A Tale of Two Recoveries

 The recovery has been different depending on who you are. The wealthy have made out handsomely, while the poorer of society have not been treated well. People who are in a position during to purchase stocks and securities have made a lot of money since March, but the poorer amongst the population do not have  the means to own stocks. When you live paycheck to paycheck, you can not really put money into investments.

The stock market rose 4.3 Trillion in November, and the people that were hit hardest by the recession and the pandemic hardly saw any of it. Many people are still struggling, and hopefully congress will pass some sort stimulus bill to help people weather the storm until a vaccine is widely distributed.

https://www.washingtonpost.com/business/2020/12/04/stock-market-stimulus-unemployment-figures/

A Blow to Economic Recovery

Six months after the coronavirus pandemic tore a hole in the U.S. economy, the once-promising recovery is stalling, leaving millions out of work, and threatening to push millions more. We have seen throughout this pandemic, that many places are out of business and many people have been laid off from companies due to the decrease in productivity by those companies. At first, it was supposed to be temporary, but now it seems as if this could go on longer than expected and this could cause protests and outbreak from people who got laid off. Many companies went online allowing people to be able to still work but still, even those companies had to lay off many people in order to maintain their business and not let it die down. Economists said that the economic report underscored the need for more federal help. This means many people are wanting to get more federal aid or more stimulus checks in order to maintain their lives. The unemployment rate fell to 7.9 percent, down from a record high of nearly 15 percent in April which means there was some improvement. But along this good news carried a caveat that nearly 700,000 people left the labor force, meaning they no longer counted as unemployed. Overall, unemployment is even worse for women than men if looked across demographics. This means single women who tend to take care of their children are in a much worse condition and should be given aid through either federal aid or be considered for jobs as much as men. Do you guys believe this is unfair to each person? Do you guys believe that people should get more federal aid or should the companies get more aid so they could start hiring more employees decreasing unemployment rate as well? Cited: Casselman, B., & Friedman, G. (2020, October 02). Job Gains Are Waning, a Blow to Economic Recovery. Retrieved December 07, 2020, from https://www.nytimes.com/2020/10/02/business/economy/september-jobs-report.html

China Helps Fund COVID Vaccine

 A Chinese Biotech company named Sinovac has received over 500 million dollars in funding efforts so that they will be able to double their production numbers on the vaccine. The company that invested such a large amount was another Chinese company by the name of Sino Biopharmaceutical Limited. With this amount of money, Sinovac will be able to produce 600 million vaccine doses a year. Numbers this large will quickly show a positive impact around the world, especially with a 95% efficiency rating. Hopefully soon there is a break in all the madness and things can return back to where they were before the pandemic, socially at least anyways.

Sinovac secures $515 million funding to boost COVID-19 vaccine production | Reuters

Further Slowdown in Job Creation Sets Off Economic Alarms

A few months after the economic opening of the country and the quick decline of the unemployment rate, the rate of hiring has slowed significantly.The Labor Department reported Friday that employers added 245,000 jobs in November, fewer than half the number created in October. The pace of hiring has now diminished for five straight months.While many of those knocked out of a job early in the pandemic have been rehired, there are roughly 10 million fewer jobs than there were in February. 

One of the longer-lasting wounds is likely to be a large pool of people, many still of prime working age, who drop out of the labor force, remaining sidelined even when opportunities return. The share of those 16 and older who are in a job and actively looking for one fell by 61.5 percent in November and continues to remain far below levels seen before the pandemic. This drop is most seen in women, who are heavily significant in the service industry that hit hardest during the pandemic have left the labor market to take on family responsibilities. It is not just women are being hit the hardest with this stall in employment. Unemployment among Blacks and Hispanics are significantly higher than it is for whites. 

There is some positives in the labor market. The biggest gains have been in warehousing and moving goods and in health care jobs while jobs in hospitality, travel and leisure continue to struggle. But job creation is slowing with millions of Americans still unemployed so if job creation doesn’t pick up, it will take more than three years to get back to where the labor market was before the pandemic hit.

https://www.nytimes.com/2020/12/04/business/economy/november-jobs-report.html

Brian Deese will Lead National Economic Council

Brian Deese, former advisor for the Obama administration, was chosen late this past week by President Biden to lead the National Economic Council. Deese has a background in climate change and environmental policy. He was appointed by President Obama in 2015 as the Senior Advisor on Climate Change and Energy. He has also spent his time since then as the "sustainability director of asset management" at BlackRock, a leading investment management firm. 

This nomination signals a focus towards climate change amid a pandemic and recovering economy. While environmental policy certainly needs to be a focus for the Biden administration, does this nomination surprise you at all given the current uncertainty of the market? With Trump repealing so many environmental policies that Obama (and Reese) had helped pass, do you think Reese will prioritize environmental policy over other things? How do you think this will impact his opinion on major corporations and environmentally related economic policies like cap-and-trade?

https://www.nytimes.com/2020/12/03/business/brian-deese-national-economic-council.html

A $900 Billion Plan Would Help the Economy, but Not Fix It

There is talk about a $908 billion aid package possibly coming in the future. It is a bipartisan framework assembled by a group of senators. Economists have been calling for Congress to approve a stimulus for months. “The economic recovery, slowing for months, is in danger of going into reverse.” By no means is there any final plan for who it is distributed to, but “experts say the plan would provide relief to several battered corners of the economy. It includes nearly $300 billion for small-business aid, $180 billion for unemployed workers, and $160 billion for state, local and tribal governments.” Unfortunately, a plan this small won’t be able to help everyone who needs it, but it is a little boost. Biden said that even if Congress does reach a deal before the end of the year, he will be pushing more spending when he takes office. The package would extend the initial programs set to expire at the end of the year that expanded and extended the unemployment insurance program. Many restaurants and retailers made job cuts in November leading to the weakest monthly gain of recovery in unemployment data so far. At the moment, this plan would be more of a compromise and the goal is most likely to prevent millions of families from losing their income the week after Christmas based on the direction of the economy.

Tankersley, Jim, and Ben Casselman. A $900 Billion Plan Would Help the Economy, but Not Fix It. 4 Dec. 2020, www.nytimes.com/2020/12/04/business/economy/congress-stimulus-economy-impact.html

Will coming months be the "worst-case" scenario for the US?

This pandemic has been difficult for everybody, but we can now see the light at the end of the tunnel. As we are waiting for the approval and distribution of the highly anticipated vaccine, health experts are saying that the next few months will likely be extremely difficult for the country. Emergency medicine physician Dr. Leana Wen has said that the next three months are going to be "the most difficult in the public health history of this nation." Hospitals are expected to be overwhelmed in terms of the death count due to the virus. Hospitalizations also reached six figures for the first time ever this week, with now more than 100,600 Covid-19 patients nationwide. With death tolls once again rising, Ohio Gov. Mike DeWine warned hospitals were not only in a crisis, but that "the crisis is worsening and getting more serious." This country's healthcare system is clearly under immense stress and pressure. Moreover, we still don't know the exact impact of Thanksgiving traveling and get togethers on the spread of the virus. On the bright side, the leading vaccine that has been developed by Pfizer is 95% effective as shown by their large scale trials. They are expected to apply for emergency use with the FDA as soon as December 10th, and distribution of the vaccine is expected to begin within a week after approval. This is a huge positive, however, people still need to be careful for the upcoming months until health experts instruct otherwise. With that being said, do you think that people will continue to follow the provided guidelines after being vaccinated, as suggested by healthcare experts? What impact do you think this vaccine will have on the economy of the country? How soon after the distribution of this vaccine do you think we will be able to return to some sense of normalcy?

Maxouris, Christina. “There's a Light at the End of the Tunnel, but Coming Months Will Be Covid-19 'Worst-Case Scenario,' Expert Says.” CNN, Cable News Network, 4 Dec. 2020, edition.cnn.com/2020/12/04/health/us-coronavirus-friday/index.html. 

Cyber Monday Biggest Online Shopping Day in History

 CBS News reported this week that Cyber Monday marked the largest single online shopping day in history.  Online shoppers spent $10.8 billion, up from last year's prior record of $9.4 billion.  According  to the article, consumers were spending $12 million per minute between 7:00 pm and 11:00 pm.  

Online shopping volumes were certainly influenced by the ongoing global pandemic which makes shopping from the safety of home appealing to all consumers but the robust sales numbers are an encouraging sign for the economy which is struggling to recover from coronavirus.  

Subsequent holiday spending events including small business Saturday and giving Tuesday also saw a boost in activity year over year which may be additional indication that American consumers are ready to get back to normal habits.

https://www.cbsnews.com/news/cyber-monday-online-shopping-record-12-million-minute/

UK economy better off due to lockdowns

 Economists from the UK believe that even with lockdowns the economy is doing better than if there were no lockdowns at all. Some experts believe that the recession could have been 50-70% worse if the lock downs had not taken place. Even with the current lockdown they are in they believe the economy is still doing well especially since educational systems are still running and were more prepared for a possible lock down. Survey that have been conducted that working from home between the lockdowns had remained steady with a third of people not returning to their place of work in-between the lock downs. They also found that nearly 97% of adults have been adhering to mask mandates. I think it will be interesting to see in the long run the effects of countries that had multiple lockdowns verse others that had 1 or none at all.

Article Link

Is Boeing a Buy?

2020 has been very rough for most companies across the country. This is mostly due to the pandemic which has caused mass panic and record high unemployment rates. One particular industry that has suffered horribly is the aerospace industry. The Boeing Company is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide. The company also provides leasing and product support services. It dominates the aerospace industry with over 80% of the industries sales coming from then and one other company. Boeing's stock price peaked at $440 in March of 2019 and has since dropped down to as low as $93 but has recovered to $213 as of today. They have suffered so much because of two main factors. One of them being that their 737 max plane had technical issues and caused two accidents killing everybody on board. The other reason being the pandemic stopping almost all flying across the world. As of just recently, they have just gotten their 737 max approved to be flown again by the government so this is a great start for them. On top of this the vaccine is soon to be released to the public so this is also very beneficial for them. I personally have a price target of $400 over the next 5 years for Boeing because I don't know for certain how long it will take for society to get comfortable with flying on planes again but I believe that over that 5 years is plenty of time to do so. 

What do you all believe will happen with Boeing?

Yellen Will Lead Biden's Treasury

     As of November 23rd, president elect Joe Biden announced that Janet Yellen will serve as America's next Treasury Secretary. Ms. Yellen, former head of the Federal Reserve is clearly one of the most qualified economists for the job. Yellen, who specializes in labour economics, also serves as the president of the American Economic Association. Fortunately, the progressive left and conservative right can both see something to like in Yellen. This means that it is almost a guarantee that she will be conformed by the senate. Her biggest task in office will be to pass another stimulus bill that has been hard to do during the pandemic. Throughout the pandemic, Yellen has urged for more fiscal support to help the struggling economy. Republicans and Democrats have been unable to agree on a new stimulus bill passed in the spring, with even more of a disagreement on the size of the stimulus package. Economists believe that if anyone can break the deadlock it is Ms. Yellen.

Is Yellen a good choice for the position?

https://www.economist.com/finance-and-economics/2020/11/24/janet-yellen-will-lead-joe-bidens-treasury-what-does-she-stand-for

America Failed at COVID-19, but the Economy’s Okay. Why?

 While the US entered the coronavirus recession with few structural advantages, the US economy ranks near the top. The US is predicted to contract by 4.4% in 2020, while countries like Japan, Germany, and the United Kingdom are expected to contract at 5.3%, 7.1%, and 10% respectively. When looking at how each country handled the pandemic, these countries outperform the US with fewer cases and a quicker reopening. Additionally, the US's rate of unemployment exceeds these countries. The success of the US economy is deemed only to the stimulus package.

 In the coronavirus recession, the US has a few structural advantages that other countries cannot rely on. One advantage is the diversified economy. Some countries rely heavily on one industry, like Spain with tourism. Additionally, the US does not rely on exports for growth, making up only 12% GDP. This compares to Japan at 18% and Germany at 47%. Some of the advantages the US has are a flexible labor market and better monetary policy implementations.

 How do you think these advantages affected the US recession compared to countries like Japan and Germany?

link: https://www.theatlantic.com/ideas/archive/2020/11/america-failed-covid-economys-ok-why/617223/

JPMorgan becomes first major bank to say first-quarter GDP will decline because of Covid surge

    The JPMorgan economists become the first to disagree with Wall Street's forecast of 2021 Q1 showing positive economic growth and instead say that due to the recent surges in covid cases the first quarter of 2021 will be negative. They see the economic growth shrinking down by one percent in the first quarter and then rising to 4.5 in the second quarter and rising even more to 6.5 in the third quarter of 2021.This all being said JPMorgan economists still think that the year 2021 will be met with good expansion in the second and third quarters due to the hopeful development of a vaccine . Not only are they predicting that the positives of a vaccine will help the economy but more stimulus checks will help the economy to see increased growth in the second and third quarters as well.  In the end, the JPMorgan economists believe that this growth we were experiencing in the months after the shutdown was the economy opening up but now the majority of the economy is opened and running and now we are facing restrictions that will slowly close the newly opened economy, Sadly the side effects will be decreased growth from q4 of 2020 to q1of 2021. Hopefully, the positives of a vaccine and more financial help from the government will help the economy grow and move past the restrictions after they are implemented in 2021.

Do you think these factors will help the economy to see growth?

https://www.cnbc.com/2020/11/20/jp-morgan-says-first-quarter-gdp-will-decline-because-of-rising-covid-cases-and-restrictions.html

Biden's First 100 Days in Office

With the president-elect looking to enter the White House with a divided Congress, it is not clear when we would start seeing Biden’s plans for the economy, environment, education system, and health care take form. Instead, in his first 100 days, Biden plans to focus on more immediate issues, hoping to gain bipartisan support. 

On his first day in office, or beforehand, Biden has several plans surrounding COVID-19: 

• Biden has already announced a team of advisors to spearhead his pandemic response once he takes office. 

• Begin work on a new coronavirus aid package, coordinating with state governors, mayors, and other local politicians. 

• Expand coronavirus testing resources as well as for increasing the country’s capacity to make personal protective equipment. 

• Install “an effective distribution plan” - His plan includes spending of $25 billion on vaccine production and disbursement and calls for an eventual vaccine to be free for all Americans. 

• Mend relationship with the World Health Organization by rejoining the body. 

Aside from his COVID-19 plans, Biden also plans to reverse Trump’s corporate tax cut, raising corporate income taxes from 21-percent to 28-percent. Biden additionally has plans to reenter the U.S. in the Paris climate accord of 2015. Furthermore, on his first day, Biden plans to produce comprehensive immigration legislation that will create a pathway to citizenship for 11 million migrants living in the U.S. illegally. With the first immigration plans, he has also pledged to make the DACA program permanent on his first day in office, stop the practice of separating immigrant families trying to enter at the border and rescind the restrictions on people in Muslim-majority countries from traveling or immigrating to the U.S. 

For Biden’s first 100 days in office, his plans include more points on immigration, where he wants to reform the U.S. asylum system and the treatment of people at the border with Mexico. The funding for the construction of a wall along the southern U.S. border will additionally be discontinued, however, Biden says that he will not take down the parts already constructed. Aside from immigration, Biden also plans to:

• Institute a national police oversight commission as part of his larger plan to help overhaul policing.

• Quickly push Congress to pass the SAFE Justice Act, a first step in addressing prison reform and crime prevention. The legislation includes taking steps to reduce the use of mandatory minimum sentencing for nonviolent offenses and institute policies geared at lowering recidivism.

• Reach out to U.S. allies to work on foreign policy. Biden wants to plan an international summit where democratic leaders will discuss ways to fight corruption and authoritarian practices. He additionally wants to plan a climate world summit to assist nations with high carbon emissions to take climate action. 

Due to the volume of his plans, some people wonder if Biden will be able to execute them all, do you agree with this question? Additionally, what do you think of Biden’s plans for his first 100 days in office? When do you think we will start seeing Biden’s bigger plans for the economy and environment?

https://www.npr.org/2020/11/09/932190347/bidens-first-100-days-here-s-what-to-expect

Federal Reserve To Wind Down Pandemic Programs After Rare Clash With Treasury

 https://www.npr.org/sections/coronavirus-live-updates/2020/11/20/937009220/fate-of-pandemic-funds-sparks-unusual-dispute-between-treasury-and-federal-reser

The Fed decides to wind down Covid stimulus programs at the end of the year. Emergency funds are rarely used, but this year, these funds have been vital since March to help with the economy during the pandemic. The Treasury Department has convinced Jerome Powell that the funds are not needed anymore because "they have done their job." These funds include small-medium business loans and extensions on rents. This is all against what the Fed wants to do as they desire to extend the use of these funds. Some business owners have begged for more help as states are starting to shut down again. Powell also hopes that with Biden coming into office, the funds will begin being used again. In the end, however, the Fed must follow the Treasury's requests to slow down the spending.

How do you think this will change the recovery of the economy?

Global Stocks Rise Ahead of US Data Amid Virus Unease

Due to the United States presidential election and the Coronavirus regulations, the global stock market rose. Countries are consider about the U.S. possibly locking down because this would have a negative impact on global services relating to business and travel. The following have risen, FTSE 100 in London, Shanghai Composite Index, Kospi in Seoul, and India’s Sensex. Due to Trump’s unwillingness to concede, he has been the driving force of market nerves. Will Asian stocks rise or fall once Joe Biden is in office?

Article Link: https://www.usnews.com/news/business/articles/2020-11-23/asian-stocks-rise-ahead-of-us-economic-data-amid-virus-fears

Tesla added to the S&P 500

Tesla has recently been added to the S&P 500 which is huge for them! For those of you who don't know, the S&P 500 is an index that contains the top 500 publicly traded companies in the stock market. After Tesla was officially added, their stock price has been pumped up to all time highs ($500 per share). Tesla is one of my personal favorite companies because I believe like many others that they are in their infancy. The electric vehicle market demand has the potential to 10x over the next 5-10 years. One reason this will happen is the increasing threat of climate change. Everyday, climate change is getting worse and we are seeing more  civil unrest. Electric vehicles are scientifically proven to be safer on the environment and this will give all electric vehicles a competitive advantage over gas powered vehicles. On top of this, Tesla is also involved in the energy industry which I believe is being slept on by investors. The CEO of Tesla, Elon Musk has said himself that he believes their energy business will grow to be larger than their electric vehicle business by 2030. There energy business is also extremely beneficial for the environment because they are using renewable energy. Tesla is a company that I not only want to succeed because I will make a profit on my investment, I want them to succeed because they will help the entire world and in turn help our economy thrive. What do you think about Tesla?

No Sources used 

"Amazon Opens Online Pharmacy, Shaking up Another Industry"

 https://www.usnews.com/news/us/articles/2020-11-17/amazon-opens-online-pharmacy-shaking-up-another-industry

We all know the simplicity and convenience that is Amazon.  No matter what you need, you know you can find it on amazon and it will be on your doorstep before you can say United States Postal Service.  Amazon has often been called a monopoly although it is not. Amazon may seem as though it dominates the market, it only holds a significant amount of power in the e-commerce world. However, with the impact of COVID-19 and the general convenience of online shopping, brick and mortar stores, and companies are going out of business. We all saw the tragic closing of Toys R Us which many millennials and older Gen Z hold near and dear to our hearts, but stores of all kinds are closing quietly.  

Amazon started as an online book store but has grown to an e-commerce mega-site. Although not entirely due to Amazon, brick, and mortar stores of all kinds are struggling to keep up with e-commerce. However, who would have thought that Amazon would ever carry prescription medication.  Amazon will now carry insulin, inhalers, and other common medications.  This is a whole new world of competition for large and small pharmacies.  Amazon can choose to offer these medications using various forms of discounts such as offering percentage discounts to prime members, lower prices for people without insurance, and cheaper shipping than other online pharmacies.  COVID-19 has put many pharmacies, big and small, under a lot of stress, and adding a strong, new competitor is the last thing they need.

Is there potential that Amazon will run small and large corporations out of business? Although it is unlikely they will completely dominate the pharmaceutical market, there is a chance they could become a leader.  As Amazon begins to enter more markets, how will it impact the economy? Stock in Amazon skyrocketed during COVID-19. Do you think consumption will increase, decrease, or stay the same as Amazon begins to dominate beyond e-commerce?

Fed Chair: The New Economy and its Growing Pains

 On Thursday, November 12, Jerome Powell, The Chair of the US's Central Bank, said in a conference with other central bank chairs that the economy that we are going recovering from is no more. In this recovery, we will transition into a new economy that is even more technology heavy. While in the long run this is good, as technology will raise our Total Factor Productivity, leading to a higher standard of living. In the short run, this transition has some growing pains; this transition causes disruption. This disruption is mostly felt among people with lower paying jobs, minorities, and women. These groups typically filled roles that are more face-to-face, and in the wake of a pandemic, these groups are being left behind, and will have to adapt to this more technology heavy economy in the long run. In the short run, these groups are unemployed and will need some assistance until they are able to pick up a new job. The Federal Reserve has pretty much done everything they can do, so now the US government needs to step up to help mitigate these pains.

https://www.cnn.com/2020/11/12/economy/economy-after-covid-powell/index.html

The Effects of a Fully Functional Vaccine on the Economy

As we have seen in the past few days about the vaccine is that there is a 90% chance that the vaccine will be fully functional against covid-19. This has caused the stocks of that specific pharmaceutical company to substantially rise upwards. This means people will start buying these stocks fast, helping that company to grow in comparison to others that have also been trying to conjure up a vaccine. This will help this very company to expand their operations and make vaccines available to even more people around the world. It is true that whichever company is able to make a vaccine, will in fact become the highest gross earning and valued company during the pandemic and maybe even beyond it. A vaccine will not only help the people who made it, but also every single person who will be given it in order to avoid getting covid-19. This will help businesses to start running and companies to resume work. This will also cause workers to stop working at home and be more productive at offices with the capital present. This will also cause students to resume their studies hence producing more labor for companies to hire and hence this will cause an increased output rate that was decreased due to the pandemic resulting in the continuation of the economy. Labor has been the most affected in these times since not only many people became jobless, but many others died causing a substantial decrease in productivity hence markets were forced to close down. The vaccine will also help restart trading for the US with other countries as the US would know that it would be able to increase its GDP during this time because they would be immune to covid-19. By restarting trading, the vaccine would be exported and for the time being, imports would still remain as it is to make sure all people first get the vaccine before making death tolls rise once again. Therefore, this will cause net exports to rise since net exports = Exports - Imports, causing an increase in overall GDP.

Macroeconomic effects of Biden’s immigration policy

 This article discussed the effects that Biden's potential immigration policies could have on the country in the future. Some of the policies that were listed were a transition to legal status for illegal immigrants and restoring immigration rates back to pre-trump levels. He would accomplish this through a 10-year transitional period to grant citizenship to current illegal immigrants and granting a lot more work permits. Some of the initial impacts would be an increase in population leading to an increase in GDP. However, since most of the immigrants bring little to no savings the capital stock relative to labor would increase by a smaller amount. With labor at a higher amount than capital, wages would initially be lower. The lower capital would also increase foreign investment and domestic saving. By 2050 they expect GDP and capital stock to increase by 1.7 relative to the baseline. They also project the debt held by the public to decrease by 1.6%. What I think is interesting is they project it out to 2050 but there will be a lot of presidents and changes between now and then. The end goal is good but will the initial impact be worth it for the possibility of the future returns. I think it will also be interesting to see what other policies and plans he has for immigration.

Article Link

Lockdown Part 2

 With the rising number of COVID cases, many states and business have a lot to consider. The state of Washington is establishing some new rules in an attempt to limit the number of virus cases. The are reducing the amount of people allowed in indoor facilities to 25% of their normal capacity. The less people there are in one place, the lower the chances are of getting the virus. Washington is also prohibiting the gathering of multiple households, unless every member quarantines for 14 days and has a negative test result. Although this can not be enforced, it is being highly recommended for the safety of others. This may seem like a hassle, but it is necessary if we want things to return to a more "normal" state again anytime soon. At one point, Washington experienced a 72% increase in the number of cases from one week to the next, so the state officials feel as if these guidelines are their best line of action.

https://www.usnews.com/news/best-states/washington/articles/2020-11-15/new-covid-19-restrictions-on-dining-gyms-in-washington

Vaccine Distribution Will Favor the Richest Countries

 Even as the world is optimistic about the news from Pfizer that their vaccine looks to be more than 90% effective, there are already concerns about how the vaccine will be distributed in a world where almost no region has been spared.  According to an article published this weekend by Salon, more than 80% of Pfizer's available vaccine doses have already been bought by the world's richest countries.  Pfizer claims it can produce 1.35 billion doses over the next year.  The US has already purchased 100 million doses with an option to buy 500 million more.  Even with two doses required, this is enough to vaccine everyone in the country. 

After the US and other European countries claim what they need, only 14% of the world's population will have a sufficient supply of the vaccine leaving the rest of the world vulnerable.  Pfizer is expected to donate vaccines to developing nations through the World Health Organization but the gap between rich and poor nations is stark.

https://www.salon.com/2020/11/14/more-than-80-of-pfizers-vaccine-doses-have-already-been-bought-by-worlds-richest_partner/

China-Led Trade Pact Is Signed, in Challenge to U.S.

China and 14 other nations that make up ASEAN, Japan, South Korea, New Zealand and Australia have formally signed one of the world's largest regional free trade agreements, the Regional Comprehensive Economic Partnership (RCEP). Negotiations have been underway for 8 years and the new trade agreement covers 2.2 billion people within the region. The pact is most likely to formalize business between the countries rather than remake. 

The RCEP would eliminate tariffs for goods that already qualify for duty-free treatment under existing free trade agreements. That means that countries are able to keep tariffs on imports in sectors regarded as important or sensitive. The so-called rules of origin will set common standards for how much a product must be produced within the region for the final product to qualify for duty-free treatment making it simpler for companies to set supply chains within several countries.

The pact does not go deeper into legal work, accounting or intellectual property protections. Nor does it address sensitive issues such as protecting independent labor unions, the environment or limiting government subsidies to SOEs (state-owned enterprises). 

This pact is seen as a challenge to the United States former hegemonic influence in the Asian region by China. Due to the U.S. withdrawing from the TPP (Trans-Pacific Partnership), an Obama administration's response to China's growing influence in the region. It is unclear how the U.S. will respond to the new trade pact considering fraught tensions with China and the unpopularity of the TPP amongst politicians, Democrat or Republican. Either way, this new trade agreement can be seen as the rest of the world no longer waiting around for the U.S. and instead are moving forward as the U.S. tries to reset itself.

https://www.nytimes.com/2020/11/15/business/china-trade-rcep.html

Chicago cancels Thanksgiving plans as lockdown begins. Will the rest of the country follow?

This past week, Chicago mayor asked residents to "cancel Thanksgiving plans and stay at home unless they need to go to work or school or to tend to essential needs such as a doctor’s appointment or grocery shopping.". This seems all to similar to the nationwide lockdown the country saw earlier this year. Mike Dewine also came out this past week and mentioned the possibility of a lockdown in Ohio as well. As COVID-19 cases continue to rise, there is increasing speculation of another lockdown looming for the country. However, there seems to be a vaccine euphoria regarding the virus, and many argue a lockdown is not needed if the virus will be ready in the next few months.

An additional lockdown would likely hurt an already crippled United States economy, but no lockdown could lead to increased cases, and potential deaths. So what do you think? Should the US go into another lockdown? Will other large cities follow Chicago? How will the Biden administration handle this issue differently than the Trump administration?

https://www.cnbc.com/2020/11/12/chicago-issues-stay-at-home-order-as-covid-cases-continue-to-rise.html

Fed’s Bullard Says Economy Has Recovered Faster Than Expected

The Federal Reserve Bank of St. Louis leader James Bullard gave an update today. He said that the US central bank policy is in a good place right now following Covid challenges. Regarding the monetary policy, Bullard said “we don’t know what’s around the corner as far as the crisis goes, so all those things make me think that we’re in a good position for now.” 

The interest rates are at very low levels which aren’t expected to change much and there is seemingly a significant pace of purchases. He didn’t show much concern towards more stimulus because of the larger first round of fiscal stimulus which is still helping the economy. He also thinks that there is more improvement still coming with the unemployment rate. He said unemployment, which is currently at 6.9%, “could fall to between 4.9% and 5.5% by year-end, depending on when workers are called back.” Unfortunately, Bullard didn’t give any insight into possible policies going forward, but he noted that central bank and government aid have been effective during this Covid economic shock.  

I agree with him that policies and aid thus far have been effective. I am not sure that I agree with stimulus being unnecessary at this point because many people and many businesses are still facing serious hurt. Do you agree or disagree with Bullard’s statements? What possible economic events do you think are coming our way that could change our current economic position?

Derby, M. S. (2020, November 13). Fed's Bullard Says Economy Has Recovered Faster Than Expected. Retrieved November 13, 2020, from https://www.wsj.com/articles/feds-bullard-says-economy-has-recovered-faster-than-expected-11605274229

 

Africa's Debt Crisis Grows Amid COVID-19 Pandemic

 [SOURCE]

As reported by DW, various countries, particularly Zambia, have been racking up foreign debt over the past few years, and while the path to repayment has already been a long and tough one, the COVID-19 pandemic is not making it any easier. 

Zambia is expected to grow over 120% of GDP by the end of the year. It owes about $3 billion in debt to just China and Chinese entities. This would already be a significant challenge to overcome even without the pandemic. Angola, the 5th largest African economy recently has received around €5.3 billion over the next few years from donors, but that still does not place them favorably. 

DW writes, "According to the International Monetary Fund (IMF), African states need almost €410 billion to pay off all foreign debts due by 2023. ". 

While not only does this seem bad from an economic standpoint, we also have to think of the individuals in these countries. What happens when the money for fighting the pandemic runs out? What happens when funding for schools and hospitals runs out? 

Seeing how various international entities have been attempting to invest in various large African countries over the years, this can also have greater affects off the continent, such as in China who has heavily invested here. At this point, how could countries like those discussed be able to look for help, as so many foreign entities have been focused on containing this pandemic domestically and not helping abroad?

What happens between now and Inauguration Day

 Now that Americans have spoken and casted their votes, what happens next? Well, Americans who went to the polls on Election Day don't actually select the President directly. They actually voted for 538 electors, who, by the constitution of the United States, meet in their respective states and vote for President and Vice President once the popular vote totals are completely counted. These electors are known as the electoral college as a whole. Now that the votes have been counted and certified, all disputes must be settled in the supreme court by December 8th. On December 14th, all electoral votes are cast. These electoral votes must arrive in Washington by December 23rd. On January 3rd, Members of the House and new members of the Senate take the oath of office at noon. This marks the official beginning of the new congress. January 6th is the day that the electoral votes are counted. The President of the Senate (that’s Vice President Mike Pence) presides over the session. Each state gets a vote, and it it the house that decides the next President of the United States.  While there are more Democrats in the House, Republicans, as of now, control more state delegations, so it is very possible the House could pick Donald Trump even though there is a Democratic majority. This leads us to January 20th, Inauguration day. This is the day that the elected president takes the oath of office. The people of the country have spoken, and have chosen Joe Biden as the next president of the United States. Assuming that all goes well, do you think that we will have a peaceful transfer of power? If not, what effect do you think it will have on the economy of the country, and with the international relations of the country?

Wolf, Analysis by Zachary B., and Will Mullery. “What Happens between Now and Inauguration Day.” CNN, Cable News Network, 12 Nov. 2020, edition.cnn.com/2020/10/18/politics/electoral-college-timeline-2020-election/index.html. 

What a vaccine means for America’s economy

 https://www.economist.com/finance-and-economics/2020/11/14/what-a-vaccine-means-for-americas-economy

The news of a vaccine may curb the threat of the US economy sliding into a recession. Before the news of a vaccine was publicized the US economy was already recovering better than what was predicted. With many countries in Europe begging shutdown and lockdowns the US will likely follow suit in the next coming months but not as severe as European countries, these more relaxed restrictions will help the economy not lose much momentum on its journey of recovery. As the news of the vaccine breaks the chance of having a vaccine will only help our economy in it a trend to pre covid levels, all this being said the economy is still not predicted to be in the state it was in before covid until 2022 or even later but the signs of a vaccine will help the US decrease it record-breaking infection rate. Everything in the US economy seems to be trending in the right direction but we must keep in mind that these future lockdowns will hamper economic growth and employment growth. The delay of stimulus packages being passed is also a problem we will have to face. Even though the signs of a vaccine have appeared, the economy can still be set back by the constant increase in covid cases through the US, we still have a long road to travel to fully recover but it seems the road is paved for us to travel.

What do you think the act of having a vaccine will have on the economy and do you think it will come in time before the US sees lockdowns and restrictions?

Winter Covid-19

     With winter months coming close, we have already seen the predicted surge in coronavirus cases. Countries in Europe are going back in to lockdown, and their economies will struggle once again. Positive economic performances in the third squared saw the US GDP rise by 7.4%, and European output grew 12.7%. However, the recent surge in cases has already drove down the price of oil to a 5 month low. Mobility data from Google has shown that America's recovery has come to a halt as cases have risen. Europe reached an economic peak in September, and has been on a decrease since. With countries such as France and Germany going in to lockdown, economists are unsure of the consequences. Luckily, it is assumed that new lockdowns will be less damaging as previous ones due to more knowledge on the virus. Manufacturing, and construction firms will stay open this time around with safety precautions.

Will new lockdowns have as big of an economic impact as previous ones?https://www.economist.com/finance-and-economics/2020/11/07/how-economically-damaging-will-new-lockdowns-be

In other news...

 Article: "Turning Inward," The Economist, November 7, 2020

We all know COVID-19 has disrupted supply chains. So has rising suspicion of China in the West. The global economy is decoupling, according to The Economist, as it has been since the financial crisis of 2008. Given the major supply chain shocks that are causing the industrialized world to look increasingly inward, an old idea is becoming popular once again in emerging markets: import-substituting industrialization. The article defines this practice as, "a strategy that seeks to develop industrial capacity by shielding domestic producers from foreign competition." Practices associated with ISI are tariffs, subsidies, and government protection of key industries (sound familiar?). However, the goal in ISI is not to protect jobs or workers, but to develop a mature, industrial economy. 

The article points out ISI's flaws, which I agree with: despite its promise, ISI will not deliver long term growth to most emerging markets. First, most emerging economies are not highly effective autocracies run by technocrats (read: they are not China). This means that firms will likely be protected not for economic reasons, but political ones. Further, even firms that are protected for their economic potential will, when shielded from foreign competition, have no incentive to become more efficient or to be responsive to consumer demand. Finally, although this is not mentioned by the article, I think the global economy will, in the long run, return to the enthusiasm for globalization present before the financial crisis. When this happens, emerging markets will need to be able to compete in a world where developed nations will (albeit a little hypocritically) insist upon the principles of free trade being adhered to. 

What do you think? Are there any countries or circumstances in which ISI might be beneficial? 

How the U.S. Election Could Affect Europe's Markets, Economy and Trade

 The results of the election can have an effect that reaches farther than just the United States. Europe does a lot of business with the United States and the future policies of the next president can have a large impact on economies other than our own. The increased number of mail-in ballots is causing the results to take longer and the volatile changes caused by the difference in poll and mail-in votes has created a stir. While the U.S. stock market has been going strong, consumer confidence could take a hit abroad. The continued legal actions to drag out the election will only increase the market's volatility. If Trump is re-elected, then a trade war could erupt between the U.S. and Europe. In 2019, Europe exports to the U.S. equaled about 384 billion euros; while the U.S.’s imports to Europe were only worth about 232 billion euros. Europe’s surplus means that they have a lot to lose if Trump were to impose tariffs on their goods. If Biden were to win the election, there following tax changes in the U.S. could have an effect on Europe. Biden may undo Trump’s tax cuts and increase taxes while pushing expansionary spending; this has the potential to lead to negative market growth. The U.S. economy could have many, potentially negative, global effects due to its important role. Other sources believe that the increased public spending could boost global markets and increase equity performance. Ultimately, there are more than just U.S. citizens who will be impacted by the results of the presidential election.

https://www.cnbc.com/2020/10/14/how-the-us-election-could-affect-europes-markets-economy-and-trade.html 

Biden’s economic recovery plan, called Build Back Better, would spend over $7.3 trillion and invest in green infrastructure, health care and more

Joe Biden has recently been announced as the next US President. With this, Biden is inheriting an economy that has been destroyed throughout 2020. Therefore, Biden will have to come up with an economic recovery plan at the forefront of his presidency. 2020 has seen high unemployment, bankruptcy, and eviction rates. Additionally, the winter months are approaching, which is when Covid has been predicted to be more prevalent and deadly. Therefore, his economic policy will also need to be a pandemic policy. 

Biden plans to start with another stimulus bill. While this requires a lot of spending, this is only the start. Afterwards, he plans to spend over $7 trillion on initiatives such as infrastructure, housing, education, economic fairness, and healthcare. His economic policy has been given the title Build Back Better.

Do you think this plan will work? What short term and long term effects will come out of his $7 trillion spending on initiatives?

link: https://www.cnbc.com/2020/11/10/president-elect-joe-bidens-plan-for-the-economy-jobs-and-covid-19-.html

"The UK economy is heading back into recession"

https://www.cnn.com/2020/11/05/economy/uk-economy-recession/index.html

Stores, restaurants, schools, and more across the UK are closing as the country plans to head back into lockdown. The United Kingdom has seen their interest rates stay extremely low and they want to keep it that way, however, the central bank plans to buy more bonds from the government.  The country has seen one of the worst years for their economy at the hands of Covid-19 and leaving the EU.  However, stimulus package plans have already been released and the country plans to continue their previous furlough policies. The country knows that this year will be hard to recover from and are attempting to prevent the economy from worsening any farther.

Do you think the US will start to follow suit as more countries are going into lockdown and providing stimulus etc.? Do you think there is potential for the current US administration to follow suit?  

Big Data and Recessions

When the pandemic hit, Opportunity Insights, a research and policy institute based at Harvard University, began to pursue a new data project they hope will revolutionize the way the U.S. tracks and defeats recessions. Essentially, the economists at Opportunity Insights are analyzing raw digital data on millions of customers, workers, taxpayers, and businesses to find solutions to rising inequality and declining upward mobility in America. 

Opportunity Insights was able to convince the businesses and government agencies that house big data to pipeline information to the team so they can analyze it, this information includes:

• Data on credit card spending from a company called Affinity Solutions

• Employment data from Earnin, Paychex, and Intuit

• Data on small business revenue from Womply

The data has allowed economists to laser in on who got hit the most by the spending drop, where different income level individuals are in terms of recovery, and if government aid, such as the Paycheck Protection Program, were actually beneficial to the economy. (I recommend reading the article for more specifics!)

With unemployment and business failures remaining high, and policymakers debating what will stimulate the economy, they have begun to turn to the Opportunity Insights team to get answers. In summary, Opportunity Insights has suggested targeted aid to those households and businesses that need it the most. An example of which, includes boosting and extending unemployment insurance benefits and awarding grants or low-income loans to businesses who are actually struggling. 

Opportunity Insights hopes in the future that its website, currently a prototype, will serve as official government statistics, helping to guide policymakers in making sound economic decisions. What benefit do you see Opportunity Insight having on the economy? What do you think of big data potentially being utilized by policymakers? 

https://www.npr.org/sections/money/2020/10/27/927842540/the-dark-side-of-the-recovery-revealed-in-big-data 

What the US can learn from how African countries handled Covid

 https://us.cnn.com/2020/11/03/africa/africa-coronavirus-lessons-opinion-intl/index.html

With African countries expected to be a leader in Covid cases, their 1.8 million positives have shown that not to be true compared to the US's 9 million cases. Some say this could be due to poor testing, while others say they simply handled the pandemic better than the US. Recent reports show that deaths in African countries have been .28 in one day while the US reports around 70 deaths each day. Europe has now opened up to Africa. These numbers are surprising considering levels of GDP in both countries. This article mentions that their increased "civic duty" is the reason for these differences or maybe their more aggressive lockdown measures. Although, African readiness scores are up to 78%, and they are able to run hundreds of tests. There also seems to be more trust between the CDC and African citizens and between them and their leaders.

What do you think these differences are due to?

Oregon Decriminalizes All Drugs

 Oregon has recently become the first State to decriminalize the possession of all hard drugs. The intent of this law is to make those who are addicted to any drug be  more comfortable coming forward about their problem. When one is found in possession of a drug like heroin, they will be put into rehab instead of jail. "aimed at diverting people from jails and prisons by treating possession as a citation and expanding access to treatment and recovery." Oregon voters also approved a measure making it the first state to legalize the therapeutic use of psychedelic mushrooms. "About 3,700 fewer Oregonians per year will be convicted of felony or misdemeanor possession of controlled substances now that the measure has passed, according to estimates by the Oregon Criminal Justice Commission." In my opinion I can see this being a great move for Oregon or a terrible one. Either more people will begin partaking in the use of these harmful drugs because they know they cant go to jail for it or people will finally come forward and the drug problem will slowly come to a halt. What do you think? Could this effect the economy if this took place all across the United States?

https://apnews.com/article/election-2020-elections-oregon-01edca37c776c9ea8bfd4afdd7a7a33e

Germany to offer aid package while going into second lockdown

 Source

    As Germany prepares to enter a second lockdown as of November 2nd, they plan to offer a 10 Billion Euro package to support affected business. Focusing on small businesses, firms with up to 50 workers and those that are self-employed can have up to 75% of 2019's November turnover reimbursed by the government. 

    Likely to affect many small businesses, restaurants, and bars, this shutdown hopefully will not have as big of an affect as the first one back in March, and as such this aid package will be smaller. For context, the aid package offered back in March was 750 Billion Euros. This then raises the question, will this only 10Bil package be enough? November through January is very important in Germany with many towns and small businesses profiting greatly from various festival and tourism. There is another 50Billion euros that has been stated is in reserve for a lengthier lockdown. Should the government begin by using all 60Billion and going with a longer lockdown from the start in order to hopefully prevent future lockdowns? 

Social Media and The Elections

 Recently, the heads of major social media websites have declared what precautions will be taken as we near the presidential elections. Twitter has reported that none of the candidates will be allowed to claim they've won the election before a declared result, nor are they allowed to  retweet content that encourages interference with the election process. Facebook is yet to voice their plan, however the wall street journal reports that they plan on altering their news feed algorithms to suppress viral posts that encourage fake news and violence. Google is working to provide authoritative election results. In the days after the election, if you search "Who won the election", Googlw will direct you to the Associated Press's updated results. Along with this, google will ban all ads relating to the 2020 election after the Election Day. Youtube has said it will ban "misleading claims about voting or content that encourages interference in the democratic process". It will also remove all content claiming that mail-in ballots were used to manipulate the elections. Reddit has said that information that misleads the election results is not allowed and would be removed from the site. Social media has been a catalyst that has helped people discuss information regarding the election during this ongoing pandemic, but at the same time it has been used to mislead people through the spread of fake news. Do you think that what these social media companies are doing will be enough to avoid confusion and miscommunication?

Clayton, James. “How Social Media Is Preparing for US Election Chaos.” BBC News, BBC, 31 Oct. 2020, www.bbc.com/news/technology-54738873. 

Florida voting to increase Minimum Wage to $15

Minimum wage as of 2020 for Florida is $8.56. Residents of Florida are voting towards $15 as their minimum wage that would be implemented until 2026. This would cause a decrease in the unemployment rate overall because in the state, more people would be trying to get more money which is the human nature no matter where you live and no matter what the prices are. However, people would also be reluctant to consume more because the since the minimum wage increased, it would also cause an increase in prices along with a greater tax that would automatically be implemented. This means a plus side towards the government and hence for the state since a higher amount of tax that would be collected by the government would be spended towards the state which in turn would help improve standard of living. It would not only increase business opportunities, but also introduce incentives for people to invest more hence increasing overall investments. We can also say that most of the increase in GDP by Florida is based off of tourism which in turn would mean, that people who come to the state would now pay more due to the increase in prices which means greater money would be flowing inside the state ending up to be overall better for the state itself. Do you believe in the government to help the state or the country or do you guys think it would cause people to loose more than what they earn?

Lockdown Part 2: Fall and Winter Edition

 Coronavirus cases are surging across both the United States and Europe. France, Germany, and England have all announced that they will be implementing another lockdown. Other European countries also have some very strict regulations on what can be opened, and it it is open, the specific ways that they have to operate as to not spread the virus. While in the US, there has not been much in the way of lockdowns since earlier this year. With the surging numbers, due to people not wearing masks and the fact that people are migrating indoors due to cold weather, states have been debating on imposing new restrictions.

All this news about the virus and lockdowns have hurt the S&P 500, along with the DJI, with them seeing its largest weekly decline since March of this year.

These lockdowns across Europe, and the possible ones to come in the US will lead to economic decline. That is the trade-off we have to face, economic decline for the lives of thousands. With these lockdowns, the governments of these countries should step in to give relief to the people who are out of work, and the businesses who will be shut down that still need to pay their fixed costs. A big wave a businesses closing down, my go along way at hurting jobs and the economy for many years to come.

With all this government sending, someone one day, either sooner or later, will have to pay down the debt.

What do you think the right course of action is? What is the best way to balance the economy and the effects of the Coronavirus?

https://apnews.com/article/europe-us-shutdowns-virus-surge-covid-19-a8b0d7b63fde5b9d289cabf06ae367bf

The Economy Is Down. Why Are Home Prices Up?

 Housing prices are on a rise. While they have been rising from people leaving big cities due to the pandemic, they were rising beforehand too. Additionally, the price of stocks and bonds have been rising too. This global market boom in price is caused by "easy money". Easy money is defined as money that is obtained at relatively low interest. Interest is low because central banks have been lowering interest rates to stimulate growth. The problem is that this money keeps on flowing into financial markets. This rapid spike has reached levels last seen in 2000 2008 which was known as financial bubbles. To put it in perspective, over 400 out of 484 cities have reached housing prices that are far beyond reach of the typical family. The least affordable being New York City.

The response that is being concerned is tighter regulation. The problem with this if regulators clamp down on mortgage lending, investors will likely move to stocks and bonds instead. Money will continue to shift from one market to another as long as easy money exists.

What do you think could be a possible solution? Do you think elections will cause any sort of rapid change in this?

link: https://www.nytimes.com/2020/10/31/opinion/real-estate-home-prices-covid.html

2020 Election

 With the election coming up, I thought it would be beneficial to talk about how the economy will be affected. Both parties involved in the election claim that they will make sure that the economy recovers from the hits it had been taking due to the current pandemic but it is hard to tell which side is telling the truth. As I'm sure everybody knows, politicians will say just about anything to ensure they get whichever elected position they are running for. Trump has claimed that he will raise wages for the middle class which would be beneficial to most of the American population but Biden claims that he will offer better opportunities for people to go to college and make it more available for people. It is up to us as United States citizens to determine who we believe will make a greater impact on the economy and who has the best interest in mind for the citizens.

https://www.usnews.com/elections/economy-2020

The COVID Economy is Good for Some; Terrible for Others

 A recent story by Reuters illustrated the impact of the covid crisis in central Ohio, highlighting one struggling family who is facing eviction and utility shut off as both working parents have jobs directly impacted by the coronavirus; and another family who had the means to cash in on low interest rates and upsize their home.  Bidding wars on million dollar homes are not uncommon in the current market and homes are selling in an average of five days.  Professionals are thriving as a result of the pandemic policies put in place by the Federal Reserve but low wage workers who went into the crisis with no cash reserves are really struggling.  According to the article, the phenomenon is called a K Shaped recovery, in which those on the top are able to climb even further while those on the bottom slide more quickly.  Until the virus is contained by a vaccine and/or treatments, job losses in the hospitality sector and others that support lower income families will continue to struggle.  An Ohio State professor quoted in the article said there is little hope for a return to normal in the near term.  "People's jobs and incomes have disappeared, and they aren't coming back until the threat of dying from the virus dissipates."

https://www.reuters.com/article/us-health-coronavirus-usa-inequality-ins/the-great-divergence-u-s-covid-19-economy-has-delivered-luxury-houses-for-some-evictions-for-others-idUSKBN27G0H7

China talks up a future in which it needs collaboration with the U.S. and other countries

During these trying times such as a global pandemic and increasing trade tensions between the world's two largest economies, China is determined to be self-reliant when it comes to new and innovative technology that is more than just made in China. And while it is a good thing for the Chinese to be self-reliant when it comes to critical components, the country is still young when it comes to innovation and thus still needs the expertise of international entities. Thus the desire to ensure global cooperation with the rest of the world despite the current situations. 

Even with the desire to be more self-reliant, China is keen on making sure that the rest of the world will continue to do business with the Chinese. And that also means the United States. Chinese authorities are pushing back on the US-China "decoupling" since it is not beneficial for the two countries in the long run as any trade is better than no-trade.

https://www.cnbc.com/2020/10/30/china-talks-up-a-future-in-which-it-needs-collaboration-with-the-us-.html

For Retailers, a Halloween Shock: It’s Actually Happening

Sales of Halloween costumes and decorations have been stronger than what was expected with the pandemic. People are seeing this day as the last day for the kids to have fun outdoors before winter hits. “While Mr. Berman, like many other business owners, has welcomed the volume of Halloween sales given the uncertainty of the moment, he noted that before the pandemic, 2020 was poised to be a bonanza for the holiday and party industry.” Some business owners are saying people are dressing up and decorating the house much more leading to more sales than ever before in the history of their stores. “The National Retail Federation, an industry group, expected Halloween consumer spending to hit about $8 billion this year, a decline from $8.8 billion last year, as a result of fewer Halloween parties and haunted house visits and less trick-or-treating. But enthusiasm around costumes and decorations has persisted.” Halloween sales are higher than anyone could have ever expected, but It is nice to see strong sales considering this crazy year for retailers. 

Do you think that Halloween fun will get too chaotic and we will see a rapid increase in cases to come? Do you think a significant increase in cases will lead to a shutdown like in France? Increased sales will help our economy now, but do you see it coming back on us with a shutdown?

Maheshwari, Sapna, and Gillian Friedman. “Get Your Hand Sanitizer Costume. Halloween Is Still Happening.” The New York Times, The New York Times, 29 Oct. 2020, www.nytimes.com/2020/10/29/business/halloween-costumes-decorations-sales.html. 

Record GDP won't mean much to investors

Even though the economy is experiencing record breaking GDP growth, it seems that this has not done much for investor confidence. The main reason that the stock market is still seeing some decline is due to many investors terrified of the economy falling back into a recession and out of the recovery. These investors definitely have a lot of ground to be concerned about due to both North America and European covid cases getting out of control again. Especially with the two biggest economies in the European Union (France and Germany) are both enforcing stroger restrictions like with France shutting down all non-essential business and restaurants for 4 weeks and with Germany doing the same and advising citizens to stay inside. These harsh restrictions are projected to have France's GDP drop by  as much as 4 percent and Germany's GDP is expected to drop by one. With all of this happening it is no surprise that inventories are having a hard time feeling safe to invest their money when at a moment's notice we can see the economy shut down again and with how many new cases the US is getting it would not surprise many if the US imposed restrictions much like Germany and France. Thanks to the recorded growth many companies are increasing their dividends payments and buybacks. This shows that the companies are not that worried about receiving funding in the future.

With so many different regulations being presented by a number of different countries it is no wonder many people are not wanting to invest during this uncertain time. What do you think could help give investors more confidence to invest?

 https://www.cnn.com/2020/10/29/investing/premarket-stocks-trading/index.html

Q3 Sees Large GDP Rebound

The U.S. economy made up significant ground in Q3 in what was termed as the quarter of re-opening. Reports have shown that GDP likely grew around 7.4% which is a record setting rate for one quarter. However, it is clear this rate will not continue. COVID cases are at a new high and there is much uncertainty with the election. The market has seen massive selloffs the last few days as well, and tech earnings were disappointing. There is still much confusion in regard to the fiscal stimulus and especially the vaccine, which was promised by the election by President Trump.

Most economists believe the economy will continue to grow as we re-open, but at a much milder rate. What do you think GDP growth and economic activity will be like in Q4?

https://www.morningstar.com/news/dow-jones/202010295208/us-economy-likely-recovered-significant-ground-in-third-quarter-gdp-rebound

Economic growth will slow in Q4

 This year has been unexpected to say the least. Many Americans' lives have been jeopardized by the pandemic similar to many businesses that have likewise been jeopardized. One key thing our government did to try and cushion the blow of the pandemic was the release of the "stimulus checks". The stimulus checks, for the most part, did exactly what the name entails: it stimulated economic growth. However, JPMorgan Asset Management’s David Kelly calls this growth a "steroid kind of recovery" basically meaning that the economic growth will slow during quarter four of 2020. After a recession, economies can see sharp V-Shaped recovery whereas the United States has seen an "interrupted V-Shape recovery" or "half of V" (Kelly, 2020). Basically, the stimulus was a "shot in the arm" for the United States by temporarily fixing the problem. Economic growth is now slowing down due to the absence of a second stimulus. Kelly, in response, believes there will be a second stimulus package after the November elections to bolster economic growth. 

Weizent. “Economic Recovery Could Slow in Q4 after 'Steroid of Fiscal Stimulus' Fades, JPMorgan Asset Management Says.” CNBC, CNBC, 22 Oct. 2020, www.cnbc.com/2020/10/22/jpmorgan-asset-management-on-economic-recovery-us-stimulus-talks.html. 

Airlines will struggle long after it is safe to fly again

     The airline industry has been one of the hardest hit during the COVID-19 pandemic. United States airlines collectively lost $12 billion in the second quarter alone. The 5 largest airlines have already reported losses of $8.9 billion for the third quarter. History is not on the airlines side when it comes to recovering from the pandemic. After the Great Recession ended in 2009, it took five years for passenger traffic to recover. Even after the small recession in 2000 it took four years for passenger traffic to hit pre-recession levels. Historically, it takes even longer for business travel to recover which is one of the most depended on sectors for airlines. With millions of people losing their jobs, people are less likely to take any vacations. For struggling businesses, air travel will be the last thing on their mind until they can recover their losses. It is unknown how long it will take for air traffic to recover.  Airlines are also worried about a permanent impact on travel. With so many business successfully using video calls for conferences, there is the possibility that some travel will be unnecessary in the future. The CEO of Delta believes that this drop could be up to 20% for the next few years. With no set time of the pandemic ending, airlines worry that every day will continue to hurt them more and more.

when do you think the airline industry will recover?

https://www.cnn.com/2020/10/27/economy/airlines-pandemic-recession-impact/index.html

Unemployment Claims Are Down, but Many Workers Lower Expectations

 Weekly unemployment claims are decreasing, but there is still a long way to go to reach economic recovery. There are still 757,000 unemployment claims as well as 345,000 claims for the federal jobless program; created to provide aid to certain groups of people during the pandemic. With no increase in current federal aid to those hit hard by the pandemic, there may be a decrease in consumer confidence. Many people have been out of work for 7+ months which exceeds the 6 month limitation on unemployed insurance programs. Thankfully, there are still some programs in place by the government to provide excess aid due to the continuing pandemic. While numbers of unemployment claims are decreasing, it may not be due to so many returning to jobs but that people are no longer fitting the criteria and moving into a longer term unemployment status. The current job finding rate is low and continuing to decrease, causing further permanent unemployment problems. The continuation of worsening opportunities is becoming very discouraging to those looking for work. With the presidential election looming, many are taking the experiences of the last few months into account and seem to be favoring Joe Biden. This could, however, be related to the fact that most of the people who lost their jobs are considered to be minorities and were already favoring Biden. Many factors are currently at work that will affect the election and, in turn, the future economy. 

https://www.nytimes.com/2020/10/22/business/economy/unemployment-claims.html