Just two weeks ago, President Obama expressed that it was unlikely that we would see a case of Ebola virus in the United States. Yet, just a short time later, the Centers for Disease Control and Prevention confirmed the first known U.S. case of the Ebola virus. The improbable has occurred with alarming speed.
The infected individual arrived from West Africa to Texas on September 19. By September 24, he began displaying symptoms, but was initially sent home when he sought treatment on September 26. He was eventually admitted on September 28 for proper care.
During this period, he had interactions with numerous individuals, including five schoolchildren. This situation prompted some opportunistic investors to acquire shares in biotech firms developing Ebola treatments, leading to a more than 30 percent surge for Tekmira Pharmaceuticals Inc.
Investing in Ebola treatment development could prove lucrative, potentially accelerating the arrival of effective vaccines. The infusion of funds and ingenuity could lead to unexpected solutions.
However, at Economic Prism, we take a more pragmatic approach. Rather than pouring money into biotech stocks, we suggest purchasing Berkey Water Filters. This way, you can ensure access to clean water in case of a widespread panic.
The Sick Market
The human psyche is easily swayed. Homo sapiens can quickly spiral into a chaotic frenzy, turning a cheerful crowd into a panicked mob at the drop of a hat. Have you noticed the recent turmoil in the stock market?
The broad index reflecting collective human sentiment seems to have caught its own ailment. Just two weeks ago, it appeared robust, with the DOW reaching an all-time high of 17,350 on September 29.
Now, it faces a severe downturn, as though it has been infected with Ebola. Or perhaps there’s a different reason for its malaise.
It could be that investors are beginning to recognize the frailty of our economy. How can economic growth be sustained when so few people are actually working?
Furthermore, with quantitative easing likely wrapping up this month, the absence of the Fed’s artificial stimulation may finally align share prices with reality.
Pouring Buckets of Ice Water on the Fed’s Delusion
These musings are ultimately just speculation. No one can accurately predict the future trajectory of the stock market, and it’s wise to be wary of anyone who claims they can.
While we enjoy making our own analyses and forecasts, we don’t take them too seriously. For kicks, we might even lean back in our chairs and gaze into the clouds until some vague intuition of what lies ahead forms. But let’s be clear; our instincts should not guide your investment decisions.
The truth is, we have anticipated market declines for so long that we’ve lost track of the last time we thought it would rise. It has certainly been many years, perhaps longer. We’ve erred so often that any credibility on the matter has vanished.
Yet, at some point, we’ll be right—and perhaps that time is now. A great deal of deceit and manipulation has taken place at the hands of the Fed over the last six years to sustain the illusion of a consistently high stock market. Now, we’re witnessing a reality check as buckets of ice water are thrown on that illusion.
Sincerely,
MN Gordon
for Economic Prism
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