Trump Trumps The Democrats
Live by the executive order and die by it. President Barrack Obama took the power of the pen and Presidential executive orders to a new level. Now President Trump is using that precedent to thwart and expose congressional Democrats that want to use the American people as pawns to further their far-left political agenda. President Trump would not sign the Democrat bill jammed with pork. Instead, President Trump signed and an executive order that created $400 in weekly enhanced unemployment assistance, student debt repayment relief, a payroll tax holiday, and an exploration of protections from housing evictions. At the same time, Congressional leaders begged to have the Republicans meet them halfway so they could get some of their pork they desperately wanted.
President Trump went around the Democrats, setting the stage for a potential stock and commodity market rebound. On Fox News Sunday, House Speaker Nancy Pelosi said she agreed with Republican Sen. Ben Sasse of Nebraska that Trump's actions were "unconstitutional slop." Of course, it was President Obama who embraced slop by saying, "We're not just going to be waiting for legislation," I've got a pen, and I've got a phone…and I can use that pen to sign executive orders and take executive actions and administrative actions.”
Yet the oil market, after two down days, seems to be taking Trump's executive action as a positive. It is also helping the global oil demand that is on the rise. Bloomberg News reported that "crude market in Asia is almost back to pre-virus levels, Saudi Aramco Chief Executive Officer Amin Nasser said Sunday. Meanwhile, oil drilling in the U.S. fell to a 15-year low, and the number of active global rigs is at a record low, as explorers abandoned growth plans and as billions of barrels from old discoveries became worthless.”
David Gaffen of Reuters writes that "The world's five largest oil companies collectively cut the value of their assets by nearly $50 billion in the second quarter, and slashed production rates as the coronavirus pandemic caused a drastic fall in fuel prices and demand. The dramatic reductions in asset valuations and decline in output show the depth of the pain in the second quarter. Fuel demand at one point was down by more than 30% worldwide and remains below pre-pandemic levels. Several executives said they took massive writedowns because they expect demand to remain impaired for several more quarters as people travel less and use less fuel due to the ongoing global pandemic that has killed more than 700,000 people.
Big oil has reduced output by over 1.0 million barrels of oil a day, and with the hit they have taken, the assumption is that their production will continue to fall.
In the meantime, the commodity backdrop is still positive. With Trump's stimulus and global yield falling, the outlook for commodities is strong. The strength in gold and silver will, at some point, trickle down to oil or at least give us a floor.
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You painted a rosy picture, Phil. Too bad the country is suffering through a pandemic magnified by Trump's mishandling of it from day one. Worse yet, he has continually done just about everything wrong, which has, and will continue to have a cataclysmic effect on the lives of Americans and our economy in general.
The market is being propped up by the trillions the administration and the Fed is pumping in, which is further adding to our national debt, already bloated, and added to by a tax package that benefited basically corporate America and the top 1% or the super-wealthy. Now the fools are cutting off or slashing the aid that millions of our less fortunate citizens are in desperate need of, which will turn this lightning recession into a full-blown depression if the fool in the WH is reelected.
What will we do with the millions of Americans who become homeless through no fault of their own? What about the millions of businesses that will go bankrupt and never reopen? Do you not think that ultimately Wall Street will feel the pain that Main Street is currently experiencing? Can you be so oblivious that you don't see that our economy is currently little more than a house of cards easily toppled? Do you believe that the virus will just magically disappear as Trump has promised repeatedly? And if it doesn't because there are too many fools who refuse to wear masks or socially distance because they believe Trump's words even after his repeated lies. Been to an indoor restaurant recently? A movie? A bar? A nightclub? Your gym? How about on a date with a stranger? Do you think the bikers in N. Dakota are cool? Are your children going to school? For how long after some become infected? How will you get to work with the kids at home? How long will the market be propped up as long as our economy remains closed and locked down?
I'm more concerned about the destruction of our Constitution when the President issues executive orders that purposely misallocates money from Congress, strips States of their money and their rights, and undermines the legislature. The Senate and the House are the only ones who have the right to allocate the money by Constitutional authority, Moreover, not collecting taxes as passed by the Congress is refusing to follow the law of the land and is a dereliction of executive duty. I would tend to say, America First when opposing this executive order as it attempts to destroy America by undermining the Constitution. Either this President is too stupid to know what this does, or is purposefully trying to undermine the Constitution. Both of which are more important to the economy or the crisis which was manufactured by having the Senate not deal with it until the last moment.
Moon, it's sad that many in the investment community are unable to see past their own portfolios.
What do you mean Norman?
I was a popular Seeking Alpha contributor until I warned against the possible election of Trump, citing the possibility of the devastating impact he could have on our portfolios. Amazingly, no matter all his missteps: trade wars, tariffs, and threatened embargos, it finally took his gross mishandling of the pandemic to make my prediction come true. Worse yet, the fool continues to hurt our country and economy, and if the pandemic run the path that it's on, we will face an even worse outcome, whereby the false, propped up, market will begin to reflect what is happening on main street. Sadly, I learned many old white man the populate the investor class and spend much of their retirement time of platforms such as Seeing Alpha and TalkMarkets are so concentrated on their own inconsequential portfolios that they fail to recognize the danger of electing a stupid, ignorant, and ill-informed as president. Sadly, Trump is much worse and this was evident, yet many here still gave him their vote and still support this creature. Have any of you even thought about the consequences of Climate Change? Trump is a denier and already has instituted policies to accelerate the problem. We only have one planet to live on as yet, are we so nearsighted that we will make it uninhabitable for those who come after us?
Agreed.
All excellent points.
Oil's floor is when money losing oil companies stop getting bank bailouts which can't even pay for interest and close up shop, gold and silver will not help oil get a floor in any way. Likewise, OPEC and Russia must further curb their output based on supply and demand.