If the rest of the world just did what is expected of it, we would have a decent stock market and more prosperity with less inflation. This is simply not the case now. We are in a seasonally strong period – that’s for sure. We seem to be having decent retail sales, at least in the now resurrected mall stores. It’s a bit of a brick-and-mortar surprise, especially among the more erratic apparel companies. It looks like stocks are in check and that’s enough to get investors excited. I prefer to see strong sales as a reason to buy. But given the worries so many people have about a recession, low inventory means less debt and fewer promotions. Unless you’re talking about low Bed Bath & Beyond (BBBY) stocks, which may be more related to a lack of credit than an abundance of insight. What baffles us has more to do with the actions of our allies and – just call it what we see it – our enemies. Let’s start with China. Here is a country that treats Covid-19 like it’s Captain Trips, the deadly strain of flu that wiped out most of the world’s population in Stephen King’s apocalyptic novel “The Stand.” It seemed logical, even rational, that once President Xi Jinping became president forever, he was free to end the madness of pretending his country’s zero Covid strategy could work. What more did he need? Now we’re starting to really wonder about Xi’s ultimate plan. There isn’t a scientist worth their salt who says we can actually stop the infection – even with near total lockdown. Our body simply cannot create immunity. We have our second best thing, the vaccine which is almost 100% effective so you don’t really get sick, and we have pills if you do. But China is stuck in April 2020, and it looks like chaos could truly reign. Protesters and police clashed Sunday night in Shanghai over the latest round of restrictions. Not only is the production army out of whack – as we learned from Apple (AAPL) and the violent worker protests at Foxconn’s flagship iPhone factory – but the consumer columns are also sorely lacking. Is there really no viable driver and no control over a government that doesn’t seem to want it? It’s amazing how irrational this has all become and how isolated China really is. There was a time when you couldn’t imagine not manufacturing in China and selling products here. Now I think any company that’s still in China making things for the United States wishes they could just close and reopen anywhere else and just pay the price for more labor Dear. The double-edged sword of “we make it cheaper and we buy more because there are so many of us” will fray if this continues; it is amazing that President Xi does not understand this or even care. How is it possible? How does he not watch “iPhone City” and think about Captain Trips? Maybe because he’s not a fan of Stephen King. His loss. Then there is Russia. The full-fledged ground war has somehow disappeared from the front pages even as the humanitarian crisis escalates. namely the Patriot missiles to stop the endless rockets raining hell down on his people. There is no lull in this war. Only a lull in the coverage of this war. That President Joe Biden has not traveled to Europe to make sure allies stick together and offer more help to Ukrainians is a sign that he is content with the status quo. This is outrageous, given that the status quo means Russian President Vladimir Putin’s madman is winning. We are not dealing with Joseph Stalin here, with an army of 28 million who is equipped with the latest complementary armaments of the United States. Putin has nuclear weapons, but if he uses them, he ensures the destruction of his own country. No better time than to rally allies to cut Russia off and even threaten to block all oil leaving the country. But that doesn’t happen. It’s just not rational. A tyrant could be overthrown and a new order of peace and prosperity could beckon if the West simply showed united might. In the United States, we have our own versions of irrationality. We have a possible railroad strike over a deal President Biden basically crafted for the unions that now appears to be uninvolved. In 1992 it happened and Congress got involved quickly and it lasted two days. It shouldn’t go that far this time, but in the meantime the irrationality of the strike doesn’t seem to surprise anyone. We expect irrationality from Washington. Finally, there is crypto irrationality. It’s the hardest of all. What is really going on in this world? Let’s start with a simpler question: does it matter? Is it lustful? How much was lost? Who lost it? Will it have an impact on purchasing power? Were the people who lost in crypto the ones who weren’t discouraged from shopping at Best Buy (BBY) or Dick’s (DKS), which had spectacular orders? Were they the ones who bought the Deere (DE) equipment to keep their lawn in good condition or to do heavy construction work? We don’t know these people and we don’t know the impact of their losses on our economy because of, well, the irrationality of loving and rooting for no safety net after a century of being grateful . There’s too much irrationality to go for a huge rally unless things get so irrational that companies don’t want to hire like they have, and hiring freezes turn into layoffs. Then, and only then, will irrationality lead, bizarrely, to higher stock prices. The Federal Reserve will recognize that only the United States is strong. This alone will finally put pressure on prices to come down due to the end of supply chain problems and the start of real fear for the future, as talk of reduced premiums and layoffs after Christmas make the headlines. Good – that is, too hot – is always bad for stocks. But less good? This is what the bulls must be hoping for as irrationality takes hold from all over the world and makes its way through Wall Street. (See here for a full list of Jim Cramer’s Charitable Trust stocks.) As a CNBC Investing Club subscriber with Jim Cramer, you’ll receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTMENT CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY, AS WELL AS OUR DISCLAIMER. NO OBLIGATION OR FIDUCIARY DUTY EXISTS, OR IS CREATED BY YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTMENT CLUB. NO SPECIFIC RESULTS OR PROFITS ARE GUARANTEED.
Only a few vehicles, including one with two health workers, pass through Beijing’s central business district on November 23, 2022, as the region announced stricter Covid controls.
Kevin Frayer | Getty Images News | Getty Images
If the rest of the world just did what is expected of it, we would have a decent stock market and more prosperity with less inflation. This is simply not the case now.
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