Cognative Dissonance.
That's the mental state experienced by an individual who holds two or more contradictory beliefs, ideas, or values at the same time. On the one hand, the President and Fox News are pushing the idea of "Opening Up America Again" as if their lives depend on it and, politically, Trump's does because if he doesn't "beat" this virus, he won't be re-elected and, if Trump isn't re-elected, he is very likely to go on trial for all sorts of things he's currently being protected from.
On the other hand, the Senate is about to look at a relief packgage aimed to shore up the states, including paying unemployment benefits (like they are supposed to) for 24M newly unemployed Americans and that "CARES 2" package is looking like ANOTHER $2.2Tn. So are we ready to open up Amercia just 6 weeks after we locked it down or is this a lingering crisis that requires $4.4Tn of direct Government aid PLUS $4Tn from the FED? That's cognative dissonance – they can't both be true – but we're acting as if they both are.
All this talk of throwing MORE FREE MONEY around is driving the Dollar down and boosting the market and our Futures are up another 1% as the Dollar drops another 0.5% – which is pretty much the usual relationship between the two.
It's not much of a rally when the buying power of the currency your stocks are priced in keeps falling but it undoes a lot of technical damage as yesterday the S&P 500 pushed over our Must Hold line at 2,850 and we're also back above the 50-day moving average at 2,800 so, if we can hold that today without going under, next stop is testing the 200 dma at 3,000 and that's just 15% off the all-time high – what virus?
A "recovery" like this sows the seeds of its own destruction as we're going up on stimulus and ignoring the reality of businesses opening up at 25-50% of capacity and the very real possibility that we're re-opening America far too soon (as most medical experts are warning), which will ultimately prolong the lock-down if the virus begins to spread too fast and we're forced to run back inside.
Trump says we will soon be able to test 2M people a week and that does sound like a big number but it's only 150,000 a day, up from 100,000 per day we've been testing for the past month so Trump is saying that all the resources of the US Government have only been able to come up with a 50% increase in testing and that it will take 150 weeks (3 years for you Fox viewers) just to test everyone once. Why am I not impressed?
Do you ever get the feeling that Trump's mom must have put everything he did right on the refrigerator – no matter how mediocre it was? The President acts like every little step he takes is an accomplishment of epic proportions and I spent an hour watching Fox News last night and, guess what, they couldn't agree more!
You really do have to watch Fox once in a while so you can understand what your Conservative friends are talking about. Yesterday it was mostly about Tara Reade's accusation that Joe Biden assaulted her in 1993, which the mainstream media has investigated and found very doubtful but on Fox it's an absolute fact and a huge cover-up by all other media outlets.
To be fair, the media did cover the allegations against Brent Kavanaugh like they were facts and Democrats are not tolerant of sexually assaulting women the way Republicans are so there's plenty of meat on that bone for Fox to chew on – even though it's ridiculous to attack Biden for an uproven accusation from 27 years ago while Trump had many PROVEN sexual situations (there are checks!) and his own admission/boasting about assaulting women that they completely gloss over. More cognative dissonance…
Cognative dissonance is what Fox News sells. It's also how the fictional Government of Big Brother controlled the people in 1984 – forcing them to constantly hold contradictory beliefs until they simply had no idea what the truth was anymore – so it became whatever Big Brother would tell them. They called that DoubleThink. In the novel, for someone to even recognize, let alone mention, any contradiction within the context of the Party line is akin to blasphemy, and could subject that person to disciplinary action and the instant social disapproval of fellow Party Members. Sound familiar?
"The power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them… To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just as long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies—all this is indispensably necessary. Even in using the word doublethink it is necessary to exercise doublethink. For by using the word one admits that one is tampering with reality; by a fresh act of doublethink one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth." – Orwell
That's because George Orwell was a propaganda expert in World War II and wrote 1984 in 1949, as TV was just beginning to become a part of everyone's lives. He foresaw a future in which the public could be controlled through non-stop manipulation of the media they watched, repeating lies endlessly until the people were unable to remember what the truth was anymore – even taking away the very concept that the truth exists.
The only truth we care about today is the 2,850 line on the S&P 500 but it's all good news this morning as we're ending the lockdown and no one got sick (because we haven't actually done it yet but let's not quibble) so now they can say "I told you so" and encourage more people to go out before the results are in from the first round – why not?
We just passed 3M confirmed Global Covid-19 infections and, as of this morning, the US will have 1M of those infection (that's 1/3 Fox fans!) with 56,253 deaths so far and, as you can see from this infection graph – it is clearly time to declare victory and go outside because we obviously have this virus under control and our ability to test 1 out of 130 citizens every week tells you how safe and well-planned this is.
See what I did there, that last part was CLEARLY the opposite of what is true yet you WANT it to be true so, DESPITE starting right at factual evidence that contradicts every word I was saying – you start losing your sense of what is real and what is not – Cognative Dissonance!
$4.4Tn is a very real amount of money being pumped into the market and, as you can see from the chart on the left, we should be heading towards a record recovery and there's nothing at all to worry about because $4.4Tn was found between the cushions of the couch in the Oval Office and there's probably $4.4Tn more where that came from.
"He gazed up at the enormous face. Forty years it had taken him to learn what kind of smile was hidden beneath the dark moustache. O cruel, needless misunderstanding! O stubborn, self-willed exile from the loving breast! Two gin-scented tears trickled down the sides of his nose. But it was all right, everything was all right, the struggle was finished. He had won the victory over himself. He loved Big Brother.” – Orwell
