Archive for August 2020

Regrettably, America’s three largest trading partners will be of no meaningful help in recovering from this recession. Canada’s economy will recover unusually slowly because of very weak energy prices. Mexico’s economy will mend particularly slowly due to a complete lack of fiscal assistance on top of it already being in a recession before Covid-19. Lastly,…

The Friday File: This past July 4th, Joey Chestnut broke his own record by eating 75 hot dogs and buns in 10 minutes. Miki Sudo set a woman’s record of 48.5. Professor James Smoglia recently showed that 83 is the maximum number that can be eaten under such conditions. His paper further shows that adjusted…

The UN estimates global population will peak at 10.9 billion persons in 2100. New projections from the University of Washington see the population peaking at 10 billion in 2060 and then declining to 8.9 billion by 2100. The much lower projection is based on improved education and contraception in Africa, and fertility rates in nations…

Because investors value the dollar as a particularly safe asset, in turbulent times there is a run to the dollar, and more turmoil makes the rush that much greater. However, the rush itself creates assorted stresses and shortages in global dollar markets. These stresses are so severe that only the Fed can resolve them. Of…

Executive Extension President Trump’s executive orders deferring payroll taxes, extending unemployment benefits, halting evictions and waiving interest on student loans will help, but by much less than expected. Taxes will remain due, and the $300/week in federal unemployment benefits depends on funding that will be exhausted by early October and requires states to pay $100/week.…

July’s job growth of 1.8 million was strong and brought unemployment down to 10.2%. But, outside of the last three months it remains higher than at any time since 1983 and payrolls remain 12.9 million below their 2/20 level. Moreover, job growth is well below June’s 4.8 million and May’s 2.7 million and is slowing.…

The Friday File: The median distance Americans live from their mothers is 18 miles. That distance is just 6 miles in the East South Central region and 10 miles in the Northeast, but 44 miles in the Mountain West. In the remaining 29 states, the average distance is about 25 miles. Only 20% of children…

In yet another indication of a stalling national economy, after rising by ten percentage points a month in April, May and June, credit card purchases were flat in July and are now ten percent below their pre-Covid-19 level. This flatlining is probably due to rising coronavirus cases and subsequent behavioral changes in addition to state-imposed…

Vaccine Variation In a survey of healthcare experts, 1% expect a Covid-19 vaccine to be available by 12/31/20, 25% more believe one will be ready during 20H1, and another 41% project having a vaccine in 20H2. Financial experts are decidedly (and I suspect mistakenly) more optimistic. 12% believe a vaccine will be accessible by 1/31/21,…

Over the next months we are quite likely to hear the Fed speak about monetary policies such as forward guidance, explicit forward guidance, open-ended forward guidance, calendar-based forward guidance, yield curve control, price-level targeting, symmetric inflation targeting, asymmetric inflation targeting, temporary price-level targeting and more. Which policy or policies are pursued is irrelevant. The aim…