Posts Tagged ‘political gridlock’

THE UNFORTUNATE MATH BEHIND OUR ECONOMIC PLIGHT

Pragcap argues that the U.S. is in a balance sheet recession, not a gov’t debt crisis, and not a banking crisis (Geithner, Bernanke and Paulson all misdiagnosing the problem).  And it won’t end till 2012 at the earliest. – Ilene 

THE UNFORTUNATE MATH BEHIND OUR ECONOMIC PLIGHT

Courtesy of The Pragmatic Capitalist

Few will argue against the fact that the U.S. economy is sputtering.  For several years now I have been arguing that the government misdiagnosed our problems and subsequently applied the incorrect cure.  If we take a look under the hood at the growth drivers of our economy we can reveal convincing evidence showing that this was in fact the case.

The following chart shows 30 years of US GDP along with potential output.  The blue line represents actual GDP while the red line shows potential GDP.  This represents what economists call the output gap.

output gap THE UNFORTUNATE MATH BEHIND OUR ECONOMIC PLIGHT

(Figure 1)

At the current levels we are running an output gap of just over $1.2T.  This merely means that the U.S. economy would be producing $1.2T more in total GDP if we did not have so much idle capacity.

The math behind the U.S. economic growth of the last 100 years is fairly straight forward.  Economists describe GDP in mathematical format as follows:

Y=C+I+E+G

Y = GDP

C = Personal Consumption Expenditures

I = Fixed Private Investment

E = Net Exports/Imports

G = Government Consumption Expenditures

While all four components matter to the economy the C component (at roughly 71%) is the coaching staff, offense and defense of this football team.   Let’s just call the other three components “special teams” – important, but far less so in the grand scheme of things.   What’s happened to this crucial component of the U.S. economy in the last three years has been remarkable to say the least.  There has been a dramatic stagnation in personal consumption expenditures (PCE).  If we take a look at the historical data it’s truly incredible.  PCE grew at an average rate of 7.5% for almost 50 straight years.  Even more incredible is that this growth has been almost entirely uninterrupted.

PCE THE UNFORTUNATE MATH BEHIND OUR ECONOMIC PLIGHT

(Figure 2)

PCE1 THE UNFORTUNATE MATH BEHIND OUR ECONOMIC PLIGHT

(Figure 3)

When the Nasdaq bubble imploded, American balance sheets were cracked, but not shattered.  Slowly, they began to come back.  But as we all know now a far more nefarious bubble was brewing.  One based on pure debt and speculation.  When the housing bubble imploded in…
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Phil's Favorites

How TikTok got caught in the crosshairs of US-China politics

 

How TikTok got caught in the crosshairs of US-China politics

Vowing to ban TikTok was a power play by the US president. Evan El-Amin / Shutterstock.com

Courtesy of Kerry Brown, King's College London

Donald Trump’s threat to ban TikTok, a video sharing app owned by Beijing-based ByteDance, on August 1 is only the latest in a series of clashes between the US and China. With each of these events – from the US ban on telecoms company Huawei to the US response to events in Hong Kong and the co...



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Zero Hedge

UConn Becomes First Major College In The US To Cancel 2020 Football Season

Courtesy of ZeroHedge View original post here.

UConn's 2020 football season will forever remain the year that could have been.

The Connecticut flagship state university set a nationwide precedent on Wednesday when its athletic department announced that it would cancel its upcoming football season over fears tied to the coronavirus pandemic.

...



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The Technical Traders

Walk Through the Gold and Silver Charts to See What to Expect

Courtesy of Technical Traders

Check out the analysis of this morning’s Gold and Silver charts by our own Chris Vermeulen, Chief Market Strategist and Founder of TheTechnicalTraders.com, to see what is in store for precious metals. Make sure you check out our Gold and Silver article from August 4th, 2020 for additional context behind our predictions and rationale for continued price appreciation.

Learn more about our ...



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Biotech/COVID-19

What the huge COVID-19 testing undercount in the US means

 

What the huge COVID-19 testing undercount in the US means

Health care workers use a nasal swab to test a person for COVID-19 in Pembroke Park, Florida. Joe Raedle / Getty Images News

Courtesy of Melissa Hawkins, American University

Researchers from the Centers for Disease Control and Prevention and other institutions recently published a study which estimated that the true number of people infected by COVID-19 could be six to 24 times high...



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ValueWalk

Beyond Meat Has Not Disclosed Its Environmental Effects

By Jacob Wolinsky. Originally published at ValueWalk.

A recent S&P Global Market Intelligence Trucost analysis found that Beyond Meat Inc., the maker of plant-based meat alternatives, has not disclosed the full extent of its environmental impacts. This includes the amount of greenhouse gases emitted or the volume of water discharged.

Q2 2020 hedge fund letters, conferences and more

Beyond Meat Has "0" Disclosure Of Environmental Impacts

Key insights from the analysis include:

  • Beyond Meat’s weighted environmental disclosure ratio, which shows what percentage of its environmental impacts it discloses...


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Kimble Charting Solutions

Is the US Dollar Nearing Bottom? Or Is It Different This Time?

Courtesy of Chris Kimble

The U.S. Dollar ran into a perfect storm in 2020: a pandemic (Coronavirus), an easy Federal Reserve, and trillions of dollars in government stimulus.

The result has been a steep decline in the greenback.

Looking at today’s chart, however, suggests that the US Dollar may be nearing a bottom. That is if recent history proves true.

The Dollar is testing its 9-year bullish up-trend support at (1) and US Dollar bulls are disappearing. In fact, investors are the least bullish the US Dollars (20% bulls) since 2011 at (2). Notice that each ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

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Date Found: Sunday, 29 March 2020, 07:00:37 PM

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Comment: Silver Shorts Are In a Bind | Ted Butler youtu.be/qQc0AoJp-Q8



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Digital Currencies

Twitter Says "Human Error" And "Spear-Phishing Attack" Responsible For Massive Bitcoin Hack

Courtesy of ZeroHedge

Twitter suffered from a major hack about two weeks ago and has now said that its staff was tricked by "spear-phishing", which is a targeted attack to trick people into simply handing out their passwords. 

Twitter staff were targeted through their phones, according to a new report from the BBC. The attacks then allowed hackers the ability to Tweet from celebrity Twitter accounts. Twitter has said it was "taking a hard look" at how it could improve its permissions and processes.

"The attack on July 15, 2020, targeted a small number of employees through a phone spear phishing attack. This attack relied on ...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

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Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

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