Ukrainian refugee Yana in San Francisco (Stephen Lam/The San Francisco Chronicle).
A Different Kind of Post
Occasionally, I write posts like the one below, which appeared on Zero Hedge today, in which I share a story I find interesting, which is often of a current events/political nature, and append a brief investing note to them. These tend to generate a lot of interest on Zero Hedge, but I’m not sure if my Substack subscribers want to read them, so I thought I’d ask you.
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From One War Zone To Another
Eight years ago, University of Chicago Professor John Mearsheimer presciently predicted that the West's Ukraine policy would get that country "wrecked".
But even Professor Mearsheimer probably couldn't have predicted that the West would find a new way to harm Ukrainians: exposing them to American public schools. On Sunday, The San Francisco Chronicle published an astonishing article about a Ukrainian teen's experiences in a San Francisco public school, that have prompted her to want to return to her war-torn country ("She fled the war in Ukraine but failed to find a safe haven in S.F. middle school"). Below are a few key excerpts, followed by a comment by me about a somewhat similar incident in the UK.
We'll close with a brief market note about Michael Wilson's latest missive about stocks having entered a "death zone".
Ukrainian Teen Yana Experiences American Public School
Everything Yana, a 13-year-old Ukrainian refugee, knew about public schools in the United States was what she had seen on television or in the movies, often idyllic settings where teenage conflict and angst ironed itself out by the end.
She never imagined herself in those American classrooms [...]
“I thought it was going to be better because it’s San Francisco,” she said in Ukrainian, with her aunt translating. “But after two days, I saw everything going on at the school.”
Students interrupted classes, jumped on desks, cursed at teachers. At first, Yana wondered what was going on, but then, “nothing happened.” Students were not disciplined or prevented from repeat behavior.
“After one week, I understood that was normal,” said Yana, whose last name The Chronicle agreed not to publish in accordance with its source policy.
For Yana, the situation only got worse as the weeks went on, her fears escalating. She had escaped war, but not bullying and bad behavior by classmates.
Yana’s mother and aunt, Mariia Moroz, said the teen would come home from school and describe the chaotic scenes in her classrooms.
“She would tell us and we were terrified,” Moroz said of the verbal abuse, hallway conflicts and classroom outbursts, adding they told Yana to avoid eye contact and try to avoid the students acting out.
Not long after, Yana said, she became the target [...]
Within a month at Marina, Yana said, someone stole her cell phone in the cafeteria and then a group of students who she believed was responsible, threatened her. Yana knew enough English to understand the gist.
“They started yelling and cursing and moving toward her,” her aunt said of the early February encounter. “A counselor came and intervened.”
The next day, Yana stopped going to school. School officials offered her a security action plan to make sure she felt safe.
Yana’s aunt and mother have requested a transfer to another school, where the teen could start over without fear for her safety or an escort through the hallways, but so far, the district has denied that request and urged Yana to return with the support services offered.
So far, she hasn’t been back.
Yana just wants to go back to her hometown in central Ukraine, back to the only school she knew before the war, even as her mom and aunt have started to research camps and other programs in San Francisco to occupy the summer months.
A Somewhat Similar Situation In The UK
The story about the Ukrainian teen in San Francisco brought to mind a somewhat similar story about Ukrainian refugees in the UK, except in the British story, by their Channel 4, Ukrainian discomfort with Western dysfunction is framed as a failure of the Ukrainians to integrate. As a Ukrainian woman says in the video below, she moved from "the best area of Kiev" to "the worst area of Birmingham".
The Channel 4 interviewer tries to suggest that the refugee is simply uncomfortable with with diversity, but the refugee tells her she went to the police website and saw crime stats. Touché, Oksana.
Now onto Michael Wilson's "Death Zone".
Have Stocks Have Entered A "Death Zone"?
Michael Wilson, the Chief US Equity Strategist at Morgan Stanley, recently analogized the current market environment for stocks to the high altitude "death zone" on Mount Everest, described by John Krakauer in his (excellent, by the way) book Into Thin Air (Michael Wilson: Stocks Have Entered The "Death Zone"). Zero Hedge premium subscribers can read the whole thing at the link, but the basic idea is that at the current high valuation and low equity risk premium, if the predicted Fed pause doesn't materialize, stocks could tumble.
Is Wilson right? I have no idea. But I think it's good to have some bearish bets in the event the bears are right. And the best kind of bearish bet is on a stock that looks like it might struggle even if the market doesn't tumble. On my trading site, we entered one such bearish bet last week:
This stock is up more than 80% year-to-date, as part of the recent rally in low quality names.
Its Altman Z-Score is negative (scores below 1.8 indicate a risk of bankruptcy). That’s today’s new bearish bet.
That's the kind of name I'd feel comfortable betting against in a bull market, but if Michael WIlson is right, we'll do even better betting against it in the "death zone".
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