That’s CNBC’s Jim Cramer summoning his inner Samuel Beckett to talk about the disconnect between equities and the harsh reality of what’s going on in the U.S. economy.  Read More

Last month, I’d discussed whether Cineplex (TSX:CGX) was headed toward bankruptcy. The COVID-19 pandemic forced theatres across North America to close their doors for the entirety of the spring season. When the summer arrived, theatre companies were forced to adjust to chaotic conditions and take a regional approach. Shares of Cineplex, the largest movie theatre operator in Canada, have plunged 76% in 2020 as of close on August 7.

Today, I want to look at how conditions may change for Cineplex for the rest of 2020.

Cineplex has started its phased reopening

In July, Ontario allowed for most regions to enter phase three of its reopening plan. Unfortunately, movie theatres were still left in a precarious position. The province stipulated that theatres could only allow up to 50 patrons per individual screen. Cineplex and other operators argued that this was not financially feasible. The company hoped to lobby the government for an exception for this industry.

On July 31, Cineplex unveiled its own phased reopening. This began with 25 locations opening on July 31, each adhering to the 50 individuals per screen regulation. The company expects that most its locations will open in the next several weeks. Ontario, Canada’s most populous province, was the last to reopen theatres to the public.

Will this be enough to give Cineplex a boost in the latter half of 2020? CLICK for complete article

The reliance on “good news” narratives dooms our financial system and economy to a death spiral once reality breaks through the induced euphoria.

“Markets” that never go down aren’t markets, they’re signaling mechanisms of the Powers That Be. Markets are fundamentally clearing houses of information on price, demand, sentiment, expectations and so on–factual data on supply and demand, shipping costs, cost of credit, etc.–and reflections of trader and consumer emotions and psychology.

If markets are never allowed to go down, the information clearing house has been effectively shut down. Whatever information leaks out has been edited to fit the prevailing narrative, which in this moment is “central banks will never let markets go down ever again, so jump in and ride the guaranteed Bull to easy gains.”

The past 12 years offer ample evidence for this narrative: every dip draws a near-instantaneous monetary-policy response that reverse the dip and gooses markets higher.

That permanent monetary intervention distorts markets doesn’t matter to participants. Who cares if markets have become “markets,” simulacra of real markets that are now nothing but signaling mechanisms that all is well so buy, buy, buy? If gains are essentially guaranteed, who cares that markets are not longer information clearing houses?

Indeed. There’s no reason to care until the fatal spiral downward surprises us all. Here’s an analogy of what happens when real information gets edited to fit a convenient narrative.

Unfortunately, the patient has cancer which is starting to metastasize, i.e. spread to other organs in the body. But unbeknownst to the patient, this accurate information is considered “bad news,” so the test results and other information is carefully edited to show the cancer is actually shrinking–the exact opposite of what the actual facts reflect. The patient is naturally delighted with this false data because it appears he’s on the mend and doesn’t need any surgery or other drastic treatments.

If participants don’t have information that reflects actual conditions, they cannot help but make disastrous decisions. Falsified or heavily edited information is misleading, and so all decisions made on the assumption this information is accurate will be fatally skewed.

Symptoms of the fatal spread of the disease are masked by stimulants that not only mask the spread but give the patient a sense of euphoric power and supreme confidence.

Imagine the patient’s terrible dismay when symptoms break through the euphoria and he learns his cancer is now terminal. Increasing the tragedy is his awareness that had the authorities in charge of his care given him the real-world data instead of the carefully edited “happy story” version, treatments could have been undertaken that might have extended his life. Now those options have been lost forever.

That’s the situation in our economy and financial system. The information cleared in markets has been suppressed, distorted and edited for 12 long years of permanent and ever-increasing monetary interventions, as the “doses” of intervention required to maintain the cocaine-like euphoria and supreme confidence in central bank manipulation of “markets” so they always signal the “good news” of guaranteed gains ratchets higher on every intrusion of reality.

The reliance on “good news” narratives dooms our financial system and economy to a death spiral once reality breaks through the induced euphoria. Our last chances to clear the financial cancers eating away at our economy are slipping away forever, masked by the “market’s” cocaine-like euphoria and supreme confidence in central-bank guaranteed gains.

If the stock market is never allowed to go down, this is the equivalent of telling the cancer-riddled patient that their cancer has disappeared, even as the disease is leading inexorably to the patient’s needless demise.