Virtually all our stocks are up today, as they were on Friday.
Maybe they’ll continue going up, since the economy seems to be recovering nicely:
Good news on the economy
From this weekend’s Economist.
America’s economy is recovering faster than expected
A slowdown of the virus, a big stimulus and a flexible labour market are causing faster growth
“WHEN AMERICANS vote in November, unemployment will be below 6%,” declared Lars Christensen, a maverick economist, in May. Given that lockdowns had sent the unemployment rate soaring to 14.7% only the month before, it was a bold prediction. In June at least 14 of the Federal Reserve’s 17 interest-rate-setters forecast that quarterly unemployment at the end of the year would still be above 9%. Most other prognosticators were equally gloomy. They expected American GDP to collapse in 2020 and recover relatively slowly. Mr Christensen insisted that natural disasters, unlike financial crashes and recessions brought on by economic policy mistakes, are typically followed by rapid recoveries.
He may be proven right. Over the summer the unemployment rate fell fast, to 8.4% in August. And economists have scrambled to upgrade their growth forecasts (see chart). On September 16th the OECD, a rich-country think-tank, predicted that the American economy would shrink by 3.8% this year, rather than the 7.3% expected in June. The outlook was upgraded across the rich world, but nowhere by as much. America still faces a recession about half as deep again as the one it endured after the financial crisis. But expectations are not as apocalyptic as they were-and look better than they do in most of Europe.
The upgrades in America can be attributed to three factors. First, the spread of the coronavirus in the southern “sunbelt states”, which rode a wave of the epidemic in the summer, has slowed. Second, America’s economic stimulus, the world’s largest both in absolute terms and as a proportion of GDP, has been potent. Thanks to one-time stimulus cheques worth up to $1,200 per person and an extra $600 a week in unemployment-insurance (UI) payments, households’ disposable income has risen since the pandemic began. Americans did not spend the money all at once, meaning that it continues to support consumption today, even though most of the emergency funding has expired. In early September UI recipients were still spending more than they did before the pandemic hit.
The final reason behind the forecast revisions is probably America’s flexible labour market. The fall in unemployment in recent months seems to reflect mainly the creation of more new jobs, rather than the departure of discouraged workers from the workforce. In Europe governments have tended to assume much of the payroll cost for furloughed workers. Such schemes are handy in a tight spot. But if prolonged, they could keep workers in jobs that are never coming back. America, in contrast, has mainly protected people’s incomes with unemployment benefits (although it has absorbed the payroll costs of many small businesses via loans that may eventually be forgiven). As a result the reallocation of labour from dying industries to up-and-coming ones is happening at speed. For example, the number of travel agents has fallen by 10% since April, even as overall employment has risen. Employment in general-merchandise shops is 6% higher than before the pandemic.
Much could still go wrong. The virus could surge again, as it has in Europe. Many forecasters continue to assume, optimistically, that Congress will pass another stimulus package this year. Americans cannot run down their savings for ever. And social-distancing requirements remain in place in much of the country. As a result some labour-market indicators still look dire. In August, even as the overall unemployment rate fell, roughly 3.4m jobs were permanently culled, more than in October 2008, soon after Lehman Brothers collapsed. The rapid rebound this time could yet hit a hard ceiling. But Mr Christensen’s optimism no longer looks so exceptional.
Apple is thoughtful and classy
OK. I’m a fan.
I love how pleasurable Apple is to deal with. . I love my Apple Watch. I love how easy it’s been to buy the new one. I love my new Apple credit card, which they gave me without my having to unlock Transunion, Experian, and Equifax. I love the software upgrades Apple painlessly sends me on my iPhone 11 Pro Max and my Watch.
Susan loves her iPhone 11 Pro Max. She loves listening to podcasts on it. She loves her iPad Pro and its Magic Keyboard. She spends hours Zooming on it and playing Canasta. Once I was the love of her life. Now I’m jealous of all her Apple gadgetry.
Two of the biggest joys in our family are Apple — FaceTime and Photostream. We can’t get to see the grandkids in person, these are the two good substitutes.
Apple is my “perfect” investment. My Apple stock has returned far more in appreciation than I’ve spent with the company or could ever spend with Apple. I can see an iPad Air and Magic Keyboard in my future.
Meantime, you should upgrade to IOS 14. It’s free. For clues on what you get:
New features available with iOS 14.
Click here.
13 Things to Know About Amazon Prime
Amazon Prime is much more than cheap, fast shipping. Here’s everything you need to know about Amazon’s membership service.
Read PC Magazine’s article here.
Trump’s tax returns
I’m less bothered by Donald Trump’s tax shenanigans than I am by the fact that the IRS has let him get away with it for so long.
If I had tried half his stunts — like deducting huge personal expenses — I’d probably be in IRS jail surviving on bread and water.
Fact is real estate has huge tax benefits. You can make pots of cash money in your pocket, but show a loss to the IRS and hence don’t pay them any taxes.
You can delay paying taxes by selling your profitable building and buying another one in what’s known as a 1031 exchange.
Real estate is a gigantic unique, tax loophole.
From 51 years doing business in America. I’ve learned several things:
+ The IRS code is complex. Really complex. No one human can understand it.
+ The IRS code favors entrepreneurs, especially those in real estate.
+ The IRS code stiffs salaried employees, who, as all the studies show, pay a much higher percentage of their income than rich people do.
+ No one tax lawyer understands it all. But a team of them (if you can afford them) can run rings around IRS people and really save you big bucks.
Story: Years ago, I was in a meeting with a fellow from the IRS and my tax lawyer. It wasn’t going well. When my lawyer went to the bathroom, I said to the IRS man, “My lawyer’s an idiot?”
With a broad grin, he answered “Yes.”
He then explained, “If he had set you up right, you wouldn’t be paying the $1 million you’re paying now.”
Ouch. That was an expensive lesson.
The New York Times and Donald’s taxes (or lack thereof)
18 Revelations From a Trove of Trump Tax Records
Times reporters have obtained decades of tax information the president has hidden from public view. Here are some of the key findings.
You can read this article here.
My favorite Yom Kippur story.
Today is Yom Kippur, the holiest day of the Jewish calendar. I won’t explain what it celebrates except that I do remember when I was young spending most of the day in synagogue listening to prayers in a language I didn’t understand. Since my parents had run away from the Nazis on the last boat to arrive in far-off Australia I’m guessing they were motivated for our family not to stand out. I didn’t learn Hebrew (the language of the synagogue), but I did learn enough Yiddish to find out what they had in store for me as punishment for my latest misdemeanour. I do remember my mother’s heavy use of a large wooden spoon which she used to stir the washing in the copper hot water heater — something we had before they invented the washing machine.
One Yom Kippur, in Sydney, I learned the best Yom Kippur story ever:
The Talking Parrot
Meyer, a lonely widower, was walking home along Delancy Street one day wishing something wonderful would happen in his life, when he passed a pet store and heard a squawking voice shouting out in Yiddish,”Quawwwwk…vus machts du?”
Meyer rubbed his eyes and ears. Couldn’t believe it. Perfect Yiddish.
The proprietor urged him, “Come in here, fella, and check out this parrot…”
Meyer did. An African Grey cocked his little head and said: “Vus? Kenst sprechen Yiddish?”
In a matter of moments, Meyer had placed five hundred dollars on the counter and carried the parrot in his cage away with him. All night he talked with the parrot in Yiddish. He told the parrot about his father’s adventures coming to America. About how beautiful his late wife, Sarah, was when she was a young bride. About his family. About his years of working in the garment district. About Florida .
The parrot listened and talked. They shared walnuts.
The parrot told him of living in the pet store, how lonely he would get on the weekends. They both went to sleep.
Next morning, Meyer began to put on his Tefillin, while saying his prayers. The parrot demanded to know what he was doing and when Meyer explained, the parrot wanted to do the same. Meyer went out and had a miniature set of tefillin hand made for the parrot.
The parrot wanted to learn to daven and learned every prayer. He even wanted to learn to read Hebrew.
So Meyer spent weeks and months, sitting and teaching the parrot, teaching him Torah In time, Meyer came to love and count on the parrot as a friend and fellow Jew.
One morning, on Rosh Hashanah, Meyer rose and got dressed and was about to leave when the parrot demanded to go with him. Meyer explained that Shul was not a place for a bird, but the parrot made a terrific argument, so Meyer relented and carried the bird to Shul on his shoulder.
Needless to say, they made quite a spectacle, and Meyer was questioned by everyone, including the Rabbi and the Cantor. They refused to allow a bird into the building on the High Holy Days, but Meyer persuaded them to let him in this one time, swearing that the parrot could daven. Wagers were made with Meyer.
Thousands of dollars were bet that the parrot could NOT daven, could not speak Yiddish or Hebrew, could not lay tefillin, etc.
All eyes were on the African Grey during services. The parrot perched on Meyer’s shoulder as one prayer and song passed. Meyer heard not a peep from the bird. He began to become annoyed, slapping at his shoulder and mumbling under his breath, “Daven!”
Nothing.
“Daven..parrot, you can daven, so daven…come on, everyone is looking at you!”
Nothing.
After Rosh Hashanah services were concluded, Meyer found that he owed his Shul buddies and the Rabbi over four thousand dollars..
He marched home, so upset he said nothing to the parrot.
Finally several blocks from the Temple the Parrot began to sing an old Yiddish song, as happy as a lark.
Meyer stopped and looked at him.
“Why? After I had tefillin made for you and taught you the morning prayers, and taught you to read Hebrew and the Torah. And after you begged me to bring you to Shul on Rosh Hashana, why? WHY?!? Why did you do this to me?”
“Meyer, don’t be a schmuck,” the parrot replied.
“Think of the odds we’ll get on Yom Kippur!”
Yom Kippur in Columbia County, mid-state New York
See you tomorrow. Harry Newton
