By Chris Black
The people who are in the know get a front row seat to the biggest train wreck of all time.
It takes around 1-2 years for the initial effects of an event to truly show up in the economy. Right now you are beginning to see the real effects of shutting down the entire country one year ago.
Businesses are going to go bankrupt in numbers never seen before in history over the next year.
It doesn’t matter if everything opens up, the supply chain was destroyed, the core of small business America is gone, and the only source for income is now the government. Entire cities are now boarded up with nothing left of commerce.
The things that drove people to the city, like shopping, and restaurants, are still shut down. You went to those things after you sought entertainment.
Without the entertainment venues, everything else fails. How is anything outside Fenway going to survive when only 2000 people are allowed to go to a Red Sox game? How is the stadium going to survive? 5000 people at a Patriots game? The team doesn’t survive.
Cleveland Ohio is now a ghost town. The current situation makes the dark times of the 1970s look like the roaring twenties.
People thought 1929 was crazy and it could never happen again. It took 70 years but it happened.
1999 was insane and everyone knew it. But Wall Street was given a huge bailout and financial deregulation allowed a new massive bubble to form.
They called 2008-09 a financial crisis. Compared to what has happened over the last decade, it was nothing.
Now every other bubble in history, including the South Seas and Tulip mania look like tiny blips.
Apple has fallen below $2 trillion, wiping out the entire valuation of the company prior to 2018.
That is how insane this bubble is. A company can have its total market cap after nearly 40 years of being a publicly traded company wiped out 100%, AND STILL BE WORTH $1.9 TRILLION!!!!!
If Apple drops back to $1 trillion in market value, it would be the greatest crash of market valuation in history, and still leave the company worth nearly double what it was three years ago.
Global Macro is clearly filled with idiots.
The incomes of millions of workers have been permanently destroyed. The businesses aren’t coming back. What will be opened will be opened with diminished capacity. The supply chains are ruined and costs have skyrocketed.
The only things that came through unscathed were the massive megacap companies that have been destroying the sustainable economy for decades.
Inflation is running at rates not seen since the 1970s and incomes are dropping. The things left alive have increased prices 25% since September. Restaurant meals that were $12 are now $17, you can’t even feed three people at Applebee’s for under $50.
The entire leisure and hospitality industry is decimated and Covid regulations won’t be going away for a long time. This will keep a lid on the recovery in this sector.
The United States is dead. China is the new king of the world.
GDP is simply a measure of the transfer of money, not real economic activity. Sending a couple hundred billion to Israel, so that Israel can send it back to their agents around the world to buy up property and businesses doesn’t grow anything. It just concentrates power. But those transfers count as growth in GDP.
The vast majority of Americans do not care about stocks, even less care about crypto. The Wall Street Bets crowd is going to learn the hard way about what happens when the SEC and the IRS get involved.
If you actually made money and pay taxes, the “stimulus” is just a forward payment of a tax credit. Those who normally expect to get $2000-3000 back at tax time are in for a rude surprise. If you thought you were getting an extra couple thousand dollars, you’re wrong. You just got your refund early.
The wealthy don’t care about $1400, but they’ll claim that the stimulus is great for stocks, because if stocks go up 1%, they will make a lot more than $1400 on their holdings.
The stimulus was really nothing but a gift to the garbage of our society that lives off government hand-outs. Because they pay no taxes, they just get to keep the cash. The “thank you” note for voting more big government I guess…