11 Reasons Why U.S. Economic Growth Is The Worst That It Has Been In 3 Years

Those that were predicting that the U. S. economy would be flying high by now have been proven wrong. U. S. GDP grew at the worst rate in three years during the first quarter of 2017, and many are wondering if this is the beginning of a major economic slowdown. Of course when we are dealing with the official numbers that the federal government puts out, it is important to acknowledge that they are highly manipulated. There are many that have correctly pointed out to me that if the numbers were not being doctored that they would show that we are still in a recession. In fact, John Williams of shadowstats.com has shown that if honest numbers were being used that U. S. GDP growth would have been consistently negative going all the way back to 2005. So I definitely don’t have any argument with those that claim that we are actually in a recession right now. But even if we take the official numbers that the federal government puts out at face value, they are definitely very ugly…
Economic growth slowed in the first quarter to its slowest pace in three years as sluggish consumer spending and business stockpiling offset solid business investment. Many economists write off the weak performance as a byproduct of temporary blips and expect healthy growth in 2017.
The nation’s gross domestic product – the value of all goods and services produced in the USA – increased at a seasonally adjusted annual rate of 0.7%, the Commerce Department said Friday, below the tepid 2.1% pace clocked both in the fourth quarter and as an average throughout the nearly 8-year-old recovery. Economists expected a 1% increase in output, according to a Bloomberg survey.

This post was published at The Economic Collapse Blog on April 28th, 2017.

What Gary Cohn And Steve Mnuchin Really Said About Trump’s Canadian “Trade War”

For the past two days everyone has been scrambling to try to figure out the reasoning behind Trump’s latest flip-flop on NAFTA. Speculation and rumors behind the controversial flip, which is sure to annoy some of his most ardent supporters, have ranged from Trump being convinced by Wilbur Ross that it would result in massive jobs losses in key battleground states to very convincing calls directly to Trump from Mexican President Pena Nieto and Canadian Prime Minister Justin Trudeau. But, a new revelation from the Wall Street Journal seems to suggest that former Goldmanites Gary Cohn and Steve Mnuchin, the globalist faction of Trump’s White House, have been pulling the strings on trade behind the scenes from day 1.
Per the WSJ, the conventional story behind Trump’s NAFTA flip goes something like this:
As rumors spread of the possible action, Mexican President Enrique Pea Nieto called the president urging him not to pull out of the accord. ‘Let me think about it,’ Mr. Trump said. Within a half hour a call came in from Canadian Prime Minister Justin Trudeau with a similar request. After the talks, Mr. Trump was convinced ‘they’re serious about it and I will negotiate rather than terminate,’ the president said in an interview with The Wall Street Journal on Thursday.

This post was published at Zero Hedge on Apr 28, 2017.

Tesla’s Musk Aspires To Create A “Counter For Skynet”

Authored by Soren K Group via MarketSlant.com,
Elon Musk wants to hook up your Brain to Neuralink’s Computer
We can’t help but note the lower Tesla Stock goes, the more brilliant and long term Elon Musk’s ideas become. We have made our opinion clear several times on Musk’s corporate shell game. But we are not naive. To short Tesla is like shorting the Government. TBTF as pet projects go. His new one is NeuraLink . The company was created to battle the Terminator of sorts. Don’t believe us? Here’s Musk from futuism.com’s interview.
Ultimately, Musk fears that AI will, one day, overtake humanity. Over the years, this fear has pushed Musk to make moves that will help ensure that our artificial intelligences don’t turn humans into second class citizens. Here’s a direct quote from that interview (link embedded in story):
‘It’s best to try to prevent a negative circumstance from occurring than to wait for them to occur and then be reactive.’ -Musk Investors in Musk’s current ventures may not be particularly pleased to learn that the inventor has found yet another distraction from his already ambitious, and in the case of Tesla, lofty and overvalued goals.

This post was published at Zero Hedge on Apr 28, 2017.

Puerto Rico Takes First Steps Toward Bankruptcy-ish Filing

After what has been the slowest of slow-motion train wrecks, Puerto Rico’s federal overseers have finally taken the inevitable first step toward considering the use of bankruptcy-ish proceedings, known as Title III, to allow the island to escape it’s $70 billion debt burden.
Last year Puerto Rico was granted a 1-year temporary stay, courtesy of the so-called Promesa Act passed by Congress, that allowed protection from creditor proceedings in order to allow the debt-burdened island to negotiate a consensual agreement with bondholders. That said, the stay expires on Monday and the government has struggled to make headway in negotiations with creditors.
With $70 billion of debt outstanding, Puerto Rico’s debt restructuring will be the largest ever for the $3.8 trillion municipal-bond market and is also expected to be among the most complicated as well with the commonwealth’s debt issued by more than a dozen agencies and backed by sometimes competing repayment pledges.
As Bloomberg notes, the board also took steps to wind down the island’s government development bank which was used to finance multiple public projects but also defaulted on debt obligations.
Separately, the board approved winding down Puerto Rico’s government development bank, which financed public works on the island until it defaulted during the crisis, and increasing water rates as part of a plan to steady the Puerto Rico Aqueduct and Sewer Authority. Details of those fiscal proposals haven’t yet been released.

This post was published at Zero Hedge on Apr 28, 2017.

Don’t Show President Trump This Chart

It’s been (almost) 100 days and stocks are higher, hype is at its peak, hope remains higher-ish… there’s just one problem, real economic data is collapsing…

As today’s Q1 GDP proved, relying on ‘hope’ and ‘soft’ data to lift a ‘real’ economy is simply a false narrative…

This post was published at Zero Hedge on Apr 28, 2017.


Gold: $1266.10 UP 2.40
Silver: $17.21 DOWN 11 cents
Closing access prices:
Gold $1268.70
silver: $17.21!!!

This post was published at Harvey Organ Blog on April 28, 2017.

Are Fed Officials Throwing Main Street Under The Bus?

Via Birch Gold Group,
Earlier this month, Richmond Fed President Jeffrey Lacker was forced to resign after admitting that he leaked confidential information to the financial press. And Fed Vice Chairman Stanley Fischer just gave a closed-door meeting to high level industry insiders.
Accidentally On Purpose
Richmond Fed President Jeffrey Lacker is now at the center of a major legal probe after he disclosed confidential information about the regional bank’s asset acquisition plans to Medley Global Advisors in 2012 – supposedly, he wants us to believe, by ‘accident’.
In a report published by Medley, several confidential pieces of the regional bank’s plans were accurately predicted, with Lacker cited as a source. Upon these revelations, Lacker claimed he must have confirmed the confidential information by accident during an interview with the firm.

This post was published at Zero Hedge on Apr 28, 2017.

Gold Price Today Climbs, Putting Metal on Track for 1.3% Gain in April

This is a syndicated repost courtesy of Money Morning. To view original, click here. Reposted with permission.
The gold price today (Friday, April 28) is up 0.1% to $1,267. While that puts gold on track for a 1.3% gain in April, it caps off what has otherwise been a poor weekly performance.
Earlier in April, gold prices pushed through the resistance level, and now they seem to be retreating.
In the gold futures market, that showed up as a sharp rally from $1,257 to $1,288 during the week ended April 14, but it was on little more than average trading volume.
I told you to expect another test of the $1,260 200-day moving average, and that’s exactly what we got this week.

This post was published at Wall Street Examiner by Peter Krauth ‘ April 28, 2017.

28/4/17: Russian Economy Update, Part 4: Aggregate Investment

This part (Part 4) covers outlook for aggregate investment over 2017-2019. Part 1 covered general growth outlook (link here), part 2 covered two sectors of interest (link here) and part 3 concerned with monetary policy and the ruble (link here).
From the point of Russian economic growth, investment has been the weakest part of the overall ex-oil price dynamics in recent years.
Rosstat most recent data suggests that the recovery in seasonally adjusted total fixed investment continued in 1Q 2017, with positive growth in the aggregate now likely for the 2Q 2017:
4Q16 investment was down about 1% from 2015 Total investment rose from 22.12% of GDP in 2015 to 25.63% in 2016, and is expected to moderate to 22.23% in 2017, before stabilsing around 22.9% in 2018-2019 The investment dynamics are, therefore, still weak going forward for a major recovery to take hold However, 2017-2019 investment projections imply greater rate of investment in the economy compared to 2010-2014 average

This post was published at True Economics on Friday, April 28, 2017.

Weekend Reading: Trumponomics – End Of 100 Days

Authord by Lance Roberts via RealInvestmentAdvice.com,
On election night, my friend Jessica and I were standing in the studios of Fox News in Houston as the ready to provide ‘color commentary’ as the Presidential election proceeded. The newsroom was highly electric with reporters rushing back and forth grabbing the latest data as it poured in.
In between interviews on what a ‘Trump’ election could mean for the country, Jessica and I stood glued to the monitors watching the results as they were reported. While we were both very hopeful that Trump could win the election, but deep down I don’t think we actually believed it. The odds of Trump winning enough of the ‘swing’ states to gain the sufficient number of electoral votes seemed astronomical. Yet, as each of those states began to fall in Trumps favor, a whisper began to spread through the room:
‘I don’t believe it…he could actually win this thing.’ But, as each state did fall to Trump, locking in the electoral votes needed to win, stock market futures went in the same direction. Down 100, 200, 500, 700 points, as panic of a Trump victory swept through the markets. It was going to be a brutal opening on Wednesday morning.
But then, just as if someone had flipped a switch, it all changed.

This post was published at Zero Hedge on Apr 28, 2017.

Larry Fink Lashes Out At Trump Tax Plan: America’s On “A Path To Exploding Deficits”

The US economy is on “pause” because of the new administration, according to Blackrock’s Larry Fink, and Trump’s tax proposals are unlikely to spur enough economic growth (due to demographics), leaving America “on the path to exploding deficits.”
Just a week after the CEO of the world’s largest asset manager said that ‘the warning signs are getting darker” and pointed to slowing auto sales and corporate M&A activity as evidence that the underlying economy may not be as healthy as S&P returns would indicate.
“The U. S. economy is not growing as fast as people would have thought in the 4th quarter.” “So to assert that we’re going to continue to grow at this size or higher…well, I never make forward predictions like that.”
And today, Fink told an audience at the Morningstar Investment Conference in Chicago…
“We will have a severe issue if the reform increases deficits.” If the U. S. economy grows at 3 percent a year that may help push deficits down but “with our demographics it seems pretty improbable to see sustainable 3% growth,” he said. Fink predicted growth of 2.5 percent to 2.75 percent.

This post was published at Zero Hedge on Apr 28, 2017.

Damn the Deficits, Huge Tax Cuts Ahead!

As I mentioned in my January commentary, Donald Trump’s big-spending, tax-cutting campaign rhetoric threatened to make him the biggest borrower in presidential history. He comes to office at a particularly vulnerable time for budget dynamics. After contracting by nearly two thirds from 2010 to 2015 (from the mind-bending $1.3 trillion to the merely enormous $438 billion), the Federal deficit started expanding again in 2016, moving up to $587 billion (Govt. Publishing Office, Office of Management & Budget (OMB). Current projections have it going up nearly every year over the next two decades. The Congressional Budget Office expects it to permanently surpass $1 trillion annually by 2021 or 2022. But these ominous forecasts were made well before anyone thought Trump had a snowball’s chance of ever becoming president. Now that he is in the office, those projections will be the floor. The ceiling is anyone’s guess.
The forecasts assume that the taxing and spending laws in place during the Obama Administration won’t change. The steep increase in projected deficits towards the end of this decade and into the next is largely driven by the retirement of the Baby Boom generation, which will lead to simultaneous increases in entitlement spending and decreases in tax revenue. This brick wall has been hiding in plain sight for decades but the can-kickers in Washington have serially failed to do anything to avert the inevitable collision.

This post was published at Euro Pac on Friday, April 28, 2017.

World Bank Maintains Oil Price Forecast At $55

In its latest Commodity Markets Outlook, the World Bank maintained its Q1 forecast for oil prices at $55 a barrel, saying, however, that overall energy prices will increase 26 percent in 2017.
The WB is overall optimistic for oil, expecting supply to tighten in the current quarter as OPEC and non-OPEC production cuts start to affect global supply. In that, the institution differs from some energy analysts who are markedly bearish on oil prices.
Listen to Jim Bianco on Global Market Rally, Oil, Rates, and More
Based on this optimism, the World Bank expects crude prices to reach $60 a barrel next year – the price level that Middle Eastern producers would like to see sooner rather than later. Oil is unlikely to go much higher than this, however, the WB argues, shale output increases will limit the upward potential of prices.
If shale production rises faster than the bank expects, this would put additional pressure on prices and would slow down the rebalancing of the market. It would also lower compliance with the OPEC deal, which is also a possibility as the current reductions in output are taxing for many producers’ budgets, and an extension could motivate some of them to cheat.

This post was published at FinancialSense on 04/28/2017.

Space Mining: The Final Frontier For Oil Countries

Authored by Tsvetana Paraskova via OilPrice.com,
The centuries-long human fascination with space may go beyond making sci-fi movies and into a brave new world of asteroid mining within just a couple of decades.
While scientists and engineers have been studying the costs and technology necessary to launch space mining probes and missions, an analyst reckons that private companies could begin launching satellites prospecting asteroids within five years, and actual mining for water and rare metals on asteroids could begin within eight years.
In this new quest for resources, the Middle East oil-exporting countries, which have long been considered the swing crude oil suppliers on Earth, could play a role in mining for water and platinum group metals on asteroids in space, according to Tom James, Senior Quality Assurance (QA) Partner at energy consultant Navitas Resources.

This post was published at Zero Hedge on Apr 28, 2017.

This Is Not Expansion

This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
Back in October, the Bureau of Economic Analysis released GDP figures that suggested what those behind ‘reflation’ had hoped. After a near miss to start 2016, the economy had shaken off the effects of ‘transitory’ weakness, mainly manufacturing and oil, poised to perform in a manner consistent with monetary policy rhetoric. The Federal Reserve had been since 2014 itching to ‘raise rates’ if for no other reason than to signal a successful end to their post-crisis mandate.
The advance estimate for Q3 2016 GDP was 2.9%, at the time the highest in two years dating back to 2014. It has since been revised up to nearly 3.5%, which does on the surface seem like an economy more so on the move. That was how it was interpreted in widespread fashion.
From CNBC:
‘As long as you have consumer spending, some stabilization of capital spending, trade kicking in and inventories switching from being a significant drag, that balanced composition will make us confident that things are moving in the right direction,’ said Anthony Karydakis, chief economic strategist at Miller Tabak in New York.

This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ April 28, 2017.

What you need to know before Consolidating Student Loans

If you are considering consolidating your students, there are some details that you need to keep in mind. Individuals usually qualify for consolidation after they graduate, leave school or have been enrolled for less than half or part-time. Many private lenders allow borrowers to consolidate private and federal loans. Private consolidation can help you reduce your interest rate. Knowing whether or not to consolidate student loans depends on various factors. It is always important to be aware of your options when you want to make a financial decision. Pick the best option that is available and practical for your situation.
Consolidation is one of the solutions that individuals who have a number of student loans opt for. During this process you take out a loan to pay off other current student loans. If you successfully get your new loan, you will be financially responsible for repaying the single loan. All federal loans can be consolidated as well as most private loans.
Before you apply, learn more about the advantages of student loan consolidation. Potential advantages include streamlining the payment process. When you have different student loans, you need to remember different due dates for repayments on a monthly basis. A single loan means that there will only be one due date that you should remember along with one payment to make.

This post was published at ZenTrader on April 27, 2017.

28/4/17: Russia Cuts Headline Rate by 50bps

Bigger than forecast move by the Russian Central Bank to cut rates (down 50bps against consensus – and my own – forecast of 25bps cut) signals the CBR’s comfort with inflationary expectations forward.
As noted in my regular advisory call on the Russian economy earlier this week (transcript here), inflation fell substantial in 1Q 2017, with current FY 2017 forecast sitting at around 4.3 percent. In line with this, CBR started cutting rates at the end of March, moving from 10% to 9.75% for its benchmark one-week auction rate. Today, the CBR lowered the rate to 9.25%.
According to CBR: “’Inflation is moving towards the target, inflation expectations are still declining and economic activity is recovering. Given the moderately tight monetary policy, the 4 percent inflation target will be achieved before the end of 2017 and will be maintained close to this level in 2018-2019.’

This post was published at True Economics on Friday, April 28, 2017.