WASHINGTON (Reuters) – Senate Republican Leader Mitch McConnell said on Sunday he has not abandoned his longtime goal of making sure any tax cuts are revenue neutral, saying the growth estimates in the Republican tax reform plan will offset the cuts. Nick Note: BULLSHIT! Don’t be fooled this tax break bonanza for billionaires and mega corporation who will not spend i thin dime on the economy is a budget buster. It will be the biggest economic disaster ever.The Trump administration’s tax plan promises up to $6 trillion in tax cuts but will increase the federal deficit by $1.5 trillion over the next decade. Asked on CNN’s “State of the Union” if it abandons the revenue-neutral goal, McConnell said: “No, actually we’re not because that’s a rather conservative estimate of how much growth you’ll get out of this pro-growth tax reform.”
In a statement, he described the imposition of direct rule as the worst attack on Catalonia’s institutions since the Franco dictatorship. Spanish PM Mariano Rajoy’s plans include the removal of Catalonia’s leaders, and curbs on its parliament. It follows the independence referendum that went ahead despite being banned by Spain’s Constitutional Court. Mr Puigdemont said the Spanish government was acting against the democratic will of Catalans after refusing all offers of dialogue. He said he would call for a session in the Catalan parliament to debate a response to Mr Rajoy’s plans. Addressing European citizens in English, he added that the European Union’s founding values were “at risk in Catalonia”. Nick Note: Bye Bye European Union and good riddance. First England, Now Catalonia in Spain and soon Italy
MILAN (AP) — Voters in the wealthy northern Italian regions of Lombardy and Veneto are heading to the polls to decide if they want to seek greater autonomy from Rome, riding a tide of self-determination that is sweeping global politics. While the twin referendums Sunday are non-binding, a resounding “yes” vote would give the presidents of the neighboring regions more leverage in negotiations to seek a greater share of tax revenue and to grab responsibility from Rome. The leaders want more powers in areas such as security, migration, education and the environment. Even though the referendums — which are approved by Italy’s constitutional court — don’t seek independence, the autonomy drive is a powerful threat to Rome’s authority. Together, Veneto and Lombardy account for 30 percent of GDP and nearly one-quarter of the nation’s electorate. Both regions are run by the anti-migrant, anti-Europe Northern League, which has long given up its founding goal of secession as it seeks a national profile. Also supporting the referendum is former Premier Silvio Berlusconi’s Forza Italia and the populist 5-Star Movement. The Italian constitution already grants varying levels of autonomy to five regions in recognition of their special status: the largely German-speaking Trentino-Alto Adige; the French-speaking Aosta; the islands of Sardinia and Sicily; and the region of Friuli-Venezia Giulia for its position on the border with then-Yugoslavia as a Cold War hedge. These votes Sunday are the first referendums to pose the question to voters, while Emilia Romagna, a center-left region, has recently opened talks with Rome on greater autonomy without a popular vote. Nick Note: This is really about the crack up of the European Self destructing Union
The numbers: The federal government finished fiscal 2017 with a budget deficit of $666 billion, an increase of $80 billion over the previous year. It was the biggest shortfall since 2013 and the sixth-highest on record. The deficit equaled 3.5% of gross domestic product, up slightly from the prior year. Spending rose by 3% for the fiscal year, while receipts climbed by 1%. The government’s fiscal year runs from October through September.
What happened: Higher outlays for Social Security, Medicare, and Medicaid, as well as interest on the public debt, contributed to the boost in spending for the year, the Treasury Department said. Higher spending by the Federal Emergency Management Administration for hurricane relief also boosted overall outlays. The agency’s disaster relief spending climbed by 33% for the year. Receipts grew as individual withheld and payroll taxes climbed, a factor the Congressional Budget Office has attributed to increases in wages and salaries. Tax receipts were partially offset by lower deposits of earnings by the Federal Reserve, Treasury said.
Big picture: The fiscal year numbers come as President Donald Trump and congressional Republicans are pushing a tax cut that could add even more to the deficit: $1.5 trillion over 10 years. The Senate on Thursday night passed a budget bill that paves the way for tax cuts, but lawmakers haven’t released a tax bill yet. The Trump administration has expressed confidence that the tax cut can be paid for through economic growth. The national debt, meanwhile, has exceeded $20 trillion. In a report last summer, the CBO estimated that debt held by the public would rise to about 91% of the economy by 2027, absent major policy changes.
The U.S. exported 5 million barrels a day of refined products, along with 1.8 million barrels of crude. Of the refined fuel, 1.4 million barrels was diesel or distillates, and 636,000 barrels was gasoline.
if we look at crude oil the US is producing 9.6 million barrels a day. Next year production will be at 10.6 million or higher. That would be about even with Saudi Arabia. And that increase will more then offset ALL proposed OPEC production cuts. The U.S. has several other things that go into production numbers. We have natural gas liquids. We are the biggest natural gas liquid producer in the world, and we have biofuels. … If you add the bio fuels, natural gas liquids and refinery efficiency gains, it’s closer to 15 million barrels a day.” Nick Note: OPEC kiss my ass. Talk about a nothing burger. I long predicted the US would become the worlds largest oil producer and exporter. Now you know why the Saudis are so eager to sell their Oil company. I suggest they dust off their tents and get the camels ready!
“Bull markets are born on pessimism, grow on skepticism, mature on optimism and die on euphoria.” — Sir John Templeton
That simple truth (partially) explains why U.S. stocks have continued relentlessly higher. The chart below provides a conceptual visual of the sentiment phases described by Templeton.
The 2007 euphoria led to the 2008 crash, just as the 2000 tech euphoria preceded the burst of the tech bubble. The chart below plots the S&P 500 against six sentiment measures (CBOE SKEW Index, CBOE Put/Call Ratio, CBOE VIX, NAAIM survey of money managers, II survey of newsletter writers, AAII survey of retail investors).
The chart allows for a comparison between the 2007 top and today. Three of six indicators are more extreme today than they were in 2007. Here they are:
• CBOE SKEW: The SKEW was helpful in 2010-2012, but has since lost its mojo. Extreme readings since 2014 did not matter.
• CBOE VIX: The VIX is lower today than prior to the 2007 crash. However, a low VIX is actually bullish for stocks as this revolutionary VIX study from 2014 shows.
• NAAIM study: Active money managers are more bullish today than in 2007. Recent money manager bullishness however, was not a good contrarian indicator. Nick Note: I want to be clear here… the biggest stock market crash EVER is on the near horizon. It is your last chance to get fabulous wealthy. So get your head out of your ass and trade the shit out of it. As in short the moon!
- The 10-year U.S. Treasury yield has fallen nearly 10 basis points so far this year.
- The slippage may reflect expectations of slower long-term domestic economic growth.
- Dallas Fed President Robert Kaplan doubts that the slide in the yield is the result of “easy financial conditions.”
The slippage in the U.S. 10-year Treasury yield may reflect investors’ expectations of slower long-term domestic economic growth rather than looser financial conditions, Dallas Federal Reserve President Robert Kaplan said on Wednesday. “That is not a sign of easy financial conditions,” he said of the benchmark U.S. yield which has fallen nearly 10 basis points so far this year. “That may be a sign of worry about future growth,” Kaplan told reporters after participating on a panel with New York Fed President William Dudley about regional economic trends sponsored by Hearst and Partnership for New York City. Nick Note: YES the yield curve is also flashing its deflationary warning. Don’t worry soon the stock market will figure it out and crash. Wall Street is ALWAYS the last to know. Our long suffering will soon be abundantly rewarded
U.S. economy absorbs blows from hurricanes, plows forward
The Fed’s verdict: The Federal Reserve said the pace of growth in the U.S. was “split between modest and moderate” in its latest snapshot of the economy known as the Beige Book. The report covers Aug. 29 to Oct. 6.
A stable economy and the tightest labor market in years, however, did little to move the needle on inflation. The Fed characterized the increase in wages and the cost of materials as “modest.”
A bigger problem is an ultra-tight labor market. All 12 Fed regional banks said companies “were having difficulty finding qualified workers.”
The shortage of talent has moved some businesses to boost wages, but for the most part worker pay still isn’t growing very rapidly. In some cases, firms have resorted to unorthodox methods to attract employees that do not involve extravagant pay hikes. The strong growth has soaked up almost all of the nation’s available pool of skilled employees, especially in industries such as construction, manufacturing, trucking and health care. Senior Fed officials still expect labor and material bottlenecks to spur inflation higher, but the Beige Book doesn’t find much evidence. Nonetheless, the central bank is prepared to raise interest rates again in December as part of a strategy to head off an unwanted spike in inflation. The October Beige Book does nothing to change that. Nick Note: Further proof we are in a deflationary death spiral
Builders broke ground on fewer homes in September, another step back in the on-again, off-again housing recovery.
Housing starts ran at a 1.13 million seasonally adjusted annual rate, down 4.7% for the month, the Commerce Department said Wednesday.
Housing permits, which foreshadow future starts activity, also tumbled. They were down 4.5% for the month, and 4.3% lower compared to September 2016.
Investment in homebuilding contracted at a 7.3 percent annualized rate in the second quarter, the steepest drop in nearly seven years. As a result, housing subtracted three-tenths of a percentage point from gross domestic product in the April-June quarter.
Nick Note: this report is a disaster and follows a long string of data that shows housing is about to wipe out.
U.S. import prices for September recorded their biggest increase in more than a year amid rising petroleum and food costs, but underlying imported inflation remained modest. The Labor Department said on Tuesday that import prices jumped 0.7 percent last month, the biggest gain since June 2016, after an unrevised 0.6 percent rise in August.
Last month, prices for imported petroleum increased 4.5 percent after rising 5.0 percent in August. Food prices surged 1.8 percent, the largest gain since July 2016, after edging up 0.2 percent in August.
Import prices excluding petroleum rose 0.3 percent after a similar gain in August. They increased 1.2 percent in the 12 months through September.
The increase in import prices excluding petroleum has remained moderate despite the dollar weakening more than 6 percent against the currencies of the United States’ main trading partners this year.
The report also showed export prices rose 0.8 percent in September, the largest increase since June 2016, after gaining 0.7 percent in August. Export prices were boosted by an increase in prices for nonagricultural commodities, which offset a decline in the cost of agricultural exports. Nick Note: Take out the Pop in oil and gasoline and you see deflation is with us
Credit card delinquency rose for the third straight month in September, data from JPMorgan Chase & Co and card issuer Discover Financial Services suggested on Monday. The data add to signs that U.S. consumers are struggling amid rising household debt, after bank results last week pointed to an increase in provisions for future losses. September delinquencies for JPMorgan rose 1.22 percent, while those at Discover Financial were up 1.64 percent from August. Those at Bank of America also rose 1.56 percent – the second rise in three months. Credit quality at several banks appears to be deteriorating as lenders target consumers with worse credit ratings to fuel revenue growth at a time when low interest rates are quashing their returns on other loans. “Delinquency rates have risen in part because lending to subprime borrowers increased significantly in recent years,” CreditCards.com’s senior industry analyst Matt Schulz said. “That brings with it a lot of risk, for both the banks and the consumer.”
JPMorgan said last week that provisions for credit losses across the bank rose 14 percent in the third quarter. Citigroup Inc saw a 15 percent rise.
U.S. household debts hit a record high after having earlier in the year surpassed its pre-crisis peak, helped by modest rises in mortgage, auto and credit card debt, where delinquencies jumped.. Nick Note: You need to pay attention here. Sub Prime is back with a vengeance. And it will wipe out tne financial system……. AGAIN!
Beyond stocks, Paul is also worried about the U.S. dollar. The former congressman believes that the dollar is “under threat,” and could someday be replaced. Paul’s 50 percent correction call is even bolder than a previous prediction he made back in July. At the time, he stated he thought the stock market could fall 25 percent.
“But the recovery is not yet complete, with inflation below target in most advanced economies, and potential growth remains weak in many countries,” it said.
Fink, head of the world’s largest asset manager, said the amount of risk in the financial system is comparable to 2007 levels.
He said that consistently low volatility in the stock market, as well as the overall strength of the global economy, may mean markets are not accounting for that risk as much as they did in the past. “If there is a major event, which I don’t foresee anything, but if there is one, we could have a big correction,” he said at the annual meeting of the Institute of International Finance. Fink spoke during a panel discussion alongside the CEOs of JPMorgan (JPM.N) and Morgan Stanley (MS.N) – Jamie Dimon and James Gorman. All three were generally optimistic about the economy, although they highlighted several significant risks. “If nothing gets done on the corporate tax, that’ll be a big disappointment,” warned Gorman. “That’ll take a lot of energy out of the market.” Nick Note: The biggest stock market crash and Depression EVER is on the near horizion
September surge tied to higher gas prices, response to hurricanes
The numbers: Retail sales in the U.S. leaped 1.6% in September, reflecting the largest increase in two and a half years. The big boost came from new autos and trucks. Excluding autos, sales rose 1%. And sales excluding autos and gasoline climbed a smaller but still robust 0.5%. Sales of cars and trucks surged last month after a disappointing August. The rebound reflected the purchase of replacement vehicles after many were damaged by hurricane-related flooding in Texas and Florida. Home-supply stores also got a bump in the cleanup that followed the storms. Higher gasoline prices boosted sales at gas stations dealers as well. In September, online sellers posted a 0.8% increase in sales while department store sales fell 0.4%. Nick Note: This will not last. Another example of the temporary boost from hurricanesss.
Motor vehicle inventories rose 1.3 percent instead of the previously reported 1.2 percent jump.
Retail inventories excluding autos, which go into the calculation of GDP, increased 0.4 percent as reported last month. They slipped 0.1 percent in July. August’s gain suggests inventory investment could contribute to GDP in the third quarter after adding just over one-tenth of a percentage point to the 3.1 percent annualized pace of growth in the April-June period. Hurricanes Harvey, Irma and Maria are expected to chop off at least six-tenths of a percentage point from economic growth in the July-September period. Nick Note: this is another example of bad numbers from the old days skewing reality. In a inflation big inventories were smart because higher prices meant you made more when you finally liquidated at ever higher prices. So it was counted as a plus in the GDP calculations. In today’s deflationary world. Business wants to keep inventories as lean as possible as prices continue to drop. With the wonderful just in time distribution systems today you can pare way back on inventors. So increasing inventories are a sign of future sales slow down. You need to look no further then the HUGH increases this past year in auto inventories. its so bad car companies are shutting assembly lines and laying off workers. In reality increase in inventories are a sign of the coming sales slow down.
The consumer price index rose 0.5% in September, Driven by a one time increase in gasoline prices because of two Hurricanes hitting the gulf coast. With food and energy stripped out, core CPI rose a much smaller 0.1%. The core CPI yearly rate more closely followed was unchanged at 1.7% for the fifth month in a row. Well under the Fed’s target of 2.5%.
Adjusted for inflation, hourly wages fell 0.1% and were down for the second consecutive month.
The cost of housing, car insurance and wireless phone service rose in September. Prices for medical care, clothes and new and used cars fell. The mini-surge in headline inflation since August largely reflects higher energy prices, but they already started to decline as refineries get back in business. By and large, inflation is still quite mild, indeed surprisingly so. Nick Note: their is no surprise here. We are in a deflation and now wages are DROPPING to prove it. According to FED doctoral economist mathematical theory with unemployment so “low” wages should be rising… Another one of those unexplained mysteries they are all going on about. But if you live in the REAL world you know that part time employment at minim wage is not a job. You know you can’t remodel your kitchen for $1000. And you know a tax cut of $4000 over 10 years is no tax cut at all. Its voodoo economics. and you know the economy is sucking shut as in a deflation…. Mystery solved. Hey do I get one of those plastic explosive prizes?
This is America the wealthiest country on earth. Not some third world shit hole. But if Trump has his way. He and his billionaire friends will turn America into a ever loving hell hole. Wake Up!
Here is a good chance to make America great again!
Common explanations such as global, or temporary, factors are unsatisfying, Fed governor says
The U.S. central bank is struggling to understand a “material” decline in the trend of inflation and so far the most common explanations seem off base, Federal Reserve Governor Lael Brainard said Thursday.
“We have seen a reduction in the underlying trend rate of inflation that is material,” and the cause remains “a bit of an open question,” Brainard said during a discussion at the Peterson Institute for International Economics.
In the U.S., inflation has stayed below the central bank’s 2% annual target since 2012 even as the unemployment rate has fallen from 8% to just over 4%. Brainard said she didn’t think the decline was due to temporary or global factors either. Many analysts and other Fed officials, have suggested such forces are the cause of low prices.
The minutes of the Fed’s September meeting showed that many officials do not want to raise interest rates until they are confident inflation is moving higher. Nick Note: Let me explain what they are not telling you. If their INDICATORS are right that are flashing their deflation warning. And they raise rates they throw the economy into a crises. Its like ignoring the flashing lights at a rail road crossing and driving into a oncoming train. They refuse to see the deflation, broke over leveraged banks and the bubble stock market coming wipe out. BAD for them and GREAT for us.
The CEO of a major European bank offered a stark warning for his industry on Thursday, suggesting that years of accommodative policy by global central banks could quickly turn sour. Low interest rates have been supportive for the world economy, according to ING Group’s Chief Executive Ralph Hamers, but banks have to be “very cautious” at this moment in time because “this is exactly when things may go wrong,” he said. “You have to be careful and very cautious not to take too much risk at this moment in time because everything looks so perfect,” he told CNBC on the sidelines of the International Monetary Fund meetings in Washington D.C. on Thursday. The International Monetary Fund (IMF) said some of the world’s largest financial institutions could be set to struggle to remain sufficiently profitable in the current economic environment. The Washington D.C.-based institute listed nine banks likely to struggle with profitability over the coming years including According to IMF’s biannual Global Financial Stability Report, Citigroup Inc. (C), Barclays PLC, Deutsche Bank AG , Société Générale SA, UniCredit Group SPA, Standard Chartered PLC, Sumitomo Mitsui Financial Group, Mizuho Financial Group and Mitsubishi UFJ Financial Group are all likely to post mediocre results in the next few years.
These nine banks together represent $47 trillion in assets, or about one-third of global banking loans and assets. Nick Note: its to late to close the barn door. That horse is long gone. Risk on the balance sheets of the worlds banks are already out of control. Their over leverage balance sheets are chock full of incredible bad sub par loans from Autos to Zeppelins… Yes they have loaned money to Zeppelin companies… AND ALL ALL these shit loans and their 800 Trillion in derivative bad bets are about to go south.
U.S. producer prices rose in September as the price of gasoline recorded its biggest increase in more than two years amid production disruptions at oil refineries in Texas caused by Hurricane Harvey.
The Labor Department said its producer price index for final demand increased 0.4 percent last month after rising 0.2 percent in August. The more important core PPI was only up 0.2 percent. Most of the gain was driven by Wholesale gasoline prices which soared 10.9 percent in September after increasing 9.5 percent in August. These gains were driven by 2 hurricanes hitting the gulf coast where 25% of US gasoline is produced. The Labor Department said higher energy prices were likely the result of “reduced refining capacity in the Gulf Coast area due to Hurricane Harvey.”
Last month’s gasoline-driven surge in the PPI is likely to be temporary amid ample crude oil supplies.
A key gauge of underlying producer price pressures that excludes food, energy and trade services rose 0.2 percent last month after a similar increase in August. Inflation has remained relatively low, with the main measure tracked by the Federal Reserve retreating further below the U.S. central bank’s 2 percent target in August. Price pressures remain benign despite the labor market nearing full employment.
Trump just claimed stock market gains actually offset national debt
President Donald Trump on Wednesday said that, “in a sense,” gains made by private financial markets reduce the national debt. The claim is incorrect on its face, but it does point to how the president views the economic interplay between the federal government and Wall Street. “The country — we took it over and owed over $20 trillion,” Trump said in an interview on Fox News, referring to the total national debt, which has hovered near $20 trillion since early 2016. “As you know, the last eight years, [the federal government] borrowed more than it did in the whole history of our country,” Trump said. “So they borrowed more than $10 trillion, right? And yet we picked up $5.2 trillion just in the stock market. Possibly picked up the whole thing in terms of the first nine months, in terms of value.” “So you could say, in one sense, we’re really increasing values. And maybe in a sense we’re reducing debt. But we’re very honored by it,” Trump said. While it’s true that U.S. stock market indexes have risen markedly during Trump’s time in office, the current gains are part of a bull market that began in the spring of 2009, when the country began to recover from the Great Recession and the collapse of the housing market. And it’s absolutely the case that the national debt increased by $9 trillion during President Barack Obama’s time in office, but many were scratching their heads at Trump’s implication the debt was lessening because markets are increasing in value. Nick Note: Shit we don’t have to bother with the IQ test. Trump just proved again he is a Moron.
The next global economic slowdown could come from rising risks outside the banking sector, according to the International Monetary Fund.
Leverage in the nonfinancial sector for G-20 economies as a whole has surpassed its precrisis high, the IMF said
Nonfinancial sector debt refers to borrowing by governments, nonfinancial companies and households. The total level of that debt for G-20 economies rose to $135 trillion, or about 235 percent of aggregate gross domestic product in 2016, surpassing the debt-to-GDP ratio of 210 percent in 2006, before the financial crisis, according to the IMF.
Low borrowing costs and muted financial market volatility “support a sanguine view of risks to the global economy in the near term,” the report said. “But increasing leverage signals potential risks down the road, and a scenario of a rapid decompression in spreads and volatility could significantly worsen the risk outlook for global growth.” The U.S. central bank would have to reverse its policy of removing accommodation, and emerging markets would likely suffer about $100 billion in portfolio outflows over four quarters, the IMF said.
In China, where worries about leverage are among the highest, the IMF said banking sector assets have risen steadily to 310 percent of GDP from 240 percent of GDP at the end of 2012. Nick Note: More debt, more risk, more leverage then before the 2007 wipe out. You are smart enough to know what that means. Look out below!
President Donald Trump again attacked NBC News on Wednesday, accusing them of making up their sources.
“It’s frankly disgusting the way the press is able to write whatever they want to write,” Trump said. “And people should look into it.” Trump criticized a story from NBC News citing sources that the president told military aides that he wanted to increase America’s nuclear weapons force “tenfold.” “The press should speak more honestly,” Trump said. “I mean, I’ve seen tremendously dishonest press. It’s not even a question of distortion.” Trump said that, in his opinion, the press was making up their anonymous sources. “They don’t exist,” he said. “They make up the sources. There are no sources.”
“With all of the Fake News coming out of NBC and the Networks, at what point is it appropriate to challenge their License? Bad for country!” he wrote in a tweet.
Nick Note: This is the stuff of dictators. Very scarey. That is why i Call him Trampoline. He has entered the danger zone!
Uncertainty from Brexit and Catalonia’s push for independence is a major risk to the outlook in Europe, Maurice Obstfeld, the chief economist at the International Monetary Fund, said Tuesday. At a press conference discussing the agency’s latest global economic report card, Obstfeld urged British and EU negotiators to avoid a “cliff edge” Brexit. He said British Prime Minister Teresa May’s proposal of a two-year transition period could be a “good thing” as it would set out a clear end-point and a process to get there. “The clock is, as everybody knows, very short,” he said. Asked about the tension between Spain and Catalonia, Obstfeld said it was “indeed concerning.” “We can only hope the parties don’t act precipitously [and] negotiate. There is a lot of potential gain on both sides if they do so,” he said. Nick Note: The crack up of the European Union has begun. You cannot get the tooth paste back into the tube. The Brits are out. Sooner or later Catalonia is gone. Then Italy. Germany will soon tire of this great social experiment and subsiding Euro debt. When that day happens the Euro experiment is over!
BOSTON (Reuters) – University of Chicago professor Richard Thaler may have won the Nobel Economics Prize on Monday for his work on behavioral economics, but the behavior of investors has him stumped.
Thaler said on Tuesday he is puzzled by the steady rise of global stock markets in recent years, even as many countries are gripped by political and social drama.
“It’s a mystery to me. That, and the unbelievably low volatility in a time of massive global uncertainty seems mysterious to me,” Thaler said in a phone interview from his Chicago apartment. Thaler also said his field could do more to research how human psychology affects things like inflation or interest rates. Nick Note: Here is another academic type that has a mystery… What the hell are these guys smoking. its no mystery at all….. Its a bubble stock market designed to take peoples money about to crash……… Mystery will be soon solved as you wipe out your fund my friend!
- Investors have shown a willingness to pay some of the highest multiples for future earnings in history.
- Consumer confidence measures in the extreme today relative to the future.
- Credit spreads assume ultralow default probabilities for the foreseeable future.
Investors have shown a willingness to pay some of the highest multiples for future earnings in history; volatility forecasts come awfully close to assuming relatively safe high returns for equities; consumer confidence measures in the extreme for today relative to the future; and credit spreads assume ultralow default probabilities for the foreseeable future.
Economic Exuberance Index 1997-present
Source: ACIMA Private Wealth
Over the last 40 years, readings at or above 25 correspond to periods of high equity prices and late stages of the economic cycle. More importantly, when the index value approaches 50 like it is now, recessions occur within a short period.
While the last two recessions needed readings above 25 and for extended periods, the cycles of the ’70s and ’80s needed excitement readings barely at 25 before recessions occurred. And how are we doing now?
The index closed the third quarter at its highest level since December 2006 (exactly 12 months before the recession of 2008-2009) and higher than the highest it ever achieved during the boom of the 1990s.
When looking at only valuations, we have exceeded the level of the 2000s cycle. The “euphoria and exuberance” for U.S. equities is as high as it has ever gotten over the last 40 years. The only question left is how much longer can we remain this excited? Nick Note: its the biggest stock market bubble ever and i believe it will soon crash. And if i am right once again about a record breaking stock market crash and depression you could will be on your way to establishing your great family fortune
In the first half of this year, the U.S. economy was growing at an annual rate of 2 percent. Most people, including myself, are not happy with that pace of economic growth. We want more — and faster. But the sad truth is even that growth rate of 2 percent is more than the current factors of production (labor and physical capital) can deliver under conditions of non-accelerating inflation. How come? It’s simple: The stock and the efficiency of current labor and capital resources can only produce a noninflationary growth rate of 1.5 percent. And that’s not new. That limited growth potential has been there last year, too, when the actual GDP growth was also 1.5 percent. Nick Note: This is important and here is why. The tax cut for mega corporations and billionaires creates no new jobs and no business investment. And books a budget deficit over 10 years of 7.5 trillion dollars under projected GDP growth of 1.5% per year. So to make the tax cuts work they are projecting GDP growth of 3% a year every year for the ext 10 years…. and they does not count the coming recession. Its Mission Impossible and that is why the tax cuts for billionaires are such a danger to the economy. But we elected a liar and chief and this is what we get……
MONTREAL (Reuters) – The Federal Reserve must respond to “very tight” U.S. labor markets by gradually raising interest rates or risk halting the economic recovery, a hawkish Fed official said on Saturday. In prepared remarks that largely restated his views, Boston Fed President Eric Rosengren said he expects the labor market to improve further after U.S. unemployment dropped to 4.2 percent last month, its lowest level since 2001. “Prudent risk management would argue for the continued gradual removal of monetary policy accommodation in order to minimize the risk of outcomes that might prematurely shorten the current economic recovery,” said Rosengren, who was speaking at the International Atlantic Economic Conference in Montreal, adding he expects the U.S. economy will likely continue to grow above its potential. “Failing to respond to very tight labor markets with rates remaining negative in real terms could potentially risk unnecessarily shortening the economic recovery,” added Rosengren, who does not vote on policy this year but whose views often portend overall Fed policy. The Fed has raised rates three times in less than a year and is expected to hike again in December. Below-target inflation has caused some more dovish Fed policymakers to want to wait. Nick Note: This is known as selective reasoning. The Fed is ignoring the fact we are in a deflation. And the reality is the last labor report that showed wage increases was distorted by the hurricanes. The net wage gains were only because low pay leisure and hospitality service workers (restaurants and hotel workers) are the first to be laid off. Over 100,000 jobs were lost in that sector. So that means you were left with the higher paid workers that showed bogus wage gains. They are relying on the household survey to calculate the Jobs rate. With so many displaced from the hurricanes they could not answer their landline phone and tell them the are not working. The more accurate U6 rate show that year over year unemployment has gone up. From 8.3 to 8.6 and this is a big number. Now add to these FACTS the lowest work force participation rate and you can see why the FED is about to make a colossal mistake.
The U.S. Treasury Department on Friday said parts of the Dodd-Frank Act should be repealed, among other steps, to promote economic growth and capital formation. “By streamlining the regulatory system, we can make the U.S. capital markets a true source of economic growth which will harness American ingenuity and allow small businesses to grow,” Treasury Secretary Steven Mnuchin said in remarks accompanying a report on regulation and markets. The report also recommends increasing the amount that can be raised in a crowdfunding offering from $1 million to $5 million. Among the Dodd-Frank recommendations are repealing disclosure requirements regarding conflict minerals. Friday’s report outlines a broad range of 91 technical fixes aimed at boosting stock, bond and derivatives markets. “It’s almost uniformly deregulatory. It calls for cutting back on post-crisis Dodd-Frank rules,” said Marcus Stanley, policy director for Americans for Financial Reform. “It’s quite dangerous.”
Nick Note: They are hell bent to forget the lessons of the 2007/8 financial wipeout. From removing the stress test to letting them pay out thir capital in bonuses. All this right before the next bank and stock market crash. They know what they are doing. Treasury under wall street banker Munchin is removing the controls on the out of control bankers. The crowd funding increase is eye candy. They are letting the banks off the hook to the tune of trillions of dollars…. Disaster awaits the banking system.
An alternate number that includes discouraged workers as well as those working part-time for economic reasons also tumbled, falling from 8.6 percent to 8.3 percent, its lowest reading since June 2007.
In all, though, 2017 thus far has seen the slowest jobs growth in at least five years.
Nick Note: what they forgot to tell you the REAL unemployment number is 8.3% UNCHANGED over the past year. and they forgot to tell you that workforce participation rates is at decades lows see chart below.
Putin, Saudi king meet as Russia signals openness to extending oil output curbs
Russian President Vladimir Putin staged a lavish welcome for Saudi Arabia’s King Salman on Thursday, cementing a relationship that could have long-lasting effects on the global oil market. A warming relationship between Moscow and Riyadh has seen Russia, which isn’t a member of the Organization of the Petroleum Exporting Countries, join a Saudi-led effort by the cartel to cut crude oil output by nearly 1.8 million barrels a day this year in an effort to rebalance the global market. The Moscow meeting between the two leaders is seen by analysts as a venue to deepen the relationship and, in the near term, allow the Saudis to nudge Russia toward extending the pact.
Wall Street’s fear gauge posted its lowest close ever Thursday as U.S. stock markets continued to mark record highs in a seemingly unstoppable march higher. The CBOE Volatility Index, or VIX, ended the day at 9.19, down nearly 5 percent since Wednesday. This widely followed index reflects the bets of options traders on the direction of the S&P 500. Right now it’s saying traders are not worried about an imminent stock market sell-off.
The low level of volatility in the markets contrasts with supercharged indexes. The S&P 500 benchmark had its sixth-straight record high on Thursday, edging up 0.6 percent to 2,552.07. Technology-heavy Nasdaq hit intraday and closing highs, closing at 6,585.36, and the Dow Jones industrial average also closed at a record high 22,775.39. Nick Note: I have put up new trades. Remember this day. i don’t know exactly when…. but i know like i have never know anything before in my life… That this will end in the biggest stock market crash ever. And its worth millions to you
Noted Federal Reserve watcher Jim Grant told CNBC on Thursday that President Donald Trump wants a Fed that would give him what he wants: “Cheap credit.” “What (Trump) wants is the Trump standard, which would feature great amounts of credit creation, very cheap credit, and very low interest rates,” said Grant, founder and editor of Grant’s Interest Rate Observer. “If, for example, Jeffrey Gundlach is right as he so often is and Neel Kashkari, the very dovish Fed governor is appointed Fed chairman, that’s a kind of outside-the-box call. But I think it’s a provocative one,” he said in an interview on “Squawk on the Street.” Grant also said Trump wants a “great, big booming economy” and therefore wants an “easy Fed.” “Bond King” Gundlach, CEO of DoubleLine Capital, said Tuesday that he believes that Trump will pick Kashkari as the next Fed chief. “(Kashkari) happens to be the most easy money guy that’s in the Federal Reserve system today and that’s why he may win,” Gundlach argued.
Kashkari, the president of the Minneapolis Fed, said Monday that the central bank is making a mistake by continuing to raise rates, which Gundlach referenced.
Nick Note: as you see things are getting crazy. The Fed is a house divided against itself and the best interest of America. This is a about the banks needing higher rates to steepen the yield curve and upping borrowing costs of their costumers so they can make more money.
The Federal Reserve is likely to raise interest rates again in December but the move depends on the performance of inflation over the next few months, said Philadelphia Fed President Patrick Harker on Thursday. “I have penciled in a third rate hike in December but we have to see how the inflation dynamics play out,” Harker said in an interview on CNBC. The Fed has already raised interest rates twice this year. Fed Chairwoman Janet Yellen and a majority of the central bank’s top officials indicated in September that they expect another rate hike by the end of the year. Nick Note: it makes sense.. Everyone is ignoring deflation and the hurricane wipeout. A rate hike is a damn fool thing to do. So thats what the FED always does. It is amazing to me how they make the same damn fool mistake over and over again
Saudi Arabia’s energy minister told CNBC on Thursday that progress is being made in preparations to launch state oil group Saudi Aramco on the international stock market. Speaking at an energy industry panel moderated by CNBC in Moscow, Khalid Al-Falih, who is also chairman of Saudi Aramco, said that the IPO (initial public offering) was set to happen in the second half of 2018.”The government is moving right ahead, as the chairman of Saudi Aramco I can tell you that our board remains focused on reviewing the preparations for that event by a very dedicated team within the company. It will take place in 2018 and there is nothing to indicate that that schedule is slipping,” he said. Nick Note: The Saudis are desperate. They budget $80 a barrel oil. At $50 even $60 oil they slowly go broke. In essence they have maxed out their credit card with disastrous results. They are DESPERATE for this IPO. If you look at the valuations they get the equivalent of $100 a barrel for oil. And the investors get screwed once again. This deal is really a matter of the regimes survival. My bet is they don’t survive. Frackers are their death knell.
“There are going to be 2.6 million people [who] die this year in the United States,” but there will be only about 5,000 tax returns that will owe estate taxes, he said in a wide-ranging interview. “If they pass the bill they’re talking about, I could leave $75 billion to a bunch of children and grandchildren and great-grandchildren. And if I left it to 35 of them, they’d each have a couple billion dollars,” Buffett said. He then asked rhetorically, “Is that a great way to allocate resources in the United States?” Using a sports metaphor to argue against that kind of dynasty building, Buffett said, “I don’t think we should have our ‘Olympic team’ 20 years from now be the eldest sons of the ‘Olympic team’ currently.”
“The wealthy now are so much wealthier than they were 25 years ago,” he said. “We’re talking about the 400 [richest] now having $2.4 trillion … 25 times as much money.”
Buffet, told CNBC earlier Tuesday that Berkshire is holding off on selling to see how tax reform plays out.
“I would feel kind of silly if I realized $1 billion worth of gains and paid $350 million in tax on it if I just waited a few months and would have paid $250 million,” Buffett said.
Nick Note: Dropping the inheritance is the billionaires tax and sphuld be left in place. Please Note WB like everyone is is holding off SELLING. A 35% tax rate versus 25% is a enormous difference. You can see why their are buyers over sellers in the stock market. That will soon change when this tax mess is sorted out. The sellers will come out of the wood work.
Gold sank as low as $1,271 on Tuesday, its lowest level since Aug. 9. And some strategists see the yellow metal falling further still. “The fundamentals for gold in the long term are not very good. If you look at how gold tends to perform, it basically moves opposite interest rates or the dollar,” said Gina Sanchez, CEO of Chantico Global. As the market enters a rate normalization cycle, rates are likely going to rise, and with it the dollar, adding to the pressure on gold, she said Monday on CNBC’s “Trading Nation.” Sanchez added that if geopolitical tensions heat up, the asset may see additional demand as a safe haven. Gold futures were trading slightly lower, at $1,274 per troy ounce, on Tuesday. The metal has risen nearly 11 percent this year. Nick Note: Gold is a inflation hedge NOT MONEY! No inflation no gold. By the way Russia was hording gold for the past year worried about increased sanctions. They have a friend in TRUMP and they are not worried about sanctions and just started gold sales again!
- Australia’s central bank leaves cash rate unchanged at 1.5 percent for the 14th consecutive month
- The Australian dollar weakened against the greenback following the release of the central bank statement at 11:30 am HK/SIN
Australia’s central bank left its cash rate at 1.5 percent on Tuesday, a widely expected decision given policy makers have signaled a steady outlook for some time to come. The Reserve Bank of Australia (RBA) made the announcement following its monthly policy meeting. A Reuters poll of 49 analysts had found all but one expected a steady outcome this week. Nick Note: Don’t let the desperate spin of the US Federal Reserve fool ou. rats are still going to double digit negative.
WASHINGTON (Reuters) – American International Group Inc (AIG.N) poses less of a threat to financial stability because it shrank its assets by more than $500 billion, Federal Reserve Chair Janet Yellen said on Monday in explaining why she voted in favor of releasing the company from stricter oversight.Her comments and others published by regulators on Monday shed light on a process financial firms say is too opaque and unaccountable, indicating big banks and insurers will have to downsize dramatically if they are to shake off the “systemically risky” label. The U.S. Financial Stability Oversight Council (FSOC) said on Friday that AIG – which received a $182 billion U.S. government bailout during the crisis – is no longer critical to the health of the U.S. financial system. By law, any bank with over $50 billion in assets is automatically considered a SIFI, while the FSOC can apply the label to nonbanks on a case-by-case basis. The panel only once before has removed a SIFI designation, with GE Capital in 2016.
Minneapolis Fed President Neel Kashari on Monday openly disagreed with Fed Chairwoman Janet Yellen by urging the central bank not to raise interest rates again until inflation hits the central bank’s 2% annual target. “My preference would be not to raise rates again until we actually hit 2% core PCE inflation on a 12- month basis,” Kashkari said in an essay posted on his regional bank’s website. Kashkari is a voting member of the Fed’s interest-rate policy committee this year. He has dissented from the two rate hikes so far this year. In a speech last week, Yellen had argued that waiting to hike until inflation moved back to target would be “imprudent.” She said moving too gradually would risk the economy overheating or causing bubbles in asset markets. The year-on-year growth rate of core PCE inflation sank to 1.3% in August.
In his essay, Kashkari said Fed’s rate hike campaign over the past three years was mistaken. He said monetary policy was not as stimulative as hoped for and the main impact of the moves was to cause falling inflation expectations, and somewhat slower job growth, wage growth and inflation.
LONDON (Reuters) – Struggling to make money in a world of ultra-low volatility, hedge funds are taking bigger – and riskier – gambles in foreign exchange markets. Futures market positioning data from the Chicago Mercantile Exchange shows that speculators have amassed their biggest bets on a weaker dollar in nearly five years, and the biggest bet on a higher pound in almost two.
Hedge fundst in the week to Sept. 26, hedge funds upped their net short dollar positions against six major currencies by almost $4.5 billion to over $21 billion, the most since January 2013, according to the Commodity Futures Trading Commission. Hedge funds have been net short dollars since the start of July, increasing that position every week bar one. But after hitting its lowest since January 2015 in the first week of September, the dollar has now risen for four weeks in a row. Nick Note: I feel much better now that I know we are trading opposite the Hedge funds. As you know we are long the dollar against the Euro and British Pounds. It will be fun to see who is right
David Stockman Stockman, the Reagan administration’s director of the Office of Management and Budget, iis warning about the Trump administration’s tax overhaul plan, Federal Reserve policy, saying they could play into a severe stock market sell-off.” “If you have to work for a living, get out of the casino because it’s a dangerous place.” “This is a bubble created by the Fed,” he said. We are heading for a huge reset of pricing in the risk markets that’s been based on ultra-cheap yields that the central banks of the world created that are now going to go away because they’re telling you that they’re done.”
“This market at 24 times GAAP earnings, 21 times operating earnings, 100 months into a business expansion with the kind of troubles you have in Washington, central banks [are] going to the sidelines,” he said. “There’s very little reward, and there’s a heck of a lot of risk.”
Stockman argued that President Donald Trump’s business-friendly tax reform bill, which was unveiled Wednesday, won’t prevent a damaging sell-off. He previously said Wall Street is “delusional” for believing it will even be passed. “This is a fiscal disaster that when they [Wall Street] begin to look at it, they’ll see it’s not even remotely paid for. This bill will go down for the count,” said Stockman.
He said White House economic advisor Gary Cohn and Treasury Secretary Steve Mnuchin “totally failed to provide any detail, any leadership, any plan. Both of them ought to be fired because they let down the president in a major, major way.”
Nick Note: this “tax cut” is a sick joke. it won’t pass and if they modify it and cram down Congress’s throat it will be billionaire bail out. NOTHING NOTHING can stop the coming real estate crash, Banking system collasp and stock market wipeout… you have been warned. When you are standing in a breadline or WORSE remember my stark warning!!
- Philadelphia Federal Reserve Bank Pres. Patrick Harker says he has “penciled in” an interest rate hike in December, and three more rate hikes next year.
Philadelphia Federal Reserve Bank President Patrick Harker said Friday he still has “penciled in” an interest rate hike in December, and three more rate hikes next year, despite weak inflation. “Labor markets feel really tight,” Harker said at a conference in Philadelphia on Fintech, adding that it was appropriate for the Fed to take a pause for now in raising rates as it begins to shrink its $4.5 trillion balance sheet. Low inflation is a concern, especially since the Fed may be under-estimating productivity, which means it may also be over-estimating inflation. Nick Note: The Fed is about to make the classic mistake and that is raising rates in a deflation. Their own numbers show its a deflation. So you may as why make matters much worse? The answer is a flat yield curve (which occurs in a recession) kills banks. and raising rates at this time is what the bankers are demanding of their Federal Reserve employees
The PCE index, the Federal Reserve’s preferred inflation gauge, increased 0.1% in August. The closely followed “core” rate that strips out food and energy edged up 0.1%. Neither index rose on a yearly basis.
Inflation remained subdued. The 12-month rate of PCE inflation was unchanged at 1.4%. The core rate fell a tick to 1.3% — the lowest level since November 2015.
Both indexes are well below the Fed’s 2% target. The most important takeaway is that inflation remains stubbornly low. The Fed plans to raise interest one more time in 2017 and three times in 2018, but the bank might have to reconsider unless inflation tracks higher again. Nick Note: inflation is dead and getting deadder by the day. The FED refuses to see this building deflation doom. Its their indicator of choice and record and they refuse to heed its warning
America’s top 1% now control 38.6% of the nation’s wealth, a historic high, according to a new Federal Reserve Report. The Federal Reserve’s Surveys of Consumer Finance shows that Americans throughout the income and wealth ladder posted gains between 2013 and 2016. But the wealthy gained the most, driven largely by gains in the stock market and asset values.
The top 1% saw their share of wealth rise to 38.6% in 2016 from 36.3% in 2013. The next highest nine percent of families fell slightly, and the share of wealth held by the bottom 90% of Americans has been falling steadily for 25 years, hitting 22.8% in 2016 from 33.2% in 1989.
The top income earners also saw the biggest gains. The top 1% saw their share of income rise to a new high of 23.8% from 20.3% in 2013. The income shares of the bottom 90% fell to 49.7% in 2016. Nick Note: this is the shit that class warfare is made of. AND after the next stock market crash and real estate wipeout their will be no middle class left. We are ABOUT to see the greatest loss of wealth ever. and the greatest concentration. i hope your on the concentration side as verses the loss side of the ledger.
The Conference Board says its consumer confidence index fell to 119.8 in September from 120.4 in August. The reading still suggests that U.S. consumers are in a mostly sunny mood. But Conference Board economist Lynn Franco says that confidence “decreased considerably” in hurricane-hit Florida and Texas. The index takes into account Americans’ views of current economic conditions and their expectations for the next six months. Their outlook rose slightly in September. Economists pay close attention to the numbers because consumer spending accounts for about 70 percent of U.S. economic activity. Nick Note: this is just the start of the lasts index to pick up the recession we have entered. And get this the FED knows all the bad numbers and is still hell bent to try and raise rates. Amazing they ALWAYS get it wrong!
“If you consider the markets could get into a phase where they’re rethinking what is happening,” she told CNBC Tuesday, referring to the ability of U.S. lawmakers to push through new reforms. the average volatility of stocks is much higher than the VIX because it is getting diversified away. The VIX (CBOE Volatilty Index) benchmark measures the market’s expectation of volatility over a 30-day period, and has declined significantly this year. “So stocks were acting very idiosyncratically. So if you looked at the VIX it was quite a bit lower than the average volatility in the market because you had this diversification effect,” she said. “If that starts to unwind at the same time that the markets start re-rating, you’re not just going to get a pop, you’re going to get an even bigger unwind in volatility, and it could be actually quite devastating,” she warned.
Nick Note: as you know we have a tread for that….
WASHINGTON (Reuters) – Sales of new U.S. single-family homes unexpectedly fell in August, hitting their lowest level in eight months,
the latest indication that the housing market was slowing.
The Commerce Department said on Tuesday new home sales decreased 3.4 percent to a seasonally adjusted annual rate of 560,000 units last month, which was the lowest level since December 2016. July’s sales pace was revised up to 580,000 units from the previously reported 571,000 units. Sales were down 1.2 percent on a year-on-year basis in August. The Commerce Department suggested Hurricanes Harvey and Irma could have impacted new home sales data last month. The areas in Texas and Florida that were affected by the storms accounted for 14 percent of single-family home permits in 2016. Housing weighed on the economy in the second quarter and economists expect the sector to be a drag on gross domestic product in the July-September period. The inventory of new homes on the market rose 3.6 percent to 284,000 units, the highest level since May 2009. Still, new housing stock is less than half of what it was at its zenith during the housing bubble. Nick Note: Forget the broker bullsht. New homes sales suck… signaling the looming housing bubble bursting. See that part about inventories increasing? That puts to bed broker bullshit that their is not enough homes to meet demand. This is a disaster in the making.
There’s one classic market theory that could predict exactly when the next correction will occur. Todd Gordon, founder of TradingAnalysis.com, says that the “Elliott wave” theory shows that while the S&P 500 has more room to rally, it will ultimately fall once it reaches a certain level. The framework, invented by Ralph Nelson Elliott, posits that each bull market rally goes through five different “waves” before a pullback occurs, with the first, third, and fifth waves moving upward while pullbacks happen in the second and fourth waves. According to Gordon, the market is currently in that fifth and final upward wave. While the S&P 500 continues to climb, as it did in the first and third waves, once it finishes its current “trend channel,” the market will begin to fall. “At the current angle of ascent, I’m not calling a top [in the short term],” he said Monday on CNBC’s “Trading Nation.” “We could have a bit more of a rally, potentially reaching the 3,000 mark in the S&P 500.”
That would represent a 20 percent rise from Monday’s closing price.
Factory output and consumer spending were a negative tug on the Chicago Fed’s index of national economic activity for August, while hiring offered a smaller boost last month than in July. In its report issued Monday, the Chicago Fed’s national activity index slumped to a negative 0.31 in August from an upwardly revised, but still barely positive, 0.03 in July, in what was yet another turn for an especially volatile measure over the past handful of months. The index’s less-volatile, three-month moving average decreased to negative 0.04 in August from a neutral reading in July.
The Chicago Fed index is a weighted average of 85 economic indicators, designed so that zero represents trend growth and a three-month average below negative 0.70 suggests a recession has begun.
Total industrial production declined 0.9% in August after moving up 0.4% in July, Federal Reserve data had shown earlier. Nick Note: And Another one. Foam the run way we are gong to make a crash landing!
“Whenever I hear people talk pessimistically about this country, I think they’re out of their mind.”— Warren Buffett, Berkshire Hathaway chairman, reported by Reuters
Nick Note: Thats because those Wall Street owned Business publications don’t want you to know what a con job stocks are. And the fact that short selling is the fastest way to mega wealth know to man… see list below
“Being short America has been a loser’s game. I predict to you it will continue to be a loser’s game,” said Buffett, who appeared on the cover of the anniversary issue of Forbes, featuring 100 greatest business minds.
MARK MY WORDS Buffet is about to take a big wipe out. this next market crash will reverse his 50 years of gains in a matter of months
Nick Note: What bullshit Shorting America greedy bankers has been the most profitable trades of all time. Short sellers just don’t like to advertise the fact. And those business publications that are little more then infomercials getting people to buy stocks. They don’t want people to know that stocks are a lousy investment making over the years less then T bills. See Story Sept 22 in breaking news titled: The Shocking Truth About Stock Returns This Century. AND AND the Indices are rigged since they throw out the Losers and refigure the index. Some of the richest men of our times are short sellers:
- George Soros, who shorted the British Pound in 1992, “breaking the Bank of England”
- Steve Eisman, Michael Burry, Jamie Mai, and Charlie Ledley, who Michael Lewis profiled in The Big Short.
- David Einhorn, who shorted Lehman Brothers
- Jesse Livermore shorted the 1929 market crash and made $100 million.
- Paul Tudor Jones made an estimated $100 million when he predicted Black Monday in 1987 and shorted the stock market.
- Andy Krieger shorted the Kiwi in the late 80s and made $300 million.
- Louis Bacon bet on Saddam Hussein invading Kuwait and returned 86% that year.
- John Templeton shorted the Dot-Com bubble and made $80 million in weeks.
- Jim Chanos shorted Enron when everyone thought the company was in great shape.
- John Arnold bet against a rival energy hedge fund’s natural gas positions.
- John Paulson shorted subprime mortgages just before the financial crisis hit and made $3-4 billion.
- Kyle Bass also made that same bet against mortgage-backed-securities and netted $3-4 billion.
Federal Reserve Chairwoman Janet Yellen says she’s mystified by low inflation, but is she really?
Federal Reserve Chairwoman Janet Yellen says the recent slowdown in U.S. inflation is a “mystery,” but she and her colleagues are not mystified enough to keep borrowing costs as low as they are now. A majority of senior officials are still convinced inflation will rise again soon, stoked in part by an uber-tight labor market. The unemployment rate recently touched a 16-year low of 4.3%, a level typically associated in the past with higher inflation. Yet there little’s evidence to suggest a return to past inflationary trends. The 12-month rate of inflation measured by the Fed’s preferred PCE index, for instance, fell to 1.4% in July from a five-year high of 2.2% in February. Now it stands well below the Fed’s 2% target for inflation.
The recent shortfall in inflation “is more of a mystery,” Yellen acknowledged in a press conference Wednesday after the Fed announced its latest steps. Later she used the term “mysterious.” Nick Note: as i have constantly pointed out we are in a global deflation. The industrial matrix (algorithms) the Fed uses were developed for the ole industrial economy. They cannot understand the digital world and its disruptive deflationary implications. They are making serious miscalculations not understanding that the economy is slipping into a recession. AND AND raising rates will be bring us the greatest economic disaster this century. They admit they don’t understand what is going is going on. Would not prudence dictate that they scratch their asses and figure it out before they destroy the financial system
S&P Global Ratings downgraded China’s long-term sovereign credit rating by one notch on Thursday to A+ from AA-, citing increasing risks from the country’s rapid build-up of credit. “The downgrade reflects our assessment that a prolonged period of strong credit growth has increased China’s economic and financial risks,” S&P said in a statement, adding that the ratings outlook was stable. S&P’s downgrade follows a similar demotion by Moody’s Investors Service in May and comes as the government grapples with the challenges of containing financial risks stemming from years of credit-fuelled stimulus spurred by the need to meet official growth targets. Nick Note: China has built the biggest credit bubble in the history of the planet. this will end badly. And major global financial institutions like HSBC and Blackstone are betting the firm on a miracle. their can be no doubt that the China debt bubble will burst in the coming global recession/depression.
U.S. import prices recorded their biggest increase in seven months in August as the cost of petroleum surged and there were also signs of a pickup in underlying imported inflation. The Labor Department said on Tuesday that import prices jumped 0.6 percent last month, the biggest gain since January, after a downwardly revised 0.1 percent dip in July. Last month, prices for imported petroleum raced 4.8 percent after slipping 0.4 percent in July. Import prices excluding petroleum rose 0.3 percent after dipping 0.1 percent the prior month. Import prices excluding petroleum increased 1.0 percent in the 12 months through August. The report also showed export prices rose 0.6 percent in August after gaining 0.5 percent in July. They increased 2.3 percent year-on-year after rising 0.9 percent in August. Nick Note: Bottom line take ut oil and cor import prices rose a minuscule 0.3%. nothing to worry about
Tens of thousands of workers to be put on temporary layoffs
DETROIT — Ford Motor Co. said Tuesday it will temporarily idle production lines at five North American plants, including three in the U.S., the latest in a series of moves by U.S. auto makers to cope with slowing vehicle sales and rising industry capacity. Ford F, +0.77% is scheduling one to three weeks of downtime at the factories to whittle down unsold-car inventory on dealer lots. Collectively, these five factories employ tens of thousands of workers, who will be put on temporarily layoff during the down weeks. The move will affect plants that mostly build Ford passenger cars, including the subcompact Fiesta and bread-and-butter Fusion sedan, whose sales have been hit hard by the shift in consumer demand to larger crossovers and SUVs. Ford executives have signaled throughout the year it might take such actions to counter slowing U.S. sales. While it has largely resisted permanent layoffs, opting instead to schedule downtime when needed, the company’s inventory levels on dealer lots have crept up in recent months. Nick Note: well i guess Trumps dream of a job at a car plant for all just got shot in the ass. Reality is auto sales have always been a early warning sign of a recession. Consider yourself warned
Builder confidence in the market for newly built single-family homes dropped in September, on worries that the recent hurricanes will make it difficult to find workers and materials. The National Association of Home Builders/Wells Fargo housing market index fell 3 points to 64, and August’s reading was downwardly revised by a point.
“The recent hurricanes have intensified our members’ concerns about the availability of labor and the cost of building materials,” said NAHB Chairman Granger MacDonald, a home builder and developer from Kerrville, Texas, in a statement.
The concern is that Hurricanes Harvey and Irma did so much damage that construction workers will flock to Texas and Florida for rebuilding. Concern about the ability to find qualified workers has been a problem for some time, and the hiring rate in the construction industry, 5.3%, is well above the national average of 3.8%. The component gauging current sales conditions fell 4 points to 70, the index charting sales expectations in the next six months also dropped 4 points, to 74, and the component measuring buyer traffic slipped 1 point to 47. Nick Note: Please note that they report severe concern about future sales. And it makes sence buyer traffic is down. a great indicator of future new home sales trends
U.S. industrial output fell in August for the first time since January as Hurricane Harvey battered oil, gas and chemical plants along the Gulf Coast and a cool summer sapped utility demand in the east, the Federal Reserve said on Friday.
Overall industrial production fell 0.9 percent over the month after a July increase revised upward to 0.4 percent.
The Fed, using a combination of high-frequency plant output data and economic modeling, attributed about 0.75 percentage point of the decline to storm effects that “temporarily curtailed drilling, servicing, and extraction activity for oil and natural gas.” The output of consumer goods fell 0.7 percent as a rise in production of consumer durables was offset by declines in nondurables and consumer energy products. Production of motor vehicles and auto parts rose 2.2 percent. Utilization of factory capacity fell 0.8 percentage point to 76.1 percent, compared to a revised upward figure of 76.9 percent in July, nearly 4 percentage points below the long run average. Nick Note: Did I mention Holy Shit Batman! This is just the start…. it called a crash and all markets crash from record highs. Maintain your average points. And figure out how you going to spend your money
U.S. retail sales post biggest drop in six months
WASHINGTON (Reuters) – U.S. retail sales unexpectedly fell in August, likely hurt by the impact of Hurricane Harvey on motor vehicle purchases, suggesting a moderation in consumer spending in the third quarter. The Commerce Department said on Friday retail sales dropped 0.2 percent last month, the biggest decline in six months. Data for July was revised to show sales increasing only 0.3 percent instead of the previously reported 0.6 percent jump. The Commerce Department said while it could not isolate the impact of Harvey on retail sales, it had received indications from companies that the hurricane had “both positive and negative effects on their sales data while others indicated they were not impacted at all.” Excluding automobiles, gasoline, building materials and foodservices, retail sales fell 0.2 percent last month after an unrevised 0.6 percent increase in July. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. Last month’s drop suggested consumer spending could slow in the July-September period. Nick Note: Holy shit batman! this is ugly. Its called a recession and obviously we are headed for the BIG one.
U.S. producer prices rebounded in August, driven by a surge in the cost of gasoline, and there were also signs of a pickup in underlying producer inflation. The Labor Department said on Wednesday its producer price index for final demand increased 0.2 percent last month after slipping 0.1 percent in July. In the 12 months through August, the PPI rose 2.4 percent after advancing 1.9 percent in July. the increase was largely due to a 9.5 percent increase in the cost of gas. That was the largest rise since January and followed a 1.4 percent decline in July.”Energy price gains, which will likely dominate the September inflation reports in the aftermath of Hurricanes Harvey and Irma, will likely be viewed as having a temporary impact on inflation by the Fed,” A key gauge of underlying producer price pressures that excludes food, energy and trade services rose 0.2 percent last month after being unchanged in July. Nick Note: obviously hurricane induced increases in gasoline prices are a onr time event. Inflation is still minuscule.
- The U.S. federal flood insurance program estimates it will pay out $11 billion for flooding in Texas caused by Hurricane Harvey.
- The payment will be made more quickly to homeowners who do not object to their adjustors’ determinations.
The U.S. federal flood insurance program estimates it will make $11 billion in payments through the government-run program for flooding in Texas caused by Hurricane Harvey, the program’s administrator Roy Wright said on Wednesday. Additionally, in an attempt to make those payments more quickly, homeowners who do not object to the determination made by adjustors will be able to receive their payouts without completing additional paperwork, Wright said. Nick Note: Do the math….. preliminary estimates are ten billion in flood insurance payouts in Texas alone. Where we know more then 90% of the houses were NOT NOT insured. So that equates to over 100 billion in non insures loses on single family residential. And the estimates always double. And that does not include commercial real estate, multi family residential or business loses. So conservatively we got 200 billion in uninsured loses. Now add at least 150 billion on Florida and you see where the wipe out is going to come from. The financial industry cannot cover 1/3 of a billion dollars in loses against their meager capital… You have been warned!
Hedge fund legend Julian Robertson Jr. sees stock market valuations as “very high” and worries about a bubble forming. “The market as a whole is quite high on a historical basis,” he said. “I think that’s due to the fact that interest rates are slow low. But there’s no real competition for the money other than art and real estate.” “I think we need interest rates to appreciate, to go up, because I think we are creating a bubble,” he added. Nick Note: the Bubble Bath in Stocks and real estate is here. And i have never evr seen a bubble that did nt pop
Robertson is perhaps best known for predicting the tech bubble in the late 1990s. He also is well known for his philanthropy.
As Irma leaves Florida, statistics from the hardest-hit areas of the state are a reminder of how pricey it remains to insure against floods — both for homeowners and taxpayers. Florida households account for 35% of all National Flood Insurance Program policies across the country. But data from the Pew Charitable Trusts’ Flood-Prepared Communities program show that only about 14% of the 3.3 million households in the nine counties covered by the Irma Presidential Disaster Declaration have such coverage.
Nick Note: this is the story the bankers don’t want you to know. Only 15% of homes had flood insurance. BUT 95% have mortgages. most of which are maxed out. Which means the BANKS are on the hiok for the hundreds of billions of loses. And the stock market rallies because the loses could have been higher… Go figure! A third of trillion of dollars in uninsured loses is enough to give us another banker wipe out!
Fighting wars, big tax cuts and economic stimulus packages have all added to the debt burden
The U.S. has exceeded $20 trillion in national debt — the nation was a cool $20.16 trillion in the red as of Friday — and now that it’s crossed that mark, get ready for some finger pointing over who’s to blame.
If history shows anything, it’s that both parties share responsibility for boosting the debt. Fighting wars, big tax cuts and economic stimulus packages have all added to the burden over the years. Nick Note: the tax plan, 2 hurricanes and increased military spending are all debt busters. Adding to the national debt in the future. The recession soon to be a depression wijl cap US debt and start bringing it down.
As of Thursday, it had been exactly 10 months since the S&P 500 saw a pullback of 3 percent, Detrick pointed out. That makes this only the second-longest streak without a 3 percent pullback that has been since 1928, beaten by an 11-month run that took place from the end of 1994 to December 1995.
That extended rally suggests stocks may be overdue for a downturn. Looking forward, Detrick concludes that the market is long overdue for shallow pullback.”Could we keep going higher without a lot of volatility? It’s possible, but we just think it’s been awfully long so that a normal correction this time of the year makes a lot of sense to us here,” the market strategist said last week on CNBC’s “Futures Now.”
“The economy still looks good, and potentially, this bull market still has a long way to go. It’s just near-term, things look dicey.” Nick Note: Look how hey are preparing the stupid money for the coming crash! But they just can’t form the words in their mouth as in SELL the shit out of it. They say ” this bull market has a long ay to go” What a load of shit!! this bull market is over. It may trash around up here for a little while longer but But BUT the biggest stock market crash EVER is right around the corner
The Federal Reserve Bank of New York has lowered its “nowcast” for gross domestic product growth in the United States during the third quarter to 2.1%, according to a report released on Friday. The previous reading stood at 2.2%, while the GDP growth estimate for the fourth quarter declined to 2.6% from 2.7% over the same period, the report revealed. The downward revision comes in response to this week’s data releases, with negative impacts from lower-than-expected imports and exports data accounting for most of the decrease, the bank said. Nick Note: another report that is flashing its warning. and this is before the stats pick up not 1 but 2 record breaking hurricanes
Total consumer credit increased by $18.5 billion in July to $3.75 trillion, growing at an annual rate of 6.9%, the Federal Reserve said Friday. The’s the fastest pace in five months and well above the annualized 3.8% increase in June. So-called nonrevolving credit, largely reflecting loans for education and new autos, rose at an annual rate of 6.9% in July. That’s more than double the 3.1% rate in the prior month. Revolving credit, composed mostly of credit-card purchases, rose at an annual rate of 3.2% in July. Revolving credit rose at a 5.8% clip in June. If credit consistently expands faster than income, however, its a sign Americans are more stretched financially. Nick Note another record breaking rise in consumer debt a ominous warning sign of the disaster to come!
Lloyd Blankfein, the chief executive of Goldman Sachs, endorsed his former deputy Gary Cohn as Fed chair. But Blankfein couldn’t help himself from taking a little jab at Cohn’s reading habits — or rather lack of them.
“Gary is very, very capable,” Blankfein said in an interview that was part of a conference hosted by the German newspaper Handelsblatt. Cohn served under Blankfein for years at Goldman before leaving to join the Trump White House. Donald Trump has said that Cohn is one of the potential candidates for the Fed chairmanship when Janet Yellen’s term expires in February. But Blankfein pointed out that appointing Cohn would be a big departure from recent appointments to the Fed.
“He’s not an academic. I don’t know that he reads a lot of policy papers, let alone writes them,” Blankfein said.
That’s an understatement. When Cohn was at Goldman, his deputies knew that any written communications with Cohn needed to be limited to a few sentences if they were to be effective. In interviews with dozens of former associates, none could recall reading anything Cohn wrote that was longer than a few paragraphs.
Blankfein tried to put a nice gloss on this. “He’d be much less theoretical, much more practical. We have gone in that direction in a few generations as far as the Fed, but we used to. And who’s to say what’s better or not?” Blankfein said. Nick Note: Cohen would be the most clueless Fed Chief ever. He in stupidity will screw things up. it is beyond comprehension that the President would even consider appointing him. Come to think of it it might be right up Trumps alley. Incompetence is the hallmark of he Trump presidency
The Federal Reserve appears ready to accept that its inflation assessments have been wrong, indicating an important shift in how it will approach rate hikes ahead. In a speech Tuesday, Fed Governor Lael Brainard said the long-standing assessment at the central bank that persistently low inflation is the result of transitory factors that eventually will pass does not add up considering current circumstances. “I am concerned that the recent low readings for inflation may be driven by depressed underlying inflation, which would imply a more persistent shortfall in inflation from our objective,” Brainard told the Economic Club in New York. “In that case, it would be prudent to raise the federal funds rate more gradually.” Brainard pointed to the current low unemployment rate — 4.4 percent — and compared it to the last time the economy was around “full employment” from 2004 to 2007. During that run, inflation averaged about 2.2 percent. Currently, the three-year average is 1.5 percent. Nick Note: Is it not incredible these freeging idiots just can’t get their heads wrapped around the facts thtt we are IN a deflation soon to become a depression. I guess these marble edifices to stupidity where they proclamate from on high causes brain damage
WASHINGTON (Reuters) – New orders for U.S.-made goods recorded their biggest drop in nearly three years in July. Factory goods orders tumbled 3.3 percent amid a slump in demand for transportation equipment, the Commerce Department said on Tuesday. That was the biggest drop since August 2014 and followed a 3.2 percent surge in June. Orders excluding transportation equipment rose 0.5 percent after edging up 0.1 percent the prior month. Orders for non-defense capital goods excluding aircraft, seen as a measure of business spending plans, jumped 1.0 percent in July instead of gaining 0.4 percent as reported last month. Machinery fell 0.9 percent. That was the largest drop in nine months and followed a 0.5 percent gain in June. Orders for industrial machinery fell 0.8 percent. Nick Note: The real numbers no one watches (wonder why) are diving off a cliff. Notice how this incredible downturn is barley reported. And the Hurricanes have not taken their bite out yet.
A popular measure of volatility on Wall Street jumped more than 30% on Tuesday as stock-index benchmarks saw one of their worst daily declines since mid August. The CBOE Volatility Index VIX, -0.98% surged 34% Tuesday afternoon to 13.56, marking its biggest one-day rise since Aug. 10 when it surged 44%. Known as the fear gauge, the indicator is a measure of options bets on the S&P 500 index SPX, -0.76% 30 days in the future and tends to be used as a sign of increased anxiety in the market because stocks fall faster than they rise. The jump in the gauge, which is still holding below its historic average of 20, comes as the Dow Jones Industrial Average DJIA, -1.07% is down 245 points, or 1.1%, the S&P 500 index SPX, -0.76% is off 0.9% and the Nasdaq Composite Index COMP, -0.93% is looking at a 1.1% tumble. Nick Note: We have a trade for that. The UVXY which is doing Nicely.
The death of a major economic concept is riling many economists and analysts.
Known as the Phillips Curve, a concept developed by New Zealand economist William Phillips, it shows that inflation and unemployment have a stable and inverse relationship and is a fundamental philosophy for many. In recent months with central banks using artificial ways to pump money into the economy, this inverse relationship is seen to be dying, or rather “flattening” as many economists point out. Low wages and temporary jobs add pressure on workers. That in turn leads to less spending power in the economy even though the level of unemployment maybe falling. Recent economic data across the U.S. and Europe have shown that while unemployment seems to be cooling down, inflation is lagging gains.
Nick Note: The Phillips curve is simplistic and a sick joke. What the central bankers the world over refuse to acknowledge is the fact the world has entered a deflation. AND AND AND the fact that even in the slave labor markets of China and India Robbie the robot is still cheaper then human labor. Less people working, less hours and making less money means the world is slipping back into global poverty. The gains in the past 50 years are being eradicated by algorithms, artificial intelligence and workplace automation. I use the catch all term Robbie the Robot. By the time the central banks scratch their collective asses and give up their stupid ass curves the world will be in a global depression. And rates will go double digit negative for all the good it will not do!
U.S. oil prices edged up on Tuesday as the gradual restart of Gulf of Mexico refineries following forced shutdowns due to Hurricane Harvey raised demand for crude, their most important feedstock.At the same time the return of many, though not all, U.S. refineries ended a spike in gasoline prices as initial fears of a serious supply crunch faded. “Gasoline fell as refineries in Texas began to reopen,” said William O’Loughlin, investment analyst at Rivkin Securities.
Nick Note: a great in and out trade. But you got to stay connected. See live trade update every market day 12:00 Noon NY time
Germany might be the known as the powerhouse of the euro zone economy but it has its own banking problems to deal with, Pier Carlo Padoan told CNBC on the sidelines of the Ambrosetti Forum on Sunday. “I think that there are some German banking problems and I’m confident the German authorities will deal with them,” Padoan said when asked about remarks made by former Prime Minister Matteo Renzi last year. Though Italy keeps making headlines due to its financial sector, analysts have also warned on banking problems in Germany. These include the reliance on the shipping industry, which used to be a stable investment before the euro zone debt crisis. Other issues include the sheer number of banks in Germany with very little consolidation. There are approximately 2,400 separate banks with more than 45,000 branches throughout the country and over 700,000 employees, according to Commercial Banks Guide, an industry website. Nick Note: Everyone knows Italian banks stiil have massive losses. What is less known is the fact that Deutch Bank has massive derivatives uncovered counter party loses it has virtually no capital. This is the ticking time bomb in the European banking system
U.S. stock benchmarks, having closed out a second straight weekly gain that has helped to reverse much of the recent weakness in major indexes, are near record levels. Uh-oh? The recovery—the latest example of investors using any slight pullback as a buying opportunity, thereby prohibiting more pronounced pullbacks—comes at a time when uncertainties about the economy are growing, the government faces some key deadlines with major financial implications, and when the situation with North Korea remains both unclear and tense. In addition, markets just entered the month of September, which is historically the worst of the year for market performance, with the Dow averaging losses of about 1.5% over the past 20 years, according to Bespoke Investment Group data“We’ve had a tremendous recovery over the past couple of weeks, one that pushed the VIX down to 10. As that happens we get into an overbought situation, and I don’t see us as having the ability to go much higher,” said Donald Selkin, chief market strategist at Newbridge Securities. . Nick Note: The rally back. Bring it on. They always do it. Whats a little trillion dollar wipe out anyway. Who’s afraid of the bear market. Talk about fools rushing into this market. I can’t wait for the day of reckoning. it wiil be a lot of fun!
“I think that there’s a lot of confusion about where interest rates are going to go, not only on the short end of the yield curve but on the long end of the yield curve,” Morganlander said Friday on CNBC’s “Trading Nation,” referring to bonds with varying maturities. Economic growth domestically and globally will begin to “modestly decelerate,” he said, which would lead to a depression in yields. Global rates are still historically low, he pointed out, and the European Central Bank will move “slower than investors think” going forward when it comes to normalizing its monetary policy. “There’s this tug-of-war happening between economics, as well as monetary policy, not only here in the U.S. but also across the globe. Take into consideration the European Central Bank, as well as the [Bank of Japan]; there’s been an unprecedented amount of liquidity thrown at the credit markets and the sovereign debt markets over the course of the last 18 months,” he said. Furthermore, historically low interest rates in European nations such as Germany, as well as in Japan, are pushing U.S. yields down as well. Nick Note: as you are seeing they are slowly begrudgingly acknowledging the fact that we are in a deflation (global slowdown) its called a depression.
U.S. construction spending fell in July, hitting a nine-month low amid a steep decline in investment in private structures. The Commerce Department said on Friday that construction spending decreased 0.6 percent to $1.21 trillion also as investment on public sector projects fell. That was the lowest level since October 2016 and followed a downwardly revised 1.4 percent tumble in June. In July, spending on private nonresidential structures plunged 1.9 percent to the lowest level since April 2016.
The percent drop was biggest since October 2015 and followed a 1.6 percent fall in June. Investment in residential and nonresidential structures such as oil and gas wells is slowing as the boost from recovering oil prices fades. As a result, spending on private construction projects fell 0.4 percent in July after slipping 0.5 percent in June. Investment in private residential construction rose 0.8 percent. Outlays on public construction projects dropped 1.4 percent to their lowest level since February 2014. That followed a 4.4 percent plunge in June. Spending on state and local government
construction projects fell 1.4 percent in July, also dropping to the lowest level since February 2014. Federal government construction spending declined 1.2 percent to the lowest level since April 2016. Nick Note: what part of a economy sucking shut is so hard for the FEDS to understand? In the last 2 months construction spending has dropped a whopping 2% a disaster!
The report showed hourly pay rose 2.5% from August 2016 to August 2017, unchanged from the prior month.
About 100,000 homes were damaged by Hurricane Harvey, President Donald Trump’s Homeland Security Adviser Tom Bossert told reporters on Thursday. Speaking at the White House, Bossert said the administration would soon ask Congress for an initial round of emergency funding to aid relief efforts. He said a second request would be made after getting more information. Nick Note: This is a preliminary estimate and is bogus. Hurricane Katrina damaged a million housing unit (including apartments) and Harvey was much bigger. it will take many months to get the right numbers. Loses will be in the hundreds of billions AND less then 5% of the loses are covered by insurance insurance
Pending home sales fell for the fourth time in five months in July, according to data released Thursday. Pending home sales fell 0.8% in July, and June levels were downwardly revised, the National Association of Realtors reported.Pending home sales are down 1.3% from year-ago levels. The trade group again blamed low inventories for the weak sales pace. “The pace of new listings is not catching up with what’s being sold at an astonishingly fast pace,” said Lawrence Yun, NAR’s chief economist. Inventory was 9% lower than 12 months ago, Yun pointed out. Another factor the trade group won’t be as keen to point out — the increased prevalence of transactions outside conventional sales channels, which wouldn’t be picked up by NAR. “The National Association of Realtors periodically benchmarks its pending and actual sales data to attempt to account for this (and other) factors that can affect the accuracy of their data, but it is unlikely that even this benchmark process can fully deal with the effects of such market changes,” said Joshua Shapiro, chief U.S. economist at MFR Inc. A sale is listed as pending when the contract has been signed but the transaction has not closed. Nick Note a slow down is a slow down. Maybe its because people are broke, under employed and can’t afford houses at these bubble market prices.
The U.S. economy grew faster than initially thought in the second quarter, notching its quickest pace in more than two years, and there are signs that the momentum was sustained at the start of the third quarter. Gross domestic product increased at a 3.0 percent annual rate in the April-June period, the Commerce Department said in its second estimate on Wednesday. The upward revision from the 2.6 percent pace reported last month reflected robust consumer spending as well as strong business investment. Consumer spending, which makes up more than two-thirds of the U.S. economy, grew at a 3.3 percent rate, the fastest in a year, reflecting more spending on motor vehicles, cellphones, housing and utilities than previously estimated. Nick Note: This does not compute. Car sales were down by double digits, the single biggest component of retail sales. Eventuality ever populist dictator gets around to cooking the books.
Hurricane Harvey will be the most expensive natural disaster in U.S. history, AccuWeather said Wednesday, estimating the full cost at close to $160 billion. That would be similar to the combined cost of Hurricanes Katrina and Sandy, the weather service said in a report. The cost will shave 8/10 of 1% off GDP, said the report. “Business leaders and the Federal Reserve, major banks, insurance companies, etc. should begin to factor in the negative impact this catastrophe will have on business, corporate earnings and employment,” said Dr. Joel Myers, founder and chairman of AccuWeather. “The disaster is just beginning in certain areas.” The city of Houston, which took the brunt of the storm damage, will likely be uninhabitable for weeks and possibly even months, due to water damage, mold and disease-ridden water. The worst flooding is still to come as rivers and bayous continue to rise putting levees at risk of breaches, he said. Nick Note: Don’t be fooled by the banker assholes. Goldman predicts $30 billion…Why so low …. because they and the banker assholes are on the hook for the uninsured losses… they created this mess by loaning money to construction projects and mortgaged homes built on flood plains…. and to make matters worse they waived flood insurance. Now the floods came…….The loses will be over $300 billion and banks will go broke and the GDP will go negative. AND the bubble that is the Stock Market and the bubble real estate markets will ALL crash!
Once the immediate danger of a natural disaster subsides, and the loss of life, property damage, cost of rebuilding, and degree of insurance coverage can be assessed, attention generally turns to the economic effect. How will Hurricane Harvey affect the nation’s gross domestic product? You will no doubt hear assertions that the rebuilding effort will provide a boost to contractors, manufacturers and GDP in general. But before these claims turn into predictable nonsense about all the good that comes from natural disasters, I thought it might be useful to provide some context for these sorts of events. The destruction wrought by a hurricane and flooding qualifies as a negative supply shock. Normal production and distribution channels are destroyed or disrupted. Producers have to find less-efficient (i.e. more expensive) ways to transport their goods. The net effect is lost output and income, and higher prices.Over the years, I’ve observed a tendency among economists and traders to view such events through a demand-side prism. They see lost income translating into reduced spending on goods and services, which might even warrant some largesse from the central bank. Of course, that is precisely the wrong medicine. Nick Note: This hurricane will take 1% of the GDP. This is a enormous uninsured disaster. Anyone that has flood insurance and has had a flood knows its a sick joke. It takes money to rebuild and 80% of the WATER DAMAGE FLOOD loses are NOT NOT NOT insured!
When it comes to retirement savings, Americans are falling short: Most families have little or nothing stashed away. That being said, some are more prepared than others, and the wealthiest Americans have significantly more in savings. According to the Economic Policy Institute (EPI), which looked at the state of American retirement in a 2016 report, the top one percent of families had $1.08 million or more stashed away in 2013. That’s 216 times the median working-age family (50th percentile), which had only $5,000 saved in 2013. The 90th percentile family had $274,000 saved, which is 55 times the total of the median American family. The 80th percentile family had $116,000, or 23 times the median family.
The euro flexed its muscles against the dollar and other major currencies again on Monday, pushing closer to $1.20 as it traded at a 2 1/2-year high after European Central Bank President Mario Draghi held back last week from talking down the shared currency. Trading was thin, however, as a public holiday in global foreign exchange capital London quieted dealings and kept most European trading pairs confined to narrow ranges in early action. Nick Note: i am watching the Euro carefully. i want to add more positions in our Euro trade… Soon come! the budget should give us Euro’s at even better prices
Exports drop at faster pace than imports
WASHINGTON (MarketWatch) — An early look at U.S. trade patterns in July points to a wider deficit. The advanced trade gap in goods — services are excluded — widened by nearly 1.8% to $65.1 billion in July, the Commerce Department said Monday. Both exports and imports declined, but exports dropped at a faster pace. Despite the wider deficit, economists expect trade to be positive to growth in the third quarter. U.S. exports are being helped by a rebound in global growth and a weaker dollar. Economists note that the wider deficit in July follows a sharp narrowing in June, when the overall trade deficit slumped to an eight-month low, which should help smooth the quarterly impact.
A wider deficit is generally negative for gross domestic product, the official scorecard for the U.S. economy. Trade has been positive for growth in the first two quarters of the year after being a drag for most of the past three years. An advanced look at wholesale inventories, meanwhile, showed a 0.4% increase in July. And an early look at retail inventories reflected a 0.2% decline. Nick Note: Retailers are pairing down inventories reflecting slowing sales. And the trade deficit is growing which the GDP report will pick up as a negative it really is
Oil refineries are shutting down in the wake of rainfall and flooding from Hurricane Harvey. Shell has shut down its massive Deer Park refinery in southeastern Houston, among the largest in the United States with a crude oil capacity of 340,000 barrrels per day. The company said in a statement obtained by CNBC, “On Sunday, August 27, 2017, we made the decision to initiate a controlled shut down of the Deer Park refinery and chemical plant as a result of heavy rainfall and associated nearby flooding from Hurricane Harvey. Only essential personnel will stay on site through the end of the week.” Also on Sunday, Petrobras said it would shut down its Pasadena refinery, with a capacity of 110,000 barrels per day, thanks to “severe weather,” according to Dow Jones. The Bureau of Safety and Environmental Enforcement said on Sunday that almost 22 percent of current oil production in the Gulf of Mexico has been “shut-in,” based on reports from operators. That’s about 378,000 barrels per day, out of a total of 1.75 million in the region. Exxon Mobil on Friday shut down its plant in Baytown on the Houston Ship Channel, with a capacity of more than 500,000 barrels, according to the Wall Street Journal. Damage assessments are underway at other area refineries, Reuters has reported. Harvey, now a tropical storm hovering over the Houston area, could set a Texas rainfall record with over 50 inches of rainfall, said the National Weather Service. Nick Note: If Houston get 50 inches of rain you better stock up on gasoline.
Hedge fund managers have a dim view of the second half of 2017 after a solid start to the year, an industry survey released on Thursday showed. Fundraising, which had picked up during the first six months of 2017, will likely slow and investor sentiment is more negative now than it was a year ago, hedge fund managers told industry research company Preqin which polled 140 respondents in June 2017. “Fund managers do not feel optimistic about the months ahead,” Preqin researchers bluntly wrote in a survey titled “Hedge Fund Manager Outlook.” Sixty-nine percent of those surveyed said they expected flows into hedge funds to be flat or negative in the second half. Many state pension funds have felt pressure from retirees and pulled out some or all of their investments amid growing complaints about the industry’s high fees.
The view marks a sharp contrast with the first half, when managers finally had reason to cheer. Months of outflows ended when $25 billion in new money came into the $3.38 trillion industry during the first six months. In 2016, $110 billion in assets were pulled out. Nick Note: the Trump Bump is over. Now get ready for the TRUMP DUMP!
Orders for big-ticket U.S. goods fell by the largest amount in three years in July, reversing a strong gain in the prior month, according to government data released Friday. The Commerce Department reported that orders for durable goods fell 6.8% in July, led by a sharp drop in volatile aircraft. It was the biggest decline since August 2014. This followed a 6.4% gain in June.
orders excluding the defense sector fell 7.8% in July, the biggest drop in three years.
Durable goods are pricey items designed to last for several years, so growth signals enough confidence
Nick Note: Another straw on the Camels back. Every day we get more and more proof of the slaughter that is soon to come. Notice how the BAD signs are getting ignored or poo pooed. Well that poo poo shit can wipe you out if your not crefull
Federal Reserve Governor Jerome Powell said Friday that he couldn’t quite explain why inflation was running below the central bank’s 2 percent target. “Inflation is a little bit below target, and it’s kind of a mystery,” Powell said on CNBC in a live interview from Jackson Hole, Wyoming, where central bankers were gathered for an annual meeting. “You would have expected given that we’re getting tighter labor markets that we’d have a little higher inflation,” he said. “I think that what that gives us is the ability to be patient” regarding future rate hikes.. The latest read, released earlier this month, showed a 1.5 percent increase in the 12 months through June, little changed in pace from May. The Fed has a 2 percent target. Nick Note: This is called stuck on stupid. They have eyes that don’t see. Reality is we are in a deflation. And the FEDs rates increases are a freeging disaster. They keep looking at their mathematical models. And all they need to do is go for a walk down the street to see the suffering of the masses. When you go from a $50 a hour full time job to a $10 a hour part time job all kind of bad things happen. That is a deflation…. of course their data base show a increase in employment. When it actually is a increase in poverty! Reality is people are earning less, spending less and and prices as a result are dropping. Mystery solved!
JACKSON HOLE, Wyo. (Reuters) – President Donald Trump’s name was rarely mentioned as top central bankers and economists spent Friday mulling the fate of the global economy at a mountain lodge here. Fed chair Janet Yellen, European Central Bank President Mario Draghi and a host of researchers – amounted to a broad rebuttal of many of the ideas that carried Trump to office. “America First” economic nationalism were countered by Yellen’s reminder of how a deep financial crisis wrecked the economy a decade ago, and economic research arguing that China and Mexico are less to blame for job losses than forces like technology. “For some, memories of this experience may be fading – memories of just how costly the financial crisis was and of why certain steps were taken,” Yellen said in arguing for only modest changes to existing regulation. Draghi, , gave a broad call for free trade and stronger multilateral institutions of the sort Trump has criticized. “A turn toward protectionism would pose a serious risk for continued productivity growth and potential growth in the global economy,” Draghi said in a lunch address that included a defense of the World Trade Organization, the Group of 20 and other global groups he felt should be strengthened. They also agreed that Trump’s seemingly singular focus on trade agreements won’t fix the problem. “Renegotiating NAFTA and protectionist measures against China will not save jobs,” University of Pennsylvania professor Ann Harrison said, arguing that the decline in manufacturing jobs was due to labor-saving management and technologies. Nick Note: Trump is threatening to leave the NAFTA agreement. For all the wrong reasons. The lost jobs are due to technology. That is a BIG mistake. Renegotiate yes. Laving it will cost jobs and cost US businesses billions.
NEW YORK (Reuters) – Investors pulled $3.4 billion from U.S.-based stock funds during the latest week, marking the funds’ sixth straight week of withdrawals, according to Lipper data on Thursday.Taxable bond funds drew in $643 million during the week ended Aug. 23, their seventh straight week of inflows, the data showed. Nick Note: What is a trickle soon will be a flood as people flee the stock market in mass. The problem is the longer they wait the more they will lose. Another stock market wipe out.. and lord knows we had a lot of them is on the near horizon. its makes sense. Its the biggest bubble most overvalued market EVER and the wipe out will be of epic proportions. Just like in the last depression the coming stock market death plunge will take the entire US and global economy and finical system with it. Real Estate, Retail, Jobs and most significat 2/3 of ALL banks will wipe out.
Sales of previously-owned homes slid to their lowest level of the year in July. Existing-home sales ran at a seasonally adjusted annual rate of 5.44 million, the National Association of Realtors said Thursday. That was down 1.3% from a downwardly-revised June pace. While July’s pace was 2.1% higher than a year ago, it was the lowest since last August. The median sales price in July was $258,300, a 6.2% increase compared to a year ago. Inventory was 9% lower than a year ago, and at the current sales pace it would take 4.2 months to exhaust available supply. First-timers, whose share ticked up to 33% from 32% in June. That’s still substantially lower than the 40% market share they’ve historically commanded, however. In July, sales in the South rose 2.2%, and sales in the West were up 5%. Sales in the Midwest fell 5.3%, while in the Northeast, sales plummeted 14.5%. “The American housing market is stuck in its own kind of stagflation: Existing home sales have been flat since last fall, while home values are up more than 4% over the same period,” said Zilow Senior Economist Aaron Terrazas in a statement. Meanwhile, new construction, especially in the densely-packed Northeast has slowed. Builders broke ground on fewer homes in July, the Commerce Department said last week. Nick Note: Slower sales are slower sales… no matter the Bullshit spin. Reality is both new homes sales and existing home sales are plunging.
Rates for home loans sank to their lowest level of the year this week as inflation remained stubbornly low and fears about a possible government shutdown mounted, mortgage provider Freddie Mac said Thursday.The 30-year fixed-rate mortgage averaged 3.86% during the August 24 week, down three basis points to a nine-month low. The 15-year fixed-rate mortgage averaged 3.16%, unchanged during the week. The 5-year Treasury-indexed adjustable-rate mortgage averaged 3.17%, up one basis point. The 30-year fixed-rate mortgage followed the path of the 10-year Treasury yield TMUBMUSD10Y, +0.77% , which sank six basis points during the week, moving opposite of its price. The benchmark note’s yield recorded its biggest single-day selloff in over a month on Wednesday after President Donald Trump threatened to shut down the government if his Mexican wall isn’t funded. Demand for government bonds has remained strong as political uncertainty jangles investors’ nerves and as inflation continues to elude central banks around the world. Nick Note: The FED just does not get it. We are in a deflation where interest rates DROP. No mater what te FED does. Mortgage rates plunging, Bond rates falling again. The Trump bubble has come to a end. AND WE ARE IN A DEFLATION. Later rather then sooner the FED will Figure it out
New U.S. single-family home sales unexpectedly fell in July, dropping to their lowest in seven months
The Commerce Department said on Wednesday new home sales tumbled 9.4 percent to a seasonally adjusted annual rate of 571,000 units last month, the lowest level since December 2016. The percentage drop was the largest since August 2016 and confounded economists’ expectations for a 0.3 percent gain.
New home sales, which account for 9.4 percent of overall housing sales, are volatile month-to-month and are drawn from building permits. Still, sales declined 8.9 percent on a year-on-year basis.
Housing weighed on the economy in the second quarter, subtracting nearly three-tenths of a percentage point from gross domestic product. At July’s sales pace it would take 5.8 months to clear the supply of houses on the market, up from 5.2 months in June. A six-month supply is viewed as a healthy balance between supply and demand. The median price of a new home increased 6.3 percent in July from a year ago to $313,700. Nick Note: Another clear sign of the wipeout that is coming. I can’t wait! I have been begging you to get ride of ALL real estate.
HSBC Holdings Plc, Citigroup Inc. and Morgan Stanley see mounting evidence that global markets are in the last stage of their rallies before a downturn in the business cycle. Analysts at the Wall Street behemoths cite signals including the breakdown of long-standing relationships between stocks, bonds and commodities as well as investors ignoring valuation fundamentals and data. It all means stock and credit markets are at risk of a painful drop.
As traders look for excuses to stay bullish, traditional relationships within and between asset classes tend to break down.Despite the turbulent past two weeks, the CBOE Volatility Index remains on track to post a third year of declines.
“The cycle of real corporate profits has turned with the most expensive equity valuations among major markets, should worry investors in U.S. stocks.”
. The U.S. is in the mature stage of the cycle — 80 percent of completion since the last trough — based on margin patterns going back to the 1950s, according to Societe Generale SA.