Stocks

[PlatinumGuy]

Which can only make the bubble larger, and the pop more painful.

Not necessarily. Not every time values rise it is bound to burst.

A good infrastructure program can have an Keynesian effect and return the economic activity to pre covid levels.

[Afrages6]

It just depends how far the Fed(s) will go, and people are betting Trump will stop at nothing to win the reelection.

He really doesn’t control the fed.

[ExGingi]

Not necessarily. Not every time values rise it is bound to burst.

AKA "This time is different" 

A good infrastructure program can have an Keynesian effect and return the economic activity to pre covid levels.

It seems like the entire world turned Keynesian now.

As for that infrastructure program - wake me up when that happens. I agree that it's needed, and should have been implemented back in 08. But instead of using questionable tactics to put that (which could have been good policy, even if it came with lots of pork) in place, those tactics were used to pass the infamous Obamacare (I guess I shouldn't complain, as I have directly benefited from it, but I still think it's bad policy poorly implemented).

[PlatinumGuy]

He really doesn’t control the fed.

The Fed can only buy US Treasury bonds if the Treasury issues them.

AKA "This time is different"  ::

Similar to post WW2 where govt spending skyrocketed.

As for that infrastructure program - wake me up when that happens. I agree that it's needed, and should have been implemented back in 08.

Infrastructure is only an example. Any way the government stimulates economic production can work (wage subsidies), as long as it's not pure handouts.

Personally I think the market is under-appreciating the virus and another dip is coming, but I disagree that fundamentals aren't in sync. The $3T the govt injected are here to stay. The fundamentals changed for good.

[ExGingi]

Personally I think the market is under-appreciating the virus and another dip is coming, but I disagree that fundamentals aren't in sync. The $3T the govt injected are here to stay. The fundamentals changed for good.

The only logical conclusion I can derive from that is to buy Gold (and possibly - gasp - Bitcoin)

[zh cohen]

https://twitter.com/hussmanjp/status/1268961102244786182

Who got 24 weeks of PPP?

[Mordyk]

Who got 24 weeks of PPP?

Nobody did.  He just put these numbers so it looks exciting

[ExGingi]

Who got 24 weeks of PPP?

https://www.cbh.com/guide/alerts/ppp-forgiveness-period-extended-to-24-weeks/

First, the time during which wages, group health plan contributions and retirement plan contributions can be paid is extended from eight weeks to 24 weeks after the loan disbursement date, but no later than December 31, 2020. With the longer forgiveness period, it becomes significantly easier for businesses to continue with current payroll levels, even if they are lower than pre-COVID periods, to obtain 100 percent forgiveness. Also, by extending this covered period, the maximum loan forgiveness for any individual increases from $15,385 to $46,153.

Nobody did.  He just put these numbers so it looks exciting

Hussman isn't a media guy, he's a scientist. He doesn't just throw numbers there for looks. If you think his assertion is flawed, reply to his tweet questioning them.

[cgr]

https://www.cbh.com/guide/alerts/ppp-forgiveness-period-extended-to-24-weeks/

A) it doesn't increase the loan amount, just the forgiveness ability
B) it's not clear yet that the actual payroll forgiveness for owners will increase to 24/52- it might very well stay at 8/52. The 100k/annual cap is still in place (employees were allowed to receive bonuses under the previous rules as well so no $ change there).
C) There are still FTE/salary level requirements so it's not like you can just pay everyone less now that you have 24 weeks to spend it

I think this whole 24 week period is a crock. The only real change is that you can now choose a later 8 week covered period instead of having to spend it all within the first 8 weeks that you were funded.

[ExGingi]

B) it's not clear yet that the actual payroll forgiveness for owners will increase to 24/52- it might very well stay at 8/52. The 100k/annual cap is still in place (employees were allowed to receive bonuses under the previous rules as well so no $ change there).

I think the difference is whether one has employee or is just self-employed. If I understand this correctly, self-employed stays at 8/52. If one has employees and the numbers work out, it could be 24/52.

[cgr]

I think the difference is whether one has employee or is just self-employed. If I understand this correctly, self-employed stays at 8/52. If one has employees and the numbers work out, it could be 24/52.

Definitely possible but no confirmation- waiting to see what the SBA will release on this.

[cgr]

https://www.washingtonpost.com/business/2020/06/05/may-2020-jobs-report-misclassification-error/

[ExGingi]

https://www.washingtonpost.com/business/2020/06/05/may-2020-jobs-report-misclassification-error/

And...

https://twitter.com/n_yang/status/1268922043778469893

That "mistake" is as large as the pre-shutdown total claims number.

And the market rallies. There's lots of hot air elevating the markets, but the fundamentals are scary.

[zh cohen]

Hussman isn't a media guy, he's a scientist. He doesn't just throw numbers there for looks. If you think his assertion is flawed, reply to his tweet questioning them.

I'm not on twitter, and can only see tweets that are embedded, but it's a pretty glaring mistake that should be obvious to a scientist.

[ExGingi]

I'm not on twitter, and can only see tweets that are embedded, but it's a pretty glaring mistake that should be obvious to a scientist.

Why are you say in it's a mistake. If time to spend PPP was extended to 24 weeks, it's not a mistake. You are thinking 8/52 for self-employed. But if a small business has payroll and is paying employees, now they are given 24 weeks to spend it. So for the median employee making 34k/yr 24 weeks is $15,692.

[cgr]

Why are you say in it's a mistake. If time to spend PPP was extended to 24 weeks, it's not a mistake. You are thinking 8/52 for self-employed. But if a small business has payroll and is paying employees, now they are given 24 weeks to spend it. So for the median employee making 34k/yr 24 weeks is $15,692.

How does it matter that it's 24 weeks if the loan amount didn't increase? It's adding the same $ to the economy as before. I'm sure even those businesses who originally complained about the 8 week window would have found a way to spend it if not for the change in rules.

[ExGingi]

How does it matter that it's 24 weeks if the loan amount didn't increase? It's adding the same $ to the economy as before. I'm sure even those businesses who originally complained about the 8 week window would have found a way to spend it if not for the change in rules.

It's explaining the job numbers, by dividing the PPP funding by the amount available to use per median income employee.

[cgr]

It's explaining the job numbers, by dividing the PPP funding by the amount available to use per median income employee.

Again- PPP funding didn't increase. If the median income is 34k, the employer still only received funding to cover ~8 weeks of that (a little more because funding was 2.5X months), funding didn't increase to 24 weeks, and employers have no obligation to keep employees on for that long.

[AsherO]

https://twitter.com/thebondfreak/status/1268981748047712257

Click tweet to see more.

The federal money being given out as well as PPP, EIDL and the ability to withdraw from qualified accounts and repay in 3 years without tax or penalty, is going towards paying down consumer debt.

I couldn't find a clear description of what's included in this number. But if it includes the entire credit lines of consumer credit cards, rather than balances, then the issuers slashing credit lines could be a big factor here.

[ExGingi]

Again- PPP funding didn't increase. If the median income is 34k, the employer still only received funding to cover ~8 weeks of that (a little more because funding was 2.5X months), funding didn't increase to 24 weeks, and employers have no obligation to keep employees on for that long.

Many small businesses have been struggling to incur enough wage costs to maximize their loan forgiveness, often as a result of reduced workforces. The law makes a number of changes to help employers reach complete forgiveness of their PPP loans. First, the time during which wages, group health plan contributions and retirement plan contributions can be paid is extended from eight weeks to 24 weeks after the loan disbursement date, but no later than December 31, 2020. With the longer forgiveness period, it becomes significantly easier for businesses to continue with current payroll levels, even if they are lower than pre-COVID periods, to obtain 100 percent forgiveness. Also, by extending this covered period, the maximum loan forgiveness for any individual increases from $15,385 to $46,153.