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Authored by Ryan McMaken via The Mises Institute,

Michael Bloomberg dropped out of the Democratic Party’s primary this week, but not before he spent more than $500 on political advertisements. According to Bloomberg (the news service, not the man),

Through Friday [Feb 21], he’s spent $505.8 million on broadcast, cable, radio and digital ads, according to Advertising Analytics. That’s an average of $5.5 million a day since he officially became a candidate.

It’s also $190 million more than all of his active Democratic rivals combined, including billionaire hedge-fund founder Tom Steyer, have spent on political ads.

This all netted Michael Bloomberg a whopping twenty-seven delegates. That’s more than $18 million per delegate. This means Bloomberg didn’t even succeed in becoming a spoiler or a kingmaker at the Democratic convention this summer.

In short, the failed Bloomberg ad blitz serves as a helpful reminder that advertising doesn’t actually make people do anything. Ads on YouTube and TV—even when they are released in a veritable torrent as Bloomberg’s ads were—are not enough in themselves to convince people to vote for someone.

We saw a similar issue during the 2016 election, when Hillary Clinton outspent Trump 2 to 1. Indeed, among so-called outside groups (such as super PACs), “Pro-Clinton ads outnumbered pro-Trump ads 3 to 1—a mind-numbing 383,512 ads for Clinton compared to 125,617 supporting Trump.”

This isn’t to say that having $500 million lying around for advertising makes no difference. It may be that if Elizabeth Warren had had that sort of advertising budget, she might have been able to compete better with Bernie.

But the fact remains that if an advertisement asks a person to take some sort of action—whether it’s buying Acme zit cream or voting for Michael Bloomberg, that action has to be something that the person targeted by the ad is open to doing. That is, the person being asked to buy or vote must have been already “conditioned”/”brainwashed”/”socialized”/”educated” in such a way that the advertisement’s request for action seems like a good thing.

Often, ads simply stand no chance of succeeding because they’re not addressing what the target audience is inclined to desire.

Ludwig von Mises realized this long ago and noted,

It is a widespread fallacy that skillful advertising can talk the consumers into buying everything that the advertiser wants them to buy. The consumer is, according to this legend, simply defenseless against “high-pressure” advertising. If this were true, success or failure in business would depend on the mode of advertising only. However, nobody believes that any kind of advertising would have succeeded in making the candle makers hold the field against the electric bulb, the horse drivers against the motorcars, the goose quill against the steel pen and later against the fountain pen.

Examples of this phenomenon abound. In recent years, for example, we’ve seen articles on how so-called Millennials are uninterested in buying what the funeral industry is selling. That is, expensive coffins and funerals are highly profitable for funeral homes, but fewer people under fifty are interested in buying. They want less-profitable cremations. So, the funeral industry has had to change the way it does business. But this raises a question: why should the funeral industry change anything? Why not just run a bunch of advertisements telling people to buy $20,000 coffins? Then surely everyone will buy them, right?

But that’s obviously not how it works.

And then there’s the story of the American waterbed industry. Many people over forty may still remember the time in the 1980s when all the cool kids had waterbeds. But then they fell out of favor and waterbed stores collapsed in a heap of irrelevance during the 1990s. But why did the waterbed merchants allow that to happen? Why didn’t they just run a bunch of advertisements telling people to buy waterbeds?

People do what advertisers tell them to do, right?

After all,  we’re told that “Russian hackers” with some targeted online ads — many of which were little more than low-budget unsophisticated memes — “swayed” the 2016 election and somehow turned Hillary voters into Trump voters. 

The next time a modern-day McCarthyite insists that the 2016 election was stolen by Russian memes, let’s keep in mind that with $500 million, Bloomberg couldn’t manage to convince more than a few voters to vote for him instead of for Joe Biden, who apparently thinks he’s running for the US Senate.

So, let’s just chalk up the failed Bloomberg campaign to yet another case of how all the ads in the world won’t convince people to buy a product—or vote for a candidate—they don’t like, don’t want, and generally regard as useless.

Last week we highlighted how Americans across the country have begun to panic, heading to their local Costco and other big-box stores in a mad dash to hoard supplies as coronavirus descends on the country.

“It’s been nuts,” said Costco CFO Richard Galanti on a Thursday earnings call with investors.

And now, a photo from an unidentified Costco reveals just how dire the problem is…

That’s quite a serious out of stock at Costco…. pic.twitter.com/6kh2q5b8ch

— Matthew Boyle (@bizboyle) March 5, 2020

On a more serious note, big-box stores have been raking it in of late – with Costco reporting sales up 12% y/y, saying they had “benefited from an uptick in consumer demand in the fourth week of the reporting period” when coronavirus fears swept the country.

“We attribute this to concerns over the coronavirus,” said the company.

And on Thursday morning, the San Bernardino County Sheriff’s Department showed up at the Chino, California Hills Costco after receiving reports that customers had become aggressive after learning that they were out of water, toilet paper and paper towels.

To try and manage the situation, some locations have been limiting sales of essential items:

The panic is starting– local Costco trying to limit fear-fed buying. pic.twitter.com/5aylL8u1c1

— Bruce Kamich, CMT (@BruceKamich) March 4, 2020

We warned you several years ago that Venezuela was coming to America. Who knew it would be caused by a virus.

Following reports that Beijing had “quarantined” dirty cash, the Federal Reserve is now doing the same out of fear that dollars in circulation from Asia could contain Covid-19, reported Reuters.

A Fed spokesperson told Reuters on Friday that “quarantining physical dollars that it repatriates from Asia before recirculating them in the US financial system” has begun. The new “precautionary measure” is to limit the transmission of the virus in the US.

The spokesperson said the Fed regional bank system, with 12 total branches across the country, will help manage money supply coming from Asia and quarantine dollars for upwards of ten days before recirculation.

There were no specifics of how the dollars would be sanitized. Bear in mind that even before the Covid-19 outbreaks, a 2014 study by researchers at New York University identified 3,000 types of bacteria on dollar bills due to how widely and frequently they change hands.

The World Health Organization (WHO) warned Monday that the virus could survive on banknotes, potentially spreading the virus within communities and across the world. To reduce the risk of being infected by money, the NGO advised citizens in countries struggling with outbreaks to favor digital payments when possible.

Past research has found that Covid-19 could live on surfaces for as long as nine days.

* **

It looks like the Chinese started something…

Following reports that Beijing had “quarantined” dirty cash, the WHO warned on Monday that the virus could survive on banknotes, potentially spreading Covid-19 within communities, and across the world. To reduce the risk of being infected by money, the NGO advised citizens in countries struggling with outbreaks to favor digital payments when possible, the Daily Telegraph reported.

That the WHO is telling the public to avoid cash is hardly a surprise: research has found that coronaviruses have been found to live on surfaces for as long as 9 days.

During the statement, a WHO spokesman referenced a Bank of England study claiming that banknotes “can carry bacteria or viruses” and urged people to wash their hands. Other studies have shown that 90% of US $1 bills had bacteria present, and one Swiss study found that viruses had survive on the faces of Swiss francs for days.

The WHO’s warnings follow the People’s Bank of China last month started disinfecting currency deposited at Chinese banks using ultraviolet light, before quarantining the bills for a week before releasing them back into circulation.

Brits, and their fellow Europeans, should be increasingly careful as the virus spreads across Europe, the WHO warned, via the Telegraph:

“We know that money changes hands frequently and can pick up all sorts of bacteria and viruses,” a spokesman told the Telegraph.

“We would advise people to wash their hands after handling banknotes, and avoid touching their face. When possible, it would also be advisable to use contactless payments to reduce the risk of transmission.”

Of course, that one of the world’s major NGOs is seizing the opportunity to proclaim the virtues of ‘paperless’ money is hardly a surprise: the globalist push toward a ‘cashless society’ has been underway for years now, having had its biggest successes in Scandinavia. Sweden has gone virtually “cashless”, and in such a short time, they’ve already confronted the many drawbacks of relying exclusively on digital money.

As we noted previously, here is what happens next:

…the virus spreads throughout the US and Europe and governments respond the same way China’s government has; martial law and full blown concentration camp culture. This would lead to civil war in the US because we are armed and many people will shoot anyone trying to put us into quarantine camps. Europe is mostly screwed.

The establishment then suggests that paper money be removed from the system because it is a viral spreader. China is already pushing this solution now. 

Magically, we find ourselves in a cashless society in a matter of a year or two; which is what the globalists have been demanding for years. Everything goes digital, and thus even local economies become completely centralized as private trade dies.

A viral outbreak is a significant danger to us all, but an even greater threat is the supposed cure. Trading our economic and social freedom in the name of stopping the coronavirus?  No matter how deadly the bug, it’s just not worth it.

Authored by Lance Roberts via RealInvestmentAdvice.com,

These last couple of weeks have been crazy in the markets, last week we saw steady declines and this week we’re yo-yoing from one of the best days in the market to date to one of the worst. It seems like the sky is falling, it always does when we get into one of these environments, but fret not we’ve been here before. The question is what will you do different this time around? Since you’re here you’re probably already doing something different in reading the Real Investment Advice Newsletter, maybe you’re a client or a RIA Pro subscriber. Those resources will help you navigate these choppy waters.

Here are a few additional tips.

• Understand that it’s ok to take profits and pay taxes.

• Have a discipline to your investing approach.

Wall Street promotes an “it’s always a good time to buy” philosophy, but rarely does it give advice on when to reduce risk or increase it. For Wall Street it’s always about you… well, you staying invested. Have an exit strategy or a strategy to take profits, reduce risk and eliminate areas you no longer need to invest in. Markets change and so should your investments. Set it and forget it is not good enough.

Buy and hold is dead.

Portfolios should be monitored and changes should be made when needed. Not only when you visit or call your advisor. Buy, hold, monitor and sell. Buy and hold is for vampires who live forever, your life is finite. Getting back to even shouldn’t be a long term strategy.

Diversification is all but dead.

Wall Street will claim diversification is all you need, but we all know the type of diversification Wall Street refers to is all but dead. Markets are to intertwined in 2020, global supply chains, money flows, coordinated central bank interventions and the speed of information.

Speed of information is a loud, but silent killer to portfolios.

Years ago someone may be shot across the globe and we’d never hear about it or if we did by the time we received the information it was old news, outdated or like the game of telephone you may have played as a child: widely inaccurate. Now we get information in minutes if not seconds.

Everyone is an expert.

Have a Twitter account and an opinion or following and you are automatically an expert. There are many platforms out there for people to express their views, be careful what you consume. Facebook, Twitter or any other site may be a vacuum for your thoughts or may be a sales pitch in hiding. When I hear or see information I always want to know someone’s motive.

It’s ok to have a motive or promote your business. We promote ours daily by telling people what we do inside our business, how we invest and things you should be doing inside of your own financial plan.

Just remember, most of those so-called expert were in grade school during our last market down turn.

Nothing against being young, we were all there. But more and more advisors or experts have never been through a bear market. Many of these new investing platforms haven’t been around long enough to experience one either.  A bear market or a recession does more than impact your investments it can take a part of your soul. It changes people, I’ve heard many older advisors who’ve been around the block that they may not make it through another bad market. The emotional toll and stress is real. If you’ve never experienced a bad market it’s difficult to guide people through it. All the more reason you must guard against elation and have a process surrounding your investments, your actions and your emotions.

Watch for the wolf in sheep’s clothing.

Fear sells. Period. We get lots of calls from readers, our daily radio show or podcast and our television interviews. A big question I get from prospects or in the form of a general question is do you guys sell annuities? Typically the reason why is they were told something bad about one, preyed on by an insurance salesman or have had a bad experience with one. I’m telling you this because just this last week I’ve had more calls asking about annuities with guarantees. Fixed annuities, fixed indexed annuities or any other that will guarantee 7%.

The reasoning for these calls is that fear sells. When markets are as volatile as they currently are we make some of our worst mistakes and the annuity sales force knows this. I’m not saying annuities are bad, just don’t get sold one and live to regret it. We believe that annuities should be planned for not sold.

Understand your financial plan.

Many have financial plans that use only the rosiest of data. Don’t be afraid to stress your plan, use low performance numbers, bad market returns, give yourself a raise annually-stress your plan! I’m not saying that any of those events above will happen, but what if they did? We want you to be prepared. Our job is to educate you on how all of your financial world combines to help you meet your goals and provide you with the best results and the retirement you hoped for your family.

Keep your cool.

This is difficult to do when you see your life’s savings eroding quickly. Markets are very reflexive when they are at extreme deviations and markets moving as quick as they have over these last couple of weeks can be a scary event. You will come out on the other side. The markets don’t just go up and no one has taken a recession out of the business cycle. It will be ok, if you work with a good advisor they have a plan, an exit strategy, maybe they’ve already reduced your equity exposure, they’ve accounted for this in your financial plan. It doesn’t feel good. Investing is difficult because we let our emotions get in the way.

Just because we CAN do something doesn’t mean we should. We’re often our own worst enemy.

Our brains and gimmicky marketing often get in our way. Have you ever seen the E Trade commercial where they tell you all about your high school buddy that trades on E Trade from his yacht or the Vanguard ad with the guy next to his personal plane? When the markets go up investing can be fairly easy, but what about when markets begin to drop? Dalbar did a study in 2019 that shows since 1988 the stock market’s average return has been 10% per year, but stock fund investors have earned only 4.1% annually. Why the big difference? Fear. Human nature is for us to get into something when it’s high and get out when it’s bad. We buy high and sell low even when we know the number one rule of investing is buy low and sell high.  I need a degree in Psychology just as much as I do in Finance. We study Behavioral Finance to limit the biases, help with self control and help make rational decisions.

Communicate

Reach out to your advisor, we have sent numerous emails, videos, hold investor summits and one on one phone calls or meetings to discuss the overall impact and to reinforce the plan and strategy. This is when good advisors earn their keep.

If you have questions, concerns or want to know more about how to implement these strategies for your family please don’t hesitate to reach out. We’d love to help.

Update (1230ET): On the heels of JPMorgan’s decision to begin its resilience plan, a number of the rest of US’ majors have also started their own contingency plans:

• Citi is sending hundreds of traders and salespeople to its backup site in Rutherford, NJ starting Monday as part of its coronavirus planning, CNBC’s Hugh Son reported in tweet, citing a source. To view the source of this information click here To contact the reporter on this story

• Bank of America is splitting its trading force, sending some employees to its back-up office in Stamford, Connecticut, Business Insider reports, citing an internal memo.

• Morgan Stanley is moving about half of its institutional securities traders to its disaster recovery site in Westchester, New York, Business Insider reported, citing a memo it saw.

• Plans for trading desk came days after non-essential travel outside the U.S. was halted; additional changes may be made

• Additionally, Morgan Stanley is beginning to shift London-based sales and trading staff to Heathrow site as part of its coronavirus contingency plans, Reuters reports, citing sources.

Would all these banks be doing this if the risk from this virus was, as we are being told, low?

*  *  *

As we detailed yesterday, America’s largest bank is going on lockdown…

And today has seen JPMorgan escalate their resiliency plan by sending some of its New York and London sales and trading staff to backup locations in response to the coronavirus.

“We are starting to shift people as a precautionary measure at this stage,” the bank said Thursday in a memo to staff.

“Dividing our workforce into different locations improves our ability to serve clients continuously while reducing the health risks associated with physical contact should a case arise.”

Reuters reports that Brian Marchiony, a bank spokesman, confirmed the plans and said they are “precautionary.”

And this comes after we noted yesterday that, according to Bloomberg, JPMorgan is asking thousands of US-based employees to work from home in test of “virus contingency plan” for closing domestic offices should the coronavirus spread. As part of the test, managers have requested that about 10% of staff across its consumer bank work remotely as part of the plan’s resiliency testing, which has been code-named “Project Kennedy” (it wasn’t clear why JPM picked that name for the project). And since JPMorgan’s consumer bank has 127,137 employees, the most of any of the firm’s divisions, that means that over 12,000 workers will be working from home for the foreseeable future.

As the coronavirus spreads, banks around the world have been scrambling ensure they can keep their businesses running and avoid a worst-case scenario by restricting travel, splitting up teams and traders amid different locations, and quarantining staff. As Bloomberg notes, some are also “dusting off regulatory plans for keeping “critical operations” open through a potential pandemic, some of which describe things like how far apart traders should sit from each other, or how many can work remotely.”

The key test for JPM’s will assess its telecommuting policy on a sampling of employees across businesses to ensure kinks are worked out before the plan needs to be rolled out more broadly in the event of a pandemic, one of the people said.

In other words, JPMorgan thinks it’s just a matter of time before it gets… worse.

It wasnt exactly clear how JPM’s client-facing bank tellers will do their job by teleconference. While technology has made it possible for more professionals to do their jobs remotely, working from home generally isn’t an option for branch workers like tellers and bankers who deal directly with customers. JPMorgan had 4,976 branches around the country as of the end of December that are filled with thousands of employees who have to show up to work for business to run.

JPMorgan’s leaders have been double-checking contingency plans to be sure the firm can continue to serve customers in the event of widespread disruptions.  The moves are part of broader resiliency planning at the bank. The firm last week followed the lead of major US corporations in restrictring non-essential international travel for all employees and has been urging workers to test their remote-access capabilities.  JPMorgan has also been testing systems at backup trading sites over the past few days in case workers need to be moved off of the main trading floors in New York and London.

There is a silver lining: with hand sanitizer sold out virtually everywhere, the bank is providing that precious commodity – extra hand sanitizer – to customer-facing branch workers and taking extra steps to sanitize offices, branches and equipment, including elevator call buttons and door handles, according to a memo from Co-President Gordon Smith to consumer bank staff on Friday.

And just to nip any potentially viral problems at the bud, JPMorgan has been encouraging consumers to access bank services and products through digital channels instead of walking into branches when they can.

“This can make their life easier all the time,” Smith wrote.

While nearly 300 million students across 22 countries out of school due to the coronavirus, officials in Washington state are resisting calls to follow suit amid the nation’s hardest-hit outbreak of the deadly disease.

Microsoft employee Andrew Davidoff tells Reuters that while he’s been told to work from home to slow the spread of the virus, his daughter and other children in the Lake Washington School District (LWSD) should also be sent home after 12 people have died of COVID-19 in the state.

“LWSD is doing everything they can to get me sick,” said the 59-year-old Davidoff – one of more than 20,000 people who have signed an online petition demanding school closures.

The district, however – much like schools in New York and Los Angeles – has resisted calls to send students home.

“School closures can be disruptive and costly for families,” said LWSD in a statement, recommending that schools remain open unless there were specific COVID-19 risks.

The dilemma over whether to close schools has rolled into the United States as U.S. coronavirus cases top 200. The outbreak has had an unprecedented impact on schools worldwide, the education of over 290 million students affected in 13 countries, according to the United Nations.

Closures have long been a U.S. response to influenza, a dangerous and highly contagious disease for students. But health authorities are rethinking their approach for coronavirus, shown to have limited effects on children. –Reuters

“Do we really want to close schools or do we want to keep schools open so faculty can continue to come in and serve children?” said Seattle and King County health officer, Jeffrey Duchin.

Still, some of Seattle’s schools have closed – including the Northshore School District, which shut its doors on Thursday after a staff member was possibly exposed to COVID-19 and a student absentee rate of around 20%. It said that the students would receive online instructions.

Davidoff thinks that’s the right approach.

“Kids will have mild exposure but they will be spreading it to vulnerable parents,” he said.

Economic impacts and asymptomatic carriers

Reuters then appears to side with the school district – noting that having a large portion of the country’s 56 million+ school children in the US stay home for weeks or months could put a serious strain on an economy which is already facing great risks from coronavirus. What’s more, schools provide meals to more than 30 million students, as well as free childcare to working families.

With nearly 25% of the US workforce having no paid sick leave if they’re forced to stay home with their kids, the impact of school closures would be felt throughout the country.

According to the report, some think that school closures would increase the chances of community spread.

School closures could have a paradoxical effect on coronavirus spread.

If children are carrying the infection but not showing symptoms, they could be an invisible reservoir for community spread, said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota.

Duchin said sending students home to grandparents or older caregivers could expose them to the virus. And students sent home often gather together at places like malls, risking community spread.

“If kids are not getting infected and they’re not getting sick, then the last thing you want to do is shut down a school,” said Osterholm, citing data that only 2.1 percent of China coronavirus cases were among those 19 or younger. –Reuters

Proponents of school closures such as Satya Ananthu disagree – saying that children would spread COVID-19 to their families if schools don’t shut down. 

“Having kids in school will make them carriers of the virus to older people,” said Ananthu, an Everett, Washington tech worker who started an online petition advocating for shutdowns.

Another online petition was launched last weekend by eighth-grader Michael Finlayson of Kamiakin Middle School in Kirkland, and has nearly 22,000 signatures as of this writing.

“We are literally a half-mile away from ground zero for this virus,” said Finlayson.

Some parents, such as 27-year-old parent Alicia Aguirre of Los Angeles, have kept their children home voluntarily.

“I am going to go by the week and the numbers,” she said.

Another parent, 36-year-old Jamilah Mabruk is conflicted. Living 10 minutes from the Kirkland area of Seattle – where almost all of the state’s deaths have occurred – she’s nervous about sending her 15-year-old daughter to school. While her daughter doesn’t want to miss classes due to grades, she suffers from asthma and could be more severely affected by the virus.

“My anxiety is out the roof. I am very concerned because every day there is something new … a new death,” said Mabruk.