Withholding tax collections were relatively stable through November. But the 5 day average ticked a hair below November’s low here in early December. New lows would suggest that December’s jobs data will be awful, which will add to the likelihood of more stimulus, both fiscal and monetary. Whether that’s bullish or not depends on the Fed. The wrong fiscal/monetary balance could ignite a conflagration.
The Wall Street captured media constantly feeds us the BS that the vaccine is the Magic Bullet that will save us. But while we wait for that shot, the talk about more, more, more stimulus will continue to be the narrative that drives the pundit excuses for why the markets are doing what they’re doing. “Market Rises on Stimulus Hopes” will be the near daily headline.
This is mindless nonsense designed to divert us from paying attention to the financial markets’ real problems.
We have become inured to these $200 billion monthly budget deficits. But this data has catastrophic implications which I get into in this report.
And this is BEFORE any new stimulus.
As more and more Americans get the virus, and more people know someone who has gotten it, or worse, died, the economy sinks.
The eConomic establishment sees the vaccine as the magic bullet. But we now know that it won’t be available for widespread distribution until next summer, thanks to the Don Trump waving off a bigger, sooner deal with Pfizer.
That means that the US will be dependent on social consciousness to reduce the spread of the virus for at least the next 7 months. Good luck with that. 74 million people believe that the election was stolen, and the virus is a hoax. Consequently they refuse to wear masks and proudly engage in superspreader behavior. That won’t change after January 20. So we face months of worsening economic conditions and ever bigger deficits.
Until then, the only magic bullet is more stimulus. It may or may not cushion the catastrophe besetting many American households. And its consequences for the financial markets will only be guessable when we know the size of the package and the size and shape of the Fed’s response. We know what the Fed needs to do at a minimum, and we know what will happen if it doesn’t do it.
Here’s what to look for.
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Available at this link for legacy Treasury subscribers.
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