Take Off Tuesday – Crisis, What Crisis?
43,138 infected and the Nasdaq don't care.
It's more like the Nasdaq is excited about the Coronavirus. It did care for a minute, back in January but, after two whole days of going down, right back up and then one more down day to end the month but everything has been coming up roses in February, so far.
It's kind of strange as Senator Tom Cotton (R-Ark) is on CNBC right now telling viewers that this virus is a threat to our American way of life and was, in fact a Chinese Bio-Weapon that was being developed in a lab in Wuhan and he should know – because he's on the Senate Intelligence Committee (you can find that under the term "oxymoron").
You know it's true because Tom Cotton has now CHALLENGED "The Chinese" to prove him wrong and, guess what? They haven't! That's certainly guilty enough for me and you, right?
And why are we rusing to villify China for having a bug when the Swine Flu started in the US and no one accused us of doing anything other than catching a cold? Well, China is a fantastic scapegoat that plays well with the Republican base and they need a villain to rile up support in an election year and Joe Biden's son didn't work out so well, so on to China!
Blaming China gives Trump another reason to keep his Slush Fund (tariffs) going during the election year so he can hand out goodies to his pals – like Tom Cotton of Arkansas! Trump already picked Tom Cotton to head the CIA and his own party rejected the idea as too crazy – even for Trump. But that was back in 2017 – I wonder what would happen if Trump nominated him today?
Tom Cotton says we could win a war with Iran with just "two strikes, the first and the last" – like he seems to think we did in Iraq (where we still are, 17 years later). Cotton has called his potentially fellow CIA department heads "insolent and obstructive" and he KNOWS the Ukraine interfered with the 2016 election, not the poor, innocent Russians. Tom Cotton wants to be Trumps new Ted Cruise so badly you can smell it when he's on TV…
Meanwhile, back in reality, the spread of the virus does seem to be slowing a bit but 2 days does not a trend make so we remain cautious as the death toll passes the 1,000 mark (1,018 this morning, 10% more than yesterday) with only 4,284 patients having actually recovered – though it's possible a lot of early patients took too long to be detected so hopefully the death rate will drop off into next week.
Speaking of rates, Chairman Powell will spreak to Congress this morning and we're expecting the following topics:
1) US economy doing well (despite coronavirus)
2) $1 trillion deficit is not good
3) Boosting labor force participation & productivity should be “a national priority”
“Putting the federal budget on a sustainable path when the economy is strong would help ensure that policymakers have the space to use fiscal policy to assist in stabilizing the economy during a downturn,” Powell will say in prepared remarks to the House Committee on Financial Services. Powell has been warning lawmakers that the central bank won’t have much ammunition left to fight the next downturn since interest rates are currently so low (the benchmark rate is just below 1.75 percent, far below rates above 5 percent in the past).
“Some of the uncertainties around trade have diminished recently, but risks to the outlook remain. In particular, we are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy,” Powell will say.
Will it make a difference if the Chairman of the Federal Reserve says he's concerned about the virus' effect on the US economy or will that too be ignored by traders? We'll see shortly….