ECONOMY | WHAT REALLY HAPPENED


ECONOMY

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

May 06 06:02

The Fed Is Paralyzed By Mixed Messages

May 05 18:04

US sanctions boosted Chinese investment in Russia, Pentagon admits

The Russian economy has enjoyed increased Chinese investment as Western sanctions have pushed Beijing closer to Moscow, according to a report released by the US Department of Defense.

May 05 17:50

Some of these things do not go together

May 05 17:44

I Dare You To Tell Me The Economy Is “Booming” After Reading This List Of 19 Facts About Our Current Economic Performance

After taking an honest look at the facts, I don’t know how anyone can possibly claim that the U.S. economy is “booming”. I really don’t. We hear this sort of rhetoric from the mainstream media all the time, but it doesn’t make any sense. As I discussed yesterday, nobody should be using the term “booming” to describe the state of the U.S. economy until we have a full year when GDP growth is 3 percent or better, and at this point we haven’t had that since the middle of the Bush administration. And as you will see below, the latest numbers are clearly telling us that the U.S. economy is not even moving in the right direction.

May 05 17:41

Boon Times For Auction Houses As American Farmers Go Bankrupt

In an earlier report, our analysis of federal data showed the number of farmers across the Midwest filing for bankruptcy soared to its highest level in a decade. Now it seems some of those farmers are closing up shop, liquidating machinery and land, all to stem financial pressure, a dozen or so farm-equipment auction houses told Reuters.

May 05 14:00

Occupational Licensing — An Unnecessary Evil

By Paul Boyce

Occupational licensing comes under the guise of protecting the consumer from poor quality service. Professions that require licensing in the US include; nursing, law, dentistry, teaching, accounting, psychology, engineering, and architecture — among many others. This is to ensure that the service received is of a satisfactory standard.

Occupational licensing restricts the supply of labor. Not everyone will pass the examinations or bother trying — therefore reducing potential supply. As the supply of labor is reduced, the price of their services will increase...

May 05 13:27

Israel kill Hamas commander in airstrike and 'prepares Gaza ground invasion' as it hits back after 600 militant rockets kill four and injure 66

An Israeli man, 58, became the first citizen to be killed in the Middle East hostilities since the 2014 war.

Seven Palestinians, including a pregnant mother and her baby daughter, were also reportedly killed.

Israeli PM Netanyahu said Hamas is paying a 'heavy price' and has ordered ground troops up to Gaza's border.

Three Israelis, including an 80-year-old woman, were also wounded by rocket fire in the weekend of combat.

Webmaster's Commentary: 

People who have been following the demonstrations at the border knew that this was coming; it was only a matter of time, until the israeli military felt that the "optics" of such an invasion would most probably be seen as a "Justified retaliation" by the rest of the world.

And this time, the IDF is going to kill as many innocent non-combatants as humanly possible; it will be a no holds barred situation, and the Israelis will not negotiate a cease fire this time.

May 05 10:20

Video: Expect oil prices to skyrocket

May 05 09:48

The Company Store

This model was simple enough to understand. “Pay” your workers with scrip vouchers, then sell them your marked up goods at the company store, pocketing a nice profit. On top of that, force your employees to live in company housing, too, also at terms very favorable to the company.

Add it all up and the workers found themselves in perpetual service to their employer. No matter how hard and long they toiled, there was nothing left for their own private benefit after all was said and done. The company succeeded in skimming off any and all ‘excess’ for itself.

This vast unfairness eventually led to the formation of unions as well as to regulations providing protection to the workers.

May 04 09:48

NEARLY 102 MILLION AMERICANS DO NOT HAVE A JOB RIGHT NOW – WORSE THAN AT ANY POINT DURING THE LAST RECESSION

Wouldn’t it be horrible if the number of Americans without a job was higher today than it was during the Great Recession of 2008 and 2009? Well, that is actually true. As you will see below, nearly 102 million Americans do not have a job right now, and at no point during the last recession did that number ever surpass the 100 million mark. Of course, the U.S. population has grown a bit over the last decade, but as you will see below, the percentage of the population that is engaged in the labor force is only slightly above the depressingly low levels from the last recession. Sadly, the truth is that the rosy employment statistics that you are getting from the mainstream media are manufactured using smoke and mirrors, and by the time you are done reading this article you will understand what is really going on.

May 04 09:19

Visualizing the Unicorn Landscape in 2019

May 04 08:41

EU foreign affairs chief slams US ‘full activation’ of Cuba embargo law, vows counter steps

Full implementation of US embargo law on Cuba is illegal under international law, the EU foreign affairs chief Federica Mogherini said as she promised retaliatory measures amidst yet another row between Brussels and Washington.

The “full activation” of US embargo legislation against Cuba is “contrary to international law” and goes against the previous US-EU agreements, Mogherini said on Thursday, promising to apply “all appropriate measures” to defend European interests.

May 04 08:37

Expect a ‘minor correction’ of 5% before stocks march higher, famed bull says

U.S. stocks followed up their impressive first quarter with another month of healthy gains in April, but the returns so far have many investors wondering how long the party can last.

Tony Dwyer, equity strategist at Canaccord Genuity, weighed in on the question in a Tuesday research note, writing that, after the S&P 500 index SPX, +0.96% has gained more than 17% year-to-date, “the tactical backdrop continues to suggest a minor correction in the near term, with any drawdown limited to 5%”

May 04 08:31

Pompeo to Portray China as a Threat in Major Arctic Policy SpeechWill reject China's claim of being a 'near-Arctic state'

One day after the Pentagon issued a new report dramatically hyping China as a grave threat to the United States, Secretary of State Mike Pompeo is said to be planning a major anti-China speech during his visit to Finland on Monday.

Monday’s speech is expected to be a major US policy speech on the Arctic, and territorial claims therein. Pompeo is expected to spin China as threatening the entire Arctic, and will reject Chinese claims to be a “near-Arctic state” because of its interest in using the area as a shipping route.

The focus of Pompeo’s attack on China, however, is likely to be totally distinct from the Arctic, and just a continuation of the flurry of vague allegations that the Pentagon started with in its own report, part of a broader US policy to portray China as a major enemy and threat to American dominance worldwide.

Webmaster's Commentary: 

I have to wonder; when Pompeo was a kid in elementary school, did he ever get a gold star on his report card in that little section, "Works well with others"?!?!?

Because right now, with the exceptions of Israel and Saudi Arabia, the man appears to be the most consistently disagreeable guy in DC.

These are threats, engineered to get ever-more money for the Pentagon, and arrived at by some very dubious thought processes, most of which have little to no foundation in facts.

And Secretary Pompeo, there is a question which haunts me, and I think my brother and sister Americans deserve a straight answer here: why is the US government objecting to the "Silk Road" concept, rather than joining it, and enabling American companies to trade with Chinese companies, and vise versa?!?

Trading always trumps war, in my world, at least.

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