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Warren Proposes Using Tax Money to Give Free Medical Care to Illegal Immigrants

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Democratic presidential candidate Senator Elizabeth Warren of Massachusetts recently told a crowd of liberal activists that her proposed “Medicare for All” plan will be available even to illegal immigrants, free of charge.

The comments were made at a political rally event that Mijente, a “pro-Latinx” activist group, sponsored. 

It comes as no surprise, therefore, that Warren went on to explain how her free-for-all plan will help justify future amnesty:

“I believe health care is a basic human right, and we fight for basic human rights. But let me tell you another reason why I do it: it fits with my immigration plan, and that is – my immigration plan is to put the people who are here to stay on a path to citizenship.”

Medicare for All might sound like it’s free, but it’s projected to cost about $52 trillion over the next decade. 

Warren repeatedly dodged the numerous direct questions on how middle-class taxes will be affected as a result. 

Whether in political debates or by liberal media (including ABC News and The Late Show with Stephen Colbert), her evasive answers remained the same every time she was asked about it.

With very little variation, Warren consistently insisted “costs are going to go up for the wealthiest Americans, for big corporations… and hard-working middle-class families are going to see their costs go down.”

Even when challenged by moderator Jake Tapper during the July 30 CNN debate, Warren continued to say “for middle-class families, costs – total costs – will go down.”

However, at long last, she released a post last week making repeated promises that “Not one penny in middle-class tax increases” to pay for her plan.

But this was proven to be a lie, even confirmed by other Democrats.

Fellow presidential candidate Senator Bernie Sanders of Vermont continues to support the idea of Medicare for All. However, he’s gone on record saying “yes, [the middle-class] will pay more in taxes.”

Former Vice President and current Democratic presidential candidate Joe Biden was even more direct in calling Warren what she is: a liar.

“She’s making it up,” he said in answer to PBS host Judy Woodruff’s question regarding Warren’s estimated cost projections: 

“She’s making it up! Look, nobody thinks it’s $20 trillion. It’s between 30 and 40 trillion dollars. Every major independent study that’s gone out there, that’s taken a look into this – there’s no way. Even Bernie, who talks about the need to raise middle-class taxes, he can’t even meet the cost of it.”

In fact, Biden believes “it’s going to be very difficult to even get a Democratic Congress to vote for that.”

Ask yourself whether you want your hard-earned money to be heavily taxed just to benefit illegal immigrants, many of whom endanger our lives

We certainly don’t think it’s a patriotic thing to do.

Economy

Fed Bank Predicts 53 Million Americans Out of Work, 32% Unemployment Rate

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Fed Bank Predicts 53 Million Americans Out of Work, 32% Unemployment Rate

As we covered here on The Capitalist last week, during an interview with Bloomberg News, Federal Reserve Bank of St. Louis President James Bullard said that he is forecasting the U.S. unemployment rate will hit 30% in the coming months as the coronavirus pandemic continues.

The comments understandably raised a few eyebrows at the thought of such a staggering unemployment rate, which would be nearly triple what we experienced during the Great Recession.

Bullard tried to soften the blow in a later interview with CNBC, stating that although the unemployment number will be “unparalleled” we shouldn’t get discouraged.

“…if we play our cards right and keep everything intact, then everyone will go back to work and everything will be fine.”

Now, one of Bullard’s colleagues at the St. Louis Fed has an even more dour prediction about what America will face in the coming months.

In a research paper published last week, Miguel Faria-e-Castro, an economist at the St. Louis Fed, titled his article “Back-of-the-Envelope Estimates of Next Quarter’s Unemployment Rate” and estimated (remember, this is one man’s estimates) that nearly 53 million Americans could find themselves unemployed due to the coronavirus.

That works out to an unemployment rate of 32.1%. At the peak of the Great Depression nearly 100 years ago the unemployment rate topped out at 24.9%.

Faria-e-Castro acknowledges that it’s a massive number, and states “These are very large numbers by historical standards, but this is a rather unique shock that is unlike any other experienced by the U.S. economy in the last 100 years.”

He points to previous research that identifies 66.8 million workers who are in “occupations with high risk of layoff” that include sales, production, food preparation and services. He then looks at additional research that found 27.3 million workers in “high contact-intensive” jobs at risk such as barbers, stylists, airline attendants and food and beverage services.

Faria-e-Castro then averages those two numbers and adds in the existing number of unemployed Americans to arrive at his estimate.

While we are nowhere near reaching that unimaginable number, we are at the very beginning of a massive wave of initial jobless claims filings.

Just last week initial jobless claims hit a record of 3.3 million and another 2.65 million are expected to join them this week, according to economists surveyed by Dow Jones.

Some are even more pessimistic.

Thomas Costerg at Pictet Wealth Management has the highest estimate at 6.5 million, while Goldman Sachs estimates 5.25 million and Citigroup is at 4 million.

Moody’s Analytics predicts that initial unemployment claims from last week, which will be announced Thursday, could reach 4.5 million.

“COVID-19 has caused unemployment to surge and we look for U.S. initial claims for unemployment insurance benefits this week to total 4.5 million, compared with the 3.283 million in the week ended March 21,” Moody’s Chief Economist Mark Zandi said in a statement.

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Stocks Continue to Rally on Mixed News, Hopes For A Coronavirus Vaccine

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Stocks Continue to Rally on Mixed News, Hopes For A Coronavirus Vaccine

The stock market continued its week-long rally yesterday, with the Dow Jones Industrial Average climbing 690 points to finish almost 3.2% higher on a day that saw both good and bad news for the market.

The S&P 500 closed 3.35% higher and the Nasdaq gained 3.62% as the pending home sales index hit a three-year high in February, but oil prices continued to crater and the Dallas Federal Reserve reported that its manufacturing index fell well below expectations.

Oil prices hit an 18-year low yesterday, as the price of WTI crude fell to $20.09 per barrel, the lowest price since February 2002. Demand continues to disappear as nearly all travel is frozen amid the coronavirus outbreak just as the supply is about to explode as Saudi Arabia and Russia increase production when the current OPEC deal ends on March 31.

The Dallas Federal Reserve’s manufacturing activity index absolutely collapsed in March, measuring -70.0 compared to expectations of -10.0. New orders, capacity utilization and shipments all fell to their lowest readings since the Great Recession.

A handful of stocks climbed higher on positive news of clinical trials for a COVID-19 vaccine and the ability to rapidly test for the virus as well, but at least one analyst is skeptical the gains will last.

Johnson & Johnson (NYSE: JNJ) rose 8% after announcing it would begin human testing of a coronavirus vaccine by September and says it expects the first batches of a COVID-19 vaccine could be available for emergency use authorization in early 2021. The company also reported that it plans to produce as much as one billion doses of the vaccine.

Alex Gorsky, Johnson & Johnson’s Chairman and CEO said, “The world is facing an urgent public health crisis and we are committed to doing our part to make a COVID-19 vaccine available and affordable globally as quickly as possible.”

Abbott Labs (NYSE:ABT) climbed 6.4% after it received an emergency use authorization (EUA) from the FDA for its 5-minute COVID-19 testing kit, which it says it hopes to produce 5,000 per day starting on Wednesday.

“Abbott’s ID Now Covid-19 test will help battle the pandemic in real-time by bringing vital information in minutes to front-line clinicians who are working to stop the spread of the virus,” said John Frels, Abbott’s vice president of research and development.

Nigam Arora, investor and founder of the Arora Report says the revenues that Abbott Labs will see from sales of the 5-minute COVID test will be dwarfed by the losses it will see elsewhere as a result of the coronavirus.

And Arora says that Johnson & Johnson will be selling the vaccine at cost, resulting in no additional revenue for the company. Thus, the run-up in stock price is unwarranted in his opinion.

While investors and Wall Street analysts can debate whether or not the rising stock prices are warranted, the rest of us can at least benefit from these companies bringing forward new tests and treatments in the fight against COVID-19.

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The Fed is Propping Up Bond Prices, Are Stocks Next?

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The Fed is Propping Up Bond Prices, Are Stocks Next?

Last Monday the Federal Reserve announced that it would spend nearly $700 billion to buy up Treasurys and mortgage-backed securities as part of its “aggressive action” to soften the impact the coronavirus is having on our economy.

As part of the stimulus package, the Fed also said it would start buying exchange-traded funds (ETFs) that track the corporate bond market. For now, it appears the purchases will be limited to investment grade or highly-rated corporate bonds and won’t include more risky high-yield (or junk) bonds.

It’s the first time that the Fed has directly bought securities in an attempt to add liquidity and jump start a frozen market.

“This will provide much-needed liquidity to the bond market and to ETFs,” said Todd Rosenbluth, head of ETF and mutual fund research at CFRA.

Steve Blitz, chief U.S. economist for TS Lombard, says the Fed’s move is helping investors enter and exit a position if needed. “All of this is to make sure that people who want to sell have a buyer. The Fed is taking both sides of the market so people who need to raise cash can do so.”

It’s clear why the Fed prefers to buy corporate bonds through an ETF as opposed to buying bonds in individual companies. With one purchase order, it can impact the bond prices of hundreds of companies at once, as opposed to the time consuming task of identifying, pricing and then buying bonds of individual companies.

By moving into the ETF space and buying up bonds, the Fed may also be trying to calm a part of the market that has seen record outflows over the last few weeks. Just two weeks ago, the iShares iBoxx $ High Yield Corporate Bond ETF saw a $1.2 billion outflow, or roughly 8% of it’s total value.

The question becomes, if the market continues to slide as the coronavirus outbreak batters the economy, would the Fed extend its reach and start buying stocks via index ETFs?

It’s an unprecedented move, but then again so was buying bond ETF a little over a week ago.

It would allow the Fed simultaneously impact the stock price of hundreds of companies at once. With the SPDR S&P 500 ETF, the Fed could move the stock price of all S&P 500 companies with a single purchase.

The same would apply for all broad index ETFs like the Dow Jones Industrial Average (DIA) and Nasdaq (QQQ).

Vincent Reinhart, chief economist and macro strategist at BNY Mellon Asset Management, says it could be in the Fed’s playbook.

“Other central banks have done it. It’s the ETF route that the Bank of Japan has taken. I would not rule out them doing equities.”

Lindsey Bell, chief investment strategist at Ally Invest added “We’ve seen the Fed show that they’re willing and able to do whatever it takes to make sure the markets are opening in an efficient manner. They’re taking whatever steps they can. That would be new territory for the Fed, not that they’re scared of new territory.”

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