Before we get to Chinese tensions, let's start at home with the explosion of racial tensions in Minnesota after a white cop kneeled on a black man's neck, George Floyd - causing him to have trouble breathing and ultimately, die. It appears in the video that Floyd was complying with the cop's orders.
There have now been multiple nights in a row of rioting and looting in Minneapolis. The cop has been fired and charged with 3rd degree murder.
The riots have spread to the other large cities across the country. Watching the news is like watching reports from war-torn 3rd world countries. It's surreal.
On Friday, there was a video of a black reporter on the scene being arrested on a live broadcast while clearly complying with orders from the police. He's since been released, but still.
Only a few weeks ago we got video of a Georgia jogger, Ahmaud Arbery, who was shot by a man in the back of a pickup truck. Ahmaud Arbery was a black man. The shooter(s) are white.
This is an atrocity.
There shouldn't be racial violence in modern times. Especially from cops. Something about President Trump brings out the worst in a certain segment of the population. It needs to end. We're better than this.
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Moving on to China, they've threatened to renationalize Hong Kong with 27 years left on the quasi-independence deal made 23 years ago. Hong Kong was the gateway to China - where Westerners could transact in a rigorous, reliable system - where the rule of law was upheld. Ending that is a bad idea for China as global capital will flee. China is also involved in a skirmish at their Indian border. Neither of these is good. Neither is being talked about enough. That's a problem.
Never mind that Russia tried to invade Ukraine a few years ago. What's to stop them from joining the foray and making a move too?
Geo-political tensions are clearly elevated.
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Also in the US, President Trump got mad at Twitter when they fact-checked one of his Tweets about mail-in voting. He quickly formulated and signed an executive order as part of his tantrum about fake news outlets across the board. He then Tweeted something about "looting leads to shooting" which Twitter flagged again as promoting violence.
Donald Trump was not made to lead in this setting. He's not compassionate or able to navigate nuanced, tense situations. He's a blunt person who can be hard-headed. In the first few years of his presidency, that was fine. He can renegoatate deals when the stakes are economic. When war drums are beating too, he's out of his depth. Throw in the pandemic, which he downplayed and is now angry about. And the racial tensions. It's no wonder he didn't take questions during his Friday speech. He might have exploded.
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Let's get into some charts!
Starting with 70% of Americans think we're in a depression or recession. I don't know why 30% think we're not, but at least the trend is in the right direction.
A fun chart about increasing debt, a favorite topic of ours. Commercial & Industrial loans are spiking and at all-time highs. Nonfinancial Corporate Debt is likely to follow when the data gets released. The debt bubble continues to build.
Personal consumption expenditures off a cliff:
Which means that personal savings is flying high:
Inflation continues to slow:
Earnings calendar: We'll be watching Broadcom, specifically, for an opportunity to add it back on weakness.
The plan this week is to stay nimble and keep working our single-stock long ideas while shorting various equity indexes. That seems to be our sweet spot. We've been pretty good at shorting indexes and horrible when it comes to shorting single stocks. On the other hand, we've done pretty well on the long side and will keep looking for opportunities in new and past companies.
We're at the family lake house opening the place up for ourselves. Due to COVID-19, it won't be as full of people this year. Getting here is a problem for the out-of-state folks. Being here as a group is a problem for everybody. So it will be a very different summer on the lake.
There have now been multiple nights in a row of rioting and looting in Minneapolis. The cop has been fired and charged with 3rd degree murder.
The riots have spread to the other large cities across the country. Watching the news is like watching reports from war-torn 3rd world countries. It's surreal.
On Friday, there was a video of a black reporter on the scene being arrested on a live broadcast while clearly complying with orders from the police. He's since been released, but still.
Only a few weeks ago we got video of a Georgia jogger, Ahmaud Arbery, who was shot by a man in the back of a pickup truck. Ahmaud Arbery was a black man. The shooter(s) are white.
This is an atrocity.
There shouldn't be racial violence in modern times. Especially from cops. Something about President Trump brings out the worst in a certain segment of the population. It needs to end. We're better than this.
_________________________________________________________________________________
Moving on to China, they've threatened to renationalize Hong Kong with 27 years left on the quasi-independence deal made 23 years ago. Hong Kong was the gateway to China - where Westerners could transact in a rigorous, reliable system - where the rule of law was upheld. Ending that is a bad idea for China as global capital will flee. China is also involved in a skirmish at their Indian border. Neither of these is good. Neither is being talked about enough. That's a problem.
Never mind that Russia tried to invade Ukraine a few years ago. What's to stop them from joining the foray and making a move too?
Geo-political tensions are clearly elevated.
_________________________________________________________________________________
Also in the US, President Trump got mad at Twitter when they fact-checked one of his Tweets about mail-in voting. He quickly formulated and signed an executive order as part of his tantrum about fake news outlets across the board. He then Tweeted something about "looting leads to shooting" which Twitter flagged again as promoting violence.
Donald Trump was not made to lead in this setting. He's not compassionate or able to navigate nuanced, tense situations. He's a blunt person who can be hard-headed. In the first few years of his presidency, that was fine. He can renegoatate deals when the stakes are economic. When war drums are beating too, he's out of his depth. Throw in the pandemic, which he downplayed and is now angry about. And the racial tensions. It's no wonder he didn't take questions during his Friday speech. He might have exploded.
_________________________________________________________________________________
Let's get into some charts!
Starting with 70% of Americans think we're in a depression or recession. I don't know why 30% think we're not, but at least the trend is in the right direction.
A fun chart about increasing debt, a favorite topic of ours. Commercial & Industrial loans are spiking and at all-time highs. Nonfinancial Corporate Debt is likely to follow when the data gets released. The debt bubble continues to build.
Personal consumption expenditures off a cliff:
Which means that personal savings is flying high:
Inflation continues to slow:
Earnings calendar: We'll be watching Broadcom, specifically, for an opportunity to add it back on weakness.
The plan this week is to stay nimble and keep working our single-stock long ideas while shorting various equity indexes. That seems to be our sweet spot. We've been pretty good at shorting indexes and horrible when it comes to shorting single stocks. On the other hand, we've done pretty well on the long side and will keep looking for opportunities in new and past companies.
We're at the family lake house opening the place up for ourselves. Due to COVID-19, it won't be as full of people this year. Getting here is a problem for the out-of-state folks. Being here as a group is a problem for everybody. So it will be a very different summer on the lake.
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