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June 16, 2018 | Demographics and Destiny: Pension Trainwreck Coming Up

A pension crisis looms as shown by excellent charts from the Harvard Kennedy School and the Peter G. Peterson Foundation John Mauldin compiled an excellent set of charts and comments on the pension crisis in this week’s Thoughts from the Frontline. This is a guest post. The Pension Train Has No Seat Belts by John Mauldin. In describing […]

June 15, 2018 | NY Fed President Dudley Complains Unemployment is Too Low, Rate Hikes Needed

NY Fed President William Dudley is worried about the low unemployment rate. He thinks the Fed needs to be above neutral. New York Fed President William Dudley will retire Monday. Current San Francisco Fed chief John Williams will take over. He departs with one more gem: Dudley Foresees Need for Fed Rate Hikes to Slow […]

June 14, 2018 | Spending Like Crazy: Retail Sales Jump but Bond Yields Lower

Retail sales jumped far more than expected in May, up 0.8% vs a consensus estimate of 0.4%. Curiously, bond yields fell. The Advance Estimate of U.S. Retail and Food Services suggests consumers are spending like crazy. Advance estimates of U.S. retail and food services sales for May 2018, adjusted for seasonal variation and holiday and […]

June 13, 2018 | Fed Hikes Again, Modifies Accommodation Language, Plans on 2 More Hikes in 2018

The Fed hiked rates to a range of 1.75% to 2.00% as unanimously expected. As expected, Fed Raises Interest Rates, Sets Stage for Two More Increases in 2018. The latest increase, the second this year, will bring the benchmark federal-funds rate to a range between 1.75% and 2%. Officials penciled in a total of four […]

June 12, 2018 | Year-Over-Year CPI Up Most in 6 Years, Bond Market Reacts with Big Yawn

Inflationistas are howling about the CPI but yields at the long end of the curve are flat to slightly lower on the day. The BLS Consumer Price Index summary shows the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in May on a seasonally adjusted basis after rising 0.2 percent in April. […]

June 11, 2018 | The WSJ asks “Is the Booming Job Market a Problem?” I ask “Are Jobs Booming?”

The Wall Street Journal believes the Fed has a jobs-based dilemma. Let’s investigate the claim. The WSJ says the Fed has to figure out whether inflation is around the corner. Allegedly, the wrong choice could cripple the economy. Please consider The Fed’s Biggest Dilemma: Is the Booming Job Market a Problem? No question looms larger for […]

June 10, 2018 | Bitcoin Dives Below $7,000 Extending Losses Following $40 Million Hack

Bitcoin extends losses following the hack of the South Korean crypto exchange Coinrail. Bloomberg reports Bitcoin Tumbles Most in Three Months Amid South Korea Hack. Bitcoin extended losses for a third day, tumbling 12 percent Sunday as South Korean cryptocurrency exchange Coinrail said there was a “cyber intrusion” in its system. The largest cryptocurrency declined to […]

June 8, 2018 | Social Security Payments Exceed Income: “Trust Fund” Will Be Wiped Out by 2034

The notion there is a trust fund is ludicrous but let’s look at this story through the eyes of a WSJ report. The Wall Street Journal reports Social Security Expected to Dip Into Its Reserves This Year. The Social Security program’s costs will exceed its income this year for the first time since 1982, forcing […]

June 7, 2018 | Average New Vehicle Auto Payment Hits Record High $523 Per Month

The average size of a loan for a new car in the U.S. set a record in the first quarter as did the average payment. Database firm Experian notes U.S. Monthly Auto Payments Reach Record High in First Quarter. New vehicle loans averaged $31,455 The average monthly payment for a new vehicle hit at record $523/month […]

June 6, 2018 | Amidst Inflation Scare, Price War intensifies between Costco, Target, Walmart

You’re not imagining things. Stuff is a little bit cheaper at Costco, Target, Walmart, and Kroger this year. Bond yields jumped today over fears of a wage-induced bout of inflation. Meanwhile, price wars have broken out. CNN Money reports Price War Intensifies Between Costco, Target and Walmart. Costco: “Price is at the top of our […]

June 5, 2018 | Brazil Steps Up Intervention to Support the Real: Reflections on Currency Wars

Winning currency wars is easy. As with trade wars, one may not care for the end result. Bloomberg reports Brazil Steps Up Intervention as the Real Crashes Toward Two-Year Low. Brazil’s central bank bolstered efforts to shore up the currency after it tumbled to the weakest level since former President Dilma Rousseff’s tumultuous impeachment in 2016. […]

June 4, 2018 | NAFTA is Dead: Trump Seeks Separate Agreements With Mexico and Canada

Trump proposes NAFTA by another name. But it won’t look like NAFTA. He wants tailored bilateral trade agreements. President Trump says Mexico and Canada are ‘very different countries’. That is true of any two countries, even countries in the EU. And on that note Trump Raises Prospect of Separate Trade Deals With Canada, Mexico. “I […]

June 2, 2018 | Google Ad Revenue Increases, Competitors Drop, After EU’s New Privacy Rules

The EU is targeting Google. Preliminary results show one part of the plan has backfired already. Here’s the hoot off the day: Google Emerges as Early Winner From Europe’s New Data Privacy Law. GDPR, the European Union’s new privacy law, is drawing advertising money toward Google’s online-ad services and away from competitors that are straining to […]

June 1, 2018 | Hot May Jobs Report: Employment +223K, Private Wages Rose $0.08 Per Hour

Jobs exceeded expectations and the unemployment rate edged lower to 3.8% as the participation rate fell. Initial Reaction Today’s establishment survey shows jobs rose by 223,000. The Econoday consensus estimate was +190,000 jobs in a range of 150,000 to 220,000. Nonfarm wage growth was +0.3%. The unemployment rate dropped as the labor force was barely […]

May 31, 2018 | Liquidity Crisis Coming: Here, There, Everywhere

Jim Puplava thinks a liquidity crisis is on the horizon. I agree, adding that the problem is global. Please pay attention to Jim Puplava at Financial Sense. He says a Liquidity Crisis Looming. In total, index funds represent $7 trillion of U.S. stock funds that have no active manager. All buying and selling are done […]

May 30, 2018 | Fed’s Beige Book Supposedly Shifts Into Higher Gear: Reality vs. Anecdotes

The Fed’s “Beige Book” report finds employment grew at a modest to moderate pace across most Fed districts. The Fed’s “Beige Book” is a compilation of economic activity by each of twelve Federal Reserve districts. The title sounds impressive but it is little more than a summation of the anecdotes from the latest Fed regional […]

May 29, 2018 | Illinois Pension Benefits, Other Promises, and Insolvency

Let’s take a momentary reprieve from Italian insolvency to discuss the sorry state of affairs in Illinois. WirePoints asks: Will Illinois budget negotiations reverse the 10 trends dragging Illinois toward insolvency, or simply perpetuate them? This a guest post from WirePoints. I will skip the blockquotes and instead note the end of the article. By […]

May 28, 2018 | Hello Treasury Bears: About That 3.0% Treasury Yield Line in the Sand

According to numerous treasury bears, yields would soar out of control once the 3.0% threshold broke. Well? Here are some amusing predictions. ​ No Such Thing As Lines in the Sand Note to Bill Gross, MarketWatch, the Edelson Institute, the Financial Times, Jeffrey Gundlach, Heritage Capital, and numerous other forecasters not caught up in that […]

May 27, 2018 | Kilauea: 4 Major Explosions Send Ash, Vog 15K Ft High, Power Plant Questionable

A geothermal plant has never been engulfed by lava. We are on the verge of discovering the risks. The Huffington Post reports New Lava Flow Encroaches Onto Power Station Property On Hawaii’s Big Island. Encroachment on the property started several days ago, and dozens of nearby homes have been destroyed, but the big question is “what’s […]

May 26, 2018 | GDPNow Morphs Into Flatline of Consistency: Take the Under

At the start of the quarter, Pat Higgins at GDPNow announced changes to reduce volatility. It worked but how accurately? I now have enough GDPNow Data Points for the second quarter to display a chart. Those used to amazing volatility may now be amazed by amazing non-volatility, especially in the real final sales estimate. On April 30, […]

May 25, 2018 | Cash Out Refis 10-Yr High, Private-Label Credit Card Delinquencies at 7-Yr High

If you think the economy is improving, you better check your facts and some disturbing trends. Despite the much ballyhooed “strong jobs” economy, things are not what they seem upon closer inspection. For example, Store-Branded Credit Card Delinquencies Hit 7-Year High. The share of private-label credit cards with accounts at least 60 days delinquent is 4.65%, […]

May 24, 2018 | Housing Peak? Existing Home Sales Drop 2.5%, Down Year-Over-Year Second Month

It’s looking increasingly likely that housing has peaked this cycle. Year-over-year sales are down the second month, The Econoday economists missed the mark badly this month on existing home sales. Single-family home sales fell 3.0%. Overall sales fell 2.5% for the month and were lower than even the lowest estimate. Year-over-year sales are down 1.4%. […]

May 23, 2018 | Germany Accuses Italy of “Debt Blackmail”: Hello EU, Time for Reform Expired

For 10 years, the EU and EMU promised reform. None was delivered. Time is Up. Populists have taken control of Italy. Merkel’s CDU/CSU coalition is in a state of panic regarding Italy. The German parties went on the attack accusing Italy of “debt blackmail” Eurointelligence Snips This was the day when people who were left […]

May 21, 2018 | Italy’s New Prime Minister Puppet: Time to “Ringfence” Italy? MMT to the Rescue?

Giuseppe Conte is slated to become Italy’s next prime minister. But he will not be in charge of anything. The Financial Times calls Giuseppe Conte, Italy’s Prime Minister designate, a Political Novice. That’s precisely the point of it all. Conte will have no power. Instead, he will take orders from League leader Matteo Salvini and […]

May 20, 2018 | NY Fed Study on Home Prices & Ownership Rates Shows Skewed Recovery Benefits

A report on home prices and housing wealth contains a set of interesting charts and observations. The New York Fed report on Home Prices, Housing Wealth and Home Equity Extraction provides an interesting look at home prices and home ownership rates before and after the recovery. Mortgage Debt​ ​ Home Prices ​ Ownership Rate ​ Home Ownership […]

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