• Tag Archives Congress
  • BAT Is Dead: Republicans Kill Border Adjustment Tax

    The Trump fiscal agenda – which these days really means tax reform – may be dead, but that does not mean it can’t reemerge as a zombie every now and then. That’s precisely what happened moments ago when Paul Ryan just announced that after months of speculation whether border adjustment tax will or won’t be implemented to help offset Trump’s proposed tax cuts, it is now officially dead.
    “BIG SIX” REPUBLICANS IN CONGRESS, TRUMP ADMINISTRATION ANNOUNCE BORDER TAX PROVISION HAS BEEN SET ASIDE IN ORDER TO ADVANCE TAX OVERHAUL A statement Thursday from the so-called Big Six – Ryan, Brady, White House economic adviser Gary Cohn, Treasury Secretary Steven Mnuchin, Senate Majority Leader Mitch McConnell and Senate Finance Committee Chairman Orrin Hatch – said due to the unknowns associated with the border-adjusted tax, the group ‘had decided to set this policy aside in order to advance tax reform.”

    This post was published at Zero Hedge on Jul 27, 2017.

  • U.S. Mega Banks Are This Close to Breaking Their Profit Record

    The last time big U.S. banks made so much money, the financial world was heading toward the brink of collapse. This time, it’s stiff regulation that’s in danger.
    Ten of the nation’s biggest lenders including JPMorgan Chase & Co. and Bank of America Corp. together made $30 billion last quarter, just a few hundred million short of the record in the second quarter of 2007, according to data compiled by Bloomberg. The achievement comes just as the industry’s long campaign against post-crisis rules finds traction with the Trump administration.
    Banks have been decrying regulations aimed at curbing risk, blaming them for hurting capital markets and discouraging lending to consumers and companies. President Donald Trump, echoing those complaints, has asked regulators to find ways to ease off. But in this year’s second quarter, banks saw their profits propped up by lending operations even after a surge in revenue from more volatile trading units subsided.
    ‘It shows that the legislation we passed in no way retarded the ability of the banks to make money,’ said Barney Frank, the former congressman whose name is on the 2010 law tightening industry oversight. Banks are supporting the economy, he said. And ‘very specifically, it refutes Trump’s claim that we cut into lending. How do banks make record profits if they can’t lend — especially when they’re down in trading?’
    The second quarter wasn’t a fluke. Even looking at the past 12 months, profits are still near the same level as 2007.

    This post was published at bloomberg

  • Technical Scoop – Weekend Update July 23

    It was another quiet week for the markets even as the S&P 500 hit new all-time highs less than 25 points from 2,500. Investor focus continued to be on Trump and the goings-on at the White House. For months, years even, Republicans and Trump vowed that there would be health care reform by ending Obamacare and bringing in their own version. Tax reform was another part of the agenda that was top in investors’ minds. By week’s end, health reform lay in tatters and tax reform is becoming doubtful. Despite a number of iterations of repeal-and-replace Obamacare, in the end they did not satisfy enough Republican senators to push it through the Senate. It went either too far or not far enough. In desperation, they went for a straight repeal and that one proved to be dead on arrival.
    After six months of Republicans controlling the White House, Congress, and the Senate they have not been able to pass one piece of major legislation. While seemingly it has not weighed on the stock markets, it does appear to be weighing on the US Dollar as the US$ Index sunk to new 52-week lows. As to tax reform, well, that appears to be going nowhere either and deadlines loom at the end of the fiscal year September 30, 2017. The debt ceiling is looming once again as the Treasury is poised to run out of money in early October – unless, of course, they agree to extend it once again. The debt ceiling debate is becoming increasingly rancorous, but not between Republicans and Democrats – instead, between Republicans and Republicans. The White House is on one side and Congress on the other, with one wanting and recognizing the need to raise the debt ceiling while the other wants to slam on the brakes for their own agenda.
    Things continue to heat up on the Russian investigation front. Donald Trump Jr., Paul Manafort, and Jared Kushner, the principals at the heart of the Russian meeting that was initially denied, are due to meet a Senate judiciary committee on July 26. Things continue to whirl around the investigation with constant implied threats from the White House leveled at special counsel Robert Mueller if the investigation expands into Trump’s finances. It ought to be interesting given Mueller’s authority especially if it clashes directly with the President. The President also slammed his Attorney General for recusing himself in the Russian investigation and if he had known that in advance, Jeff Sessions would never have been appointed. Something about throwing your report under the bus it seems. Finally, the President said that since he has the power to grant pardons he could pardon himself. Nothing said about the ensuing constitutional crisis.

    This post was published at GoldSeek on 23 July 2017.

  • How Accurate Are CBO Forecasts? The Answer In Two Charts

    Even as the Republican effort to repeal Obamacare in recent months has suffered one humiliating loss after another, at the hands of none other than the very same Republican party, one government agency has been repeatedly scapegoated for the GOP’s failure to come up with a credible and passable alternative to Obamacare: the Congressional Budget Office. Then agan, while hardly an excuse for their sheer incompetence, the GOP is certainly right to point the finger at the CBO’s track record of “forecasts”, one which we have mocked here on occasion after occasion after occasion.
    And here, in just two charts, is why when it comes to matters of predictive accuracy, the CBO is almost as bad as the Federal Reserve.

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

  • Prepare for a 30-year bull market

    Heading into 2017, Wall Street was excited by the prospect of a U. S. president who sympathized completely with business. His promised tax and healthcare reforms were widely cheered by investors in the wake of his election. Yet the Congress has so far failed to deliver on those promises and investors are no longer giving the Trump administration a free pass based on the assumption that tax breaks are on the way.
    This loss of enthusiasm is reflected in the long periods of dullness the market has experienced since March. While the bull market leg which began with the November election remains intact, the market has proceeded in a halting fashion and has gradually lost some of its erstwhile momentum. The following graph illustrates this principle.
    Along these lines, a number of Wall Street economists have expressed the belief that if Trump’s promised reforms fail to materialize, the stock market’s current valuation precludes a continuation of the bull market. There are a number of reasons why this statement is likely false, however, not the least of which is that the market doesn’t need a political excuse to rally. Indeed, if that were the case then China’s equity market, in view of the country’s Communist government, would forever be stuck in neutral. The pace of innovation and productivity in countries with a market-driven economy is consistently high enough to always provide some justification for higher valuations and stock prices, regardless of the political climate.

    This post was published at GoldSeek on 21 July 2017.

  • Congress’s Radical Plan to End Illegal Money

    What Constitution?
    One of the many downfalls of being the United States Secretary of the Treasury is the requirement to place one’s autograph on the face of the Federal Reserve’s legal tender notes. There, on public display, is an overt record of a critical defect. A signature endorsement of a Federal Reserve note by the Treasury Secretary represents their personal ratification of unconstitutional money.
    There it is, plain as day. The former treasury secretary clearly put his signature on money with highly dubious legal credentials. Evidently he must have found it agreeable though. [PT]
    If you recall, Article I, Section 8, of the U. S. Constitution empowers Congress – not the Federal Reserve – to coin money and regulate its value. What’s more, Article I, Section 10, specifies that money be coined of gold and silver and cannot consist of bills of credit – such as paper legal tender notes.
    As far as we can tell, paper dollars are illegal money on two counts. First, they’re issued by the Federal Reserve. Second, they’re bills of credit with no ties to gold or silver.
    What gives? Isn’t the U. S. Constitution supposed to be the supreme law of the land? Don’t be silly. Anyone with half their wits about them knows the U. S. Constitution has been reduced to a mere artifact of history. Does this bother you?

    This post was published at Acting-Man on July 21, 2017.

  • Well Well, Look What We Have Here…

    “The ObamaCare reform fiasco looks like a tipping point toward a strain of toxic political paralysis that might literally kill the government as we’ve known it. Over the many months of debate, congress never even got around to raising the salient issue: that the 18-or-so-percent of the economy ‘health care’ represents consists largely of outright racketeering.”
    Oh, and I believe it’s now up to 19% and change, soon be 20.
    And somewhere not far from there the entire mess comes apart.
    3+% real GDP expansion cannot be achieved when one dollar in five is literally stolen for an alleged “service” that is worthless at best and kills you at worst.
    Let us not forget that to consume you must first produce, or convince someone you will in the future (he then lends you what you spend, of course.) The latter has been made easy over the last 30 or so years (since the early 1980s) by a generally-declining interest rate environment.
    You take a million dollar loan @15% interest and you have to come up with $150,000 a year or the come take your property.
    But when the rate falls to 10%, you can borrow a million and a half, spending the other $500 large.

    This post was published at Market-Ticker on 2017-07-21.

  • Congress’ Radical Plan To End Illegal Money

    Authored by MN Gordon via EconomicPrism.com,
    One of the many downfalls of being the United States Secretary of the Treasury is the requirement to place one’s autograph on the face of the Federal Reserve’s legal tender notes. There, on public display, is an overt record of a critical defect. A signature endorsement of a Federal Reserve note by the Treasury Secretary represents their personal ratification of unconstitutional money.
    If you recall, Article I, Section 8, of the U. S. Constitution empowers Congress – not the Federal Reserve – to coin money and regulate its value. What’s more, Article I, Section 10, specifies that money be coined of gold and silver and cannot be bills of credit – such as paper legal tender notes.
    As far as we can tell, paper dollars are illegal money on two counts. First, they’re issued by the Federal Reserve. Second, they’re bills of credit with no ties to gold or silver. What gives? Isn’t the U. S. Constitution supposed to be the supreme law of the land?
    Don’t be silly. Anyone with half their wits about them knows the U. S. Constitution has been reduced to a mere artifact of history. Does this bother you?
    It bothers us. To be clear, we don’t take the recline and flail of the U. S. Constitution lightly. But we also can’t ignore the pervasive truth of its sad state.
    Of course, the dollar has other problems besides the major technicality of being illegal. For example, its payment qualities are suspect.

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

  • Why the Gold Price Could Continue Beyond Today’s 4-Week High

    This is a syndicated repost courtesy of Money Morning – We Make Investing Profitable. To view original, click here. Reposted with permission.
    Over the last week, the gold price has bounced back above the $1,200 threshold. With the metal currently trading at $1,251, it’s set to post a weekly gain of 1.7%. The price of gold’s rally this week to its highest level since June 23 came mostly on the back of comments from Mario Draghi, president of the European Central Bank (ECB). Draghi said during the bank’s policy meeting on Thursday that the ECB had not yet formalized plans to roll back monetary policy stimulus.
    The Bank of Japan (BoJ) also said its inflation expectations were not meeting targets, with the current 1.1% inflation rate below the previous forecast of 1.4%. The BoJ noted that a dovish monetary policy would persist for some time.
    And that echoed what U. S. Federal Reserve Chair Janet Yellen said in her Congressional testimony last week, when she admitted the global inflation slowdown could call for an ‘adjustment’ to the Fed’s policy.

    This post was published at Wall Street Examiner by Peter Krauth ‘ July 21, 2017.

  • One Trader Warns – Next Week’s FOMC Meeting May Not Be As “Benign” As The Market Believes

    If ever there was a chance for The Fed to ‘sneak’ in a rate-hike while everyone is distracted, it’s next Wednesday as Trump Jr testifies to Congress. As former FX trader Richard Breslow remarks, The Fed “woulda, coulda, shoulda [hike] next week… but certainly won’t,” noting that if they are truly concerned about the “stretched valuations” taking an extended vacation through the summer is the worst thing The Fed can do…
    Via Bloomberg,
    It feels strange but, curiously, not entirely pointless, to suggest the Fed do something that there’s zero chance they will even contemplate. I’m talking about next week’s FOMC meeting and using it as an opportunity to be bold. This is mostly a meeting they hold in mid-summer to justify the fact that no one has any desire to be in Washington DC in August, and September is a long way off.
    But taking an extended holiday is precisely what they oughtn’t do. The only thing it will accomplish is forcing, as well as encouraging, investors to carry on with the types of trades every right-minded observer thinks has a large element of recklessness. Which is just a somewhat less nice word for ‘financial conditions remain benign.’

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

  • Healthcare Plan Collapse Rekindles Doubts About Trump Economic Agenda

    The dollar plunged after Republicans in Congress abandoned their plan to overhaul Obamacare this week.
    The plan to ‘repeal and replace’ the Affordable Care Act collapsed after Senators Mike Lee and Jerry Moran joined fellow Republicans Susan Collins and Rand Paul opposing it. In fact, ‘repeal and replace’ was a misnomer. The Republican plan kept many key elements of Obamcare in place. It was more of a Republican revamp than any kind of repeal.
    Nevertheless, pundits and analysts widely viewed the failure to get healthcare reform done a major stumble for Republicans, and it seems to cast doubt on the Pres. Trump’s ability to advance his ambitious economic agenda. Reuters put it this way:

    Republican’s healthcare failure spelled uncertainty for Trump’s other top agenda items of tax reform and an infrastructure overhaul, leaving the president without any major legislative accomplishments six months into his tenure.’
    The announcement of the breakdown in Congress rattled financial markets and sent the dollar to a 10-month low. Gold and silver both saw gains.

    This post was published at Schiffgold on JULY 19, 2017.

  • The Fed Has Hit the ‘Pause’ Button

    ‘Last week the Fed raised the white flag on further rate hikes. There won’t be any for the foreseeable future.
    No rate hikes are coming at the July, September or November Fed FOMC meetings. The earliest rate hike might be at the December 13, 2017 FOMC meeting, but even that has a less than 50% probability as of today. I’ll update those probabilities using my proprietary models in the weeks and months ahead.
    The white flag of surrender came in two public comments by two of the only four FOMC members whose opinions really count. The four voting members of the FOMC worth listening to are Janet Yellen, Stan Fischer, Bill Dudley and Lael Brainard.
    Yellen and Brainard made public remarks last week. Yellen’s testimony before Congress received the usual saturation coverage. Brainard’s remarks to an academic conference at Columbia University received far less coverage, but were perhaps far more important in terms of the impact of Fed policy on markets including gold.
    These comments by the two FOMC members should be put in the context of my model forecast for Fed behavior. I expect the Fed to raise rates 0.25% at FOMC meetings every March, June, September and December from now until mid-2019 until the Fed’s policy rate reaches a ‘normalized’ level of 3.25%.

    This post was published at Wall Street Examiner on July 18, 2017.

  • China’s Economy Charges On as Officials Target the Risk ‘Gray Rhino’

    China’s economy grew faster than expected in the second quarter, putting the nation on track to meet its growth target this year and giving backing to officials in their campaign to corral oncoming financial risk.
    Data showing that the world’s second-largest economy expanded 6.9 percent in the second quarter, matching the pace from the first three months, was released hours after the Communist Party’s People’s Daily newspaper warned of potential “gray rhinos” — highly probable, high-impact threats that people should see coming, but often don’t.
    In China’s case it’s the relentless buildup of risks caused by the debt-fueled investment that’s contributing to growth, a development tackled by a major meeting of top leaders in Beijing at the weekend. Until now, regulators have homed in on financial-sector excesses; that probe is now widening to debt in the broader economy, a shift that prompted a sell-off in domestic stocks.
    China is grappling with how to ensure annual growth of at least 6.5 percent this year while reining in financial sector risks ahead of a twice-a-decade leadership transition this fall at the 19th Communist Party Congress. A regulatory crackdown pushed up money market rates and helped damp down speculative lending while at the weekend President Xi Jinping warned regulators that failing to spot and dispose of risks in a timely manner would amount to a “dereliction of duty.”
    “The gray rhinos are containable,” said Liu Ligang, chief China economist for Citigroup Inc. in Hong Kong. But the economy is “still relying quite a lot on investment and credit and overall financial leverage is still building up. There’s no doubt that China’s debt overhang is still a serious challenge.”

    This post was published at bloomberg

  • What The Senate’s Healthcare Fiasco Means For Trump Policies: Goldman Explains

    Now that Trump’s hope to replace Obamacare is dead indefinitely following last night’s mini rebellion in the Senate , and only the possibility of repeal remains although even that is not likely, pundits are asking what this means for Trump’s overall agenda, and whether it will accelerate or further delay (or block outright) the implementation of any other Trump proposal, chief among which is budget resolution, increasing the government debt ceiling and passing tax reform. Regarding the latter, the stakes are especially great because as Bank of America explained earlier, “there is a general consensus that without tax reform the GOP could lose their majority in the House.”
    Still, for a market that has gotten used to ignoring everything out of Washington, if not virtually all newsflow, the reaction will likely be delayed because as BMO’s Ian Lyngen writes, investors will likely ‘start looking at the issue more closely in the coming weeks, but don’t expect any visceral market response till the 11th hour from either Congress or the markets.” Still, they warn that ‘the broader implications of this health-care failure may reverberate a bit more over time than markets may be currently assuming.”
    So while we wait for the market response, what happens next? Overnight Goldman’s chief political analyst Alec Phillips writes that while Congress may still pass a health bill, it just won’t be this one and notes that the “enactment of much more narrowly-focused health legislation is still possible this year, in light of problems facing the individual insurance market for 2018.”

    This post was published at Zero Hedge on Jul 18, 2017.

  • Ron Paul: You Can’t Run a World Like This (Video)

    Last month, Federal Reserve chair Janet Yellen made a bold prediction, saying an economic meltdown like the one we saw in 2008 will not likely happen again ‘in our lifetime,’ because banks are ‘very much stronger.’
    Ron Paul begs to differ.
    In fact, during an interview on World Alternative Media, the former congressman said Yellen’s comments should probably make us more than a little nervous because, ‘central bankers are always wrong on their predictions – especially before a bust.’
    What she says shouldn’t reassure anybody.

    This post was published at Schiffgold on JULY 18, 2017.

  • Brodsky: This Is A Red Flag Warning

    Red Flag Warning
    Two identifiable dynamics may signal significant market shifts imminently:
    1. The US debt ceiling will be debated soon and signs point towards a messy outcome.
    2. Recent economic data have been weak, confirming our thesis that US economic growth is slowing and will not be reversed until a recession is acknowledged.
    Debt Ceiling
    Excessive debt has a way of catching up with people and institutions, and the first true test for the US government may be at hand. Congress was expected to raise the debt ceiling by October or else Treasury could not fund all the government’s programs and current obligations. Yet talk of Trump tax reform in 2016 may have given taxpayers incentive to defer their liabilities. As a result, Treasury received about 3 percent less in revenues than expected, accelerating the timetable to debate and raise the debt ceiling. Progress on raising the ceiling will unlikely be made in August, as Congress is in recess.

    This post was published at Zero Hedge on Jul 17, 2017.

  • In Case You Missed It – July 15, 2017

    This is a syndicated repost courtesy of Danielle DiMartino Booth – Money Strong, LLC. To view original, click here. Reposted with permission.
    Janet Yellen headed for the Hill this past week for what could be her last appearance before Congress. Of course, that prompted me to grace sweltering Manhattan with my presence to chime in and opine on her viewpoint of the world. As you will see in more than a few of the links below, Yellen’s confusion left me scratching my head. The job market continues to strengthen and wage growth still can’t get off the floor. The economy has withstood as much as it can in the form of interest rate hikes and it’s time to get busy shrinking the balance sheet ‘appreciably,’ to borrow her term? ‘Egregious and unacceptable’ practices have occurred on her watch and yet no action has been taken. The sensation was akin to being swallowed whole by inconsistency itself. If you have a moment, enjoy my jaunt across media outlets. Some are longer than others. But those asking the questions had done their homework and that’s always a plus for the gal on the receiving end.

    This post was published at Wall Street Examiner by Danielle DiMartino Booth ‘ July 15, 2017.

  • Ron Paul Warns “Central Bankers Are Always Wrong…Especially Before A Bust”

    The global dollar-based monetary system is in serious jeopardy, according to former Texas Congressman Ron Paul. And contrary to Fed Chairwoman Janet Yellen’s assurances that there won’t be another major crisis in our lifetime, the next economy-cratering fiat-currency crash could happen as soon as next month, Paul said during an interview with Josh Sigurdson of World Alternative media. Paul and Sigurdson also discussed false flag attacks, the dawn of a cashless society and the dangers of monetizing national debt.
    Paul started by saying Yellen’s attitude scares him because “central bankers are always wrong – especially before a bust.”
    ‘There is a subjective element to when people lose confidence, and when is the day going to come when people realize we’re dealing with money that has no intrinsic value to it, we’re dealing with too much debt, too much bad investment and it will come to an end. Something that’s too good to believe usually is and it usually ends. One thing’s for sure, we’re getting closer every day and the crash might come this year, but it might come in a year or two.’ ‘The real test is can it sustain unbelievable deficit financing and the accumulation of debt and it can’t. You can’t run a world like this, if that were the case Americans could just sit back and say ‘hey, everybody wants our money and will take our money.’

    This post was published at Zero Hedge on Jul 15, 2017.