WASHINGTON (MaceNews) –-The following is Friday’s status check of developments in the U.S. that can influence economic, health and political outcomes:
- A week of many parts, – some scary, some absurd, some mystifying – and yet only a very few worth holding on to, with meaning for the future. That narrows it down to Tuesday’s unexpected agreement between House Speaker Nancy Pelosi and Treasury Secretary Stephen Mnuchin. Unexpected because it involved giving up leverage, something counterintuitive in the middle of a face-off like the one between House Democrats and the White House. Who blinks first on the size and scope of the next virus relief package? The agreement was for neither side to threaten a government shutdown midnight Sept. 30. Both sides must realize that a disgruntled electorate, facing so much uncertainty and experiencing so much anxiety, might not applaud when government services stopped a few weeks before a choice of the next president. Vice President Mike Pence confirmed the agreement in his appearance Friday on CNBC. Now, he said, both sides can focus on renewed unemployment benefit enhancements, aid for near-bankrupt small businesses, money for testing, contact tracing, medical supplies. And some money – how much is the big sticking point – for one of the nation’s biggest employers, government at the state and local level. The White House side insists no bailouts for states poorly run by Democrats. Pelosi says in that case, the White House doesn’t get that liability protection from virus lawsuits it wants. No White House signing ceremony for President Trump when he needs it most.
- How about the scary parts? One of them was that range of projections of future U.S. virus deaths by the IHME. Back when the Corona Virus Task Force was allowed to hold briefings, it was often quoted as the gold standard of virus estimates and often its estimates turned out to be far too low. Now its current estimate is for between 410,00 to 515,000 total deaths by January 1, more than twice the current total. On the high side 620,00 to 874,000. On the low side – if everyone in the country wore masks when they couldn’t socially distance – just 288,000 to 328,000. You can look up how many more fathers, mothers, uncles, aunts and grandparents will die for each individual state at covid.19.healthdata.org/united-states-of-america.
- In that context, the absurdity of President Trump mocking Joe Biden for wearing a mask has to be a prime contender. Thursday night’s performance, to a crowd of several hundred with few masks in evidence, is viewable at YouTube.com. Or don’t bother. You might not get past David Blaine sailing off, carried by his 52 helium balloons Wednesday, another absurdity but without the dark implications.
- The NIH’s Anthony Fauci popped up on CNN Friday evening to rebut in a nonconfrontational way President Trump’s assertion in an evening news conference a few minutes earlier that the anti-virus effort is succeeding. Fauci said of leveling off at 40,000 new cases a day and averaging more than a 1,000 deaths a day, “We’ve got to get it much lower.” Otherwise we’ll hit the fall-winter influenza season with a base rate far too high to permit effective contact tracing and other mitigation. He didn’t use the words “out of control.” With the White House urging more governors to reopen their states and schools will the country with such a small percentage of the world’s population and the highest proportion of world mortality change its ways? Will the White House change its ways? Specifically, will it make public its secret warnings to some governors about their state’s surge potential so they will be less likely to ignore them? Friday’s tally, at least 1,078 more deaths for a total of 187,300 (NYT Tracker).
- Dr. Fauci had some encouraging words for the holiday weekend, do it outdoors. Beaches are fine if you keep your distance. Masks if you can’t.
- In the mystifying category, why would U.S. stocks almost get back to the positive side Friday after such a pullback Thursday – after hitting record highs earlier in the week? At least the runup of FAANG stocks before they ran down seemed to make more sense after the Financial Times and The Wall Street Journal ran those stories of Softbank’s deep-pockets machinations in the options market. Except others say it wasn’t just Softbank, the Japanese juggernaut investor. And “seemed” assumes you understand how it works. (Warning: We’re talking about derivatives.) It’s all so simple when you read the WSJ explain it. “Options dealers buy derivatives and stocks. In the case of call options (to zero out exposure to investors’s contracts) this can give stocks and indexes another boost higher. As shares jump, they need to hedge more, adding fuel to the fire” and intensifying market moves lower. See? Simple. Ouch.
- The heck with all that. What did Apple do Friday? After shedding about $350 billion – with a “b” – in market capitalization Thursday, the biggest U.S. publicly listed deflation ever, it ended Friday almost even, at $120.96 a share. Yes, we remember. On Wednesday it was as high as $137.59 a newly split share.
- What about the juicy stuff, that story about how President Trump dissed the wounded and dead members of the armed services, according to The Atlantic magazine’s editor in chief – and confirmed by – not a typo – Fox News. To be fair – actually there’s no way to be fair in the midst of this fight-to-the-death campaign. It’s likely not the last fireball to be tossed into the pit in the weeks ahead. There are armies of fierce partisans more than willing to fight that one out. But maybe there has been a silver lining. President Trump, his declared reverence for the military under attack, tweeted Friday he will save the revered publication serving the armed services, Stars and Stripes, from oblivion. The Pentagon had ordered the newspaper, whose editorial decisions are independent, to stop publication later this month, saving the defense budget $15.5 million a year.
- Boston Federal Reserve Bank President Eric Rosengren was on CNBC, as faithful followers of @macenewsmacro were all too aware. Bottom line, no reason to raise rates, perhaps for years.
- Fed Chair Jay Powell ventured into mass media territory to explain on NPR that, bottom line, no reason to raise rates, perhaps for years. Sound familiar?
- The latest monthly jobs report had a palliative effect on markets and worriers in general, showing 1.4 million jobs were added last month. Best not to think about the fact that so far not quite half the jobs destroyed by the pandemic have been recovered, that the 8.4% unemployment rate almost surely underestimates the real proportion of people who can’t rejoin the labor force because they’re taking care of the kids, who are forced into part-time work, whose old jobs are lost forever, who are so demoralized by having to wait hours in food lines they have no time to answer Bureau of Labor Statistics questionaires. Officially 13,550,000 people were unemployed in August. Had there been no pandemic and some economic catastrophe destroyed 13.5 million jobs overnight Congress would be working 24/7 to react. Now, if there is an approaching precipice over which there is hunger and street unrest members of Congress will be able to act surprised. Who knew? Kevin Kastner breaks down the jobs report in detail at macenews.com.
- Kevin also takes a look at the upcoming week’s data, including the CPI and PPI, once so important when inflation was more than a distant memory. Again, at macenews.com.
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