•  From now on, when I’m making out my grocery list and I need to buy half-and-half, I am just going to write down half.  Because I think I can remember the other half.

•  Know who cares which team won the Super Bowl three days after the fact?  Pretty much no one except those who played it.  Ditto for so many other heavily-touted achievements and awards in our celebrity culture.

•  We were about to sell a car on Craigslist, and my spouse and I were reviewing the text of our ad.  One angle we came up with: $2oo off the asking price, for liberals.  We were really tempted to throw that in, but it would have alienated most potential buyers in these parts.  (As it is, we did sell it for asking price, 16 hours after listing it, and had to turn away ten other interested parties.)

•  Faith in Humanity Department: When we handed our car over to the buyer, I forgot to remove our garage-door opener clipped to the visor.  We called the buyer a few hours later, and he told us that he had already stopped at the post office to mail it back to us.  We got it the next day.  My guess is that the buyer was a liberal and that we owe him $200.

•  So, we bought our first new vehicle in over a decade.  It has a back-up camera and other modern safety features — very happy about this.  But it has an “infotainment panel” rather than an everyday radio and CD player.  I’ve driven the vehicle 120 miles now and have not yet dared to turn on the radio or play music.  I’m sure I’ll figure everything out sometime.  Gosh-darned newfangled technology.

•  When I was a kid, my mom would walk into my bedroom, or the den, or wherever it was I happened to be reading, and turn on most of the lights in the room.  “It’s too dark in here to read, you’ll ruin your eyes!” she would say.  As it turned out, I guess she was right.

•  By that I mean, one of my eyes doesn’t see colors so well anymore.  My other eye makes up for it.  I guess I have the COVID-19 virus to thank that I can renew my license without a trip to the DMV for an eye test which I may no longer be able to pass.  (But who knows?)  Passing the DMV eye test and getting my license renewed has been a worry of mine for a few years.  But you all need not worry, I see fine to drive and I won’t be crashing into you, or anyone else.  I wouldn’t bring it up otherwise, he says defensively.

•  Meanwhile, as I fret about my driver’s license, right-wing militias plot their next moves.  If the government has priorities, they should be going after the danger that is me.

•  Love is sharing finger-food without a thought.

•  Thanks largely to my spouse’s diligence, I had my first-of-two COVID-19 vaccinations yesterday at Walgreens.  I said to my spouse, Thanks, Biden —  as otherwise, my spot on our health department’s waiting list was April or May.  I was never so glad to get a shot.    It feels like a corner has finally been turned, not that normality is knocking on our doors.  But still, it was an eye-waterer.  Damned newfangled technology.

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•  Say you have a couple of years of extraordinary medical expenses, enough to surpass the 7.5% income threshold that lets you deduct some of them on your U.S. income tax return.  Then the next year or two, your medical expenses are still high, but not quite high enough to meet the deductibility threshold.  As a taxpayer, you can’t help but feel a bit disentitled at that point, even though you should be thinking, thank goodness I didn’t have as many medical expenses.

•  Lest you feel too sorry for yourself, consider: our friends in Great Britain can’t deduct any medical expenses from their income tax returns.  Because they have none to deduct.

•  Although this seems to come naturally to every dog-walker on the planet, I shouldn’t have to befriend your dog in order to make friends with you.  (That goes double for your cats.)  We’re human beings.  We evolved larynxes and language.  We shouldn’t have to rely on voiceless four-legged intermediaries to help us strike up conversations.

•  My spouse thinks our country needs a Robert Kennedy and that Biden is “too ho-hum.”  While I wouldn’t argue, I say we liberals can’t afford to eat our own at this point.  Biden did exactly what we needed him to do, which was to get Trump out of office.  That alone will satisfy me for a lifetime.  I cried with joy watching Trump’s plane take off for Florida.

•  I enjoy the satirist-commenter Bill Maher.  I like his observations and the way he crafts his jokes, even if his tone often misses my mark.  (Too many sex/scatological references — I don’t do that world.)  Thing is, whenever I mention Bill Maher, I always feel like I need to add a disclaimer about not agreeing with everything he says.  Probably because he once hosted a show called “Politically Incorrect” and is known to depart from the liberal line.  Nonetheless, Maher did an excellent piece the other night on how U.S. citizens’ lives are really improved — not by mobs wearing Guy Fawkes masks and wielding spray paint but by dedicated people who spend thousands of hours working on and within the system.  This totally-unexpected display of patriotism on his show almost brought me to tears.

•  My spouse bought us a ticket for the $730 million Powerball Lottery, but it was won by someone in Maryland.  That’s OK.  Swearing in two new Democratic U.S. Senators from Georgia and having a Democratic voting majority in the Senate feels like I already won.

•  When this song by Daft Punk (remember it? remember them?) was played on the radio way back when, I thought sure (and I’m not alone) that its title was “Mexican Monkey” and wondered what the hell that was all about.

•  It’s February.  Can you believe it?  A year ago at this time, Trump was being impeached.  No one was wearing masks.  The nation was divided.  Punxsutawney Phil did not see his shadow, signaling an early Spring.  450,000 U.S. citizens had not died yet.

•  Headwear as signifiers of good, evil and authority.  Compare and contrast:

People with headgear, representing good, evil and other attributes

•  Not to embarrass my spouse (I would not dare do that, with Valentine’s Day coming up and all) but I appreciate her more every day.  We have been getting along better than ever,  even in these confined quarters.  For my part, I have been trying to be more aware of when I’m being a pill so I can stop being so.  For her part, as far as I know, she hasn’t had to be anything other than who she always is and d0 what she always does.  What hasn’t killed us has made us lovers.

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I’ve been watching the stock market with a bit of trepidation lately.  (Roughly half of our retirement/long-term-care money is in stock market mutual funds, the rest is in less risky bond funds and CDs.)  The current “Reddit Revolt” led by a self-assembled group of online trader-warriors against Wall Street hedge funds has turned the popular notion of stock-market-as-casino into something that feels more like the Running of the Bulls.

These self-styled Davids (you know, of Goliath fame), spurred along by everyday Joes and Josies tempted by quick profits, have led to wild gyrations — and absurd valuations — of the stocks of GameStop, AMC Theaters, Blackberry and whatever meme company that the Redditors will decide to target next.

I don’t think this will end well for those companies, for the speculators in those companies, nor inevitably for the whole idea of normal people like you and me using mutual funds as a means to secure one’s retirement.  Something has broken, and I am wary of the machine falling apart.

This Gamestop stock-market ploy smells a lot like the January 6th US Capitol rampage: a loosely-coordinated anarchical uprising of people wanting to take something back (but not sure exactly what) and who discovered their sudden and surprising power to create havoc.  As Sen. Susan Collins (no relation) of Maine would put it, this is all very troubling. Luckily, there have been no casualties so far in GameStopGate, as it is already called.

Yes, fellow lefties, I realize that hedge funds and the big investment banks like JPMorgan, Goldman Sachs, Barclays and others, have been screwing ordinary saver-investors forever to enrich themselves and their high-net-worth clients.  But financial anarchy would portend something far worse.  Reddit speculators are not going to topple the powers-that-be and usher in a new era of capitalism-as-a-positive-force in our lives.  Rather, financial anarchy a la Reddit would be more like a forest fire, burning down anything in its path.  My fear is that government regulators would respond like forest firefighters, i.e., trying to contain things only after much damage is done and lives are ruined.

Have I painted a too fatalistic scenario?  I’m not sure.  The embers of the fire are there for all to see.

• • • • • 

With that sad taste-in-the-mouth, I offer an update on The Trend.  The U.S. stock market as of January 2021 is at a level well above what The Trend (its performance between 1950 and 2012) suggests is reasonable.  Below is an updated chart of how the S&P 500 Index has fared relative to The Trend since 1950.  As of this writing, the S&P 500 Index — which mainly reflects the stock prices of the big U.S. tech companies Apple, Amazon, Facebook, Google and Netflix — is almost 24% above The Trend.

This excess performance represents three-years-worth of normal stock market returns.  This is not sustainable, I repeat, not sustainable.  The party could go on for quite a while longer, or it could end tomorrow.

I take The Trend seriously — I lighten up on our family’s stock-market allocation when the Trend suggests we are 25-30% above historical price levels, as we are now.

• • • • • 

If you’re not a fan of The Trend, then may I offer this from Yale economist Robert Shiller.  Shiller created a metric (let’s just call it the Shiller P/E) that captures what investors are willing to pay for a dollar of corporate profits.  One would think that, after taking inflation and interest rates into account, the amount that an investor is willing to pay for a dollar of profits would be relatively stable.  But here’s the real story, a la Shiller:

The white line in the graph above is Shiller’s P/E Ratio, plotted from 2006 to the present.  Note how the P/E ratio (how much an investor is willing to pay for a dollar of earnings) has risen steadily since the Great Recession — then less than 15, now approaching 30.  Why?  Why are investors willing to pay so much more for the same return on stocks?

It’s not just about our ultra-low interest rates since the Great Recession.  Rather, it has much to do with the tons of money that have been pumped into the economy and where that money has gone.  The green line in the graph shows how the U.S. “M2” money supply (which includes checking, savings, and money-market funds) has grown over the same time period.  See any parallels between this and the prices being paid for stocks?

The Great Recession (Bush) tax cuts and Trump tax cuts, on top of the easy-money policies dictated by the Federal Reserve, have clearly benefited corporations, and those who hold corporate stocks, and those who receive corporate dividends, more than they did middle-income families.*   The haves who benefited the most from financial stimulus have been using the money to bid up the prices of the assets of greatest interest to them: stocks and real estate.  There’s only so much food rich people can eat, and only so much gas they can pump into their BMWs.  The rest of their money has to slosh somewhere.  That is why we have asset inflation (which the Fed mostly ignores) instead of food/energy inflation.

And that is why stocks are so expensive now, far beyond what The Trend and Shiller would deem that they are intrinsically worth.  And now, internet desperadoes have arrived on the scene to stir up this already-boiling pot.  Oh, did I forget to mention that we remain in the grips of a worldwide pandemic?  What (more) could possibly go haywire?  Stay tuned.

______________

* As Lino Zeddies said on positivemoney.org, “…money being created as bank credit systemically results in a multitude of direct and indirect factors that concentrate the distribution of power, wealth and income in the hands of fewer and fewer people.”
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