Mad Hedge


June 2, 2020

Fiat Lux

The Five Most Important Things That Happened Today

(and what to do about them)

Gun Shots Kept Me Awake All Night.

When I woke up the next morning, there was a pile of empty cash register drawers down the street. Foreign readers are asking me if an American Civil War has started and when do I plan on fleeing the country. Out of quarantine into curfew. Many shops were only opened a week before they were burned down. This second closing of the economy will slow down the recovery for sure, but the stock market could care less.

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Delayed Stimulus is Hampering the Economic Recovery,

with at least one third yet to go out two months after promised. My 14 and 16-year-old kids already got their checks because they file their own tax returns. Go figure! State unemployment benefits are lagging by weeks, deluged by 41 million applicants. If you have a job, you’re the lucky one, as my grandfather said during the Great Depression.

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Atlanta Fed Says Q2 GDP to Plunge 52%,

in their ever-worsening outlook. A nationwide insurrection will no doubt pull the numbers down even further.

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Consumer Confidence is Recovering,

as even the slightest bit of reopening looks like a lot coming off of zero. The Conference Board’s consumer confidence index rose to 86.6 this month from 85.7 in April, well up from an expected 82. Call it “green shoots.”

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Mortgage Demand is Soaring,

as ultra-low rates spur demand. Housing will lead the recovery of the bricks and mortar economy. It will take another year before jumbo loan rates start to decline as banks avoid risk like the plague. Buy (LEN) and (KHB) on dips.

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Published today in the Mad Hedge Global Trading Dispatch, the Mad Hedge Technology Letter, and the Mad Hedge Biotech and Healthcare Letter:





1938 Boeing Stearman

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