American households are socking away large sums of cash amid economic uncertainties later this year such as a new wave of COVID-19 and the post presidential election aftermath. US consumers built up an astounding $12.5 trillion in excess of savings from April through July, according to new research by Morgan Stanley economist Ellen Zentner. This equates to 13.5 months of the $600 a week supplemental unemployment insurance benefit that lapsed on July 31, Zentner estimates.
Cash hoards have been built across the income spectrum, says Zentner. That ultimately runs counter to cash being saved by wealthier households during tough economic times while lower income households are forced to spend more aggressively due to job loss, etc. https://cutt.ly/Nf19W95
Dow jones trends: The Trend is your friend, the rest is just noise
This is a considerable amount of cash, and sooner than later, the masses will give into euphoria. Joy, like fear, is an altered state of consciousness; one canâ€™t remain in either one of these states forever. The point where fear and euphoria/joy intersect represents equilibrium, otherwise known as peace or tranquillity. The masses confuse joy, euphoria, happiness with tranquillity, and this bodes well for the Tactical Investor. For the masses seek two outcomes that are not sustainable (Fear and Joy) for long periods, and this is why like hamsters they never find what they are looking for; the two options they have been provided with, lead to a negative outcome. The above data and the other stories provided under the News section clearly validate that the crowd is still in a heightened state of anxiety.
This graph illustrates that behind all this doom and gloom momentum is building up as the number of high propensity business applications (business likely to succeed) surged year over year by 45%. A total of 97,190 applications were filed for the week ending Sept 19. However, what is interesting is that overall number today, during one of the most disruptive moments in history, is much higher than during any point after the financial crisis of 2008. Hence, experts of yesteryear and the naysayers of today fit the same mould; living creatures that make a lot of noise but barely utter anything of value, sort of like todayâ€™s friendly old Burro AKA the donkey.
John Haltiwanger, a University of Maryland economist,Â told The Wall Street Journal, â€œThis pandemic is actually inducing a surge in employer business startups that takes us back to the days before the decline in the Great Recessionâ€
When the masses and experts are nervous, Tactical Investor should celebrate for opportunity is always close at hand