Dow
Soars on Election Day, Banking Stocks Lead the Way
20
3:01
The
U.S. stock market roared into election day, sending the Dow Jones Industrial
Average over 450 points higher.
The Dow climbed by more than
680 points, or around 2.5 percent Tuesday morning, before retreating from
their highs.
With two hours of trading left,
the Dow is up 460 points, or 1.74 percent. The Nasdaq Composite is up 1.5
percent. The S&P 500 is also up 1.5 percent. The small-cap Russell 2000 is
up 2 percent.
Ten of the 11 sectors of the
S&P 500 were up. The Energy sector was down 1.2 percent. The Financials
sector was the best performing, up 2.3 percent for the day, lead higher by the
bank component’s 2.7 percent gain and the consumer finance subsector’s 2.8
percent gain. The KBW Nasdaq Bank Index, which tracks the stocks of the biggest
banks, rose 2.5 percent.
Donald Trump’s victory for
2016 set off an explosive rally in stocks, defying widespread predictions that
he would lose or that if he won it would cause the market to crash.
Many of the big Wall Street
firms have Joe Biden as the runaway favorite to win the presidency, just as
they had Hillary Clinton the favorite four years ago. Morgan Stanley said in a
note to clients Tuesday that they estimate a 76 percent chance that Biden wins
and the Democrats take control of the Senate. They estimate just an eight
percent chance that Trump wins and GOP holds the Senate. The Wall Street firm
gives just a thirteen percent chance of a mixed result with Biden winning but
the GOP holding the Senate.
Biden has raised tens of
millions of dollars from Wall Street. During his time as a U.S. Senator from
Delaware, Biden earned the nickname “Plastic Joe” for his willingness to
promote legislation friendly to credit card issuers, including a law that made
it harder for bankrupt customers to get debt relief.
Most analysts think the
economy and the stock market could get a big boost if Democrats sweep the
election. A unified government would be more likely to quickly pass a stimulus
bill, likely giving stocks a short-term boost and ameliorating the drag from
new restrictions aimed at stemming the pandemic’s surge.
Biden’s
immigration and visa programs would likely import enough workers to ease wage
pressure, boosting corporate profits by lowering compensation costs. An
increase in foreign workers also generates new customers for U.S. companies,
especially U.S. banks and large retailers. Biden is viewed as likely to lift
tariffs on China, allowing U.S. companies to send more jobs to cheaper overseas
labor markets.
Biden has promised a rush of
higher taxes and new regulations, including climate change schemes that would
make energy more costly and damage U.S. manufacturing.
Patriotism vs. Globalism in 2020: A Country Is at Stake
BY VERONIKA KYRLENDO
Given the extraordinary
pace of events in America and the world this year, it is not hard to imagine
that a bystander — perhaps a bug-eyed alien who has been following the series
"The Earth" — would be pleased with the dynamics of the
show. But he also would be puzzled at the rapid twists of the
plot. The U.S., for example, enters a 2020 season in all its might
and glory, with the strong economy, where unemployment for everyone is low,
where reduced taxes and regulations promise further growth, and the basic
indices of economic activity spell "victory" for the funny-looking
guy who made it happen. Then — BAM! — a "deadly virus"
hits — eh, unimpressive...the mortality rate would have been much higher for
the sake of the show; 2 percent is a rookie number (would be even lower if the
infected were not placed in the nursing
homes). Nonetheless, America goes into lockdown, losing trillions of
dollars. Unemployment soars. Then — BAM! — massive
protests accompanied by rioting, looting, arson, vandalism, and sheer violence
erupt as a response to the incident of police brutality. The whole
system is declared evil and beyond repair. The crime rate
soars. American flags are burned — not in Iran or
North Korea, but in Washington, D.C. Some parts of the country that
were the envy of the world look like a war zone. Whoa, a
startled viewer would think — what just happened?
What is happening is that
November gets closer, and the country finds itself in a situation that may be
described with a mathematical catastrophe theory used to study discontinuous
processes. An example of a discontinuous process would be an arched
bridge to which more and more weight is added. At first, little
effect is seen as the weight on the bridge is increased — the bridge begins to
bend almost imperceptibly. At a certain point, however, enough
weight is added to the bridge that it collapses. A sudden change in
a discontinuous process is called a catastrophe.
The American model right
now has one active variable, the economic model, and one active parameter, a
necessity to choose one out of two courses of its
development. Speaking scientifically, we have reached a divergence
point that requires a system to follow one of the two possible paths that are
mutually exclusive. At this point, both of them are equally
probable, and the system "freezes" — to land on one of the paths, it
needs a push. It is difficult to accurately prognosticate the
system's behavior at this point, but one can model it. Once the
choice is made, the return to the divergence point is impossible — if you stand
before the abyss, you may either walk around it or take a step into it.
Which paths lie before
America? The first one is presented — and has been practiced for the
last 20 years — by the globalism aimed to secure America's leading place in
monopolar world. The main tools of it are supranational
entities such as international organizations, multinational corporations, and
financial institutions like the IMF and the World Bank. Even though
globalization has been pictured by academia and media as an endless pool of
growth, opportunities, and progress, it has been marked by substantial
shortcomings. For example, under the new regime of enhanced financial
mobility and power, with greater volatility of financial markets and increased
risk, real interest rates have risen substantially. This has
discouraged long-term investment in new plants and equipment and stimulated
spending on the re-equipment of old facilities along with a large volume of
essentially financial transactions — mergers, buybacks of stocks, financial
maneuvers, and speculative activities. This explains why overall
productivity growth in the member-countries of the Organization for
Economic Co-operation and Development fell. So did gross
fixed investment, and so did GDP growth. But the elites have done
well despite the slackened productivity. Because globalization
has helped keep wages down, while increasing real interest rates, the upper 5
percent of households have been able to skim off a large fraction of the
reduced productivity gains, thereby permitting elite incomes and stock market
values to rise rapidly. For the multinational corporations
that shaped foreign policy by
engaging in lobbyism, globalization has also been great. One of
their main objectives that they achieved was cheaper labor
sources. Labor is often cheapest, and least prone to cause employer
problems, in authoritarian states. Capital moves to such friendly
investment climes, shifting resources from the more expensive to the less
costly locale. (That is why the MNCs have vocally opposed the Trump
administration's escalation of trade tensions, tightening of immigration
restrictions, and disruption of global value chains.)
For the global majority,
globalization has been a whole different story. Income inequality
rose markedly both within and among countries. In the United States,
despite a great increase in productivity thanks to new technologies, inequality rose. Underemployment, job insecurity, benefit
loss — all increased.
The Trump administration
disdains globalization and practices a healthy and much needed
protectionism. It withdrew from free trade and other deals and
viciously attacked globalization structures nurtured by the previous
administrations: U.N., NATO, WTO, International Criminal Court, and now WHO,
which proved shockingly unprofessional and frankly hostile to the U.S.
interests.
If Trump gets four more
years as a president, he may get to the holy of holies of the economic
globalism — the IMF and the World Bank — which will undoubtedly face a debt
crisis due to the downfall of the world economy. Ironically, the
COVID-19 hysteria that became an act of desperation for the Democrats — whether
it was a projected event or a natural crisis that would have been a shame to
waste — now plays against the global financial leviathan and its
masters. According to none other than George Soros, the COVID-19 pandemic
is a one-two financial punch for developing economies. Not only has
it put extraordinary pressure on budgets worldwide, but it has also caused a
sharp exodus of capital from emerging markets. JPMorgan Chase &
Co. predicts that 1 in 5 emerging-market countries will default on their debt
obligations — meaning that the core banks may collapse. If some
federal reserve banks fail, the government may nationalize them — but no doubt
Trump would not save them, as Obama did in 2008. That would fatally
undermine the economic foundation of the Democrats for good; that's why Trump's
victory is not an option for them.
If Biden wins, he, as a
true O'Biden-Bama Democrat, will have to save the failing banking system by
unprecedentedly increasing the national debt in a weakened
economy. The previous model that balanced emission with trade deals
would not be possible to execute in a severely damaged global
economy. That is why Biden's victory would lead to a delayed
catastrophe, but with lower chances of surviving it, because the condition of
the country will deteriorate — his leftist policies will make sure of it.
The choice we as a
country will make in November is clear: Trump and patriotism or Biden and
globalism. Development or decline. It is just that
simple.
Follow Veronika
Kyrylenko, Ph.D. on Twitter or LinkedIn.
Image: Fox News via YouTube.
WALL STREET
BANKSTERS KNOW HOW WELL OBAMA-BIDEN-HOLDER SERVED AND PROTECTED THEM DURING THE
ECONOMIC MELTDOWN THEY CAUSED.
A remarkable article
in The American Prospect—a liberal publication that supports
Biden against Trump—makes a devastating exposure of these militarists for
Biden, under the headline, “How Biden’s Foreign Policy Team Got Rich.”
In other words, Wall
Street favored Biden by better than four to one, and Biden’s $23
million lead among the financial elite accounted for more than his entire $16
million edge over Trump in fundraising in May and June.
“According to figures released this week by the Center for
Responsive Politics, Wall Street in particular is favoring Biden’s campaign
over Trump’s. The group found that Biden has raised $52.4 million from the
finance, insurance and real estate industries, of which $32.2 million came from
“securities and investment.”
Wall Street,
Republicans and militarists back Biden campaign
9 July 2020
Anyone who wants to know what type of policies will be
pursued by a Biden administration in the event the Democrats win the November 3
presidential election has only to look at the social and political forces that
are rallying to his campaign.
BLOG EDITOR: BIDEN WAS ENDORSED VERY EARLY BY WAR PROFITEER
AND PARTNER FOR RED CHINA SEN. DIANNE FEINSTEIN.
They include Wall Street, prominent Republicans and
veterans of the Obama national security team.
Thanks to strong support from big business, the
presidential campaign of the former vice president outraised President Trump’s
reelection campaign in June, according to figures announced by the two
campaigns last week. Joe Biden raked in $141 million, while Trump’s campaign
took in $131 million.
It was the second consecutive month that Biden collected
more in campaign contributions than Trump, following a $6 million edge in May,
$80.8 million to $74 million, according to reports filed with the Federal
Election Commission.
The Trump campaign still leads in cash in the bank, with
$295 million on hand as of July 1, as it had few expenses during the Republican
primaries, where Trump had only token opposition. Biden’s campaign was
effectively broke at the time of his breakthrough victories in the Super
Tuesday primaries on March 3, but he now has amassed a war chest of at least
$125 million, according to published estimates.
ActBlue, the online fundraising vehicle for the Democratic
Party as a whole, took in $392 million in June, shattering all previous
records, the bulk of it in smaller donations and contributions from first-time
donors. This is an indication of the widespread popular hostility to Trump,
exacerbated by his vitriolic attacks on the mass protests against police
violence that took place throughout the month, as well as his refusal to take
any serious action to stem the coronavirus pandemic.
BLOG EDITOR: THE RICH KNOW WHO WILL SERVE THEM BEST! ALL
BILLIONAIRES ARE DEMOCRATS. THE GREATEST
TRANSFER OF WEALTH TO THE RICH IN AMERICAN HISTORY OCCURRED DURING THE BANKSTER
REGIME OF OBAMA-BIDEN-HOLDER.
But a major factor in Biden’s fundraising surge has been a
series of virtual events featuring former President Obama, Senator Elizabeth
Warren and Senator Kamala Harris, at which wealthy contributors were invited to
give the maximum donation of $5,600 directly to Biden as well as much larger
sums to the Democratic National Committee (DNC) and the political action
committee favored by the Biden campaign, Priorities USA, which expects to spend
$200 million by itself to support his election.
Under the terms of an agreement between the Biden campaign
and the DNC, the Biden Victory Fund can receive checks as large as $620,600
from wealthy donors. The money is then distributed in smaller amounts to the
campaign, the DNC and various state parties in order to comply with campaign
finance regulations.
According to figures released this week by the Center for
Responsive Politics, Wall Street in particular is favoring Biden’s campaign
over Trump’s. The group found that Biden has raised $52.4 million from the
finance, insurance and real estate industries, of which $32.2 million came from
“securities and investment.”
Trump raised $33.5 million from the broader category of
finance, insurance and real estate. He was competitive with Biden among the
real estate moguls, who view Trump as one of their own, but trailed badly, with
only $7.8 million, from the “securities and investment” subcategory.
In other words, Wall
Street favored Biden by better than four to one, and Biden’s $23
million lead among the financial elite accounted for more than his entire $16
million edge over Trump in fundraising in May and June.
Along with the support of the stock exchange and financial
institutions, Biden is winning support from sections of the Republican Party.
This includes the well publicized Lincoln Project, established by former
Republican campaign operatives Reed Galen, John Weaver, Rick Wilson and Steve
Schmidt, with the support of other former party officials like Jennifer Horn,
former chair of the New Hampshire Republican Party, and George Conway, a prominent
Republican lawyer and husband of Trump adviser Kellyanne Conway.
The Lincoln Project began running
television and internet commercials denouncing Trump from a right-wing foreign
policy standpoint, criticizing him as soft on China and Russia. One ad, released
after the New York Times launched its fabricated and
unsubstantiated charge that Russia paid bounties to Taliban fighters to kill
American soldiers in Afghanistan, features a former Navy SEAL who attacks Trump
for not ordering military action to kill Russians. The ad is titled “Betrayal.”
BLOG EDITOR: BOTH BIDEN AND GEORGE W BUSH ARE GLOBALIST FOR
OPEN BORDERS AND ENDLESS WAR. THE BUSH FAMILY, LONG PARTNERED WITH THE 9-11
INVADING SAUDIS, STARTED TWO WARS AGAINST IRAQ WHICH ARE STILL FILLING THEIR
POCKETS.
Another political action committee, “43 Alumni for Biden,”
consists of hundreds of former officials in the Republican administration of
George W. Bush (the 43rd US president). They declare they are “choosing country over
party” in the November election, stating: “We believe that a Biden
administration will adhere to the rule of law ... and restore dignity and
integrity to the White House.” As a Super PAC, the group can raise unlimited
sums of money to run ads attacking Trump or boosting Biden.
The final component in the rapidly coalescing coalition of
reactionaries supporting the Biden campaign consists of former
military-intelligence officials of the Obama administration, who have made a
killing in the lucrative business of “strategic consulting” and now hope to
return to power in a Biden administration. Several of them, including former
deputy defense secretary Michele Flournoy and former deputy national security
adviser and deputy secretary of state Anthony Blinken, have signed on as Biden’s
top national security advisers.
A remarkable article
in The American Prospect—a liberal publication that supports
Biden against Trump—makes a devastating exposure of these militarists for
Biden, under the headline, “How Biden’s Foreign Policy Team Got Rich.”
It documents the creation of a strategic consulting firm
called WestExec Advisors (named after West Executive Avenue, the street outside
the West Wing of the White House in Washington D.C.). WestExec was founded by
two lesser operatives, Sergio Aguirre, former chief of staff to Samantha Power,
UN ambassador under Obama, and Nitin Chadda, a former aide to Obama Secretary
of Defense Ashton Carter.
These two recruited Flournoy and Blinken to serve as the
group’s biggest “names.” Flournoy was widely expected to become secretary of
defense if Hillary Clinton won the 2016 election and she is once again at the
top of the list for Pentagon boss under Biden.
Under Trump, Flournoy served on the
Pentagon’s Defense Policy Board, the President’s Intelligence Advisory Board
and the CIA director’s External Advisory Board, before leaving once the 2020
presidential campaign heated up. She is a notorious warmonger, and The
American Prospect article details her role in
advocating continued US military support to Saudi Arabia in its war in Yemen,
which has resulted in $3 billion in weapons contracts for Raytheon. WestExec
principal Robert Work, a former deputy defense secretary, is a member of
Raytheon’s board of directors.
WestExec quickly made a splash in Washington with its
launch party attended by top former Obama national security aides such as Susan
Rice, Tom Donilon and Denis McDonough. It lined up a list of clients so potent
that neither WestExec nor the Biden campaign would release the names, for fear
of exposing the fact that Biden’s foreign policy advisory group is a wholly
owned subsidiary of the big military contractors.
One particularly noxious principal at
WestExec is former Deputy CIA Director Avril Haines, who, as The
American Prospect put it, “helped design Obama’s program of using
drones for extrajudicial killings.” In June, the Biden campaign announced that
Haines would oversee foreign policy for the Biden transition team.
While the former drone missile chief
prepares plans for the future Biden administration, the current advisers, with
their lucrative “consulting” affiliations, are listed by The American
Prospect as follows: “Nicholas Burns (The Cohen Group), Kurt Campbell
(The Asia Group), Tom Donilon (BlackRock Investment Institute), Wendy Sherman
(Albright Stonebridge Group), Julianne Smith (WestExec Advisors) and Jake
Sullivan (Macro Advisory Partners). They rarely discuss their connections to
corporate power, defense contractors, private equity, and hedge funds, let
alone disclose them.”
This is what Senator Bernie Sanders, Senator Elizabeth
Warren and their various liberal and pseudo-left apologists have embraced as
the alternative to the fascistic Trump administration—a government of
warmongers and corporate shills, no less committed to the defense of the
interests of the American ruling elite.
Fear and uncertainty dominate
Jackson Hole central bankers’ meeting
The annual Jackson
Hole conclave of central bankers, which concluded over the weekend, underscored
the incapacity of global financial authorities to devise any policies either to
bring about economic growth or counter the mounting contradictions in the
financial system.
Reporting on the meeting, held in virtual format this year
because of the COVID-19 pandemic, the Financial
Times noted: “It was the head of Singapore’s monetary
authority who best summed up the biggest fear gripping the virtual Jackson Hole
conference this year.
“‘We’re not
going back to the same world,’ Tharman Shanmugaratnam warned.’”
The central
initiative at the gathering was the decision by the Fed’s key policy-making
body to maintain interest rates at their ultra-low levels for an indefinite
period and keep pumping money into the financial system.
The decision,
announced by the Federal Open Market Committee as the conclave opened and
elaborated on in a keynote speech by Fed Chair Jerome Powell, was in effect a
guarantee to Wall Street that its demand for “forward guidance”—lower interest
rates for longer—would be met.
The Fed said it
would no longer be guided by a 2 percent inflation rate limit in determining
its interest policy, but would instead focus on an “average” rate of 2 percent,
meaning that the cheap money regime could continue even if prices rose above
that level.
As for
dealing with the slump in the global economy—the most serious since the Great
Depression—and combating the potential for further storms in the financial
system following the market meltdown in mid-March, there were no answers, as
underscored by the remarks of the Singapore finance minister.
“We’ve got
to avoid a prolonged period of high levels of unemployment, and it’s a very
real prospect,” he said. “It is not at all assured that we will get a return of
tight labour markets even with traditional macroeconomic policy being properly
applied.”
It was a
significant comment because one of main themes in remarks by central bank
chiefs was that monetary policy alone would not be sufficient to restore
growth, and government intervention was needed to boost the economy. But, as
Shanmugaratnam noted, even if “properly applied,” there were no guarantees of
success.
According to the Financial
Times, the notion that central bankers “need to face the reality of
permanent upheaval and long-term economic damage” was the “main theme” of the
event.
One of the most
frequently cited academic papers produced for the meeting was prepared earlier
this month by Colombia University academic Laura Veldkamp on the long-term
effects of the COVID-19 pandemic.
The paper said that
the biggest economic effects of the pandemic “could arise from changes in
behaviour long after the immediate health crisis is resolved.” A potential
source of such a long-lived change was a shift in the “perceived probability of
an extreme, negative shock in the future,” and that “long-run cost for the US
economy from this channel is many times higher than the estimates of the
short-run losses in output.”
The paper
continued: “This suggests that, even if a vaccine cures everyone in a year, the
COVID-19 crisis will leave its mark on the US economy for many years to come.”
In other words, the
pandemic was not only a trigger event, acting on the contradictions that had
built up in the economy and financial system, but a transformative one as well.
With the Fed now
having formally committed itself to the endless supply of cheap money to Wall
Street, attention will turn to the European Central Bank (ECB), which is also
conducting a strategic policy review, to see whether it goes down the same road.
While the governing
council, under the presidency of Christine Lagarde, may be inclined to move in
the same direction as the Fed, it would face certain opposition from Germany’s
Bundesbank, which has expressed opposition to the easing of monetary policy.
A member of the governing council told the Financial Times, “we will look
at it,” but the Bundesbank would be “very nervous” about it.
“We are not out of
firepower by any means, and to be honest, it looks from today’s vantage point
that we were too cautious about our remaining firepower pre-COVID,” he said,
adding that there are times when we “need to go big and go fast.”
The actions
of the Fed have done nothing to boost the real economy, as an increasing number
of companies announce that temporary layoffs will be made permanent.
The Wall
Street Journal reported Saturday that a survey conducted by
Randstad RiseSmart found that “nearly half of US employers that had furloughed
or laid off staff because of COVID-19 are considering additional workplace cuts
in the next 12 months.”
This indicates that
the pandemic has been a trigger for a major restructuring of employment
conditions.
The effects of the
Fed’s policies and the further monetary easing to come are focused on the stock
market, with Wall Street indexes rising to the record levels they achieved in
February. The main beneficiaries have been the high tech
companies—Apple, Microsoft, Alphabet (the owner of Google) and Facebook—which
together comprise more than a fifth of the Nasdaq index.
The extent
of their rise and growing financial and monopoly power is indicated by the
results of an analysis carried out by Bank of America Global Research, reported
by the business channel CNBC. It found that the market capitalization of the
major US tech firms, now standing at $9.1 trillion, was greater than the market
capitalization of the entire European market, including the UK and Switzerland,
at $8.9 trillion. In an
indication of the massive shift that has taken place, the research note pointed
out that in 2007, total European market capitalization was four times that of
US technology stocks.
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