RUTHFULLY YOURS

Since the moment coronavirus entered the media’s vocabulary, the media and the Democrat party have been working diligently to assure the American people that it’s the second coming of the Black Death and that it’s all Trump’s fault. Disgustingly, many of them have been insisting that it will destroy the American economy (which, after all, is one of Trump’s biggest selling points) and certain people who shall be named – Paul Krugman, I’m talking to you – seemed to celebrate the stock market’s big drop last week. The stock market, though, seems to be recovering already, posting huge gains on Monday.

Don Surber, one of the most astute bloggers around, was unsurprised by the market’s gyrations because he had predicted this event long ago:

 NPR reported, “Stocks took another steep dive Friday, deepening a multi-day rout fueled by fears about the coronavirus’ impact on the global economy.

“The Dow Jones Industrial Average fell 357 points on Friday, capping a week in which the blue chip index fell 3,583 points or 12.4%. The Dow is down 16.3% from its recent peak on Feb. 12.”

This is the correction I predicted for 2020 in highlights on December 31.

(See Item 19: “I am tepid on the stock market. The Total Market Value of American companies is now 144% of the GDP. I see a midyear correction of 10% to 15%. The press will cheer, again to their great disappointment as the stocks will rebound. But history shows big growth following a year like this year’s huge growth. Also it is a presidential re-election year. My advice as always is watch what Warren Buffett does.”)

There is no way I knew that a new strain of flu would trigger the correction, but this gives the stock market time to weed out the weak stocks and rally ’round the strong ones. The Dow Jones Industrial Average should hit 30,000 by the year’s end.

We can probably expect more gyrations from the stock market as the media hypes every death from coronavirus (while ignoring the tens of thousands of annual deaths from “the flu,” as happens every year), but today’s Dow jump showed that the market is already figuring out that the media are overreacting:

The stock market roared back from an abysmal week last week in response to fears over how the spread of the coronavirus could impact business around the world.

“The Dow Jones Industrial Average closed 1,293.96 points higher, or 5.1%, at 26,703.32,” CNBC reported. “The move on a percentage basis was the Dow’s biggest since March 2009. It was also the largest-ever points gain for the 30-stock average.”

“The S&P 500 climbed 4.6% — its best one-day performance since Dec. 26, 2018 — to close at 3,090.23,” CNBC added. “The Nasdaq Composite also had its best day since 2018, surging 4.5% to 8,952.16.”

According to Politico, the reason for this rebound is investors’ belief that the central bank will step in and save things:

Stocks rose sharply on Wall Street Monday as traders hope that central banks will take action to help shelter the global economy from the effects of the coronavirus outbreak.

[snip]

Despite the pickup in stocks, the bond market signaled that investors are still worried. Bond prices climbed, pushing yields to more record lows. The yield on the 10-year Treasury note fell to 1.09% from 1.12% late Friday. Gold, another traditional safe-haven asset, rose 1.7%.

[snip]

Investors are increasingly anticipating that the Federal Reserve and other major central banks around the world will lower interest rates or take other steps to shield the global economy from the effects of the outbreak.

That sounds about right but there may be more going on: With China’s fragility on display there’s going to be renewed interest in moving manufacturing out of China, a thuggish country that abuses trade the world over and uses slave labor at home.

The greenies will love it because coronavirus practically shut down air pollution in China. American workers and manufacturers will also love it (indeed, they already do), as it brings products and profits back home – especially if Trump can convince both the federal government and the states to lower barriers to starting new manufacturing businesses in America or to resurrecting old ones.

Trump was right all along when he said that our dependence on China was a problem. Imagine how bad things would have been if he hadn’t started disentangling things practically on his first day in office. And imagine how bad things would have been if Trump the germaphobe hadn’t had the political courage to shut down our borders to traffic from China. We are singularly blessed to have a hard-headed visionary in the White House.