In mid February when Covid-19 was getting to Italy, I thought that the hysteria would be over in 3 days or so and already the first 3% drop of the stock markets was an unbelievable overreaction to this slightly new kind of a flu-like disease.
Well, the markets dropped over 30% and bottomed around March 23rd when the fear was omnipresent. That was when the blood was in the streets, that's when you should have bought stocks like mad. My expectations of the shrinking hysteria were wrong numerically but they were right qualitatively. Now, 9 months after the first Italian hysteria, Dow Jones is the last U.S. index that is setting new all time highs (it was at 29,995.5, beating the spring record below 29,600).
Those 9 months ago, I was pointing out that after the 9/11 attacks in 2001, the U.S. stock markets returned to setting new all time highs within a month. It could have been true in this case, too. Here, I was wrong just by a factor of 9 or so. ;-)
OK, it's today, on November 9th, when people started to buy risky assets as if there were no tomorrow. The attributions are always a bit fishy but today, the rise is attributed to Joseph Biden's declaration that he considers himself a winner (he still considers his granddaughters to be his dead son, too; there is so far no official indication about the identity of the president in 2020-2024); and the Pfizer announcement that their vaccine is 90% effective in preventing infections. While this is higher than for flu vaccines that prevent 35% infections in average, I still find this 90% somewhat unimpressive and "unsafe" and my understanding is that the Russian vaccine is better.
At any rate, stocks went insanely up today although the initial 6% rise of the U.S. stocks was already reduced a bit as of now. Banks, emerging markets went up etc. So did oil. A particularly cute jump is the 12% jump of ExxonMobil (it's just a nice representative of the oil companies). Much of the market seems to agree that it's great news for ExxonMobil that a senile socialist (with aggressive Bolsheviks demanding his obedience) who has vowed to "transition away from the fossil fuels" (not to mention the planned increases of the corporate and other taxes). Holy cow. But I sort of did expect it today. All this behavior is utterly irrational but these kinds of irrationality have become so widespread that they became predictable.
No, more seriously, I understand that people bet that lots of oil will be needed if the Covid-19 almost disappears due to a vaccine and everyone starts to move and travel once again. But still, to ignore the senile green apparatchik and his nearly-AOC plans for the fossil fuel industry seems profoundly unwise to me. OK, the world has gone nuts, it behaves irrationally and too much money is held by people who are incredibly stupid and brainwashed. Also, it is obvious that much of this positive overreaction in the markets is due to the positive tone that the left-wing media started to emit from the weekend. It is just unbelievable how many people (and their banknotes) may be manipulated so easily, by this dumping ground of mankind that deceptively calls itself "the journalists". The likes of CNN may easily earn trillions simply by telling their brain-dead viewers and readers (all of them are!) whether they should buy or sell, and by pre-adjusting the positions correspondingly.