April 27-May 1, 2020 

a look back at this week’s essays… 

The Corona Economy, Part III

What the Media and Our Representatives Don’t Understand 

2020 will be a watershed year for the US. In terms of the usual data points that measure economic health, it has already neared or surpassed numbers that are as bad as we’ve seen in 100 years…. Few in Washington or in the mainstream media are alarmed about this. The attitude seems to be: We’ll deal with it after we defeat the coronavirus.

In fact, an ethos has spread that is disturbing.

Click here to read more.

 

The Corona Economy, Part IV

War, Debt, and the Eve of Destruction 

The history of US debt is the history of its wars. Before the Civil War, the national debt was relatively modest, because before then there was no income tax. Wars were funded with sales taxes and the like.

The Civil War changed that. Click here to read more.

 

The Corona Economy, Part V

What Will America Look Like in 2021? 

Like the spectral enemies we fought before it, COVID-19 is a formidable killer of human beings. And like the wars against poverty, drugs, and terrorism, the cost of the War on COVID-19 is immense and will be ongoing. What irks me is that most of the perfectly intelligent people I speak with have no idea how expensive it will be. The fact is, it will likely eclipse the cost of all previous wars.

Let’s add up the damage so far…

Click here to read more.

 

quick quiz  

  1. How much do you remember about this week’s “Words to the Wise”? Use each of these words in a sentence: 

* solvency (4/27/20)

* deus ex machina (4/29/20)

* carnage (5/1/20) 

  1. Fill in the blanks in this week’s quotations: 

* “_____ is a system whereby a person who can not pay gets another person who can not pay to guarantee that he can pay.” – Charles Dickens (4/27/20)

* “I found this _____, doubled, wrapped in a big bow waiting for me as I stepped into the Oval Office.” – Barack Obama(4/29/20)

* “Unemployment is skyrocketing; deflation is [here] for the first time since the Great Depression. I don’t care whose fault it is. It’s the truth.” – John Mellencamp (5/1/20)

  1. Are these statements True or False? 

* The interest on Treasury bonds is 100% tax-exempt. (4/27/20)

* There are two kinds of Treasury notes: T-bonds and T-bills. (4/29/20)

*The Social Security Administration was established during Herbert Hoover’s administration. (5/1/20)

 

recommended links from this week’s blog 

* Rockwell International decided to get into the heavy-duty automatic transmission business and they wanted an introductory video. What they saw, initially, was this rehearsal for camera, lighting, and stage crew – strictly off the cuff. No script. Nothing written down. And it became a legend within the training industry. Click here to watch it.

* Good corona humor: “Adley on Instagram” Here

* “A Gaucho Appears in the Distance, Riding Hell for Leather…” by Bill Bonner

“There’s an advantage to spending time in a place like Argentina,” Bill writes. “It’s been through these things [economic, political, and social ruin] before. In fact, it makes a habit of it.” Read the entire essay here.

* Very interesting. With all the research I’ve been doing, I didn’t know some of these “facts.” Here

* “My Restaurant Was My Life for 20 Years. Does the World Need It Anymore?” in The New York Times

“On the night before I laid off all 30 of my employees,” Gabrielle Hamilton writes, “I dreamed that my two children had perished, buried alive in dirt, while I dug in the wrong place, just five feet away from where they were actually smothered. I turned and spotted the royal blue heel of my youngest’s socked foot poking out of the black soil only after it was too late.” Read the entire article here.

* Great song… great ensemble performance. Here

 

Q&A 

Your Question: 

I wonder if any of the analysts you talk to have looked to see what if any parallels in market action/reaction there was in ’29 as compared today’s events. I would wager human nature being immutable that the two may graph similarly.

I note that quite a few are theorizing that timing may be right for a few good stocks to be in buy territories. I am actually too chicken to sell everything, but I honestly believe this is going to get worse and the turnaround is going to take years. The more money the Feds throw at it, the longer it will take to recover.

My Answer: 

Re the ’29 Depression: The analysts I talk to are a motley crew. But one thing I’m convinced of: All the great economic collapses have the same essential causes. Unbridled debt, uninhibited spending, and foolish speculation.

Re the stock market and your/my stock portfolio: I’m not selling, but I have a long-term perspective (10+ years) and I don’t own many growth stocks. I do think there are good speculations out there, but I’d never risk more than 1% of my investible net worth on them. I invest in speculations for ego satisfaction, not to preserve or enhance my wealth.

Have a question for me? Submit it on our Contact Us page. 

 

For a look back at the stock market, click here

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