Bleachy Keen

May 03, 2021 | Mark Ryan


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Remember a year ago, when bleach-based cleaning products were more precious than, ah, toilet paper?

 

Right. So what do you get when…?

  • Every bleach product in the world gets bought up in the early days of a pandemic, and;
  • About 1/3 of the world sits on the furlough board, instructed to wash and wipe up and watch Netflix, and meditate and don’t eat too many hot-dogs, and;
  • Oodles and oodles of brooding households and shopkeepers bleach everything, every day, all-year, and;
  • Western governments send about half of their households some extra spending money, and;
  • Your wife bleaches the bathroom floor and you stupidly walk on it with black socks while it’s still wet, and;
  • One of the few safe activities allowed all year involves wriggling your mostly-naked body in a warm cement box filled with bleach water – also known as swimming, and;
  • Western governments send home some more spending money, and maybe more still, and;
  • An important bleach factory in Louisiana burns down.

 

So what do you get? “Poolmageddon” (not to be confused with “Sharknato”), weirdly discoloured socks, and very expensive chlorine, AKA chlor-flation. And as noted by financial firm IHS Markit, wholesale chlorine prices will probably jump 70% this summer. Others say they’ve already doubled. Buy tuna.

 

A Soft Landing and then Some: In the following US GDP chart, I think I see an ambitious hill-climbing dirt biker, revving to jump the 2020 crevice and hoping to land gracefully on the 2021 side. 

 

 

The Belly of an Ant: As reflected in the second graph, it’s no secret that the recovery is being fueled, to no small extent, by the itty-bitty speed-bump that passes for a 4-month US t-bill yield (a reflection of policy-driven low short term rates). It looks like something you could have stubbed your toe on, but consider the scale -- it peaked at a modest 2.5% in late 2018

 

 

What’s this all mean? In short, when the canal is being filled, even approaching its banks, stay in the boat and ride the high water -- for now at least.

 

Globally, this week:

  • The UK’s growth surge – Buoyed by a vaccine program that’s racing ahead, accelerating manufacturing, and a resurrection of the services sector, the UK outlook has a glow. (Are you getting this Justin?). We’re also keeping our eye on several non-COVID UK wrinkles that could impact growth.
  • Conducive conditions keep U.S. stocks rallying – Stocks rally as earnings season evolves favorably with large-cap tech results; strong GDP, and Fed commentary proving constructive for markets.
  • Canada: Yields take a pause despite strong economic data;
  • China’s antitrust probe of tech giants. In this context “anti-trust” actually means “counter-revolutionary.”

 

More here:  Global Insight Weekly

 

Long-lined Vaccination Nation: I finally got my COVID shot appointment for next Saturday. Who ever thought a guy would be excited to get stabbed. Well I am! And maybe one of these days I’m gonna sit right next to a perfect stranger at a hockey game, high-five him, and shout obnoxious insults at the bad guys.

 

Enjoy your weekend.

 

Mark