The Japanese government wants its corporations to diversify their supply chains away from China. The government is offering to pay businesses to do just that. The preferred method is to bring business back to Japan, but the government will even pay some firms to move their Chinese operations into other countries. South China Morning Post reports: Japan has earmarked US$2.2 billion of its record economic stimulus package to help its manufacturers shift production out of China, as the coronavirus disrupts supply chains between the major trading partners. The extra budget, compiled to try to … [Read more...]
Archives for April 2020
Coronavirus is a Wake Up Call for the Irresponsible, Here’s How to Regain Control
Coronavirus Infects Stock Market: Part XXVII You’ve told some heroic stories about your loved ones on the front lines and your children who are doctors and nurses working 19-20 hours days. Some of you who work in hospitals now are telling me it’s a war zone, especially those of you in New York. Thank you. As the number of Americans losing the battle is peaking, I think all of us are thankful for the good that we have in our lives. As I wrote to you yesterday, it is shocking how this virus has ruined the finances of those that should have been better prepared. How a large group of … [Read more...]
The Cost of Retirement Income is Going Up
The Fed announced this morning that it is going to spend up to $2.3 trillion helping out municipalities and companies by purchasing their bonds. Where is the $2.3 trillion going to come from? The Fed is of course just going to print the money. Yup, Jay Powell (Fed Chair) & Steve Mnuchin (Treasury Secretary) have decided to turn the Fed into a hedge fund. Munuchin will provide the capital and Powell will provide the leverage by conjuring a few trillion out of thin air. 10 to 1 leverage works for Jay. Won’t all this money printing cause inflation? Of course it will. The Fed will deny … [Read more...]
What My RAGE Gauge™ is Telling You
Coronavirus Infects Stock Market: Part XXVI Before you dig into my latest RAGE Gauge™, let’s spend a few minutes defining the coronavirus pandemic: It has been way harder for some than it needed to be. I’m not talking about the poor. I’m not talking about those who are living paycheck to paycheck, either. Unfortunately, for a large swath of Americans, a $1,000 shock to monthly income is devastating. That may never change. The group I’m talking about is, perhaps, the fifth of you who have savings: the wealthy, the upper-middle class, the middle-class, the doctors and lawyers … [Read more...]
Can America Just Turn the Economy Back On?
The now-ubiquitous Dr. Anthony Fauci told reporters that America’s virus response “isn’t like a light switch on and off.” But that might not be entirely true for the economy. It may be more like a light switch than Fauci’s estimate for the response. After turning the economy back on, Americans will still have to participate in social distancing, but going from only essential economic activity to even half of former capacity utilization could be a pretty powerful boost. That said, the longer America drags out its shutdown, the more likely it is a negative feedback loop will form, causing … [Read more...]
Amazon Suspending its Shipping Service
Shortages of labor and capacity brought on by the coronavirus outbreak have forced Amazon to suspend its Amazon Shipping service. Paul Ziobro reports in The Wall Street Journal: Amazon told shippers the service, known as Amazon Shipping, will be paused starting in June. It was available in just a handful of U.S. cities. Under the program, Amazon drivers would pick up packages from businesses and deliver them to consumers, rather than ship orders from Amazon warehouses. “We understand this is a change to your business, and we did not take this decision lightly,” Amazon said in a note to … [Read more...]
Media’s Fear and Loathing in Las Vegas
Coronavirus Infects Stock Market: Part XXV If you have watched President Trump’s press conferences, especially last Saturday night, you’ve seen him hit it out of the park like a modern-day Babe Ruth. He’s leading from the front. He’s in control. He defers to experts and has an A-1 lieutenant in VP Pence. Turn your eyes to the cesspool media and their negative questions and all you get are “what have you done for me lately?” questions. It’s as if they’re not even there, straight out of Hunter Thompson’s Fear and Loathing in Las Vegas. In a time of America’s governor-inflated crisis, the … [Read more...]
Protect Your Business: NYPD Reports 75% Increase in Business Burglaries
Small-business owners prepare for slow months, seasonal slumps, and staffing interruptions. They even spend time planning for natural disasters, cash flow shortages, and changes in government regulations. But one of the last things most businesses are ever thinking about is being looted in times of social turbulence. That is, unfortunately, what is happening today to an increasing number of New York City businesses. The NYPD has reported a 75% increase in burglaries of businesses since March 12. Ben Chapman and Keiko Morris report for The Wall Street Journal: The increase in burglaries … [Read more...]
Is Warren a Skinny Dipper?
“You never know who is swimming naked until the tide goes out.” –Warren Buffett CNBC reports here that Buffett sold large stakes in Delta Airlines and Southwest Airlines last week. Berkshire now holds just under 9% of each firm. The chart below shows the prices of Southwest and Delta shares. Somebody has apparently been swimming naked. Who knew that dirty dog from Omaha was a skinny dipper! … [Read more...]
Investing Takes Faith
Coronavirus Infects Stock Market: Part XXIV Once again, you’ve been telling me all week how much you miss Richard C. Young’s Intelligence Report. That’s OK. I’m used to it especially in times like these. But don’t despair. If you’ve followed Dick’s advice, through thick and thin, you’re in the catbird seat today, because one of his most enduring messages has always been to be a prudent investor and to know thyself. To know thy risk tolerance like you know your family. (Sorry about the sheltering in place!). It takes faith to invest. It takes a little push forward to get you out of … [Read more...]