Miscellaneous And Off Topic Subjects

[Dr. Strangelove]

I'll try to respond eventually, Jeff. Busy day.

Mainly just wanted to post that DeWine has covid. Was supposed to go around with Trump in Ohio today and they test anyone near him in advance.

[Dr. Strangelove]

I'm going to leave you alone on your take of the COVID threat. We're apparently not going to see the data the same way. Fine. But THIS deserves a response.



The markets are not always rational and in this unique period where the global economy has been crippled, a case can be made that business consolidation is creating the fundamentals upon which stock prices can rationally rise. Beyond the tech sector that is benefitting from demand created by the shift to working remotely among other factors are larger companies that had huge cash reserves. That, with federal help, allowed them to retain employees and production capacity. They've weathered COVID so far and because they continued to operate at near scale they are now profiting to meet shifting demand as smaller companies falter. To my untrained eye, there's no secret to why Amazon, Walmart and major supermarket brands have become highly profitable and rising stock prices are an appropriate reflection of that. Such as your world view is, you're not going to applaud or recognize those fundamentals.

Certainly there are sectors of the global economy that are hurting badly and aren't going to recover anytime soon. The travel and leisure industries and especially airlines are prime examples. I don't see companies, even some of the biggest, surviving. Great gnashing of teeth will appear as the likes of United, probably the weakest of the US majors,declares bankruptcy. But this has happened before and reorganization occurs and the airline industry in new shape and new form will rise from the ashes. That's because as travel gradually becomes less restricted, demand will surge, money can be made and investors will jump back in. When that occurs is anyone's guess. Right now, things look bleak but it isn't going to stay that way for long. You won't see that either - the future, all of it, is no more than a nuclear winter.



COVID federal relief, in this case, isn't "redistributive socialism." It is a reflection of the drift away from Milton Friedman among other economists and toward Modern Monetary Theory. You should read up on it...... and of course, this well timed and very effective federal relief has kept the economy from nose diving as well as keeping the folks heads above water ...... and spending. Spending produces demand, demand produces profits, profits produce economic expansion ...... never mind.



First, no, federal aid cannot continue indefinitely to prop up the economy although MMT suggests that printing money works until currency value erodes and we're not close to that. But, with the appropriate application of management strategies to deal with COVID (and the next virus and the next), a level of robust economic activity will return. But make no mistake, COVID has changed the labor market forever.

I have no idea what it will look like in the next three years but companies in advanced economies will rely on less workers, new technology including AI and more automation. Skilled workers will thrive, unskilled workers, while still required to fill labor requirements in agriculture and service sectors, will face tough times as a lot of pre-COVID jobs aren't going to return. The issue of the unskilled unemployed has to be addressed and there are reasonable ways to do that from a federal level that do not involve vast, expensive social give-way programs that are disincentives to the jobless to seek better education that begets a better job.



Sure, some of the Tesla stock's rise is speculative but most of it is based on solid fundamentals. Back in February, pre-COVID, I saw some NASDAQ analysis that actually compared Tesla metrics to those of Toyota. Toyota certainly had the lead in many of them but it was look back data. What's driving Tesla stock prices beyond speculation is the realty of green economics and electric vehicles. Tesla is already expanding production capacity to meet future electric vehicle demand as countries transition away from carbon based fuel/towards electric vehicles while Toyota isn't. I'd call that a winner. Buy it, not Toyota.

* I think we talk past each other when we refer to 'socialism' because we both take extreme positions on what the word means for the sake of arguments. I get the sense you use the term 'socialism' interchangeably with 'Marxism' while I use it more to refer to any time the government takes direct intervention in the economy. Neither position is all that correct. But I guess it depends if you think a government-managed but not government-planned economy has elements of 'socialism' or not.

* I feel like I've made a breakthrough just getting you to acknowledge that the markets are not always rational. Heh. So the question is whether we're in one of those period of irrationality. You can make a good argument that individual companies absolutely deserve their high valuation right now. But this discussion really originates in whether the stock market is a true reflection of the 'real economy' or not. Are mass layoffs good for the economy? They're definitely good for individual company stock prices.

* Stocks are often evaluated with an eye to the future but how far into the future is it rational to predict? 12-18 months is the norm I believe so unless you think Tesla's revenue is going to increase tenfold over that period (their growth over the past few years hasn't been anywhere close to that) then maybe their valuation is overheated. So I don't really disagree with your take on the future so much as I don't think it's happening in the next 12-18 months. You're probably closer to a decade down the road. Whereas double-digit unemployment is here right now.

* From your perspective I'm way too negative and too short-term. From my perspective you're too eager to skip over the nastiness of 'restructuring'. We still haven't found a good way to revitalize parts of the country hurt the most by deindustrialization in the 70's and 80's. This current revolution of the economy is probably now going to ravage the service/white collar sector. I'm less confident than you that we have a good plan on how to handle that without the 'social giveaway programs' you say you want to avoid.

* One final tidbit I did hear on CNBC this morning (heh) and this is even wilder than the Nasdaq one. The 5 biggest companies of the S&P 500 are the same 5 that top the Nasdaq: Amazon, Apple, Alphabet, Microsoft, and Facebook. Year to date they are up by about 30%. The remaining 495 companies of the S&P 500? Year to date they are down by an average of 6%.

[Dr. Strangelove]

Fuck that's long...no more quoting

[AlabamAlum]

Jesus.

Buchanan has assimilated DSL and the Hive are quoting each other now.

[iam416]

But this discussion really originates in whether the stock market is a true reflection of the 'real economy' or not. Are mass layoffs good for the economy? They're definitely good for individual company stock prices.

If the stock market isn't a "true reflection" of the "real economy" then it could be behaving entirely rationally at the moment. I mean, the whole, ummm, "CNBC Line" of argument is that the stock market is irrational BECAUSE it's not reflecting the "real economy." Well, if the stock market doesn't necessarily reflect the "real economy" then that line of argument is wrong. Further, you illustrate an example as to how the economy and stock market aren't necessarily causatively tied.

There's definitely a general correlation between stock market and economy and, certainly, at times a bad stock market causes a bad economy or vice versa. But, in a striped unicorn playing a fiddle situation like this -- where the economy would otherwise be great -- historically great -- and the entire cause for the economic downturn is non-economic factors, it's certainly not shocking that the stock market is operating in a different way. Investors quite likely (and rightly) view core companies as fundamentally strong and set for a huge rebound once this Covid shit "clears up."

So, you know, if you don't think a bad economy has to cause a bad stock market, then there's nothing at all wrong with where things are. And there's nothing irrational with where it is. You and the CNBC Line seem to think they are directly and closely linked. I don't -- not in this situation. And Buchanan probably doesn't either.

[Jeff Buchanan]

Long? Maybe but all fair points. Long has merits.

[AlabamAlum]

Long? Maybe but all fair points. Long has merits.

There is a Braveheart quote reply there for the taking.

[iam416]

The only decent quote from that bigoted Gibson screed is "The problem with Scotland is that it's full of Scots."

[AlabamAlum]

It wasn’t bigoted. The Angle-ish ARE horrible.

[iam416]

The English spent centuries trying to lift Scotland out of its peat-eating, poop-flinging ways only to be repaid with unrepetent and vicious slander.

[Dr. Strangelove]

Barely more than a month into Trump's USMCA deal, Trump is re-imposing tariffs on Canadian aluminum. Eliminating those tariffs was part of the negotiation of the USMCA but hey, Trump is the Darth Vader of trade agreements.

https://www.ctvnews.ca/politics/trump-to-impose-10-per-cent-tariff-on-canadian-aluminum-1.5054066

[Dr. Strangelove]

Scott DesJarlais, the Tennessee Republican I posted about yesterday who had numerous affairs, fucked his patients, and talked his wife into having two abortions, has won his primary. Barf

[Dr. Strangelove]

Second test for DeWine says he’s negative.

This raises the question if the tests used by OSU are more accurate than the White House

[foxhopper]

Everything is great people. Wear your masks, sit back and relax. Trust me.

[lineygoblue]

Our county has had a mini-spike of sorts. We were down to about 8 total cases in the county, but we've now got 30. We've had nobody hospitalized since late May, but we have one person hospitalized now. I suppose someone could say our county had a 300% increase in cases, if they wanted a splashy headline.