US Economy

19

Bannon: US in “economic war” with China

Via The Guardian: White House chief strategist Steve Bannon has given an unusual interview in which he claimed there was no military solution for North Korea, the far right was a “collection of clowns” and the left’s focus on racism would allow him to “crush the Democrats”. Bannon, who has been called the mastermind behind Donald Trump’s nationalist

6

Are US stocks a bubble about to burst?

As said this morning, the Fed hedged dovish minutes today with this: This overall assessment incorporated the staff’s judgment that, since the April assessment, vulnerabilities associated with asset valuation pressures had edged up from notable to elevated, as asset prices remained high or climbed further, risk spreads narrowed, and expected and actual volatility remained muted in

70

Trump isolated as neo-Nazi crisis escalates

From the NYT: President Trump’s main council of top corporate leaders disbanded on Wednesday following the president’s controversial remarks in which he equated white nationalist hate groups with the protesters opposing them. Soon after, the president announced on Twitter that he would end his executive councils, rather than put “pressure” on executives. The quick sequence

43

When a Superpower leads with its chin

The memory-free Australian press likes to couch Donald Trump as a random mad man taking America down untrodden paths to disaster. In truth he is something more complex and less easily judged for the dependent ally. Leaders do not spring from holes in the ground. They are their political culture, parties and people manifest. Through

26

The Democratic case for restricting immigration

By Leith van Onselen Left-leaning magazine, Vanity Fair, has published a well-argued article laying the Democratic (left) case for restricting immigration into the United States: With stricter border enforcement, employers would immediately start to feel a reduction of available labor, as is already happening… With the share of low-skill workers becoming smaller, many sorts of

41

The Mooch is gone as Trump deadlocks the Swamp

by Chris Becker Is the civil war in the White House – bigger than the first one back in 1860 according to Trump – over with the dumping of freshly minted mini-me Anthony Scaramucchi? Was The Mooch sacrificed for the greater good by incoming Chief of Staff John Kelly? Does anyone want to work at

4

US lowflation temporary or permanent?

Via Westpac: In recent months, uncertainty over the outlook for US inflation has grown. From a peak of 2.8%yr in February, headline CPI inflation abruptly fell back to 1.6%yr in June. Similarly core inflation (which excludes the impact of food and energy) slowed from 2.3%yr in January to 1.7%yr. Albeit only available to May, the

20

Democrat launches Trump impeachment

From The Hill: Rep. Brad Sherman (D-Calif.) formally introduced an article of impeachment against President Trump on Wednesday that accuses the president of obstructing justice during the federal investigation of Russia’s 2016 election interference. This is the first time a lawmaker has offered an impeachment article against Trump, and it comes as Democrats have debated whether it is

5

Vampire squid wraps tentacles around the Fed

Via Politico: President Donald Trump is increasingly unlikely to nominate Federal Reserve Chair Janet Yellen next year for a second term, four people close to the process said. National Economic Council Director Gary Cohn is now the leading candidate to succeed Yellen as the world’s most important central banker, these people said. Yellen begins two

29

Impeachment risks rise as Trump’s Russian debacle deepens

Via Citi: Today’s release of a series of emails by Donald Trump Jr., President Trump’s son, and the subsequent reaction by financial markets and in the news media has again highlighted one of this year’s key political risks: concerns about durability of the Trump Administration, and its ability to pass the pro-business legislative agenda that

1

Stocks roar as US lowflation returns

The Aussie dollar took off Friday night against the USD and firmed against EUR: It also rose against most EMs: Gold broke out: Brent broke down: Base metals were mixed: Big miners were flat: Em stocks hit new highs: US high yield is firming as EM stalls: The US yield curve was crushed: European spreads

0

Will reversing Fed QE trigger volatility?

Via Deutsche: Summary The common wisdom is that Fed tightening combined with tapering could lead to greater volatility. The reality is far more complex, it is more like a driver shifting gear to adjust his deceleration as he coasts to the red light. If he doesn’t he might just have to hit the brakes hard.

4

Markets dismiss hawkish Fed

Got the lurgy today so limited posting. Fed minutes were out last night: …Importantly, PCE  growth was expected to pick up to a stronger pace in the spring, which would be more consistent with ongoing gains in employment, real disposable personal income, and households’ net worth. …Members generally judged that it would be prudent to

71

The US Health system is busted

By Leith van Onselen VOX has produced an interesting study on the US health system where, despite spending by far the most in the world, health outcomes are poor by developed world standards, partly due to the overuse of expensive low-quality drugs: Abstract: Despite higher per capita healthcare spending, US health outcomes compare poorly with

23

Has Trump killed the Trump trade?

Citi says it’s all a storm in teacup:  A report from the New York Times citing a memo alleging that President Trump asked former FBI Director Comey to end an investigation into Russian links has roiled markets. Concerns about Congressional reviews, potential special prosecutors and a deeper inquiry into the allegations could paralyze the

82

Is Trump headed for Watergate?

New York Times: President Trump asked the F.B.I. director, James B. Comey, to shut down the federal investigation into Mr. Trump’s former national security adviser, Michael T. Flynn, in an Oval Office meeting in February, according to a memo Mr. Comey wrote shortly after the meeting. “I hope you can let this go,” the president

0

Previewing US jobs

Cross-posted from Calculated Risk: On Friday at 8:30 AM ET, the BLS will release the employment report for April. The consensus, according to Bloomberg, is for an increase of 185,000 non-farm payroll jobs in April (with a range of estimates between 150,000 to 225,000), and for the unemployment rate to increase to 4.6%. The BLS

3

Is Chimerica about to “buckle”?

I generally take Ambrose Evans-Pritchard with a grain of salt but this can’t be ignored: Global recession risk rises as the US and China tighten into the storm Equity investors across the world are positioned for the nirvana of synchronised and accelerating global expansion led by China and the US. What they may instead get