Wall Street ignores human suffering to launch new bull market
San José, CA – On Thursday, March 26, the Labor Department reported the new claims for Unemployment Insurance (UI) benefits rocketed to 3.3 million for the week ending March 21. This was almost five times the previous record of almost 700,000 new claims in October of 1982, when the recession drove the unemployment rate to 10.8%. The number of new claims for UI was 15 times higher than the report just two weeks earlier.
San José, CA – The U.S. Senate has failed twice to pass a Republican-backed economic stimulus bill worth over a trillion dollars ($1,000,000,000,000). Opposition to the bill comes from its top-down (or in the 1930’s Great Depression term, ‘trickle down’) approach. The bill would provide hundreds of billions of loans to corporations that would not have to be paid back, just as in the loans made to U.S. auto makers after the financial crisis in 2008. It would also give direct cash handouts, with almost half of all households getting half of what middle and higher income households would get.
Federal Reserve takes extreme measures to protect wealthy
San José, CA – Last week the financial news was dominated by the falling stock market, which had its worst week since the 2008 financial crisis. But behind the scenes the U.S. Federal Reserve, or Fed, was working feverishly to prevent another financial crisis, taking actions not even done during the 2008 crash.
San José, CA – On Thursday, March 19, the Department of Labor reported a surge of applications for Unemployment Insurance (UI) benefits as the COVID-19 pandemic began to bite into the economy. For the week ending March 14, a seasonally adjusted 281,000 claims were filed, up 70,000 (or one-third) from the week before and much greater than the predicted 220,000. A National Public Radio poll also conducted last week showed that 18% of all households had already lost income from layoffs or reduced work hours.
San José, CA – The fall in stock prices gained speed on Wall Street on Monday, March 16. By the closing bell, U.S. stocks had the largest drop since the crash in October 1987, with prices down almost 13%. The headline Dow Jones Industrial Average fell 3000 points to end just above 20,000, while the tech-heavy NASDAQ fell almost 1000 points. A circuit breaker kicked in within minutes of the market opening as the broad S&P 500 fell 7%. This led to a short-lived attempt to bounce back but in the end, stocks were just short of another trading halt at 13% down.
San José, CA – On Sunday, March 15, the Federal Reserve bank hit the panic button, dropping interest rates by a full percentage point to near zero. The last time that Fed did this was in December 2008 during the financial crisis. The Federal Reserve also pledged to restart the Quantitative Easing or QE program of longer-term bond buying, first started in November 2008. Trump’s Secretary of the Treasury Mnuchin also vowed to go to congress this coming week to restart emergency financial powers for the federal government in addition to the Fed’s actions.
San José, CA – From the corporate magic of Disneyland in California to the bright lights of Broadway in New York City, to the famous tourist sites of Paris, France and Rome, Italy, lights are literally going out as more and more businesses shut down, as of today, March 15. Meanwhile, in socialist China, where the COVID-19 pandemic initially hit first and hardest, the economy is starting to recover as enterprises start to reopen and more and more people go back to work. One is struck by the irony of Apple, one of the capitalist world’s most valuable corporations, shutting all of its retail stores around the world even as it reopens its stores in China.
Dow down 10%, largest drop since October 1987 crash
San José, CA – U.S. stocks fell almost 10% Thursday, March 12, the day after President Trump called for a travel ban on Europe. This was the largest drop since the stock market crash of October 1987 and put the broader S&P 500 as well as the tech heavy NASDAQ stock market indices in bear market territory as all three major indices are down more than 20%.
San José, CA – U.S. stocks plunged sharply right after the opening bell and ended more than 7% lower as the Dow Jones Industrial Average lost more than 2000 points, March 9. So swift was the fall that within minutes so-called circuit breakers developed after the 1987 stock market crash kicked in, halting trading for 15 minutes. Stocks tried to bounce back but ended the day lower.
San José, CA – On Friday, March 6, the Labor Department reported that 273,000 new jobs were created in January, driving the unemployment down to 3.5%. But despite this strong job report, U.S. stocks fell again; the broadest S&P 500 was down 50 points or about 1.75%. The Dow Jones Industrial Average, which is made up of 30 large companies, fell less than 1% as investors may have felt larger companies are safer havens. But the real flight was to bonds, with the ten-year U.S. Treasury Bond interest rate falling to another record low of 0.75%.
