Middleboro Review 2: 05/09/22

Monday, May 9, 2022

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09 May 22

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POLITICO NIGHTLY: Biden holds onto stock market strategy

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BY BEN WHITE

Presented by

People walk by the New York Stock Exchange in New York City. | Spencer Platt/Getty Images

DON’T POKE THE BEAR — President Donald Trump and his aides in the White House watched and gabbed about markets constantly, even obsessively. CNBC and Fox Business shared time with Fox News on Trump’s very full TV-watching schedule. The Biden White House doesn’t do any of that.

Biden himself almost never mentions the stock market unless asked. And for very good reason at the moment. Stocks are on a massive slide for the year, driven down by fear of inflation, rate hikes and Russia’s war in Ukraine.

The tech-dominated Nasdaq has lost more than a quarter of its value this year (27 percent). The S&P is down close to 17 percent, and the Dow nearly 12 percent.

The major indices all tanked again today, with the Dow off another 2 percent, the S&P 3.2 percent and the Nasdaq a miserable 4.3 percent.

“Your 401k misses President Trump,” Rep. Jim Jordan (R-Ohio) tweeted this morning.

BRAINIAC GYM JORDAN - NOW AN ECONOMIST!

So should Biden just come out and talk about it? It seems untenable for Biden or some other senior official not to come out and say something significant about the state of the stock market.

It would be easy enough to cheerlead the low unemployment rate and suggest that market turbulence, while unsettling, is to be expected as the global economy adjusts following the worst of the pandemic and that people should maybe chill a little.

But market commentary is just not in the Democratic Party’s DNA. That goes back at least to the Clinton White House and admonishments from senior officials like top economic adviser and later Treasury Secretary Bob Rubin who warned staffers to never, ever talk about stock market moves.

“It was drilled into us pretty early at the time and a lot of people with Biden now were around then like Gene Sperling, Steve Richetti, Ron Klain and even Janet Yellen,” a former senior Clinton White House official told Nightly on condition they not be named talking about a sensitive issue within the party.

“The message was, ‘You shouldn’t talk about markets because in essence you have no control over them and they go down as well as up,’” the former staffer said. “The key was to get the economic fundamentals right and in the long-term the market would follow the fundamentals.”

Even so, having a strong stock market in addition to a good economy is clearly a recipe for winning. And Biden’s numbers on inflation and the economy are in the tank. All the talk of “transitory” inflation seems like mostly bunk now. And the stock market just keeps bleeding.

Trump Treasury Secretary Steven Mnuchin told CNBC in 2017 that the stock market was “absolutely” a good report card on that administration’s economic record. Markets generally went higher under Trump. But trade wars and then Covid also caused giant whipsaws in the market.

And Trump wound up with a lower annual return on the Dow (11.8 percent) than did Presidents Bill Clinton (15.9 percent) and Barack Obama (12.1 percent).

A White House official told Nightly of Biden and the stock market: “As the president has said, we don’t judge the economy by the daily movement of the stock market. And while the stock market is volatile, since President Biden took office the market is up considerably, which is good for the millions of Americans who have stocks or mutual funds in their retirement accounts.”

There’s another way for Democrats to counter GOP arguments about stocks: Say you’re on the side of labor, not capital. Forget about the big losses for all those Wall Street fat cats.

“IT'S THE TWO ECONOMIES,” Bloomberg’s Joe Weisenthal (@thestalwart) recently tweeted. “American workers are experiencing the tightest labor market in a generation, with unemployment at 3.6% … Meanwhile, the world’s 500 richest people have already lost $1 trillion this year.”

The problem with this approach is that while a small group does own a vast majority of stocks, millions more — around 56 percent of Americans — have exposure to the market through individual holdings, 401(k) and other retirement accounts and pensions. They don’t like giant drops, either financially or often mentally.

And even those not invested at all can get depressed by headlines of Wall Street chaos, darkening their view of the economy. Thelatest CNN poll found that only 23 percent of Americans view the economy as “at least somewhat good,” despite a tight jobs market and decent if much slower growth than earlier in the pandemic recovery.

So maybe Biden is right to keep quiet on the slump in the markets. At this point the risks could outweigh any benefits. Wall Street might take it as a panic move. And Biden’s record in economic forecasting is not that great.

“They kind of broke the mold a little with the president coming out and calling inflation ‘transitory,’ which obviously it hasn’t been,” the former Clinton aide said. “So I don’t know why they’d suddenly start talking about stocks given their terrible experience with inflation.”

Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com. Or contact tonight’s author at bwhite@politico.com, or on Twitter at @morningmoneyben.

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WHAT'D I MISS?

— Hill leaders strike deal on nearly $40B in Ukraine aid: Congressional Democratic leaders have reached a bipartisan accord to send $39.7 billion to Ukraine to bolster its months-long battle to stave off a brutal Russian assault. And that deal is now expected to move swiftly to Biden’s desk, after Democrats agreed to drop another one of their top priorities — billions of dollars in pandemic aid that has stalled on the Hill. The Ukraine aid could come to the House floor for a vote as soon as Tuesday, according to a person familiar with the discussions who spoke candidly on condition of anonymity.

— Russia marks WWII victory overshadowed by Ukraine: Russian President Vladimir Putin today sought to cast Moscow’s military action in Ukraine as a forced response to Western policies and a necessary move to ward off a potential aggression. Speaking at a military parade on Red Square marking the World War II victory over the Nazis, Putin drew parallels between the Red Army’s fighting against the Nazi troops and the Russian forces’ action in Ukraine.

— White House adviser Susan Rice tests positive for Covid: Rice said in a tweet she last saw Biden in person on Wednesday while masked, and “and under CDC guidance he is not considered a close contact.” Rice’s diagnosis comes just two weeks after Vice President Kamala Harris tested positive for Covid and five days after Secretary of State Antony Blinken announced he had contracted the virus.

— Jan. 6 coverage wins Pulitzer’s public service prize: The Washington Post won the Pulitzer Prize in public service journalism today for its coverage of the Jan. 6 insurrection at the U.S. Capitol, an attack on democracy that was a shocking start to a tumultuous year that also saw the end of the United States’ longest war, in Afghanistan. The Post’s extensive reporting, published in a sophisticated interactive series, found numerous problems and failures in political systems and security before, during and after the Jan. 6, 2021, riot in the newspaper’s own backyard.

DON'T MISS DIGITAL FUTURE DAILY - OUR TECHNOLOGY NEWSLETTER, RE-IMAGINED: Technology is always evolving, and our new tech-obsessed newsletter is too! Digital Future Daily unlocks the most important stories determining the future of technology, from Washington to Silicon Valley and innovation power centers around the world. Readers get an in-depth look at how the next wave of tech will reshape civic and political life, including activism, fundraising, lobbying and legislating. Go inside the minds of the biggest tech players, policymakers and regulators to learn how their decisions affect our lives. Don't miss out, subscribe today.

AROUND THE WORLD

HORROR UPON HORROR NEAR KYIV — It has been more than a month since Russian troops withdrew from their positions around Kyiv, yet bodies and mass graves are still turning up on a weekly if not daily basis, underscoring the scale of atrocities committed by Vladimir Putin’s forces during their monthlong occupation near Ukraine’s capital, Christopher Miller writes.

Putin has called the atrocities in Bucha “fake” and claimed they were staged by the West, despite overwhelming evidence that they were real.

POLITICO interviewed the families and friends of five men killed in three instances, just a few miles apart from each other in Kolonshchyna and Kalynivka in March. In each case, the men were unarmed. Two of the men found together were hastily buried in a shallow grave; two others were found shot to death in a burned-out car; the third man was discovered inside the trunk of his own sedan — his body boobytrapped with an antipersonnel mine. The information provided by the families about their loved ones was corroborated by local police and territorial defense forces.

The cases add to the mounting pile of evidence of alleged war crimes being logged by Ukrainian and international prosecutors that amount to what is likely the largest atrocities in Europe since World War II.

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NIGHTLY NUMBER

15 percent

The reported decrease in consumer spending on alcohol month-over-month in March, according to a new Morning Consult survey, as nonessential purchases declined with increased prices in necessities like groceries and gas.

STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president’s ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.

PARTING WORDS

NOTHING NEW ABOUT PROTESTS — Protesters flocked to the Chevy Chase, Md., homes of Supreme Court Justices John Roberts and Brett Kavanaugh over the weekend to protest a draft Supreme Court majority opinion, first reported by POLITICO, that would overturn Roe v. Wade. As Anthony Adragna reports in Congress Minutes, it’s just the most recent example of activists protesting at the private homes of prominent public figures.

Sen. Josh Hawley (R-Mo.): Protesters chanted outside his Vienna, Va., home in early 2021 after he joined objections to certification of Donald Trump's 2020 election loss. "Hawley, Hawley, shame on you! Biden Harris won through and through!" they chanted.

Speaker Nancy Pelosi: Protesters placed an “eviction” notice on Pelosi’s San Francisco home in July, amid the impending lapse of a federal eviction moratorium enacted during the pandemic. In January of last year, they vandalized her home by spray painting “we want everything!” after a failed vote on $2,000 stimulus checks during Covid failed.

Senate Minority Leader Mitch McConnell: At the same as the January 2021 incident at Pelosi’s home, vandals spray-painted McConnell’s Louisville, Ky., home with “Where’s my money?” — a reference to the failure of Congress to pass those $2,000 stimulus checks. Back in September 2020, a group with the Sunrise Movement protested outside his D.C. home with a go-go band, objecting to the GOP’s plan to fill Justice Ruth Bader Ginsburg’s vacant Supreme Court seat following her death.

Sen. Joe Manchin (D-W.Va.): A group of West Virginia kayakers protested outside the influential centrist’s houseboat in September, hoping to secure his vote for the Democrats-only climate change and tax package (so far, unsuccessfully).

Lawmakers in both parties and other public officials, such as judges, are facing heightened threats to their personal safety. Some members of Congress have even moved to spend campaign funds on personal security safeguards.

A message from Save American Solar Jobs:

The Biden administration’s Commerce Department is threatening to implement massive tariffs of up to 250% on solar panel components imported by American solar manufacturers for assembly in the U.S. This tariff threat is devastating the American solar industry, costing U.S. jobs, hurting domestic manufacturing, raising inflation and undermining efforts to address climate change.

There is a better solution already on the table. Congress should pass the clean energy tax credits and incentives that have been stalled since last year. These policies will drive the expansion of domestic solar panel component manufacturing and ensure we have the infrastructure needed to fight climate change and create jobs.

President Biden: Tell Your Commerce Department to Stop Undermining U.S. Solar Manufacturing.

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These Stock Patterns Are Impossible – Without Brazen Manipulation that the SEC Is Choosing to Ignore

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FEDERAL RESERVE & THE MARKET MANIPULATION

These Stock Patterns Are Impossible – Without Brazen Manipulation that the SEC Is Choosing to Ignore

Dow Jones Industrial Average Chart, Wednesday, May 4, 2022

By Pam Martens and Russ Martens: May 9, 2022 ~

Beginning in November of 2008, the Fed was allowed by Congress to manipulate the U.S. bond market through purchases of bonds with money it creates at the flick of an electronic button. The Fed calls this “Quantitative Easing” or QE.

Beginning on September 17, 2019 – when overnight lending rates on repo (repo means repurchase agreements between financial institutions) touched 10 percent instead of the 2-1/2 percent that the Fed wanted the market to be at – the Fed began providing repo loans at “administered rates.” It did that by jumping into the repo market with both feet, proceeding to make trillions of dollars in cumulative loans to trading houses on Wall Street, at interest rates as low as 0.10 percent by the spring of 2020.

During 2020, the Fed also artificially propped up money market mutual funds, commercial paper, Exchange Traded Funds (ETFs) and the corporate bond market with emergency lending facilities it created. The Fed did not need a vote in Congress to create those bailout programs. It needed only the permission of Steve Mnuchin, Donald Trump’s wily U.S. Treasury Secretary.

Wall Street On Parade has been witnessing a persistent new pattern in the stock market for several months now where the market plunges at the open and then shortly thereafter, on no major news, it turns on a dime and spikes higher. This suggests one of two things to us: (1) either the New York Fed is manipulating stock trading out of its second office close to the futures markets in Chicago; or (2) big money at Wall Street trading houses and/or hedge funds are doing it. Either way, the SEC and the Justice Department have not nipped this activity in the bud.

On January 31, Wall Street On Parade reported that the New York Fed, which is the only one of the 12 regional Federal Reserve banks to have a trading floor – complete with those expensive Bloomberg data terminals and speed dials to Wall Street’s biggest trading houses – had decided, after 100 years of operation, that it needed a second trading floor in Chicago where S&P 500 futures are traded along with other futures contracts. (Read our detailed report here with photos.)

Take a look at some of these price moves that we have captured below in the Dow Jones Industrial Average since March. Nothing about this is normal. If this is allowed to continue and the SEC does not explain, with credible details, who is behind these moves, what’s left of confidence in U.S. markets is going to evaporate.

Dow Jones Industrial Average Chart, Wednesday, April 27, 2022

Dow Jones Industrial Average Chart, Tuesday, April 26, 2022

LINK

Your Senators voted RIGHT on the Iran deal poison pill!

Did you see? Last week, the Senate voted on a "Motion to Instruct" that threatened to undermine a potential Iran nuclear agreement.

When word got out, hundreds of other activists took action to call on senators to reject this diplomacy poison pill. Thank you for being the lifeblood of our movement for peace.

Unfortunately, the Senate voted in favor of the poison pill — 62 to 33 — a deeply troubling let-down for those of us pushing for a foreign policy that centers diplomacy over war, seeks to eliminate nuclear weapons, and frees ordinary people from collective economic punishment — key aspects of the Iran nuclear deal.

While this was not the outcome we worked for, we know it’s important to express our gratitude to the 33 senators who did the right thing by voting against this shameless effort to sabotage diplomacy with Iran.

Can you take two minutes to thank Senators Elizabeth Warren and Ed Markey for voting against the Iran deal poison pill?

We always expected the warhawks in Congress to fight tooth and nail to sabotage the Iran nuclear agreement.

It's what they did when President Obama prepared to sign the first deal in 2015, and it's part of how Trump was able to break that deal just three years later. With President Biden committed to reentering the deal, we must do everything we can to ensure that it goes through.

As we enter the fifth year of Trump's "maximum pressure" policy, millions of families in Iran continue to suffer from U.S. sanctions that deny them access to basic necessities and life-saving medical supplies. As if this wasn’t bad enough, by failing on diplomacy, our military-industrial complex cheerleaders are gearing up for yet another senseless war, one that could repeat or even exceed the tragedy of our wars in Iraq and Afghanistan, which ruined millions of lives.

What we need right now is for the United States to abide by its international commitments and return to the Iran nuclear agreement that Donald Trump unilaterally withdrew from — without delay.

Despite a majority of U.S. voters supporting a reentry into the Iran deal, some of our elected representatives are intent on sabotaging any effort at diplomacy with Iran. The White House and Congress may ultimately decide how this story ends, but we, Tony, have the power to sway their decisions by reminding them why we support peace.

Now, can you take a quick moment to write to your senators to say how grateful you are for their support for diplomacy and remind them how much their voice means to our movement?

If there’s a silver lining, it’s that last week’s vote was non-binding, meaning that if President Biden does #ReSealTheDeal, Congress will have another chance to get things right. But that’s why what happens next is SO important — and why we need you to remind your senators that we’ll have their backs if they work for peace.

Thank you for working for peace,

Eric, Faith, Sara, and the Win Without War team