Tag Archives: Donald Trump

Trumpxuberance… Until It’s Not, by James Howard Kunstler

Posted on December 12, 2016 | Leave a comment

James Howard Kunstler joins the chorus crying that the big stock market rally after Trump’s election won’t last, which means it will probably last longer than most people think. Kunstler does, however, make some good points about the differences between the current economic landscape and that when Ronald Reagan took office. From Kunstler at kunstler.com:

At this time of year, only the hardest, coldest heart can fail to show good will to fellow man. That said, the silvery orb of Donald Trump’s post-election honeymoon may set sooner than expected as Ms. Yellin prepares to hoist her interest rate petard this week. Even a modest up-bump in the Fed Funds Rate is liable to prang the orgy of corporate share buybacks fueling the eight-year bull market that many formerly sane observers think is a permanent feature of the human condition. The bond market bull also seemed to last a lifetime and that’s gone south now, too.

Poor Trump’s mammoth ego has led him by the snout into a deadfall trap. The Trumpublican voters and cheerleaders expect another Morning in America miracle. Sorry, been there, done that, that was then, this is now. Conditions were quite different in 1981. For one thing, a brutal decade after the 1970 all-time US oil production peak, the Alaska North Slope fields came into full flow, along with the North Sea and Siberian fields.

The Alaska bonanza did not boost US production back to 1970 levels, but it did take the leverage away from OPEC, and it stuffed the elevated price-per-barrel back down to levels that an industrial economy could tolerate. The rest of the Reagan miracle was accomplished with debt. The case was similar for Mrs. Thatcher over in the UK. She was not an economic magician, just the beneficiary of a brief oil boom that made Britain a net energy exporter for two decades, providing an illusion of permanent prosperity and cover for the financialization of the economy. Now, with the North Sea oil playing out, all that’s left is the banking necromancy in Threadneedle Street.

To continue reading: Trumpxuberance… Until It’s Not

Advertisements

Leave a comment

Posted in Business, Debt, Economy, Energy, Financial markets

Tagged ,

A “Soft Coup” Attempt: Furious Trump Slams “Secret” CIA Report Russia Helped Him Win, by Tyler Durden

Posted on December 11, 2016 | Leave a comment

There’s not a shred of hard evidence that Russia made any attempt to influence the US election, just a lot of allegations and innuendo. Now various intelligence agencies are destroying what’s left of their reputations by dignifying the allegations and innuendo. From Tyler Durden at zerohedge.com:

Overnight the media propaganda wars escalated after the late Friday release of an article by the Washington Post (which last week admitted to using unverified, or fake, news in an attempt to smear other so-called “fake news” sites) according to which a secret CIA assessment found that Russia sought to tip last month’s U.S. presidential election in Donald Trump’s favor, a conclusion presented without any actual evidence, and which drew an extraordinary, and angry rebuke from the president-elect’s camp.

“These are the same people that said Saddam Hussein had weapons of mass destruction,” Trump’s transition team said, launching a broadside against the spy agency. “The election ended a long time ago in one of the biggest Electoral College victories in history. It’s now time to move on and ‘Make America Great Again.’ ”

The Washington Post report comes after outgoing President Barack Obama ordered a review of all cyberattacks that took place during the 2016 election cycle, amid growing calls from Congress for more information on the extent of Russian interference in the campaign. The newspaper cited officials briefed on the matter as saying that individuals with connections to Moscow provided WikiLeaks with email hacked from the Democratic National Committee, Democratic nominee Hillary Clinton’s campaign chief and others.

To continue reading: A “Soft Coup” Attempt: Furious Trump Slams “Secret” CIA Report Russia Helped Him Win

Leave a comment

Posted in Government, Intelligence, Media

Tagged , , ,

A Rising Stock Market Does Not Signal Economic Health, by Steven Horwitz

Posted on December 10, 2016 | 1 comment

Steven Horwitz suspects that Trumponomics is just going to be another variant of crony socialism. From Horwitz at the Foundation for Economic Education, fee.org:

The headlines tell us that the Dow Jones is up around 1,000 points since Donald Trump won the election on November 8th. The conventional wisdom is that this shows how much confidence people have in Trump’s ability to generate a healthy American economy. The argument is that if people are willing to buy stock in American firms, this indicates their belief that those firms will see improving profits over the next few years. They then draw the conclusion that more profitable firms indicate a healthier American economy.

Things are not good or bad for the economy. They are good or bad for people.

Although this argument is correct about stock prices reflecting an increasing belief in the profitability of US firms, it makes a major error in assuming that profitable firms necessarily mean a better economy.

The Economy Isn’t A Thing

First, it’s important to understand that phrases like “a healthier economy” are themselves problematic. The “economy” is not the thing we should be concerned about. In fact, in some fundamental sense there’s no such thing as “the economy.” As Russ Roberts and John Papola memorably put it in the music video “Fight of the Century:”

The economy’s not a car.
There’s no engine to stall.
No experts can fix it.
There’s no “it” at all.
The economy is us

Things are not “good/bad for the economy.” They are good or bad for the people who comprise the market process, specifically in our capacity as consumers. All the economy amounts to is people engaging exchanges in order to better satisfy their wants. What we should care about is whether or not people are able to better satisfy those wants.

To continue reading: A Rising Stock Market Does Not Signal Economic Health

 

1 Comment

Posted in Capitalism, Economy, Financial markets

Tagged ,

Trump, Taiwan, and the Chinese Paper Tiger, by Justin Raimondo

Posted on December 9, 2016 | Leave a comment

Justin Raimondo, who usually defends Donald Trump, criticizes the controversial phone call with Taiwan’s president. SLL shares his view that China’s economic miracle is structurally flawed and to use a favorite Trump word, overrated. From Raimondo at antiwar.com:

The media and the foreign policy “experts” went ballistic recently over President-elect Donald Trump’s phone call with Taiwan’s President Tsai Ing-wen. With one brief call, which the Trump team says was only a congratulatory call initiated by Ms. Ing-wen, Trump blew up our longstanding “One China” policy and precipitated a dangerous collision with Beijing.

While this reaction was somewhat overwrought – not surprising, given the media’s adversarial relationship with the PEOTUS – there is indeed good reason to find this worrying.

I say this because Trump’s view of China, and especially the stance taken by Peter Navarro, one of his economic advisors, is dangerously wrong. While it is true that China has flooded our markets with cheap goods that easily out-compete US products, in reality China is an economic disaster waiting to implode on itself – and the regime’s hold on the populace is increasingly precarious.

Navarro, a professor of economics at the University of California at Irvine, is a protectionist whose view of China as a rising military power is based on nothing but scare-mongering. His most recent book, Crouching Tiger, is a compendium of myths and pseudo-facts which posit that Chinese “militarism” is a real threat to the US – a nonsensical idea with no basis in reality. China spends about 2% of its GDP on the military, while the US spends almost double that. China’s army consists mostly of conscripts, and exists largely to control the borders and put down internal strife. The last time China was involved in a major foreign conflict was its brief albeit bloody war with Vietnam, in 1979, and it was a disaster for Beijing, which was driven out of northern Vietnam with its tail between its legs in less than a few months.

To continue reading: Trump, Taiwan, and the Chinese Paper Tiger

 

Leave a comment

Posted in Foreign Policy, Governments

Tagged , ,

Carrier & The Broken Window Narrative, by Lance Roberts

Posted on December 9, 2016 | 2 comments

Donald Trump made a deal with Carrrier for which the taxpayers of Indiana are paying. Such deals will not make America great again. From Lance Roberts at realinvestmentadvice.com:

“Trump saves jobs in Indiana before even being President. This is how you make ‘America Great Again.”

Between promises to cut corporate taxes from 35% to 15%, reduce regulatory burdens and penalize companies who leave the U.S., markets, economists and analysts are all trying to figure out what it means. As I noted on Tuesday, the always bullish analysts are already pushing up corporate earnings to record levels while the mainstream media is fostering the idea of an economic resurgence to levels last seen during the Reagan Administration. In turn, this will result in higher inflation, higher interest rates and an end to the stagflationary environment that has gripped the economy over the last 8-years.

Well, that is what is hoped for.

I thought it might be useful to take a look at the specifics of the deal struck with Carrier and the reality of the current economic backdrop as it relates to fostering future job growth, higher wages and the avoidance of a recessionary outcome.

The Art Of The Deal

Supporters of Donald Trump have praised the president-elect for working out a deal to keep jobs at a manufacturing plant in Indiana from being moved to Mexico.

The deal with Carrier, which makes heating, air conditioning, and refrigerator parts, meant that roughly 1,000 workers will keep their jobs in Indiana. However, in exchange for keeping those jobs in Indiana, Carrier will receive $7 million in tax credits and other incentives which will ultimately be picked up by the taxpayers of Indiana. Carrier also said it will invest $16 million in its Indianapolis plant.

To continue reading: Carrier & The Broken Window Narrative

 

2 Comments

Posted in Business, Government, Politics

Tagged ,

Wall Street’s Calling the Sheep to the Slaughter — Again! by David Stockman

Posted on December 8, 2016 | Leave a comment

David Stockman’s take on the economy and markets after Donald Trump’s inauguration is probably prescient. From Stockman at daily reckoning.com:

I believe the shock of Donald Trump’s election will soon be vastly exceeded by an even more shocking shutdown of Washington governance within days of the inauguration.

For the first time since the 1930s there will be a crash on Wall Street and a recession on main street, but the Imperial City will be powerless to remedy either.

That’s because financial history is not circular; it’s cumulative and all the fiscal and monetary artifices, expedients and frauds that can be deployed by the state to maintain the illusion of prosperity and soaring financial asset prices will have finally been exhausted.

With the Fed pitifully impaled on the zero bound for 96-months running, it has become evident to even the bubble vision cheerleaders that the massive monetary stimulus of the last two decades is over and done. The only thing left in the Fed’s arsenal is sub-zero interest rates, and that option does not have even a remote prospect of getting off the ground.

Donald Trump won the election against all odds, and that he did so on the back of a populist uprising that is unmitigated bad news for Wall Street. Brandishing whatever the present day equivalent of torches and pitchforks might be, the people will surely descend en masse on the Eccles Building if the Fed even hints at the possibility of imposing negative rates on savers and retirees.

Nor can the market be rescued through the backdoor of some kind of antiseptic QE that showers gamblers with unspeakable windfalls and stir the populist political pot to a full boil.

To continue reading: Wall Street’s Calling the Sheep to the Slaughter — Again! 

 

 

Leave a comment

Posted in Business, Collapse, Debt, Economy, Government

Tagged

Are Sanctuary Cities Legal? by Andrew P. Napolitano

Posted on December 8, 2016 | Leave a comment

With sanctuary cities making a stand against Trump’s immigration law enforcement, liberals may suddenly discover a love for the federalism that they have worked so hard to drum out of the Constitution. From Andrew P. Napolitano at antwar.com:

Last week, President-elect Donald Trump re-emphasized the approach he will take in enforcing the nation’s immigration laws, which is much different from the manner of enforcement utilized by President Barack Obama. The latter pointedly declined to deport the 5 million undocumented immigrants in the United States who are the parents of children born here – children who, by virtue of birth, are American citizens. Trump has made known his intention to deport all undocumented people, irrespective of family relationships, starting with those who have committed crimes.

In response to Trump’s stated intentions, many cities – including New York, Chicago, Los Angeles and San Francisco – have offered sanctuary to those whose presence has been jeopardized by the president-elect’s plan. Can they do this?

Here is the back story.

Under the Constitution, the president is the chief federal law enforcement officer in the land. Though the president’s job is to enforce all federal laws, as a practical matter, the federal government lacks the resources to do that. As well, the president is vested with what is known as prosecutorial discretion. That enables him to place priority on the enforcement of certain federal laws and put the enforcement of others on the back burner.

Over time – and with more than 4,000 criminal laws in the United States Code – Congress and the courts have simply deferred to the president and permitted him to enforce what he wants and not enforce what he doesn’t want. Until now.

To continue reading: Are Sanctuary Cities Legal?

Leave a comment

Posted in Civil Liberties, Government, Immigration, Law

Tagged ,