Week of September 6, 2020

September 08, 2020


Stuff I read that gets stuck in my head

“They gave him some glasses that brought things back for a while and he said they were wonderful and that once he was done feeling sorry for himself, he became greedy for the looking of things, and he went out and saw things, looked hard at things until the old became new.  He said he was afraid that there was too much that he might not see again, but rather than gorge on new places and scenery, he wanted to see the familiar things and places, wanted to take the time to see them completely, instead of rushing by as if they would be there forever.”  Hayes, D. 1995. Passion Below Zero, Essays From Last Chance, Idaho

“Collaboration between unrelated strangers seems to be an uniquely human achievement.  In no other species, can two individuals that have never before met exchange goods or services to the benefit of each other . . . Indeed, in other group-living species, such as ants or chimpanzees, their interactions between members of different groups are almost always violent.  Yet human beings can treat strangers as honorary friends.”  Ridley, M. 2010. The Rational Optimist

“Each animal is still obliged to support and defend itself, separately and independently, and derives no sort of advantage from that variety of talents with which nature has distinguished its fellows.  Among men, on the contrary, the most dissimilar geniuses are of use to one another.”  Smith, A. 1976. An Inquiry Into The Nature And Causes Of The Wealth Of Nations

Human Tribe & Ingenuity

People working better together and inspiring each other

Changing demographics.  The Covid-19 virus has changed how people work, go to school, and where they live.  What will the movement of people out of cities do to how states traditionally vote?  https://thehill.com/opinion/criminal-justice/514541-the-coming-blue-city-exodus

Venezuela is a fascinating story.  At one time it was the major oil producing country, a founding member of OPEC.  Years of mismanagement, socialistic ideals, and American sanctions has created a real life Atlas Shrugged like situation in this country. https://www.wsj.com/articles/oil-industry-is-fading-away-in-land-of-the-worlds-richest-reserves-11599238961?mod=itp_wsj&ru=yahoo


We are seeing a great rotation in companies via the virus.  Companies like Home Depot, Microsoft, Apple, large grocery chains, etc. were able to capitalize.  Dominoes was thinking ahead of the curve and is an interesting look into how companies that were pushing research and new ideas were able to capitalize in this market.  https://www.wsj.com/articles/most-businesses-were-unprepared-for-covid-19-dominos-delivered-11599234424?mod=itp_wsj&ru=yahoo

Black Swans & Other Market Tidbits

What is on the horizon that could trip us up

The Fed now has less tools to combat a recession.  Their reduced effective influence may keep them from supporting the stock market through a “Fed put”.  https://www.wsj.com/articles/the-fed-lays-out-new-goals-but-its-tools-could-be-lacking-11598796001?mod=itp_wsj&ru=yahoo  This, and the Fed guidance that they won’t raise interest just because inflation grows past the 2% target or just because unemployment rates fall below a level the Fed thinks could cause increased consumer demand (demand goes up, prices go up).  Inflation and a market pullback are things to watch.

Something to watch regarding Covid-19:  large third-world countries and even continents are drastically lagging developed countries in testing.  https://www.wsj.com/articles/in-the-worlds-coronavirus-blind-spot-fears-of-a-silent-epidemic-11598806800?mod=itp_wsj&ru=yahoo Here lies the biggest risk in infections and mutations of the virus that go undetected due to underfunded and understaffed medical facilities.

With Hong Kong done as far as democracy goes, is Taiwan next?  https://www.wsj.com/articles/fearing-hong-kongs-fate-taiwan-moves-to-bolster-its-military-against-china-11598803656?mod=itp_wsj&ru=yahoo

We are in a time of tremendous social upheaval.  It is not hyperbole to compare the rise of the internet and social media to the invention of the printing press.  Now, anyone can post their opinion and worldviews for anyone else in the world to see at the press of a button.  Ad in a modern plague, and you have similar conditions to the reformation and the revolutions in Europe that followed.  Could war be the next shoe to drop?  https://www.wsj.com/articles/plagues-are-back-will-wars-follow-11598915607?mod=itp_wsj&ru=yahoo

People are travelling for vacation by automobile, but it is not enough to offset the lack of normal driving patterns.  Most large corporations continue to have their employees work from home, many schools and universities are doing remote learning, and normal business travel has come to a near halt.  People also tend to consume (restaurants, convenience stores, etc.) while they are driving.  Are the energy markets a precursor for other sectors?  https://www.wsj.com/articles/summer-fuel-demand-disappoints-challenging-economy-11598952601?mod=itp_wsj&ru=yahoo

More money is coming from the Feds.  How much and when is still under debate.  Will it be enough and will it help the markets?   https://www.wsj.com/articles/mnuchin-urges-congress-to-passmore-stimulus-funding-11598988384?mod=itp_wsj&ru=yahoo