ECONOMY | WHAT REALLY HAPPENED


ECONOMY

May 14 10:07

U.S. Readies New Tariffs as Trump Says He’ll Meet China’s Xi

The U.S. prepared to hit China with new tariffs even as President Donald Trump said he’ll meet his Chinese counterpart, Xi Jinping, at next month’s G-20 summit, an encounter that could prove pivotal in a deepening clash over trade.

The U.S. Trade Representative’s office Monday released a list of about $300 billion worth of Chinese goods including children’s clothing, toys, mobile phones and laptops that Trump has threatened to hit with a 25% tariff.

May 14 10:04

Burnout Nation

Authored by Charles Hugh Smith via OfTwoMinds blog,

The economic and financial stresses will exceed the workforce's carrying capacity in the next recession.

A number of recent surveys reflect a widespread sense of financial stress and symptoms of poor health in America's workers, particularly the younger generations. There's no real mystery as to the cause of this economic anxiety:

-- competition for secure, well-paid jobs that were once considered the birthright of the middle class is increasingly fierce;

-- the pay and predictability of the jobs that are available are low;

-- high-paying jobs are extraordinarily demanding, forcing workers to sacrifice everything else to keep the big-bucks position;

-- the much-lauded gig economy is tracking the Pareto Distribution, as 80% of the income accrues to the top 20%, and those trying to earn a lower-middle class income in the gig economy are working long hours to do so;

Webmaster's Commentary: 

I know that Mike and I are working harder than we ever have before, in terms of hours necessary just to keep WRH alive; it has become a plus-time, full-time vocation for both of us, and the emotional and financial strains of this are definitely affecting us negatively.

May 14 10:00

"White Women Jog and Walk Their Dogs on Streets That [black] Drug Dealers Once Ruled": Atlanta Journal-Constitution Laments Whites Have Made Martin Luther King's Birthplace in Atlanta a Thriving Community

One of the great admissions – well, many actually – of racial reality (and the type of communities black people exclusively create in the absence of whites) is contained in this piece from the Atlanta Journal-Constitution. [Atlanta’s gentrification wave washes over historic Old Fourth Ward, Atlanta Journal-Constitution, May 9, 2019]:

May 14 09:58

Similarities to the dot-com bust?

May 14 09:57

Tariffs: The Taxes That Made America Great

A tariff may be described as a sales or consumption tax the consumer pays, but tariffs are also a discretionary and an optional tax.

If you choose not to purchase Chinese goods and instead buy comparable goods made in other nations or the USA, then you do not pay the tariff.

China loses the sale. This is why Beijing, which runs $350 billion to $400 billion in annual trade surpluses at our expense is howling loudest. Should Donald Trump impose that 25% tariff on all $500 billion in Chinese exports to the USA, it would cripple China’s economy. Factories seeking assured access to the U.S. market would flee in panic from the Middle Kingdom.

Webmaster's Commentary: 

What concerns me more than the tariffs, is the uncomfortable understanding about how quickly trade wars can become shooting wars.

and I can guarantee you, we do NOT need a shooting war with China right now.

Our military doesn't have the troop strength; the weaponry; the manufacturing; or the money to insure a positive outcome to a war with China (and/or Russia)

May 14 09:52

Apple Needs A 14% iPhone Price Hike To Offset Higher Tariffs: JPM

One of the companies that has been hit the hardest following the latest escalation in trade war between the US and China, and which not only is reliant on Chinese consumers to purchase its products and services on the mainland, but also produces iPhones in China and is thus subject to a double whammy of anti-American sentiment and higher export tariffs, is Apple, with its shares sliding -11% since the start of last week and 5% on Monday, on fresh worries relating to escalating trade war and the imposition of tariffs on imports from China, as well as on concerns over the consequences of the recent Supreme Court decision allowing a lawsuit against Apple practices in the App store.

In a note published this morning, JPMorgan writes that while it is difficult to precisely attribute the magnitude of the share price decline between tariffs and the lawsuits, "it is fair to say that the majority of the share price decline is driven by tariff
concerns."

Webmaster's Commentary: 

Understanding this, is going to cause people to look for cheaper alternatives, at least for the time being.

May 14 09:49

Ron Paul Warns Losing Income Tax Privacy Is A Real Danger

Authored by Ron Paul via The Unz Review,

Last week the New York Times published some of President Trump’s 1980s and 1990s tax returns information. The information detailed President Trump’s financial difficulties during that time. While you would not know it from reading some media reports, this is old news. In fact, President Trump openly discussed his financial difficulties on his popular reality television show.

What should be of great concern is the possibility that the person who leaked the returns - who the paper says has legal access to President Trump’s tax records - is an IRS employee seeking to undermine the president. This would hardly be the first time an IRS employee has leaked confidential information because he disagreed with the taxpayer’s politics. In 2014 the agency had to pay the National Organization for Marriage 50,000 dollars after an IRS employee gave names of the group’s donors to the group’s opponents.

Webmaster's Commentary: 

Whoever did this should be handed their hat, and immediately sacked; this was just a really vindictive thing to do.

But the reality is, it could happen to ANYONE the government really dislikes, and wants to see driven from their job.

May 14 09:13

How Amazon Destroys Millions of New Items it Can’t Sell

Amazon destroys millions of brand-new items including televisions, books and nappies it cannot sell, an investigation has revealed.

Lorry-loads of goods, many still in their packaging, are dumped in sprawling landfill sites or incinerated. The shocking waste was revealed by undercover investigators who secretly filmed in one of the multi-billion-pound company’s enormous warehouses.

Reporters posing as Amazon workers discovered an area called the ‘destruction zone’ where they covertly filmed staff loading pristine toys, unused kitchen equipment and flat-screen TVs into skips to be transported to dumps.

Later, cameras fitted to a drone tailed a truck crammed with expensive consumer goods from an Amazon warehouse to a waste disposal centre and on to a landfill site.

May 14 09:12

Farmers get impatient with Trump's trade war: 'This can't go on'

The escalated tariffs don't hit agricultural products directly, since most were already facing a 25% tariff imposed by China last year. But the news still sent commodity prices plummeting.

"The President of the United States owes farmers like myself some type of plan of action," John Wesley Boyd Jr., a soybean farmer in Baskerville, Virginia, told CNN's Brianna Keilar on Monday.

"Farmers were his base. They helped elect this president ... and now he's turning his back on America's farmers when we need him the most," he added.

May 14 09:09

Disney takes full operational control of Hulu

The Walt Disney Company has taken full operational control of Hulu, The Walt Disney Company and Comcast Corporation announced on Tuesday.

NBCUniversal, which is owned by Comcast, owns 33% of Hulu right now. The companies said in a press release that as early as January 2024, Comcast can require Disney to buy NBCUniversal's interest in Hulu, and Disney can require NBCUniversal to sell that stake to Disney for its fair market value at that future time. Disney has guaranteed a sale price that represents a minimum total equity value of $27.5 billion.

The deal also includes an agreement for both corporations to fund Hulu's recent purchase of AT&T Inc.'s 9.5% interest in Hulu.

May 13 17:45

Kentucky Taxpayers On The Hook An Estimated $1.5B for Their “Information Highway to Nowhere”

By B.N. Frank

Activist Post reported less than a month ago about how Google has to pay $4M to Louisville, KY to remove fiber, repair damage, and repave roads after its failed project. According to a recent article from ProPublica, Kentucky residents are on the hook for a different high-speed internet fiasco...

May 13 17:28

The Japanisation of Europe is evident.

May 13 14:10

RBC customer out of pocket after fraud: What you need to know if you e-transfer money

A system to transfer money online — used over a million times a day in Canada — is not as safe as it advertises, says a Royal Bank customer who had $1,734 stolen during an e-transfer.

The theft occurred after Anne Hoover of Peterborough, Ont., e-transferred money from her RBC account to her friend Fran Fearnley, only to have a fraudster intercept the transaction and divert the money to his own account at another bank.

"I always use e-transfer," says Hoover. "I thought it was a safe way to send money."

May 13 12:33

The cost of Trump’s tariffs has fallen ‘entirely’ on US businesses and households: Goldman

Goldman Sachs said the cost of tariffs imposed by President Donald Trump last year against Chinese goods has fallen “entirely” on American businesses and households, with a greater impact on consumer prices than previously expected.

The bank said in a note that consumer prices are higher partly because Chinese exporters have not lowered their prices to better compete in the US market.

May 13 12:31

Oil Jumps After Saudis Admit Two Tankers Attacked As Iran Tensions Soar

The bizarre and mysterious explosions that rocked the UAE port of Fujairah on Sunday just got even more strange after Saudi Arabia admitted overnight that two of its oil tankers were attacked while sailing toward the Persian Gulf possibly as part of the incident.

Crude prices quickly jumped as much as 2% on the news. Throughout Sunday as what was being reported in international press as multiple oil tankers exploding at port, local UAE officials had vehemently denied any explosion, much less that any sabotage incident, took place.

May 13 12:30

Kudlow Undercuts Trump, Admits American Consumers Are Paying For China Tariffs 

National Economic Council Director Larry Kudlow admitted on Sunday that American importers and consumers would have to pay the tariffs on Chinese imports, completely contradicting President Trump's claims that China pays the duties.

On Fox News Sunday, two days after the US-China trade deal fell apart, anchor and political commentator Chris Wallace pressed Kudlow: "It's not China that pays the tariffs, it's the American importers, the American companies that pay what, is in fact, a tax increase."

May 13 12:29

Morgan Stanley Clients Saddled With Massive Losses After Disastrous Uber IPO

The technology bankers at Morgan Stanley are probably regretting all of the work they put in to steal the coveted 'lead left' spot in the Uber IPO from Goldman.

Though the bank will still take home a sizable chunk of the underwriting fees, minus whatever they've been obligated to spend to try and 'stabilize' the stock, according to Bloomberg, Morgan's hopes to strengthen ties between its wealth management business and its investment-banking side have been dealt a serious setback.

May 13 12:28

Gold Surges Back Above $1300 On Huge Volume As Trade Tensions Escalate

With China's retaliatory threats coming just minutes after Trump warned them not to, and including a closet threat to dump USTs, precious metals are aggressively bid this morning with Gold surging above its 50DMA and breaking $1300 once again.

Gold spiked on extremely heavy volume...

May 13 12:25

Markets Tumble As China Unveils Retaliatory Tariffs, May Dump "Some Treasuries"

After vowing over the weekend to "never surrender to external pressure", Beijing has defied President Trump's demands that it not resort to retaliatory tariffs and announced plans to slap new levies on $60 billion in US goods.

May 13 11:20

Americans driving to Canada for cheaper insulin as prices skyrocket

As insulin prices soar to new heights, some Americans have decided to cross the Canadian border to obtain cheaper medication.

People from Minnesota who are part of the #Insulin4All initiative organised a "Caravan to Canada", driving five hours to purchase insulin for $30 (£23) a vial rather than the $300 they would pay in the US.

May 13 10:57

S&P and Dow Both Triple Topping? Possible

May 13 10:55

Illinois might start charging $1,000 per year to own an electric vehicle: 'It's outrageous'

A proposed hike in Illinois’ annual registration fee for electric vehicles, from $17.50 to $1,000, is being called unfair by current EV owners, and a sales disincentive by manufacturers — just as the new technology is beginning to gain broader traction.

“It’s outrageous,” said Nicoletta Skarlatos, 56, of Chicago, who bought a Tesla Model S five years ago. “I thought Illinois was progressive and would want to encourage EV ownership.”

May 13 10:49

Tariffs: Donald Trump's trust in trade war tactic is big electoral gamble

Donald Trump’s obsession with tariffs may be based on one of his few core beliefs. Or it may be part of a grand strategy to win votes. Either way, triggering a trade war between the world’s two biggest economies represents a huge gamble ahead of next year’s US presidential election.

Webmaster's Commentary: 

Looking at the stock market right now, I think Trump lost the gamble.

May 13 10:28

Most people don’t know the difference

May 13 10:27

Why The Never Ending Market Rally Just Ended

May 13 10:16

War! Good or Bad for Stocks?

May 13 10:13

The Untold Story of the Paul Weiss Internal Investigation that Didn’t Catch a Massive Stock Fraud

The legal press has been having a field day with how the U.S. Department of Justice, funded by U.S. taxpayers to conduct its own serious and unbiased investigations, has been outsourcing its investigations to the criminal target and its outside counsel – specifically, the law firm Paul, Weiss, Rifkind, Wharton & Garrison.

The case making the headlines involves Deutsche Bank. But another Paul Weiss internal investigation that has escaped meaningful scrutiny by mainstream media involves China Medical Technologies. The U.S. Department of Justice now describes this company as a massive securities fraud that dates back to the time that Paul Weiss conducted one of its internal investigations and came up empty-handed – or, at least, that’s what China Medical Technologies told the Securities and Exchange Commission in an official filing document.

May 13 10:09

Dow Plunges, Nasdaq Falls More Than 3% After China Hikes Tariffs

Stocks were falling sharply Monday after China said it would increase tariffs on as much as $60 billion worth of U.S. imports to as high as 25% following last week's collapse of trade talks between the world's two largest economies.

China said the tariff increase on around 5,000 product groups will take effect on June 1. The U.S. last week raised tariffs on $200 billion of China-made imports to 25%.

"The recent escalation in U.S.-China trade tensions is taking a worsening toll on stocks as rising retaliatory tariffs risk sparking a full-blown trade war," Alec Young, managing director of global markets research, FTSE Russell. "Investors are increasingly worried an anticipated second-half profit rebound may now evaporate as President Trump's threat to tariff the remaining $325 billion in Chinese imports would disproportionately target consumer products like iPhones, thereby posing a greater threat to the consumption-driven U.S. economy."

May 13 09:34

Seven Banks Rigging The Multi-Trillion Dollar Foreign Exchange Market

Barclays, Citigroup, HSBC, JPMorgan and three other banks are set to be fined by EU antitrust regulators in coming weeks for rigging the multi-trillion dollar foreign exchange market, two people familiar with the matter said.

The other three lenders are Royal Bank of Scotland, UBS and a small Japanese bank, the people said. The banks will see a 10 percent cut in their fines for admitting wrongdoing.

May 13 06:46

5 Ways to Address Millennial Pessimism about Capitalism

By Doug McCullough and Brooke Medina

Polls suggesting that millennials have a favorable view of socialism are well publicized. Less known are polls showing that 90 percent of millennials have a positive view of entrepreneurship, and 58 percent of millennial respondents believe they are more entrepreneurial than previous generations. So far, though, millennials have not been as entrepreneurial in practice as prior generations. But there is hope that this could change given their views on entrepreneurship and the currently robust economy.

Capitalism is facing high-profile criticism and challenges from politicians. But capitalism doesn’t need to be saved. Rather, we need to teach this generation the skills to prosper in a free enterprise system...

May 12 18:22

44 States Sue Pharma Giants Over “Multi-Year Conspiracy” to Hike Drug Prices by 1,000%

By Jake Johnson

A far-reaching lawsuit filed Friday by the attorneys general of more than 40 states accused some of the nation’s largest generic drug manufacturers of conspiring to inflate prices, in some cases by over 1,000 percent...

May 12 18:02

Top 10 World’s Biggest Unicorn Companies

May 12 09:45

A "Cancer On Our Economy": Report Finds Over $7 Billion Laundered Through British Columbia In 2018

It may have taken a while, but now that housing prices are starting to crash in Vancouver, BC legislators are finally starting to get wise to the fact that the province has been a hot bed for money laundering. It was an easy problem to ignore with prices on the way up, but on the way down - not so much.

And so an independent report released on Thursday concluded that an astounding $7.4 billion was laundered in British Columbia in 2018, out of a total of $46.7 billion laundered across Canada throughout the same period. The report was published by an expert panel led by former B.C. deputy attorney general Maureen Maloney.

May 12 09:15

AOC Comes Out Against Usury

New York Democratic Rep Alexandria Ocasio-Cortez on Thursday called for an end to usurious high interest credit cards and said the usury laws of the 1970's (where usury ceilings were generally around 8 to 10 percent) were "common sense."

Alexandria Ocasio-Cortez tweeted: "There is no reason a person should pay more than 15% interest in the United States. It's common sense - in fact, we had these Usury laws until the 70s."

May 12 09:10

U.S. regulators approve new Silicon Valley stock exchange

U.S. regulators on Friday approved a new stock exchange that is the brainchild of a Silicon Valley entrepreneur, a move that will give high-growth technology companies more options to list their shares outside of the traditional New York exchanges.

May 12 09:05

Trump Escalates Trade War With China as Latest Talks End

Trade negotiations between the US and China have ended without any deal, leading to President Trump further escalating the bilateral trade war. He announced substantial increases in US tariffs, to 25%, on $200 billion in Chinese imports.

In a series of Tweets cheering his own moves, Trump suggested that the sanctions might remain in place not only during future negotiations, but might never be eased at all. Trump claimed his relationship with China’s President Xi remains strong and talks will continue.

May 12 09:04

Trump Should Let the World Join Fight Against China

If they’re not careful, the U.S. and other developed nations could drive potential allies into Beijing’s arms.

May 12 08:57

Could Your Age Cost You Your Job?

May 12 08:57

Why MMT won’t work.

May 12 08:38

French prosecutor opens investigation over suspected Monsanto file

The French prosecutor on Friday said it had opened a preliminary investigation into a suspected file assembled by Bayer’s seed maker Monsanto to influence various personalities in France.

The probe was opened after a complaint was filed by daily newspaper Le Monde.

According to Le Monde and other French media, Monsanto built up a file of some 200 names that includes journalists and law makers in the hope of influencing their positions on pesticides.

The file, Le Monde reports, dates from 2016 and was leaked by U.S public relations and marketing agency FleishmanHillard.

Officials at Bayer were not immediately available for comment.

Webmaster's Commentary: 

GOOD!!

May 11 19:17

The Fed Created an Uber Problem

May 11 13:04

You think global growth is picking up again?

May 11 10:28

How Accurate Are the US Jobs Numbers?

While the Current Establishment Survey (CES) Report (covering large businesses) shows 263,000 jobs created last month, the Current Population Survey (CPS) second Labor Dept. report (that covers smaller businesses) shows 155,000 of these jobs were involuntary part time. This high proportion (155,000 of 263,000) suggests the job creation number is likely second and third jobs being created. Nor does it reflect actual new workers being newly employed. The number is for new jobs, not newly employed workers. Moreover, it’s mostly part time and temp or low paid jobs, likely workers taking on second and third jobs.

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