Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Category Archives: Economics

VW Expanding its Chattanooga Plant Again, Investing a Billion Dollars and Creating Jobs

This article appeared online at TheNewAmerican.com on Wednesday, January, 16, 2019:  

Following the announcement that Volkswagen America was going to be expanding its Chattanooga plant to build electric vehicles (EVs), President Trump was delighted. He tweeted: “Congratulations to Chattanooga and Tennessee on a job well done. A big win.”

It was a big win for the president, who invited the CEOs of VW, BMW, and other foreign car manufacturers to the White House in December to persuade them to invest more in the United States. At the same time VW made its announcement at the Detroit Auto Show on Monday, BMW management announced its own expansion plans of its production facilities in the United States. With VW’s financial commitment of $800 million for Tennessee and BMW’s financial commitment of $600 million added to the $340 million VW announced last March for its Chattanooga facility, those two automakers are investing almost $2 billion in their U.S. automobile manufacturing plants. Their expansion plans will require more than 2,000 additional workers, adding to the already robust manufacturing resurgence taking place in the United States.

That resurgence has added nearly 500,000 manufacturing jobs in just the last two years, the most in more than 20 years.

Following the announcement by VW’s CEO Herbert Diess, CEO of Volkswagen AG, his American counterpart, Scott Keogh, CEO of Volkswagen Group of America, added, “We could not be prouder to build the future of mobility here in the United States. We’re known as ‘the peoples’ car’ for a reason, and we plan to build EVs for millions, not millionaires.”

What Keogh didn’t say was that

Keep reading…

Maduro’s Second Six-Year Term Won’t Last Six Months

This article was published by the McAlvany Intelligence Advisor on Wednesday, January 16, 2019:

This writer is happy to declare that his prediction (see Sources below) about Maduro’s longevity appears to be dead wrong. Washington has just issued credible threats that it will turn off Maduro’s cash flow by prohibiting exports of crude from his state-owned PdVSA oil company to U.S. Gulf Coast refineries.

Last Friday, this writer thought that Maduro could not only remain as Venezuela’s dictator for another six-year term, but for as long as he wished. Now his tenure is likely to be measured in months.

An unnamed White House official told the Wall Street Journal on Monday that, “until now, we have been going around the edges. Now, it’s a new dynamic: we are no longer going to be tinkering around the edges.”

Earlier the Journal pointed out that

Keep reading…

Bull Market Could Run for 10 More Years; Tariffs Are Helping

This article appeared online at TheNewAmerican.com on Friday, January 11, 2019:

Jeffrey Vinik, one of America’s most successful hedge-fund operators, told CNBC’s “Squawk Box” on Thursday that he thinks the current bull market in stocks will run another 10 years. Furthermore, Vinik sees such opportunity in stocks that reflects the thriving U.S. economy that he’s reopening the hedge fund that he closed in 2013.

Vinik managed Fidelity’s Magellan Fund from 1992 to 1996, during which time the fund made its investors rich, averaging

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Fed Head Powell Admits He Has Accomplished His Purpose: Stopping Trump

This article was published by The McAlvany Intelligence Advisor on Friday, January 4, 2019: 

If you stop Trump’s economy, you stop Trump. This is more and more clearly the policy of the Federal Reserve under its temporary head, Jerome Powell. Temporary because the Fed, now more than 100 years old, is the bastard child of the international banking establishment and its authority is granted only temporarily to its chairman.

The Fed’s job is to slow the Trump economy to the point where it becomes a liability for his reelection campaign in 2020 instead of an asset. How do we know this? In Powell’s Q and A following the announcement that the central bank was raising interest rates by another 25 basis points on December 19, he was asked a question about the “runoff” of bonds that it has been engaging in for months now, sucking capital out of the financial markets. Asked Heather Long of the Washington Post: “I’m wondering if the Fed has had any discussion of altering the course of the balance sheet normalization and if you could give us any thoughts on what might lead the FOMC to alter that balance sheet normalization in 2019?”

Responded Powell:

Keep reading…

Following Great Jobs Report, Fed Chair Says He’ll Be “Patient” Before Raising Rates Further

This article appeared online at TheNewAmerican.com on Friday, January 4, 2018: 

The jobs report issued by the Department of Labor on Friday was unequivocally positive. Every sector of the economy, save one, saw robust gains in employment, with 312,000 new jobs created in December beating forecasters’ predictions by 30,000 jobs. In addition, the DOL revised October’s and November’s numbers upward by 58,000 jobs. Even the rise in the unemployment rate from a record low of 3.7 percent to 3.9 percent was explained by the number of new people entering the job market.

The number of unemployed workers dropped by 300,000 over the last 12 months, while the labor participation rate jumped. Wages improved as well

Keep reading…

As Economy Slows, Bond Investors Say Fed Won’t Raise Rates

This article appeared online at TheNewAmerican.com on Thursday, January 3, 2019:  

A month ago, bond investors were predicting that the Fed would be raising interest rates several times in 2019. As the economy is now clearly slowing, those same investors are predicting the Fed has now done its job and won’t be raising rates in the New Year. Said the Wall Street Journal:

Fed-funds futures, which investors use to bet on the direction of Fed policy, on Wednesday showed a 91% probability that the central bank’s policy makers will finish the year [2019] with interest rates at or below their current levels.

 

That is a reversal from early November, when futures prices indicated a 90% probability that rates would end 2019 higher than they are now.

The latest report from the Institute of Supply Management merely confirmed that slowing economy, with its manufacturing survey published on Thursday coming in below forecasters’ expectations (which were below October’s).

The New American has been tracking and noting the slowing of the U.S. economy that has been established policy at the Fed for many months now. In November we noted that

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Tax Attorney: Social Security Participants About to be “Disenfranchised”

This article appeared online at TheNewAmerican.com on Tuesday, January 1, 2019:  

If Rebecca Waiser is right, millions of Americans are about to be “disenfranchised” of their Social Security benefits. Waiser, a licensed tax attorney and certified financial planner writing for Fox Business, says the math is incontrovertible and irreversible.

According to the trustees running the program, Social Security will be forced to start cutting benefits by 2034, 15 years from now. According to Waiser the crisis will hit in three years.

Wrote Waiser:

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Who’s to Blame for the Decline on Wall Street?, Part II

This article was published by The McAlvany Intelligence Advisor on Friday, December 28, 2018:  

Less than three weeks ago, this writer opined here [at The McAlvany Intelligence Advisor] that the root cause of the selloff on Wall Street then was the deliberate intentional stalling of the economy by the Federal Reserve:

Who is the real culprit behind this volatility in stocks? The well-informed have been pointing to the actions of the Federal Reserve as the prime driver, focusing on its determination to slow the economy by raising interest rates.

 

For example, the insider bank Goldman Sachs said in late November: “The FOMC [the Fed’s Federal Open Market Committee] will likely be reluctant to stop [raising interest rates] until it is confident that the unemployment rate is no longer on a downward trajectory….”

 

In other words, the Fed is determined to keep on raising interest rates until the economy is so weak that unemployment starts to increase!

If more evidence of the Fed’s deliberate intervention in the markets were needed by skeptics, last week’s volatility on Wall Street ought to suffice. Late last week,

Keep reading…

What Sparked Wall Street’s Massive Turnaround Late Thursday?

This article appeared online at TheNewAmerican.com on Friday, December 28, 2018:

Most Wall Street observers were caught by surprise at the massive upward spike in stock prices that turned a 600-point down day on the Dow into a gain of 230 points. It began less than 90 minutes before the close, and by the time the market closed stocks had gained nearly four percent from the low of the day.

Michael Wursthorn, writing in the Wall Street Journal, called it a “big comeback” from “an unexplained jolt of adrenaline … that morphed into a broad rally.” All 11 sectors of the S&P 500 Index were up for the day, as were 28 of the Dow 30 stocks. Without explaining why, Wursthorn said the sudden move up was “symptomatic of the volatility that has rocked the markets this month.”

John Carey, a portfolio manager at Amundi Pioneer, reflected on what happened:

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While Wall Street Wobbles, Consumers and the Economy Continue Humming

This article appeared online at TheNewAmerican.com on Thursday, December 27, 2018:  

The Wall Street rollercoaster — down huge on Monday, up huge on Wednesday, decline on Thursday — is giving commentators, pundits, and forecasters heartburn. The Dow Jones Industrial Average (DJIA) surged more than 1,000 points on Wednesday, the first time in history, rebounding from a four-day selloff that took 4,000 points out of the Dow and put various blue-chip indexes on the verge of a bear market.

Street commentators searched high and low for the root cause or causes of the volatility. They ranged from concerns over the incipient trade war with China instigated by the president as he seeks to rebalance fair trade with that communist-controlled country, to the firing of his Secretary of State over U.S. troop withdrawals from Syria and Afghanistan. Pundits pointed to Treasury Secretary Steven Mnuchin’s attempt to calm the markets by calling big bank CEOs and reporting that all is well with their reserve ratios. This attempt backfired, especially when it was followed by reports of a gathering of the president’s “plunge protection team” consisting of Mnuchin, Fed Chairman Jerome Powell, the chair of the SEC Jay Clayton, and the head of the Commodity Futures Trading Commission, Christopher Giancarlo at the White House on Monday.

Blame for the volatility fell on

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Downloads of 3D-Printed Firearms Increase After Judge Tries to Stop Them

This article appeared online at TheNewAmerican.com on Wednesday, December 26, 2018: 

A federal judge’s ruling to limit the transfer of files allowing citizens to print their own guns using 3-D technology has resulted in exactly the opposite: The number of downloads of those files has exploded since his ruling in August.

It was Western Washington’s District Court Judge Robert Lasnik who ordered the settlement between the Justice Department and Cody Wilson’s company Defense Distributed to be suspended. He should have known better. He and other gun-grabbers such as New Jersey Governor Chris Murphy and Massachusetts Democrat Edward Markey are trying to play catch-up and instead are falling farther and farther behind.

It isn’t that gun grabbers haven’t tried.

Keep reading…

Tepid Government Slowdown Hasn’t Slowed Shoppers

This article appeared online at TheNewAmerican.com on Wednesday, December 26, 2018: 

Holiday shoppers apparently couldn’t care less about any government shutdown or slowdown: U.S. retailers notched one of the busiest holiday seasons in years, meeting and in some cases exceeding forecasters’ already rosy outlooks.

Total retail sales, according to Mastercard’s SpendingPulse indicator, rose 5.2 percent from November 1 through December 19 compared to last year, with five more shopping days left before Christmas. And ever-lower gas prices are adding nearly five billion dollars to families’ budgets every month, which bodes well for the economy into next year.

None of this appears to be registering with liberals writing for left-wing progressive papers such as the

Keep reading…

Five of Maduro’s Big Lenders Want Their Money Back. Good Luck.

This article appeared online at TheNewAmerican.com on Tuesday, December 18, 2018:

Five investment firms holding $380 million of one of Venezuela’s bonds demanded payment of both the principal and unpaid interest on Monday. This could be the trigger that unleashes an avalanche of claims by more than 40 creditors holding $150 billion of Venezuela’s debt.

The Marxist regimes that have controlled Venezuela for the last 20 years have finally run out of other people’s money, and now those other people want it back.

Up until Venezuela failed to make an interest payment on its outstanding bonds, patience was the strategy for the bondholders. After all, Maduro had paid back Goldman Sachs’ “hunger bonds,”which helped keep the socialist regime alive, making a final $90 billion payment on the loan in May.

In October, Maduro’s government paid $1 billion to selected bondholders to keep them from foreclosing.

This was followed in November by an agreement reached between a defunct Canadian gold-mining company and Venezuela,settling a $1.4 billion claim with a down payment of $500 million and promises to pay the balance on a quarterly basis thereafter until it was paid off.

But then Maduro breached that promise in December, and the mining company took action to start selling off shares of Citgo, owned by Maduro’s state-owned oil company, PdVSA.

That’s when the five unnamed investment firms decided it was time to get in line — perhaps first in line — to get what could be gotten from a regime that had run out of time, money, and seizable assets. Think of a 10-year game of musical chairs: That’s how long a similar process took in settling Argentina’s debt crisis in the late 1990s.

Crystallex International went bankrupt when Venezuela failed to honor its agreement to let the Canadian gold miner develop some of Venezuela’s potentially highly profitable gold reserves. Arbitration settled the amount owed Crystallex by Venezuela: $1.4 billion, but Venezuela failed to honor the agreement. Crystallex sought and obtained permission to go after Citgo, the $8 billion wholly-owned subsidiary of PdVSA. This is when Maduro made the agreement in November, sealed with a down payment of $500 million in exchange for a promise by Crystallex to back off from selling at public auction shares of Maduro’s prime income-generating asset.

That agreement was breached by Venezuela less than a month later.

Time ran out on Monday with the announcement that now requires Maduro not only to pay back interest but to pay off the $1.5 billion loan even though it isn’t due to be paid off until 2034.It’s called “acceleration,” and rightly describes the likely “acceleration” of the end of the Maduro’s mad tyranny that has driven Venezuela into unspeakable poverty and suffering for its citizens. Mitu Guilati, a Duke University professor who has been closely following the accelerating collapse of the country, said Monday’s move will prompt other debt holders to move from patience to legal action to protect their interests: “In a world in which you have limited assets, [the winner is] whoever grabs the assets first.”

For most it’s probably too late. Maduro’s only source of income is the state-owned oil company PdVSA, which owns Citgo. When oil prices were high and government control of the country’s economy was in its early stages, revenues from PdVSA allowed first Hugo Chávez and then Nicolás Maduro to provide all manner of state-provided services to the poor. Socialists from around the world applauded the Marxists’ success in raising them from poverty with their “new brand of socialism.”

Consider for example the plaudits poured out on the Marxist regime back in 2013 by David Sirota in his article in Salon entitled “Hugo Chavez’s Economic Miracle.” Wrote Sirota: “Chavez’s …full-throated advocacy of socialism and redistributionism … delivered some indisputably positive results.… Chavez racked up an economic record that a legacy-obsessed American president [Obama] could only dream of achieving.”

The dream in Venezuela has turned into a nightmare for those citizens who haven’t been able to escape. One searches Sirota’s website in vain for his apology to them. A famous quote from England’s former Prime Minister Margaret Thatcher explains what is now happening in Venezuela: “The problem with socialism is that you eventually run out of other people’s money.” Maduro’s problem is now compounded by the reality that those other people now want their money back. 

U.S. Economy Remains Strong Despite Wall Street Nervousness

This article appeared online at TheNewAmerican.com on Tuesday, December 11, 2018:  

At bottom, Wall Street is a gigantic gambling casino where investors and money managers predict the future and then place their bets. Those trying to justify Wall Street’s present nervousness are coming up with next to nothing.

Big banks such as JPMorgan and Bank of America, try as hard as they might, can’t make a single case for a downturn in the U.S. economy next year. Bloomberg allowed them a thousand words to make their case, but they failed. “On balance,” said these worthies, “[we’ve] been finding that a 2019 downturn still isn’t likely — though it’s becoming slightly more so.”

First are initial unemployment claims,the precursor, it is said, of future weakness in job hiring. “Initial jobless claims,” explained these experts, “are heading slightly higher on a weekly basis of late … but they’ve been at extraordinarily low levels and their recent pop has been relatively small.”

Nothing here. Move along.

Other indices are auto sales,industrial production, and aggregate hours worked, according to Bank of America’s Michelle Mayer. She said that the bank’s “gauge based on [these indices] puts the chance [of a recession] at less than 10 percent over the nex tsix months.”

Keep moving.

Business sentiment measures are another early warning signal, according to JPMorgan’s seers, which they say “have softened recently.” But the Institute of Supply Management’s two economic indicators, manufacturing and services, both jumped higher last month. Nothing to see here either, but the bank’s analyst, Jesse Edgerton, will stay focused on what he calls “high-frequency data … for an up-to-date picture of [economic]activity.” And he’ll be sure to let everyone know as soon as something substantial shows up.

Moving on.

The most revered of all indicators is the Fed’s Survey of Professional Forecasters, according to the banks. And, they say, “they’re starting to sour on the economy’s prospects four quarters from now.” But, they added, “their pessimism might be too remote to mean much.”

Conclusion: After writing 1,000 words,the banks have come up with essentially nothing. As a hat-tip to reality, it ended its article with this from Deutsche Bank’s Torsten Slok, who wrote last Thursday that “the incoming data continues to be good. Where is this recession the market is so worried about?”

Precisely.

Holiday sales are expected to set records. OPEC’s piddling response to the threat of oversupply of crude in world markets continues to drop oil prices and the cost of gasoline, which translates for more than 200 million American drivers into a tax-free bonus just in time for Christmas. Oh yes, and real wages are increasing faster than they have in years, while price increases (“inflation,” according to the Fed) have moderated below two percent on an annual basis.

What is the Fed doing about raising interest rates to kill the non-existent inflation monster? It has raised interest rates eight times since 2015 and is likely to raise them again next week. But what about the future? Prognosticators have just changed their tunes:The Fed was expected to continue raising rates well into 2019, but now futures traders (those who bet real money and not just ink on Bloomberg’s website) are backing off. They are betting that the Fed might raise interest rates one more time next year (instead of the three to four times experts were predicting just a month ago), and some are putting large sums down on the bet that — ready? —the Fed will reduce interest rates by one notch next year instead.

With China cutting tariffs on American-made vehicles from 40 percent to 15 percent, some can see the day when trade between the two nations will actually increase because of those lower tariffs. Where is the recession forecast in that? How would stocks react to that? Investors sitting on the sidelines waiting for things on Wall Street to settle down won’t have to wait long. The U.S. economy is doing just fine, and Wall Street investors will shortly put the recent gyrations in their rear-view mirrors and begin making their bets on a healthy and robust economy continuing into the foreseeable future.

Stocks Lose Four Percent Last Week, Thanks to the Fed

This article appeared online at TheNewAmerican.com on Saturday, December 8, 2018: 

Wall Street’s selloff last week has been blamed on everything but the real thing. The major indices lost more than four percent, with the Dow off nearly 10 percent since its recent high in early October.

Pundits have been peering into every corner for the culprit(s) to blame for the ferocious decline: shrinking housing and auto sales, rising credit card debt delinquency rates, higher oil and gas prices, slowing of job growth and capital investment, the accusations leveled at Chinese companies trying to break into technology service providers here in the United States, the appearance of “yield curve inversions,” and so forth.

The appearance of so-called death crosses (the 50-day moving average falling below its 200-day moving average) in the major averages have no doubt triggered more volatility. Algorithms have driven trading by computers (program and high-frequency trading) to up to half of all stock trades on the New York Stock Exchange. This leaves money managers and individual investors behind, forcing them to the sidelines to wait for calmer times.

Who is the real culprit behind this volatility in stocks? The New American has been nearly alone in pointing to the actions of the Federal Reserve (see Related Articles below) as the prime driver, focusing on its determination to slow the economy by raising interest rates. For example, we quoted the insider bank Goldman Sachs in late November: “The FOMC [the Fed’s Federal Open Market Committee] will likely be reluctant to stop [raising interest rates] until it is confident that the unemployment rate is no longer on a downward trajectory.” At the time, we said, “The Fed is determined … to keep raising rates until the economy is so weak that unemployment starts to increase!”

There’s more to that story. Since September 2014, the Federal Reserve has been intentionally and deliberately shrinking the money supply — the capital that a capitalist system needs to thrive and prosper — from $4.15 trillion to $3.5 trillion as of November 21,2018. That’s a 15-percent shrinkage in the “oxygen supply” the capitalis tsystem needs. But it’s worse than that: Most of that shrinkage has taken place since last September. Since then the Fed has reduced the money supply (its “Adjusted Monetary Base” numbers are available from the St. Louis Fed’s website) from$4.0 trillion to $3.5 trillion, a reduction of 12.5 percent.

That money-supply shrinkage is now showing up in the various places pundits are looking to place the blame, i.e.,anything that affects the financial well-being of the economy. As interest rates rise and the money supply shrinks (the two most powerful tools the Fed is using to slow the economy), housing starts slow, car sales dwindle, credit card payments increase, profit margins decline, and capital expenditure projects are taken off the board as they are no longer profitable enough to be justified.

Add to this the toxic mix of mixed messaging from the White House over the China trade talks, the incipient arrival of the Mueller investigation’s findings into Trump’s alleged misdoings, the threats being ramped up against the president by the Democrats salivating over their power to investigate when they take control of the House in January, and one wonders that Wall Street has any buyers left at all.

What about the economy? Does the “yield curve inversion” signal a recession in the next six months or so? Not according to Joseph Haubrich, an economist and a consultant for the Federal Reserve Bank of Cleveland. In April 2006, Haubrich was tasked with answering the question,“Does the Yield Curve Signal Recession?” His answer:

Evidence since the early 1990s sugges tthat the relationship between the yield curve and [future economic] growth has shifted, if not disappeared….

Speculating on whether or not the yield curve is truly predicting a recession remains exactly that: speculation.

Evidence continues to pour in over the health and strength of the U.S. economy. The Institute for Supply Management’s latest reports from both the manufacturing and service sectors of the U.S.economy confirms that health and strength. The latest jobs report, coming in below expectations for the first time, shows remarkable strength considering the shrinking pool of capable and skilled workers so desperately needed in the increasingly technology-driven U.S. economy. Oil and gas prices will continue to trend lower worldwide thanks increasingly to U.S. production records being set almost on a daily basis, which are making the United States the world’s largest producer of crude and refined products.

It’s the Fed that stands athwart the economy’s startling growth trajectory.

Who’s to Blame for the Decline on Wall Street?

This article was published by The McAlvany Intelligence Advisor on Monday, December 10, 2018:  

Following a volatile week in the stock market, President Trump met with his advisors to see if his Twitter account had anything to do with it. It is hoped that Trump’s original diagnosis remains in play: It’s Jerome Powell, the head of the Fed and his Keynesian sycophants on the Federal Open Market Committee (and not Trump’s Twitter account), who thinks it’s time to slow down the Trump train.

Some have opined that that decision was made more than a year ago when the Fed started raising interest rates an inch (25 basis points) at a time. Others think it was September 2017 when the Fed began shrinking its Adjusted Monetary Base with a vengeance. According to the FRED chart provided by the St. Louis Federal Reserve Bank (see Sources below), on September 12, 2017 the AMB was $4.0 trillion. On November 21, 2018, it had shrunk to $3.5 trillion, a 12.5 percent decrease in the single most important ingredient a capitalist economy needs to survive and thrive: capital. In simpler terms, the Fed has been stepping on Trump’s economy’s oxygen hose for more than a year, and the results are just now showing up.

Pundits have been peering into every other conceivable corner for the culprit(s) to blame for the ferocious decline: shrinking housing and auto sales, rising credit card debt delinquency rates, rising oil and gas prices, slowing of job growth and capital investment, the accusations leveled at Chinese companies trying to break into technology service providers here in the U.S., the appearance of “yield curve inversions,” and so forth.

The appearance of so-called “death crosses” (the 50-day moving average falling below its 200-day moving average) in the major averages have no doubt triggered more volatility. Algorithms have driven trading by computers (program and high-frequency trading) to up to half of all stock trades on the New York Stock Exchange. This leaves money managers and individual investors behind, forcing them to the sidelines to wait for calmer times.



Who is the real culprit behind this volatility in stocks? The well-informed have been pointing to the actions of the Federal Reserve as the prime driver, focusing on its determination to slow the economy by raising interest rates. For example, the insider bank Goldman Sachs said in late November: “The FOMC [the Fed’s Federal Open Market Committee] will likely be reluctant to stop [raising interest rates] until it is confident that the unemployment rate is no longer on a downward trajectory….” In other words, the Fed is determined to keep on raising interest rates until the economy is so weak that unemployment starts to increase!

That oxygen starvation is now showing up in the various places pundits are looking to place the blame: anything that affects the financial wellbeing of the economy. As interest rates rise and money supply shrinks (the two most powerful tools the Fed is using to slow the economy), housing starts slow, car sales dwindle, credit card payments increase, profit margins decline, and capital expenditure projects are taken off the board as being no longer profitable enough to be justified.

Add to this the toxic blend of mixed messaging from the White House over the China trade talks, the incipient arrival of the Mueller investigation’s findings into Trump’s alleged misdoings, the threats being ramped up against the president by the Democrats salivating over their power to investigate when they take control of the House in January, and one wonders that Wall Street has any buyers left at all.

What about the economy? Does the “yield curve inversion” signal a recession in six months or so? Not according to Joseph Haubrich, an economist and a consultant to the Federal Reserve Bank of Cleveland. In April 2006 Haubrich was tasked with answering the question, “Does the Yield Curve Signal Recession?” His answer:

Evidence since the early 1990s suggests that the relationship between the yield curve and [future economic] growth has shifted, if not disappeared….

Speculating on whether or not the yield curve is truly predicting a recession remains exactly that: speculation.

Evidence continues to pour in regarding the health and strength of the U.S. economy. The latest reports from the Institute for Supply Management on both the manufacturing and services sectors of the U.S. economy confirm that health and strength. The latest jobs report, coming in below expectations for the first time, shows remarkable strength considering the shrinking pool of capable and skilled workers so desperately needed in the increasingly technology-driven U.S. economy. Oil and gas prices will continue to trend lower worldwide thanks increasingly to U.S. production records being set on an almost daily basis that are making the U.S. the world’s largest producer of crude and refined products.

It’s not your Twitter account that’s causing Wall Street to stumble, Mr. President, although there are times when you’re less than totally consistent in your using of it. It’s not the “natural end” of the nearly 10-year long bull market. Bull markets (and economic growth) don’t die of old age, they are murdered by the Fed. There is only one enabler that has the power to raise interest rates and shrink the money supply, Mr. President, and Powell and Friends are using both of these tools to stop your economy.

—————————-

Sources:

McAlvanyIntelligenceAdvisor.comWho gave Powell the Power to Manipulate Markets?

CNBC.comDow tumbles more than 500 points, wipes out gain for the year to cap wild week on Wall Street

Does the Yield Curve Signal Recession? By Joseph G. Haubrich, Federal Reserve Bank of Cleveland (2006)

Five year chart of the Adjusted Monetary Base

History of the Financial Crisis of 2007

MarketWatch.comA death cross for the S&P 500 highlights a stock market in tatters

Investopedia.comProgram trading 30 to 50 percent of daily NYSE volume

Background on Joseph Haubrich

United States Is Now World’s Largest Oil and Gas Producer

This article appeared online at TheNewAmerican.com on Friday, December 7, 2018:

The United States exported more crude oil than it imported last week, for the first time since 1943. The crossing over the threshold to energy independence was inevitable thanks to the fracking revolution and the fading influence of the OPEC cartel that has dictated world oil prices for 60 years. Michael Lynch, president of Strategic Energy & Economic Research, said, “We are becoming the dominant energy power in the world.”

Just last month, U.S. Interior Secretary Ryan Zinke announced that “we are the largest oil and gas producer on the face of the planet, rolling through 11 million [barrels of oil a day] … on our way to 14 [mbd].”

And, along the way, reducing OPEC’s influence. Seniors remember

Keep reading…

Tuesday’s Wall Street Selloff Triggered by Trump, Not the Economy

This article appeared online at TheNewAmerican.com on Wednesday, December 5, 2018: 

It was President Trump’s tweets that set Wall Street’s teeth on edge on Tuesday, with the popular averages losing more than three percent by the close of business. On Monday it was the president’s assurance not only that a “truce” had been declared in the tariff war between the United States and China, but that the Chinese had 90 days to come to terms with the president, or else.

The Dow gained 300 points on Monday over the perceived good news.

And then the president appeared to backtrack slightly on Tuesday, letting a lot of air out of Wall Street’s balloon:

Keep reading…

Who gave Powell the Power to Manipulate Markets?

This article was published by The McAlvany Intelligence Advisor on Friday, November 30, 2018: 

With just two words – “just below” – Fed Chair Jerome Powell gave Wall Street what it was hoping to hear on Wednesday: a step back from his “we’re a long way from neutral” comments in early October. Wall Street finished the day higher by more than two percent. Here’s what Powell said that triggered the relief rally:

Interest rates are still low by historical standards, and they remain just below [emphasis added] the broad range of estimates of the level that would be neutral for the economy – that is, neither speeding up nor slowing down growth.

That’s a very long way from his previous comments that took 2,500 points off the Dow in the weeks following their issuance.

Nearly all the conversation was about Powell’s words, which were, according to Robert Pavlik, chief investment officer at SlateStone Wealth, “exactly what the market was expecting to hear. Obviously it has to do with the market reaction to his previous comments. He had to walk [them] back.”

There was much discussion over just what he meant by “neutral.” Two weeks ago, Charles Evans, the president of the Chicago Federal Reserve Bank who also sits on the Fed’s Federal Open Market Committee, didn’t know what “neutral” meant:

Keep reading…

Two Words From the Fed, and Wall Street Jumps More Than Two Percent

This article appeared online at TheNewAmerican.com on Thursday, November 29, 2018: 

While Fed Chair Jerome Powell was addressing the Economic Club of New York on Wednesday, the stock market was open, and it was listening. What it was listening for exceeded its expectations and stocks jumped in the final hours of trading by more than two percent, its biggest one-day gain since the end of March.

What was “the street” listening for?

Keep reading…

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2018 Bob Adelmann