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Nice to vote for a President. But… the outcome means little to your stocks

What matters for your stocks is the Fed and who’s in charge. Not the President whom you’re voting for today.

Right now Jerome H. Powell is in charge of Fed. He’s there until February 4, 2022. In September 2020, the Federal Reserve maintained its target for the federal funds rate at a range of 0% to 0.25%. At its September meeting, the FOMC (Federal Open Market Committee) said it intends to keep the benchmark rate at those current rock-bottom levels until inflation is at 2% for the long term — which, in my humble opinion, won’t happen for at least two or three years — enough for the virus to be vanquished and the economy to get somewhat back to normal — whatever that is.

And for the stock market to gain.

Ed Yardeni has a neat finding: Stocks do better when Washington is gridlocked. Here’s Ed:

+ At my firm, we recently analyzed the performance of the S&P 500 under unified and divided government since FDR took office (Fig. 1). (It’s below.) We calculated the percentage increases in the index from January-through-December periods during the two alternative regimes. We found that during the previous six Blue Waves, the S&P 500 increased 56% on average. During the previous three Red Waves, the index rose 35% on average. During the seven periods of divided government, the S&P 500 rose 60% on average.

This suggests that gridlock is more bullish than the two unified alternatives, which are also bullish, but less so, with Blue Waves more bullish than Red Waves. Perhaps the market figures that government is less likely to grow much bigger when the government is divided rather than unified. In any event, the government has been getting bigger and more meddlesome for years, as evidenced by ever-widening federal budget deficits and mounting federal government debt (Fig. 2). (The founders generally disapproved of debt and believed that the amount the country owed should be limited.)

Here’s Fig 1.

And to prove Yardeni’s point that president mean little to stock prices, today we’re enjoying a nice boomlet, with all the major indices rising above 2%.

Meantime, go out and vote for Joe Biden. It shouldn’t be too difficult. I just read this on Trump’s efforts:

Mr. Trump has managed to wage a campaign offering no central message, no clear agenda for a second term and no answer to the woes of the pandemic.

Early this morning I caught my friend Harry Petchesky at Charrons gas station in Chatham, NY wearing his own designer mask (He was the designer.)

Do masks work?

The University of Kansas Institute for Policy & Social Research did the definitive study. The answer is an unequivocal YES, masks work. Here’s their key chart:

The study is instanced in a the Kansas City Star. Click here and watch the presentation. It compares counties with a mask mandate and those without. Those wearing masks (the blue line) had far fewer infections than counties with no mask mandate — the red line.

America has far too much bricks and mortar retail space

Retailers are going Chapter 11. Old news. Covid drove the nail into their coffins.

Now mall REITs are going. These two just went Chapter 11 on the weekend. Together these two account for some 87 million square feet of real estate space across the country, according to Bloomberg. This chart of their share prices over time is fascinating:

It’s winter, almost. My family is newly obsessed with boots

Most of them come from Australia. The creme de creme Australian boot is made by a company called R.M.Williams.

These are called Craftsman. I bought a pair eons ago in Australia. They’re the most comfortable shoe I’ve ever owned:

They’re made from one piece of leather. They cost $495. That’s American dollars. Click here. 

The family has been opting for another Australian boot, called Blundstone. Michael, my son, just bought himself this one called the Chelsea ($199), click here.

All the grandkids now have Blundstones, courtesy their loving grandmother, Susan.

Before this latest family madness I had bought a pair of these from LandsEnd. They’re made of multiple pieces of leather. They don’t look anywhere near as stylish as the Australian boots, but they only cost $49.47 and are as comfortable as all get out.

For this one, click here.

You need to read this story. It has serious life lessons.

The doctor said, “Alfie, the good news is I can cure your headaches. The bad news is that it will require castration.

You have a very rare condition which causes your testicles to press on your spine, and the pressure creates one hell of a headache. The only way to relieve the pressure is to remove the testicles.”

Alfie was shocked and depressed. He wondered if he had anything to live for. But when he thought about it some more, he decided he’d rather be free of pain. He had no choice but to go under the knife.

When he left the hospital, he was without a headache for the first time in 20 years, but he felt like he was missing an important part of himself. As he walked down the street, he realized that he felt like a different person. He could make a new beginning and live a new life.

He saw a men’s clothing store and thought, “That’s what I need… A new suit.” He entered the shop and told the salesman, Abe “I’d like a new suit.”

The elderly Jewish tailor eyed him briefly and said, “Let’s see… Size 44 long.”

Alfie laughed, “That’s right, how did you know?”

“Been in the business 60 years!” the tailor said.

Alfie tried on the suit; it fit perfectly.

As Alfie admired himself in the mirror, the salesman asked, “How about a new shirt?”

Alfie thought for a moment and then said, “Sure.”

The salesman eyed Alfie and said, “Let’s see, 34 sleeves and 16-1/2 neck.”

Alfie was surprised, “That’s right, how did you know?”

“Been in the business 60 years,” the man repeated.

Alfie tried on the shirt, and it fit perfectly.

Alfie walked comfortably around the shop, and the salesman asked, “How about some new underwear?”

Alfie thought for a moment, then said, “Sure.”

Abe said, “Let’s see… Size 36.”

Alfie laughed, “Aha! I got you, I’ve worn a size 34 since I was 18 years old.”

Abe shook his head, “You can’t wear a size 34. A size 34 would press your testicles up against the base of your spine and give you one hell of a headache.”

Now go out and vote.

Susan and I are about to go out and vote at the Spencertown, NY Town Hall.

I played tennis at 6:30 AM. I feel virtuous.

See you tomorrow — Harry Newton