Boots & Sabers

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Category: Economy

Biden Unveils Another Covid Relief Package as Economy Soars

The economy is rebounding. The only thing retarding it is Democratic governors who keep their states locked down. So if the economy is doing OK, why another relief package? Oh yeah, it’s another slush fund to transfer wealth from our grandchildren to Democrat constituencies – just like the “stimulus” package that Obama passed when he came into office. This spending is insane.

Biden unveiled the broad strokes of a rescue plan that includes items that will likely have some bipartisan support – like an additional $1,400 for Americans – boosting the total to the $2,000 per adult President Donald Trump demanded in December.

 

‘$600 is simply not enough if you still have to choose between paying rent and putting food on the table,’ Biden observed.

 

But it also outlines loftier goals, like implementing a national $15 per hour minimum wage, a campaign promise the Democrat made.

 

[…]

 

$130 billion is specifically allocated to go toward schools.

 

[…]

Biden wants to see the approved $300-a-week federal unemployment benefit increased to $400.

Update on Ammo Shortage

FYI

Hornady says that ammunition sales first spiked in March, when the company saw an 86% increase over March of 2019. That, in essence, wiped out the company’s inventory, and they’ve been making and shipping as fast as they can ever since.

“The stuff that goes out today was literally put in a box yesterday,” he explains. “We’ve made one-third more ammunition than we did last year. Unfortunately we don’t have an extra factory laying around or anything else. We’ve got ‘X’ number of people, and we’re certainly trying to add as much capacity as we can.”

 

Hornady also addresses some of the rumors around the ammunition shortage; assuring customers that there isn’t a government conspiracy to buy up ammo and keep it off the civilian market. Apparently some folks have even suggested that Hornady could be making more ammunition if they weren’t busy making t-shirts, but Jason Hornady patiently explains that the company actually buys their shirts, so there’s no production time being lost by focusing on fashion.

 

“We understand it’s frustrating. It’s frustrating for us too,” Hornady says in conclusion. “Keep shooting, because we’re going to keep making more, we promise.”

 

[…]

 

Vanderbrink had to specifically say that the companies are not storing ammunition in “secret warehouses,” and that ammunition is being made and shipped every day in their factories. He noted that if the estimated 7-million new gun owners each purchased two boxes of ammunition, that would amount to an extra 700,000 rounds that would need to be produced. Factor in the ammo hoarding that’s been taking place for most of the year, and you can understand why the supply simply can’t keep up with demand.

IRS Plans 50% Increase in Small Business Audits Next Year

Welcome to Biden’s America. Right after liberal states and municipalities hammered small businesses with lockdowns and restrictions, the IRS is going to audit the hell out of them.

The Internal Revenue Service is planning to ramp up audits of smaller businesses and their investors by about 50% next year, following years of persistently low examination rates, an agency official said Tuesday.

 

The result could be a surge in audits of companies ranging from mom-and-pop retail stores and technology startups to investment funds that have historically faced only infrequent checks thanks to the time and effort required at the IRS.

 

“The IRS is focusing our efforts to increase compliance activity in this area of not only partnerships, but also investor returns related to pass-throughs,” De Lon Harris, the IRS deputy commissioner of examination for small businesses, said at an American Institute of Certified Public Accountants event. For 2021 “we are planning for 50% more than we had in the previous year.”

EU and UK Make a Deal

Good news!

The EU and UK have reached a post-Brexit trade deal, ending months of disagreements over fishing rights and future business rules.

At a Downing Street press conference, Boris Johnson said: “We have taken back control of our laws and our destiny.”

The text of the agreement has yet to be released, but the PM claimed it was a “good deal for the whole of Europe”.

The UK is set to exit EU trading rules next Thursday – a year after officially leaving the 27 nation bloc.

Wisconsin’s Labor Participation Rate Declines

Concerning.

The state’s labor force lost 23,100 people over the month and the labor force participation rate dropped by a half-point to 66.9%. Unemployment was down by 33,000, but employment was up just 9,900, according to place of residence data released by the Department of Workforce Development.

Private sector employment was also down by 1,000, according to a separate survey of businesses used to track job growth.

The retail trade sector was particularly challenged, losing 5,200 jobs from October to November. It is down 11,400 from this time last year.

The leisure and hospitality sector also lost 2,100 jobs and is now down 74,200 from last year.

There were some bright spots. The manufacturing sector added 4,200 jobs, led by nondurable goods, which added 3,200 positions. Transportation, warehousing and utilities also added 2,200 jobs.

Wisconsin’s dip in labor force participation was among the 15 largest in the country last month. Washington was the worst, dropping 2.6 percentage points.

Wisconsin’s participation rate had dropped from 66.9% at the start of 2020 to a low of 65% in July. It had rebounded since then before dropping in November.

DWD Still Failing Wisconsin

It’s been nine months and they still aren’t close to handling the workload.

The Wisconsin Department of Workforce Development says it’s shrinking the backlog of unpaid unemployment claims, however a second backlog of denied applicants appealing the decision is starting to swell.

In an interview last month, DWD Transition Director Amy Pechacek told the I-Team there were approximately 12,000 claimants waiting on an appeal.

The I-Team received more than a dozen emails from unemployed residents who felt their claim was unfairly denied. Some of them said their hearings are being set months out. Others are still waiting just to get a date, including Dan Cacciotti of Racine.

Oracle And HP Move to Texas

The flight from California is accelerating. Let’s just hope that they don’t turn Texas blue in the process.

Tech giant Oracle Corp. said Friday it will move its headquarters from Silicon Valley to Austin, Texas, and let many employees choose their office locations and decide whether to work from home.

The business software maker said it will keep major hubs at its current home in Redwood City, California, and other locations.

‘We believe these moves best position Oracle for growth and provide our personnel with more flexibility about where and how they work,’ the company said in a regulatory filing.

[…]

This month, Hewlett Packard Enterprise, one of the early companies in Silicon Valley, said it will move to the Houston area and build a campus with two five-story buildings by 2022.

‘HPE’s largest U.S. employment hub, Houston is an attractive market to recruit and retain future diverse talent, and is where the company is currently constructing a state-of-the-art new campus,’ the company said in a statement.

[…]

Texas also offers a lower cost of living and no state income tax, both of which may appeal Oracle as well as South Africa-born Musk, 49, who overtook Bill Gates to become the world’s second-wealthiest person last month as Tesla stock reached ever-greater heights.

I would point out that there is nothing stopping Wisconsin from attracting businesses like this. It’s a choice.

Disney Shifts to Streaming

The industry shift continues. I expect that this isn’t going to revert back.

Disney has unveiled plans for a major expansion of its Star Wars and Marvel franchises on its Disney+ subscription streaming service.

The company said that its upcoming films Peter Pan & Wendy and Tom Hank’s Pinocchio will be launched directly onto Disney+, skipping theatres.

Disney is the latest major studio to divert its focus from cinema to streaming.

Last week Warner Brothers said all its 2021 releases would debut on HBO Max.

And, of course, they are going to flood the zone with the same stuff until we’re all sick of it and the market cries uncle.

Disney said that it planned to offer 10 new TV series in Its Marvel and Star Wars franchises over the next few years.

 

Director Whines About Public Seeing Movies

Heh

Tenet director Christopher Nolan is leading a chorus of furious protest from the film industry over Warner Bros’ decision to release its entire 2021 slate in the US simultaneously in cinemas and on its streaming service HBO Max.

In an interview with E!, Nolan said his response was one of “disbelief” and that “there’s such controversy around it, because they didn’t tell anyone … They’ve got some of the top film-makers in the world, they’ve got some of the biggest stars in the world who worked for years in some cases on these projects very close to their hearts that are meant to be big-screen experiences … And now they’re being used as a loss-leader for the streaming service … without any consultation.”

He added: “It’s very, very, very, very messy … [It’s] not how you treat film-makers and stars and people who … have given a lot for these projects.”

[…]

John Stankey, the chief executive of AT&T, which owns both Warner Bros and HBO Max, defended the move on Tuesday, calling it a “win-win-win”. He said: “I know there’s a lot of noise out in the market, people with different viewpoints. Anytime you’re going to change a model, it’s going to create a degree of noise.” Stankey said the move would give customers a “choice”, and the longer-term would be “dictated by what consumers wish to do”.

Remember that this is all about the money. All of the directors, producers, etc. have been paid – except for those who have compensation tied to box office receipts. They are perfectly happy to sit and wait for the theaters to reopen. Warner Brothers, meanwhile, shelled about a lot of money to make these movies and hasn’t been able to reap any return on that investment. They are trying to salvage some revenue for the year and generate funds to reinvest to make more product. Nobody makes money on movies that nobody is paying to see – except the people who were already paid to make them.

Every Business Is Essential to Someone

Yep.

When people were told they had ‘15 days to slow the spread’, they listened. While they obliged, they watched crowds gather in protest of their personal causes and politicians ignore their own rules.

As Gavin Newsom dines at French Laundry and Andrew Cuomo collects Emmy Awards, small-business owners in their states are going viral for fighting back against the orders rendering their businesses not essential. That’s how the governors have justified the shuttering of thousands of businesses since March: you are not essential. As it turns out, the least essential workers happen to be the mayors of Denver, Austin, Chicago, Philadelphia, Washington DC, New York City, San Jose and San Francisco, all of whom violated the COVID restrictions they had imposed on their own constituents. When members of our media flatter the likes of Cuomo with giant cotton swabs and late-night appearances, here’s what they should be asking: what is not an essential business?

Which businesses are not essential to people? What defines a non-essential business? Every business that employs someone is essential. Every business owned by a private citizen on personal capital is essential to that person.

Big Business Supports Increasing the Cost of Entry

This is a very old process.

Many of the nation’s top companies, including AmazonGoldman SachsFordGoogle and Walmart, are calling on the new administration to address climate change and come up with long-term solutions in response to concerns from investors, customers, communities and employees.

In a letter to President-elect Joe Biden and the new Congress, 42 corporations urged the government to rejoin the Paris Agreement and enact ambitious climate policies now.

The statement, which represented a cross section of corporate America, said it would support Biden’s decision to recommit to emissions reduction goals under the accord after President Donald Trump formally withdrew the country from the climate change agreement.
“Fighting climate change” = “lots of regulations.” Big businesses love regulations because they can afford to comply with them. Meanwhile, startups and small businesses can’t afford the army of lawyers and accountants to meet the burden. Big business always supports more regulations because they get a seat at the table to create the rules and it squeezes out competition.
The fact that Goldman Sachs and Walmart support climate change regulations does not mean that it’s good for us. In fact, for the lefties who have spent their lives demonizing these companies, why would you trust them now?

In Praise of Capitalism

Fist bump.

Whole Foods CEO John Mackey claimed capitalism cannot be replaced by socialism, stating it is ‘the path to poverty’.

Speaking to Robert Doar from the American Enterprise Institute via Zoom last week, the multimillionaire, 67, said capitalism is the ‘greatest thing humanity has ever done’ while claiming socialism ‘impoverishes everything’.

The libertarian grocery store boss, whose business is said to ‘lead with love’, spoke passionately about leadership and criticized those who slam capitalism.

‘Socialism has been tried 42 times in the last 100 years, and 42 failures,’ he said. ‘It doesn’t work. It’s the wrong way. We have to keep capitalism. I would argue we need conscious capitalism.’

[…]

‘We’ve told a bad narrative, and we’ve let the enemies of business and the enemies of capitalism put out a narrative about us that’s wrong.

‘It’s inaccurate and doing tremendous damage to the minds of young people,’ he said. Until we get this corrected, capitalism is always going to be disdained and criticized and attacked.

‘It’ll be attacked for its motivations, because its motivations are seen as somehow impure. Yes, of course, business has to make money.

‘If a business doesn’t make money, it will fail, but that doesn’t mean that its purpose is to make money.’

Instead he suggests business culture needs to evolve, to avoid the socialists ‘taking over’, which he describes the ‘path to poverty’.

‘They talk about trickle-down wealth, but socialism is trickle-up poverty. It just impoverishes everything. That’s my fear, that the Marxists and socialists, the academic community is generally hostile to business. It always has been. This is not new.’

The supporter of a free market economy suggests professors are more upset than the students and proposed there should be more ‘business people’ teaching.

Mayor Says Mall Shooter Should Have Complied With Mall’s Gun Prohibition

You can’t fake being this stupid.

Wauwatosa Mayor Dennis McBride says the Mayfair Mall mass shooting wouldn’t have happened if the shooter had “complied” with the mall’s “strict no-gun policy.”

McBride made the comment in a press release. “Guns have no place in shopping malls or other places in which crowds of people gather. Mayfair has a strict no-gun policy. If the shooter had complied with that policy, no one would have been hurt yesterday,” he wrote.

He added, “On behalf of the community, I thank the officers of the WPD and nearby police departments for their protection of shoppers, employees, and other members of the greater Milwaukee community. ”

The mayor returned to the issue of guns in a Sunday news conference where the chief revealed a 15 year old Milwaukee teenager was in custody in connection with the mass shooting, which injured eight. McBride reiterated that Mayfair has a no-gun policy. “Mayfair has that rule and people should follow that rule. Unfortunately, there are people who break rules and laws,” he said.

“I see a deeper problem in society. Children shouldn’t have guns. Mayfair has a strict no gun policy. People should not bring guns to malls,” said the mayor.

Unfortunately, Mayfair Mall has begun its slide into desertion. After a wave of crime there several years ago, the city and mall authorities responded with aggressive measures to quell the violence. The result has been several years of the mall flourishing.

Now the City of Wauwatosa has decided to neuter its police force. They just publicly forced an officer to resign after that officer, coincidentally, shot a kid who was brandishing a gun at Mayfair.

The crooks got the message and they are back roving Mayfair Mall. Why? Because it’s a convenient place to gather where nobody will bother them too much. With the crooks back, violence will become more common and the suburban families who might spend a few hundred dollars at the mall on a nice evening will choose other destinations.

And Mayfair Mall will go the way of Northridge. It’s coming. There are a few short months for Wauwatosa to stop the slide before it gathers too much momentum. Once a reputation is gained, it is quite difficult to reverse it.

Big Auto Stitches with Big Government

And screws consumers in the rest of America in the process. Aren’t you glad that you are still paying the bill to bail them out from 2008/9?

DETROIT (AP) — General Motors is switching sides in the legal fight against California’s right to set its own clean-air standards, abandoning the Trump administration as the president’s term nears its close.

CEO Mary Barra said in a letter Monday to environmental groups that GM will no longer support the Trump administration in its defense against a lawsuit over its efforts against California’s standards. And GM is urging other automakers to do the same.

The move is a sign that GM and other automakers are anticipating big changes when President-elect Joe Biden takes office in January. Already at least one other large automaker, Toyota, said it may join GM in switching to California’s team.

School Closings are Not About the Rona

The Wisconsin Institute for Law and Liberty has done a study which shows what we all anecdotally knew. Unions and politics are driving school closures. COVID is just the excuse. If you want to see systemic classism/racism, look to the public school system.

Diving Deeper: As the new school year approached in 2020, individual school districts in Wisconsin had to make important decisions about in-person learning or using virtual options. But how much did the local presence of the COVID-19 virus factor into these decisions? Research Director Will Flanders, author of Politics in the Pandemic: The Role of Unions in School Reopening Decisions, finds that factors other than the local presence of the virus appear to have played a much larger role.

  • Union presence predicts a school going virtual. Districts with a teachers union were more likely to go virtual than districts without a teachers union.

  • Political ideology predicts a school going virtual. Districts with a higher percentage of votes for President Trump in 2016 and 2020 were more likely to open, while those with a higher percentage for Hillary Clinton were more likely to remain shuttered.

  • COVID-19 cases in an area were not predictive. The per-capita rate of COVID-19 cases in an area was not significantly predictive of whether a school district would reopen or not.

  • Districts with more low-income children are more likely to go virtual. As the percentage of students in a district who are low-income increases, so does the likelihood that the district will have chosen virtual education for the fall.

 

Expected Biden Tax Hike May Be Shifting Equity Markets

It’s one perspective.

  • “In our view the current rotation from some of the FAANG names and other companies tied to them is likely more attributable to profit-taking after a long profitable run ahead of the potential hike in capital gains taxes next year rather than concern that the momentum in technology is running out of steam longer term,” Oppenheimer Chief Investment Strategist John Stoltzfus writes in a note out today, but written before the Moderna vaccine update.

Another Possible COVID-19 Vaccine

Great news.

A new vaccine that protects against Covid-19 is nearly 95% effective, early data from US company Moderna shows.

The results come hot on the heels of similar results from Pfizer, and add to growing confidence that vaccines can help end the pandemic.

Both companies used a highly innovative and experimental approach to designing their vaccines.

Moderna says it is a “great day” and they plan to apply for approval to use the vaccine in the next few weeks.

However, this is still early data and key questions remain unanswered.

 

Pfizer Vaccine Results Looks Positive

Cautiously hopeful.

Pfizer announced Monday that a COVID-19 vaccine developed with its partner, BioNTech, has proved to be more than 90% effective and that it plans to ask regulators for permission to sell the shot before the end of this month if pending data shows it is safe.

“Hopefully now we can move on and get this vaccine out there and make sure it’s doing what it’s supposed to do and stop” the virus, said Kathrin Jansen, Pfizer’s head of vaccine research and development, reports The Wall Street Journal.

According to Pfizer, the vaccine proved to be more than 90% effective in the first 94 subjects who had both been infected by coronavirus and had developed at least one of the disease’s symptoms, according to the companies. The companies say no serious safety issues have come up in its study, which includes almost 44,000 subjects in the United States and in other countries.

However, health regulators say it will take some time to review the vaccine. The Food and Drug Administration requires that safety assessments include at least two months of monitoring for half of the study’s subjects.

Positive Earnings Season

Good!

While the Q3 earnings season has been overwhelmed by the focus of investors on the U.S. election (see the latest), a look back by Bank of America shows that 67% of S&P 500 companies have beaten estimates on both the top and bottom line. That tally is well above the average of 38% of double beats and would be the strongest proportion since Reg. FD.

[…]

The firm notes that small caps smashed it, with the S&P SmallCap 600 index Q3 earnings besting consensus expectations by 50%, driven by Consumer Discretionary, Financials and Industrials.

People Getting Jobs

Great news on the economic front.

The economy added 638,000 nonfarm payrolls and the unemployment rate fell by a full percentage point to 6.9%. The government compiled the data for the report in the middle of October.

Stock futures temporarily erased some losses and bond yields rose as the report showed about 100,000 more jobs than economists expected and a much better unemployment rate. The report did include the loss of 268,000 government jobs, with 147,000 of those Census workers and many others in education.

“The rebound continues to have strong momentum, more than people were thinking,” said John Briggs, head of strategy at NatWest Markets. “Private payrolls blowout, the participation rate went up 0.3… People are coming back into the economy, and [the unemployment rate] still went down a full percentage point.” Economists had expected an unemployment rate of 7.7%.

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