The Economy, Stupid!

The markets have had wild swings for about a year now….but with that the profits roll on for the corporations…..the president’s lack of economic knowledge and the wild lies of something good is just making things worse.

And this past week it has come to a head (as they say)…..it happened in the bond markets……

An economic alarm bell has sounded in the US, sending warnings of a possible recession ahead—and sending the Dow plunging 800 points by the end of the day. Yields on 2-year and 10-year Treasury notes inverted early Wednesday, a market phenomenon that shows investors want more in return for short-term government bonds than for long-term bonds. It’s an indication that investors have lost faith in the soundness of the US economy, the AP reports. What appeared to be a slight thaw in trade relations between the US and China that had sent markets sharply higher Tuesday was quickly forgotten, with the Dow opening down 400 points. By 12:30pm ET it was down nearly 650 points; a half-hour later it had plunged 737 points, or 2.6%, reports CNBC. By end of day it was down 800, the S&P 500 was down 86, and the Nasdaq was down 242, per Marketwatch.

CNBC notes that bank stocks like Bank of America and Citigroup have been the big losers today, down 5% and 5.2% respectively, as “it gets tougher for [them] to make a profit lending money in such an environment.” The yield on the benchmark 10-year Treasury note hit 1.622%, falling below the yield of a 2-year, which was 1.634%. The last inversion of this part of the yield curve was in December 2005, two years before a recession brought on by the financial crisis hit. An inversion like the one taking place Wednesday has preceded the last nine recessions dating back to 1955. When a recession might hit, if it does, is a little hazier. Months or even years have passed after an inversion takes place, and before economists can connect the two. Marketwatch notes Wednesday was the Dow’s worst day this year.

Here comes the “R” word…. a “recession”…..some are running worried….

Then there are the multiple lies about China and tariffs….remember when he said China would pay for the tariffs not the American people?  That was the same lie as Mexico would pay for that damn silly border wall.  Don’t forget the lie about all the billions flowing into the coffers of the nation…that was a lie as well…..

If China was gonna to pay and the pain would all be on someone else then why did Trump decide to postpone tariffs until mid-December?

U.S. President Donald Trump on Tuesday backed off his Sept. 1 deadline for 10% tariffs on remaining Chinese imports, delaying duties on cellphones, laptops and other consumer goods, in the hopes of blunting their impact on U.S. holiday sales.

https://uk.reuters.com/article/uk-usa-trade-china-tariff/trump-backs-off-china-tariff-plan-with-delays-for-cellphones-laptops-idUKKCN1V31CR

Would “impact US holiday sales”…..that should tell you everything you need to know about these pseudo-economic solutions….even if you are not a genius like our Supreme Leader Trump.

Be Smart!

Learn Stuff!

“Lego Ergo Scribo”

 

Advertisements

Poverty, Climate And Defense Spending

The first Dem debate is in the tank…..I heard very little about poverty, lost of lip service but no new ideas, climate was on the agenda for the MSM and little about out of control defense spending.

But fortunately there was an outlet for the candidates to go on the record without having to depend on the MSM to bring up the issues like they do with the debate.

The Institute on Policy Studies met with most of the candidates and got their views the day before the debate……

Where do the 2020 presidential candidates stand on poverty, climate change, taxes, and military spending?

Over 140 million Americans — or 43 percent of us — are poor or low-income, according to research by the Institute for Policy Studies and the Poor People’s Campaign. That poverty is compounded by the interlocking injustices of racism, militarism, and ecological devastation. It was caused not by poor personal decision making, but by massive public investments in policies that benefit a tiny few at the expense of the rest.

The good news? We have abundant resources to fix it, our Poor People’s Moral Budget report shows. All we have to do is get them out of the military, Wall Street, and the mass incarceration industry and into programs that actually work for the public.

When we launched our Moral Budget with the Poor People’s Campaign, we asked nine 2020 presidential candidates if they had the political will to put those resources to work for the public.

https://ips-dc.org/2020-candidates-poverty-climate-change-military-spending-racism-militarism-ecological-devastation-presidential-debates/

If you are considering voting in 2020 then maybe this post and accompanying article will be helpful….I try to be as much FYI as I possibly can…..hoefully it will be informative.

Be Smart!

Learn Stuff!

The VOTE!

I Have More Space Force News

That time again….a Saturday and time for IST News from Space…..

I know this does not interest most of my readers…but I feel obligated to keep informing my readers and trying to make sense of the space force thingy……

Besides the bureaucracy the cash needed to fund this new branch of the military will be staggering….cash needed elsewhere in the society…health, infrastructure, education, et al….but for some reason a Space Force is a priority.

The House Armed Services Committee voted to establish a United States Space Corps within the Department of the Air Force. The vote came in the overnight hours Thursday. The committee began its markup of the 2020 National Defense Authorization Act Wednesday morning. After a nearly 21-hour session, the committee passed the NDAA 33-24.

The Space Corps amendment was offered by the HASC Strategic Forces subcommittee leaders Chairman Jim Cooper (D-Tenn.) and Ranking Member Mike Rogers (R-Ala.). The proposal is similar to what the committee proposed in the 2018 NDAA, including the name of the new space service, U.S. Space Corps, rather than the Trump administration’s preferred name, U.S. Space Force.

Like the Marine Corps, the Space Corps would be led by a four-star Commandant who would be a member of the Joint Chiefs of Staff.

House Armed Services Committee votes to create a U.S. Space Corps

Space will be something to watch for it will siphon off more taxpayer money…..meaning that social services will be the first to suffer with cuts to pay for this adventure.

FYI

It will be hot here today…..I wrote this draft at 0300 hrs and it was already 94…..we already have heat advisories and it is only the second day of Summer…..gonna be a long Summer for us down here.

Tariffs–Winners And Losers And Economics

Our Trade War With China!  Who’s gonna win and who gonna lose?

With all the words flying around about this legal aspect or another…..the news on our trade war with China takes a back seat…..but I think it needs to be in the forefront……

I found an article that tells the winners and losers in this trade war (I am hoping that you will actually read the referenced article)…..areas of our economy like technology, agriculture, steel, etc……

U.S. companies in everything from computer chips to tractors have said President Donald Trump’s trade wars, including disputes with Beijing and global steel tariffs, have had an impact on them.

Even for some of the expected winners, such as steel companies, the benefits of the president’s tariffs are not entirely clear.

Trump said on May 5 he would raise tariffs on $200 billion (£159 billion) worth of Chinese goods from 10% to 25%, ratcheting up pressure on Beijing to agree to a deal.

https://uk.reuters.com/article/uk-usa-trade-china-winners-losers-factbo/winners-and-losers-in-trumps-trade-war-with-china-idUKKCN1TK1UM

And yet the markets have not tanked on the bad news for the bigger of our corporations…..

Is this a good thing…… these tariffs?

This “Booming Economy” that we hear about from Trump, the GOP and others is looking a lot like the economy……wait for it……under Obama…..

In some key ways, the Donald Trump economy, on fire last year but slowing this year, is starting to resemble the one he inherited from his predecessor .

There are the rock-bottom bond yields, plodding economic growth and, not to be understated, the Federal Reserve seemingly pulling all the strings, a role that was only exacerbated in the days since the financial crisis and Great Recession and continues to the present day.

Those similarities came into even sharper focus this week, when the benchmark 10-year Treasury note yield fell below 2% for the first time since Trump became president, and the Fed’s indication, if something just short of an outright promise, that it soon will be cutting rates about half a year since its most recent hike.

It wasn’t supposed to be this way: The 2017 tax cut and aggressive moves toward deregulation were supposed to pull the U.S. economy out of its glacial move higher. That happened in 2018, but policymakers and Wall Street pros are growing increasingly fearful that a slowdown if not outright recession is on the horizon, and the Fed is being asked again to ride to the rescue.

https://www.cnbc.com/2019/06/20/the-trump-economy-is-starting-to-look-more-and-more-like-the-obama-economy.html

Oh Snap!  All the comparisons to what Obama did…will this make the list for Supreme Beloved Leader?

Me thinks this news will not see the light of day.

There is other news that is missed by the MSM……some economists are predicting a crash is coming…..but can Trump hold it off until after the election…..

If he times it right, Donald Trump might set back the Democratic Party for a generation or more; if he misses, he’ll go down in history along with Herbert Hoover as the guy who brought the nation an economic disaster.

Back in 2007 and early 2008, many of us were convinced that an economic crash was coming, and that George W. Bush and his Treasury secretary, Henry Paulson, and Fed chairman, Alan Greenspan, knew it.

And we also thought that they were doing everything they could to hold it off so it would happen after the 2008 election, so if a Democrat was elected they could say the crash was because people were “worried about the incoming Democrats,” and if McCain won it would be his problem, not Bush’s.

https://www.commondreams.org/views/2019/06/18/can-donald-trump-hold-economic-crash-until-election

What do you think?

Would a crash change your mind on voting this time around?

We Need An Economic Bill Of Rights

This election cycle there seems to be a call from the Left for a new idea they call the “Economic Bill of Rights”…….Bernie, Warren, Harris et al will call for this to be the law of the land….

I agree…there needs to be some sort of economic reset so that poverty does not become the “law of the land”….

The problem with this idea is that it is old hat…..this idea was floated by FDR back in 1944 just before he died….and the idea apparently died with him for Truman made no mention of it…..there were some of the same ideas being floated by Dems for 2020…..

Among these are:

  • The right to a useful and remunerative job in the industries or shops or farms or mines of the nation;
  • The right to earn enough to provide adequate food and clothing and recreation;
  • The right of every farmer to raise and sell his products at a return which will give him and his family a decent living;
  • The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad;
  • The right of every family to a decent home;
  • The right to adequate medical care and the opportunity to achieve and enjoy good health;
  • The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment;
  • The right to a good education.

http://www.ushistory.org/documents/economic_bill_of_rights.htm

What was old is new again!

It’s time to think big. The rules that govern our economy are working best for far too few, at the expense of far too many. While Republicans have sought to dismantle the New Deal and the regulatory apparatus that was developed to protect Americans from an unfettered private sector, Democrats in recent decade have mustered no more than incremental changes to an increasingly unequal and unfair economy. The rise of Donald Trump provides a political lesson for both Democrats and Republicans: People are looking outside the box. Despite the vast gulf between the two major political parties on many issues, on fundamentals both have adhered to a neoliberal agenda of deregulation, reliance on market-based solutions to our social problems, and a devolution of the role of government in ensuring and enforcing Americans’ right to a decent standard of living, economic dignity and economic mobility. 

Direct government intervention for full employment, a cornerstone of the Democratic Party Platform for almost half a century, has been all but forgotten, replaced by a commitment to market liberalization or tax incentives and other subsidies for corporate America to cajole them into hiring more workers. Policies put forth by Hillary Clinton in 2016, which included raising the minimum wage and promoting equal pay for equal work for women, would have improvde the lives of many working Americans – but they do not go nearly far enough.  They do not address the fundamental problem of increasing risk and vulnerability—employment “precarity”—confronting the American workforce.

Let us be clear: Our economic reality is not mere circumstance; these are the result of policy choices.

https://prospect.org/article/economic-bill-rights-21st-century

Ask yourself why the Dem Party forgot this plan until recently.  In an age when Dems were extremely popular why did they abandon such a great program?

I know why…..do you?

Be Smart!

Learn Stuff!

Now take what you ahe learned and….VOTE!

Ever Heard Of ‘Cause And Effect’?

Closing Thought–31May19

I realize that the “invasion” of Latin Americans is important to this president and “tariffs” are his answer to all our economic problems…..whether you believe these fantasies or not…there is a thing call ’cause and effect’……

That is ….. one process or state, a cause, contributes to the production of another process or state, an effect, where the cause is partly responsible for the effect, and the effect is partly dependent on the cause. In general, a process has many causes, which are also said to be causal factors for it, and all lie in its past.

A little simpler?

For every action there is an opposite but equal reaction. Did that help?

All that out of the way what am I going on about?

The newest utterance from Our Beloved Supreme Leader……

President Trump has vowed to slap new tariffs on all goods from Mexico—and to keep increasing them until the country stops migrants coming to the US. On June 10, the US “will impose a 5% Tariff on all goods coming into our Country from Mexico, until such time as illegal migrants coming through Mexico, and into our Country, STOP,” the president tweeted Thursday. “The Tariff will gradually increase until the Illegal Immigration problem is remedied at which time the Tariffs will be removed.” The White House says the tariffs will rise to 10% on July 1, then go up 5% each month after that until they hit 25% on Oct. 1, reports the Washington Post. Earlier Thursday, Trump told reporters he was going to make his biggest statement on the border so far.

Trump said in a statement that after October, the tariffs will remain at 25% “until Mexico substantially stops the illegal inflow of aliens coming through its territory.” The surprise announcement came on the day that Mexican President Andres Manuel Lopez Obrador began to ratify the USCMA trade deal with US and Canada, which could now be in jeopardy, reports Reuters. The tariffs could devastate Mexico’s economy, though experts including trade lawyer Daniel Ujczo suspect Trump will backtrack on the move, as he did with his threat to seal the border in March. “This seems more theater and tactics than a strategy to solve the migration crisis and rebalance North American trade,” Ujczo tells the AP.

Is this just something said to divert the attention of the MSM?  Will it remain if the markets tank?

Does he realize that if this is law and the economic activity in Mexico ceases it will create more people in search of economic security?  (That is cause and effect)…..

This is a silly trade policy…it is that simple……

But let us look at other economic news……

How about those “tax cuts”?……..(Read and weep!)

Despite lofty promises from President Donald Trump and the Republican Party, the $1.5 trillion in tax cuts that went into effect last year have done little—if anything—to raise workers’ wages, boost economic growth, or spur business investment.

That’s according to a new analysis by the nonpartisan Congressional Research Service (CRS), which appeared to vindicate warnings from progressive critics that the GOP tax cuts were little more than a scam designed to put more money in the pockets of wealthy Americans.

In its 23-page report (pdf), the independent research arm found that while the Republican tax law has not done much for workers or the overall economy, it has sparked a wave of stock buybacks, which primarily benefit rich executives.

https://www.commondreams.org/news/2019/05/29/virtually-no-wage-growth-surge-stock-buybacks-study-offers-more-proof-trump-tax-cuts

Billions are pouring into the US treasury because of the Trump tariffs……..

President Donald Trump likes to talk about the money Washington is making from the spate of tariffs his administration has imposed on global trading partners. The catch? Most of it is probably coming from American pocketbooks.

At a postelection news conference on Wednesday, Trump misleadingly claimed that billions of dollars would “soon be pouring into our Treasury from taxes that China is paying for us.”

He got the first part right. Federal revenue from tariffs in the third quarter increased by more than 33% from the same quarter last year, Treasury Department data shows. And in October — the first full month in which all tariffs announced to date were in effect — the monthly collection appears to have doubled from the 2017 level to about $6 billion, according to estimates from daily receipts.

https://markets.businessinsider.com/news/stocks/trump-tariffs-revenue-up-sharply-american-costs-increase-2018-11-1027713336

These Trade Wars are good for the US, right?

President Trump’s trade battles are costing the U.S. stock market $5 trillion and counting, according to Deutsche Bank.

Given the bulk of equity returns come from equity price appreciation, in an escalated trade war with China and now Mexico, the U.S. is losing trillions of dollars in foregone returns as markets sink on the negative headlines, the bank said Friday.

“The costs of the trade war in our view are about its indirect impacts,” said Deutsche Bank chief strategist Binky Chadha in a note to clients. “The trade war has been key in preventing a recovery in global growth and keeping US equities range bound. Foregone US equity returns from price appreciation (12.5% annual rate) for 17 months are worth $5 trillion.”

https://www.cnbc.com/2019/05/31/trumps-trade-wars-have-cost-the-stock-market-5-trillion-and-counting-deutsche-bank.html

Someone explain to me where the “good news” is in all this trade war stuff?

Farmers Get Help

Yesterday Our Beloved Supreme Leader had a presser to announce his aid to the American farmer that may have trouble with the tariffs……and they all bow down……

With more than a dozen farmers at his side, President Trump announced a $16 billion aid package to compensate farmers for their losses in the trade war with China. “This support for farmers will be paid for by the billions of dollars the Treasury takes in” from China, he said. That’s not the way it works, the Washington Post points out: China does not pay the tariffs; importers do. Some importers then pass the cost on to American consumers. The administration had announced $12 billion in emergency measures in July. The relief announced Thursday will be distributed to farmers in three installments, with the first payment in July or August, the others in November and January 2020, if the tariffs are still in place.

Randy Spronk, a hog farmer and past president of the National Pork Producers Council who attended the White House meeting, said farmers realize the aid will not make up for their losses in a trade war. “But it makes enough of a difference to keep a lot of farmers so they can survive,” Spronk said, per the Post. The aid for farmers will ultimately come from taxpayers, said one expert, ABC reports. “Do the Chinese pay some of the tariff? Yes, probably in specific cases,” he said. “Do they pay most of it? No, the consumer pays most of it ultimately.” The American Farm Bureau and the National Farmers Union said that they appreciate the help, but that farmers would prefer to have a long-term trade deal with China.

This money was offered last Summer….and I agree with whoever said…”if tariffs hurt farmers then welfare is not the answer”……as always…I have written about the announcement a year ago……https://lobotero.com/2018/09/21/closing-thought-21sep18/

God knows our farmers need the help….but not everyone sees this politicial ploy as the answer to that problem……

President Donald Trump’s snap decision to send billions of dollars in new aid to farmers could be bad for the farm economy and the federal budget.

Many farmers are still deciding what to plant this spring and could be swayed toward crops that receive higher payouts from the aid package, such as soybeans. That would add to already record supplies and further depress prices that have been falling for five year

But the Trump administration’s decision to roll out the program now is drawing critics.

Sen. Chuck Grassley, an Iowa Republican, told reporters Wednesday that the White House should have been more cautious about the timing of the announcement because farmers are still planting.

“[W]e want farmers to make decisions on how many acres of corn and soybeans to plant based on the market and not something the government’s doing,” he said.

“The timing couldn’t have been worse,” said Jonathan Coppess, an agricultural policy professor at the University of Illinois, and a former head of the USDA Farm Service Agency during the Obama administration.

https://www.politico.com/story/2019/05/23/trump-farmer-bailout-trade-usda-1459840

Our farmers do not want the ‘welfare’ they prefer to earn their money….keep one thing in mind….agri-business also will get this ‘welfare’ and that who it is truly protecting.

Where are the deficit hawks?  They have plenty to say when food stamps are on the agenda….where are they now?