Category Archives: Wall St.
Fire Feeding Feds
The Feds are still feeding the Inflation fire. They might taper off on their bond buying spree but still plan to keep interest rates near zero.
Meanwhile Republicans want to blame Democrats for raising the debt ceiling to make room for more fuel.
Wall Street seems to have overcome its China angst, for now. It’s back on a shopping spree too.
Wall Street out on a Ledge over China
Wall Street took a deep dive yesterday on news from China. Investors are afraid China’s biggest property developer, Evergrande Group, won’t be able to make payments on its debt. If that happens the company could collapse like Lehman Brothers in 2008 and take the economy down with it.
To make matters worse the Wall Street Journal (paywall) reports that Communist Party leader Xi Jinping isn’t a capitalist! He thinks private capital is running “amok.” And he wants to force China back to “the vision of Mao Zedong, who saw capitalism as a transitory phase on the road to socialism.” He even showed up in a Mao suit.
Maybe my guy on the ledge is afraid he’s on the road to serfdom.
Corporate CEOs Woke to State Voter Laws
Elite corporate CEOs held a zoom conference over the weekend. Their mission was to show they are woke to state laws that suppress minority voters. Or, in other words, to stay a step ahead of the mob. Ed Bastian, CEO of Atlanta based Delta is very concerned about the Georgia voter law which requires ID, just like the company he runs. In 2015 Delta paid $450 million for a 3.5 percent stake in its Chinese partner China Eastern Airline.
Economy Not Sheltering in Place
The economy isn’t sheltering in place. It’s heading down. Fast.
Goldman Sachs forecasts 15% unemployment and a 34% decline in GDP in the second quarter. And the stock market just finished its worst quarter since 2008.
Goldman Sachs is still predicting a “V-shape” recovery, however, meaning the steep drop-off will lead to a bigger bounce of 19 percent in the third quarter.
The Hill
Economy Not Sheltering
The election is seven months away. Can Trump pull the economy out of its Corona nose dive by then?
Scott Brennan, an Iowa Democratic National Committee member and a former state party chairman, said, “If the economy pops back … it’s hard to know what people are going to think.”
Politico
Two Trillion Dollar Stimulus Brings Back Bull, For Now
The Senate passed a two trillion dollar stimulus bill Wednesday night. And the Dow lurched forward 6.4% on Thursday. And that followed an 11% bump from the day before. But the 401k party was over by Friday and it was still down over 20% for the year.
