At this time of year I ask myself what were the biggest stories of the year ending in business/financial news. This year, the answer "Covid-19 and its Consequences" must dominate, as completely as the Wall Street centered financial crisis dominated 2008. Breaking that down by month as usual, I've given Covid-related stories to four of the twelve. That still rather understates its significance, but blame that on the ease with which I am bored. And I could have called my December entry Coronavirus (5), but chose to go with something more specific for that one. Let's start with those innocent days of January, when few people very far from Wuhan had any clue what was coming. Instead, there was a lot of talk about pipelines that month. January Pipelines. The TurkStream pipeline illustrates the continued viability of fossil fuels. https://www.reuters.com/article/us-turkey-russia-pipeline/turkey-russia-launch-turkstream-pipeline-carrying-gas-to-europe-idUSKBN1Z71WP ...
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The "wet markets" of the Peoples' Republic of China have received a fair amount of abuse, via allegations that they are responsible for the rise of the destructive coronavirus... there is a self-congratulatory social media meme, "we don't eat bats over here." So presumably "they" are at fault "over there." Indeed, a September 2019 article in a peer-reviewed journal concluded, in more august scientific language, proposed " biological behavioral surveillance in high-risk geographic areas in order to reduce the risk of zoonotic disease emergence." That apparently means somebody should keep track of what's going on in the wet markets of emerging countries and crack down on practices that might enhance risks. The same study identified "serological evidence of bat coronavirus spillover in rural communities in Southern China." Here's a link to the source for those quotes: https://www.sciencedirect.com/science/...
In finance, there is a concept known as "skin in the game." It is used to warn against taking advice from anyone who does not share with you in the related risks. Though when it is offered as advice ("only listen to people with skin in the game") it can cut both ways. "Buy Xerox," says the television prophet. On the one hand, yes, I see the point of expecting that he has some skin in the game himself. If he doesn't own some stock, he doesn't really care whether the price of Xerox goes up or down. It is an academic exercise for him. It is a retirement fund for some sucker paying attention to him. But on the other hand: what if he does have skin in the game? That may work against his reliability. After all: he may be trying to drum up interest in Xerox, holding Xerox stock himself, precisely because he plans on selling INTO that drummed-up interest. :Pump and dump. His talk may be pumping so his broker can do the dumping. ...
There has been a good deal of talk lately about "stock buybacks." This is because, if I understand the situation, the Republicans want to give money to various businesses to get them through the coronavirus problem. The Democrats respond, NOT "subsidies are wrong in principle" (given the history, that seems an unlikely position for them to take, though these days anything is possible) -- rather their response is "we'll go along with the bail-outs to your buddies, so long as various strings are attached which we can pretend are pro-worker strings." I just want to say that on this point the Republicans have a case. Let's not talk or act as if there's never a good reason for a company to buy its stock back. Example: a management may have a good faith belief that its stock is undervalued by the market, and thus due for an upswing. It may also face a situation in which, before that upswing can happen, it faces a takeover threat from a corpor...
I'm still collecting my thoughts about President Trump's speech from the Oval Office on March 11 with regard to coronavirus. The whole point of speaking from the Oval Office is that a President gets a solemn backdrop -- like a captain on the bridge, or a King in his 'throne room.' The throne room is only rarely used for this purpose, and the rarity of course helps underline the importance of the pronouncements made in this way. On March 11th, though, Trump went off the rails. VOX has the full text: https://www.vox.com/2020/3/11/21176001/trump-coronavirus-speech-travel-ban-transcript The key conceit of the speech is that the US under Trump's wise leadership had shut the virus out on the western flank, by limiting immigration from China, and that it would now simply have to perform the same magic on our eastern flank, limiting immigration from Europe. Here's the key bit. "To keep new cases from entering our shores, we will be suspending all t...