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