American consumers are holding $1 trillion in revolving credit, mostly in credit card debt. So how well is this segment of consumer debt holding up? Synchrony Financial – GE’s spin-off that issues credit cards for Walmart and Amazon – disclosed on Friday that, despite assurances to the contrary just three months ago, net charge-off would rise to at least 5% this year. Its shares plunged 16% and are down 27% year-to-date. Credit-card specialist Capital One disclosed in its Q1 earnings report last week that provisions for credit losses rose to $2 billion, with net charge-offs jumping 28% year-over-year to $1.5 billion. Synchrony, Capital One, and Discover – a gauge of how well over-indebted consumers are managing to hang on – have together increased their Q1 provisions for bad loans by 36% year-over-year. So this is happening.
And suddenly the storms of early Trumptopia subside, or seem to. The surface of things turns eerily placid as the sweets of May sweep away the toils of an elongated mud season. Somebody stuffed Kim Jong Un back in his bunker with a carton of Kools and the Vin Diesel video library. France appears resigned to Hollandaise Lite in the refreshing form of boy wonder Macron. It’s been weeks since The New York Times complained about the Russians stealing Hillary’s turn as leader of the free world. We’re given to understand that Congress managed overnight to cook up a spending bill that will avert a Government shut-down until September. Rest easy America… oh, and buy every dip.
The genesis of the idea is as always the unemployment rate. Here, however, economists have it all backward as usual. They use it as a basis for transforming what is clearly weak into “solid”; like rose colored glasses, at 4.5% the unemployment rate makes everything appear to look rosy. Instead, the fact that nothing has changed from consistently pathetic disqualifies the unemployment rate, particularly given what we find for incomes and wages. The economy stays the same no matter what that ratio calculates.
After dropping to an all time low 62.9% in Q2 of 2016, the US homeownership rate rebounded modestly in the subsequent two quarters, before once again taking a step lower according to the latest Census data, released last week, and which showed that the percentage of US homeowners declined from 63.7% to 63.6% in Q1 of 2017, less than 1% from the all time lows in the series history going back to the mid 1960s….A breakdown of the data by age group reveals that the primary driver for this latest decline was once again the youngest age cohort. A breakdown of the data by age group reveals that the primary driver for this latest decline was once again the youngest age cohort.
Policing is broken… It has evolved as a paramilitary, bureaucratic, organizational arrangement that distances police officers from the communities they’ve been sworn to protect and serve. When we have shooting after shooting after shooting that most people would define as at least questionable, it’s time to look, not just at a few bad apples, but the barrel. And I’m convinced that it is the barrel that is rotted.”— Norm Stamper, former Seattle police chief. Please. Somebody give Attorney General Jeff Sessions a copy of the Constitution. And while you’re at it, get a copy to President Trump, too.
The Deep State Still Rules—Makes Trump’s Statement That South Korea Pay For THAAD System Inoperative
Like the child who innocently asks “Where are the Emperor’s clothes?” Donald Trump has once again blurted out a truth that none of the “adults” in the room are supposed to acknowledge. In an interview with Reuters, the President averred: On the THAAD system, it’s about a billion dollars. I said, ‘Why are we paying? Ah, but they don’t understand it – and neither does H. R. McMaster, Trump’s newly-appointed National Security Advisor, who rushed to assure Seoul that the President didn’t really mean what he clearly said. And the South Koreans, who are in the midst of a presidential election – the vote is on May 5 – are in a uproar.
And, as the in-fighting ramps up, it seems that Elizabeth Warren is quickly emerging as the leader of the far-left movement. In fact, she has become increasingly critical of President Obama in recent days with her most recent attack coming via an interview with the Guardian in which she suggested that Obama was disconnected from the woes of the working class people of the United States who are “getting kicked in the teeth” after 8 years of his rule. “I think President Obama, like many others in both parties, talk about a set of big national statistics that look shiny and great but increasingly have giant blind spots,” she told the Guardian. “That GDP, unemployment,no longer reflect the lived experiences of most Americans.
The industry has crossed the line into risky territory on automaker incentives, leasing levels and new-vehicle inventory, said AutoNation Inc. CEO Mike Jackson…….”To me, 30 percent leasing has always been a red line, where you’ve had a massive distortion if you take it above that,” Jackson said. He called incentives that top 10 percent of sticker prices another red line, and inventories above a 70-day supply yet another. “So we have three red lines that the industry in total is over on new vehicles,” he said.
With autos and general consumer spending rolling over, the two things propping up the economy are housing and durable goods orders, more specifically airplane orders. What’s up with that?…….Boeing is very good with its customers and accommodates to the extent possible. But, wide-body airplane demand is collapsing. Emirates just pulled 12 flights per day as US-Mideast travel is in decline due to Trump’s actions. 2018 and 2019 look grim for Boeing. Expenses are high and they are laying off to stay ahead of the curve.
For decades in art circles it was either a rumour or a joke, but now it is confirmed as a fact. The Central Intelligence Agency used American modern art – including the works of such artists as Jackson Pollock, Robert Motherwell, Willem de Kooning and Mark Rothko – as a weapon in the Cold War. In the manner of a Renaissance prince – except that it acted secretly – the CIA fostered and promoted American Abstract Expressionist painting around the world for more than 20 years……The connection is improbable. This was a period, in the 1950s and 1960s, when the great majority of Americans disliked or even despised modern art – President Truman summed up the popular view when he said: “If that’s art, then I’m a Hottentot.” As for the artists themselves, many were ex- communists barely acceptable in the America of the McCarthyite era, and certainly not the sort of people normally likely to receive US government backing.