Yesterday former President Obama’s ridiculous tweet that he was responsible for the roaring Trump economy was reviewed.
The USMCA trade deal replacing NAFTA, passed by Mexico more than half a year ago, has finally passed both the Senate and the House in the United States. PDJT is expected to sign it next week. The deal is a major win for manufacturing in North America.
Despite broad bi-partisan support in both legislative chambers in this country, Speaker Pelosi had held up submitting the deal for a vote for months. Pelosi did not want PDJT to have a win in providing a better economy for all Americans. Eventually internal pressure within her own party forced her to move on the issue. No Democrat facing re-election wanted to be the target of voter angst because the Democrats were hurting Americans in their pocketbooks. It is also a certainty that the Democrats did not want PDJT pummeling them about the USMCA during his State of the Union address this year.
Back in May, Goldman-Sachs came out and claimed that American businesses and consumers were bearing the full cost of the Chinese tariffs. This is funny in so many ways. If this were truly the situation, why are Chinese companies (and others) opening up plants in the US now? If this were the case, why are companies changing their supply lines away from China?
Let’s remember Goldman Sachs is a premier investment firm who controls assets in the tens of billions. Back in May, Goldman clearly did not believe that PDJT would follow through on more tariffs. They really just didn’t believe a U.S. President would ever go into a full economic confrontation with China. In this Goldman probably represents the majority opinion of the Wall Street ‘multinational’ community at that time.
After a week that saw the British Parliament vote against the British people and the British government but for the unelected bureaucrats in Brussels, it appears that Boris Johnson may have been playing rope-a-dope with his opposition.
Brexit is the exit of the UK from the EU. The British people had voted for this a few years ago despite massive ad spending by multi-nationals and others to prevent it. Johnson was elected because the British people were tired of the constant stalling that was going on. October 31 was the latest deadline of multiple extensions previously agreed to by former PM Theresa May. If no deal was reached, then a so-called no-deal exit would take place.
The EU will never agree to any exit deal. They do not want an exit. Such an action would probably embolden a few other countries to consider the same move. The EU is top-down control over most of Europe by unelected bureaucrats. The EU is fighting to prevent their own extinction. Such extinction is probably inevitable based on current circumstances.
PDJT negativism has changed. The Russian Collusion Hoax is officially dead. The use of this hoax to undermine the Trump Presidency has failed, spectacularly so at times. One can tell the hoax is done because the MSM and Wall Street have switched gears and are now trying to talk the American public into a recession. They know that, if they can succeed at this, then there might be a chance that a Democrat, any Democrat, someone who they could control, could win the Presidency in 2020.
This past week the pundits at the MSM were screaming about “an inverted yield curve” that they said foretold an impending recession. According to them it had not happened since 2007 right before the beginning of the Great Recession. Of course, this was a lie since this had happened last year and no recession has appeared on the horizon. Wall Street took note of the screaming and promptly lost 800 points.
Eureka! An economic analyst who understands what is actually happening! This embedded video with Mohamed El-Erian accurately explains what is going on economically around the world. As Sundance at CTH, who has been saying this since PDJT took office, notes,
Finally an economic analyst gets prime-time media pundits to listen as he describes the fundamental difference between the U.S. “Economy” (Main Street) and the U.S. “Markets” (Wall Street). Charles Payne understands most of this, but El-Erian has it nailed.
Allianz Group chief economic advisor, Mohamed El-Erian, accurately describes what is happening in an era where deglobalization is taking place. The U.S. economy is strong; however, the multinationals on Wall Street -invested overseas- are exposed. Thus there’s a disconnect and accompanying market volatility.
This is well worth watching because this is the first well-regarded financial pundit that is speaking truth to Wall Street in terms the panel pundits will understand/accept.
There is an interesting slam of the Obama policies by the host at the 6:08 mark. Are more and more people coming around to the fact that Obama’s presidency was a disaster?
The sky is falling! The sky is falling! These are the ridiculous proclamations of the MSM because the yield curve has turned negative. That’s where long-term bond rates (returns on investment) are lower than short-term rates (returns).
The yield on the Treasury’s benchmark 10-year note fell to 1.59% Wednesday afternoon. Earlier in the day it had briefly traded below the return on the Treasury’s 2-year note, something investors haven’t seen since June 2007. That spooked the equity markets, with the S&P 500 Index down by more than 3%.
Financial pundits in the MSM led by CNN immediately called for a US recession. They pointed to the fact that China’s industrial production grew at the slowest rate in 17 years in July while Germany’s economic output actually shrank slightly in the second quarter.
Let’s look at the bigger picture from the 30,000 foot level. One has to start with the idea that, in economics, there is something known as supply and demand. This idea is economics 101 and has been intentionally overlooked by the MSM financial “experts.”
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin returned from two days of talks in China on Thursday. After briefing the President on the results of the talks, the President announced a decision to apply a 10% tariff on an additional $300 billion worth of Chinese products. These tariffs will go into effect on September 1st.
An interesting dynamic is playing out in Hong Kong. Protests broke out a week ago over a proposed law that Carrie Lam, Hong Kong’s first female chief executive, supports. The law would allow extradition of Hong Kongers to mainland China.
Please note the use of the term Hong Kongers. Although mostly descended from ethnic Chinese, the vast majority of the residents of Hong Kong do not consider themselves to be Chinese. Hong Kong has had long experience (150 years) with Western rule-of-law concepts. Additionally over 3 million people fled communist China in 1949 to the safety and freedom of Hong Kong. Hong Kongers are not conditioned culturally, as many of those on the mainland are, to the acceptance of totalitarian forms of governance.
In what historians will undoubtedly debate as a master stroke, PDJT announced on Friday that the tariffs on aluminum and steel from Canada and Mexico had been removed. At the same time Canada and Mexico removed their tariffs on American goods. All of this is expected to be in effect by Monday, May 20th.
Bloomberg…President Donald Trump said the U.S. will lift steel and aluminum tariffs on Canada and Mexico, boosting efforts to encourage lawmakers to ratify a new North American trade deal (USMCA).