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Sell in May and Go Away. Come Back Another Day

All the awful facts are in: 30+ million unemployed. Over a million+ people infected with Covid-19 in the U.S. More people dead in the last month (63,000) than Vietnam and 9/11 combined. A huge swath of the economy shuttered. No early vaccine or cure. Retailers are going broke. Apparel makers are over-burdened with inventory they can’t sell. Few of the stay-at-home and pharma company stocks are working any longer. And … a frightening lack of leadership from the Administration.

Unless you have the stomach for losing money each day (I don’t), it is better to be in cash. Sit this one out, for now.

The Economist has these words:

Just as in 2008, investors are confronting huge variables that outnumber solid facts. Will the virus weaken as the seasons change? Will it mutate and become even more virulent? If the pandemic goes on long enough, it could ravage economies and bring down companies, threatening their ability to pay their debts.

“Large economic shocks have a proclivity to turn into financial shocks,” said Mr. Stiglitz, the economist. “There is every reason to believe that things will get much worse.” …

Forecasters at Morgan Stanley offered one of the grimmest assessments for how much damage the coronavirus could inflict on the American economy in the months to come. The economists said in a research note that they expected the economy to contract at an annualized rate of 2.4 percent in the first quarter of the year and a 30 percent rate in the second quarter — which would be the worst single-quarter drop recorded in modern American economic statistics.

In that scenario, the unemployment rate would approach 13 percent, which would also be a record.

“Economic activity has come to a near standstill in March,” they wrote. (And worse, in April.)

Then there’s a devastating piece written by a famous Irish political reporter, Fintan O’Toole, in a recent issue of The Irish Times:

Donald Trump has destroyed the country he promised to make great again

The world has loved, hated and envied the US. Now, for the first time, we pity it

by Fintan O’Toole, The Irish Times, April 25, 2020

Over more than two centuries, the United States has stirred a very wide range of feelings in the rest of the world: love and hatred, fear and hope, envy and contempt, awe and anger. But there is one emotion that has never been directed towards the US until now: pity.

However bad things are for most other rich democracies, it is hard not to feel sorry for Americans. Most of them did not vote for Donald Trump in 2016. Yet they are locked down with a malignant narcissist who, instead of protecting his people from Covid-19, has amplified its lethality. The country Trump promised to make great again has never in its history seemed so pitiful.

Will American prestige ever recover from this shameful episode? The US went into the coronavirus crisis with immense advantages: precious weeks of warning about what was coming, the world’s best concentration of medical and scientific expertise, effectively limitless financial resources, a military complex with stunning logistical capacity and most of the world’s leading technology corporations. Yet it managed to make itself the global epicentre of the pandemic.

As the American writer George Packer puts it in the current edition of the Atlantic, “The United States reacted … like Pakistan or Belarus – like a
country with shoddy infrastructure and a dysfunctional government whose leaders were too corrupt or stupid to head off mass suffering.”

It is one thing to be powerless in the face of a natural disaster, quite another to watch vast power being squandered in real time – willfully, malevolently, vindictively. It is one thing for governments to fail (as, in one degree or another, most governments did), quite another to watch a ruler and his supporters actively spread a deadly virus. Trump, his party and Rupert Murdoch’s Fox News became vectors of the pestilence.

The grotesque spectacle of the president openly inciting people (some of them armed) to take to the streets to oppose the restrictions that save lives is the manifestation of a political death wish. What are supposed to be daily briefings on the crisis, demonstrative of national unity in the face of a shared challenge, have been used by Trump merely to sow confusion and division. They provide a recurring horror show in which all the neuroses that haunt the American subconscious dance naked on live TV.

If the plague is a test, its ruling political nexus ensured that the US would fail it at a terrible cost in human lives. In the process, the idea of the US as the world’s leading nation – an idea that has shaped the past century – has all but evaporated.

Other than the Trump impersonator Jair Bolsonaro in Brazil, who is now looking to the US as the exemplar of anything other than what not to do? How many people in Düsseldorf or Dublin are wishing they lived in Detroit or Dallas?

It is hard to remember now but, even in 2017, when Trump took office, the conventional wisdom in the US was that the Republican Party and the broader framework of US political institutions would prevent him from doing too much damage. This was always a delusion, but the pandemic has exposed it in the most savage ways.

Abject surrender

What used to be called mainstream conservatism has not absorbed Trump – he has absorbed it. Almost the entire right-wing half of American politics has surrendered abjectly to him. It has sacrificed on the altar of wanton stupidity the most basic ideas of responsibility, care and even safety.

Thus, even at the very end of March, 15 Republican governors had failed to order people to stay at home or to close non-essential businesses. In Alabama, for example, it was not until April 3rd that governor Kay Ivey finally issued a stay-at-home order.

In Florida, the state with the highest concentration of elderly people with underlying conditions, governor Ron DeSantis, a Trump mini-me, kept the beach resorts open to students travelling from all over the US for spring break parties. Even on April 1st, when he issued restrictions, DeSantis exempted religious services and “recreational activities”.

Georgia governor Brian Kemp, when he finally issued a stay-at-home order on April 1st, explained: “We didn’t know that [the virus can be spread by people without symptoms] until the last 24 hours.”

This is not mere ignorance – it is deliberate and homicidal stupidity. There is, as the demonstrations this week in US cities have shown, plenty of political mileage in denying the reality of the pandemic. It is fuelled by Fox News and far-right internet sites, and it reaps for these politicians millions of dollars in donations, mostly (in an ugly irony) from older people who are most vulnerable to the coronavirus.

It draws on a concoction of conspiracy theories, hatred of science, paranoia about the “deep state” and religious providentialism (God will protect the good folks) that is now very deeply infused in the mindset of the American right.

Trump embodies and enacts this mindset, but he did not invent it. The US response to the coronavirus crisis has been paralysed by a contradiction that the Republicans have inserted into the heart of US democracy. On the one hand, they want to control all the levers of governmental power. On the other they have created a popular base by playing on the notion that government is innately evil and must not be trusted.

The contradiction was made manifest in two of Trump’s statements on the pandemic: on the one hand that he has “total authority”, and on the other that “I don’t take responsibility at all”. Caught between authoritarian and anarchic impulses, he is incapable of coherence.

Fertile ground

But this is not just Donald Trump. The crisis has shown definitively that Trump’s presidency is not an aberration. It has grown on soil long prepared to receive it. The monstrous blossoming of misrule has structure and purpose and strategy behind it.

There are very powerful interests who demand “freedom” in order to do as they like with the environment, society and the economy. They have infused a very large part of American culture with the belief that “freedom” is literally more important than life. My freedom to own assault weapons trumps your right not to get shot at school. Now, my freedom to go to the barber (“I Need a Haircut” read one banner this week in St Paul, Minnesota) trumps your need to avoid infection.

Usually when this kind of outlandish idiocy is displaying itself, there is the comforting thought that, if things were really serious, it would all stop. People would sober up. Instead, a large part of the US has hit the bottle even harder.

And the president, his party and their media allies keep supplying the drinks. There has been no moment of truth, no shock of realisation that the antics have to end. No one of any substance on the US right has stepped in to say: get a grip, people are dying here.

That is the mark of how deep the trouble is for the US – it is not just that Trump has treated the crisis merely as a way to feed tribal hatreds but that this behaviour has become normalised. When the freak show is live on TV every evening, and the star is boasting about his ratings, it is not really a freak show any more. For a very large and solid bloc of Americans, it is reality.

And this will get worse before it gets better. Trump has at least eight more months in power. In his inaugural address in 2017, he evoked “American carnage” and promised to make it stop. But now that the real carnage has arrived, he is revelling in it. He is in his element.

As things get worse, he will pump more hatred and falsehood, more death-wish defiance of reason and decency, into the groundwater. If a new administration succeeds him in 2021, it will have to clean up the toxic dump he leaves behind. If he is re-elected, toxicity will have become the lifeblood of American politics.

Either way, it will be a long time before the rest of the world can imagine America being great again.

This week MSNBC interviewed O’Toole

O’Toole referred to some of Trump’s recent words as “frightening gibberish, a mix of messages which are actually deadly.”

Watch the short interview here.

I reproduced the entire article above. If you want to see it, caution, it’s protected by a paywall — it’s here.

You don’t have to read all the above.

This cartoon tells it all:

This is the best stuff ever in a can

We had the beans for dinner last night. They were delicious.

A final thought: I’m not capable of playing this market

I wrote these words to myself the other day:

When do we get back into the market? We don’t.

By now, most of us should have sold enough to have a bucket of cash somewhere.

Please don’t let the money burn a hole in your pocket.

Please don’t try to catch falling knives.

Please don’t try to get “creative.”

Don’t try to figure where this is all going.

You can’t shut the world down, send everyone home and expect predictability.

Jobs have disappeared. Industries have collapsed.

The personal pressures are immense. The brain is not working as well as it should. A doctor told my unhealthy friend to get “some exercise.” He went to the gym and promptly caught the virus. A friend’s business got hit by a tornado. A friend of a friend committed suicide. He seemed in a good place. People have become nasty. I hate to imagine the vitriol I will receive from readers for publishing today’s blog.

Staying at home, the refrigerator is handy. I’ve chunked on four pounds.

Washington is its usual dysfunctional place. Someone once said Washington was eight square miles surrounded by reality.

Free government money goes to those who need it the least. Or so it seems.

I’m off to play tennis. I seriously need a haircut. — Harry Newton

  • Hugh

    Good column. Don’t let the Trump fools (gullibles) get you down. As P.T. Barnum said “there’s a succor borne every minute.”

  • Tom

    Please stop the Trump bashing. It serves no purpose.

  • Mike Nash

    The article by the Irish writer is fake. I Googled him and there is no writer with that name. Harry you fall for fake news from the deep state time and time again. We need to focus on hillary’s email and Biden’s rape victim.

  • TomFromVa

    I would vote for Bush’s Baked Beans – really tangy. And for my personal taste, topped with applesauce.

    Trump has certainly not sounded good during all this, but the strategy of providing guidelines and then leaving it up to the states is the correct one. Wyoming is not New York and does not have the same requirements.

    Sadly, some of the state decisions have been poor. Everyone knows about the ludicrous restrictions in Michigan that led to mass demonstrations, but less well publicized has been (Saint Andrew) Cuomo’s directive that nursing homes in New York MUST admit Covid-positive patients. This has resulted in New York leading the nation in nursing home deaths ( DUH ! ) – a great example of a politician with blood on his hands. Not that you would know it from the adulation he has received from “traditional” media.

  • Scooter

    O’Tool is quite the tool. What a sad example of actuality.

  • barry

    I have been a long time blog reader as well as more than a couple of the telecom dictionaries but the beans intrigued me.

    • Tom from CA

      Sadly, the only thing worth consuming in today’s blog.