President Donald Trump and his administration recently announced that Kodak would be transformed into a pharmaceutical producer under the Defense Production Act (DPA). The president confirmed that Kodak would receive a 5 million loan to establish Kodak Pharmaceuticals to manufacture generic pharmaceutical ingredients to decrease America’s reliance on foreign drug makers. If you have not ...
Andrew Moran considers the following as important:
This could be interesting, too:
Tyler Durden writes What’s The Difference Between ‘Villain’ Assange & ‘Intrepid’ Woodward?
Tyler Durden writes ‘No Anything In The Champagne Room’: Ontario Shuts Strip Clubs
Tyler Durden writes Video Surfaces Of Biden Calling Troops “Stupid Bastards” When They Won’t Clap
President Donald Trump and his administration recently announced that Kodak would be transformed into a pharmaceutical producer under the Defense Production Act (DPA). The president confirmed that Kodak would receive a $765 million loan to establish Kodak Pharmaceuticals to manufacture generic pharmaceutical ingredients to decrease America’s reliance on foreign drug makers. If you have not been paying attention to Kodak’s transformation, you might be surprised that a film and camera maker from back in the day is now producing pharmaceuticals. But the business filed for bankruptcy in 2012 and turned itself into a materials and chemical company.
A Kodak Moment
The announcement was huge for Kodak shares, as the stock skyrocketed nearly 1,300 percent in only a few trading sessions, climbing from a couple of bucks to as high as $60. But the subplots behind Kodak’s ascent were just as riveting as seeing the stock soar to the moon.
The first storyline involved the New York Stock Exchange halting trading because circuit breakers were tripped twenty times. The volume of Kodak trading activity spiked after the news was announced, climbing to more than 250 million in just two sessions. The number of Kodak options ballooned to as much as 300,000—and these were not bullish contracts either. The final compelling development was the considerable number of Robinhooders holding Kodak stock. Only a few thousand Robinhood traders held shares in the company before the news, but that figure spiked to more than 130,000.
The men in tights have been near the front of the line when it comes to the various bullish trades, even if it is only for a week or two. At the start of the pandemiconomy, dumb money was pouring into coronavirus-related stocks, such as personal protective equipment (PPE) and biotech companies. Weeks later, Robinhooders were hitting the bullseye on bankrupt stocks like J.C. Penney and Hertz. As gold prices hit all-time highs, users were putting their bows and arrows in gold exchange-traded funds (ETFs).
What else will the cool kids on the block tell us about the next big thing in the equities arena? It is generally said that investors should follow the Federal Reserve. But perhaps it is time to follow whatever the young whippersnappers are doing on the mobile platform.
The Swamp Judges Judy
Senators Mitt Romney (R-UT) and Susan Collins (R-ME) recently confirmed that they would not support Judy Shelton‘s nomination to serve on the Federal Reserve. While Romney did not give a precise reason (we all know why), Collins expressed concern over Shelton’s past views regarding the nature of the century-old institution. It seems that you must not hold any dissenting opinions about the central bank. That is violating Fed orthodoxy, and that is not allowed.
Shelton’s nomination has been a contentious battle for about a year now. But this has been the norm for all of Trump’s picks to sit inside the Eccles Building. The late Herman Cain and Stephen Moore became targets in the mainstream media, because they, too, shared criticisms of the Fed.
It is more than likely that Shelton would be unable to transform the Federal Reserve System and would inevitably choose to maintain the neo-Keynesian status quo. But those opposing her nomination have made it clear that they do not appreciate her past writings that questioned the integrity of the Fed, the international monetary order, and the fiat money system. This is blasphemy inside the Swamp, as only money printing, market manipulation, and economic distortions are accepted monetary policy mechanisms.
Whether it is part of political expediency or a 4D chess strategy, Shelton has conceded that she will lend her support to near zero interest rates and debt monetization. By now it might be clear that any opposition is based on disdain for President Trump and nothing else.
That said, if Shelton’s nod fails, her presence in the public realm is still a positive one. Her public record might be enough to spark a discussion about the unprecedented and carte blanche endeavors of the US central bank. Is it wrong to have some reservations about unlimited quantitative easing, bailing out Wall Street through corporate bond buying, artificially low interest rates, and inflation? Tho Bishop may have said it best in a recent opinion piece for the Mises Institute:
If confirmed, will Judy Shelton be a revolutionary force within America’s central bank? Almost certainly not. Just as no election will truly drain the Swamp in Washington, no Fed nominee is going to restore humility to the Eccles Building. Instead, Shelton’s nomination is best seen as a litmus test for Republican senators. Are you interested in actually promoting ideological diversity within American institutions, or are you simply willing to stand with the academic gatekeepers that have given us the federal Leviathan that we have today?
The Fed is the biggest Swamp creature of them all, but nobody is willing to slay the monster.
Misreporting the GDP
Legendary economist Murray Rothbard wrote in Making Economic Sense:
It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a "dismal science." But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance.
A perfect example of this is the mainstream media’s coverage of the gross domestic product in the second quarter. According to the Bureau of Economic Analysis (BEA), the US economy contracted by an annualized rate of 32.9 percent in the second quarter, beating market forecasts of –34.1 percent. The GDP shrank 9.5 percent in Q2 from the first. Which number do you think is generating the most headlines?
Yep, you guessed right: –32.9 percent.
CNN, for example, had this headline: “America’s Economy Just Had Its Worst Quarter on Record.” NPR reported: “GDP Drops at 32.9% Rate, the Worst U.S. Contraction Ever.” USA Today noted: “The second quarter Gross Domestic Product just plunged a record 32.9% from the previous quarter.”
The problem with this reporting is that it makes everything seem a lot worse than it is. The –32.9 percent annualized second-quarter decline was multiplied by four, and the 9.5 percent slump in Q2 was from Q1—a big difference. Whether this is out of ignorance or partisanship is unclear, but it is essential that the media, even the business-oriented outlets, get this right. Unfortunately, in today’s landscape, that is asking too much from the Fourth Estate.