Vax #2 Hype & A ’62 Flashback!
Seat belts on for market hype deluxe? Moderna says its vaccine is 94.5% effective at preventing Covid-19. Remember in last week’s round of virus hope that the RNA answer had to be kept super cold? Well, this one seems a little more practical as Early Data Suggests Moderna’s COVID-19 Vaccine Is Nearly 95% Effective—And You Can Keep It in the Fridge. Well, your doctor, then.
Is the planet saved? No, not especially. We remember Ma Nature always has another variant in the wings. And – as pointed out in this Wall St. Journal article, “immunity” may be fleeting since some people are getting the disease twice. Hard sell of the vax if so. That fear also surfaced in a story Friday that asks whether you might get Covid twice.
That said, the stock market is ripping early futures (+500), but it’s wildly over-hyped. The damage from the disease has already set the stage for the Second Depression. Construction of high-rise office buildings has fallen, with no jobs growth (people overlook that we’re STILL down 8.738 million jobs compared with year-ago levels). Political divisions not healing – see DC clashes overnight – and fresh lockdowns underway…
We see a Reality Gap between the facts of today (like with Washington State relock) versus the hype of “sometime next year.” Color us skeptical.
Overly glum? Not so: A ‘huge wave of evictions’ is possible in January. As the U.S. surpasses 11 million coronavirus cases. Oh, and let’s not overlook WHO chief warns that vaccine alone wouldn’t end COVID pandemic.
People on Wall Street who are buying at the peak are a common feature of bubbles. The Rich need patsies to dump their hype-heavy, debt-saturated, dividend-free paper on.
All Feeds the BBIH
Biggest Bubble in History. We love bubbles – many fond memories….
You may not be old enough to remember the World’s Fair in Seattle in 1962. But, one of the main attractions was in the former Washington State Armory building at the Seattle Center that became the Food Court for the Fair. Over on the middle east side of the building was thing marvelous group elevator. With a plastic “Bubble” over it for passenger safety, it quickly became the Bubbleator.
Here’s a photo of it – borrowed from Wikipedia – which seems to trace back to the archives of the Seattle Museum of History & Industry (where Pappy was a volunteer docent at MOHAI for several years thanks to his remarkable memory…).
People attending the Fair would come into the former basement of the armory at the northeast corner and then watch in awe as this large elevator lifted them into the Food Court. First step out of it – Ure slapped in the face with the smells of cotton candy and every fast food that could be shoe-horned into the Seattle Center, why it was amazing.
Old News Man Nostalgia? Indulge me. One of the things that “made the World’s Fair work” (The Food Court, the Fun Forest, and the whole experience of the World’s Fair) was a remarkable PR man who was always coming up with great story ideas for me. The late Dave Lempesis. Always went out of his way to find “only the best” for the inquiring young reporter. One of those “shining light” people you meet in life. The kind of people there are never enough of, and once found, too quickly go. But I digress. Other than suggesting a future World’s Fair build a Hype-O-Lator.
Why share this corner of history with you? Because when I look at the Bubbleator and I looked at how the pre-opening chart for the markets looks today, I’m struck by the uncanny resemblance. I’m just sure you’ll see it at once:
To our way of thinking, there is no rational justification for present levels of market pricing. Like the Bubbleator, it’s part spectacle, part amusement, yet somehow familiar….
However, much to the chagrin of Mr. Ure’s trading account balances, the market has been woefully disrespectful of economic realities.
This market is no longer driven by sound investing principles. Instead, it’s a con-job, a super-bubble waiting for collapse. Yet, there are the futures prices and there’s the Bubbleator. Work it out for yourself.
Once upon a time, people bought stocks because the company would have large increases in sales dead ahead. Today, with population at saturation levels, there are few profitable voids in physical goods. So, we’ve turned to the game of “optimizing.” Everyone is getting on the gerbil wheel Mondays like this trying to out-run their “next-door gerbil.” All totally frantic. But we should rudely ask sometimes: Have any of the gerbils noticed they don’t seem to be getting anywhere?
If there was the prospect of dividends? Or, if we living in a world where bonds paid a livable return…maybe “mounting the wheel” would make sense. To me, this particular Monday doesn’t seem to warrant the effort. Wheels will be there Tuesday.
Empire State Data
Not that the market needs another huff on the financial crack pipe, but here’s the latest NY Fed Empire State Manufacturing tease:
” The headline general business conditions index fell four points to 6.3, pointing to a slower pace of growth than in October. There was a small increase in new orders, and shipments were modestly higher.
Looking ahead, firms remained optimistic that conditions would improve over the next six months.”
One vax press release creating 500-points of Dow gains? Pinch me so I can wake up.
Well-Fed Paranoia Dept.
One thing to place a small side wager on? (Not to be too paranoid, but let’s for the sake of argument say there really is a global biological war underway…): I’d put a $20 on the idea of a new – novel – semi-related but much higher kill-rate disease being discovered in the next 90 days.
Because if it looks like a country (US) that was attacked by a bioweapon has an effective counter measure (and record highs in its financial markets), then would an adversary see this as the time to “up their game”? In terms of conflict, CV-19 w0uld have only been a nuisance in the aftermath. Something more deadly would be a bigger problem on the backside, but CV-19 isn’t getting the theoretical adversary the kind of results they were looking for.
Or, putting in artillery terms: Maybe CV-19 is just a “ranging shot.” Hope like hell it’s not…
Slamming Central America as a cat-4:
Wonder if this thing could “re-fire” over on the Pacific side? Details this weekend?
Things in Passing
These won’t really change your life (if you live the duck, cover, and Clorox) but notable:
While the getting’s good: Jay Clayton, S.E.C. Chairman, Is Stepping Down.
Something for the next farm bill? Regulatory maze, money prevent craft marijuana farmers in California from offering own brands. Despite all the liberal hype, we don’t see Slow Joe and Kam Slam legalizing nationally. Just too much dasch to be made on working contributions and lobbyists. Send some to pops.
All talk? Trump Lawyer Sidney Powell: “We’re Getting Ready To Overturn Election Results In Multiple States”. Call us when it happens…
Say, here’s a story worthy of NY Times coverage: To Scare Off Wild Bears, Japanese City Calls In Robo-Wolf. AYFKM?
Invest in the Obvious: The story Tyson Foods beats sales estimates on strong pork, beef demand caught our eye. A couple of times in the past week or two we’ve done the new Tyson “slow cooker meals” – Wal-Mart’s carrying them. Beef or Pork along with veggies (carrots, onion, potatoes) and they pretty good. Pot roast dinner for 3-minutes in the kitchen. Elaine watched in shock – as she does when Mr. Stopwatch comes in… Nothing broken in the blur.
To finish, remove cooked food, cover. Boil juices and thicken with oat flour to gravy…yum!
War is Coming. On the simple theory that governments don’t spending money on things they’re not planning to use. So when Forbes writes up “The Chinese Air Force Sure Is Buying A Lot Of Bombers” we not only pay attention, we also remember while coastal cities out West may have seafood, they also have bull’s eyes on ’em…
OK. Enough out of Mr. Cheer. Off to the pot roast left-overs and then a full to-do listwith 10-hours of crap on it. You can tell when the temp is under 40 F here when Zeus-the-Cat comes into the office and parks in front of the heat. Frost on the pumpkin coming into view… Zeus’ seasonal hang-out marks this as the first day of winter. Screw what the calendar sez…
Write when you get rich,