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Archives for May 2020

Cowards Loot, You Fight

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Coronavirus Infects Stock Market: Part LV You’ve seen how quickly blue state governors go wild. Now you’re seeing the looting and burning by cowards the blue-state governors aim to protect. Is this a dress rehearsal? Consider the recklessness from blue state governors and their self-crowning press conferences, stirring up resentment from the producers of the world. The allies of blue-state politicians in the media and technology industries have no problem setting one set of rules for America’s producers, and another for their favored groups. Tucker Carlson explains: Watch the … [Read more...]

How will the U.S. Repay $30 Trillion in Debt?

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With Congress considering yet another stimulus bill with the price tag measured in trillions, Victor Davis Hanson offers a sobering reminder of what comes next. The deficit is expected to exceed $4 trillion soon and the national debt may climb to $30 trillion or nearly $100,000 for every American. How will the United States sustain this level of debt, let alone repay it? VDH offers five ugly choices. Inflation looks like the most expedient option for the political class. Negative Interest Rates One, Americans would be forced to live with permanent near-zero interest rates, or … [Read more...]

Get Ready: Your Survival Guy’s Guide to the Second Wave

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Coronavirus Infects Stock Market: Part LIV You read the news: “Coronavirus reaches 100,000 deaths,” streaming across all forms of media yesterday and yet, not a peep just a couple of years ago when the flu killed 80,000. It’s like the media is taking a victory lap, cheering the virus numbers higher. A group of restaurants and bars in Rhode Island want government money to stay closed, claiming it’s stressful being open. Imagine all the pushy parents wringing their hands because little Jonny can’t play travel sports this summer. Talk about an aggressive group. They along with the … [Read more...]

Big Government Politics on the Shores of Newport and Beyond

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Coronavirus Infects Stock Market: Part LIII Blue state governors have completely dropped the ball in the name of science, killing businesses and creating new health problems like anxiety and depression. In blue Rhode Island, we have our governor patting us on the head after a “successful” Memorial Day weekend. “The good news is, overwhelmingly, people were out and about doing the right thing,” she said during her daily news briefing. Tonight’s Newport City Council meeting will hear a resolution to require all pedestrians to wear masks on certain streets at all hours of the day. Councilwoman … [Read more...]

Don’t Follow Europe into Banning Bank Dividends

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At The Financial Times, Greg Baer makes the case against banning bank dividends. He writes: Leaving aside its putative benefits, a blanket dividend ban imposed outside the current regulatory framework would come with a substantial cost. It would make it difficult for investors to value banks, and thereby make them decidedly less investable. Investors might logically prefer companies whose boards of directors retain authority to maximise value for shareholders, so long as all regulatory requirements are met. This would continue a worrisome trend. The market value of US banks, relative to … [Read more...]

American Businesses Show the Way Forward Where Blue-State Politicians Fail

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Coronavirus Infects Stock Market: Part LII During the coronavirus outbreak, the difference between heavy-handed local government, and private enterprises has been plain. Businesses are incentivized to protect their most important assets, their employees. Government officials are protecting their own reputations. In the early days of the virus, Leupold, an American business serving police departments and America's military elite took smart steps to protect employees. At The Federalist, Madeline Osburn reports on Leupold's response in an interview with company CEO Bruce Pettet. … [Read more...]

GMO on the Risk-Reward in Stocks and Competitive Capitalism

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Jeremy Grantham’s GMO often offers useful insight. GMO’s head of asset allocation was interviewed by Barron’s recently. Below are some of the highlights. Emphasis is ours. Barron’s: You just more than halved the stock allocation in your flagship funds. What’s worrying you? Ben Inker: We were getting very nervous about how much the markets had gone up. The risk/reward trade-off for equities had really gotten a lot worse than it was in March. Value stocks at this point are trading at some of the widest spreads we have ever seen. The optimistic scenario is: We get a vaccine relatively … [Read more...]

Is Nearshoring the Future of the American Supply Chain?

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Angela Velasquez reports for Sourcing Journal that the combination of coronavirus and the Trump administration's USMCA could lead to greater "nearshoring," a term describing supply-chain sourcing from nearby countries, with Mexico. She writes: Though the denim industry faces unprecedented challenges, executives from leading Mexico-based mills are planning for a brighter future. As denim mills in the country prepare to reopen on June 1, Tricia Carey, Lenzing’s director of global business development for denim, gathered players from Cone Denim, Global Denim, Kaltex and Tavex for a virtual … [Read more...]

Is Made in China the New Blood Diamond?

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Bloomberg reports that 40% of Americans will not buy Chinese made goods and a record 60% now have a negative view of the country. It’s about time the public turned negative on China. Young Research has been pointing out the problems in China for years and advising against investment in the country. In early 2012, we explained. It is perplexing that the world has allowed a command style economy run by an unelected political party to become such an important player in the global economy. China is now the world’s second largest economy and America’s second-largest trading partner. If China … [Read more...]