US economy still booming in 2018 Q4 despite naysayers

Late post, since I am trying to solve my Twitter dilemma.

The feds announced Thursday morning that US economy grew at a 2.6% rate for the 4th quarter, defying all the recession hawks panicking stocks at the end of 2018.

The growth was a surprise to the upside as doom and gloom Wall Street analysts were looking for 2.0% growth at best. Like some of the news organizations that skew the news to their agenda, if Wall Street was looking for 2% growth, then how could they have been concerned about recession.

The Obama administration would have celebrated 2% growth most quarters during its eight years of economic malaise. As you can see from the market reaction since the dramatic year-end sell off, investors were not buying the news Wall Street was selling.

“The reading adds some reassurance after the near-panic in financial markets in 2018’s closing weeks, as the stock market bottomed on Christmas Eve and has roared back since then,” said Bankrate senior economic analyst Mark Hamrick.

On a year-over-year basis, 2018 GDP rose 3.1%, the highest print since 2005, certainly something President Trump will ballyhoo once he gets back in this hemisphere after cutting short his meeting with North Korean leader Kim Jong Un in Vietnam.

Corporate R&D lead the way with spending soaring 3.5% annualized in Q4, climbing 9.9% over the last year.

Corporate R&D spending now represents 2.3% of US GDP, an all-time record. Rising R&D spending signals increased productivity growth in the near future as new processes are generally aimed at reducing costs on manufacturing or systems services.

“If secular stagnation is a thing, US firms are fighting like hell to avoid it,” according to Renaissance Macro’s Neil Dutta latest note.

Advertisements

North Korea’s the keystone to China trade success

As I wrote recently, the Trump administration is making great strides in dealing with China and that a deal will happen.

So news broke Sunday that the US has suspended implementing the new tariffs scheduled for March 1 while continuing talks.

The ongoing North Korean talks figure prominently into this equation.

The loop-sided trade deals we have with China are so bad that the US could get many concessions and China will still have the upper hand on trade imbalances.

The Chinese have agreed to buy additional agricultural products including soy beans, not as a concession, but because they cannot source enough crops elsewhere to feed their people.

Global stock markets — with its typical knee-jerk reactions — jumped on the news of Trump delaying the tariff tiff. Just as the markets fell numerous times on bogus news that the draconian tariffs would kick in.

Now how the Trump administration is using North Korea as the keystone in its China trade talks are taking two tracts.

One the US trade representatives are telling China officials that Trump will open up North Korea to be a far cheaper manufacturer of American products, if we do not get fairer trade movement. However as a result it will put an end to North Korea hostilities on the Chinese border as the North Korean economy improves.

Secondly, the Trump team is pointing out to North Korean leader Kim Jong Un that his country will be able to thrive as the new American factory country just like his neighbors to the south.

These maneuvers come from someone with a business background, which is why the president snidely tweeted (below), “But thanks anyway!” to those who could not get this done over the last twenty years.

 

Following the money from the Fed to Middle East and back again

Tuesday we were reminded about the huge cache of cash that was funneled from the US to Iraq and later Iran after US forces secured the areas earlier this century.

How the New York Federal Reserve bank — the first among equals of the 12 regional banks —  shipped billions of dollars in physical cash shrink-wrapped on pallets to Baghdad to pay allegedly for the reopening of the government and restoration of basic services.

The Bush II White House sent cash weighed 363 tons reportedly loaded onto military aircraft in the largest money shipments ever made by the Federal Reserve, said Rep. Henry Waxman, chairman of the House of Representatives Committee on Oversight and Government Reform in 2007.

Similar shipments were sent to Iran. This time the payments were categorized by the Obama administration as interest to resolve a decades-old dispute over an undelivered military sale. A $1.3 billion payment was sent to Iran two days after the Obama White House allowed $400 million in cash to fly to Tehran from the Federal Reserve in early 2016.

In order to perhaps cover their tracks better with Iran, the Fed Reserve made the disbursements in 13 separate payments of $99,999,999.99 and final payment of about $10 million to avoid further detection by keeping the individual transactions under $100 million.

With little accountability, where does this cash wind up? The post suggests that some may be brought back to differing political campaigns and “charitable” foundations to further agendas. It’s not one party doing this, it’s all parties exploiting the citizens.

So the drop begins by asking what happens when an outsider becomes president and asks for information on this theft of taxpayer money and wants to change how we go about funding our country?

The two most recent presidents to question the true purpose of the central bank — John F Kennedy (assassinated) and Ronald Reagan (assassination attempt) — tells you exactly what happens.

While reports on attempts to take the life of President Trump may be highly classified at this time, some have come out. A presidential motorcade driver in Florida with a hidden handgun arrested by Secret Service, A man arrested last month trying to secure an anti-tank missile to fire at the White House and a rogue missile being fired and intercepted while Air Force One is flying to Asia for meeting with North Korean leader Kim.

The President has made no bones about his dislike of the Federal Reserve system and how it operates for private owners under the guise of being part of the government. While the central bank may return some annual profits to the Treasury Department, that comes only after stakeholders receive their healthy dividend.

It’s insiders vs an outsider. It’s about retaining control vs. losing it, the drop says.

AOC should have Amazon deliver an economic book to her

The ultra left liberal Democrats in New York City are still taking a victory lap over pushing Jeff Bezos and Amazon out of the city.

They are celebrating the loss of 250K jobs with a median salary of $150K for positions the city totally lacks in the 21st century: High tech development careers.

These positions were not here to make sure your package arrived on time or that Alexa understood your voice, no these were the positions that were going to catapult Amazon to its next iteration.

The men and woman hired would probably develop the first true cancer database for assessing tumors and treatment through AI running on Amazon’s cloud storage system assessing millions of prior scans and treatment options in real time.

That’s one of hundreds of ideas that may have come out of this effort.

Instead we have House Rep. Alexandria Ocasio-Cortez — who is the subject of a perfect meme of holding a surge protected power strip plugged into itself and smiling — celebrating that the $3 billion in Amazon givebacks can now go to the people.

AOC did not get it, since she is only 29 perhaps, that there is no $3 billion to spend. The only way Amazon would received $3 billion in givebacks was if it created $27 billion in revenue for the city in payroll taxes by hiring people.

There’s no such thing as free energy Alexandria and there’s no $3 billion for the people. You and your ultra left-leaning cohorts made sure of that.

President Trump’s game-changing SOTU speech

President Trump delivered an inspired speech last night that even brought the white-clad suffragettes to their feet to applaud his reaching across the aisle.

This speech was a game changer from the partisan politics parlay that has been the present condition in Washington.

Yes he tweaked them on “America will never be a socialist country,” but he celebrated their ability to serve in Congress as showing how great America is.

He spoke of the wall in humanitarian terms. He personalized the horrors that invade our countries across the southern border. Trump told Americans that children were enduring unspeakable hardship through sex trafficking.A topic most Americans probably know little about, but he put a face to the heroes that combat this on a daily basis.

Trump clearly laid out the national emergency on the southern border without using the explosive term. On Feb. 15 he can now make the case for a declaration far more convincingly than prior.

He spoke for many Americans when he said it’s not OK for babies to be aborted hours before birth like New York and Virginia approved recently.

The president laid out his economic successes over the last two years, such as the job booms where more Black, Hispanic, Women and Disabled Americans are working now than ever before. How tax cuts put more money in the hands of the people and not in Washington’s pockets.

Of course this speech will not move the needle in New York, California or Illinois, but it certainly had to make the fence-sitters and marginal RINOs take notice that this State Of The Union was a powerful message that America is Great Again and we should not stop moving forward in that greatness.