The World Health Organization made it official on 3/11/20: COVID-19 was a pandemic. The shutdowns that followed in the next month – airlines, restaurants, office buildings, schools, shopping malls – crushed the worldwide demand for crude oil. The price of West Texas Intermediate (WTI) crude fell by 31% in a month, dropping from $32.98 a barrel to $22.76 a barrel. On 4/09/20, major oil producers OPEC and Russia agreed to a historic production cut of 10 million barrels a day, hoping to stop the pricing freefall by slashing output. Their action, along with vaccine-driven optimism, has pushed the price of WTI crude to $46.26 a barrel on 12/04/20, up +103% in 8 months (source: NYMEX).
Stop me if you have heard this story before – Washington lawmakers have until midnight this Friday (12/11/20) to agree on the broad spending framework for $1.4 trillion of discretionary spending for fiscal year 2021, or the government will come to a standstill. A government shutdown would be Washington’s 4th in the last 3 years, the most recent lasting 35 days before ending on 1/25/19 (source: Congress).
Congress has passed 4 separate bills providing $3 trillion of pandemic relief, but the last of the 4 bills was signed into law on 4/24/20 or 7 ½ months ago. Both parties favor passing a 5th bill before leaving Washington for Christmas, but their appetite for spending is what has caused the gridlock. Democrats favor at least $2.4 trillion of new relief and Republicans want to spend $650 billion. A compromise for $908 billion has gained some momentum but is still lacking the necessary bipartisan support (source: Congress).
Notable Numbers for the Week:
- I NEED MY SPACE - 28% of the households in the United States in 2020 were made up of just 1 individual living alone. Another 35% of US households are comprised of just 2 people, of which 65% (of the 35%) are a married couple (source: Census Bureau).
- NOT GOING TO THE MALL - $1 out of every $6 spent on US retail sales (16.1%) during the 2nd quarter 2020 was transacted online (source: Census Bureau).
- COLLEGE - The cost of tuition, fees, room and board at an average public 4-year college for the current 2020-2021 school year is $22,180. The cost of tuition, fees, room and board at an average private 4-year college for the 2000-2001 school year, i.e., 20 years ago, was $22,240 (source: College Board).
NOT A BOOMER - Bill Clinton, our nation’s # 42 president, left office in January 2001 or 20 years ago next month. Clinton, age 74, is 4 years younger than 78-year old Joe Biden, our nation’s # 46 president who will take office on 1/20/21 (source: BTN Research).
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