FEB 3- 17 SIT EC y POL
Economics in WASHINGTONs BLOG
Posted on February 3, 2017 at http://www.washingtonsblog.com/
Take a quick glance at these
charts of the Federal Reserve balance sheet and bank credit in the U.S. Notice what happened to bank credit after the Fed
“tapered” and stopped expanding its balance sheet?
Bank credit exploded higher:
Now look at corporate profits:
Once the Fed ended its $3.7
trillion “experiment” of vastly expanding its money-creation and bond-buying in
early 2014, what happened to bank credit? Bank
credit had expanded by a bit over $1 trillion in the early years of the Fed’s
quantitative easing, but it really took off after QE3 ended, soaring roughly $2
trillion.
This was the policy goal all
along: the Fed would do the heavy
lifting to keep credit and the financial markets from imploding, and eventually
private-sector credit would expand enough to fuel a self-sustaining recovery.
While measures of employment and
production have lofted higher, productivity, profits and wages for the bottom
95% have all stagnated. Is it
coincidental than corporate profits began weakening once the Fed’s QE3 ended?
Perhaps.
What about the stagnation of household median income during
the Fed’s expansion and the rise of private bank credit from 2014 to the present? Was that also a coincidence?
If the economy was expanding smartly as the Fed was goosing
credit higher, it certainly wasn’t trickling down to households.
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Check also these articles in http://www.washingtonsblog.com/ :
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ZERO HEDGE. ECONOMICS
Absent the various seasonal and
other) adjustments, non-adjusted (so actual) US
Factory Orders in December were almost exactly the same as they were in March
2006 - unchanged in 11 years.
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US real
yields have collapsed since shortly after The Fed hiked rates, with
today's decline erasing the entire
post-election Trumpflation surge in TIPS yields.
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Business activity in the US Services industry accelerated to its fastest since Nov 2015,
according to the 'soft' survey data from Market, but some
firms noted that squeezed margins
had acted as a brake on employment growth at their business units in January.
ISM Services slipped lower with unadjusted new orders tumbling to their lowest since Jan 2016.
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Disappointing earnings growth this morning seemed to convince traders
that The Fed would likely be on hold through March (and The Fed's statement
earlier in the week did nothing to help_ but after tumbling all morning, the dollar is now jumping higher
because The Fed's John Williams says he "sees some arguments to raise
rates in March."
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For the third week in a row, the US oil rig count rose dramatically (up
15 to 583 - the highest since October 2015). This is the biggest 3-week surge
in rig counts since April 2013...but so far no jobs are showing up in the oil patch!
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While the Dow Industrials remain near all-time highs, the Utilities
are well off of their highs; this has signaled trouble in the past.
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Where
The January Jobs Were Official (lie) report
While in recent months, we had documented that job growth was mostly
observed in lower, or minimum-wage paying, jobs, in January, when as the BLS
earlier reported the US added some 227K jobs, the
increase was uniform across virtually all job sectors, with only Government and
Transportation and Warehousing jobs declining.
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Following today's jobs report, the market's reaction to the unexpectedly “strong” January payrolls visualized in the
charts below, is straightforward: the
disappointing wage growth is an indication that the Fed may not hike rates for
quite a bit longer than expected, and will
likely will be forced to reduce its rate hike expectations from 3 to 2
(in line with the market) or fewer if wage growth
continue to stagnate.
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"Bubbles
Are Invisible To Those Inside The Bubble..."
Suggested Readings
Trump/Economy
- Peril In The Casino – You’re Fired by David Stockman via Daily Reckoning
- The Vampire Squid Is Back by Nomi Prins via The Daily Reckoning
- My Trump Bubble Bursts by John Stossel via Reason.com
- Trump & Trade by Eduardo Porter via NY Times
- Optimistic Growth Forecasts Miss The Risk by Ashoka Mody via Project Syndicate
- The Left Underestimates Trump’s Plans by Tyler Cowen via Bloomberg
- Fed Rates Hikes May Haunt Trump by Paul La Monica via CNN Money
- Border Tax May Backfire On Economy by Brad McMillan via Commonwealth
- Sharing Economy: Does It Create Real Jobs? by Shellie Karabell via Forbes
- Biggest Test For Trump Is Trump by Matt Egan via CNN Money
- What Happens Next May Scare You by Lawrence Summers via Wonkblog
- Trade Is Not The Driver Of Job Loss by Robert Samuelson via Real Clear Markets
- Trump Tweets Won’t Stop Job Departure by Justin Wolfers via NYT
- So Goes Tax Reform, So Goes The Nation by Ernest Christian via IBD
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Markets/Fed
- Fed: The Cash Menagerie by Danielle DiMartino-Booth via Money Strong
- The Bond Bull Isn’t Dead Yet by Jim Rickards via The Daily Reckoning
- Everything You Know About Bonds Is Wrong by Sid Verma via Bloomberg
- The Stock Market Bubble Is Inflating by Michael Sincere via MarketWatch
- 3-Trends Point To Stock Upside by Sue Chang via MarketWatch
- The Honeymoon Is Over by Tim Mullaney via MarketWatch
- Wall Street Faces Rude Awakening by Matt O’Brien via Wonkblog
- Phase 3 Of The Trump Rally by Mohamed El-Erian via Bloomberg
- Has The Love Affair Already Ended? by Anthony Mirhaydari via Fiscal Times
- Don’t Worry About Bond Pullback by Simon Constable via US News
- Trump Will Market Uncertainty Great Again by Doug Kass via Real Clear Markets
- Is The Trump Rally Over Already by Edward Harrison via Credit Writedowns
- Dow 20,000 Running On Fumes by Kenneth Rapoza via Forbes
- How To Confuse The Markets by Buttonwood via The Economist
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Favorite / Interesting Reads
- Countries Where Millennials Will Support Parents by Tyler Durden via ZeroHedge
- Will Trump’s Walls Literally Divide Us by Caroline Baum via MarketWatch
- America’s Declining Dynamism by The Economic Innovation Group
- The Delusion Of Wind/Solar Salvation by Gail Tverberg via Our Finite World
- America’s Student Debt Problem Larger Than Imagined by Shaun Bradley via TheAntiMedia.org
- Retirement: $350k For Healthcare? by Robert Powell via MarketWatch
- Apple’s Results Worse Than You Think by Thomas Kee via MarketWatch
- Surviving The next Housing Market Crash by Mark Roe via Project Syndicate
- America’s Great Divergence by Alana Semuels via The Atlantic
- The $60 Billion Euro Brexit Battle by Mark Gilbert via Bloomberg View
- Millennial’s Doing Worse Than Boomers by Jim Probasco via Investopedia
- Earnings Are Still A Confusing Mess by Clara Linnane via MarketWatch
- Watch Out FedEx, Amazon Is Coming After You by Tyler Durden via ZeroHedge
- Harry Dent: A 70% Correction Is Coming by Adam Taggart via Peak Prosperity
- The Case For A 50% Correction by John Hussman via Hussman Funds
- So Goes January, So Goes The Year? by Dana Lyons via Tumblr
- The Unintended Consequences Of QE by Jesse Felder via The Felder Report
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As we noted earlier, real yields have erased
all the trumpflation gains...
SEE ALL GRAPHICS AT: http://www.zerohedge.com/news/2017-02-03/disappointing-wages-spark-biggest-market-rally-year
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SEE ABOVE: Economics in WASHINGTONs BLOG
If the returns on central bank "free money
for financiers" are diminishing rapidly while public anger at rising
wealth inequality is heating up, why put the central bank's credibility and political independence on the
line for a policy that has visibly failed to benefit Main Street?
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POLITICS
Not much for room for mis-understanding there...
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President Trump's executive order on travel may
be generating big protests, but
an IRS missive on travel and passports may not go down too well either.
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As previewed earlier today, moments ago
President signed two executive aimed at starting the process of rolling back
the regulatory system put in place after the financial crisis. Among the
targets are rules that protect against predatory lenders, force brokers to
lower fees for retirees and ban proprietary trading.
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"The point is a century of scientific mismanagement of the currency has
pushed the economic, financial, and social order well past any rational limit. Total
government debt and stock valuations are at all-time extremes. Something big is
coming. You can guarantee it. But don’t blame Trump
when the world ends. There ain’t a
doggone thing he or anyone else can do to stop it."
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The dynamic of US politics today:
Following a brief moment of 'success' for the
Trump administration as a Boston judge ruled Trump's immigration
policy was not a Muslim ban, a Bush-appointed federal judge in Seattle, who said the
states of Washington and Minnesota can sue claiming their residents were
harmed by the ban, granted a nationwide temporary
restraining order blocking Trump's recent action.
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In a blow to every mainstream media news outlet
(and likely hurting a lot of feelings), President Donald Trump’s ban on
immigrants from seven Muslim-majority countries will take effect in Boston on
Sunday after a federal judge refused to
extend a temporary ruling blocking its enforcement, because Trump's order "is neutral with regard
to religion."
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"...our reliance on the United
States, in normal times, wouldn’t worry too many people...
But Donald Trump doesn’t seem to
be a normal president."
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WORLD ISSUES and ME
Mexico's consumer confidence index fell to its
lowest level on record in January, amid soaring inflation , an uncertain
economic outlook after Trump became president and rapidly deteriorating public
sentiment.
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The U.S.
imposed fresh sanctions on Iran as President Donald Trump seeks to punish
Tehran for its ballistic missile program after warning the Islamic Republic that it is “playing with
fire." As Bloomberg reports, the Treasury Department published a list of 13 individuals and 12 entities facing new restrictions, some for
contributing to proliferation of weapons of mass destruction and others for
links to terrorism.
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“In retaliation for the U.S. sanctions, Iran will impose legal restrictions on some American
individuals and entities that were involved in helping and founding regional
terrorist groups,” the Iranian Foreign Ministry said.
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The US has moved a Navy destroyer, the infamous
USS Cole, to off the coast of Yemen to protect waterways from Houthi militia
aligned with Iran, as tensions between Washington and Tehran are once again
soaring.
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DEMOCRACY NOW
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GLOBAL RESEARCH
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INFORMATION CLEARING HOUSE
Arguments on fascism in
USA: see last 7 titles
This
Is How Russia and the United States are Cooperating in Syria By Federico Pieraccini The American deep state has deep,
hidden links with terrorism in Syria.
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New
Sanctions on Iran Announced by Trump Regime By
Rebecca Shabad The open hand
of AIPAC: “Iran continues to "threaten" U.S. friends and allies in
the region,” Flynn said.
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Demonizing Iran
Trump
Press Secretary Falsely Accuses Iran of Attacking U.S. Navy Vessel, an Act of
War By Zaid Jilani, Alex Emmons This, of course, is how U.S.
starts war.
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The
Coming Clash With Iran By Pat Buchanan Supporting Saudis, main actors of 9/11 terrorism. Are
the Saudis entitled to immunity from retaliation in wars they start?
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Steve
Bannon’s Apocalyptic Worldview About Civilization’s Coming ‘Trial By Fire’ By Sarah K. Burris
Bannon believes the only way to usher in a new world order is with a
“massive reckoning”
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Trump
is the Less Effective Evil By Margaret Kimberley Trump simply continues a U.S. policy that
“makes countries unlivable and then tells fleeing victims that the door is shut”.
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The
Berkeley Incident By Mike
Whitney How many similar
experiments will transpire before Trump puts his foot down and bans
demonstrations altogether?
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Has The U.S. Become a Prison?
Another Travel Ban: IRS Moves To Revoke Passports For Unpaid Taxes By Robert W. Wood The law isn't limited to criminal tax cases, or even cases where the IRS thinks you are trying to flee.
Another Travel Ban: IRS Moves To Revoke Passports For Unpaid Taxes By Robert W. Wood The law isn't limited to criminal tax cases, or even cases where the IRS thinks you are trying to flee.
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“Outside
World” According to the Western “Progressive Liberals” By Andre Vltchek They
have no ideology, and no beliefs. Their passions are shallow and short-lived.
Their world is surreal.
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COUNTER PUNCH
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Oliver Ortega Before
Trump, the Border Wall Was a Bipartisan Project
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Alex Jensen Trump’s
Populist Deceit
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Brian Cloughley How
Trump is helping Israel Destroy the Palestinian People
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John W. Whitehead Rule
by Brute Force: on the True Nature of Government
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Pepe Escobar Game-Changers
Ahead on The (Long) Maritime Silk Road
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SPUTNIK and RT SHOWS the
other face of the coin
Bridges With Belgrade: Serbians Look to Moscow to Protect Nation's Interests https://sputniknews.com/europe/201702041050339515-russia-serbia-integration/
Related
Croatia, Serbia Buying Advanced Weapons https://sputniknews.com/europe/201702011050218507-croatia-serbia-buying-advanced-weapons/
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Pentagon Chief Calls Iran 'Single Biggest State Sponsor of Terrorism' https://sputniknews.com/politics/201702041050338034-mattis-iran-terrorism/
Related
Trump Sanctions Continue US Chest Beating Against Iran https://sputniknews.com/us/201702041050334934-trump-sanctions-chest-beating-iran/
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Russian-Iranian Military Cooperation 'Not Limited to Supply of S-300 Systems' https://sputniknews.com/world/201702041050339262-russia-iran-military-cooperation-future/
Related
Moscow, Tehran Ready to Establish Joint Venture to Churn Out Helicopters https://sputniknews.com/business/201612131048511645-russia-iran-helicopters/
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Trump's Immigration Order Halted Nationwide by US Federal Judge https://sputniknews.com/us/201702041050336363-trump-immigration-order-halted/
RELATED
Baghdad Amazed by Trump's 'Hasty, Wrong' Travel Ban, Pledges to Respond https://sputniknews.com/middleeast/201702041050334137-iraq-travel-ban-response/
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Iran Announces Counter Sanctions Against US https://sputniknews.com/middleeast/201702031050331205-iran-counter-sanctions-us/
RELATED 1
New Iran Sanctions Show Nuclear Deal Not in Best Interest of US - White House https://sputniknews.com/politics/201702031050329728-sanctions-iran-interests-us/
RELATED 2
German FM Says He Understands Why US Imposed New Sanctions on Iran https://sputniknews.com/middleeast/201702031050328497-germany-iran-missile-test/
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'Ukraine's Role as Troublemaker for Russia' Challenged in New Political Reality https://sputniknews.com/europe/201702031050303619-ukraine-troublemaker-russia/
RELATED
Russian Military Denies Shooting at Ukrainian Transport Plane in Black Sea https://sputniknews.com/russia/201702011050248710-russia-ukraine-plane-sea/
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Wind of Change: Russia, US to 'Closely Cooperate' Within UN Framework https://sputniknews.com/politics/201702041050336886-russia-us-closely-cooperate-un/
RELATED
Russia Expects Better Relations With US Under New Secretary of State https://sputniknews.com/politics/201702021050269630-russia-tillerson-hope/
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Easing Tensions? China Wants to Expand Cooperation With US in All Areas https://sputniknews.com/business/201702041050335914-china-us-beneficial-coopeartion/
RELATED
US-China Trade War: Why the Prospects Remain Low https://sputniknews.com/world/201701201049818234-us-china-trade-war/
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Unexpected Fallout: Trump Pick for US Army Chief Reportedly Withdraws Nomination https://sputniknews.com/us/201702041050337085-trump-pick-us-army-drops-out/
RELATED 1
White House Unaware if Trump Plans to Arm Ukrainian Forces – Spokesman https://sputniknews.com/us/201702031050329967-mccain-ukraine-trump-weapons/
RELATED 2
Senator McCain Says US Should Send Javelin Anti-Tank Missiles to Ukraine https://sputniknews.com/us/201702031050299158-mccain-javelin-anti-tank-missiles-ukraine/
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Mexico, Turkey Agree to Speed Up Negotiations on Free Trade Agreement https://sputniknews.com/latam/201702041050336791-mexico-turkey-accelerate-free-trade-deal/
RELATED
Mexico Sending Over $40 Million to Help Its Immigrants in US https://sputniknews.com/latam/201701281050096402-mexico-sending-money-usa-immigrants/
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RT SHOWS
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NOTICIAS IN SPANISH
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El tormentoso debut de Trump Claudio Katz
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Ent a James Petras “Tras la demagogia de
Obama llegó Trump y provocó proceso de mov popular"
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Estímular empresas USA y sus
consumidores "Made in
México", antídoto contra Trump
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Los otros muros que nadie ve Homar
Garcés
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Al nacionalismo de Trump opongamos el
nuestro: Cerrar Emb USA, sus barracas militares para –ojo- nacionalizar el oro. Es el decretazo a
calcularse para momento A-decuado.. Estilo Velasco. La caída de Trump es
inevitable: la oligarquía no lo quiere y menos el pueblo. Cuando se dé el golpe
en el US se dará la crisis esperada (aún se debate anular elecciones de Nov 8 y
dejar que Corte Suprema nomine Presid transitorio. Lo único claro: el Gbno T debe
desaparecer). Esa crisis será nuestro momento “A”.
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Frente Amplio: Desafíos tácticos y proyección estratégica Fco Plaza Frente=inclusión. Estrat= programa
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China, los 12 cargos del poderoso presidente Xin Centralis-Dec no es lo esencial. Plan Geo-pol-ec
lo es
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PRESS TV
Majority
of Americans disapprove of new president:
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Iran response to deal violation ‘to
be effective, immediate
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Russia vows
punishment for embassy in Syria
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US imposes
new sanctions on Iran on13 Iranian and 12
entities
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US-led
airstrike cuts off Raqqah water supply is
call humanitarian strike
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