12 October 2020

1) With the recession from the Covid-19 came predictions of waves of bankruptcy filings as businesses, large and small, failed. But that wave of bankruptcy has not materialized, and so far, there’s no sign that it will, indeed bankruptcies are down a little from last year. This is a good sign that companies and households are not as stressed as many economist feared. However, bankruptcy filings aren’t a perfect measure of hardship, with many companies barely hanging on, so bankruptcies may still be coming. Many small businesses and households go bust without ever formally filing for bankruptcy.

2) The four massive high tech companies, Google, Amazon, Apple and Facebook are under investigation at Federal and State levels for antitrust. These investigations are spurred by concerns that competition is being stifled by the domination of these companies, but there are concerns that the big tech is trying to also stifle conservative voices. Google is facing a relatively narrow complaint from the Justice Department that it seeks to disadvantage rivals in search and advertising. The focus on Apple is their apps store with accusations that Apple introduces new products and then put out apps that compete with them. Facebook has raised concerns over how they treat some of their app developers on its platform and therefore engaged in unlawful monopolistic practices. Amazon is suspected of conflict of interest in competition with small sellers on its marketplace platform.

3) Silicon Valley companies are thinking about the future of work taking actions from pay cuts to permanent work-from-home as they strive to cope with the coronavirus crisis. The big tech companies have formed various plans for the future of work. Some companies, (Twitter and Slack), said their employees never need to return to the office, while others, such as Microsoft, are adopting a hybrid model where employees report to the office only a few days a week. Amazon and Salesforce are adopting new benefits to help out working parents, such as subsidized back-up childcare and extended paid leave, while Facebook, employees may work from home permanently. However, if they leave the Bay Area for a less expensive city, they’ll may face a pay cut. Silicon Valley may bear little resemblance to the thriving hub before the pandemic. Tech companies have largely shut down their sprawling campuses and asked employees to work from home — in some cases, forever. When those offices reopen office life is unlikely to resemble the past. Companies may change their real estate plans, opting instead for a new type of office, or none at all.

4) Stock market closings for – 9 OCT 20:

Dow 28,586.90 up 61.39
Nasdaq 11,579.94 up 158.96
S&P 500 3,477.13 up 30.30

10 Year Yield: up at 0.78%

Oil: down at $40.52

26 August 2020

1) The American Airlines Group Inc. will layoff 19,000 workers once the federal payroll act expires on the first of October, making for a 30% reduction in its workforce since the Convid-19 crisis. This will result in 17,500 workers furloughed and about 1,500 cuts to management staff. These cuts are forced by a 70% drop in passenger numbers. This will bring the airlines pandemic cuts to 40,000 positions since the coronavirus outbreak. Presently, American plans to fly less than 50% of its normal schedule in the fourth quarter, while their long haul international flights will be just 25% of 2019. The airlines will have 100,000 employees compared with 140,000 in March of this year.

2) Real estate investors, including some of the largest investment groups, are skipping loan payments while raising billions of dollars for new investments. While the pandemic has devalued some real estate, it has also created new targets for investors loaded with cash. It’s the age-old strategy of abandoning ‘loser investments’ to buy winners, the losers being commercial properties with businesses that don’t need as much space as before the pandemic. Property owners are more likely to walkaway when their equity has been wiped out by lower values. Restaurants and hotels properties are especially vulnerable.

3) Reverse mortgages have new appeal for older Americans because of the super low interest rates, which means more of the equity is available to the home owners since less is going towards the interest. Essentially, a reverse mortgage is like a loan, where the owner sells his property for cash, but continues living in it. This makes retirement more comfortable or even possible with the homeowner having access to his house equity without having to actually sell his home.

4) Stock market closings for – 25 AUG 20:

Dow 28,248.44 down 60.02
Nasdaq 11,466.47 up 86.75
S&P 500 3,443.62 up 12.34

10 Year Yield: up at 0.68%

Oil: up at $43.43 this will

20 July 2020

1) The international British Airways has announced they are retiring their entire fleet of Boeing 747 jets, a direct result of the Convid-19 crisis. Once one of the biggest airlines using the iconic jumbo jet, the contraction of the airline industry and the likelihood that air travel will not return to its previous size is forcing all airlines to abandon their jumbo jets early. They are going to the more modern fuel efficient Airbus A350 and Boeing 787 in their place. British Airways now has 31 Boeing 747s, about 10% of its total fleet, with an average age of 23 years.

2) What appears to be a massive attempt to embezzle monies from the general public has come to light with the social media Twitter confirming that 130 accounts were targeted in a hack. The accounts of a handful of prominent users were compromised that allowed criminals to gain access to prominent users such as Joe Biden, Barack Obama, Elon Musk, Bill Gates and Kanye West to post solicitations for money. The attackers were able to gain control of accounts then send Tweets from those accounts asking to send money via Bitcoin to commit cryptocurrency fraud. Wire fraud is a federal felony crime, so the FBI immediately began an investigation of who and how the fraud was perpetrated.

3) Delta Airlines is proposing a 15% cut to minimum pay for pilots to avoid furloughs for a year. This would have to come after the first of October when federal aid terms expire. This is in view that a quick recovery in air travel is becoming increasingly remote because of the rise in new coronavirus cases. More than 60,000 airline employees across several carriers have been warned that their jobs are at risk, including more than 2,500 of Delta’s 14,000 pilots. As financial losses pile up, employees are urge to take early retirements, buyouts and other forms of leave in a attempt to slash cost as financial losses pile up. So far, more than 1,700 pilots have signed up for early retirements. This is just another indicator how the air travel business is probably fundamentally changing.

4) Stock market closings for – 17 JUL 20:

Dow 26,671.95 down 62.76
Nasdaq 10,503.19 up 29.36
S&P 500 3,224.73 up 9.16

Year Yield: up at 0.63%

Oil: down at $40.57

7 July 2020

1) Research by the Wall Street firm UBS, predicts that as many as 100,000 brick and mortar retail stores in the U.S. will close by 2025. Because of the pandemic, retailers are closing store locations permanently at an un-precedent rate. But this closure was going on before the coronavirus shutdown, with shoppers embracing other ways to buy such as e-commerce and picking up products at stores purchased online. This is in addition to large traditional retailers going into bankruptcy. This prediction is in keeping with the 9,800 stores already closed this year, with 25,000 stores predicted to close by the end of 2020. The retail sector has already lost 1.2 million jobs between March and June. This opens questions if the present hyper-consumerism economy can continue.

2) With the continued threat of the pandemic and a slowdown of reopening of economies in states, evictions are likely to skyrocket as jobs remain scarce. This is because a backlog of eviction cases is beginning to move through the court system. Millions of people had been counting on federal aid and eviction moratoriums to remain in their homes, but now fear of being thrown out is mounting. This situation is further aggravated as the enhanced unemployment benefits run out at the end of July. The enhanced unemployment and $1,200 stimulus payment had been supporting households this spring. There are 110 million people living in rental households with 20% at risk of eviction by the end of September.

3) The food delivery service Uber has acquired rival Postmates, despite Uber not having become a profitable enterprise yet. This should make Uber a stronger competitor to its main rival Doordash. The food delivery sector is undergoing a major consolidation this year, people jumping from service to service to find the best deal. With this acquisition, Uber gets a bigger share of the market with 31% of the business with DoorDash the largest at 44%.

4) Stock market closings for – 6 JUL 20:

Dow 26,287.03 up
Nasdaq 10,433.65 up
S&P 500 3,179.72 up

10 Year Yield: 0.68%

Oil: up at $40.59

4 June 2020

1) The stock market continues to climb, with some saying this signals the end of the recession. The S&P 500 has a return of 37.7% over the past 50 trading days, which is the largest 50 day rally in history. This rally is attributed to the quick response of the Federal Reserve, with a record $2 trillion dollar federal stimulus package. Another factor is the unlimited asset purchases by the Federal Reserve. While the shutdown depressed retail and airlines businesses, other parts of the economy saw a boost, such as Netflix, Amazon and Facebook. But there is still the record high of over 40 million workers idled by the pandemic, while the weakening in the Chinese’s economy coupled with the tensions between China and America could have a telling effect to the economic recovery.

2) There are fears of another round of layoffs in the later part of 2020, amid questions of where the economy will go in the next six to twelve months. Businesses are now reluctant to expand and hire new people, and may decide to contract thus being better able to weather economic hard times. There is also the unspoken problem of continued automation taking jobs as AI (Artificial Intelligence) and automation that experts predict will continual to sap jobs for the next decade. Automation gives companies an added advantage in surviving when the economy slows down, but a second wave of layoffs may trigger that slowdown.

3) The giant movie theater chain AMC has announced they doubt they can remain in business after the effects of the coronavirus shutdown. The company has problems with their liquidity, their ability to generate revenue and the timeline for reopening its theaters. The chain expects to lose $2.1 to $2.4 billion dollars for the first quarter, with the second quarter to be even worst. With all its theaters closed down, AMC is generating zero revenues. The major problem in reopening is having enough cash for operations until cash starts coming in again, and there is still questions of when theaters will be able to open again, especially if there are flare-ups of the virus.

4) Stock market closings for – 3 JUN 20:

Dow 26,269.89 up 527.24
Nasdaq 9,682.91 up 74.54
S&P 500 3,122.87 up 42.05

10 Year Yield: up at 0.76%

Oil: down at $36.75

21 May 2020

1) The Federal government is moving to address the record deficits that America has amassed. One method is to stretch out the time over which the deficit is paid off. Part of that plan is the reinstating of the 20 year bond, which was last issued in 1986. The Feds will auction off $20 billion dollars worth of bonds Wednesday, with an expected return of 1.21% verses 0.70% for the 10 year bonds and 1.42% for the 30 year bonds. The government is also considering 50 and 100 year bonds, but there doesn’t seem to be any demand for such financial instruments. It’s expected that the deficit will be $3.4 trillion dollars for fiscal 2020 and $2 trillion dollars for 2021.

2) The CBO (Congressional Budget Office) estimates the nation’s unemployment rate will exceed 15% through September then remain above 11% for the rest of the year. For 2021, they estimate an average of 9.3%. For the second quarter of 2020, the labor market is projected to see the steepest declines since the 1930’s. These high unemployment rates are expected to persist despite lawmakers’ efforts to counter with injections of cash into the economy. Further layoffs are expected despite the $660 billion dollar Paycheck Protection Program, but a partial rebound is possible in the last three months of the year, with as much as 30% of laid off workers being rehired.

3) Housing sales are way down, the lack of inventory has propped up prices with bidding wars from the limited availability of properties. The health guidelines have made it more difficult to market homes, another fallout of the pandemic. Since the pandemic began, the demand has fallen off, with the number of sellers also contracting, therefore the limited availability of properties. Despite the economic uncertainty, the supply shortage prior to the Covid-19 crisis still remains. Nevertheless, the housing market has cooled, with sales of existing homes projected to fall 20% in April compared to March, which had a 8.5% drop. Construction of new houses is down as contractors wait out the virus. While loan interest rates are low, lending institutions have tightened up their loan standards.

4) Stock market closings for – 20 MAY 20:

Dow 24,575.90 up 369.04
Nasdaq 9,375.78 up 190.67
S&P 500 2,971.61 up 48.67

10 Year Yield: down at 0.68%

Oil: up at $33.52

TEXAS REFINERIES RESTART AFTER COLOSSAL HURRICANE HARVEY!!!!!!!!!

By: Economic & Finance Report

Texas oil refineries began production of oil again Saturday Sept 3, 2017.  This is after a rocky and unstable week presented to the Texas and Louisiana region from the turbulent hurricane called Harvey. Hurricane Harvey being categorized as a Category 4 hurricane, ruined and destroyed billions and billions of dollars of infrastructure and property (residential and commercial); and distablized the southern gulf region.

The federal government has indicated that close to $200 billion will be needed to infuse in the economies; of Texas and Louisiana especially to jump start business initiatives and future business development projects in the region.

Alot of the Texas refineries had to drastically cut production because of the damage Harvey propelled. More then half of the oil refineries in the US is in the Gulf, so when Harvey hit the region, it really made a impact to oil production.

As the refineries begin to resume their productivity, many people and businesses will have to find ways to pick up and resume their lives, from the turmoil this horrible hurricane has inflicted on them. -SB

 

Give Us A New Federal Tax! Please! Data Is The Newest And Most Proliferate American Business, Whose Growing Wealth Remains Free Of Taxation !!!!!!!!!

By: James Lymon BSAE, BSEE, MSSM

Economic & Finance Report

Every day, across America, across the whole world, innumerable faceless, seemingly nameless companies slither across the internet to slip into peoples computers and root around gathering information and data about us with the intent of selling and reselling that data to other companies for a profit. All without our knowledge or consent. We are never aware when they are there, what they are copying or what will ultimately be done with it. And for them it’s virtually free! They come into our various computers (desk top, lap tops, tablets, smart phones and old fashion flip phones) to root around looking for any data which might be marketable to someone, then leave to come again at a later date, hopefully not damaging our software or data because their programs where not fully thought out or tested. Then someone else comes in to repeat the process. And what do we get from of all this– aside hopefully no damage to our data and systems?

NOTHING!! Absolutely nothing!

These are our computers, our systems, paid for by us, with our money which we earned through our labors, yet untold businesses feel these computers are their’s to do as they please! Like someone walking uninvited into your house, strolling around making notes of things, taking pictures of this and that, then casually walking out without so much as a howdy there or even a cursory smile. Just as if your house belongs to them and not you. Needless to say, like many other Americans, this somewhat rankles me. After all … all this data is used to manipulate, maneuver, coax, dupe, sway and cajole people for commercial and political gains. Since they are making money harvesting data from our possessions, then we should at least get paid for it, right? But how? Well, maybe it’s nearly impossible to get paid directly for information gathered, but how about indirectly? How about if all the data gathered from everyone had to be paid for, then those proceeds go towards things which benefits all us little people … like maybe health care that everyone is so worried about?

How about if the Federal government was to tax all data acquired through computers or bought and sold to other users of that data? How about a data transfer tax based on a fix rate per byte of data transferred? Right now, there are vast quantities of data being harvested from us, stored, bought and sold over and over for huge profits … and it’s all free as far as we and the government are concerned. A huge new industry of data that unlike other commodities such as oil or consumer goods, goes untaxed, untouched like back in the good old heady days of laissez-faire capitalism.

Let’s say there was a tax rate of one-hundredth of one cent of hard cold American cash currency for each byte of data transferred. So, if one of these companies comes into your computer and helps itself to two hundred bytes of data or information, then there would be a tax of $0.01 X 200 or 2 cents owed to the Federal government. You say, ‘Well so what’! Two cents … that’s nothing but a joke! What difference does that make?’ But for that same company to go into a million people’s computers and harvest data, that’s $20,000 revenue. And for a thousand similar companies, that totals up to $20,000,000 … and twenty million bucks is no longer something to sneezed at. But that’s only the start. Each time that company sells those chunks of data, the transfer is taxed again, so if sold to ten other companies, that’s another $200,000 each for a total of $220,000 in revenue. Then if a buyer such as one of the data mining companies purchases that data, it may resell it tens or hundreds of times, generating untold wealth for the American people.

You see, that two cents multiplies itself many times over into millions of dollars!

I have no idea just how many bytes of data are transferred between computers each year, nor would I dare a guess. I just know that it is tremendously huge! Other business are subjected to inventory taxes, that is taxes on the value of physical property they hold to sell to create their revenues. But data is just waves of electrical impulses on a wispy cloud of electrons, not physically visible to the human eye, and hence, unlike other inventories, goes untaxed. But when it moves from one computer to another across the internet, it becomes visible and therefore accountable. At that time of visibility, it becomes a taxable entity.

The youth of America are heavy users of data machines, creating much of the new data being bought and sold, providing the machines at their own expense which allows all this harvesting of data. Since the millenniums are facing an ever increasing burden of taxes because there are fewer of them to support more and more of their elders, it’s quite natural they would welcome a method of taxation that could reduce what’s now taken directly out of their pockets. Get some real payback for the use of their private property, which so many business consider as 0open range0 for any enterprise to come in and use as they please and see fit.

After all, why should we the people fork out our hard earned cash for taxes while all those data enterprises go scot free?

Steven Mnuchin Is CONSIDERED TO BE NEXT US TREASURY SECRETARY!!!!!!!!!!

steve-mnuchin-pic

By: Economic & Finance Report

Sources close to the President Elect Trump, have indicated that former Goldman Sach’s banker/partner Steven Mnuchin, is being considered as the next US Treasury Secretary; sources of the Trump campaign have indicated a strong notion for him to be the next Treasury Secretary.

Mr. Mnuchin was Donald Trump’s national campaign chairman. He handled the majority of the finances coming into the campaign and exiting the campaign, also being dispersed to the Republican National Finance Committee; money would be distributed to Republican candidates around the country.

Mr. Mnuchin has years of experience in finance; being apart of the group that bought the federal government’s INDYMAC. Mnuchin’s group bought the former loan house, made it profitable and sold it for a tremendous profit. The group led by Mr. Mnuchin sold IndyMac for over $3.7 billion dollars. -SB

ALMOST HALF OF AMERICAN CITIZENS DON’T PAY FEDERAL TAXES!!!!!!!!!!!!!!!!!!!!!!!

taxes

By: Economic & Finance Report

Approx. 77 million American citizens do not pay federal taxes. This has been indicated from policy think tank, Tax Policy Center. Americans can’t pay taxes if close to the majority, does not have taxable income, or make enough income to pay federal taxes.

The bottom later of citizens who make under the threshold of disposable income, get aid and assistance from the govt, which allows them to use it for sustainable purposes. It is an interesting point to consider, when filing this tax season; that if you are not making enough, you may not be susceptible to pay federal taxes. -SB