February 17: Daily Contrarian Reads

What Recovery? January Industrial Production Flat-lined Versus Prior Year

Industrial Production in the United States was flat in January 2017, following in December the first positive growth rate in over a year. The monthly estimates for IP are often subject to greater revisions than in other data series, so the figures for the latest month might change in the months ahead. Still, even with that in mind, there is no acceleration indicated for US industry. After suffering through a more than yearlong slump, and for the manufacturing segment two years, there really should be. That there isn’t any is indicative of the same lack of meaningful change as we find in other economic accounts.

Whatever Happened to Inflation after All This Money Printing? It Has Arrived!

Consumer prices surged 0.6% in January from December, double the consensus forecast of a 0.3% rise. The sharpest monthly increase since February 2013, according to the Bureau of Labor Statistics…..Compared to January a year ago, consumer prices as measured by CPI-U surged 2.5%, after having already jumped 2.1% in December. The rate of inflation has now accelerated for the sixth month in a row. It has surged one full percentage point over the past four months and hit the highest rate since March 2012…..

It’s Over, Folks—-The Neocons And Deep State Have Already Neutered The Trump Presidency

Less than a month ago I warned that a ‘color revolution ‘ was taking place in the USA.  My first element of proof was the so-called “investigation” which the CIA, FBI, NSA and others were conducting against President Trump’s candidate to become National Security Advisor, General Flynn.  Tonight, the plot to get rid of Flynn has finally succeeded and General Flynn had to offer his resignation……  For one thing, Flynn dared the unthinkable: he dared to declare that the bloated US intelligence community had to be reformed.  Flynn also tried to subordinate the CIA and the Joint Chiefs to the President via the National Security Council.  Put differently, Flynn tried to wrestle the ultimate power and authority from the CIA and the Pentagon and subordinate them back to the White House.  Flynn also wanted to work with Russia. Not because he was a Russia lover, the notion of a Director of the DIA as a Putin-fan is ridiculous, but Flynn was rational, he understood that Russia was no threat to the USA or to Europe and that Russia had the West had common interests.  That is another absolutely unforgivable crimethink in Washington DC.

What Recovery—-Real Wage Growth Again Turns Negative On A Y/Y Basis

Real average weekly earnings for the private sector fell 0.6% year-over-year in January. It was the first contraction since December 2013 and the sharpest since October 2012. The reason for it is very simple; nominal wages remain stubbornly stagnant but now a rising CPI subtracts even more from them. Consumers receive no significant boost to their incomes, but are starting to pay more (in comparative terms) for things like gasoline. Without income growth, this is the background for why the economy can only ever remain in variable forms of stagnant.

Trump’s Envoy To Brussels Drops A Bomb—-EU Undemocratic, Elitist And Anti-American

In comments that will terrify Brussels, Ted Malloch said the EU had become “bloated” by bureaucracy and “anti-Americanism”. And he called for member states to hold their own Brexit-style referendums – which could spark the break-up of the union. It comes after Mr Trump hailed Brexit as a “blessing to the world” and said the UK would be far stronger outside the bloc.

Inside The Inflation Report—–Main Street Households Being Smacked With Huge Price Jumps For Necessities

The things that we all spend money on month after month just keep going up in price.  I am talking about food, housing, medical care and other essentials.  If there is one thing that we can always count on, it is the fact that things are going to cost more tomorrow than they do today. Let’s talk about food for a moment.  Whenever I go to the grocery store, I am almost always shocked.  I still remember a time when I could get everything that I needed for an entire week for about 20 bucks, but these days you can’t even fill up one cart for 100 dollars. That is because food prices have been rising aggressively for many years.  The following is a list that was posted on The Economic Policy Journal that shows how much some food and grocery items have increased over the past decade…

How Trump Could Trigger A Massive Wave Of Selling In The Treasury Market

In recent years, Treasury market volatility has come in the form of “tantrums” wrought by the Federal Reserve or other central banks. Now, that volatility could be spurred by the Trump administration. Hawkish foreign policy positions, coupled with looser domestic regulation, could create an avalanche of selling from two of the biggest Treasury buyers: big U.S. banks and China……U.S. commercial banks now hold $2.4 trillion in government debt and agency securities, more than double the total from nine years ago, according to the St. Louis Fed. But House Republicans — with the support of the administration — are pushing to roll back parts of the Dodd-Frank regulations that were put in place after the 2008 financial crisis. That means banks could get a reprieve from those capital level requirements, and they could reduce their Treasury holdings as a result.

Aetna CEO:  Obamacare In “Death Spiral” And “It’s Getting Worse”

And while Democrats may be all too willing to quickly dismiss our analysis, they may want to listen to the warnings of the CEO of one of the country’s largest health insurers who says that Obamacare is in a “death spiral.”……. Aetna CEO Mark Bertolini said, among other things, that the “risk pools are deteriorating in the ACA” to a point that it would inevitably result in more withdrawals this year….. “It’s not going to get any better; it’s getting worse….. There isn’t enough money in the ACA as structured, even with the fees and taxes, to support the population that needs to be served.”

Why Trump Didn’t Put Saudi Arabia On The Travel Ban—It’s The Petro-Dollar, Stupid!

It was a glaring omission that Saudi Arabia—the country that provided 15 of the 19 hijackers for the 9/11 attacks—was absent from the list. In short, the petrodollar is the glue that holds the US–Saudi relationship together. But its bind is not permanent. Bretton Woods lasted 27 years. So far, the petrodollar has lasted over 40 years. However, the glue is already starting to lose its stick. I think we’re on the cusp of another paradigm shift in the international financial system, a change at least as fundamental as the end of Bretton Woods in 1971. The relationship between Saudi Arabia and the US is near historic lows. I only expect it to get worse.

The New Normal of Ultra-Low Interest Rates Is Actually Dangerously Abnormal

After nine years of outrageous, unwarranted and irrational monetary policy, some people are taking the current monetary regime as normal and natural — the new normal. You can see this on corporate ballot sheets, bank leverage, and the low personal savings rate.