When will the market climb?

[Asher Kelman]

Here’s a solid set of hints

1. China scant locally initiated cases in the next month: Chances: 85% true

2. The dead stop piling up in Italy: 4 months
Chances 40% true. Bad!

3. South Korea and Norway prove one can can maintain control. Chances: 85% true

4. France, Spain, Germany and the U.K. don’t become Italy (4 months to prove that)
Chances 60% they can manage it, but may be sluggish like the U.S.A. Smoker incidence great hazard throughout Europe!

5. A single scientific double blind study with ANY DRUG, showing prophylaxis in 10,000 healthy folk at risk. We will all know.

6. Leaked news of successful antibody synthesis in the first volunteers in the vaccine trials will show a required response to a second antigen challenge in about 6 weeks!

There will be insider trading: watch for stock buys from 3 weeks time.

7. Low fuel prices will allow exports prices from China to fall and ease the airline pain in restarting. Chances 100%

Summary: In the simplest terms, the stock market will jump at the first good news from research labs in the next 2-6 months. The insiders will already know the results before us.

You may not be fast or rich enough to jump back in the market, but you will feel good that we will then be at the very beginning of the curtain call of the end of first “act” of a 3 year long, three-act global tragedy!

Asher

 

[Asher Kelman]

What happens in Russia, Iran, Turkey, Pakistan, Syria or The Gulf States will be a terrible suffering that won’t effect us much economically, unless regimes fall.

 

[Asher Kelman]

I think India is a very unique country at risk, for us all to be aware of.

We can forget oil prices for now as a limit to our recovery! But there is a risk from a surprising quarter!

India of all nations must be assisted at whatever cost is required to prevent mass deaths. It’s a place of extremes: the brightest in science, medicine, engineering and manufacturing.

But the paradox is that the nation that can send probes to the moon still has a huge disparity in distribution of opportunity to their enormous population.

There is a real danger of the worst tragedy in the history of man due to the presence of a massive at risk densely housed, impoverished population.

Remember, India is a key partner and sole supply chain origin in much international bulk industrial chemicals as well as pharmaceutical drug and vaccine manufacture.

... even when they may not seem to be the sources of the drugs we depend on, chances many of the high-priced brand-name drugs we are used to start their creative journey somewhere in Indian factories!

India is thus too critical to us, (for so many ethical, humane and economic reasons), to be allowed to fail. That one country, if it succumbs to the virus, will make it very difficult for the rest of the world to recover.

Asher

I am not a stock advisor! These are just my current views on the global situation hit by COVID-19, while we mourn human loss and grit our teeth at vanishing savings!

 

[Asher Kelman]

So far, we are on track to double the dead in the USA in the next week, but few big metropolitan regions are yet even at their at their peak. So it looks like we are in for a delayed broad increase of infections and deaths.

It turns out that the Federal Government here didn’t take responsibility and actually order masks and ventilators until March 25th.

This is the price we pay for anti-science attitudes in those going for law degrees and business and alliance with anti-evolution and hostility to biology teaching of the Evangelical Right.

Our leaders are simply unprepared and innocent of practical grasp of the reality of environmental sciences and any concept of disease spread, beyond bad luck and a curse for God!

Why can’t folk have faith but still know germ theory and logarithmic infection rates are real and worth knowing?

Asher

 

[nicolas claris]

So far, we are on track to double the dead in the USA in the next week, but few big metropolitan regions are yet even at their at their peak. So it looks like we are in for a delayed broad increase of infections and deaths.

It turns out that the Federal Government here didn’t take responsibility and actually order masks and ventilators until March 25th.

This is the price we pay for anti-science attitudes in those going for law degrees and business and alliance with anti-evolution and hostility to biology teaching of the Evangelical Right.

Our leaders are simply unprepared and innocent of practical grasp of the reality of environmental sciences and any concept of disease spread, beyond bad luck and a curse for God!

Why can’t folk have faith but still know germ theory and logarithmic infection rates are real and worth knowing?

Asher

@Will Thompson …

 

[James Lemon]

As with all flu seasons you will see cases subside as the weather warms. You can expect a stock market increase by early June but by fall there will be a spike in new cases of people that are currently on lock down. Thus another stock market decrease.

 

[Jerome Marot]

As with all flu seasons you will see cases subside as the weather warms.

Or not. First, this is not the flu and, second, figures from tropical countries would appear to show that this virus does not mind the heat.

 

[James Lemon]

As with all flu seasons you will see cases subside as the weather warms. You can expect a stock market increase by early June but by fall there will be a spike in new cases of people that are currently on lock down. Thus another stock market decrease.

Or not. First, this is not the flu and, second, figures from tropical countries would appear to show that this virus does not mind the heat.

I did not say it is the flu. However there are underlying factors that can be attributed to a bank of survived patients from the normal season that caused a spike in deaths.

 

[Jerome Marot]

Here’s a solid set of hints

1. China scant locally initiated cases in the next month: Chances: 85% true

2. The dead stop piling up in Italy: 4 months
Chances 40% true. Bad!

3. South Korea and Norway prove one can can maintain control. Chances: 85% true

4. France, Spain, Germany and the U.K. don’t become Italy (4 months to prove that)
Chances 60% they can manage it, but may be sluggish like the U.S.A. Smoker incidence great hazard throughout Europe!

5. A single scientific double blind study with ANY DRUG, showing prophylaxis in 10,000 healthy folk at risk. We will all know.

6. Leaked news of successful antibody synthesis in the first volunteers in the vaccine trials will show a required response to a second antigen challenge in about 6 weeks!

There will be insider trading: watch for stock buys from 3 weeks time.

7. Low fuel prices will allow exports prices from China to fall and ease the airline pain in restarting. Chances 100%

Summary: In the simplest terms, the stock market will jump at the first good news from research labs in the next 2-6 months. The insiders will already know the results before us.

You may not be fast or rich enough to jump back in the market, but you will feel good that we will then be at the very beginning of the curtain call of the end of first “act” of a 3 year long, three-act global tragedy!

Asher

So what has become from these predictions?

 

[Asher Kelman]

Jérôme,

Thanks for bringing us back to this!

The key fulcrum is an insider/leak on the human trials with challenge infection.

Only one such study I heard about and that here in the USA. We should get news by June.

China can’t really ramp up exports until the West is alive again. They seem to be switching a massive effort to building landing craft and submarines.

They might simply dole at investment billions abroad to create more infrastructure for their future trade and raw material sourcing.

No one wants to shop and work under fear.

We don’t have a therapeutic yet and the vaccine news “trigger” is not for months. I did say 2-6 months. Hold on!

Trump saying he sees the vaccine by the end of the year means to me that Fauci let him know limited promising real news on antigen/virus challenge with at least one vaccine, or else Fauci wouldn’t have allowed that exaggerated glimmer of hope without even more qualifying than he hesitatingly gave!

There are a lot of hurdles. Not the least of which is ruling out “enhancement of virus infectivity” which has occurred in previous attempts with such vaccines. The coated virus simply is swallowed up by the cell somehow!

Look at the new phenomena we discovered about the infection: cytokines storm, brain inflammation, micro strokes!

Similarly strange unexpected consequences can appear with any new drug or vaccine. A fairly rare but serious consequence may only be first “sparsely” seen in the first 20,000 immunized. Imagine that dilemma when one wants to inject at least 200 million in the USA alone!

Still with Bill Gates having already set aside production factories for the best candidates and the USA and the UK having real and believable early progress, a September rally of the market is likely. The good detailed reliable news won’t stay hidden. A few separate reports from Germany, the U.K.South Korea, Israel or the USA on their candidate vaccines will boost each other’s spark of optimism and some in the market will actually know!

So I am thinking a cascade of optimistic news events in September!

But at the same time there will be terrible new numbers of deaths in places of tight congregation and places that mocked social distancing.

The political divide will be greater, with Trump heralding victory and Conservative States pretending the scare is over, (as its mainly hitting democratic leaning big cities with many blacks, not his core base).

Biden has a rubber spear!

Asher

 

[Jerome Marot]

I am not sure I understand. The title is about the market climbing. The "market" (say, indexes like the Dow Jones, Hang Seng, DAX) climbed for the better part of last week (and then fell right before the week-end). A quick check shows it is climbing as I write this message. A new vaccine is not necessary for the market climbing, is it?

 

[James Lemon]

I have made 42% in last month. Buy when everyone is heading for the exit.

No biotechs for me though.

 

[Jerome Marot]

That is quite impressive. What did you buy, then?

 

[Asher Kelman]

I am not sure I understand. The title is about the market climbing. The "market" (say, indexes like the Dow Jones, Hang Seng, DAX) climbed for the better part of last week (and then fell right before the week-end). A quick check shows it is climbing as I write this message. A new vaccine is not necessary for the market climbing, is it?

I am comparing to the prior level.

I am not counting these adjustments!

 

[James Lemon]

That is quite impressive. What did you buy, then?

The world GDP requires energy. Nothing happens without it.

 

[Jerome Marot]

The world may need energy, but I understood that oil is down at the moment. What did you buy that raised 42% in a month? Renewables?

 

[James Lemon]

The world may need energy, but I understood that oil is down at the moment. What did you buy that raised 42% in a month? Renewables?

Oil may be down but some of the companies that produce it were purchased at bargain basement prices.

 

[Reginald Johnson]

Reflecting on the bigger question - when will we get back to the lives we used to live? Difficult to answer, of course, but then, should we?

The pandemic I think, has come to teach us some lessons, albeit unpleasant ones. Besides the sufferings and deaths and lost jobs, the three month lock-downs have left the earth visibly cleaner. I can feel the air lighter in my lungs, here in Hyderabad, India. I even saw a video showing fishes in the canals of Venice. With almost no burning of fossil fuels even the greenhouse gases are absent.

We have also learnt that all humans are equal - whether one is a prime minister or a road sweeper, the virus treats them equal.

Staying at home I begin to learn the difference between real needs and extravagant wants. Eating home made food (good for health!), whole family sharing housework (no maids), less quarrels with the spouse, getting more creative with my hobbies, less money spent on online orders, restaurants, petrol....

I think Mother Earth is rebooting. Even after the covid pandemic is wiped out, I do not think we humans should go back to our bad old ways.

 

[Jerome Marot]

The Dow Jones is back at its 2019 level.

 

[nicolas claris]

The world may need energy, but I understood that oil is down at the moment. What did you buy that raised 42% in a month? Renewables?

Oil is going up again now…

 

[nicolas claris]

I think Mother Earth is rebooting. Even after the covid pandemic is wiped out, I do not think we humans should go back to our bad old ways.

Hmmmm, maybe for some few weeks… My pessimistic part of my brain is thinking that most of our habits will be restored sooner than expected. Capitalism has its embedded laws and large companies may change their wording in marketing, they will continue to seek for more money and larger incomes. At all prices!
Just have a look on Amazon, they got richer than ever during the Covid! They have hired more people but with few social protection and by the same time destroyed thousands of side workers… Yuk!

 

[Jerome Marot]

Word is that the market surge around the 24th of June is liked to 90% of the fed measures. It seems that the fed basically "printed" money accounting to a sizeable percentage of the US gross domestic product (I read 20%, but cannot confirm that figure) and that is responsible for the market surge.

 

[Jerome Marot]

Here’s a solid set of hints

1. China scant locally initiated cases in the next month: Chances: 85% true

2. The dead stop piling up in Italy: 4 months
Chances 40% true. Bad!

3. South Korea and Norway prove one can can maintain control. Chances: 85% true

4. France, Spain, Germany and the U.K. don’t become Italy (4 months to prove that)
Chances 60% they can manage it, but may be sluggish like the U.S.A. Smoker incidence great hazard throughout Europe!

5. A single scientific double blind study with ANY DRUG, showing prophylaxis in 10,000 healthy folk at risk. We will all know.

6. Leaked news of successful antibody synthesis in the first volunteers in the vaccine trials will show a required response to a second antigen challenge in about 6 weeks!

There will be insider trading: watch for stock buys from 3 weeks time.

7. Low fuel prices will allow exports prices from China to fall and ease the airline pain in restarting. Chances 100%

Summary: In the simplest terms, the stock market will jump at the first good news from research labs in the next 2-6 months. The insiders will already know the results before us.

You may not be fast or rich enough to jump back in the market, but you will feel good that we will then be at the very beginning of the curtain call of the end of first “act” of a 3 year long, three-act global tragedy!

Asher

The message was published at the en of March (3 months ago). Let us see what really happened:

1: we don't really know whether there were scant cases in China. Parts of Beijing were locked down around 25/6, so 3 months after that message.

2: Deaths stopped piling up in Italy after about a month.

3: South Korea and Norway appear to maintain control.

4: Spain and, to some extent, France became like Italy. The UK became actually worse. Germany managed pretty well. Smoking does not appear to be a factor (and is not noticeably more prevalent in Europe than in the US, I think).

5: We don't have a prophylactic drug.

6: No antibody synthesis.

7: China does not appear in a hurry to resume exports. Airlines are still down.


So why didn't the prediction happen?

1-4: The number of cases in any given country is strongly dependent on initial conditions. A single super-spreader can make a lot of difference. Early lock-down measures proved to be extremely important.

5-6: Designing drugs (and vaccines!) takes a long time.

7a: Consumption is still down, and so are China exports. But I am not so sure whether we may be seeing a different pattern, with Asia disconnecting itself from the USA. That is potentially a real game changer.

7b: World tourism and, therefore, world airlines are still locked down. It is not clear when that will restart, if ever.

 

[Jerome Marot]

From the World Trade Organisation:

Trade falls steeply in first half of 2020

World trade fell sharply in the first half of the year, as the COVID-19 pandemic upended the global economy. However, rapid government responses helped temper the contraction, and WTO economists now believe that while trade volumes will register a steep decline in 2020, they are unlikely to reach the worst-case scenario projected in April.
"The fall in trade we are now seeing is historically large – in fact, it would be the steepest on record. But there is an important silver lining here: it could have been much worse,” said Director‑General Roberto Azevêdo.

​

 

[Asher Kelman]

I am interested in the organic change in the rate of increase in trade back in 2008. That suggests that there might be very long term effects in the rate of growth Even though we do “recover”.

Asher

 

[Jerome Marot]

I am not sure I understand what you mean by "organic change in the rate of increase". Do you mean the recovery between 2009Q3-2010-Q3 or do you mean that the slope of increase appears to be higher between 2005Q1 and 2008Q1 than between 2011Q3 and 2019Q1?

 

[Asher Kelman]

I am not sure I understand what you mean by "organic change in the rate of increase". Do you mean the recovery between 2009Q3-2010-Q3 or do you mean that the slope of increase appears to be higher between 2005Q1 and 2008Q1 than between 2011Q3 and 2019Q1?

The latter!

Jérôme,

It’s as if the “vitality“ of the world economy was wounded and couldn’t getback to its previous rate of growth.

I have no knowledge of how inflation is taken into account and whether or not those slope differences are real or an artifact of some imperfect normalization process.

It would be good to know if there are other sources that have graphed their same data.

Asher

 

[Jerome Marot]

The latter!

Then, I suppose that part of it is linked to a drop in trade between China and the USA. They are the world biggest economies, so they would have the largest influence on that curve.

Before the 2008 crisis, China was content to export manufactured goods to the USA and to only receive paper with numbers written on it in exchange. The USA were content to run the wolrd's biggest deficit. With a deficit like that running for years, the value of their respective currencies should have shifted towards appreciation of the Renminbi. But it did not.

China was content with the deal, because the main problem of the ruling communist party is to find a job for 60 millions new workers each year. China population is still increasing from policies changed long ago (the effect of the one child policy will only kick in in some years), so China still has more people entering the job market (in their late teens) than people retiring. China is still a communist country, so there is no unemployment. 60 millions new jobs are to be created each year. As the trade situation would change if the relative values of the currencies shifted, China needed a way to keep their currency artificially low. They bought US bonds.

After 2009, China changed their policies, stopped buying US$ and sold their piles of bonds, but slowly so as not to crash the market. The USA, on the other hand, did not change much (except that they started producing oil and therefore imported less) and continued to run a huge deficit. Normally, this should have crashed the US$ long ago, but apparently nobody really wants that. So the other players (Europe, Japan, the middle east states) simply pretended that the situation is normal and the world trade kept running. The billions of US$ created out of thin air created inflation (as predicted by classic economy theories), but that inflation only affected the price of shares and real estate. This is why the markets and real estate appreciated so much in the absence of real development of the economy.

 

[Asher Kelman]

Thanks for that helpful explanation. So what “things” have real value?

 

[Jerome Marot]

Thanks for that helpful explanation. So what “things” have real value?

Food?


More seriously, it seems that your question relates to the concept of money. Many people are under the impression that money should have "real value", e.g. by being backed by some other "things" of "real value", like gold for example.

As far as the economy is concerned, this is actually a terrible idea. Backing up the money on a single asset has two undesirable consequences:

• the value of that asset increases with the size of the economy
• we run the risk that there will not be enough of that asset to allow for all transactions.

The latter was the situation in Europe in the middle ages. Most gold and silver was hoarded by the ruling class, so there was not enough money for transactions to happen. Most people lived in autarky. When technological progresses allow mining silver in what is present day Saxony, the economy resumed.

Far better is the present system where money is just figures on paper or electrons in computers.