Blog

The News Cycle

The coronavirus and every aspect of its growth or retreat continue to be red meat for the news writers and broadcasters. 

 

A Better Story on Coronavirus

If you read between the headlines these days, there are actually some words of encouragement.

 

 

 

Wartime Footing

There are many comparisons being made these days to World War II. We're fighting a global battle with very challenging and powerful fronts: the health front, and the economic front.

 

 

Bad Markets Improve Buying Opportunities

The “coronavirus downturn” is delivering some significant buying opportunities.  Recognizing the sell-offs’ value could help reposition portfolios to recoup recent losses. 

Underlying Causes of the COVID Correction

 

Are market corrections and bear market events all about COVID 19?  I think not. People are certainly justified in their fear of severe health threats, but many savvy investors believe that overpriced markets added to the severity of the market pull-backs.

Coronavirus

The impact of the spread of the coronavirus can be measured in many ways, from human physical health to service sector and supply chain economics.

What the Candidates are Thinking and Brewing

Well folks, several weeks ago I started collecting comments from the large pool of  Democratic candidates with lofty ambitions for the top job if President Trump stumbles. To me, it looks like the contenders must be reading each other’s private commentaries and draft speeches. Why, you might ask? The majority of the democrats all seem to be cooking from the same playbook: Increases in taxes served in different forms but with the same bitter taste.

Joe Biden spoke first about keeping and improving Obamacare. I guess Joe didn’t want to jump out too far on a limb like some of the real risk-takers in the Democratic gang. He did, however, propose a raise in the personal tax rate to 39.6% and 28% for corporations. I guess Joe had forgotten we just had rates at that level just a short time ago.

 
Julian Castro thought that raising the top personal tax rate above the current 37% was as far as he would go. John Delaney, a U.S. Rep from Maryland, thought that the top marginal rate could go to 70%, with a move in the corporate rate from 21 to 27%. Bernie the socialist also thinks that 70% sounds like the right marginal tax rate along with several other ideas that seem to come from an unstable character who doesn’t have a full grasp of how our economy has thrived.
 

Elizabeth Warren seems to have the most to say about taxes. She seems to despise and criticize the most successful of our businessmen and women. Many of her critics believe she is driven by pure envy and lives in a fantasy world of her inflated intellect.

Kamala Harris wants to GIVE $6,000 to families earning less than $100,000 and offer renters a credit who spend 30% of their earnings on rent. The list goes on and on!

I don’t doubt that there is room for improvement in how we can improve upon how our citizens are taxed and incentivized. We will have to come up with a much better plan or approach than what is currently being offered by the candidates. Maybe luring more Mike Bloomberg’s into the race is a real solution. He certainly earned a great reputation in his 12 years as one of New York City’s greatest mayors.

If higher taxes wins the day, then my effort is to take every opportunity to make my client portfolios more tax-efficient! ……… more to come.

 

This Is The Real Rodeo

Well, folks, I am sure this week, if you have younger children at home, you were busy sorting out costumes and making sure the candy was in ample supply for the crush of trick or treaters. Sounds all pretty normal and comforting! As my prep duties at home were completed early, I started to research the potential past correlation of impeachment and market performance. Fortunately, we don’t have an abundance of home-grown events to evaluate, however some of our close trading countries had some data to contribute.

Our first impeachment attempt was levied against President Johnson who had taken office after the assassination of President Lincoln.  President Johnson, soon after he replaced President Lincoln, was charged with violating the Tenure of Officer Act for removing Secretary of War Edward Stanton. Johnson was acquitted three days after Stanton’s acquittal. Watching too much evening political coverage on President Trump’s current political standing certainly has interested me in the possibility of impeachment.

More in our time was the break-in event at the Democratic National Committee offices at the Watergate Office Complex in 1972. The spotlight was eventually focused on President Nixon and indeed it was quite the battle. Once the burglars were identified, a narrative surfaced that placed many of Nixon’s close ties at the organization and in the direction of the break-in. It was believed that the mission was to spy on the Democratic party and sabotage elements of their proposed political plans. As the story and facts started to be understood, the White House counsel was fired and the FBI director resigned for destroying evidence. It was becoming clear that more people were aware that possibly efforts to cover up any inquiry on the Watergate break-in were coming from the top. Washington was still pursuing at this time a full legislative agenda.  The Bretton Woods Agreement, which was a fixed exchange rate system established after WWII, converted to a floating rate system in March of 1973 (Nixon Initiative).

The following events all produced meaningful market moves:

 

WATERGATE:

Spying events first reported in 1972

End of the fixed rate exchange system 1973

Televised hearings in 1973

Nixon resigns December 1974

 

THE CLINTON /LEWINSKI SCANDAL:

Major drop in world equities early 1999

News of scandal breaks 1998, Clinton confession 1998

Clinton acquittal, US Equities and Bonds recover January 1999

 

 

Click below to read an interesting article by Washington-based journalist Elizabeth Drew entitled, "Will Trump Be Removed from Office."

 

https://www.project-syndicate.org/commentary/trump-impeachment-removal-from-office-real-possibility-by-elizabeth-drew-2019-10

A Robust News Cycle: Will Trump Be Removed from Office

Hello, Folks: 

It is always good to start a story with something positive for all. Progress on the trade agreement is great place to start. Last week's reported news on trade announced plenty of good news coming in for the agriculture sector. I am not sure that all the details have been nailed down, but...

Will a Trade War Push the U.S. Economy Into Recession?