Trump Coronavirus Response: Tax Cuts

President Donald Trump has been laser-focused on the deadly Coronavirus epidemic, especially one frightening symptom, the biggest stock market dive since the 2008 financial crisis. This is big trouble for Mr. Trump, who has been taking credit for rising stock prices for the past three years. After putting public health expert Mike Pence in charge of the nation’s Coronavirus response, Mr. Trump prescribed his no-fail remedy for Wall Street’s ills: tax cuts. They’ll even pay for themselves! Too bad they won’t treat disease or pay for America’s health care.

More:

“Trump officials discuss tax cuts, other emergency measures in hopes of tackling coronavirus fallout,” Jeff Stein and Ashley Parker,” Washington Post

“Coronavirus Shows the Problem With Trump’s Stock Market Boasting,” Neil Irwin, New York Times

“The coronavirus gores Trump’s bull market,” Robert J. Samuelson, Washington Post

“Trump tries to shift blame as virus outbreak rattles markets,” Jonathan Lemire and Josh Boak, Associated Press

“Only Doctors Can Save the Markets From the Coronavirus,” Binyamin Appelbaum, New York Times

Update:

“Dow plunges despite Fed’s emergency rate cut to stem coronavirus panic,” Rachel Siegel and Thomas Heath, Washington Post

Related:

“Stock markets are headed for a 40 percent plunge, says economist who predicted financial crisis,” Summer Meza, The Week

“Global stock markets have lost $6 trillion in value in six days,” Maggie Fitzgerald, CNBC

Market Correction

On Friday Wall Street deflated with a mighty belch, as the Dow dropped over 500 points, the worst one-day loss since 2008. Overall there’s been a 10 percent drop from the May 19 peak, so it’s officially a “Market Correction.“

Why? Some blame it on the fears about the instability of China’s economy, others on the EU and Greece, or the Fed, or the low price of oil and other commodities, or the Zodiac.

Fender

The Fender company makes electric guitars that have become American icons. The firm is “being buffeted by powerful forces on Wall Street,” writes Janet Morrissey:

“A private investment firm, Weston Presidio, controls nearly half of the company and has been looking for an exit. It pushed to take Fender public in March, to howls in the guitar-o-sphere that Fender was selling out. But, to Fender’s embarrassment, investors balked. They were worried about the lofty price and, even more, about how Fender can keep growing.

Fat Profits

Obesity is a growing global pandemic, the fifth greatest cause of death. Unlike other mass health threats though, the problem is worse in the wealthiest countries. Hey — what a chance to make a buck! A guy could make a killing.

In a Bank of America Merrill Lynch Global Research report, “Globesity – The Global Fight Against Obesity,” Sarbjit Nahal observes:

“Global obesity is a mega-investment theme for the next 25 years and beyond. Obesity may be the most pressing health challenge facing the world today and efforts to tackle it will shape thinking by policy makers and in boardrooms around the world.”

From a press release:

“Medical costs for treating obese patients are 40 percent higher than for non-obese patients. Treating obese patients comes at a higher premium than treating smokers. Obesity adds 50 percent to annual medical costs, while smoking adds 20 percent. High levels of global childhood obesity and growing obesity in emerging markets will further increase global costs.”

High-Crime Neighborhood: Wall Street

“It is no exaggeration to say that since the 1980s, much of the global financial sector has become criminalised, creating an industry culture that tolerates or even encourages systematic fraud. The behaviour that caused the mortgage bubble and financial crisis of 2008 was a natural outcome and continuation of this pattern, rather than some kind of economic accident.

JPMorgan Chase: Banking as Betting

JPMorgan Chase & Co. had an awkward moment recently when it bet its hedges instead of hedging its bets. This resulted in a $2 Billion loss, some management changes, and loss of CEO Jamie Dimon’s ability to lobby against Wall Street reform with a straight face.

Wall Street Scoundrels Skip Jail

“Nobody goes to jail,” notes Matt Taibbi. “This is the mantra of the financial-crisis era, one that saw virtually every major bank and financial company on Wall Street embroiled in obscene criminal scandals that impoverished millions and collectively destroyed hundreds of billions, in fact, trillions of dollars of the world’s wealth — and nobody went to jail.”

Wall Street and the Economy

From Robert Reich:

“The stock market has as much to do with the real economy as the weather has to do with geology. Day by day there’s no relationship at all. Over time, weather and geology interact but the results aren’t evident for many years. The biggest impact of the weather is on people’s moods, as are the daily ups and downs of the market.

The real economy is jobs and paychecks, what people buy and what they sell. And the real economy — even viewed from a worldwide perspective — is as precarious as ever, perhaps more so.”

 

More here.

Have a happy Labor Day.

 

 

Image by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com

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Sharron Angle: Privatize Social Security

Nevada Republican senatorial candidate Sharron Angle wants to privatize Social Security and trust Wall Street with seniors’ retirement funds. After all, says the Tea Party favorite, Chile’s right-wing dictator Augusto Pinochet did it.

We are not sure if General Pinochet shared Ms. Angle’s views on abolishing the Department of Veterans Affairs and Medicare, but both approve of juntas. 

 

Hat Tip: Alex Pareene.

Image by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com

Comments are welcome if they are on-topic, substantive, concise, and not boring or obscene. Comments may be edited for clarity and length.

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Wall Street’s Bailout Bonuses

 

Kenneth Feinberg, Special Master on Compensation Reform, cited 17 financial firms for “ill-advised” excessive payments to their executives while taxpayers were bailing their companies out with TARP funds. He called this “bad judgement.” Total of the bonuses and other executive payouts: $1.6 billion.