Off to the Races
On Sunday, Larry Kudlow stepped up on the pitcher’s mound and threw this fat pitch: The economy is ‘Off to the Races‘.
“With the rescue package and the reopening of the economy as we transition, 80 percent of small businesses according to the Chamber of Commerce are reopening. … New business applications are roaring,” Kudlow told “Sunday Morning Futures.” “I think we’re off to the races in what will be a very strong V-shaped recovery.”
Morgan Stanley Echos Kudlow
The recovery rally has further to run, so Buy Socks says Morgan Stanley.
“While the last four months have been exceptional, we think that this cycle has been, and will be, more ‘normal’ than appreciated,” said Andrew Sheets, the bank’s chief cross-asset strategist.
“We think that stocks and credit will be modestly higher and tighter over the next 12 months,” he said. The bank forecasts the S&P 500 index at 3,350 points and benchmark U.S. 10-year yields at 1.3% by mid-2021.
“We recommend a broad rotation into cyclicals and value across global equities.”
It’s not often I agree with the Fed, but I do now.
The Fed Warns of High Downside Risks
, and it’s crazy to pretend they do not exist.
Fed Projects 2020 Growth at -6.5%, Unemployment 9.3%
Please note the Fed Projects 2020 Growth at -6.5%, Unemployment 9.3%
Fed’s New Tool
Also, please see Fed’s New Tool: Not Thinking About Thinking
The Fed does not expect a V-shaped recovery and neither do I.
Mish
Mish do you think morgan stanley knows something /wants to drum up business / is jumping on the trump bandwagon.
Of course it means nothing that a bunch of crazed racist yahoos will sign up for anything but still: over 1,000,000 did. I take that as a sort of poll.
Sure thing… racists need an outlet to their frustration.
Not sure I understand how 1.5 million lost jobs last month is good news if the economy is reopening. Two notes – first a friend who works for a marketing firm – his job was on the Walmart account found out two weeks ago his job was eliminated. 15 years with the company. My daughter was told Friday her layoff was permanent as they are restructuring and no longer are going to fill her position. Revenues are down and they do not see them picking up enough in the short term. Unemployment is helping for now but come July 31 it will be tough.
Well, we have arrived, the fed will now be channeling newly invented cash directly to the shareholders of individual companies at the expense of all the rest of us.
The Fed says it is going to start buying individual corporate bonds
That’s it baby, it is all over now, if they had one single defense against the argument that they are solely responsible for wealth inequality prior to this day they have lost that argument now, this IS what structural inequality looks like. If you are not in the top 10% now your odds of getting there would be better with the purchase of a lottery ticket than through hard work and smart investing.
The PRA : People’s Republic of America has arrived.
That is just what I would expect from a fascist who has never known a single day of discrimination. And you know where you can shove it too.
Kudlow Talks His Book
‘The recovery rally has further to run, so buy socks’
How apt. You need lots of socks if you plan on doing lots of running.
The Monthly Treasury Statement for May showed federal withheld income tax receipts falling a record 33% from the comparable period one year ago. The decline in May tax receipts exceeds the 30% decline in April.
People are so busy opening up new businesses, they forgot to pay their income tax.
And we are just gonna ignore Covid? Unless we are really lucky big chunks of the US will be sheltering in place again by August….that will have some interesting economic impacts
I keep thinking that the market was over-valued before all this started and the there is no reason that it should become significantly more over-valued in the absence of pandemic. But then again, I’ve been wrong for years. I just can’t gin up that much faith in the “perpetual greater fool” theory. I suppose thought that if I were smarter I would accept that, given recent history, we should believe that the Fed will eventually become that marginal buyer who halts future pull-backs.
I disagree somewhat Mish. In this slump, it was the poor who lost their jobs, not the middle class. Bartenders can move back into their jobs as soon as the bar owner says go. So I think the possibility for a v-shaped recovery exists.
It is going to depend upon whether Trump supporters have the cojones to follow basic health guidelines (wear masks, wash hands) if the hospitals start running low on space again. I don’t think they can pull it off. But if Trump showed leadership on the issue, I think it could work.
Wearing masks is at least as effective as the shutdowns were. Consider the cases of the two hair stylists in Missouri who worked while infected, and but the hair of about 200 people. Everyone wore a mask. No one got infected.
You actually said that aloud. It is basically an oxymoron.
“Bartenders can move back into their jobs as soon as the bar owner says go.”
Only if the owner survives financially.
Maybe it is just me being too much of a cynic but I have a very hard time believing a lot of the economic numbers that are posted these days. It also seems that the futures market jumps significantly on the eve of each positive number posted. That may always have been the case but it seems like it has gotten more pronounced of late.
Looks like Trump in a landslide if you believe what state and local Republicans have to say:
This is the most bizarre political climate and election year since I have been alive (46 years ago).
Yeah I saw that this morning. Carnahan, the party chief here in my state – who is also the wife of 1st Congressional district rep Hagedorn – is like most party chiefs of both parties, a partisan hack. I also believe she is pretty delusional regarding how the state will break. I don’t think Trump will come anywhere near as close to vote totals here as in 2016 or swinging the state to red. As with other cities, it appears he has lost many suburban voters and especially the women. We Minnesotan’s may be slow, plodding Scandinavians but you can’t fool us forever!
I’ll believe this if Kudlow quits and applies to be a small business owner.
In limit-case financialized dystopias, all “applying to be a small business owner” resolves to, is begging The Fed to hand little you some of the loot it steals from your neighbors as well, instead of including you in the “stolen from” side of the ledger.
Nowadays the definition of the word “small” seems to be negotiable. A bunch of chains managed to obtain the SBA loans.
Once absolutely all resources are distributed entirely at the arbitrary discretion of The Fed, The Fed, by necessity, also get to, again entirely arbitrarily, define what “is” is. Can’t have it both ways.
Kudlow inflating the balloon ahead of the retail sales numbers.
There’s gonna be a lot of new stores…
Even the losing team has rousing cheers and cheerleaders.
More of a “checkmark” shaped recovery.
Kudlow
Imo, the story around him this weekend was his advocating people wear masks at Tulsa MAGA rally this week.
The Trump supporters I know think virus overblown and wearing masks a government attempt at controlling the population.
The only thing I’m interested about the rally – will DJT be surrounded in plexi bubble? … or will he walk the talk … and actually speak without safety precautions?
He’ll just pound some HCQ and he’ll be fine…
This is all about perspective. Remember that Kudlow, Powell, Trump and the rest of the political/financial elite (yes, this includes Republicans and Democrats, Biden, Bernie, McConnell, Pelosi…and all the rest) live in a different universe with different rules. It’s a big club, and you ain’t in it.
The elite know that as long as the Fed can keep pumping money into places where it never reaches the pockets of the 99% – the Wall Street Money Machine(TM) will continue to run. And for them, that represents the V-Shaped Recovery (TM) – in their universe.
They only care about our universe to the extent that they will do whatever is necessary to keep us fighting each other. Because as long as we are at each other’s throats, we’re not working together gathering pitchforks, torches, tar, feathers, rails and rope.
Remember the old adage about stepping back and letting neighborhoods riot because they were just destroying their own infrastructure? Take a good look around you right now because that’s literally what the 1% are saying about the rest of us. They honestly do not care if we collectively destroy all our stuff because they know that at some point, we will have to go back, hat in hand, to them when we’re ready to rebuild. And they will of course be magnanimous enough to help by loaning us the money to do so, and taxing us to pay it back.
“The elite know that as long as the Fed can keep pumping money into places where it never reaches the pockets of the 99% – the Wall Street Money Machine(TM) will continue to run.”
…
Yes … but that does not mean it will last forever. I believe at SOME point a crash will occur. But it will happen only after the elites are allowed to position themselves accordingly. Who doesn’t like to buy stuff at half price? A crash allows Shock Doctrine … bailouts / loosening of regulations / more get out of jail cards / etc … which will benefit the elites long term.
Thieves will steal as long as there is anything left to steal.
Totalitarian dystopias all seem to end predictably. As they are always organized as an onion. With layers of decreasing influence and privilege as you move outwards.
The Fed, Government and the few the very closest to them at the center, then layers of decreasing privilege and protection as you move outwards. The further you get from the center, the more your assigned role is theft victim, as opposed to theft beneficiary. At any given time, there exists a line of effective demarcation, where those onion layers closer to the center than that line at least looks to benefit from the theft rackets, while the layers further out suffers.
Up until 2008, the demarcation line ran outside lots of people who liked to fancy themselves “middle class.” To them, it at least appeared as if their relative inclusion in the (nonsensical but still) much ballyhooed “ownership society” provided them with some benefit. They were the “home owners”, and the guys with “401Ks” etc. “The System” could afford to include those guys, since there were still enough wealth in layers further out the onion to afford handing those guys a small drip of the looting.
But then, around 2008, further out layers were effectively stripped barren. There was nothing left there to steal. The System faced a Thatcher Moment. It “ran out of other people’s money” as the Iron Lady put it back when.
Hence, keeping The System from collapsing, required moving the demarcation line. Punting large groups of those previously lauded as “risk takers”, “entrepreneurs”, “builders”, “financially savvy”, “investors” blah, blah out of the theft beneficiary ranks, and demoting them to “house flippers”, “day traders” who were now the theft rackets’ new victims.
Of course, it doesn’t take long before those guys’ money run out as well. Then the demarcation line has to be drawn closer yet. With yet more layers peeled off. Etc., etc. All in a never ending circling of the drain. Towards the end, the Soviet population had been robbed so barren, that only the very tightest Kremlin core, and the immediate security apparatus looking out for them personally, could still be supported. Everyone else had needed to be robbed to complete ruin. Had even a few more years gone by before their version of “The System” went the way all “Systems” should, they would have sold off the nuclear stockpile as well, to anyone bidding for it. All in order to prop of the “vaiijueue” of their Moscow apartments and Dachas.
America is no different from that. No “System” is. Any “System” built entirely on stealing from those who do productive work, in order to hand loot to idle leeches who add no value at all, by arithmetic necessity must always eventually run out of other people’s money. And then another layer must be peeled off to keep the charade afloat, and “The System” from “collapsing.” There simply is no other way, since there simply cannot be any other way.
Truth.
The trick is to be able to plan ahead, and then predict where they are on the onion so that by the time they get to the closest layer, you can escape before the fit hits the shan.
The way things are happening now reminds me of something my dad used to say when I asked him “how long” something was going to take:
“Like the monkey said when his tail got cut off: Won’t be long now.”
“I think we’re off to the races in what will be a very strong V-shaped recovery.”
…
Mmm, OK … care to explain why then the Republicans will discuss (and pass) another $trillion stimpack in July?
That’s an easy question to answer. Why turn down the opportunity to raid the treasury when you can get away with it? Start with $1200 for each taxpayer, at a cost of about $18 billion. Add $982 billion for the rich, and you have a Trillion. A Trillion doesn’t go very far these days.
The next one will target repatriating US manufacturing, not paycheck/UI stuff.
Note the jump in NYMI far higher than expected.
Wait until the next $2Trillion relief bill to be passed.
And yet gold keeps going sideways or down it seems.