2020 – Something Big is Afoot. Are You Prepared?
Unexpected Clarity is Good
October is my favorite month. Cool, crisp, low humidity air replaces the hot, “close” high humidity of summer. This year I completely missed September due to my recovery from a hernia operation combined with Shingles. The surgeon prescribed opioid derivative pain meds. I threw them away and used Tylenol. The pain from the Shingles was worse than the pain from the surgery. Much worse. Get the new vaccine against Shingles. I have an appointment with my doctor for January 2021 to get that vaccine. I try to only repeat things that are fun, profitable, or both. Shingles is not on any of those lists.
However, the Love of My Life discovered a previously unknown and unrecognized cure for Shingles. Key Lime Pie. While picking up a prescription for me, she and the pharmacist discussed the sale Food Lion was having on a particular brand of Key Lime Pie and they decided it would help me recover. They were correct.
Slices from the first Key Lime Pie applied at lunch were a critical turning point in my recovery. Like any good study of therapeutic medicines, there was a pause in applying the cure once the first pie was consumed. Because my recovery stalled, a second Key Lime Pie was acquired. By the time the second Key Lime Pie had been consumed, the Shingles were clearly in retreat. Since I cannot get the vaccine against Shingles until January, I am going to apply a Key Lime Pie at the end of each month between now and January in order to make sure that Shingles does not return. It seems to me that is simply being prudent.
In the last week clarity was achieved on a variety of other issues:
- Bad Management not Climate Change – In the midst of having wildfires burn 4,000,000 acres in states on the west coast, it was great to see some articles from knowledgeable professionals accurately stating that the origin of those wildfires is the mismanagement of the timberland. One article even had a picture of a Northern Spotted Owl (NSO) which was the species that Bill Clinton “saved” by banning the harvesting of timber on Federal land in reaction to the environmentalists claiming the NSO demise was due to timber harvesting. Now we know that it was the Brown Owl killing the Northern Spotted Owl, not timber harvesting. And we have 30 years of tinder created in unmanaged forest resulting in horrendous timberland fires that kill people and destroy communities. Big Government. Never waste a crisis to build your power base.
- Dodging and Weaving – Comey appeared at a hearing in the Senate. Despite his relatively young age, his memory was surprisingly deficient. He said he remembered that at a meeting of Obama, Biden, Sally Yates (acting Attorney General) at the White House in late December 2016, no one brought up using the Logan Act against General Flynn especially not Biden because that would have been illegal. But, that means Comey forgot his own written memo and Sally Yate’s handwritten notes, both of that meeting that stated Biden was the origin of the idea of using the Logan Act against General Flynn. It was use of the Logan Act that was a major part of the Russian Collusion Hoax that the Democrats used to hammer Trump for the first two years of his presidential term. By his response Comey actually provided great clarity that the Obama administration has consistently lied and did weaponize the USA security agencies being against a political opponent. Every American should be livid, that is beyond scary.
- Theatre 1 – The First Debate has been the source of much criticism of Trump for his “Bullying” of Biden. Given the fact that Trump was on stage with the man who played a major role in the unprecedented, brutal, and illegal use of government agencies to spy on and then defame Trump, it seems to me that Trump deserves a great deal of credit for not walking across the stage and cold cocking Biden. Now that is a “debate” I would stay up and watch. In addition to his three nominations for Nobel Peace Prize for the Mideast Treaty (an actual treaty, not a pretend one like Obama’s nor Clinton’s one we taxpayers bought), Trump deserves an award for his restraint.
- Commercial Real Estate Agony – It is still a little early to quantify the Wuhan Virus distress in the commercial real estate market. It will be spring 2021 when enough data will be available to gauge the impact accurately. However, some preliminary data was reported this past week. Metro Richmond seems less impacted than many areas. However, a significant number of distressed commercial loans are beginning to appear with most of the pain in office, hotel, and retail markets.
- Caution Ahead – In the last two recessions we reached a point where too much liquidity was floating in the economy. We are at that point again because one of the hottest investments on Wall street today are Blank Check Special Purpose Acquisition Companies known as SPAC. These companies have no earnings, are purely speculative investments by folks depending on the sponsor’s promise to buy private companies with earnings. Dumb money creates problems.
- Theatre II – The release of Brennan’s handwritten notes of a meeting in July 2016 in which he discloses Obama, Biden, Brennan, Susan Rice and others that Hillary Clinton had decided to create a fiction of Russian Collusion to divert attention from her illegal private server. Have you enjoyed watching the Obama co-conspirators like Brennan shucking and jiving as they dance to explain how their own memorandum and notes are wrong? This would be funny, except it is EXTREMELY DANGEROUS. I hope his life insurance is paid up.
This material existed three years ago proving the Russian Collusion was a hoax. So Mueller’s Special Counsel was a sham, the FISA warrants were false, ad nauseum. What it does not explain:
- What acts did Obama and his co-conspirators need to cover up?
- How come our Justice Department could not take these facts, indict, and convict the co-conspirators. It looks like a first-year law student cake walk. Obama appointees.
- Stay tuned, there was so much corruption under Obama that more is coming.
In the real world, the financial markets are fully valued so the trading is based on headlines. That increases the risk versus when the financial markets are trading on financial fundamentals. All of the economic stimuli flowing into our economy is giving us the economic equivalent of a sugar high.
The residential land market is red hot because The Fed is forcing mortgage rates below 3% to the lowest levels in history. Similarly, The Fed is trying to force investors to spend their cash rather than hold it in savings accounts. The Fed wants economic growth.
As a result, investors with cash are “chasing yield”. In the financial markets, that driving force is creating the opportunity for such “creative” investments as SPACs. In the land market we are seeing investors that are seeking land with various criteria. Reality will come into focus in two stages:
- In the spring of 2021 as we reach the trough of the Wuhan Virus Recession.
- With The Fed saying they expect to keep interest rates close to zero until the end of 2022, there is the risk of creating a huge bubble in asset values. That means that 2023 is high risk for a slower real estate market with declining prices as interest rates increase.
The severity of the future downcycle will depend on who is elected President on November 3. Trump’s policies will lead to strong economic growth which will raise household income. That will soften the downcycle. Biden’s announced policies of increased taxes and regulations will return us to the same tepid economy of Obama/Biden. The resulting lower growth in household income will exacerbate the downcycle leading to pain.
One has to wonder when the electorate will finally figure out that it is impossible to raise taxes and increase the size of government to create economic growth. If that combination worked, communist countries would be the rich. None of them are. It is impossible. But there are plenty of idiots that believe foolish statements by someone with a PhD. “Intelligent” is not the same as “Smart”. Biden’s economic plans are pure snake oil.
“For God’s foolishness is wiser than human wisdom, and God’s weakness is stronger than human strength”.”
(1 Corinthians 1:25 New Revised Standard Version, Oxford University Press)
Capitalism builds wealth, socialism consumes it in self destruction. I serve an awesome God. With God on our side, who can stand against us. Pray. Hard.
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