GDP Contracts -52.8% 2nd Quarter-What might happen in the near future?

According to the Federal Research Bank of Atlanta GDP declined significantly. I'm curious it there will be some bumping upward in the third and fourth quarter.  Most of this is COVID related but the protests might also change some of the investment structure in the short term impacting part of the beginning of the third quarter.  The underlining large investors still have money to spend and seem to be taking a wait and see approach. 

This was taken from their website...https://www.frbatlanta.org/cqer/research/gdpnow

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2020 is -52.8 percent on June 1, down from -51.2 percent on May 29. After this morning's Manufacturing ISM Report On Business from the Institute for Supply Management and the construction spending report from the U.S. Census Bureau, the nowcasts of second-quarter real personal consumption expenditures growth and second-quarter real gross private domestic investment growth decreased from -56.5 percent and -61.5 percent, respectively, to -58.1 percent and -62.6 percent, respectively. The nowcast of the contribution of the change in net exports to second-quarter real GDP growth decreased from 0.73 percentage points to 0.43 percentage points.

What I'm hoping for is that in the middle of Q3 we will start to see rises as the economy grows. What happens in Q4 and early next year will depend on large scale investors, government policy, consumer confidence, and the world economy. It would be further hoped we could master this crisis and create an export culture capable of building new businesses and manufacturing companies by drawing investing home. 

Kellyanne Conway, Senior Counselor to President Trump, Discusses Current Sitation

Mrs. Conway discussed certain issues as they relate to race and protests. A lot of interesting information to watch and listen to. It appears from this speech there will be an effort to change justice system to improve on development of a more equal America. This should be interesting since no one has ever tried to do it yet. Fingers crossed that it will help create a stronger economic system with additional fairness based on individual merit. My personal opinion is that when artificial road blocks like racism are removed and people can earn on their own merit people will have incentive's to be everything that they were meant to be. True racial and religious freedom means that people are not restricted from engaging in a full personal and economic life regardless of their background.

Nice Weather Comes to Escanaba Harbor

Chaos seems to be gripping our country with the plague and protests.  Focus on the small stuff. Good weather and a beautiful harbor. Visit Escanaba for old fashion small town charm.

Congressman Bergman Supports PPP Flexibility Act 2020

Policies work wonders but sometimes there may be tweaks that can help make programs more effective. When dealing with policies it is hard to craft a perfect one size fits all. The UP has a lot of tourism and mom & pop type businesses that dont fit into the standard approaches. Some adjustments are necessary.

The following is taken from a press release......

Bergman Supported Paycheck Protection Program Flexibility Act of 2020 Passes House

Washington - Today, the Paycheck Protection Flexibility Act – which Rep. Bergman helped introduce – passed the U.S. House 417 - 1. The Paycheck Protection Program (PPP) is the small business relief program enacted by the CARES Act, implemented by SBA, and facilitated by SBA-approved lenders. Unfortunately, for some First District businesses, the terms of the PPP have proven too inflexible for employers, employees, and lenders weathering the current economic storm.

Following House passage of the bill, Rep. Jack Bergman said, "I'm grateful the PPP Flexibility Act passed the House in overwhelming fashion today. Small businesses across the First District and the entire nation have felt the economic strain due to the coronavirus, but the PPP has come very far in easing this burden. This bill will add much-needed flexibility for the local employers making good-faith efforts to support their employees and communities and will help carry Northern Michigan and the U.P. into the U.S. economic recovery."

“We appreciate Congressman Bergman’s leadership with the PPP Flexibility Act,” stated Marty Fittante, CEO, InvestUP, “It is evident that he has listened to the small business community of the Upper Peninsula to propose changes that better serve and support them which in turn will help to further our region’s economic recovery.”

“I appreciate Representative Bergman’s leadership and dedication to see the Paycheck Protection Program Flexibility Act through the House. The hospitality industry has been decimated in Michigan and the original Paycheck Protection Program, while well intended, has proven largely unworkable for an industry that remains mostly dormant. The flexibility embodied in this legislation will allow more restaurants, hotels and resorts to survive, then thrive in our state’s great northern region,” said Justin Winslow, President and CEO of the Michigan Restaurant and Lodging Association.

The PPP Flexibility Act Will:

• Allow forgiveness for expenses beyond the original 8-week covered period.
• This timeline does not reflect reality for many First District businesses that are prohibited from opening their doors or are able to open with restrictions. 

• Relax restrictions limiting non-payroll expenses to 25% of loan proceeds.
• For many businesses, especially seasonal businesses - payroll does not represent 75% of their monthly expenses and 25% does not leave enough to cover mortgage, rent, and utilities. The new legislation increases the non-payroll share to 40%.

• Eliminate restrictions that limit loan terms to 2 years.
• According to the American Hotel and Lodging Association, full recovery for their industry following both the September 11, 2001 terrorist attacks and the 2008 recession took more than two full years. This bill makes five years the minimum length of a PPP loan.

• Ensure full access to payroll tax deferment for businesses that take PPP loans.
• The purpose of PPP and the payroll tax deferment was to provide businesses with capital to weather the crisis. Receiving both should not be considered double-dipping. 

• Provide a rehiring safe harbor for businesses unable to rehire employees due to the effects of enhanced Unemployment Insurance.
• To receive loan forgiveness under PPP, a business must rehire employees by a deadline of June 30, 2020. Businesses that make a good faith attempt to rehire employees, but are unable to, should still be able to receive loan forgiveness.

Small businesses looking to apply for a PPP loan, click HERE.

Police Kneel and Protesters Cheer-Changing the Narrative

The mirrors of anger, violence, and rage show the wrong story. We are a ONE people and seeing officers kneeling in solidarity with protesters that there is room for improvement is a positive sign. That sends the right message of hope while offering a signal to anarchists and I suspect some of the racists out there that there is opportunity for understanding.

If we truly want to stop this crisis we can deescalate by engaging in positive reform that can help make policing more effective, help minority community fully engage the economy as equal citizens, and reduce the drag that inappropriate overuse of prisons have on our communities. We can focus on helping and improving our communities and finding reasonable alternatives for those suffering from mental health, lack of opportunity, pain of rejection, family abuse, and the wet blanket of being downtrodden. We can become a single people if we so desire....race is socially constructed and useless in the grand scheme of a modern world.

President Trump Announces Use of National Guard and Military to End Violent Protest

Violent protests will become the target of recent White House announcements. It appears that military mobilization is on way. I believe in the right to protest and raise awareness over long stemming racism that has hampered full engagement of all people in our economy and opportunities. That does not include violence or destruction. Rage and hate on either side is not good. We must get everyone talking about how to improve our country so that all people can feel free in our great nation. I can only hope and pray that people on both sides will be safe and open themselves up to listen to each other. I hope that good people will begin to think of positive and helpful change.

Fed Reserve Buys ETFs-Top Purchases

The video shows the top ETF purchases. One of the reasons why the Federal Reserve adds to its asset books is to maintain liquidity so people can buy and sell without getting stuck. ETFs are large and can impact a lot of bonds at once so they are the easiest to handle.

Press Secretary Kayleigh McEnany Discusses Use of National Guard and Military (06-01-2020)

The military is being called to squash protests. My concern is that we have two sides that are going to clash and I'm afraid of the ramifications. Our military is designed to protect us from outside and are not well equipped to protect against internal threats. I hope with all my heart that it works out, people will go home for their own safety, and we will have honest discussion on race and economic growth in this country. It seems we are tackling this problem from a mindset of Baby Boomers and not that which comes from Millennials. St. Johns is iconic and should not have been damaged. This was an act of a destructive anarchist...but doesn't represent the deeper meaning of why the protests occurred. We will be giving this country to the young someday...now is the time to engage and reconcile to build a better future. Discussion on reform and economic engagement must happen.

I think we can find a win-win situation if we work on it and open our hearts and minds to find solutions. The video of people working together from both sides and protecting each other is very helpful. That is how it should be.....but isn't fully part of the process of reconciliation yet.

Stay-at-Home Order in Michigan Lifted

Michigan Stay at Home Order lifted to "Improving" stage. That will mean certain businesses and retail will open but places like gyms and salons will stay closed. That can help in rejuvenating some of the lost monies and state tax revenue. We are running against a point where from a budget standpoint we cannot keep things closed.

We will need to start thinking "out of the box" on how to rejuvenate our economy and draw more businesses and investment in the area. We know that if we encourage our communities to start new businesses, with a focus on manufacturing, we can make the biggest impact. Retail spends our money but manufacturing and services can generate new wealth.

Drowning Out the Voice of Reason-Protest and Politics

Our nation is going through a transition and there are needed changes and it would be helpful if these changes were more of smooth transition than a bumpy destructive bounce. Change will happen as many of our nation's leaders begin to ponder the difficulties, trials and tribulations of a long legacy of exclusion. There are people on both sides of the spectrum sharing short-sighted opinions. I love opinions but people are often blinded by their backgrounds and past so the voice of reason and wisdom is often ignored.

We are what the world reflects on us. If you are raised in a certain race and background you may have a hard time seeing what others are saying because you don't have the same symbolism, values, and backgrounds. It would take years for people to gain that perspective. It doesn't matter if you are White, Black, Asian, Hispanic, Mixed or anything else.

There are a few people who can step outside their past but still may not have the exposure to the other side to really understand their perspective. Lining up to force our opinions on each other isn't the wisest things to do. A line was crossed and people on both sides are continuing to radicalize their followers. That will likely make things much more difficult before they get better.

To encourage transition faster.....

Stop! Listen! Think!

Violence isn't the Answer: Violence is not the answer. It doesn't matter who you are and what side you are on. This isn't a small group of people complaining and could easily turn into a national movement. Therefore, it is necessary to deescalate both sides, avoid violence, and start the process of dialogue.

Ignoring Each Others Voice Isn't the Answer: There are good points being made on both sides. We all want neighborhoods to be safe and most of us want to partner and work with each other to create new opportunities for everyone. Minorities are no longer minorities and it is important for our political leaders to listen and embrace reasonable requests for change by a younger generation.

Listing to Foreign Governments inst the Answer: Under no circumstances should anyone be listening to anyone outside this country trying to "stir the pot". There are people in the world who want this situation to turn very bad. Many want it to get better but people get confused by the mix messages. It wouldn't be a wild speculation to say there are agents on their way to cause problems where and when they can.

The Strategic Answer: In any strategic solution it is important to take a good look at what both sides are saying and listen them. Most of the time there is a win-win situation that hasn't been explored. What if we can create a stronger economy by helping Millennials of all backgrounds start jobs, get training, and live helpful lives? What if we can reform our justice system to reduce cost, improve effectiveness, and accept more universal values? There is a path but all the "experts" seem to talk without truly understanding.