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Muddled, Murky, but Weekend Virus Relief Success Expected

The following is Tuesday’s status check from Mace News of developments in the US that can influence economic, health and political outcomes:

  • The general public, the markets, social service providers, food pantries and shelter providers were left reading between the lines Tuesday as they tried to decode the scant signals being sprinkled like bread crumbs on Capitol Hill and the White House. The talks on the next wave of the government’s infusion into wallets and purses, medical care and local/state government budgets plus virus testing seemed to get nowhere – again. Senate GOP leader Mitch McConnell spoke. Senate Democratic Leader Chuck Schumer spoke. Treasury Secretary Stephen Mnuchin spoke. And their words about making progress but not enough had one common element. They want a deal by the end of the week when nearly everyone else expects them to do it.

The bottom line, though, was that of President Trump, who must sign whatever they come up with. The question was posed to him at his evening briefing Tuesday, will he sign what the negotiators come up with? The answer follows, in its entirety and advance warning, it’s somewhat disjointed.

“As far as the various things that I may or may not sign: I may not have to sign. I mean, progress is being made, as you know very well, on the Hill. We’ll see what happens. But I have the right — including the payroll tax suspension. We may do some things.”

A rough translation might be: I will decide whether to sign it when I see it. Maybe I can do some of the things by executive order, like extending the eviction moratorium, but probably not.

If talks break down and either side digs in, unbending, then the entire scenario for the second half of the year begins to shift and becomes darker. And so, as has been expected ever since the Senate set Saturday as the date it wants to begin the treasured summer recess, Kabuki blame-game political theatre aside, that’s when it will be completed.

  • The virus itself killed another 605 Americans Monday, more than Sunday but less than the 1,000 plus every day in the week before that (NYT Tracker). Tuesday, back up past 1,000, with 1,302 more deaths. Cases are rising in 32 states. If there was a “talk of the town” it was the Axios-HBO interview of President Trump done by Jonathan Swan. Available now for viewing throughout the Internet, it showed the president struggling to cope with his interviewer’s question about why so many deaths in the United States. Trump shuffled through papers he said showed the US had one of the lowest death rates in the world, not the third worst. It raised the question whether he could actually believe the positive view he keeps repeating, and did so again Tuesday evening, not only about a low mortality rate but about how so many virus cases – an average of 60,200 a day for the past week – was only because of increased testing, as if testing spreads the virus. Finally, when asked about 150,000 dead (157,200) he replied, “It is what it is…It’s under control as much as you can control it.”
  • With all that as context, it can’t be ignored what the president said at the evening briefing about the big Beirut explosion, underlining the question about whether he is operating off a valid information base. Having described it as an “attack” he was asked what he meant. His answer, again, in its entirety:

“Well, it would seem like it, based on the explosion.  I’ve met with some of our great generals, and they just seem to feel that it was. This was not a – some kind of a manufacturing explosion type of event.  This was a – seems to be, according to them – they would know better than I would, but they seem to think it was an attack. It was a bomb of some kind. Yes.”

Needless to say, never was there a report of any attack, only of an immensely tragic explosion of hundreds of tons of ammonium nitrate stored without safeguards, enough to register as a 4.9 earthquake on the Richter scale.

  • One nugget of correct information did seem to make it to the Oval Office, leading to a reversal of the president’s repeated criticism of mail-in voting. Florida’s version, he tweeted, was quite all right. Florida is a key – some say the most important single battleground state, well versed in mail-in balloting. Encouraging Republicans that mail-in voting is suspect could jeopardise Republican wins, even Trump’s own chances in the state. In his evening briefing, Trump did repeat mail-in voting could not work in a state like Nevada, where he accused the governor of a secret move to make it mandatory.
  • An analyst based abroad might view US newscasts and come to the conclusion there is always a lot of Trump and hardly any Biden. The presumptive Democratic candidate did appear by surprise for one interview during the day, saying nothing significant, but generally seems to be quite happy letting Trump hold on to the spotlight and sticking to one showcased appearance a week, as long as Trump seems to be hurting himself by commanding the stage.
  • With much of the recent economic data reflecting an outsized rebound from the deep pit of April, May and June’s lockdowns, the most meaningful comparisons seem to be missing. Yes, a bounce back from the bottom of the cliff can seem to be good news, but not when compared to the same level a year earlier. It’s a comparison not as easy to make when comparing a month to a previous month or a quarter to a previous quarter as is the practice in the US air travel may have shown a big improvement lately and still be far, far below where it was in August of 2019, which is the case.
  • In the markets, gold’s all-time highs crossed over the $2,000-an-ounce mark at 10:22am ET in the morning. By Tuesday night the metal was trading around $2,033.70. The continuing decline in dollar versus the euro continued Tuesday and has seen a drop of 4.8% in a month, 8.3% in three months. The dollar index has been on a similar path, helping lift precious metals priced in dollars. As always worth mentioning, when adjusted for inflation gold hit a peak equivalent to about $2,800 an ounce in January 1980.
  • China’s ambassador the US disclosed US trade representative Bob Lighthizer and his China counterpart will compare notes by video Saturday, August 15, on the state of the Phase 1 trade deal. Before that date Health and Human Services Secretary Alex Azar will become the highest US government official to visit Taiwan in six years. Such visits never fail to evoke an angry reaction from China. What level of Taiwanese government official will welcome Azar has not been announced.
  • In Tuesday primary voting, Rep. Roger Marshall beat former Kansas Secretary of State Kris Kobach, a gratifying development for main-line Republicans who believed Kobach would likely lose the Senate seat to Democrat Barbara Bollier.

*        Upcoming data include the MBA report on weekly mortgage applications at 7am ET, the ADP employment report at 8:15am, the Treasury’s quarterly refinancing announcement at 8;30am, the Markit US services index at 9:45am, the ISM non-manufacturing index at 10am and the EIA oil stocks report at 10:30am. Federal Reserve Vice Chair Richard Clarida will be interviewed on CNBC at 8:30am and Dallas Fed President Robert Kaplan on CNN at 12:30pm.

  • In US stocks, a last-minute surge for the Nasdaq took it to still another record high close Tuesday in US hours, now up 5.4% in a week, 25.6% in three months.

denny@macenews.com

www.macenews.com

Colin Lambert

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