China's Bogus SARS2 Numbers
Episode 4: No one dies of Sars2 in China (lucky them) so market will rip. Meanwhile, get ready for your Soma drip, America! Faculty lounge Smartypants isn’t worried about GameStop.
Hi there.
Welcome to Double Plus. It’s a Chinese saying. It means something that is really good. If you buy into the Double Plus China Gold No. 1 Fund, you know it’s great. You’re going to be rich.
We are a big picture macro investing newsletter. We focus on Davos Man and what he’s up to. He’s the guy (and the gal) that attends the World Economic Forum and hangs with Hollywood celebrities on yachts. They’re the ones that hire expensive prostitutes and fly on private jets and lecture you for being such a stupid pleb, eating carbon-producing hamburgers, and shit. Losers.
In the high school cafeteria, they’d be the cool kids. We would be the counter-revs. We would sometimes steal their VSCO girls.
Okay, true story. Because I like my Substack to be breezy and informal here’s one: at Antioch College, where I attended pre-woke in the mid-1990s, a friend of mine whom I was crushing on was dating a German exchange student. His dorm room door was littered with anti-American messaging. I may have agreed with smashing the military-industrial complex, but I thought: he’s a guest in my country. Only I can bad mouth my fam. If you don’t like my fam, you can go study somewhere else.
I launched Operation Made in the USA with my friend Dave O. The goal was to steal his girl, cuz I was in my 20s and that’s what you do and I sincerely liked her a lot.
Mission Accomplished. We dated for the rest of the school year until graduation.
If you like that attitude, join the Double Plus club by clicking below. It’s not really a club. Yet. For now, it’s just a random newsletter in beta test mode.
Eventually, we will roll out our investor newsletter for subscribers only. Come for the lolz on current events and market talk. I got some today.
No one ever dies of SARS2 in Shanghai.
Go look at John Hopkins University’s (JHU) Covid-19 tracker. Zoom in on Shanghai. JHU has had the death toll in Shanghai at 7 since May.
It’s impressive that, in one of the largest cities in the world, no one is dying of the most deadly disease since the Spanish flu of 1918.
The World Health Organization, in working with China, should figure out how they are doing this. It would be good for humanity to come up with that answer, would it not? So if China – and by extension the WHO – was at all serious about getting to the bottom of this, we would get some honest numbers out of China about a virus that people seem to catch, but never die from anymore, at least based on JHU, which is all over the American, Brazilian and Russian death tolls.
I don’t want the Chinese people to die. But if China is doing well, shutting down an occasional district now and then – maybe to remind the Western world that they need to panic (something the G7 enjoys more than anything) – it seems clear to me that it’s not just because they are good at contact tracing.
I am not a scientist, but I doubt that the virus says, ut-oh, the contact tracers are coming to this town, we should not attack anyone here.
Maybe this will sound all too Alex Jones for you but think about this for a second: my mom pays around $100 a month for pharmaceuticals. She is on thyroid medication and blood pressure medication. She might even take more. Drug companies are guaranteed a rent payment of $100 a month to keep my mom “healthy”.
I pay $0 to drug companies.
I pay more than that to health food companies selling protein, vitamin supplements and superfood drinks. My doctor will not get worried if I stop drinking Mass Pro.
But if I had to take a $50 a month pill no matter my age and health in order to protect myself from poisoned water, even if the science isn’t out on just how poisonous the water is, and if at least 100 million of Ken’s did it too because none of them wants to take chances on drinking poisonous water, that’s a $5 billion a month rent payment on your body divided up between two or three pharma companies making the patented drug.
We do this already. I drink well water from my town. But millions of us spend at least $50 a month on bottled water. Now imagine that to be a necessity, like your mom’s thyroid medication. Or in order to get back into the office?
With the new variants in this virus, like the flu shot, the SARS vaccine will be needed every year. In a way, SARS2 is like a new annual rent payment to pharma.
I am willing to bet there will be more of these pandemics and health crises needing Big Pharma to save us.
I think this is why the ARK Innovation ETF is so hot right now. It is not just because of Tesla, but because investors are looking at future biology. You’ll all be on Soma and you’re all going to like it!
In non-China news, impeachment trials are coming! Glenn Greenwald said it best, that the media needs a trial.
“That was the big, secret paradox of the Trump years: those who hated him most flamboyantly and monomaniacally were the ones who prospered the most from his presidency.”
Then there were my two yuan on the subject. It got a lolz on Twitter. Yeah me!
The Wall Street Watercooler:
JP Morgan Picks the Wrong China ETF
I never chimed in on the GameStop show last week, though it was quite a show. I love how even Hollywood trolls like late-night comedian Jimmy Kimmel spoke about it. They chastised the riff-raff on Reddit. Kimmel blamed Russian trolls. Kimmel is a D-student and doesn’t know what a short-sale is.
I think there is no way that GameStop cranked as it did just because of a bunch of Reddit Wallstreetbets odd-lot traders. Big investors like Chamath Palihapitiya were also in on this trade in the options market.
The hedge fund billionaires that do the CNBC circuit all have their bitter rivalries. They want to bring each other down just like two Russian oligarchs going at it.
I bought Nokia at $5.33. I only bought 20 shares. I don’t care if I lose 50%. It’s a bottle of Ferreira port out the window, that’s it.
To Davos Man and his minstrels wondering what all the fuss is about, here is a great takeaway I read:
“It’s giving a bunch of young men the sense of community, camaraderie, purpose, and accomplishment that was taken away from them by people like you.”
China traders were also buying. They love this stuff. In fact, a 1,000% gainer in China’s A-shares is a regular occurrence. When the STAR Board launched, some of the new semiconductor stocks gained over 100% in one day’s session.
Meanwhile, China’s central bank, which had tightened liquidity worried that its “stir fry” stock market and real estate were heading into bubble territory, is now rolling back. The PBoC injected liquidity to avert a credit crunch at the start of the Lunar New Year.
Recall, this time last year that the authorities canceled all Lunar New Year (LNY) travel because of the brewing public health scare in Wuhan. If China escapes this LNY without a hitch, China and the WHO will have to explain their secret Covid sauce. Am I right?
JP Morgan recently came out with a report on January 19 and they pick MSCI China.
Rrrrrnt! WRONG!
Buy KraneShares China Internet and E-Commerce (KWEB) or KraneShares China Healthcare (KURE). They are more geared towards the local economy, and the domestic demand equation is more favorable to them. They can withstand geopolitics. I own KURE and buy on the dips of 1% or more. This is a long term hold for a year or more. You will beat the MSCI China.
You can go with JPM, or me on that one. Fair warning: I’ll be right.
From the water cooler chatter re: $SPY:
The long term outlook for us is that the S&P 500 should track new highs on its earnings run rate by year-end. The prospects of a return to some semblance of “normal” after herd immunity is reached from the vaccine is a nice tailwind.
If you say so. Watch out for those scary variants. Those Amazon ones….brrrrrr.
There will be headwinds, along with any bad vaccine headlines. Remember what I said about Biden’s China-style stimulus in a previous Double Plus. It’s coming. It’s the booster shot.
On GameStop and the Need for Decentralization, by Smartypants.
It’s telling to see just who in the world came down heaviest on the long GameStop day traders. Hollywood came down, the financial press came down, hedge fund billionaires came down, and some in Congress all sided with Wall Street. They were all fine with people being unable to trade the way they wanted to on Robinhood, one of the investing apps made infamous for its fight against the well-connected hedge fund firm Citadel. The whole thing against GameStop, AMC and Nokia shorts stemmed from months of planning and conversation about short positions in the market on Reddit’s Wall Street Bets sub-Reddit page. It spread on other social media, too, but one of the biggest issues here is how these people were blocked by a handful of big firms. It is an example of why we need decentralization. It is the only way to inoculate against corporate power.
Humans have always been tribal. They work best in small groups of less than 150 people. Wherever there is centralization and excessive hierarchy, there's inefficiency and underutilized human potential. Capitalist monopolies and socialist dictatorships are equally bad.
In today's world of trillion-dollar monopolies and bloated governments, the potential of hundreds of millions of people gets suppressed by the limitations imposed on them by these increasingly centralized systems of corporate power.
Closing Credits:
Little China Girl
My little China girl/You shouldn’t mess with me/I’ll ruin everything you are/You know, I’ll give you television/I’ll give you eyes of blue/I’ll give you men who want to rule the world