WASHINGTON (MaceNews) – The following is Thursday’s status check of developments in the U.S. that can influence economic, health and political outcomes.
· Does anyone still care that House Speaker Nancy Pelosi and Treasury Secretary Stephen Mnuchin exchanged letters, each listing the deficiencies in the other’s position on pandemic relief. Suffice to say they’re far apart and apparently were never that close to an agreement despite all those daily chats. In an afternoon interview, the Speaker told Bloomberg that there had been an oral agreement on money for testing but when it was reduced to paper, much of it had been ruled out. Mnuchin’s letter to Pelosi said, “While you accuse the administration of holding up the negotiations, you refuse to bring to the floor of the House stand-alone legislation.” There is a theory that after his advice to Mnuchin to reach a deal, President Trump finally lost patience with the back and forth. Bottom line, no deal now, not much prospect of a deal later … unless there is a change in the Trump-Pelosi mutually antagonistic dynamic. If Trump loses Tuesday the supposition is he’ll be even less willing to consider any concessions. There are several other iterations of Tuesday’s possible outcomes among the White House, the House and Senate and guessing which would be most favorable for a pandemic relief deal before Inauguration Day will doubtless occupy a lot of analysts’ attention. A severe worsening of pandemic outcomes, such as that predicted by the experts to begin to take hold around Thanksgiving, or a deterioration in the economic news, such as some combination of evictions and bankruptcies, could force action at some point.
· The day’s GDP was both as spectacular as expected, particularly if you were speaking for the White House or Fox News, and fairly meaningless if you were among the economists and analysts who pointed out the level of economic activity entered the fourth quarter still between about 3% and 4% below its pre-pandemic level. Still a 33.1% increase is a record worth remembering, even if it’s only 7.4% before annualization. As Fox contributor Greg Gutfeld suggested, GDP stands for “Grateful Donald’s President.” Various administration officials added their view similar to Treasury’s Monica Crowley, that it was “a monster report.” President Trump told one of his two MAGA crowds during the day, “Nobody’s ever seen a number like this.” Other more impartial experts said the economy might not get back to where it was for another year, depending.
· Now that everyone has witnessed how slow Congress can be to act, why are claims considered credible that a Biden win would impel the next Congress to immediately raise taxes? A split Congress in contrast to a one-party Congress can be the difference between a steam engine – lots of smoke, noise and low speed – and a bullet train. If the one party is Democratic, as far as stimulus is concerned, make that a rocket assisted bullet train. if somehow that one party is the same as party controlling the White House then that congressional train can acquire wings. But how long has it been since anyone’s seen a Congress that’s prone to action?
· With now four days until Election Day, it’s still not clear how many people have come to terms with the fact the virus is presenting more than some speed bumps to the economy while threatening to kill perhaps another couple hundred thousand by Inauguration Day. In fact it’s more than 40 miles of bad road, it has mountainous dimensions. Will Election Day galvanize a leadership response or further neutralize it. The status quo seems least likely to continue.
· By now you’ve learned that the display of guns and ammo at Walmart stores has become a sort of barometer of the national mood. Once again in those stores that sell such hardware, it’s being put under lock and key until after it’s clear Election Day or its aftermath hasn’t turned violent. Walmart said it has done that several times in the last several years.
· Upcoming economic data includes the 8:30a ET report on personal income already incorporated in the GDP report, Chicago PMI at 9:45a ET, consumer sentiment at 10a and the Baker-Hughes rig count at 1p. As observed last week, with 542 fewer rigs than a year ago, the U.S. oil industry itself seems ahead of the curve on transitioning away from fossil fuels. Amid the Thursday stories elsewhere on this macenews.com site, of the ECB decision to hold steady and President Christine Lagarde’s hints of some additional ease before yearend, Kevin Kastner’s explication of the GDP report and of the report of more slowing in new jobless claims, of Tokyo’s inflation report and much more, there is a preview of next week’s FOMC meeting by Steve Beckner.
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