The U.S. economy is like a semi-trailer truck. No one likes being stuck behind a semi at a stoplight because big trucks don’t go from zero to 60 in 2.5 seconds. Neither does the U.S. economy.

When the pandemic brought our economy to a near virtual standstill early in 2020, the U.S. government and Federal Reserve (Fed) took extraordinary measures to help the economy get going again:

• Congress passed the CARES Act stimulus, which gave Americans and American businesses badly-needed fuel to support economic recovery. Businesses were able to stay open and people had money to spend. That’s important because consumer spending accounts for almost 70 percent of U.S. economic growth.
• The Federal Reserve paved the road and gave it a downward slope by creating a supportive interest rate environment and implementing special lending facilities intended to support businesses, as well as state and local governments. Some programs were funded by the CARES Act.

Government and central bank stimulus helped the American economy get going again.

Is slower growth ahead?
In recent weeks, however, there have been signs economic recovery may be losing momentum and the virus may, once again, be responsible.

Recently, the United States passed a grim milestone. The number of deaths attributed to COVID-19 surpassed 250,000. For perspective, that’s roughly equivalent to the population of Winston-Salem, North Carolina; Irving, Texas; or Buffalo, New York.

Last week, some economic data came in weaker than expected and initial unemployment claims ticked higher. Lucia Mutikani of Reuters reported:

“U.S. retail sales increased less than expected in October and could slow further, restrained by spiraling new COVID-19 infections and declining household income as millions of unemployed Americans lose government financial support…‘Fed officials are saying they might have to do more and today’s data may turn that thinking into a reality.’”

The Treasury curbs the Fed
The tools available to the Fed changed last week. The U.S. Treasury announced it will let several of the Fed’s Treasury-funded special lending programs expire at the end of 2020. Alexandra Scaggs of Barron’s reported the programs include:

• The Main Street Lending Program for small-to-mid-size businesses and non-profits
• The Municipal Liquidity Facility that lends directly to state and local governments
• Corporate Credit Facilities that purchase corporate bonds

For these programs to reopen in the future, Congress will need to appropriate new funds. One economist cited by CNBC said, “U.S. Treasury Secretary Steven Mnuchin’s decision to allow key pandemic relief programs to expire is like stripping the lifeboats from the Titanic.”

Not everyone agreed. “Programs like the municipal bond program and the Main Street Lending Program have not worked, in part because the Fed is a central bank. And when you demand that it take on fiscal government tasks…it does that very carefully, and, frankly, very badly,” explained an analyst interviewed on Marketplace Morning Report.

Despite changing monetary support, U.S. stock markets remained resilient. Ben Levisohn of Barron’s attributed the stock market’s resilience to positive vaccine news, which “…might not have pushed the stock market higher, but it sure was a reason not to sell.” Major indices finished the week slightly lower.

Disruption and innovation – Thanksgiving style.
Thanksgiving is going to be a lot different this year – and Americans are rising to the challenge. Some are cooking up their favorite recipes and peppering the table with screens so they can share the event from afar with friends and family members. Others are taking the opportunity to move away from turkey and introduce new entrees. No matter what will be on the table, people are finding opportunities to give and reasons to be grateful:

“In my neighborhood, we have decided to divide the Thanksgiving dinner up. Each neighbor participant makes something to share…We will package up our dishes in individual containers to be left on each neighbor’s porch at a determined time. The people who are having a difficult time getting by don’t have to contribute anything – neither do the veterans. We will all enjoy our meal in our separate homes but will definitely be grateful for the kindness and generosity of our neighbors and friends.”
–Sheryl Smetana, an Axios AM reader

“I’m going to have an amazing Thanksgiving all by myself,” Gabriel said. “I will sit on a park bench, and I will think about the great Thanksgivings that I’ve had in my life and be thankful for them. One bad Thanksgiving out of 63 amazing Thanksgivings – that’s pretty good odds. Maybe we should be a little more thankful for what we do have than constantly be complaining about what we don’t have.”
–Person at a food pantry, interviewed by CBS News

 “Everyone loves her father-in-law’s potato salad but the family cannot congregate this year to enjoy it…Walker says she resorted to desperate measures. “I reached out to him and asked whether we could maybe send the potato salad in the mail,” she confesses. Because no one wanted to add side servings of botulism to the holiday menu, Walker says, her father-in-law decided to tell everyone how to make the potato salad instead. Numerous long-coveted, heavily-guarded family recipes are being shared for the first time in 2020.”
–Cora Faith Walker, interviewed by NPR Weekend Edition Sunday

We hope you have a happy and safe Thanksgiving!

Weekly Focus – Think About It
“Give thanks for a little, and you will find a lot.”
–Hausa proverb

Investment advice offered through Research Financial Strategies, a registered investment advisor.
* This newsletter and commentary expressed should not be construed as investment advice.
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Investment advice offered through Research Financial Strategies, a registered investment advisor.

Sources:
https://home.treasury.gov/policy-issues/cares
https://fred.stlouisfed.org/series/DPCERE1Q156NBEA
https://www.brookings.edu/research/fed-response-to-covid19/
https://fred.stlouisfed.org/series/GDP
https://www.reuters.com/article/us-usa-economy/u-s-retail-sales-lose-speed-as-pandemic-lack-of-fiscal-stimulus-weigh-idUSKBN27X1PC
https://coronavirus.jhu.edu
https://worldpopulationreview.com/us-cities
https://www.dol.gov/ui/data.pdf
https://www.barrons.com/articles/the-treasury-is-asking-the-fed-for-its-money-back-heres-what-it-means-for-markets-51605893511 (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/11-23-20_Barrons-The_Treasury_is_Asking_the_Fed_for_Its_Money_Back-What_it_Means_for_Markets-Footnote_9.pdf)
https://www.cnbc.com/2020/11/20/weinberg-mnuchins-fed-move-is-like-stripping-titanic-of-its-lifeboats.html
https://www.marketplace.org/2020/11/20/mnuchin-moves-to-cut-off-fed-pandemic-emergency-lending-program/
https://www.barrons.com/articles/remember-the-fed-put-now-theres-the-vaccine-put-to-bolster-stocks-51605916806?refsec=economy-and-policy (or go to
https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/11-23-20_Barrons-The_Stock_Market_is_Getting_Support_from_a_Vaccine_Put-Heres_What_that_Means-Footnote_12.pdf)
https://www.barrons.com/market-data?mod=BOL_TOPNAV (or go to https://peakcontent.s3-us-west-2.amazonaws.com/+Peak+Commentary/11-23-20_Barrons-Market_Data-Footnote_13.pdf)
https://www.axios.com/newsletters/axios-am-019c54d0-e50a-41f9-8f88-22284fc78778.html
https://www.cbsnews.com/news/covid-19-pandemic-many-reflect-on-what-to-be-thankful-for/
https://www.npr.org/2020/11/22/934982793/how-to-plan-and-even-be-grateful-for-a-socially-distanced-thanksgiving
https://www.countryliving.com/food-drinks/g2059/thanksgiving-quotes/

Veterans Day – The Tomb of the Unknown Soldier

On March 4, 1921, the United States Congress approved the burial of an unidentified soldier who fought and died in World War I. He was buried on a Virginia hillside not far from the Potomac River in the Arlington National Cemetery—a symbol of those who have died to protect our freedoms. In respect, soldiers stand guard to protect his tomb.

Intriguing … who was this man? What was his story? Why do soldiers stand guard? What makes today’s solider want to be chosen for this duty? How did this tradition come about?

The Story

The story begins in France on Memorial Day 1921 when wounded Army Sergeant Edward F. Younger was given the task to choose from four caskets of unknown soldiers to receive this honor. He placed a wreath of white roses on the third casket from the left. The casket was sent to the Capitol Rotunda where the unknown soldier lies in state from the day his casket arrived until November 11, 1921. President Warren G. Harding officiated at the interment ceremony.

In 1958, several “unknowns” were exhumed from cemeteries in Europe, Africa, Hawaii, and the Philippines to represent World War II. Two of these exhumed soldiers were chosen—one from the European Theater, and one from the Pacific Theater. These two caskets were taken aboard the USS Canberra where Navy Hospitalman 1st Class, William R. Charette selected the Unknown Soldier of World War II. The casket not chosen received a burial at sea.

This same year, four unknown Korean War Veterans were chosen from the National Cemetery of the Pacific in Hawaii. The final selection of two caskets was made by Army Master Sgt. Ned Lyle. President Eisenhower conducted the ceremony of internment for the World War II and Korean War Veterans at Arlington Cemetery.

The Unknown Soldier from the Vietnam War was designated by U.S. Marine Corps Sgt. Maj. Allan Jay Kellogg Jr. on May 17, 1984. President Reagan presided over this internment. In 1998, the Unknown Soldier from the Vietnam War was exhumed and, through DNA testing, was determined to be Air Force 1^st Lt. Michael Joseph Blassie. It was decided that the crypt containing 1^st Lt. Blassie’s remains would remain empty.

The Guards of the Tomb

Guards of the tomb were created in 1926 as too many visitors were using the original crypt as a picnic table. By 1937, guards were stationed from the moment gates were opened in the morning until gates closed at night. Guards are charged to prevent any desecration or disrespect to the tomb and crypts.

These guards are military soldiers who come from every walk of life, from every state in the union, and are hand picked. Training for these men and women is rigorous. Over 80% of those who try out for this duty do not make it. Knowledge must be extensive about this monument, and strong military bearing a must. There are three Reliefs assigned with each guard, consisting of nine soldiers. And each Relief is based on height of the soldiers. The Tomb is completely run by Non-Commissioned Officers. Each soldier has a specific post to cover.

To serve at the Tomb of the Unknown Soldier is a great honor.

Please join with us this Veterans Day to remember those who have died so all of us may enjoy the freedoms we all have today.