The market is trading on speculation. Fundamentals don't matter now. Fundamentals will matter again. The Fed can print only so much money before inflation rears its ugly head. We can't continue to devalue the dollar as a matter of long-term monetary policy without consequences. Our "print first, ask questions later" monetary policy and "subsidize everything" … Continue reading Mr. Market Is Trading On Speculation. Fundamentals Will Matter Again.
Tag: Economic Stimulus
The economy will not enjoy a "V" recovery. A combination of defaults, bankruptcies, market disruption and high unemployment will make for a gradual recovery. PPP and Fed liquidity will eventually expire. Admittedly the Fed will likely inject more capital into the economy growing its already bloated $6.6 Trillion balance sheet. At some point this all … Continue reading A “V” Recovery Is Not In the Cards
Headcount reductions continue. We have updated our list of recent Tech company layoffs. Access the Excel version HERE. The PDF version may be accessed HERE. It is difficult to imagine a snap economic recovery as companies continue to shed talented people. The mythical "V" recovery would require all components of the global economy to recover … Continue reading Tech Layoffs & The Mythical “V” Recovery
Earnings calls thus far have struck a similar tone XYZ CEO: "Let me begin by saying our thoughts are with..."XYZ CEO: "We are grateful for the opportunity to delight our customers during this difficult time. We got off to a good start in the months of January and February as we experienced healthy year-over-year growth. … Continue reading Earnings Season Thus Far: Lack of Color & Backbone
Square's (tkr: SQ) Cash App appears to be winning the mind share battle against Venmo, the peer-to-peer ("P2P") payments platform owned by PayPal (tkr: PYPL). We ran a Google Trends analysis on search terms "Cash App" and "Venmo" for two time periods - the past 12 months and the past 30 days - for Google … Continue reading Is Square’s Cash App Winning The P2P War?
Congress will vote on a $484 Billion stimulus plan later this week which includes $250 Billion for the Paycheck Protection Program ("PPP") and $60 Billion for the SBA's Disaster Relief Fund. Congress and the Trump administration are racing to approve this stimulus package. The speed to execute this stimulus is driven by the fact that … Continue reading Expect More SMB Failures Despite Latest $310B SBA Relief
The macro trade where stocks fell in unison in late March only to recover in unison in early April is doomed to fail. We will re-test market lows. A staggered economic recovery will require that investors identify "winning" stocks coming out of the downturn and avoid "value traps". Life is about who you choose to … Continue reading Investors: Sharpen Your Pencils!
The SBA lacks the infrastructure to efficiently process the $350 billion capital allotment it received from the recent $2 trillion economic stimulus plan (read our breakdown here). The SBA's loan origination Website is overwhelmed from a bandwidth standpoint. The SBA's Website regularly times out or crashes before providing loan origination IDs to bank partners. It … Continue reading SBA Loan Processing – Every Which Way But Smooth
Alternate Title: "COVID Plus Pork". The $2 trillion economic stimulus package may be best described as "bloated". Our breakdown may be accessed HERE. The actual bill may be accessed HERE. https://youtu.be/3h7JY1vfq8U