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

Tag Archives: Federal Reserve

U.S. Economy Adds Another 204,000 Jobs in April

This article appeared online at TheNewAmerican.com on Wednesday, May 2, 2018: 

The booming U.S. economy added another 204,000 jobs in April, down slightly from the (revised) 228,000 jobs it created in March, but still more than forecasters predicted. Those forecasters have consistently underestimated the health of the economy and their record remains unbroken. Economists polled by Econoday expected 190,000 new jobs in April.

This is the sixth straight month of job growth over 200,000 which continues to confound observers. “The labor market continues to maintain a steady pace of strong job growth with little sign of a slowdown,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.

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Starvation, Suicides Increasing Under Venezuela’s Hyperinflation

This article appeared online at TheNewAmerican.com on Tuesday, April 17, 2018: 

When Venezuela’s legitimate but outlawed National Assembly reported on the country’s runaway inflation numbers last week, the statistics were so astronomical that few could relate to them. Prices increased by 67 percent in March, 453 percent in the first quarter, and 8,878 percent over the last year.

Marxist Nicolás Maduro’s socialist government stopped reporting on those price increases two years ago, and he has sharply criticized any efforts by the National Assembly or websites such as Dolartoday.com since then to tell the truth. A spokesman for the National Assembly, Congressman Rafael Guzman, told a press conference that the runaway prices are beyond the control of the government:

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CBO Update: Trillion-dollar Deficits to Arrive Two Years Sooner

This article appeared online at TheNewAmerican.com on Tuesday, April 10, 2018: 

According to the latest report from the Congressional Budget Office (CBO), released on Monday, the U.S. economy is going great guns. But that growth, no matter how robust, will never catch up with government spending. Hence, despite that growth, annual deficits of a trillion dollars will arrive two years sooner than originally projected.

That previous projection, made by the CBO last June, showed a deficit of $563 billion for 2018, rising to $689 billion next year. Now, with the Tax Cuts and Jobs Act behind them, the CBO projects this year’s deficit to be $804 billion and next year’s to be just a touch below a trillion dollars, at $981 billion.

The CBO is considered by many to be less partisan than most government entities and as likely to create more accurate projections than those coming from the White House’s Office of Management and Budget (OMB). It covered itself with this disclaimer:

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New Unemployment Claims Drop Further, Beating Estimates

This article appeared online at TheNewAmerican.com on Friday, March 30, 2018: 

English: A map of the 12 districts of the Unit...

A map of the 12 districts of the United States Federal Reserve system.

New claims for unemployment insurance dropped last week to the lowest level in 45 years, according to the Department of Labor: “Seasonally adjusted initial claims [for unemployment insurance benefits were] 215,000, a decrease of 12,000 from the previous week’s level [which was revised downward].”

Once again the economy is beating forecasters, who expected new claims to come in at 230,000. Either way, the performance of the economy continues to astound Democrats increasingly worried about the midterms and delight Republicans who voted for tax cuts and tax reform.

The last time new claims were this low was in 1973, when the labor force was much smaller. In 1973, the U.S. labor force was 100 million; today it is more than 160 million. Translation: Unemployment claims are the lowest in U.S. history when compared to the workforce.

It gets better.

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Fed Sees Inflation Coming, Raises Rates to Head it Off

This article appeared online at TheNewAmerican.com on Thursday, March 22, 2018: 

Following the unanimous and much-anticipated decision by the Federal Reserve to raise interest rates by another quarter of a percent on Wednesday, the new chairman, Jerome Powell, said, “The economic outlook has strengthened in recent months. Several factors are supporting this outlook: fiscal policy [i.e., Trump’s tax cuts to individuals and corporations] has become more stimulative, ongoing job gains are boosting incomes and confidence, foreign growth is on a firm trajectory, and overall financial conditions remain accommodative.”

This raises the question:

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Is the Federal Reserve Working Against Trump’s Reelection in 2020?

This article was published by The McAlvany Intelligence Advisor on Friday, March 23, 2018: 

English: Short-Run Phillips Curve before and a...

Short-Run Phillips Curve before and after Expansionary Policy

In politics, according to FDR, there are no coincidences. He famously said that “in politics if something happens you can be sure it was planned that way.” The announcement by Trump that he has filed for reelection in 2020 and the pronouncement by the Federal Reserve following it may just be one of those “planned” coincidences.

The pronouncement from Jerome Powell, the new head of the Fed, was, on the surface, comforting:

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Globalist Trump Advisor Gone, Will Americanist Take His Place?

This article appeared online at TheNewAmerican.com on Wednesday, March 7, 2018: 

DAVOS/SWITZERLAND, 27JAN10 - Gary D. Cohn, Pre...

Gary D. Cohn, FORMER Trump advisor

Following the president’s decision to impose tariffs on aluminum and steel imports, Donald Trump’s chief economic advisor, Gary Cohn, announced his resignation on Tuesday. Cohn had led a team pushing Trump not to impose those tariffs, but lost out to another team pushing to keep America first.

Wall Street took the news poorly, thinking that those tariffs could lead to a trade war. But the Wall Street Journal intimated indirectly in its coverage that something much different, and vastly more important, is at stake.

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Economy’s Performance Continues to Beat Forecasts

This article appeared online at TheNewAmerican.com on Friday, March 2, 2018: 

Three more measures of how the U.S. economy is performing once again beat economists’ forecasts: consumer confidence, jobless claims, and manufacturing. Tuesday’s release by the University of Michigan of its monthly “Survey of Consumers” showed all three of its indexes notching highs not seen in years. Its Index of Consumer Sentiment (“How are you feeling about your finances today?”) hit 99.7 compared to January’s robust 96.3. That is the second-highest level since 2004, reflecting, according to the survey’s chief economist Richard Curtin, consumers’ “favorable assessments of jobs, wages, and higher after-tax pay … overall, the data signal an expected gain of 2.9% in real personal consumption expenditures during 2018.”

The forecasters in this instance nearly got it right. The consensus reported by the Wall Street Journal expected 99.5. But that’s about as close as any of them got.

The U of M’s Index of Current Economic Conditions (“How does the economy look to you from your personal perspective?”) also beat expectations,

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Despite Stock Sell-off, Few See Recession

This article appeared online at TheNewAmerican.com on Friday, February 9, 2018: 

Barbara Friedberg must be feeling pretty good right about now. Last October she made “10 Bold Stock Market Predictions for 2018,” and already she is scoring five out of 10:

Value stocks will triumph;

Cash will be king;

Inflation will inch up;

Market volatility will return; and

Bonds will offer higher yields.

The jury is still out on her prediction that “the Bull Market [in stocks] will end in 2018.”

Friedberg is no lightweight. She is a former portfolio manager and has taught finance and investments at several universities. She authored a popular book in 2014, How to Get Rich Without Winning the Lottery.

Despite the mantra that stocks’ performance is often a harbinger for future economic performance, few at present agree with her about the bull market in stocks being over.

The sell-off (which appears to be continuing as this is being written) in stocks is impressive. The Dow Jones Industrial Average (DJIA, or The Dow) has lost 3,227 points since its high on January 26, or 12 percent, while the S&P 500 Index (SPX) has dropped by 290 points, or 10 percent, since then as well. This is into “correction” territory and should be drawing negative outlooks on the future of the U.S. economy from every quarter.

But they can’t be found. Aside from perma-bears Michael Snyder and David Stockman, few of the usual suspects can be found who agree with Friedberg. When the Wall Street Journal polled its economists, they remained adamant about the health of the economy: GDP will continue to grow and unemployment will continue to drop:

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Markets Move Higher Following Crash Instigated by Obscure Agency

This article appeared online at TheNewAmerican.com on Wednesday, February 7, 2018: 

English: Logo of The Goldman Sachs Group, Inc....

With Wall Street regaining its footing following the decline that started last Thursday, commentators in the mainstream media are still searching for the decline’s cause. Initially they claimed that it was an unexpected surge in inflation evidenced by the rise in the yield of 10-year U.S. Treasury notes approaching three percent (in early September it was closer to two percent). This was followed by the jobs report that announced that wages increased 2.9 percent year-over-year, up from just over two percent previously.

Writers at the Wall Street Journal dug deeper: The selloff was caused by — ready? — “volatility sellers, risk-party funds and algorithmic trading.” They then went into mind-numbing detail about how these strategies work and how the crash cost people using in them in excess of $200 billion.

Peter Schiff, CEO of Euro Pacific Capital, told TheStreet.com that maybe it was the Federal Reserve’s unhappiness with The Donald:

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Treasury Advisory Committee Says U.S. Must Borrow Trillions, Sending Stocks Down

This article appeared online at TheNewAmerican.com on Monday, February 5, 2018:

When an obscure advisory committee announced last Wednesday that the U.S. Treasury would have to borrow billions to fund Trump’s tax reform program, the stock market pitched headlong into a selloff, dropping Thursday, Friday, and early into Monday. Before the selloff, the Dow was approaching 26,300, but by the close on Friday it had lost 760 points. The rout continued into Monday, with the Dow down more than 1,200 points from Wednesday’s high. [Note the rout continued into Tuesday but found some footing by the end of the day.]

Much handwringing by commentators blamed the selloff on various technical factors:

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Credit Card Debt Hits $1 Trillion; Wall Street and Michael Snyder Yawn

This article was published by The McAlvany Intelligence Advisor on Wednesday, January 10, 2018: 

Michael Snyder rivals only David Stockman in his pessimistic economic outlook, reflecting that outlook by naming his blog “The Economic Collapse.” On the first day of the New Year, Michael dug into his files for the most “crazy” numbers from 2017. He found 44, including these:

One out of every ten young adults in the United States has been homeless at some point over the past year;

 

The United States has lost more than 70,000 manufacturing facilities since China joined the WTO in 2001;

 

A total of 6,985 store locations were shut down last year, and we are expected to break the record again in 2018:

 

Only 25 percent of all Americans have more than $10,000 in savings right now; and

 

44 percent of all U.S. adults do not even have enough money “to cover an unexpected $400 expense,” according to the Federal Reserve.

What’s missing from Michael’s list? Credit card debt, student loan debt, and vehicle financing debt. Surely he was aware of these numbers, but for some reason didn’t include them in his list. For the first time in history, credit card debt last year hit $1 trillion, eclipsing the record set back in 2008 following the real estate collapse and the beginning of the Great Recession. Snyder didn’t mention the nearly $3 trillion in “non-revolving” debt (i.e., auto and student loans) either. Seeking Alpha called these numbers “scary” but Snyder ignored them.

A closer look behind the numbers reveals that these may not be such “scary” numbers after all. Perhaps that’s why Snyder ignored them, simply because, by his definition, they didn’t qualify as “crazy.” For one thing, fewer than 40 percent of all households carry any sort of credit card debt. Among millennials ages 18 to 29 only a third even have a credit card.

Next, the ratio of income to credit card debt at the end of 2017 (before the new tax cuts) was already declining with the ratio of credit card debt compared to the nation’s gross domestic economic output at about 5 percent, compared with 6.5 percent in 2008.

Also, credit card delinquencies remain way below the 9 percent historical average, at just 7.5 percent, and far below the rate of 15 percent touched following the 2008 financial crisis.

There’s another way to look at credit card debt: compare outstanding balances to incomes.ValuePenguin performed such a service, showing that households with annual incomes of between $25,000 and $100,000 have less than $7,000 in outstanding balances on their credit cards. Further, that analysis showed that the average has increased only slightly since 2013.

With almost two million more people working today than held jobs a year ago, and others enjoying wage and salary increases, that $1 trillion in credit card debt becomes far less “scary.” In a $20 trillion economy that is growing at three percent a year, $1 trillion in credit card debt may reflect that growth as banks are willing to issue more cards to more credit-worthy individuals and those individuals, having perhaps learned lessons from the Great Recession, are using them more prudently. That “trillion” dollar number may instead reflect a growing and increasingly healthy economy employing more people making more money who are using credit opportunities more wisely.

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Sources:

USATodayCredit card debt hits new record, raising warning sign

SeekingAlpha.comCredit card debt on watch

Michael Snyder: 44 Numbers From 2017 That Are Almost Too Crazy To Believe

ValuePenguin.com:  Average Credit Card Debt in America: 2017 Facts & Figures

Credit Card Debt Hits $1 Trillion, Raising Alarms

This article appeared online at TheNewAmerican.com on Tuesday, January 9, 2018: 

For the first time in history credit card debt hit $1 trillion last year, reported the Federal Reserve on Monday. This eclipsed the previous record set almost 10 years ago, just before the housing and credit bubbles burst. In addition, “non-revolving” (i.e. auto and student loans) debt is approaching $3 trillion.

These numbers have put credit card debt on “watch” at Seeking Alpha, which said that that trillion dollar number is “scary.”

A closer look behind the numbers reveals that these may not be such “scary” numbers after all.

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U.S. Economy’s Stunning Performance Continues to Bewilder Forecasters

This article appeared online at TheNewAmerican.com on Thursday, December 14, 2017:

US Retail Sales 1992–2010

US Retail Sales 1992–2010. Threy’ve been on a tear ever since.

Economic forecasters continue to fall behind reality, as shown by the latest numbers from the Commerce Department. Forecasters predicted that November’s retail sales would increase just 0.3 percent over October. Instead, retail sales jumped an astonishing 0.8 percent. In an economy where two-thirds of economic activity is geared toward providing consumers with goods and services, that’s huge miss — on the order of a three-quarters of a billion dollar miss.

October’s numbers dumbfounded them as well:

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Head of Consumer Financial Protection Bureau Resigns, Giving Trump Chance to Abolish It

This article appeared online at TheNewAmerican.com on Wednesday, November 15, 2017: 

English: Richard Cordray, Attorney General of Ohio

Richard Cordray

Richard Cordray, the rogue head of the unaccountable Consumer Financial Protection Bureau (CFPB), announced on Wednesday that, effective at the end of the month, he would be leaving his post. His term doesn’t run out until July of 2018, but he’s leaving early with no reason being offered. In an internal e-mail he told his 1,623 employees, “I have told the senior leadership … that I expect to step down from my position here before the end of the month.”

The CFPB was created in July 2011 as part of the Dodd-Frank bill that was hastily passed following the real estate crisis of 2007-2008 that led to the Great Recession. It is physically located inside

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Trump’s Establishment Pick for Fed Chair, Jerome Powell, Won’t Rock the Boat

This article appeared online at TheNewAmerican.com on Friday, November 3, 2017: 

Nothing will change with Trump’s nomination of Powell to head the Fed. He has a strong establishment background and opposed former Congressman Ron Paul’s effort to “Audit the Fed.”

In announcing his pick to replace Federal Reserve Board chair Janet Yellen, President Trump was generous in his praise for Jerome Powell, a present Fed board member:

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What’s in the GOP Tax Bill?

This article appeared online at TheNewAmerican.com on Monday, November 6, 2017:

The red "GOP" logo used by the party...

The GOP tax reform bill presented last Thursday attempts to be “revenue neutral” within 10 years. By giving most of the cuts to corporate taxpayers, there’s precious little left for the middle class to enjoy. The problem is not only the mathematics — trying to match the “give” with the “take” — but the politics: Democrats will work to scuttle any attempt to relieve fiscal pressure on entrepreneurs (i.e., capitalists) who are largely carrying the burden of supporting the government. Absent any attempt to cut spending — the tax bill’s 429 pages offer little help with that — what’s left, as has been said, is simply moving the chairs around on the deck of the Titanic.

First,

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The U.S. Economy is Built on Papier-mâché and Politicians’ Promises

This article was published by The McAlvany Intelligence Advisor on Wednesday, November 1, 2017:

What a perfect definition of the American economy! Papier-mâché is defined as a “composite material consisting of paper pieces of pulp, sometimes reinforced with textiles, bound with an adhesive such as glue, starch, or wallpaper paste.” Add in a dose of political promises that everyone knows cannot be kept – not even close – and we have the American economy.

From a distance it looks pretty good. More than pretty good: to the untrained eye the American economy is setting world records, to wit:

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U.S. Economy Continues to Surprise to the Upside

This article appeared online at TheNewAmerican.com on Tuesday, October 31, 2017: 

One measure of how the U.S. economy continues to exceed expectations is the Economic Surprise Index published by Citigroup. It’s a tool that is used to measure how the economy compares to those expectations and, at the moment at least, it reflects the ebullience reported elsewhere. Any reading above zero indicates that the economy’s performance is exceeding projections. On Tuesday it hit 40 — its highest level since April.

That performance has repeatedly been reported in The New American and elsewhere, with these notable results:

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Dow Crosses 23,000 for the First Time in History

Performance of the Dow Jones Industrial Index ...

Performance of the Dow Jones Industrial Index during Black Monday

This article appeared online at TheNewAmerican.com on Tuesday, October 17, 2017:

The Dow Jones Industrial Average (DJIA), colloquially called “The Dow,” crossed over the 23,000 benchmark level early Tuesday morning for the first time in history. The Dow, which tracks the stocks of 30 major corporations, has gained 25 percent since the election while the NASDAQ (which tracks the stock performance of a vastly larger and more diversified range of companies across the globe) is up 27 percent. The S&P 500 Index (which tracks the stock performance of 500 American companies) is up 19 percent.

The Wall Street Journal had no trouble finding money managers who were willing to comment positively on the news. Mark Freeman, chief investment officer and portfolio manager at Westwood Holdings Group (which invests $22 billion for its customers), told the Journal:

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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