We sure hope you and yours had a wonderful, safe, fun and healthy weekend. The kick-off to summer is underway….as that hazy period apporaches.
The high speed frequency data suggests many cylinders of the economy are coming back to life – several of those in a very positive way.
As we see Merck enter the race over the weekend to kill this virus (Merck has a very good record of creating vaccines), let’s sit back and consider a few of the things which have taken place in roughly 100 days:
The human toll has been significant – with nearly 100,000 reported COVID deaths and a medical profession on the front line which is exhausted, stressed and in need of further support.
A market waterfall panic, complete liquidation run out of the exits as the fear of the virus driving us all from record highs and a top-flight economy – to – a bear market and a global shutdown of almost all movement in 14 days.
For the only time in history, 350MM people were directed to create a recession. No choice – just do it. (warning – my next statement is not intended to be political or anything else) Any voicing of any opinion other than follow directions was met with “so you don’t care if people die…” type responses, which of course, could not be further from the truth I suspect.
We were told that we could get the disease from touching things, rubbing elevator buttons, grabbing the mail, taking a box of pasta off the shelf at the grocery store.
Fast-forward 100 or so days –
Thanks to the tech and medical science we have helping us all, we see over 100 different potions are racing toward a vaccine finish line. Dozens more are racing toward various therapeutics – all hunting down this virus.
Crude oil crashed from $32 to a negative $38 a barrel as last month ended, igniting screams of complete and total global collapse and mass bankruptcies. This was followed by what is now becoming “the best month on record for crude oil” – with prices back to, you guessed it – the low $30’s per barrel.
We see a long Memorial Day weekend with muted yet seemingly very enjoyable things taking place.
We see re-openings in states with some mild increases in cases primarily driven by more testing. Still, after all the horrible news on the health-front, less than 2% of all cases are serious – with a vast number of those succumbing to the disease being over 70 and carrying other risks into the illness. Let’s make sure we protect that group – no matter how we open up.
We found out in the last week that the CDC no longer feels one can likely get the illness from surfaces. Call me nutty – but they are trillions of dollars late on that finding – and yet we worry about a company missing a quarterly report by 3 cents. LOL
Oh, and how could I forget – a new bull market has been birthed in the middle of our darkest collective hours – for those with patience and discipline – and, the toughest of all, the strength to hear all this bad news and stay focused on the long-run success of the US.
And finally, for this small highlight list – while the media has focused only on COVID for its attention-grabbing coverage 99% of the time – SpaceX is about to send astronauts into space in the beginning of a series of live flights as they prepare a pathway back to the moon and then – on to Mars.
Still – even as I type, the news roll is almost all bad.
One thing in common about all of this as compared to past disasters we have come through is perception of explanations and ideas shared. Sorry, I have typed this before:
For some odd reason, especially during times of stress, if one expresses the negatives, the downfalls, the risks, the dangers and the intricate reasons for all of them – it feels and sounds intelligent, well thought out – and often bought into in the minds of many. It just feels smarter.
On the other hand, if one listens to the same data on the ground, eliciting a less scary, more patient review of our past ability to overcome – and productive actions going forward – it is deemed to be folly, not caring, too risky and, of course, they just don’t understand how bad it is out there.
In the end, we must all remember this: The very best way to control a person and their focus – is to make them afraid. If I tell you that with patience and the force and abilities of the citizens of this country, we will overcome, then I am deemed as not getting it. If I tell you your life is in danger, I have your undivided attention – and – for as long as I convince you that you are in danger.
Hopefully Beneficial Thoughts…
As we have all learned, it is very. very difficult to remain patient in a world where everyone seems to be losing their minds with fear and concerns about the future. In the toxic heat of that mental battle, it is even more difficult to think clearly about all the other times “It has never been this bad…” and how well we recovered from those periods.
A long study of the people of America suggests we must admit this: The harder you hit us, the stronger we come back. By the way, don’t just trust me – think back on all other disasters yourself and remember how we made it through then too.
And how do we know that we are just about over the attention span of the current disaster? Well, we are already seeing the pathway prepped for the next monster….trade tensions…ha
…read ’em and reap:
While the news will simply keep you moving from one monstrous fear to the next – be confident of this over time: This country will recover from this massive setback. In the end, we will become stronger than we were at the last top.
The best news? No one can tell you “this bull market is long in the tooth” anymore.
Even better than that? Everyone hates the market – still:
Sorry – I had to throw in the last one just for a chuckle.
The Bottom Line –
Get ready for a series of months where we will be set to hear these great words often:
“Better than expected….”
These two flashes above were just released this morning.
The Barbell Economy© is set to pick up speed and only become stronger.
Look, the fear trade is rampant –
√ Almost $18 trillion in the bank now suggests we have a”rainy decade fund”set aside now.
√ Remember what happened after 1918.
The decades of disruption we talked about all during 2019 are upon us – Lord knows we never thought this would kick it off. Nonetheless, we are getting a stress test of the “New Economy.”
Can tech really handle the infrastructure of the new world ahead?
You bet it can – and it will only get better at it as the months and quarters ahead unfold.
Buckle up. Pull that belt very tight.
The new economy ahead will run into problems – and fix them – at far greater velocity that anything seen before. Solutions will come far faster – even as the “problems” seem larger. Our psyche will be tested – our ability to remain patient will be tested even more.
We will all past the test together.
Maybe John Wayne was a good investor after all – he seems to have the fear conundrum thing down to a pretty basic thought:
Stay Safe and Healthy
Please remember -we are here to help as always.
Try very hard to reduce your stress – as we all work through this together.
Together is how our ancestors built this country.
Together is how we will conquer this enemy and carry us all into the New Age ahead.