Face masks and extreme greed…they’r e connected

[5 min read]

Dear Reader,

I flew into Melbourne yesterday for the first time in a few months.

If you missed the story, with heavy hearts the family and I recently moved from our home in Melbourne to Wollongong (where I have family) to escape the tyranny of the Andrews government. The lockdown was just the start of it. If you think otherwise, you’re not paying attention.

Anyway, despite borders between Sydney and Melbourne opening a few days before, both airports were dead. This used to be one of the busiest air corridors in the world.

After arriving at Tullamarine, I was surprised to see the amount of people wearing face masks. Didn’t Dictator Dan recently decree that these were no longer compulsory?

Given the complete lack of evidence that the flimsy things that people wear have any effect on lowering transmission of a virus that has all but disappeared from Melbourne, I happily decided not to wear one.

On boarding the SkyBus to the city, I was the only one on the bus without one. (I realise that facemasks are to be worn on public transport, and most people were just following the rules. But the driver said nothing and there were no signs to that effect. If someone felt ‘threatened’ and asked me to comply, I would have done so. But thankfully no one did.)

I was thinking about the strangeness of this situation as we hurtled along the freeway at 100km/h, with no one wearing a seatbelt.

Everyone seemed scared of a non-existent virus, but not at all worried about the much greater risk of having an accident on the road with zero protection.

Once in the city, again, there were loads of people wearing masks. And this morning walking to the local café to grab a coffee, more masks.

WTF?

C’mon Melbourne!

Don’t succumb to the fear!

Get out and enjoy the sun and fresh air. As Roosevelt once said, ‘the only thing you have to fear is fear itself’. As Ramesh Thakur recently wrote in The Spectator:

‘Lockdown fanatics are mostly evidence-light and data-poor. Consider this: Australia’s Department of Health reported that at 31 October, just 36 flu deaths had been recorded for the year. There were 943 flu deaths for the same period last year. The total number of Covid-associated deaths are 907. If you add 36 flu deaths, the total is, wait for it: 943. Coincidences don’t come any more interesting than this.’

Now, I’m not saying this virus is just a nasty flu. But it’s not the Bubonic plague either.

Governments would have you believe it is though. Fear is the currency they love to print. And Andrews does it better than most.

Unfortunately, we humans are wired to succumb to it. The same emotional impulse that makes us wear masks when we don’t really need to, sees us dump gold despite it being a proven store of value for millennia.

Or, on the other side of the emotional ledger, it sees us buy tech stocks at ANY price. I mean, look at Tesla…

This is just fear turned upside down. Which is also known as greed.

Again, we’re wired to succumb to this stuff. Our brains release chemicals that promote fear and greed. We evolved these responses because they promoted survival. But that was before stock markets become a thing. Now, these chemicals can get you into real trouble.

The only real answer to this is to be aware of it.

When you feel the impulses of fear or greed trying to force an investment decision on you, get up and walk away. Go for a run. Do some exercise. Just don’t act on it.

CNN is a basket case of an organisation. But they do have one useful indicator…the fear and greed index. And right now, it’s flashing extreme greed:

The indicator has seven inputs. Here’s the description of each from the website, with the current reading added.

Stock Price Momentum: The S&P 500 (SPX) versus its 125-day moving average (Extreme Greed).

Stock Price Strength: The number of stocks hitting 52-week highs and lows on the New York Stock Exchange (Extreme Greed).

Stock Price Breadth: The volume of shares trading in stocks on the rise versus those declining (Extreme Greed).

Put and Call Options: The put/call ratio, which compares the trading volume of bullish call options relative to the trading volume of bearish put options (Extreme Greed).

Junk Bond Demand: The spread between yields on investment grade bonds and junk bonds (Greed).

Market Volatility: The VIX (VIX), which measures volatility (Neutral).

Safe Haven Demand: The difference in returns for stocks versus treasuries (Extreme Greed).

Please don’t misinterpret what this is saying. It’s not predicting a crash. But it is saying that in the very short term the market is extremely stretched to the upside. So don’t be surprised to see the rubber band snap back in the weeks ahead.

If this recent rally has made you regret your conservative exposure to stocks, fight the greed impulse to get on board now. Write down somewhere that you intend to increase your allocation when the correction comes.

Because when it does, you’ll need a reminder that you wanted to load up on stocks in the first place!

Regards,

Greg Canavan,
Editor, The Rum Rebellion

The US Got the President It Deserved
By Bill Bonner

Finally, it’s over.

We checked the news this morning. We were both delighted and appalled. A smile spread over our face…and our steps lightened…as we looked ahead to four years without Hillary Clinton’s know-it-all mug in the news.

But our shoulders stooped, too, as we listened to Donald Trump’s victory announcement.

Depravity and degeneration

As we predicted, Americans got the president they deserved. Now, ‘no dream is too big’. No nightmare is out of bounds, either.

Dow futures fell as much as 800 points as news spread and investors thought the end of the world had come.

But here at the Diary, we were serene. We had mocked both candidates…and mooned the sacred rite of democracy — the election itself.

Why?

No matter who wins, the insiders make the important decisions…

…but now, the voters are complicit in every foolish, fraudulent, and criminal act of the government; they are responsible for things they can’t possibly understand or control…

…and the election provides a cloak of respectability under which the Deep State can get away with murder.

Democracy corrupts both voters and votees. Studies show that voters are unable to separate their ballots from their own self-interests. They don’t vote their consciences; they vote their wallets.

Retirees vote for more Social Security and Medicare benefits. The rich vote for lower taxes. The poor vote for more welfare benefits. And the insiders manipulate both the candidates and the voters to get what they want.

Remember our Diary dictum #21: ‘People are neither always good nor always bad, but always subject to influence’.

The influence exerted by politics is like a huge, black moon. Plants sprout, women give birth early…and mental defectives howl from the asylums.

Even on nice, normal people, the tug of lunatic gravity brings depravity and degeneration. Few voters can resist it. And almost no politicians.

If they are not craven before getting into office, once the newly elected officeholders walk into the sty, it is just a matter of time until they slip up and wallow with the pigs.

That is what happened to Ronald Reagan after the Gipper was elected in 1980.

More waste

At the time, we were running the National Taxpayers Union, fighting a losing battle against ‘waste’ in Washington. Then, at Reagan’s first inaugural ball, we were urged to pack up.

‘You guys might as well go home,’ said friends. ‘Reagan’s going to clean this town up.’

But Reagan forgot the scrubbing brush. The pace of new regulations slowed for a while. Tax rates were cut. But the trough was full, and the hogs ate more than ever.

Reagan was only in office for a few months when he began to feel the slime and grime upon him. He and key members of his team — who were firmly and honestly committed to cutting back the reach of big government — found that almost nobody was on their team. Neither Republicans nor Democrats…Liberals nor Conservatives…red nor blue.

Inside the Beltway, practically no one wanted to cut ‘waste’. They wanted more of it.

Every penny spent went into some insider’s pocket. The more wasteful the spending, the more the nomenklatura protected it because more of it remained in Washington’s zip codes.

The wasteful spending increased during Reagan’s two terms. And then, once he was out of the way, the regulatory machine went back to work, too.

We discovered recently, for example, that the Department of Justice actually has a ‘feather policy’.

For many, many years, the nation had gotten along without one. But in 2012, the lawyers, activists, do-gooders, and hacks got together to decide who would be allowed to possess eagle feathers and who wouldn’t. Not a minute too soon, we suppose.

Then, their policy worked out with the elegance and subtlety of a ball-peen hammer; they brought it down on the head of one poor man.

A shaman used an Indian headdress as part of his professional get-up. He had been given the headdress many years earlier. Still, the feds proposed to put him in jail for eight years.

Clownish perversities

Will Donald J Trump do what Reagan couldn’t? We doubt it.

But every society needs its heroes, its gods, its myths, and its mumbo jumbo.

Most importantly, it must decide who gets to kill and steal without consequence.

That’s what politics is all about.

And the American system…for all its clownish perversities…is not the worst in the world.

Regards,

Bill Bonner,
For The Rum Rebellion

On a final note today…A CONTRARIAN’S GUIDE TO CLEAN ENERGY INVESTING…

The conventional narrative around clean energy stocks this year goes something like this…

Policymakers are finally over fossil fuels.

COVID-19 has sent fossil fuel prices tumbling, making renewables way more competitive.

Now Biden is in, we’re on fast-forward to a cleaner, greener future.

And if you think ASX green stocks had a blinder in 2020…just wait to see what next year has in store.

While there’s some truth to that, what’s actually going on beneath the surface is more complex.

And, potentially, far more profitable than you might first think.

Because of that, we’re devoting a significant amount of airtime next week to an ALTERNATIVE TAKE on the alternative energy sector.

For instance…how is Australian mining pivoting to get in on this trend for 2021? Who will the winners and losers be?

What are the DOWNSIDES of this boom? Which sectors and stocks are overhyped and overbought?

Is traditional oil and gas REALLY dead and buried…or are there way-oversold opportunities to be had there?

Why are some of the BIGGEST stories in clean energy not yet being reported? Which side industries are vying for smart money attention right now?

Are there really clean energy versions of future Facebooks, Amazons and Googles to be snapped up now? If so…who are they?

Whatever your politics are on this issue, we believe there’s a huge megatrend forming here.

But it’s not what most people think.

Next week, we’re going to break this whole thing right down and bust it wide open for you. And acquaint you with a set of stocks we think will be getting more than a bit of news attention in the coming year.

Until then…

James Woodburn,
Group Publisher