4 May 2020

1) The coronavirus economic troubles has reached out to touch social security. The social security is financed by the payroll tax, those social security deductions on worker’s paycheck and the SSI employers pay for each worker. With a little over 30 million people now unemployed, one out of every six American workers, the monies needed by the government to send out social security checks has been drastically reduced. But the government’s obligation has not been cut, they are sending out the same amount each month, so the government must spend monies they get from other sources. The social security program is the largest single source of federal spending, which is now even more shakier than before.

2) More states are beginning the process of relaxing restrictions on businesses and shut down orders. About half of the states are retracting closing orders for businesses deemed nonessential allowing them to open for business again. The states are using a patchwork of strategies to reopen, based on the type of business and how their operations expose the public to infection of the virus. Two states with large populations, Texas and Ohio, have joined in the reopening process. States are feeling enormous pressure to restart businesses and restore social life, mostly in the South, Midwest and mountain West leading the way. There are big questions if the reopening is too early, that the waning virus infection might suddenly erupt in force.

3) American colleges and universities are also facing crippling financial difficulties from the coronavirus impact, with some small colleges already closing. They are having to bear the cost of having to suddenly shift to online classes, giving partial reimbursements of room and board, plus deferring summer secession without a change in their fixed cost of operations. Many experts considering the college education system is being forever changed in America.

4) Stock market closings for – 1 MAY 20:

Dow 23,723.69 down 622.03
Nasdaq 8,604.95 down 284.60
S&P 500 2,830.71 down 81.72

10 Year Yield: up at 0.64%

Oil: down at $19.69

17 January 2020

1) The trust funds for Social Security are in trouble and will run dry by 2035. But Social Security is not going bankrupt because the program’s primary source of revenue is payroll taxes, which at present is 12.4% of pay. So even if the trust fund should run out, Social Security still would have the money to largely keep up with benefits. A much greater danger for retirees is high inflation, for historically the first to suffer from a collapsing economy are those on fixed incomes.

2) The recently signed phase one agreement with China made for a cease-fire in the trade, but leaves the tariffs largely in place, with some considering the tariffs to be the new norm in international trade. China has committed to making $200 billion dollars in purchases from America. The agreement does not address the intellectual property issues, both the forced intellectual transfers and out right theft.

3) Claims for unemployment benefits fell more than expected last week, indicating a sustained strong labor market. Claims dropped 10,000 last week to 204,000 with the labor market remaining on a solid footing, the unemployment rate holding near a fifty year low of 3.5% for December. Layoffs were in manufacturing, transportation and warehousing.

4) Stock market closings for – 16 JAN 20:

Dow              29,297.64    up    267.42
Nasdaq          9,357.13    up      98.44
S&P 500         3,316.81    up      27.52

10 Year Yield:    up   at    1.81%

Oil:    up   at    $58.59

28 October 2019

1) The telecommunications giant AT&T is making its belated entry into the streaming video business to compete with Netflix, Apple and Disney. AT&T plans to reach about 80 million subscribers globally, 50 million in the United States by 2025. HBO Max is expanding its customer base into the streaming market through AT&T wireless. AT&T also owns the satellite service DirecTV.

2) The UAW (United Auto Workers) has approved a new contract with GM (General Motors) which ends the six week strike. GM is calling back technicians to prepare the plants to resume production, with production resuming as early as Monday at some plants. The new contract gives workers a series of wage increases and a path for temporary workers to become permanent employees. Permanent workers can earn as much as $32 an hour.

3) The U.S. government has ended its 2019 fiscal year with the largest deficit since 2012. Gains in tax receipts were offset by higher spending and growing debt service payments. The budget deficit has widened to $984 billion dollars, which was 4.6% of the nation’s gross domestic product. Last years deficit was $779 billion dollars and 3.8% of the GDP. Defense, healthcare and social security programs are a major source for driving the deficit, with worries that these expenditures will not be sustainable.

4) Stock market closings for – 25 OCT 19:

Dow             26,958.06    up    152.53
Nasdaq          8,243.12    up      57.32
S&P 500         3,022.55    up      12.26

10 Year Yield:    up   at    1.80%

Oil:    up   at   $56.63

11 October 2019

1) Social Security recipients will receive a 1.6% cost of living increase in 2020, up from the average of 1.4%. This is less than the pervious two years, 2.8% for 2019 and 2.0% for 2018, but still it’s better than the zero increases of 2010, 2011 and 2016.

2) Because of a pig killing disease in China, the U.S. could see tightening supplies of pork products this next year. With China’s supply of pork decreasing, the Chinese may be forced to import significant pork supplies from the U.S. because pork is a major source of protein in the Chinese diet. This is despite the high tariffs China has imposed on U.S. pork imports. American pork exports to China will see about a 12% increase for 2019 and 13% for 2020.

3) Democratic presidential candidate Elizabeth Warren is causing concerns among businessmen with her promises to remake capitalism from the ground up. Now in the front ranks of Democratic contenders, her plans are now viewed with more concern. Warren would drastically cut back on the amount and influence of big business, push private companies from parts of the economy altogether and shift power to government and labor. The presidential contender has blamed big business for a wide range of social problems.

4) Stock market closings for – 10 OCT 19:

Dow             26,496.67    up    150.66
Nasdaq         7,950.78     up      47.04
S&P 500        2,938.13    up       18.73

10 Year Yield:    up   at    1.66%

Oil:    up   at    $53.94

24 April 2019

1) The stock market rallied in a big way yesterday, recovering the losses from last year, pushed up by the tech stocks and the release of their positive quarterly earnings reports. Furthermore, confidence that the interest rate will not increase further drove the markets up. Both the Nasdaq and S&P broke their record highs too.

2) The government released a report today detailing the dire straights which the Social Security and Medicare programs are in financially. Medicare is forecast to be insolvent by 2026 resulting in doctors, nurses, hospitals and nursing homes not getting fully compensated for services. Even worst, for Social Security their cost will exceed their income in 2020. The fiscal situations come in part from increasing number of obligations because baby boomers are retiring in increasing numbers and the Affordable Care Act. Many politicians wish to extend Medicare to the uninsured.

3) Problems of air bags not deploying in accidents is prompting a recall for as many as 70 million inflaters in America and 100 million world wide by the end of the year. This will involve about 12.3 million automobiles.

4) 23 APR 19 Stock market closings:

Dow               26,656.39   up   145.34
Nasdaq            8,120.82   up   105.56
S&P 500           2,933.68   up      25.71

10 Year Yield:    down   at    2.57%

Oil:    down   at    $66.18

9 April 2019

1) In ten years, the US debt to GDP ratio will be equal (100%). The debt to GDP ratio is presently 78%, the highest since the end of World War II, but it’s anticipated to be 96% by 2028. To bring this into perspective, countries with sever economic problems such as Greece have a ratio of 188%, Italy 130%, Portugal at 120% and Spain with 97%. On the positive side, Germany has a ratio of 59%. The IMF is warning of the problem for America if the ratio is left to continue as is. A high ratio hinders a government’s ability to counter any economic downturn. America’s entitlements is the principle cause for the increase, because when Social Security was started, there were 16 workers to support each retiree, now there are just 2.6 workers.

2) European Union borrowers are eager to see how a Brexit extension will effect markets, by possibly reducing the uncertainty that Brexit has brought on. This spring, the IMF and World Bank will be meeting for their annual conference on world economic matters.

3) Tesla, the maker of electric automobiles, is starting its new quarter with another round of cuts of sales staff following poor deliveries. The company is closing some of it’s show rooms in favor of online sales. These actions are rattling investors by stoking confusion.

4) 8 APR 19 Stock market closing:

Dow                          26,341.02     down     83.97
Nasdaq                       7,953.88           up     15.19
S&P 500                      2,895.77           up       3.03

10 Year Yield:    up   at    2.52%

Oil:    up   at    $64.46

6 March 2019

1) The Green New Deal is bringing out proposals for financing the single payer health care proposals. There is a big problem with providing enough health care people such as doctors and nurses to care for the increase numbers of people. Suggestions for finance is an overhaul of present payroll tax combining social security, unemployment and medicare into one flat tax for all of a person’s income. However, apparently there has been no modeling of this strategy to determine its viability.

2) President Trump proposes to drop the preferential trade treatment for India. Presently, there are $5.6 billion dollars worth of Indian goods imported each year into America duty free, while India is imposing high tariffs on US goods imported into India.

3)  As Brexit nears, British people and companies are stockpiling goods at an increasing rate, fearful of shortages if a ‘no-deal’ exit occurs. Both business and households are fearful of shortages especially food items first, then things like toilet paper and medicine.

4) 5 MAR 19 Stock market closings:

Dow           25,806.63     down     13.02
Nasdaq        7,576.36     down       1.21
S&P 500       2,789.65     down       3.16

10 Year Yield:    unchanged   at    2.72%

Oil:    down   at    $56.28

13 February 2019

New article posted below titled, “Failings of the Fourth Estate!”

1) The CIO of Vanguard investments expects stock market returns, for the next decade, to drop down from 8% to about 7%.

2) The national debt has topped $22 trillion dollars. The debt increase is accelerating as a result of the tax cut and congressional spending on domestic and military programs. Additionally, the mounting cost to fund social security and the retiring baby boomers is pushing federal spending up too.

3) In Venezuela the cost for a hamburger is now a months wages for the average worker, with inflation now over one million percent annual. Demonstrations mount against Maduro for not letting relief (food and medicine) convoys come in for his people. Maduro rejects foreign aid fearing it is a conspiracy to oust him. This issue could be a wedge between Maduro and the Venezuela military who he depends on to remain in power.

  4) 12 FEB 19 Stock market closings:

Dow                 25,425.76     up    372.65
Nasdaq             7,414.62     up    106.71
S&P 500            2,744.73     up      34.93

10 Year Yield:     up   at    2.68%

Oil:    up   at    $53.34