US Data and Republican Infrastructure Plan

28 May 2021

Quite a lot of data on the US economy was published yesterday. It cannot be said that they were breakthrough. According to the results of the first quarter, the GDP was not revised (the same 6.4% annual growth). The data on orders for durable goods somewhat spoiled the mood (-1.3% against the forecast of 0.7%), but the impression was smoothed by the figures on jobless claims. Initial applications for unemployment benefits came out at the lowest values ​​since the start of the pandemic, practically leaving 400K.

Republicans, meanwhile, presented their version of the infrastructure plan. We will remind, earlier Biden proposed a plan in the amount of 2.4 trillion. But the amount was too obviously overpriced and impassable among Republicans. So last week, Biden cut it by a good $ 700 million to $ 1.7 trillion. And while this is a clear step in the direction of the Republicans, the parties are still far from each other. The fact is that the proposal of the Republicans is less than 1 trillion. That is, the gap is another 700 million. Apparently, the parties will converge in the region of 1.3-1.4 trillion. Unless, of course, they quarrel in the process, because the Republicans are categorically against the increase in corporate income tax.

Finally, a few words about the cryptocurrency market. We continue our week of skepticism. Note that our dislike for cryptocurrencies is explained not only by the meaninglessness of prices, but also by the dubious meaning of the basic concept of cryptocurrencies and blockchain in the real world. On this point, here's a quote from Brian Moynihan of Bank of America: "We still haven't found applications at scale." Let us explain. Bank of America holds over 60 patents related to blockchain, the distributed ledger technology that underlies cryptocurrencies, but it just doesn't know what to do with it or why. That is, patents were made just in case, but there is no practical sense in them.