Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Category Archives: Economics

Stock Market Rallies Despite Negative News

This article appeared online at TheNewAmerican.com on Thursday, June 4, 2020:

The small-cap Nasdaq 100 Index has rallied more than 43 percent since its low set on March 23. The S&P 500 Index has posted its largest 50-day rally in history. The Dow Jones Industrial Average has gained 7,600 points.

With all that is going on in the country and the world, how is that possible? The national riots, the confrontation with China building over Hong Kong, and the deaths continuing to mount as a result of the coronavirus, would all seem to be negatives on the market, driving investors away.

But, no. Investors aren’t looking out the back window, but instead are looking out the front. And they are increasingly seeing what they want to see and hope to see: a recovery that justifies their decision to invest in companies that appear likely to benefit and profit from it.

The president is perhaps the most well-informed individual on the planet. On May 29 he said, “We’re going to have a great third quarter, a great fourth quarter. I think next year is going to be one of our better years.”

There are trillions of dollars just itching to hear such confidence coming from the president. During the lockdown, consumers hunkered down and hoarded many things — toilet paper, canned goods, cleaning supplies, and cash. The savings rate, which is normally around five percent of personal incomes, soared to 12.7 per cent March and then to 33 percent in April. As a result, economists are expecting a virtual tsunami of consumer spending to occur once the economy is fully open.

And the economy is already opening.

Keep reading…

Institute of Supply Management Says Purchasing Managers Are Guardedly Optimistic

This article appeared online at TheNewAmerican.com on Monday, June 1, 2020:

The Purchasing Managers Index (PMI) from the Institute of Supply Management released on Monday moved from abysmal to hopeful. Specifically the index for May came in at 43.1 percent, up 1.6 percent from April’s 41.5 percent. Anything below 50 reflects contraction.

The index is a composite of a number of smaller targeted indexes, and many of them are turning around, some decisively. Take altogether, “the overall economy returned to expansion after one month of contraction,” said Timothy Fiore, ISM’s chairman.

From the report:

The New Orders Index jumped 4.7 percent in May;


The Production Index leapt 5.7 percent in May;


The Employment Index rose 4.6 percent; and


The New Export Orders Index increased by 4.2 percent compared to April.

Six of the 18 manufacturing industries tracked by the ISM reported growth in May: mineral producers, furniture makes, apparel, leather products, food/beverage and tobacco, paper goods, and wood products.

Notable also is the fact that the PMI was at 50.9 in January, right before the COVID shutdown hit. That’s just eight points away as the index continues its rebound as the shutdown restrictions are being lifted.

Also revealing is the attitude of some of the respondents to the survey conducted by the ISM for May:

Keep reading…

Economic Green Shoots Appearing; Trump Moves to Water Them Via Regulatory Relief

This article appeared online at TheNewAmerican.com on Monday, May 25, 2020: 

Green shoots are appearing as the economy is starting to rebound from the COVID-19 shutdown.

On Saturday President Trump’s economic advisor Kevin Hassett told CNN, “It looks like the economy is picking up at a very rapid rate. In which case we could potentially move on to other things that the president has mentioned, like the payroll tax cut and potentially even a capital-gains holiday.”

That would provide additional fertilizer to an economy that hasn’t seen much light or water for the last two months. But businesses are reopening and credit-card usage is rebounding. Airline travel as measured by TSA screenings has more than tripled since their nadir on April 14.

Truckstop.com, which monitors trucking activity, says its weekly index has improved for four straight weeks and available loads were up 27 percent last week.

Property showings in the real estate market are also up 27 percent as of Saturday, and the Mortgage Bankers Association is reporting a rebound in the number of new mortgage applications. Last week Delta Airlines announced that it is restoring some flights between key cities such as New York and Atlanta. The airline is also restoring daily flights to Canada, the Caribbean, Central and South America, Mexico, and Europe.

Last week President Trump signed an executive order instructing regulatory agencies in the Executive branch “to use any and all authority to waive, suspend and eliminate unnecessary regulations that impede economic recovery.”

Added Trump:

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Estimated Worldwide Cost of COVID-19 Shutdown in the Trillions

This article appeared online at TheNewAmerican.com on Tuesday, May 19, 2020: 

The headline number from Cambridge University, released on Tuesday, was scary. In its “worst case scenario,” the Centre for Risk Studies projected that the COVID-19 shutdown will cost the world’s economy $82 trillion. $20 trillion of that would be borne by the United States.

But wait! That’s the worst-case scenario. And it’s over the next five years.

The “middle case,” which the economists at the Centre call their “consensus” expectation, is for global costs to be vastly lower. And its “best case” — “a scenario in which pent-up demand fuels a rapid economic recovery” — projects a global cost of just $3.3 trillion, or about two-thirds of one percent of total global economic output over the next five years.

Here’s the number to keep in mind:

Keep reading…

Trio of Reports for April Show Economy Might Be Turning Around

This article appeared online at TheNewAmerican.com on Friday, May 15, 2020:  

Three reports released on Friday give a glimmer of hope that the worst may be behind for the U.S. economy.

While the headline from MarketWatch shouted, “Retail Sales Crater 16.4% in April,” the details were far less concerning. Auto dealers reported that April sales of new vehicles were off 12 percent. Translation: Despite nearly complete shutdowns of all economic activity in many states, somehow consumers still bought new vehicles at a rate of 88 percent of normal.

Gas stations saw their sales drop by 29 percent, which meant that, somehow, even though traffic has fallen off dramatically in response to the COVID-19 edicts, they still managed to sell gas and fast food items at nearly 70 percent of normal.

Grocery stores are operating at 87 percent of normal; clothing stores reported sales at 22 percent of normal even though most malls are closed. Electronics stores are still operating at 40 percent of normal, while furniture stores reported sales at 40 percent of normal. Bars and restaurants, most of which are closed, still managed to report sales at 70 percent of normal.

Lest we be accused of seeking signs of light in a darkened room, consider the Empire State Manufacturing Survey,

Keep reading…

Consumer, Producer Prices Plunge in April

This article appeared online at TheNewAmerican.com on Thursday, May 14, 2020:  

Wholesale prices dropped by 1.3 percent in April, the sharpest decline since the Labor Department’s Bureau of Labor Statistics has been tracking them dating back to December 2009. This followed a decline of 0.2 percent in March.

The report followed the Labor Department’s announcement on Tuesday that consumer prices dropped by the most since the Great Recession of 2007-2009.

The decline is blamed largely on the collapse in gasoline prices, which have dropped by nearly 60 percent over the last two months. Food prices also declined during the month, along with declines in prices of apparel and airline tickets.

But is that the real reason? It’s easy to be lulled into thinking that the shutdown of the economy is the primary cause: People aren’t driving or flying or eating out. Therefore demand is down, which is followed by declining prices.

Simple. Easy. And wrong.

Keep reading…

Frustrated Tesla Founder Elon Musk Threatens to Move Out of California

This article appeared online at TheNewAmerican.com on Monday, May 11, 2020: 

Tesla co-founder and CEO Elon Musk threatened to move his manufacturing facility located in Fremont, California, in response to the county’s demand that it stay closed. Musk and his people had been working with health officials of Alameda County (where the plant is located) to open safely and soon.

The company said it had worked out a thorough “return to work” plan that included

Keep reading…

ADP Reports 20 Million Lost Their Jobs in April

This article appeared online at TheNewAmerican.com on Wednesday, May 6, 2020:  

According to national payroll processor ADP, the U.S. economy lost more than 20 million jobs last month. The expectation was job losses of 22 million, but the ADP only covers the first 12 days of April.

As Ahu Yildirmaz, co-head of ADP’s Research Institute, warned in Wednesday’s report, “Job losses of this scale are unprecedented. The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession. Additionally, it is important to note that [our] report is based on the total number of payroll records for employees who were active on a company’s payroll through the 12th of the month.”

The pain was shared more or less equally across the economy. Businesses employing fewer than 50 people lost six million jobs, while those under 500 employees lost more than five million. Large employers (500 and above) lost nearly nine million.

The services industry suffered the most,

Keep reading…

Oil Prices Jump 20 Percent; Expected to Double by Summer 2021

This article appeared online at TheNewAmerican.com on Tuesday, May 5, 2020: 

Crude oil prices have jumped by 20 percent in the last week. Forecasters are expecting them to double from here by the summer of 2021.

Olivier Jakob, managing director at the energy consulting firm PetroMatrix, explained why: “You have low crude production in North America … and some improving demand [thanks to] shelter-in-place policies [that are being rescinded].”

Colin Cieszynski, chief market strategist at SIA Wealth Management, agrees: “As more economies start to reopen, crude oil finds itself in the opposite situation, as the forces which [drove] the price collapse — falling demand and a failure to cut production — start to reverse.”

For Edward Moya, senior market analyst at the oil-trading platform Oanda, the shift has been completed:

Keep reading…

Pending Home Sales Dropped 20 Percent in March; Realtors Are Coping

This article appeared online at TheNewAmerican.com on Wednesday, April 29, 2020:  

The Pending Home Sales Index (PHSI) published monthly by the National Association of Realtors (NAR) dropped 20 percent in March. Contract signings dropped 16 percent compared to a year ago.

Lawrence Yun, NAR’s chief economist, said “the housing market is temporarily grappling with the coronavirus-induced shutdown, which pulled down new listings and new contracts.” For the year he expects overall home sales to be down 14 percent compared to last year.

But home prices “are holding up well,” he said. “In fact, I project the national median home price to increase 1.3% for the year.”

How are realtors coping,

Keep reading…

Consumers Are Adapting to New Post-Virus Lifestyles, and Marketers are Trying to Keep Up

This article was published by The McAlvany Intelligence Advisor on Wednesday, April 29, 2020:

Just three months ago, the international marketing research firm Euromonitor International (EI), headquartered in London, published its outlook on consumer behaviors for 2020. So much has changed since then that the firm has been forced to revise many of those outlooks.

Thanks to the coronavirus and the “sheltering-in-place” mandates that followed, some trends are being accelerated; others have been stalled; still others are being redirected.

For example, in its report released on December 31, 2019, EI said

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Global Research Firm: Shutdown Altering Lifestyles in Major ways

This article appeared online at TheNewAmerican.com on Tuesday, April 28, 2020:  

The global market research firm Euromonitor International (EI), headquartered in London, has been forced to revisit its 2020 predictions thanks to the coronavirus shutdown.

Some trends are being accelerated; others have been stalled; still others are being redirected.

For example, in its report released on December 31, 2019, EI said, “During times of economic, political or personal uncertainty, consumers are drawn to the comforts of home. In seeking to unwind and get back on track, consumers retreat to their personal safe spaces where they are free from the distractions of the world around them.”

“Shelter-in-place” mandates and “stay-at-home” orders have greatly accelerated this movement, as more and more consumers are turning their homes into multifunctional work and play centers: adding fitness centers, entertainment rooms, and school classrooms to their homes through retrofitting rooms’ previous usages. The home is increasingly being viewed as “the hub” of all activities, including social, family, religious, education, and exercise.

The momentum behind the “green” revolution has stalled,

Keep reading…

Trump Announces Cautious Reopening of U.S. Economy

This article appeared online at TheNewAmerican.com on Friday, April 17, 2020:

President Donald Trump told a gathering of governors in Washington on Thursday about his plan to reopen the U.S. economy, calling it “Opening up America Again.” He said, “We are not opening all at once but one careful step at a time.” Based on advice from his advisors, it calls for a three-phase, “science-based” strategy that he is recommending to the states.

Phase One calls for governors to announce that

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Trump Brokered Oil Agreement Using Rules From His “Art of the Deal”

This article appeared online at TheNewAmerican.com on Tuesday, April 14, 2020:  

Following the announcement that 23 oil-producing nations had formally agreed to cut world production of crude oil by 10 percent, Daniel Yergin, energy expert, author, and vice-chairman at IHS Markit, said this of President Trump: “Of all the deals he’s done in his life, this has to be the biggest and most complex. He had to be not only dealmaker but also divorce mediator.”

It took four days of intense virtual meetings and negotiations with leaders of the nations making up the OPEC cartel, plus Russia and Mexico, to get the deal done. In deal’s final form, global production of crude oil will officially be cut by 9.7 million barrels a day starting May 1. After two months, the cut will drop to 7.7 million bpd until January, and drop further to 5.8 million bpd for another 16 months.

The real cut will approach 20 percent of world production, reflecting the fact that many oil-producing nations are already suffering cuts due to the global shutdown in response to the COVID-19/coronavirus threat.

The president tweeted:

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Wall Street’s Monster Rally Unfazed by Record Unemployment Numbers

This article was published by The McAlvany Intelligence Advisor on Monday, April 13, 2020: 

Ned Davis, the head of Ned Davis Research, can’t explain it: Last week’s monster rally in stocks occurred while breathtaking unemployment numbers were reported. Said Davis: “It defies logic. My explanation is that … the market tends to look ahead.”

In the shortened trading week – the markets were closed on Good Friday – the popular averages all hit double digits: the Dow closed up 12.6 percent; the S&P 500 closed up 12.1 percent; and the tech-heavy Nasdaq closed up 10.6 percent.

This rally ignored the numbers from the Labor Department: 6.6 million people filed for unemployment insurance last week, bringing the total to 17 million claims in just the last three weeks. Some are expecting claims to exceed 25 million before the COVID-19 crisis is over.

Another indicator for a healthy and quick economic rebound is

Keep reading…

Massive Oil Discovery in Alaska to Provide More Supply as World Economy Recovers

This article appeared online at TheNewAmerican.com on Monday, April 13, 2020:

The announcement of a massive new oil find on Wednesday couldn’t have come at a better time. The 1.8 billion barrel prospect called Talitha is located next to the Trans-Alaska Pipeline on Alaska’s North Slope, reducing greatly the developer’s transportation costs when the field comes online in the next few years.

By that time the world’s thirst for low-priced crude oil will have returned following the COVID-19 shutdown, and Talitha’s low cost will help lead the United States and global economies to even higher levels of output.

Pantheon Resources updated an evaluation of an old exploration well and concluded that

Keep reading…

Consumer Prices in March Fall by the Most in Five Years

This article appeared online at TheNewAmerican.com on Good Friday, April 10, 2020:

The summary of how consumer prices behaved in March, released on Friday by the Bureau of Labor Statistics, noted that its index registered “the largest monthly drop since January, 2015.” The 0.4 percent drop in March is equivalent to a five-percent decrease in prices at the consumer level for a year.

Its Consumer Price Index (CPI) was pushed down mostly by the price of gasoline, which fell by 10 percent in March. This reflected the virtual collapse in crude oil prices, which dropped more than 30 percent last month.

Apparel prices also were down, along with new car prices, reflecting an absence of buyers in retail outlets and showrooms, thanks to the coronavirus shutdown.

When pressed on the matter, Federal Reserve Chairman Jerome Powell (head of the machinery that is responsible for increasing the money supply) said

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Stockman: The CARES Act is the Country’s “Greatest Folly”

This article was published by The McAlvany Intelligence Advisor on Good Friday, April 10, 2020:  

Never one to pull his punches, David Stockman, Reagan’s former OMB Director, unloaded at LewRockwell.com:

[CARES] … the greatest folly ever to beset our [country] is now racing full speed ahead.

Instead of belt-tightening, work-arounds, payment deferrals and negotiated price and wage adjustments for a few months … current and future taxpayers are being saddled with trillions of unnecessary obligations, which will prove to be the final straw on the debt-ridden camel’s back….


Because the ship-of-fools in the Eccles Building [which houses the Federal Reserve’s Open Market Committee] have led Washington and Wall Street alike to believe in what amounts to the greatest lie in financial history: that we can borrow and print our way back to prosperity!

His article is already out of date. The Fed and the Treasury are doubling down, adding an additional $2.3 trillion to the economy in the belief that such a flood can hasten the end of the economic depression caused by the powers-that-be.

That makes attempts to measure the real amount the Treasury owes by Truth in Lending and Boston University professor Laurence Kotlikoff irrelevant.

On April 7, Truth in Lending, the non-partisan think tank that tries to provide an accurate (read: full accounting of all promises) measure of the government’s true financial condition, released its latest report.

Instead of repeating the canard that the national debt is only around $23 trillion, it reported that the federal government actually owes more than $113 trillion when “off-budget” items like Social Security and Medicare are added back in.

For this, the think tank gave the Federal government a financial grade of “F.”

The report didn’t take into the account the CARES Act.

Professor Laurence Kotlikoff has developed the “intergenerational accounting” protocol that

Keep reading…

One in 10 Americans Out of Work; That Number Likely to Grow

This article appeared online at TheNewAmerican.con on Thursday, April 9, 2020: 

The latest report from the Labor Department on Thursday showed that 6.6 million people filed for unemployment insurance the week ending April 4. Forecasters were predicting 6 million.

The report also adjusted upward the number reported the previous week, to 6.9 million. Added to the claims filed the week before that, 17.6 million Americans are now out of work as a result of the coronavirus shutdown.

And that number is very likely much too low as the states’ unemployment offices have been buried with new claims that haven’t been processed yet.

Two questions are surfacing: Just how bad is it likely to get? And how long will it last?

Here is how bad it is at the moment:

Keep reading…

Government’s Coronavirus Stimulus Program Will Massively Increase National Debt

This article appeared online at TheNewAmerican.com on Wednesday, April 8, 2020: 

The Congressional Budget Office (CBO) projected that the federal government would run a deficit this fiscal year of more than $1 trillion, or about five percent of the country’s gross domestic output of goods and services.

William Foster, the lead U.S. analyst at Moody’s, the credit rating agency, says the deficit, thanks to the CARES (Coronavirus Aid, Relief, and Economic Security) Act, will instead likely approach 10 percent of GDP, while Fitch Ratings is predicting it will be closer to 13 percent. Either way, they both predict that the deficit this year will exceed the previous post-World War II record for the deficit, set in 2009, when it was 9.8 percent of GDP.

The CARES Act is injecting an expected $2 trillion of new money into the economy in order “to provide emergency assistance and health care response for individuals, families, and businesses affected by the 2020 coronavirus pandemic,” according to the act’s complete title. Other credit facilities, by loosening credit requirements, are expected to add up to another $4 trillion, with talks currently underway for CARES 2.0 to add even more new money to the economy.

None of this was taken into account by Truth in Lending, the non-partisan think tank that promotes “transparent government financial information,” when it published its latest report on the nation’s current financial condition on April 7. Instead of repeating the canard that the national debt is only around $23 trillion, it reported that the federal government actually owes more than $113 trillion when “off-budget” items such as Social Security and Medicare are added back in.

For this, the think tank gave the federal government a financial grade of “F.”

David Stockman, President Ronald Reagan’s director of the Office of Management and Budget from 1981-1985, called the move to flood the economy with new money the “greatest folly”:

Keep reading…

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2020 Bob Adelmann