More proof that the end is near
will politicians repent?
Last week, I had put out the idea that the end of Covid was coming in my post...
At the time, we were seeing many news articles coming out talking about the Omicron wave peaking. In addition, the Supreme Court had shutdown the administration’s attempt to have OSHA enforce a shot mandate on businesses with more than 100 employees.
Then just yesterday, Canada abruptly cancelled their mandate for truckers. This was cancelled three days before it was suppose to go into effect.
Now we have news out of the UK. The Gateway Pundit is reporting that face masks will no longer be required anywhere in England. On top of this, the government will also give up its COVID pass requirement and no longer force people to present their vaccine papers to enter public venues.
“In the country at large, we will continue to suggest the use of face coverings in enclosed or crowded spaces, particularly when you come into contact with people you don’t normally meet, but we will trust the judgment of the British people and no longer criminalize anyone who chooses not to wear one,” Johnson announced Wednesday as parliament rejoiced.
The emphasis here is mine. “Trust the judgment of the British people” sounds like the tide has turned and politicians are playing catch-up. It is also a very convincing argument that this whole charade is going to get swept under the rug.
England will begin treating Covid like the flu, Johnson explained.
There is no forced isolation for the flu. There are no vaccine requirements for the flu. Boris Johnson’s pivot here looks like he is on the ropes and looking for an out. He has been facing numerous calls to resign. This is his chance to show that he hears what the public wants (a return to normal) and this is his attempt to get them on his side once more.
While I think Australia is a long ways from dropping the farce, other countries will start to follow suit. I expect the US is not far off. It will start with corporations dropping their worker vaccine requirements. It will snowball from there. These businesses are still desperate to attract workers. The vaccine requirements will be one of the first policies on the chopping block.
Biden has been holding onto the Covid narrative because it was the only topic he had consistently polled well on. Even that has now slipped.
This administration is seeing all their political capital evaporate. This is like backing a wild animal into a corner. It could unpredictably lash out at any moment. I am hearing the war drums beat over the Ukraine/Russia dilemma. It makes me nervous that the administration thinks it could sway public opinion by getting the US involved in a new war. This is dangerous territory poking a bear like Russia. It could bring about a serious pullback in the market. Remember, the stock market is like a future discounting machine. If something abrupt were to happen, panic leads the scene. I would not be an immediate buyer on a war dip, but I would certainly be prepared to be.
Margin Debt
Margin debt figures were released yesterday. Here is a look at investor’s use of margin:
We are continuing to witness reduced margin use. It is nowhere near as steep as the drop off in late 2018. Margin use is associated with strong upward momentum in the stock market. Since the margin use has leveled off, we have seen repeated weakness and pull-backs in the major indices.
Meanwhile, cash on the sidelines has hit new highs.
This cash is looking to get put to work.
The market is experiencing extreme volatility due to the Fed removing liquidity from the market through their taper program. This is making traders reduce margin use and raise cash balances. Nothing here signals an imminent recession. The 10-year minus the 2-year is still hovering around 81 basis points.
We’ll get a look at the money stock next week. This will be the final puzzle piece into the market’s continued performance.
Been a good week for SOG. Ukraine tensions the primary cause?