Treasury Department

The U.S. Added Only 70,000 Jobs In February Based On Withheld Taxes

Two weeks ago we reported that while for most of 2015, tax withholdings rose at a rate of 5% or more from a year ago, on the back of job growth and gains in wages, commissions and other incentive pay, in recent months there has been a substantial dropoff in this key indicator. Today, TrimTabs put an actual jobs number to this particular decline in tax withholdings: according to the research service, the US added only 55,000 to 85,000 jobs in February, less than half of the official estimate.

Frontrunning: February 25

  • Europe shrugs off pre-G20 China stocks slump, sterling steadies (Reuters)
  • China Unveils Its Deliverables for G-20 -- And No Plaza Pact (BBG)
  • Foreign Money Could Be Slow to Enter China’s Bond Markets (WSJ)
  • China Urged to Stomach Much Higher Fiscal Deficit (WSJ)
  • Trump's Momentum Has Republicans in Congress Confused and Cowed (BBG)

Donald Trump Is Right: Here Are 100 Reasons Why We Need To Audit The Federal Reserve

When a leading nominee for President gets something exactly right, we should applaud them for it.  In this case, Donald Trump’s call to audit the Federal Reserve is dead on correct.  Most Americans don’t realize this, but the Federal Reserve has far more power over the economy than anyone else does – including Barack Obama.  The funny thing is that the Federal Reserve is not even part of the federal government.  It is an independent private central bank that was designed by very powerful Wall Street interests a little over 100 years ago.  It is at the heart of the debt-based financial system which is eating away at America like cancer, and it has no direct accountability to the American people whatsoever.

Fannie, Freddie May Need Another Bailout As Washington Drags Feet On Housing Finance Reform

“The most serious risk and the one that has the most potential for escalating in the future is the enterprises’ lack of capital," Fannie's top regulator, Mel Watt says. The GSEs' capital buffer is being steadily depleted as the government sweeps the entirety of the businesses' profits, putting taxpayers in the absurd position of having to bail out two entities they've already bailed out due to the constraints imposed in an effort to recoup the first bailout.

An Alarm Goes Off Threatening The "Strong U.S. Jobs" Myth: Withheld Income Taxes Are Stalling

Official Treasury tax-receipt data are at major odds with the much more upbeat numbers reported by the Labor Department. January’s year-over-year payroll increase of 2.665 million, or 1.9%, along with a 2.5% gain in average hourly earnings should yield something in the neighborhood of 4.5% year-over-year growth in tax withholdings — or more than double the actual growth rate in recent weeks. And yet over the past 10 full weeks, starting Dec. 7, tax withholdings have grown just 3.1% from a year ago.

Fed's Kashkari Says "We Won't See Next Crisis Coming", Compares Banks To Risky Nuclear Reactors

"Unfortunately, I am far more skeptical that these tools will be useful to policymakers in the second scenario of a stressed economic environment. Given the massive externalities on Main Street of large bank failures in terms of lost jobs, lost income and lost wealth, no rational policymaker would risk restructuring large firms and forcing losses on creditors and counterparties using the new tools in a risky environment, let alone in a crisis environment like we experienced in 2008. They will be forced to bail out failing institutions—as we were."

Here's Why (And How) The Government Will "Borrow" Your Retirement Savings

The bottom line is that government needs more money. Lots of it. And there is perhaps no easier pool of cash to "borrow" than Americans’ retirement savings. $7.3 trillion in US IRA accounts is too large for them to ignore. And if you think it’s inconceivable for the government to borrow your retirement savings, just consider the following...

Obama OK's First Factory In Cuba In 57 Years

In milestone, two entrepreneurs are set to open a tractor factory in Cuba. The move will mark the first time a US factory has been located on Cuban soil since the revolution.

The Mechanics Of NIRP: How The Fed Will Bring Negative Rates To The U.S.

Now that talking about NIRP in the US is no longer anathema but a matter of survival for market participants for whom frontrunning the Fed's policy failure has emerged as a prerequisite trade, the question is: what are the mechanics of NIRP, what are the implications of negative rates for US markets. Here is the handy answer

Groundhog Day Trading: Stocks Slide As Oil Plunge Returns; BP Suffers Biggest Loss On Record

It certainly does feel like groundhog day today because while last week's near record oil surge is long forgotten, and one can debate the impact the result of last night's Iowa primary which saw Trump disappoint to an ascendant Ted Cruz while Hillary and Bernie were practically tied, one thing is certain: today's continued decline in crude, which has seen Brent and WTI both tumble by over 3% has once again pushed global stocks and US equity futures lower, offsetting the euphoria from last night's earnings beat by Google which made Alphabet the largest company in the world by market cap.

Even Goldman Has Bailed On Bush

"The money he raised early was largely in order to give him the chance to blow the others away early, which we know he did not do..."

Attention Finally Turns To Saudi Arabia's "Secret" US Treasury Holdings

If you were wondering how much US debt Saudi Arabia holds, you're out of luck because as it turns out, that's a state secret protected by a decades old "unusual Treasury blackout." “It’s mind-boggling they haven’t undone it. The Treasury didn’t want to offend OPEC [but] it’s hard to justify this special treatment at this point.”

When Correlation Is Causation - The Most Important Chart In The World If You're A Realtor In London Or NYC

If ever there was any doubts about the narrative of freedom-seeking China capital outflows driving the irrationally exuberant prices of homes in some of the world's largest cities to record highs, the following two charts will extinguish them entirely. As China continues to strengthen (as quietly as possible) its capital controls to slow the leak of money from the devaluing currency nation, and US authorities clamp-down on the anonymity of cash-only transactions, realtors in NYC, Miami, and London better hope that correlation is not causation.