When debt grows much faster than GDP for an extended period of time, it is inevitable that a good portion of that debt will start to go bad at some point. We witnessed a perfect example of this in 2008, and now it is starting to happen again.
With global stock markets basking in the afterglow of Dow crossing 20,000 for the first time, on Thursday they propelled higher in sympathy with the US, as Asia and Europe are trading solidly in the green, as is the dollar which rebounded strongly off a 5 week low.
After months of threatening to levy a 35% border tax a cars imported from Mexico, Trump will sit down with the CEO's of the Big 3 domestic auto manufacturers this morning to discuss ideas on how to keep manufacturing jobs in the U.S.
US equity futures were flat, European stocks rose and Asia was mixed after the dollar posted a modest rebound overnight despite Mnuchin's "strong dollar" comments, while oil was flat and gold fell, as investors focused on President Donald Trump’s plans to boost growth. The pound fell after a U.K. court ruled that Parliament must vote on triggering Brexit.
The recent blow-up of the Dallas Police and Fire Pension System was entirely predictable. The combination of overpriced financial markets, inadequate contributions and overly generous pension promises mean dozens of US local and state government pension plans will end up in the same situation.
"As the U.S. manufacturing base increases its competitiveness, we are able to further increase our investment, resulting in more jobs for America and better results for our owners. The U.S. is our home market and we are committed to growth that is good for our employees, dealers, and suppliers and supports our continued effort to drive shareholder value.”
Korea's Hyundai Motor Group said it plans to lift U.S. investment by 50 percent to $3.1 billion over five years and may build a new plant there - the latest auto firm to announce fresh spending after President-elect Donald Trump threatened to tax imports.
General Motors will announce plans to invest at least $1 billion across several U.S. factories, the WSJ reported, a move aimed at underlining GM's "commitment to U.S. manufacturing jobs" following Trump’s criticism of the auto maker’s imports from Mexico. GM will also create over 1,000 new stemming from the investment.
A day after the EPA announced their probe of Fiat Chrysler's alleged "cheating" over diesel emissions tests, the company now faces criminal charges as the US department of Justice has joined the probe.
Yesterday we sarcastically noted "they are all at it" when Fiat Chrysler was slammed by the EPA for emissions cheating, and now get further confirmation of the farce as The FT reports, French authorities have started a preliminary investigation into Renault amid suspicion the company may have “cheated” to conceal abnormal emissions of pollutants from some of its diesel engines.