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  • Buy Ebola, Sell the Fed

    Posted by Jonathan on October 24th, 2014 (All posts by )

    The stock market began to recover from its recent selloff as initial ebola fears abated. Meanwhile bond markets remained strong.

    Conclusions? The fed-fueled bubble bull market in stocks isn’t over. Ebola won’t kill us all. Future Ebola outbreaks will have to be much more severe to generate market reactions of similar magnitude. (Corollary: The next Ebola-inspired market selloff will be a buying opportunity, and thus may not happen.)

    Caveats. Watch for a govt bond selloff, perhaps as a result of unexpected events. The entire financial world has been watching for this for the past several years. It could happen in two weeks or two years, but it will happen eventually.

    —-

    Disclaimer: This is not investment advice. You would be crazy to listen to me and probably shouldn’t even be reading this, as I have predicted twenty of the last 2 bear markets in bonds.

     

    7 Responses to “Buy Ebola, Sell the Fed”

    1. Texas Ranger Says:

      The New York Doctor should have quarantined himself for 21 days! But, it seems no one – not even doctors honor a voluntary self imposed 21 day quarantine, that’s really scary!

      Thanks to Mr. Barrack Obama for freely issuing a U.S. Visa to, and welcoming Liberian Mr. Thomas Eric Duncan Ebola to the USA with open arms! And, for keeping the door wide open for other West Africans to come on over with Ebola!

      Remember, they can not legally enter the USA without a Visa!

      Mistakes Have been Made – Others Will Pay and Others Will Be Blamed!

      Urgent! Your Help Is Needed To Stop The Spread of Ebola! You, Your Family and Co-Workers are at extra Risk! Here’s What You Can Do – Listen to Judge Jeanine Pirro!

      https://www.youtube.com/watch?v=A0Gkzm7O0ew

      Help Do Something – Sign the Petition Now! Help the Word Go Viral – Not The Virus!

      https://petitions.whitehouse.gov/petition/have-faa-ban-all-incoming-and-outgoing-flights-ebola-stricken-countries-until-ebola-outbreak/FFJHH9yX

      The 1918 Flu Virus Pandemic infected over 500 million people across the world, including the USA, remote Pacific islands and the Arctic, and killed 50 to 100 million of them, that’s a 10 to 20 percent death rate.

      A large factor in the worldwide occurrence of this flu was increased travel. Modern transportation systems made it easier for soldiers, sailors, and civilian travelers to spread the disease.

      Now we have Jumbo Jets and the Fast Spreading Ebola Virus… With a 50 to 70 percent death rate!

      Help Do Something – Sign the Petition Now! And Spread the Word Not The Virus!

      You Can Help – Facebook it, Tweet it, Pin it, Instagram it and ask your family, friends and co-workers to sign the Petition!

      Obama is Wrong – People are dying! – Help Stop Ebola New York Doctor University Hospital Dallas Texas Nurse Nina Pham Amber Vinson Thomas Eric Duncan Patient Zero Cruise Ship Train! Travel Ban Visa’s.

      You Can By Help Re-Posting this Message to other sites and Tweet it and Vote!

      Vote!

    2. Texas Ranger Says:

      It seems no one – not even doctors honor a voluntary self imposed 21 day quarantine, that’s really scary!

      And it’s even more scary but, maybe New York will soon test this Ebola research conclusion!

      Ebola Can Spread by Air in Cold, Dry Weather Common to the U.S.

      http://www.infowars.com/u-s-army-ebola-goes-airborne-once-temperature-drops/

      U.S. Army: Ebola Goes Airborne Once Temperature Drops
      Ebola can go airborne but hasn’t in West Africa because it’s too warm, researchers conclude.

      Help Reduce the Risk of Spreading Ebola!

      https://petitions.whitehouse.gov/petition/have-faa-ban-all-incoming-and-outgoing-flights-ebola-stricken-countries-until-ebola-outbreak/FFJHH9yX

    3. Grurray Says:

      The Fed’s policies of artificially suppressing bond yields are the source of economic inequality and enormous financial malinvestment.
      If the period between the 80s and 2007 are ‘The Great Moderation’ for their relatively placid business cycles and growth, the past few years are ‘The Great Malinvestment’ because of all the market manipulation by the Fed.

    4. Death 6 Says:

      Jonathan,
      Best disclaimer I have ever read. Of course I seldom read them because I don’t have a magnifying glass that is powerful enough to make out the print. But I do accept your terms!

      Mike

    5. Jonathan Says:

      Grurray,

      Correct. The Fed is accomplishing tacitly via Zirp what other govts accomplish by openly expropriating private savings.

      See also this recent Chicago Boyz post by Kevin Villani.

      Govt-created market trends are the biggest and longest-running market trends, but all market trends end eventually.

    6. MikeK Says:

      “A large factor in the worldwide occurrence of this flu was increased travel.”

      There is a school of thought that blames Wilson for the spread of the pandemic early on.

      In October, during the height of the pandemic, Wilson was advised to halt troop deployments to Europe as the crossings simply spread influenza. Chief of Staff General March disagreed, saying that the deployment of troops was crucial to bring a speedy end to the war. While acknowledging that soldiers were dying in the thousands from influenza, March insisted that a speedy end to the war would limit deaths overall. Wilson ultimately endorsed March’s plan and the deadly troop crossings continued.

      Wilson also concealed this information.

      The early cases seemed to be confined to Army posts and Navy ships and shore facilities.

      The immense 1918 plague, product of the genetically unstable influenza virus, was facilitated by the mechanisms of an intense European war and the efficiency of contemporary mass transportation. It began, at the latest, in the winter of 1918, sickening millions over the following two seasons. Relatively few died during this time, and those who recovered were blessed with a degree of future immunity, but some isolated outbreaks were quite deadly. Over the summer the highly contageous, if “weak” flu virus merged with the previously rare killing version. In late August and early September the resulting very lethal type of influenza struck simultaneously in several widely separated places, from which railways and steamships carried it deep into continents and across oceans.

      Boston, Massachusetts Naval facilities suffered one of these initial outbreaks, and from there the disease moved rapidly inland and down the coast. In local epidemics lasting a few weeks to a month, what was then called “Spanish Influenza” sickened a large percentage of the Navy’s people. From 31 August to 31 December 1918 it left over four thousand dead, nearly one percent of the Sailors and Marines then on active duty, and about double the number killed in World War I combat. Generally, the epidemic was most severe ashore, especially at training facilities. Worst hit was Great Lakes, Illinois, with more than 900 deaths, nearly 500 in just one late September week. Afloat, many ships were afflicted and some disabled. Notable among the latter was the armored cruiser Pittsburgh, stationed at Rio de Janeiro, Brazil, with the majority of her 1100-man crew sick and 58 dead. The patrol vessel Yacona had 95 cases, more than eighty percent of her small complement.

      Though not disabled, the Navy’s transports were hit hard, with fatalities running expecially high among troops en route to France.

      Rather than the “Spanish flu” it should have been called the “American flu.”

      There were several reasons why it was so deadly. Many patients got secondary bacterial infections, especially with streptococcus. There were, of course, no antibiotics.

      Secondly, many patients developed streptococcal Empyema and strep empyema tends to be a thin fluid which will allow the lung to collapse if it is drained openly. It took Evarts Graham’s Empyema Commission to learn why this occurred. The lung functions with a relative vacuum between it and the chest wall. If air is allowed into that space, the lung collapses and the ill patients would die. After Graham’s study, it was learned that using a tube sealed with a water trap would prevent this and mortality would be reduced by 50 to 75%. The Commission learned this too late for the epidemic’s victims.

      Somewhat ironically, this information was known to Hippocrates who gave advice on treatment and prognosis.

      He wrote “After surgical drainage, the prognosis depends on the macroscopic image of the drained pus. If the pus is white and clean and contains streaks of blood, the patient generally recovers. If the pus is yellowish, thick, and fetid, the patient usually dies.”

      Streptococcal empyema is watery and foul. Staph empyema is thick, white and the lung adheres to the chest wall avoiding the lethal complication of collapse.

    7. vxxc2014 Says:

      “Streptococcal empyema is watery and foul. Staph empyema is thick, white and the lung adheres to the chest wall avoiding the lethal complication of collapse.”

      I fear doctors more than fearsome evil men or battle.

      Let me die, please. Thanks.