Monday, April 27, 2020

Prepare for the Great Stock Market Crash of 2026

And just when you thought it was safe.  Sorry.

The 18 year real estate cycle that's been known to exist for over a 100 years and TO THIS DAY it trips everyone up.  We never seem to learn.
Nobody paid attention during the 1990s when those familiar with the real estate cycle predicted the Depression of 2008 (including myself, in 1997). Almost all economists, financial analysts, journalists, pundits, bloggers, and armchair cynics will also scoff at this prediction of a severe recession and depression in 2026. They will say there is no way to accurately predict such an event so far in advance. But the cycle exists precisely because people don’t believe it.

There has been one fundamental cause of the boom and bust cycle: massive subsidies to land values. Since these subsidies are a governmental intervention into the market, the cause of the cycle is not “business,” hence the term "business cycle" is misleading. It is a cycle of economic distortions caused by government policies.

The monetary subsidy to real estate consists of cheap credit. In the US, the Federal Reserve manipulates interest rates by expanding the money supply. An injection of money increases the money reserves of the banks, which then lower their interest rates to loan out the extra money. Cheap credit fueled the real estate bubble that peaked in 2006, and super-low interest rates today are sowing the seeds of the next bubble. Similar money creation occurs by other central banks.
The legendary stock trader WD Gann used the 18.6 year average cycle in his famous financial table of 1901 and used it to time the market.  That is how predictable it is.

But over and over and over again, we fall for it.

Wednesday, April 15, 2020

Some social distancing may be needed into 2022 to keep coronavirus in check, new study says

So the number-crunchers are all sitting around a table, eating peanuts and cashews.

"So..." crunch crunch "we ran the numbers" crunch crunch - "and" - crunch - "looks like we need to keep up this social distancing until 2022".  crunch crunch crunch.




So, if the intent was to show how really stupid we all are, I think they miserably failed.
The research, published Tuesday in the journal Science, looked at a range of scenarios for how the SARS-CoV-2 virus will spread over the next five years. Those scenarios included variables like whether people who are infected develop short-term immunity — less than a year — or longer-term protection. But, overall, the research concludes it is unlikely that life will return any time soon to the way it was before the virus’ emergence.
The article goes on to make the point that our ability to build immunity only lasts a year or two. So, our propensity to be reinfected is quite high.

But....what did they forget?  Truly astonishing, in my opinion.

The Chinese Virus is easily dispensed with.

The hydroxychoroquinone or HCQ stops the deadly disease in its tracks!

What else helps?  A diet or supplements high in zinc, vitamin C and D.  These can help harden your immune system.

So, I ask:  WHAT'S THE BIG DEAL???

What could I compare it to?  I would say David and Goliath with Goliath as the deadly and ravaging disease.  And David with his two stones at the ready, slaying what everyone thought was a MONSTER.

I think this is the sentence that told me these guys THINK they have us over a barrel:
"But, overall, the research concludes it is unlikely that life will return any time soon to the way it was before the virus’ emergence."
You see, the human race has had to fight all kinds of diseases over the past millennia.  It is wasn't smallpox, it was bubonic plague.  If it wasn't cholera, it was tuberculosis. If it wasn't polio it was whooping cough.  The list goes on and on and on.

From what I can tell, "normal life" is that small sliver of time between the final lapse of one calamity to the raging onslaught of a new disease.  Normal life free of a calamity is not the normal.  All the other times are the normal.  And guess what?  We're still here! 

Fuck Social Distancing.

Sunday, April 5, 2020

Hungary and the Evolution of Dictatorships

My brother texted me he had just learned that Hungary was now a dictatorship.

Apparently, this is how it goes.  I found a website that has a nice synopsis of Plato's Republic.

So, the order is:

- Monarchy/Aristocracy (a government based on wisdom)

- Timocracy (a government based on honor and merit; like a military)

- Oligarchy (a government based on wealth; a capitalist state)

Democracy/Anarchy (a government based on liberty and equality)

Mixed Republic is the most stable allowing "sub systems" of Democracy and others to thrive.

So, I wonder if those countries that have preserved their Aristocracy in some form (becoming a subsystem of a Republic) may be stable-forming influence. Just a guess.

Countries like Hungary have been whipsawed from one form of government to another. Reading just a little bit of their history in Wikipedia new governments were a way of life!

I'm hoping America's mix of representative Republic and State Government will be good.

Walters: California — specifically, Jerry Brown — also failed to prepare

I never got the impression that Arnold was a very good governor.  But there was one thing he did that was undone.  That decision has now come back to haunt CA.
The most disturbing revelation is that Brown essentially abolished predecessor Arnold Schwarzenegger’s effort to prepare California for a pandemic.

In 2006, Schwarzenegger created the Emergency Medical Services Authority and invested tens of millions of dollars to stockpile supplies and equipment, including three mobile hospitals.

“In light of the pandemic flu risk, it is absolutely a critical investment,” Schwarzenegger said at the time. “I’m not willing to gamble with the people’s safety.”

“Each hospital would be the size of a football field, with a surgery ward, intensive care unit and X-ray equipment,” a weekend article by the Center for Investigative Reporting and the Los Angeles Times said. “Medical response teams would also have access to a massive stockpile of emergency supplies: 50 million N95 respirators, 2,400 portable ventilators and kits to set up 21,000 additional patient beds wherever they were needed.”

However, five years later, Brown, having inherited huge budget deficits from Schwarzenegger that were accumulated during the Great Recession, cut off funding for the program. Most of the equipment was donated to local hospitals and other medical agencies without money to maintain it and much of it was allowed to expire.

“There was a time there that Arnold Schwarzenegger had a bold vision and a responsible one,” Jack Lewin, former CEO of the California Medical Association, told the Sacramento Bee, which broke the story about the rise and fall of Schwarzenegger’s prescient act. “But I think that got diluted over the course of time. People get complacent, and money goes elsewhere.”
 What a shame.  CA gambled with people's safety...and lost.

Wednesday, April 1, 2020

Editorial: Other states have emergency financial reserves to help combat the coronavirus. Not Illinois.

So, the chickens are coming home to roost.  What a shame. These are the things that unmake countries...and states.
In dealing with the needs of people hurt by the coronavirus crisis, the state of Indiana has a notable advantage: a rainy day fund that holds more than $2 billion. State budget director Cris Johnston says some of the reserve will be used to cover unexpected expenses, such as buying personal protective equipment for health care workers. It’s a welcome buffer, which the state had wisely built up from $831 million a decade earlier.

Too bad Illinois was not so farsighted. Its Budget Stabilization Fund has only $58,655. That’s enough to cover the state government’s normal expenses for about 30 seconds. Indiana’s is enough to cover more than a month.
The state has a backlog of $7.5 billion in unpaid bills.  Why would anyone want to do business with a deadbeat state?