crunch time is here

The big port complex in Los Angeles is reporting that it expects a yoy decline of about a third in the amount of cargo it processes, starting in the next week or so. In the close to half-century (ouch!) I’ve been involved in the US stock market, the processing of economic information with significance for the financial markets has come in two phases–anticipation of, and then reaction to, developments. Reaction has always, in my experience, moved markets more than anticipation, with reaction taking on progressively larger role as computers have replaced human analysts.

Paul Krugman

I’m a big fan. Reading his Substack posts, I can understand why he parted ways with the NYTimes. Today, for example, he writes:

“Trump and his team have done something remarkable: They have started a trade war that is bad both for Americans and for countries that sell to us. But Trump is unlikely to change course. The economic punishment will continue until morale improves.”

I’d add my thought that the damage inside the US will be disproportionately felt by the ordinary citizens who voted him into office.

Disney

My family and I have recently returned from a few days at Disney World. My reactions: lots of fun, a new generation of us introduced to the Teacup Ride, hugely expensive. The Coke Zero I can find in the supermarket on sale for $.50, for example, was $5+.

My pre-earnings-release reaction has been that because the parks are so expensive–and that Comcast is opening a serious competitor pretty soon–DIS is closer to a short than a screaming buy. I’m no longer so sure. Given the plunge in the dollar that Trump has triggered, Disney World may will look cheap to foreigners. There is the issue that a foreigner risks being seized by ICE and imprisoned in El Salvador, with apparently no possible legal recourse. My guess, though, is that this will not be top of mind until the first incident happens.

M&A

As usual, taking off my hat as a human being and putting on my investor hat, I’ve been thinking for some time that we’re in a value stock market, not a growth one. Put a different way, for the moment solid asset value is more important than explosive growth potential. If the dollar’s decline continues, and I have no reason to think it won’t, at some point, this alone will likely trigger an M&A boom. as foreign money seeks to acquire cheap US assets.

are Venezuelans invading the US?

Trump says yes. That’s his rationale for arresting and deporting alleged Venezuelan gang members that he asserts are agents of that country’s government. US spy experts, however, say this isn’t true, as a recently declassified document attests. This makes the Trump/ICE axis seem much more Putin/KGB-esque–and the failure of Congress or the courts to do anything more chilling. Enough to cancel that trip to Disney? Probably not. Enough to have second thoughts about that M&A? Definitely.