{"id":1187585,"date":"2020-05-27T10:25:55","date_gmt":"2020-05-27T15:25:55","guid":{"rendered":"https:\/\/dailyreckoning.com\/?p=109386"},"modified":"2020-05-27T10:25:55","modified_gmt":"2020-05-27T15:25:55","slug":"jamie-dimons-big-admission","status":"publish","type":"post","link":"https:\/\/juniorminingnews.com\/?p=1187585","title":{"rendered":"Jamie Dimon\u2019s Big Admission"},"content":{"rendered":"

This post Jamie Dimon\u2019s Big Admission<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

Yesterday the S&P crested 3,000 for the first instance since March 5.<\/p>\n

The same S&P outdistanced its 200-day moving average \u2014 a \u201cbullish\u201d portent.<\/p>\n

Yet its reach exceeded its grasp…<\/p>\n

The bears, rousted and alarmed, launched an afternoon counterraid.<\/p>\n

They threw the overextended and outweaponed index back beneath 3,000\u2026 which ended the day\u2019s jousts at 2,991.<\/p>\n

But as the chart men will remind you\u2026<\/p>\n

The S&P\u2019s initial probe above the 200-day moving average rarely holds. The second assault often does.<\/p>\n

Did today\u2019s assault succeed where yesterday\u2019s failed?<\/p>\n

Yes Under covering fire from the Federal Reserve\u2026 it took the terrain.<\/p>\n

For that fire is heavy. That fire is accurate. And that fire is sustained.<\/p>\n

The S&P ended the day at 3,036.<\/p>\n

The Fed\u2019s \u201cBazooka\u201d Is Responsible<\/b><\/h2>\n

Even JPMorgan head man Jamie Dimon concedes:<\/p>\n

\n

The Fed’s liquidity, bringing out the bazooka, is propping up stock prices (as well as all other asset classes).<\/i><\/p>\n<\/blockquote>\n

Where the S&P would sit without \u201cthe bazooka\u201d covering its advance\u2026 we do not know. But we hazard it would languish far beneath 3,000.<\/p>\n

We further hazard the Dow Jones industrial average would average a great deal less than its present 25,548.<\/p>\n

And so the reputation of the Wall Street man as a rugged and swashbuckling fellow, as a sort of daredevil carving his own way through constant peril\u2026 has died the death.<\/p>\n

He is now perceived \u2014 justly in part \u2014 as a man on the dole, as a man on public relief.<\/p>\n

The Federal Reserve clears his way. It bazookas all resistance. It mends his erring ways\u2026 and insures him against loss.<\/p>\n

\u201cHeads I Win, Tails You Lose\u201d<\/b><\/h2>\n

The Wall Street man collects all his winnings in flush times.<\/p>\n

Yet when a fate is against him, when he faces hardship\u2026 the Federal Reserve lifts his losses from his hands… and slips them into taxpayer pockets.<\/p>\n

Thus he is perceived almost as a man in possession of stolen property.<\/p>\n

He has certainly enjoyed a good steal\u2026 and he has certainly enjoyed a long steal.<\/p>\n

\u201cHeads, I win,\u201d he seems to say to our hapless taxpayer. \u201cTails you lose.\u201d<\/p>\n

Is this justice?<\/p>\n

Real Capitalism<\/b><\/h2>\n

We are heart and soul for the unchained capitalist system.<\/p>\n

If a man speculates successfully in the combats of the free and open market, he has our loudest applause.<\/p>\n

He confronts danger from all directions\u2026 and often sees off odds that would make us quail.<\/p>\n

He earns his money. And the better he speculates the more he takes in.<\/p>\n

If he fails, he fails in an honest system of profit and loss. He hangs upon his own hook. And he enters the business knowing it.<\/p>\n

This is the way it should be. Alas, it is not the way it is.<\/p>\n

Fake Capitalism<\/b><\/h2>\n

As much as we are heart and soul for the unchained capitalist system\u2026 we are heart and soul against the corrupted capitalist system…<\/p>\n

That is, we are against the rigged deck, we are against the tilted game board, we are against the loaded die…<\/p>\n

We are against thumbs on scales, we are against artificial winds at backs, we are against referees who pick sides.<\/p>\n

That is, we are against the system that presently obtains.<\/p>\n

That system has put Wall Street back in funds… or largely so. America\u2019s billionaires \u2014 for example \u2014 have fattened $434 billion since March.<\/p>\n

The bright-siders insist the stock market has come barreling back because the economy will come barreling back.<\/p>\n

The market is merely \u201cdiscounting the future,\u201d they croon.<\/p>\n

Yet we find ourselves severely at outs with this assessment. We gaze ahead and see a discount vastly reduced…<\/p>\n

42% of Job Losses Could Be Permanent<\/b><\/h2>\n

Some 40 million Americans presently wither in unemployment, idled, hands in pockets.<\/p>\n

Economist Nicholas Bloom \u2014 a Stanford man \u2014 estimates 42% of them may remain in unemployment.<\/p>\n

Their jobs will never return.<\/p>\n

We do not know if 42% will prove the correct figure. It appears precious high to our notion.<\/p>\n

Yet we wager the true number will nonetheless reflect a calamity.<\/p>\n

Even a 20% figure leaves 8 million Americans permanently idled.<\/p>\n

Meantime, we learn today that Boeing is cutting out 12,000 positions. It further projects “several thousand remaining layoffs” in the months to come.<\/p>\n

That is because it fears the airline industry will not recover for years.<\/p>\n

We project the same for the travel industry in its entirety. And for other industries currently knocked flat\u2026<\/p>\n

Six Feet Apart Means Six Feet Under<\/b><\/h2>\n

How, for example, will the restaurants come back if they must choke the inflow of eaters?<\/p>\n

Restaurants generally go along on the knife\u2019s edge, on profit margins truly slender. Most cannot endure a diminished customer flow.<\/p>\n

Six feet apart \u2014 to draw upon our co-founder Bill Bonner \u2014 means six feet under for the restaurant business.<\/p>\n

We can think of two capital Baltimore restaurants that did a brisk trade. They were constantly thronged with patrons.<\/p>\n

Yet we are informed that neither will reopen once the present siege lifts. They are permanently killed.<\/p>\n

We are certain many more will follow.<\/p>\n

And the restaurant industry, like the airline and travel industries, touches other industries.<\/p>\n

Like a great ship sinking beneath the waves\u2026 when one goes under it tugs mightily upon those close by.<\/p>\n

Extend the dilemma nationwide and you will find an economy in hard shape.<\/p>\n

Where will the next batch of jobs originate?<\/p>\n

Don\u2019t Count on the Jobs Coming Home<\/b><\/h2>\n

Some believe millions of offshored jobs will come swimming home. That is because the virus has rubbed the shine off globalism.<\/p>\n

We must produce essentials ourselves, they insist. Global supply chains are too fragile. Hacksaw one link and the entire chain is undone.<\/p>\n

We cannot tie our fate to hostile China, for example. We must brew our own medicines and stitch our own surgical masks.<\/p>\n

But the jobs originally jumped the ocean for this reason: Business costs were lower across the ocean.<\/p>\n

Business costs remain lower across the ocean. And business costs will remain lower across the ocean.<\/p>\n

Wages are often a slender fraction of American wages. Occupational safety regulations scarcely exist. Neither do environmental regulations.<\/p>\n

China\u2019s Losses Will Be Someone Else\u2019s Gains<\/b><\/h2>\n

How many American businesses will repatriate operations if it places them at a competitive disadvantage?<\/p>\n

Precious few, we hazard.<\/p>\n

They may quit China (many already have due to rising labor costs).<\/p>\n

But China\u2019s losses would likely become Vietnam\u2019s gains, or Malaysia\u2019s gains, or Indonesia\u2019s gains.<\/p>\n

In brief\u2026 we do not expect millions of jobs to make the swim home.<\/p>\n

The Fed\u2019s Bazooka Did Nothing for the Economy<\/b><\/h2>\n

The Federal Reserve\u2019s bazooka may give the stock market its cover. Yet for the economy overall… its bazooka has proven a mere pop gun, a spitball blaster, a shooter of blanks.<\/p>\n

It has done little but load the economy with cheap debt. Much of it, unproductive debt.<\/p>\n

Total United States debt eclipsed $75 trillion even before the virus blew in.<\/p>\n

For a decade and more the economy hunched along, weighted down by this overloaded cargo of debt.<\/p>\n

As we recently noted:<\/p>\n

GDP growth did not attain 3% one year during this past decade. From 1996\u20132005 \u2014 conversely \u2014 GDP exceeded 3% seven years of the 10.<\/p>\n

Meantime, even heavier debt loads are heaping down. The economy will squat even lower in the water.<\/p>\n

It is an economy headed for the doldrums. We sincerely hope it can avoid the shoals…<\/p>\n

Regards,<\/p>\n

Brian Maher
\nManaging editor, The Daily Reckoning<\/i><\/p>\n

The post Jamie Dimon\u2019s Big Admission<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

This post Jamie Dimon’s Big Admission<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n

JPMorgan head man Jamie Dimon admits what’s caused the stock market to come storming back…<\/p>\n

The post Jamie Dimon’s Big Admission<\/a> appeared first on Daily Reckoning<\/a>.<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-gradient":""}},"footnotes":""},"categories":[3724,366,656,4331,4332,462,4026],"tags":[],"_links":{"self":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1187585"}],"collection":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1187585"}],"version-history":[{"count":1,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1187585\/revisions"}],"predecessor-version":[{"id":1187586,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=\/wp\/v2\/posts\/1187585\/revisions\/1187586"}],"wp:attachment":[{"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1187585"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1187585"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/juniorminingnews.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1187585"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}