Rep. Jim Clyburn, an influential figure in South Carolina politics, endorsed former Vice President Joe Biden on Wednesday, Feb. 26, 2020.
Clyburn’s endorsement came ahead of South Carolina’s Saturday, Feb. 29, 2020, primary, where Biden needed a win in order to keep his bid for the Democratic presidential nomination alive.
Not only alive, it ended all the other contestants’ campaigns. Joe won and spent the remainder of the campaign pretty much in his basement.
Senate Minority Leader suspects the $2.3T stimulus plan is a Trojan Horse for massive tax increases. Indeed, only about $160 B is really for infrastructure, the rest for green energy and inevitable paybacks to unions. Team Biden let Bernie Sanders and Liz Warren compile this wish list, more than they could have accomplished had they won. Does anyone think we will ever see an actual accounting of where this amount of money will go?
The mass media has ignored the Viacom CBS and Discovery meltdowns of last Friday. Bill Hwang was booted from the Hedge Fund industry and fined for misdeeds. He re-named his enterprise Archegos, one who leads, into a family business. He engaged in ‘swaps’ with investment banks including Morgan, Goldman, Credit Suisse, and Mitsubishi. His character was so disreputable that initially Goldman refused to do business with him, now that is saying something! But as other banks were making money with Bill, Goldman relented. Archegos called a meeting a week ago announcing margin calls requiring position liquidations. A margin call is a demand for more funds when the collateral against a securities loan falls too far. As the saying goes, Goldman only has one client-Goldman. Goldman and Morgan were the first out the door with the least losses. Hesitating has apparently cost Credit three to four BILLION (not a misprint) dollars. The liquidated assets included Viacom CBS, which lost half its total value in five days trading.
Swaps allowed Hwang to ‘control’ leveraged assets which technically the banks owned without having to reveal positions. This meant the banks had no idea of his total exposure. If this sounds like Long Term Capital Management or the sub prime mortgage crisis, move to the head of the class. How many more Bill Hwangs are out?
The most reliable stock market indicator is the NYSE advance decline line. It is now flattening indicating fewer advances. Indeed, the recent new highs were accompanied by more declines than advances. It may take until the seasonal high of May for the A/D line moving averages to decline.
WTIC is trading below $60. World demand for gasoline is said to have peaked. The Federal Government continues to force electric cars on a public which has shown little interest in their purchase.
We continue to monitor what appears to be a similar market to March, 2000 (dot.com peak) and Fall, 2007 (sub prime mortgage peak).
