VRA Weekly Update: CARES Act, Setting the Record Straight. CV Insanity, What If?
/CARES ACT Phase 4 Negotiations. Setting the Record Straight, With Thanks to Three Men.
With congress back in session, negotiations are hot and heavy for Phase 4 of the CARES Act. I remain thunderstruck by the financial assistance that’s been provided to the American people and American businesses to date. Yes, we still have a long ways to go to right our financial ship, but so far, it’s rather amazing what’s been accomplished. After watching the implosion of the housing market/stock market following the onset of the 2008 financial crisis, I had little faith that our leaders would work hard enough or fast enough to get the job done, once the reality of coronavirus insanity set in and the financial and economic implosion that came with it.
Was I ever wrong.
From the PPP, to mortgage forbearance programs (individual and business), to the $1200 stimulus payment to the added $600/week in Federal disaster unemployment insurance, to statewide efforts to block evictions for renters, let me just say it the best way I know how; for once…maybe the first time in my lifetime…our government really came through for us. They came through for us BIG. $6 trillion big so far, with $3 trillion in fiscal stimulus (govt) and $3 trillion in monetary stimulus (Fed)…and it looks like its about to grow to $8 trillion, which we’ll cover in a bit.
And I give the vast majority of the credit to three people; President Donald Trump, Treasury Secretary Steve Mnuchin and Fed Chair J Powell. Serious props, so far.
You know my thoughts on CV. It’s been a dramatic overreaction to a glorified flu season. Were it not for 5 Dem governors that forced the elderly that had CV back into their nursing homes/assisted living communities (mass homicide), and were it not for the mass manipulation of data surrounding CV (died “with/from” CV and the fact that the CDC admitted just last week that their case totals have been wildly exaggerated, combining those with antibodies with the infected, in their case totals), CV would today be known as a tough flu season, but almost certainly little more.
And the same applies in the international community. Outrageously stupendous mistakes that have taken the lives of so many of the most vulnerable among us, that not only included little to no protection in mass transit systems, while then forcing those sick family members to remain locked down in their own homes, which resulted in near immediate, deadly infections/deaths from among their own family members.
As I watched this calamity unfold…as we struggled to make sense of God-awful decision making from our leaders…I had little to no faith that they would get the financial/economic side of this right.
Again, I was dead wrong.
Our government may have well been complicit in causing the vast majority of pain from coronavirus insanity (they were), but when I say they also acted with speed and haste to remedy their mistakes as much as possible, as a proud American I say “they are doing just that”.
What if…? Coronavirus Insanity Possibilities
Tyler and I have a theory we’re working on. It will likely lead to a fully researched, lengthy & sourced research piece and possibly even my next book (Tylers first, as we write it together). While the topics covered may come across as highly controversial, we believe we have early facts to begin to back it up.
Without giving too much away, it goes something like this; the world was already heading into a deep recession…or worse…in great part due to the takedowns of black market/underground economies from drug cartels and human/sex trafficking, in the US and globally, which have caused untold amounts of human misery and suffering. If you’ve followed Trumps work closely over the last 4 years (and his comments surrounding drug cartels and human/sex trafficking over much of his last 20 years +), you know that this has been a focus of Trumps life for a very, very long while.
But here’s the key; removing those untold/enormous revenue producing sums from these black markets was also going to remove massive amounts of liquidity from the global economy. Trump and his (global) team needed a way to re-insert this missing liquidity from global markets.
The question that we have…and we have substantive evidence from our research to date…is “what if CV was in fact part of a cover story to insert ten to fifteen trillion dollars, back into the global economy, filling that big hole left behind, in part, from this illicit and lost liquidity”??
If our theory sounds too out there to comprehend or take seriously, take a few minutes to read this article from The Guardian of more than a decade ago, roughly a year into the financial crisis:
“Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations’ drugs and crime tsar has told the Observer. Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were “the only liquid investment capital” available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.”
https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims
This article, which I first read back in 2009 when it first appeared, has been stuck in my mind…God only knows how big the illegal drug and human/sex trafficking trade is…the pain and suffering it’s caused…but if you’ve been following the news since Trump was elected (and this has been a focus of the Q crowd research) you’ve likely seen some of the “many” stories revolving around the ongoing takedowns of organized crime, in the US and around the world. More 4D chess stuff, possibly, from #45.
Our theory…assuming we can compile the required research to more fully back it up…would answer some of the hardest questions we’ve had from the onset of CV insanity. What’s clear to us is that the speed and certainty with which US and global governments acted in unison to support the global economy looks very much to have been “in lockstep”, as if preordained and pre-planned. Following the money, the signs are there. The reactions to date in global financial markets are most certainly all there. A global reset, under the cover of coronavirus? We think thats a story that needs to be more fully researched. If you have info that might help us to develop this story more fully, please send it our way. Thank you in advance.
CARES Act, Phase 4 Details Coming Into Focus
Here’s what we are hearing about phase 4 details so far. Remember, to date we have $3 trillion from the CARES Act, already circulating in the economy, plus the $3 trillion from the Fed, taking the grand total to $6 trillion that’s been inserted into US markets. It sounds like we’ll soon be able to add another $2 trillion to that total. Dems want that figure to be $3 trillion (already passed in the House), while Republicans opened with $1 trillion. A meeting in the middle appears likely (before the 8/7 recess for Congress), which looks to include:
1) Extension of Federal Disaster Unemployment Insurance. While it may not be another $600/week (in addition to state UI), at least $400/week looks likely, possibly through year end.
2) Increased state and local funding, which to date has totaled $350 billion. States have blown massive holes in their budgets due to CV lost tax revenues and are desperate for funding. If not, the layoffs as we head into next year will be catastrophic to the US economy. Like it or not…and Republicans have little appetite for bailing out bankrupt blue states…expect an additional several hundred billion to be paid to states in Phase 4.
3) Liability protections to businesses and schools. This ones a biggie…and its beyond required to reopen the US economy. With liability protection from CV risks, many businesses and schools simply will not be able to reopen. Here again, blue states are aggressively using this issue as leverage. Consider the passage of liability protection as baked in the cake.
4) What’s not clear at this point is how congress will handle renter/lease evictions, for both individuals and businesses. Unless something is done here, all of the hard work that Trump and team have done will quickly unravel, as mass evictions (somehow) work their way through the court system. It’s impossible for me not to have sympathy for people that have lost their jobs and cannot make the rent or support their leases, through no fault of their own. This is in fact why we have a government, most especially when that government is the direct result of its citizens financial agony/bankruptcy.
5) Another interesting issue is mortgage forbearance programs, which are set to end (for those that have yet to sign up) in August. Roughly 6 million homeowners have taken advantage of these programs to date, which allow homeowners to live mortgage payment free for up to a full year. Robinhooders are certainly enjoying the newfound liquidity, which they’ve been piling into the stock market.
We’ll stay on top of Phase 4 negations and report back….
Until next time, thanks again for reading…
Kip
Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/17 years.
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