Something’s Coming.
This week’s Economist:
Yesterday’s Wall Street Journal:
The Atlantic:
Remember when Tony knew Something Coming in 1961. It was beautiful for a moment. But didn’t end well.
The 2008 Great Financial Crisis started with subprime mortgages losing value. It was precipitated by the collapse of Lehman Brothers in September 2008.
I’ve been mulling. What could be the precipitating event this time around? There definitely will be one.
My best guess is one of the big subprime business lenders — the ones who lend to businesses which conventional banks won’t touch. There’s been a huge explosion in these business lenders, many promising high returns to investors. Many are leveraged, some highly leveraged.
In times of crisis, like now, leverage is not good. And many of their lenders are small and undercapitalized and very vulnerable to the disastrous impacts of new sky-high tariffs.
“So… I am the meanest mom ever… Like… Ever.
From Quora:
Took the kids to Dairy Queen after dinner. They ordered their dessert choices and we waited about 5 minutes for them to call out our number. The young lady (maybe 17) handed each child their ice cream.
Not one looked her in the eye. Not one said thank you. Not to her, not to me… So I waited. I counted to 10 in my head as they dug into their ice cream and the young lady just looked at me (probably because she thought I was hearing voices) and I watched as my children strolled out the door. I followed them outside where I calmly collected their ice creams and my kids watched in horror as I deposited them into the nearby garbage can.
All 3 launched into mass hysteria. I waited. Quiet. Calm. When they realized I had something to say, they quieted down.
I explained that one day, if they were lucky, they would work a job like that young lady. And I would hope that people would see them. Really see them. Look them in the eye and say thank you. We are too old at 8/7/5 to move through our days without exercising manners and honestly basic human decency.
So today, I am the meanest mom in the world.”
Today’s Favorite headline
My dear friend commented “Hire Clowns. Expect a Circus.”
The worst start in 100 years
Investopedia ran this headline yesterday: “U.S. Stocks Are Off to Their Worst Start to a Presidency in a Century”
Desperate, investors are searching. Many are rushing for the exits, going heavily into cash. Some believe that present low prices are bargains. But the bargains are getting cheaper daily. Nothing is easy in these uncertain times.
Trump has simplistic ideas. Interest rates should come down, he says. Trump says the banker he picked to lead the Federal Reserve, Jerome Powell. is “a major loser.” Powell’s reports are a “complete `mess!'” And his termination “cannot come fast enough!” He has called for Powell to be fired.
Many people believe that Powell’s firing would trigger a huge crisis. Powell is the last common sense, remaining.
The law says Trump can’t fire Powell …. But, and that’s part of the uncertainty hanging over markets.
For now, I’m long NFLX, QID and GLD, but short TSLA and BA.
They’re not big bets.
This is not a time to be making big bets on anything.
This is a time to be playing tennis and reading novels.
My recommendation: Ken Follett. He’s perfect for today. A master story-teller, with no axe to grind. Thoroughly engrossing.
A little fun
I’ll be back. That’s a promise and a threat. — Harry Newton
