ECONOMY | WHAT REALLY HAPPENED


ECONOMY

May 09 11:42

Economic Might As A Foreign Policy Tool

The news is full of President Trump’s, supposedly confidential, tax filings (from 25+ years ago). The only relevant current news I found was it seems that despite the losses on his tax returns, Trump’s lifestyle didn’t change because the losses were largely suffered on projects where the President was not utilizing his own money. Presumptively, that means that Trump the developer, put together deals in which he had an interest in the partnership, but contributed no actual money. Thus, when the loses from the partnership were apportioned for tax purposes, the future President Trump was able to claim that loss against taxable income that h earned on other projects. The bottom line appears to be that Developer Trump negotiated multiple deals in which he personally benefitted financially whether or not the project was ultimately successful. That no lose proposition appears to be exactly where the president finds himself in the current China trade negotiations.

May 09 11:29

Economic Warfare Man Strikes Again

May 09 11:06

The US is terrible at building high-speed rail — here's why

China has the world's fastest and largest high-speed rail network — more than 19,000 miles, the vast majority of which was built in the past decade.

Japan's bullet trains can reach nearly 200 miles per hour and date to the 1960s. They have moved more than 9 billion people without a single passenger casualty.

France began service of the high-speed TGV train in 1981 and the rest of Europe quickly followed.

But the U.S. has no true high-speed trains, aside from sections of Amtrak's Acela line in the Northeast Corridor. The Acela can reach 150 mph for only 34 miles of its 457-mile span. Its average speed between New York and Boston is about 65 mph.

Webmaster's Commentary: 

Last night I watched a documentary on China's commercial maglev train. 300 MPH!

May 09 10:49

‘China has chosen to retreat’ — the U.S. view as negotiations reach critical juncture

The document released Wednesday outlining a planned increase in tariffs on China makes clear the U.S. fury at a perceived backtracking on key positions.

“In the most recent negotiations, China has chosen to retreat from specific commitments agreed to in earlier rounds,” a Federal Register notice reads. “In light of the lack of progress in discussions with China, the President has directed the Trade Representative to increase the rate of additional duty to 25 percent.”

Those tariff increases, from 10% on roughly $200 billion of Chinese goods, are set to be implemented on Friday.

May 09 10:47

Luongo: 'Economic-Warfare-Man' Strikes Again

It’s getting tiresome watching Donald Trump’s bipolar presidency. It seems he can’t let a day go by without making some massive announcement to raise tariffs, threaten sanctions or overthrow a government.

Every 24 hours is another exercise in chasing the Trump Reality Show around. Every lull in the perpetual news cycle has to be seized upon to create more chaos so he can validate his insanity.

Trump has so many plates spinning there’s no way he’s actually thinking anything through. Take the latest fiasco, Chinese trade talks.

One day “Talks are going well,” the next “We’re raising tariffs to 25%.”

May 09 08:11

Money printing always works

May 09 07:39

John Rubino – Follow the Debt

May 09 04:31

How to Survive a Personal Economic Collapse

May 09 03:58

Chick-Fil-A Sales Soar Above The Competition

May 09 03:20

"'Trade War' In May... And Go Away"

May 08 15:34

7 Laws of Investing

May 08 11:49

Behind The Recent Crypto Surge? Chinese Banks Are Quietly Running Out Of Dollars

The catalyst has remained unclear - anticipation of an ETF? Growing institutional interest? Short-squeeze? Manipulation? Or, just plain old safe-haven flows as various nations around the world collapse into totalitarianism?

We may have found one, rather large, answer - from China, where, as SCMP reports, authorities have quietly begun 'soft' capital controls on foreign currency withdrawals

Chinese banks have increased their scrutiny of foreign-currency withdrawals and quietly reduced the amount of US dollars people are allowed to withdraw, tightening the country’s capital controls as the nearly year-long US-China trade war bites.

The issue was thrust into the spotlight on Friday when a viral video clip showed a bank cashier unable to answer a furious customer demanding to know why she was not allowed to withdraw US$200 from her dollar-denominated account, even though she was within her quota.

May 08 11:47

Gundlach Warns Bear Market Just Getting Started, "Better Than 50% Chance" Trade Talks Collapse

Never one to stray off message, DoubleLine Capital's Jeff Gundlach sat down for a mid-day interview with CNBC's Scott Wapner on Tuesday, where he elaborated on many of his talking points from his headlining appearance at Sohn.

As one of the few speakers at Sohn whose pitches have actually generated alpha for anybody willing to heed his advice (at last year's conference, Gundlach recommended traders short Facebook and buy oil companies), the audience and the financial press listened attentively on Monday as he recommended shorting the lowest polling Democratic contenders (presumably on PredictIt or some other online betting platform), and touched on a familiar topic: The risks posed by the surging US debt interest.

May 08 11:32

INFURIATING DEMOCRATS, TRUMP PLANS TO REDEFINE POVERTY, CUTTING AMERICANS FROM WELFARE

The Trump Administration is looking into altering how it determines the national poverty level, which may put some Americans at risk of losing access to welfare programs, according to Bloomberg. The move might occur from changing how inflation is calculated in the “official poverty measure” according to a regulatory filing by White House Office of Management and Budget. That formula has been used for decades to try and determine where the poverty line is and what people qualify for social programs and federal benefits.

The measure is calculated at three times the cost of a minimum food diet and adjusted every year as prices rise. It was first set in the 1960s and, in 2018, a family of four making no more than $25,900 was considered under the poverty line. This figure determines eligibility for federal, state and nonprofit programs like Medicaid and food stamps.

May 08 10:43

A Synchronized Global Downturn Intensifies As JPM Global Manufacturing PMI Plunges

Last month, we reported that CPB Netherlands Bureau for Economic Policy Analysis' world trade volume fell 1.8% in the three months to January compared to the preceding three months as a synchronized global downturn gained momentum.

Four months later, and the performance of the global manufacturing sector remained depressed in April. This is the month where global trade data should trough, in preparation for a 2H rebound. However, that is not the case - as a synchronized global downturn intensifies.

May 08 09:52

AN UNFINISHED LEGACY: PRESIDENT REAGAN AND THE SOCRATES PROJECT

In the closing days of his administration, President Reagan had an executive order drafted to create a new government agency — the first new federal agency since the creation of NASA in the 1950s. Why would a president who built his reputation on reducing the size of the government want to create more government?

Reagan recognized that America’s future depended on remaining an economic superpower. He also recognized that America’s competitiveness on the world stage was declining and that countries like China and India posed a significant threat because of their ability to use technology-based planning to gain a long-term competitive advantage.

May 08 09:29

Scott Adams: China, Iran, NK, Trump Taxes, Socialism, Coffee, and Guns

Comments at: https://twitter.com/ScottAdamsSays/status/1126125111462047745

Gun control proposal: Make it illegal for Democrats to own guns
Why would Dems object? Solves half the problem
Another Proposal: ALL gun owners REQUIRED to join NRA
They promote gun safety, responsible use, important stuff
NRA membership is essentially gun control and safety
Jerry Nadler and Congressional Oversight
Manufacturing crimes and stalking President Trump
People are being manipulated into committing crimes…
…without even realizing they’re committing a crime
NYT legally obtained some…illegally obtained, Presidential tax info
If you understand business and taxes, smart, legal tax stuff
If you understand finance, nothing unusual in his taxes
China is smart, nobody says they aren’t
They’re stalling for time, wearing down the other side

May 08 07:52

What if Government Suddenly Disappeared?

By Peter C. Earle

If the strange and little-known case of the condominium of Moresnet — a wedge of disputed territory in Northwestern Europe, and arguably Europe’s counterpart to America’s so-called Wild West — acts as our guide, we must conclude that there is an inverse relationship between the size and scope of government and the potential for both peace and prosperity.

The remarkable experiment that was Moresnet was an indirect consequence of the Napoleonic Wars (1803–15), which, like all wars, empowered the governments of participating states at the expense of their populations: nationalism grew more fervent, many nations suspended specie payments indefinitely, and a new crop of destitute amputees appeared in streets all across Europe...

May 07 18:38

Charter squeezes more money out of Internet users with new cancellation policy

Charter is making it more expensive to cancel its Spectrum Internet service, as it will begin charging customers for the full month after they cancel instead of providing a prorated final bill.

Charter broke the news to customers in the fine print of their latest billing statements. Stop the Cap reported the change yesterday, and we were able to confirm it on the May billing statement received by an Ars staffer in Texas who subscribes to a triple-play package with Spectrum TV, phone, and Internet service.

May 07 12:57

Facts and Figures on Washington's Immense Defense Lobbying Industry

I haven't posted on this specific subject for some time and, given the upcoming midterm elections and the meeting between the leaders of Russia and the United States, I thought it was time to revisit one of the most powerful groups in the United States, the defence industry. Thanks to Open Secrets, we have ready access to how much the defence sector has contributed to politicians and how much it spends on lobbying. This is particularly pertinent given the hundreds of billions of dollars that are transferred from American taxpayers to a handful of companies every year.

Let's start by looking at the defence industry's contributions to those who are supposed to represent Americans in Washington. Here is a graphic showing the sector's long-term political contributions:

May 07 11:43

Markets Re-Plunge As Lighthizer Confirms Tariff-Hikes After China Reneges On Promises

While a Chinese delegation is still scheduled to visit Washington as planned this week, with talks to take place Thursday and Friday, U.S. Trade Representative Robert Lighthizer told reporters Monday that the Trump administration plans to increase duties on Chinese imports at 12:01 a.m. on Friday, accusing Beijing of backpedaling on commitments it made during negotiations.

U.S. and China had been making substantial progress on a trade deal, but in the past week China has reneged on some of its promises:

“We felt we were on track to get somewhere. Over the course of last week we have seen an erosion of commitments by China,” Lighthizer said, adding that significant issues remain unresolved, including whether tariffs will remain in place.

The result, more than half of the intraday gains have been erased already...

May 07 11:42

America's $1.6 Trillion Student Debt Crisis Triggers Suicidal Thoughts: Survey

There are currently 44 million student loan borrowers who owe approximately $1.6 trillion in student debt. Student loan borrowers are feeling the pressure of insurmountable debts as the economy slows, wages stagnate, and borrowing costs rise. As a result of taking out too much debt, new evidence shows an undeniable impact on borrowers' mental health.

Student Loan Planner surveyed 829 people, which revealed shocking data about debt load, student loan depression, and suicide.

As debt loads increase, so does the borrower's likelihood of suicidal thoughts, the study stated.

Researchers found 1 in 9 borrowers who owe $80,000 to $150,000 contemplated suicide because of their debt.

"The feeling of hopelessness gets you into a place where you feel like you can't recover," said Motlagh, a clinical psychologist with $300,000 in student loans.

May 07 11:35

Bannon: We're In An Economic War With China. It's Futile To Compromise

Getting tough with China to bring manufacturing jobs back to the United States was the linchpin of President Trump’s electoral march through the Rust Belt during his 2016 victory. Today, the goal of the radical cadre running China — the Chinese Communist Party (CCP) — is to be the global hegemonic power. The president’s threatened tariffs on Sunday demonstrate the severity of this threat. But as Washington and Beijing wrap up months of negotiations on a trade deal this month, whatever emerges won’t be a trade deal. It will be a temporary truce in a years-long economic and strategic war with China.

These are six “understandings” that highlight why it is futile to compromise with this regime.

May 07 11:29

Sorry Bernie and AOC! New Poll Shows Only 10 Percent of Americans Want Socialism

Between Alexandria Ocasio-Cortez’s “Green New Deal” and Bernie Sanders‘ “Medicare-for-All,” we hear a lot about the supposed newfound popularity of socialism in the United States today. But a new poll released Monday shows that only a very small minority of Americans favor such a system.

May 07 11:24

Has The Fed Done It? No More Recessions?

May 07 11:16

Pompeo says Canadian claim to Northwest Passage is 'illegitimate'

Canada's claim over the Northwest Passage is "illegitimate," U.S. Secretary of State Mike Pompeo said Monday in a major speech to the Arctic Council that Canadian experts called both provocative and frequently inaccurate.

Pompeo offered his characterization during a wide-ranging speech in Finland in which he also warned against China's increased Arctic presence, saying it threatens North American security and could be harmful to the environment.

May 07 11:14

Is Turkey The Snowflake That Unleashes The European Banking System Avalance?

Turkey’s debt problem, coupled with the plummeting lira, is arguably the most important risk factor for the nation’s economy.

To make matters worse, far from it posing a threat just to Turkey itself, it also has the potential to inflict significant damage elsewhere too, starting with key economies in the Eurozone.

At first glance, the situation in Turkey might resemble many past similar scenarios of a heavily indebted nation with a plummeting currency that descends into a severe recession and eventually gets bailed out, like Greece.

May 07 10:46

Curse of the London Gold Fix strikes again as SocGen abandons ship

News last week from the LBMA that French bank Societe Generale (SocGen) has resigned as a market maker for gold and silver continues an exodus from the London bullion markets that has included such former heavyweight bullion banks as Barclays, Deutsche Bank, Mitsui and Credit Suisse.

Indeed, SocGen, Deutsche Bank and Barclays were three of the five members of the infamous London Gold Fix which was hurriedly buried by the LBMA in 2015, so now an incredible 60% of that gold fixing clique have stepped back from the shadowy world of the London paper gold and paper silver markets.

May 07 10:35

Universal Basic Income Is a Pandora’s Box

By Paul Boyce

The case for a Universal Basic Income (UBI) is a strong one, in some ways. A UBI would stimulate aggregate demand, help those affected by technological change, and create a basic income for the poor. Its effectiveness and impact, however, depend on how much is given out. The benefits and consequences of a $100 UBI will be very different than one of $1,000. Therefore, for the purpose of this analysis, I will look at the case for a $1,000 per month UBI—as suggested by presidential candidate Andrew Yang...

May 07 10:33

BRICS Challenges Dollar: Russia DEFIES U.S Sanctions – Increases Ruble Exports

The share of rubles payments in Russian exports to the BRICS countries increased by 7.2 times in 2018 compared to 2013, and in euros, the increase was 8 times.

According to the international audit and consulting network FinExpertiza, the share of dollar payments between the BRICS countries (Brazil, Russia, India, China and South Africa) is gradually decreasing.

“In the last five years Russian rubles payments to the BRICS countries have increased by 7.2 times to 9.4 percent and amounted to $6.3 billion, and the share of payments in national currencies – by 3.1 times [to 4 percent, or $2.7 billion],” according to the authors of the study.

Overall, the dollar’s share of exports to the BRICS countries fell by 20 percent to 77 percent, or $51 billion.

May 07 10:30

Actual Home Sales Are Tanking – Here’s Proof

The National Association of Realtors (NAR – existing home sales reports) and the Census Bureau (new home sales reports) report monthly sales on a “seasonally adjusted annualized rate” basis (SAAR). Notwithstanding the reliability – or lack thereof – of the “seasonal adjustments,” it would seem absurd to report monthly home sales on an annualized rate basis.

May 07 09:17

The ECB comes to banks' rescue

May 07 08:51

Phasing out the dollar: Russia significantly increases ruble share in export settlements with BRICS

Russia’s trade turnover with its partners from BRICS – Brazil, India, China, and South Africa – totaled $125 billion last year, according to data from international audit and consulting firm FinExpertiza.

Over the five-year period, the country’s share of export settlements in rubles with the bloc’s trade partners increased more than seven times to 6.3 billion in the dollar equivalent, data showed. Moscow also boosted the share of settlements in euro by almost eight times.

The share of payments in national currencies between the BRICS nations has also risen by more than three times to $2.7 billion.

“The share of settlements in dollars between the BRICS countries is systematically decreasing… In general, the share of US dollar in Russian exports to the BRICS countries declined by 20 percent, accounting for 77 percent, or $51 billion,” said the authors of the report.

May 06 17:19

Physical Metal Holdings of Trusts and Funds

May 06 13:03

PMI/GDP, House prices, Investigations update

May 06 12:24

Beijing Says Trade Delegation's Trip To Washington Still Happening Despite Trump Threats

With Chinese stocks down a staggering 6% on Monday during their worst session in three years, Chinese state media scrambled to project an air of calm. Though his comments did little to quiet stormy markets, Chinese foreign ministry spokesman Geng Shuang told reporters Monday that a trade delegation is still "preparing to travel to the U.S. for trade talks" or what was - according to the US, at least - supposed to be the 'final round' of negotiations. However, he declined to say whether Vice Premier Liu He would join the delegation, Reuters reported.

May 06 12:21

Dow Soars 300 Points Off Overnight Lows: "Be Careful What You Wish For"

From the moment the opening-bell rang for US cash equity markets, a buying-panic ensued, lifting Dow futures 300 points off their lows...

Webmaster's Commentary: 

PPT?

May 06 12:21

Turkish Lira Collapses After Election Board Nullifies Istanbul Mayor Vote

Turkey's state media says election officials ordered Istanbul's mayoral election redone, nullifying the opposition candidate Ekrem Imamoglu's win.

“Istanbul elections are being renewed," Recep Ozel, the ruling party’s representative on Turkey’s elections board, says via Twitter.

As Bloomberg reports, the High Election Board’s verdict, which is final, came after a vote on whether to nullify the vote based on the ruling party’s allegation that there were widespread irregularities in the March 31 vote, which Erdogan’s candidate lost. The decision fueled concerns about the democratic foundations of Middle East’s largest economy and the prospect of more political turmoil.

The result is dramatic and immediate - a collapse in the lira...

May 06 11:25

As Trump Approval Rating On Economy Skyrockets, Biden Slams President As "Aberration" 

President Trump's approval ratings are on the rise since the release of the Mueller report - with CNN begrudgingly admitting the percentage of people who approve of how Trump is handling the economy "is the highest number we've ever seen."

May 06 11:22

S&P Futures Plummet As China Said To Cancel Washington Trade Trip, All Eyes On S&P 2,890

It's only appropriate that the S&P may be about to suffer its biggest drop of the year one day after hitting a new all time high.

For those who are only now catching up, the reason why futures are tumbling is that just after 12pm ET, Trump tweeted that trade talks - which according to the White House, media leaks and Larry Kudlow would be basically concluded by next week - are instead effectively dead, as the current 10% tariff will spike to 25% on Friday, while an additional $325BN in goods will be subject to new trade tariffs.

Some saw in Trump's tweet a retaliation for Friday's North Korea ballistic missile launch, the first since 2017, and one which would not have happened without the explicit blessing of Beijing.

May 06 11:20

Boeing Knew About Warning Light Problem a Year Before Fatal Crash, But Kept Info to Itself

Only after the deadly Indonesian Lion Air crash in October did Boeing come forward about a warning light problem it had been aware of for more than a year before the tragedy, the company admitted Sunday.

Boeing did not immediately disclose to the Federal Aviation Administration (FAA) or airlines that a warning light connected to an important sensor on the 737 MAX wasn’t working on most of its planes, reported The Seattle Times.

The world’s attention is on Chicago-based Boeing after 189 people died in the Lion Air crash on Oct. 29, 2018, and 157 people died in the similar Ethiopian Airlines crash on March 10. The warning light would have turned on prior to both tragic crashes, but it is unlikely it would have given pilots enough time to fully correct the issues and avoid crashing, according to the newspaper.

May 06 10:31

Europe Vows To Continue Buying Iranian Oil As US Revokes Export Waivers

As if to mark one year since President Trump formally withdrew from the JCPOA - better known as the "Iran Deal" - last May, the foreign ministers of the UK, France and Germany, as well as EU foreign policy head Federica Mogherini, on Saturday issued a statement condemning the White House's decision, and vowing once again to abide by the terms of the deal.

The statement is the latest sign that Trump's decision to reimpose sanctions on Iranian oil exports could set up the US for a showdown with its allies in Europe that could accelerate the de-dollarization of the global financial system, as Europe continues to work on an alternative payments system to the Treasury-dominated SWIFT network.

May 06 10:13

US-China Trade Talks Tensions Escalate As Trump Threatens 25% Tariffs On $200B Goods

Wall Street is expected to take a grim view of president Donald trump’s decision to impose tariffs of 25 percent on Chinese goods starting May 10, an indication that trade talks with China haven't moved forward despite months of administration claims of steady progress.

Trump unexpectedly announced the 25 percent jump in U.S. tariffs on $200 billion worth of Chinese goods on Sunday, and said 25 percent tariffs on $325 billion of Chinese goods will be imposed “shortly.”

May 06 10:11

Top 35 $SPX share buy backers in past year.

May 06 09:44

America Needs A Debt Jubilee

As school children my friends and I were very interested in archaeology and ancient civilizations. We read all the available books. My best friend intended to become an archeologist and to explore ancient ruins about which we imagined more than we actually knew.

As far as I can discern these days no one in the general population has any thoughts of Sumer, Babylonia, Assyria, Ur. For the American young the 1940s, not 2,500 BC, is the ancient past.

A time so long ago that it predates the Old Testament by 2,000 years is probably imagined as a brutal and politically incorrect time of inhumanity and human sacrifice. In short, a script for a horror fantasy movie or a video game.

In actual fact, these civilizations were more advanced and more humanitarian than our own. They were more advanced because the rulers were focused on ensuring the society’s longevity by maintaining a livable balance between debtors and creditors. It has all been downhill ever since.

May 06 09:05

Chris Hedges: Sacrifice Zones of America

Chris Hedges calls them "sacrifice zones," huge pockets of impoverished America on the verge of cementing a permanent underclass. The Pulitzer Prize winning journalist has teamed up with cartoonist Joe Sacco in his latest project "Days of Destruction, Days of Revolt" to shed some light on this issue. He joins Piya Chattopadhyay for more on his warning.

May 06 09:04

Samsung and Huawei crush Apple's smartphone global market share

It wasn't long ago that it looked like Apple would overtake Samsung to grab the biggest chunk of the global smartphone market. But now the company has been pushed into third place by Huawei.

May 06 07:38

Never Hurts To Ring The Cash Register

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