News

April 2020

China’s Coronavirus Stats Can’t Be Trusted

April 1, 2020John Banks

The coronavirus data coming out of China is manipulated, and possibly outright false. We know this, in part, because a Chinese health official has admitted as much. There have also been questions and red flags around China’s data reporting from very early on. This matters because China’s coronavirus statistics — the number of cases, the number of fatalities, and the slowing of new infections — are frequently used as a benchmark and a source of hope. It has been noted

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March 2020

Congress Needs Remote Legislating Capabilities As Soon As Possible

March 27, 2020John Banks

Without remote legislation capabilities, there are plausible scenarios where Congress loses its ability to legislate, or even to function. Imagine a scenario where the government is frozen in place — and no new emergency bills or measures can be passed. The risk of a non-functioning government, in the midst of the worst global crisis in generations, is now staring us in the face. A surprise event on Friday served to drive this point home. If this happens at the wrong

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Is $2 Trillion Worth of Stimulus a “Nuclear Bomb” — or a Mattress in a Volcano?

March 26, 2020TradeSmith Research Team

A $2 trillion emergency relief bill passed in the U.S. Senate by unanimous vote on Thursday. The bill is likely to pass in the House, and the president is likely to sign it. The final ink is not dry as of March 26. And yet we can say, with a high degree of confidence, that roughly $2 trillion worth of aid is coming — the biggest fiscal stimulus in history. But will it be enough? Many are impressed by the

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The Day the Fed Went to Infinity — and Markets Didn’t Care

March 24, 2020TradeSmith Research Team

The Federal Reserve went to infinity, and markets didn’t care. It’s hard to say which part of that statement is more remarkable. On the one hand, the Fed has promised to print endless trillions, if need be, to absorb whatever assets it needs to. That is mind-blowing. On the other hand, the market took the Fed’s announcement in stride — and then decided to ignore it, which is even more mind-blowing. Before we get into what happened on Monday, keep

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America and the World Will Never Be the Same

March 20, 2020TradeSmith Research Team

Vladimir Ilyich Lenin once said: “There are decades where nothing happens; and there are weeks where decades happen.” We are living through one of those weeks. Lenin led the Bolshevik revolution of 1917 and the formation of the USSR (Union of Soviet Socialist Republics) in 1922. When he said “there are weeks where decades happen,” Lenin meant society can exist in a certain way for a very long time — decades even — and then, all of a sudden, radical

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Congratulations: You Survived the Wildest Market Conditions Since 1929

March 17, 2020TradeSmith Research Team

Have you ever wondered what the 1929 stock market crash was like? Have you ever imagined how it might feel, as an investor, to endure 1929-level panic and turmoil? Have you ever wondered if you could handle it? Well, you don’t have to wonder anymore, because it just happened. The extreme volatility and fear displayed on Monday broke all records going back 91 years, all the way to the crash of (you guessed it) 1929. On Friday of last week,

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Italy is a Foreshadow of the “Tsunami” that is Coming. All Americans Should Prepare.

March 11, 2020TradeSmith Research Team

We have been sounding the alarm on the coronavirus situation for weeks. Last week, we explained that America is entering the coronavirus J-Curve. We also explained why more than 80 million Americans are likely to be infected (as a low-end estimate). One of the replies we received was short and blunt: “Thanks for scaring the s–t out of me.” It is not our goal to scare you. The goal is to prepare you — or at least to inform you,

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The U.S. Shale Industry Might Not Survive the Saudi-Russian Oil War of 2020

March 9, 2020TradeSmith Research Team

The overnight futures markets were a stunning sight to behold this weekend. On Sunday night, the Brent and West Texas Intermediate crude oil futures markets were down more than 30% at their lowest point. That is the wildest price move for crude since the first Gulf War in 1991. Crude oil is still, by far, the most important commodity in the world. Prior to the coronavirus slowdown, the world consumed roughly 100 million barrels of oil per day. For a

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Central Banks are Confirming a 71-Year-Old Prophecy from Austrian Economics

March 3, 2020TradeSmith Research Team

On Monday, Feb. 2, 2020, the Dow Jones industrial average roared higher by nearly 1,300 points. The single-day rally was the Dow’s best day in more than a decade. And the Dow was only one part of it. Stocks in general were up big on Monday in the anticipation of central bank stimulus. The story is well known: When things get bad, central banks ride to the rescue. Investors have learned this lesson over and over for 30-plus years, dating

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Why the Outbreak is Like a Biological EMP Attack

March 2, 2020TradeSmith Research Team

Last week, the markets experienced true panic. The S&P 500 saw its fastest-ever 10% correction from all-time highs; the 30-year U.S. treasury bond yield fell to all-time lows on safe-haven buying; and the Chicago Board Options Exchange (CBOE) Volatility Index, also known as the VIX, saw a bigger intra-month spike than it did in October 2008. The source of fear was the coronavirus, which has now killed more than 3,000 people and spread to every continent barring Antarctica. Coronavirus, also

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February 2020

Coronavirus is Coming to the United States — Here’s What to Watch

February 26, 2020TradeSmith Research Team

Coronavirus is coming to the United States. “It’s not so much of a question of if this will happen anymore,” Nancy Messonnier, Director of the National Center for Immunization and Respiratory Diseases (NCIRD), said in a Wednesday briefing, “but rather more of a question of exactly when this will happen.” Immediately after the NCIRD briefing was released, the stock market sold off for a third day in a row. “We are asking the American public to work with us to

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The WeWork Saga Was Even Nuttier Than We Thought

February 21, 2020TradeSmith Research Team

The era that ran from 2007 to 2019 was the most epic in Silicon Valley history. In 2007, Steve Jobs introduced the first iPhone. Then came the rise of Facebook and Twitter, the founding of Airbnb and Uber, the genesis of Bitcoin, the dominance of mobile apps, and the ubiquity of the “gig economy.” And then, finally, the spectacular collapse of WeWork closed things out. In 2019 — before the IPO was pulled and the CEO fired — we explained

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