Beware of Plans to Build Back Better

Posted on May 8, 2020 by MN Gordon

Central planners the world over disdain the free exchange of goods and services.  They believe they can better shape the world around them according to their wishes.  This fatal conceit compels them to intervene in destructive ways.

Some central planners, like Fed Chair Jay Powell, think they’re saving the world economy by cranking up the printing press.  Others, like AOC, could care less about the economy…so long as they can mediate the redistribution of wealth more to their liking.

The mess wrought by extreme government intervention has been magnified by coronavirus.  The central planners took a bad situation and made it dramatically worse.  They destroyed the economy so they could ‘build back better.’

First the shutdown was ordered to flatten the curve, resulting in over 33.5 million new claims for unemployment in just seven weeks.  Then the big bailouts of big business were rolled out to counteract the breakdown of financial markets.  Token checks were also sent out to the broad populace.  And that’s just the beginning. Continue reading →

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Buckle Up for Economic Destruction

Posted on May 1, 2020 by MN Gordon

The S&P 500’s up over 30 percent from the March 23 closing low.  What’s more, it’s only about 18 percent from its February 19 all-time closing high.  Could it be that the market storm’s behind us and only sunny clear skies are ahead?

Why not?  Fed Chair Jay Powell’s manning the monetary levers with gusto.  Treasury Secretary Steven Mnuchin’s assuaging his Wall Street pals.  And an interventionist Congress is hell bent on racking up a $4 trillion deficit.

With all the funny money flowing into financial markets this must be just the time to buy stocks…right?  The answer, no doubt, depends on if you’re feeling lucky.

Carl Icahn – a billionaire – is not feeling lucky.  Hence, he’s not buying stocks.  He thinks they’re overvalued.  And he should know.  The 84 year old has traded every stock market crash since the Great Depression.

Instead of buying stocks, Icahn is hoarding cash, shorting commercial real estate, and preparing for the coronavirus to trigger “some big downdrafts.” Continue reading →

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What You Must Know About Zeros in the Years Ahead

Posted on April 24, 2020 by MN Gordon

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 →

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Facing Down America’s Myths and Legends

Posted on April 17, 2020 by MN Gordon

[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 →

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