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October 22, 2018 | China Builds Infrastructure, US Drops Bombs

Obama bombed 7 nations. Trump threatens Iran. Meanwhile, China builds infrastructure. Its foreign policy makes sense. The American Conservative asks Is China Waiting Us Out? The subtitle “While the U.S. bombs, Xi Jinping is building—one power play at a time” provides the answer, but let’s investigate the details. The one constant in recent U.S. foreign policy—regardless […]

October 21, 2018 | “Ultra-FICO” to Boost Credit Scores Giving Millions More Access to Credit

Just in the nick of time not: Fair Isaac is launching a new type of credit score that will give millions more credit. Just as the economy is peaking, consumers with a low FICO could get a higher “UltraFICO“, a new score that factors in bank-account activity as well as loan payments. Credit scores for […]

October 20, 2018 | Adding to Merkel’s Woes: SPD’s Collapse in Germany, Greens the New Left Darlings

Support for Merkel’s coalition partner SPD is in a state of collapse. And it’s not just a single poll. Greens the Big Beneficiary in SPD Collapse Support for Merkel’s coalition partner SPD is in a state of collapse. Four consecutive polls have SPD at 14%. The Green party is at 21% in the latest poll […]

October 19, 2018 | Existing Home Sales Drop 6th Consecutive Month

Existing home sales declined 3.4% in September. This was the 6th month and the 5th month below the consensus estimate. The NAR reports Existing-Home Sales Decline Across the Country in September. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 3.4 percent from August to a seasonally adjusted rate […]

October 18, 2018 | “One Size Fits Germany” Math Impossibility, Get Your Money Out of Italy Now!

Italy, on the Euro, has a currency that is 9% too high. Germany, on the Euro, has a currency that is 11% too low. There was much discussion yesterday about the US Treasury report that determined China was not a currency manipulator. However, there are six countries on the manipulation watch list: China, Japan, Korea, […]

October 17, 2018 | Fed Minutes Suggest Gradual Rate Hikes Coming: Little Market Reaction

As expected, the Fed signaled gradual rate hikes are coming. The Fed released the Minutes of the September 26, 2018 FOMC Meetingtoday. Information received since the Federal Open Market Committee met in August indicates that the labor market has continued to strengthen and that economic activity has been rising at a strong rate. Job gains have […]

October 16, 2018 | Debt Counselor Phones at “Capacity” in Australia over Mortgage and Rent Issues

Too Much Debt: Financial helpline counselors are at capacity as record numbers of older Australians struggle in poverty. Down under, a Record Number of Older Australians are in Financial Trouble. Key Points The National Debt Helpline — a federal government-run financial counselling service — said it’s on track to receive a record number of cases through […]

October 15, 2018 | Gold Shorts About to Get Burned

The Gold COT report shows gold shorts piling on in addition to long liquidation. Meanwhile, the price of gold is rising. Gold Daily Chart ​ This is an incredibly price-bullish setup. Buy Gold. Mike “Mish” Shedlock

October 13, 2018 | GDPNow vs Nowcast Gap Widens Again, Huge GDPNow Inventory Contribution

The Atlanta Fed GDPNow Model Forecasts 4.2% GDP Growth. Nowcast is 2.3%. Inventories contribute 2.2 % to GDPNow. The gap between the GDPNow and Nowcast Third-Quarter GDP estimates widened slightly to 1.9 percentage points. The latest estimates are 4.2% for GDPNow on October 10 and 2.3% for Nowcast on October 12. The inventory contribution for […]

October 12, 2018 | Inevitable De-Industrialisation of Europe

EU ministers agreed to binding cuts in CO2 emissions of 35% by 2030. The German auto industry won’t be able to deliver. The Telegraph reports Berlin court orders German capital to ban most diesel vehicles on 11 major roads to counter pollution. Hamburg was first in May. Stuttgart, home of Mercedes and Porsche, was second in […]

October 11, 2018 | A Recession is Coming. Who Will Take the Blame?

All booms end in recession. So who will accept the blame for the next one? Of course, nobody will volunteer to take any portion of the blame. Yet fingers will most assuredly be pointing. Trump will blame the Fed for hiking too fast. The Fed will blame Trump for starting a trade war. Scarcely anyone […]

October 10, 2018 | IMF Warns About Emerging Markets: Hello “Always Late” IMF, Global Crisis Coming

The IMF is finally warning that there may be an emerging market crisis. Hello IMF, it’s already here. Look ahead. The IMF is perpetually late in its forecasts. Here’s the latest hoot: IMF Warns of Possible Emerging-Markets Crisis. A new study by the International Monetary Fund projects emerging economies will muddle through recent market turbulence without […]

October 9, 2018 | Wide Gap Between Wages and Median Home Price: Home Buyers Dilemma

The BLS says wages are rising faster than the CPI. Prospective home buyers would not agree. If you do not already own a home it’s getting harder and harder to buy one. Meanwhile, rent outstrips wage growth. Key Ideas Those who seek to buy their first home will have a very difficult time finding one […]

October 8, 2018 | How Import Chinese Steel Tariff-Free: Change the Label to Turbine Parts

18,927 product codes provide countless ways to avoid tariffs by relabeling. Evidence suggests that’s happening. Switching around the 18,927 codes that identify imported goods is an increasingly popular way some Chinese exporters are ducking American tariffs according to the Wall Street Journal report: New Era of Tariff Dodges. Every product imported into the U.S. carries […]

October 7, 2018 | Australia Auto Crash on Top of Housing Crash

New car sales in Australia are down for the sixth consecutive month. The real numbers are worse. News AU reports New-Car Sales Hit the Brakes for the Sixth Month in September. Here’s the punchline: Dealers report the downturn is sharper than what the reported sales figures show. Official figures show new-car sales hit the brakes for […]

October 6, 2018 | New Single Family Home Sales vs New Residential Construction

The above chart plots sales, held for sale, sold, and starts. It doesn’t quite add up, but it’s close. Comparing New Home Sales and New Residential Construction I totaled the above numbers in various ways and they did not quite match up. The Census Bureau explains. We are often asked why the numbers of new single-family housing […]

October 5, 2018 | Y-o-Y Employment is Up an Average of 136K Per Month, Jobs 211,000 Per Month

Year over year employment is up an average of 136,000 per month. Jobs are up an average of 211,000 a month. Employment, a household survey measure, is more volatile than jobs, an establishment survey measure. The divergence is large even though the trends look alike. Jobs vs. Employment Level ​ The trends are in the […]

October 4, 2018 | China Infiltrated 30 US Companies Including Apple and Amazon with Hardware Hack

Amazon discovered a hardware hack while testing servers supplied by a Chinese company. Apple was hit as well. Bloomberg has a fascinating report on how China used a tiny chip to infiltrate U.S. companies. The attack by Chinese spies reached almost 30 U.S. companies, including Amazon and Apple, by compromising America’s technology supply chain, according […]

October 3, 2018 | China’s Effort to Rein in Property Bubble Creates “Rental Loan” Bubble as Well

Rental loans, intended to ease the cost of living in big cities, contribute to China’s property bubble mess. Once an economic bubble is inflated, it is damn near impossible to let the air out slowly. China’s effort to rein in a property bubble by making it harder to buy homes has the price of rent […]

October 2, 2018 | Kavanaugh Carnival: Ford’s Paper on “Creating Artificial Memories”

The carnival continues with interesting twists such as Ford’s paper about using self-hypnosis to create memories. The Federalist reports Kavanaugh Accuser Co-Authored Study Citing Use of Hypnosis to Retrieve Memories. Christine Blasey Ford, a California woman who has accused Supreme Court nominee Brett Kavanaugh of attempted rape in the 1980’s, co-authored an academic study that cited […]

October 1, 2018 | Construction Spending Weakness: Private Spending Down 0.5%, Government Up 2.0%

A surge in gov’t spending kept construction spending in the green by 0.1%. Private spending is down and trending lower. Construction spending reports are volatile and heavily revised, but given the weakness in most housing reports, the Monthly Construction Report for August rings true. Total Construction Construction spending during August 2018 was estimated at a seasonally adjusted […]

September 30, 2018 | McKinsey: Corporate Executives Increasingly Wary of Global and Local Economy

Sentiment is down for the 3rd straight quarter in McKinsey survey of businesses. Trump’s trade policies at heart of it. According to the McKinsey Economic Conditions Snapshot, September 2018, business sentiment is down for the third quarter. The global outlook is worsening at a faster pace than local conditions. As they regard economic conditions at […]

September 29, 2018 | Mortgage Rates Highest Since Early 2011: Fed Could Push US Into Recession

The 15-year average mortgage rate is 4.22%. The 30-year rate is 4.72%. These are the highest rates since early 2011. Bleakley Advisory Group’s Peter Boockvar says the Fed and Global Central Banks Could Push the U.S. into Recession. Mortgage Rates Highest Since Early 2011 ​ Mortgage News Daily sees things slightly differently but the the disagreement […]

September 28, 2018 | GDP Estimates Dive Following Trade and Income Data

GPD estimates generally tanked this week. Curiously, the Nowcast forecast rose. I can show why. GDPNow The GDPNow forecast fell from 4.4% on September 26 to 3.8% on September 27, then to 3.6% on September 28. Disastrous trade data accounted for 0.5 percentage points of the drop on the 27th. Income and expenditures accounted for the entire […]

September 27, 2018 | Durable Goods Order Jump 4.5%, Almost Entirely on Aircraft

Durable goods orders jumped 4.5% in August. Excluding transportation, durable goods orders increased 0.1%. The Census Department report on Advance Durable Goods shows orders rose 4.5% in August. New Orders New orders for manufactured durable goods in August increased $11.1 billion or 4.5 percent to $259.6 billion, the U.S. Census Bureau announced today. This increase, up two […]

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