MidSouth Week in Review:
February 21, 2020

Stocks fell worldwide today as the coronavirus outbreak continued to spread in China and other countries, increasing concerns of economic fallout.  The concerns caused global investors to flee to U.S. bonds and the U.S. dollar, which is at its highest level since April 2017.  The S &P declined 1.1% today and was down 1.3% for the week.   The U.S. Technology Index (TYW) declined 4% from its Wednesday close.  Gold surged to $1650, a 7-year high.  Groupon fell 43% on Wednesday and Blue Apron was down 22%, after weaker-than-expected earnings renewed concerns about the sustainability of their business models.  Also on Wednesday, Pier 1 Imports fell 71% on the announcement that they were filing for bankruptcy.

BuzzBits

Presidential Returns – The stock market averaged a 25.5% annualized return under Coolidge (1923-1929) which was followed by the worst ever annualized return during the Hoover term (1929-1933) of -35.6%.  The next best returns was Clinton’s (1993-2001) of 15.9% which were followed by the next worst return of -3.5%, under Bush II (2001-2009).

A Successful Man – is one who makes more than his wife can spend.  A successful woman is one who can find such a man – Lana Turner

Contrarian – When unemployment is rising, buy stocks.  When unemployment is falling, avoid stocks – Stephen Leeb

Births – 2.1 per family are needed to sustain population levels.  In Hungary, fertility is now under 1.5 per female.  Even Catholic countries like Italy (1.32) and Ireland (1.82), once fertilize powerhouses, have lapsed, because the women there remember their grandmothers as “worn-out husks at age 60.”  Only poor countries with extreme gender equality, such as Somalia (6) or Niger (6.9) still have booming populations.  The birthrate in the U.S. is 1.84 – THE TIMES

Interest Rates – “If the next recession is anything but mild, the Fed will go to negative rates, which will be a complete and utter disaster” – Paul Schatz, president of Heritage Capital ….. The yield on 30-year Treasury bonds dropped to a 5-month low of 1.90% today, which is not good news for lenders.

Jeff Bezos – purchased a Beverly Hills mansion for $165 million, which represented 0.13% of his net worth of $130 billion.  If your net worth was $68,093, the median household income in LA, you’d have $88 to spend on a house or maybe a used tent – L.A. Times

IRA’s for Seniors – The Secure Act scrapped the age limit for IRA contributions.  A tax loophole might be for older citizens to make IRA contributions, which are fully deductible, which at age 70 ½ can be withdrawn to make tax-free charitable donations – Buzz

The Deal Breaker – A YouGov poll found that half of respondents said the debt load of a prospective spouse would be a factor in tying the knot.  Of the 1000 respondents, only 4% said student load debt would be a deal breaker vs. 11% who said credit card debt was a bigger issue.  Nearly one-third of respondents between ages 18 and 34 said they would or had postponed marriage due to debt – LendKey Technologies poll

Free Tax Filing – is now available for the 70% of filers who make under $70,000, which can save a filer $50 to $300 in fees paid to a tax preparer.  Only 2.5% of the eligible taxpayers obtained a free return filing through the Free File program in the 2019 filing season.  The free file program can be found at www.irs.gov – USA TODAY

Roads – 19% of the population live in rural areas, but those regions have 68% of the total lane and road miles.  The normal life span of an asphalt road is 30 years.  Reconstruction of a mile of road cost $300,000 and chip sealing is $17,000 a mile. A typical loaded semi-trailer can produce 5,000 to 10,000 times the road damage of one car.   A town of 29,000 in Wisconsin say their roads haven’t been repaired since the ‘60s and would need $60 million to $80 million to repair their roads. Ouch!  - New York Times

Low Taxes – Amazon made $13 billion and paid only $162 million in federal taxes, representing a 1.2% tax rate.  Amazon also has $1.7 billion in federal tax credits available to offset future tax liabilities – Yahoo Finance

Egypt’s Population – hit 100 million.  The only problem is that 95% of their entire population live on only 4% of the land, a green belt that follows the Nile as it snakes through the desert in the Nile Delta – New York Times

THE IDIOTS

Cleveland Browns lineman Greg Robinson, who made $6.9 million last year, was arrested in Texas for being in possession of 157 pounds of marijuana, with a retail value of about $750,000.  The 27-year-old Robinson and his ex-NFL buddy had picked up the pot in California and were headed to Louisiana, but took a wrong turn in South Texas and wound up at the border patrol station, where a patrol dog-sniffer alerted the border patrol officers.  Both fellows, who played football at Auburn, are facing up to 20 years in prison, if convicted.  Robinson, has reportedly made more than $29 million during his NFL career. – TMZ SPORTS 

buzz@msifund.com

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