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Authored by Steve Watson via Summit News,

CNN anchor Chris Cuomo made a startling confession Monday, declaring that he doesn’t value his job and that CNN is “trafficking in things that I think are ridiculous.”

In a Howard Beale-esq moment, Cuomo made the comments on his SiriusXM show, apparently having an epiphany after contracting coronavirus.

“I don’t want to spend my time doing things that I don’t think are valuable enough to me personally,” Cuomo said, adding “I don’t value indulging the rationality, hyper-partisanship.”

Listen:

.@CNN‘s Chris Cuomo went on a rant today about how having the coronavirus has made him reconsider his life. He said he doesn’t like what he does, that it isn’t worth his time and even ranted about a “jackass, loser, fat tire biker”:https://t.co/ctHzceHlO1 pic.twitter.com/btHJRu41nI

— Shelby Talcott (@ShelbyTalcott) April 14, 2020

“I don’t like what I do professionally,” Cuomo said. “I don’t think it’s worth my time.”

Cuomo also said that he dislikes “talking to Democrats about things that I don’t really believe they mean” and “talking to Republicans about them parroting things they feel they have to say.”

The host seems to be reevaluating his role in the fake news system that has become purely about winning ratings by saying ridiculous things.

“I don’t think its worth it to me because I don’t think I mean enough, I don’t think I matter enough, I don’t think I can really change anything, so then what am I really doing?” Cuomo continued.

“I’m basically being perceived as successful in a system that I don’t value. I’m seen as being good at being on TV and advocating for different positions… but I don’t know if I value those things, certainly not as much as I value being able to live my life on my own terms.” he added.

The host also related an experience about being approached by a biker on Easter Sunday, being verbally abused while he was out with his family, adding that he wants to be able to act like any other member of the public, so he told the biker to ‘go to hell’.

“I don’t want some jackass, loser, fat tire biker being able to pull over and get in my space and talk bullsh** to me, I don’t want to hear it.” Cuomo ranted.

“That matters to me more than making millions of dollars a year…because I’ve saved my money and I don’t need it anymore. I want to be able to tell you to go to hell, to shut your mouth…I don’t get that doing what I do for a living.” he added.

Last year, Cuomo made headlines when he was caught on video threatening a guy who called him ‘Fredo’, the name of the ‘weak’ middle brother in ‘The Godfather’.

Cuomo told the person that he would “f***ing throw you down the stairs like a f***ing punk”:

“So, I’m gonna make changes,” Cuomo concluded.

“Why? Because I’ve gotta be happy. Why? Because life is short. Life is short. And I’m pretty far down the road – I’m gonna be 50.”

He also admitted that he doesn’t want to be like other network anchors who are open about their partisanship.

“I’ll never be Sean Hannity. I’ll never have this mass following that echoes a political set of ideas and principles that I’ll agree with. Similarly, Rachel Maddow.” Cuomo announced.

It seems that Cuomo is ‘mad as hell and he aint gonna take it no more!’

While some companies may be wasting time asking for rent concessions as a result of the coronavirus lockdown, Tesla, which is now valued at about $130 billion as of Tuesday morning’s trading, is telling its landlords its going to be paying less in rent.

The company sent out an e-mail to landlords as part of a broader push to find cost savings during the coronavirus lockdown, according to the Wall Street Journal. In it, they unilaterally decided they would be paying less in rent.

The e-mail read: “The rapid world pandemic that is now affecting our country has led Tesla to make strategic decisions to ensure the company’s long term success and growth. As a result of the increasing restrictions on our ability to conduct business, we would like to inform you that we will be reducing our monthly rent obligations effective immediately.”

The company, after unilaterally deciding rent concessions were in order, then said it hopes it can discuss options with its landlords in the days and weeks to come “so we can continue to partner and work together to ensure a continued and mutually beneficial relationship.”

The demand by Tesla raised some eyebrows on social media:

Look who’s panicking now? $TSLA valued at $120 billion should not be asking for rent savings due to coronavirus
Unless of course @Tesla @ElonMusk are engaged in overvaluation fraud via false sales projections to give the appearance of hypergrowth, eh @TheJusticeDept & @FBI? https://t.co/b8kmQ3XztP pic.twitter.com/Ucs7rVWn1L

— KillingMyCareer (@MelaynaLokosky) April 14, 2020

one of these companies is faking deliveries and can’t afford to pay rent pic.twitter.com/3Cm9JrnSZO

— EVent Horizon (@evdefender) April 14, 2020

Recall, just two days ago, we reported that Tesla had furloughed 50% of its sales and delivery team in the U.S. 

The company announced on Friday that about half of the company’s entire U.S. sales and delivery staff would be affected.

Workers in sales and deliveries were furloughed by their rank and their tenure, not on the basis of their performance. Anyone with entry-level roles or lower sales quotas each quarter have all been furloughed, according to sources at Tesla. Employees in senior sales and delivery roles who have been with the company for less than two years have also been furloughed.

One furloughed employee worried that permanent layoffs could be next as a way for Tesla to continue cost cutting that began in 2019.

Tesla had suspended production at Fremont and in New York on March 24. The Fremont suspension came after a spat with the Alameda County Sheriff’s department about whether or not Tesla was an “essential” business. It also came 8 days after Musk told his workers they were “more likely to die in a car crash” than from coronavirus. 

Two days after Tesla’s delayed close, on March 26, it was reported that two Tesla employees had tested positive for coronavirus.

According to an email sent to U.S. employees by in-house counsel Valerie Capers Workman, workers pay is going to be cut 10%, directors will have their salaries cut by 20% and VP salaries will be cut by 30%, the company said.

Tesla said that pay for salaried employees would be reduced on April 13 and that cuts would remain in place until the end of the second quarter, despite the company’s plans to re-open in early May.

Authored by Patrick Buchanan via Buchanan.org,

The same day the number of U.S. dead from the coronavirus disease hit the 15,000 mark, we also crossed the 15 million mark on the number of Americans we threw out of work to slow its spread and “bend the curve.”

For each American lost to the pandemic, 1,000 Americans have lost their jobs because of conscious and deliberate decisions of the president and 50 governors.

Some 60,000 citizens, we are told, will likely be lost in this pandemic. Are we prepared to accept 60 million unemployed to “mitigate” those losses?

What price victory in this good and necessary war to kill the virus? Is it unseemly or coldhearted to ask?

At what point do we “declare victory and get out,” as one senator told us to do in Vietnam, rather than continue to sustain the U.S. war dead, even if that meant South Vietnam would fall to our common enemies?

Economists at J.P. Morgan are forecasting that the U.S. gross domestic product will fall by 40% this spring and unemployment will reach 20% of the labor force this month.

These are numbers not seen since the Great Depression.

What does this deliberate decision to shut down the country and carpet-bomb our own economy, upon which we all depend, tell us about what we Americans value?

Consider. In a nation one-tenth as populous as ours today, Abe Lincoln sent more than 600,000 men and boys, North and South, to their deaths rather than let seven Deep South states secede and depart in peace.

While the daily loss of Americans to the virus appears to be leveling off, one-third of the way to that 60,000 figure, the other losses from the social and economic devastation we have invited upon ourselves have just begun to mount and will continue far longer.

How many millions of sick and elderly have we sent into solitary confinement? How many families have we forced into a daily struggle for the means to put food on the table and get medicine from the pharmacy?

When the decisions come from President Donald Trump and the governors to open up the economy and encourage Americans to go back to work, will the nation respond?

Will movie theaters and malls all reopen? Will shuttered hotels and motels fill up again? Will professional teams — the NFL, MLB, NBA or NHL — play again to the crowds they knew?

Will public, private and parochial schools, charter and high schools, colleges and universities, all open again to the same-sized classes?

Will conventions, concerts, rallies and recitals begin anew?

To save Americans from contracting a virus that may kill 1-3% of those infected, we have put America on a ventilator.

By courting a depression — a certain consequence of having a nation of 328 million mandatorily sheltering in place and socially distancing — we are telling the world the price we will pay to help save the lives of the thousands who might otherwise contract the virus and die.

Yet this decision raises related questions of life and death.

Can a nation that will accept a depression that destroys the livelihoods of millions of its citizens be credible when it warns another great power that it is willing to fight a nuclear war — in which millions would die — over who rules the Baltic states or who controls the South China Sea?

Would a nation so unwilling to accept 60,000 dead in a pandemic it would induce a depression to cut the casualties, engage in a nuclear exchange with Russia over Estonia?

The longer the shutdown continues, the broader, deeper and more enduring the losses the country will sustain.

We Americans already live in a nation and world atop a mountain of debt.

Student loan debt. Mortgage debt. Consumer debt. Corporate debt. Municipal, county and state debt. A national debt of $22 trillion now soaring into the stratosphere.

Then there is the sovereign debt of the Third World and of nations like Argentina and Italy. If we bring the U.S. and world economy down, who pays that debt? Or is that a ridiculous question?

The decisions we are taking today, hurling scores of thousands of small businesses and millions of citizens toward bankruptcy, could start a rockslide of loan defaults that will start tumbling the banks as well.

The decisions we take in this coronavirus crisis are defining us as a nation and a people. They are telling the world what we Americans will sacrifice and what and whom we will seek to save at all costs. They will tell us who and what is expendable and who and what is not.

They will establish a hierarchy of values that may not correlate exactly with what we Americans publicly profess.

Our decisions may tell us who we truly are.

For the first time since early March, Nasdaq has scrambled back above key technical levels as Dow futures test Sunday night opening highs…

Nasdaq Composite is back above its 50- and 200-day moving-averages…

Dow futures are soaring…

Will the machines extend or bend here?

After staying on the sidelines for the entire primary, President Barack Obama will officially endorse his former VP, longtime purported friend and now finally the presumptive Democratic nominee Joe Biden in the race for president.

NEW: Former President Barack Obama will endorse his former vice president Joe Biden in a video to be released this morning, according to a source close to the former president.

— Peter Alexander (@PeterAlexander) April 14, 2020

The endorsement is expected to come in the form of a video to be released via social media.

Late last week in a piece entitled “Barack Obama Wins The Democratic Primary”, Politico examined Obama’s reluctance to take the spotlight during the primary, and his weariness with the Democratic Party’s “bullshit”.

Though they tried to portray Obama as taking steps to bolster Biden behind the scenes, the details provided by the reporters don’t really support this. Instead, it looks like Obama sat out the whole primary, and didn’t even start talking about a Biden endorsement until after South Carolina, when Biden effectively clinched the nomination thanks to a strong debate performance, a solid win and the implosion of the Bloomberg campaign.

But some of his aides now concede that behind the scenes Obama played a role in nudging things in Biden’s direction at the crucial moment when the Biden team was organizing former candidates to coalesce around Biden.

“I know he did a few things,” said one longtime close adviser to Obama. “He was talking to Biden regularly in that period. I don’t know exactly what he said, but you can speculate! It’s noteworthy that he called Klobuchar and the others right when they got out.”

A person with knowledge of Obama’s conversation with Buttigieg after the former Indiana mayor exited the race explained it this way:

“Obama talked to Pete the night that Pete dropped out. When Pete told Obama that he was 99.9 percent of the way there in terms of endorsing Biden, I would say that Obama was encouraging. But I would also say that Obama was very careful not to be seen as putting a thumb on the scale. He and the people close to him are very careful about the optics – the 2016-style optics. Sanders and his supporters had reason to believe the party put the thumb on the scale for Hillary in 2016 and he wanted to avoid that. Obama wasn’t the driving force, but he was encouraging of people who had those instincts to rally around Biden. But he was very cautious and discreet in how he operated.”

A Democratic strategist added, “The truth is, he’d rather be on David Geffen’s yacht than dealing with internal Democratic party bullshit.”

And as the New York Times explained yesterday, while Biden appears to have a solid lead in ‘national’ polls, a close reading of polling data shows the race for the Electoral College is much closer than it seems, with the two candidates at a virtual draw, since the swing states that will decide the election have a disproportionate number of poorer whites with no college education who represent a huge chunk of the president’s base.

That’s because Biden’s bumbling primary campaign, where he frequently looked confused or even as if he were suffering from early-onset dementia, has not been forgotten, and the only reason that Biden even made it this far is because the public bought the DNC’s “most electable” narrative, hook, line and sinker.

It’s officially “anyone but Trump” 2020 as Bernie Sanders’ diehard fans weigh whether to just sit this one out.

The US State Department received two cables from US Embassy officials in 2018 warning of inadequate safety at a Wuhan, China biolab conducting ‘risky studies’ on bat coronaviruses, according to the Washington Post, which notes that the cables have “fueled discussions inside the U.S. government about whether this or another Wuhan lab was the source of the virus.”

A US delegation led by Jamison Fouss, the consul general in Wuhan, and Rick Switzer, the embassy’s counselor of environment, science, technology and health took the unusual step of repeatedly visiting the Wuhan Institute of Virology (WIV) – which had become China’s first laboratory to achieve the highest level of international bioresearch safety (BSL-4) in 2015. The last of the visits, which occurred on March 27, 2018, was documented on WIV’s website and subsequently scrubbed (archive).

US officials were so concerned by what they saw that they warned of a potential pandemic stemming from the lab’s work on bat coronaviruses.

“During interactions with scientists at the WIV laboratory, they noted the new lab has a serious shortage of appropriately trained technicians and investigators needed to safely operate this high-containment laboratory,” reads a January, 2018 cable drafted by two officials from the embassy’s environment, science and health sections who met with scientists from the WIV.

Interestingly, the Chinese researchers were receiving assistance from the Galveston National Laboratory at the University of Texas Medical Branch and other U.S. organizations, however the Chinese had requested additional help. Consequently, the cables warned that the US should give the WIV additional support because of how dangerous the research on bat coronaviruses was.

“Most importantly,” the cable warns, “the researchers also showed that various SARS-like coronaviruses can interact with ACE2, the human receptor identified for SARS-coronavirus. This finding strongly suggests that SARS-like coronaviruses from bats can be transmitted to humans to cause SARS-like diseases. From a public health perspective, this makes the continued surveillance of SARS-like coronaviruses in bats and study of the animal-human interface critical to future emerging coronavirus outbreak prediction and prevention.”

Shi and other researchers have strongly denied that the new virus known as 2019-nCoV came from WIV, after her team was the first to publicly report it.

According to the report, the bat coronavirus research was aimed at preventing the next SARS-like pandemic “by anticipating how it might emerge,” however according to the report “even in 2015, other scientists questioned whether Shi’s team was taking unnecessary risks.”

In October 2014, the U.S. government had imposed a moratorium on funding of any research that makes a virus more deadly or contagious, known as “gain-of-function” experiments.

WaPo is careful to note that ‘many‘ have said there’s no evidence that COVID-19 was engineered, and that concensus is that it came from animals, “that is not the same as saying it didn’t come from a lab, which spent years testing bat coronaviruses in animals,” according to Xiao Qiang, a research scientist at UC Berkeley.

“The cable tells us that there have long been concerns about the possibility of the threat to public health that came from this lab’s research, if it was not being adequately conducted and protected,” he said.

Meanwhile, similar concerns remain about the nearby Wuhan Center for Disease Control and Prevention Lab – a level 2 biosecurity facility, while the Chinese government refuses to say whether either lab was involved.

Notably, the Wuhan CDC is located roughly 900 feet from the wet market which accounted for roughly half of the new COVID-19 cases late last year.

That said, the report notes that the wet market didn’t sell bats – and the first known patient had no known connection to the market. That said, there’s nothing to say that an employee from the Chinese CDC didn’t accidentally infect themselves and go shopping for meat during the virus’s well known asymptomatic incubation period.

According to WaPo, citing sources familiar with the cables, the US embassy wanted to sound an alarm about the grave safety concerns at the WIV lab, “especially regarding its work with bat coronaviruses.”

“The cable was a warning shot,” said one US official. “They were begging people to pay attention to what was going on.”

Next, WaPo moves on to the ‘blame the Trump admin’ phase of the report, noting that “no extra assistance to the labs was provided by the US government in response to the cables” which “began to circulate again inside the administration over the past two months as officials debated whether the lab could be the origin of the pandemic and what the implications would be for the U.S. pandemic response and relations with China.”

Of note, the Obama administration ‘paused’ funding to the WIV, which was lifted a year into Trump’s presidency according to the National Review.

“The idea that is was just a totally natural occurrence is circumstantial. The evidence it leaked from the lab is circumstantial. Right now, the ledger on the side of it leaking from the lab is packed with bullet points and there’s almost nothing on the other side,” said one WaPo source.

Meanwhile, the CCP has put a complete lockdown on information related to the origins of the virus – refusing to provide US experts with samples collected from the earliest cases, and quickly shutting down the Shanghai lab which published COVID-19’s genome on January 11th for “rectification.”

As WaPo notes, “Several of the doctors and journalists who reported on the spread early on have disappeared.”

And now – considering the source of the report, the bat’s out of the bag and the official narrative has been set – which we were called conspiracy theorists for positing three months ago.

Authored by Richard Breslow via Bloomberg,

One thing you hear a lot of is, “I’m no epidemiologist, but…”

• The stock market will make new lows.

• The bottom is in.

• If we get a second round of infections, earnings will continue to be hurt and valuations are too high.

• If we come up with a vaccine faster than we thought, the recovery could come sooner than we are expecting.

None of the above is all that convincing when making predictions about where equity prices are likely to go.

All we can go on is what we know now. Whether the policies put in place seem sensible and whether we can catch a break.

We know for a fact that global economic numbers will be horrid. We just don’t know for how long and to what lasting effect.

I’m not at all sure why there’s this fascination over arguing vehemently about the issue of this being a dead cat bounce or the resumption of the rally. The truth is, we haven’t seen this before. There have been some big, quick and tradeable moves. They counted if you caught them. And also if you didn’t. And now we move on.

Lots of markets are at interesting pivot levels. Which matter more in the moment than earning bragging rights over calling the next big one.

The S&P 500 at and around 2,800 matters. Euro Stoxx 50 anywhere between 2,900 and 3,000 is as well.

Get the little things right and the rest will be much more likely to work out as hoped.

Guessing where the next home run will come may be a coin flip at this point.

But we do know that the market has friends within the halls of the central banks. And they care about the level of asset prices. They’ve gone, or are going, pretty much all-in. Doing so doesn’t always work out and, absolutely, not necessarily in a straight line. But it’s worth factoring it into your calculus. We all know what the Fed has been up to. Thankfully, they did a masterful job keeping the financial plumbing functioning. In any case, they didn’t, and perhaps shouldn’t have, stopped there. But, I don’t for a second think they will be able and willing to “take it back” when the time is right as easily as they hope. We’ve seen this play before.

Bloomberg News ran a really eye-opening article this morning detailing the extent of the BOJ’s activities in supporting the economy. And markets. Apparently there is always room to do more. What’s a balance sheet for, if not to use it? The line, however, that stood out came in an attached table. In listing purchases of ETFs and J-REITS was the explanation, “No schedule is announced. They tend to be conducted when equities drop.”

As we wait to see how the various pivot levels play out, it’s worth paying attention to how Italian fixed income trades. BTPs sagged right from the get-go. They have tried to rally since. There was a lot of criticism in Italy over the weekend about the terms that Finance Minister Roberto Gualtieri agreed to last Thursday as part of the euro zone rescue package. And he received some harsh criticism by the populist parties. Whether this becomes a lasting political problem for the government remains to be seen. But it should be on the radar. The Europeans tend toward needing to take multiple bites at the apple. And, to be fair, their equities are up on the day.

Another thing to follow will be the dollar. Maybe it really is going down. It just is unlikely to do so as easily as many forecast. Rates are low. They are going to stay there. Who else can afford to be jacking up theirs?

Millions of Americans are terrified that the first pandemic in 100 years will mark a dramatic turning point in social interaction that might cause disruptive new changes in many aspects of society and the global economy. What they seem to be forgetting, in many cases, is that 50 million people died during the Spanish Flu outbreak of 1918 – marking a global disaster on a much grander scale even than COVID-19 – and, afterward, nothing really changed.

This of course doesn’t guarantee that there won’t be serious long-term disruptions to certain industries – if not the entire economy – this time around. For all we know, Tyler Cowen’s dystopian vision of a New York City where those without COVID-19 ‘immunity’ are relegated to a kind of permanent underclass might come to pass. However, it certainly doesn’t seem likely.

And according to thousands of armchair analysts tweeting out their views and dozens of more refined professionals sharing their outlook on CNBC, if there’s any industry that’s going to need a rethink, it’s going to be travel and leisure.

Experts have raised the possibility that nobody will go on cruises anymore, that the “one-meeting” business trip will become a thing of the past, and traveling abroad for brief vacations might also become far less common.

But as valid as they seem, there’s also reason to believe these concerns might be misplaced.

To wit: as BI notes, despite the staggering negligence of management and maddening 14-day quarantines endured by passengers – not to mention the dozens who have died and hundreds who have been sickened – reservations on American cruise lines have actually climbed for 2021.

Even with at least one major cruise line facing a criminal investigation, BI said that over the past 45 days, the cruise booking site CruiseCompete.com saw a 40% increase in its bookings for 2021 over its 2019 bookings.

For those wondering why Americans might want to go on a cruise after all of this, we have two ideas: 1) lower prices, 2) many Americans are idiots (as evidenced by the ‘Covidiots’. Those people have parents).

Shortly after the report was published, Morgan Stanley’s Mike Wilson appeared on CNBC to explain his bank’s revised outlook, and emphasized the varying “best, base, and worst”-cases. When he got to the “best” case, he noted that there’s still reason to believe that the ‘best case’ scenario might actually play out, and the massive fiscal stimulus coincides with a natural strong rebound to send the global economy into growth overdrive.

Here’s one more reason to support that thesis – and a 3,250 2020 price target.

Authored by Bill Blain via MorningPorridge.com,

“If you try to take a cat apart to see how it works, the first thing you will have is a non-working cat.”

On Thursday I posted a note on the Fed doing exactly what I predicted – a programme to buy high-yield junk. A sniffy Wall Street trader called me an imbecile – which is quite a big word for a Wall St trader. He told me the Fed is not buying junk bonds, just ETFs related to junk and levered finance. He yelled at me to get it right. Really..? Go figure. Same difference. Its detail. I confidently predict the Central Banks will be buying equity ETFs soon enough – which is buying equity. End of. 

*  *  *

After a glorious 4 days Easter staycation over the best April weekend in history, do I feel refreshed enough to face another week in markets? As analysts simultaneously forecast global depression and record stock markets by year end, are we are into the realms of financial insanity? I have some seriously dark dystopian forebodings about where this could go…

Get over it… Smile.

But before we talk ourselves into giving up.. REMEMBER – things are never as bad as you fear they might be. (It doesn’t mean they are looking particularly good either.) If you are prepared for the worst, then you are less likely to be disappointed if it happens…  

If you can’t make your mind up about markets, you are in good company. I have to admit I am beginning to wonder what some commentators are smoking – there is lot of hallucinogenic nonsense out there. But, the bottom line is the global economy is not dead. It is adapting. That means massive change. It means dropping current orthodoxy, and working out what is real today may well be dead and buried tomorrow, and front-running the completely new opportunities that are going to arise. It’s dangerous, but kind of exciting. 

To face the future… get pragmatic. 

First: 

Work out why the market is fooling itself. Markets are scared of change, with a default position things will revert to “as-they-were.” This time they will not. There are a number of dangerous narratives playing out in markets at present – all of which expect things to revert to “same-as”. 

1) C-19 is going to go away because of “curve flattening”, and we will have a vaccine in a few months time. No. We mighthave a vaccine in a year or so, and Might is not a winning market strategy. C-19 might not go away any time soon.

2) This is not a real war. No means of production like factories, ships, infrastructure have been destroyed. Everyone can start working again when the all clear sounds. No. As the old adage goes – 40% of American’s are one pay-check away from bankruptcy. A recent survey says nearly 40% have seen family members lose jobs, and 30% of Americans think their jobs are at risk.

3) Global trade will swiftly fill any supply gaps.  No. Protectionism is going to play front and centre as countries seek to ensure they are not caught again.

The World had changed. Adapt to it. 

Second:

Let’s remind ourselves of the disturbing reality.. A few examples to think about: 

• Stocks have just staged their best turnaround performance in over 80 years. The Global economy is heading for a 10-15% single quarter contraction. 

• Investment banks are calling the bottom on stock markets, to buy credit bonds, and predicting a V-Shaped recovery. Landlords, Lenders, Companies and Individuals are being sucked into a cascading landslide of defaults, missed payments, increasing debt, fear and panic.  

• Central banks are pumping cash into economies through QE infinity, governments are doing everything to get cash to companies to keep them going. Some support programmes are swift and are working. Others are delayed, with failed delivery exacerbating the sense of crisis. Markets are arbing the supports.

• Asset managers say strict investment ESG guidelines have never been so critical. Moral Hazard has gone out the window when it comes to bailing out protectionism, payrolls and sectors. 

• The Financial sectors thinks it’s fantastic – witness the Goldman Sachs syndicate head bragging of his record first quarter new issue revenues in bonds, despite lockdown. People don’t have enough cash to put food on the table for their kids.

• Investment banks are telling their staff to get back into their offices. C-19 is running rife around bankers who have gone back in. 

• Politics is creating new heroes. Everyone loves Boris. Trump gets testy when his C-19 record is questioned. Not a problem – the Democrats look determined to lose in November. 

Third

My job is to try and make sense of it. Let’s lay all the pieces of the jigsaw on the table, and try to put them together. 

• Massive monetary stimulus through QE Infinity, and unlimited fiscal support via the promise of sector and company bailouts and nationalising payrolls, have fuelled the market’s expectations rally. NOT BECAUSE OF A STRONGER ECONOMIC OUTLOOK OR RISING COMPANY RESULTS. Distortion and disconnect is not sustainable long-term (although its pretty much fuelled markets since 2009). 

• The expectation is Central Banks can’t allow a market meltdown. Follow the Fed.. you won’t lose. Financial assets – bonds and stocks are rising. If you fear inflation, stocks and bonds are where to look for it.

• There is no escape for Central Banks and Governments from the consequences of their actions – they can’t pull fiscal spending without crushing the economy, and they can’t pull back monetary market support for fear of crushing confidence. They have “crossed the diamond with the pearl” to create the ultimate market drug high, and markets can’t face cold-turkey. The merest hint of a taper tantrum today – and we’re talking massive market reset. Negative rates look inevitable. 

• A massive deflationary demand shock is under way as incomes crash, insecurity and uncertainty wipes out whole sectors, and governments predict massive GDP damage. 

• This week we will get a barrage of new doom-laden forecasts from the virtual Washington IMF/World Bank meetings. Plus, it’s the start of the US earnings season – so we get first look at Q1 business damage. They may shock markets, but we really need to know how companies plan to cope. 

• Investment firms are in serious trouble as dividends plummet. Asset managers need returns to pay investors. There are zero returns across financial assets. The only way to generate returns is to go yield hunting – meaning investors will take increased risk, piling into riskier assets like Emerging Markets. It’s another accident-waiting-to-happen the authorities can’t let happen. Expect further financial asset bailouts. 

• Where will all the cash go? Companies borrowing unlimited amounts of rescue money through governments are unlikely to rationalise making any serious investments into deflationary economies with 20% plus unemployment. Their response is more likely to be defensive, retrenchment via cost and job-cutting while determining what the future looks like. Depression will fuel depression. 

• Demand for get rich quick speculative fantastical stories – like Bitcoin, We Work and other implausibles – will push prices higher. Note how Tesla has bounced 40% plus off its recent lows despite the fact no one is buying cars. I’m pretty sure I’ll be writing about Softbank’s collapse in coming days/weeks/months. 

• Helicopter money support direct to consumers may alleviate immediate poverty by giving the masses a couple of day’s fish, but for those still with income and the knowledge to fish, it will magnify income inequality. 

I’ve seen some investment banks predicting a 35% Q2 global GDP crash. Other analysts are looking at 2022 before we see global production recover. Sage old hedge fund managers are telling us it’s the “worst I’ve ever seen..” 

What does the jigsaw show us? Ongoing uncertainty and insecurity, meaningless financial asset markets reflecting monetary and fiscal distortion rather than economic reality, low growth (if any), declining investment, soaring unemployment, rising social discontent. 

Fourth: 

What are the opportunities?

I suspect…. A massive refocus on what is real in the real economy. Make the assumption the global economy is going to recover and change to reflect the impact of C-19 Event. Working patterns will change. Microsoft is a good example – its cloud business is going through the roof. Office property? Not so hot. Global travel will return, but could take years. Go figure out what the future looks like. Fundamentals…  

Who wants to own high risk financial assets in search of a few basis points in yield? Better returns will be made from owning real assets in the real economy. That is what Warren Buffet and others are waiting for – the opportunity to buy real companies and assets.. not overpriced stocks. Until the distortion of financial assets is undone – which looks pretty much impossible… I’d rather own real things… 

Recovery is going to follow – Commodities could be a starting point. At the moment everyone is looking at depressed Oil prices, saying global demand has plummeted, despite China’s stronger than expected production numbers. At some point, sooner than expected, we will see commodity demand rise sharply. 

I cycled round Southampton Docks on Saturday. There were five massive cruise liners laid up, empty. They cost about $750mm, and guzzle around $10mm a month to run in terms of debt service, crews, fuel, and the rest. How long can cruise companies haemorrhage money? Well… I read that cruise bookings for 2021 are actually up. Yep.. people still want to go to see the world from a luxury hotel room. 

Or… we could figure out how to reset the global economy. More than a few folk are proposing a debt jubilee – but that would have enormous consequences. 

Let’s finish on a fairy-tale…

The publican was worried – the bar was empty. No one was making any money and could afford to drink. Next day a German tourist walks into the bar. He says he needs a room for the night. The publican shows him both available rooms. The German says he will need to ask his wife. He gives the publican 100 Euros to hold the rooms. The publican immediately runs across to the grocers and pays off his 100 Euro tab. The grocer nips across to the butchers to pay the 100 Euros he owes for last week’s meat order. The butcher runs across to the undertaker to pay off the Euro 100 cost of his father’s recent funeral. The undertaker rushes off to the village Madam to pay for services rendered. She runs across to the pub, and pays the publican 100 Euros for the rooms she’d rented. The German returns with his wife, who doesn’t like either room, and the publican gives the German his 100 Euros back. The bar is full that evening… 

If only life was so simple…