19 June 2020

1) Kroger, the largest supermarket chain in the U.S., has been surprised by a 92% gain in its e-commerce sales. The giant has lagged behind its competitors like Walmart, Amazon and Target with e-commerce, but the coronavirus has provided the motivation for people to use the service to stay at home and do their cooking during the pandemic. The grocer has been working hard to expand into the electronic marketing area, including working with a robotics company for automated ‘stores’ to fill orders for delivery. With the pandemic changing shopping habits of Americans, now is the time for Kroger to establish its position for the future. The question now is can Kroger maintain this increased sales of e-commerce as the virus crisis subsides. Kroger had $41.55 billion dollar revenues compared with $37 million a year ago.

2) Looking back at the 100 days of the Convid-19 crisis and shutdown, we find the American economy has endured an extraordinary upheaval. Americans have endured over 2.1 million people suffering with Covid-19 which resulted in 117,000 deaths. The closing of non essential businesses sent the economy crashing into a deep recession, with record numbers of layoffs and a skyrocketing unemployment rate. This in turn made for record drops in household spending and manufacturing. Businesses such as automobile manufacturing, the airlines and hotels came to a near complete standstill. Small businesses such as restaurants were stopped dead in their tracks with fears than a large portion would not survive. The feds cut the interest rates to near zero, while pumping in trillions of dollars to stabilize the economy and support businesses until recovery starts.

3) Unemployment claims for last week were 1.5 million more people, up from the expected 1.3 million. This is the thirteenth straight week that claims were above one million. The elevated claims continue even as the country starts to open up and resume business. The real question is how many of those jobs will return and how many will be replaced by technology. Times of economic stress is when automation makes significant inroads as companies look for ways to cut cost to survive.

4) Stock market closings for – 18 JUN 20:

Dow 26,080.10 down 39.51
Nasdaq 9,943.05 up 32.52
S&P 500 3,115.34 up 1.85

10 Year Yield: down at 0.69%

Oil: up at $38.84

5 June 2020

1) The bankers are suggesting to America’s debt laden companies- raise money now, because things could get a lot worse! Although there is plentiful optimism across the county for a quick economic recovery, there are some real concerns for the near and far future, such as a new wave of coronavirus in the fall, an extended period of double-digit unemployment, spike in defaults and a slower than expected economic recovery as business adapt to prolonged social distancing. These all translate into reduced revenues for many months or even years. This is particularly hard on companies carrying a heavy debt load. Hard times means companies need to have as much cash reserve as possible to weather any fiscal storm over the horizon. Even companies like Uber Technologies, Inc are selling bonds, in this case $1 billion dollars of bonds last month even with a first quarter giving $8 billion dollars of cash. The mantra for businesses this day and age is ‘Cash is survival’.

2) Airlines in America are adding summer flights as passengers slowly return to traveling. The air carrier American Airlines plans to fly 55% of its domestic schedule in July, up dramatically from just 20% in May. Slowly, the airline business is coming back to life as more flights are being added to schedules in anticipation of a recovery across the country. While increased passengers is encouraging, passenger levels in the U.S. remain extremely depressed from the pandemic. The question is, are air carriers getting ahead of themselves in bring back service too fast, because if service grows faster than the number of passengers, airline companies could lose money by flying airplanes with too few paying people.

3) The job loss from the coronavirus may not be over with yet. About 6 million white collar workers, higher paid workers, could lose their jobs as the pandemic’s fallout slams other sectors of the economy. These are people who are supervisors at restaurants and hotels, real-estate and finance services. A second wave of layoffs is coming despite states starting to reopen their economies, but this time it’s the well paid workers and not the low wage workers as before who are losing their jobs.

4) Stock market closings for – 4 JUN 20:

Dow 26,281.82 up 11.93
Nasdaq 9,615.81 down 67.10
S&P 500 3,112.35 down 10.52

10 Year Yield:up at 0.82%

Oil: up at $37.35


Photo Image Credit: Wikipedia

By: Economic & Finance Report

Vice chairman of Berkshire Hathaway, Charlie Munger has indicated that the recession that has been displayed because of the Coronavirus; has had drastic effect on the US and global economy as a whole.

Vice chair Munger has indicated executives from top S&P 500 companies are not seeking a government bailout aka “government intervention”, because in his opinion they are “too frozen” to do so. He has spoken that the airline industry has done very little to bring increase scrutiny on where they lie ahead of their financial stats and balance sheets. -SB

27 March 2020

1) The $2 trillion dollar coronavirus relief bill has been passed and Treasury Secretary Steven Mnuchin said the people should receive cash payments within three weeks. The IRS has been tasked with distributing the monies, but the agency is hobbled by obsolete technologies such as 1960’s era computers, limited staff and a small budget. So there are questions if the agency can get the job done in a timely manner, let alone in three weeks. Experts say its more like a matter of months rather than weeks for Americans to receive their check.

2) Almost 3.3 million Americans have applied for unemployment benefits this last week, more than quadruple the previous record set in 1982. This is a result of the wide spread economic shutdown from the coronavirus pandemic. This rate of layoffs is expected to accelerate as the U.S. economy sinks into a recession with the collapse of revenues for a wide range of businesses. Economist predict the nation’s unemployment rate could approach 13% by May.

3) Gold has traditionally been a panic investment which people and nations buy to protect the value of their money. The worldwide panic over the coronavirus coupled with a flood of stimulus by central banks has ignited demand for gold to store wealth. But the gold market is running into difficulties in buying. Stored in high security vaults, government mandated shut downs have left access iffy. Also, refiners of gold have been forced to close because of the virus. Transporting gold is done via airlines, but the sharp drop in air service has also made transport of the metal difficult. All these factors have put a squeeze on gold futures.

4) Stock market closings for – 26 MAR 20:

Dow 22,552.17 up 1351.62
Nasdaq 7,797.54 up 413.24
S&P 500 2,630.07 up 154.51

10 Year Yield: down at 0.81%

Oil: down at $23.18

20 March 2020

1) Today, more coronavirus concerns have surfaced that most airlines will go bankrupt soon without government bailouts. The virus has shut global aviation down because of virus outbreaks as well as travel restrictions that are intended to contain the virus. Within weeks, many airlines will need government help to avoid bankruptcy. Major U.S. airlines are seeking $50 billion dollars in financial assistance because of the steep falloff in U.S. travel demand. Estimates are for $25 billion dollars in grants, $25 billion dollars in loans and significant tax relief to survive.

2) Monday markets opened with another sharp downfall of all three major markets despite the Federal Reserve embarking on a massive monetary stimulus campaign to curb the slowing economic growth from the coronavirus. Shortly after opening, trading was halted for fifteen minutes from a ‘circuit breaker’ triggered by the S & P 500. The U.S. central bank has launched a massive $700 billion dollar quantitative easing program designed to help cushion the economic downside from the virus. The Dow was down 11% while both the Nasdaq and S & P fell more than 10%.

3) As fears grow of a world economic downturn, which will put economic stress on the U.S. economy, people are becoming concerned about their jobs. American workers may lose their jobs by the millions as the effects of the virus ripple through the financial system, the impact being devastating. The disease has spread rapidly around the world with whole nations shutting down as well as major cities. It’s unknown just what the impact will be for the world economy, when major economic areas isolate themselves from the system, even for a few weeks. Many segments of the economy are reporting significant problems which can lead to further problems across the U.S. and world economy. All this translates into layoffs, at a time when the young people of America have limited opportunities.

4) Stock market closings for – 19 MAR 20:

Dow 20,087.19 up 88.27
Nasdaq 7,150.58 up 160.73
S&P 500 2,409.39 up 11.29

10 Year Yield: down at 1.12%

Oil: up at $25.08

11 March 2020

1) Fully 70% of the American economy is consumer spending. Even through wages and incomes have been stagnant for many households, the consumer has continued to spend. It is not new investment by corporations, tax cuts or big new federal spending programs that stimulate the economy, but rather it’s consumer spending. However, fears of the coronavirus is dampening that spending by curtailing business trips, personal travel, sports and other outings. With the interest rate near zero, the major tool used to combat a recession is now impotent.

2) The collapse of the long standing deal between Saudi Arabia and Russia, to limit oil production, fell through this weekend sending oil prices crashing from oil supplies surplus. The coronavirus has caused China to limit economic activity and therefore reduced China’s oil consumption leading to further oil surpluses. China’s purchase of oil is down 20%. The low oil prices has made the world economy very unstable and therefore volatile. For America, independent oil companies have gone deeply into debt to pay for the shale oil extraction process, who are now threaten by low oil prices making it impossible to pay that debt. Failure of these oil companies could ripple through the American economy to pull other segments down.

3) Airlines across the world continue to sink deeper into crisis from the worsening coronavirus epidemic reducing the number of passengers, who are foregoing travel fearing the virus. The situation is made worst by not being able to predict how long the crisis will likely last and therefore unable to make accommodating plans. The lockdown of Italy has further aggravated world air travel, especially with the interruption of tourism just as the tourist season would be ramping up.

4) Stock market closings for – 10 MAR 20

Dow 25,018.16 up 1,167.14
Nasdaq 8,344.25 up 393.577

S&P 500 2,882.23 up 135.67

10 Year Yield: up at 0.748%

Oil: up at $34.62

Ebay & Delta: Companies Defining the New and Different World, in which the Youth Are Living In.

By: James Lyman BSAE, BSEE, MSSM

Economic & Finance Report

I keep telling people that the world of my generation (second half twentieth century) has already slipped away, died, never to return … that the world for the millenniums is completely different from my generation.  How? Well, I just had a stark demonstration of how that world is so very different from my world.  I’ve been getting rid of some of the things I’ve accumulated over the years by putting them on the auction service eBay.  One item was a radio control transmitter, almost never used, that was in excellent condition, and I anticipated selling for a good price.   I had a sever problem with eBay’s system that resulted in selling it for a fraction of what I expected.  I tried to send an email detailing the problem, only to find I was limited to just 100 characters.  Below is the email I tried to send, which best explains my problem.

I had a Radio control transmitter, Hi-tec Laser 6 channel FM (PPM) R/C up for auction this last week with a starting bid of $15, item number 152531590747 ending this last Sunday evening.  I had a lot of interest, something like 116 views the last time I checked, about a dozen or more watching, and six or more bidders.  Trouble is, despite all these bids, the bid amount remained fixed at the $15  I specified for starting.  And so that’s what it sold for!

 Now just what is going on here?  With the product type and interest shown, I would expect it to have sold for $80 to $100, instead I practically gave it away.  Is this suppose to be some practical joke by one of the mirid of programmers sitting on your payroll?  Considering the time and effort I put in with the pictures and written description, I would have been better off just to have taken it down to Goodwill!

As a degree electronic engineer having spent most of my career with embedded systems, I’m shocked by how poorly your software has matured.  Your software is as buggy as flour full of weevils!!  I see the basic system is continually being changed, with snags which I considered should have been resolved years ago.  Considering how long your company has been operating, your system should by now be very stable requiring few changes to its design.

 I consider my loss to be the result of the poor performance of your software staff, in particular the management in the software department.  It’s past time for eBay to have a thorough house cleaning of it’s software management personnel, particularly the upper levels of management, and start getting qualified people in who have the knowledge and ability to manage large software systems.

 But like so many other giant modern American business, eBay has insulated themselves from the troubles and bother of their customers by using technology.  The little trick of limiting an email to just 100 characters, 40 less than a tweet, is a prime example.  Just the first sentence of my proposed email ran 185 characters, almost twice what was allowed.  Their idea for customer service, and it’s the same for so many other large American companies, is to create some on-line ‘puzzle palace’ of canned answers, leading the customer around and around in software loops until they tire and give up.

The recent video on television news, of Delta Airlines arbitrary and capricious treatment of a paying customer being beaten and bodily dragged off their airplane, graphically shows the companies real attitude towards their customer base.  And these two events made me realize just how different today’s millenniums world is from the world I grew up and came to know.  In my youth, companies bent over backwards, jumped through hoops making sure their customers were taken care of, the axiom of American business being:

Take care of your customers … or somebody else will!

But not today.  Today’s companies consider their customers as nothing more than livestock to be  cultivated and herded around using the modern technologies of mass media and the internet.  I know . . . I used to live on a farm and worked with livestock.  Their attitude is the same as any farmer or rancher towards their cattle or hogs.  This typifies what I mean when I say the world of the millennium’s parents has faded away and died, while the millennium’s world is completely different from my world.  In my time companies who acted in such a manner towards their customers would have found themselves lepers in American society, slowly dying just as surely as if they had leprosy.  In the long run, this can only hurt American business and the economy.


But the same modern technologies which destroyed my world and created the millennium’s commercial world has gone beyond the economic boundaries to be infused into America’s political system, with the same disastrous results.  Elected officials (Presidents, Vice-presidents, Senators and Congressmen) no longer work at the problems plaguing their constituents, instead they ‘work their people’ using the mass media and mass advertising technologies of commerce to cultivate and manipulate their voters to their own ends and means.  For so much of the government, people are just livestock for them to use as they see fit.


In not addressing the problem of obsolescence of workers, they have destroyed the whole future of a whole generation, the generation of the millenniums and Z Generation.  With 20% to 25% of new college graduates unemployed or under-employed, one shouldn’t be surprised at the growing student unrest


No one cares about the young people, so no one is doing anything to address their problems.

Samsung Note 7 Banned on UAE Flights……………….


By: Economic & Finance Report

UAE Airlines has banned the Samsung Note 7 usage; as well as the charging of the phone on their airlines. The ban was issued by risk management of UAE airlines because the Samsung Note 7 has battery defects; in which the phone burns and explodes.

Other countries such as US, China, India, Europe, Singapore have all held special adversaries, either banning or discontinuation of using the Note 7 on commercial and domestic flights.

Because of the controversy surrounding the warnings of the Note 7, Samsung has issued a voluntary exchange program, in which customers can exchange their Note 7 phones, because of the faulty battery issue the phone seems to have. -SB


cuba travel

By: Economic & Finance Report

JetBlue has indicated they will add a secondary charter flight from JFK Airport (Queens, NYC) to Havana, Cuba. The trips will be flown every Tuesday, non stop and direct, from New York City to Havana, and vise versa. JetBlue will do this in partnership with Cuba based, Cuba Travel Services, who are licensed by the U.S. government to provide service flights into Cuba.

Flights flying into Cuba are allowed to fly directly without the intervention of the U.S. Treasury Dept. However, US tourism as a who is still banned but relaxation of the ban is critical in progress between the United States and Cuba.

During the U.S. trade embargo of 1962, United States flights going into Cuba were suspended indefinitely. -SB