4 September 2020

1) For first time since World War II the U.S. government’s debt will nearly equal the size of the entire American economy. By the end of 2020, the amount of debt owed by the United States will be about 98% of the nation’s gross domestic product with a debt that is about three times the 2019 level. The huge surge in debt is a result of the Congress spending an additional $3 trillion dollars in emergency funding since March, a result of the economic downturn from the coronavirus crisis. This is why some members of Congress and the White House have balked at approving an additional $2 trillion dollars in spending in view of the weak economy coupled with having little promise of improving soon. Few experts believe the Congress is likely to do something to reduce the deficit in the short term, all the while unemployment remains near 10 percent. Interest rates are low, which makes it less costly for the federal government to borrow. In addition to increase emergency spending, tax revenues fell as business slowed and many people lost their jobs.

2) After a steady increase in the markets, setting new records for highs, the stock markets took a sudden nose dive. This was caused by a massive and sudden sell off of the technology sector. The tech stocks had been on a ten day winning streak then a sudden overnight change which caught everyone by surprise. The Nasdaq dropped almost 600 points while the Dow was down 800 points. Market experts are left wondering what will come next, especially with the next jobs report for August coming out.

3) The pace of rehiring is expected to slow in August, so the economy will likely add fewer jobs than in July, while workers continue to be laid off. Because of the pandemic, America lost about 22 million jobs in March and April. In May through July, about 9.3 million jobs came back, so we are still short about 12 to 13 million jobs. Part of this is a result of so many small businesses having gone bust, so it will take a long time to replace those businesses and therefore replace the jobs they had. Economic turmoil is when technology displacement is prevalent as business seek the means to survive by reducing labor cost (eliminating jobs).

4) Stock market closings for – 3 SEP 20:

Dow 28,292.73 down 807.77
Nasdaq 11,458.10 down 598.34
S&P 500 3,455.06 down 125.78

10 Year Yield: down at 0.62%

Oil: down at $41.03

11 November 2019

1) General Motors announced it has sold its Lordstown Assembly plant in Ohio, which has been idle since 8 March. The 6.2 million square foot facility was sold to an investment group called Lordstown Motors, in conjunction with Workhorse Group, a maker of electric trucks, for an undisclosed amount. The company plans to build its Endurance electric pickup focusing on electric pickup trucks for commercial fleets. The operation is expected to create 450 jobs.

2) Truck drivers cheer the automation of LA ports with robots, which will reduce their wait time to be loaded, while the longshore locals, with 9,300 register members, are fighting the robots. The 13,000 truckers are nonunion who get paid by the load-trip and have little to no fringe benefits, while the longshoremen have excellent pay and benefits. The truckers must wait from half an hour to as much as seven hours, for which they receive no pay for. The robots will automate the loading/unloading process reducing the wait times for truckers.

3) Today, 44% of Americans, age 18 to 64, are low-wage workers with a median wage of $10.33 an hour. This is despite a near five decade low in unemployment, the workforce participation at its highest in six years. Low wage workers is defined as those who earn less than two-thirds the median wage. There are 53 million low wage Americans who have little prospects for anything better in life, with nearly half of those working in just ten occupations such as cooks, cleaners, construction and retail sales.

4) Stock market closings for – 8 NOV 19:

Dow          27,681.24    up      6.44
Nasdaq       8,475.31    up    40.80
S&P 500      3,093.08   up       7.90

10 Year Yield:    up   at    1.93%

Oil:    up   at    $57.44