It commonplace to blame the weather for sub-par economic performance, but it’s rare to see reports give weather its due when when things look good. Today, the latter happened.
In the sappiest of sappy interviews, outgoing vice president Joe Biden looks back, and forward. ‘I Wish to Hell I’d Just Kept Saying the Exact Same Thing’ says Biden in a New York Times interview.
The title is cryptic but it pertains to a speech Biden gave in July that he wishes he repeated more often instead of attacking Trump.
Lost in the cheering over news that president Obama commuted the sentence of Chelsea Manning is one simple idea: justice delayed is not justice served.
The fact of the matter is Chelsea Manning is a hero who should not have been convicted of anything.
The British pound surged nearly 3% today after UK Prime minister Theresa May added clarity to the Brexit decision. “No deal for Britain is better than a bad deal for Britain,” sad May.
Currency traders were convinced a hard Brexit would kill the pound, instead it rallied. And the decline in the US dollar index, widely attributed to Trump statements, has at least as much to do with May statements.
Regardless, the UK is striking the right tone at last.
Donald Trump described the dollar as “too strong” and the yuan as too low. He also went after House Speaker Paul Ryan’s tax plan as “too complicated”.
Trump got the reaction he wanted. The US dollar index declined over 1% from 101.62 to a low of 100.28.
Companies are fawning all over Trump, citing job creations that were already planned before Trump was elected. Walmart and Amazon are the latest examples.
Paul Krugman has entered the John Lewis debate on civil rights.
So far, I have only seen one person make total sense of the discussion, and we will get to that in a moment.
On the “duh” side of non-revelations, Bank of England says Rates Could Rise or Fall.
That actually made headline news on the BBC. There was one curious detail.
On behalf of Merkel-sponsored Russophobia, including threats of fines, Facebook rolls out fake-news filtering service to Germany.
After lowering US, UK, and global growth forecasts, the IMF reversed course and is now part of the Trump bull parade.
In an amazing set of interviews that proves Obama to be the lamest of lame duck presidents, Trump Slams NATO, Slams Germany, and Floats Russia Nuke Deal.
Donald Trump called NATO obsolete, predicted that other European Union members would follow the U.K. in leaving the bloc, and threatened BMW with import duties over a planned plant in Mexico, according to two European newspapers which conducted a joint interview with the president-elect.
Trump, in an hourlong discussion with Germany’s Bild and the Times of London published on Sunday, signaled a major shift in trans-Atlantic relations, including an interest in lifting U.S. sanctions on Russia as part of a nuclear weapons reduction deal.
Quoted in German by Bild from a conversation held in English, Trump predicted that Britain’s exit from the EU will be a success and portrayed the EU as an instrument of German domination designed with the purpose of beating the U.S. in international trade. For that reason, Trump said, he’s fairly indifferent to whether the EU stays together, according to Bild.
The Times quoted Trump as saying he was interested in making “good deals with Russia,” floating the idea of lifting sanctions that were imposed as the U.S. has sought to punish the Kremlin for its annexation of Crimea in 2014 and military support of the Syrian government.
Repeating a criticism of NATO he made during his campaign, Trump said that while trans-Atlantic military alliance is important, it “has problems.”
“It’s obsolete, first because it was designed many, many years ago,” Trump said in the Bild version of the interview. “Secondly, countries aren’t paying what they should” and NATO “didn’t deal with terrorism.” The Times quoted Trump saying that only five NATO members are paying their fair share.
While those comments expanded on doubts Trump expressed about the North Atlantic Treaty Organization during his campaign, he reserved some of his most dismissive remarks for the EU and Merkel, whose open-border refugee policy he called a “catastrophic mistake.”
In contrast, Trump praised Britons for voting in 2016 to leave the EU. People and countries want their own identity and don’t want outsiders coming in to “destroy it,” he said. The U.K. is smart to leave the bloc because the EU “is basically a vehicle for Germany,” the Times quoted Trump as saying.
“If you ask me, more countries will leave,” he said.
Vehicle For Germany
Also consider Donald Trump Takes Swipe at EU as ‘Vehicle for Germany’
Donald Trump has taken his strongest swipe yet at the EU, labelling it “a vehicle for Germany” and predicting that other countries will follow Britain in leaving the bloc.
The president-elect also warned that his trust for Angela Merkel “may not last long at all”, ranking the German chancellor alongside Vladimir Putin as a potentially problematic ally.
Washington’s ambassador to the EU, Anthony Gardner, said last week that it would be “the height of folly” for the US to become a “Brexit cheerleader”. He also revealed that Mr Trump’s team had called EU leaders to ask “what country is to leave next”.
But Mr Trump appears ready to do exactly that, predicting that other countries would leave the EU largely as a result of its immigration policy.
“I believe others will leave. I do think keeping it together is not going to be as easy as a lot of people think. And I think this, if refugees keep pouring into different parts of Europe . . . it’s going to be very hard to keep it together because people are angry about it.”
Mr Trump told Mr Gove: “You look at the European Union and it’s Germany. Basically a vehicle for Germany. That’s why I thought the UK was so smart in getting out.”
BMW Border Tax
“I would say to BMW, if they built a factory in Mexico and want to sell cars in the US without paying a 35 per cent tax, then they can forget it. If they want to build cars for [export to] the rest of the world, I wish them all the best. They can build cars for the US. But they will pay a 35 per cent tax for every car they export to the US. What I am saying is that they should build their factory in the US.”
I agree with Trump on Brexit, NATO, EU, and Russia.
I strongly disagree with Trump’s trade policy. If every nation acts similarly, global trade will collapse.
Mike “Mish” Shedlock
Conventional wisdom suggests National Front candidate Marine le Pen will make it to the second round in French elections, then lose in a landslide to whoever her opponent happens to be.
I believe le Pen’s odds of winning it outright are far better than most think.
Zerohedge has an interesting post out today called Treasury Specs Are So Short, It Is Now A 4 Sigma Event. Let’s take a look at his charts and a couple of mine.
Here’s an interesting graph from the World Economic Forum from their article Which countries are on the right track, according to their citizens?
Between October and November 2016, the percentage of people who believe things are on the right track in their country dropped by 2 percentage points to 37% globally.
China is bucking the trend with 90% of people expressing confidence in their country’s direction, followed by Saudi Arabia (80%). More than three quarters of Indians and just under six in ten people in Russia and Argentina also believe their country is on the right track.
Brazil is the notable exception among the BRICs nations with only 17% believing the country is heading in the right direction. In Asia, South Korea is an outlier too. Just 13% of its citizens have faith in the country’s trajectory.
Among the Western nations, Canadians are the only people with a predominantly positive outlook (54%).
The US is in the midfield, despite a small month-on-month drop in confidence from 37% to 35%. However, the survey was conducted before the presidential election, and the mood may have changed.
France and Mexico bring up the rear as their citizens have the least confidence in their country’s direction: 88% and 96% of the populace respectively believe that their country is on the wrong track.
A gender split suggests that, globally, men are more optimistic about their nations’ direction than women, with the biggest gender confidence gaps in the US, Israel and Russia.
Ipos MORI Poll
The poll was conducted by Ipos MORI with a strong emphasis on comparing the UK with the rest of the world.
Clicking on the above link downloads a set of charts in a single PDF file. Here are a two more charts.
Most Worrying Issue
The most worrying issue in the US is terrorism. Isn’t that a hoot? How many in the US have died from terrorism?
How much terrorism has the US sponsored in other nations, including its own drone policy?
— Mike Mish Shedlock (@MishGEA) January 7, 2017
The US warmongers sure have stirred up a lot of irrational fear of terrorism in the US.
Mike “Mish” Shedlock
Both the Atlanta Fed and New York Fed updated their GDP model forecasts today.
There was little change in either.
With today’s retail sales reports comes updated charts on inventory-to-sales ratios. Let’s take a look.
So much for that expected strong Christmas. Economists were giddy across the board, but other than autos and gas, retail sales were flat in December. Christmas hype did not live up to its billing.
Some interesting charts came my way today regarding the income inequality debate.
Let’s start with some charts, then explore the meme of the day that rising income inequality is behind “secular stagnation”.
I challenge economists Brad DeLong, Larry Summers, Ben Bernanke, Paul Krugman, Steve Keen, Michael Pettis, Albert Edwards (and anyone else), to respond to this post.