Billionaire investor and American folk hero Warren Buffett’s been lying low. This is a change from the 2008-09 financial crisis. Back then he eagerly supplied cash to Goldman Sachs and Bank of America in exchange for high interest rates and warrants. But not now.
Instead of making deals, Buffett says he’s “…drinking a little more Coca-Cola” to ward off coronavirus. Yet is that really all he’s doing? Buffett admirer Bill Ackman doesn’t think so. Ackman – who’s been aggressively buying stocks – thinks the Oracle of Omaha has a few tricks up his sleeve. When recently asked:
“Ackman said he suspected his mentor was quietly putting his $125 billion in cash to work buying stocks. He was keeping a low profile to make sure the stocks stayed cheap while he is buying. ‘After he invests that $100 billion and change,’ Ackman says, ‘he’ll let everybody know.”’
Maybe so. And good for Buffett and Ackman. If they want to put billions of dollars into stocks right now, good on them. Continue reading
[Editor’s Note: We are social distancing from a remote mountain cabin in the shadow of Tahquitz Peak. The secluded locale first inspired today’s Economic Prism, which was originally published on March 30, 2018, as Searching for Tahquitz. There are ample insights to America’s present war on coronavirus found within. So we’re dusting it off and republishing it. Enjoy!]
Myths and Legends in America
Each generation is disposed to its own unique myths and legends. Perhaps an absence of prior experience is what compels the younger generation to pick up the torch of popular delusion, regardless of whether it’s pure madness. The older generation, on the other hand, may have garnered false expectations through a lifetime spent living in a world that no longer exists.
“Myths and legends die hard in America,” remarked Hunter S. Thompson in The Great Shark Hunt nearly 40 years ago. No doubt, Thompson’s insight holds true today. There is an abundance of myths and legends in America today… all bound for a hard death. A partial listing includes: Continue reading
The property adjacent to the northeast intersection of South Prairie Avenue and Century Boulevard, in Inglewood, California, has undergone a staggering facelift over the last three years. The former Hollywood Park Racetrack was demolished and regraded. SoFi Stadium, at a price tag of $5 billion, is being constructed in its place.
The new home of the Los Angeles Rams and Los Angeles Chargers is scheduled to open in late-July 2020. That’s when an initial christening will be performed by Taylor Swift. Then it will be time for the 2020 NFL season.
Obviously, there are big plans for this property. Per the Sofi Stadium website:
“The state-of-the-art stadium re-imagines the fan experience and will host a variety of events year round including Super Bowl LVI in 2022, the College Football Championship Game in 2023, and the Opening and Closing Ceremonies of the Olympic Games in 2028. Located on the site of the former Hollywood Park racetrack, the stadium is the centerpiece of a 298-acre mixed-use development featuring retail, commercial office space, a hotel, residential units, and outdoor park spaces.” Continue reading
“The bank is something more than men, I tell you. It’s the monster. Men made it, but they can’t control it.” – John Steinbeck, The Grapes of Wrath
Mass Dollar Debasement
The monster of all monsters is rampaging far and wide. The Federal Reserve, the central bank responsible for issuing U.S. legal tender notes, is going big. But its aim is small.
The Fed’s working 24/7 with singleness of purpose. Fed Chairman Powell’s applying what Minneapolis Fed President Neel Kashkari recently called “infinite cash” to the financial system. The sole purpose is to destroy the dollar to save it. The stakes are high. The odds are higher.
The greatest asset bubble in human history, a bubble that was inflated by the Fed’s endless supply of cheap credit, has popped. At the same time, coronavirus containment measures have collapsed the economy. The forthcoming cascade of job losses, bankruptcies, oil gluts, and economic destruction could far exceed the Great Depression of the 1930s. Continue reading