Now, in yet another note from Goldman over the weekend, the bank’s Washington analyst Alec Phillips breaks down the “Fiscal Constraints on the Political Agenda” and lays out why, despite Trump’s intention to announce “something phenomenal on taxes in the next 2-3 weeks”, a statement which promptly boosted stocks to new all time highs, the reality is far different, and that between Trump’s tax plans and various other aspects of the president’s fiscal agenda, the most likely outcome will be imminent disappointment as the plan begins to move through Congress where it is about to hit major roadblocks.
Show me your budget and I’ll tell you what you value. Under the Trump administration, what is valued is spending on military weaponry and wars. The Pentagon is due to get a major boost under Trump, as reported by the Associated Press and FP: Foreign Policy: Money train. It’s looking like it might be Christmas in February for the U.S. defense industry. The Pentagon has delivered a $30 billion wish list to Congress that would fund more ships, planes, helicopters, drones, and missiles, the AP reports.
One year ago, when we first started discussing the Vancouver housing bubble, which as we first speculated – and was later confirmed – was the result of Chinese oligarch money-launderers parking “hot cash” in this offshore housing market (at least until a 15% property tax on foreign purchases made Seattle the new Vancouver), we said that Vancouver houses had become the de facto new Swiss bank account, and because of that the houses – once purchased – would remain a highly overprized, if vacant tribute to China’s soaring capital outflows.Now, courtesy of data by urban planner Andy Yan of Simon Fraser University’s City Program, this has been confirmed because according to the latest census numbers, as of 2016 there were 25,502 unoccupied or empty housing units in the City of Vancouver. Expanding to include the entire metro area, Yan found that vacant or temporarily occupied dwellings have more than doubled since 2001 to 66,719 last year as neighborhoods have hollowed out.
The “rising dollar” hit EM economies by far the hardest, and for that most of them suffered years of contraction. While numerous statistics here and in other places are starting to suggest an end to that specific downturn, against all prior experience it doesn’t mean recovery. In places like Brazil, you end up with what used to be called “scraping along the bottom” – at best. Last month, the OECD estimated that in November 2016 for the first time in almost three years industrial production was positive year-over-year. It was really flat (+0.8%), but though the number was low it was at least one with a plus sign in front of it….it doesn’t come close to erasing the contraction that really began in the middle of 2013. Since peaking in June of that year, small coincidence given the “dollar” actions at the time, Brazil’s IP index is down an astounding 19% through November. Some renewed positive numbers are small comfort given what has transpired.
Jackson knew powerful banking and corporate interests were the antithesis of how a government by the people, for the people and of the people should function. He also knew debt and fiat paper created a speculative gambling economy, not beneficial to the common man over the long-term. Giving away the power of the people to bankers and corporations created as much havoc and suffering in the 1830s as it has today.
Donald Trump is proving himself a President prone to unleashing inconvenient truths side by side with blatant falsehoods. One of the most scurrilous of those falsehoods is his recent claim that Iran is the “number one terrorist state.”……The Trump administration’s consistent and ongoing demonization of Iran flies in the face of reality in which Iran has stood, alongside Syria, Russia, the Kurds, and the Iranian-backed Lebanese resistance movement Hezbollah, as a pillar against the very same Salafi-jihadist terrorism that poses a threat to the American people. It is a struggle in which the Iranians have expended both resources and blood in recent years, and as such justice demands that the world, including the United States, acknowledges that it owes Tehran a debt of gratitude.
An especially bizarre claim made by opponents of reform is that the proposal would give the air traffic corporation the power to “tax” airspace users. That deliberately obscures the legal distinction between taxes and user fees. When Dulles Airport charges an airline company landing fees, is it taxing the airline? Of course not, just as people’s electric bills for the power they use are not taxes. This distinction holds whether the airport or electric utility is a public-sector or private-sector entity. That stream of user fee revenues is how airports finance major capital improvements; they go to the bond market and issue revenue bonds, based on that predictable revenue stream from users. The same is true of air traffic control corporations like Nav Canada and its U.K. counterpart, NATS. Both have investment-grade bond ratings, due to their predictable revenue streams and prudent management.
Now with one Navy SEAL dead, several others injured, and a $75-million aircraft destroyed, the calculus has changed. However briefly, Yemen is in the headlines, with the press even taking note of the civilian bystanders killed and wounded as the Americans fought to extricate themselves from an operation gone awry. Here for our novice commander-in-chief who has promised “we’re gonna win so much people will say we can’t take it any more” was a vicarious baptism of fire……Senior civilians and senior military officers today engage in their tug of war over military minutiae—when, how, and whether to conduct a raid—because doing so enables them to sustain the pretense that the United States is engaged in a strategically purposeful enterprise: that America is killing people pursuant to some plausible political outcome. The truth of the matter is that America is killing people—terrorists and others—because its leaders don’t know what else to do.
Before the Financial Crisis, German lenders went on a wild binge and became the world’s biggest issuers of shipping loans that ended up funding horrendous overcapacity of ships, just when global trade would face enormous challenges. Of the $400 billion in maritime loans issued by large banks, German banks hold nearly $100 billion.Bankruptcies have cascaded through the shipping industry, starting with bulk carriers during the Financial Crisis then converging on container carriers. In August last year it sunk Hanjin, the sixth largest container carrier in the world. In Germany, these bankruptcies have created a financial bloodbath that has led to serial bank bailouts with much more pain to come.
The United States is adding new sanctions on Iran over that country’s alleged misdeeds, and nearly all of those allegations are either out-and-out lies or half-truths. It has a familiar ring to it, as demonizing Tehran has been rather more the norm than not since 1979, a phenomenon that has included fabricated claims that the Iranians killed American soldiers after the U.S.’s armed interventions in Afghanistan and Iraq. This time around, the administration focused on the perfectly legal Iranian test of a non-nuclear-capable, medium-range ballistic missile and the reported attack on what was initially claimed to be a U.S. warship by allegedly Iranian-backed Yemeni Houthi fighters. The ship was later revealed to be a Saudi frigate.