Author: scott.hodges

COVID-19: New Type of Purchasing?

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Markets are moving in new directions.  The demand for digitalization is growing at an extraordinary pace in the age of social distancing.

BlueJeans – one of the world’s largest videoconferencing, screen sharing and video calling companies with around 15,000 customers – is being bought out by Verizon for approximately $400 million. According to Business CEO of Verizon Tami Erwin:

 “As the way we work continues to change, it is absolutely critical for businesses and public sector customers to have access to a comprehensive suite of offerings that are enterprise ready, secure, frictionless and that integrate with existing tools.”

BlueJeans will be built into Verizon’s 5G offering.  Since companies such as Zoom have faced hacking issues and the New York City Department of Education told workers not to use it, other rival companies are now seeking to profit from the new business opportunity.

COVID-19: Fiscally Recoverable?

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We know that the global COVID-19 crisis is hitting firms and individuals very hard in many ways, not least of all financially.  What economic experts and financial organizations saying about this?

On the one hand, Kristalina Georgieva, IMF Chief, points out that there has not been a fiscal crisis this bad for over a hundred years, since the Great Depression.  She believes it to be “the worst crisis since the Great Depression a century ago,” and not only that, but there will likely be lasting damage.

In the space of merely three weeks, 17 million US employees are now hitting the unemployment line.  New York Federal Reserve Bank economists are thus comparing this to a natural disaster (such as a massive earthquake) as a standard financial crisis usually happens over a longer period of time.  However, given that there are not the same physical consequences, it is believed that a faster economic recovery will be more likely.

Former US Treasury Chief Economist and Peterson Institute for International Economics  contributor Karen Dynan – while noting the 20 percent plummet in the US economy in April and May – is predicting a 7.2 percent rebound in the US economy next year, year-over-year.

Further, on the other hand, some economists are predicting a “solid rebound” once people can get back to work.

Coronavirus Relief Bill

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There is a $2 trillion Relief Fund Bill for Employee Retention set up by President Trump.  But should that run out of money, he has pledged to seek additional funding from Congress.  During a COVID-19 White House briefing, Trump said:

 “This is money that’s really going directly to the people who need it, the small businesses who need it, and the workers that need it. When we open, we want to open strong with businesses that are going.”

Known as the CARES Act – the Coronavirus Aid, Relief and Economic Security Act – this has been hailed as “the largest economic stimulus bill in modern history,” more than 100 percent higher than the Stimulus Act initiated during the Financial Crisis of 2009.

Hope for US Economy

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President Donald Trump said Tuesday he wants the U.S. economy to “open” back up by Easter Sunday, despite expert warnings about the deadly threat of the coronavirus. Easter is April 12, less than three weeks away. Medical experts had recoiled at Trump’s suggestion that Americans could gather en masse amid the coronavirus outbreak.

America’s Economy

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America’s Economy is the world’s wealthiest and most powerful.  Even macro-economists find it challenging to picture this as it is just so large.  But the numbers speak for themselves. Since 1871 America has been the world’s largest economy.  Indeed in 2018 it was measured at $20.58 trillion in 2018 in nominal terms.

For comprehension purposes the only way even macro-economists can fathom this enormity is by looking at GDP and labor force numbers as well as trade balances.

So let’s now look at trade balances.  Last year goods and services trade deficit was valued at $616.8 billion; imports – $3.1 trillion and exports – $2.5 trillion – not the best figures.  Adding insult to injury the trade deficit just for goods was $866 billion.

However, there was still a decline in the overall trade deficit for America in 2019 so that is definitely a good sign. Moreover, the US’s goods deficit with China declined too. Still, experts believe that many more stringent policies must be put in place to further reduce the deficit.

Recharge Your Community’s Economy

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Four one-day workshops are being offered – at no fee – by Native American Development Corporation, Rural Community Assistance Corporation and the People’s Partner for Community Development. The first one is next week, March 24.  This will be followed by April 28, May 12 and June 16 – each one will follow from the one before and will last for 6 hours.

To be held at the Charging Horse Casino Bingo Hall (on East U.S. Highway 212), they will start at 9am and finish at 3pm.  The subjects covered include: an analysis of where the economy is today; pinpointing emerging economic opportunities for the future; how to select the right leaders who are best equipped to respond to those opportunities; a development of plans to make those visions a reality.

US Economy: Growth Industries

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The cement industry in America seems to be faring well. One measuring tool is cement consumption and right now it has been relatively high. What’s more is that experts anticipate it will continue to grow (albeit modestly) over the next few years.  As Portland Cement Association’s Senior VP and Chief Economist Ed Sullivan pointed out:

“The economy doesn’t have the zip and the vigor that it had 10 years ago, and so what we’re seeing is the economy’s now in late stages of economic growth and recovery. That suggests that overall growth is going to start to slow, which is reflected in a slowdown in GDP numbers. It’s also reflected in our slow-down in job creation numbers.”

Sullivan added that both job creation and consumer sales numbers have not plummeted at all which is also a good indicator of stabilization and continued growth as well as an increase in home prices.

There have been some upturns in solar job industry following a dip in employment in the industry.  Employment in the solar industry jumped by 2.3 percent in 2019 and 5,600 jobs were added during the same time frame.  In addition, 31 states had an increase in solar jobs in 2019.

Reducing America’s Carbon Footprint

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In an effort to alleviate its universal carbon impact, over the next 10 years Delta airlines will be investing $1 billion into fuel-efficient aircrafts, replacing single-use plastics with a greener substance and more.   Ed Bastian, the firm’s Chief Executive pointed out that:

“There’s no challenge we face that is in greater need of innovation than environmental sustainability, and we know there is no single solution.”

The current situation is that it has been very hard for airlines to help preserve the environment since the development and supply of biofuels is minimal and challenging.  While technology has advanced so greatly in other parts of the transportation industry, the air travel part lags behind and we are not witnessing any futuristic fuel-efficient planes.  Still, Delta is committed to making an impact.

Meanwhile, in California researchers might be closer to a solution.  At the Viterbi School of Engineering in Southern California’s University, work is being undertaken in conjunction with the U.S. Department of Energy’s National Renewable Energy Laboratory. A metal carbide nanoparticle has been discovered as having the capacity to  convert CO2 into fuel.  Should this actualize it would be the first ever time a would be able to produce sustainably at low temperature resulting in the production of particles at a low cost, but industrial scale, while at the same time having a substantially lesser impact on the environment, ultimately diminishing greenhouse emissions throughout the world.

America’s Manufacturing Sector: Good, Bad or Somewhere in Between?

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The manufacturing industry in the US has gotten a bad rep over the last few years.  On and off.  It’s hard to determine where it stands today but in this article we will take a look at some of the more accurate indicators.

From around June 2019, a recessional atmosphere occurred in the industry.  But that turned around in January according to a report from the Institute of Supply Management.  The report showed a jump in purchasing manufacturing index to 50.9 – even higher than predictions of 48.5.  According to NY’s ING’s Chief Economic Strategist, James Knightly:

“It seems likely that the phase one trade deal with China has generated a positive lift for the sector by giving some certainty that there will be no more tariffs, at least in the near term.”

Furthermore, it is believed that 2020 will “likely be a better year for US manufacturers,” due to the stabilization of international growth and the light at the end of the tunnel for domestic economic activity.

On the other hand, Anneken Tappe of CNN Business would have us believe that “America’s manufacturing sector is in a recession.”  But, she adds, “that is only part of the story,” and illustrates how two factors are at play here: the expansion of factories and their recession. In 2008, the manufacturing industry began its road to recovery, adding around 1.4 million jobs. But still, it has been dipping for the last 40 years.  

So that’s the current summary of the good and bad in America’s manufacturing sector.