Another Aid Bill by February? Plus, Washington’s Martial Law Hysteria
Author: Greg Valliere
December 21, 2020
FIRST, THE BOTTOM LINE: Chances of a first quarter recession have dropped significantly in the wake of congressional agreement on a $900 billion aid package. That’s a very big deal.
BUT IS IT ENOUGH FOR THE SECOND QUARTER? There are several provisions in the bill — which will be signed into law late tonight or tomorrow morning — that will have to be addressed within months. Another measure will be on the table after Joe Biden’s Jan. 20 inauguration.
THE SIZE OF ANOTHER BILL DEPENDS LARGELY ON THE GEORGIA RUNOFFS: Polls show a virtual tie in both of these Senate races, amid record early voting. It’s simple — if the Republicans win just one of the two seats, they will retain control of the Senate, which would point to a small bill; if the Democrats win both seats — and thus the Senate — a much larger stimulus bill would be likely.
IN ANY EVENT, THERE ARE SEVERAL PROVISIONS in the $900 billion bill that will have to be re-visited. First of all, the unemployment benefits extend for only 11 weeks, until March 14; it’s unlikely that the economy will be up and running by then, so more aid will be required.
AND THERE WAS NO RESOLUTION of the business liability protections that Mitch McConnell favors and there will still be a need to aid state and local governments (although some states are in fairly good shape, thanks in part to the stock market rally’s impact on income).
THERE ARE SOME SURPRISES in the bill, including a deduction for business meals, and generous funding for theaters. There was an artful compromise on the role of the Federal Reserve, which apparently will be allowed to establish new lending facilities, as long as they’re not exactly the same as ones that were ended by Treasury Secretary Steve Mnuchin.
THERE ARE STILL MOVING PARTS that will be addressed in today’s writing of the bill, which is sure to be a sloppy and hurried process. Beneficiaries of PPP aid apparently will not have tax liability, for example, but the devil will be in the details. In the meantime, people who desperately need aid will benefit from this modest bill, and more aid is possible by late winter.
* * * * *
THE MARTIAL LAW HYSTERIA: Cable news has fanned the flames — could the U.S. military agree with Gen. Michael Flynn that the Army should intervene in states where elections were close, imposing a re-count?
IT’S TRUE that Donald Trump is desperately seeking a life preserver; his lawyers filed still another suit with the Supreme Court yesterday that is doomed to fail, and he’s trying to find House and Senate members who will challenge the Jan. 6 congressional vote count, another gambit certain to fail.
MORE TROUBLING IS TRUMP’S INDIFFERENCE to two enormous crises — the Russian hack of U.S. government and corporate computers, and the Covid explosion, which probably will intensify during and after the upcoming holidays. Trump is still furious over the election result, and he apparently cares little about anything else.
IN AN EXTRAORDINARY STATEMENT ON FRIDAY, top Army officials declared that there will be “no role” for the Army in any martial law or vote re-do. There’s no authority — none — to nullify the election, but the mere fact that Army generals felt compelled to state this is astonishing.
* * * * *
Happy Holidays !!
We greatly appreciate your support and and friendship, it’s extremely gratifying. Now it’s time for a break — we’ll only publish in the next two weeks if there’s a major development (which you can’t rule out, it’s 2020 after all).
We’ll be back in early January. In the meantime we wish you and your families a joyous holiday. Stay safe, everyone.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2023 AGF Management Limited. All rights reserved.