What is the future of the United States
I can't think of two charts that better represent the conundrum of the United States than these two.
1) Coronavirus cases vs the world
This chart in various manifestations has gone viral in the past two weeks because it's damning. The US coronavirus response has been an utter failure compared to virtually every developed country.
2) The S&P 500 vs the world
While there has been four-months of failure in the coronavirus chart, there is +30 years of success in business. In fact, it's the same story over almost any timeframe.
The question for 2020 and beyond is, what is America? Is it a country that can't cohesively protect its people? Or a business juggernaut?
Maybe it's both but is that the kind of trade-off that voters are eager to continue making?
What's so incredible about America is a company like Facebook. Everyone hates it. Zuckerberg is universally reviled, all the platforms are hated and yet it continues to print money. It will crush the latest boycott just like it's crushed every other one.
It started out as a company to connect friends and share photos, then it morphed into this data-collection and exploitation monster. It gets worse by the day.
In theory, it would be the easiest thing to crush. It shouldn't be that hard to get people to switch to something new, especially in one of the countries that's pushing for personal data ownership/transferability. It doesn't seem like it would be so hard to replicate Facebook without all the toxicity.
Yet it hasn't happened. It's such a crystal clear example of an American company that should lose but continues to win.
There are a dozen other examples from politics, to education, to healthcare and yet America keeps on winning. Is that something you want to bet against?
That's the connundrum in the market right now. At some point the US economy will uniquely suffer because of the virus. If it was Australia getting ravaged right now, the Aussie would be at 50-cents.
America and the American dollar, through, hold this special place in markets because of the track record of rebounding from mistakes. Let's not forget the housing and financial crisis in the US. Home values tanked and banks were wiped out yet the US rebounded better than Canada, where house prices kept going up and banks were rock solid.
There's a century of magic in American that you just can't bet against and you see it every day in the market. So either past is prologue or we're about to see the American 'bubble' pop. Granted, American looks like a mess in plenty of ways right now but everyone who has ever bet against it has lost.