Stimulus Deal on 5 Yard Line: Stocks Soar But Questions Remain

Mish

Stocks are flying this morning on news a stimulus deal is at hand.

The Wall Street Journal reports Negotiators Nearing Accord on U.S. Stimulus Package to Combat Coronavirus but specific details are still up in the air.

Top lawmakers and the Trump administration closed in on completing a colossal stimulus package, worth at least $1.6 trillion, designed to shield the U.S. economy from the most drastic consequences of the coronavirus pandemic. “I believe we’re on the 5-yard line,” said Senate Majority Leader Mitch McConnell (R., Ky.) on the Senate floor. “I hope today is the day this body will get it done.”

Treasury Secretary Steven Mnuchin, who has led the negotiations for Republicans, said on Tuesday morning that he expected a deal. He and Mr. Schumer completed a round of late-night talks Monday predicting they could soon finalize an agreement, which Mr. Schumer said could run to $2 trillion.

The two sides were approaching an agreement on one of the primary remaining sticking points: oversight on $500 billion that Republicans had proposed to allocate to aid distressed businesses. Democrats had sought controls on those funds, which include loans made directly by the Treasury Department and a backstop for losses in Federal Reserve lending facilities.

Stop the Nonsense

I agree with Trump on the nonsense.

So how many pages will there be to this bill, and what's on the pages?

Meanwhile, Wall Street loves the bailout, no matter what it is. THe DOW is up about 8% , with the Nasdaq up 5%, and the S&P 6.5%.

Gold is up another $87 to $1654.

Is Everybody Happy?

Not quite. especially the 5-year note. The 5-year yield is up 11 basis points to 0.51%. The 10-year note is is at 0.82% and the 30-year bond yield is 1.39% up 4 basis points.

Mike "Mish" Shedlock

Comments (45)
No. 1-19
Zardoz
Zardoz

Look out below when everyone sees what's IN the bill....

Ebowalker
Ebowalker

What is the breaking point with our debt? Does this finally end our ridiculous empire?

abend237-04
abend237-04

Widows and orphans cliff diving for yield...shades of David Stockman, complete with Congressional jabberwocky.
I'M not crazy; I'm NOT crazy; I'm not CRAZY. Maybe I'm crazy.

Realist
Realist

Many countries are following the same playbook. Steps are not in any particular order. Step 1: shut down the country as much as possible to reduce the spread of the virus. Step 2: provide support for individuals and businesses who are affected by the shutdown. Step 3: support and enhance the health care system to help them deal with this crisis. Step 4: enact special powers, as provided for, in each country, in order to make quick decisions without approval. Step 5: provide daily updates to the public in order to keep them informed. It is important to be honest and straightforward and not mislead the public in the updates. Providing accurate and timely information is crucial.

njbr
njbr

Ahahaha..it's not about the stimulus--it's the low-info buy-the-dip see Trump pushing to restart the economy no later than China does (opening up Hubei and Wuhan in the next week or so). It's too boring for to continue on with the news conferences on the world's tiniest stage, it was a hoax anyway, it's time for a new story.

Maybe he can take up plate-twirling. Enjoy!

And, what about two weeks from now?

Tony Bennett
Tony Bennett

Buy the rumor, Sell the news?

How long after stimpack in rear view mirror before tantrums begin (again)?

Greggg
Greggg

Just keep one thing in mind.... There are far more horse's asses in Washington than there are horses.

Maximus_Minimus
Maximus_Minimus

Fire up the bubbles.

Stan88
Stan88

Trump will cave as usual. He'll sign any piece of garbage bill that lands on his desk.

Seb
Seb

Everyone wants to be a capitalist until it’s time to do what capitalists do. When that time comes the rich turn to socialists as fast as dollars can be printed. Who are the republicans and democrats and capitalists kidding? Only themselves. Karl Marx is laughing in his grave.

Sechel
Sechel

If Trump is restarting the economy in less than two weeks it begs the question on why this is all necessary. I don't really believe that Trump's dreamed up goal is achievable when the new infectins and deaths are increasing and not decreasing but he is the commander in chief.

DBG8489
DBG8489

Here's an idea for Trump:

Prove to everyone on the planet that you have 50 lb cast-iron balls swinging below a johnson to rival Moe Biggsley.

Take 12 hours and have your staff read the whole thing and create an itemized list that shows each garbage provision along with a sentence explaining why it's garbage.

Hold a very large very public press conference where you go over each item, and then veto the the bill on camera and send it back.

Make them override it or change it.

PecuniaNonOlet
PecuniaNonOlet

Saw Kudlow at Trumps briefing. Its is a SIX trillion dollar bailout. Four trillion for banksters and two trillion for people who got laid off.
And the economy is supposed to be roaring back after Easter.

You’ve done been had.

QE2Infinity
QE2Infinity

We're early in this crisis (both health and financial) and it's hard to see how throwing buckets of counterfeit money at this problem is going to make anything better. But today Wall Street gamblers were sent stampeding like lemmings.

Russell J
Russell J

I'm gonna go out on a limb and say the national debt will be 35t in 36 months. How it plays out from there is beyond me but they're right when they say life is not going to be the same from here on.

Herkie
Herkie

One moment Mish, if the market cap is around 50-60 trillion for all equities and it soared by 11% in one day that means something like $6 TRILLION was plowed into stocks just today.

Now who do you know that has that kind of cash just sitting around waiting to buy stocks?

Todasy was all about Fed intervention and the blinding flash of every bit of Fed power to nuke the market with money. Of course the middle and lower classes WILL pay for all of this eventually via unmeasured and unreported hyperinflation. But, at least they will not run out of toilet paper for about 5 years.

Herkie
Herkie

Total public debt outstanding on January 20, 2017 = $19,947,304,555,212.49
Total public debt outstandiung today = $23,514,534,990,918.53

By tthe time Trump's first term is up that will be AT LEAST $27 trillion, in 48 months we will have added 7 trillion. More than $14.583 billion per month every month of his tenure.

So, the far right that so desparately wants fiscal rectitude now has to admit Obama was a far better president in that regard. In fact nobody could possible be worse than Trump.

TumblingDice
TumblingDice

@PecuniaNonOlet, If what you are saying about $6 Trillion being pumped into the market. That is a lot of cash added to the sidelines.

Seems like people have two options:

  1. Save money at the bank and let the Fed drip, drip, drip, and drip rob you.
    or
  2. Belly up to the stock market (craps table) and take one's chances there.
AshH
AshH

What's the saying? Something like "don't let a good crisis go to waste"?


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