To paraphrase the police officer who told me my old neighborhood had burned down during the 2017 NorCal fires, “the markets are no more.”
After the Fed announced it is bailing out junk bonds today, Wall Street has now morphed into a full-blown “Soviet Sausage Factory.”
Jay Powell probably had no choice and needed to blunt the blow of another 6 million-plus print of new unemployment claims but isn’t Socialism and state intervention dandy?
We can understand providing support to local and state municipalities, now strapped with severe cash flow problems as their tax revenues have gone to near zero, but junk?
You know, like many of the same companies that levered up to buy back shares while shitting all over their employees or, say, the wildcat and shale-oil drillers? Even Jed Clampett and Ellie May understood Texas Tea is risky business. Come on, man.
Chapter 11 and debt restructurings are not only the right thing to do but the only thing to do lest we lose an entire generation to stagflation and a zombie economy. That’s probably the best case unless the economy miraculously snaps back, which assumes the economy was structurally sound before the virus took it out. We seriously doubt that.
Here’s to hoping the bailouts are just a bridge to a major economic restructuring with the long-needed structural reforms.
Waste Of Time
There’s no sense in wasting time analyzing the markets anymore.
We will sit on cash and gold, hope and pray the virus soon passes, and try and tune out this shit show until the major political dislocation that is surely coming on the other side.
…click on the above link to read the rest of the article…