Instead of criticizing Trump for his misguided advocacy of tariffs as a panacea, we should at least give him credit for recognizing a serious problem that so many others ignore. The real criticism should be directed at those who would allow America to continue down this self-destructive path.
Is there anyone on the planet who's actually stupid enough to believe these New Normal charts are healthy and sustainable? We doubt it. Rather, the apologists, toadies, apparatchiks and flacks are being well-paid to cheerlead, and the "leadership" (using the term lightly) of the discredited institutions are terrified of what will happen when people finally catch on. The New Normal is not sustainable.
According to leaked negotiating drafts and internal positions, which were obtained by Greenpeace and seen by the Guardian, it seems the stumbling blocks ahead of the TTIP's implementation are indeed substantial, and potentially dealbreaking. As the Guardian reports, talks for a free trade deal between Europe and the US face a serious impasse with "irreconcilable" differences in some areas. The leaked texts also show that the two sides are at odds "over US demands that would require the EU to break promises it has made on environmental protection."
Quickly signally agreement to my question whether working as a waiter had hurt him financially, he said he dropped from $34.00 an hour toiling in the coal mine to $2.65 plus tips.
China’s historic post-2009 debt binge flew largely under the radar - fooling most observers into thinking the global economy was recovering rather than just re-leveraging. Now Beijing is back at it, borrowing over $1 trillion in this year’s first quarter, buying up commodities and creating the illusion of global growth. But this time the scam hasn’t gone unnoticed. Reporters, editors and money managers seem, at last, to be catching on. So think of today’s relative calm as the eye of yet another storm, and what’s coming as a return to the hyper-leveraged new normal.
Think back over the last 10 years - how different was your life in April 2006? While you may think your daily existence is largely the same (maybe the kids are older or you’re married now, but that about it…), consider what was actually different about your life in the spring of 2006:No iPhone;No Facebook (unless you were in college at the time); No Twitter; No Instagram; No Kim Kardashian; No Uber; No iPad.
Chinese President Xi Jinping recently announced that he would take command of all of China’s armed forces, including the People’s Liberation Army (PLA). Xi is already chairman of the Central Military Commission that oversees the army. He is now taking a more direct role as head of the new Joint Operations Command Center, which puts him in operational command of the PLA in times of war. The new title in all likelihood means little in terms of actual command, but it has tremendous political significance. Officially, the Chinese are reforming their military, which is logical (read why here). The roots of this change, however, lie in China’s economic crisis and the need to preserve the regime.
In the new normal, where bad news is good news, stagnation is growth, and depression is a buying opportunity, it should be no surprise that the so-called "safety stocks" of the Consumer Staples sector have never been more risky. At a P/E valuation of 22x, food, beverage, and tobacco companies have never been more expensive. But, "safety stocks" are not the most expensive stocks in the US equity market...
The banquet of consequences is about to be served.
At the top, with annual price increases over 9% and as high as 11.9% in the case of Portland, we also find Seattle Denver and - of course - San Francisco. On the other end are Washington, Chicago and oddly enough, New York. We wonder if Case Shiller used the UMich "random" telephone directory to calculate that NYC home prices rose at precisely the rate of core inflation in the past 12 months while ignoring the dramatic moves in the ultra luxury high end segment.
After meandering steadily higher for the past week, and completely ignoring the negative newsflow out of the Doha meeting, today oil took an unexpected leg lower to 4-day lows, leaving many stumped: what caused this drop? The answer: it looks increasingly likely that the Kingdom is targeting another 0.5-m b/d of sales, bringing its production up to a steadier 11-m b/d or higher as it scramble to regain Chinese market share lost in recent months to Russia.
It's not just Halliburton ("What we are experiencing today is far beyond headwinds; it is unsustainable") and Intel (12,000 layoffs amid re-evaluation of programs) that are facing up to a new normal very different from expectations. As Avondale Asset Management notes, having poured over 100s of earnings transcripts, while most CEOs don’t see signs of an imminent downturn, the environment still feels a little fragile. It seems that almost everyone is on high alert for a macro curve-ball...
The “bullish case” is currently built primarily on “hope.” Hope the economy will improve in the second half of the year; Hope that earnings will improve in the second half of the year; Hope that oil prices will trade higher even as supply remains elevated; Hope the Fed will not raise interest rates this year; Hope that global Central Banks will “keep on keepin’ on.” Hope that the US Dollar doesn’t rise; Hope that interest rates remain low; Hope that high-yield credit markets remain stable.
For those who believe that broad-based stimulus is coming to save the world from China (via RRR cuts or even pure QE) - as opposed to the hole-filling credit pump they just supported - think again. As we warned last year, this is 'western' thinking as the go to policy of the rest of the world's central banks has been - put on pants, print money, paper over cracks, proclaim victory. However, in China there is one big problem with this... stoking inflation... and most crucially the social unrest concerns when suddenly a nation of newly minted equity - and now bond - losers can no longer afford their pork - which is surging to record highs.
Three weeks after angering the mainstream media with his apocryphal assessment that the US "Is Headed For A Massive Recession" and that "It's A Terrible Time To Invest In Stocks", Trump is likely set to make even more waves with an interview he gave to Fortune magazine, which will be released in its entirety later this week, in which Trump says that while he likes Janet Yellen’s low interest rates, he is not a big fan of Janet Yellen herself. "I think she’s done a serviceable job," Trump tells Fortune. "I don’t want to comment on reappointment, but I would be more inclined to put other people in."