My postings to twitter provide short, to the point, and often data oriented comments on important daily economic trends in the US and global economy. Important data points often associated. Here’s the entries for January-February 2019.
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Feb 27
#Tradewar US trade rep hardliners are now complaining China subsidizes its companies & must stop to get a US deal. But so does the US–thru the US tax system. Example: Amazon in 2018 doubled profits from $5.6 to $11.2 billion but paid no taxes. Then got check for $129m from IRS
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Feb 23
#US deficit US stats underestimate inflation, unemployment, and now US deficits. CBO forecasts$900b deficit 2019. But first 3 mos. deficit already $319B. CBO also ignores $70b ‘black budget’ military projects. + if another stock correction or early recession, deficit still higher.
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Feb 23
#TrumpTaxScam Some have asked how 17% decline in tax refund? IRS says 8.7%, i.e. an average for all returns including capital incomes where the bigger refunds are happening. For wage earners only (those affected by withholding) much higher decline + higher state taxes now as well
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Feb 23
#TrumpTaxScam Trump front-loaded tax cuts for investors & businesses in 2018 + changed payroll deductions to appear wage earners also got tax cut. That’s over. Now tax hikes on wage earners hitting in 2019. Tax refunds down by 17% so far. Even bigger tax hikes coming after 2022.
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Feb 20
#MuellerReport Rumors in DC that Mueller will soon release his report to Trump’s new attorney general, Barr. But you and I will never see it. Barr says he’ll provide only a summary to Congress. So they won’t either. So much for transparency and democracy in USA today
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Feb 14
#TrumpWall Breaking news this afternoon is Senator McConnell (Trump’s echo) says Trump will declare national emergency today as he signs compromise bill to fund his wall. Big surprise? To mainstream media maybe. But I predicted it back on January 7. See my tweet below that date
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Feb 13
#Fed former vice-chairman, Stanley Fischer, joins Blackrock shadow bank–i.e. the latest in a ‘revolving door’ relationship between Fed chairs and Fed governors (the latter who typically leave the Fed to work for banks long before their 14 yr. term on the Fed expires).
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Feb 8
#USdebt Update to my prior post on foreign owners of US govt debt (T-bonds): Financial Times today, Feb. 8, reports US needs to sell $12T more T-bonds next decade to cover US debt rise. Foreigners now own 36% US debt v 45% decade ago. China sold off $60b in May-Nov. 2018 alone .
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Feb 6
#Fed Fed’s recent 180 degree rate hike reversal sets the stage for 3rd DOW crash later in 2019 (after Feb18 and Nov-Dec 18). DOW may fall to 21,000. Also, renewed junk bond surge now underway=more deadwood zombie corps. Plus more BBB bonds (now half of $9T I-grade US bond market)
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Jan 30
#centralbanks Globally ‘throw in the towel’. Fed stops rate hike and sell-offs. ECB retreats on rates & selloff. Bank of Japan to continue QE. BoEngland no hikes. PBOC pumping more liquidity. Entering next recession, balance sheets to remain bloated at more than $15 trillion.
Jan 30
#Fed Signals no rate hike in March (as I predicted) + slower balance sheet selloff. The meaning? Help shore up shaky stocks? (which Fed denies ever its goal) OR US economy slowing in 2019-20? (Read my 2017 & 2018 articles in European Financial Review at http://jackrasmus.com )
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Jan 20
#Tradewar For my latest up to date analysis of US-China trade ‘war’, check out my blog, http://jackrasmus.com and the ‘Trump’s Deja Vu China Trade War’, parts 1 & 2
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Jan 18
#China US-China trade negotiations getting serious. China to buy $1 trillion more US goods next 6 yrs, allow 51% US ownership in China, and pass tech transfer-IP legislation by Jan. 29. Mnuchin offers to remove all US tariffs. Mtgs in Wash. 1-30. Will US hawks scuttle the deal?
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Jan 14
#USstocks Major Oct-Dec contraction (worst since 2008, 1931). Jan2019 bounce fading, driven by stock buybacks and speculators. Keys ahead: 1.China-EU-US GDP slowdowns, 2.Brexit, 3. US Fed rates, 4.China trade war. 1. continue; Brexit & Fed to postpone; Trade war resolved by June
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Jan 9
#USbudgetdeficit Deficit first quarter 2019 at $317 billion, 41% higher than prior yr.; On track for $1.2-$1.3 trillion add to US $21 trillion federal debt. Deficit = 1st full year of Trump tax cuts. Interest on the debt costs up by 47%. US goods trade deficit now also $800 bil.
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Jan 7
#Shutdown Can (and will) Trump declare national emergency to fund his wall? Yes and Yes. Dem Congress in 1976 law gave him wide powers. 100s laws since say which. He’ll move $ from Defense budget to wall. Dems to be outmaneuvered again. US slouching further toward dictatorship
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Jan 7
#Fed Atlanta Fed president, Bostic, today says only one more Fed rate hike in 2019, agreeing with my prediction a year ago. Why halting now? Growing stocks & financial asset deflation. So much for Fed’s long term declaration it only responds to the real economy, not the markets.
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Jan 3
#yieldcurve Second yield curve about to invert. Latest 3mo. T-Bill at 2.4%; 7year T-Bond at 2.43%. (2 & 5-year bonds already inverted). Fed Board governors beginning to show signs of capitulation, to stop raising rates. But if Fed halts rate hikes it has nothing to do with Trump.
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Jan 3
#Apple Apple’s stock plunge: due to trade war? No. Causes: China consumers’ demand falling+Android-China sellers competition+Over-priced Apple latest model plus Yuan devaluation 10% price hike effect (due to US Fed rate hikes & Dollar rise). Watch for big Apple stock buyback.
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Jan 2
#globaleconomy global manufacturing retreating. China PMI negative. Europe (Germany). US Fed regional PMIs slowing fast (Phil.,NY, Texas). Both housing & Mfg. sectors now flashing red. Next contagion? Global Tech. Watch for major tech sector stock fall this week led by Apple.
Dr. Jack Rasmus @drjackrasmus
Jack Rasmus 
Interesting. The Dow closed down almost 6% for 2018. The Fed’s Flow of Funds, page 2, shows household net worth down from $109 trillion in Q3 2018 to $104 t in Q4. Just released 2 days ago. The net worth went from $48 trillion in Jan. 2009 to $109 trillion in Q3 2018, about 81% increase, inflation adjusted. The US Treasury site “The Debt to the Penny” shows $1.3 trillion added to debt in calendar year 2018 even though the fed deficit was $779 billion. I wonder why, I guess they anticipate higher interest (borrowing) costs and sell bonds now rather than later at higher cost. China agrees to 51% foreign ownership in Chinese companies? I doubt it, but if you say so. Probably some fine print nullifies that report, I bet. The charity United Way released a report showing that 40% of American households cannot afford seven basics of life: food, housing, utilities, health- and child-care, phone, car. And 40% earn less than $15 an hour, while 60% earn less than $20 an hour — ALICE, United Way. I suspect this is accurate. The Social Security report on wages, 2017, shows that median annual wage earning was $31,561, about $20.86 an hour (for 1800 hours). https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2017
Factor in part-time workers, partial year workers, unemployment. The lower-earning 48%, earning less than $30,000, combined earnings equals $1,027 billion. The national income was $15,007 billion (says Joint Comm. on Taxation), leads to conclusion that half of workers earned in wages 6.8% of all income. That’s about 80 million workers. What’s their average income? $12,918, that’s less than a full-time minimum wage year-round income of $15,080. And while I’m still at it, there’s an excellent article at In These Times by Colleen Boyle about corporate pay to workers, “Instead of Enriching Shareholders, These Companies Could Have Raised the Income of 8 Million Workers by $46,000”.
http://inthesetimes.com/article/21713/stock-buy-back-wealth-workers-shareholders-nike-amazon-visa-express —-My blog now is at http://benL88.blogspot.com — Thanks. B.L.
It’s public record that CHina trade negotiators have offered 51% ownership (and intimated it could go to 100% in 3 yrs). That’s public. (Also, they offered to buy $1 trillion more in US goods by 2022. Your estimate of 6.8% wage hikes for some is accurate, since reports show that half of US work force got no raise at all. So the roughly 3% reported got the rest. But I bet it’s skewed way to the top end as well. Also, need to clarify always if the ‘wage’ is really weekly earnings (wages X hours worked). And if they’re referring only to full time workers. And if by ‘wage’ they mean bonuses and commissions. And, of course, what’s the price index they’re using to adjust to real time wage. All officially indices underestimate inflation (and thus over estimate real wage), especially for median income and below families where the ‘weights’ for the basket of goods are greater for those goods and services rising in price fastest (e.g. rents, health costs, etc.). Rising wages is one of the most misrepresented myths in official government stats. Not far behind the phony U-3 unemployment rate. Serious problems too with savings rate calculations, poverty stats, and of course GDP since 2013.
Reblogged this on Taking Sides.