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Gates and the Coronavirus: https://www.instagram.com/tv/
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ Today Trump was asked does the buck still stop in the Oval Office and how would he rate his response to the virus crisis. He said the buck does stop with him and he gave himself and his team a 10. He then began to explain.
I wish he had ducked giving a number and had stuck with his explanations which were really plausible.
He pointed out his administration inhabited a system that was not designed to confront what we were experiencing so they have had to totally redesign the response protocol. That takes time.
Secondly, they are designing a protocol that will be available when a future circumstance returns.
Third, the administration was moving swiftly to get in front of the curve and he encouraged governors to move independently if they could accommodate their needs faster rather than depend upon the government.
Finally, he stated co-operation with states and the federal government were basically good and everyone involved were on the same page.
Trump is always defensive and hurts his case but he also gave rational responses. As he responded to the question, which was appropriate, I thought of the French and their Maginot Line.
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I am reluctant to talk a lot about the market because I do not have answers. I do believe the problem began, not from an economic standpoint, but more from a health standpoint and this particular virus is new and no one,therefore, is immune.
This is a positive because when the virus crisis is contained the recovery should benefit from this fact. That said, I do not expect consumers will rush out and start spending but the market should respond favorably because it is a barometer not a thermometer and markets discount the future.
Assuming warmer weather might have a positive effect then we might be some three months away from a turn in the recovery curve. If that is a reasonable assumption one could begin a measured program of nibbling every time the market is down. For example: If the market goes down 60 times in the next 90 market days and someone has $100,000 to invest they could spend 1 1/2% on the down days and then pray. There is no way to time the market and they should not spill their guts out of fear or panic. The horse is already out of the barn.
A very insightful article about future markets. I particularly agree China will pay dearly for unleashing the Coronavirus on the world.
Though nothing may come of it, I would like to see ten or more western, African, Asian and South American nations bring a law suit for damages in The World Court. It would expose their Communist Government in ways that could shake their leadership exposing them in ways the Chinese people would see and realize what contempt their leaders have for them.
Crisis Means a New Business Era
Cheap energy, a shift from China and remote work will all shape the long-term economy.
By Andy Kessler
The junk-bond-financed $6.75 billion buyout of United Airlines collapsed on Friday, Oct. 13, 1989. The stock market immediately dropped 191 points or almost 7%, equivalent to a 1,500-point drop today. Scary.
Rod Berens, head of research at Morgan Stanley at the time, called a departmentwide meeting after the market closed. I dreaded going. I had a list of tech stocks I was recommending that got killed that day. When I showed up, I noticed several cases of champagne—a weird way to celebrate the loss of wealth. But why not? I grabbed a glass; it was Friday.
And then my boss headed toward me. Uh oh, I thought, he’s going to fire me. Instead, he smiled, gave me a high-five and said, “Congratulations, now it’s your turn,” and clinked my glass. Talk about confused—one of the worst days in my professional life and I get congratulated?
The current market turmoil tells me a new era is breaking, so question everything. Will cable, energy, mobile and social media ever come back? And if not, what’s next?Well, the knee-jerk reactions will come first. Most think the 2003 SARS epidemic in China ushered in that country’s era of e-commerce, but it was going to happen anyway—the crisis only accelerated it. So be wary about talk of robot and drone deliveries. It may come to that if the virus spreads, but the economics still seem far out.
Will energy stay cheap forever after this week’s devastation? I doubt it, but the economy can finally benefit from fracking’s cheap natural gas. I’d bet so-called clean and renewable energy was set back a decade by having to compete with lower prices. Cheap fossil fuels may also push back any new adoption of carbon-free nuclear energy.
More interesting is the emptying of countless college campuses, sending students home. Classes will be online-only until further notice. Smart. But at some point parents will surely ask, “Why again are we paying 78 grand a year?” Is the end of universities far behind?
Similarly, lots of companies are telling employees to work at home. Will an era of telecommuting and no rush-hour traffic finally arrive? Maybe not. Recall that early in Marissa Mayer’s tenure as Yahoo CEO, she banned working from home because so many people were, as they say, mailing it in.
The end of China’s dominance is certainly coming. No one will ever again concentrate manufacturing in China alone. Vietnam and other countries with low-cost labor will benefit. Maybe this is Africa’s moment. Related: A louder globalization backlash may arise again—but since consumers like cheap goods, it will flame out.
Another observation: Interest rates and the Federal Reserve may be increasingly irrelevant. The Fed’s job seems to be to ensure the availability of Treasurys—mostly, as we wrote last September, as collateral for the repo market, which finances an increasing share of global trade. The $500 billion announced Thursday is encouraging.
What about mobile and cloud computing, and even the stock market and its trillion-dollar valuations? It’s worth asking, as venture capital and private equity using cheap debt are keeping companies private longer, or forever. Others think it is value stocks’ turn to shine, but that usually requires a period of inflation that I certainly don’t see coming. Quite the opposite.
No, growth will still rule, but with a different set of leaders. In the bio world, DNA sequencing and Crispr gene editing are starting to ramp up. Health care will be transformed by new ways to detect and treat cancer and other ways to cure previously incurable diseases like sickle-cell anemia.In the high-tech world, mobile seems tired. Apple’s hottest product is AirPods Pro, those Star Wars-inspired white sticks hanging out of everyone’s ears. That’s an accessory, not an innovation. Here’s hoping for some knock-your-socks-off new mobile products. Note also that we’re only about a third of the way into the cloudification of enterprises. And we’re only beginning to master machine learning and artificial intelligence, with their ability to find patterns that humans can’t. I think the next tech era will be driven by implementation of AI-infused systems into every business.
Finally, I asked the man himself, Rod Berens, whom he’d high-five today. He says that the past 30 year’s tech abundance means the developing world’s billions will finally see productivity improvements and attract an increasing share of investment. That’s probably right.
New eras are notoriously hard to predict. So instead of focusing on which cities are quarantined, start thinking about what’s next. Very few investors do.
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Global warming is not settled science:
This appeared in The Oregonian, on July 13, 2014:
Guest columnist D.W.Nebert, MD
Daniel Nebert, MD, is professor emeritus at the Cincinnati College of Medicine and Cincinnati Children's Hospital.
The 2013 report by the United Nations Intergovernmental Panel on Climate Change (IPCC) states that "global warming is unequivocal and human influence has been the dominant cause since the mid-20th century". During his State of the Union speech (January 2014), Obama declared "the debate is settled. Climate change is a fact." As a physician-scientist who has carried out basic research for more than 50 years, I agree that we should not pollute the planet unnecessarily; however, I find these statements far beyond credulity!
Estimates of numbers of scientists who "believe" in global warming range between 5 per cent and more than 99 per cent. Those in disagreement have been called "skeptics", "deniers", and "nonbelievers". However, "believing" and "denying" are terms used in "consensus science", not in "basic science".
What's the difference? Basic science is defined as "knowledge about, or study of, the natural world based on facts learned through experiments and observations". A theory (hypothesis) is tested by performing experiments and interpreting results either to prove or disprove the hypothesis in a way to minimize uncertainty. It's best if those doing the experiments are "blinded", i.e. samples are coded so that those doing the experiments are not biased toward any expected outcome. These experiments must also be repeated by other groups to confirm the original findings. Only after data have been properly collected, vetted, and thoroughly corroborated, do we have a conclusion––with the least amount of uncertainty needed to establish a scientific fact.
In contrast, consensus science is "what the majority in a particular field of study agree upon might be true". The consensus may or may not turn out to be confirmed by further research; for example, 15 years ago simulation models predicted that all Arctic ice would disappear by September 2013. In fact, Arctic ice thickness doubled between summer of 2012 and summer of 2013. Other forecasts 15 years ago included substantial melting of Antarctic ice, warming of global temperatures, and rising sea levels. Although CO2 levels have risen during the past 15 years, the Antarctic ice shelf has become thicker, there's been no increase in global temperatures, and (if anything) global sea levels have slightly decreased. Thus, these simulation models included much uncertainty and, to date, all have been proven to be invalid.
There are many instances in which "established science" has been overturned by further experiments. In other words, science is never completely irrefutable.
For example, "mad cow disease and the human equivalent Creutzfeldt-Jakob disease––were degenerative brain diseases of unknown cause. After ten years of experiments, neurologist Stanley Prusiner reported in 1982 that these diseases were caused by a virus-like protein which he named "prion" (derived from "protein" and "infectious"). Almost every scientist laughed, because "viruses had been well known to always be made of DNA or RNA". Prusiner persisted, however, because he was convinced the consensus was wrong. He proved to be correct and was awarded the 1997 Nobel Prize for Medicine or Physiology for his novel discovery. Prions are now realized to affect tissues other than brain and, in fact, are found even in lower organisms such as yeast.
For decades, peptic ulcer was believed to be caused by "mental stress" and excess stomach acid. Following many years of experiments, physicians Barry Marshall and Robin Warren reported in 1985 that peptic ulcer was caused by Heliobacter pylori. This finding forever changed the field of ulcer research: instead of treating ulcers with antacid medications and/or surgery, antibiotics could now kill the bacteria and cure the disease! Marshall and Warren were awarded the 2005 Nobel Prize for Medicine or Physiology for this breakthrough.
It is a fact that Earth's climate has been changing for 4.5 billion years. Indeed, fossil records in the Americas over the past 16,000 years have confirmed countless serious droughts lasting many decades, sometimes hundreds of years. Climate is measured in centuries; today's global warming "scientists" are talking about weather (measured in months or years). Is it reasonable––when U.S. debt is increasing at a rate of $3.7 billion each day––for any taxpayer money to be spent on consensus science speculation?
This appeared the next day, in response to Dr. Nebert's article:
Thank you Professor Nebert.
You correctly point out that science is forever changing, just like our climate. If science is to continue making the remarkable progress it has over the last four centuries, it must never be allowed to fall into a look-alike that amounts to no more than tall tales, politics, and sugar pills. The original scientists who formed the first scientific society, the British Royal Society, understood this and adopted the motto "Take no one's word for it" to express their determination to avoid the domination of authority. They were resolved to keep the political and religious spheres from telling them what to believe, as had occurred with Galileo decades earlier.
Unfortunately, science, like all human activities, is subject to the encroachment of corruption. When vast sums of money hang in the balance, as for instance in drug trials, there is the ever-present danger of deliberate cheating or just inadvertent skewing of the data toward a positive result. A recent study of journal articles by Dr. Patrick Michaels of the Cato Institute showed a tremendous skewing of published articles toward positive results likely to further careers. The medical community has been very wise to use double blind studies to nearly eliminate such bias. In other fields, such an approach is largely impractical.
How, then, is science audited? In many cases today, it is not. Papers that produce the results that scientific journal editors support get only 'pal-review' while papers that run contrary to a consensus are relegated to the rubbish bin. This is especially true of journals like Nature and Science.
Real science MUST be audited by a free and open discussion of the issues. When we are working on the frontiers of science, there are and should be sharp differences of opinion that get a full airing. At the just-concluded 9th International Conference on Climate Change in Las Vegas, speakers and their colleagues differed sharply over terrestrial versus extraterrestrial origins for the climate variations we have observed recently. Astrophysicist Dr. Habibullo Abdussamatov from St Petersburg, Russia argued for a strong solar component while Professor William Gray from Colorado State argued the case for an ocean origin. Many others took varying positions in these two camps.
No one argued the case for Catastrophic Anthropogenic Global Warming, although many thought that there might be a small anthropogenic component from man-made carbon dioxide.
Why was the fanatical warming crowd absent, although invited?
Because they know that their arguments cannot stand up to free and open discussion. And if they were to try and lose, they would face severe retribution from the government's contract monitors who enforce the 'settle science' demands of the Obama Administration. Losing in front of some 55 journalists from around the world would have been a financial disaster for them.
Again, THANK YOU, Professor Nebert for recognizing the similarities between medical and climate science.
Gordon J. Fulks, PhD
(Physics) Corbett, Oregon USA
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Double standard reporting? https://issuesinsights.com/
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Ross Rant- somewhat disjointed:
Ross Rant- somewhat disjointed:
The whole developed world has finally come together to bring massive fiscal stimulus. The EU is proposing to have a massive fiscal program equal to 1% of EU GDP. That is a major boost to their economy depending on how they do it. The central banks are all feeding the capital markets with liquidity. The Fed infused $1.5 Trillion to the bond market which made a big difference to stop any slide toward illiquidity. They are now doing much more in an unprecedented way with QE and zero fed funds rate to make certain the bond markets remain liquid. The major central banks have coordinated and made sure the dollar swaps market is sound and liquid. That is critical to trade and cross border funding. This time they are ahead of the problem compared to 2008, and there are no issues with the banks nor interbank liquidity. They are making sure the repo market is working well so the non-banks can continue to operate properly. There are no issues so far with home mortgages. That makes a huge difference from 2008. The financial system now is very strong. Note that the ten year rose from .3% to almost 1% in days. That is why I warned that if you were buying Treasuries at the low point you would get hurt. As the fiscal programs kick in, and as the Fed and other central banks are easing further, you are likely going to see rates rise over time as the market will begin to perceive that the economy is going to survive. You willpossibly lose more money as rates return to some semblance of rationality.
Even if there is a recession in Q2, which is now almost certain, we will emerge in Q3 with GDP growing again, and the stock market regaining a material amount of the lost ground by year end. The virus peaked in China, S Korea, Singapore, and will do so here soon as the weather warms and as mass containment takes effect. China is reopening and should be back in almost full production in two weeks or so. They just need to get workers back to their work places so they can produce. US banks are still very strong and will make a lot of accommodations to borrowers for the short term to get to the fall and growth returning. The key this time is that the banks are very liquid and safe, and there is no issue in the interbank loan market like in 2008. That means banks will keep struggling industries alive along with the government programs about to be announced. There will be no credit crunch as we saw in previous economic downturns. Credit spreads have not widened a lot in most cases, other than lowest grade bonds. The continuing availability of credit at reasonable spread pricing is key to a good recovery, and that seems to be what the Fed and Treasury are targeting to happen. A lot of lessons were learned in 2009. Virtually everyone expects there will be a material turn around by Q3, and that optimism is critical to having a good recovery. 2008 has made a huge difference in getting most people to understand that this too will end, and the recovery could be quite substantial. The tax cuts, dereg, and pro- business attitude in the administration is the opposite of Obama Biden who wanted to punish banks with multi-billion dollar fines, instead of lending support.
If you wondered why we need huge money center banks, this is why. If they were broken up as the Dems demand, we would be in real trouble now in the capital markets, and small business and individuals would be hurt as they were in 2008-9. The Dems have no understanding of how banking is key to the economy, and why crimping them and breaking them up is a stupid mistake. People will travel again in a few months. The airlines will get some temporary government loans or guarantees, but low gas prices are going to make a huge difference to help the airlines recover. Tax credits will help a lot of struggling companies so long as they are accompanied by extension of credit from lenders immediately to get by until the tax credits kick in from a cash flow basis. If companies are losing money and do not owe taxes then the credit will not be of any value. There needs to be additional short term targeted, low interest loans, or similar, as well. The most critical thing is to make sure everyone still has a paycheck every week even if laid off. Consumers have a lot of good things happening with low gas prices (oil under $30) and ultra-low mortgage rates. The stock market will eventually have a good recovery, and that will make consumers feel a lot better, and in Q3 spending will increase again. There is going to be a lot of pent up spending by year end. I cannot name the bottom, but we might be close, or not. The market will continue to be irrational until there is some better handle on how bad things get. Once all those events are back fully, and people are back in their offices, there will be huge pent up demand and attendance and spending. Clearly the federal government is going to have to implement much more subsidies and stimulus soon. This is a key week in Congress for that. A lot of rich guys have been selling stocks this week to lock in tax losses of major size then reinvesting. That pushed down stock prices further. That may be nearing an end. Companies will do major buybacks at this level. Another major difference this time is that many corporations have substantial cash reserves from strong profits which they are now going to be using to sustain staff with full wages and benefits. That has never been done before on a mass scale like we are seeing now. It is a direct subsidy to wage earners instead of depending on some wasteful government program. There is also the new back up unemployment and tax credit program to allow most employees to continue to get paid in full. That, along with the help for struggling industries like airlines, and hotels, will make this recovery faster and different than any before it. By Q3, when the economy is back on track and unemployment is not very high, Trump will look like a good leader and he will win even bigger. Congress needs to act, not go on a break-they just look like even bigger idiots than we know they are.
Did we hit bottom? Possibly, but we can’t know yet. Fear and algo trading is not able to be forecast. We need to see a few days of big ups in a row, and more evidence the government programs will bail out the industries most harmed, and the workers who get laid off will get paid. If those two things happen, then we could see the S&P back over 3000 by Q4, but impossible to know. The mass public response to isolate everyone is unprecedented, and will turn the curve of infection hopefully in two or three weeks, and then the stock market takes off again. It seems almost everyone across the country is doing the things they ask and staying away from most other people. This will not only stop the virus, but will also mean a far better flu season. From what I hear, and witness, virtually everyone is complying. Working virtually has made all the difference this time. It changed everything in terms of allowing most business to continue even if at a lower pace. Schools are continuing with online classes. That has never been done before on such a mass scale. I wonder what the diversity, inclusion, sex harassment, etc. administrators are going to do to keep busy now. Likely they will claim the online classes are racist since they will claim not everyone has the same online access, which is BS. Or they will claim the diversity students can no longer get their remedial tutoring so have been racially harmed. This is great. Now there can be no racial preference in class, as there is only the online class. Maybe the computer can issue grades and really show the diversity/ inclusion industry is BS. The Hamptons are like August right now, and the rental market is on fire there as Manhattan people are taking their kids and going out there to pass the time until this is over. Maybe this will reverse the decline in Hamptons real estate values that has been taking place since SALT.
The press still rushes to find some reason to attack the administration, and they announce there was one death in some state, or one cop in LA who got sick. Governors are racing to look like they are taking action, even if everything that they order might not be what is required. Net of the nursing home, there are only 40 deaths since the beginning , in a country of 330 million. Meantime there were multiple deaths from overdose by young people. There were likely 200-300 flu deaths nationwide on any given day. Trump is doing all the things he needs to do to shut the borders and have people stay home to look like he is the leader everyone wants.. By enlisting the private sector he has changed the game of response. The trade being made is harm the economy vs a few more deaths of people who were likely dying anyway from something else. That may seem cold, but it is a simple cost benefit look at what is really happening. I have never seen anything like this in my lifetime. 9-11 was a shorter disruption. The good news is most of my group continues to play tennis every day even though the club is otherwise closed. Because one doctor in the group said he was dropping out, some others suddenly did, but there are still a bunch playing. We just do not kiss at the end of a set. 
The other sign we might be near the bottom is the mad rush to sell stocks and buy bonds by retail investors. That is often the bottom. There will be a huge rush of subsidies, and all sorts of payment programs for workers in the next couple of days which will buoy the market. Nothing is rational right now due to the unknowns.
If you feel you lost a lot this past two weeks, relax, some professional investors with big reputations lost as much a 40% it is rumored. Stay safe, relax and this too will pass. As my mother advised me when she was 99, given time all will work out and be OK.
Biden lost Texas and some other key states in the debate when he said no more fracking, major gun control, and other similar left wing things. He really did say he wanted to cut SS, and it is on tape. If Trump just plays those tapes Biden loses. The press rushed to tout that Biden made it through without making a mental blunder. What a measure! He committed to have black woman on SCOTUS. That cost him millions more votes. And that is before he stumbles, bumbles and has memory loss.
Stay safe and busy, and just wait for your portfolio to recover.
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This from my number two daughter :
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