Chasing Yield

Chasing yield is the tactic of going for the highest-yielding investment available at the expense of other considerations. One of those considerations that gets disregarded in the chase is whether the yield being…offered…is radically higher than that of other investment vehicles on the market. If it’s much higher, that yield likely is too good to be true.

Another consideration that gets lost in the chase is the underlying soundness of the issuer. Checking the level of soundness is hard work, often tedious and boring. It’s necessary, though, and it’s equally necessary to avoid the flip side of that: the laziness of just jumping onto a handy get-rich-quick scheme, which is what so much of yield-chasing is.

A “Careful” Economy

In a Wall Street Journal op-ed about the dangers we’re facing because we’re reopening our economy much too soon to suit him, John Cochrane had this remark:

…the most important thing government can give us is accurate and timely information on how widespread the virus is in each community—how dangerous it really is to go out—something we don’t have now.

The truly Critical Item on how dangerous it might be to go out is the mortality rate, and that’s down around 1% for Americans younger than 60-ish, which includes children and working age Americans, and it’s not much higher for those older.

Long Overdue

The People’s Republic of China has been able to raise billions of dollars for its various business outlets by listing them on American stock exchanges—all while being exempt from the same public visibility and auditing requirements that other nations’ companies and our domestic ones must satisfy on our exchanges.

Maybe that’s changing.

Legislation passed by the Senate—and now introduced in the House—would kick Chinese companies off US stock exchanges unless their audits are inspected by US regulators.

And

The Senate legislation requires the Chinese companies with shares traded here to disclose to the Securities and Exchange Commission whether they are owned or controlled by state authorities.

House Relief Bill

Here’s what’s in the House “relief” bill, written in House Speaker Nancy Pelosi’s (D, CA) kitchen where she could have ready access to her special ice cream. The bill was written with zero Republican input, zero Republican amendments, carefully limited debate on the House floor, and passed almost entirely along party lines; although the bill did make 14 Progressive-Democrats choke to the point of voting against it, and one Republican was too timid to oppose it.

  • $1 trillion in funding for state and local governments

Time for a New Plan

That’s what Dr Marty Makary, Professor of Surgery at Johns Hopkins Medicine, says.  Broad lockdowns might have been justified at the outset of the present Wuhan Virus situation, but new information has arisen.

Since that time, we have data that has taught us that this infection is associated with public transit, with density, with mass gatherings, with city-to-city travel and it is associated with climate[.]

And

What we do know, [is that] there are safe ways to conduct activities in society if we use certain precautions and we probably need a targeted approach where we find areas where there is either an outbreak or an ongoing increase in cases, and use some of the more aggressive strategies in that particular location.

Trade Needs

In an article about, among other things, the People’s Republic of China’s attempt to extort Australia into sitting down and shutting up about the PRC’s role in the Wuhan Virus’ spread across Earth, David Thomas, a consultant who for several decades has advised Australian businesses on investing in the PRC, said this:

The world is going to need China’s capital, manufacturing, and consumption power when this is all over.

That’s so wrong it’s foolish. We’re discovering that now, and after the Wuhan Virus situation has been dealt with from medical and economic perspectives, that we can’t afford to be very economically involved in the PRC.

Economic Recovery Post-Wuhan Virus

Paul Hannon and Saabira Chaudhuri wonder, in their Wall Street Journal piece, whether we’ll have the V-shaped recovery that President Donald Trump confidently predicts, or whether we’ll have a swoosh-shaped recovery a la the Panic of 2008 recovery. They don’t, though, seem to recognize key differences between the two situations, beginning with the underlying causes of the two dislocations.

The Panic was driven by economics: a credit crunch. The present situation is created by a Government-mandated closure of our economy in response to the rapid spread of the Wuhan Virus and its perceived danger; economics has nothing to do with it.

Off-Books Lending in the People’s Republic of China

The People’s Republic of China may be approaching a problem with off-books lending as its economy—restarting though it is—still is stumbling badly, which coupled with the government’s attempts to rein in debt creation generally, is making it difficult for businesses and individuals to obtain credit.

Off-balance-sheet entities are selling bonds to finance projects such as investing in warehouses, expanding underground metro networks, building data centers or renovating shantytowns.

Such debts, though, afford government at any level little direct oversight—which the PRC government levels especially desire—and they have often fed wasteful spending.

And

Economic Reopening, Resistance, and Perspective

As States reopen for business, and as increasing numbers of businesses reopen and customers patronize them against State government encouragements or outright diktats to the contrary, Progressive-Democratic Party Presidential candidate Joe Biden is nattering on that President Donald Trump’s policies are undermining the core pillars of our economic strength. In the meantime, the NLMSM is focusing ghoulishly on body counts and not mentioning any other relevant information.

The following table looks at some data for three States mentioned in one Wall Street Journal article, another State mentioned in a different WSJ article, and two States mentioned by Fox News.

Control of the Internet

ICANN (Internet Corporation for Assigned Names and Numbers) is the American manager of Internet domains and Domain Name Service under contract to the Internet Assigned Numbers Authority, the globally agreed agency responsible for the global Internet. It had been about to sell the Internet domain .org to a private enterprise.

The .org registry is a database of more than ten million websites managed since 2003 by the nonprofit Internet Society. The group decided .org could be better served by a company that could invest returns back into the service.

The sale would have been for $1.1 billion, which ICANN could have put to good use, too.