E Anxious Consumers, Stock Greed, New Normal And The Fed

Before addressing the latest Fed scam, we should talk about the real economy. 

People are hoarding for winter. Whether we like it or not, there are specific products that are in high demand. We know that toilet paper and paper towels are at the top of the list and there are already purchase limits at the store. But food items are in demand, from beans to rice as well as frozen items. Spices and olive oil and peanut butter and jam are just a few of the products that we had to hunt for in spring.

Beyond those necessities, air purifiers and holiday gifts may be in short supply. There is an effort to increase inventory coming out of the recession as we see from GDP Now.

The goal of this hoarding is to avoid a worst case scenario regarding a resurgence of the Covid-19 virus. Mitigating factors could be vaccine availability. But winter comes fast, and delivery of vaccines appears to be after winter hits. The problem revolves around the collection of data. Moderna could have a vaccine ready by November or December, but without sufficient data collection, it may not be safe until data is collected through the middle of 2021.

I realize there are lots of pundits who are thinking that the economy will do fine from here on. But wait til people start coughing and sneezing. If the winter Covid numbers go up, there will be delays in economic growth accompanied by additional hoarding. And while Trump blinked and allowed TikTok to continue, what about Huawei? What about all the American companies doing business in China? Growth will hit a ceiling even if the virus is curtailed unless we can work something out with China. 

I believe we will get through the virus, but cooperation with China will be crucial to real prosperity.

Stock Market Greed

What if we are at the end stages of a bull market? Talkmarkets contributor Joseph Calhoun argued that we may be entering a final phase. He says that investors putting money into Robinhood and into blank check companies, while gambling on dubious ventures is not normal investment behavior: 

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Disclosure: I have no financial interest in any companies or industries mentioned. I am not an investment counselor nor am I an attorney so my views are not to be considered investment ...

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Gary Anderson 1 month ago Author's comment

Update 1: The Chinese biz model of requiring partnerships is exactly what the US is doing with Oracle/Bytedance. I think it is ok to require it. However, we have to know, China is surpassing the US in many fields. This required partnership with Oracle is just one proof.

Rachel Anne 4 weeks ago Member's comment

Even with a US owner, couldn't China still spy on users through some pre-existing backdoor. Oracle isn't going to scratch TikTok's product and build a new one from scratch.

Gary Anderson 4 weeks ago Author's comment

That is a bit paranoid. Google and Apple denied Huawei spying back when all this unfolded. The US just doesn't want to compete. Global prosperity will be the victim. You do know that China bailed the US out of the Great Recession. If they hated us they would not have done that.

Rachel Anne 4 weeks ago Member's comment

I'm sure China didn't do that out of the goodness of their hearts. It was in their best interests as well.

Andrew Armstrong 1 month ago Member's comment

Great insight.