4 January 2021

1) The prospects of approving the $2,000 stimulus checks have dimmed further. The legislation was scrambled in the final days of the 116th Congress. Democrats rapidly passed a bill with some Republican support and attempted to approve it in the GOP-led Senate. But the Senate Majority Leader blocked a vote on the checks, by eliminating Section 230 liability protections for social-media companies and reviewing purported voter fraud in the 2020 election. These contentious measures cut off Democratic support for the bill and avoided holding a vote directly on the larger checks. While a half dozen Senate Republicans have expressed support for larger checks, most have opposed additional spending on top of the $900 billion in aid.

2) There are eleven GOP senators who plan to object to certification of the election results, with Vice President Pence welcoming their move on January 6. So far, every state has certified their election results. The senators’ opposition to official certification is considered to only stall Congress by a matter of hours in finalizing the results. Nearly one-quarter of the Senate Republicans have broken with GOP leaders to join the effort to invalidate Biden’s win. Meanwhile, in the House, over half of the Republican members have said that they will vote on January 6 to block certification of the election results.

3) Nancy Pelosi has been reelected speaker of the house despite a narrow majority, for a fourth non-consecutive term, to lead the House of Representatives, despite suffering a handful of defections in a narrow vote. After serving for 17 years in charge of the House Democrats, Pelosi ran unopposed in her election. The Democrats’ had their smallest majority in decades and a pandemic that has hindered attendance. Some in her caucus have agitated for new leadership, and Republicans were unified against her. She received 216 votes, compared to House Republican leader Kevin McCarthy 209 votes.

4) Stock market closings for – 31 DEC 20:

Dow 30,606.48 up by 196.92
Nasdaq 12,888.28 up by 18.28
S&P 500 3,756.07 up by 24.03

10 Year Yield: down at 0.92%

Oil: up at $48.42

22 July 2020

1) China, with the second largest economy in the world, is steadily developing into a technological powerhouse that could upend the status quo. China’s ten year plan called “Made in China 2025”, has a principle goal for China to catchup, then surpass the West in various technological fields. Some consider this not only threatens the U.S. economy, but the world economy too. China has already declared they intend to be the dominate power in the world by 2050, and having the high ground in technology development is a key milestone in that quest.

2) Some consider that the stock market will likely head upwards to a new high, fueled by borrowing and money printing. With another stimulus package in the near future, it is ‘out of fashion’ to consider how the borrowed money will be paid back. The central banks, who are not elected, stand ready to print as much money as is wanted, no matter that historically this is how inflation is created and fuel. Example is the Weimar Republic (Germany) who induced their great wave of hyper inflation by printing massive amounts of money in the 1920’s, that lead the way for the Nazi’s to ascend to power. Other problems stemming from printing too much money is currency depreciation, difficulties borrowing, higher interest rates and social unrest. With other investments limited, the excess of money goes to the stock market, thus pushing the market up, and possibly into a bubble just waiting to pop!

3) The Congress remains busy crafting a second stimulus package with lots of debates what should and shouldn’t go in it, intending on having a deal worked out by the end of next week. However, this could go into August before a bill is ready to sign. A major point of contention is checks vs taxes. Should stimulus be checks like the $1,200 checks given out a few months?. If checks, then who gets them this time and how much? The other strategy is reducing payroll taxes, but this only helps those who are working. The Republicans are proposing a $1 trillion dollar relief strategy, while the Democrats propose a sweeping $3.5 trillion dollar plan. This would add to the $2.9 trillion dollar package already implemented early this year. As usual, everything is being done will little to no real analysis, instead relying on gut feelings of lawmakers in making the future of America.

4) Stock market closings for – 21 JUL 20:

Dow 26,840.40 up 159.53
Nasdaq 10,680.36 down 86.73
S&P 500 3,257.30 up 5.46

10 Year Yield: down at 0.61%

Oil: up at $41.58