Toshio Matsuda, Samurai Lecturer, Commentator & Intl Economist
Straight from the Shoulder
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(This issue is submitted to a Washington D.C., Seattle, and Zurich think-tank as the English edition of “Straight from Shoulder”.)

"Straight from the shoulder " by Toshio Masuda-Samurai Lecturer
Above is on those facts and my imagination
March 2020
( Free of charge to the people I met)

What are we to make of the tumultuous week that the financial markets experienced between 24 and 28 February?
In the matter of days the Dow Jones index on the NY stock markets fell by about 13%: from its high of $29,000, to around $25,400.
Global markets soon followed the NY lead, being similarly hit by the Coronavirus syndrome.

In recent times the Dow Jones had been relentlessly scaling the lofty heights, and this went on even in the new year of 2020. It seemed that nothing could stop the bubble.

In my last newsletter of February 3 I wrote: “the Coronavirus is the Divine Wind to stock markets”.

The Dow Jones begun to drop on January 20, then bounced back only to drop again. This up-and-down movement occurred three times, until the DJ reached its highest level of $29,300, on February 10. Few weeks previously I have predicted that “February 10 would be the first day of correction and from then on the Dow Jones would go down and would not recover until I tell you when”.

The Dow Jones went down by almost $4,000, which was the adjustment it needed.

The NY sock markets turned out to be normal, but the Coronavirus kept its relentless march, first hitting hard at China - the world’s second largest economy, and then going global.

Currently the fear and chaos brought in by the virus are spreading amongst investors, escalating and assuming a global scale.

Some time ago I coined the term “the Will of Capital”- an invisible power that moves the markets and decides where the money goes.

Fed wields influence over the markets as it controls their monetary foundations.

Fear of a Coronavirus-induced recession will drive governments to spend more on public investment programs that stimulate their economies.

Those fearing recession will also urge Fed to go on for rate cuts and the quantitative easing (QE), at FOMC on March 17-18th.

It is fair to expect that the virus that lives will eventually die.
The day that FOMC announces rate cuts and QE will be the day that I dubbed “the Will of Capital”, when the Down Jones will begin to rise and will continue to do so until November 20 - the day of the US presidential election.

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Written by Toshio Masuda