“Never underestimate the size of a panic, nor the power of a politician.” — Sir Harry Schultz (p. 112, “Maxims of Wall Street”)
After the World Health Organization declared the coronavirus a “pandemic” yesterday, Wall Street suddenly entered bearish territory and fell more than 20% in just one month!
Talk about March Madness. Everyone is panicking. In this issue, I will show you why there is some reason for hope.
The hysterical reaction to the coronavirus is breathtaking. Investors have joined the chorus of scaremongers who have suddenly canceled conferences, major film festivals, concerts, college classes, church meetings and even sporting events.
President Trump announced that he plans to use an executive order to stop foreign nationals from flying into the United States from Europe in order to limit the risk of coronavirus-carrying passengers from coming into the United States. That flawed policy will disrupt routine travel and commerce and seems “nutty” to me. (See my “You Blew It” column for more.)
Professor Larry Iannaccone wrote me, “Never in my life have I seen such risk-averse insanity.”
Even at Chapman University, where I teach, students and their parents threatened lawsuits if the president didn’t close the campus and send their students home. He caved in.
Despite the fact that not a single student there has the COVID-19 virus and the Orange County Health Center has declared that the threat to Orange County to be “low,” the university president told the students to go home and continue their classes online.
One Chapman University student worked for four long years to get ready for her April musical performance in front of faculty, students and family. Now, she has to perform in front of an empty concert hall.
How tragic and frankly unnecessary (especially when you see the chart below)! I hope the pandemic will be over in a month or two, but by then, it will be the end of the semester.
Impact on the Economy and the Stock Market
There’s no doubt that a recession is inevitable the longer that this crisis lasts. Many people and businesses are closing their doors. The stock market is a leading indicator, and it is currently conveying, “beware of a slowdown, if not a downright recession.”
The economists at “GDP Now” have predicted that the economy will grow 3.1% in the first quarter. However, that forecast seems outdated when we look at the current conditions of the economy.
Smart investors are buying gold and Treasury securities due to the Federal Reserve’s easy money policies and the uncertainty in the global economy. We’ve been recommending gold in my newsletter, Forecasts & Strategies. (To subscribe, go to www.markskousen.com).
Bigger Danger in November
Suddenly the odds are moving quickly in favor of the Democrats taking over Washington in November. A month ago, President Trump had a big lead over either Sen. Bernie Sanders or Sen. Joe Biden, but now they are neck and neck. For the latest odds, see John Stossel’s election betting site: https://www.electionbettingodds.com/.
There are two reasons why the Democrats are gaining ground fast.
First, the moderate Sen. Joe Biden has passed the radical Sen. Bernie Sanders in terms of delegate count and is now the Democrat who will likely run against Donald Trump in November. Bernie Sanders was unelectable as a hardcore socialist.
Second, the likelihood of a recession and an extended bear market dramatically increases the chances that Trump will lose his bid for re-election in November. The economy is the key factor in an election.
Professor Allan Lichtman, author of “The Keys to the White House,” has accurately predicted every presidential election from Reagan to Trump. He will be a keynote speaker at www.freedomfest.com. He now says, “The election is too close to call.” He will give us his “surprise prediction” in July.
Light at the End of the Tunnel
But, I have good news. Look at the chart below, which tracks the daily growth rate of the coronavirus. It’s starting to slow!
If this trend continues, it means that the pandemic will be over soon.
This other chart shows you what has happened in China. The daily number of virus cases is now practically down to zero.
Chart courtesy of Barron’s.com.
Emergency Meeting at FreedomFest
All kinds of conferences have recently been postponed or canceled in the face of the coronavirus, but not FreedomFest 2020. In fact, we have continued to increase our numbers. More than 800 people have signed up, 30% ahead of last year.
And with airfares at bargain-basement prices, now is the time to sign up and take advantage.
We are holding an emergency meeting at FreedomFest to discuss the 2020 election and its impact on the economy and our investments. Speakers include Dr. Jordan Peterson, Steve Forbes, Larry Elder, John Stossel, John Mackey, Tom Woods and hundreds more to be confirmed soon.
Watch our three-minute video about this year’s big show by clicking here.
To sign up, click here, or call 1-855-580-3733, ext. 202. Please be sure to use Code: FF20EAGLE.
Catch the vision in 2020!
Watch My Interview on the Global Financial Wealth Network!
You can watch my interview with the Global Financial Wealth Network on your Amazon Fire, Roku or Samsung Smart TV. Or, if you want to watch directly on your computer, phone or tablet, click here to watch now!
Good investing, AEIOU,
You Blew It!
President Trump Bans Foreign Nationals From Entering the United States From Europe!
By Mark Skousen
It is one thing for private enterprises to cancel conferences, events, cruises, sporting events or college classes. It’s quite another for the government to intervene in normal business activities.
Airline companies have been trying to make sure that customers feel safe and healthy when they travel. But President Trump created chaos in the travel industry through his March 11 remarks that were televised from the White House. During these remarks, he stated that he would ban foreign nationals from flying into the United States from continental Europe in order to limit the spread of coronavirus, also known as COVID-19.
Imagine the many people who have planned trips for business, school or vacation that suddenly can’t go. What right does the government have to interfere with personal decisions?
Last week, the mayor of Austin, Texas, decided to cancel the South by Southwest Festival that attracts thousands of attendees and millions of dollars in business. This will ruin many businesses. Why not let the festival organizers make that decision, like how the NBA did by suspending its regular season games indefinitely after discovering a star play for the Utah Jazz tested positive for the deadly virus?
Some people may agree with the president that the United States should not allow coronavirus-carrying people to enter the country. However, a blanket federal policy covering all foreign nationals seeking to enter America from Europe penalizes healthy tourists and business travelers, along with the airlines that fly those routes and the hotels where they would stay.
In my view, it is all a question of persuasion, not force.
“The sign of a civilized society is the triumph of persuasion, not force,” I wrote in my pamphlet, “Persuasion vs. Force.” I invite you to read it by clicking here.