Around the world, many companies that binged on easy credit after the global financial crisis have excess capacity and are struggling to find buyers, since economic growth in the U.S., Europe, and Japan is relatively weak, and China’s economy is cooling. “The pie is growing more slowly, and that makes domestic producers more defensive about their share of it and more willing to fight when threatened,” says Tim Condon, chief Asia economist in Singapore with ING. Bloomberg Intelligence chief Asia economist Tom Orlik points out that over the past two decades, consumers and businesses have spent heavily on laptops, tablets, and smartphones, but despite efforts by Apple and others to popularize smart watches, there’s no new must-have device to boost global trade. Stagnant income growth in the West also forces politicians to show they understand voters’ worries. “The pressure grows for governments to appease those voices by giving them the things they want,” says Orlik, “and the things they want are trade restrictions.”
The tide is turning with a vengeance for emerging-markets debt. Investors are fleeing funds that focus on the debt, yanking a record $6.6 billion from emerging-markets bond strategies in the week ended Nov. 16, according to EPFR Global data. The debt is poised for its biggest monthly loss since the so-called taper tantrum of 2013, when Federal Reserve Chair Ben Bernanke hinted that the central bank might soon slow its monthly bond purchases and threw markets into a tizzy.
Individually, we can analyze the charts. They mostly look ominous. Despite record auto sales that realistically have little room to go anywhere but down, the auto inventory-to-sales ratio is at the top end of the range. Retailers have over-expanded in an economy that has clearly shifted away from big box stores to online delivery. The manufacturers chart is skewed because manufacturing includes autos. Merchant wholesalers looks downright scary.
President Obama’s Federal Register added 572 pages on Thursday (Nov. 17) alone! Obamacare, Dodd-Frank, Consumer Financial “Protection” Agency, EPA, etc? Land of the free is now the land of the over-regulated. Check it out. Obama holds the record for the four largest increases regulatory pages, George W. Bush is in 5th place, then Obama again in places 6-8, Bush again in places in places 9-10, then finally Obama again in 11th place.
They support a significant increase in spending on highways, bridges and other infrastructure to stimulate the economy, as Trump has proposed. However, they are incensed that the proposed spending of as much as $1 trillion over the coming decade is not offset by corresponding cuts in other government programs. Rep. Raul Labrador (R-ID) warned that unless Trump came up with a way to legitimately pay for the new infrastructure, “then a majority if not all of us will vote against it.”
Unfortunately, the business media stream, investment research and other threads are dominated by consensus thinking. Their utility for both short-term traders and long- term investors is diminishing over time as they not only refuse to make waves with dissenting views but by their representations of foogazi-like and mistake-free recommendations. (Divine Ms M calls these pundits “carpet sweepers.”)
As millions of Americans mourn Donald Trump’s victory last night — and millions celebrate it — divisions within American society are growing increasingly glaring. While some are rioting and others are vowing to move the Canada (while still others are heralding the birth of a renewed nation), some Californians are eager to secede from the rest of the country.
Alan Greenspan in June 2003 essentially set up an infallible test. The results perfectly clear from all over the world through a quarter century of economic history, and there is no money in monetary policy; what has been proved as not credible is monetary theory, calling into doubt all those economic degrees that Alan Greenspan used for a joke to make his point. But the point he made shows that the joke is on us for allowing this to continue since all that it is left now are some positive numbers that get many people really excited just as in Japan heading into 1993 and the surefire fruits of “stimulus.” They will try to claim it is actual growth worth heralding even though it looks more and more like Japan’s lost decade the further we go. The world’s economy problem is not what policy Janet Yellen or Haruhiko Kuroda might carry out now, it is Janet Yellen and Haruhiko Kuroda.
Hillary Clinton and Donald Trump have both recommended large increases in infrastructure spending as a means of increasing the efficiency and size of the economy and boosting wages. But this is not the cure for our economic malaise. Productivity and wages are not generally suffering from an insufficiency of infrastructure. They are suffering from a glut of government.
The neocons know who are their enemies, and they accurately saw Trump as their undoing: they led the “Never Trump” mini-movement, and did everything in their power to destroy him. They sponsored and promoted two open letters from the GOP “foreign policy community,” a.k.a. the League of Discredited Warmongers, viciously attacking Trump: a concerted campaign to declare him “unfit” for office was promoted by the neoconservative media, which charged him with all the familiar epithets: “racist,” “authoritarian,” “isolationist,” and even “fascist.” One of the loudest and most unrelenting was Eliot Cohen…..Cohen was one of the leading voices in favor of invading Iraq: the war would be a “cakewalk,” he told us, even easier than in the first Gulf war. The “liberation” of Iraqis, he pontificated, “will bring about a far, far better life than they have know for more than twenty years.” As Iraq disintegrates into warring tribes, and ISIS rampages across the decimated landscape, I wonder if Professor Cohen would be willing to tell that to the Iraqi people in person.