Closing Thought–03May21

When elected Biden was said by conservs that the markets would suffer…..but all their doom and gloom from the GOP and its spokesmen…….happily they were WRONG.

Modest gains for stocks nudged the S&P 500 and the Nasdaq to more record highs on Wall Street as investors braced for a deluge of earnings reports from big US companies. Of the 500 members of the S&P 500 index, 181 will report their results this week. Apple, Microsoft, McDonald’s, and Caterpillar are among the big-name companies that will be telling investors how they did in the first three months of the year. Ten of the 30 members of the Dow will also release their results.. The S&P 500 rose 7.45 points, or 0.2%, to 4,187.62. The Dow Jones Industrial Average fell 61.92 points, or 0.2%, to 33,981.57. The Nasdaq rose 121.97 points, or 0.9%, to 14,138.78. The Russell 2000 index of smaller companies rose 26.15 points, or 1.2% to 2,298.01

The stakes for investors are high this week, the AP reports. With millions of vaccines going out daily and trillions of dollars worth of government-led economic support being paid out, investors have turned much of their attention to how well the global economy—and corporate profits—will do in the recovery. Corporate profits in the S&P 500 are expected to be up 24% from this time a year ago, according to FactSet. Earnings growth is being welcomed by investors who have had to justify high stock values as many companies continue to emerge from a pandemic slump. About a quarter of S&P 500 companies have reported quarterly results so far this earnings season. Of these, 84% have delivered earnings that topped Wall Street’s estimates, according to FactSet.

Not to worry the CEOs are raking in the cash for themselves.

Once again the GOP has shown just how bad they lie and just how outta touch they truly have become.

I Read, I Write, You Know

“lego ergo scribo”

Bested By Amateurs

Have you heard the news?

The news where the hedge funds lost their collective butts.

A bunch of non-professional day traders pulled the veil over the big hedge funds…..all around the stock for Game Stop……

Two major players have admitted defeat in the “David and Goliath” battle over GameStop’s share price—but other Goliaths have made a fortune. The stock surged to a new high of $347.51 at the close of trading Wednesday, up almost 135% for the day, making a profit of around $2 billion for the firm’s largest three shareholders, and smaller profits for a horde of others, the Guardian reports. On Tuesday, two of the short-sellers targeted by an army of Reddit users closed their positions after taking major losses, reports CNBC. Andrew Left of Citron Research said the loss had been “100%.” Melvin Capital is believed to have lost billions on its bet that the retailer’s share price would drop, but fund manager Gabe Plotkin said rumors of a bankruptcy filing were untrue. More:

  • What happened? NBC explains how the struggling video game retailer became Wall Street’s hottest stock, rising more than 8,000% in six months. The frenzy began when amateur investors on the Reddit r/wallstreetbets community and other forums began buying stock and pushing the price up. Hedge funds that had shorted the stock—borrowing shares with the aim of profiting by selling them and rebuying them at a lower price later—were left in a squeeze when they had to rebuy the stock at a higher price, which sent the price even higher.
  • Professionals are “reeling.” The Wall Street Journal says professional investors are “reeling from their losses” as power shifts from them to day traders and newbie investors who use sites like Discord and Reddit to discuss which stock to pile into next—and to mock short sellers for their massive losses. On Wednesday alone, investors who took short positions in GameStop lost an estimated $14.3 billion.
  • White House is monitoring the situation. White House press secretary Jen Psaki said Wednesday that the White House and Federal Reserve are monitoring the situation with GameStop and other companies that have seen meteoric share price rises, reports Reuters. Fed chief Jerome Powell rejected suggestions that policies including ultra-low interest rates were the cause of asset bubbles.
  • Forum goes private. The r/wallstreetbets forum on Reddit was taken private late Wednesday and reappeared with a note from moderators saying that with a flood of new users, it was becoming impossible to enforce content policies, the Verge reports. “We have grown to the kind of size we only dreamed of in the time it takes to get a bad nights sleep,” they wrote.
  • AMC is also heating up. The nightmare for short-sellers is continuing with steep rises in the shares of struggling companies including AMC Entertainment and BlackBerry. The Wall Street Journal reports that the flurry of activity was so intense Wednesday that AMC Networks, which has no connection to the other AMC, also spiked more than 20%
  • AOC speaks out. “Gotta admit it’s really something to see Wall Streeters with a long history of treating our economy as a casino complain about a message board of posters also treating the market as a casino,” Rep. Alexandria Ocasio-Cortez tweeted Wednesday. Sen. Elizabeth Warren also weighed in, tweeting: “With stocks soaring while millions are out of work and struggling to pay bills, it’s not news that the stock market doesn’t reflect our actual economy.”
  • Where will it end? The New York Times notes that despite the hype, GameStop the company “isn’t noticeably different from a month ago,” which makes its share price appear “wildly inflated” and a risky bet indeed. The “weird little bubble” could cause the price of more solid stocks to drop if big investors have to offload them to cover their losses, according to the Times.

I love it!

The elites were beaten at their own game.

Well done!

After years of the 1% sticking it to the country they have been bested at their own game.

I think the Biden admin will either find the move illegal or they will put in massive restrictions and regulations.

Until then…let the ‘little guy’ hit back at the slugs on Wall Street.

Watch This Blog!

I Read, I Write, You Know

“lego ergo scribo”

Who Controls The Nation?

We can pretend that it is the president….or Congress…..or even the people….all would be truly ignorant answers…..the real power at the helm of the nation is……the “Markets” control it all.

You really believe that it is different?

For instance Donald the Orange called off any more stim packages until after the election….and the markets fell drastically….

Stocks turned sharply lower on Wall Street Tuesday afternoon after President Donald Trump ordered a stop to negotiations with Democrats on a coronavirus economic stimulus bill until after the election. The S&P 500 index slid 1.4% after having been up 0.7% prior to the president’s announcement, which he made on Twitter about an hour before the close of trading. The late-afternoon pullback erased most of the benchmark index’s gains from a market rally a day earlier, the AP reports. The S&P 500 fell 47.66 points to 3,360.97. The Dow Jones Industrial Average dropped 375.88 points, or 1.3%, to 27,772.76. It had been up by more than 200 points. The Nasdaq composite lost 177.88 points, or 1.6%, to 11,154.60.

The comments from the president came just hours after Federal Reserve Chair Jerome Powell urged Congress to come through with more aid, saying that too little support “would lead to a weak recovery, creating unnecessary hardship for households and businesses.” Optimism that Democrats and Republicans would reach a deal on more stimulus ahead of the Nov. 3 election had helped lift the stock market recently. Now, investors face the prospect that more aid may not come until next year, after the new Congress is seated, says Willie Delwiche, investment strategist at Baird. “This isn’t just pushing it off until after the election, this realistically is pushing it off until spring,” Delwiche said. “I don’t think this is just a one-day financial markets reaction. This really goes to the health of the recovery.”

Then after the fall Donald the Orange had to try and save the markets with the less than 30 days away he needs all the good news he can steal just to keep what little support he has now…..

Donald J. Trump
 
@realDonaldTrump
If I am sent a Stand Alone Bill for Stimulus Checks ($1,200), they will go out to our great people IMMEDIATELY. I am ready to sign right now. Are you listening Nancy?
 
 
Nothing I like better than a decisive president….(that is sarcasm in case you missed it)…….
 
And you think you matter.
 
Think Again!
 
The telling question will be….can Trump revive the stim talks by a simple text?
 
I Read, I Write, You Know
 
“lego ergo scribo”

The Pandemic Economy

Running pandemic tally……3.5 million cases…..138,000 deaths

Here is something to think about…..A country like India with a massive population and a worse health system than the US has only 1 million cases and 25,000 deaths…..YOU explain that!

Now on to the meat of this post……

We have all heard that the economy needs to get back to doing business…..right?

But why?

I mean the economy as defined by the media is the markets and the markets are doing very well as the bodies of the dead pile up……so what economy needs to return to doing business?

There were 71,670 new cases of COVID-19 recorded, the second-worst day on record. Nearly 1,000 people lost their lives to the disease, according to official figures.

With Texas hospitals at 90 percent capacity, dozens of mobile morgues are being dispatched to the state. In Florida, 54 hospitals now have zero available beds in their intensive care units. And, amid a full-on drive to reopen schools, officials said that one third of children who were tested in Florida were positive, adding to the body of evidence that children can play a major role spreading the disease.

The Institute for Health Metrics and Evaluation at the University of Washington reported that it estimates 224,089 people will die from COVID-19 by November 1, an upward revision of 20,000 from just one week ago.

Meanwhile, the most basic medical supplies, such as masks, gowns, gloves and disinfectants, “simply are not readily available from the usual sources our physicians use,” the American Medical Association reported.

https://www.wsws.org/en/articles/2020/07/16/pers-j16.html

Look into your finances…..are you doing as well as the media says the markets are doing?

My guess is NO.

The Real Economy sucks……financials soar……

Reports issued by four major US banks this week have highlighted the widening dichotomy between the real economy and the financial system.

The US is set to record the worst recession since the Great Depression, threatening elevated levels of unemployment well into the future and a wave of bankruptcies. Yet the banks are raking in billions of dollars through speculative operations financed by the massive intervention of the Fed into all corners of the financial markets.

On Tuesday, JPMorgan Chase, Wells Fargo and Citigroup set aside a combined total of $28 billion for current and expected losses on their loans. The second quarter provisions bring the total for the three banks for 2020 to $47 billion, more than they set aside in the last three years combined.

At the same time, two of them, JPMorgan and Citigroup, reported major increases in revenues derived from financial market trading.

https://www.wsws.org/en/articles/2020/07/16/bank-j16.html

Please do not base your life on what the media tells you is the truth……the truth is unless you are wealthy then the economy sucks!

Learn Stuff!

I Read, I Write, You Know

“lego ergo scribo”

But Markets Are Booming!

We hear every day just how the markets are doing (that would be stock markets not the food markets…although they are doing well as well with the increase in prices….you know profits are far more important than the well being of the people)…..

But reality is a lot different than the Fantasy that if markets are up then the economy is in great shape……that is a stupid statement that keeps getting regurgitated day after day……

Ask the 47% workers that are unemployed.

According to newly released Bureau of Labor Statistics (BLS) figures, 47.2 percent of working-age Americans were without work in May, the highest level recorded since the end of World War II.

The numbers are based on the BLS employment-population ratio, which takes the total labor force and divides it by the number of those actually working. It is a more accurate measure of joblessness than the monthly unemployment report, which only counts those actively seeking work.

At the end of May the employment-population ratio stood at 52.8 percent; it stood at 61.2 percent at the start of the year. The employment-population ratio reached a postwar high of nearly 65 percent in 2000.

https://www.wsws.org/en/articles/2020/07/01/jobs-j01.html

Poverty is expanding….regardless what some right wing dolts try to tell you…..I have written about this some 12 years ago…..https://lobotero.com/why-poverty/

Then there is the “inequality” thing……again many years ago a blog post…..https://lobotero.com/2010/03/09/the-creeping-cancer-known-as-inequality/

The virus has done little to change the slide of the workers into poverty….and it appears that the world economy will have a bad couple of years to come thanks to the pandemic…..

The International Monetary Fund (IMF) has significantly increased its forecast for the contraction in global economy, warning that it will take a cumulative $12 trillion hit over 2020–2021. Updating its forecast yesterday, the IMF said the global contraction for 2020 would be -4.9 percent, some 1.9 percentage points below the forecast it issued in April.

It said the COVID-19 pandemic “has had a more negative impact on activity on the first half of 2020 than anticipated, and the recovery is expected to be more gradual than previously forecast.” Overall, this would leave 2021 gross domestic product (GDP) some 6.5 percentage points lower than the pre-pandemic projections of 2020.

https://www.wsws.org/en/articles/2020/06/25/imfr-j25.html

We have an election approaching…you can help change the trajectory of the economy by voting……and it needs a change….

Trump’s nationalism is clear, but is U.S. capitalism turning nationalist too?

Broadly, U.S. employers neither think nor care much about racism. Some use it to divide employees, keep them from unifying around workplace issues, labor unions, unwanted political initiatives, etc. Most ignore it unless and until gross racism brings victims and anti-racists into the street in ways that threaten their commerce or the economic status quo. Then lip service against racism flows. Corporations make mostly cosmetic adjustments hyped by major public relations efforts. At best, a few genuine, usually marginal improvements are achieved in racial integration and the excruciatingly slow decline of institutional racism.

US global capitalist leadership of the last 50 years is now in decline

Learn Stuff!

VOTE!

I Read, I Write, You Know

“lego ergo scribo”

What Kinda System Is This?

From the start of this pandemic I have been saying that this system is rigged and sick and needs to change for the good of the people of this nation…

Again we have 2.1 million new unemployment claims and 100,000 deaths from this virus and yet the markets rise above 25,000…..what makes the market so excited?

The trading floor of the New York Stock Exchange was reopened on Tuesday morning for the first time since March 23. Among those present to celebrate the ringing of the opening bell was New York Governor Andrew Cuomo, who abandoned the somber demeanor of his daily coronavirus updates and shared elbow bumps with Wall Street investors. For the next six-and-a-half hours, the financial community continued its celebration of the pandemic’s bull market.

When the trading floor was closed down in March, the Dow Jones Industrial Average was down to 18,000. It has since risen approximately 40 percent. Flush with trillions of dollars of bailout money provided by the CARES Act, the Dow Jones Industrial Average rose yet another 530 points, an increase of 2.2 percent over its close last Friday.

https://www.wsws.org/en/articles/2020/05/27/pers-m27.html

Is it the deaths (100,000+) that makes the markets optimistic?  Maybe it is the unemployed (40 million)…..or maybe the markets know that they are well protected…..(my bet is on the later)……

It is time to re-think this bullshit system for one that is good for everyone….one that gives all a fair chance to succeed.

And also when Congress can profit through insider trading the system is rigged in favor of those with the cash…..

The Justice Department has closed insider trading investigations into three senators who sold off stocks following early briefings on the coronavirus, aides told NBC News.

A spokesman for Sen. Kelly Loeffler, R-Ga., confirmed that she had been informed that the Justice Department had dropped an inquiry into her trades and called the allegations “politically motivated.”

“Today’s clear exoneration by the Department of Justice affirms what Senator Loeffler has said all along — she did nothing wrong. This was a politically-motivated attack shamelessly promoted by the fake news media and her political opponents. Senator Loeffler will continue to focus her full attention on delivering results for Georgians,” said the spokesman, Stephen Lawson.

https://www.nbcnews.com/politics/congress/justice-department-drops-insider-trading-probes-three-senators-n1215196

I was hoping but I knew deep down the Barr and the DoJ would let this ride and protect the spineless slugs in Congress from prosecution….if you are part of the GOP and Trump’s minions you can do as you like with no retribution for bad acting…..

I Read, I Write, You Know

“lego ergo scribo”

Is The Economy Rigged?

My answer ….yes….. you bet your sweet bippy it is.

But I am sure that there will be those that do not agree with my assessment…..

Let me point to the stock markets during these trying times….over 30 million Americans are unemployed and yet the stock markets are still going great guns…..

The stock market is doing fine, even though everything else is definitely not.

Earlier in the coronavirus crisis, Wall Street had a meltdown. Stocks plunged amid fears of the disease’s spread and its potential impact on the global economy, sometimes to the point that trading was halted altogether to rein in the chaos. But in recent weeks, the market has been doing okay. It’s not at the record highs it was in mid-February, but it’s not bad — the S&P 500 is hovering around where it was last fall. And given the state of the world — a deadly global pandemic with no end in sight, 30 million Americans recently out of jobs, an economy that’s fallen off of a cliff — a relatively rosy stock market is particularly perplexing.

Sure, the stock market isn’t the economy, but right now, it seems particularly divorced from what’s happening on the ground. “The gap between markets and economic data has never been larger,” wrote Matt King, global head of credit strategy at Citigroup, in a recent note.

https://www.vox.com/covid-19-coronavirus-economy-recession-stock-market/2020/5/6/21248069/stock-market-economy-federal-reserve-jerome-powell

The latest reports on the economy are grim…..

The Dow Jones Industrial Average surged more than 300 points at opening Friday, while the S&P 500 and Nasdaq continued to steadily climb from a low point in late March, when states across the country were imposing economic shutdowns.

The Dow also increased by 250 points right after the Labor Department released its May jobs report Friday, which showed an official unemployment rate of 14.7%, the highest since the Great Depression. Economists estimate that including people who lost their jobs in the last two weeks and people who have not filed for unemployment, the actual unemployment rate is likely higher than 20%.

https://www.commondreams.org/news/2020/05/08/what-rigged-economy-looks-says-sanders-stock-market-enjoys-best-month-33-years

I agree that it is time for the economy to be more reflective of society….granted the markets are NOT the economy…but those thieves need reining in….

Even Trump’s lackeys are not painting a rosy picture for this Summer…..

The US economy is in rough shape, and things are going to get worse. That was the dire prediction from not one but two of the White House’s top economic advisers Sunday, per the Washington Post:

  • “The reported numbers are probably going to get worse before they get better,” Treasury Secretary Steven Mnuchin said on Fox News Sunday. “I think you’re going to have a very, very bad second quarter.” Asked by host Chris Wallace whether the nation’s unemployment rate was “close to 25% at this point, which is Great Depression neighborhood,” Mnuchin replied, “Chris, we could be.”
  • “To get unemployment rates like the ones that we’re about to see … which I think will climb up towards 20% by next month, you have to really go back to the Great Depression to see that,” said White House economic adviser Kevin Hassett on CBS’ Face the Nation. He predicted the rate will be “north of 20%” by next month, and added that “nobody knows” when the jobless will be able to go back to work.
  • But it wasn’t all dire; Mnuchin predicted the job market could start to improve by September. The situation we’re in, he noted, “is no fault of American business, it is no fault of American workers, it is the fault of a virus.” And Vox notes that on ABC’s This Week, Larry Kudlow, director of the Trump administration’s National Economic Council, said that of the latest unemployment numbers, “80% of it was furloughs and temporary layoffs,” which “suggests strongly that the cord between the worker and the business is still intact.”

This economy is driven by greed, pride, gluttony and vanity….we need an economy that benefits everyone not the wealthy few.

To prove that point I point to the recent report that 20.5 million Americans are unemployed…..and that same day there was a market rally…..

The clearest illustration of that came on Friday, when the government reported that 20.5 million people lost their jobs in April. It marked a period of unfathomable pain across the country not seen since the Great Depression. Also on Friday, the stock market rallied.

The S&P 500 is now up 30% from its lows in mid-March and back to where it was last October, when the outlook for 2020 corporate earnings looked sunshiny. Companies have sold record amounts of debt in recent weeks for investment-grade companies. Junk bonds, historically dodgy during an economic swoon, have roared back.

https://www.propublica.org/article/the-bailout-is-working-for-the-rich

Now you tell me who benefits the most from this system?

Count out the workers….and the nation……

Learn Stuff!

I Read, I Write, You Know

“lego ergo scribo”

Covid Capitalism

The workers are losing their jobs….and yet the markets are doing so well during this time that shareholders are making billions…..why is this?

Five major U.S. corporations that have laid off thousands of workers in recent weeks have simultaneously dished out hundreds of millions of dollars in cash dividends to wealthy shareholders, drawing outrage from Sen. Bernie Sanders and others who say the companies should be using the money to keep people employed.

The Washington Post reported Tuesday that manufacturing giant Caterpillar, toolmaker Stanley Black & Decker, clothing company Levi Strauss, office furniture company Steelcase, and World Wrestling Entertainment have paid out a combined $700 million in cash dividends to shareholders while they shutter operations and lay off employees as the Covid-19 pandemic continues to ravage the U.S. economy.

https://www.commondreams.org/news/2020/05/06/outrageous-major-us-companies-hand-shareholders-hundreds-millions-dividends-while

Seems like bodies are commodities…..

The allure of capitalism has never been a clean or ethical one—the very roots are predicated on a system of continued growth and extraction, only becoming less feudal and more “modern” with the advent of beliefs that technological advances could usher in continued input to help the system survive. This has been true in some ways, such as the advent of fracking, which was able to massively disrupt Hubbert’s peak (the bell curve expected to show the gradual diminished reserves of oil). That peak was extended like a covid graph 10 days after an evangelical beach party. The rub with all things extractive and unsustainable is that there is always inherent blow-back. Just because there is more petro-product to burn doesn’t mean those greenhouse gases won’t build up from actually burning them—there will be hell to pay. This is because the natural world has a way of slapping down hubris with an intangible, almost sentient response to the greed.

Capitalism’s Voracious Appetite: Bodies are the Commodities

Instead of helping the US deal with the coming viral storm….companies kept shipping much needed supplies overseas…..

U.S. companies continued their massive sell-off of medical masks overseas throughout March, well after the coronavirus began infecting Americans and draining hospitals of critical supplies and even as White House officials raised red flags, a USA TODAY investigation found. 

America exported more protective masks — including disposable surgical masks and N95 respirator masks — this March than in any other month in the past decade. In all, $83.1 million worth of such products were sent from the United States to the rest of the world, according to an analysis of the latest U.S. Census Bureau trade data for the export category that includes textile-based protective masks.

https://www.usatoday.com/story/news/investigations/2020/05/08/u-s-companies-kept-shipping-masks-overseas-despite-warnings/3090505001/

The capitalism has grown into profits even at the price of screwing the country…..there is no “patriotism” in the souls of these corporations….

…consider 23 ways in which it is a crisis of and by capital and its class rule profits system:

+1.  The Straw that Broke the Camel’s Back. United States capitalism was already on the verge of a major recession before COVID-19 hit.  All the classic signs were there:  absurdly inflated P/E ratios s (an absurdly inflated stock market), massively deb-leveraged corporations, giant consumer and student debt, savage economic inequality (so extreme that the top tenth of the U.S. upper 1 percent had more wealth than the nation’s bottom 90 percent), tens of millions living just one inadequate paycheck away from being unable to meet basic living expenses, and more.  If the virus hadn’t broken that camel’s back, something else would have done the job, albeit with a less devastating impact than an epic pandemic.

Coronavirus Capitalism and “Exceptional” America  

It is time for a change….but this election will bring NO CHANGE….mostly a few reforms that do nothing but strengthen the hold that capital has on the nation….and more people will suffer and die…..

WE NEED CHANGE NOW!

WE NEED STRONG UNIONS!

Will you be part of it or just a by-stander?

I Read, I Write, You Know

“lego ergo scribo”

Markets Go Up….Markets Go Down

We have had a volatile few weeks in the markets…..up….down….up again…..down again…..

Just the other day the markets went up then down 2000 pts and then up 1000 then down another 1000…..markets are waiting for Trump to do something to off-set the market losses…..

US stocks slid on Wednesday as investors mulled the timeline for the White House’s stimulus measures in response to the coronavirus outbreak.

All three major indexes tanked roughly 5%, erasing gains made during Tuesday’s rebound. The drop ushered in another day of heightened volatility from coronavirus risks and the escalating oil-market war between Russia and Saudi Arabia.

Investors initially expected stimulus details to be announced Tuesday. Markets surged through the previous session amid reports that President Donald Trump wanted to cut payroll taxes through the November election. The fiscal stimulus would join the Federal Reserve’s early-March monetary-policy boost.

https://markets.businessinsider.com/news/stocks/stock-market-news-today-index-reaction-coronavirus-white-house-stimulus-2020-3-1028985996

Trump’s ace in the hole for the election is the good economy……and with the virus crapping all over his rep as an astute businessman…..he may decide to do something to help and to improve his chances for the next election….

President Trump on Tuesday proposed eliminating the payroll tax until the end of the year to mitigate the effects of the coronavirus. A few different timelines were discussed during a closed-door meeting with Republican lawmakers, with some talk of the rollback stretching beyond 2020, officials tell NBC News, adding Trump favors a cut that would last at least until November. Payroll taxes are paid by employers and employees to fund Social Security and Medicare. Employees pay 6.2% on the first $137,700 of their income for Social Security, and 1.45% of all their earned income for Medicare, with employers matching those amounts. Under the Obama administration, the Social Security payroll tax was temporarily cut to 4.2%, per CNN. The idea of a 0% payroll tax rate is reportedly being met with resistance from Republican senators, per CNBC.

Officials tell the Wall Street Journal that the April 15 tax deadline is also likely to be extended, though a specific date hasn’t been decided, nor is it clear who would qualify for the extension. Republicans also discussed federal assistance for the shale oil industry, which is suffering as a result of a price war between Russia and Saudi Arabia. “They are talking about specific industries that would be hurt the worst and to try and get first of all this payroll tax deduction,” GOP Sen. David Perdue of Georgia tells NBC. “That’s at the top of my list as having immediate impact,” but “if you’re not getting paid, that doesn’t help.” Any economic stimulus plan would need to be approved by Congress. House Speaker Nancy Pelosi said Tuesday that Democrats were working on a plan of their own.

Something needs to be done to calm the nerves of the profit takers…..but is the proposed plan anything but a secret attack on Social Security?

Economists and progressive advocacy groups are warning that President Donald Trump’s proposal to cut or temporarily suspend the payroll tax in an effort to mitigate the economic impact of the coronavirus is “a Trojan Horse attack on our Social Security system” that will do little to help most U.S. households.

Slashing the payroll tax, the primary funding mechanism for Social Security, “is the wrong way to go,” said Dean Baker, senior economist at the Center for Economic and Policy Research (CEPR).

https://www.commondreams.org/news/2020/03/10/stealth-attack-social-security-trump-condemned-exploiting-coronavirus-crisis-push

But do not worry the president went on national TV to calm the frayed nerves…..and it did not go so well…..

President Trump announced a 30-day ban on travel to the US from Europe Wednesday night—but the anti-coronavirus move did not reassure the stock market. CNN reports that Dow Jones futures plummeted more than 1,000 points overnight, setting up another day of stock market carnage Thursday, the day after a 1,465-point plunge officially ended the 11-year bull market. Asian markets also saw major falls Thursday, and European markets suffered in early trading, with Britain’s FTSE 100 down 5.7% to 5,542.17. Analysts say investors were dismayed by Trump’s failure to set out a comprehensive medical and economic response to the outbreak and its effects. More:

  • Travel ban clarified. Trump initially said all travel from Europe—excluding the UK—would be suspended for 30 days, but officials later clarified that the ban only applies to foreign nationals who have been in the 26 Schengen Area countries that allow passport-free travel between each other, the AP reports.
  • Britain won’t follow suit. Authorities in Britain say they won’t copy the US ban on flights from the European Union, the Guardian reports. “With regard to flight bans we are always guided by the science as we make our decisions here,” health secretary Matt Hancock said Thursday. “The advice we are getting is that there isn’t evidence that interventions like closing borders or travel bans are going to have a material effect on the spread of the infections.”
  • EU condemns move. The European Commission slammed Trump’s move in a statement Thursday, reports the New York Times. “The coronavirus is a global crisis, not limited to any continent and it requires cooperation rather than unilateral action,” the EU’s governing body said. “The European Union disapproves of the fact that the US decision to impose a travel ban was taken unilaterally and without consultation.”
  • Airlines hardest hit. The Wall Street Journal reports that airlines and cruise ship operators have been the hardest hit by pretrading drops, with America Airlines, Delta, and United all down at least 10%. Analysts say that with the full effect of the virus and containment measures on the world economy still largely unknown, markets may remain volatile for weeks to come.

Sorry but the markets are not showing much faith in the proposals by this president….and today’s opening shows the lack of confidence in the president…..

The market is cratering at the open, and it happened so fast that trading was suspended for the second time this week. The Dow fell more than 1,700 points, about 7%, after another string of worrying coronavirus developments. The benchmark S&P fell 7% as well, and that triggered a 15-minute “circuit breaker” pause in trading, reports CNBC. The plunges come after the Dow slipped into a bear market Wednesday after 11 years of a bull run. On Thursday, the S&P also entered a bear market.

Meanwhile, the New York Stock Exchange is exploring the unprecedented step of closing its trading floor and switching to electronic backup systems, reports the Wall Street Journal. The move comes amid a push to discourage large gatherings of any kind as a way to curb the spread of the disease.

I Read, I Write, You Know

“lego ergo scribo”

Is Saudi Arabia Broke?

I ask this question because of a report that I read last week……I seems that the oil arm of the Saudi royal family, ARAMCO, is about to offer an IPO on the stock exchange……

Saudi Arabia began an initial public offering Sunday of a sliver of oil giant Saudi Aramco after years of delay, hoping international and local investors will pay billions for a stake in the kingdom’s crown jewels, reports the AP. An approval by Saudi Arabia’s Capital Market Authority served as the starting gun for an IPO promised by Crown Prince Mohammed bin Salman since 2016. But unlike traditional IPOs, Saudi Aramco offered no hoped-for price range nor idea how much of the firm would be offered on Riyadh’s Tadawul stock exchange. Analysts say the kingdom likely hopes local investors will push share prices toward a desired $2 trillion valuation and buoy that price ahead of any further listing abroad. Saudi Aramco made a point in its filings to highlight its profitability and low costs through data once held as a state secret by the royal family, euphemistically referred to as its “current shareholder.”

However, economic worries, the trade war between China and the US, and increased US crude oil production have depressed energy prices. A Sept. 14 attack on Saudi Aramco spooked some investors, with one ratings firm already downgrading it. It’s hard to overstate Saudi Aramco’s power: It produces over 10 million barrels of crude oil a day, some 10% of global demand. The firm’s net income in 2018 was $111.1 billion, far beyond the combined net income of oil giants BP, Chevron, Exxon Mobil, Royal Dutch Shell, and Total SA. Al-Arabiya reported last week that pricing for the stock will begin Nov. 17. A final price will be set Dec. 4, with shares beginning to be traded on the Tadawul on Dec. 11. Analysts say a $2 trillion valuation—Apple and Microsoft are $1 trillion each—may be a stretch. By announcing the start of the IPO on Sunday, Prince Mohammed may have been convinced to take a lower valuation in order to get the IPO moving.

Why would the Royals who own the oil in Saudi want to submit to the regulations of a stock exchange?

Then maybe Gen. Petraeus has the answer……

Gen. David Petraeus, the retired four-star Army general and former head of the CIA, told CNBC on Thursday that Saudi Arabia is “gradually running out of money.”

Petraeus said the Saudi’s need their initial public offering (IPO) of the state-run oil company Aramco, to be successful. In December, the Saudis plan on releasing some shares of Aramco to the public in an effort to attract outside investors.

The IPO is part of Crown Prince Mohammad bin Salman’s “Vision 2030,” his effort to diversify Saudi Arabia’s economy and reduce its dependence on oil exports. Petraeus said Saudi Arabia’s budget deficits can be “anywhere from $40 to $60 billion” each year, depending on the price of oil.

When asked about other people’s criticisms of the crown prince, Petraeus said it was in the entire world’s interest to see “Saudi Arabia succeed” and to also see it “moderate” some of its practices.

(antiwar.com)

Petraeus is currently the chair of the KKR Global Institute, a branch of the American global investment firm KKR. Petraeus said there is no KKR investment into Saudi Arabia he is aware of yet, and that the Saudis need to “regain the confidence of all the investors of the world.” But Petraeus did say KKR has invested elsewhere in the region and put $2 billion into the United Arab Emirates’ Abu Dhabi National Oil Company.

Why is Saudi running out of cash?

Why would the Royals allow someone to gain control over their production?

I Read, I Wrote, You Know

“Lego Ergo Scribo”