Senator Rand Paul (R-Kentucky) has learned his lesson, and it is this: it’s better to be bold. He’s exchanged the mealy-mouthed equivocations of his ill-fated presidential run – when he actually met with Bill Kristol, presumably to negotiate getting a break from his neoconservative nemeses – with a full-on frontal assault against the War Party. As I write, he is standing in the well of the Senate, making the case for his amendment to the Defense Authorization Act that would nullify the Authorization for the Use of Military Force that gave the green light to the Afghan and Iraq wars and subsequent American aggressions.
With the market breaking out to all-time highs, the media has started to once again reach for their party hats as headlines suggest clear sailing for investors ahead. After all, why not? We have run one of the longest stretches in history without a 5%, much less a 10% decline. Threats of nuclear war, hurricanes, disaster, fires, earthquakes, and civil unrest have failed to unnerve investors. It seems all that has been missed was famine and pestilence.
Regardless of immediate market impact, there will be a longer term effect on the government budget, currently the subject of heated debate, that most investors and politicians are ignoring. That’s because the Fed’s bond-buying program, in addition to lowering the government’s borrowing costs at a time when weak economic activity called for bigger budget deficits, created a stream of yearly returns of nearly $100 billion for the Federal Reserve which it then siphoned back to the Treasury.
Your car gets counted once in GDP when it is built, not when it is driven. Your clothes, your bicycle, your furniture, all get counted once when they are manufactured, and not again when they are worn, ridden, or sat on. But homes are counted twice, writes Dr Cameron Murray: Once when they are constructed, and again when they are occupied.
Steel production in China chalked up a fresh monthly record as mills in the world’s top supplier increase output to profit from a rally in prices to six-year highs before government-ordered pollution curbs are implemented. Crude steel output climbed to 74.59 million metric tons last month, surpassing the previous peak of 74.02 million in July, and up from 68.57 million in August 2016, according to the statistics bureau Thursday. While that’s an all-time high for the month, daily output was less than the record in June. Production surged 5.6 percent to 566.4 million tons in the first eight months, also a record.
One more thing about the new Census Bureau’s Income and Poverty report for 2016, which found to the great excitement in the media that median household income, adjusted for inflation (via CPI), rose 3.2% in 2016 to $59,039 – finally a tad above where it had been 17 years ago. We already found buried in it that inflation-adjusted earnings from wages, salaries, etc. for full-time employed men have fallen 4.4% since 1973.
Hillary Clinton is sitting down this week for a series of media interviews, mostly with supportive TV personalities, such as Rachel Maddow, to discuss her views of “What Happened,” the book’s title. Calls for Clinton to be quiet and disappear are misguided for all sorts of reasons, including the fact that she is a very smart, informed, and articulate politician, which means her interviews — especially when she’s liberated from programmed campaign mode — are illuminating about how she, and her fellow establishment Democrats who have driven the party into a ditch, really think.
According to eMarketer, digital video consumption is on the rise leading to a seismic shift in the industry. Traditional TV viewers are expected to shrink nearly 10% by 2021 with the expectation of a sharp decrease of total media ad spending upwards of -30% reduction. Even in 2017, the trend is accelerating with eMarketer expecting a slowdown in ad spending, after 2016 benefited from the Olympics and U.S. presidential election.
Jim Chanos’ Kynikos Associates is betting against a number of U.S. shale oil and gas stocks, saying Wall Street analysis of the sector is deeply flawed. Investors are taking for granted accounting methods that mask problems with the fundamental business model in the U.S. shale patch, Chanos warned during a speech Tuesday at CNBC’s and Institutional Investor’s Delivering Alpha conference. Their focus on certain metrics is causing them to overlook hidden threats that will leave drillers with skimpier returns than investors are anticipating, he said.
Let’s forget for ten minutes the upcoming Q3 reports (supportive for stocks), US policy risks (probably the biggest medium-term risk for stock markets), hurricane-related diversions and North Korean rumblings – and turn to a pretty fundamental issue, most likely the biggest one in contemporary capital markets: Central bank interventions in and manipulation of capital markets.