MMA Weekly Column: August 24, 2020

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Our economy, they (Democrats and Republicans) say is broken… that the wealth gains of recent years have gone entirely to the top 1% of earners, that real wages for the middle class have stagnated and the “game is rigged.”(But) in a study published by the Brookings Institution, Stephen Rose found that the number of Americans in the upper-middle class increased from 6% in 1967 to 33% in 2016… Michael Strain’s new book “The American Dream is Not Dead” (shows) that inequality has decreased by 7% between 2007 and 2016… The populists of right and left have agreed on something that just isn’t so. The death of the American Dream has been vastly exaggerated. – Mona Charen, senior fellow at the Ethics and Public Policy Center, “The American Dream is Not Dead,” Arizona Republic, August 21, 2020.

By refusing to normalize monetary policy after the financial panic ended, (the Fed) inflated asset bubbles on stock exchanges, in corporate debt markets, urban property markets, and other parts of the world. These booms benefitted mainly asset owners at the expense of wage earners and entrepreneurs. The result was a damaging form of inequality, new in America, that rewarded asset ownership or political connections instead of innovation and hard work. This helped Donald Trump make the case that the Obama expansion had left behind working people. – “The Obama-Biden Economy Redux,” Wall Street Journal Opinion Page, August 21, 2020.

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MMA Weekly Column: August 17, 2020

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U.S. equity markets ended the (Friday) session flat in what was a quiet summer Friday trading session after lawmakers went on break without agreeing on a coronavirus relief package and retail sales softened. – Jonathan Garber, “Stocks Finish Little Changed as COVID Relief Hangs in Limbo,” https://www.foxbusiness.com, August 14, 2020.

If you looked at the end of the week in Asian equities, you may have the impression that Uranus turning retrograde this weekend is leading to an upside breakout. The Nikki and NIFTY indices are breaking out to a new post-crash high.

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MMA Weekly Column: August 10, 2020

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The Labor Department said in its Friday report that employers added 1.8 million jobs last month, sending the unemployment rate down for the third straight month to 10.2%, topping Wall Street’s expectations. The report marked the third consecutive month of job growth in the millions, indicating a slow — but steady — improvement. Still, the economy has so far added back less than half — about 42 percent — of the 22 million jobs it lost during the pandemic, data shows. There are still 10.6 million more out-of-work Americans than in February. – Megan Henney, “July Marked the Third Consecutive Month of Job Growth in the Millions,” www.foxbusiness.com, August 7, 2020.

The polls show the economy is the one issue on which a majority trusts Mr. Trump more than it does Joe Biden. But if he signs another Nancy Pelosi special, voters can be forgiven if they wonder what the economic policy difference is between Republicans and Democrats. – “Trump’s Trillion-Dollar Choice,” Opinion Page, Wall Street Journal editors, August 7, 2020.

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MMA Weekly Column: August 3, 2020

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The government reported Thursday that U.S. economy shrank at a dizzying 32.9% annual rate in the April-June quarter, by far the worst quarterly plunge ever, as the coronavirus outbreak shut down businesses, threw tens of millions out of work and sent unemployment surging to 14.7%. – The Associated Press, “Trump Floats Election ‘Delay’ Amid Claims of Voting Fraud,” www.foxbusiness.com, July 30, 2020.

Yes, some pollsters were off four years ago, but that merely confirms that polls (and pundits) are fallible, not that they are always wrong and should be ignored. Jason L. Riley, “It’s Getting Late Early for the Trump Re-Election Effort,” Wall Street Journal, July 30, 2020.

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MMA Weekly Column: July 27, 2020

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Silver prices just made their biggest weekly advance since the 2008 collapse of Lehman Brothers, but the run-up has been largely eclipsed by smaller gains in gold prices. The less-valuable metal climbed 20 percent over the past week to $23 an ounce, an increase of more than 94 percent from its bottom below $12 in March. – Jonathan Garber, “Silver Prices Poised to Outshine Gold,” www.foxbusiness.com, July 24, 2020.

So the default is to proceed on the notion that the way to hold the White House and Senate this fall is to join Democrats in a spendathon. In fact, conservative voters are increasingly unhappy about the lasting damage Washington’s aid bills are doing to both the balance sheet and the underpinnings of the private economy…The mystery is who in the White House keeps deputizing Mr. Mnuchin as lead congressional envoy, given Mrs. Pelosi’s flawless record of schooling him in the art of the deal. Kimberly A. Strassel, “The Mnuchin Follies,” Wall Street Journal, July 24, 2020.

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MMA Weekly Column: July 20, 2020

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The U.S. reported 77,200 coronavirus cases on Thursday, a record, according to Johns Hopkins University. That spike brought the total number of confirmed U.S. infections to more than 3.57 million. Covid-related deaths are up to more than 138,000. “There’s definitely a sense of nervousness in the market,” said one trader. – Fred Imbert, www.cnbc.com, July 17, 2020.

The bigger economic danger by far posed by the pandemic debt is that it will remain precisely that – debt. The U.S. thus finds itself stuck in a debt trap, alongside the rest of the world. Economists at the Bank for International Settlements coined that term to describe a situation in which prolonged low interest rates induce the accumulation of so much unproductive government and private debt that to raise taxes would risk a catastrophic financial system or fiscal crisis. –Joseph C. Sternberg, “The Covid Fiscal Crisis is About Debt and Taxes,” Wall Street Journal, July 16, 2020.

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MMA Weekly Column: July 13, 2020

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In the midst of a record second-quarter rally, (Jeffrey) Gundlach told Yahoo Finance that Wall Street’s recent out performance in the face of surging coronavirus infections was actually driven by what he dubs the “Super 6,” which consists of Facebook (FB), Amazon (AMZN), Apple (AAPL), Alphabet (GOOGL), Netflix (NFLX), and Microsoft (MSFT). “Without the Super 6, there is no earnings growth in the United States stock market. There isn’t any for the past five years. If you take them out, there’s nothing,” Gundlach added. He estimated that earnings in the stock market were the equivalent to where they were in 2016, when the market was a third lower. “So, the fundamentals are completely out of sync with how the market has been manipulated.” – Julia LaRoche, “Why the Dollar and the Tech Rally are ‘Real Risks’ to Investors,” Yahoo Finance, July 6, 2020.

Confidence builds that the country’s economy is shaking off the coronavirus pandemic. The optimism has spurred mainland Chinese stocks to multiyear highs, with the Shanghai Composite rising 16.5% over eight straight sessions of gains through Thursday. – Chong Koh Ping, Xie Yu, and Joanne Chiu, “China Cautions Investors About Market Exuberance,” Wall Street Journal, July 10, 2020.

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MMA Weekly Column: July 6, 2020

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The U.S. economy created a better-than-expected 4.8 million jobs in June as states gradually eased coronavirus restrictions, allowing more businesses to reopen and rehire idled workers. It marked the second consecutive month of growth in the millions, indicating a continued improvement in the nation’s stressed labor market as business activity resumed. The unemployment rate dropped to 11.1 percent, down from 13.3 percent in May. A separate report on Thursday showed that another 1.43 million Americans filed for jobless aid last week, indicating that layoffs are continuing to mount. – Megan Henney, “U.S. Economy Created 4.8M Jobs last Month,” https://www.foxbusiness.com/ July 2, 2020.

Unemployment is likely to remain in double digits through year end and the economic downturn will be more severe than previously forecast, according to projections released Thursday by the Congressional Budget Office. The (jobless rate) is likely to remain above the pre-coronavirus pandemic level of about 3.5% through the end of the decade.– Kate Davidson, “CBO Downgrades Economic Forecast,” Wall Street Journal, July 3, 2020.

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MMA Weekly Column: June 29, 2020

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Stocks plunged Friday as a rebound in COVID-19 infections began to slow America’s reopening from economically wrenching lockdowns meant to curb the pandemic’s spread. The U.S., which has the most cases in the world, recorded an all-time high of about 40,000 new ones on Thursday after states and cities began allowing people back in stores, restaurants, and public gathering spots such as beaches. – James Langford, “Stocks Slide as Coronavirus Spike Slows US Reopening,” www.foxbusiness.com, June 26, 2020.

Stephen Roach, Yale University senior fellow and former Morgan Stanley Asia chairman, has a warning for U.S. dollar bulls. The prominent economist says that the era of the U.S. buck may be coming to an end and is forecasting a 35% decline soon in the U.S. currency against its major rivals, citing increases in the nation’s deficit and dwindling savings. (He) said that the rise of China and the decoupling of the U.S. from its trade partners is setting the stage for a dramatic weakening of the U.S. currency in the next few years that is likely to end the supremacy of the monetary unit as the world’s reserve currency.-Mark DeCambre, “The Dollar is Going to Fall Very, Very Sharply, Warns Prominent Yale Economist,” www.marketwatch.com, June 23, 2020.

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MMA Weekly Column: June 22, 2020

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Stocks finished Friday lower, after swinging wildly throughout the session due to technical factors. A number of headlines also raised concern about a resurgence in the coronavirus and a slowdown in the economy’s recovery… Apple said it’s reclosing a total of 11 stores in Florida, Arizona, South Carolina and North Carolina. – Fred Imbert and Yun Li, “S&P Ends Roller-Coaster Session Lower, But Ekes Out Gain for the Week,” www.cnbc.com, June 19, 2020.

Heliocentric Mercury was indeed at work early this week. This started June 16 and remains in effect through June 28. This one will be interesting because now Mercury’s geocentric position has turned retrograde (June 18-July 12). This could get wacky, or rather more whacky, because helio Mercury in Sagittarius is given to wild price swings and Mercury retrograde is given to… tricks and misdirection. It is a good time be a chiropractor, or at least know a good one.

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