Former White House Council of Economic Advisers Chairman Kevin Hassett is returning to the administration as a senior economic advisor to President Trump during the COVID-19 response.
Kevin Hassett is very sharp and a happy warrior by disposition. Hassett was excellent as CEA Chair and no doubt his rejoining the economic team with an advisory position to President Trump will bring a great voice back to the crew.
Comrade citizens, California governor Gavin Newsome announced today he has issued a statewide “stay at home” order. California residents can only leave their homes when necessary and/or critical during the coronavirus pandemic.
Public gatherings are not allowed. [Executive Order HERE] Under the order California residents can travel alone and visit: Gas stations, Pharmacies, Grocery stores, farmers markets, food banks, convenience stores, take-out and delivery restaurants; Banks and Laundromats/laundry services.
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Treasury Secretary Steven Mnuchin called-in to Maria Bartiromo earlier today to discuss the overall financial approach of the Trump administration to the COVID-19 impacts.
Mnuchin has been working closely with House and Senate political leadership to structure the financial flow needed for particular sectors and workers inside the Main St economy. The target date for legislation directing the financial relief is early next week.
The underlying economy is strong. The treasury response is targeted to those who need short-term relief. Short-term economic indicators are no longer valid.
President Trump and the coronavirus task force hold a press briefing for the latest updates and information [Video Below – Transcript Added]
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[Transcript] – THE PRESIDENT: Thank you very much. I think this is going to be a very important conference and I’ll get to that toward the middle, but I have a few things to report. And I want to thank you all for being here.
And I have to say, I think with social distancing that the media has been much nicer. I don’t know what it is — all these empty — these in-between chairs. We probably shouldn’t have anybody sitting behind you either. You know, you should probably go back. But I love it. It’s so much nicer. But I shouldn’t say that because you’ll get me now.
…there had to be a point where the value of the Wall St economy surpassed the value of the Main St economy… Part I Here
We now look forward, and consider the question: How would the multinational underwriters, the multinational financial systems, reset all transactional tables (the bookkeeping systems underneath the valuation) if the U.S. stock market was ever forced to re-value economic nationalism over multinational globalism?
To first answer the “how” question, we must visit the “why” question. Why would the multinational financial underwriters want to reset their valuations?
Obviously, the global financial system does not act altruistically. What would motivate the global wealth valuation authority (various market investment indexes) to want, or need, a reset.
The answer to the “why” question might not be as challenging as it appears.
First, there has been a seismic shift in how the world looks at the economic exploitation of multinational systems, or globalism. See Bernie Sanders? See those yellow vests in France? See what happened with the U.K. Brexit referendum? See the shrinking EU influence? See the open/public confrontation and push-back against China? See Trump? All examples are consequences of the rise of economic nationalism.
Secondly, the original Wall Street corporate motive (during decades of mergers and acquisitions) to shift product manufacturing to Southeast Asia (ASEAN nations) was driven by a lower cost of overall business, higher profit margins and greed.
As a direct outcome economic wealth was shifted from the U.S. to ASEAN nations, and particularly China. Low wages, low regulation, cheap operational costs, incentives and subsidies from Asia equals cheap TV’s, sneakers, furniture and durable goods.
Even with high fuel prices and overseas shipping costs, there was a big difference between U.S. and ASEAN manufacturing costs. As hundreds of U.S. Wall Street multinationals chased profits the rust-belt was created.
The stock market is not the U.S. economy; the stock market is an investment instrument that determines valuations of economic activity company by company. The valuation is considerably arbitrary, based on the determinations of the arbiters (investors). This is empirically true.
However, that said, how would the multinational underwriters, the multinational financial systems, reset all transactional tables (the bookkeeping systems underneath the valuation) …if the U.S. stock market was every forced to re-value economic nationalism over multinational globalism? Enter “Coronavirus”.
Four years ago CTH first explained a new way to look at the U.S. economic system and how Main Street was/is disconnected from Wall Street. We presented a metaphor to explain. Before going deeper into the discussion of tomorrow; and at the request of several people who now accept the era of “deglobalization” is upon us, I first present that prior reference & then will use this as the baseline to describe what could come next.
There is a key phrase at the fulcrum of everything past:
…there had to be a point where the value of the second economy (Wall Street) surpassed the value of the first economy (Main Street).
What we are going to outline in part II is the possibility what happens when this natural truism is reversed. The objective is to answer: How, specifically would Wall Street reset its evaluative systems if Main Street once again emerged as the priority?
But first, a baseline revisit is needed.
White House trade adviser Peter Navarro outlines some of the ongoing supply chain initiatives to meet ongoing demands of the corovirus effort. Navarro highlights the cooperation between US government and private enterprise. WATCH:
Earlier today President Trump met with executives from the U.S. tourism industry to discuss how their operation are impacted by the various COVID-19 mitigation efforts.
Participants included: Roger Dow, President & CEO, Travel Association; Chip Rogers, President & CEO, American Hotel & Lodging Association (AHLA); Jon Bortz, President and CEO, Pebblebrook Hotel Trust and AHLA Chairman; Elie Maalouf, President, The Americas, Intercontinental Hotels Group (IHG); Christopher Nassetta, President & CEO, Hilton; Arne Sorenson, President & CEO, Marriott International; Richard Bates, EVP, Disney; Mark Hoplamazian, President & CEO, Hyatt Hotels Corporation; John Sprouls, Chief Administrative Officer, Universal Parks and Resorts; Patrick Pacious, President and CEO, Choice Hotels International; David Kong, CEO, Best Western Hotels and Resorts; Jim Murren, President & CEO, MGM [Video and Transcript Below]
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[Transcript] – THE PRESIDENT: Well, thank you very much. We have the tourism industry executives, the biggest anywhere in the world. These are the great ones, and they’re going to say a couple of little words pretty soon, I think. We’ll talk about their company quickly and the number of employees and what’s happened since the Chinese virus came about. And they’ll be discussing that.
Let me say up front, there’s something very sketchy about the wordy explanations provided by National Institute of Allergy and Infections Diseases (NIAID) Director Dr. Anthony Fauci. Listen/watch or read what he says below.
Encapsulating Dr. Fauci’s position: Data on the coronavirus assembled today doesn’t reflect what is actually taking place today, but rather reflects where we were several days ago…. OK, that part makes sense (there’s a lag).
He then goes on to say what is actually happening today will not be included in data until we arrive at a place a few days from now when today’s reality is quantified. Again, that reasonably makes sense… However….
The media is/are reporting on coronavirus impacts in real time. There is no delay in what the media are reporting from various places around the nation. The media reporting reflects what is taking place today; right now… and what the media is reporting today is not worse than the data Fauci is explaining.
Meaning if Dr. Fauci was correct, and if the coronavirus data (the reports of spread) was behind by several days from the reality of today; then what the media would be reporting (the on the ground reality of the spread today) would be significantly worse (higher incidents) than Fauci’s data, which he claims is lagging several days behind….
The problem with that supposition – The media ground reports do not reflect a higher incidence of coronavirus spread than Fauci’s data today.
National Economic Council (NEC) Director Larry Kudlow held an impromptu press conference to describe what sectors of the U.S. economy may need direct financial assistance to bridge revenue gaps from mandated government policy. The stock market is not the U.S. economy.
Calling this type of financial assistance a “bailout” is not a fair term considering the financial impact was created by government instruction. Government orders to shut down restaurants creates a financial loss for restaurants who also have bills and payroll obligations to meet. These types of affected businesses will need immediate assistance.
Airlines, hotels, resorts, private parks, gyms, restaurants and various entertainment companies/industries may also need a direct infusion of cash or deferred tax payment to compensate for financial losses. Again, these businesses have been impacted by government ordering their closure. Depending on the size of the business, the need for gap funds may be urgent.