David Rosenberg: With U.S. Economy in Disarray, A Democratic Sweep Could Spell More Trouble for Markets
David Rosenberg
Financial Times, July 27, 2020At some point after Labor Day, the U.S. election will take centre stage. I was stunned to see, over the weekend, a Quinnipiac poll showing Donald Trump behind Democratic rival Joe Biden in Florida by 13 points. A Wall Street Journal/NBC survey also showed 50 per cent of the electorate indicated they will not vote for the President under any circumstances, versus 37 per cent for Biden.The latest U.S. elections roll around as the economy is clearly in disarray.
Is the end-game near for oil?As of mid-July, 55 per cent of the 132,500 U.S. business closures on Yelp, a crowd-sourced review website, have now shown to have been permanent.
Restaurants and retail are clearly the hardest hit. Flight and hotel reservations are now being cancelled at peak season, while bars are being forced to close again, even in Las Vegas. Data from OpenTable reveals that restaurant activity has tapered off following a brief burst of demand in May and June.
And the labour market is cooling off in a material way — not just the hooking-up in initial jobless claims (and right in the same week that the payroll survey was taken), but the work I have gleaned concludes that the Payroll Protection Program boosted employment between 1.4 and 3.2 million in May and June.
This means that this temporary, or maybe not-so-temporary, program was responsible for half the job gains in the past two months — that had the stock market bulls in a tizzy.
And we have the added data from the Weekly Census Bureau that shows that employment has declined since the June U.S. jobs report. Someone in the consensus forecast is actually calling for a one million setback in the payroll number that comes out on Aug. 7. Hold on to those long U.S. Treasuries!
Data from Homebase, which tracks hours and schedules for local businesses and employees, supports the thesis that the jobs recovery is stalling. This is a shocking statistic: five per cent of small businesses have already been forced to close down again due to the COVID-19 resurgence — reportedly taking small business employment back to the level it was at the end of May.
The risks of a fiscal cliff, big or small, are coming our way as the Senate Republicans pull off their version of (U.S. President) Herbert Hoover. No doubt we will see something, but apparently nothing close to the House bill that calls for US$3.5 trillion of “stimulus” — the Senate seems set for something closer to US$1 trillion.
In a world of second derivatives, “reduced stimulus” is the same thing as “fiscal drag.” As an example, the GOP senators want to limit the coronavirus boost to unemployment benefits to US$100 per week, from US$600 per week currently. Let’s do the math. There are about 30 million Americans receiving jobless benefits — so the reduction in fiscal assistance would amount to a total cut in aid of US$60 billion per month. That isn’t small. … [To read the full article, click the following LINK – Ed.}
______________________________________________________
The Biden-Sanders Manifesto
Phil Gramm
WSJ, July 30, 2020
When unemployment and poverty rates hit record lows in late 2019, while retirement accounts and average household incomes surged to record highs, Joe Biden understood that general-election voters would never go for Bernie Sanders’s tax-and-spend socialism or Elizabeth Warren’s command-and-control version. Mr. Biden also bet, taking longer odds, that the Democratic establishment and ultimately the Democratic primary voter, desperately wanting to retake power, would reject his primary rivals as well. So Mr. Biden offered a nicer version of the status quo. “Nobody has to be punished,” he told donors in June 2019. “No one’s standard of living will change, nothing would fundamentally change.”
Despite Mr. Biden’s shaky start, he surged in South Carolina once Democrats faced the reality that the alternative was Mr. Sanders, a self-identified socialist who was on record saying positive things about Venezuela, Cuba and the Soviet Union. The establishment swung behind Mr. Biden and the primaries were over.
Yet after he won the nomination as the only “moderate” in the race, the new world of the coronavirus shutdown revealed a new candidate who wants “not just to rebuild the economy, but to transform it,” as Mr. Biden said in a May address. In rapid succession he adopted the Sanders platform, the cornerstone of the Warren candidacy, and the most radical racial agenda in recent U.S. history.
Mr. Biden’s dramatic political transformation has exposed what many have always suspected: Moderate Democrats aren’t socialists unless they think they can adopt socialist policies and survive politically.
The Biden-Sanders “Unity” manifesto envisions the socialism of an all-encompassing welfare state, with virtually every need a right, and every right guaranteed by taxpayer funding. Housing becomes a right, and “no one should have to pay more than 30 percent of their income for housing.” Public colleges will be “tuition-free” for “roughly 80 percent of the American people.” Student loans are expunged, payments are capped and eventually forgiven. School lunches, along with breakfast and supper, will be universally free.
On health care, Mr. Biden bought Mr. Sanders’s “Medicare for All” scheme—though on an installment plan. First health care becomes a right where “no one pays more than 8.5 percent of their income.” Mr. Biden’s planned public option is heavily subsidized, with no deductibles and low copayments. Like current Medicare, this “Medicare option” would further inflate the cost of private plans by making them pay more to compensate for government’s underpayment to hospitals and doctors. The inevitable result would be that the Medicare option would quickly “compete” private plans out of business. Commercial banking would be similarly threatened by new publicly backed post-office banks along with the Federal Reserve, which Mr. Biden wants to grant permanent authority to lend to businesses. … [To read the full article, click the following LINK – Ed.]
______________________________________________________
Biden Eyes Major Shifts in US Foreign Policy, Including Restored Palestinian Aid
Matthew Lee and Will Wissert
Times of Israel, Aug. 3, 2020
Should former US vice president Joe Biden win the White House in November, America will likely be in for a foreign policy about-face as Biden reverses, dismantles or severely curtails many of President Donald Trump’s most significant and boldest actions.
From the Middle East to Asia, Latin America to Africa and, particularly, Europe, and on issues including trade, terrorism, arms control and immigration, the presumptive Democratic nominee and his advisers have vowed to unleash a tsunami of change in how the US handles itself in the international arena.
With few exceptions, Americans could expect Biden to re-engage with traditional allies. Where the iconoclastic Trump has used blunt threats and insults to press his case, Biden, a former senator, would be more inclined to seek common ground.
Historically, US foreign policy hasn’t changed drastically as the presidency shifted between Democratic and Republican administrations. Allies and adversaries stayed the same and a non-partisan diplomatic corps pursued American interests.
That changed with Trump. Under his “America First” policy, he viewed both allies and the foreign policy establishment with suspicion, while speaking warmly of adversaries like North Korea’s Kim Jong Un and Russia’s Vladimir Putin.
But Trump found it hard to make swift changes. Academics often say that American foreign policy is like an aircraft carrier: Easy to order a wholesale change of direction from the bridge, but far more difficult and time-consuming to alter course.
Trump saw that when he was unable to extricate the US from the Iran nuclear deal for more than year. His well-publicized withdrawals from the Paris Climate Accord and the World Health Organization won’t actually become final until after the November 3 election, if ever. His decision to redeploy thousands of troops from Germany could take years.
Trump’s initial problems may have reflected a lack of governmental experience by both him and his top advisers. That created a steep learning curve that was complicated by their intense distrust of national security institutions.
Biden, with his Senate and White House experience, may be better positioned to deliver on change swiftly. Biden told reporters Tuesday in Delaware that he knows “how to get things done internationally.”
“I understand the national security and intelligence issues,” he said. “That’s what I’ve done my whole life. Trump has no notion of it. None.”… [To read the full article, click the following LINK – Ed.]
______________________________________________________
Caroline Glick: Riots and Protests from Portland to Jerusalem
Caroline B. Glick
World Israel News, Aug. 2, 2020
Over the past several years, public discourse in the United States has seen a lot of new lows. It saw another one this month when House Speaker Nancy Pelosi referred to federal officers in Portland, Oregon as “stormtroopers,” that is, Nazi Brownshirts.
In a tweet on July 18 and in subsequent remarks, Pelosi accused the federal forces deployed to Portland of “kidnapping protesters and causing severe injuries in response to graffiti.”
Pelosi’s allegations would cause a political earthquake—if they were true. But they aren’t true. And the fact that she slandered federal officers as Nazis is a deeply disturbing testament to where the Democratic Party—of which she is the senior elected official—stands today and what its intentions are.
For the past two months, the progressive city of Portland in the progressive state of Oregon, has been the scene of chaos and rioting. The liberal media have misleadingly characterized the riots as “peaceful demonstrations.”
Night after night, hundreds of “peaceful demonstrators” have vandalized and destroyed stores and other businesses, transforming downtown Portland into a war zone. Over the past five weeks, the focal point of the violence has been the federal courthouse.
“Peaceful protesters” from Antifa and other radical groups have been attacking the federal courthouse in Portland with incendiary devices including pipe bombs and commercial grade fireworks.
Federal officers charged with guarding the courthouse have been blinded with lasers and attacked with stones, metal balls shot from slingshots, bricks and two-by-fours, among other things.
The rioters are backed in their efforts by city and state officials as well as national Democrats, who have castigated federal forces protecting the courthouse as “occupiers,” the “Gestapo” and of course, “stormtroopers.”
Pelosi channels Antifa
As for the alleged “kidnapping” of peaceful protesters, local journalist Andy Ngo explained this week that Pelosi’s statement channeled Antifa propaganda.
Ngo told Fox News, “That’s an Antifa talking point that is being repeated by sympathetic media.”
He explained that federal officers charged with protecting federal property are using plainclothes agents in unmarked vehicles to peacefully apprehend leaders of the violence. This is a routine, entirely legal tactic which Ngo explained is only being castigated now because “it is quite effective.”… [To read the full article, click the following LINK – Ed.]
______________________________________________________
For Further Reference:
Former Aide Says Military Hates Trump: Diane Francis, National Post, July 23, 2020 — President Donald Trump is the “most hated” U. S. commander- in- chief in a century and the military won’t back him if he contests the results of the November election, former senior Trump aide Anthony Scaramucci says.
Trump’s Restraint Is A Good First Step If He Has Any Hope Of Gaining On Biden’s Lead: John Ibbitson, Globe and Mail, July 22, 2020 — Donald Trump’s previous coronavirus press briefings were so disastrous that aides begged him to quit. But with his re-election prospects at risk, the U.S. President decided he had no choice but to return to the White House press briefing room, Tuesday, where he offered a sombre and restrained assessment of a pandemic that, he admitted, “will probably unfortunately get worse before it gets better.”
Democrats Make Mockery of Barr ‘Hearing’: Andrew C. McCarthy, National Review, July 28, 2020 — If it’s a “hearing,” Bill Barr asked with an irked tongue in cheek, “aren’t I the one who’s supposed to be heard?”
New Disclosures Confirm: Trump Himself Was the Target of Obama Administration’s Russia Probe: Andrew C. McCarthy, National Review, Aug. 1, 2020 — Long-sought documents finally pried from U.S. intelligence agencies prove that the Obama administration used the occasion of providing a standard intelligence briefing for major-party candidates as an opportunity to investigate Donald Trump on suspicion of being a Russian asset.
