Far East Capital Newsletter
The rules have changed, for now
25 Jul 2020

In This Issue


The rules have changed, for now

Perhaps it is time to acknowledge that we are playing a different ball game today. Rules that have been around for decades are not binding any more. By all rights the markets should be depressed due to the virus and the certainty that the economy and businesses are going through the toughest time since the 1930s, but they are not. Why not? Seeing governments all around the world spending up big, on borrowed funds, to alleviate the pain of the slowing economies should make the market nervous about how this debt is going to be paid back, but they are not. The opposite is the case. Prudent, cautious investors who are not participating in the market rise are underperforming.

Right now it is all about making us feel good and keeping the wheels turning. This is being financed by printing money and handing it over to the individuals, companies and special interest groups who are being compensated for the commercial pain that comes with lockdowns. It is all about increasing liquidity and that liquidity is finding its way into the market place. Hence, the booming stock market. 

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