• Category Archives Politics
  • 2017: A Review Of The Fed, Treasuries, Mortgages and Housing (Volatility and Velocity)

    This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.
    2017 has been an interesting year. Donald Trump was elected President and seated in January 2017. The Federal Reserve kept rates near zero with a massive balance sheet for almost all of Obama’s 8 years as President, then started to raise rates and unwind their massive balance sheet AFTER Trump was elected. Note the decline in M2 Money growth after Trump’s election.

    This post was published at Wall Street Examiner by Anthony B Sanders ‘ December 23, 2017.


  • The West Proves That Poland’s Loyalty Was Worthless

    Authored by Andrew Korybko via Oriental Review,
    Poland, one of the most loyal EU members, was just stabbed in the back by Brussels after the bloc initiated punitive Article 7 proceedings against it, proving that Warsaw’s unwavering loyalty to the West was worthless this entire time and thus giving Poles a reason to reconsider whether it’s time that they attempted to restore their long-lost Great Power status in Europe.
    Many Poles were shocked to hear that Brussels had begun the process to sanction their country, despite knowing in the back of their minds all along that this was a very probable scenario. The EU had been warning Poland for months now that it wouldn’t tolerate the ruling Law & Justice party’s (PiS) judicial reforms, labelling them as ‘anti-democratic’ in spite of the same envisioned changes already being in place in many Western European countries. All that PiS wants to do is make it so that judges are accountable to the people, not to one another, and break the backs of the communist-era clique that still controls the country’s courts. This is crucial in the modern context because PiS follows a EuroRealist ideology that aspires to improve Poland’s sovereign standing in the EU, a vision which is directly at odds with EU-hegemon Germany’s EuroLiberalism that instead wants all member states to be subservient to an unelected bureaucracy in Brussels.
    EuroRealism vs. EuroLiberalism
    The matter is an urgent one for Poland because PiS’ Civic Platform (PO) predecessors stacked the courts with their allies before leaving power after the ruling party won the first-ever post-communist electoral majority in the country’s history in 2015. PO’s former leader is the current President of the European Council Donald Tusk, and he and his organization are popularly regarded as Germany’s proxies in Poland. PiS, on the other hand, is allied with Hungary Prime Minister Viktor Orban’s Fidesz party, with which it shares a strident belief in the conservative ideology of EuroRealism. It had long been the case that EuroLiberalism was on the ascent in Europe ever since the end of the Cold War, but the 2008 global economic recession and the 2015 Migrant Crisis sparked a grassroots movement all across Central and Eastern Europe which has seen the rapid rise of EuroRealism.

    This post was published at Zero Hedge on Dec 23, 2017.


  • Zuesse: Americans Are Only Now Beginning To Learn They Live In A Dictatorship

    Authored by Eric Zuesse via The Strategic Culture Foundation,
    The first time when it became clear to me that I live in a dictatorship was in 2014 when reading, prior to its publication, the landmark (and still the only) scientific empirical study to address the question as to whether or not the United States federal Government is, authentically, a democracy – or, whether, alternatively, it’s instead more of a dictatorship, than a democracy.
    This study documented conclusively that America’s Government is the latter.
    So, on 14 April 2014, I headlined ‘US Is an Oligarchy, Not a Democracy, Says Scientific Study’. Subsequently, my editor linked it to the published article at the Journal where the study was published, Perspectives on Politics, from the American Political Science Association, and the full study can be read there.

    This post was published at Zero Hedge on Dec 22, 2017.


  • Doug Noland: Epic Stimulus Overload

    This is a syndicated repost courtesy of Credit Bubble Bulletin . To view original, click here. Reposted with permission.
    Ten-year Treasury yields jumped 13 bps this week to 2.48%, the high going back to March. German bund yields rose 12 bps to 0.42%. U. S. equities have been reveling in tax reform exuberance. Bonds not so much. With unemployment at an almost 17-year low 4.1%, bond investors have so far retained incredible faith in global central bankers and the disinflation thesis.
    Between tax legislation and cryptocurrencies, there’s been little interest in much else. As for tax cuts, it’s an inopportune juncture in the cycle for aggressive fiscal stimulus. And for major corporate tax reduction more specifically, with boom-time earnings and the loosest Credit conditions imaginable, it’s Epic Stimulus Overload. History will look back at this week – ebullient Republicans sharing the podium and cryptocurrency/blockchain trading madness – and ponder how things got so crazy.
    From my analytical vantage point, the nation’s housing markets have been about the only thing holding the U. S. economy back from full-fledged overheated status. Sales have been solid and price inflation steady. While construction has recovered significantly from the 2009/2010 trough, housing starts remain at about 60% of 2004-2005 period peak levels. It takes some time for residential construction to attain take-off momentum. Well, liftoff may have finally arrived. As long as mortgage rates remain so low, we should expect ongoing housing upside surprises. An already strong inflationary bias is starting to Bubble. Is the Fed paying attention?

    This post was published at Wall Street Examiner on December 23, 2017.


  • UMich Confidence Disappoints As Bipartisan Divide Weighs On Hope

    Hope is fading among Americans…

    Consumer confidence continued to slowly sink in December, with most of the decline among lower income households.
    Tax reform was spontaneously mentioned by 29% of all respondents, with a nearly equal split between positive and negative impacts on economic prospects.
    As usual, party affiliation was the dominant correlate of people’s assessments of the tax legislation.
    The long term outlook for the economy was most affected, with three-quarters of Republicans expecting a stronger economy and three-quarters of Democrats expecting a downturn.

    This post was published at Zero Hedge on Dec 22, 2017.


  • 2017 Year In Review

    Markets fiddle while Rome burns
    Introduction
    ‘He is funnier than you are.’
    ~David Einhorn, Greenlight Capital, on Dave Barry’s Year in Review
    Every December, I write a survey trying to capture the year’s prevailing themes. I appear to have stiff competition – the likes of Dave Barry on one extreme1 and on the other, Pornhub’s marvelous annual climax that probes deeply personal preferences in the world’s favorite pastime.2 (I know when I’m licked.) My efforts began as a few paragraphs discussing the markets on Doug Noland’s bear chat board and monotonically expanded to a tome covering the orb we call Earth. It posts at Peak Prosperity, reposts at ZeroHedge, and then fans out from there. Bearishness and right-leaning libertarianism shine through as I spelunk the Internet for human folly to couch in snarky prose while trying to avoid the ‘expensive laugh’ (too much setup).3 I rely on quotes to let others do the intellectual heavy lifting.
    ‘Consider adding more of your own thinking and judgment to the mix . . . most folks are familiar with general facts but are unable to process them into a coherent and actionable framework.’
    ~Tony Deden, founder of Edelweiss Holdings, on his second read through my 2016 Year in Review

    This post was published at PeakProsperity on Friday, December 22, 2017,.


  • A Merrier Christmas Sales Season

    Our theme that a new business cycle expansion began in 2016 is easy to see when looking at the renewed strength in the basic industrial and material sectors, which we have highlighted in past newsletters. Less obvious – and just as important however – is the persistent consumption trends since the 2008-2009 Great Recession.
    While consumers have been the backbone of most expansion cycles, they have been the only GDP component keeping our economy from a long economic winter this decade. Now that the industrial sector is making a comeback with a rare boost to the investment component of GDP, consumers are even more optimistic. Euphoria surged upon Trump’s election and boosted our merriment to finish 2016. It looks like 2017 will be even merrier as the National Retail Federation estimates record spending in their most recent survey after the subdued decade that preceded

    This post was published at FinancialSense on 12/22/2017.


  • “This is Groundhog Day”: Spanish Stocks Battered By Catalan Vote, Bitcoin Crashes

    Spanish stocks and the euro fell, while Spanish government bond yields hit their highest levels in over a month after Catalan secessionists delivered an unexpected blow to the government of Spanish PM Rajoy by winning the Catalan regional election. Meanwhile across the Atlantic, U. S. equity futures and the dollar rose on the last trading session before the Christmas holiday. The MSCI index of world stocks was flat.
    Europe’s Stoxx 600 Index traded sideways as Spain’s Ibex 35 underperformed, dropping as much as 1.6%. Spanish stocks dominated Europe’s biggest fallers, confirming analyst expectations that any shake-out from the Catalonia vote would be mostly confined to Spain. Spain’s bonds also fell along with peripheral European government debt, though bunds were little changed after a selloff this week drove yields to five-week highs. For those who missed it, Catalan separatist parties triumphed in regional elections, outperforming some polls and reigniting Spain’s political trauma. While the Euro has stabilized since, it suffered a mini flash crash in the illiquid aftermath of the Catalan election news, momentarily dipping to $1.1817 before trimming losses to last stand at $1.1853, down 0.2 percent.

    This post was published at Zero Hedge on Dec 22, 2017.


  • Are Tax Cuts Really Just Undemocratic Exploitation?

    Will Wilkinson, the vice president for policy at the Niskanen Center, does not like the tax bill just passed by Congress. Writing in The New York Times, he finds the legislation ‘notably generous to corporations, high earners, inheritors of large estates and the owners of private jets.’
    Wilkinson has discovered a surprising source for the legislation he dislikes so much. It is none other than the libertarian idea, promoted by Murray Rothbard and Ayn Rand, that taxation is theft. Under their theory of ‘absolute’ property rights, taxation was ‘morally criminalized.’ Democratic majorities, in this view, cannot override property rights.
    Wilkinson rejects this account. ‘The idea that there is an inherent tension between democracy and the integrity of property rights is wildly misguided.’ Democracy is a means for the poor and middle class to protect themselves from exploitative elites. Democracy is a relatively recent innovation; in pre-democratic states, ruling elites exploited the ‘lower orders.’ Those not in the ruling elite need the redistributive democratic state for protection.
    The fault is no doubt mine, but I find Wilkinson’s line of thought difficult to follow. How does the thought that taxation is morally wrong underlie a tax bill? If you reject taxation, would you not oppose taxes rather than enact new taxes? Perhaps what Wilkinson has in mind is this: in present circumstances, Republicans under nefarious libertarian influence could not proceed all the way to abolition of taxation. The best they could manage is not to tax the well-off as much as Wilkinson thinks appropriate.

    This post was published at Ludwig von Mises Institute on 12/21/2017.


  • Taking Turns With The B(L)S

    This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
    The worst aspect of this economy is by far the real effects pressed upon especially American workers. Of that there is no doubt, including young adults who would be working rather than ‘studying’ if the economy was at all like it has been described. The second worst part is watching politicians trade their descriptions for whomever occupies the White House. It does nothing to advance the cause of the American worker (or the global economy for that matter).
    In early 2015, within the recent shadows of the BEA’s Q4 2014 GDP report that estimated growth that quarter of better than 5%, Republicans were more and more criticized for their economic criticism. The left-leaning Washington Post in February 2015 wrote:
    A robust economy marked by a boom in jobs and a plunge in gas prices is threatening the longtime Republican strategy of criticizing President Obama for holding back growth and hiring, forcing the GOP to overhaul its messaging at the beginnings of a presidential campaign…
    The improvement may mark a turning point in the nation’s seven-year-long debate over the state of the economy. Obama came to office amid a financial crisis, promising to turn the economy around. Republicans repeatedly – and, in the 2014 midterm campaign, successfully – argued that he had fallen short, with an economy suffering slow growth and unnecessarily high unemployment.

    This post was published at Wall Street Examiner on December 21, 2017.


  • Trump Tax Reform Causing Panic in Europe & Asia

    While the American press keeps pushing the class warfare along with the Democrats, outside the USA there is a major panic taking place on a grand scale. I have been called into meeting in Europe and even in Asia all deeply concerned about the loss of competition with the United States due to the Trump Tax Reform. Naturally, the American press would NEVER tell the truth how cutting the corporate tax rate will upset the powers that be around the globe.
    A German study warns that its economy will be among the losers in the face of the Trump Tax Reform, which they warn will fuel the tax competition between America and Europe, but also the study leader, Christoph Spengel from the Economic Research Institute ZEW, came out and told Reuters:
    ‘In addition, competition between EU members for US investment will increase; Germany is the loser.’

    This post was published at Armstrong Economics on Dec 22, 2017.


  • Credit Card Debt Suddenly Surges 18% As U.S. Consumers “Pre-Spend” Tax Relief Savings

    With Republicans in Washington D. C. on the verge of passing their first major piece of legislation in the form of comprehensive tax cuts that will allow Americans across the income spectrum to keep a little more of their hard earned cash in 2018, it appears as though eager U. S. consumers may have already “pre-spent” their savings on their credit cards.
    As the folks at Gluskin Sheff point out, 13-week annualized credit card balances in the U. S. have gone completely vertical in the last few months of 2017 which should make for some great Christmas gifts for little Johnny and Susie…gifts that will undoubtedly find themselves tucked away in a dark closet, never to be seen again, by mid January.

    This post was published at Zero Hedge on Dec 21, 2017.


  • 3 (Mis)Statements About Tax Reform

    With the passage of the Tax Cut And Jobs Act on Wednesday, I wanted to address a few of the questions and misinformation currently circulating about the impact of tax cuts on the U. S. economy.
    Over the last couple of months, I have been repeatedly asked why I am not ‘enthusiastic’ about the ‘greatest tax reform’ since the Reagan era.
    First, let me be clear, I like getting a ‘tax cut.’ Under the new plan, and because I own several small businesses structured as limited liability corporations (LLC’s), I will potentially see a reduction in the amount of taxes I will pay next year.
    What I am opposed to, as a ‘fiscal conservative,’ is the ongoing expansion of our debts and deficits which are an inherent drag on the future prosperity of the country.
    For the last 8-years, Republicans have repeatedly blamed the previous Administration for doubling the national debt and further expanding dependency on the welfare and entitlement system. When the Republican-controlled Senate and House had the opportunity to live up to their promise of reducing spending and being more fiscally responsible, their first piece of major legislative action will add another $10 Trillion in debt over the next 10-years, increase the deficit to more than $1 Trillion, and double the size of an existing welfare program through increasing child tax credits.
    As the Committee for a Responsible Federal Budget just wrote:

    This post was published at Zero Hedge on Dec 21, 2017.


  • Another Liberal Governor Demands His State’s Pension Abandon Fiduciary Duties, Sell Fossil-Fuel Investments

    As if public pension managers around the country weren’t having enough difficulty digging themselves out of their massive $3-$5 trillion funding gap, the chorus of liberal governors suggesting they should recklessly abandon their fiduciary obligations to future retirees and choose investments not on their financial merits but rather based on the political preferences of clueless politicians is growing stronger by the day. As Pensions & Investments points out today, New York Governor Andrew Cuomo is the latest such politician to jump on the bandwagon after suggesting that the New York State Common Retirement Fund should “divest from all fossil-fuel holdings.”
    New York Gov. Andrew Cuomo on Tuesday proposed that the New York State Common Retirement Fund halt all new investments “with significant fossil-fuel-related activities” and prepare a plan to divest existing fossil-fuel investments.
    “New York has made incredible strides in securing a clean energy future for this state … yet the Common Fund remains heavily invested in the energy economy of the past,” Mr. Cuomo said in a news release.
    “Moving the Common Fund away from fossil-fuel investments will protect the retirement savings of New Yorkers,” he said. “This proposal lays out a roadmap for the Common Fund to take responsible steps to divest from its fossil-fuel holdings.”

    This post was published at Zero Hedge on Dec 21, 2017.


  • Treasury Curve Inverts As Trump Slams Dems For Forcing Shutdown

    House Democrats want a SHUTDOWN for the holidays in order to distract from the very popular, just passed, Tax Cuts. House Republicans, don’t let this happen. Pass the C. R. TODAY and keep our Government OPEN!
    — Donald J. Trump (@realDonaldTrump) December 21, 2017

    Early in the week, anxiety over a government shutdown appeared to ebb as the short-term Treasury Bill market began to ‘normalize’, but following the tax-reform ‘win’, President Trump is accusing Democrats of trying to force a government shutdown…

    This post was published at Zero Hedge on Dec 21, 2017.


  • BOOM: AMERICAN COMPANIES RAIN DOWN CASH ON EMPLOYEES IN RESPONSE TO TRUMP TAX CUTS

    After Republicans passed sweeping tax reform Wednesday, some of the largest employers in America began dropping cash bombs on their employees. The businesses also pledged to invest hundreds of millions of dollars into the American economy.
    The GOP tax bill cuts the corporate tax rate nearly in half.
    Here is a round up, so far, of companies that are celebrating the tax cuts by enriching their employees.
    1. AT&T

    This post was published at The Daily Sheeple on DECEMBER 21, 2017.


  • Are the EU’s Days Numbered?

    My recent meetings in Brussels reveals some concern what happens when Merkel loses power? Schultz is calling for the complete federalization of Europe – the United States of Europe as he puts it. The power is starting to slip between their fingers and as Italy approaches its confrontation with the EU in the next elections, there too we see the Social Democratic ruling party PD is losing its support in the same manner as the SPD in Germany.
    Now with only a few weeks before the expected dissolution of the Italian parliament before the new elections, the PD is already down to only a 23.4% approval rating. The Socialist agenda is losing around the world just as Hillary lost in the States as did Schultz in Germany.

    This post was published at Armstrong Economics on Dec 21, 2017.


  • Three Cheers for the GOP Tax Plan

    Last night the Senate passed the Republican proposed tax plan, a major political victory for Trump and the GOP-controlled Congress.
    At the Mises Wire, we have featured numerous articles pointing out many of the fallacies involved with the general debate on the issue of “tax reform.” For example, the absurdity of “revenue neutral” reform, the danger of raising rates through eliminating loop hopes, the fallacy of trying to address the deficit through eliminating deductions on state and local taxes, and the general notion that tax breaks can be equated to tax subsidies. While the Republican bill does fall for some of these traps, the result of the bill as a whole is a genuine reduction in the tax burden for the majority of Americans. That is always something worth celebrating.
    There are additional benefits to be found within the bill as well.
    For example, the elimination of the Obamacare individual mandate is a small, but significant, step to improving the American healthcare system. As I noted in March, when Paul Ryan’s attempt at Obamacare reform failed, the rise of direct primary care and other market solutions meant that the best thing the GOP could do is simply provide as much freedom as possible for Americans to opt out of government-managed insurance markets:
    Given that this is happening naturally on the market already, the legislative focus for those in Washington concerned about American healthcare should be preventing any future laws and regulations that would destroy this model going forward. Further, rather than trying to completely overhaul Obamacare, simply eliminating the individual mandate tax and allowing Health Savings Accounts to be used for healthcare membership would be subtle ways of empowering the market to revolutionize American medicine. This should be coupled with real tax cuts, not ‘revenue neutral reform’ to help Americans keep their own hard-earned money to help pay for it.

    This post was published at Ludwig von Mises Institute on 12/20/2017.


  • House Passes Trump Tax Plan For Second Time

    Update: In a vote that almost exactly mirrored yesterday’s results, the House once again passed the final Trump tax bill – formerly known as the conference agreement on the Tax Cuts and Jobs Act – by a vote of 224-201.
    As the Financial Times pointed out, “the vote gives the president a longed-for legislative victory to carry into his second year, one whose scope matches the radical reforms of healthcare and Wall Street regulation achieved by his predecessor Barack Obama.”
    But the tax bill is already as divisive as Mr Obama’s achievements, ensuring 2018 will be dominated by electoral sparring over whether it will help middle-class families, as Republicans claim, or will deliver further riches to the wealthy and powerful, as Democrats say.
    Mr Trump said at a ‘celebration’ cabinet meeting that people would begin seeing the results of the tax bill in February when adjustments to their after-tax income started appearing in pay checks. ‘We got it done,’ he said, thanking congressional leaders.


    This post was published at Zero Hedge on Dec 20, 2017.