Up we go again.
Of course, we're up today because Europe and Asia are up and they are up because we were up 2.5% on Friday and they are just catching up but that doesn't stop our pre-market traders from seeing a rally in Europe and trying to catch up to that – even though their rally was a reaction to our rally and yes – it's all total BS but that's the way the market works, so don't whine about it…
Despite the record-high markets (or maybe the record-high markets are because of them?), Congress is still talking about another stimulus package on top of the $3Tn they've already doled out plus the $4Tn the Fed has been tossing around. House Democrats already passed the HEROES Act in mid-May, which would provide a one-time payment of up to $6,000 to households and come with a mammoth $3 trillion price tag which, so far, the Republicans have shut down because this money would actually go to people, not Corporations – so they've been pushing their own bills but stimulus is stimulus – more or less.
The extra $600/week unemployment benefits for our 25M unemployed citizens runs out on July 31st at which point this party could come screeching to a halt as that's $2,400/month x 25M = $60Bn/month of stimulus that could be taken away – then who's going to order take-out?
This economy is fake, Fake, FAKE yet we have many many people in willfull disbelief (Jerry) who would much rather go on as if everything was great than face the truth – that the Government (Elaine) is just putting on a big show to make the voters feel better and is generally lying about the economy's "performance." To George (skeptics), it just doesn't seem likely that things could be going so well – given the actual evidence he sees of economic performance yet even he WANTS to believe all the "breathing, the panting, the moaning, the screaming" is all for real and, unlike Elaine – you're not going to have a moment of truth with this Government – so enjoy your fantasy!
Even Friday's Non-Farm Payroll Report, which kicked off and 829-point move in the Dow, was FAKE!!! In the May Jobs Report, over 3 MILLION workers were mis-classified as "absent from work" instead of laid off. That "mistake" gave us a gain of 2.5M jobs on Friday rather than a loss of 500,000 jobs and, EVEN THOUGH the BLS issued a correction right after the report was released, President Trump took credit for the 2.5M job gains as if they were real with all the breathing, panting, moaning and screaming that has come to defy the United States' President.
"Nobody has ever done, for the Black Community, what President Trump has done – think about it."
Yes, let's all think about that…
See, it doesn't matter if it's FAKE!!!, as long as you WANT to believe it then you are happy to hear the BS – even if you know it can't possibly be true. Trump had his usual slew of lies in that press conference but the most insulting was the one about Black Unemployment, which was the only category of Unemployment that went up in May – even with the FAKE!!! numbers.
Oh well, what does it matter as long as the market is going higher?
If you can live with that attitude – great – I guess. If not, then you need to hedge, even when the hedges aren't working. That's what we did during Q1 and THANK GOD we had those hedges when SUDDENLY the markets realized there was a virus in March – the same virus that we had been talking about since Christmas.
Markets aren't quick to react, they are slow to react and they are very slow to accept reality. We had a Financial crisis that began in 2007, when the Wishire 5000 (most of the market) went from 15,200 in September to 12,500 in March, 2008 – a 17.7% correction. We recovered from that in May of 2008 (sound familiar) and THEN the whole thing fell apart and the market fell another 50% into March of 2009 – a full 18 months after the correction began.
Here we are just 3 months after our correction began declaring victory and we're back to people predicting Dow 30,000 and Nasdaq 10,000 because that's what happens when your economy does all that breathing, panting, moaning and screaming, right?
Let's hope it's not faking it….
