Manipulation and Surprises
Over the past few months we have outlined the manipulation led by the FED and Treasury and how this will not end well. We continue to look for mid-October as a date to watch and target for market declines to crater. By the middle of September it should be evident that the much talked about third quarter economic bounce didn’t happen. It will be a surprise as the view that speculative money will save the day runs out of traction.
The COVID-19 Drill
We also have been doing the COVID drill. Take care of yourself and be safe. In our view the continued downplaying of the virus is the core problem. This downplaying starts at the top with Trump and goes down to the very core of his base in all of our communities. If you follow the Nextdoor app for your area or facebook to follow your supposed friends, you will witness an unbelievable level of denial.
This is a virus, kind of a high powered cold that if you are unlucky will kill you. The fact that more and more observation and research shows the antibodies only last for two or three months is my big concern. It means that initial vaccines may not be that effective. There is little protection other than isolation and masking at this point.
The New Normal should be the Emphasis
A big picture approach to redeploy people to areas that have economic need is essential. Right now all the emphasis is to send money to people who work in areas with little economic need.
Also note economic numbers are being presented on a month over month basis which is kind of a meaningless attempt to provide a positive spin on things. In order see the real picture you will need to construct your own numbers with a December 2019 base. We will be doing that over coming days.