday 4 June 2020
The biggest U.S. mall owner, Simon Property, sues Gap over skipped rent payments - CNBC.
On Twitter: Danielle DiMartino Booth @DiMartinoBooth: 'Happy Nonfarm Payroll Friday Eve! My hats off to Ellen Zentner’s group at @MorganStanley. They’ve been spot on with their payrolls forecasts thus far. Let’s see if their winning streak continues." chart.
On Twitter: SpaceX @SpaceX: "Successful deployment of 60 Starlink satellites confirmed": video
Reality Check: The Mall REIT Apocalypse Is Really Here - Seeking Alpha.
Authors retract influential Lancet article that found hydroxychloroquine risks - Reuters.
On Twitter: Holger Zschaepitz @Schuldensuehner: "Elon Musk said it’s “time to break up #Amazon” in a tweet, escalating feud w/Bezos. https://bloomberg.com/news/articles/2020-06-04/musk-says-time-to-break-up-amazon-escalating-feud-with-bezos?sref=61mHmpU4"
Germany requires all gas stations to provide EV charging - EV.
Wednesday 3 June 2020
The Nasdaq 100 closed at 9704.69 near to the previous high of 9718.73 on 19 Feb 2020.
This is the greatest 50-day rally in the history of the S&P 500 - CNBC. A hundred years from now people could be quoting this as example of the insanity before the second great depression.
On Twitter: Otavio (Tavi) Costa @TaviCosta: "Money printing doesn’t fix the economy": chart. If government handing out money led to prosperity, Venezuela and Zimbabwe would be very prosperous. Government printing money is equivalent to citizens printing their own money. It can only be inflationary, unless the government invests it in a way to leads to new economic activity that is multiple of the initial investment. Politicians look for the easiest way to be re-elected. Infrastructure takes too long.
On Twitter: Stalingrad & Poorski @Stalingrad_Poor: "Biggest stock market bubble in history": image.
From 17 July 2012: The Stock Market Crash of 1929 - The Bubble Bubble.
From 21 Apr 2020: Stock Market Crash of October 1929 - Social Welfare. This all seems very familiar:
.... "Consumers also lost their money because many banks had invested their money without their permission or knowledge" (like pensions). "Even after the stock market collapse, however, politicians and industry leaders continued to issue optimistic predictions for the nation’s economy. But the Depression deepened, confidence evaporated and many lost their life savings." "By 1932 approximately one out of every four Americans was unemployed".
.... "Management’s disposition to maintain prices and inflate profits while holding down wages and raw material prices meant that workers and farmers were denied the benefits of increases in their own productivity. The consequence was the relative decline of mass purchasing power."
.... "The sucking off into profits and dividends of the gains of technology meant the tendency to use excess money for speculation, transforming the Stock Exchange from a securities market into a gaming-house".
.... "tariff policies that left foreign loans as the only prop for the export trade, and policies toward monopoly which fostered economic concentration".
On Twitter: Preston Pysh @PrestonPysh: "I can't take the misuse of this terminology any more. Inflation....Deflation.... Here's my point of view. Central banks are aggressively "inflating" the fiat monetary base. Since 2008, the US federal reserve has expanded their balance sheet from .8T to 7.1T. Post 1": chart. It only goes up. Any decline causes a recession.
Negative interest rates could be needed for a 'V' recovery, Fed economist says - CNBC. There is no recovery. The economy requires more debt because wages are falling behind inflation.
Microsoft to replace MSN news production workers with artificial intelligence - WSWS.
Warner Music Shares Jump in First Day of Trading - The Street.
Zoom nearly doubles revenue forecast on coronavirus remote-work boost, but costs rising - SCMP.
European stock markets are up today: FTSE 100 +2.5%, CAC40 +3.0%, DAX +3.5%. Stock markets have wild swings due to speculators who only look at price direction, without regard for the underlying economy. It is unlikely that life will return to normal for a few years, depending on when everybody has been vaccinated. There will likely be a permanent decline in living standards, which will show in company results.
V-Shaped Recovery? Consumer Data Is Pointing to a Big One - The Street. "According to the U.S. Bureau of Economic Analysis, personal income rose by $1.97 trillion (10.5% increase) in April while disposable personal income was up $2.13 trillion (12.9% increase)". On the FRED chart below average hourly earnings in blue shows a 7.7% jump in April (from a year ago). How is that then? Perhaps the total wage bill was divided by fewer workers.
According to the FRED chart below Disposable Personal Income jumped 14.4% to $18.66 trillion annualized in April. It spikes often, and then collapses.
Tuesday 2 June 2020
Shopping Center REITs - Dividend Outlook 2021 - Seeking Alpha.
On Twitter: Stare Decisis @MsResJudicata: "Dollar stores emerge as winners from coronavirus crisis. Sales jump at Dollar General and Family Dollar
as thrifty shoppers safeguard budgets. https://ft.com/content/a72365ef-69ac-41c8-8f54-f9762c65a7ec via @financialtimes". A sign of people becoming poorer.
On Twitter: jeroen blokland @jsblokland: "Chart of the day! The G4 Central Bank (#Fed, #ECB, #BoJ #BoE) Balance Sheet as a % of #GDP rose to 46.7% in May." chart. No exit strategy.
That Change You Requested…? - LewRockwell.
G7 members reject Trump’s bid to bring Russia in from the cold - SCMP.
On Twitter: Quoth the Raven @QTRResearch: "INFOGRAPHIC: The Dow is up 37% since March. How did we do it?": chart.
Below are the valuations of the 6 stocks responsible for most of the rise in the S&P 500 stock market index. The market doesn't think they will be impacted by the eventual depression. A depression is unavoidable after people have lived above their means through debt or asset bubbles. The savers/lenders who delayed their spending will find their wealth has been diminished by inflation, and their reduced spending power will also weaken the economy when the debt is paid back. There could be an initial economic boost from money government hands out, but it will later be followed by inflation that exceeds the growth due to the lack of economic output.
Apple (AAPL) revenue growth -6.3%, price/earnings = $321.85/$12.75 = 25.
Alphabet (GOOGL)(GOOG) revenue growth +13%, price/earnings = $1434.87/$49.55 = 29.
Amazon (AMZN) revenue growth +25%, price/earnings = $2471.04/20.93 = 131
Facebook (FB) revenue growth +17%, price/earnings = $231.91/~4x$1.71 ~ 34.
Microsoft (MSFT) revenue growth +14%, price/earnings = $182.83/$5.74 = 32.
Netflix (NFLX) revenue growth +28%, price/earnings = $425.92/$4.94 = 86.
The FRED chart below shows Australia's economic output (Gross Domestic Product) relative to M3 money supply, which is the velocity of money flow. It is down to 0.23. That means the money in circulation only generates 23% of its value in economic activity in a year. If the extra money added only created inflation and no economic growth, then this graph represents real economic output.
Monday 1 June 2020
On Twitter: Rachel Olding @rachelolding: "Hard to describe how rampant the looting was tonight in Midtown Manhattan and how lawless it was. Complete anarchy. Literally hundreds of stores up and down Broadway, Fifth Ave, Sixth Ave. Kids ruling the streets like it was a party." photo. A civilization must be actively maintained. There is obviously a decline. Would this looting have happened in the 1950s?
Moderna's coronavirus vaccine announcement set off a frenzy on Wall Street. Now some are calling for an investigation - CNN.
Impossible Foods forces Nestlé to stop selling 'Incredible Burgers' in Europe - CNN.
Researchers develop viable sodium battery - TechExplore. "The research, led by Yuehe Lin, professor in WSU's School of Mechanical and Materials Engineering, and Xiaolin Li, a senior research scientist at PNNL". Washington State University and Pacific Northwest National Laboratory. According to Trump these Chinese are stealing US technology.
Chinese Govt officials ask major agricultural firms to pause purchases of US farm goods – Bloomberg - FxStreet.
Sunday 31 May 2020
On Twitter: NASA @NASA: "This is the first time in human history @NASA_Astronauts have entered the @Space_Station from a commercially-made spacecraft. @AstroBehnken and @Astro_Doug have finally arrived to the orbiting laboratory in @SpaceX's Dragon Endeavour spacecraft.": video.
On Twitter: NASA @NASA: "Docking confirmed! @AstroBehnken and @Astro_Doug officially docked to the @Space_Station at 10:16am ET": video.
On Twitter: Whole Mars RocketFlag of United States @wholemarslog: "Cost to fly an astronaut to the International Space Station:
Boeing — $90,000,000
SpaceX — $55,000,000
@elonmusk is basically doing a 2 for 1 deal. And guess who saves? You, the taxpayer." It looks like Boeing is working on 95,000kg to 130,000kg payload capacity to low Earth orbit.
Curfews and chaos as race protests spread to major US cities - SCMP. Looters are wearing virus protecting facemasks to conceal their identity.
On Twitter: Holger Zschaepitz @Schuldensuehne: "Just to put things into perspective: Bank of #Japan owns almost 80% of all ETFs domiciled in #Japan. (via DB)": chart. There is no way to exit without causing a collapse. The government is effectively nationalizing the economy.
On Twitter: US Riot Updates @QuarantineTrac1: "Complete Anarchy in Philadelphia....": video. Perhaps the police do not want to take action for fear of being charged with assault.
Saturday 30 May 2020
On Twitter: Jim Bridenstine @JimBridenstine: "Weather is a GO for launch! #LaunchAmerica"
Making History: NASA and SpaceX Launch Astronauts to Space! - Youtube.
Fires, arrests, curfews, confrontations: George Floyd protests continue nationwide - USA Today.
On Twitter: jamie mcgurk @jpm25: "My wife is a healthcare worker and has gotten 3 COVID-19 tests over the last 2 months. We got the bill for the first one today: $18,415 w/o insurance." image.
Friday 29 May 2020
S&P 500 - MOMENTUM DIVERGENCE - The Grey Fire House. Facebook, Apple, Alphabet, Amazon, Netflix, and Microsoft account for most of the S&P outperformance.
SpaceX SN4 Has Exploded - Next Big Future. A Starship prototype.
“Fixing” the Debt Problem - Lyn Alden. "In the United States, the Great Depression in the 1930’s was the culmination of the long-term debt cycle, and a period of massive deleveraging and currency devaluation occurred". Governments usually end up paying for debt by printing the money.
On Twitter: Nomi Prins @nomiprins: 'The Fed's market activity has only just begun. "The Fed’s announcement that it would begin buying corporate bonds and ETFs that track the market prompted a flood of cash... An investment-grade bond ETF run by BlackRock’s iShares, has swollen by $12bn to a record $49bn since...": Financial Times
@FT: "Federal Reserve adds just $1bn of new corporate debt to balance sheet https://on.ft.com/3gy8zP8" '.
Central banks act as lenders to keep interest rates down, the opposite of what should be happening with rising inflation. Consumers are impoverished by the inflation the increase in money causes, which will impact businesses. Those businesses will end up defaulting on central bank loans. It makes no difference which part of an economy a central bank tries to support, eventually they will pay for the all the debt by printing the money.
On Twitter: Lisa Abramowicz @lisaabramowicz1: "The U.S. high-yield corporate default rate will rise to 12.5% by March 2021 from 3.5% in March 2020 under S&P Global's base-case forecast. To reach this, 233 speculative-grade companies would need to default. https://tinyurl.com/ybbjenuk": chart.
Stick or twist? Investors face coronavirus-induced property dilemma - Reuters.
Trump says he wants to shut down Twitter, signs order to crack down on social media - Business Insider SA. It is not the responsibility of a website host to censor content, just like it is not the responsibility of a printer to censor newspaper content. Every profile on Twitter or Facebook is a publisher. The webhost is not an editor.
Squad’s solar-powered mini electric car gets new options, more solar power - Electrek.
Volkswagen Goes On Billion Dollar EV Investment Spree In China To Compete Directly With Tesla - Talk Markets.
On Twitter: Daniel Lacalle @dlacalle_IA: "The problem of the auto industry is not Covid-19. It is a business model based on death by working capital that needs constant customer churn of vehicles to survive, let alone make a profit." It is wasteful to crush old models, and replace it with a new models, when all you need to do is upgrade some parts. One possible reason why parts are expensive, is that vehicle manufacturers want you to buy new models.
On Twitter: Cerebral Wisdom @CerebralWisdom: "Three-fifths to two-thirds of the federal budget consists of taking property from one American and giving it to another. Were a private person to do the same thing, we'd call it theft. When government does it, we euphemistically call it income redistribution. - Walter Williams". It is called bribing voters.
Taylor Swift Blasts Trump, And Other Celebrities Respond To George Floyd's Death - Forbes. These liberals usually live in upmarket suburbs, away from the decaying neighbourhoods or cities.
On Twitter: St. Louis Fed @stlouisfed: "In April, the nation’s personal saving rate (as a percentage of disposable personal income) climbed to 33%—the highest rate in
@BEA_News records dating back to 1959 http://ow.ly/6EdR50zU2bo": chart. Lockdown effect.
On Twitter: Gold Telegraph @GoldTelegraph_: "Fed's Powell says Fed policies will 'absolutely not' lead to more income inequality". There is a FRED chart for that, the Shares of gross domestic income: Compensation of employees, paid: Wage and salary. It has declined since the gold standard was abolished in 1971, because wages have not kept up with the inflation caused:
Thursday 28 May 2020
With US states facing a $230 billion loss in education funding, Betsy DeVos channels public assets to private schools - WSWS. Budget deficits everywhere. Money will be printed and currencies devalued like never before.
Government surveillance bill withdrawn in U.S. House - WSWS.
Nissan to cut production capacity by 20% after suffering worst year since 2009 - CNN.
Pending Home Sales Plummet 35% YoY - Biggest Drop Ever As Buyers Forfeit Deposits - Zero Hedge.
California hospitals struggle financially after preparing for COVID-19 surge that never came - Reuters.
International Report: Q1 2020 - Seeking Alpha. The profit rug is being pulled from under the US stock market, but it moves higher.
Jack Dorsey explains why Twitter fact-checked Trump’s false voting claims - TechCrunch. The amount of time Americans spend watching their supreme leader shows the influence of the government is far too big. In countries where government plays a limited role, citizens have no interest in what their government does.
On Twitter: Reuters Business @ReutersBiz: "#Carbon Shift: Globally, nuclear energy is losing ground to renewables. Many of the world's nuclear plants are aging and set to close on cost and safety grounds". Plans For New Reactors Worldwide - World Nuclear: "Nuclear power capacity worldwide is increasing steadily, with about 55 reactors under construction." In a few decades wind turbines and solar panels will have decayed. When the public realize they have to pay for it again, they will probably lose interest. That is besides the fact that gas, coal or nuclear must run 100% of the time as backup to renewable energy.
Wednesday 27 May 2020
All of the World’s Money and Markets in One Visualization - Visual Capitalist.
On Twitter: SpaceX @SpaceX: "Standing down from launch today due to unfavorable weather in the flight path. Our next launch opportunity is Saturday, May 30 at 3:22 p.m. EDT, or 19:22 UTC". Why not look at the weather forecasts? Saturday doesn't look good either.
Making History: NASA and SpaceX Launch Astronauts to Space! - Youtube.
On Twitter: Viv Dragon @flcnhvy: Some awesome @NASA pics from today. Despite the scrub, the last 4h+ have been super exciting, and I can’t wait for Saturday #LaunchAmerica": photo.
Boeing cutting more than 12,000 U.S. jobs, thousands more planned - Reuters.
Re-Opening The Economy Won't Fix What's Broken - Talk Markets.
The 30 Most Anticipated Luxury Hotel Openings For 2021 - Forbes.
Tuesday 26 May 2020
CDC Says Possibly 'Less Than Half' Of Positive Antibody Tests Are Correct - Forbes.
Dimon says US has good chance for a rapid economic recovery - Detroit News. The US economy was declining relative to the money supply as inflation indicator. By recovery does he mean decline at a lower rate than at present?
Virgin Orbit rocket cuts short crucial test flight - CNN.
Monday 25 May 2020
There's a new entry in India's electric rickshaw race - CNN.
New emissions blow for VW as German court backs damages claims - Engineering News.
Delta and United Airlines caught up in rising US-China tensions - CNN.
End of 'shale gale'?: Around 250 U.S. oil companies could go bust if oil prices don't rise quicklys - Financial Times.
Central bank printing presses might be in overdrive, but inflation is not the real threat here - Financial Times. The FRED chart below shows Canada's M3 money supply growth in blue (8.84% per year) is closer to the gold price in yellow than the official consumer price index in red (3.85% per year). Inflation is running away.
Some-one forgot to add the cost of housing in Canada (blue) to inflation (red), which makes up about 1/3 of the average household expenditure.
Sunday 24 May 2020
On Twitter: Elon Musk @elonmusk: Space rocket on launch pad. The Falcon 9 requires a weight of 549,054 kg, to lift 5,500 kg to geostationary orbit at an altitude of 35,786 km (Wikipedia). That is 100 times the payload. That is about 10 tons of rocket and fuel to free a human of 100kg from earth's gravity.
Boeing has the Starliner capsule and rocket: "NASA is Boeing's customer for the Space Launch System, the largest rocket ever built, which will take humans and crew well beyond low-Earth orbit and into deep space." It can take "95 metric tons, 105 metric tons and 130 metric tons of payload capacity to low Earth orbit".
The Virgin Galatic launches from the air, and reach an altitude of 15 km, for space tourism and suborbital launches for space science missions.
Blue Origin, founded by Amazon's Jeff Bezos, has vertical-takeoff and landing spaceships. The Blue Moon lander can take 3,600 kg to 6,500 kg to the moon. The Glenn rocket uses 7 reusable BE-4 LOX/LNG engines to take 13,000 kg to geostationary transfer orbit.
Ready, SETI, go: Is there a race to contact E.T.? - Live Science. Due to the enormous distances between solar systems, the chances of picking up transmissions from other planets are virtually zero.
Building the Perfect Squirrel Proof Bird Feeder - Youtube.
Saturday 23 May 2020
A Swedish Covid-19 antibody study suggests the herd-immunity strategy isn't working - Business Insider SA. "... 7% of people in Stockholm had developed coronavirus antibodies by the end of April"
Crumbs for the Hungry but Windfalls for the Rich - NY Times.
Bankruptcy Tsunami Begins: Thousands Of Default Notices Are "Flying Out The Door" - Zero Hedge.
Hospitals overwhelmed in California and Alabama as national death toll approaches 100,000 - WSWS. California Coronavirus Cases - Worldometers. California cases are slowly rising, despite the lockdown.
Air Canada announces layoff of up to 22,800 workers - WSWS.
COVID-19 Causes Supply Chain Headaches for Coffee Growers - Modern Farmers.
Facebook Wants to Be the Remote Work Platform of the Future - The Street.
Betty White in 1955: Make The Connection: Guest Fred Allen (Sept 1, 1955?) - Youtube.
What's My Line? - Clarence "Donald Duck" Nash; Bob Hope (Dec 12, 1954) - Youtube.
#ConanAtHome: Nikki Glaser Full Interview - CONAN on TBS - Youtube.
Friday 22 May 2020
Covid: Killing Fields of the Old and Sick? - Ron Paul Institute.
Cannabis Stocks Surge on Report of Benefits in Fighting Covid-19 - The Street. In the future, pensions will probably be insufficient due to high inflation. Every retiree should open a micro brewery or a cannabis business. It will be a great retirement.
Hertz Global Holdings Takes Action To Strengthen Capital Structure Following Impact Of Global Coronavirus Crisis - Hertz. "certain of its U.S. and Canadian subsidiaries have filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware"
America Is Drowning in Problems - Paul Craig Roberts. A lot of flu viruses seem to originate in China. It could be related to the way they deal with animals or meat products. From 18 Feb 2020: Why Do New Disease Outbreaks Always Seem to Start in China? - Real Clear Science. 'Farmers often bring their livestock to "wet markets" where they can come into contact with all sorts of exotic animals'.
The Remdesivir Study Is Finally Out: Drug Only Helped Those On Oxygen, Finds Mortality Too High For Standalone Treatment - Zero Hedge.
China and India have fueled global growth for years. That engine has stalled - CNN.
Renault could 'disappear' without government help, French finance minister warns - CNN. So many governments subsidize their car manufacturing, it makes a mockery of the free market.
Australia's Wesfarmers to shut or rebrand over 100 Target stores in virus slump - Reuters.
Hydroxychloroquine or chloroquine with or without a
macrolide for treatment of COVID-19: a multinational registry analysis - The Lancet. "We were unable to confirm a benefit of hydroxychloroquine or chloroquine, when used alone or with a macrolide, on in-hospital outcomes for COVID-19". Scanning superficially through the document, it looks like the medication were mainly given at an advanced stage of the sickness, judging by the higher number on ventilators (Table 2). It is supposed to be used for prevention, or at an early stage.
Hydroxychloroquine – More than 91 percent chance of helping COVID-19 patients - Ice Age Now.
Why we might not get a coronavirus vaccine - The Guardian.
Tencent-backed grocery start-up Missfresh closes in on US$500 million fundraising as Covid-19 boosts demand - SCMP. It wil be amusing if Chinese companies make money in the US, but are not allowed to list on US stock markets. Bill to delist Chinese stocks moving at ‘warp speed’ as a crackdown gains bipartisan support - CNBC. "The Senate bill would require companies to certify that “they are not owned or controlled by a foreign government” and allow the Securities and Exchange Commission to delist non-compliant firms".
US House Republicans press TikTok on use of kids' data, ties to Beijing - SCMP.
From 15 May: Factset: 90% of the S&P 500 Q1 revenue growth +0.7%, earnings decline -13.8%.
M3 money supply increased by +8.3% for the first quarter (compared to a year ago), but according to company results nominal economic output only increased +0.7%. Consumers usually spend less because wages do not keep up with inflation. Now they are also spending less due to lockdowns. Inflation (consumer price index) was reported as 2.1% (FRED). The big decline in profits does not agree with the small inflation figure. If volume only declined by -1.4%, why were profits down -13.8%?
Some people think a lower rate of money flow through an economy (velocity) means deflation. An increase in money supply, and decline in velocity can cancel each other out without impacting inflation or economic growth. They are on the left-hand side of the equation: Velocity x Money supply = Economic growth x Inflation. There is actually a correlation between money supply and inflation, and between velocity and economic growth. The more times money circulates through an economy during a year, the greater the economic output. Lower velocity means economic output is declining.
The FRED chart below shows velocity increases and the economy grows (red up), when money supply grows more slowly (blue lower). The usual way governments add money does not increase economic production, but reduces economic efficiency.
Thursday 21 May 2020
US government to file antitrust lawsuit against Google this summer - WSWS. Google search results start with a list of advertised websites before users get to the relevant unsolicited sites.
Best Buy (BBY) computer & electronics retail. results Q1 revenue -6.3%, shares -4.1%, EPS from $0.98 to $0.61, quarterly dividend $0.55, share price $81.54.
While U.S. economy slides, heartland auto dealers cry out for more trucks - Reuters. Perhaps city dwellers going back to subsistence farming.
A replaceable, more efficient filter for N95 masks - Phys.org.
On Twitter: Forbes @Forbes: "Former Full House star Lori Loughlin and her husband Mossimo Giannulli have agreed to plead guilty to charges of conspiracy and fraud for paying $500,000 to secure their daughter's admission to the University of Southern California http://on.forbes.com/6010GBhAu by @iamsternlicht". Can they get back the bribe now that classes are cancelled due to the coronavirus?
Dam collapse in central Michigan sparks historic flooding - WSWS. "breached two aging and neglected hydroelectric dams". The US government would rather spend money on weapons they can sell tot Saudi Arabia, to attack Yemen with.
COVID-19 cases at Ford plants in Detroit, Chicago as anger grows over inadequate safety measures - WSWS.
More Tyson Employees Test Positive for Coronavirus - The Street.
Additional 2.4M file jobless claims as economic fallout from the coronavirus pandemic lingers - USA Today. "In just nine weeks, 38.6 million have sought jobless benefits that represent the nation’s most reliable gauge of layoffs".
From 20 Mar 2019: 1918 Pandemic (H1N1 virus) - CDC. "The number of deaths was estimated to be at least 50 million worldwide with about 675,000 occurring in the United States" (1.3% in US). Worldwide deaths from the coronavirus is now 331 707, of which 95 474 are in the US (29%).
Wednesday 20 May 2020
Catheter With Ultravoilet Light Could Help Coronavirus Patients - Next Big Future.
Nearly a quarter of Canadians say they’ve lost most or all of their income during the COVID-19 pandemic - The Logic.
The economic theory that suggests lower demand for products mean lower prices, and thus deflation, is questionable. During lockdown, workers are not producing, but are receive government support. That is more money chasing fewer goods. Usually businesses try to compensate for lower volume by increasing selling prices, to overcome fixed costs. Economies are dominated by large companies with limited competition (Coronavirus Market Sell-Off: Should You Buy FAANG Stocks Right Now?), and therefore pricing power.
On Twitter: Liz Ann Sonders @LizAnnSonders: "Through March 2020, China’s YTD impThrough March 2020, China’s YTD imports of covered products from US were $19.8B vs. prorated target of $43.2B & US’ exports to China were $14.4B vs. $35.7B target...based on @PIIE prorating methodology, purchases outlined in #Phase1 lagging in every area (energy suffering most)": charts. Increasing exports to China also means lower exports to other countries, for the same imports. Trump has never stated what the US will actually import, thus overall exports will decline.
Target results Q1 revenue +11.3%, shares -2.6%, EPS from $1.53 to $0.56, dividend $0.66 is more than EPS, shareholder equity -5.6%.
Rail Car Traffic US - Snippet.
How Berkshire Hathaway’s Class A And Class B Shares Are Different - Talk Markets.
Let’s Get Realistic, Part 2 - Talk Markets. In the long run no investment will beat nominal economic growth, which is mostly actual inflation of around 6% per year (about to go much higher). A minority can beat the growth rate through lower real wages, but the population as a whole can't.
Lockdowns cause 17% drop in daily global carbon emissions - Business Insider SA. At the same time there are droughts around the globe: United States Drought Monitor, 18 Mei 2020: Czech Republic drought visible from space, 24 April 2020: Germany heading toward drought amid coronavirus crisis: forecaster, 23 April 2020: Poland could face "worst drought in a century". Clean air probably means less seeding of clouds by smoke. Rain is required for plants to grow and absorb the CO2.
The FRED chart below shows US exports relative to M3 money supply, up to Q1 of 2020. Import restrictions and subsidies strenghten the dollar, and make exports uncompetitive. If imports decline, exports must also decline. The recent increase in money supply will take it down further.
UK inflation slumps to lowest since 2016 as coronavirus hits - Reuters. The gold price (yellow) suggest the M3 money supply (red) is closer to the actual inflation rate, than the official inflation version (blue) since about 1990:
Tuesday 19 May 2020
They're famous for their investments. But Warren Buffett and Masa Son keep striking out - CNN.
On Twitter: David Rosenberg @EconguyRosie: "CNBC runs with this: "Powell looking at ways to accommodate more borrowers." One more in the long lineup of using more debt to remedy an already over-indebted society." Without debt growth the scam collapses.
On Twitter: Peter Schiff @PeterSchiff: "The one benefit of the Treasury sending Americans debt cards that can be loaded with freshly created stimulus money for consumers to spend, is that it will eliminate the need for wheelbarrows to transport the bills to stores to buy bread".
On Twitter: Peter Schiff @PeterSchiff: "When future historian write about the epic economic collapse America is about to experience, special emphasis should be placed on how clueless everyone, including the so-called experts were just before it began. It will be hard for future generations to believe we were this dumb." If you extrapolate the decline of civilization forward, it can only get worse.
On Twitter: Prof. Steve Hanke @steve_hanke: "Tedros’ reign at the helm of the WHO has consisted of a litany of mistakes. Remember when #Tedros appointed longtime #Zimbabwean strongman Robert Mugabe, a serial human rights abuser, as Goodwill Ambassador to the WHO. The #WHO’s failures are never ending."
Mark Zuckerberg announces Facebook Shops, making it easier for businesses to list products for sale - CNBC.
Walmart (WMT) results: Q1 revenue +8.6%, shares -1.3%, EPS +5.3% to $1.40, P/E = $125.90/$5.26 = 24.
Walmart sales surge at stores and online on coronavirus-led demand - Reuters.
Home Depot (HD), home improvement retail, results Q1 revenue 7.1%, shares -2.6%, EPS -8.4% to $2.08, P/E = $245.35/$10.06 = 25. The company pays $6.00 dividend, which leaves $4.06, enough to buy back 1.7% of their shares at present price.
Given the high valuations, stock market investors are sleep walking into the upcoming lockdown results. If the high revenue growth of Walmart and Home Depot is any indication, inflation has already picked up.
Opinion: Don’t even think of owning stocks unless you’re willing to buy and hold for at least 10 years - Market Watch.
Suze Orman says she made a ‘serious sum’ buying the coronavirus crash — now she’s warning of another drop - Market Watch.
Weekly Gasoline Price Update: WTIC Up 26% - Talk Markets.
On Twitter: Alessio Urban @AlessioUrban: "What a bullshit.. printing money means higher inflation.. they should change it in asset inflation": chart. The official inflation rate measures affordability. The inflation rate appears to stay low because consumers are getting poorer. The products they can no longer afford disappear from store shelves, and out of the inflation basket.
Coronavirus Infections Spiked In Wisconsin After In-Person Election, Study Says - Forbes.
Hundreds of Mexican maquiladora workers dying after back-to-work orders take effect - WSWS.
"They Don't Want To Come Back To Work" - Restaurant Blames CARES Act For Labor Shortage - Zero Hedge.
Monday 18 May 2020
On Twitter: Ivan Jarden @ivesjar: "When mining gold becomes more difficult, gold will become more expensive because there will be less of it. when mining cryptocurrency becomes more difficult it becomes less expensive because it doesn't make any sense in the first place." The difference is gold has a practical use, and physical mining cost, which limits the minimum and maximum price. The price of any metal (silver, platinum, palladium, etc) that is pushed up by speculators will collapse if the practical use disappears.
Berkshire Hathaway’s Q1 13F: Buffett Is on a Selling Spree - Market Realist.
On Twitter: Jesse Felder @jessefelder: 'When you add it all up—the $3 trillion already spent, the $3 trillion now required, and trillions more to accelerate the U.S. recovery—the total price tag for averting another Great Depression could be about $10 trillion.' The Atlantic.
If money is handed out without economic production in return, it just creates inflation. The reduced economic output due to the lockdown still results in a depression. To avoid a depression, the government needs to spend the money on public works which makes the economy more efficient than before, so as to cancel out the loss of productivity during the lockdown. Usually government spending does little to improve standard of living.
Coronavirus Australia live updates: McDonald's forced to close 12 restaurants - News Au.
Nevada Releases Guidelines for When Casinos Reopen — What to Know (Video) - Travel and Leisure. Casinos are a great way to take money from the poor, and give it to the wealthy.
Moderna Announces Positive Interim Phase 1 Data for its mRNA Vaccine (mRNA-1273) Against Novel Coronavirus - BusinessWire. As of 20 March 2020 Moderna had a long pipeline of vaccines, none of which has reached Phase 3 and commercial use as yet.
Boring Company completes ambitious underground tunnel - Popular Mechanics.
Sunday 17 May 2020
Countries' massive debt piles are turning into a disaster - CNN.
Restaurant and bar owners say social distancing could wipe out their industry - CNN.
Finance expert predicts ‘massive bankruptcies’ in two-year meltdown - News Au.
At least 6 countries reimposed lockdown measures as new coronavirus cases flared up again - Business SA.
Doordash and Pizza Arbitrage - The Margins.
Saturday 16 May 2020
On Twitter: Anil @anilvohra69: "More and more comparisons are being made between the current economy and the one in the Great Depression, and the trend is getting extended to markets. Here is a look at the Energy sector vs SPX. A second lockdown in fall should take Energy lower. Via @ISABELNET_SA": chart
Zombie J.C. Penney Finally Files for Bankruptcy, in Deal with Distressed Debt Funds. Stock and Some Bonds Wiped Out - Wolf Street.
Hundreds of workers walk out at six fruit packing plants in Washington state - WSWS.
US Senate reauthorizes domestic surveillance, allows access to internet histories - WSWS. And people are worried about Huawei spying.
Trump threatens to cut all ties with China - WSWS. After pressuring China into signing a one-sided trade deal he now feels he has ties with China.
One dead and more than 600 Irish meat processing workers infected with coronavirus - WSWS.
Coronavirus crisis exposes devastating conditions in the German meat processing industry - WSWS.
'Everything's on the table': How COVID-19 could change Canada's meat processing industry - Financial Post.
Counties with Meat Plants See Double the Infection Rates - Modern Farmer. Animals are striking back.
Native American Farm Working to Keep Community Fed During Pandemic - Modern Farmer.
In a Global Survey, Almost All Respondents Said They'd Go to Work Sick - Science Alert.
Jeremy Corbyn’s brother arrested at Hyde Park anti-lockdown protest - Metro UK.
King Tut - SNL - Youtube.
Lucy Teaches Ethel Merman to Sing - Youtube.
"Whale Watching" - Jim Gaffigan Stand Up (Mr.Universe) - Youtube.
Ancient High Technology: The Precision Carved Granite Boxes of Abu Sir - Youtube.
Cutting granite with sand - PBS.
Unexplained boreholes in Egypt, evidence of advanced technology? - Youtube.
Friday 15 May 2020
Forget the Fed: This stock market fantasy will end - Banyan Hill.
Zoom is Now Worth More Than the World’s 7 Biggest Airlines - Visual Capitalist.
Commerce Addresses Huawei’s Efforts to Undermine Entity List, Restricts Products Designed and Produced with U.S. Technologies - Commerce.gov. "... to protect U.S. national security by restricting Huawei’s ability to use U.S. technology and software to design and manufacture its semiconductors abroad." If the technology is not patented in the country then there are no legal limits.
On Twitter: Garrett Goggin, CFA @GarrettGoggin: "Gold vs Buffett over 20 years. Not even close. Gold up 532%. BRK up 322%.": chart. An inanimate object does better than the guru of investment.
On Twitter: John Lounsbury @jlounsbury59: 'The 4-Phases Of A Full Market Cycle by @LanceRoberts. http://econintersect.com/pages/investing/investing.php?post=202004091428. Good reference. Where do you think we are in the cycle? "Bear markets have three stages - sharp down, reflexive rebound and a drawn-out fundamental downtrend" Chart is from the first week in April': chart.
The Big Four Economic Indicators: April Real Retail Sales - Talk Markets.
GDPNow Forecasts The Economy Shrank By A Record 42% - Talk Markets.
Op Twitter: Daniel Lacalle @dlacalle_IA: 'Gold vs Emerging Market Currencies. And governments wonder why citizens all over the world prefer gold when they "print money for the people".' chart. The emerging market investment could pay some income, but not enough to beat gold. Buying gold too high could result in low returns for years.
Nike Shares Slip After Caution on 'Material' COVID-19 Earnings Impact; Digital Demand Provides Support - The Street.
Chipmaker stocks fall on fears of Chinese retaliation against Huawei order - CNBC. Trump extends telecom order behind Huawei ban until May 2021 - Engadget. Trade restrictions and subsidies have made the US economy uncompetitive for decades. For example, US car brands have largely been replaced by Asian brands outside the US. In 2019 Volkswagen sold 10.97 million vehicles globally, Toyota 10.74 million, Nissan-Renault 10.16 mllion (The Japan News).
Sorrento finds a coronavirus antibody that blocks viral infection 100% in preclinical lab experiments - TechCrunch.
iPhone maker Foxconn’s profits gutted by smartphone slump - Tech Central.
The Only Stimulus Package That Has Any Hope Of Saving The Economy - Talk Markets. For new money added to an economy to create economic growth and not just inflation, it could be spent on infrastructure that leads to economic activity that is a multiple of the cost, or new education which makes workers more efficient.
Thursday 14 May 2020
On Twitter: La nuit sera calme @NuitSeraCalme: "Some perspective on Covid in the US:
- 55k deaths, 92% over 55 years old,
- 459 deaths under 35 (4% of all deaths for that age range),
- 6.6% of total deaths for the period vs pneumonia 9.4%,
- 78k pneumonia deaths in same period
The US has 1,458,243 reported cases, which is 0.44% of the population. The rest could either be immune or could still be infected. Of the closed cases 21% died.
Fed Chair Powell’s Solution Is the Root of the Problem - Schiff Gold. How countries think they can just grow debt indefinitely without consequences is inexplicable.
'Stocks are overvalued': Wall Street heavyweights sound the alarm about markets - Financial Post.
U.S. Workforce: April 2020 Update - Talk Markets.
Norwegian Cruise Line Shares Fall On Mixed Q1 Report, CEO Says 'We Have Taken Decisive Action' - Talk Markets. "The stock has a 52-week high of $59.78 and a 52-week low of $7.03".
OPEN IMMEDIATELY!': Wisconsinites head out to bars after state stay-at-home orders lifted - USA Today. "After the Wisconsin Supreme Court struck down the state's stay-at-home order ..."
NASA Astronauts are ready for historic SpaceX mission as they officially enter preflight quarantine - Tesmanian.
China opens up to US barley, blueberry shipments days after restricting Australian beef, barley exports - SCMP. To rebalance trade, the US must now export less to Australia, and Australia import less from the US. Trade always remains in balance.
On Twitter: Liz Ann Sonders @LizAnnSonders: "Beneficiaries of food price inflation: Major appliance manufacturers geared toward freezer production will capitalize on American households’ building out food storage capacity" chart.
Sorry, ma'am, that dress is in quarantine: How clothing stores are prepping for a strange new reality - Financial Post.
China's rejects planned U.S. moves at U.N. on Iran sanctions - Reuters.
Exclusive: Tesla's secret batteries aim to rework the math for electric cars and the grid - Reuters.
Wednesday 13 May 2020
UK follows EU, U.S. in approving Roche COVID-19 antibody tests - Reuters.
Abbott's rapid coronavirus test misses nearly half of positive cases, study finds - The Hill.
The ECB Cannot Disguise Risk Much Longer - Hedgeye.
Locked down shoppers turn to vegetables, shun ready meals - Reuters. They are not the doomsday preppers. Fresh food is cheaper than processed food. Perhaps an indication of lower income.
A Taste Of What Is Coming – Food Prices Just Increased By The Most That We Have Seen Since 1974 - Talk Markets.
On Twitter: Stare Decisis @MsResJudicata 'Philip Georgiadis: Victor Mallet: "Marseille-based shipping line CMA CGM has become the latest French company to receive a state loan guarantee with France backing a €1.05bn loan from BNP Paribas, HSBC France and Société Générale.'
33 London bus drivers killed by COVID-19: “We are expendable like diesel” - WSWS.
Democrats and unions seek to suppress resistance by Amazon workers - WSWS.
AKO Trike aiming for over 300 km of electric range - Atlas.
Commentators who point to lower prices as indication of deflation, for example oil, must also adjust their inflation basket, if consumers use less of those products. When sales volume declines, a company's management could first try to increase prices, before firing staff. Then lower demand would lead to higher prices.
The FRED chart below shows the annual increase in total debt in red in billions of dollars, and the increase in M2 money supply in blue. The big increase in the M2 money supply only pays for one year's increase in total debt in red. To pay for all debt the same money creation ($3000 billion) is required every year for 25 years, if debt stops growing. At the normal M2 money growth rate ($600 billion per year), it would take 126 years.
The FRED chart below shows wages relative to M2 money supply. These are the consumers that have to support the economy and pay the debt. The recent increase in M2 money doesn't show yet. That will take it closer to 0.5. The same drop can be seen every recession, as workers are impoverished by the money created to keep the illusion of economic growth going.
Tuesday 12 May 2020
In Unprecedented Move, Two Fund Giants Liquidate CLO Warehouses - Zero Hedge. Collateralized loan obligations - Investopedia.
Financial Media Is In Denial About The Real Economy - Talk Markets.
U.S. auto industry workers return to jobs amid concerns of second virus wave - Reuters.
London's Trains Packed With Commuters As PM Johnson Lifts 'Stay Home' Order - Zero Hedge.
Some companies are part of the coronavirus economy. The rest are in trouble - CNN. Companies are not islands, but are dependent on the rest of economy.
Tim Hortons lays out its path back to normal, hoping to reopen dining areas across Canada by next month - Fiancial Post. "The new plan revolves around tables: Tim Hortons will widen the space between tables; it will sanitize them, as well as chairs, after each use; and it will limit the number of customers allowed at any given table to no more than four." Is it worth eating out?
The Maxwell Smart Cone of Silence could be used in restaurants to limit the spread of viruses.
Below the Wilshire 5000 stock market index in blue is compared to economic output in red, both relative to M3 money supply. This shows the situation for a constant amount of money. The economy has declined since 2000. After the stock market bubble of 2000, it did show a declining trend, but has recently exceeded the highs of 2008. With the M3 money supply about to shoot higher, both lines will show a drop. It doesn't make sense for the stock market to rise when the economy declines.
Monday 11 May 2020
New York Fed Announces Start of Certain Secondary Market Corporate Credit Facility Purchases on May 12 - NewYorkFed. "... the SMCCF may purchase U.S.-listed ETFs whose investment objective is to provide broad exposure to the market for U.S. corporate bonds".
China's Wuhan plans city-wide testing for coronavirus over period of 10 days: sources - Reuters.
On Twitter: Peter Schmidt (The 92ers) @The92ers: "For people who think the Fed's bailout was a success, this chart proves them wrong. If the bailout could be judged a success, then the Fed would need to sell everything it purchased back into the market & return its balance sheet to normal. That never happened!" chart.
On Twitter: Squawk Box @SquawkCNBC: "There is no doubt in my mind that the next shoe to drop is the malls and REITs that own the malls," says M-III Partners' Mo Meghji. "The #COVID19 pandemic has really accelerated this process."
BREAKING NEWS: Elon Musk announces plan to move his factory to Mars.
The US economy requires more debt to keep growing. It is mostly bad debt, such as for consumption, or building big houses which generate no long term economic output (white elephants). Can it continue? On the FRED chart below total debt was 3.4x wages in 1980. It is now 8x. Workers have to pay for the debt. Demographics looked a lot better in 1980 than it does today, and that was before China emerged. There will either be a depression, or a miraculous industrial revolution.
Sunday 10 May 2020
There is an enormous difference in the number of coronavirus cases and deaths in the US (1,353,534 and 80,351) and China (82,901 and 4633). Is it due to a difference in the governments' response, and the discipline of the populations? Are old age homes uncommon in China, where 41% live with an adult child (Living arrangements of the elderly in China: evidence from the CHARLS national baseline - NCBI)?
EU could open legal case against Germany over ECB bond-purchases ruling: Commission - Reuters.
Home builders have shot back up, like the ITB exchange traded fund iShares Dow Jones US Home Construction. It does make sense in the long run to invest in assets as protection against inflation. In the short term house prices will likely come other pressure due to job losses.
Saturday 9 May 2020
Tesla sues California county in virus factory closure fight, threatens to leave - Reuters.
Depressionary Economy Vs. A Bull Market. Both Can’t Be Right. - RIA.
On Twitter: Gold Telegraph @GoldTelegraph_: "Federal Deficit Projections:
2019: -$26.6 Billion
2020: -$252.1 Billion
= 847.7% increase
2019: $984 Billion
2020: $3.8 Trillion
= 18.7% of U.S. economic output
Math does not lie. Very scary times..."
Elon Musk: Tesla will move from California to Texas/Nevada due to local coronavirus response - Electrek.
‘We’ve seen the lows in March’ for the stock market, says man who called Dow 20,000 in 2015, ‘and we will never see those lows again - Market Watch. People keep talking about economic recovery as if the economy is actually growing. What is growing is inflation.
Increasing the money supply creates inflation because nothing was produced in return for the money. It is basically impossible to add more money to an economy without causing inflation, unless it is traded for another medium of exchange like gold. Then the public can return the money in exchange for gold, which was the gold standard. The only reason why there could be some economic growth, is because worker wages do not keep up with the inflation.
If the money supply growth only creates inflation, then the velocity of money flow shows the real economic growth. It is shown below divided by the population. It also represents spending per person, relative to the total money in circulation. Despite the down slope, governments claim that people are better off because their money buys so much more. Do people spend more slowly because they are poorer?
If more money is printed to pay debt, velocity is going to slow down further. The stock market could go up due to the inflation, but it has already run far ahead of inflation. The question is for how long a government will remain in power before voters realize they are being impoverished. This typically happens under dictatorships, and with restrictions on capital outflow.
Below is Japan's money velocity over a shorter period.
Friday 8 May 2020
On Twitter: Peter Schmidt (The 92ers) @The92ers: "Think economists know what they're talking about? Think again. Well into the 1980s, Paul Samuelson & many others constantly sang the praises of the Soviet command economy & were blind to all its considerable defects. Keep this in mind when @krogoff praises negative rates." image.
On Twitter: Danielle DiMartino Booth @DiMartinoBooth: "THE CANADIAN CONUNDRUM. Business investment has been declining over the past decade, while residential investment has risen to all-time highs.": chart
European Union Looks To Extend Its Travel Ban To June 15 - Forbes.
Hostess Brands (TWNK) results Q1 revenue +9%, shares +25%, dEPS from $0.21 to $0.02.
On Twitter: Sven Henrich @NorthmanTrader: "From record low unemployment to record high unemployment. Nasdaq green on the year.": chart.
On Twitter: Christopher Cole @vol_christopher: "Hoover is demonized today for not doing enough to stop the Great Depression, but in October-November 1929 the initial stimulus measures were cheered by investors leading to a six-month rally that fizzled into early 1930... here is what they did in Q4 1929": image.
Fastest Job Loss Ever - ECRI.
On Twitter: Liz Ann Sonders @LizAnnSonders :"Now a distant memory & an even loftier goal ... full commitment of Chinese purchases of U.S. goods under phase 1 trade deal remains quite elusive @SoberLook @SPGlobal": chart.
Shanghai Disneyland Tickets Sell Out Instantly for First Days After Reopening - The Hollywood Reporter.
Global luxury sales could collapse up to 60% in the second quarter, consulting firm says - CNBC.
On Twitter: Stare Decisis @MsResJudicata: "Why would any country want to pay for the debts of another country by giving them grants instead of loans and guaranteeing them monthly income for life? If the others want to leave the EU, instead of threats, just do it." Kickback @Kickbac37161083: 'Replying to @MsResJudicata
There you have it in a nutshell and that's the core of it -why the EU doesn't work. These guys always wants a free lunch and expects the more prudent nations to pay their bills so that they can keep spending and living their socialistic "manana lifes" '. Also an internal/national problem many EU countries are socialist states, which is why their economies can't growth.
Coronavirus: African Union presses Madagascar on efficacy of Covid-Organics ‘tonic’ - SCMP.
Democratic senators propose $2,000 monthly payments to most Americans - Politico. To make it even more fun, pay child grants, and watch people breed (figuratively).
On Twitter: Senator Eloise William CFA, MBA, PHD (doctor), @thestinkmarket: "I have read The Intelligent Investor 25 times and I’m still not an intelligent investor. I’m down $500,000 this year and counting. What a dumb book. Warren Buffett is a liar and idiot investor for recommending this trash.": video.
Google throws up weird search suggestions to "if a":
"if a dog salivates to a blue light and not to a yellow light the dog is showing evidence of"
"if a case goes on appeal and the appellant wins we would say"
"if a door number fitter needed to fit the numbers of 100 houses 1 to 100 how many 9's would he need" (It depends on whether the numbers are made of brass, and are stolen).
In accumulating the total US debt of $75.474 trillion at the end of 2019, who is so irresponsible? The FRED chart below shows the biggest contribution is household and nonprofit organizations debt in green (sum of debt, mortgages, and consumer credit). It grew fast before 2008, and has since slowed down. The second biggest is nonfinancial corporate and nonfinancial business debt in red. Coming in third is federal government debt in purple. Not shown are state and local government, domestic financial sectors, and rest of the world debt. The question is how much of this debt is good debt, that is used for long term investment in assets, which will generate the income needed to pay off the debt?
Thursday 7 May 2020
Plastic Shields, Interview Pods, No More Entourages: Red Carpets' New Normal? - Hollywood Reporter. To most men the award ceremonies never happened.
Beware, the stock market’s being supported by ‘nothing more than an ideological dream,’ economist warns - Market Watch.
German auto companies demand even more state money - WSWS. If the government bails out everybody, nobody benefits. The aid is cancelled out by an equal amount of inflation. If some benefit from aid, then others must pay for it. It is usually poor people who have no pricing power against the inflation caused.
More than sixty COVID-19 cases linked to Australian abattoir outbreak - WSWS. What is it about virus outbreaks at meat plants and meat markets? Is it punishment for the way animals are slaughtered?
On Twitter: Daniel Lacalle @dlacalle_IA: "European earnings so far -25% vs 1Q2019, sales -6%.": image....
.... Daniel Lacalle @dlacalle_IA: "US earnings so far -9%, sales 0%": image.
Bristol-Myers Squibb (BMY), health care. results Q1: revenue +82% (acquired Celgene), shares +38%, EPS from $1.04 to -$0.34, expected 2020 EPS $0.37 to $0.57, or non-GAAP $6.00 to $6.20. The long term GAAP profit record is poor, presumably due to constant specials items, which are excluded from the non-GAAP earnings.
ViacomCBS class B (VIAC) television. results: Q1 revenue +60% or -6.1% combined, EPS from $4.21 or $3.18 to $0.84, or non-GAAP from $1.46 to $1.13.
ViacomCBS, Google Expand YouTube TV Distribution Deal - The Hollywood Reporter. Viacom (2005–2019) - Wikipedia: "In February 2007, Viacom sent upwards of 100,000 Digital Millennium Copyright Act takedown notices to the video-sharing site YouTube".
Dish Loses Record 413,000 TV Subscribers Amid "Severe Disruption" From Pandemic - The Hollywood Reporter.
Mark Cuban: 'Hotel California' is the only solution for sports to resume before COVID-19 vaccine is available - Fox News.
Wednesday 6 May 2020
How 39 million Europeans kept their jobs after the work dried up - CNN. "In Europe, nearly 39 million people are being paid by governments to work part time or not at all". Some-one else must pay for it. Government jobs are only worthwhile if the value of the service to a client equals the cost.
On Twitter: Jeffrey Gundlach @TruthGundlach: "Long term Treasury yields are rising, understandably, due to a $4 Trillion growth of the National Debt coming in just the next few months. The Fed has manipulated “Investment Grade” corporate bond yields to below 3%. They will certainly want a lower ceiling for Treasury yields."
US interest rates should be must higher considering the apparent inflation rate of around 6%, which is about to go much higher. Investment in bonds only makes sense for as long as interest rates decline, which pushes the price up. This is another reason why governments want interest rates to go down only, and not up, otherwise the bond market could collapse.
On Twitter: Yardeni Research @yardeni: "YARDENI RESEARCH. The recession caused by the Great Virus Crisis (GVC) has turned into a depression-like downturn. It’s so bad that the latest batch of global economic indicators are all off the charts. Resizing the charts to accommodate the latest outlie…" chart.
ADP says 20.2 million private-sector jobs lost in April amid coronavirus crisis - Market Watch.
T-Mobile US (TMUS) results Q1 revenue +0.3%, shares +0.9%, EPS from $1.06 to $1.10, P/E = $86.59/$4.07 = 21.
General Motors (GM) results Q1 revenue -6.2%, EPS from $1.48 to $0.17.
Coronavirus quickly spread around the world starting late last year, new genetic analysis shows - CNN.
‘Scared’ US workers stay home as coronavirus-infected meat-packing plants reopen - SCMP.
Chinese chip maker SMIC’s US$3 billion Shanghai listing is a hedge to reduce company’s reliance on US technology - SCMP. Developed countries have made their exports expensive with import restrictions and subsidies. It makes sense for countries to replace the expensive imports with local manufacture. At this point cheaper airplanes (as opposed to Boeing US or Airbus Europe) would have helped airlines to recover. Another duopoly that needs to be broken up.
FCC slaps Sinclair with $48 million record-breaking fine - Engadget.
Tuesday 5 May 2020
Beyond Meat (BYND) results Q1 revenue from $40.206M to $97.074M, dEPS from -$0.95 to $0.03, price/sales $122.74/~4x$1.47 ~ 21.
Coronavirus reached Europe weeks earlier than thought, say doctors - FT.
Exclusive: U.S. airlines burn through $10 billion a month as traffic plummets - Reuters.
Walt Disney (DIS) results: Q2 revenue +21%, shares +18%, EPS from $3.56 to $0.25, P/E = $101.06/$2.79 = 36, P/S = $101.06/$43.07 = 2.3, total equity +1.1%, equity per share -23% to $52.25.
Warren Buffett May Have Met His Match: The Fed - Talk Markets. The vast majority of stock market gains is from inflation, as a result of an increase in money supply.
Meet Winter, the Llama Who Might Just Save Us All From COVID-19 - Modern Farmer.
On Twitter: Jeffrey Kleintop @JeffreyKleintop: "V-shaped rebound in car sales in China (big ticket item requiring confident consumer). Latest week car sales up 25% from a year ago after falling 99% year-over-year during 6th week of the year.": chart. Could just be pent-up demand. If people want to avoid public transport, they might have to buy more cars.
J.Crew bankruptcy: Uncle Sam can't bail everyone out - CNN.
Pfizer, BioNTech set to begin U.S. coronavirus vaccine trial - Reuters.
Sweden still hasn't locked down. But normal life is a luxury for only a few - National Geopgraphic.
On Twitter: Holger Zschaepitz @Schuldensuehner: "#ECB says that it has taken note of German Constitutional Court ruling & remains fully committed to inflation mandate.
BUT: ECB failed to increase inflation despite massive balance sheet expansion, it is questionable whether bond purchases comply w/principle of proportionality": chart
The FRED chart below shows the Eurozone economic output (Gross Domestic Product) relative to the M3 money supply, which is the velocity of the money flow in blue. If the increase in money only caused inflation, and not economic growth, this represents the real economic output. The official real economic growth is shown in red. Not much happened after the 2009 Great Recession. So, a lot more money was added, it didn't circulate as well as before, but created more economic activity.
Monday 4 May 2020
"Nouriel Roubini Sees a Bad Recovery, Then Inflation, Then a Depression" - Bloomberg.
California becomes first state to borrow from U.S. to make unemployment payments - Market Watch.
With US inflation apparently close to the money supply growth rate of around 6%, is the stock market beating inflation? For Q1 so far, revenue growth is 0.7%, and earnings decline -13.7% (Factset). For Q4 of 2019 revenue growth was 5.8% and earnings growth 3.1% (Lipperalpha). For Q3 revenue growth was +3.8%, and earnings declined -0.4%. When profit growth is less than revenue growth, it is typically a sign of high inflation putting pressure on costs. Volume probably declined, sales prices were increased, but wasn't enough to overcome fixed costs.
Scientists Create Antibody That Defeats Coronavirus in Lab - Bloomberg.
GM Korea to cut output of key SUV as virus hits U.S. exports: document - Reuters. "Shipments of vehicles fell 36% and vehicle components dropped 50%". Cars is one of the discretionary items people will be cutting back on, to compensate for a lack of income during the coronavirus.
Here Is Why The U.S. Economy Would Continue To Crash Even If All The Lockdowns Were Lifted Immediately… - Talk Markets.
Hong Kong Gross Domestic Product fell -8.9% in Q1. Before the coronavirus, it was already -2.8% and -3% the previous two quarters: Trading Economics.
Investor Cash Continues To Build - Seeking Alpha. For every stock seller there is a buyer of equal value. So the money is not coming out of the stock market. It could be income that not is being spent due to the lockdown, but that wasn't the reason for the 2009 rise in cash. People could be saving their money because of the weak economy. Perhaps it is the money the Federal Reserve is supplying.
On Twitter: Reuters Business @ReutersBiz: "Trump administration pushing to rip global industrial supply chains from China as it weighs new tariffs to punish Beijing for its handling of the coronavirus outbreak, according to officials https://reut.rs/2WsguUM" He wants to punish Americans for buying Chinese products. The punishment will be higher prices on imports, or higher prices for local manufacture.
On Twitter: Megan Greene @economistmeg: "There will be no V-shaped recovery. https://twitter.com/edwardnh/status/1257077169488101376" CBS poll.
On Twitter: Maria Bartiromo @MariaBartiromo: "Mnuchin: PPP is a great success story http://ow.ly/Nizj30qD2hf @MorningsMaria @FoxBusiness" (Paycheck Protection Program). The public will pay for it, specifically those who get no hand-outs, and those who have no pricing power against the subsequent inflation.
J. Crew files for bankruptcy, the first major retailer pushed over the brink by the coronavirus pandemic - Business Insider.
Sunday 3 May 2020
Buffett says he dumped entire stake in airline-sector stocks: ‘The world changed for airlines’ amid coronavirus - Market Watch. Airlines have always been high risk.
On Twitter: Keith McCullough @KeithMcCullough: "NEW ORDERS (not a focus of the CNBC or Pump narrative on Fri)": chart.
Money Pumping Won’t Fix What’s Wrong With The Economy - Talk Markets.
Are you one of these people who writes reviews on products and restaurants? - Youtube.
From 21 Aug 2013: The Great Pyramid of Egypt New Evidence Full Documentary - Youtube.
It looks like most of the increase in the US money supply has resulted in inflation, which is usually the case. Then the velocity of money flow in red on the FRED chart below is close to the real economic output (from velocity x money supply = real economic growth x inflation). The official economic growth is shown in blue, which grew an average of 3.0% per year. That implies your standard of living must be 2.4x better than your parents 30 years ago (excluding population growth). Your house should be 2.4x bigger, you should own 2.4x more cars, etc. There are probably young people living in their parents' basement who would disagree. There might be more poor neighborhoods than 30 years ago. Wages have definitely not increased at the economic growth rate. If there is economic growth, it has benefitted the wealthy.
Saturday 2 May 2020
Disney World trespass suspect viewed Discovery Island as 'tropical paradise,' authorities say - Fox News. The suspect said he had life long ambition to take his family on a cross country drive in a station wagon to a theme park.
Fact check: Vitamins C and D are not used in 'conventional treatment' of coronavirus - USA Today. This "fact-check" article promotes Remdesivir, but describes vitamin C and D treatment as "extremely misleading and potentially very dangerous". "The data shows that remdesivir has a clear-cut, significant, positive effect in diminishing the time to recovery," Dr. Anthony Fauci, the director of the National Institute of Allergy and Infectious Diseases, said Wednesday." ...
.... NIAID report: "Preliminary results indicate that patients who received remdesivir had a 31% faster time to recovery than those who received placebo (p<0.001). Specifically, the median time to recovery was 11 days for patients treated with remdesivir compared with 15 days for those who received placebo. Results also suggested a survival benefit, with a mortality rate of 8.0% for the group receiving remdesivir versus 11.6% for the placebo group (p=0.059)." It is better than nothing, but doesn't look like a cure.
From 28 April 2020: Data on 53 Patients Treated With Investigational Antiviral Remdesivir Through the Compassionate Use Program Published in New England Journal of Medicine - Gilead: "Treatment with remdesivir resulted in an improvement in oxygen support class for 68 percent of patients (n=36/53) over a median follow-up of 18 days from the first dose of remdesivir." That took 18 days. No placebo comparison.
From 23 April 2020: Gilead Sciences Statement on Data From Remdesivir Study in Patients With Severe COVID-19 in China - Gilead: "The study was terminated early due to low enrollment and, as a result, it was underpowered to enable statistically meaningful conclusions." If it showed results in a reasonable amount of time, it probably would not have been terminated.
White House blocks Fauci from testifying next week - CNN.
"Running A Marathon" - Jim Gaffigan (Quality Time) - Youtube.
Action replay. The Nasdaq index in blue on the FRED chart below still has to fall -76% (on this arbitrary scale).
December last year the US consumer was still considered "strong". On the FRED chart below the 2008-9 retail sales in blue, and the stock market in red both fell, now the stock market stays high.
The FRED chart below compares the price of gold in yellow with US M3 money supply in blue, and inflation in red. The gold price suggests the M3 money supply is a better indicator of the actual inflation rate.
That would also explain why nominal economic output (Gross Domestic Product) divided by M3 money supply (as inflation measure) in green matches Rail Freight Carloads (physical units, which can't be manipulated like statistics in dollars) in blue. The Real Gross Domestic product in red does not match. In the equation: velocity x money supply = real economic growth x inflation, money supply growth = inflation, and the economy declines with the velocity of the money flow.
Friday 1 May 2020
Pandemic Double Takes. 1918... Or 2020? - Forbes.
On Twitter: Adam Tooze @adam_tooze: "Contrary to previous experience, since 2018 Brazil has experienced a dramatic devaluation shock with virtually no inflation response so far. Via @SoberLook. What happened? Serious question." chart.
The Real Top Ten Mistakes of Back to the Future Revised In HD - Youtube. Funny.
On Twitter: Gold Telegraph @GoldTelegraph_: "MUST WATCH. For those who might be wondering: “Where does the Federal Reserve get all the money that they inject into the market via QE?” A blast from the past explanation of how it all works.": video.
On Twitter: Lord Polemos @LordPolemos: "As much as the FED in the United States is printing it does not hold a candle to other central banks". chart.
On Twitter: Trevor Noren @trevornoren: "US companies sold almost $32bn of junk bonds in April, marking the biggest month of fundraising by low-rated issuers in three years as support from the Federal Reserve spread through credit markets" https://ft.com/content/bf954b18-302f-4c97-94a7-fc3f0b2a76f9: chart.
U.S. emergency approval broadens use of Gilead's COVID-19 drug remdesivir - Reuters. "Data released this week from a trial by the National Institutes of Health (NIH) in the United States showed that remdesivir reduced hospitalization stays by 31% compared to a placebo treatment, but did not significantly improve survival."
Charter Communications (CHTR), cable & satellite. results Q1 revenue +4.8%, shares -6.5%, dEPS from $1.11 to $1.86, shareholder equity -5.4% to $173 per share, price/profit $495.23/$8.23 = 60, price/sales $495.23/$218 = 2.3, net profit margin 3.4%. Earnings yield was 1.7%, but they bought back 6.5% of the shares (price unknown), thus reducing shareholder equity.
What is noticable about the peasants who are standing in lines for food, is how much clothing they are wearing, and now their faces are also covered with a mask. To improve resistance to virus infections, people need sun exposure to produce vitamin D.
The big deflation fear is resurfacing.
From 18 Mar 2020: How Did the Gold Standard Contribute to the Great Depression? - History. "A slowing economy combined with the stock market crash of 1929 and a subsequent wave of bank failures in 1930 and 1931 led to crippling levels of deflation. Soon, the frightened public began hoarding gold." Today people want to hoard gold because of inflation, not deflation.
The Money Supply and the Banking System Before and During the Great Depression - San José State University. "The money multiplier was decreasing in the early 1930's because of increased cash holding by the general public and retention of increased excess reserves by the banking system." A distinction must be made between cause and effect. If the economy weakens, requiring banks to hold more money in reserve makes sense. Today central banks are trying to force the public to borrow more. It has made matters worse.
There was deflation from 1927 to 1933, at an average -4.8% per year. The M2 money supply also declined by -5.3% per year. Reserve banks want to avoid deflation because of the myth that consumers would delay their spending, as goods are getting cheaper. Who wants to wait a year to enjoy a new purchase, in order to get it -5% cheaper?
The reason for depressions is that people have lived above their means, either through debt, or investment gains in stock market or property bubbles. They have to pay for the excesses by lowering their standard of living, which appears as a recession or depression relative to the preceding period. Interest rates should have risen to suppress the debt or the bubbles. Deflation or inflation makes no difference, nor can central banks prevent it. The only way to lessen the impact is greater economic efficiency, such as an industrial revolution. Redundant workers like those in government must be reduced. To improve efficiency virtual monopolies like Amazon, Apple, Facebook, Alphabet (Google), Microsoft, Visa/Mastercard, etc. should be split up, as they suck money out of the rest of the economy (like Standard Oil in 1911).
The FRED chart below shows inflation in red, and M2 money supply in blue. From May 1947 to Feb 2020 deflation only occurred briefly (red line dipping below zero). US M2 money supply is now $16,870B compared to $43.7B in 1926. That is 6.5% growth per year. From 1980 the growth was 6.2% per year.
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