The State of the American Consumer: Free Pandemic-Money Runs Low

Stimulus & extra UI dried up. But 16% of “proprietors’ income” in October was PPP money & Pandemic farm aid.

By Wolf Richter for WOLF STREET.

Consumers are running low on artificial steam – meaning stimulus money, extra unemployment benefits, money from rents-not-paid and from mortgage-payments-not-made, though they still get a lot of money from cash-out mortgage refis at historically low interest rates. And consumers are still spending record amounts on durable goods, a lot of them imported, but cut back on nondurable goods. And spending on services – plane tickets, hotels, healthcare, rent, etc. – are still deep in the hole.

Personal income.

Personal income from all sources in October ticked down 0.7% from September, to a seasonally adjusted annual rate of $19.7 trillion, according to the Bureau of Economic Analysis today. It was down 6.9% from its fabulous stimulus-and-unemployment-money-induced spike in April. But it’s still up 5.5% from a year ago, which makes this, during the Pandemic when over 20 million people are still claiming state or federal unemployment benefits, the Weirdest Economy Ever:

The personal income and spending numbers released by the BEA are “annual rates,” a hypothetical concoction that extrapolates the amount of the current month out to an entire year, essentially multiplying the current month figure by 12. So no, consumers didn’t make $19.7 trillion in October. That was the “annual rate.” And it was seasonally adjusted too. To illustrate: the actual personal income in all of 2019 was $18.5 trillion, or $1.54 trillion on average per month.

Free Pandemic Money Runs Low.

Income from unemployment insurance (UI) had skyrocketed from an annual rate of $28 billion received by consumers in February to an annual rate of $1.40 trillion in June, fired up by the extra $600-a-week in federal unemployment benefits, which expired at the end of July. While backlogs saw to it that payments were still being processed in the following months, the amounts of UI received began to plunge. And in October, it fell to $306 billion (annual rate), the lowest since March.

Stimulus & welfare payments – the $1,200 per adult and $500 per child – started arriving in bank accounts in April. The BEA adds these stimulus payments to the regular and fairly steady welfare and other government payments (for short, “welfare payments”). Those welfare payments amounted to $506 billion (annual rate) in February, before there was any stimulus. Then in April, stimulus payments of $2.86 trillion (annual rate) flooded consumer bank accounts, and combined with welfare payments amounted to $3.38 trillion (annual rate).

By October, most of the stimulus payments had dried up (deadline had been extended to November 21 for the stragglers the IRS has a hard time finding). And the welfare and stimulus payments dropped to $732 billion (annual rate).

UI, stimulus, and welfare combined, after spiking to an annual rate of $3.88 trillion in April, fell to $1.04 trillion in October:

Money from wages and salaries.

Personal income from wages and salaries, including from self-employment activities, rose 0.7% in October from September to an annual rate of $9.58 trillion. This was still down 0.9% from February, the last month of the Good Times, but it was up 2.1% from a year ago. This is income “in aggregate,” all added together, including those at the top of the income scale with multi-million-dollar increases in annual incomes:

The chart below shows by how much the stimulus and extra unemployment benefits overshot the drop in income from wages and salaries, which is in part what triggered the Weirdest Economy Ever:

Personal income from other sources, October v. the Good-Times February:

Proprietors’ income (farm and nonfarm) rose by 17.5% from February, to $1.92 trillion (annual rate). This includes, you guessed it…

Free Pandemic-money for proprietors: $302 billion (annual rate) of proprietors’ income in October, or nearly 16% of total proprietors’ income, was provided by Pandemic aid programs:

  • “Coronavirus Food Assistance Program” for farms added $93 billion (annual rate)
  • “Paycheck Protection Program loans” (PPP) for farms added $6.3 billion (annual rate)
  • PPP for nonfarms added $203 billion (annual rate).

Supplements to wages and salaries – employer contributions to employee benefits, pensions, and social insurance – at $2.15 trillion (annual rate) are down just 0.6% from February.

Interest and dividend income fell by 3.6% from February – thanks to the Fed’s interest rate repression and corporate dividend cuts – to $2.88 trillion (annual rate).

Rental income rose by 2.0% from February to $818 billion (annual rate).

Government transfer payments via Social Security, Medicare, Medicaid, and Veterans’ benefits rose 5.0% from February to $2.76 trillion (annual rate).

Medicare and Medicaid payments are counted in personal income because individuals are the beneficiaries though healthcare providers received the payments. The sharp increase in those two and in the payments to Veterans are at least in part a function of the costs of treating Covid patients:

  • 2.4% increase in Social Security benefits (to $1.09 trillion annual rate)
  • 6.1% increase in Medicare payments (to $854 billion annual rate, paid to providers)
  • 7.7% jump in Medicaid payments (to $669 billion annual rate paid to providers)
  • 6.2% jump in Veterans’ benefits (to $147 billion annual rate).

Where did consumers spend this moolah?

Consumers still went nuts over durable goods, but cut back on nondurable goods and continued to scrimp on the biggie, services.

Total consumer spending in October ticked up 0.5% from September to $14.64 trillion (annual rate), but was still down 1.6% from Good-Times February and down 0.6% from a year ago:

None of the spending data is adjusted for inflation, and in some categories there have been big price increases, including historic 15% price increase for used vehicles over the three-month period July, August, and September.

Spending on durable goods added a tad to the crazy spike – many of these products are imported from China, Germany, Japan, Mexico, etc., and they’re all very grateful for the stimulus – as consumers are splurging on laptops, other electronic devices, expensive vehicles, furniture, appliances, and the like.

But the increase in October, +0.6% from September, was the smallest month-to-month increase since April. At $1.79 trillion (annual rate), spending was up by 15% from Good-Times February and from a year ago:

Spending on nondurable goods ticked down by 0.3% in October from September, to $3.14 trillion (annual rate), the first month-to-month decline since April, but was still up 4.0% from February and 4.2% from a year ago:

And the biggie, spending on services – which include rents (so if more people than normal don’t make their rent payments…), healthcare, insurance, airplane tickets, lodging, haircuts, broadband and cellphone subscriptions, utilities, etc., accounting for about two-thirds of total consumer spending – inched up a mere 0.7% in October from September, to $9.72 trillion (annual rate), the smallest increase since April, and remain 5.8% below February and 4.4% below a year ago:

The shift from business spending to consumer spending.

Work-from-home and remote learning have had a big impact on consumer spending. Households upgraded their homes to accommodate the new work and study regime. They bought laptops like never before, they bought other electronic devices and network equipment. They bought desks and chairs and lamps. These were one-time expenditures to get set up, and they’re starting to fade out.

And they’re drinking coffee at home instead of drinking the free stuff at the office, and they’re eating at home instead of at the free cafeteria at work. They’re buying toilet paper and paper towels and snacks. And they’re using electricity at home all day. And on and on.

These outlays shifted spending from offices to households. In other words, some of the spending that used to show up under consumption by businesses is now showing up under consumption by households. This part of consumer spending doesn’t actually ad to the economy. It just shifts the money flow.

Credit-score algos got fooled by forbearance. Weirdest economy ever where no one knows what’s going on anymore. Read…  No Payment, No Problem: In Rosy World of Forbearance, Official Delinquencies Plunge, Credit Scores of Delinquent Borrowers Jump

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  172 comments for “The State of the American Consumer: Free Pandemic-Money Runs Low

  1. raxadian says:

    So.. stimulus goes down, Down Jones goes up… and we have a crash as a Christmas present next?

    • MonkeyBusiness says:

      There will be a 20% correction, followed by a stimulus good for a 40% run up. Do it a couple more times, you are still looking at Dow 100K in the end.
      The rich needs to maintain their opulence. Once they’ve figured out a new place to store their wealth then yeah, I suppose it’s time to allow the stock market to collapse. They can then buy the carcasses back at bottom prices.

      • Old School says:

        One of two things are going to happen. 1) The Fed is going to keep inflating assets and stocks go up 2) Fed’s going to let inflation in real economy get away from them and they will have to stop pumping and stocks and bonds will crash. Nobody is smart enough to know, so be prepared for both. Never been a time in history that stocks stay flat lined, it’s either up or down.

        • M says:

          See the Huffington Post’s article as to why we will soon have an even worse conductor on this runaway, economic train as it heads toward destruction: “Janet Yellen Urged Glass-Steagall Repeal And Social Security Cuts, Supported NAFTA” We must have broken lots and lots of mirrors or actually gotten cursed somehow. Nominating a horse would have been better and less likely to cause harm.

        • Bruce George Adlam says:

          Nothing is free in life someone pays this QE or asset buying by the federal reserve and central banks with free currency is theft on an epic scale against the general population not just in the USA but everywhere it amazes me we not rioting against the criminal cartels the central banks. we are going to pay dearly eventually for our sleepwalking

      • Mira says:

        Does this, buy, buy, buy, .. sell, sell, sell, really work .. up & you can put the buy cash away .. start at the bottom again & build up a small fortune ??

        I bought a lottery ticket .. zit result.
        I bought another lottery ticket .. zit result.
        Week 3, I bought another lottery ticket .. I won $3.50.
        Okay .. So I bought another ticket ..
        Week 5 now .. I bought one more lottery ticket .. right.
        The penny dropped & I stopped.
        It’s a suckers game.

    • Apple says:

      Foreclosures will skyrocket in January.

      • Thomas Roberts says:

        More printed money is coming, I fear only, that they won’t print enough.

      • Ethan in NoVA says:

        Mortgage forbearance runs until Dec 2021 though?

        That doesn’t do anything for rental properties, of course.

        • Shiloh1 says:

          March 2021

        • Bobster says:

          Rentals are doing fine. Wolf stated: “Rental income rose by 2.0% from February to $818 billion (annual rate).”
          Yeah, I’m more than a little surprised by that too — with no threat of residential eviction.

      • Sierra7 says:

        Apple (and others)
        Unless a broader vision of how to solve what’s about to happen to our economy in 2021 when all the “Covid Support Payments, Forebearances etc” stop we will all be in deep doo-doo.
        So much of CA is again at this time 11-29-20 rated to “Purple Level” Covid conditions returning to very strict operational standards for both business and the public that there will be a further “wringing out” of our economy.
        Relative is a salesperson for one of America’s foremost computer companies and his area is mostly central US and the report is that many, many large businesses in that category are just plain laying off employees…….and have no future plans for re-hiring at this time.
        We’ve got to have more supportive vision from our elected politicians and the wealthy….either help or cut bait.
        May we all see better times!

      • w says:

        Nope!Continual forbearance until maybe next summer.Digi$ rollout targetted for Nov. 2021.China had their closedloopInflation digi$ experiment already.Inflation in food$ for us comes next year,maybe starting in spring if it hasnt started by you yet.This will be due to continued martial law,shipping container shortages,possible trucker strikes if pedocriminal Biden is Actually seated and sworn as prez,and yhen there are the elements of droughts,floods,swinefever culling,supervirulent avian flu virus which is Already a problem in several countries,port congestion,and hoarding.All inflation ramps up if people spend like crazy when they get digi$!Do not take the bait.

  2. Michael Grace says:

    I like the way you identify products and origins of said item, roughly. i.e, a coffee. Every single non self-produced thing is now part of a monetised Valhalla of debt and fear

  3. Ted says:

    “They can then buy the carcasses back at bottom prices.” So can we!

    • MonkeyBusiness says:

      Well unless you are part of the privileged group, there will be officials who will determine who is fit to bid on those “toxic” items, and no you don’t qualify.

      • Saylor says:

        I saw that happen with SoCal real estate after the crash. People (families) with good/great credit and decent sized down payments 20%+ were losing out to institutional investors on SFR properties that were sold at a lower price to the investors than the private solo buyers were willing to pay.

        • MonkeyBusiness says:


        • NoEasyDay says:


          >…on SFR properties that were sold at a lower price to
          >the investors than the private solo buyers were willing
          >to pay.

          The RE syndicates borrowed cheaply but paid HIGH prices for these properties in order to keep “the comps” inflated. The investors are frequently public pension funds. The RE swindle continues.

  4. WES says:

    It seems to me, if it involved people, spending dropped.

    If it didn’t involve people, spending went up.

  5. Thomas Roberts says:

    Clearly from the charts, we can see. It’s time, past time really. To print lots more money. I will take my share and spend it like a responsible american. I fear only, that they won’t print enough, that’s the reason some are in poverty.

    • Old School says:

      You can clearly see that once the solution is easy money, then politicians just scramble to give the printed money away to their constituents the fastest. All money gets mixed together.

      Social security gets lumped in with medicaid as transfer payment, but there is a difference. At least in social security the money was confiscated from you along with medicare taxes and income taxes. These are taxes on participating in the labor market and supposedly part of the production system of real goods and services. But the money gets lumped in as a government transfer payment. That’s because the government has one big financial payroll they are trying to keep rolling along.

    • Frederick says:

      So your actually believe that printing money relieves prople of poverty Think again

    • Absur Ditty says:

      The beautiful thing about fiat currency is that it’s UNLIMITED!

      The USA has printed it’s way to prosperity. Just needs to print a little more and buy a nice house and car for everyone who doesn’t have one. And fill up their pantries. And also pay for their kids education etc.

      The grumpy people just don’t believe it.

    • Mira says:

      Yep !!

  6. Jonas Grimm says:

    We spent 40 years ignoring or joking about ‘post-Soviet Russia’. I wonder who will laugh and joke about post-Capitalist America. Probably China. Regardless, America ten or twenty years from now will likely be more divided, more poor, more stupid, more belligerent and more pathetic than it already is. Granted, humans are terrible at making predictions for long term, but so far anyone and everyone whose ideas don’t conform to within at least ten degrees of the status quo have been sneered out of the building, and without some vision of the future to pursue, nihilism, cynicism and apathy will prevail, until come 2100, our children will lack the ability to question why the people they trust are leading them through abattoir doors and the meat their masters eat looks so familiar.

    • Dave says:

      first regionalization and ascension to empire, maturity and overextension then follow and the last stage is decline and legacy. The 5 phases of civilization….. where are we?

      • Yancey Ward says:

        We have been in the denial phase for a very long time.

      • Endeavor says:

        first regionalization and ascension to empire, maturity and overextension then follow and the last stage is decline and legacy. The 5 phases of civilization….. where are we?

        4.5 Delusion

      • MonkeyBusiness says:

        I would argue we’ve collapsed. Just look at our quarter of million dead. Few people even care. That’s collapse i.e. nothing is binding us together.

        Just like the Roman Empire, collapse can last a LONG time. It’s not just one final implosion. This is not a movie.

      • Realist says:

        Dig forth Glubb Pascha’s writing on this subject !

    • Endeavor says:

      Yes, we got it coming. Maybe not you or me, but America has it coming. The people are a different breed from just 20 years ago and have tossed logic out the door. Once we would have trimmed the sails for rough weather but now we add sails and open the hatches. Only Corporate America may reach a safe harbor if past policy is our guide.

      • historicus says:

        The Fed NEVER “trims sail”. They rescue but never retire. They only self author and self expand their powers. THEY are the problem. They do not believe in the power and benefits of a free market, one that flushes excesses periodically. Central bankers create pent up excesses and the more infrequent “corrections” come at a magnitude that is systemic threatening. We saw it in 2008. We saw it in March of 2020.

        • Historicus, Americans should be fed up with the FED. Now with Yellen put forth as Treasury Secretary, it will be a cabal of Washington insiders that never met a payroll that attempt to determine the fate of the Banana Republic of America.

          In the last year, 12 months last, the DXY or U.S. Dollar Index is down by 6.6% and down 4.8% since January 1st, 2020. That is a huge depreciation in the buying power of the Greenback since our Trade Deficit clearly pegs us as addicted to Imports.

          The FED will be at the helm when hyperinflation hits the U.S. of A. Since we still have a contested election, and lawsuits are not accepted by courts without a presentation to same of actual evidence, who the heck wants to put their hard-earned money into Dollar denominated assets. The bloom is off that rose.

          This is a limit to how much money a Central Bank can print to primarily keep the advantaged boys and girls on Wall Street happy. The Fed’s printing has done little since 2008 to advance the economic well-being of the vast majority of Americans. Income Inequality is worse than ever!

          When inflation starts coming in, on the street, not out of the BLS fake number factory, at from 6% to 8% per annum on a regular basis, the FED will have no choice but to change course. The ship will have to turn very slowly, and because of its huge size, it will take months to have any effect on markets and rates. This developing situation will not be kind to financial assets of all genre.

          The Dollar is toast. Think of putting what you have left after 2021 outside of the Dollar centric world, a world that is surely in the intermediate stages of Collapse. Happy Holidays, The Grinch.

    • Heff says:

      “Granted, humans are terrible at making predictions for long term…”

      I predict: 10 years from now our standard of living will be so bad, people will look back at 2020 and lament: Those were the good old days.

      • Totally correct, Heff. We have borrowed from the future by spending like drunken sailors at all levels: private, Corporate, and Public, BY USING UNPRECEDENTED & VAST SUMS OF MONEY WE DID NOT EARN, CALLED “BORROWED MONEY”. The day of reckoning is here after decade upon decade of this imprudent/self-centered behavior, and we pass on a legacy of a bankrupt country that is destined to suffer a lower standard of living for generations that follow us.

        There is no way out at this point, not enough Tea in China as they say, to EARN our way out of this DEBT SINKHOLE. DEFAULT IN ONE FASHION OR THE OTHER IS OUR ONLY AVENUE OF PURSUIT. Killing the Dollar alone, a tactic now embraced by the illegally operating FED, will lower the standard of living for each and every American in the immediate days ahead.

        • RightNYer says:

          I’m sadly forced to agree. I said when the original ARRA was passed in 2009, and it was clear we were a bankrupt country, that we had at most 20 years of this game left. I listen to my Wall Street friends who think that the “least dirty shirt” will lead to this game going on for the next 100 years and laugh.

      • Mira says:

        & lament: “Those were the good old days” .. seems to me we spend a lot of time lamenting .. The good old days .. but did they really exist.
        Isn’t it that we exchanged several things for several other things because we can’t have all those things & the new things at the same time ??

  7. CRV says:

    “Personal income from wages and salaries, including from self-employment activities, rose 0.7% in October from September to an annual rate of $9.58 trillion. This was still down 0.9% from February, the last month of the Good Times, but it was up 2.1% from a year ago. This is income “in aggregate,” all added together, including those at the top of the income scale with multi-million-dollar increases in annual incomes:”

    That is about $5000 per person (approx. 160 million workforce?).
    I’m sure there is a majority of people thinking:”hey, i’m average Joe, but this is not my average monthly income by far.”

    • Beardawg says:

      Also makes a $30T national debt seem paltry. Confiscate personal income for 3 years and our debt is gone. For some reason, that seems reasonable.

  8. MCH says:

    Honest headlines: China demands more stimulus, Congress in collaboration with incoming administration to act.

    The stimulate China with borrowed money act is expected to have bipartisan support. Chinese factory workers are grateful to US lawmakers and the executive branch.


    • Petunia says:

      Watch for Chinese sovereign bonds to be the next new thing to be pitched, and cheered on by the swamp.

      • Anthony A. says:

        We are already buying common stock issued by their gov controlled companies. Nothing new to add bonds.

        • JK says:

          And those Chinese companies stocks have done me very well. Look, you got to work. Say what you want, the Chinese work-hive mentality. I know a guy from Eastern Europe that came here 2-3 years ago with a suitcase and I think 1000 bucks. He drives a truck making 5-6 grand a month now. He went to school to learn. Worked doing constuction (he can’t build anything, but do demo) and then went to learn to drive a truck. In the meantime, he was a personal trainer on the side, drove Uber and did some bouncer work. You got to be creative and work 2-3 jobs sometimes. I’d do delivery or Uber or combo, whatever to survive.

      • China’s currency has been appreciating vs the dollar and their comparable yields are higher. Someone who doesn’t know any better might think there will a move to unbeggar thy neighbor, while nations compete for foreign investment dollars by allowing interest sovereign rates to rise. (not sure if this is because global monetary base is shrinking or expanding, but either way) China’s foreign reserves are winding down. The only export we sell them is crude oil and now Venezuela is going to break sanctions and sell to China. The artifice of tariffs and sanctions is collapsing in big orange heap. China now retreives their shipping containers without waiting for US ag refills which were pledged. The next financial crisis we will see whose market and economy sustains the damage, even if Europe collapses, and Japan realigns with China.

        • Sierra7 says:

          JK: “You got to be creative and work 2-3 jobs sometimes.”
          It isn’t only “immigrants” who are doing this kind of life.
          I have many grandchildren between 20’s and early ’30’s….have all been hit hard by the economy and Covid restrictions of companies they work for. Hours cut back; working from home; ALL (4) in this case doing “door-dash” types of 2nd jobs. Main jobs for 2 working normally for business in Silicon V. that has been an ongoing concern for more than 35 years but suffering from the “chain reaction” cut backs of suppliers and customers are suffering mightily. Many are doing what they have to to survive. Lots of young and not so young working “2-3 jobs”.

    • Mira says:

      I watched .. Our 1st Manufacturing plant in India – YouTube
      I am delighted for the workers of India & I hope that these workers get a descent wage.
      It is also wonderful to see that our old manufacturing jobs have survived.

    • w says:

      Stop buying Unnecessary,imported crap!!!!#!Learn from greatgrandparents and,makedo,use what you have in New ways,live within yourmeans,borrow instead of buy,join the makers movement and learn to make whatever,garden and can food at home,set up abarter system,buy hypetlocal or u.s. Made,waste less,save $ and give more to animalshelters or foodbanks.

  9. Zantetsu says:

    Again I ask: how much of this increase in pure dollar amounts is due to price inflation, and how much is due to people actually buying more stuff?

    • Yancey Ward says:

      A lot of it is inflation. I do the household shopping once a week- those items are invariant over a months’ time- they are the same stuff I bought last year in a given month. I was reviewing the amounts spent- I am spending almost 15% more averaged over each month than I spent in 2019, and nearly 20% more averaged over each month in 2018.

    • Petunia says:

      Some of this money is from trading down to cheaper locations, homes, tax jurisdictions, from penalty free withdrawals from 401k’s, and from forbearance programs.

      Oddly enough it also accounts for the increase in personal savings. The increase savings are masking the massive debt being accumulated through forbearance.

    • Wolf Richter says:

      It’s a mix. Various shortages have cropped up in recent months, including a shortage of low-end laptops. Hot tubs for decks are back-ordered, etc…. due to high demand. We know new and used vehicle retail sales in terms of number of vehicles are near/slightly lower than a year ago. But people are buying upscale models (more dollars, lower number of units) and used-vehicle prices have surged, and there were also price increases on new vehicles. On the other hand, in terms of nondurables, gasoline prices are down from a year ago.

      • Wolf, and refrigerators and freezers are backordered for 90 to 120 days here in northwestern Virginia. Allows consumers to make fewer trips to the Covid threatened grocery stores.

  10. Old School says:

    Talking about free money and in addition Fed policy. Just punched in numbers from 2009 bottom. GDP 1.46 times trough, SP 500 5.44 times trough. Anybody lucky enough to borrow cheap and buy stocks made a killing. Maybe the fast money crowd with some leverage could have made 10 times their money from bottom. Average person working in labor market was lucky to keep up. Must be past time to sell stocks imho.

    • And what the gunslingers on Wall Street tend to miss: YOU AIN’T MADE NUTHIN UNTIL YOU TURN YOUR PROFITS INTO HARD CASH AND HEAD FOR THE HILLS WITH IT. Day traders are thumping their chests, but profits can disappear in minutes and hours with the computers running the show.

      • RightNYer says:

        Yes, and what I said a few days ago in another thread bears repeating. If any significant portion of people attempted to turn those “gains” into cash, prices would plummet. Everyone is rich, but only for so long as no one is selling. It’s a mirage.

  11. fizee says:

    The monkey/banana experiment: scientists studied monkeys (facial expressions, vocalisation etc) to determine their “mood”. They then gave 2 monkeys a banana each- result was 2 happy monkeys. Then they gave one of the monkeys a second banana – his happiness level rose a little. They then took the 2nd banana back and his mood changed drastically. End result is 2 monkeys each with a banana – one is happy the other is angry.
    I think this experiment tells you everything you need to know about politics in a “democracy”.

    • Engin-ear says:

      Did the angry monkey become the boss of happy one?

    • Sir Eduard R. Dingleberry III says:

      Who was the idiot that thought a monkey could type the entire works of Shakespeare on a keyboard if given all eternity? I mean a monkey only has 3 different actions: 1.) Eat keyboard. 2.) Poop on keyboard. 3.) Eat keyboard while pooping on keyboard. None of those actions even lead to a word! If I remember right, the monkey didn’t even get the word “the” because the keys on the keyboard stuck together from all the poop.

  12. Lance Manly says:

    So much for the V shaped recovery, total non-farm payroll:

    Oct 2016 – 145,061
    Oct 2020 – 142,373

    Looking at yesterdays initial and continuing claims it looks like we will start loosing jobs again in Nov. But at least there are those government payments to extend and pretend.

    • Cas127 says:


      Keep the employment stats coming.

      Looking at them over multi yr and multi decade periods tells a story that tends to be glossed over.

      The BLS has a huge array of data points and FRED can put them into a nice looking graph.
      makes the more current data more accessible by state and metro.

      And even the employment stats ignore wage stagnation and decline (although just looking at one at a time simplifies the picture)

  13. Brant Lee says:

    Looking through the Black-Friday ads I see little ‘stuff’ I would want, much less need at any price. The thrill of electronics has faded fast for me this Covid year and I dang sure don’t need them in different package, larger sizes.

    Perhaps some American crafted, original, well-made products would be refreshing, but those things are classified as antiques.

    • Anthony A. says:

      “Perhaps some American crafted, original, well-made products would be refreshing, but those things are classified as antiques.”

      Plus, one can’t buy them with a One Click from Amazon!

      • Cas127 says:

        You can get them at Etsy…but Etsy ain’t going to be fixing 50 yrs of horrific trade deficits any time soon.

      • p coyle says:

        i recently found a snare drum that fits this description to a tee. on craigslist. paid in cash.

    • Dan Romig says:

      America makes hi-fi audio electronics quite well.

      Ever listen(ed) to music on a pair of Minnesota made Magnepan loudspeakers? They do present a challenge for the amp though as they are low impedance and current thirsty.

      Schiit Audio makes a great amp in California, the Vidar, designed for this; “It’s perfectly happy driving difficult loads like Magneplaners.”

      The best of the best is still made in the USA. Ask ‘Seneca’s Cliff’ how he likes his New York made McIntosh components.

      • Zantetsu says:

        On the other end of the spectrum, my son needed a new computer mouse. There was a cheap and highly rated one available on Amazon from one of those hordes of Chinese companies with weird names like “Rose Puff”. It was 1/4 the cost of the Logitech mouse I would have normally bought.

        It’s better in every way. So well designed. It can connect in three ways (bluetooth, USB dongle, USB cable), its rechargeable with its own built in battery, it’s smooth, sleek and elegant. The buttons click with a sublime quiet click, yet with a solid feel.

        Some tech has become so ubiquitous and modern design tools are so readily available at the low end that even something as simple as a mouse can be made much better by a small company working for cheap in China.

      • Fat Chewer. says:

        Possibly could change the name. Schitt audio seems a bit misleading if they are as good as you say.

        • Dan Romig says:

          I’m not quite sure how & why the name got there, but the two audio engineers that started it have an impressive set of equipment they’ve designed. In 2010, Jason Stoddard of Sumo and Mike Moffat of Theta got together to make good gear for a reasonable price in southern Cali.

          I use one of their preamps in my main system. It’s nice to know who was the designer and engineer of things I have and use – to me anyway. That was one of the reasons I went with Rega & Graham Slee for phono system upgrades recently; the people behind the gear.

      • coalman says:

        kudos Dan. domestic western Hi-Fi is a cut above most cheaper asian imports. I use Osborn loudspeakers made in Melbourne and they are amongst the finest available anywhere. My Burson DAC/Headphone Amp, also from Melbourne, paired with Sennheiser HD 800 cans are musical nirvana. I do confess to owning chinese made SET mono bloc’s, but i use GE made 845’s, left channel made july 1941, right channel Sept. 1941.

        • Dan Romig says:

          coalman, this speaks volumes to me:

          “Osborn No Compromise Loudspeakers was founded in 1984 by the current designer, Greg Osborn.”

          They look beautiful too! Enjoy …

  14. David Hall says:

    The unemployment rate is 6.9%. Initial unemployment claims rose this past week. People waited for hours in lines at food banks before Thanksgiving.

    • Frederick says:

      6.9 percent Uhh dont bubba

      • Cas127 says:

        More useful to look at 25 to 54 employment to Population ratio over time and absolute count over time.

        Those more accurately reflect state of the economy.

        The publicized unemployment rate is a politically gamed number with enough convenient exclusions to make it misleading.

    • Mira says:

      I watched a short video .. it is a wonderful thing the networks of organisations & people who make food banks work.
      But I do not understand why it would not be easier for people to buy or qualify & have food delivered, rather than the cues upon cues of people waiting.
      I need to think on it a bit more .. there is an easier & more efficient way.

  15. Ron says:

    Greed business sent jobs to Mexico 8$ a day to much went to China 1$ a day no manufacturing jobs in America no country so sad we will never compete with these countries

    • Sunny129 says:

      But every one including T pointed at china but the real culprit – US Chamber of Commerce and their Mult-National members.

      Capital (mobile) flourishes under globalism but at a cost Labor-Wage workers!

      • coalman says:

        so true, cheap flat screen tv’s will never compensate for the loss of decent local manufacturing jobs that our children can use as a leg up to higher income management positions. Plus importing foreign middle management workers that do not grasp western quality control standards.

      • Sierra7 says:

        Yes, and too many blame China for, “….taking away so many millions of good paying US jobs”.
        Sorry, no.
        It was (and still is) the politicians of both major US political parties plus the short sited, greedy heads of so many of our largest corporations that salivated unto disgust waiting to ship those jobs “overseas”. I will also include traitorous major organized labor leaders (such as Lane Kirkland) who colluded against the “rank and file”.
        All the while major politicians promise to “….bring those jobs back!” Really ??????
        Too many Americans are unrealistically depending on our government to get good jobs “back”.
        Ain’t gonna happen.
        They’re gone, gone, gone!
        Nothing too new here. This was apparent back at least into the late ’70’s and ’80’s.
        Americans have to build a new kind of political/economic and probably social system to survive in the “New World”.
        May we all see better days!

  16. Shiloh1 says:

    What happened to all the institutional sized rolls of toilet paper that would have been designated for sale to shut down offices, restaurants etc.?

    • josap says:

      They are for sale on Amazon. And probably many other places. They don’t fit in home bathrooms.

  17. Old School says:

    Too much easy money. If you worked hard for your money would you really be buying bitcoin or Tesla shares. I say these two things are signs of the top and no matter how high they go in the bubble will lose 90% plus of price because they don’t have much backing them up except a squiggle up and to the right on a computer.

  18. Mad Dog says:

    Cashing in on people’s misery.

    The refinance boom in residential real estate is a direct result of the easy money and low interest rates coming out of the pandemic. Maybe it is only me, but does anyone seen something wrong here, with people on the bottom end of the economic ladder getting wiped out, small businesses being destroyed, lines for food stretching miles, homeless on streets all over the place including the suburbs, and on the other hand people are going into debt, leveraging their homes to the hilt, and bragging about the cash they have gotten, spending it on who knows what, and providing no services or goods to the economy as a whole. Greenspan 2.0 said this was great in 2004. We saw what happened to that. Now we are into Powell/Greenspan 3.0 on steroids.

    When interest rates normalize, after this pandemic is over, I can see these leveraged homes going underwater again like they did in 2007 – 2010 with all the negative consequenses.

    • Fat Chewer. says:

      MD, there is absolutely no way interest rates can be normalised in the current environment. For all the reasons you refer to, if government raised rates now, the bottom would fall out of society. It would be the equivalent of a purge.

      • Jonas Grimm says:

        The longer an ossified, stratified society goes without a purge of SOME kind, whether triggered by internal or external pressures, the more miserable its inhabitants will become. Eventually, all wealth comes to be concentrated in a tiny group who produce nothing but own everything, and everyone else just starves.

        This isn’t an issue of communism or capitalism. It’s just authoritarianism. Those who crave power will do anything to acquire more, regardless of the negative externalities. Money is power is influence. Ergo, a small group have dedicated themselves to acquiring ALL the money, and thus ALL the power. A healthy democracy would prevent such an occurrence, but we haven’t been healthy for a long, LONG time.

    • Cas127 says:

      “homeless on streets all over the place including the suburbs,”

      Well, on the bright side, we can only hope those are the ZIRP real estate speculators from phony boom 1.0 in 2008.

    • Mad Dog, I think we will see many of the homes purchased in 2020 with below-the-inflation-rate money and a dissolving economy along with prospects for resilient jobs in the process, going into default and eventually being foreclosed on a la 2009. This is the last gasp for ZIRP being able to get a dying fish off of a hot deck. Called the Marginal Utility of Diminishing Returns or something like that. One has to have earned income to service debt, even if the Government tries to make it Free Money.

  19. Mad Dog says:

    Welcome to America month 9 months into the pandemic

    Just did a refinance appraisal on a half million property in a semi nice commercial/residential property in Washington DC. The owner was refinancing to get a lower rate. At the same his tenants were defaulting on their rent. We went into the property, the tenants were evicted a day earlier and all their possessions including their clothing were left in the residence. The locks were changed and the property was sealed off except for the owner who let us in. We asked what would happen next. The owner said he was having all their possessions thrown out onto the street where it could be looted by anyone in the neighborhood. They had zero value to him.

    The owner was a Vetnam Vet

    Welcome to America, the land of the free

    • qt says:

      No, this is what happened when you don’t pay your rents regardless of the situations. Yes, this sucks for the tenants but the owner got bills to pay too.

    • Old School says:

      I pay monthly rent to a friend. No contract. I do maintenance and small expenses. It’s a gray market thing and we would not screw each other.

      If it’s a rental contract then it’s the real deal of a business transaction. The landlord is taking the business risk and is subject to many conditions including total economic loss. He can show mercy if he desires, but that doesn’t mean he is going to get mercy from his cost of doing business or a slip and fall lawyer.

      A half million dollar property means someone somewhere along the way delayed gratification enough to build something that took real labor and real materials. Consuming is fun, producing usually not so much.

    • “Mad Dog” wrote:
      > Washington DC […] tenants were defaulting on their rent.
      > […] the tenants were evicted a day earlier […]

      No, they can’t be evicted for non-payment.

      No sheriff.

      More likely, they -chose- to leave,
      to escape the mayhem.

  20. Paulo says:

    The informative charts are interesting, but what really grabbed my attention today are the clips of miles and miles of people lined up for a food bank handout in their idling modern cars, most likely bought on time. The interviewer sidles over for a word and the driver cries out, “No food in the house.”

    This is a horrible vision, but something fades out of the message when the speaker is in a top end car. Financed. Thanksgiving.

    My prediction is a massive Infrastructure Plan similar to Roosevelt’s WPA crews. Starting date to coincide with mass vaccinations and a change in Govt. Sure, most of the work will be tilt up prefab using machines and hydraulics, (and selected companies will grow rich), but there will be some grunt work required. Always is. Now, do many Americans have the jam of the past, say, to hop down in the trench with a shovel? Can you do it with a law degree? Have you ever worked in a factory, the mind numbing 8 hour shift that feels like a year? There is a reason why those jobs are overseas and it isn’t just economic. Don’t believe me? Try pulling lumber on a green chain for a year, or put in concrete forms in the mud and snow….for a decade or more.

    Folks want the office job and a coffee to go from a drive thru. Clean clothes. Vacations. Guarantees. I’m not sure life is like that anymore. It only became that way when the World was subjugated by military prowess and the reserve currency. Govt policy serving the needs of multi national corporations. Insurgencies have long since neutered the effect of occupying armies and hungry rivals have taken over the factory work. A green new economy might help going forward, but a return to past prosperity for regular folks is long gone.

    My advice for a high school kid is to learn a trade. Male or female. Be willing to hop in the trench with a shovel. Abhorrent? Learn tech skills then. Medical skills. Engineering. But for God’s sake, learn something practical and necessary that people are willing to pay for. How many college degrees does a declining society need or can afford? Not as many, that is for sure.


    • Old School says:

      My friend is making a darn good living putting up gutters and owning his own company. Does the gutter guard thing as well. It’s a real need around here as it keeps old people off of ladders. He had to take the risk though. Quit his job at 30 to go in business for himself. So far, so good.

    • IdahoPotato says:

      “There is a reason why those jobs are overseas and it isn’t just economic. Don’t believe me? Try pulling lumber on a green chain for a year, or put in concrete forms in the mud and snow….for a decade or more.”

      I know a couple of farmers who cannot get a single American to work on their farm in lieu of undocumented workers.

      • Wolf Richter says:


        “I know a couple of farmers who cannot get a single American to work on their farm in lieu of undocumented workers.”

        You forgot to add: “…at those wages (low, and for piece work) and working/living conditions (crappy and crowded).”

        With the right wage and with the right working/living conditions, there would be Americans eager to do the work. But the principle of low cost dominates competitive thinking — because your competitor is hiring those undocumented immigrants to harvest the strawberries (back-breaking work), and you cannot sell your strawberries profitably if you did what you needed to do to hire Americans.

        • IdahoPotato says:

          That begs the question: what consequences do these farmers have for hiring undocumented workers? Zero. In fact, they get billions in subsidies.

          And why can’t they sell their strawberries profitably? Because Americans want cheap food, no undocumented workers AND no consequences for those who hire them.

          Throw ONE of these farmers who hire undocumented workers in jail and see how quickly things change.

        • MonkeyBusiness says:

          American farmers are known welfare queens. You would hear bankruptcy stories from time to time coming out of the agricultural sector, but in 2019 farmers got 22 billion worth of government subsidies.

          I actually don’t mind the subsidies per se as long as our farmers produce high quality goods, but they don’t. Recently the Taiwanese held a demonstration to protest the import of American pork. Apparently we feed our pigs with things that might cause cancer down the line. WTF. Why don’t our media cover things like this?

        • Stephen C. says:

          I’m waiting for the article and discussion that takes a look at the Orwellian phrase “Farm Aid.” Is it just free money to corporate land owners? Did it get its legitimate start in the Depression and subsequently turned into the accepted monster that it is? Could I afford groceries without this arrangement? Any serious economist out there willing to defend it in clear terms, or is it in the basket of “things we don’t talk about.”

    • p coyle says:

      “Folks want the office job and a coffee to go from a drive thru. Clean clothes. Vacations. Guarantees. I’m not sure life is like that anymore.”

      paulo, this is an important point. i also doubt that life will go back to the old normal.

      the competition between the go back to the old normal vs. the new better normal is an argument i fear will continue to fester. it will be interesting to see where clean clothes, vacations and guarantees get valued down the road.

    • w says:

      Got to respond!I see it up here in n. IL. When I go to one of those popup foodbanks.Yes,I do go and yes my family is actually superpoor due to various reasons,two primary ones being their father is a selfish addict and I have been an Unpaid,overworked caretaker for various family members.Point is that the observation of the many $$$vehicles containing foodbank recipients is something I noticed immediately!Many do have iphones,decent appropriate clothing,and pricey/newish vehicles.They possibly have cable t.v.,decent intetnet,netflix,newish laptops,,and better than medicaid insurance.Its difficult to gauge as each case is uniwue.Their may very well be maxedout trying to avoid eviction/car repo. Or have been used for medical costs.They may have taken in family+friends+stray pets due to covd chaos.They may very well be unpaid caretakers of one of the Millions pf stroke/heartattack recoverees.They may have chronic health issues.The vehicle may be the first nice one they Ever bought.

  21. Mad Dog says:


    What about boxing up the stuff and putting it in storage for the tenants to retrieve later. Wouldn’t that be a more civilized thing to do? Is money so important that you have to treat people like animals.

    • Old School says:

      If people don’t care enough to shepherd their own stuff, why should he. They knew they weren’t going to pay. Why didn’t they call a friend or family member to help them move their stuff. It’s called personal responsibility.

      • Saylor says:

        If you don’t have a place to go…, you don’t have a place to move your stuff to.

        • Zantetsu says:

          If you don’t have a place to go, then neither does your stuff. So where should it go? To storage on someone else’s dime?

        • Shiloh1 says:

          “The Dog That Didn’t Bark” – local government entities and associated pension funds on the landlord’s must be paid property tax bill.

          “Essential Government Workers” have not missed an hour’s pay around here.

      • w says:

        Been in a dangerous spot because ofselfish,horrible sisters and selfish,lying ex.Life is Never black and white.My sons and I were illegally forced out of the family home last winter because sisters were tired of being inconvenienced and put elderly father in n. Home so they could sell his house,dump his stuff,and not have todrive down from Wisconsin.Sons and I were caring for him and property unpaid 24/7 after I cared for dying mom.Had to self-represent in court and fought it for 8 months in three court cases while we were all Very sick-possibly covd.Neighbor I did not even know was only person besides overpaid driver to physically help me and that was after I gave her family alot of valuable things.Many singke parents and unpaid caretKers are in same boat.All your time,energy,$,attention goes to just Keep the Plates Spinning until something gives,lije your health or brokendown car!!Alot of struggle out there and tommorrow brings more.Be compassionate!

    • Massbytes says:

      That is my feeling exactly. I have had to evict people over the years, but I never treated them like that. I feel very gifted to be where I am in life and don’t try to pile on the poorer people, even when they have done things to me. I have my limits, but I don’t try to make tough times worse than they already are.

      • Beardawg says:

        Some jurisdictions, like Kansas City, for example, have ordinances to put evictee belongings at the curb – i.e. that IS the law.

        Gotta say I side with the DC landlord on this one. In EVERY eviction I have dealt with, the decision not to pay rent was calculated by the tenant. I wish “poor but honest” was the norm, but it is the exception.

        • Sierra7 says:

          ” I wish “poor but honest” was the norm, but it is the exception.”
          Can’t throw all renters under the bus!
          There are many good honest renters who thru no fault of their own are thrown into the streets in bad times. Some of them will have not choice but to default in order to “live for another day.”
          Let’s not put all defaulters in the same pot.
          May we all see better days!

          To those who have commented about government support for “farmers”.
          Another case where you can’t throw all “farmers” into the same pot.
          Thousands upon thousands of small truck farmers across the country who serve the everyday needs of America do not receive significant amounts of help from the government.
          Larger corporate (LLC) farms do. From water irrigation support, subsidy payments for crops, price supports and much, much more.
          There is/was a reason for all those payments.
          It is historic to allow the US to continue to produce crops that were/are perceived essential to the survival of our feeding public. Those payments do not include the smaller type “truck farms” that still surround although farther out in territory, our urban areas.
          I spent a good part of my young life operating one of those farms and it is 24hrs day, 7 days week with no “vacations” to plant, grow, market all those smaller crops to an urban area. And, little “profit”!
          So, again. Don’t throw all “farmers” into the same pot!
          May we see a better day!

    • w says:

      Totally agree!We do not know the history of the landlord-tennant relationship,maybe they were loud,always latepayers?I would not just dump their stuff especially in bad weather season,but maybe I am too nice.

  22. Timothy Patrick says:

    First gold crashed, second bitcoin crashed, next the stock market. Lack of liquidity. The stock market will resemble the 1970’s. Go nowhere. Need to burn off overvaluations. Housing to get clubbed also. Way overvalued. Wages will not keep up with inflation. I have named this the decade of “Fear and Loathing”, in honor of the late, great Hunter S. Thompson.

    • Dan Romig says:

      “No, this is not a good town for psychedelic drugs. Reality itself is too twisted.”

      The Fed has declared that future money should have virtually no intrinsic value above current money, and in fact, it will be worth less as they are on a mission to keep inflation higher than interest rates.

      To me, that is a twisted reality.

    • Heinz says:

      ‘Fear and Loathing in Las Vegas’ casino known as US economy.

  23. Heinz says:

    On Thanksgiving Day this appropriate comment comes to mind:

    “When we replace a sense of service and gratitude with a sense of entitlement and expectation, we quickly see the demise of our relationships, society, and economy.” — Steve Maraboli

    Consider also that Nature works in more or less predictable cycles both in the environment and human affairs.

    RIP American consumer economy, at least as we knew it these past cozy decades. A dark winter approaches (metaphorically).

    • Bobber says:

      Spot on. You could also say America has traded its community for corporatism. You can’t put a price on the value of community, so it has been cast aside.

      • p coyle says:

        once enough focus groups have been conducted, the marketing department will eventually try to set a price on community.

        • Lisa_Hooker says:

          All of the focus group research on community will be concentrated on packaging.

  24. nick kelly says:

    Questions for Janet Yellen:

    Recessions used to be a considered a normal part of the economic cycle. They had uses: by punishing speculation in ‘get rich quick’ schemes, they sent capital back to slower but surer industry, agriculture etc. Then Allan Greenspan decided that not only should recessions be quickly ended by the Fed, they should be ‘headed off at the pass’, prevented from occurring by preemptive interest rate cuts.

    One question: is it now Fed policy that a recession cannot be allowed? Second: if so, is this because the policy of avoiding sharp but short corrections on speculation has allowed speculation to reach such heights that a correction or reversion to the mean would be too painful ?

    • Bet says:


    • Bobber says:

      Next question for Yellen:

      After two massive bubble collapses in 20 years and a 3rd one on the way, how’s that policy of avoiding little recessions been working for you?

      • p coyle says:

        next question:

        is serfdom or indentured servitude the goal? after all, some of us want to make a little profit on our 401k thingys.

    • Heinz says:

      Yes, they (the uppity almighty Fed governors and their army of Fed lackey PhD economists) believe they have achieved perfection and now have complete command and control of our economy.

      So the business cycle has been repealed (only booms, not busts allowed).

      Not my opinion— but surely theirs.

      • sunny129 says:

        The usual business cycles have been replaved by repeated, insane credit cycles since March of ’09! Nearly 20% of S&P are Zombies!

        They have digged the hole deeper than since 2000 and 2008.
        0.1% top have more than the bottom 80% ( before it was top 1.0%!)

        Foxes are in charge of hen houses. Hence I expect no change.

      • Lisa_Hooker says:

        A boom is when the stock market ramps up rapidly, a bust is when the stock market goes up slowly. Always up.

  25. Martha Careful says:

    One dynamic in this pandemic period, is the reaction to isolation and insecurity. People are rewarding themselves and they are motivated towards immediacy, looking for security and comfort. It doesn’t matter if that means eating extra bags of cookies or retiring early and then buying homes that seem risky in valuation.

    The Babyboomers are especially being motivated to move ahead with planning, after years, if not decades of pent-up hesitancy. The last eight months have provided a stark fork in the road for many, if not all among us. This new age sets a course for rapid change, not unlike what may unfold for refuges in a crisis — except, instead of a mass flood of homeless, dislocated people that suffer, we have a tsunami wave of people with money, motivated to re-invent their lives in some new way.

    This mass social change has many layers for various economic groups, but, the fork in the road will most likely split further apart, with lower incomes highly burdened and trapped, and the smaller stream of people on the other paths will adapt with far greater ease.

    Perhaps the greatest wrinkle for those on the higher road, will be higher taxes needed to maintain order in this chaos.

    • Beardawg says:

      MARTHA C

      Interesting take. As a younger Boomer, I see much of what you postulate already taking form.

  26. Saylor says:

    In the ‘wages and salaries’ section, the growth shown from last year is 2.1% for the month of October. If this is not including the stimulus monies and my gut read tells me that while people were getting back to work in this month NOBODY on an hourly paycheck was making more than they were 1 year ago. Which leaves that 2.1% increase only to the top earners that you mentioned and has ‘no fanfare for the common man’?
    How nice.

    • Wolf Richter says:


      I cannot quite square these numbers with the unemployment numbers. There is something off — but I cannot put my finger on it.

      One thing we know: higher-end employees did very well during the pandemic. They switched to work-from-home instead of getting laid off. Many of them got their normal raises. At the very top, the usual multi-million dollar pay increases people get when they switch jobs or when the new contract is negotiated also had a big influence. It’s the low end of the wage scale that got brutalized.

  27. Micheal Engel says:

    1) Happy Thanksgiving.
    2) This week we were hiking on the DOW trail to the top.
    3) Great view from 30,000.
    4) In 2000, 20 years ago, we were hiking on the steep dotcom trail.
    5) Great view from the 5,000 peak.
    6) The Nasdaq is resting at the top, waiting for DOW to reach 30,000, taking pictures.
    7) Angels Envy Rye Whisky for the DOW & the Nasdaq.
    8) Happy givings 2021.

  28. john vermeer says:

    I don’t understand people not paying their rent when they have the money. It’s going to backfire not only on them but all of society. The best thing we can do is buy an affordable place to live and pay it off
    ASAP. Those who don’t, risk having no place to retire and will be living
    in exile somewhere, in misery. I’ve seen it in my own family and it it’s not pretty.

  29. Bet says:

    It’s about price o the way up in the markets.
    About value on the way down

  30. Lisa_Hooker says:

    Is this the best of all possible worlds?
    Is the future more uncertain than ever?
    But I find today that I am very thankful to be – here.
    And I’m thankful that you are here too.
    Eat too much and drink just enough.
    Good health and A Happy Thanksgiving to all.

  31. Tony22 says:

    Happy Thanksgiving to all.
    Have been pondering the hypocrisy of family Thanksgiving gatherings being banned while bars and restaurants are allowed to be reopened.

    Middle of the night insight. Nothing is for sale at home, and thus nothing is taxed as food, liquor and labor are in commercial settings, thus a reason for municipalities to allow them to partially reopen at a state and local level-it’s the taxes.

    What other advantages are there to the powerful by reopening businesses and discouraging family cohesiveness which drives people into public spaces? Commercial Mortgage Backed Securities get a partial reprieve when businesses reopen.

    Always keep a pad and pencil by your bed. You have probably forgotten more things from the middle of the night than you learn in the day.

  32. BuySome says:

    Ping Pong diplomacy has failed. Time to force the enemy to the peace table by mining their most strategic harbors. Start with Los Angeles/Long Beach/San Pedro. It’s going to be a Haiphong Holiday season.

  33. Micheal Engel says:

    1) Mike pillow day and night for FOX premium discount. Ilan don’t spend a dime on advertisement. Tesla rely on words of mouth.
    2) When someone mention Tesla, a tsunami of comments by his followers, who have “behavior condition” to say something good about Tesla, erupt.
    3) Tesla owners don’t drive to the food banks. It’s below them even if they are obese and hungry all day long. Everybody in the food bank get the same : junk on high sodium with plenty chemicals. There are no special orders on the line.
    4) TSLA was breaking out last week. Breaking out is always a good sign.
    5) TSLA took off vertically in Nov, out of the launching pad, to 574.
    6) Ilan became the second richest man in US on his way to #1.

  34. tommy runner says:

    alices restaurant playing (ty ag) and youre still ransoming the people while searching for the problem with the dysfunctional edd system. thinking about another task force governor? while you were doing the laundry and filling the wrong pockets i think we found the problem, were thinking less like the long goodbye and more like total recall.

  35. George W says:

    Not everyone waits until Black Friday to do their Xmas shopping.
    Many people like to get their shopping completed before the holidays start.

    There has been no pre holiday spike in deliveries at Amazon.
    Amazon is acting as if everything is normal but to me nothing feels normal.
    Data can be manipulated and from what I am experiencing, nothing is adding up.

    • josap says:

      All of my holiday shopping was done and delivered before Thanksgiving. No need to make the delivery people work 14 hr days right through Christmas eve.

  36. Dave Mac says:

    I suspect sometime soon mega FED printing just won’t work anymore.

    Will it be in 2021?

  37. makruger says:

    Maybe it really is different this time and in this new normal of ZIRP along with impending high inflation, stocks really will just keep going up as the USD continues to lose value.

    More seriously, with the government likely to inflate away the nation debt, the future of bonds really isn’t looking very bright at all. I was thinking their replacement could be a combination of dividend stocks, TIPS, and REIT’s.

    But with P/E ratios in the stratosphere and housing as inflated as ever, maybe only TIPS comes out smelling like a rose (assuming CPI isn’t grossly understated). If not then perhaps commodities as their prices are likely follow inflation to some degree.

    • Bobber says:

      What is the inflation gauge for TIPS? If it is CPI, the TIPS won’t help you. The inflation is happening outside traditional inflation measures.

      • Lisa_Hooker says:

        Exactly. In a game where the Government controls the CPI the TIPS yield can always be set lower than inflation.

  38. George W says:

    To me, the Fed’s ability to influence the market is determined by their ability to lower interest rates.

    QE, and/or money printing by itself is not an economic driver but instead plays a supporting role in ensuring there is sufficient liquidity to support the drop in interest rates.

    Home building is the US economy.

    Dropping interest rates allows one that could only afford to purchase a $100,000 home to be able to afford a $200,000 home and as rates continue to decline a $400,000 home. QE/Money printing ensures sufficient liquidity exists in the system for the transaction to be completed.

    As interest rates approach zero, no amount of QE/Money printing can drive the market forward as that is not it’s role.

    • Crush the Peasants! says:

      Actually, it’s the same $100,000 house now priced at $400,000. :>))

      • Heinz says:

        And, all houses depreciate over time for entropy and wear and tear (although only income properties like rental buildings can claim that fact on their income tax).

        As has been often said, a house is the biggest money pit you will ever own (although boat and airplane owners might disagree).

        But as we all know the market is cyclical in most places and prices go up and down. Overall, they claim that housing historically only keeps pace with an average inflation rate over long time spans.

  39. Hap says:

    “though they still get a lot of money from cash-out mortgage refis at historically low interest rates”

    Whatever happened to good old fashioned HELOCS?

  40. Stephen C. says:

    I’m grateful this Thanksgiving Day to have received my Wolfstreet mug just in in time to fill ‘er up with my own form of quantitative and qualitative liquidity. Thanks Wolf, and all you clever commenters/commentators.

  41. sunny129 says:

    Is there a amicable solution for this conundrum, ever?

    • sunny129 says:

      The above is directed @ Idahopotato and WS response to him. this got misplaced in the thread.

  42. historicus says:

    Handing out money to get the economic statistics where you want them.

  43. Yort says:

    Best Recession ever for DIS stock owners like me. I kind of feel like a smuck, but hey, capitalism is about profits, not people and ethics…right??? Still, feels kinda scrooge McDuckish…

    Read this….wow!:

    Disney is laying off 32,000 workers after:
    -Issuing $1.5B dividend
    -CEO temporarily cut compensation 5% & makes 1,242x the median worker
    -Execs kept bonuses & returned to regular pay in August
    -Workers started food pantry and GoFundMe for laid off coworkers

    • Joe in LA says:

      90% of Americans are going to learn, during this long cold winter, what capital really thinks of them.

  44. Micheal Engel says:

    1) McKinsey research shows that the combine central banks and gov
    stimulus in response to CV-19, relative to GDP is :
    Germany 33% ; Japan 21 % ; France 14.6% ; UK 14.5% ; US 12.1%
    Canada 11.8% ; India 10% ; S. Africa 8.6% ; Brazil : 5.5%.
    2) Option #1 : the global stimulation will induce inflation. It will lift all assets up. SPX on the way to : 4K – 5K.
    3) Option #2 : it was a waste of time. All in vane. Chaos and debt collapse will ignite deflation. It will lift USD, but other assets will deflate in stepping stones.
    4) After 72 years between 1949 to 2021, – through two relay stations, in the 60’s & the 70’s and 2000 & 2009, – we might have reached the end of cycle, the end of an era. Life will be different …
    5) A shallow 38% correction will send the 30,000 DOW to : 30K – 11.4K = 18,600. That’s : 2015/16 level.
    7) A deeper 62% correction will send the 30,000 DOW to : 30K – 18.6K = 11,400. That’s between 1998 and 2000.
    8) The first stopping action was in 1997. // 1998 hi was a Buying Climax.
    9) Jan 2018 was stopping action #1. // Oct 2018 was a Buying Climax. // Feb 2020 : an UT. // Nov 2020 is either : UT, or UTAD.

  45. Micheal Engel says:

    Ilan @ 600 on the way to US #1, the top of Pareto 0.001% top.

  46. Martha Careful says:

    FYI, this is from a Fed post:
    By Bill Dupor
    Friday, February 10, 2017

    “One more broad way to measure the relative size of the two fiscal stimuli is to compare their effect on the federal debt as a fraction of gross national product (GNP). A larger increase in the debt may be interpreted as greater fiscal easing. The cost of programs such as CARS is reflected by an increase in the federal debt.

    To get at this measure, I first calculated the increase in the federal debt between 1931 and 1939 as a fraction of GNP in 1931. This equaled 30.3 percent. Then, I calculated the increase in the federal debt between 2008 and 2011 as a fraction of GNP in 2008. This equaled 32 percent. By this broader measure, the two interventions were of a relatively similar size, with the response to the 2007-09 recession being slightly larger. The figure shows the four-year change in the federal debt scaled by GNP across time.”

  47. Micheal Engel says:

    1) The Nasdaq : Oct 2018 is stopping action #1. // Feb 2020 : BCLX. // Nov 27 2020 high (today ?), shortening of the thrust, is an UT.
    2) Gov stimulus work, at least for a while : in Apr 2020 the Personal Saving Rate reached 33.7% and Ilan became the second richest man in the world, this week, on falling volume.
    3) If Ilan wealth will correct like the personal saving rate, – falling in 6M from 33.7% in Apr 2020 to 13.6% in Oct 2020 ==> Ilan is fake.

  48. The US financial wizards are not afraid to experiment in the midst of a crisis, and this time they found out that MMT will work. The worker consumer subsidized cradle to grave, adds more revenue to corporate americas earnings. The analogy is US/China relations, loathed by many, an embarrassment of riches for all. We are steeped in our puritanical code, turned outward onto the world. Covid gave us a chance to break that tradition, and a few more which are detrimental to world health.

  49. B Wilds says:

    What consumers buy matters a great deal. When looking at the policies flowing out of Washington it is clear many politicians seem to have no idea that all consumer spending and purchases are not created equal.
    An article in that delved into this claims, “where money flows and who it enriches is a key component of economics, the failure to consider this is a blind spot many people have.” The fact is, consumers should take a long look at how their purchases will impact the economy over time. 

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