# American Economy News & Updates



## LeveragedBuyout

I noticed that there was no dedicated economy thread for the US, so let the games begin.

U.S. sees another boom in jobs in June - Economic Report - MarketWatch






Economic Report

July 3, 2014, 8:47 a.m. EDT

*U.S. sees another boom in jobs in June*
*Payrolls expand by 288,000, unemployment drops to nearly 6-year low of 6.1%*
By Jeffry Bartash, MarketWatch





Getty Images
A now hiring sign is posted in the window of a clothing store on June 6, 2014 in San Francisco, California. The Labor Department reported nonfarm payrolls numbers for June.
WASHINGTON (MarketWatch) — The U.S. economy produced another big batch of jobs in June, — many of them good paying — and the unemployment rate fell to a nearly six-year low as more people entered the labor force and found work.

The U.S. added 288,000 jobs in June and the unemployment rate fell to 6.1% from 6.3%, the government reported Thursday. That’s the lowest jobless rate since September 2008.

Economists surveyed by MarketWatch had expected an increase of 215,000 nonfarm jobs.

The strong jobs report suggests the economy continues to gain momentum, and it could force the Federal Reserve to raise interest rates sooner than it had planned unless growth cools off.

U.S. stock futures (NAR:SPY) only saw slight advance on those concerns, as Treasury yields (ICAPSD:10_YEAR) climbed .





In June, virtually every major industry added jobs, led by professional services, retail, restaurants, health care, finance and manufacturing.

Employment gains for May and April were also revised up by a combined 29,000, the Labor Department said .

The government said 224,000 new jobs were created in May, up from a preliminary 217,000, based on newly available data. April’s gain was revised up to 304,000 from 282,000, marking the biggest increase in jobs in two and a half years.

Average hourly wages, meanwhile, rose 6 cents, or 0.2% to $24.45 in June. Wages are up 2% over the past 12 months. The average workweek was unchanged at 34.5 hours.

The labor-force participation rate was also flat at 62.8%.

So far in 2014 the economy has gained an average of 231,000 jobs a month, 19% faster than the 2013 pace of 194,000. It’s the best stretch of hiring since the recession ended in mid-2009.

The so-called U6 unemployment rate that includes people who can only find part-time work and those who recently gave up looking fell to 12.1% in June from 12.2%.

Separately, the government said weekly U.S. jobless claims edged up by 2,000 to 315,000 in week of June 22 to June 28. Jobless claims, a proxy for layoffs, have been hovering near a postrecession low for several months. 



Copyright © 2014 MarketWatch, Inc. All rights reserved.

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## Edison Chen

Dow Average Climbs Toward 17,000 as Small Caps Hit Record - Bloomberg

Strength in manufacturing pushed the Dow Jones Industrial Average (INDU) to within two points of 17,000 for the first time, joining small caps and transportation stocks at records in a pattern that chart analysts consider bullish.

Netflix Inc. (NFLX), Amazon.com Inc. and Biogen Idec Inc., among the biggest losers during a two-month selloff earlier this year, rose at least 2.3 percent. International Business Machines Corp. climbed 2.8 percent, leading a rally among technology stocks. General Motors Co. jumped 3.6 percent after a surprise sales gain in the auto industry’s best month since July 2006.

The Dow increased 129.47 points, or 0.8 percent, to 16,956.07 at 4 p.m. in New York. The Standard & Poor’s 500 Index climbed 0.7 percent to 1,973.32. The Russell 2000 Index of smaller companies rallied 1.1 percent and the Dow Jones Transportation Average (TRAN) gained 0.7 percent. The Dow, S&P 500 and transport gauge all closed at records, while the Russell 2000 touched an intraday high.

Simultaneous gains in disparate sections of the market are sometimes cited by chart analysts who base predictions on charts as evidence economic growth is pervasive enough to fuel additional gains.

“The breadth sends a message about the strength of the bull,” Rex Macey, chief allocation officer at Wilmington Trust in Atlanta, said in a phone interview. The firm oversees $82 billion. “People are comfortable with the story of the economic backdrop that we’ve got going on. People feel like they’re missing the boat and they want to get on.”





Photographer: Jin Lee/Bloomberg
The New York Stock Exchange on June 24, 2014. U.S. stocks rose, with equity benchmarks... 

Stocks are extending a rebound from the selloff that started with biotech and small-cap stocks about five months ago. Equities have rallied since the S&P 500 reached a two-month low in April as central bank stimulus spread from Europe to Japan and the U.S. and economic data suggested global growth is strengthening.

The Russell 2000 has retraced nearly all of its losses after a 9.3 decline through May 15. The Nasdaq Biotechnology Index, which tumbled 21 percent from February to April, soared 2.3 percent today.

Biogen Idec climbed 3.1 percent to $325.05 and Amazon.com added 2.3 percent to $332.28. Both stocks sank 16 percent between March and April.

Manufacturing in China expanded in June by the fastest pace this year, a purchasing managers’ index compiled by the government showed today. The Institute for Supply Management’s U.S. factory index was little changed at 55.3 in June from 55.4 in the prior month, the Tempe, Arizona-based group’s report showed. Readings above 50 indicate expansion.

*Manufacturing Strength*
Producers of wood products, furniture, metals and machinery were among those seeing a pickup in demand as gains in auto and home sales rippled through the world’s largest economy. Growing consumer spending, lean inventories and improving overseas markets will probably keep assembly lines busy in the second half of the year.

“Manufacturing is back on track,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, the top U.S.-based ISM forecaster over the past two years, according to data compiled by Bloomberg.

U.S. auto sales adjusting for seasonal trends accelerated to an annualized pace of 16.98 million in June, the fastest in almost eight years, according to researcher Autodata Corp. Vehicle sales were aided by available credit and an improving economy with housing starts that remained near the 1 million mark in May.

GM rose 3.6 percent to $37.59, its highest level since March. The company reported a gain of 1 percent in auto sales, beating the average analyst estimate for a 6.3 percent decline.

Other reports this week may yield further clues on the strength of the U.S. economy. A private release may show U.S. employers hired more workers in June than in the previous month. The official jobs data is due Thursday, a day before the U.S. Independence Day holiday.

*Economic Growth*
U.S. equities have reached all-time highs, with the S&P 500 gaining 6.8 percent this year, as data from employment to housing fueled confidence that the U.S. economy is rebounding after the worst contraction in gross domestic product since 2009. Federal Reserve Chair Janet Yellen said on June 18 that accommodative monetary policy, rising property and equity prices and the improving global economy should lead to above-trend growth.

The S&P 500 trades at 16.7 times the projected earnings of its members, its highest valuation in four years. The U.S. market has gone more than two years without a 10 percent drop.

“With all these perceptions that GDP is going to improve in the second half of this year, Europe is getting their act together, why would I ever want to sell?” Jim Welsh, a portfolio manager at Forward Management LLC in San Francisco, said in a phone interview. His firm oversees $5.5 billion. “Markets don’t go down because they’re expensive or because there are too many bulls. They go down because there is a reason to sell, and there is no reason to sell.”

*‘Great Environment’*
Investors will get a further chance to assess the economy when companies start releasing financial results in July. Earnings for S&P 500 companies probably grew 5.2 percent during the second quarter while sales rose 3.2 percent, analyst estimates compiled by Bloomberg show. The forecasts are lower than they were at the beginning of April, when analysts projected earnings to rise 7.3 percent and sales to increase 3.7 percent.

“It’s a great environment,” Ernie Cecilia, chief investment officer at Bryn Mawr Trust Co. in Bryn Mawr, Pennsylvania, said in a phone interview. The firm oversees $7.4 billion. “You have a slowly broadening recovery. You have the Fed that’s going to remain accommodative. We’re soon to embark on the earnings season and we’re optimistic about that.”

About 6.1 billion shares changed hands on U.S. exchanges today, in line with the three-month average. The Chicago Board Options Exchange Volatility Index declined 3.6 percent to 11.15. The gauge, known as the VIX (VIX), is near its lowest level since February 2007.

All 10 industry groups in the S&P 500 advanced except for utilities, with technology, health-care and consumer-discretionary stocks climbing at least 1 percent. IBM, a computer-services provider, gained 2.8 percent to $186.35 for the biggest increase in the Dow. The Morgan Stanley Cyclical Index added 0.7 percent, also closing at an all-time high.

*Netflix, Twitter*
Netflix gained 7.4 percent to $473.10. Goldman Sachs Group Inc. boosted its recommendationon the Los Gatos, California-based company to buy from neutral, citing the potential for global subscription growth. The shares have gained 29 percent for the year, recovering from a 31 percent plunge in March and April.

Twitter Inc. (TWTR) rose 2.6 percent to $42.05 after naming former Goldman Sachs banker Anthony Noto its new chief financial officer. Noto, who led the social-media company’s initial public offering last year, replaces Mike Gupta, who will assume the role of senior vice president of strategic investments.

GoPro Inc. jumped 20 percent to $48.80 amid optimism that revenue tied to users’ shared videos will fuel profit growth. GoPro’s first-person-viewpoint cameras, which let surfers, sky divers and bungee jumpers document their exploits, have attracted a younger generation driven by selfies and sharing adventures on social media. The shares have doubled since their market debut last week at $24.

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## LeveragedBuyout

China Fuels Surge in Foreign Purchases of U.S. Housing - Real Time Economics - WSJ








July 8, 2014, 10:00 AM ET
*China Fuels Surge in Foreign Purchases of U.S. Housing*
*ByNick Timiraos*




Foreign purchases of U.S. real estate jumped by 35% last year, and the Chinese led the way, according to a survey released Tuesday.

Chinese buyers have become the largest source of foreign cash in the U.S. residential real estate market, accounting for nearly one in four dollars spent by foreigners on American housing last year, the *National Association of Realtors* said in its annual survey of international property sales.

China accounted for $22 billion in international sales for the 12 month period ending March 2014, or 24% of all foreign sales, up from $12.8 billion, or 19%, during the year-earlier period.

Total international property sales rebounded last year to $92.2 billion, according to the NAR’s estimates, up from $68.2 billion in 2013 and $82.5 billion in 2012. The total represented around 7% of the market for all U.S. sales of previously owned homes during the same period.

In recent years, American real-estate markets have been viewed alternately as a safe haven and a bargain amid concerns over geopolitical instability or unsustainable asset values abroad.

U.S. real-estate also continues to be popular thanks to the dollar’s weakness against some currencies, though the currency advantage has dimmed somewhat for Canadian buyers that had been particularly aggressive property buyers in the U.S. in 2011 and 2012. Some agents say that American higher education is also a top draw for some trophy-property buyers.

“Foreign buyers are being enticed to U.S. real estate because of what they recognize as attractive prices, economic stability, and an incredible opportunity for investment in their future,” said *Steve Brown*, the NAR’s president, who is the co-owner of a real-estate brokerage in Dayton, Ohio.

European and Latin American buyers have helped push prices of South Florida condos to record highs in recent years, while foreign buyers of all stripes have sent prices of new Manhattan developments to astronomical levels. Asian buyers, particularly Chinese, have also been a major force in select property markets in San Francisco and Los Angeles.

Overseas buyers tend to hunt for trophy properties. This helps explain why the median purchase price to international clients ($268,284 last year) is significantly higher than for all sales ($199,575). That’s particularly true of Chinese buyers, where the average purchase price topped $590,000 and the median exceeded $523,000. Canadian and Mexican buyers, by contrast, appear to buy much more modest homes. 





China was the largest source of transactions on a dollar basis, and it represents the fastest growing buyer segment. But Canada remained the largest share of clients. Canadians accounted for 19% of property buyers last year, down from 23% in the previous year. Chinese accounted for 16% of buyers, up from 12%. The NAR survey includes buyers from Taiwan and Hong Kong in that tally.





The NAR estimates that 35% of Chinese buyers selected homes in California. Around 40% of Canadians bought homes in Florida, while 23% of Canadians bought in Arizona.

Every year, the NAR surveys its members about international clients in order to estimate foreign property purchases in the U.S. It conducted this year’s survey of 3,547 members for 30 days beginning in mid-April.

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## Hakan

@Aeronaut @WebMaster @Manticore 

Make this thread Sticky please.

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## LeveragedBuyout

U.S.-China talks show tension, but progress possible - MarketWatch





July 9, 2014, 1:51 a.m. EDT

*U.S.-China talks show tension, but progress possible*
By Laura He, MarketWatch

HONG KONG (MarketWatch) — As the U.S. and China opened their annual bilateral meeting Wednesday, the two powers had no shortage of things to argue about — the value of the yuan, China’s territorial disputes in Asia, and so on — though some agreement appeared possible on the economic front.





Shutterstock/Niyazz
As U.S. Secretary of State John Kerry and Treasury Secretary Jacob Lew joined their Chinese counterparts in kicking off the sixth round of the nations’ Strategic and Economic Dialogue (S&ED), there was clearly some tension.

Reflecting this, Chinese President Xi Jinping felt the need to urge peace between Washington and Beijing when he addressed the opening ceremony of the dialogue Wednesday morning.

“If any confrontation occurred between China and the U.S., it would definitely be a disaster to both countries and the whole world,” Xi said. “China, more than anytime else, needs a stable environment.”

Kerry too stressed the need for cordial relations, saying the U.S. was not seeking to “contain” China, and repeating the U.S. mantra that it welcomes “the emergence of a peaceful, stable, prosperous China”, according to remarks carried by Reuters.

Lew took a similar tone in his own comments: “We do not always agree, but our strong common interests are far more important than the individual challenges that we confront as a part of our overall bilateral relationship.”

The remarks from both sides emphasized rapprochement, as the countries have found disagreement on a wide range of issues over recent months.

These include U.S. allegations of Chinese military officers hacking U.S. companies’ data, growing territorial disputes between China and its neighbors, and political tensions in Hong Kong, where tens of thousands of people participated in a massive pro-democracy protest on July 1.

The situation was enough to prompt former U.S. Treasury and S&ED veteran David Dollar to tell The Wall Street Journal that “”There seems to be a downward spiral in the relationship” between the U.S. and China.

But if the geopolitical situation was a source of tension, agreement appeared more possible some trade issues, specifically due to China’s decision to welcome its U.S. visitors by announcing plans to increase market access.

On Tuesday, China’s official government website published a decree by the State Council, the Chinese cabinet, saying it would expand its “negative list” policy.

While China currently restricts foreign investment to only certain industries, its newly established Shanghai Free Trade Zone has allowed global investors to buy into all sectors except for a few on a so-called negative list.

In its Tuesday announcement, the State Council said this policy would now be expanded to include the entire country, a move widely seen as significantly increasing access to China’s markets.

The State Council also reiterated its stance on letting “markets play a decisive role in allocating resources” and boost entrepreneurship and job creation by lowering entry barriers to those seeking to do business in China.

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## LeveragedBuyout

This is going to be a long post composed of two articles that are highly technical in nature. The takeaway: there are troubling signs that liquidity in a critical segment of the treasuries market is drying up, primarily because of increasingly stringent capital requirements for banks. If it gets significantly worse, we could start to see severe disruptions in the US credit market. It's too soon to say if this will get to the level of a Lehman Brothers crisis, but keep an eye on it.

Bond Anxiety in $1.6 Trillion Repo Market as Failures Soar - Bloomberg





Print Back to story
*Bond Anxiety in $1.6 Trillion Repo Market as Failures Soar*
By Liz Capo McCormick - Jul 7, 2014
In the relative calm that is the market for U.S. Treasuries, a sense of unease over a vital cog in the financial system’s plumbing is beginning to rise.

The Federal Reserve’s bond purchases combined with demand from banks to meet tightened regulatory requirements is making it harder for traders to easily borrow and lend certain desired securities in the $1.6 trillion-a-day market for repurchase agreements. That’s causing such trades to go uncompleted at some of the highest rates since the financial crisis.

Disruptions in so-called repos, which Wall Street’s biggest banks rely on for their day-to-day financing needs, are another unintended consequence of extraordinary central-bank policies that pulled the economy out of the worst financial crisis since the Great Depression. They also belie the stability projected by bond yields at about record lows.

“You have a little bit of a perfect storm here,” said Stanley Sun, a New York-based interest-rate strategist at Nomura Holdings Inc., one of the 22 primary dealers that bid at Treasury auctions, in a telephone interview June 30.

Smoothly functioning repo trading is vital to the health of markets. The fall of Bear Stearns Cos., which was taken over by JPMorgan Chase & Co. in 2008 after an emergency bailout orchestrated by the Fed, and the collapse of Lehman Brothers Holdings Inc., whose bankruptcy in September of that year plunged markets into a crisis, were hastened after they lost access to such financing.

*Cash Transaction*
In a typical repo, a dealer needing short-term cash often borrows money from another dealer, a hedge fund or a money-market fund, putting up Treasuries as collateral. The cash lender can then use the securities to complete other trades, such as to close out short positions where it needs to deliver bonds.

Negative rates happen when certain Treasuries are in such high demand or short supply that lenders of cash are actually paying collateral providers interest so they can obtain the needed securities. Traders said that is a big reason why repo rates on desired Treasuries have recently gotten as low as negative 3 percent.

Now, more repo trades are going uncompleted, or failing, because it’s either too difficult or expensive for the borrower to obtain and deliver Treasuries. Such failures to deliver Treasuries have averaged $65.6 billion a week this year, reaching as much as $197.6 billion in the week ended June 18, Fed data show.

Uncompleted trades averaged $51.6 billion in 2013, and $28.8 billion in 2012, according to the Fed. In those cases, the borrower pays a 3 percent penalty.

*Liquidity Issues*
“The effect of all the collateral issues we see now is an indication of not so much how things are, but how bad things will be when you really need liquidity,” said Jeffrey Snider, chief investment strategist at West Palm Beach, Florida-based Alhambra Investment Partners LLC, in a telephone interview June 30. “That’s when you get into potentially dire situations.”

The conditions for repo stress were on display last month. The 2.5 percent note due in May 2024 reached negative 3 percentage points in repo in the days preceding a June 11 Treasury auction of $21 billion in notes to finance government operations.

*Dealer Constraints*
Repo rates have been most prone to go negative, a situation known as specials in the market, in the days preceding an auction as traders who previously sold the debt seek to buy the securities to cover those positions.

In this week’s note and bond sales, the U.S. plans to auction $27 billion of three-year Treasuries tomorrow, $21 billion of 10-year debt on July 9 and $13 billion of 30-year securities July 10.

Signs of dysfunction are coming at a sensitive time for markets. The Fed is paring its stimulus and futures show traders expect the central bank may start raising interest rates in the middle of next year.

Treasury notes declined today after Goldman Sachs Group Inc. brought forward its forecast for the Fed to increase interest rates to the third quarter of 2015, from a previous estimate of the first three months of 2016. The three-year yield climbed one basis point to 0.97 percent at 1:31 p.m. New York time.

*Available Securities*
The concern is that dealers, which have pared inventories to meet more-stringent capital requirements required by the 2010 Dodd-Frank Act mandated by the Volcker Rule and Basel III, won’t have as much capacity to handle any surge in volumes or volatility.

Securities Industry and Financial Markets Association data show the average daily trading volume in Treasuries has fallen to $504 billion this year from $570 billion in 2007, even though the amount outstanding has risen to more than $12 trillion from $4.34 trillion.

Bank of America Merrill Lynch’s MOVE Index, a measure of expectations for swings in bond yields based on volatility in over-the-counter options on Treasuries maturing in two to 30 years, reached 52.7 percent on June 30, almost a record low.

The Fed is partly to blame. Through its policy of quantitative easing, it now owns about 20 percent of all Treasuries, or $2.39 trillion. Banks hold $547 billion of Treasury and agency-related debt.

In addition, the Fed’s holdings have shifted in ways that leave fewer central-bank-owned Treasuries available to be borrowed. The shifts were caused by Operation Twist during the November 2011 to December 2012 period when the Fed sold shorter-dated Treasuries and bought more bonds, plus self-imposed central-bank restrictions on holdings of specific maturities.

*Stimulus Withdrawal*
The Fed’s lack of certain holdings “appears to be driving the surge in fails, which has been concentrated in the on-the-run five- and 10-year notes,” Joe Abate, a money-market strategist in New York at primary dealer Barclays Plc, wrote in a note to clients on June 27. On-the-run refers to the most recently issued Treasuries of a specific maturity.

While the Fed has sought to cut risk in the repo market since the crisis, it still sees the chance that rapid sales of securities, known as fire sales, could disrupt the financial system. Fails reached a record $2.7 trillion in October 2008.

Repos are also important to the Fed because it has been testing a program in the market that is seen as a potential tool to withdraw some of its unprecedented monetary stimulus.

Eric Pajonk, a spokesman at the New York Fed, decline to comment on the Fed’s reaction to the movements in recent weeks in the repo market.

*Supply Falls*
The amount of securities financed daily in the tri-party repo market has declined 18 percent to an average $1.60 trillion in June, from $1.96 trillion in December 2012, data compiled by the Fed show. In a tri-party agreement, one of two clearing banks functions as the agent for the transaction and holds the security as collateral. JPMorgan and Bank of New York Mellon Corp. serve as the industry’s clearing banks.

Another difficulty in the repo market has been the decline in Treasury bill supply, with the U.S. having sold $264 billion fewer short-term bills in the April-through-June period than those that matured, according to John Canavan, a fixed-income strategist at Stone & McCarthy Research Associates in Princeton, New Jersey.

“The repo market itself provides lubricant to the entire Treasury market,” Canavan said in a July 3 telephone interview. “Bills are a key lubricant to the repo market, and the supply of bills has fallen sharply. If this situation were to continue longer term, it would be a more substantial problem.”


Don’t freak out about UST fails (yet) | FT Alphaville

*Don’t freak out about UST fails (yet)*
Izabella Kaminska Comment | talking about the spike in repo fails.

But here’s the thing. Repo fails need to be seen in context.

Yes, this chart from BoAML makes the recent June spike look significant:






And BoAML Brian Smedley and team do advise to take the recent spate of fails seriously:

In the past month various issues across the US Treasury curve have traded special in the repo market, indicating that the demand to borrow the securities from shorts has increased relative to the supply of bonds being lent by longs. In our view, analyzing the causes of the recent repo specialness and the associated increase in settlement fails reveals information about Treasury market conditions that is relevant to investors more broadly. In particular, we believe increased specialness could be symptomatic of lingering fast money shorts and sizable central bank buying, as well as regulatory constraints on dealers’ ability to intermediate in the repo market. These factors pose risks to our short duration bias, and likely help explain why rates have declined since last week’s better-than-expected June employment report.

However, once again, the context is important.

The real story, we would argue, is that US Treasury fails have been an unappreciated market phenomenon ever since 2008 onwards. Back then fails blew out, and when repo rates (what might also be called the private collateralised liquidity rate) dropped through the floor in special issues, this is when the Fed took serious action.

The urgency was related to the fact that negative repo rates in private collateral markets reflected limited Federal Reserve control over short-term _private_ rates, and the sort of crowding out of safe assets that could later pose serious deflationary feedback loops.

In the first instance, the Fed’s Interest On Excess Reserves (IOER) policy and treasury swapping facilities helped to ease matters significantly. However, when fails continued despite the introduction of such liquidity floors (because not all institutions had access to these facilities) the Fed introduced something known as a 3 per cent fails charge.

This, as it happens, was extremely successful at suspending the fails drama in the Treasury market, leading to a general perception that the fails issue was no longer a problem.

But another way of looking at it is that all the 3 per cent charge did was push the pressure elsewhere, whilst disguising the market disruption in the UST collateral markets.

So here’s the thing. Yes, in the context of the wider fails problem of 2008 the recent June spike looks insignificant. But another way to think about this is that the fails are happening _despite_ the presence of the 3 per cent fails charge and _despite_ the presence of the Fed’s new Reverse Repo Facility, which should also have eased pressure in the market.

As BoAML notes:

The recent increase in fails is important, but not alarming. Prior to May 2009, when the 3% fails charge was introduced, widespread fails were more common and more severe than recent experience. During a particularly dysfunctional period in 2008, primary dealer fails to deliver and receive Treasuries reached nearly US$2.7tn each.

Here, meanwhile, is repo expert Scott Skyrm on the fails charge issue:

Not covering shorts was actually quite common in the past for periods of time when there were protracted shortages. It all came to a head in October 2008 when securities were pulled from the market, the Fed dropped overnight rates down to near 0.0%, and counterparties stopped trading with each other. It was the perfect storm in the repo market and fails shot up to an all-time record high of $5.06 trillion on October 15, 2008. People realized there needed to be a cost of failing in the Fed’s new 0.0% interest rate environment. About 7 months later, the Fail charge was introduced. At 0.0% rates, the Fail Charge is 300 basis points which makes the break-even cost for not covering a short the equivalent of -3.00%. These days, when repo rates get near or below -3.00%, dealers will not cover their shorts. It’s also why you rarely see repo rates below -3.00%

According to BoAML, the problem is thus not a general shortage of collateral in the market but rather the lack of a very specific type of Treasury stock — the sort being demanded to cover shorts — at the Fed, which has until now been able to lend out securities that have been overly scarce to ease such scrambles.

As they noted this week:

But because the Fed is only buying issues with more than four years to maturity in QE3, and because issues trading special in repo are excluded from purchases (so as to avoid exacerbating specialness), the Fed does not always have on-the-runs to lend. Moreover, Fed purchases under QE3 will soon come to an end, and there are no significant Treasury reinvestments in the Fed portfolio until 2016 as a result of Operation Twist. This will increase the likelihood of on-the-runs trading special, and will provide more opportunities for dealers to trade specific issues in the repo market, which is generally good news. The bad news is that the bid-ask spreads that dealers will need to earn to justify the balance sheet usage are on the rise, due to growing regulatory costs, and we think that will likely mean more dislocations in the Treasury market.

Skyrm, meanwhile, put the blame on the change in the composition of the Fed portfolio since Operation Twist:

Another outlet blamed the increase in fails on QE. I can assure you, QE is not causing the fails, and let’s be clear, I’d be one of the first to criticize QE if it did. Remember, the Fed has a securities lending program, so the securities it purchases in the market are still available in the repo market. However, I did read one interesting point. Under Operation Twist, the Fed sold their short-term securities and purchased long-term securities and the Fed does not own any securities that mature until 2016. Operation Twist skewed the Fed’s holdings away from the short-end. Thus, potentially less supply in the short-end of the market.

But whilst Skyrm concludes that this shouldn’t be anything to panic about because securities will eventually be tempted back into the market via attractive collateral borrowing rates, the BoAML analysts are less optimistic. This is because, despite the prospect of more supply coming to the market, they believe regulatory burdens will only shrink lendable supply in the coming months.

As they conclude:

The Fed remains concerned about financial stability risks posed by short-term wholesale funding markets, particularly repo. Chair Janet Yellen has noted that while the Basel III framework would help address the Fed’s concerns about liquidity risk, it does not go far enough. As such, she said that “Federal Reserve staff are actively considering additional measures that could address… residual risks in the short- term wholesale funding markets.” Among these measures are requirements that large firms hold even greater amounts of capital, stable funding or highly liquid assets based on their use of short-term wholesale funding. Also under consideration is a proposal to set minimum margin requirements (haircuts) on repo and other securities financing transactions. Increased capital charges for repo transactions would likely further reduce liquidity in the repo market, in our view, potentially leading to increased specialness of on-the-runs and an increase in settlement fails going forward. This is likely to richen on-the-runs versus off-the-runs in the cash market, and increase the cost of borrowing on-the-runs in repo in order to establish short positions.

To us that suggests the financial plumbing of the system will become a key concern of the Fed, and one which most of its new extraordinary policies will be aimed at. Especially given that, according to the above, even a balance sheet unwinding would be unlikely to solve the problem since it’s not the Fed’s hoarding of securities which is really causing market tightness. The tightness is caused by ongoing hoarding in private markets — potentially exacerbated by new regulatory reforms regarding liquid capital buffers.​


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## LeveragedBuyout

The end of QE3 in sight.

Fed plans to end bond purchases in October - MarketWatch





The Fed

July 9, 2014, 3:37 p.m. EDT

*Fed plans to end bond purchases in October*
*Central bank provides key elements of exit plan, minutes show*
By Greg Robb, MarketWatch





Getty ImagesRead selected highlights from Fed minutes

Most Fed officials said that the exact end of the tapering issue will have no bearing on the timing of the first rate hike. The Fed has said that rates would remain near zero for a “considerable time” after the Fed halts its program of bond purchases.

An end of the asset purchases will “set the clock on eventual tightening -- which we think could start as soon as March 2015,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.

Stocks (DJIJIA) dipped immediately after the Fed minutes were released but quickly moved higher. Bond yields (ICAPSD:10_YEAR) also had a brief move higher after the report.

The minutes also reveal that Fed officials had a lengthy discussion of its exit strategy.

The central bankers generally agreed to keep reinvesting the proceeds of securities that mature on its balance sheet until after it had hiked interest rates.

Fed officials also agreed that the rate of interest on excess reserves would play a “central role” in moving rates higher when the time comes. It will have an overnight reverse-repo facility with an interest rate set below the IOER rate. The spread would be “near or above the current level of 20 basis points and give the Fed adequate control over interest rates.”

A reverse repo is when the Fed accepts cash from counterparties such as banks and money-market funds on an overnight basis in return for a security.

Responding to some criticism that the Fed’s overnight repo facility might become too large and drown out private market participants, the central bankers discussed some design features that might limit its size.

Several Fed officials said that they don’t think the facility will become a permanent policy tool.

Fed officials “signal a good deal of comfort in managing policy with a high balance sheet,” said Eric Green, head of U.S. rates and economic research at TD Securities.

There is “no appetite whatsoever to sell assets,” he noted. The Fed holds a record $4.38 trillion of securities.

Fed officials said they would release a more detailed exit plan later this year. The Fed’s last exit plan was released in the summer of 2011.

At their meeting, the Fed unanimously decided to trim monthly bond purchases to $35 billion from $45 billion. Fed officials released their forecasts that signaled that the first hike in interest rates would come in 2015.

*Fed staff lowers inflation forecast*
According to the minutes, the Fed staff was not concerned with inflation despite some recent higher readings.

Although the Fed staff revised its inflation forecast up “a little” in the near term, the medium term projection was revised down slightly.

Many economists are worried that the central bank might be falling behind the curve.

At the press conference after the June meeting, Fed Chairwoman Janet Yellen said that recent inflation readings were “noisy.”

Fed officials were split on the inflation outlook. Some were concerned about below-trend inflation persisting while others expected a faster pickup.

“This Fed is still very much dovish on inflation,” said Scott Clemons, the chief investment strategist at Brown Brothers Harriman Private Banking.

“”I still think rates are lower for longer,” he added.

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## LeveragedBuyout

U.S. Jobless Rate Closing in on Nairu Estimate - Real Time Economics - WSJ








July 15, 2014, 7:53 AM ET
*U.S. Jobless Rate Closing in on Nairu Estimate*
*ByJon Hilsenrath and Josh Zumbrun*




The Wall Street Journal
The U.S. unemployment rate is getting closer to the Federal Reserve’s estimate of the non-accelerating inflation rate of unemployment, or Nairu–a rate that is happily low, but not so low that the economy and job market risk overheating and causing inflation.

It is impossible to know exactly where this theoretical jobless rate stands, and it could change over time, depending on trends in worker productivity and other measures of labor-market slack. Fed officials estimate it to help guide their interest-rate-policy decisions. Many Fed officials put it in the 5.2% to 5.5% range. Some think it might be as high as 6% or as low as 5%. The trick for the Fed is to help guide unemployment into this comfort zone with interest rate policies and keep it there. When the economy is soft, the Fed encourages borrowing and spending with low rates, and when it is too strong, it does the reverse.

At 6.1% in June, the jobless rate was getting closer to where some officials put Nairu. Its quick approach to this level helps explain why some regional Fed bank presidents are talking about interest rate increases. Fed Chairwoman Janet Yellen, who testifies before Congress on Tuesday and Wednesday on the economic outlook, has argued that hidden forms of labor-market slack, such as people taking part-time jobs when they want full-time jobs, gives the Fed extra room to maneuver.

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## LeveragedBuyout

Yellen, Fed Still Worried About Slowdown in Housing Recovery - Real Time Economics - WSJ








July 15, 2014, 10:00 AM ET
*Yellen, Fed Still Worried About Slowdown in Housing Recovery*
*ByBen Leubsdorf*
The *Federal Reserve* remains concerned about the U.S. housing recovery–which began to slow down last year when mortgage rates spiked–and has so far has failed to regain much traction, Chairwoman *Janet Yellen* said Tuesday.

“The housing sector…has shown little recent progress,” Ms. Yellen said in remarks prepared for delivery before the *Senate Banking Committee*. “While this sector has recovered notably from its earlier trough, housing activity leveled off in the wake of last year’s increase in mortgage rates, and readings this year have, overall, continued to be disappointing.”

Her comment Tuesday reinforced a warning she offered when testifying before lawmakers more than two months ago. On May 7, Ms. Yellen told the *Joint Economic Committee* that “readings on housing activity–a sector that has been recovering since 2011–have remained disappointing so far this year and will bear watching.”

Several broad gauges of housing-market activity stumbled last year after mortgage interest rates rose when the Fed began discussing the end of its bond-buying program, which now is on track to end later this year. The average interest rate on a 30-year fixed rate mortgage rose from 3.35% in early May 2013 to 4.51% in mid-July 2013, according to Freddie Mac. Rates have come down since then, to an average of 4.15% last week.

But while the rise in rates is “the most obvious explanation for the weakness in the housing market over the past year,” it “seems unlikely that interest rates are the whole story,” according to the Fed’s semiannual *Monetary Policy Report*, also released on Tuesday. “Historical correlations between mortgage rates and residential investment suggest that the effects of last year’s run-up should have begun to fade by now, but housing activity has yet to pick up.”

The report speculated that the rise in interest rates may have had an outsized effect “because an interest rate rise of that magnitude, with rates so low and housing activity so depressed, is unprecedented.”

It also said that “ongoing increases in house prices may indicate that constraints on the supply of new housing are binding more significantly than seemed to be the case.”

In addition, the report noted that short sales and sales of foreclosed homes have “declined markedly over the past couple of years.”

In any case, the Fed report concluded, the current level of new-home construction “likely remains much too low to be sustainable” and should rise again at some future point. And it singled out construction of multi-family buildings as “the only bright spot of late,” with data “noisy,” but suggesting a continued rise.

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## LeveragedBuyout

U.S. risks fiscal crisis from rising debt: CBO - MarketWatch





Economic Report

July 15, 2014, 11:22 a.m. EDT

*U.S. risks fiscal crisis from rising debt: CBO*
*Debt will exceed GDP in 25 years if laws don’t change, agency says*
By Robert Schroeder, MarketWatch





WASHINGTON (MarketWatch) — The U.S. risks a fiscal crisis if it doesn’t get large and continuously growing federal debt under control, the Congressional Budget Office said Tuesday.

In its new long-term budget outlook, the nonpartisan CBO said federal debt held by the public is now 74% of the economy and will rise to 106% of gross domestic product by 2039 if current laws remain unchanged. Read the 2014 long-term budget outlook.

In its last long-term budget outlook in September 2013, CBO said debt held by the public was 73% of GDP and projected debt would be 102% of GDP in 2039.

The stark warning from the CBO comes as deficits have recently been falling. For the current fiscal year, for example, the CBO is projecting a deficit of $492 billion, which would be 2.8% of gross domestic product.

The deficit in fiscal 2013 was $680 billion, the first shortfall below $1 trillion of Barack Obama’s presidency. The deficit hit a record of $1.4 trillion in 2009.

But the agency expects deficits to rise in coming years as costs related to Social Security, Medicare and interest payments swell.

And if federal debt grows faster than GDP, that path is ultimately “unsustainable” for the economy and risks a crisis where investors would begin to doubt the government’s willingness or ability to pay its debt obligations, CBO said.

“Such a fiscal crisis would present policymakers with extremely difficult choices and would probably have a substantial negative impact on the country,” the report says.

The report lays bare long-term challenges for lawmakers. Spending on Social Security, Medicare and Medicaid will be 14% of GDP by 2039. That’s twice the 7% average seen over the past 40 years, CBO said.

Entitlement spending has been a point of contention between Democrats and Republicans in years past as the parties have pursued deficit-cutting agreements.

Washington’s budget battles have cooled down, however, as deficits have recently declined. Spending levels were set on autopilot for this year and next after a budget deal was struck late last year between House Budget Committee Chairman Paul Ryan and Patty Murray, who heads the Senate Budget Committee. President Obama and House Republicans have offered budget plans for fiscal 2015, but neither is expected to advance with midterm elections approaching in November.

CBO Director Douglas Elmendorf will testify before the House Budget Committee about the report on Wednesday morning. The committee is led by Rep. Paul Ryan, who was the Republican vice-presidential candidate in the last election.

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## Aepsilons

*Morgan Stanley doubles its profits*



NEW YORK (AP)—Morgan Stanley said Thursday its quarterly profit more than doubled, thanks to strong performances from its investment banking and money-management units.
The results beat analysts’ estimates and drove the investment bank’s stock up in early trading.

Second-quarter net income jumped to $1.88 billion from $900 million a year earlier, after excluding an accounting adjustment. On a per-share basis, Morgan Stanley’s quarterly earnings were 91 cents, easily beating the average prediction of 55 cents from analysts polled by FactSet.

Wall Street’s banks were expected to turn in weak results this earnings season. Markets have turned relatively calm this year and trading activity has dried up, creating a tough environment for traders to make money.

Much as predicted, Morgan Stanley said revenue from trading stocks, bonds and commodities sank 13 percent in the second quarter. But like Goldman Sachs and other big banks that reported results this week, the bank offset that drop with stronger results from helping companies raise money and arranging initial public offerings, known as IPOs. Investment banking revenue in the quarter increased 25 percent over the previous year.


Morgan Stanley doubles its profits - The Japan News

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## LeveragedBuyout

Grand Central: Why the World Still Loves U.S. Treasury Debt - Real Time Economics - WSJ








July 21, 2014, 8:12 AM ET
*Grand Central: Why the World Still Loves U.S. Treasury Debt*
Highlights


Hilsenrath’s Take: Why the World Still Loves U.S. Treasury Debt
Dodd-Frank Still Unfinished
Swiss and Chinese Central Banks Agree on a Currency-swap Deal
Lagarde Says ECB Should Keep Loose Policy as Recovery Weak




It is remarkable how wrong Wall Street has been about 10-year yields. When surveyed in January by the Federal Reserve Bank of New York, more than three-quarters of the 22 big Wall Street primary dealers that trade the instruments estimated 10-year yields would be 3% or more around now.(See responses to question #6.)

There are several explanations for the latest development:

1) In a world in turmoil, investors are hungry for super safe assets like U.S. Treasury bonds. Spanish and Italian debt were favorites earlier this year, but in the past month, as tensions mounted in the Middle East and Ukraine, investors flocked back to Treasurys, stodgy Germany bunds and British gilts, over risky rivals.

2) Foreign central banks can’t give up their addiction to U.S. Treasurys and a tried-and-true economic formula. *As WSJ bond reporter Min Zeng highlighted last week, the Chinese government added $107.21 billion to its Treasury holds in the first five months of 2014. Buying U.S. debt helps to weaken the yuan and support exports. Chinese officials are trying to wean their economy off its dependence on exporting to U.S. consumers, but with domestic growth foundering, they appear to be having a hard time doing it.*

3) The secular stagnation argument is winning the hearts and souls of bond investors. This argument – popularized by former Obama administration adviser Lawrence Summers – holds that the U.S. economy can’t grow as fast as it used to grow. Slow underlying growth means lower long-term interest rates. Economists surveyed by the Wall Street Journal earlier this month said they had marked down their estimates for the economy’s long-run growth potential to 2.3%, well below its post-World War II average growth rate of 3.5%. This theory is underpinned by the fact that the U.S. economy contracted in the first quarter, assuring that growth for the year would once again wind up below Wall Street economists’ and Federal Reserve officials’ predictions.

It’s worth remembering these developments the next time you hear somebody warn the world is about to lose its appetite for Treasury bonds and U.S. borrowing costs will soar. Those warnings have been around for so long – and wrong for so long too.

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## LeveragedBuyout

To corporate America, even French law looks inviting - MarketWatch





MarketWatch First Take

July 28, 2014, 3:25 p.m. EDT

*To corporate America, even French law looks inviting*
*Opinion: Pressure building for corporate tax reform as inversions mount*
By Steve Goldstein, MarketWatch





WASHINGTON (MarketWatch) — The published reports that Hospira may merge with a division of Danone leads to a rather unsettling conclusion: To corporate America, even the famously hostile-to-business France looks more inviting.

But it’s true. According to the Organization for Economic Cooperation and Development, U.S. companies pay a tax rate of 39.1% (when the average state tax is factored in). French companies, by contrast, pay 34.4%.

Now, it’s important to note that not every U.S. company pays 39.1% of its earnings, or anywhere close to it. Various loopholes, deductions and international operations allow the effective rate for many companies to be far lower.

Take, for example, um, Hospira (NYSE:HSP) ! Over the past five years, the company has enjoyed a cumulative $216.5 million in tax benefits. That’s right — it’s earned $571.1 million before tax, and earned $787.6 million after tax.

True, it’s benefited from charges it’s taken that aren’t necessarily going to recur in future years as well as retroactive application of the research-and-development tax credit. In the first quarter, Hospira said it paid a tax rate of 24.5%.

It’s important to note that not every company can take advantage of these transactions, called inversions. Apple, for instance, would find a hard time finding another company large enough to swallow 20% of the iPhone maker, as the inversion loophole requires.

And, corporate tax represents a tiny part of the tax base anyway. According to data from ConvergEx, just under 9.9% of total tax and withholding came from corporate tax last year. (Through this fiscal year, corporate tax revenue is up about 9%.)

But it’s the principle, and of course, the sound bites, that make this an area ripe for reform, not to mention the potential for job losses when headquarters move abroad. President Barack Obama has called for retroactive action to early May to stamp out practices he calls “wrong.”

The politics aren’t easy though. “Inversions” aren’t catchy on the campaign trail, and it’s important to stress that even Senate Democrats, much less Republicans, are not in agreement on what to do with them. Politicians from both parties are keen to bundle inversions into a broader corporate-tax reform package, consisting of lower top tax rates and various changes and eliminations to the tax code.

It goes without saying that such tax reform can’t get done before the election, and in today’s 24-hour news cycle, it’s not a cinch that it can be done in 2015, either.

There may be another way. An article in Tax Notes suggests existing law allows Treasury to set standards on when a financial instrument should be treated as debt. Classifying any new debt issued to the foreign company as equity would eliminate the tax deductibility, points out Stephen Shay, a Harvard Law School professor and former Treasury official. While it wouldn’t eliminate this particular loophole, it would for instance lower the benefit of Walgreen’s (NYSE:WAG) possible transaction “by hundreds of millions of dollars,” Shay writes.

In any case, Treasury is under the gun. Shay himself talked to a banker who said the volume of deals to be announced in September will be double what was seen in June and July.

By then half of American corporations may be talking French.

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## Aepsilons

LeveragedBuyout said:


> To corporate America, even French law looks inviting - MarketWatch
> 
> 
> 
> 
> 
> MarketWatch First Take
> 
> July 28, 2014, 3:25 p.m. EDT
> 
> *To corporate America, even French law looks inviting*
> *Opinion: Pressure building for corporate tax reform as inversions mount*
> By Steve Goldstein, MarketWatch
> 
> 
> 
> 
> 
> WASHINGTON (MarketWatch) — The published reports that Hospira may merge with a division of Danone leads to a rather unsettling conclusion: To corporate America, even the famously hostile-to-business France looks more inviting.
> 
> But it’s true. According to the Organization for Economic Cooperation and Development, U.S. companies pay a tax rate of 39.1% (when the average state tax is factored in). French companies, by contrast, pay 34.4%.
> 
> Now, it’s important to note that not every U.S. company pays 39.1% of its earnings, or anywhere close to it. Various loopholes, deductions and international operations allow the effective rate for many companies to be far lower.
> 
> Take, for example, um, Hospira (NYSE:HSP) ! Over the past five years, the company has enjoyed a cumulative $216.5 million in tax benefits. That’s right — it’s earned $571.1 million before tax, and earned $787.6 million after tax.
> 
> True, it’s benefited from charges it’s taken that aren’t necessarily going to recur in future years as well as retroactive application of the research-and-development tax credit. In the first quarter, Hospira said it paid a tax rate of 24.5%.
> 
> It’s important to note that not every company can take advantage of these transactions, called inversions. Apple, for instance, would find a hard time finding another company large enough to swallow 20% of the iPhone maker, as the inversion loophole requires.
> 
> And, corporate tax represents a tiny part of the tax base anyway. According to data from ConvergEx, just under 9.9% of total tax and withholding came from corporate tax last year. (Through this fiscal year, corporate tax revenue is up about 9%.)
> 
> But it’s the principle, and of course, the sound bites, that make this an area ripe for reform, not to mention the potential for job losses when headquarters move abroad. President Barack Obama has called for retroactive action to early May to stamp out practices he calls “wrong.”
> 
> The politics aren’t easy though. “Inversions” aren’t catchy on the campaign trail, and it’s important to stress that even Senate Democrats, much less Republicans, are not in agreement on what to do with them. Politicians from both parties are keen to bundle inversions into a broader corporate-tax reform package, consisting of lower top tax rates and various changes and eliminations to the tax code.
> 
> It goes without saying that such tax reform can’t get done before the election, and in today’s 24-hour news cycle, it’s not a cinch that it can be done in 2015, either.
> 
> There may be another way. An article in Tax Notes suggests existing law allows Treasury to set standards on when a financial instrument should be treated as debt. Classifying any new debt issued to the foreign company as equity would eliminate the tax deductibility, points out Stephen Shay, a Harvard Law School professor and former Treasury official. While it wouldn’t eliminate this particular loophole, it would for instance lower the benefit of Walgreen’s (NYSE:WAG) possible transaction “by hundreds of millions of dollars,” Shay writes.
> 
> In any case, Treasury is under the gun. Shay himself talked to a banker who said the volume of deals to be announced in September will be double what was seen in June and July.
> 
> By then half of American corporations may be talking French.




Holy mackerel ! US' is at 39%? And I thought ours was bad...at 37%. 

Japan should adopt Ireland's approach. lol.

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## LeveragedBuyout

Nihonjin1051 said:


> Holy mackerel ! US' is at 39%? And I thought ours was bad...at 37%.
> 
> Japan should adopt Ireland's approach. lol.



I agree that a low, flat corporate tax rate is ideal, but then how will we be able to pay all of the deadbeats to stop working and all of the fake disability claims?

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## Aepsilons

LeveragedBuyout said:


> I agree that a low, flat corporate tax rate is ideal, but then how will we be able to pay all of the deadbeats to stop working and all of the fake disability claims?



Its just insane to see how much is taxed on US Corporations. I mean, seriously, 39%? And the DEMS blame corporations for going abroad and "selling US jobs to foreigners". Such vacuous statements.

I mean, I want to also address an issue that I have. This year, this fiscal year, I did my taxes and just was amazed how much had been taken from my income / wages. I mean, I know it goes to services and what not, but I examined also the tax regime here in the 'states. It is as if a citizen is punished for being industrious, productive member of society. A worker who is makes over $90k has a 30% tax. People who make over $250k are taxed even greater. It seems as if the more you contribute to society , you're punished. Whereas the poor / 'marginalized' are rewarded.

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## LeveragedBuyout

Nihonjin1051 said:


> Its just insane to see how much is taxed on US Corporations. I mean, seriously, 39%? And the DEMS blame corporations for going abroad and "selling US jobs to foreigners". Such vacuous statements.
> 
> I mean, I want to also address an issue that I have. This year, this fiscal year, I did my taxes and just was amazed how much had been taken from my income / wages. I mean, I know it goes to services and what not, but I examined also the tax regime here in the 'states. It is as if a citizen is punished for being industrious, productive member of society. A worker who is makes over $90k has a 30% tax. People who make over $250k are taxed even greater. It seems as if the more you contribute to society , you're punished. Whereas the poor / 'marginalized' are rewarded.



While I don't agree with it, I understand some degree of progressive taxation, in the Willie Sutton sense of robbing banks because that's where the most money is. But once the link between taxes paid and value received is broken, then the system is unsustainable. 

As this apocryphal quote (usually attributed either to Ben Franklin, Alexis de Tocqueville, or Alexander Fraser Tyler) posits:

"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."

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## Aepsilons

LeveragedBuyout said:


> While I don't agree with it, I understand some degree of progressive taxation, in the Willie Sutton sense of robbing banks because that's where the most money is. But once the link between taxes paid and value received is broken, then the system is unsustainable.
> 
> As this apocryphal quote (usually attributed either to Ben Franklin, Alexis de Tocqueville, or Alexander Fraser Tyler) posits:
> 
> "A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy, which is always followed by a dictatorship."



My dear sir, very poignant.


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## XenoEnsi-14

LeveragedBuyout said:


> To corporate America, even French law looks inviting - MarketWatch
> 
> 
> 
> 
> 
> 
> MarketWatch First Take
> 
> July 28, 2014, 3:25 p.m. EDT
> 
> *To corporate America, even French law looks inviting*
> *Opinion: Pressure building for corporate tax reform as inversions mount*
> By Steve Goldstein, MarketWatch
> 
> 
> 
> 
> 
> WASHINGTON (MarketWatch) — The published reports that Hospira may merge with a division of Danone leads to a rather unsettling conclusion: To corporate America, even the famously hostile-to-business France looks more inviting.
> 
> But it’s true. According to the Organization for Economic Cooperation and Development, U.S. companies pay a tax rate of 39.1% (when the average state tax is factored in). French companies, by contrast, pay 34.4%.
> 
> Now, it’s important to note that not every U.S. company pays 39.1% of its earnings, or anywhere close to it. Various loopholes, deductions and international operations allow the effective rate for many companies to be far lower.
> 
> Take, for example, um, Hospira (NYSE:HSP) ! Over the past five years, the company has enjoyed a cumulative $216.5 million in tax benefits. That’s right — it’s earned $571.1 million before tax, and earned $787.6 million after tax.
> 
> True, it’s benefited from charges it’s taken that aren’t necessarily going to recur in future years as well as retroactive application of the research-and-development tax credit. In the first quarter, Hospira said it paid a tax rate of 24.5%.
> 
> It’s important to note that not every company can take advantage of these transactions, called inversions. Apple, for instance, would find a hard time finding another company large enough to swallow 20% of the iPhone maker, as the inversion loophole requires.
> 
> And, corporate tax represents a tiny part of the tax base anyway. According to data from ConvergEx, just under 9.9% of total tax and withholding came from corporate tax last year. (Through this fiscal year, corporate tax revenue is up about 9%.)
> 
> But it’s the principle, and of course, the sound bites, that make this an area ripe for reform, not to mention the potential for job losses when headquarters move abroad. President Barack Obama has called for retroactive action to early May to stamp out practices he calls “wrong.”
> 
> The politics aren’t easy though. “Inversions” aren’t catchy on the campaign trail, and it’s important to stress that even Senate Democrats, much less Republicans, are not in agreement on what to do with them. Politicians from both parties are keen to bundle inversions into a broader corporate-tax reform package, consisting of lower top tax rates and various changes and eliminations to the tax code.
> 
> It goes without saying that such tax reform can’t get done before the election, and in today’s 24-hour news cycle, it’s not a cinch that it can be done in 2015, either.
> 
> There may be another way. An article in Tax Notes suggests existing law allows Treasury to set standards on when a financial instrument should be treated as debt. Classifying any new debt issued to the foreign company as equity would eliminate the tax deductibility, points out Stephen Shay, a Harvard Law School professor and former Treasury official. While it wouldn’t eliminate this particular loophole, it would for instance lower the benefit of Walgreen’s (NYSE:WAG) possible transaction “by hundreds of millions of dollars,” Shay writes.
> 
> In any case, Treasury is under the gun. Shay himself talked to a banker who said the volume of deals to be announced in September will be double what was seen in June and July.
> 
> By then half of American corporations may be talking French.



Where's China's rates?



LeveragedBuyout said:


> I agree that a low, flat corporate tax rate is ideal, but then how will we be able to pay all of the deadbeats to stop working and all of the fake disability claims?



We don't, make the laws stricter and any found abusing welfare should be fined and made forced to find and hold a job for at least a year. If they are unable to find a job they will either be sent to prison or the Government finds a job for them.


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## LeveragedBuyout

XenoEnsi-14 said:


> Where's China's rates?



Good question. @Edison Chen or @Chinese-Dragon , can you provide any insight into the Chinese corporate tax system, and how competitive it is internationally?

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## XenoEnsi-14

LeveragedBuyout said:


> U.S. Jobless Rate Closing in on Nairu Estimate - Real Time Economics - WSJ
> 
> 
> 
> 
> 
> 
> 
> 
> July 15, 2014, 7:53 AM ET
> *U.S. Jobless Rate Closing in on Nairu Estimate*
> *ByJon Hilsenrath and Josh Zumbrun*
> 
> 
> 
> 
> The Wall Street Journal
> The U.S. unemployment rate is getting closer to the Federal Reserve’s estimate of the non-accelerating inflation rate of unemployment, or Nairu–a rate that is happily low, but not so low that the economy and job market risk overheating and causing inflation.
> 
> It is impossible to know exactly where this theoretical jobless rate stands, and it could change over time, depending on trends in worker productivity and other measures of labor-market slack. Fed officials estimate it to help guide their interest-rate-policy decisions. Many Fed officials put it in the 5.2% to 5.5% range. Some think it might be as high as 6% or as low as 5%. The trick for the Fed is to help guide unemployment into this comfort zone with interest rate policies and keep it there. When the economy is soft, the Fed encourages borrowing and spending with low rates, and when it is too strong, it does the reverse.
> 
> At 6.1% in June, the jobless rate was getting closer to where some officials put Nairu. Its quick approach to this level helps explain why some regional Fed bank presidents are talking about interest rate increases. Fed Chairwoman Janet Yellen, who testifies before Congress on Tuesday and Wednesday on the economic outlook, has argued that hidden forms of labor-market slack, such as people taking part-time jobs when they want full-time jobs, gives the Fed extra room to maneuver.



What about the percentage of people who stopped looking for jobs, the chart should show that too.


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## LeveragedBuyout

XenoEnsi-14 said:


> What about the percentage of people who stopped looking for jobs, the chart should show that too.



The last sentence in the article addresses that point, but I agree with you that the NAIRU estimate is deceptive when the participation rate is falling.


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## Edison Chen

@XenoEnsi-14 @LeveragedBuyout 

In China, generally it's 33%. Besides, for some SMEs who have less taxable income, they have lower tax rate. Companies with taxable income lower than ￥30,000, the rate is 18%. Companies with taxable income more than ￥30,000 but lower than ￥100,000, it's 27% tax rate.

And, in 2013 the new rules says, for companies with sales revenue less than ￥20,000 per month, they can have a tax exemption.

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## Hypersonicmissiles

US is facing total economic collapse with massive bond, stock and property bubbles.

The crash will be greater than 2008 and it will be the end of America as a big power.


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## F-22Raptor

http://www.nytimes.com/2014/07/31/business/economy/us-economy-grew-4-in-second-quarter.html

US economy grew 4% in the 2nd quarter.

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## VCheng

F-22Raptor said:


> http://www.nytimes.com/2014/07/31/business/economy/us-economy-grew-4-in-second-quarter.html
> 
> US economy grew 4% in the 2nd quarter.



That can only mean one thing: the US economy is collapsing!

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## LeveragedBuyout

Hilsenrath: Modest Growth Beneath the Surface Keeps Fed on Track - Real Time Economics - WSJ








July 30, 2014, 11:03 AM ET
*Hilsenrath: Modest Growth Beneath the Surface Keeps Fed on Track*
*ByJon Hilsenrath*
Wednesday’s surprisingly strong report on second-quarter economic growth should keep the *Federal Reserve* on track to finish its bond-buying program in October, while intensifying the debate about when to start raising short-term interest rates without resolving it.

The new figures provide the Fed relief that the economy has weathered a disappointing first quarter But they don’t sharply change the narrative being told by Chairwoman *Janet Yellen*, who said in testimony to Congress earlier this month, “Although the economy continues to improve, the recovery is not yet complete.”

To cut through the noise and confusion produced by the report on gross domestic product, skip everything else and go straight to table 8 on page 33. It tells you everything you need to know and sends important signals about how Fed officials are likely to view the numbers.

Table 8 includes measures of quarterly output and inflation compared with the economy’s performance one year earlier. *U.S. economic output in the second quarter was up 2.4% from a year ago, compared with increases of 1.9% in the first quarter and 3.1% in the fourth quarter.*

The economy is growing at a modest pace. It picked up late last year, stumbled in the first quarter, and has resumed a modest, but not-gangbusters, pace.

*Meantime, inflation in the second quarter—as measured by the personal consumption expenditure price index—was up 1.6% in the second quarter from a year ago. It has accelerated from 1.1% in the first quarter and 1.0% in the fourth quarter, but remains below the Federal Reserve’s 2% target.*

These year-over-year numbers are different from the figures making headlines—growth at a 4% annual rate in the second quarter and inflation at a 2.3% annual pace—because a different approach to measurement is employed. The headline number of 4% growth is based on the economy’s performance in the second quarter compared to the first quarter and then extrapolated over an entire year. The numbers in table 8 show how much output the economy produced in the second quarter measured as a percent change from how much it produced in the second quarter a year earlier. The latter takes a slightly longer-term perspective.

Quarterly numbers measured at annual rates—what you see in Table 1 of the release and what gets widely reported—can loudly signal when the economy is heating up or slowing down. But these numbers are volatile, sometimes suggest more movement than actually occurs and can be skewed by seasonal adjustments meant to smooth out differences caused by weather and holidays.

Consider these make-believe output numbers over five hypothetical quarters:

Period 1: 100

Period 2: 102

Period 3: 104

Period 4: 103

Period 5: 106

The pattern shows modest growth earlier in the series, cut off by a brief downturn, and then resumed. Measured at an annual rate, the change from period 4 to period 5 is 12.2%. Measured as a change from period 1 a year earlier, the change is 6%. What better captures the broader pattern? Probably the year-over-year change.

When Wall Street evaluates the earnings of companies, it typically looks at the year-over-year percent in earnings and revenue.

Importantly, when the Federal Reserve forecasts output and inflation, it also forecasts a year-over-year percent change. More specifically, it forecasts the growth in economic output from the fourth quarter of one year to the fourth quarter of the next and the change in the personal consumption expenditure price index from the fourth quarter of one year to the fourth quarter of the next.

In June, Fed officials projected GDP would rise 2.1% to 2.3% in the fourth quarter of 2014 compared with the fourth quarter of 2013. (These projections were downwardly revised from earlier in the year, thanks to the soft first quarter.) Officials predicted inflation between 1.5% and 1.7% in the fourth quarter compared to a year earlier.

*Looked at this way, the economy is now moving largely in line with the Fed’s June predictions. Because of the first-quarter setback, it will need to stay on a growth track greater than 3% in the second half of the year to finish the year in line with its growth expectations.*

The GDP report also leaves unanswered an unsettling question: Why is the unemployment rate, at 6.1% in June, falling so fast when the economy, amidst its stops and starts, isn’t growing very fast at all. Friday’s jobs report will add another piece to that puzzle.


----------



## senheiser

F-22Raptor said:


> http://www.nytimes.com/2014/07/31/business/economy/us-economy-grew-4-in-second-quarter.html
> 
> US economy grew 4% in the 2nd quarter.



BS fake numbers now all of the sudden you change first quarter again thats the 4 or 3 time you change your Q1 data. Youre not reliable and a liar country


----------



## LeveragedBuyout

senheiser said:


> BS fake numbers now all of the sudden you change first quarter again thats the 4 or 3 time you change your Q1 data. Youre not reliable and a liar country



If you were confused, you should know that this is an initial estimate, and you should prepare for at least two revisions as further data is collected. Your ignorance is no indication of a lie on our part.


----------



## senheiser

LeveragedBuyout said:


> If you were confused, you should know that this is an initial estimate, and you should prepare for at least two revisions as further data is collected. Your ignorance is no indication of a lie on our part.



preparing? for
0.1% to
-1% to
-2.9% to
-2.1% ?
q1 growth?

youre the one accusing other countries faking their gdp numbers like you do to china. The only one faking is you


----------



## Hamartia Antidote

LeveragedBuyout said:


> I agree that a low, flat corporate tax rate is ideal, but then how will we be able to pay all of the deadbeats to stop working and all of the fake disability claims?



Large companies find ways to a zero tax rate

*Large companies find ways to a zero tax rate*
Matt Krantz, USA TODAY 12:31 a.m. EST February 19, 2014





(Photo: Justin Sullivan, Getty Images)

*Story Highlights*

Among the S&P 500, 58 companies have effective tax rates of 0% or lower
Companies that lose money are among the most common that have low effective tax rates
Tax reduction techniques, especially transfer payments to foreign units, are used
6111 CONNECT 650 TWEET 91 LINKEDIN 151 COMMENTEMAILMORE
Despite widespread groans about the recent disclosure that Apple is finding ways to cut its federal tax bill, an analysis shows the computer giant is one of scores of corporations largely dodging the taxman.

A surprising number of companies in the Standard & Poor's 500, 57, have found ways to pay effective tax rates of zero, according to a USA TODAY analysis of data from S&P Capital IQ.

The effective tax rate is a popular measure used by investors to compare how much companies pay in tax relative to profit.

*CEO PAY: *Executive compensation skyrockets on soaring stock market

The news comes months after after the Government Accountability Office released a report showing that companies in 2010 reported an average effective tax rate of 12.6%, well below the 35% federal corporate tax rate.

Corporate giants such as telecom firm Verizon, drugmaker Bristol-Myers Squibb and power management firm Eaton, all reported effective tax rates of 0% during the past 12 months. The findings underscore that while many companies bellyache about the top federal income tax rate of 35%, in reality, many pay much less than that, says Nick Yee of Gradient Analytics. "Investors hope company management is doing everything they can to generate profit, legally," he says. "But the tax code is gray, and there's often no set guidance."

*TAX REFUND DELAYS: *IRS says shutdown will delay tax filing season

Some ways companies are driving their effective tax rates to zero include:

• *Offshore transfer payments. *One of the favorite ways for companies to slash their tax bills is by setting up foreign subsidiaries to make raw materials and components in countries with low tax rates. The companies' U.S. operations then purchase these parts from the foreign units at well above cost. By doing this, the overseas unit makes a large profit, which then escapes U.S. taxes, as long as it stays in the foreign country, Yee says. Transfer payments are used at Bristol, Forest Labs, Agilent Technologies, Eaton and Lam Research, he says. Many companies are likely waiting for a U.S. tax-holiday, giving them a chance to bring the cash to the U.S. tax-free, Yee says. Agilent and Bristol declined to comment. The other companies didn't respond.

• *Harvesting losses*. Most of the companies with effective tax rates of zero, or even negative, are money losers. While Hewlett-Packard, J.C. Penney and E-Trade pay taxes, since they lose money, they have negative effective tax rates due to the way the number is calculated. Yet, some big companies that have lost money in the past accumulate credits that can be used to offset tax bills in future years. These reserves can be very lucrative and give profit a boost by lowering the effective tax rate, Yee says. Companies with these tax loss reserves include General Motors and Crown Castle, he says. GM, for instance, released credit from its reserve, taking it down from $45 billion to $11 billion. Investors must be aware, though, that once that $11 billion reserve is used up, the company's tax rate returns to the statutory rate. All this follows tax rules, but investors need to be aware. "This isn't anything illegal, but the reserve will run out," Yee says. GM declined to comment. The other companies didn't respond.

• *Accounting rules.* A big reason that Verizon's effective tax rate is so low, coming in at a negative 4.8%, is largely due to accounting. The company's sped-up depreciation, severance and pension costs are large credits that contribute to pushing the company's taxes down, says Jonathan Schildkraut of Evercore. But there's also a distortion caused by the company's 55% interest in Verizon Wireless. Vodafone, which owns 45% of Verizon Wireless, pays taxes on its share, but the entire profit is reported on income. Adjusting for this, Verizon's effective tax rate is closer to 30%, the company says. Verizon is buying Vodafone's stake, which will eliminate the issue in the future. Similarly, real estate investment trusts have low effective tax rates because they pass profit to shareholders, who then pay the taxes.

The question for investors is whether or not companies paying low effective tax rates might, eventually, attract the attention to regulators. "They are slow at getting at these issues," Yee says.

*S&P 500 members citing effective tax rates of 0% in past twelve months, ranked by market value (in billions): *

Verizon: $146.4

MetLife: $53.9

Eaton: $32.7

Regeneron Pharmaceuticals: $29.6

Public Storage: $29.5

Ventas: $19.3

Avalonbay Communities: $17.4

Agilent Technologies: $16.9

Vornado Realty Trust: $16.8

Boston Properites: $16.7

Seagate Technology: $15.9

Broadcom: $15.7

News Corp.: $9.8

Lam Research: $8.8

Kimco Realty: $8.6

Waters: $8.5

Macerich: $8.3

Plum Creek Timber: $8.4

PulteGroup: $6.4

Apartment Investment & Management: $4.3

Perkin Elmer: $4.2

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## LeveragedBuyout

senheiser said:


> preparing? for
> 0.1% to
> -1% to
> -2.9% to
> -2.1% ?
> q1 growth?
> 
> youre the one accusing other countries faking their gdp numbers like you do to china. The only one faking is you



I have not questioned China's GDP numbers, but feel free to prove me wrong if you can produce proof (you will not be able to).

If you are troubled by the revision process, I recommend that you only pay attention to Q2's numbers one year from now, when the final revision is made. Calculating the GDP is a complex process that requires reams of data, and it takes time to gather all of that data. The American process gives me high confidence in our numbers, but believe me, the US doesn't live or die based on your opinion of our process. Only the bond market matters.



Peter C said:


> Large companies find ways to a zero tax rate
> 
> *Large companies find ways to a zero tax rate*
> Matt Krantz, USA TODAY 12:31 a.m. EST February 19, 2014
> 
> 
> 
> 
> (Photo: Justin Sullivan, Getty Images)
> 
> *Story Highlights*
> 
> Among the S&P 500, 58 companies have effective tax rates of 0% or lower
> Companies that lose money are among the most common that have low effective tax rates
> Tax reduction techniques, especially transfer payments to foreign units, are used
> 6111 CONNECT 650 TWEET 91 LINKEDIN 151 COMMENTEMAILMORE
> Despite widespread groans about the recent disclosure that Apple is finding ways to cut its federal tax bill, an analysis shows the computer giant is one of scores of corporations largely dodging the taxman.
> 
> A surprising number of companies in the Standard & Poor's 500, 57, have found ways to pay effective tax rates of zero, according to a USA TODAY analysis of data from S&P Capital IQ.
> 
> The effective tax rate is a popular measure used by investors to compare how much companies pay in tax relative to profit.
> 
> *CEO PAY: *Executive compensation skyrockets on soaring stock market
> 
> The news comes months after after the Government Accountability Office released a report showing that companies in 2010 reported an average effective tax rate of 12.6%, well below the 35% federal corporate tax rate.
> 
> Corporate giants such as telecom firm Verizon, drugmaker Bristol-Myers Squibb and power management firm Eaton, all reported effective tax rates of 0% during the past 12 months. The findings underscore that while many companies bellyache about the top federal income tax rate of 35%, in reality, many pay much less than that, says Nick Yee of Gradient Analytics. "Investors hope company management is doing everything they can to generate profit, legally," he says. "But the tax code is gray, and there's often no set guidance."
> 
> *TAX REFUND DELAYS: *IRS says shutdown will delay tax filing season
> 
> Some ways companies are driving their effective tax rates to zero include:
> 
> • *Offshore transfer payments. *One of the favorite ways for companies to slash their tax bills is by setting up foreign subsidiaries to make raw materials and components in countries with low tax rates. The companies' U.S. operations then purchase these parts from the foreign units at well above cost. By doing this, the overseas unit makes a large profit, which then escapes U.S. taxes, as long as it stays in the foreign country, Yee says. Transfer payments are used at Bristol, Forest Labs, Agilent Technologies, Eaton and Lam Research, he says. Many companies are likely waiting for a U.S. tax-holiday, giving them a chance to bring the cash to the U.S. tax-free, Yee says. Agilent and Bristol declined to comment. The other companies didn't respond.
> 
> • *Harvesting losses*. Most of the companies with effective tax rates of zero, or even negative, are money losers. While Hewlett-Packard, J.C. Penney and E-Trade pay taxes, since they lose money, they have negative effective tax rates due to the way the number is calculated. Yet, some big companies that have lost money in the past accumulate credits that can be used to offset tax bills in future years. These reserves can be very lucrative and give profit a boost by lowering the effective tax rate, Yee says. Companies with these tax loss reserves include General Motors and Crown Castle, he says. GM, for instance, released credit from its reserve, taking it down from $45 billion to $11 billion. Investors must be aware, though, that once that $11 billion reserve is used up, the company's tax rate returns to the statutory rate. All this follows tax rules, but investors need to be aware. "This isn't anything illegal, but the reserve will run out," Yee says. GM declined to comment. The other companies didn't respond.
> 
> • *Accounting rules.* A big reason that Verizon's effective tax rate is so low, coming in at a negative 4.8%, is largely due to accounting. The company's sped-up depreciation, severance and pension costs are large credits that contribute to pushing the company's taxes down, says Jonathan Schildkraut of Evercore. But there's also a distortion caused by the company's 55% interest in Verizon Wireless. Vodafone, which owns 45% of Verizon Wireless, pays taxes on its share, but the entire profit is reported on income. Adjusting for this, Verizon's effective tax rate is closer to 30%, the company says. Verizon is buying Vodafone's stake, which will eliminate the issue in the future. Similarly, real estate investment trusts have low effective tax rates because they pass profit to shareholders, who then pay the taxes.
> 
> The question for investors is whether or not companies paying low effective tax rates might, eventually, attract the attention to regulators. "They are slow at getting at these issues," Yee says.
> 
> *S&P 500 members citing effective tax rates of 0% in past twelve months, ranked by market value (in billions): *
> 
> Verizon: $146.4
> 
> MetLife: $53.9
> 
> Eaton: $32.7
> 
> Regeneron Pharmaceuticals: $29.6
> 
> Public Storage: $29.5
> 
> Ventas: $19.3
> 
> Avalonbay Communities: $17.4
> 
> Agilent Technologies: $16.9
> 
> Vornado Realty Trust: $16.8
> 
> Boston Properites: $16.7
> 
> Seagate Technology: $15.9
> 
> Broadcom: $15.7
> 
> News Corp.: $9.8
> 
> Lam Research: $8.8
> 
> Kimco Realty: $8.6
> 
> Waters: $8.5
> 
> Macerich: $8.3
> 
> Plum Creek Timber: $8.4
> 
> PulteGroup: $6.4
> 
> Apartment Investment & Management: $4.3
> 
> Perkin Elmer: $4.2



The very complexity of the tax code ensures that only large multinational corporations will be able to take advantage of these deductions, and turn what is nominally a progressive tax code into a highly regressive one. It's time for a simple, low, flat tax.

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## LeveragedBuyout

Chicago PMI plunges in biggest one-month drop since Oct. 2008 - MarketWatch





Economic Report

July 31, 2014, 11:17 a.m. EDT

*Chicago PMI plunges in biggest one-month drop since Oct. 2008*
*Index at lowest level in a year*
By Greg Robb, MarketWatch





WASHINGTON (MarketWatch) — A key Midwestern manufacturing gauge saw its biggest drop in July since the start of the financial crisis in October 2008, suggesting the possibility of a softer second half U.S. economic performance than had been hoped.

The Chicago purchasing managers index plunged to a reading of 52.6 in July, down from a reading of 62.6 in the prior month and well below the consensus of 63.5.

ECONOMY AND POLITICS | @MKTWEconomics


 AFP/Getty Images
A city-by-city look at home prices in May 
Tampa, Charlotte among gainers.
• U.S. homeownership at 18-year low  

The July reading was the worst in over a year.

Purchasing managers said the downturn was a “lull” and not the start of a new downward trend.

“Some feedback from panelists points to this being a temporary setback, although we’ll need to see the August data to judge to what extent this is a blip,” said Philip Uglow, chief economist at MNI Indicators.

Jim O’Sullivan, chief economist at High Frequency Economics, said the slowdown was not likely due to the annual shutdown of auto plants to retool for new production.

“It hasn’t been an issue before,” he said.

Michael Gapen, economist at Barclays, said the reversal in the index in July reflects “a moderation of economic activity into the second half of the year after the second-quarter bounce back.”

The economy bounced back to a 4% annual growth rate in the second quarter after a sluggish winter. Gapen said he expects 2.5% growth in the second half.

“The July Chicago PMI would be consistent with this view, although the timing of the move came earlier than we had anticipated,” he said.

After the release of the Chicago PMI data -- which subscribers get three minutes ahead of the public -- stocks continued lower. The Dow Jones Industrial Average (DJIJIA) was recently down 161 points to 16,719.

Production activity fell to 51.4 from 70.1. New orders also slowed to 55.7 from 65.1 and the order backlog, which slipped into contractionary territory for the first time since last August.

The Chicago PMI reading comes ahead of the national Institute for Supply Management manufacturing index -- which economists, prior to the poor Chicago reading, forecast to rise to 56.3% from 55.3% in June. Analysts noted that the Chicago PMI can be volatile and does not always foreshadow the national number.

O’Sullivan has been expecting a 57.0% reading of the ISM in July and said he was not a “little less confident” in that forecast. But he said he still expected the ISM to rise in the month, noting that other regional indexes this month weren’t nearly as bearish.

The Empire State manufacturing survey climbed to 25.6 in July from 19.3 in June. It’s the highest level of that index since April 2010. The Philadelphia Fed survey jumped to 23.9 from 17.8. The Milwaukee index, also released Thursday morning, rose to 63.9 in July from 60.6 in the prior month.

Elsewhere on Thursday, the Labor Department reported jobless claims turned higher one week after touching a 14-year low, and the employment cost index rose 0.7% in the second quarter, the fastest growth since 2008.

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## Aepsilons

*Panasonic, Tesla to build big U.S. battery plant*


TOKYO —

American electric car maker Tesla Motors Inc. is teaming up with Japanese electronics company Panasonic Corp. to build a battery manufacturing plant in the U.S. expected to create 6,500 jobs.

The companies announced the deal Thursday, but they did not say where in the U.S. the so-called “gigafactory,” or large-scale plant, will be built. Tesla has said that Nevada, Arizona, Texas, New Mexico and California are in the running.

Financial terms weren’t disclosed for the $5 billion plant.

The plant will produce cells, modules and packs for Tesla’s electric vehicles and for the stationary energy storage market, employing 6,500 people by 2020.

Under the agreement, Tesla, based in Palo Alto, California, will prepare, provide and manage the land and buildings, while Osaka-based Panasonic will manufacture and supply the lithium-ion battery cells and invest in equipment.

Tesla CEO Elon Musk has said the factory will help Tesla reduce its battery costs by 30 percent. Tesla needs cheaper batteries in order to produce its mass-market Model 3, an electric car it’s developing that would cost around $30,000. Tesla hopes to have the Model 3 on the road by 2017. The company’s only current vehicle, the Model S sedan, starts at $70,000.

“The Gigafactory represents a fundamental change in the way large-scale battery production can be realized,” said Tesla Chief Technical Officer and co-founder JB Straubel, referring to the cost reductions.

Sales of zero-emission electric vehicles account for less than 1 percent of the global auto market. But worries about global warming and more stringent emissions regulations in many countries are expected to boost sales of electric and other green vehicles.

Yoshihiko Yamada, executive vice president of Panasonic, said the planned factory will help the electric vehicle market grow.

Panasonic, which has ceded much of its strength in consumer electronics to competitors, is putting more focus on businesses that serve other industries, including batteries.

It remains powerful in Japan and some overseas markets in consumer products such as refrigerators, washing machines and batteries for gadgets.


Panasonic, Tesla to build big U.S. battery plant ‹ Japan Today: Japan News and Discussion

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## LeveragedBuyout

Shifts in U.S. Trading Partners From 1984 to the Present - Real Time Economics - WSJ








August 6, 2014, 2:46 PM ET
*Shifts in U.S. Trading Partners From 1984 to the Present*
*ByRani Molla*
Over the past three decades, U.S. trading partners for goods have changed — but not drastically. The biggest shift has been the rapid rise of China as both an importer and exporter.






Canada consistently tops the list of countries that buy U.S. exports. Mexico and Canada have the highest exports and nearly highest imports due to geographic proximity and trade agreements over our shared borders. Otherwise, countries’ demand for U.S. exports tracks with their GDP, according to the Economics & Statistics Administration. China, for example, is quickly climbing the list of U.S. export markets as its economy grows.





The numbers for 2014 are just for the first six months of the year, and are subject to revision, meaning that rankings may shift. For example, in 2013 France beat out Belgium in the top 10 destinations for American goods and could potentially return by the end of the year. Meanwhile, Hong Kong was excluded in the rankings since it isn’t an independent country, but would have ranked 10th in U.S. exports.

Both imports and exports are dominated by capital goods and industrial supplies that are used by companies and manufacturers. Goods sold to consumers make up a smaller share of trade.

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## LeveragedBuyout

The numbers seem small, but these are among our best and brightest. I wonder when Democrats will stop forcing citizens to choose between being successful, and being American.

Americans Give Up Passports as Asset-Disclosure Rules Start - Bloomberg






*Americans Give Up Passports as Asset-Disclosure Rules Start*
By Dylan Griffiths - Aug 7, 2014
The number of Americans renouncing U.S. citizenship stayed near an all-time high in the first half of the year before rules that make it harder to hide assets from tax authorities came into force.

Some 1,577 people gave up their nationality at U.S. embassies in the six months through June, according to Federal Register data published yesterday. While that’s a 13 percent decline from the year-earlier period, it’s only the second time there’s been a reading of more than 1,500, according to Bloomberg News calculations based on records starting in 1998.

Tougher asset-disclosure rules effective as of July 1 under the Foreign Account Tax Compliance Act, or Fatca, prompted 576 of the estimated 6 million Americans living overseas to give up their passports in the second quarter. The appeal of U.S. citizenship for expatriates faded as more than 100 Swiss banks turn over data on American clients to avoid prosecution for helping tax evaders.

“Fatca and the Swiss bank disclosure program has intensified the search for U.S. nationals beyond all measure,” said Matthew Ledvina, a U.S. tax lawyer at Anaford AG in Zurich. “It’s shocking the levels of due diligence they are going through to ensure they have cleaned house.”

Swiss banks are trawling through records going back to the 1990s to find clients with U.S. addresses and telephone numbers, and those who received schooling in the country, Ledvina said. Those identified as U.S. persons are either being asked to leave or placed in special U.S.-only sections of the institution, he said.

*Imposing Tax*
The U.S., the only Organization for Economic Cooperation and Development nation that taxes citizens wherever they reside, stepped up the search for tax dodgers after UBS AG (UBSN) paid a $780 million penalty in 2009 and handed over data on about 4,700 accounts. Shunned by Swiss and German banks and with Fatca looming, almost 9,000 Americans living overseas gave up their passports over the past five years.






Fatca requires U.S. financial institutions to impose a 30 percent withholding tax on payments made to foreign banks that don’t agree to identify and provide information on U.S. account holders. It allows the U.S. to scoop up data from more than 77,000 institutions and 80 governments about its citizens’ overseas financial activities.

Swiss Bank Accounts: Not So Secret Anymore

In establishing the 2010 Fatca law, Congress and President Barack Obama in effect threatened to cut off banks and other companies from easy access to the U.S. market if they didn’t pass along such information. It was projected to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation.

*Voluntary Disclosures*
The start of Fatca was delayed by 18 months to give foreign banks time to comply with the law, after financial institutions including Canada’sToronto-Dominion Bank (TD) and Allianz SE of Germany expressed concerns it was too complex.

More than two-thirds of 400 U.S. expatriates surveyed in November by Zurich-based deVere Group said they had considered giving up their passports.

As many as 106 Swiss banks entered a U.S. Justice Department program to volunteer information on how they helped clients hide money from the Internal Revenue Service, in exchange for leniency. Those banks have discovered that thousands of their clients have dual U.S.-Swiss or European citizenship, obliging them to make voluntary disclosures, said Ledvina. To avoid prosecution for handling undeclared American money, the banks must hand over account data and pay penalties.

June 30 was the deadline for turning over information on Americans considered in breach of U.S. tax rules, while July 31 marked the end of the second wave of deliveries and includes documents that show which American clients were compliant.

*Compliance Costs*
Switzerland is the largest cross-border financial center with $2.3 trillion of assets.

About a dozen banks, including Julius Baer Group Ltd. (BAER) and HSBC Holdings Plc (HSBA)’s Swiss unit, are excluded from the program as they are already under investigation in the U.S. Credit Suisse Group AG (CSGN), the second-biggest Swiss bank that was part of the probe, was fined $2.6 billion in May after it pleaded guilty to aiding tax evasion.

The additional compliance costs for companies to ensure that Americans they hire are filing the correct U.S. tax returns and asset-declaration forms are $7,000 per person, according to Ledvina. The U.S. accounting costs for individuals opting for expatriation are typically about $4,000 per year, he said.

Americans with a net worth exceeding $2 million and an average income tax of at least $157,000 over the previous five years must pay an exit tax on unrealized capital gains when they renounce U.S. citizenship.

U.S. citizens aren’t the only ones giving up their ties to America. The Treasury Department is also trying limit the benefits from corporations adopting foreign addresses to avoid taxes, a process known as a inversion.

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## Aepsilons

Interesting.


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## Hamartia Antidote

LeveragedBuyout said:


> The numbers seem small, but these are among our best and brightest. I wonder when Democrats will stop forcing citizens to choose between being successful, and being American..



Possibly..but I think this is probably drawing the wrong picture. There needs to be more of a breakdown as to who these people really are.

1) What percentage are moving out of the US due to the tax laws.
2) What percentage are US citizens already living abroad who already had no plans for ever coming back.

I'm going to guess most are #2.
You can claim it was already unfair to tax these people for any income they earn overseas. While they are citizens..they are citizens in name only. Maybe they didn't bother getting citizenship where they are...or maybe they just like having a US passport. Now you give them a nightmare of not being able to easily have a bank account. So they give up their citizenship. Is it a huge loss for the US?...well I guess that's a case by case situation*. *

For instance @Nihonjin1051 people could already claim that Japan has "lost you" since you are physically here. I assume they don't force you to pay taxes and they can't force you to send money back. So you are in a type of limbo with them. They announce they want you to pay taxes and US banks have to file so much paperwork they don't even want to let you open an account. So do you:
1) apply for citizenship here and pay 0 Japanese taxes and keeping paying just American taxes.
2) go back to Japan and pay Japanese taxes.
3) keep your Japanese citizenship and pay Japanese and American taxes and deal with a nightmare.

Just think Japan comes out ahead tax-wise if you choose scenario #2 or #3. They lose if you pick #1...but basically they are already losing since you are pretty much in a #1 situation already tax-wise..


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## LeveragedBuyout

Peter C said:


> Possibly..but I think this is probably drawing the wrong picture. There needs to be more of a breakdown as to who these people really are.
> 
> 1) What percentage are moving out of the US due to the tax laws.
> 2) What percentage are US citizens already living abroad who already had no plans for ever coming back.
> 
> I'm going to guess most are #2.
> You can claim it was already unfair to tax these people for any income they earn overseas. While they are citizens..they are citizens in name only. Maybe they didn't bother getting citizenship where they are...or maybe they just like having a US passport. Now you give them a nightmare of not being able to easily have a bank account. So they give up their citizenship. Is it a huge loss for the US?...well I guess that's a case by case situation.



On the contrary, this has nothing to do with taxes. These citizens already pay US taxes, since the US, uniquely among the OECD, treats its citizens as tax-resident no matter where they live or earn their income. These citizens were already being extorted despite not drawing on US services, but they still paid this extortion tax as patriotic Americans. It is the onerous FATCA (and to a lesser degree, FBAR) asset reporting requirements that are driving these law-abiding citizens to surrender their citizenship. To pay US taxes and then have these onerous requirements in addition is just too much, especially because under FATCA, non-American family members are brought into the IRS dragnet. It costs thousands of dollars for these citizens just to comply with FATCA, let alone the accountant fees on top of paying their extortion taxes to the US government. My own family members are considering surrendering their citizenship over this.

Yes, it is a huge loss for the US. These are primarily professionals living abroad, not janitors. Is it a good deal to trade our managerial class for unskilled immigrant illegals? If you're a Democrat, it's a great deal. If you're a citizen concerned about the future of America, it's the worst kind of deal.


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## Hamartia Antidote

LeveragedBuyout said:


> On the contrary, this has nothing to do with taxes. These citizens already pay US taxes, since the US, uniquely among the OECD, treats its citizens as tax-resident no matter where they live or earn their income. These citizens were already being extorted despite not drawing on US services, but they still paid this extortion tax as patriotic Americans. It is the onerous FATCA (and to a lesser degree, FBAR) asset reporting requirements that are driving these law-abiding citizens to surrender their citizenship. To pay US taxes and then have these onerous requirements in addition is just too much, especially because under FATCA, non-American family members are brought into the IRS dragnet. It costs thousands of dollars for these citizens just to comply with FATCA, let alone the accountant fees on top of paying their extortion taxes to the US government. My own family members are considering surrendering their citizenship over this.
> 
> Yes, it is a huge loss for the US. These are primarily professionals living abroad, not janitors. Is it a good deal to trade our managerial class for unskilled immigrant illegals? If you're a Democrat, it's a great deal. If you're a citizen concerned about the future of America, it's the worst kind of deal.



Well i edited my response. But yes I agree we are taxed no matter where we live and the US Government is making it more and more difficult for US professionals abroad to stay US citizens as the new FATCA/banking regulations only make their life more difficult.


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## LeveragedBuyout

Peter C said:


> Well i edited my response. But yes I agree we are taxed no matter where we live and the US Government is making it more and more difficult for US professionals abroad to stay US citizens as the new FATCA/banking regulations only make their life more difficult.



I read the scenario that you proposed to Nihonjin, and I agree, it's a game of chicken. Governments may think that they can afford to abuse their citizens, since the citizens are trapped in a dilemma, and so will choose what is comfortable over what is economically beneficial. But not all will choose options #2 or #3, and those who choose option #1 will forever be alienated. 

It was always more expensive being an American abroad. Now add onerous asset reporting requirements that involve non-American family members and which bear draconian penalties, and suddenly, it's much riskier from a legal aspect to retain American citizenship. The situation now is that expatriates are, under FATCA, presumed guilty until proven innocent. I love America as much as the next citizen, but I can't love an American that hates me and presumes I'm a criminal just because I live and work abroad.

Many of these people wanted to work abroad because the job opportunities presented themselves, but intended to come back to the US at some point to "settle down." These are the people that make our multinational corporations the dominant titans they are today. Now, these citizens, their experience, knowledge, skills, and assets, are potentially lost to the US forever. Congratulations, Democrats.


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## Hamartia Antidote

LeveragedBuyout said:


> Many of these people wanted to work abroad because the job opportunities presented themselves, but intended to come back to the US at some point to "settle down." These are the people that make our multinational corporations the dominant titans they are today. Now, these citizens, their experience, knowledge, skills, and assets, are potentially lost to the US forever. Congratulations, Democrats.



Can't make an assessment without seeing the percentage of how many actually come back pre-FATCA. If it is very very very low would that affect your opinion?


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## LeveragedBuyout

Peter C said:


> Can't make an assessment without seeing the percentage of how many actually come back pre-FATCA. If it is very very very low would that affect your opinion?



We will probably never know the change, given that the Census Bureau doesn't even know for certain how many citizens live abroad, let alone return. Given the increased number of renounced citizenships since Dodd-Frank was passed, it seems certain that the percent of non-returnees has increased (or if nothing else, the percent that *cannot* return has increased). That said, it's not merely the change in percent of returnees that makes my blood boil over FATCA and FBAR, it's the burden that is placed on law-abiding American citizens abroad simply because they live abroad, especially because this is a sledgehammer of a law aimed at a tiny percentage of ultra-wealthy tax dodgers, but lands most heavily on middle class professionals (please take special note of the graphs):

http://online.wsj.com/articles/more...with-uncle-sam-to-escape-tax-rules-1402972439

Expatriate Americans Break Up With Uncle Sam to Escape Tax Rules
Record Numbers Living Abroad Renounce U.S. Citizenship over IRS Reporting Requirements

Updated June 16, 2014 11:08 p.m. ET




Patricia Moon, shown in her Toronto home, renounced her U.S. citizenship after living abroad for three decades. Philip Cheung for The Wall Street Journal

Patricia Moon was born in Dayton, Ohio, to a family descended from Quakers who settled in the New World before the American Revolution.

As a young woman, Ms. Moon fell for a Canadian man and moved to Toronto. The 59-year-old homemaker, who still visits the U.S. to see relatives, said she feels American in her bones, even after three decades abroad.

Yet despite her deep roots, Ms. Moon walked into a U.S. consulate two years ago, raised her right hand and recited an oath renouncing her U.S. citizenship. Afterward, she said, "I bawled my eyes out."

Ms. Moon is among record numbers of Americans cutting ties. U.S. offices abroad reported that 1,001 U.S. citizens and green-card holders had renounced their allegiance in the first three months of the year, according to Andrew Mitchel, a lawyer in Centerbrook, Conn., who analyzes Treasury Department data. That figure puts 2014 on track to top last year's total of 2,999 renunciations, he said, which was the most since the government began disclosing the data.

Helping boost the exodus, experts say, is a five-year-old U.S. campaign to hunt for undeclared accounts held by Americans abroad.

Since 2009, the government campaign has collected more than $6 billion in taxes, interest and penalties from more than 43,000 U.S. taxpayers. Federal prosecutors have filed more than 100 criminal indictments, including the high-profile case of Beanie Babies inventor Ty Warner, who last year pleaded guilty to tax evasion involving secret Swiss bank accounts.

The tax dragnet has also swept up many middle-income Americans living abroad, prompting some to give up their U.S. citizenship. While people who renounce aren't freed of taxes due for past years, they don't want to risk sizable taxes and penalties for them and their children in the years ahead, experts say. Nearly 8,000 taxpayers have renounced U.S. citizenship in the past five years, Mr. Mitchel found, compared with fewer than 5,000 in the preceding decade.






"The increase is due to current and future changes in tax law and enforcement," said Freddi Weintraub, a New York attorney at the Fragomen firm who specializes in immigration law. She said in recent years she has seen a threefold increase in expatriation inquiries related to taxes.

Ms. Moon, for example, feared the IRS could charge her family nearly a half-million dollars in penalties on undeclared savings and checking accounts—even though, she said, the accounts never held more than $102,000, weren't intentionally hidden and didn't have any U.S. taxes owed. "I was afraid we would have to cash in our retirement accounts and sell our home," she said.

Experts say the U.S. campaign could affect millions of Americans like Ms. Moon—people who aren't wealthy, pay taxes in their host country, and who say they weren't trying to dodge U.S. taxes.

"We have reached the point where middle-class American citizens abroad are being forced to renounce—especially if they have assets and are moving toward retirement—because of taxes, paperwork and huge potential penalties," said John Richardson, a Toronto lawyer with dual U.S. and Canadian citizenship. He and Ms. Moon help run a nonprofit group seeking to keep Canada from sharing private account information with U.S. authorities.

As word spreads, experts said, more Americans are likely to consider surrendering their citizenship. The State Department estimates that 7.6 million American citizens live outside the U.S., but only a fraction file required financial disclosure forms.

Mark Mazur, the Treasury Department's assistant secretary for tax policy, said the government's new enforcement was intended to help make sure all taxpayers pay what they owe "regardless of where they live."

At the same time, Mr. Mazur said, Treasury needs to "maintain a balance between enforcement efforts and equity, including the burdens that may be placed on taxpayers."

Mr. Mazur said Treasury was looking into how best to work with Congress and the IRS to fine-tune the system: "You can always improve."

U.S. officials launched their campaign after Swiss banking giant UBS AGUBSN.VX -0.45% admitted in 2009 that it helped wealthy American taxpayers hide money overseas. To avoid criminal charges, the bank paid $780 million to the U.S. and turned over information on more than 4,400 accounts, ending decades of Swiss bank secrecy.

In May, Credit Suisse Group CSGN.VX -1.47% pleaded guilty to similar charges and agreed to pay $2.6 billion. Dozens of other Swiss banks are currently negotiating penalties with the U.S. Department of Justice, officials said.

Following the UBS revelations, U.S. officials announced they would begin vigorously enforcing both new and long-dormant tax rules.

Unlike other developed nations, the U.S. government taxes citizens on income they earn anywhere in the world. The rule dates to the Civil War, when Ms. Moon's great-great grandfather served with Union forces.

U.S. tax liabilities also cover children born to Americans abroad, extending the reach of the IRS across generations, as well as oceans.

For decades, wealthy taxpayers were able to hide foreign assets in countries where bank-secrecy laws fostered attractive tax havens, including Switzerland, the Cayman Islands and Panama.

But the UBS case signaled the beginning of the end for such havens. Armed with information from the Swiss bank, U.S. authorities pursued individuals for back taxes, and pressured the tax professionals who helped them.

As a result of the crackdown, Ms. Moon and others learned they had failed to comply with the law. "We call it the 'Oh, my God! moment.' Every expatriate has it," Ms. Moon said. "They were going to take every dime we had, that was my fear."






The violations often don't involve unpaid U.S. taxes on wages: The law currently exempts about $100,000 of income earned abroad each year. Ms. Moon, for example, didn't owe any income tax. She said she never made more than $11,000 a year when she worked from 2007 to 2012 as a bookkeeper for a business run by her husband, who earned about $65,000 a year devising special effects for movies and TV.

The most common mistakes usually involved Americans failing to submit a form called the Foreign Bank Account Report, or Fbar. Since 1970, U.S. taxpayers have been required to file if they held one or more foreign accounts totaling more than $10,000 over the course of a year. Until the enforcement push, many Americans never filed an Fbar.

The law is more than 40 years old, but "no one ever heard of it" before the crackdown, said Edward Kleinbard, a former chief of staff on Congress' Joint Committee on Taxation, and an expert in international tax law at the University of Southern California.

Fbar penalties are as steep as 50% of the highest value of the account for each year no report was filed. The IRS fined one taxpayer for Fbar violations in four separate years, and a settlement reached this month in the case yielded $1.7 million in penalties, which was more than the account held at the time. Experts say the stiff penalties were originally enacted to discourage wealthy tycoons from hiding assets abroad.

In the fall of 2011, Ms. Moon learned she should have been filing Fbar forms on joint accounts she held with her husband. She calculated she could owe about $455,000 in penalties for the years she failed to file.

The IRS was unlikely to have imposed penalties that high, experts said, but it could have. "Getting professional help to correct her mistakes could easily have cost $15,000 to $20,000," said Bryan Skarlatos, a lawyer with Kostelanetz & Fink in New York, which has advised thousands of taxpayers with secret offshore accounts.

Ms. Moon considered what to do. One of the IRS's limited-amnesty programs had just ended and a new one didn't start until 2012. She said she wouldn't have entered a program in any case because she considered Fbar penalties too steep for "failing to file a piece of paper." Penalties and other costs can amount to a third of the balance in an account or more.

"The programs are best for people who have done things serious enough to land them in prison and are willing to pay huge penalties to stay out," said Philip Hodgen, an international tax lawyer in Pasadena, Calif.

Americans with smaller offshore accounts who entered the first IRS limited amnesty program paid proportionately higher penalties than taxpayers with larger accounts, according to Nina Olson, the National Taxpayer Advocate, an IRS ombudsman.

The typical taxpayer with less than $45,000 in undeclared accounts paid nearly six times the back taxes owed, while the typical taxpayer with more than $7 million in such accounts paid closer to three times their back taxes, Ms. Olson found.

IRS officials "didn't think about the demographics of the population" of overseas Americans, Ms. Olson said, often treating middle-class taxpayers the same as "bad actors."

"There's an awful lot of minnows caught up in this," said Marvin Van Horn, a 66-year-old retired financial controller for Alaska Airlines. He said he entered an IRS limited-amnesty program in 2009: "I assumed it would be very clear I was not one of those quote-unquote offshore tax cheats, those big whales they were looking for."

In prior U.S. tax filings, Mr. Van Horn said he hadn't declared rental income from a house he and his Australian wife own in New Zealand, as well as interest income. He said he didn't know such declarations were required.

"I have to take some responsibility," Mr. Van Horn said. "It was stupidity and not paying attention on my part."

The IRS fined him more than $172,000, roughly eight times his back taxes, which amounted to about $21,000 over six years, Mr. Van Horn said. With help from Ms. Olson's office, he said, the fine was reduced to about $25,000. Spokesmen for the IRS and Ms. Olson said they couldn't comment on individual cases.

In a June 3 speech, IRS Commissioner John Koskinen said the agency may not have been accommodating enough to U.S. citizens who have lived abroad for years. "We have been considering whether these individuals should have an opportunity to come into compliance that doesn't involve the type of penalties that are appropriate for U.S.-resident taxpayers who were willfully hiding their investments overseas," he said.

Scrutiny of Americans abroad will intensify, however, under the Foreign Account Tax Compliance Act, or Fatca, which Congress passed in 2010. The law's main provisions, which take effect in July, will require foreign financial institutions to report income of their U.S. customers to the IRS, much as U.S. banks and brokers file 1099 forms.

Middle-class Americans "face overwhelming problems when they try to engage in standard financial practices, such as having a small business, saving for retirement, investing, buying life insurance, and making wills and trusts," because of the laws governing assets abroad, said David Kuenzi, a financial planner with Thun Financial Advisors in Madison, Wis., who works with expatriates.

The U.S. tax code, for example, doesn't recognize Australia's version of an individual retirement account, Mr. Kuenzi said. American taxpayers with these accounts must file at least two forms a year declaring the account a "foreign trust," and paying taxes on annual appreciation.

The penalty for failing to file can be as much as 35% of both contributions and withdrawals each year, plus 5% of the assets, said Mr. Hodgen, the Pasadena tax lawyer.

Ms. Moon learned that U.S. law requires her to file annual reports on retirement accounts, such as her Tax-Free Savings Account—similar to a Roth IRA.

Her husband, Ken Whitmore, objected to divulging financial information on joint accounts to the IRS. "Would you want the Canada revenue service to know what your financial situation is?" he said.

Ms. Moon concluded that even if the IRS didn't levy the stiffest fines, the potential consequences down the road for missing a deadline or making a mistake were too costly. She later learned she would have been required to pay U.S. taxes on part of the gain on the couple's Toronto house, which they hope to sell for a retirement nest egg. They bought the house in the mid-1980s for $125,000, she said, and it was now worth an estimated $800,000.

Before renouncing her citizenship, Ms. Moon spoke with her sister, Sue Moon, a certified public accountant in Kansas City, Mo.

"U.S. citizenship is the most coveted citizenship in the world. To give it up, it has to be pretty serious," Sue Moon said. "There was just a sadness on her part, that she had to make that decision. She didn't take it lightly."

Months after Ms. Moon renounced her citizenship, her official notice arrived in Toronto. Ms. Moon went to the U.S. consulate to pick it up and paid a $450 processing fee. She told the clerk it was "the saddest $450 I'll ever spend."


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## LeveragedBuyout

Federal Reserve finds US households are unwell | FT Alphaville

*Federal Reserve finds US households are unwell*
Matthew C Klein | Aug 07 21:00 | Comment | Report on the Economic Well-Being of U.S. Households“. It provides some useful context for the ongoing debates about theincome distribution and excess savings.

A few particularly dispiriting highlights:


Among Americans aged 18-59, only a third had sufficient emergency savings to cover three months of expenses.
Only 48 per cent of Americans could come up with $400 on short notice without borrowing money or sell something.
45 per cent of Americans save none of their income.
Also noteworthy is the demographic breakdown of how people expect to retire, based on their current age. Young people are optimistic they will be able to stop working when they get older and live off their nest egg, while those on the verge of retiring are much more likely to expect having to toil for the rest of their lives:






The insufficient savings of many older Americans helps explain why the labor force participation rates of people aged 55 and older has steadily increased over the past quarter-century even as the labor force participation rates of those aged 25-54 hasfallen over the same period.

Another interesting tidbit regards the impact of student debt: 44 per cent of people with outstanding education burdens “reported avoiding medical treatment because they could not afford it, compared with 30 percent of people without student loans.” This seems to corroborate the intuition that excessive borrowing for degree programs of dubious value could depress consumption among a subset of the population for many years. (Whether this would have significant macro impact is less obvious. SeeCardiff’s post from June.)

The last datum we want to highlight has to do with housing: About half of American renters aged 18-49 would rather be homeowners but cannot afford the down payment required to get a mortgage. We suspect that many of those renters would have been homeowners in 2004-2006 because minimum down payments were much lower then, even though house prices and interest rates were both somewhat higher. The importance of minimum down payments as a driver of housing demand (and prices) was first called to our attention by John Geanakoplos, who created this arresting chart back in 2010:






Amusingly, the National Association of Realtors, which regularly publishes a Housing Affordability Index, does not consider down payments when calculating the cost of housing, only home prices and mortgage rates. (Tip of the hat to the WSJ’s Josh Zumbrun for catching that.) The renewed cautiousness of lenders regarding down payment requirements may help explain why the Fed’s efforts to goose the housing market by lowering borrowing costs haven’t been as successful as some might have predicted a few years back.

None of the findings in the Fed’s report provide any immediate guidance for monetary policymakers, although we hope they silence those who simplistically argue that the economy’s weakness is due to a surfeit of savings rather than what might be better described as a sub-optimal distribution of savings.

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## LeveragedBuyout

How Low Can Jobless Claims Go? - Real Time Economics - WSJ

11:36 am ET
Aug 7, 2014
EMPLOYMENT
*How Low Can Jobless Claims Go?*

By JOSH ZUMBRUN 
The number of people filing new claims for unemployment benefits fell to 289,000 last week, the second-lowest level of the year. Over the past four weeks the average for claims was 293,500. To put this in perspective, during their worst week of the recession in March 2009 claims were 665,000.

While other indicators of labor-market strength have yet to completely return to normal, the level of jobless claims is not only the lowest of the recovery, but it’s near some of the lowest levels of previous (and much stronger) recoveries as well.





The two longest stretches of economic growth in the last half century were the booms in the 1980s and 1990s. And jobless claims today are now near the lowest levels reached in those historic expansions.

Jobless claims can often be distorted around this time of year due to the patterns in which auto makers temporarily lay off workers while retooling their factories.The Labor Department, however, said no such patterns were distorting the numbers this week.

Whatever the case with seasonal adjustment patterns, “the data serve to reinforce the key point here, which is that the underlying trend in claims is declining steadily,” said Ian Shepherdson, the chief economist of Pantheon Macroeconomics, in a note analyzing the report.







In fact, two weeks ago, jobless claims fell even lower than their best week during the 1980s. The level is only slightly above that reached in the 1990s. And another year of declining claims would put the low mark of the 1970s within reach.

This means the data for jobless claims are out of sync with other labor market data. The unemployment rate of 6.2% is still well above the 5% rate reached in the 1980s and few economists believe the economy is even capable of sustaining the 3.8% unemployment rate reached in early 2000 at the end of the 1990s tech boom.

The decline in jobless claims is even more striking when the size of the workforce is taken into account. For most of the late 1980s the U.S. had under 100 million workers covered by the unemployment insurance program. Today, it’s more than 130 million. Unlike unemployment, which is a share of the workforce, jobless claims are a raw number, unadjusted for the growing workforce.





When the economy’s growing size is taken into account, jobless claims are not just at the lowest level of the year, or the lowest of the recovery. They’re near the lowest on record. By this measure, a further decline in jobless claims would put the U.S. labor market in truly uncharted territory. (The Labor Department’s data doesn’t provide the level of covered employment for the 1960s, but it’s clear from the size of the population that the percentage of claims was much higher then than today.)

Skyrocketing jobless claims are clearly a sign of distress, and one of the clearest signs of recession. But it’s not at all clear that today’s low level of claims is healthy either. After all, unemployment is still not back to normal, part-time unemployment is very high and economic growth is fairly weak. Rather, the historically low level of claims may reflect a different trend we’ve been tracking on Real Time Economics: the decline in labor market dynamism.

The U.S. economy has long been characterized by its churn, with millions of Americans leaving one job and getting hired for a new one every month. It’s better when people voluntarily quit jobs than when they get laid off, but in a healthy and dynamic labor market, people experiencing either type of job separation can quickly get hired for new work.

That turnover is not recovering. Neither hiring nor quitting are back to their pre-recession levels. And initial jobless claims appears to be another indicator that the U.S. labor market is simply less dynamic than in the past.

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## LeveragedBuyout

Highlights for those who don't want to watch:
-Labor market recovering, interest rates look to rise mid-2015
-Housing continues to look tepid
-Business investment continues steady growth
-Fed may be forced to raise interest rates earlier than expected, since the market doesn't appear to be pricing cost of capital correctly
-Global risk appetite has been puzzling (both risky assets and long-duration debt have been moving up)
-Geopolitical shocks don't appear to be significant risk at this time

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## F-22Raptor

US Economy Grew at Brisk 4.2 Pct. Rate in Q2 - ABC News

Growth has been revised upward to 4.2% in Q2.

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## Aepsilons

*U.S. auto industry posts strong sales in August*


U.S. automakers could not be more pleased with the close on Sunday of what is expected be the best month so far this year for sales and which seems to portend that 2014 will be one of the best years in recent memory.

New auto sales in the United States in August totaled 1.5 million vehicles, more than during the same month last year, analysts said.

Sales attained that level thanks to higher demand among individual buyers, who took home 1.3 million new vehicles during the month, J.D. Power said.

The 200,000 remaining units were bought by companies for their vehicle fleets, the market research firm said.

Edmunds.com, meanwhile, estimated the number of sales in August at 1.51 million.

If the current sales rate is maintained for the entire year, a total of 17 million units will be sold in the United States, the largest number since 2001.

August sales will come in 5.5 percent greater than in July and the highest in that month since 2003, Edmunds.com said.

LMC Automotive is forecasting that at year-end sales will total 16.3 million vehicles, 5 percent more than in 2013 and a figure that has not been attained since 2006, before the 2008-2009 crisis in the sector.

J.D. Power estimated that U.S. production in July totaled 1.2 million vehicles, 17 percent more than in the previous July.

Between January and July 2014, U.S. manufacturing plants have produced 9.7 million vehicles, about 5 percent more than during the same period in 2013.

LMC Automotive calculated that 2014 will finish with U.S. production of 16.8 million units. EFE



U.S. auto industry posts strong sales in August | Fox News Latino

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## LeveragedBuyout

This is but one of the many structural issues standing in the way of a return to growth for the United States.

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## LeveragedBuyout

Don’t Blame Shrinking Work Force Participation on Great Recession: Fed Board Paper - Real Time Economics - WSJ









September 4, 2014, 4:04 PM ET
*Don’t Blame Shrinking Work Force Participation on Great Recession: Fed Board Paper*
*ByPedro Nicolaci da Costa*
A decline in the share of Americans holding or seeking jobs is largely the product of longer-term factors such as a rising number of retirees rather than the aftermath of a particularly awful recession, economists at the *Federal Reserve *board say in a new paper.

The U.S. labor force participation rate was 62.9% in July, down from 66% in December 2007 when the recession began and a peak above 67% in 1999.

Fed officials have long debated how much of the recent decline in labor force participation is “structural,” and therefore more intractable, or “cyclical,” the result of an unusually weak economic recovery.

The difference matters for the central bank because the latter type is more likely to be reversed by Fed policies aimed at boosting economic demand, such as holding interest rates very low. The hope has been that if the economy strengthens, some people who have stopped looking for work—and therefore aren’t counted as part of the labor force—would return to the job market. But if the drop is mostly structural, then very low interest rates aren’t likely to make much difference.

The new research comes down squarely on the structural side of the argument.

“Much of the steep decline in the labor force participation rate since 2007 owes to ongoing structural influences that are pushing down the participation rate rather than a pronounced cyclical weakness related to potential jobseekers’ discouragement about the weak state of the labor market,” several top central bank staffers write in a paper set to be presented at a *Brookings Institution* conference next week.

The findings are part of an ongoing evolution in thinking for a central bank that until recently gave much credence to the notion that weak demand was the primary factor holding down job market participation. In a speech last month, Fed Chairwoman *Janet Yellen* appeared to subtly shift her message, arguing that “along with cyclical influences, significant structural factors have affected the labor market.”





That was different from her first public remarks as Fed chairwoman in March. “A lack of jobs is the heart of the problem when unemployment is caused by slack, which we also call ‘cyclical unemployment,’” she said then. “I believe there is still considerable slack in the labor market.”

When Ms. Yellen spoke in March, the nation’s jobless rate was 6.7%. It has since fallen to 6.2% in July. She has said recently that if improvement in the labor market continues to be more rapid than Fed officials forecast, they could raise interest rates sooner than widely expected. Many investors are expecting the first rate hike in the summer of 2015.

However, following some costly head-fakes in recent years, officials want to make very sure economic growth and job creation are sustainable before taking their foot off the gas—particularly with inflation still comfortably below the central bank’s target.

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## LeveragedBuyout

Once again, the private sector finds ways to solve its own problems, and the public sector utterly fails and asks for yet more money. Time to completely privatize the school system.

---

S&P Report Dives into Skills Gap to Find Ways Bridge It - Real Time Economics - WSJ








September 4, 2014, 2:15 PM ET
*S&P Report Dives into Skills Gap to Find Ways Bridge It*
*ByKathleen Madigan*




Businesses finally are hiring at a monthly pace above 200,000 jobs–a trend that is expected to be extended when the government reports on August payrolls on Friday. Along with more job openings, however, has come complaints about the difficulty of finding workers who possess the talents and experience needed.

Wednesday’s Beige Book from the *Federal Reserve* noted contacts in all 12 districts mentioned a shortage of skilled workers. The *National Federation of Independent Business* reports a rising share of small business owners say they cannot find qualified workers.

Economists at *Standard & Poor’s Ratings Services* examined the skills-gap dilemma and what can be done about it. What they found was that the gap can be divided into two different skills sets: basic math and language skills that should be acquired in school, and specialized knowledge attached to specific jobs and experience.

While specialized skills are–almost by definition–higher up on the learning curve, S&P projects this is where the skills gap will be narrowed faster in the short run. That’s because companies have a financial incentive to provide the training needed to run their machinery, follow company-specific processes and program company computers.

According to the report, existing economic research suggest part of the skills gap can be explained by the unwillingness among companies to train their employees and the desire to hire people with the right skills at low wages.

But those attitudes will have to change, said* Beth Ann Bovino*, U.S. chief economist at S&P and author of the report.

“Businesses picked up hiring nicely this year and wages have started to climb higher,” she said. “If this continues, they may not only hire more workers but train them as well.”

Already, she said, “you see signs private employers are taking small steps to initiate training programs.”

The gap concerning math, reading and writing skills may be harder to bridge, Bovino warned.

The U.S. lags behind other industrialized nations in preschool programs where students begin to learn math and language skills. Moreover, the report said, the difference in access to quality education between affluent and poor children is contributing to the basic skills shortfall.

The challenge is money. Changing U.S. schools will take political commitment and taxpayer willingness.

“Changing the educational system is not a short-term fix,” Bovino said.

Failing to change, however, will hobble the longer-run economic outlook. As the report argues, “although the U.S. economy might still grow even without enough trained workers, it won’t thrive under such conditions.”

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## LeveragedBuyout

Fed’s Fisher Says Recent Data Suggest U.S. Recovery Is Strengthening - Real Time Economics - WSJ








September 4, 2014, 8:15 PM ET
*Fed’s Fisher Says Recent Data Suggest U.S. Recovery Is Strengthening*
*ByRob Curran*
Recent economic data suggest the recovery is strengthening and the U.S. inflation rate may be running closer to the *Federal Reserve*‘s targets than is immediately obvious, said Dallas Federal Reserve President *Richard Fisher*.

While acknowledging that recent consumer-inflation data were softer than in prior months, Mr. Fisher said underlying trends remained inflationary, according to a prepared text of comments scheduled to be delivered to the *U.S.-India Chamber of Commerce* and *S. Jaishankar*, the Indian ambassador to the U.S. in Dallas.

“In the July statistics, we saw some of the fastest rates of increases in a while for the largest, least-volatile components of core services, such as rent and purchased meals,” Mr. Fisher said. “So the jury is out as to whether we have seen a reversal in the recent upward ascent of prices toward our 2 percent target. ”

Mr. Fisher pointed to the recent August manufacturing and services surveys from the *Institute for Supply Management* as evidence of strength in the economy.

“These reports echo a string of others—including the Beige Book survey of regional economic conditions released yesterday by the Federal Reserve—that underscore the healing that is taking place in the U.S. economy despite our having what is, in truth, a dysfunctional and counterproductive fiscal and regulatory environment,” said Mr. Fisher, according to the notes.

Mr. Fisher also noted improvement in labor-market conditions, which some economists and Fed members have viewed as mixed.

“Unemployment has declined to 6.2%, and the dynamics of the labor market are improving,” said Mr. Fisher. “At the *Federal Open Market Committee*…we have been working to better understand these employment dynamics.

Mr. Fisher, who opposed the latest round of quantitative easing from the outset, again warned about unintended consequences of the Fed’s five years of monetary easing.

Speaking about the Fed’s mandate to preserve “moderate interest rates,” Mr. Fisher said “we have overshot the mark.”

“Interest rates on the lowest-quality credits—on ‘junk’—are historically low, as are the spreads they are priced at above the current historically low nominal rates for investment-grade credits,” said Mr. Fisher, who has pointed to junk-bond prices as evidence of speculative froth in markets in the past.

Addressing the Indian ambassador in a section of the text titled “Time to Enhance the U.S.-India Working Relationship,” Mr. Fisher said: “The logic of an enhanced strategic relationship between my country and yours is crystal clear, beginning with a harsh geopolitical reality: You live in a tough neighborhood and need us; we, in turn, need all the friends we can muster in your geographic sphere.”

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## LeveragedBuyout

Interesting tidbit from Bespoke Investment Group for followers of the US stock market (one of the best leading indicators for the economy):

With the S&P 500 hitting yet another new all-time high today, the current bull market that began on March 9th, 2009 has crossed the 2,000 calendar day mark. For reference, a bull market is a rally (closing basis) of at least 20% that was preceded by a drop of at least 20%. A bear market is a decline of at least 20% that was preceded by a rally of at least 20%.

Below is a table of the historical bull markets that the S&P 500 has experienced going back to 1928. As shown, the current bull market now ranks 4th in terms of length. It needs to last another 244 days to pass the third longest bull market that ran from 10/3/1974 to 11/28/1980.

The average bull market for the S&P 500 lasts 933 days and sees a rally of 105.3%. At 2,005 days with a gain of 196.4%, the current bull market is just about double the average both in terms of gains and length.

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## LeveragedBuyout

Hiring slows as U.S. adds 142,000 jobs - MarketWatch

*Hiring slows as U.S. adds 142,000 jobs*
By Jeffry Bartash
Published: Sept 5, 2014 11:13 a.m. ET

*Unemployment drops to 6.1% to match a six-year low*




Getty Images
Fast food workers demonstrate outside McDonald's in Chicago,. Companies are hiring in almost every industry, but they aren’t offering much better pay.

WASHINGTON (MarketWatch) — The pace of hiring in the U.S. downshifted in August to the slowest rate of the year, but the disappointing employment report did little to stunt a sense among most investors and economists that it’s a temporary blight unlikely to tarnish the nation’s improved growth outlook.

The U.S. created just 142,000 jobs last month to mark the smallest gain since December, preliminary government data on Friday showed. That fell well short of the 228,000 gain forecast by a MarketWatch poll.

Employment gains for July and June were lowered by a combined 28,000, the Labor Department said.

The unemployment rate, meanwhile, fell a tick to 6.1% to match a six-year low, as more people stopped looking for work. The labor-force participation rate dipped to 62.8% from 62.9% to tie a 36-year low.

The deceleration in hiring ended a six-month streak in which the U.S. added at least 200,000 jobs, the best streak of job creation since 2006.

The report drove down yields of the 10-year Treasury 10_YEAR, -0.73% The Federal Reserve is less likely to accelerate its timetable to raise interest rates after the letdown, analysts say. U.S. stocks SPX, +0.37% rose slightly in recent action.

Still, many on Wall Street brushed off the subdued employment report as outlier that’s contradicted by a flurry of other data showing the economy speeding up. Read: why poor jobs report a fluke.

“I don’t think it indicates much of anything,” said Kate Warne, investment strategist at the brokerage Edward Jones. “Everything else suggests we saw better job growth in August.”

The dropoff stemmed in part from fewer jobs in the retail and auto sectors, both of which were influenced by short-term events.

Thousands of employees at a supermarket chain in New England called Market Basket had their hours cut or they walked off the job to protest the firing of a well-liked chief executive. Auto makers laid off fewer workers in July, so they recalled fewer employees than usual in August.

August is also prone to sharp revisions that make the initial job figures suspect. The difference between the first and third estimates of employment growth have averaged more than 70,000 a month in the past five years.

The employment report was not all negative. Most industries continued to add workers,. Employment rose in the professional ranks, health care, construction and the restaurant business.





The steady rise in hiring reduced a broader measure of unemployment to 12%from 12.2%. The so-called U6 rate includes people who can only find part-time jobs as well as those who’ve recently given up looking.

Also a good sign was an increase in hourly wages after no change in July. Wages rose 0.2% to $24.53.

Even with that gain, the increase in wages over the past 12 months is a mediocre 2.1%. The U.S. can’t grow much growth unless wages rise substantially, analysts say.

So far in 2014 the economy has gained an average of 215,000 jobs a month — the fastest pace of hiring since 1999. The U.S. is on track to add 2.6 million jobs this year.

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## LeveragedBuyout

The August Jobs Report in Six Charts - Real Time Economics - WSJ








September 5, 2014, 10:52 AM ET
*The August Jobs Report in Six Charts*
*ByNick Timiraos*

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## Aepsilons

Attempts to foster more trade and investment between Midwestern states and Japan took the spotlight Monday at the 46th annual Midwest U.S.-Japan Conference in Des Moines.

The gathering brings together business leaders from Japan and the Midwest, the governors of six states and a delegation of Japanese officials.

“We find it important enough to be here because this relationship is so important to our individual states and the people who are employed by a number of Japanese companies,” Iowa Gov. Terry Branstad said.

He was joined by the governors of Nebraska, Wisconsin, Indiana, Michigan and Missouri.

Each governor touted his state’s connection to Japan and used the conference to promote his state’s advantages to Japanese business officials.

“We believe trade and investment should be a mutually beneficial relationship, and we want you to know that Nebraska is open for business,” Nebraska Gov. Dave Heineman said.

Members of the Japanese delegation also spoke about trying to promote trade and business partnerships.

“Japanese companies are eager to do even more business, beginning right here and right now. ... Together, let’s discover even more business opportunities in this field of dreams,” said Masaharu Yoshida, the consulate general of Japan at Chicago.

Multiple speakers mentioned the Trans-Pacific Partnership, an agreement under negotiation that would create wide-scale free trade among the U.S., Japan and 10 other countries.

“The TPP is critical to further improve the United States’ position as a strong production base and export base for manufacturing and agriculture,” said Michael Beeman, the acting assistant U.S. trade representative for Japan, Korea and Asia-Pacific Economic Cooperation Affairs.

This year’s conference was the first to be hosted by Iowa since 1995.

Monday’s session began with the signing of two agreements, one by Des Moines Area Community College and the other by the Greater Des Moines Partnership.

DMACC President Rob Denson signed a memorandum of understanding with Yamanashi Prefecture University. The two colleges agreed to expand their student exchange programs.

Denson said Monday that DMACC’s relationship with Yamanashi Prefecture University goes back about 28 years.

Yamanashi Prefecture is Iowa’s oldest sister state.

The Greater Des Moines Partnership signed a memorandum with the Junior Chamber International Kofu.

Kofu is one of Des Moines’ sister cities. The agreement is intended to connect young professionals in both cities.

The conference kicked off Sunday with an opening reception at the World Food Prize Hall of Laureates. It concludes today.

Midwest-Japan trade takes center stage at D.M. conference

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## LeveragedBuyout

U.S. budget deficit narrows in August - MarketWatch

*U.S. budget deficit narrows in August*
By Robert Schroeder
Published: Sept 11, 2014 2:19 p.m. ET

*Year-to-date deficit lowest since 2008*




Getty Images
Tax receipts from individuals and corporations are driving the budget deficit lower this year.

WASHINGTON (MarketWatch) — The federal government’s budget gap narrowed in August, the Treasury Department reported Thursday, shrinking 13% from the same month a year ago as receipts rose and spending fell.

The government’s shortfall was $129 billion in August, compared to the $148 billion deficit posted in August of last year. The deficit narrowed due to higher receipts of both individual and corporate taxes, as well as lower spending on budget items including defense and transportation.

Total receipts increased 5% over their August 2013 level, to $194 billion. Spending fell 3%, to $323 billion.

The latest monthly figure is helping to power a big decline in the deficit for the fiscal year to date. Including the August shortfall, the deficit for the first 11 months of fiscal 2014 is $589 billion, which is 22% lower than the year-ago period. The year-to-date figure is the lowest since the same period in 2008.

The government’s budget year runs from October to September. August is typically a deficit month since there are no major tax due dates.

Adjusting for the timing of some payments in August of this year and last year, the monthly budget gap would have been $109 billion, a Treasury official said.

For the full fiscal year, both the Obama administration and the Congressional Budget Office are predicting the lowest shortfall since 2008, when the deficit was $458 billion. Last year, the deficit was $680 billion, the first shortfall below $1 trillion of Barack Obama’s presidency. The deficit hit a record $1.4 trillion in 2009, but has been narrowing as the economy improves.

Much of the year-to-date improvement comes from receipts: Total receipts are up 8% through the end of August, to $2.7 trillion. Spending, meanwhile, has risen just 1% this fiscal year, to $3.2 trillion.

Receipts are higher for the year to date in most budget categories, including individuals’ withheld and payroll taxes, corporate taxes and Federal Reserve earnings. Spending is up slightly overall for the year, but some areas including defense and agriculture have fallen. Defense spending has dropped 5% so far this fiscal year.

The latest budget figures arrive as lawmakers are considering a bill to keep the government open past Sept. 30, and prepare for the midterm elections in November. Without an agreement to fund the government, there would be another partial shutdown like the one that lasted for more than two weeks last fall.

The House of Representatives was due to vote Thursday on a measure to fund the government, but action was postponed until next week to allow members time to consider a White House request to assist Syrian rebels. House Majority Leader Kevin McCarthy announced the delay Thursday afternoon.

Falling deficits have taken big fiscal deals off the front burner as a political issue. But the CBO has warned that shortfalls will begin to rise again after 2015, and approach $1 trillion within 10 years if current laws aren’t changed.

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## LeveragedBuyout

Fed economists: America’s missing workers are not coming back - The Washington Post

*Fed economists: America’s missing workers are not coming back*

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By Max Ehrenfreund September 12 at 9:53 AM 






That does not look pleasant. (Courtesy of the Brookings Institution)
A paper by Federal Reserve staff that will be discussed at the Brookings Institution on Friday hints at the central bank's thinking on interest rates and employment in advance of a consequential Fed meeting next week. The findings support hawks on the central bank's Federal Open Market Committee, who feel that the Fed needs to prepare to raise rates sooner than expected.

The paper discusses the number of people who consider themselves part of the workforce -- including both people who have a job and those who are looking for work. It is a measure of the total manpower available in the U.S. economy. This number, the labor force participation rate, has been decreasing steadily since 2000. Americans who can't find work have been leaving the workforce, as have more and more retirees as the population ages.

The question now is whether there is anything that the Fed can do to slow the decline. In theory, interest rates near zero, as they have been since the financial crisis, should lead to rising prices and wages and more openings. In turn, people who are thinking of retiring might continue working, while others who retired early or just gave up on working might be coaxed back into the rat race.

That might not work, suggest the authors of the paper, who include William Wascher, a senior member of the bank's economic staff. They argue that the number of people who aren't working but would be if economic conditions were better is relatively small. In other words, America's missing workers aren't coming back. America's labor force has shrunk, the researchers find, largely because of an aging workforce and other, larger trends, not just because of a bad job market.

The authors warn policymakers that "they should not expect the participation rate to show a substantial increase from current levels as labor market conditions continue to improve."

Yet deciphering the fluctuations in the labor force participation rate is a task fraught with uncertainty. Economists are looking closely at this figure mainly because the financial crisis was so severe that Yellen and others worry it scrambled the unemployment rate, the central bank's traditional measure of the strength of the labor market. While the unemployment rate of 6.1 percent is now approaching normal levels, that figure only includes people who are actively looking for work, and the number of people who are working part time is still very high.

Most economists agree that an aging population accounts for about half of the decline in labor force participation since the crisis. The rest is a mystery. Even before the recession and among people in their working years, between the ages of 25 and 54, fewer men were employed and the number of working women had plateaued. One possible explanation the authors consider in the paper is an increasingly automated, global economy with fewer and fewer jobs in the middle of the income distribution. An education has become necessary for a job that pays well, and competition for jobs that require little skill has become so intense that real wages are falling. Perhaps the economy just no longer has work for some people.

Hard evidence for this hypothesis is hard to come by, however.

Then there is the group who is the main concern of the Fed right now: those who might be willing to go back to work. Their numbers are still being debated. In a note to investors, David Mericle and Sven Jari Stehn of Goldman Sachs took a look at the staff's paper and argued that the authors had been too pessimistic in their reading of the data.

It's also worth noting that even if maintaining interest rates near zero doesn't bring more workers into the economy, there are still reasons why it might be a good idea. Rising wages and prices would allow the Fed to raise interest rates to a higher level before the next recession, which would give the central bank more flexibility to react. Other recent research suggests that wages could rise while prices remained low, which would be a good deal for the working class.

That said, Yellen and her colleagues at the Fed have indicated that they have little interest in these theories, which means that they are likely to pay careful attention to what their staff has to say about participation in the labor force.

At their meeting next week, members of the open market committee will take another look at language in its most recent statement suggesting that an increase in rates is still a "considerable time" off, or that there are a "significant" number of people who would rejoin the workforce or work more hours if conditions improve.





(AP/Susan Walsh)
Some members, including James Bullard, the president of the St. Louis Federal Reserve, indicated discomfort with this vague language. They feel that the central bank needs to give market participants plenty of warning before raising rates and thus tightening credit throughout the economy. If the members of the committee can't resolve their differences, a change in the wording might have to wait.

Market participants will also be listening closely to Yellen's press conference following the meeting to see if she answers any of the questions about the labor market she posed in her speech at the annual central banking conference in Jackson Hole, Wyo. last month.

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## LeveragedBuyout

A conversation between two leftists (Laura Tyson and Eric Schmidt), so no surprises. The conversation about "inclusive growth" (starting around 9:40) is especially dismaying, because taking the great risks that produce world-changing technology can only be incentivized by the great rewards they bring to the risk-takers. At least they acknowledge that from a practical sense, "inclusive growth" means leveling the playing field in terms of education, not in terms of outcome--a conclusion with which I largely agree.

Leftists and fans of authoritarianism (but I repeat myself) will enjoy the discussion starting around 14:00 about how centralization of power will lead to better educational and social outcomes. I especially enjoy the predictable and gratuitous invective about how going after government workers equates to a war on women (teachers).

That said, credit to them for practical conclusions (except for number 5). Their policy recommendations for improving US economic performance are:
1) Improve STEM education
2) Immigration reform
3) Implement the TTIP and TPP trade agreements
4) Corporate tax reform (perhaps moving to VAT)
5) More wealth transfer

As an aside, here is the Wired article to which they refer in the talk about the dystopian future that technology may produce:

Wired 8.04: Why the future doesn't need us.

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## LeveragedBuyout

The Biggest Economic—and Political—Puzzle: Persistently Flat Wages - Real Time Economics - WSJ








September 18, 2014, 6:46 AM ET
*The Biggest Economic—and Political—Puzzle: Persistently Flat Wages*
*ByNeil King Jr.*
It is in many ways both the ultimate economic puzzle and the great political challenge: Why have American incomes remained so flat, for so long, and what can be done to change that?

The latest batch of data, released Tuesday by the Census Bureau, cast a harsh light on the problem. Yes, median incomes ticked up in 2013, ever so slightly, for the first time since the recession (by all of $3.46 a week, to be exact.) And the poverty rate inched down.

But in today’s dollars, an American household smack in the middle of the earnings scale is taking in now almost exactly what it did in 2000, and barely more than what it did a generation before that.

The deeper trends are more striking. Incomes tended to rise after recession-driven downdrafts in the 1980s and 1990s. But something has shifted since 2000, so that recoveries from the past two recessions have left median incomes worse off.





Not only have the job gains been meeker coming out of the past two downturns, but income gains have been nonexistent for most Americans.

The White House tried to pluck the most upbeat news from the annual Census release by highlighting a sharp drop in poverty rates among those under 18, an increase in the number of those with health insurance, and a slight narrowing of the wage gap between men and women. But the president’s economic advisers acknowledged the obvious: The data offered “a clear illustration” of the battering the middle class has taken from the recession.

This isn’t just a matter of trauma among lower-skilled or lower-wage workers. Anemic wage growth has plagued virtually all professions for well over a decade. A crunching of data last year found average pay for managers and professionals had nudged up just 2.2% between 2001 and 2012, while it had gone up 2.4% for office administrators and down 1.2% for workers across the rest of the service sector.

Why is this happening? Bookshelves groan under the multiple explanations. Wage pressures due to globalization. The decline in manufacturing and unionization. A minimum wage that hasn’t kept pace with inflation. The spread of automation. The aging of the work force. Rising federal debt and the burden of entitlement spending.

Less abundant are clear ways to reverse the trend.

The White House argues that more public works spending, a higher federal minimum wage and stronger rules on equal pay will help bolster income growth.

Conservatives like Rep. *Paul Ryan* propose steps like tying government aid to work plans for the poor and expanding the earned-income tax credit by taking money from other welfare programs.

The debate will likely find its loudest and broadest stage in the 2016 presidential campaign. *Hillary Clinton* has begun to offer small peeks at her thinking, returning to Iowa last weekend to talk of the need for “shared prosperity,” a phrase that hearkens back to her 2008 platform of cheaper health care and more government investment in jobs and education.

But as the years since have shown, neither a Democrat in the White House nor Republicans in Congress have so far found a plausible cure.


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## LeveragedBuyout

Revised Payroll Data Show Better Mix of Jobs, Nearly Same Total - Real Time Economics - WSJ









September 18, 2014, 11:19 AM ET
*Revised Payroll Data Show Better Mix of Jobs, Nearly Same Total*
*ByEric Morath*




The *Labor Department*’s number crunchers pretty much nailed it.

A preliminary annual revision to payroll data, released Thursday, shows an earlier count of how many people were employed in the U.S. in March was off by just 7,000. (Total payrolls equaled 138 million that month.)

The adjustment of less than 0.05% would be the smallest annual revision in at least the past 10 years if the preliminary numbers hold when they’re finalized early next year. Typically annual revisions move the total payroll figure by 0.3%, or by a few hundred thousand jobs.

The new revisions do show somewhat strong job creation in a few sectors. From April 2013 through March 2014, the construction industry added 89,000 jobs more than previously reported and manufacturing added 44,000 more.

The change could be meaningful because those fields provide well-paying, middle-class jobs. Meanwhile, employment in education and health services was revised down by 72,000 and employment in wholesale trade was reduced by 41,000.

“The good news is that the goods producing sector—higher paying and more cyclical—was revised upward,” said *Raymond Stone*, managing director of *Stone & McCarthy Research Associates*. “While the offset was in the service-producing sector wherein the wage rate is typically lower.”

The Labor Department surveys a sample of employers to calculate monthly payroll figures. Those numbers are then revised annually with data from state unemployment insurance tax records that covers nearly all employers.

Thursday’s preliminary figure will be followed by a final benchmark revision published in February 2015, with the release of next January’s jobs report.

The small overall revision, of course, does little to reshape the view of the economy. Spread out over 12 months, the recasting changes the average number of jobs created monthly from April 2013 through March 2014 to 191,000 from 190,000.

In the past five months, job creation has accelerated somewhat, growing on average by 231,000, according to monthly figures.


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## LeveragedBuyout

How Americans Spend: 1993 vs. 2013 - Real Time Economics - WSJ








September 18, 2014, 10:31 AM ET
*How Americans Spend: 1993 vs. 2013*
*ByRani Molla*




Labor Department data released last week paints a full picture of how much Americans earned and what they spent their money on in 2013. Compared to the year before, Americans earned and spent less in general, but spent more on health care and housing. What about 20 years ago?

In 1993 on average Americans spent a greater share of our total expenditures on food, entertainment and reading than we did in 2013. We spent less of our total expenditures on health care, housing and property taxes than we do now.

The charts below show how expenditures like reading and housing changed as a percentage of our total spending broken down by age group. You can see that every age group spends a smaller share of their expenditures on reading than their counterparts did 20 years ago, while every group spends more on housing.

For data on more spending categories — such as postage (it went down), property tax and health insurance (both up) — in these same age groups, see the sortable chart below. Note that much of the age group in 1993 that was under 25 now constitutes the age group 35-44 in 2013.

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## LeveragedBuyout

http://ftalphaville.ft.com/2014/09/18/1976702/the-return-of-the-american-borrower/

*The return of the American borrower*
Matthew C Klein | Sep 18 21:59 | Comment | Share

The Federal Reserve’s latest flow of funds data shows that US households have rediscovered their credit cards, and lenders are eager to oblige them. Just look at this:





That 3.6 per cent (annualised) growth rate is quite modest relative to the pre-crisis period but it is nevertheless the fastest pace since the first quarter of 2008. Within the household sector, there is a striking split between the anemic growth rate of mortgage debt (just 0.4 per cent annualised in the quarter ended) and the incredibly rapid increase of consumer credit, which grew at an annualised rate of 8.1 per cent — faster even than during the boom years.

About three-fourths of the growth in consumer debt in the last quarter came from an increase in credit card debt and auto loans.

Over the past five years, mortgage debt has shrunk by about $1.2 trillion (11 per cent) while consumer borrowing — autos, schooling, credit cards, etc — has increased by a little more than $600 billion (24 per cent). Much of that increase, especially during the early years of the recovery, could be explained by soaring student debt burdens, which have grown by nearly $500 billion.

More recently, the rapid growth of auto debt — $100 billion since the start of 2013, much of it subprime — has also played a major role:





What’s new, and potentially encouraging as a sign of better job prospects and higher confidence in future income, is that credit card borrowing has finally begun to accelerate in a meaningful way after shrinking for years:





Encouragingly, all of this is happening even as the government gradually removes its support from the economy. Sovereign debt growth is anemic, while the Fed has (arguably) started the very beginning of its tightening cycle. In fact, the underlying strength of the credit markets both in the US and globally may justify a relatively more aggressive Fed policy path than simpler considerations of employment and inflation would dictate.

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## Aepsilons

*Panasonic eyes ¥150 bil. for U.S. plant*

Panasonic Corp. plans to invest up to ¥150 billion in a battery factory to be built jointly with U.S. electric automaker Tesla Motors Inc., according to sources.
The two companies are expected to finalize the deal by the end of this month, the sources said.

In fiscal 2011 and 2012, Panasonic posted a net loss of more than ¥750 billion for two consecutive years. However, its structural reforms have produced results, paving the way for the company to resume large investments.
American Economy News & Updates | Page 5
Panasonic will prepare for lithium-ion battery production at a factory in Nevada, which will be one of the world’s largest for such batteries. Construction is scheduled to start by late next year, with the factory due to open in 2017. For the $5 billion (¥530 billion) factory, the Japanese company plans to make its investment in increments of ¥20 billion to ¥30 billion spread out over the period from 2015 to 2020.

By the end of 2020, Panasonic plans to produce lithium-ion batteries for 500,000 electric vehicles, with the aim of cutting production costs by more than 30 percent through mass production. Eventually, the two companies aim to market Tesla’s future models at around half the price of the U.S. automaker’s latest sedan, “Model S,” that is currently priced in Japan from ¥8.23 million, including tax.

In July, Panasonic, which has been the sole battery cell provider for Tesla since 2009, signed a basic agreement to jointly build the factory with the U.S. automaker.

Panasonic’s battery business had been in the red mainly due to sluggish sales of batteries for computers, but a shift in focus to vehicle batteries, for which there is more stable demand, has helped the business turn profitable. The company now aims to boost sales of batteries for vehicles to ¥450 billion in fiscal 2018, more than triple the sales in fiscal 2013


Panasonic eyes ¥150 bil. for U.S. plant - The Japan News

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## LeveragedBuyout

U.S. Home Prices Are Now Just 6.4% Below All-Time High - Real Time Economics - WSJ








September 23, 2014, 10:02 AM ET
*U.S. Home Prices Are Now Just 6.4% Below All-Time High*
*ByNick Timiraos*




The pace at which U.S. home prices are rising has slowed down, but a new report Tuesday shows that home prices have retraced much of the ground they lost after the 2008 crash.

Prices rose 0.1% in July after adjusting for seasonal factors, according to an index maintained by the *Federal Housing Finance Agency*. The index is calculated using prices on mortgages backed by *Fannie Mae *and *Freddie Mac*. That was down from increases of 0.3% in June and 0.2% in May, but it represents the eighth straight monthly gain.

With the latest increase, home prices are now up 4.4% over the past year. What’s more surprising is that the index shows U.S. prices now standing just 6.4% below their previous peak in April 2007.

The *S&P/Case-Shiller *index is a separate tool used to measure home prices. It showed a bigger home price boom—and a bigger accompanying bust—in part because it included more expensive homes with loans that weren’t eligible for purchase by Fannie and Freddie. It also didn’t include loans financed by subprime mortgage lenders that weren’t selling loans to Fannie and Freddie.

Also, the FHFA index is unit-weighted, meaning all sales count equally. The Case-Shiller index is value-weighted, which means price changes in more expensive properties receive greater emphasis.

The Case-Shiller national index, which is set to report its own measure of July home prices next Tuesday, showed that home prices in June were 9.9% below their 2006 peak.

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## LeveragedBuyout

Chart Of The Week: Is US Wage Growth About To Gather Steam? | Alpha Now | Thomson Reuters

*CHART OF THE WEEK: IS US WAGE GROWTH ABOUT TO GATHER STEAM?*
September 23rd, 2014 _by_ Fathom Consulting

*US wage growth remains well contained, which probably explains why most FOMC voting members are content to wait a ‘considerable’ period of time between the end of QE and the first policy rate hike. However, a survey of employers suggests that wage growth may pick up by a percentage point or more through the remainder of this year.*





Refresh Chart Edit Chart

The phrase ‘considerable time’, used to describe the duration of the pause between the end of the asset purchase programme and the first increase in interest rates, remained within the lexicon of US forward guidance following last week’s FOMC meeting. This was contrary to the wishes of two members – Philadelphia Fed President Plosser, who became the first voting member to dissent back in July, was joined this month by Dallas Fed President Fisher.

In response, Chair Yellen went to some lengths during the press conference to stress that these words are not ‘calendar based’ and therefore have no ‘mechanical interpretation’. And despite the fact that many labour market indicators seem to be well on the way back to pre-crisis norms, in her latest remarks Ms Yellen again drew attention to the ‘underutilisation of the labour market resources’.

Her cautious stance is presumably related to the lack of any meaningful pick-up in wage growth. Average hourly earnings for all private non-farm employees rose by 2.1% in the twelve months to August. This measure of pay growth has remained at or below 2.5% for more than five years. However, a survey from the National Federation of Independent Business suggests that this may be about to change. The percentage of firms planning to raise worker compensation – usually a good leading indicator of the official data – is close to a six-year high. As such, given the continued strength of the US recovery, our own projections for US interest rates remain much closer to the Fed’s ‘dot’ estimates than the market’s expectation of a relatively more gradual tightening path.


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## LeveragedBuyout

This is not a good trend. As Charles Murray has pointed out, marriage is a cornerstone to success, and the difference in marriage rates both reflects and helps explain the differences in economic achievements among the various groups.

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More Americans Forgo Marriage as Economic Difficulties Hit Home - Real Time Economics - WSJ








September 24, 2014, 12:01 AM ET
*More Americans Forgo Marriage as Economic Difficulties Hit Home*
*ByNeil Shah*
As long-term financial security becomes a pipe dream for more Americans, a growing share is giving up on marriage.

One in five U.S. adults aged 25 or older had never been married in 2012, a record high, according to a new report by the *Pew Research Center* that analyzed Census data. In 1960, the number was one in ten.

According to an accompanying survey Pew conducted this May and June, only 53% of all never-married adults said they would like to marry eventually, down from 61% in 2010. Around 32% said they were not sure, up from 27% in 2010.

The figures in the Census data are more striking for African-Americans. Some 36% of blacks aged 25 and up had not been married in 2012, compared to 25% in 1990 and 9% in 1960. For whites, the share of never-married was 16% in 2012, up from 11% in 1990 and 8% in 1960.





Americans are putting off tying the knot in greater numbers for a variety of reasons.

The sexual revolution of the 1960s and 1970s along with rising numbers of women attending college and entering the workforce have helped increase the age when Americans get married and soften public attitudes on marriage.

The decline of religious institutions and the growing importance of higher education in an increasingly services-driven economy probably play a role, too.

But a major factor is simply the economy, which has grown slowly–and increasingly unequal–in recent decades, Pew notes in analyzing the survey of 2,000 American adults.

Incomes haven’t risen for most Americans since the 1980s, after adjusting for inflation, even though housing and child-rearing costs have. Young men have been hit particularly hard: For men 25 to 34, median hourly wages have declined 20% since 1980 in real terms.

Despite their growing economic difficulties, many Americans consider financial security (or at least a partner with a job) a prerequisite for marriage.

In its spring survey, Pew found nearly 80% of never-married women said finding someone with a steady job was very important to them in choosing a spouse or partner. Among men and women who had never married but wanted to, nearly a third said they were not financially prepared for marriage.

The problem, Pew explains, is the economic malaise of the last few decades—hidden for a time by a home-price boom—has shrunk the pool of available employed men. At the same time, women’s educational attainment and labor-force participation has generally risen.

Put simply, for today’s never-married women, a “good” man is harder to find.

Among never-married adults aged 25 to 34, the number of employed, available men per 100 women has dropped to 91 in 2012, from 139 in 1960. That means if all of 2012’s never-married young women wanted to find a young, employed man who also hadn’t been married, about 9% of them would automatically fail—due to a man shortage. (Of course, these women could find and marry divorced men, or older men.)

Once again, it’s worse for blacks. Among never-married black adults aged 25 to 34, there were 87 employed men for every 100 women back in 1960. In 2012? Just 51.

The upshot?

For many Americans, staying single, cohabiting or raising children out of marriage increasingly looks like the best available option.

Nearly 25% of young adults 25 to 34 who have never been married were cohabiting last year, up from under 22% in 2007, Pew says. Roughly 7% of adults 30 to 44 were cohabiting in 2010, too, according to a different analysis, up from 3% in 1995.

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## LeveragedBuyout

This could also go in the Team USA thread. @Peter C


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## Audio

LeveragedBuyout said:


> Americans are putting off tying the knot in greater numbers for a variety of reasons.



lmao, i got a very funny, extremely politically incorrect explanation for this chart.


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## Hamartia Antidote

I'm sure the trend of companies only looking for college graduates for all of their positions matched with the high cost of a college education is influencing the "good" man percentages.

Something is going to snap sometime.
As I have said before they will take the easy solution of lowering education costs by increasing enrollment and watering down degrees.



LeveragedBuyout said:


> This could also go in the Team USA thread. @Peter C



Feel free to add it yourself. I don't want to be seen as the "righteous" owner of that thread. The more help the better!

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## VCheng

Peter C said:


> Feel free to add it yourself. I don't want to be seen as the "righteous" owner of that thread. The more help the better!



USA leads and the world follows, hence the thread is open to all.

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## F-22Raptor

http://online.wsj.com/articles/u-s-economy-grew-at-4-6-rate-in-second-quarter-1411734858

Growth has been revised upwards to 4.6% for Q2.

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## LeveragedBuyout

Small Business Optimism Stuck in ‘Second Gear,’ NFIB Says - Real Time Economics - WSJ








October 14, 2014, 7:30 AM ET
*Small Business Optimism Stuck in ‘Second Gear,’ NFIB Says*
*ByKathleen Madigan*




Small-business owners remained wary about economic conditions in September, according to a report released Tuesday. The caution has caused a cutback in equipment spending and hiring plans.

The *National Federation of Independent Business*‘s small-business optimism index fell to 95.3 in September from 96.1 in August. Back in May the index reached a cycle-high of 96.6 but lost momentum over the summer.

“Optimism can’t seem to get out of second gear,” the report said.

Economists surveyed by the Wall Street Journal expected the latest index to slip to 95.9.

The top-line index’s September decline can be traced to steep drops in two components. The subindex covering hard-to-fill job openings fell 5 percentage points last month to 21%, while the capital outlays subindexes tumbled 5 points to 22%.





In addition, small business owners are cautious about their sales activity. The positive earnings trend declined 2 points to -19%, while the sales expectation subindex fell 1 point in September to 5%.

“Overall, these readings are more like a recession period than one of expansion,” the NFIB said.

News on the labor front was more positive. Small firms hired more people in the three months ended in September. On average, NFIB members increased employment by 0.24 worker per firm, the largest net gain so far in 2014.

But the trend may not hold in coming months, the NFIB warned. In addition to the declining share of employers already with at least one open position, the job-creation subindex–which measures plans to add staff in the future–fell 1 percentage point to 9%, “suggesting weaker job creation ahead” the report said.

Pricing power also continues to unravel for the small business sector. Seasonally adjusted, a net 4% of owners have raised selling prices recently. September’s reading was down 2 points from August’s index which posted a large 8-point drop from the July level.

Looking ahead, a net 16% plan to raise prices in the next three months, down 3 points from the share planning price hike in August.

“All is quiet on the inflation landscape,” said the report.

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## LeveragedBuyout

Mortgage Rates Fall To Lowest Level Since June 2013 - Real Time Economics - WSJ








October 15, 2014, 7:46 AM ET
*Mortgage Rates Fall To Lowest Level Since June 2013*
*ByNick Timiraos*




Mortgage rates fell to a 16-month low last week, reprising a familiar turn of events in which concerns about the global economy have sent investors seeking the safety of U.S. bonds.

The upshot is that American borrowers could once again benefit from global growth jitters. The *Mortgage Bankers Association* reported Wednesday that the rate on the average 30-year fixed-rate loan fell to 4.2% last week, from 4.3% the week before. Rates stood as high as 4.72% at the beginning of the year.

Mortgage rates tend to track Treasury yields, which have tumbled over the past two weeks reflecting investors’ unease, first over a possible slowdown in China and more recently in Europe. The yield on the 10-year Treasury fell to 2.2% late Tuesday, near its lowest level since June 2013.

Mortgage rates spiked in June 2013 as investors braced for the Federal Reserve to pull back from its bond-buying program. The so-called “taper tantrum” sent mortgage rates from around 3.6% in early May 2013 to 4.75% by July 2013.

The Federal Reserve did announce plans to taper its purchases of mortgage-backed securities and Treasurys last December, and it is on pace to end those purchases this month. But even as investors have braced for the Fed to raise interest rates next year, Treasurys have fallen.

The jump in rates last year effectively killed the latest in a series of refinance waves that began in earnest in late 2008, when the Fed announced its first round of bond purchases. It also led to a slowdown in home sales as buyers adjusted to paying higher prices on top of increased financing costs.

Over the past week, some mortgage lenders have been advertising rates of less than 4%, though those typically require borrowers to pay fees equal to at least 1% of the loan amount. The MBA’s weekly average rate of 4.2% last week, meanwhile, carried fees equal to around 0.17% of the loan amount.

The MBA reported that its index tracking refinance applications rose 11% last week, though applications were still 27% below last year’s level. Many analysts believe rates would need to fall at least another 0.25 percentage points to generate a serious rebound in refinancing.

Applications for home-purchase loans, meanwhile, were down a seasonally adjusted 0.3% from the previous week, but they were just 3.8% below the level of one year earlier, the smallest such year-over-year decline so far in 2014.

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## LeveragedBuyout

U.S. Debt Held by Foreigners Hits Record $6.07 Trillion - Real Time Economics - WSJ








October 17, 2014, 9:26 AM ET
*U.S. Debt Held by Foreigners Hits Record $6.07 Trillion*
*ByIan Talley*
Foreign holdings of *U.S. Treasury* securities hit a record high $6.07 trillion in August, up nearly $70 billion from July, as the dollar began its climb to five-year highs and the U.S. recovery showed signs of gaining steam.

*Japan* added more than $11 billion to its stockpile – largely in bonds and notes – while *China* and *Belgium*, a proxy trader for Beijing, added a net $12 billion to its holdings. The figures came in a monthly *Treasury Department* report released Thursday afternoon.





The U.S. Treasury said in its semi-annual currency report published late Wednesday that China bought roughly $135 billion in foreign currencies in the year through August to keep the value of the yuan down as growth in the Asian powerhouse slowed.

There’s a good chance that September and October could continue to set new records for foreign holdings of U.S. debt, as indicated by the steady strengthening of the dollar since August andplummeting bond yields.

Amid increasing worries about slowing emerging-market growth slowing and recession risks in the eurozone rising, investors have plowed their cash into the relative safety of U.S. debt.

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## Aepsilons

LeveragedBuyout said:


> U.S. Debt Held by Foreigners Hits Record $6.07 Trillion - Real Time Economics - WSJ
> 
> 
> 
> 
> 
> 
> 
> 
> 
> October 17, 2014, 9:26 AM ET
> *U.S. Debt Held by Foreigners Hits Record $6.07 Trillion*
> *ByIan Talley*
> Foreign holdings of *U.S. Treasury* securities hit a record high $6.07 trillion in August, up nearly $70 billion from July, as the dollar began its climb to five-year highs and the U.S. recovery showed signs of gaining steam.
> 
> *Japan* added more than $11 billion to its stockpile – largely in bonds and notes – while *China* and *Belgium*, a proxy trader for Beijing, added a net $12 billion to its holdings. The figures came in a monthly *Treasury Department* report released Thursday afternoon.
> 
> 
> 
> 
> 
> The U.S. Treasury said in its semi-annual currency report published late Wednesday that China bought roughly $135 billion in foreign currencies in the year through August to keep the value of the yuan down as growth in the Asian powerhouse slowed.
> 
> There’s a good chance that September and October could continue to set new records for foreign holdings of U.S. debt, as indicated by the steady strengthening of the dollar since August andplummeting bond yields.
> 
> Amid increasing worries about slowing emerging-market growth slowing and recession risks in the eurozone rising, investors have plowed their cash into the relative safety of U.S. debt.




Uncle Sam is getting back up. Good news !

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## LeveragedBuyout

Nihonjin1051 said:


> Uncle Sam is getting back up. Good news !



Long live King Dollar.

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## Aepsilons

LeveragedBuyout said:


> Long live King Dollar.



Beautifully green.

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## LeveragedBuyout

An interesting analysis to provide further support for the strength of the USD.

---

America, the Balanced by Jeffrey Frankel - Project Syndicate




*BUSINESS & FINANCE*




*JEFFREY FRANKEL*
Jeffrey Frankel, a professor at Harvard University's Kennedy School of Government, previously served as a member of President Bill Clinton’s Council of Economic Advisers. He directs the Program in International Finance and Macroeconomics at the US National Bureau of Economic Research, where he is a member of the Business Cycle Dating Committee, the official US arbiter of recession and recovery.

OCT 20, 2014
*America, the Balanced*
CAMBRIDGE – When the United States’ current account fell into deficit in 1982, the US Council of Economic Advisers accurately predicted record deficits for years to come, owing to budget deficits, a low national saving rate, and an overvalued dollar. If the US did not adjust, knowledgeable forecasters intoned, it would go from being the world’s largest creditor to its largest debtor. Many of us worried that the imbalances were unsustainable, and might end in a “hard landing” for the dollar if and when global investors tired of holding it.

The indebtedness forecasts were correct. Indeed, every year for more than three decades, the US Bureau of Economic Analysis (BEA) has reported a current-account deficit. And yet now we must ask whether the US current-account deficit is still a problem.

For starters, the world’s investors declared loud and clear in 2008 that they were not concerned about the sustainability of US deficits. When the global financial crisis erupted, they flooded _into_ dollar assets, even though the crisis originated in the United States.

Moreover, a substantial amount of US adjustment has taken place since 1982 – for example, the dollar depreciations of 1985-1987 and 2002-2007 and the fiscal retrenchments of 1992-2000 and 2009-2014. The big increase in domestic output of shale oil and gas has also helped the trade balance recently.

As a result, the US current-account deficit in 2013 had narrowed by half in dollar terms from its 2006 peak, and from 5.8% of GDP to 2.4%. This is a decline of two-thirds when expressed as a share of global output.

A symmetric adjustment has also occurred in China, via real appreciation of its currency and higher prices for labor and land. China’s current-account surplus peaked in 2008 at more than 10% of GDP and has since narrowed dramatically, to 1.9% last year. China’s trade adjustment in some respects followed that of Japan, the original focus of American trade anxieties in the 1980s.

I propose a third, more speculative reason why it may be time to stop worrying about the US current-account deficit. It is possible that, properly measured, the true deficits were smaller than has been reported, and even that, in some years, they were not there at all.

Every year, US residents take some of what they earn in overseas investment income – interest on bonds, dividends on equities, and repatriated profits on direct investment – and reinvest it then and there. For example, corporations plow overseas profits back into their operations, often to avoid paying the high US corporate income tax implied by repatriating those earnings. Technically, this should be recorded as a bigger surplus on the investment-income account, matched by greater acquisition of assets overseas. Often it is counted correctly. But there is reason to think that this is not always the case.

The world has long run a substantial deficit in investment income, even though the correct numbers should sum to zero. The missing income must be going somewhere.

Even for officials as highly competent as those at the BEA, it is impossible to keep track of all of the stocks and flows in the international economy. Everyone knows that errors and omissions are large, especially when it comes to financial transactions. Underfunding of statistical agencies exacerbates measurement problems, but it does not create them.

Less well known, however, is a particular pattern in the revisions of the US international investment position. The currently available historical statistics show that in every year from 1982 to 2000, the initial estimate of the net international investment position was subsequently revised upward, as statisticians found overseas assets about which they previously had no way of knowing. Since then, some subsequent revisions have been positive and some negative. But, despite more frequent surveys of portfolio holdings in recent years, certain new asset acquisitions – for example, some held with foreign custodians – still most likely go unreported.

The numbers are potentially large. The reported US current-account deficits from 1982 to 2013, based on subsequent revisions, total $9.5 trillion. And yet the deterioration in the US international investment position over this period was not much more than half of that amount ($5.7 trillion if measured relative to the revised estimate for 1981).

Certainly a lot of the discrepancy is attributable to valuation effects: since 1982, the dollar value of overseas assets has increased repeatedly, owing to increases in the dollar value of foreign currency and increases in the assets’ foreign-currency value. But part of the discrepancy also reflects the discovery of missing assets, some of which may have originated in the reinvestment of overseas income.

The missing credits also originally could have been earned in other ways. For example, US multinational corporations sometimes over-invoice import bills or under-report export earnings to reduce their tax obligations. Again, this would work to overstate the recorded current-account deficit.

Consider an (admittedly extreme) illustration. If true investment income were double what is reported, the difference was reinvested abroad in the years 1982-2000, and those assets were discovered by 2014, that would explain about half of the upward revision in the US net international investment position.

If something like this under-reporting of reinvested earnings or other balance-of-payments credits has gone on in the past, it may still be going on today – especially with US firms becoming aggressive about arbitraging corporate income tax. And if true investment income is indeed as large as double what is reported, the true US current-account balance entered the black in 2009 and has been in surplus ever since.

America, the Balanced by Jeffrey Frankel - Project Syndicate


Read more at America, the Balanced by Jeffrey Frankel - Project Syndicate

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## SvenSvensonov

Nihonjin1051 said:


> Beautifully green.



Ironic isn't it. In times of crisis even the most anti-American and anti-USD still welcome its sweet, safe and stable embrace.

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## Aepsilons

SvenSvensonov said:


> Ironic isn't it. In times of crisis even the most anti-American and anti-USD still welcome its sweet, safe and stable embrace.



Which is the reason why the RMB will never replace the USD. It is the Global currency and will remain so in the long term.

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## LeveragedBuyout

Sober Look: The good, the bad and the ugly of falling energy prices

*SUNDAY, OCTOBER 19, 2014*
The recent correction in the price of crude oil should have an immediate positive impact on the US consumer as well as on a number of business sectors. However there also may be a significant economic downside to this adjustment. Here are some facts to consider.

1. The good:

The US consumer is not only about to benefit from materially lower gasoline prices (see chart), but also from cheaper heating oil.







Source: barchart

With wages suppressed, the savings could be quite impactful, particularly for families with incomes below $50K per year.

Merrill Lynch: - ... consumers will likely respond quickly to the saving in energy costs. Many families live “hand to mouth”, spending whatever income is available. The Survey of Consumer Finances found that 47% of families had no savings in 2013, up from 44% in the more healthy 2004 economy. Over time, energy costs have become a much bigger part of budgets for low income families. In 2012, families with income below $50,000 spent an average of 21.4% of their income on energy. This is almost double the share in 2001, and it is almost triple the share for families with income above $50,000.



Source: Merrill Lynch

Furthermore, with gasoline prices lower, it is unlikely that consumers will be buying significantly more of it than they have been. Historically when oil prices fell, gasoline consumption in dollar terms also fell. Dollars saved on fuel will be redirected elsewhere in the economy.




Source: Scotiabank

Moreover, suppressed oil prices will, at least in the near-term, keep inflation expectations lower. That means lower short-term rates for longer (see chart) and therefore lower home equity and adjustable rate mortgage monthly payments. It also means lower longer-term rates and cheaper fixed rate mortgages (see chart). We may even see some new refi activity.

Other benefits include cheaper transport (potentially lower travel costs) and shipping costs (lower UPS/Fedex surcharges), as well as cheaper PVC, nylon, polyester, foam, etc. - all of which should benefit the consumer.

2. The bad:

The US has become a major energy producer, with the sector partially responsible for improving economic growth and lower unemployment in recent years. As an example here is the GDP of Texas as a percentage of the US GDP. This trend is driven in part by the recent energy boom in the state.




Source: @M_McDonough

If oil prices remain under pressure, this boom could soon be in jeopardy. While large US energy companies are sitting on a great deal of cash, at some point they will begin to cut portions of the higher cost development and production. And private investment into energy and oil services firms, which has been brisk lately, is likely to moderate. For example, here is the private debt and equity capital flowing into various states last month.




Source: CAZ Investments

While, only a portion of the funds going to Texas is directly energy related, various other Texas firms funded by PE (including some real estate, manufacturing and financial companies) have been benefiting from the energy boom. Soon that flow of private capital may slow dramatically.

To put this into perspective, here are the jobs directly generated from Texas oil and gas extraction in recent years. And this does not include the thousands of jobs that support this industry. Such trend is unlikely to continue if oil prices remain at current levels or fall further.






In fact, while the overall industrial production growth in the US has been strong recently (see chart), a big portion of the gains are energy driven (see chart from Lee Adler). A slowdown in that sector will be quite visible across the US.

3. The ugly:

A significant number of middle market energy firms in the US - many funded via private capital (above) - are highly leveraged. The leveraged finance markets are becoming quite concerned about the situation - even for larger firms with traded debt. Here is the yield spread between the energy sector loans in the Credit Suisse Leveraged Loan Index and the index as a whole.




Source: Credit Suisse

Rumors have been circulating of a number of energy (and related services) firms getting ready to "restructure". There are also stories that some large funds are gearing up to scoop up distressed debt of levered energy firms. However, in spite of the ample liquidity out there, bets on companies with significant commodity exposure will be limited going forward - at least until stability returns to the oil markets. Defaults, layoffs, and cancelled projects in the energy space may be in store in the near-term. And that is sure to have a negative impact on the US labor markets and the economy as a whole.

Finally, this is terrible news for the development of alternative energy sources. At these prices, fossil fuels are becoming increasingly difficult to compete with.​


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## mike2000

SvenSvensonov said:


> Ironic isn't it. In times of crisis even the most anti-American and anti-USD still welcome its sweet, safe and stable embrace.



Well said. Cuz the U.S is still by far the safest place to place your bet, even U.S rivals like Russia/China know this.



Nihonjin1051 said:


> Which is the reason why the RMB will never replace the USD. It is the Global currency and will remain so in the long term.



I agree Nihonji san. however you shouldnt have put the word NEVER. you should never say never, for we dont know what the future holds. Though i agree that you should have said: 'Which is the reason why the RMB will not replace the USD for a long time to come'. Voila.

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## Aepsilons

mike2000 said:


> I agree Nihonji san. however you shouldnt have put the word NEVER. you should never say never, for we dont know what the future holds. Though i agree that you should have said: 'Which is the reason why the RMB will not replace the USD for a long time to come'. Voila.



Yes, you're right. Appreciate your correction. I meant to say, within my lifetime, that is. 





mike2000 said:


> Well said. Cuz the U.S is still by far the safest place to place your bet, even U.S rivals like Russia/China know this.




Yes, that and the US has a lot of God reserve, A whole lot of em. LOL


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## LeveragedBuyout

Sober Look: Gap between wages and rents continues to grow

*THURSDAY, OCTOBER 23, 2014*
*Gap between wages and rents continues to grow*

Here is a quick follow-up to the discussion on the looming rental crisis in the US. The gap in growth rates of rental costs vs. wages continues to widen. This divergence is creating a drag on the GDP growth by suppressing household formation, consumer spending, and labor mobility. Over time this trend will also increase homelessness.

*

*


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## LeveragedBuyout

Majority of Bank Risk Managers Are Worried About the Wealth Gap - Real Time Economics - WSJ








October 23, 2014, 7:54 AM ET
*Majority of Bank Risk Managers Are Worried About the Wealth Gap*
*ByNick Timiraos*
A majority of risk managers at North American financial institutions are worried that the growing wealth gap poses a risk to the financial system.

The *Professional Risk Managers’ International Association* and *FICO*, the credit analytics firm, polled bank risk managers on the consequences of inequality during their quarterly survey. It showed that more than 62% believe the wealth gap could undermine the North American financial system. Just 14% said they didn’t think it posed a threat.





The survey found that 41%, a plurality, of bank risk managers believe unemployment or underemployment is the greatest risk to consumers’ credit health over the coming six months. Some 22% were more worried about rising consumer indebtedness. Other concerns, including a sudden financial-system shock (16%), rising interest rates (12%) and the weakening of the housing market (8%), drew less consensus.





Home loans were the only asset class where a majority of risk managers didn’t see supply meeting demand. More than one quarter of those surveyed see the supply of mortgage credit falling short of demand, the highest of any consumer borrowing category.


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## senheiser

*Dream of U.S. Oil Independence Slams Against Shale Costs*
By Asjylyn Loder Feb 27, 2014 1:00 AM GMT+0100 




Photographer: Andrew Burton/Getty Images
Drilling for oil in the Bakken shale formation on July 23, 2013 outside Watford City, North Dakota.

The path toward U.S. energy independence, made possible by a boom in shale oil, will be much harder than it seems.

Just a few of the roadblocks: Independent producers will spend $1.50 drilling this year for every dollar they get back. Shale output drops faster than production from conventional methods. It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to the Paris-based International Energy Agency. Iraq could do the same with 60.

Consider Sanchez Energy Corp. The Houston-based company plans to spend as much as $600 million this year, almost double its estimated 2013 revenue, on the Eagle Ford shale formation in south Texas, which along with North Dakota is one of the hotbeds of a drilling frenzy that’s pushed U.S. crude output to the highest in almost 26 years. Its Sante North 1H oil well pumped five times more water than crude, Sanchez Energy said in a Feb. 17 regulatory filing.Shares sank 7 percent.

“We are beginning to live in a different world where getting more oil takes more energy, more effort and will be more expensive,” said Tad Patzek, chairman of the Department of Petroleum and Geosystems Engineering at the University of Texas at Austin.




Photographer: Eddie Seal/Bloomberg
Tony Sanchez, chief executive officer for Sanchez Energy Corp., left, speaks at the...Read More

Drillers are pushing to maintain the pace of the unprecedented 39 percent gain in U.S. oil production since the end of 2011. Yet achieving U.S. energy self-sufficiency depends on easy credit and oil prices high enough to cover well costs. Even with crude above $100 a barrel, shale producers are spending money faster than they make it.

*Missed Forecasts*
Companies are showing the strain. Chesapeake Energy Corp., the Oklahoma City-based company founded by Aubrey McClendon, reported profit yesterday that missed analysts’ forecasts by the widest margin in almost two years. Shares declined 4.9 percent. Fort Worth, Texas-based Range Resources Corp. fell 2.3 percent after announcing Feb. 25 that fourth-quarter profit dropped 47 percent. QEP Resources Inc., a Denver-based driller, slid 10 percent after fourth-quarter earnings reported Feb. 25 fell short of analysts’ predictions.

Rethinking the Ban on Exporting U.S. Oil

The U.S. oil industry must sprint simply to stay in place. U.S. drillers are expected to spend more than $2.8 trillion by 2035 even though production will peak a decade earlier, the IEA said. The Middle East will spend less than a third of that for three times more crude.




Photographer: Eddie Seal/Bloomberg
Floor hands operate an oil rig in the Eagle Ford Shale formation area near Texas.

*Bulls Crow*
Shale wells can vary in price. Chesapeake will spend an average of $6.4 million each this year, according an investor presentation last updated yesterday. Houston-based Goodrich Petroleum Corp.will spend up to $13 million on some of its wells, Robert Turnham, president and chief operating officer, said in a Feb. 20 earnings call.

Bullish analysts and oil executives have reason to crow. While drilling in Iraq could break even at about $20 a barrel, output will be limited by political risks, Ed Morse, global head of commodities research at Citigroup Inc. in New York, said in a January report. By contrast, the break-even price in U.S. shale is estimated at $60 to $80 a barrel, according to the IEA. The price of a barrel hasn’t dipped below $80 since 2012 and has stayed above $90 since May. Costs in the U.S. will continue to fall as drillers get faster and improve results, Morse said.

*Crude Exports*
“The U.S. oil and natural gas renaissance is receiving significant investment because return on investment is good and competitive with other opportunities,” Rick Bott, president and chief operating officer of Oklahoma City-based Continental Resources Inc., a pioneer of shale drilling, said in an e-mail. “We’re confident that continued technological advancements will keep the Bakken and other plays at the forefront of investment for the foreseeable future.”

Harold Hamm, the chairman and chief executive officer of Continental Resources who became a billionaire drilling in North Dakota, told U.S. lawmakers Jan. 30 that the country, which U.S. Energy Information Administration data show supplied 86 percent of its own energy last year, can drill its way to energy independence by 2020. Hamm is leading an effort to get Congress to allow crude exports for the first time since the 1970s.

U.S. oil production will average 9.2 million barrels a day in 2015, up from 7.4 million last year, according to the EIA, the statistical arm of the U.S. Energy Department. Colorado boosted output by 11 percent in the first 11 months of last year, Wyoming was up 12 percent and Oklahomaadded 24 percent.

“I don’t see the shale boom coming to an end,” said Andy Lipow, president of Lipow Oil Associates, an energy consulting firm in Houston. “We’re just getting started in places like Colorado, Wyoming and Oklahoma.”

*Horizontal Wells*
Sanchez Energy said in a Feb. 19 statement that Sante North 1H isn’t yet finished and the well will produce more oil than the early report suggested. The company said it has 120,000 acres in the Eagle Ford and plans to spend 90 percent of its exploration budget there this year. The company’s shares have risen 63 percent in the past year.

Traditional wells are bored straight down, like straws stuck into large deposits of crude. Shale is tapped by steering the drill horizontally through layers of oil-rich rock, sometimes for a mile or more. The formation is blasted apart with a high-pressure jet of water, sand and chemicals, a practice called hydraulic fracturing or fracking, to open up cracks that free pockets of trapped fuel. The complexity and materials needed to drill horizontally and blast the rock add to the cost.

*Yield Little*
The boom’s boosters have given rise to the misconception that wringing oil and gas from shale can be easily replicated throughout the country, Patzek said. That isn’t the case, he said. Every rock is different. The Bakken shale, along with the neighboring Three Forks formation, covers an area larger than France, according to the IEA. An oil-bearing formation that’s 400 feet (122 meters) thick in one spot may taper off to nothing just a mile away, Patzek said. What works for one well may yield little in a neighboring county.

The output of shale wells drops faster, too, falling by 60 to 70 percent in the first year alone, according to Austin, Texas-based Drillinginfo Inc. Traditional wells take two years to fall by about 55 percent before flattening out. That forces companies to keep drilling new wells to make up for lost productivity.

“You keep having to drill more and you keep having to spend more,” said Mark Young, an analyst with London-based Evaluate Energy, which tracks production and its costs.

*Sweet Spots*
A prolonged slide in prices below $85 a barrel may put pressure on operators that have struggled to contain costs or that don’t own acreage in the prolific “sweet spots” of the oil fields, said Leonardo Maugeri, a former manager at Rome-based energy company Eni SpA who’s researching the geopolitics of energy at Harvard University’s Belfer Center for Science and International Affairs.

Companies have boosted well productivity and will continue to whittle down the break-even price, he said. While the boom could survive a brief dip in oil prices, a long slump could slow drilling and cause production to fall swiftly, Maugeri said.

“To sustain in the short term, the U.S. needs prices at $65 a barrel,” Maugeri said. “That’s a critical level. Below that level, many opportunities will vanish.”

The U.S. benchmark oil contract for West Texas Intermediate crude for delivery in April 2016 is trading at about $85 a barrel, almost $18 a barrel less than today and still $20 above Maugeri’s threshold.

*Net Debt*
Even with crude prices above $100 a barrel, U.S. independent producers will spend $1.50 drilling this year for every dollar they get back from selling oil and gas and will carry debt that is twice as much as annual earnings, said Ryan Oatman, an energy analyst with SunTrust Robinson Humphrey Inc., an investment bank in Houston.

By contrast, the net debt of Exxon Mobil Corp., the world’s largest energy explorer by market value, is less than half of the cash earned from operations last year. The company will spend 68 cents for every dollar it gets back this year, according to company records and analyst forecasts compiled by Bloomberg.

So far, oil prices have been high enough to keep investors interested in the potential profits to be made in shale, Oatman said.

“There is a point at which investors become worried about debt levels and how that spending is going to be financed,” Oatman said. “How do you accelerate and drill without making investors worried about the balance sheet? That’s the key tension in this industry.”

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## LeveragedBuyout

senheiser said:


> Companies have boosted well productivity and will continue to whittle down the break-even price, he said. While the boom could survive a brief dip in oil prices, a long slump could slow drilling and cause production to fall swiftly, Maugeri said.
> 
> “To sustain in the short term, the U.S. needs prices at $65 a barrel,” Maugeri said. “That’s a critical level. Below that level, many opportunities will vanish.”
> 
> The U.S. benchmark oil contract for West Texas Intermediate crude for delivery in April 2016 is trading at about $85 a barrel, almost $18 a barrel less than today and still $20 above Maugeri’s threshold.



I would love to get oil below $65/barrel (or even $57/barrel, but the other analyses I posted), even if it meant the US shale boom was over. The knock-on effects for the economy would provide for a tremendous boom.


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## LeveragedBuyout

Sales of New Homes Worse Than Most Years in 1980s, 1990s - Real Time Economics - WSJ








October 24, 2014, 11:32 AM ET
*Sales of New Homes Worse Than Most Years in 1980s, 1990s*
*ByNick Timiraos*




Home sales rose to their highest annual pace in September in six years, but the new-home market is still depressed by historical standards.

To get a sense of just how painful the housing downturn has been, consider this: excluding the post-2008 depression, sales this year are running at their slowest pace since 1982.

Back then, interest rates were above 15% as the* Federal Reserve* fought off inflation and unemployment rose above 10%.

Of course, the recessions of the early 1980s were followed by big snapbacks in construction of the kind that haven’t been seen following the 2007-09 recession.

Through the first nine months of this year, builders have signed contracts to sell some 337,000 homes. That’s up just 1.7% from 331,000 through the same period last year, and up from the low of 233,000 in 2011.

Still, this year’s level is below every other year from 1983 to 2009. In 1982, builders had sold 226,000 homes in the first nine months of the year. Sales doubled to 478,000 in 1983.

Friday’s figures suggest that 2014 will be a giant letdown for the new-home sales market.

One sort-of bright spot: For the third quarter of 2014, new home sales were still up 17% from the year-earlier period. Why “sort of” bright? Summer 2013 saw a big drop in sales following a rise in mortgage rates from around 3.5% to 4.5%.

Still, improvement is improvement. Sales in the second quarter stood 5% below the year-earlier level, and the first quarter was down 2%.


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## senheiser

*US Manufacturing Activity Slows in October*
United States Manufacturing PMI | 2012-2014 | Data | Chart | Calendar




The seasonally adjusted Markit Flash U.S. Manufacturing PMI decreased to 56.2 in October from 57.5 in September. It is the lowest figure in four months as new business posted the smallest gain this year and new export sales recorded the slowest rise since July. 

Softer new business growth was the main negative influence on the headline PMI in October, as the latest rise in new orders was much weaker than in September and the slowest for nine months. A number of survey respondents commented on more cautious spending patterns among clients, especially in relation to export sales. October data pointed to only a moderate expansion of new orders from abroad, with the pace of growth easing sharply to a three-month low.

In line with softer new business gains, manufacturing output growth also slowed in October. The latest increase in production volumes was the weakest since March. Moreover, the rate of output growth has now moderated for two months in a row, which represents the first back-to-back slowdown since May 2013.

October data pointed to resilient manufacturing payrolls trends, despite a continued moderation in both output and new business growth. The rate of job creation was little-changed from September’s two-and-a-half year high and much sharper than the average seen since the survey began in May 2007.

Markit | Joana Taborda | joana.taborda@tradingeconomics.com
10/23/2014 2:53:26 PM

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## LeveragedBuyout

Five Charts: U.S. Home Prices Are Cooling Off - Real Time Economics - WSJ









October 28, 2014, 2:28 PM ET
*Five Charts: U.S. Home Prices Are Cooling Off*
*ByNick Timiraos*
The rate of U.S. home price increases is decelerating, and that home-price slowdown is a mixed bag.

It looks unlikely for now, but if prices turn negative again year-over-year, that would exact a toll on would-be buyers’ psyche. A sharp run-up in prices, meanwhile, has dented affordability and is one reason the entry-level buyer has been absent.

The best scenario: price gains advance at their current slower-but-steady pace. “In housing, boring is better,” writes Zillow’s Stan Humphries.

Five charts help tell the story.





Prices fell sharply during the crash as supply greatly exceeded demand, especially as foreclosures overwhelmed the market. These properties tend to sell for less than traditional properties because they’re not as well maintained and mortgage companies aren’t emotional about selling in the way traditional owners might be.

But over the past two years, prices rebounded. The share of homes selling out of foreclosure was falling, and those properties had attracted growing interest from investors, which supported prices. Meanwhile, low interest rates and pent-up demand from traditional buyers led to bidding wars.





Now the market has cooled down. The monthly increases have slowed considerably over the past four months.

Of course, there’s a strong seasonal component to housing, with more activity—and price gains—during the spring and summer. Looking at prices over the same time period in each of the last 13 years helps clarify the picture. Since December, prices are up 5.2%. That’s less than during the frenzy of the last two years or the bubble of the past decade.





The big question now is whether these year-over-year increases slow even further and if so, where they might find equilibrium. (A reminder: the Case-Shiller index is reported with a two-month delay, and it’s a three-month moving average of prices. That means prices in Tuesday’s report cover the three-month period ending in August, and those homes would have gone to contract in the late spring or early summer.)

Prices are still rising on a year-over-year basis in all 20 cities tracked by the index, but the pace of gains has slowed in nearly all of them. And in many cities, such as *Miami* and* Las Vegas*, prices are still down considerably from their peaks of 2006.





Rising prices, of course, make homes less affordable to entry-level buyers. A separate report from the Commerce Department on Tuesday showed that the homeownership rate dropped again to 64.4%, the lowest level since 1995.


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## F-22Raptor

http://www.nytimes.com/2014/10/31/business/economy/us-economy-q3-2014-gdp.html

The US economy grew 3.5% in Q3.

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## senheiser

*Microsoft to Cut 18,000 Jobs, Fires Entire Advertising Sales Division*



Microsoft's Advertising global sales team is facing redundancy, as a part of the latest round of large-scale layoffs, with company expecting to release up to 18,000 workers.

© AP Photo/ Ted S. Warren
10:14 01/11/2014


MOSCOW, November 1 (RIA Novosti) – Microsoft's Advertising global sales team is facing redundancy, as a part of the latest round of large-scale layoffs, with company expecting to release up to 18,000 workers.

"We've taken another step that will complete almost all the 18,000 reductions announced in July. The reductions happening today are spread across many different business units, and many different countries," a Microsoft spokesperson told Business Insider.

Microsoft has already closed both its Global Agencies and Accounts team, responsible for communications with top media agencies, and Yarn, the company's "creative group that collaborates, ideates, incubates and customizes highly immersive ad experiences made possible by Microsoft technology," CRN, the tech news web site reported on Thursday, October 30. A day later, Business Insider revealed that the company had fired its entire global Advertising team, which was "selling advertising space across Microsoft's MSN, Bing, Xbox, Outlook, Skype, and Windows 8 properties." CRN notes that it remains unclear whether the employees were laid off or redirected to others Microsoft's units, adding that the IT giant "could not be reached" for further comments on the issue.

Experts stress that the advertising team layoff will seriously affect Microsoft's competitiveness, noting that companies such as Oracle, Salesforce.com, Google are steadily improving their marketing portfolios. Furthermore, Microsoft is evidently risking loss of a prospective market niche.

"For Microsoft to lose that muscle, connecting with the agencies and CMOs making technology buying decisions, is a big deal. Oracle and Salesforce.com have been building marketing channels for years. They now have the tools and technology to go from the CRM system all the way out to touch the actual customer," an unnamed source told CRN, speaking on condition of anonymity.

On the other hand, according to the eMarketer figures, Microsoft only has a 2-3 percent share of the worldwide digital ad market, while Google dominates with a 31 percent share and Facebook accounts for about 8 percent. "Microsoft's display-ad business has grown increasingly insular over the past few years, which may be to blame for its declines," AdAge, a global advertising news agency points out.

CRN's unnamed source deems that Microsoft A&O (Advertising & Online) had eventually turned into a "dead horse": "Where are the relevant players in advertising today? Google and Facebook. Then you have Microsoft A&O, which has been losing talent and is seen in the space as a dead horse."

However, Business Insider underscores that the executive team of the Microsoft Advertising division is still "on board" and that could mean the IT giant is not ready to leave the prospective global digital ad market yet.

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## senheiser

F-22Raptor said:


> http://www.nytimes.com/2014/10/31/business/economy/us-economy-q3-2014-gdp.html
> 
> The US economy grew 3.5% in Q3.



Q to Q it grew that much





here is y on y as well

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## F-22Raptor

U.S. Dollar: Present Strength Reflects Economic Reality

On how resilient the US dollar has been...


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## senheiser



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## senheiser

*Warner Bros. Layoffs This Week*


by *William D'Angelo*, posted 1 hour ago / 343 Views
Warner Bros. CEO Kevin Tsujihara has released a memo to employees that the company will start laying off employees this week, according to GameInformer. No specific group was mentioned, but that "most business groups" will be affected.

"These are difficult decisions, and we don’t take them lightly," said Tsujihara in the memo. "We examined every aspect of our businesses to ensure that we were restructuring in a way that would allow us to minimize the impact on our employees, while continuing to adapt to the changing global marketplace."

The layoffs will continue through the first quarter of 2015. International branches of Warner Bros. will also be affected, however those layoffs will not be known until next year.

Last month developer Turbine, known for developing _Infinite Crisis_, was hit with layoffs. Though the total number of people laid off is not known.

________________________________________

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## senheiser

*Buck to the future*
*Is the dollar starting another long-term rally?*




SUDDENLY the dollar is the currency of the moment. The greenback has risen 6.3% on a trade-weighted basis over the past three months. It recently hit a six-year high against the yen and a two-year high against the euro.

The trend reflects confidence in the prospects for the American economy, combined with worries about the health of the rest of the world. On October 7th the IMF lowered its forecast for global growth in 2014 to 3.3% from the 3.7% it foresaw in April. Some of the biggest reductions were in Europe: it now expects France to grow just 0.4% this year, half a percentage point less than in July. To confirm the fund’s pessimism, German industrial production fell 4% in August while factory orders dropped by almost 6%; both were the biggest declines in more than five years. In contrast, the latest American data showed a 248,000 jump in jobs in September and a fall in the unemployment rate to 5.9%.


This relatively strong economic performance has reinforced expectations that the Federal Reserve will start to push up interest rates next year while the European Central Bank and the Bank of Japan will keep them low. Higher rates will attract investors to the dollar, particularly those who follow a strategy dubbed the “carry trade”, in which they borrow money in a country with low rates and invest it in a country with higher ones.

The carry trade has been difficult in recent years because nearly all countries in the rich world have held rates close to zero. But there is now a significant carry in the bond markets, where ten-year Treasury bonds yield one-and-a-half percentage points more than German bonds of the same maturity—a very wide gap by historical standards.





A stronger economy also makes American companies more appealing to international investors. America’s stockmarkets have outperformed their rivals in Europe and Japan this year, even before the strength of the dollar is taken into account. Foreign firms have bid a combined $325 billion for American firms this year. That increases the demand for dollars.

The big question, however, is how long this trend will last. As the chart shows, the latest rebound is small by the standards of the huge rallies in the early 1980s and the late 1990s. A strengthening dollar has its advantages for Americans. Foreign investors will be keener to hold Treasury bonds, making it easier for the government to fund its deficit. American tourists will find their money goes further on foreign trips. Imports will fall in price, keeping inflation down despite the healthy economy.

But there are downsides too. American companies will find that their overseas profits are worth less in dollar terms; around a third of the revenues of S&P 500 companies come from abroad, according to Factset, a data firm. America’s exports will be less competitive, at a time when the country still has a current-account deficit of 2.3% of GDP, despite the boom in shale oil. As a result, a big appreciation of the dollar cuts GDP growth by around half a point over the following year, according to the Fed’s models. (This may mean the Fed is slower to tighten policy than the markets expect, a factor that may eventually limit the dollar’s rise.)

A stronger dollar will have the opposite effect on the European and Japanese economies, making their exports cheaper and pushing up import prices. Policymakers in both areas may welcome that, since they are struggling to generate growth and avoid deflation. As David Bloom, head of foreign-exchange strategy at HSBC, a bank, says, “The dollar on its own may not be able to save the world but it will certainly buy these economies time.”

For emerging markets, the effect is probably less positive. Back in 2010 Guido Mantega, Brazil’s finance minister, warned that loose monetary policy in America and elsewhere was leading to “currency wars” in which rich countries were trying to improve the competitiveness of their exports by devaluing their currencies. Investors were also pouring money into emerging markets, enticed by their better growth prospects, leading some countries (including Brazil) to impose capital controls. A stronger dollar may now prompt capital to flow out of such countries just as fast. That will be a particular problem in places where governments or firms have borrowed significantly in dollars, since their revenues are denominated in local currency but their liabilities in dollars.

A prolonged dollar rally may also have political ramifications. A paper by Douglas Campbell of the University of California, Davis, found that the previous two big dollar surges led to a decline in manufacturing jobs. That provoked complaints from American politicians that first Japan and then China were unfairly suppressing their currencies to take American jobs. It is easy to imagine the same arguments resurfacing this time, with the obvious target being Germany. It already has a current-account surplus of 7.2% of GDP; the euro’s recent weakness is likely to boost it further. Governments resisted calls for protectionism in the past, but their economies were stronger then. It may be harder to ward off in future, given that voters have already been angered by years of austerity and declines in inflation-adjusted wages.

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## senheiser

TASS: Economy - Russia cuts investments in US government securities to $117.7 billion

November 19, 10:07 UTC+3 
Russia still keeps its 12th place in the list of the major foreign holders of American securities
WASHINGTON, November 19. /TASS/. Russia has reduced its investment in US government securities by $400 million to $117.7 billion, according to September data from the US Department of the Treasury published on Tuesday.


Russia still keeps its 12th place in the list of the major foreign holders of American securities. China ($1.26 trillion) is the largest holder of US securities, followed by Japan, which has slashed its holdings of US Treasuries to $1.23 trillion.

Among the top foreign holders of US securities are Belgium, a group of offshore states of the Caribbean, OPEC countries, Brazil, Switzerland, Taiwan, the United Kingdom and Hong Kong. Luxembourg comes in the 11th place ahead of Russia.

In general, foreign buyers in September significantly reduced their investment in US securities, with the overall figure estimated at $6.06 trillion. In August, the figure stood at $6.07 trillion.

Apart from countries, US securities are owned by foreign entities and individuals, as well as domestic companies, funds and private investors. US Treasury securities are issued to allow the government to finance the federal budget deficit.

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## C130

senheiser said:


> *Dream of U.S. Oil Independence Slams Against Shale Costs*
> By Asjylyn Loder Feb 27, 2014 1:00 AM GMT+0100
> 
> 
> 
> 
> Photographer: Andrew Burton/Getty Images
> Drilling for oil in the Bakken shale formation on July 23, 2013 outside Watford City, North Dakota.
> 
> The path toward U.S. energy independence, made possible by a boom in shale oil, will be much harder than it seems.
> 
> Just a few of the roadblocks: Independent producers will spend $1.50 drilling this year for every dollar they get back. Shale output drops faster than production from conventional methods. It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to the Paris-based International Energy Agency. Iraq could do the same with 60.
> 
> Consider Sanchez Energy Corp. The Houston-based company plans to spend as much as $600 million this year, almost double its estimated 2013 revenue, on the Eagle Ford shale formation in south Texas, which along with North Dakota is one of the hotbeds of a drilling frenzy that’s pushed U.S. crude output to the highest in almost 26 years. Its Sante North 1H oil well pumped five times more water than crude, Sanchez Energy said in a Feb. 17 regulatory filing.Shares sank 7 percent.
> 
> “We are beginning to live in a different world where getting more oil takes more energy, more effort and will be more expensive,” said Tad Patzek, chairman of the Department of Petroleum and Geosystems Engineering at the University of Texas at Austin.
> 
> 
> 
> 
> Photographer: Eddie Seal/Bloomberg
> Tony Sanchez, chief executive officer for Sanchez Energy Corp., left, speaks at the...Read More
> 
> Drillers are pushing to maintain the pace of the unprecedented 39 percent gain in U.S. oil production since the end of 2011. Yet achieving U.S. energy self-sufficiency depends on easy credit and oil prices high enough to cover well costs. Even with crude above $100 a barrel, shale producers are spending money faster than they make it.
> 
> *Missed Forecasts*
> Companies are showing the strain. Chesapeake Energy Corp., the Oklahoma City-based company founded by Aubrey McClendon, reported profit yesterday that missed analysts’ forecasts by the widest margin in almost two years. Shares declined 4.9 percent. Fort Worth, Texas-based Range Resources Corp. fell 2.3 percent after announcing Feb. 25 that fourth-quarter profit dropped 47 percent. QEP Resources Inc., a Denver-based driller, slid 10 percent after fourth-quarter earnings reported Feb. 25 fell short of analysts’ predictions.
> 
> Rethinking the Ban on Exporting U.S. Oil
> 
> The U.S. oil industry must sprint simply to stay in place. U.S. drillers are expected to spend more than $2.8 trillion by 2035 even though production will peak a decade earlier, the IEA said. The Middle East will spend less than a third of that for three times more crude.
> 
> 
> 
> 
> Photographer: Eddie Seal/Bloomberg
> Floor hands operate an oil rig in the Eagle Ford Shale formation area near Texas.
> 
> *Bulls Crow*
> Shale wells can vary in price. Chesapeake will spend an average of $6.4 million each this year, according an investor presentation last updated yesterday. Houston-based Goodrich Petroleum Corp.will spend up to $13 million on some of its wells, Robert Turnham, president and chief operating officer, said in a Feb. 20 earnings call.
> 
> Bullish analysts and oil executives have reason to crow. While drilling in Iraq could break even at about $20 a barrel, output will be limited by political risks, Ed Morse, global head of commodities research at Citigroup Inc. in New York, said in a January report. By contrast, the break-even price in U.S. shale is estimated at $60 to $80 a barrel, according to the IEA. The price of a barrel hasn’t dipped below $80 since 2012 and has stayed above $90 since May. Costs in the U.S. will continue to fall as drillers get faster and improve results, Morse said.
> 
> *Crude Exports*
> “The U.S. oil and natural gas renaissance is receiving significant investment because return on investment is good and competitive with other opportunities,” Rick Bott, president and chief operating officer of Oklahoma City-based Continental Resources Inc., a pioneer of shale drilling, said in an e-mail. “We’re confident that continued technological advancements will keep the Bakken and other plays at the forefront of investment for the foreseeable future.”
> 
> Harold Hamm, the chairman and chief executive officer of Continental Resources who became a billionaire drilling in North Dakota, told U.S. lawmakers Jan. 30 that the country, which U.S. Energy Information Administration data show supplied 86 percent of its own energy last year, can drill its way to energy independence by 2020. Hamm is leading an effort to get Congress to allow crude exports for the first time since the 1970s.
> 
> U.S. oil production will average 9.2 million barrels a day in 2015, up from 7.4 million last year, according to the EIA, the statistical arm of the U.S. Energy Department. Colorado boosted output by 11 percent in the first 11 months of last year, Wyoming was up 12 percent and Oklahomaadded 24 percent.
> 
> “I don’t see the shale boom coming to an end,” said Andy Lipow, president of Lipow Oil Associates, an energy consulting firm in Houston. “We’re just getting started in places like Colorado, Wyoming and Oklahoma.”
> 
> *Horizontal Wells*
> Sanchez Energy said in a Feb. 19 statement that Sante North 1H isn’t yet finished and the well will produce more oil than the early report suggested. The company said it has 120,000 acres in the Eagle Ford and plans to spend 90 percent of its exploration budget there this year. The company’s shares have risen 63 percent in the past year.
> 
> Traditional wells are bored straight down, like straws stuck into large deposits of crude. Shale is tapped by steering the drill horizontally through layers of oil-rich rock, sometimes for a mile or more. The formation is blasted apart with a high-pressure jet of water, sand and chemicals, a practice called hydraulic fracturing or fracking, to open up cracks that free pockets of trapped fuel. The complexity and materials needed to drill horizontally and blast the rock add to the cost.
> 
> *Yield Little*
> The boom’s boosters have given rise to the misconception that wringing oil and gas from shale can be easily replicated throughout the country, Patzek said. That isn’t the case, he said. Every rock is different. The Bakken shale, along with the neighboring Three Forks formation, covers an area larger than France, according to the IEA. An oil-bearing formation that’s 400 feet (122 meters) thick in one spot may taper off to nothing just a mile away, Patzek said. What works for one well may yield little in a neighboring county.
> 
> The output of shale wells drops faster, too, falling by 60 to 70 percent in the first year alone, according to Austin, Texas-based Drillinginfo Inc. Traditional wells take two years to fall by about 55 percent before flattening out. That forces companies to keep drilling new wells to make up for lost productivity.
> 
> “You keep having to drill more and you keep having to spend more,” said Mark Young, an analyst with London-based Evaluate Energy, which tracks production and its costs.
> 
> *Sweet Spots*
> A prolonged slide in prices below $85 a barrel may put pressure on operators that have struggled to contain costs or that don’t own acreage in the prolific “sweet spots” of the oil fields, said Leonardo Maugeri, a former manager at Rome-based energy company Eni SpA who’s researching the geopolitics of energy at Harvard University’s Belfer Center for Science and International Affairs.
> 
> Companies have boosted well productivity and will continue to whittle down the break-even price, he said. While the boom could survive a brief dip in oil prices, a long slump could slow drilling and cause production to fall swiftly, Maugeri said.
> 
> “To sustain in the short term, the U.S. needs prices at $65 a barrel,” Maugeri said. “That’s a critical level. Below that level, many opportunities will vanish.”
> 
> The U.S. benchmark oil contract for West Texas Intermediate crude for delivery in April 2016 is trading at about $85 a barrel, almost $18 a barrel less than today and still $20 above Maugeri’s threshold.
> 
> *Net Debt*
> Even with crude prices above $100 a barrel, U.S. independent producers will spend $1.50 drilling this year for every dollar they get back from selling oil and gas and will carry debt that is twice as much as annual earnings, said Ryan Oatman, an energy analyst with SunTrust Robinson Humphrey Inc., an investment bank in Houston.
> 
> By contrast, the net debt of Exxon Mobil Corp., the world’s largest energy explorer by market value, is less than half of the cash earned from operations last year. The company will spend 68 cents for every dollar it gets back this year, according to company records and analyst forecasts compiled by Bloomberg.
> 
> So far, oil prices have been high enough to keep investors interested in the potential profits to be made in shale, Oatman said.
> 
> “There is a point at which investors become worried about debt levels and how that spending is going to be financed,” Oatman said. “How do you accelerate and drill without making investors worried about the balance sheet? That’s the key tension in this industry.”



not worry at all. new experience and technology will continue to make shale more profitable in the future

and we got Venezuela going around OPEC and even Russia begging and pleading for oil to go back to above $100 

oil being this low is temporary and will go back to being over $100 in no time can't say the same for countries who bank on coal and iron ore to rebound like Australia 

oil isn't going to last much longer....the Americas hold most of the unconventional oil..soon we will be calling the shots


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## TaiShang

US positioned to lead global growth in 2015 - Global Times

With the year-end approaching, the US is expected to overtake the rest of the world in terms of economic growth next year. That is to say, the world's largest economy will likely grow faster than the previous year and notch a rate of increase greater than all other countries and regions.

Throughout the post-financial crisis era, only 2012 saw the US surpass the rest of the world with its economic expansion, with the pace of growth increasing by 0.719 of a percentage point during that year. This figure stands in stark contrast to economic contractions of 0.778 of a percentage point, 0.433 of a percentage point and 1.126 percentage points for the global, developed- and emerging-market economies respectively. Thanks to the US's strong fundamentals, the International Monetary Fund (IMF) estimates that US economic growth will accelerate 0.939 of a percentage point in 2015, outpacing the global, developed- and emerging-market economies.

Relatively high growth, low inflation and stabilizing employment conditions are likely to be the defining characteristics of the US economy next year. The IMF's 2015 forecast of real GDP growth in the country is 3.093 percent, higher than the historic average of 2.65 percent set since 1980. Meanwhile, inflation is expected to reach 2.126 percent next year, slightly higher than the 2 percent target set by the Federal Reserve; yet considering that this figure is based on overestimated oil prices, real inflation will likely fall short of earlier expectations. In addition, estimated unemployment is at 5.945 percent - though this is higher than pre-crisis levels, it marks a big improvement from the 7.91 percent average set during the height of the crisis.

Behind the country's strong recovery are several important domestic factors.

*Firstly, the US economy has robust endogenous growth momentum.* Although US real GDP contracted 2.1 percent quarter-on-quarter in the first quarter of this year, and later grew by 4.6 percent and 3.5 percent during the second and third quarters respectively, its endogenous growth rates, after the exclusion of confounding factors like inventory fluctuations, international trade and government spending, were 0.87 percent, 3.21 percent and 1.92 percent during the corresponding periods, indicating that recovery has been steady.

*Secondly, problems curbing US consumption have been largely eliminated*. It goes without saying how important consumption is to the US economy. During the first three quarters of 2014, consumption accounted for 1.27 percentage points of US economic growth, a relatively low level compared with the historic average of 2.09 percentage points.

Slowing income growth was one of the primary drags on consumption. Year-on-year growth in disposable per capita income during the first three months of this year was below 3 percent. Yet, the situation has changed, with the disposable income growing faster than 3 percent from April to September. Consequently, the US consumer confidence index has gradually recovered from 80 in March to 89.4 in November, a high not seen since July 2007.

*Thirdly, the US housing market has picked up steam again following a short-term correction*. It wasn't until mid-2012 that the US housing market finally started its post-crisis rebound. However, due to strong expectations of an interest rate hike by the Fed, the rebound trend has struggled to gain momentum. The Standard & Poor's/Case-Shiller 20-city home price index declined for four consecutive months from November 2013 to February 2014 before resuming growth from March to September.

*Fourthly, consistent improvements have been made this year in the US labor market*. The unemployment rate fell from 6.6 percent in January to 5.8 percent in September, while the employment ratio climbed to 59.2 percent from 58.8 percent, with monthly-added-jobs averaging at 269,700, much higher than the historic average of 111,400. Moreover, other indicators such as job vacancy rates and weekly working hours all indicate that there is room available for a further increase in employment.

*Fifthly, US industrial output has undergone robust growth. *The US industrial production index grew by an average of 3.94 percent year-on-year during the first three quarters, while industrial output rose 3.7 percent over the same period compared with a year earlier.

Of course, challenges still exist for the US economy in 2015, including slow growth in labor productivity and a rising savings ratio. However, the real threats to the US economy may come from political and policy uncertainties. With US President Barack Obama's term coming to an end, signs of wavering public support may lead to a more assertive domestic policy approach, which could in term create new risks for the US economy. Additionally, under the leadership of Janet Yellen, the Fed appears hesitant in terms of its decision making, which is likely to create a big source of uncertainty for the US economic recovery.

_The author is a research fellow with Beijing-based think tank Pangoal._

_bizopinion@globaltimes.com.cn_

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## F-22Raptor

http://www.nytimes.com/2014/11/26/b...th-stronger-than-expected-in-3rd-quarter.html

Q3 growth has been revised upwards to 3.9%. This is the strongest 6 month growth period in over a decade.

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## SvenSvensonov

*U.S. economy resilient in Q3 as global growth cools*

The U.S. economy grew at a much faster pace than initially thought in the third quarter, pointing to strengthening fundamentals that should help it weather slowing global demand.

The Commerce Department on Tuesday raised its estimate of GDP growth to a 3.9 percent annual pace from the 3.5 percent rate reported last month, reflecting upward revisions to business and consumer spending, as well as to inventories.

The rise in output followed a 4.6 percent advance in the prior three months to mark the two strongest back-to-back quarters since the second half of 2003. It underscored the economy's resilience against a backdrop of a Japanese recession, an anemic euro zone and a slowing China.

"This report will go some way in providing further confirmation about the sustainability of the current economic recovery," said Millan Mulraine, deputy chief economist at TD Securities in New York.

Economists had expected growth would be trimmed to a 3.3 percent pace. When measured from the income side, the economy grew at its fastest pace since the first quarter of 2012.

But the otherwise upbeat picture was marred somewhat by other data showing consumer confidence sliding to a five-month low and a further moderation in house price gains.

U.S. stocks were little changed while the dollar slipped against a basket of currencies. Prices for U.S. Treasury debt rose marginally.

The ebb in consumer confidence in November was surprising given falling gasoline prices and a firming jobs market.

"Economic growth is strong and getting stronger by the day. The consumer gets it, even if they aren't yet saying it," said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

The third quarter was the fourth out of the past five that the economy has expanded above a 3.5 percent pace, well above the level economists consider to be trend.

Some of the momentum appears to have carried over into the final three months of the year, with data from manufacturing to employment and retail sales suggesting continued strength.

But with inventories rising more than previously estimated in the third quarter, economists expect the pace of restocking to slow, holding growth below a 3 percent pace in the fourth quarter.

*STRONG FUNDAMENTALS*

Highlighting the economy's strong fundamentals, growth in domestic demand was raised to a 3.2 percent pace from the previously reported 2.7 percent rate.

"This is vindication for the Federal Reserve that they downplayed concerns overseas and it's appropriate to speak about rate hikes next year," said Christopher Low, chief economist at FTN Financial in New York.

The U.S. central bank has kept benchmark borrowing costs near zero since December 2008, but is expected to start raising them around the middle of next year.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was revised up to a 2.2 percent pace in the third quarter from the previously reported 1.8 percent rate.

Business spending on equipment was raised to a 10.7 percent rate from a 7.2 percent. While exports grew, the pace was less brisk than previously reported, leaving trade contributing only 0.78 percentage point to GDP growth instead of 1.32 percentage points.

Growth in wages and salaries was revised lower for both the second and third quarters. Economists said that brought the GDP-based wages and salaries measures into line with earnings figures from the government's survey of nonfarm employers.

"This should ease concerns that the Fed was falling behind the curve due to mismeasured wage inflation data," said Michael Feroli, an economist at JPMorgan in New York.

U.S. economy resilient in Q3 as global growth cools| Reuters

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## SvenSvensonov

*Manufacturing in U.S. Grew More Than Projected in November*

*China, Russia, Japan, the EU, much of the rest of the world slows... the US just keeps picking up steam

Manufacturing in the U.S. expanded in November at a faster pace than projected, signaling the world’s largest economy is rising above a global slowdown.

The Institute for Supply Management’s factory index was little changed at 58.7 last month, the second-strongest level since April 2011, compared with 59 in October, the Tempe, Arizona-based group’s reported today. It exceeded the median forecast of 80 economists surveyed by Bloomberg and readings greater than 50 indicate growth.

Orders over the past four months have been the strongest in a decade as growing demand from American consumers makes up for any letdown among foreign customers. Continued progress in the labor market and the plunge in gasoline prices may give Americans an even greater ability to spend in coming months, supporting manufacturing as the year draws to a close.

“Whatever is happening abroad, this sector seems to be shrugging it off,” said Guy Berger, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut, who projected a reading of 58.5. “There’s always the worry that the weakness in growth abroad eventually starts filtering into it but right now it’s not really obvious.”

The median estimate in a Bloomberg survey of economists called for a decline to 58. Projections ranged from 54.5 to 61. Manufacturing accounts for about 12 percent of the economy.

Stocks fell, sending the benchmark indexes lower for a second day, as data showed Chinese manufacturing slowed last month while fewer shoppers showed up for Black Friday sales events. The Standard & Poor’s 500 Index declined 0.5 percent to 2,056.83 at 10:32 a.m. in New York.

*Global Manufacturing*

American producers keep powering ahead at the same time their global competitors slow. Factories in Germany, France and Italy unexpectedly shrank last month, according to purchasing managers’ gauges. An index of Chinese manufacturing fell as mandatory plant shutdowns during the Asia-Pacific Economic Cooperation forum aggravated a pullback in the economy.

One standout internationally was the U.K., where manufacturing growth unexpectedly accelerated in November to the fastest pace in four months as domestic demand strengthened.

The U.S. ISM’s orders index climbed to 66 from 65.8 in October. The 64.6 average over the past four months is the highest for a similar period since early 2004.

Even exports showed improvement, with the gauge advancing to 55 from 51.5 in October.

*Order Backlogs*

Factories are struggling to keep up with demand as the index of bookings waiting to be filled rose to 55, the highest since April, from 53.

Some of the increase in backlogs may be due to inclement weather last month that could have prevented companies from obtaining needed parts. ISM’s supplier deliveries gauge increased to the highest level since February, indicating factories were experiencing more delays in getting materials.

The group’s production gauge barely budged from a 10-year high, decreasing to 64.4 in November from 64.8 the month before.

The measure of factory employment decreased to 54.9 from 55.5 in October.

Lower raw-material costs are another boon for manufacturing. ISM’s prices paid index fell to 44.5, signaling expenses dropped for the first time since July 2013 and by the most since July 2012.

*Customer Inventories*

One potentially dark cloud in the report was that factories’ clients reported they had about enough goods on hand, suggesting bookings may not pick up much more. The customer inventory index rose to 50, the break-even point between having too much and too little stock. That was its highest reading in three years.

Rockwell Automation Inc. (ROK), the Milwaukee-based maker of software for factories, is among companies that are optimistic about prospects for U.S. manufacturing growth in 2015, even if it does moderate from this year’s pace.

“Our sales tend to move best with the actual industrial production growth rates and probably secondarily with what’s going on with general GDP growth,” Chief Financial Officer Theodore Crandall said at a Nov. 20 investor meeting. On a global scale, “what we’re expecting in terms of the healthiest environment in 2015 is the U.S.”

Gross domestic product grew at a 3.9 percent annualized pace in the third quarter following a 4.6 rate in the prior period, marking the strongest six months of growth in more than a decade, according to figures from the Commerce Department.

Consumer spending, which accounts for about 70 percent of the economy, grew at a 2.2 percent annualized rate in the third quarter up from a previously estimated 1.8 percent. The improvement was spread across durable and non-durable goods, including recreational vehicles and restaurant meals.

Business investment in new equipment climbed at a 10.7 percent annualized rate last quarter, revised up from 7.2 percent, last week’s report showed.

From Manufacturing in U.S. Grew More Than Projected in November - Bloomberg

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## F-22Raptor

U.S. economy gets early gift: A surge in jobs - CBS News

The US economy added 321,000 jobs in November. The economy is on track to add the most jobs in a single year since 1999.

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## Solomon2

*Opinion: Why the U.S.’s debt is no longer such a big deal*

Published: Dec 4, 2014 6:10 a.m. ET

*A growing economy means the federal deficit is now a manageable 2.9% of GDP*






By

*HOWARD GOLD*
COLUMNIST

Shhh! Don’t tell anyone, but over the past couple of years, the U.S.’s debt burden, the big issue that swept Tea Party-led Republicans into control of the House of Representatives in 2010, has quietly improved.

According to the Congressional Budget Office, the federal budget deficit was $506 billion for fiscal 2014, which ended in October. That’s about a third the size of the deficit in 2009, in the depths of the Great Recession.

The deficit also has fallen from more than 10% of GDP in fiscal 2009 to only 2.9% of GDP in fiscal 2014. (See the chart below, courtesy of A. Gary Shilling & Co.) That would put the U.S. below the 3% limit at which the European Union requires member countries to take corrective action. The CBO expects us to stay around that level for the next five years.





And although federal debt held by the public should reach 74% of GDP this year — the highest percentage since 1950 — the CBO projects it, too, will remain steady for the rest of the decade.

The big improvement in the federal debt should be a boon to the U.S., which has been a magnet for global capital over the last couple of years.

Still, if we don’t address long-term obligations like Social Security and Medicare, the decade of the 2010s may turn out to be a quiet respite before the retirement of millions of Baby Boomers puts us back in the fiscal soup.

But for now, the improvement is impressive even to economist A. Gary Shilling, one of the few to warn about a housing bubble and impending debt storm long before the financial crisis hit.

“The federal government is recovering faster than the household sector,” he told me, mainly because of the economic rebound.

“You’ve had stronger tax collections, especially in the corporate area,” he explained. “When you’ve had any kind of economic growth, you really have a big jump in tax revenues. Economic growth covers a multitude of sins, and a lack of growth exposes them.”

The other big factor, of course, is that the epic August 2011 debt-ceiling battle between Congressional Republicans and President Obama ultimately led to $1 trillion in cuts in discretionary domestic and defense spending over nearly a decade. The “sequestration” process was legislative sausage making at its ugliest, resulting in a credit rating downgrade and later, a government shutdown. But it did the job: Few other developed countries have been able to cut so much without slowing growth dramatically.

Meanwhile, state and local governments have cut more than 600,000 jobs, which along with higher tax revenues have markedly improved the fiscal condition of even big spending states like New York and California.

Unfortunately, Shilling told me, U.S. households are recovering much more slowly.

Because of the housing and credit bubbles, total household debt (including car loans, credit cards, student loans and home mortgages) doubled from 65% of disposable personal income (DPI) in 1980 to a mind-boggling 130% in 2007. (The chart below was provided by A. Gary Shilling & Co.)





Similarly, the savings rate dropped from 12% of DPI to a minuscule 2% in 2005. Who needed to save money when you could refinance your mortgage and spend your home equity?

The savings rate is up to 5%, and total household debt has fallen to 103% of DPI, Shilling said. Usually it takes a decade for consumers to work off the debt they racked up during a boom.

But now, he said, “you’ve been at this process for six years. At this rate, it would take a lot longer than four years to complete. ... It’s a long way from where I think it’s going.”

Consumers’ deleveraging and stagnant middle-class incomes have depressed consumer spending for all but the affluent. “You no longer have the consumer spending like a drunken sailor,” said Shilling.

But there’s a silver lining. The weak U.S. consumer recovery, combined with another recession in Japan and near-recession in Europe, has helped subdue inflation here. (Read about falling oil and commodity prices.)

That could take the pressure off the Federal Reserve to raise interest rates soon and may improve the federal debt situation even more.

Why? The CBO is projecting 3% Treasury bill rates by 2017 and a 5% 10-year Treasury note by 2018.

Shilling, however, expects the yield on the 10-year to fall to 1%. (Germany, Japan, and Switzerland’s 10-year notes all yield much less than 1%.) But even if rates stayed around current levels, it would mean billions of dollars in additional budgetary relief over what the CBO projects.

The vastly improved fiscal situation may last only a few years, but it’s a big plus for U.S. markets and the U.S. dollar — and another nail in the coffin for the gold bugsand doom-and-gloomers who can add one more item to the long list of things they got really, really wrong.

_Howard R. Gold is a MarketWatch columnist and founder and editor of GoldenEgg Investing, which offers free market commentary and simple, low-cost, low-risk retirement investing plans. Follow him on Twitter @howardrgold._

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## Echo_419

Solomon2 said:


> *Opinion: Why the U.S.’s debt is no longer such a big deal*
> 
> Published: Dec 4, 2014 6:10 a.m. ET
> 
> *A growing economy means the federal deficit is now a manageable 2.9% of GDP*
> 
> 
> 
> 
> 
> By
> 
> *HOWARD GOLD*
> COLUMNIST
> 
> Shhh! Don’t tell anyone, but over the past couple of years, the U.S.’s debt burden, the big issue that swept Tea Party-led Republicans into control of the House of Representatives in 2010, has quietly improved.
> 
> According to the Congressional Budget Office, the federal budget deficit was $506 billion for fiscal 2014, which ended in October. That’s about a third the size of the deficit in 2009, in the depths of the Great Recession.
> 
> The deficit also has fallen from more than 10% of GDP in fiscal 2009 to only 2.9% of GDP in fiscal 2014. (See the chart below, courtesy of A. Gary Shilling & Co.) That would put the U.S. below the 3% limit at which the European Union requires member countries to take corrective action. The CBO expects us to stay around that level for the next five years.
> 
> 
> 
> 
> 
> And although federal debt held by the public should reach 74% of GDP this year — the highest percentage since 1950 — the CBO projects it, too, will remain steady for the rest of the decade.
> 
> The big improvement in the federal debt should be a boon to the U.S., which has been a magnet for global capital over the last couple of years.
> 
> Still, if we don’t address long-term obligations like Social Security and Medicare, the decade of the 2010s may turn out to be a quiet respite before the retirement of millions of Baby Boomers puts us back in the fiscal soup.
> 
> But for now, the improvement is impressive even to economist A. Gary Shilling, one of the few to warn about a housing bubble and impending debt storm long before the financial crisis hit.
> 
> “The federal government is recovering faster than the household sector,” he told me, mainly because of the economic rebound.
> 
> “You’ve had stronger tax collections, especially in the corporate area,” he explained. “When you’ve had any kind of economic growth, you really have a big jump in tax revenues. Economic growth covers a multitude of sins, and a lack of growth exposes them.”
> 
> The other big factor, of course, is that the epic August 2011 debt-ceiling battle between Congressional Republicans and President Obama ultimately led to $1 trillion in cuts in discretionary domestic and defense spending over nearly a decade. The “sequestration” process was legislative sausage making at its ugliest, resulting in a credit rating downgrade and later, a government shutdown. But it did the job: Few other developed countries have been able to cut so much without slowing growth dramatically.
> 
> Meanwhile, state and local governments have cut more than 600,000 jobs, which along with higher tax revenues have markedly improved the fiscal condition of even big spending states like New York and California.
> 
> Unfortunately, Shilling told me, U.S. households are recovering much more slowly.
> 
> Because of the housing and credit bubbles, total household debt (including car loans, credit cards, student loans and home mortgages) doubled from 65% of disposable personal income (DPI) in 1980 to a mind-boggling 130% in 2007. (The chart below was provided by A. Gary Shilling & Co.)
> 
> 
> 
> 
> 
> Similarly, the savings rate dropped from 12% of DPI to a minuscule 2% in 2005. Who needed to save money when you could refinance your mortgage and spend your home equity?
> 
> The savings rate is up to 5%, and total household debt has fallen to 103% of DPI, Shilling said. Usually it takes a decade for consumers to work off the debt they racked up during a boom.
> 
> But now, he said, “you’ve been at this process for six years. At this rate, it would take a lot longer than four years to complete. ... It’s a long way from where I think it’s going.”
> 
> Consumers’ deleveraging and stagnant middle-class incomes have depressed consumer spending for all but the affluent. “You no longer have the consumer spending like a drunken sailor,” said Shilling.
> 
> But there’s a silver lining. The weak U.S. consumer recovery, combined with another recession in Japan and near-recession in Europe, has helped subdue inflation here. (Read about falling oil and commodity prices.)
> 
> That could take the pressure off the Federal Reserve to raise interest rates soon and may improve the federal debt situation even more.
> 
> Why? The CBO is projecting 3% Treasury bill rates by 2017 and a 5% 10-year Treasury note by 2018.
> 
> Shilling, however, expects the yield on the 10-year to fall to 1%. (Germany, Japan, and Switzerland’s 10-year notes all yield much less than 1%.) But even if rates stayed around current levels, it would mean billions of dollars in additional budgetary relief over what the CBO projects.
> 
> The vastly improved fiscal situation may last only a few years, but it’s a big plus for U.S. markets and the U.S. dollar — and another nail in the coffin for the gold bugsand doom-and-gloomers who can add one more item to the long list of things they got really, really wrong.
> 
> _Howard R. Gold is a MarketWatch columnist and founder and editor of GoldenEgg Investing, which offers free market commentary and simple, low-cost, low-risk retirement investing plans. Follow him on Twitter @howardrgold._



Great news for our American Friends


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## F-22Raptor

Economy Grows Most Since ’03 on U.S. Consumer-Spending Gains - Bloomberg

Q3 growth has been revised upwards to 5%. This is the highest growth rate since 2003.


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## Luca1

F-22Raptor said:


> Economy Grows Most Since ’03 on U.S. Consumer-Spending Gains - Bloomberg
> 
> Q3 growth has been revised upwards to 5%. This is the highest growth rate since 2003.



This means that US has greater absolute growth than China in Q3


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## Providence

Luca1 said:


> This means that US has greater absolute growth than China in Q3



Not sure. In nominal terms it might be less. 

For example, if the nominal interest rate offered on a three-year deposit is 4% and the inflation rate over this period is 3%, the investor’s real rate of return would be 1%. While the real rate is low, at least it will preserve the investor’s purchasing power. On the other hand, if the nominal interest rate is, say, 2% in an environment of 3% inflation, the investor’s purchasing power would erode by 1% per annum.

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## Echo_419

Providence said:


> Not sure. In nominal terms it might be less.
> 
> For example, if the nominal interest rate offered on a three-year deposit is 4% and the inflation rate over this period is 3%, the investor’s real rate of return would be 1%. While the real rate is low, at least it will preserve the investor’s purchasing power. On the other hand, if the nominal interest rate is, say, 2% in an environment of 3% inflation, the investor’s purchasing power would erode by 1% per annum.



The Important thing is America is back


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## Providence

Echo_419 said:


> The Important thing is America is back



Contrary to what internet warriors would have you believe, the american dream is intact and our economy has very strong fundamentals. The core inflation and headline inflation for last couple of decades have shown very little variation which has helped our policymakers a lot of elbow room to tackle the short term setbacks.

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## Echo_419

Providence said:


> Contrary to what internet warriors would have you believe, the american dream is intact and our economy has very strong fundamentals. The core inflation and headline inflation for last couple of decades have shown very little variation which has helped our policymakers a lot of elbow room to tackle the short term setbacks.



Indeed to watching to Much RT does that


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## Providence

Check the inflation rate after 1990. It has been decently low and see the variance except probably for 2009. 

This stable inflation rate have let us enjoy several benefits : 


When inflation is low, consumers and businesses are better able to make long-range plans because they know that the purchasing power of their money will hold and will not be steadily eroded year after year.

Low inflation also means lower nominal and real (inflation-adjusted) interest rates. Lower real interest rates reduce the cost of borrowing. This encourages households to buy durable goods, such as houses and autos. It also encourages businesses to invest in order to improve productivity so that they can stay competitive and prosper without steadily having to raise prices.

Sustained low inflation is self-reinforcing. If businesses and individuals are confident that inflation is under long-term control, they do not react as quickly to short-term price pressures by seeking to raise prices and wages. This helps to keep inflation low.


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## RabzonKhan

Sorry haters for ruining your day. 


US economy adds 257,000 jobs in biggest increase since November 2008 | Business | The Guardian

Marks 11th straight month to top 200,000 jobs
Revised November figures show 423,000 jobs created, most since May 2010

Rupert Neate in New York
Friday 6 February 2015

The US economy added 257,000 jobs in January, beating expectations of 230,000 jobs and giving the market renewed confidence in the health of the nation’s economy.

The Labor Department also revised jobs data from for November and December to show 147,000 more jobs were created than previously estimated. The revised figures for November show 423,000 jobs were created – the most since May 2010.


“With today’s strong employment report, we have now seen eleven straight months of job gains above 200,000 – the first time that has happened in nearly two decades,” wrote Jason Furman, chairman of the White House’s council of economic advisers.

The private sector has now added 11.8m jobs over 59 straight months of job growth, extending the longest streak on record.

“*We keep trying to tell everyone that the US economy is enjoying a period of unusual strength; maybe now people will believe us,” said Paul Ashworth, chief US economist at thinktank Capital *Economics*. “The economy is doing so well that it has created more than 1 million additional jobs in the last three months alone. That’s the strongest pace of job growth we’ve seen since 1997.”*

January’s increase was the biggest since November 2008, and the 11th straight month that more than 200,000 new jobs were created – the longest consecutive streak since 1994.

Despite the increase in new jobs, the unemployment rate increased slightly from 5.6% to 5.7%.

*Wages also increased, with average hourly earnings for all employees on private nonfarm payrolls up 12 cents to $24.75, following a decrease of 5 cents in December. Over the last 12 month average wages have increased by 2.2%, up from a previous estimate of 1.9%.*

*David Lamb, senior dealer at the foreign exchange specialists* Fexco*, said: “Seldom do economists get everything they want. Yet today might just be one of those days.*

“America’s straight-A jobs report sent the markets and the dollar soaring – with the Greenback spiking 1% against the euro within minutes. With wages rising and the rate of job creation kicking into overdrive, even the most bearish will struggle to find fault with this latest snapshot of the US economy.”
This strong jobs report raises the probability that the US Federal Reserve may start to raise interest rates, which have been kept near zero since 2008.

“[The] very strong labour market report has put a June rate hike by the Fed back into the picture after a month of rather disappointing data,” Rob Carnell, chief international economist at ING, said. “With wages turning higher, the Fed can justify ignoring the plummeting headline inflation rate, and instead, focus more on core inflation and wages. A little bit of more positive activity data would also help the Fed hawks.
“About the only fly in the ointment in this release was the unemployment rate, and even this is really evidence more of the huge surge in the labour force [up by more than 1m] ... Such a rise is probably statistical noise, but it could also be evidence of greater optimism about the chances of gaining work, and a return to the labour market by marginally inactive people.”

Ashworth added: “Employment growth is clearly on fire and its beginning to put upward pressure on wage growth. The Fed can’t wait much longer in that environment, particularly not when interest rates are starting at near-zero.”

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## RabzonKhan

*Repeal the decades-old oil export ban to help energy renaissance*

By George Baker
March 11, 2015

The ongoing shale oil renaissance and the United States’ abundant natural resources has transformed our energy landscape, allowing American consumers access to affordable fuel supplies and spurring significant investment and job growth across our economy.

But in order for this renaissance to continue, it is critical that lawmakers ensure that U.S. policy keeps pace so that our energy resources are being leveraged to provide the maximum benefit to the nation’s economy and international geopolitical interests.

This point was made clear at a recent House Energy and Commerce subcommittee hearing, where witnesses emphasized the enormous value that the changing dynamics in the global energy markets offered for the U.S. economy and America’s energy security.

*The hearing highlighted the fact that all this historic promise is jeopardized by a little known provision of law that was enacted 40 years ago in the wake of the Arab oil embargo, which restricts the export of domestically produced crude oil. And whatever the merits of this policy may have been then, in this new age of energy abundance, prohibiting the export of America’s excess supply of crude oil no longer makes any practical or political sense.*

*Here’s why.*

*As the global leader in oil and natural gas production – recently surpassing both Russia and Saudi Arabia – the U.S. has turned global energy markets upside down. According to the U.S. Energy Information Administration, we now produce 9.2 million barrels of crude oil each day – the highest annual average in over three decades. Much of this growth is attributed to shale development and the production of light crude oil.*

*However, because much of our domestic crude oil refining capacity is configured to refine heavy grades of crude oil which are largely imported, we now find ourselves in a position where there’s a growing “mismatch” between the oil we produce (light) and the type of oil we can refine (heavy).

Domestically produced light oil has already reduced the volume of imported light oil by three million barrels per day.* However, given the lack of refining capacity to handle the increased production, crude oil inventories are swelling to record levels, creating a glut of light oil that is depressing domestic crude oil prices. This is causing the spread between international (Brent) and domestic (WTI) crude oil prices to widen.

With the restriction on crude oil exports preventing U.S. producers from accessing global markets – while refiners have the ability to buy and sell freely – drilling rigs are being idled, jobs along the supply chain are being lost and the continued growth of the American shale oil renaissance is at risk. 

As for concerns related to gasoline prices, the Subcommittee hearing last week made it quite clear that the reduced cost of domestic crude oil does not translate into lower gasoline prices for U.S. consumers. In fact, every analysis, thought leader and think tank that has weighed-in on this issue acknowledges that the price consumers pay for gasoline here in the U.S. is determined by the higher international crude oil benchmark.
According to ICF International, lifting the ban “could save American consumers up to $5.8 billion per year, on average, over the 2015-2035 period.” * Moreover, while the domestic benefits to modernizing our nation’s energy policy are clear, the influx of U.S. crude oil to the global market would better enable our trading partners and allies to reduce their dependence on less reliable and unfriendly sources of energy.*

*This point was made clear by the White House last month in their National Security Strategy, which noted: “The challenges faced by Ukrainian and European dependence on Russian energy supplies puts a spotlight on the need for an expanded view of energy security.”*

*Our transformation from a period of perceived energy scarcity to one of energy abundance has been nothing short of a game changer for the United States. It has turned global energy markets upside down and positioned the U.S. to become a global energy superpower. For us to take full advantage of this opportunity, however, we first need to repeal the decades old oil export prohibition standing in our way.*


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## Hamartia Antidote

Rabzon said:


> *Repeal the decades-old oil export ban to help energy renaissance*
> 
> By George Baker
> March 11, 2015
> 
> The ongoing shale oil renaissance and the United States’ abundant natural resources has transformed our energy landscape, allowing American consumers access to affordable fuel supplies and spurring significant investment and job growth across our economy.
> 
> But in order for this renaissance to continue, it is critical that lawmakers ensure that U.S. policy keeps pace so that our energy resources are being leveraged to provide the maximum benefit to the nation’s economy and international geopolitical interests.
> 
> This point was made clear at a recent House Energy and Commerce subcommittee hearing, where witnesses emphasized the enormous value that the changing dynamics in the global energy markets offered for the U.S. economy and America’s energy security.
> 
> *The hearing highlighted the fact that all this historic promise is jeopardized by a little known provision of law that was enacted 40 years ago in the wake of the Arab oil embargo, which restricts the export of domestically produced crude oil. And whatever the merits of this policy may have been then, in this new age of energy abundance, prohibiting the export of America’s excess supply of crude oil no longer makes any practical or political sense.*
> 
> *Here’s why.*
> 
> *As the global leader in oil and natural gas production – recently surpassing both Russia and Saudi Arabia – the U.S. has turned global energy markets upside down. According to the U.S. Energy Information Administration, we now produce 9.2 million barrels of crude oil each day – the highest annual average in over three decades. Much of this growth is attributed to shale development and the production of light crude oil.*
> 
> *However, because much of our domestic crude oil refining capacity is configured to refine heavy grades of crude oil which are largely imported, we now find ourselves in a position where there’s a growing “mismatch” between the oil we produce (light) and the type of oil we can refine (heavy).
> 
> Domestically produced light oil has already reduced the volume of imported light oil by three million barrels per day.* However, given the lack of refining capacity to handle the increased production, crude oil inventories are swelling to record levels, creating a glut of light oil that is depressing domestic crude oil prices. This is causing the spread between international (Brent) and domestic (WTI) crude oil prices to widen.
> 
> With the restriction on crude oil exports preventing U.S. producers from accessing global markets – while refiners have the ability to buy and sell freely – drilling rigs are being idled, jobs along the supply chain are being lost and the continued growth of the American shale oil renaissance is at risk.
> 
> As for concerns related to gasoline prices, the Subcommittee hearing last week made it quite clear that the reduced cost of domestic crude oil does not translate into lower gasoline prices for U.S. consumers. In fact, every analysis, thought leader and think tank that has weighed-in on this issue acknowledges that the price consumers pay for gasoline here in the U.S. is determined by the higher international crude oil benchmark.
> According to ICF International, lifting the ban “could save American consumers up to $5.8 billion per year, on average, over the 2015-2035 period.” * Moreover, while the domestic benefits to modernizing our nation’s energy policy are clear, the influx of U.S. crude oil to the global market would better enable our trading partners and allies to reduce their dependence on less reliable and unfriendly sources of energy.*
> 
> *This point was made clear by the White House last month in their National Security Strategy, which noted: “The challenges faced by Ukrainian and European dependence on Russian energy supplies puts a spotlight on the need for an expanded view of energy security.”*
> 
> *Our transformation from a period of perceived energy scarcity to one of energy abundance has been nothing short of a game changer for the United States. It has turned global energy markets upside down and positioned the U.S. to become a global energy superpower. For us to take full advantage of this opportunity, however, we first need to repeal the decades old oil export prohibition standing in our way.*



No bleepin way. It was exporting our oil which caused our fields to go dry in the first place. Which is why we ended up needing to import oil. This writer should be shot.


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## RabzonKhan

Peter C said:


> No bleepin way. It was exporting our oil which caused our fields to go dry in the first place. Which is why we ended up needing to import oil. This writer should be shot.


I am focusing more on the good news. We are producing more crude oil than the Russian and Saudi Arabia.

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## SvenSvensonov

*Surge in R&D Spending Burnishes U.S. Image as Innovation Nation*






Companies in the U.S. are again putting money where their competitive advantage lies: in uncovering the products that will one day change how you work and play.

Corporate spending on research and development rose 6.7 percent in 2014, almost twice the previous year’s gain and the biggest advance since 1996, according to Commerce Department data. The pickup was capped by a 14 percent fourth-quarter surge that signals additional increases are on the way.

The spending could extend the momentum of an era of growth-inducing innovation that produced smartphones and tablet computers, 3-D printers, cloud software that delivers services via the Internet and hydraulic fracturing that is making the U.S. more energy self-sufficient. Combined with what’s still on the drawing board, such initiatives raise the odds productivity will rebound, boosting the standard of living.


“CEOs wouldn’t be paying all these researchers -- which is where the R&D budget primarily flows to -- unless they thought that there was something really interesting going on,” Jason Cummins, chief U.S. economist and head of research in Washington for hedge fund Brevan Howard Inc. “R&D surges like this sow the portents of better productivity growth three, five, 10 years later.”

The U.S. could benefit from such a boost. Employee output per hour has climbed 0.7 percent a year on average since 2011, compared with gains of 2.5 percent from 1990 through 2005, a period encompassing what some economists have called a “productivity miracle.”

*Productivity’s Benefits*
Productivity measures the overall efficiency of the economy and governs how fast it can expand, how much companies can earn and pay their workers, and how much the government can increase its budget.

More research may help rekindle business investment in equipment that has been bogged down since late last year. Orders for non-military capital goods excluding aircraft, a proxy for future spending on new gear, slumped 1.4 percent in February, Commerce Department data showed Wednesday. It marked the sixth straight decrease, the longest stretch since mid-2012.

The pickup in R&D spending last year was paced by well-known names, as 18 companies in the Standard & Poor’s 500 Index boosted such investment by 25 percent or more from 2013, according to data compiled by Bloomberg. The list includes drug-makers such as Pfizer Inc., travel-booking firms Priceline Group Inc. and TripAdvisor Inc., and Apple Inc. and Google Inc.

*Industry Breakdown*
Pharmaceutical companies were some of the biggest spenders on R&D in 2012, running up a $48.1 billion tab, according to the latest data from a survey by the National Science Foundation. The information industry -- including publishing, telecommunications and data processing -- shelled out $46.8 billion, while transportation-equipment makers spent about $42.3 billion.

Caterpillar Inc., the world’s biggest maker of construction machinery, plans to boost R&D spending in 2015 for a third year even as sales probably will decline, Richard Moore, director of investor relations, said at a March 3 industrial conference.

“To remain the leader in the industry, there are some things we need to invest in and make progress on,” Moore said. Such spending will rise about 10 percent from 2014 levels, almost to the $2.5 billion that marked the Peoria, Illinois-based company’s peak in 2012, even as business slips by about 9 percent, he said.

Investors are now rewarding companies looking to the future rather than those using their horde of cash to buy back shares, said Savita Subramanian, head of U.S. equity and quantitative strategy at Bank of America Merrill Lynch in New York.

*Company Out-performance*
Shares of the 190 companies in the S&P 500 that disclosed R&D spending in 2014 outperformed the overall index by 6.1 percentage points, according to Factset data compiled by Bank of America Merrill Lynch analysts.

“Companies are starting to feel maybe a wee bit better about the future, so they are unleashing the purse strings,” said Subramanian. “We hadn’t seen company spending on much of anything until 2014.”

Part of that investment is going toward hiring staff with the skills needed to develop new products, which is contributing to the general improvement in the job market.

Employment at testing laboratories climbed by 4.8 percent in the 12 months ended in January. That’s twice the 2.4 increase in total payrolls over the same period, according to Labor Department figures. Hiring of research and development staff at science and engineering companies rose 2.1 percent in the 12 months through January, the biggest year-to-year gain since January 2009.

*R&D Leader*
The U.S. is a leader in R&D spending in part because some 70 percent of venture capital money is based here, said Subramanian. This is “another good barometer of how innovation-oriented a particular region is,” and shows that America is “hyper-focused” on that investment, even if some of the venture capital money ends up in foreign companies, she said.

The benefits of increased spending on R&D also are likely to help spur sluggish wage growth, Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, wrote in a March 19 research note.

More investment in intellectual property -- which includes software and entertainment in addition to R&D -- should prompt acceleration in incomes in the next couple years, he wrote.

Spending on computer software, which is tallied separately from the government’s R&D category, also has shown a revival. It increased at a 10.1 percent pace in the fourth quarter, its best gain since 2011. That bodes well for productivity as work is streamlined, Sweet wrote.

*Leading Skeptic*
Not everyone is convinced that the U.S. economy has the capability to become more efficient. Robert Gordon, a professor at Northwestern University in Evanston, Illinois, is a leading skeptic that growth has room to run via innovation.

“Diminishing returns have set in,” as the workforce shrinks because of the retirement of baby boomers, educational attainment remains low, inequality widens and federal debt balloons due to entitlement programs, Gordon wrote in a February 2014 research paper titled “The Demise of U.S. Economic Growth.”

Loretta Mester, president of the Federal Reserve Bank of Cleveland, disagrees. She said at a March 9 conference hosted by the National Association for Business Economics in Washington that she’s “not a structural-stagnation kind of person,” citing the theory which argues the economy is trapped in a prolonged period of sub-par growth.

“Productivity growth is low now, but I think it’s going to come back,” Mester said. “It’s hard for me to believe that all of the things going on in the technology realm and the biotechnology realm are not going to lead to stronger productivity and better standards of living for us.”

*Capital Spending*
More research may help rekindle business investment in equipment that has been bogged down since late last year. Orders for non-military capital goods excluding aircraft slumped 1.4 percent in February, according to the Commerce Department. It marked the sixth straight decrease, the longest stretch since mid-2012.

Multinational companies aren’t the only ones looking to grow. About 26 percent of firms with fewer than 500 workers said in February that they planned to boost capital spending in the next three to six months, according to a National Federation of Independent Business survey that included 716 responses. That matched the prior month’s reading for the third-strongest since the last recession ended in December 2007.

“I don’t think all the gains from technology have been exhausted,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York. “The fact that R&D spending is rising is a sign that firms are willing to take risks and all the good things have yet to be invented.”

From Surge in R&D Spending Burnishes U.S. Image as Innovation Nation - Bloomberg Business

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## Víðarr

*California Just Had a Stunning Increase in Solar*

The Golden State produces more utility-scale solar than all the other states combined






California is now the first U.S. state to get 5 percent of its annual utility-scale electricity from the sun. But that's really understating what just happened.

The chart above, released this week by the U.S. Energy Information Administration, shows that in just one year, big solar jumped from 1.9 percent to 5 percent of the state's total power generation. California isn't just producing the most utility-scale solar electricity of any state; it's producing more than all the other states _combined_.

And that's only what the major electricity producers are generating—it doesn't include rooftop solar, in which California is also leading the nation. In small-scale solar, capacity for another 2.3 gigawatts has been installed, according to the California Public Utilities Commission.

Renewable energy, including hydro power and rooftop solar, now constitutes about a third of California's electricity, a remarkable feat accomplished through renewable requirements for utilities and incentives for homeowners.

But even that understates California's recent gains in renewable energy, because even as solar has bloomed, hydroelectric power has been slashed by more than half, by what's been called the state's worst drought in at least 1,200 years.






In California, water has become scarce, but sunshine remains plentiful.

From California Just Had a Stunning Increase in Solar - Bloomberg Business

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## Víðarr

*Here's More Proof the U.S. Economy Is Beating the Rest of the World*

At first glance, the corporate profits data released today by the Commerce Department don't look good. Profits fell by 0.8 percent in 2014 from the prior year, the first decline since the middle of the recession.

Below the surface, however, the weakness was concentrated in earnings from abroad. It's the latest embodiment of the surge in the dollar as the U.S. recovery strengthens. 

Profits originating outside the U.S. dropped by $36.1 billion in the fourth quarter, the biggest decrease since 2008 and the second-biggest since 2002. This would be money earned by big multinational companies, such as Coca-Cola Co. or Wal-Mart Stores Inc., as well as any business that sells goods and services abroad.

Profits from the rest of the world accounted for the smallest share of total corporate earnings since 2006 and have been on the downswing for years.







Meanwhile profits from domestic industries rose by $5.7 billion in the last three months of 2014, the Commerce Department's report showed. While that's not stellar, it was weighed down by a drop in earnings of financial companies. Non-financial industries reported a rise in profits of $18.1 billion.

A weak global picture is part of the problem, as places like Europe, Japan and China all work to reinvigorate their economies, said Gus Faucher, senior economist at PNC Financial Services Group in Pittsburgh. That's been compounded more recently by the stronger dollar, which reduces the value of profits earned abroad, he said.

"Corporate profits from overseas have been falling over the past few years, while at the same time they've continued to rise domestically,'' Faucher said. "It's because of better economic conditions in the United States than we've had overseas."

In the near term, "profits are going to remain under pressure," he said. "We've seen the dollar strengthen further in the first quarter so that's going to be a drag, and growth is still soft" in places like Europe.

From Here's More Proof the U.S. Economy Is Beating the Rest of the World - Bloomberg Business

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## Víðarr

*This New Indicator Shows There's No Bubble Forming in U.S. Housing*

When a parking space in Manhattan costs $136,000 and only 15 percent of San Francisco's homes are affordable for the middle class, it's easy to worry that another housing bubble is around the corner. 

The vast majority of American homeowners have little to fear: A new gauge from Nationwide Insurance in Columbus, Ohio, suggests the national market is in its best shape since 2001 and there's no reason to fear a national downturn, no less a bursting bubble. 

In its first data release, the national Leading Index of Healthy Housing Markets rose to 109.8 in the fourth quarter. Values greater than 100 indicate a robust industry. The index uses local data in 373 metropolitan statistical areas that are underlying drivers of the housing market, including measures on employment changes, demographics and the mortgage market. 

When it comes to predicting bubbles, Nationwide's data is worthy of your attention. It accurately showed signs of unraveling in early 2005, long before the S&P/Case Shiller index of home prices peaked at the end of 2006 . 

The housing market may not improve by leaps and bounds this year, and that's exactly why Americans should feel good, David Berson, Nationwide's chief economist said. 






"There are a lot of markets that are probably growing less rapidly than people would like, but that means they're sustainable, and in the Goldilocks sense they're just right," said Berson. "It's difficult — if you're only growing modestly — to build up imbalances that cause the growth to end, and that's what we're seeing in most of the MSAs today." 

Pittsburgh, Cleveland and Philadelphia were ranked the healthiest cities. Rock-bottom was Bismarck, North Dakota. 

"In Bismarck, the booming-ness is being caused mostly by good economic fundamentals," Berson said. "Still, prices are going up there at an unsustainable rate, and that's why it gets downgraded in our rankings." 






The surge in property values in Bismarck is a case in point for Berson's biggest negative risk for housing this year: Home prices that far outpace income growth.

"Really the only concern I have is that home prices continue to grow too rapidly and make more parts of the country unaffordable," he said. 

Stagnant wage gains have been a thorn in the side of the U.S. economy since the expansion began, with the latest figures showing paychecks are growing at a pace that matches the average since we put the recession behind us in June 2009.

Set those pesky income data aside, though, and it's easy to see why housing is on track for stable, if not awe-inspiring, advances this year. And that's in no small part due to the impressive job gains of late, Berson said. 

"Because the jobs numbers in almost all of the U.S. picked up strongly in the second half of last year, the index looks pretty good almost everywhere."

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## Víðarr

*U.S. Oil Imports From OPEC Have Plunged to a 28-Year Low*

The cartel's struggle for market share isn't going so well






America is the world's biggest oil customer, and OPEC is losing its business—fast.

U.S. imports of oil and petroleum products from OPEC have fallen to a 28-year low, according to data from the Energy Information Administration. The U.S. is pumping more of its own oil, and relying less on OPEC imports than any time since April 1987.

*U.S. Imports of OPEC Oil and Petroleum Products*






In the past six years, U.S. production has increased dramatically, catching global markets off-guard and contributing to the crash in oil prices. Last year, the U.S. surpassed Saudi Arabia to become the world's biggest oil producer.

America's new oil, plus rising imports from Canada, has helped cut OPEC imports by more than half.

Here's another way to look at the data. The chart below shows a close-up of the past 10 years. Each line represents a calendar year of U.S. imports from OPEC. 2014 stands alone in blue—with by far the lowest volume of imports in the decade shown.

*10 Years of OPEC Imports Stacked*






From U.S. Oil Imports From OPEC Have Plunged to a 28-Year Low - Bloomberg Business

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## Víðarr

In the first quarter of every year, we see weak growth due to poor weather (though this year a global slowdown and strong USD aren't helping either).

*U.S. private payrolls, factory data point to weak economic growth*

U.S. private employers added the smallest number of workers in more than a year in March and factory activity hit a near two-year low, fresh signs that economic growth slowed significantly in the first quarter.

Activity braked in the first quarter, held back by bad weather, a strong dollar, weaker overseas demand and a now-settled labor dispute at the country's busy West Coast ports.

"The U.S. economic recovery is continuing to leak momentum. Growth is expected to slow to a crawl in the first quarter," said Millan Mulraine, deputy chief economist at TD Securities in New York.

The ADP National Employment Report on Wednesday showed that private payrolls increased by 189,000 jobs last month, the smallest gain since January 2014.

That was well below economists' expectations for an increase of 225,000. Manufacturing payrolls declined for the first time since January of last year.

The ADP report, which is jointly developed with Moody's Analytics, was released ahead of the government's more comprehensive employment report on Friday.

"There are some good reasons to think that the job growth has slowed, that we're not going to see monthly job gains of 300,000 for a while," said Mark Zandi, chief economist of Moody's Analytics.

While the ADP report is not a very good predictor of nonfarm payrolls, it signals softness in job growth. Employers likely added 245,000 to their payrolls last month after hiring 295,000 workers in February, according to a Reuters survey of economists.

In a separate report, the Institute for Supply Management (ISM) said its national factory activity index fell to 51.5 last month, the lowest reading since May 2013, from 52.9 in February.

A reading above 50 indicates expansion in the manufacturing sector. It was the 28th consecutive headline reading at or above 50. The new orders index eased to 51.8 last month from 52.5 in February, and the employment index fell to 50 from 51.4, both also at 22-month lows.

U.S. stocks fell, while prices for U.S. government debt rose after the data. The dollar was lower against the euro and yen.

*WEAK CONSTRUCTION SPENDING*

Manufacturing has been hurt by a strong dollar and slower demand in Europe and Asia. The dollar has gained 12 percent against the currencies of the main U.S. trading partners since June of last year.

Multinational corporations such as technology giant IBM (IBM.N), semiconductor maker Intel Corp (INTC.O), industrial conglomerate Honeywell (HON.N) and Procter & Gamble (PG.N), the world's largest household products maker, have warned that the dollar will hurt their profits this year.

In addition, lower crude prices have squeezed profits for oil companies, prompting some to either postpone or scrap capital expenditure programs.

The sector, which accounts for about 12 percent of the economy, continues to deal with supply chain disruptions created by the now-resolved labor dispute at the West Coast ports.

Separately on Wednesday, the Commerce Department said construction spending dipped 0.1 percent to an annual rate of $967.2 billion. January's outlays were revised to show a 1.7 percent decline instead of the previously reported 1.1 percent drop.

That could see economists further mark down their first-quarter growth forecasts. Estimates for first-quarter gross domestic product range between a 0.8 percent and 1.2 percent annual pace. The economy expanded at a 2.2 percent rate in the fourth quarter.

Construction spending in February was restrained by a 0.8 percent drop in public construction outlays.

Spending on federal government projects jumped 9 percent, but that was offset by a 1.6 percent plunge in state and local government outlays - the largest portion of the public sector segment.

Spending on private construction projects was up 0.2 percent as a rise in non-residential outlays made up for a decline in spending on home building.

Private residential construction spending fell 0.2 percent, likely due to the disruption from cold and snowy weather in the second half of the month.

From U.S. private payrolls, factory data point to weak economic growth| Reuters


*But then*, it always bounces back...


*U.S. factory activity at five-month high in March: Markit*

Growth in the U.S. manufacturing sector rose to a five-month high in March as output and employment gained, according to an industry report released on Wednesday.

Financial data firm Markit said its final U.S. Manufacturing Purchasing Managers' Index rose to 55.7 in March from 55.1 in February and to its highest since October, when the PMI was 55.9. It also came above the preliminary reading of 55.3.

A reading above 50 indicates growth in the sector.

"The U.S. manufacturing sector is clearly regaining momentum after a slow start to 2015," said Tim Moore, senior economist at Markit.

"Job creation has remained resilient in recent months, and falling raw material costs continue to support operating margins."

The index's output component rose to 58.8 last month from 57.3 in February and better than the flash reading of 58.2.

The index measuring employment growth rose in March to 53.8, just over the preliminary 53.7 reading and above the final 52.8 in February.

Input prices fell at the fastest pace since June 2009, Markit data showed.

From U.S. factory activity at five-month high in March: Markit| Reuters

Except this trend to be cyclical. Weak first quarter growth, strong growth for the remaining three quarters.

Overall the US economy is strong and based on solid fundamentals, we're back.

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## F-22Raptor

King Dollar Reaffirms Its Global Supremacy

Proportion of dollars in global foreign-exchange holdings has risen to its highest level in six years


The proportion of dollars in global foreign-exchange holdings has risen to its highest level in six years, cementing the greenback’s role in the center of the financial system.

Central banks held 62.9% of their reserves in dollars at the end of the fourth quarter, up from 62.3% in the third quarter and marking the highest level since 2009, according to data released Tuesday by the International Monetary Fund. The share held in euros fell to 22.2%, the lowest allocation in 13 years.

The figures show how central banks have ceased efforts to diversify their foreign-exchange reserves away from the dollar amid a plunge in the value of the euro. Because central banks with their large reserves wield unrivaled influence in currency markets, their shift back toward the dollar gives many investors confidence in the greenback’s rally.

In the first quarter, the dollar notched its biggest quarterly percentage gain against the euro since the inception of the common currency in 1999, up 13%. The greenback is trading at 12-year highs against the euro. Late Tuesday in New York, the euro bought $1.0735, compared with $1.0834 Monday.

“If you take a step back and look at the big picture, you see that the dollar is the only true reserve currency out there,” said Jen Nordvig, a managing director at Nomura.

Central banks piled into the euro in the years following its launch, causing some observers to question whether the euro could challenge the dollar’s status as the world’s top reserve currency. The euro’s share in global foreign-exchange reserves hit a peak of nearly 28% in the third quarter of 2009.

The currency lost some appeal in the years following the eurozone’s debt crisis in 2010, when some investors feared the monetary union could disintegrate. Worries about the eurozone’s fate diminished after the European Central Bank pledged to do whatever it takes to protect the union and the currency.

The ECB’s latest moves, however, have proved much more alarming to holders of euros.

The central bank lowered the interest rate on deposits held with it to below zero last June for the first time in history, as it tried to head off a recession. On March 9, the ECB began large-scale purchases of bonds, known as quantitative easing. By buying bonds, the central bank injects euros into the financial system, driving down both the currency’s value and yields on eurozone debt in hopes of fostering lending and spurring economic activity.

Some eurozone bonds are trading at negative yields, which means that investors pay for the privilege of lending money.

“For a while, it may have looked like the eurozone was a safe environment for reserve managers to move into,” said Robert Tipp, chief investment strategist at Prudential Fixed Income, which oversees some $500 billion in assets. But “the mix of negative interest rates and quantitative easing has been quite a potent one.”

With central banks seeking to reduce exposure to the euro’s negative interest rate, few markets offer the “breadth and depth to support the size of their investments besides the dollar,” Mr. Tipp said.

Some analysts cautioned that the latest data show the shift out of euros and into dollars occurring at a slower pace than in the previous quarter, indicating that further gains in the dollar may not be as sharp as they have been in past months. The holdings disclosed in the IMF report don’t include China, which holds the world’s largest currency reserves and doesn’t disclose the composition of its assets.

David Woo, head of global rates and currencies at Bank of America Merrill Lynch in New York, believes the euro’s decline is likely to moderate. He expects the euro to fall to one dollar before the end of this year but not much further.

Mr. Woo said if the euro trades below parity, “it would increase pressure on China to weaken the Chinese yuan,’’ which could lead to another currency war. Mr. Woo said a weaker euro and stronger dollar would put downward pressure on commodities prices and add to deflationary risks globally.

Still, others note that the momentum of central-bank dollar buying may be hard to stop, now that it has started.

Central banks don’t take decisions lightly, said Christopher Sullivan, who oversees $2.45 billion as chief investment officer at the United Nations Federal Credit Union in New York. “Reserve managers are put off by negative interest rates in the euroland. I think the trend of diversifying away from the euro will continue.”

Central banks don’t take decisions lightly, said Christopher Sullivan, who oversees $2.45 billion as chief investment officer at the United Nations Federal Credit Union in New York. “Reserve managers are put off by negative interest rates in the euroland. I think the trend of diversifying away from the euro will continue.”

King Dollar Reaffirms Its Global Supremacy - WSJ

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## Víðarr

F-22Raptor said:


> King Dollar Reaffirms Its Global Supremacy
> 
> Proportion of dollars in global foreign-exchange holdings has risen to its highest level in six years
> 
> 
> The proportion of dollars in global foreign-exchange holdings has risen to its highest level in six years, cementing the greenback’s role in the center of the financial system.
> 
> Central banks held 62.9% of their reserves in dollars at the end of the fourth quarter, up from 62.3% in the third quarter and marking the highest level since 2009, according to data released Tuesday by the International Monetary Fund. The share held in euros fell to 22.2%, the lowest allocation in 13 years.
> 
> The figures show how central banks have ceased efforts to diversify their foreign-exchange reserves away from the dollar amid a plunge in the value of the euro. Because central banks with their large reserves wield unrivaled influence in currency markets, their shift back toward the dollar gives many investors confidence in the greenback’s rally.
> 
> In the first quarter, the dollar notched its biggest quarterly percentage gain against the euro since the inception of the common currency in 1999, up 13%. The greenback is trading at 12-year highs against the euro. Late Tuesday in New York, the euro bought $1.0735, compared with $1.0834 Monday.
> 
> “If you take a step back and look at the big picture, you see that the dollar is the only true reserve currency out there,” said Jen Nordvig, a managing director at Nomura.
> 
> Central banks piled into the euro in the years following its launch, causing some observers to question whether the euro could challenge the dollar’s status as the world’s top reserve currency. The euro’s share in global foreign-exchange reserves hit a peak of nearly 28% in the third quarter of 2009.
> 
> The currency lost some appeal in the years following the eurozone’s debt crisis in 2010, when some investors feared the monetary union could disintegrate. Worries about the eurozone’s fate diminished after the European Central Bank pledged to do whatever it takes to protect the union and the currency.
> 
> The ECB’s latest moves, however, have proved much more alarming to holders of euros.
> 
> The central bank lowered the interest rate on deposits held with it to below zero last June for the first time in history, as it tried to head off a recession. On March 9, the ECB began large-scale purchases of bonds, known as quantitative easing. By buying bonds, the central bank injects euros into the financial system, driving down both the currency’s value and yields on eurozone debt in hopes of fostering lending and spurring economic activity.
> 
> Some eurozone bonds are trading at negative yields, which means that investors pay for the privilege of lending money.
> 
> “For a while, it may have looked like the eurozone was a safe environment for reserve managers to move into,” said Robert Tipp, chief investment strategist at Prudential Fixed Income, which oversees some $500 billion in assets. But “the mix of negative interest rates and quantitative easing has been quite a potent one.”
> 
> With central banks seeking to reduce exposure to the euro’s negative interest rate, few markets offer the “breadth and depth to support the size of their investments besides the dollar,” Mr. Tipp said.
> 
> Some analysts cautioned that the latest data show the shift out of euros and into dollars occurring at a slower pace than in the previous quarter, indicating that further gains in the dollar may not be as sharp as they have been in past months. The holdings disclosed in the IMF report don’t include China, which holds the world’s largest currency reserves and doesn’t disclose the composition of its assets.
> 
> David Woo, head of global rates and currencies at Bank of America Merrill Lynch in New York, believes the euro’s decline is likely to moderate. He expects the euro to fall to one dollar before the end of this year but not much further.
> 
> Mr. Woo said if the euro trades below parity, “it would increase pressure on China to weaken the Chinese yuan,’’ which could lead to another currency war. Mr. Woo said a weaker euro and stronger dollar would put downward pressure on commodities prices and add to deflationary risks globally.
> 
> Still, others note that the momentum of central-bank dollar buying may be hard to stop, now that it has started.
> 
> Central banks don’t take decisions lightly, said Christopher Sullivan, who oversees $2.45 billion as chief investment officer at the United Nations Federal Credit Union in New York. “Reserve managers are put off by negative interest rates in the euroland. I think the trend of diversifying away from the euro will continue.”
> 
> Central banks don’t take decisions lightly, said Christopher Sullivan, who oversees $2.45 billion as chief investment officer at the United Nations Federal Credit Union in New York. “Reserve managers are put off by negative interest rates in the euroland. I think the trend of diversifying away from the euro will continue.”
> 
> King Dollar Reaffirms Its Global Supremacy - WSJ



But, but the Chinese on PDF keep saying the dollar is dead



Nope. Long live King dollar (just stop being so damn strong!!!).

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## F-22Raptor

Víðarr said:


> But, but the Chinese on PDF keep saying the dollar is dead
> 
> 
> 
> Nope. Long live King dollar (just stop being so damn strong!!!).



It's not just here, I see it all the time on the net. It gets old after awhile.

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## Víðarr

*U.S. jobless data boosts labor market picture; trade deficit narrows*

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting the labor market continues to expand at a solid clip even as economic growth has stalled.

Sustained labor market strength supports views that the sharp slowdown in activity is probably temporary. A host of factors ranging from bad weather to a strong dollar has sucked momentum from the economy in the first quarter.

"Today’s report reinforces our view that labor market conditions continue to improve despite recent disappointments in a number of indicators related to GDP growth," said Daniel Silver, an economist at JPMorgan in New York.

Initial claims for state unemployment benefits dropped 20,000 to a seasonally adjusted 268,000 for the week ended March 28, the Labor Department said on Thursday. That was the lowest level since January.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 14,750 to 285,500 last week.

The bullish labor market tone was also underscored by signs that more people are coming off the unemployment benefits rolls.

The number of people still receiving benefits after an initial week of aid fell 88,000 to 2.33 million in the week ended March 21, the lowest reading since December 2000.

The strong labor market should keep the Federal Reserve on track to start raising interest rates this year.

The dollar was weaker against a basket of currencies, while prices for U.S. Treasury debt fell. U.S. stocks opened higher.

While the claims data has no bearing on Friday's March employment report as it falls outside the survey period, it should help allay fears of a long-lasting moderation in growth.

Nonfarm payrolls likely increased 245,000 last month, with the unemployment rate holding steady at a more than 6-1/2-year low of 5.5 percent, according to a Reuters survey of economists.

The economy, which has been hampered by weaker global demand and a now-settled labor dispute at the West Coast ports, as well as a strong dollar and a harsh winter, also got a boost from an unexpected rise in factory orders in February.

In a separate report, the Commerce Department said new orders for manufactured goods increased 0.2 percent, ending six straight months of declines. Orders excluding transportation rose 0.8 percent, the biggest rise in eight months.

First-quarter growth estimates range between a 0.6 percent and 1.7 percent annual pace. The economy grew at a 2.2 percent pace in the fourth quarter.

The growth estimates, however, could be raised as another report from the Commerce Department showed the trade deficit narrowed 16.9 percent to $35.4 billion in February, the smallest since October 2009.

Economists had forecast the trade deficit slipping to $41.2 billion. When adjusted for inflation, the deficit narrowed to $50.8 billion in February from $54.6 billion the prior month.

But the smaller trade deficit is probably temporary given a bullish dollar and weaker global demand.

"We will be looking for imports to pick up in the coming months, as consumer spending gains some momentum in the midst of rising employment levels," said Anthony Karydakis, chief economic strategist at Miller Tabak in New York.

The West Coast ports dispute appears to have slowed the flow of imports and exports. The buoyant dollar, sluggish global demand as well as lower crude oil prices also likely impacted the trade balance in February.

In February, imports tumbled 4.4 percent to $221.7 billion, the lowest since April 2011. Imports of petroleum products were the lowest since September 2004, with the average import price for crude oil at a near six-year low.

Exports fell 1.6 percent to $186.2 billion in February, the smallest since October 2012.

Exports to Canada and Mexico - the main U.S. trading partners - fell in February. Exports to China tumbled 8.9 percent, while those to the European Union were unchanged.

Imports from China plunged 18.1 percent, pushing the politically sensitive U.S.-China trade deficit down 21.2 percent to $22.5 billion.

From U.S. jobless data boosts labor market picture; trade deficit narrows| Reuters

---------------------------------------------------------------------------------------------------------------------------------------------------------

The Spring slowdown will be temporary, even with tepid overseas growth the US outlook is still strong.

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## Víðarr

Not necessarily about the US economy, it will be as the effects of renewables change the US energy picture, but I thought this was interesting none-the-less.

*Obama plugs program to train veterans for solar industry jobs*

President Barack Obama on Friday unveiled an expansion of U.S. government efforts to train military veterans for jobs in the solar power industry during a visit to Utah.

The administration announced a new goal of training 75,000 people to enter the solar work force by 2020. That is an increase from a goal announced last year of training 50,000 workers by the same deadline.

Many of those workers would be veterans, administration officials said.

The Department of Defense plans to have "Solar Ready Vets" programs at 10 bases across the country to train military members who are returning to civilian life for solar jobs.

"It's going to train transitioning military personnel for careers in this growing industry," Obama said of the program during remarks at Hill Air Force Base in Utah, standing near a set of solar panel installations.

Officials declined to provide a figure for what the programs would cost.

Obama plugs program to train veterans for solar industry jobs| Reuters






On Long-Island





At Nellis AFB





US Solar Potential





Increase in Solar Instillation by State in 2014

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## Víðarr

A strengthening USD and the weather are the biggest risks for the US economy right now. As the weather warms up, we'll see increased employment, consumer spending, construction, home sales and just about everything else.

*U.S. jobless claims data point to strengthening labor market*

The number of Americans filing new claims for jobless benefits rose less than expected last week and the four-week moving average of claims hit its lowest level since 2000, suggesting an abrupt slowdown in job growth in March was likely a fluke.

Initial claims for state unemployment benefits increased 14,000 to a seasonally adjusted 281,000 for the week ended April 4, the Labor Department said on Thursday. It was the fifth straight week that claims remained below 300,000, a threshold that is associated with a strengthening labor market.

"The claims data provide no confirmation of the March employment slowdown," said John Ryding, chief economist at RDQ Economics in New York.

U.S. Treasury debt yields rose on the data and also as Greece's 450 million euro loan payment to the International Monetary Fund reduced safety bids for government debt. U.S. stocks edged up at the open while the dollar rose against a basket of currencies.

Job growth slowed sharply in March, with nonfarm payrolls increasing by only 126,000, ending a 12-month stretch of employment gains above 200,000. But with the weakness mostly concentrated in the weather-sensitive leisure and construction sectors, economists downplayed the slowdown.

Last week's tepid employment report joined weak consumer and business spending, industrial production and housing starts data in suggesting the economy grew at a sub-1 percent annual rate in the first quarter.

Activity has been hit by a harsh winter, which is estimated to have chopped as much as seven-tenths of a percentage point from first-quarter growth. A now-settled labor dispute at normally busy ports on the West Coast, softer global demand and a stronger dollar also have weighed on the economy.

Economists had forecast claims rising to 285,000 last week.

A Labor Department analyst said there was nothing unusual in the state-level data. Claims tend to be volatile around Easter because of the shifting nature of the holidays.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 3,000 to 282,250 last week, the lowest level since June 2000.

"If claims remain this low, and we think they might even head lower in the coming weeks, it will be hard to claim there is persistent weakness in the labor market," said Guy Berger, an economist at RBS in Stamford Connecticut.

The Federal Reserve is watching the jobs market as it contemplates raising interest rates this year.

The claims report also showed the number of people still receiving benefits after an initial week of aid fell 23,000 to 2.30 million in the week ended March 28. That was the lowest level since December 2000.

The labor market strength was underscored by a report on Tuesday showing job openings surging to a 14-year high in February and less competition for jobs among the unemployed.

A separate report on Thursday from the Commerce Department showed wholesale inventories rose in February as sales remained weak, suggesting wholesalers might have little incentive to aggressively restock warehouses in coming months.

Stocks at wholesalers gained 0.3 percent after advancing 0.4 percent in January. Sales fell 0.2 percent in February after declining 3.6 percent the prior month.

At February's sales pace it would take wholesalers 1.29 months to clear shelves, unchanged from January.

U.S. jobless claims data point to strengthening labor market| Reuters

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## Hasbara Buster

*AIIB and BRICS Bank Pose Threat to Bretton-Woods Dollar System – Engdahl*

The rapid rise of the AIIB was foreseeable: the world's emerging economies got really frustrated when the US-dominated Bretton Woods institutions disregarded them as a "group of banana republics," F. William Engdahl noted.





China-Led Development Bank Establishes New Multipolar Economic Order

Washington's policy makers have been ignoring the needs of the world's emerging economies for too long, treating them as a group of banana republics, noted F. William Engdahl, a historian and researcher, adding ironically – "they haven't had their eyes checked since 1944 apparently."

"At the 2014 BRICS summit in Fortaleza, Brazil, the five heads of state declared bluntly, "We remain disappointed and seriously concerned with the current non-implementation of the 2010 International Monetary Fund reforms, which negatively impacts on the IMF's legitimacy, credibility and effectiveness," the historian pointed out.

Indeed, in 2010 China, Brazil and other fast-emerging countries proposed a reform pledging to double the funds of the IMF in exchange for greater voting rights for such states as China, Russia, India, Brazil and some other countries.





Russia to Play Big Role in China-Led Asian Infrastructure Investment Bank

The emerging powers consider it "manifestly absurd" that IMF voting rights on the Executive Board give France, with a $3 trillion GDP far more voting weight than China with its $10 trillion GDP, or provide Belgium ($500 billion GDP) with greater voting shares than Brazil ($2.2 trillion GDP).

Remarkably, Washington retains a blocking veto share of votes and "is holding on like a pit bull to the old bylaws," the researcher noted.

However, the US Congress refused to reconsider the established status quo of the US-led Bretton Woods institutions and blocked the reform.

Thus far, China and other fast-growing economies decided to create an entirely new global monetary architecture with the Asian Infrastructure Investment Bank (AIIB) at the centerpiece.





China's AIIB Boom Shows US Influence Over Allies Has Limits

The very next move made by the US has once again demonstrated Washington's foreign policy is being run by elites incapable of flexible response: by fiercely opposing the AIIB they "have royally shot themselves in both feet," remarked the author.

The fact that the China-led initiative received global support has shown the impotence of the US-dominated Bretton Woods system.

As BRICS threatens to become an independent global actor, Washington has recently tried to carry out "its usual Color Revolution organized opposition protests," this time against Brazilian President Dilma Rousseff. Alas, it seems such a method is not working as it used to, the researcher pointed out.

Indeed, the AIIB and the BRICS Development Bank poses the greatest threat to the American dollar system and Washington's control over global financial flows since 1944. However, "peace and cooperation is a far more useful way to resolve affairs among civilized nations," the author emphasized.

Read more: http://sputniknews.com/analysis/20150410/1020734705.html#ixzz3Wx0vcqgN


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## RabzonKhan

*Report: Ports contribute $4.6T to US economy*

*By Keith Laing - 04/21/15*

*Ports contribute $4.6 trillion to the U.S. economy, according to a new study released on Tuesday by the American Association of Port Authorities’ (AAPA) *.

*The report, which was conducted by Lancaster, Pa.-based Martin Associates, found that the economic value of ports rose by 43 percent between 2007 and 2014, despite recurring labor issues that have often threatened the flow of cargo packages into the U.S. *

AAPA President Kurt Nagle said Tuesday that the finding show the need for more federal investment in land connections to ports like trucking and freight railways. 

“On the land-side alone, AAPA’s U.S. member ports have identified at least $28.9 billion in needed investments by 2025,” Nagle said in a statement. “These necessary road, rail, bridge and tunnel improvements are crucial to enable our seaports to efficiently handle their expected cargo volumes, continue providing dramatic economic and jobs impacts, and enhance America’s international competitiveness.”
Congress passed a *$12.3 billion* water infrastructure measure in 2013, but the flow of cargo packages was interrupted earlier this year at 29 ports along the West Coast by a labor standoff that required *federal intervention*. 

Lawmakers are debating an extension of a surface transportation funding measure that is scheduled to expire in May, but they are *struggling* to come up with a way to pay for a new round of spending for the infrastructure.

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## Hasbara Buster

*The Dwindling US Economy 

By Paul Craig Roberts*

April 29, 2015 "Information Clearing House" - The announcement today (April 29) of a barely positive GDP first quarter 2015 growth rate of 0.2 percent (two-tenths of one percent) is an intentional exaggeration.

Today’s GDP report is the “advance estimate.” There will be two revisions, with the first occurring in one month on May 29.

Although the “consensus estimate,” which is Wall Street’s estimate, declined dramatically over the past month, the consensus estimate was for 1.0 percent.

The BEA’s advance estimate bears the burden of impact on financial markets even though it is the least reliable estimate. Subsequent revisions receive much less attention. Because of its market impact, the advance estimate is fudged by the Bureau of Economic Affairs (BEA) in order not to upset financial markets keyed to the consensus forecast.

All indications are that the first quarter experienced negative GDP growth, that is, a decline from the previous quarter. However, if BEA reported a negative GDP when the financial markets were relying on positive real growth, the government’s Plunge Protection Team might be unable to prevent a substantial market decline.

Therefore, the BEA in its advance estimate reported a barely positive result that kept GDP out of negative territory. This gives financial markets a month to undergo an orderly reduction prior to the first and then second revisions of the advance estimate, or simply to forget the poor performance altogether until the second quarter advance estimate.

Maintaining stability and not shocking financial markets is now ingrained in US economic reporting. No government statistical department wants to be blamed for crashing the financial markets. So bad news leaks in slowly if at all.

Indications are that the second quarter 2015 will also have negative GDP growth, that is, a further decline. As John Williams (shadowstats.com) is likely correct that there has been no recovery from the prior recession, just bottom bouncing with stock and bond markets driven by the Fed’s outpouring of liquidity, the first half of 2015 will signal a second downturn in the US economy which is collapsing as a result of jobs offshoring and a deregulated financial system.

The real economic outlook, which will emerge from BEA in a month or two, should be obvious to anyone who had the introductory course to macroeconomics. The economy depends on consumer spending. Consumers have two ways of spending more. One way is from rising incomes. The other way is from rising consumer debt.

With the advent of jobs offshoring, real median family incomes ceased to rise. The ability of consumers to substitute larger debt burdens for the missing growth in their real incomes was used up by Federal Reserve chairman Alan Greenspan’s policy of expanding consumer debt in order to fill in for the missing growth in consumer income. Today consumer debt levels are too high for consumers to incur more debt. The only element of consumer debt showing an increase is student loans.

The offshored jobs were not replaced with the promised “New Economy” jobs. No one has seen any sign of the mythical New Economy jobs. The “New Economy” is the transformation of the once powerful US economy into a third world labor force where new jobs exist only in domestic non-tradable services (services that cannot be exported) such as retail clerks, hospital orderlies, waitresses, and bartenders. As there are not enough of these jobs to go around, the labor force participation rate has dropped sharply.

The United States is an economic basket case. Washington has given away the US economy to Asian countries with lower labor costs. The owners and mangers of capital have benefitted, but the vast bulk of Americans have suffered. As capital’s owners and managers are not sufficiently numerous to drive the economy with their expenditures, the fabled American economy is no more.

What will bring the US economy out of the second leg of the downturn? If massive federal budget deficits and zero interest rates could not correct the first leg of the downturn, what does fiscal and monetary policy have left in its arsenal?

Â  The Dwindling US EconomyÂ Â Â  :Â Â   Information Clearing House - ICH


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## Transhumanist

*The Comeback of American Consumers*

The Federal Reserve's latest statement contained an unusual hint about their optimism for better economic growth this year.

"Consumer sentiment remains high," the statement said, breaking from the usual drone about recent economic trends.

Sentiment — despite its impressive levels of late — is often too fickle an indicator for central bankers to put much stock in, and its correlation to spending isn't perfect, so the context of the Fed's reference is important. Real disposable incomes rose 6.2 percent in the first quarter, the most in more than two years. Yet so far, consumers are banking much of their cash. 


Fed policy makers' reference to upbeat sentiment suggests their view is that "consumption is going to rebound," said Michael Gapen, chief U.S. economist at Barclays Plc. Put another way, all these high animal spirits are going to pay out in the form of shopping sprees.

Here are three indicators to watch for the consumer comeback.

*1. Personal spending*
Personal consumption expenditures as measured by the Bureau of Economic Analysis has under-performed so far this year, causing some to question whether the windfall from lower prices at the pump was stashed away for good.

The saving rate, or the share of disposable income that the consumer socks away, stands at 5.3 percent as of March. While down from February's 5.7 percent, which was the highest in more than two years, it was the third-best rate since the end of 2012.

The BEA's figure on consumption provides a more complete picture of the purchases that make up about 70 percent of the economy, since it captures spending on services in addition to retail sales. After adjusting for inflation, which generates the figures used to calculate gross domestic product, household spending increased 0.3 percent in March after little change in the prior month. That brought the year-over-year rate down to 2.7 percent from readings of 3.4 percent and 3 percent in January and February, respectively.

"I think Fed officials were disappointed with the pace of consumer spending in the first quarter,'' said Dana Saporta, an economist at Credit Suisse in New York. "In order to feel confident'' that it is time to raise interest rates, "they would have to see a rebound sometime soon.''






*2. Autos*
Vehicle sales in April had a tough time keeping up with the near-breakneck clip of the prior month, industry data showed Friday. Consumers purchased cars and trucks at a 16.46 million annualized rate last month, in line with the average for all of 2014, which was the best performance in eight years. Sales slowed a bit in weather-battered January and February before climbing to a 17.05 million annualized rate in March that was the third-best since 2006.

Auto sales have been a rare reliable bright spot in consumer spending. Fed officials will probably remain comfortable with this industry's data as long as purchases hold above the 16 million rate of annual purchases that the U.S. has seen over the past year.






*3. Homes*
Property sales have been a mixed bag so far in 2015, with new-home purchasesplummeting unexpectedly in March and sales of previously owned homes showing a spirited rebound after two depressing readings to start the year.

While tighter credit conditions after the last recession and limited inventories have held some potential buyers back, recent mortgage purchase applications hint at a solid spring rebound for the industry.

Americans' filings with lenders have shown a robust post-winter jump, with the index holding at 205.4 in the week ended April 2, the highest since June 2013. The Mortgage Bankers Association gauge, which dates to 1990, has averaged 193.8 in this expansion. It reached an all-time high 529.3 in 2005 during the housing bubble.






Economists at Goldman Sachs are projecting "gradual improvement in the housing market" this year, with total (new and existing) home sales rising to 5.51 million from 5.36 million in 2014, according to an April 6 research note.

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## Echo_419

F-22Raptor said:


> King Dollar Reaffirms Its Global Supremacy
> 
> Proportion of dollars in global foreign-exchange holdings has risen to its highest level in six years
> 
> 
> The proportion of dollars in global foreign-exchange holdings has risen to its highest level in six years, cementing the greenback’s role in the center of the financial system.
> 
> Central banks held 62.9% of their reserves in dollars at the end of the fourth quarter, up from 62.3% in the third quarter and marking the highest level since 2009, according to data released Tuesday by the International Monetary Fund. The share held in euros fell to 22.2%, the lowest allocation in 13 years.
> 
> The figures show how central banks have ceased efforts to diversify their foreign-exchange reserves away from the dollar amid a plunge in the value of the euro. Because central banks with their large reserves wield unrivaled influence in currency markets, their shift back toward the dollar gives many investors confidence in the greenback’s rally.
> 
> In the first quarter, the dollar notched its biggest quarterly percentage gain against the euro since the inception of the common currency in 1999, up 13%. The greenback is trading at 12-year highs against the euro. Late Tuesday in New York, the euro bought $1.0735, compared with $1.0834 Monday.
> 
> “If you take a step back and look at the big picture, you see that the dollar is the only true reserve currency out there,” said Jen Nordvig, a managing director at Nomura.
> 
> Central banks piled into the euro in the years following its launch, causing some observers to question whether the euro could challenge the dollar’s status as the world’s top reserve currency. The euro’s share in global foreign-exchange reserves hit a peak of nearly 28% in the third quarter of 2009.
> 
> The currency lost some appeal in the years following the eurozone’s debt crisis in 2010, when some investors feared the monetary union could disintegrate. Worries about the eurozone’s fate diminished after the European Central Bank pledged to do whatever it takes to protect the union and the currency.
> 
> The ECB’s latest moves, however, have proved much more alarming to holders of euros.
> 
> The central bank lowered the interest rate on deposits held with it to below zero last June for the first time in history, as it tried to head off a recession. On March 9, the ECB began large-scale purchases of bonds, known as quantitative easing. By buying bonds, the central bank injects euros into the financial system, driving down both the currency’s value and yields on eurozone debt in hopes of fostering lending and spurring economic activity.
> 
> Some eurozone bonds are trading at negative yields, which means that investors pay for the privilege of lending money.
> 
> “For a while, it may have looked like the eurozone was a safe environment for reserve managers to move into,” said Robert Tipp, chief investment strategist at Prudential Fixed Income, which oversees some $500 billion in assets. But “the mix of negative interest rates and quantitative easing has been quite a potent one.”
> 
> With central banks seeking to reduce exposure to the euro’s negative interest rate, few markets offer the “breadth and depth to support the size of their investments besides the dollar,” Mr. Tipp said.
> 
> Some analysts cautioned that the latest data show the shift out of euros and into dollars occurring at a slower pace than in the previous quarter, indicating that further gains in the dollar may not be as sharp as they have been in past months. The holdings disclosed in the IMF report don’t include China, which holds the world’s largest currency reserves and doesn’t disclose the composition of its assets.
> 
> David Woo, head of global rates and currencies at Bank of America Merrill Lynch in New York, believes the euro’s decline is likely to moderate. He expects the euro to fall to one dollar before the end of this year but not much further.
> 
> Mr. Woo said if the euro trades below parity, “it would increase pressure on China to weaken the Chinese yuan,’’ which could lead to another currency war. Mr. Woo said a weaker euro and stronger dollar would put downward pressure on commodities prices and add to deflationary risks globally.
> 
> Still, others note that the momentum of central-bank dollar buying may be hard to stop, now that it has started.
> 
> Central banks don’t take decisions lightly, said Christopher Sullivan, who oversees $2.45 billion as chief investment officer at the United Nations Federal Credit Union in New York. “Reserve managers are put off by negative interest rates in the euroland. I think the trend of diversifying away from the euro will continue.”
> 
> Central banks don’t take decisions lightly, said Christopher Sullivan, who oversees $2.45 billion as chief investment officer at the United Nations Federal Credit Union in New York. “Reserve managers are put off by negative interest rates in the euroland. I think the trend of diversifying away from the euro will continue.”
> 
> King Dollar Reaffirms Its Global Supremacy - WSJ



I guess many folks here will be disappointed


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## Transhumanist

Hmm, not sure if this is the right place. It only passingly deals with the US energy situation, but even so, it shows solar is a viable alternative for the US that costs an equal amount when compared to other energy production methods.

It's also underutilized in the US. Expansion can bring down costs even further.

*Solar energy enjoys a glowing outlook*







According Deutsche Bank’s recent bullish report on solar power, unsubsidized rooftop solar power costs $0.08 – $0.13 per kilowatthour (kWh) globally, which can be as much as 40 percent below retail electricity prices. As this Reuters graphic shows, Australia’s rate for solar power is $0.15/kWh, less than one-third of electricity’s average price there, making the country an exemplar of grid parity. Meanwhile, in oil-rich countries like Saudi Arabia and the United Arab Emirates, solar is still more expensive than the overall electricity price.

In the United States, the levelized cost of solar energy is $0.17 per kWh, a penny cheaper than electricity’s average price. But solar sees just a faint shadow of the popularity that other power sources enjoy, with solar projects adding up to less than one half of one percent of the megawatthours generated in the U.S.

But proponents of solar energy have reason for optimism according to that Deutsche Bank report: “In markets heavily dependent on coal for electricity generation, the ratio of coal based wholesale electricity to solar electricity cost was 7:1 four years ago. This ratio is now less than 2:1 and could likely approach 1:1 over the next 12-18 months.”

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## Transhumanist

*America’s Oil Drilling Boom Is Sputtering Back to Life*

The oil boom isn’t dead after all.

For the first time in five months, a rig in the Williston Basin, where North Dakota’s Bakken shale formation lies, sputtered back to life and started drilling for crude once again. And then one returned to the Permian Basin, the nation’s biggest oil play, field services contractor Baker Hughes Inc. said Friday.

Shale explorers including EOG Resources Inc. and Pioneer Natural Resources Co. say they’re preparing to bounce back from the deepest and most prolonged slowdown in U.S. oil drilling on record. The country has lost more than half its rigs since October, casualties of a 49 percent slide in crude prices during the last half of 2014. Futures rallied above $60 a barrel earlier this week, and a sudden return to oil fields would threaten to end this fragile recovery.


“You’re inviting a lot of pent-up supply to come back into the market -- not only do you have people drilling again, but you have this fracklog of over 4,000 uncompleted wells,” Harry Tchilinguirian, the head of commodity markets strategy at BNP Paribas SA in London, said by phone. “And then we’re in a situation where the market could easily go back into the mid- $50’s.”

While rigs are returning to some fields, the total U.S. count has continued to decline, falling 11 this week to a four-year low on Friday. The drilling slowdown won’t reach a real bottom for about another month, James Williams, president of energy consultant WTRG Economics, said by phone from London, Arkansas.

*Nearing End*
“This is an indicator that we’re nearing the end of the bust,” he said. “What we’re going to see now are mixed signals from the different basins as we near the bottom of the cycle.”

Carrizo Oil & Gas Inc., Devon Energy Corp. and Chesapeake Energy Corp. all lifted their full-year production outlooks this week. EOG said on May 5 that it plans to increase drilling as soon as crude stabilizes around $65 a barrel, while Pioneer has said it is preparing to deploy more rigs as soon as July.

Morgan Stanley said underlying data show drilling is already picking up in some counties within Texas’s Eagle Ford shale formation and the Permian Basin of Texas and New Mexico.

“Prices are triggering activity that could undermine the U.S. recovery, especially in 2016,” Morgan Stanley analysts including Adam Longson said in an April 27 research note.

The U.S. benchmark West Texas Intermediate oil for June delivery rose 45 cents on Friday to settle at $59.39 a barrel on the New York Mercantile Exchange. Prices advanced 25 percent in April alone, the biggest monthly gain since May 2009.

*Permian Basin*
The Permian will probably be the first basin to bounce back because it’s home to multiple producing zones stacked on top of each other, allowing drillers to tap oil at different depths with the same well, said David Zusman, managing director at Talara Capital Management, which handles $400 million in energy investments.

“There are multistacked pay zones and sweet spots across the basin that make economic sense,” he said by phone. “There’s more optionality associated with the Permian and more likelihood of completing those wells.”

The U.S. rig count may recover to 1,200 to 1,300 should prices rally past $70 a barrel, Allen Gilmer, chief executive officer of the Austin-based energy data provider Drillinginfo, said by phone on May 1. The total rose for three straight days in late April, he said.

“The service companies have responded very quickly in regards to dropping prices, and it has become very attractive, especially for companies with hedged positions, to come back right now before those hedges fall off,” Gilmer said. “We’re a few weeks from the bottom now. You’ll start seeing it build up.”

From America’s Oil Drilling Boom Is Sputtering Back to Life - Bloomberg Business

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## Azizam

*Economic Suicide: Chasing Away The Job-Creating Immigrant Entrepreneurs*

_Written by Samantha Huang, a research assistant at Stanford Law School. She is also completing a degree at Berkeley Law School–where she focuses on the promotion of technology entrepreneurship and innovation through law. This this article represents the views of the author and not necessarily those of Singularity University. _

At the immigration law firm where I worked during graduate school, I saw case after case of extremely talented individuals who, despite their many contributions to the U.S., faced the threat of returning home because of their immigration status. One such case involved the immigration struggles of a highly successful postdoctoral fellow from a top-five university whose work had led to a patent for a medical treatment for metastatic cancer. Another client, the founder of a multimillion dollar high-tech startup, had fallen out of legal status because immigration law lacked clear-cut visa categories for early-stage entrepreneurs. After working on such cases, I periodically would joke to clients that I wasn’t sure if the law firm could help them, as the immigration agency would not even allow cancer curers to remain in the country.

When Vivek Wadhwa invited me to become a researcher for his study on immigrant entrepreneurship, I already had experienced my fair share of visa horror stories faced by talented foreign-born innovators. I consequently came to the project with my own suspicions that immigrants were forgoing the U.S. for other opportunities abroad as the result of the U.S.’s restrictive immigration policy and the weakened state of the economy.

Our research team, supported by Duke University, Stanford University, and the UC Berkeley School of Information, found that for the first time in decades, the rate of expansion of immigrant entrepreneurship has plateaued and even started to decline.Of technology and engineering companies established from 2006 to 2012, the proportion of such companies with at least one founder who was foreign-born has decreased from 25.3% to 24.3%. These findings suggest that high-skilled immigrants have begun to leave the United States for other countries, taking their business with them.

Most alarming are the results from our special analysis of the high-tech hub of Silicon Valley. From the 1970s to early 2000s, the region boasted the greatest growth rates of immigrant entrepreneurship. However, since 2005, the rate of growth of immigrant-founded tech companies in the region has dramatically decreased eight and a half percentage points to 43.9%. As the economic health of Silicon Valley often serves as a litmus test for determining the strength of the U.S. economy, such an astonishing drop in immigrant entrepreneurship may also mean trouble for the nationwide tech industry, which has relied extensively on the contributions of foreign-born innovators.

Notably, not all our findings paint such a bleak picture. While most immigrant groups demonstrated a decline in entrepreneurship rates, Indian and Chinese founders are establishing engineering and technology companies in the U.S. at a higher rate than before. Both groups historically have exhibited a nearly unparalleled level of participation in the U.S. technology industry, and Indians have dominated the Silicon Valley tech scene since the 1990s. Of the total of immigrant-founded companies surveyed in our study, 33.2% possessed Indian founders, compared with 26.0% in 2005. The proportion of Chinese-founded startups increased from 6.9% to 8.1%. Chinese and Indians, the two most visible immigrant groups in the tech industry, appear to have resisted the general trend of stagnation of the rate of immigrant entrepreneurship in the U.S.

However, beyond India and China, the top two immigrant-founder-sending countries, our findings become increasingly complex. The case study of Taiwanese founders is illustrative. In 2005, Taiwanese founders comprised the fourth largest immigrant-founder group. Today they rank twenty-second. This drastic drop in entrepreneurship by Taiwanese immigrants is especially alarming in light of the influential role they have played in the advancement of the U.S.’s component technology field. While we may only speculate about the causes of the decline in Taiwanese entrepreneurs, one compelling explanation is that as Taiwan becomes an increasingly attractive forum for entrepreneurship and innovation, high-skilled Taiwanese have begun to seek out the opportunities available in their home country. The efforts by the Taiwanese government beginning in the 1980s to create the supportive infrastructure necessary for entrepreneurial development finally seem to have stemmed the “brain drain” problem that had once debilitated the country throughout the 1970s and 1980s.

Today the Kauffman Foundation releases the findings of our study, which was headed by Berkeley School of Information Dean AnnaLee Saxenian, Stanford Law School Professor Daniel Siciliano, and Stanford University Rock Center Fellow Vivek Wadhwa. The report shows that we sit on the brink of a historically unprecedented decline in immigrant entrepreneurship. As high-skilled immigrants leave the U.S. for increased opportunities at home, they take their specialized knowledge and businesses elsewhere. In failing to retain them, the U.S. loses many valuable entrepreneurs and innovators. As our study demonstrates, the maintenance and expansion of the 
U.S. economy and tech industry require a serious commitment to immigration law reform. With the process of the reverse brain drain already under way, legislative change must occur sooner rather than later to stop the further loss of tech talent from the U.S.

Vivek Wadhwa has also published a book on this subject, The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent which suggests ways to fix the problem.
_

Why So Many Spelling Bee Champions Are Indian-Americans | Psychology Today_


_---------------------_

Anyone, care to explain the reason?

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## F-22Raptor

Is the U.S. Economy Actually Leaving China Behind?

There is a debate over which country has the world's largest economy. One side cites gross domestic product adjusted for purchasing power parity and puts China on top, while various other indicators show the United States ahead. The claims are used to gauge China's importance, highlight Sino-American competition, and sometimes identify China as a threat.

What is almost never in dispute is that China is rising economically relative to the United States. If China is not ahead yet, it is said, the day is coming when it will be. However, at least one vital indicator casts doubt on that thesis: national wealth. From the beginning of 2008 through the middle of 2014, China may have lost ground to the United States in total wealth.

Despite a slowdown, China is still reporting GDP growth about three times faster than that of the United States, and is thus catching up in annual GDP. Why use wealth and not GDP? To be concise, we have forgotten what GDP is.

Gross Domestic Product is a measure of transactions, whereas the goal of economic development is not more transactions, but more wealth. On Jan. 2 of each year, GDP is tiny, but the economy is not. Economic activity can be measured by GDP, but the size of an economy cannot be - wealth is a far better measure.

Credit Suisse has been measuring net household wealth in most countries since 2000. This is a difficult task, and errors are unavoidable. Nonetheless, Credit Suisse has found consistent numbers from applying comparable methodology over the past 15 years. Further, their figures for the United States are fairly close to the Federal Reserve series on American net private wealth.

At the end of 2000, Credit Suisse put net private American wealth at $42.9 trillion, compared to $4.7 trillion for China: a ratio of more than 9:1. The Credit Suisse numbers do capture China's rise. By 2007, the figures sat at $64.5 trillion and $15.4 trillion, respectively. China's net private wealth had more than tripled, and the size ratio of the two economies had fallen sharply, to well under 5:1.

In 2008, of course, the financial crisis hit. It was seen as speeding up America's decline and paving the way for China's rise. Closing on seven years later, the outcome looks quite different.

The latest Credit Suisse figures are from the middle of 2014. Chinese private wealth stands at $21.4 trillion, and American wealth at $83.7 trillion. It would have obviously been unreasonable to expect Chinese wealth to triple again, but the absolute increase from 2007 to mid-2014 was only $6 trillion, versus $8.75 trillion from 2000 through 2007. China grew only 40 percent over this period.

The financial crisis certainly affected the United States as well. American private wealth growth dropped to 30 percent from 2007 to mid-2014. But the pace at which China is overtaking the United States slowed dramatically, and the size ratio barely budged. From 2007 to mid-2014, the private Chinese economy moved only from 24 percent to 26 percent of the size of the private American economy.

Moreover, the slightly shrinking ratio may be trumped by the absolute wealth gap. This gap rose from $49 trillion to $62 trillion, a bigger expansion than that seen from 2000 to 2007. On this score, China is not catching up - it is losing ground by the trillions.

The world's fixation on GDP, which even China is renouncing, is not a good rebuttal to this point. A better one involves public wealth, as Credit Suisse (and the Fed) only measure private wealth.

Public wealth is much more difficult to measure. American federal debt is well tracked, while state and local debt has ranged from $1.5 trillion to $3 trillion over this period.

But a precise figure for U.S. public sector assets is out of reach. Federal land holdings are a full 28 percent of total U.S. acreage. Depending on how land would be sold and the value of embedded resources, it could be worth less than $2 trillion (land only), or more than $100 trillion (if resource prices stay high for a long time). Land owned by U.S. states adds to that total. Federal and state-owned physical property, primarily buildings, may be worth another $2 trillion.

At the end of 2000, U.S. public debt exceeded $7 trillion. A conservative and very rough estimate of the value of U.S. public assets in 2000 was $5 trillion, putting net U.S. public wealth at about -$2 trillion and total U.S. wealth near $41 trillion. The same rough calculations put total U.S. wealth at approximately $59 trillion in 2007 and close to $72 trillion by mid-2014.

Chinese public debt is not easy to evaluate, beyond the fact that it has grown very rapidly. In 2000, most debt took the form of bank loans, but non-bank finance, known as shadow lending, has since expanded. State-owned enterprises and local governments receive disproportionate credit, though obviously not all. Less important until recently was the central government's fiscal debt.

The Chinese government owns all rural and some urban land, though the value of the land is far lower than its equivalent in the United States, due to land quality and resource depletion. The Chinese state also owns trillions in assets through state-owned enterprises. Combined, gross assets were reportedly worth more than $14 trillion in 2011, and also had been growing. Assets net of debt exceeded $6 trillion in 2013.

Using official data on debt and a very round estimate for public assets in 2000, China's total wealth measured above $7 trillion in 2000, $19 trillion in 2007, and near $28 trillion in mid-2014.

While mixing in the public sector definitely reduces the precision of the estimates, it does take them in the right direction. The gap between the full American and Chinese economies has never been as large as the private sector taken alone indicates.

The revised numbers show China climbing from almost 18 percent of American wealth in 2000 to over 32 percent in 2007 - a truly impressive gain in only seven years. By mid-2014 the figure stood at 39 percent, showing gains that are much slower, but gains nevertheless.

The argument that the United States is pulling away therefore rests on the absolute gap, which rose from $34 trillion, to $40 trillion, to $44 trillion by mid-2014. Here China is not catching up, but rather falling behind at a slower pace. This has enormous practical implications, with the United States still adding trillions more to its national wealth than is China; additional wealth that enables greater economic prosperity, military spending, and global leadership.

Considering GDP in this light actually makes the claim sharper. Which is preferable for policymakers and ordinary people: catching up in the value of economic transactions per year, or having several trillion dollars in additional national wealth? The former is a fairly good sign for economic development, but the latter is the true goal.

The stock market boom in China will accelerate private wealth gains. On the other hand, U.S. debt accumulation is now slower than China's. Looking further down the road, China's economy is plainly slowing (by any measure), while the U.S. outlook is uncertain. The absolute wealth gap rose despite very rapid Chinese expansion from 2000 to 2007. It is $10 trillion larger than it was in 2000. China has done surprising things, but closing this gap with the United States by more than $10 trillion would be one of the most surprising.

There are certainly economic measurements on which China is catching or has caught the United States. But on arguably the most important one, total national wealth, China does not look to be catching up and does not seem to have much prospect of doing so.

Is the U.S. Economy Actually Leaving China Behind? | RealClearWorld

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## Transhumanist

*How the Crazy Cost of NYC and Bay Area Housing Hurts the US Economy*






The cost of housing in New York and San Francisco has long since transcended into the realm of absurdity. But all those quaint, astronomically pricey brownstones and single family homes are part of a healthy national economy, right? Not exactly.

An interesting study titled Why Do Cities Matter?, published today on the National Bureau of Economic Research and pointed out by New York Mag_, _looks at how three cities—New York, San Francisco, and San Jose—impact the overall health of the US economy. The authors studied how these three cities have changed since the mid-1960s, tracking how the increasing demand for workers has contributed to the health of the US economy at large.

*Thanks a lot, Brooklyn Heights*

What they found was startling: Even though the trio of cities had tons of local growth, they’re not contributing to the national economy as much as other smaller cities, like those in the Rust Belt and the South.

According to authors Chang-Tai Hsieh and Enrico Moretti, there’s a fairly simple reason for that: The high price of housing. Even though there’s plenty of demand for workers, there’s essentially no place for them to live, since each of these three cities have strict land-use regulations that have prevented density-enhancing development in key areas.

Take suburban San Jose, for example. It’s near Silicon Valley and San Francisco, and housing is in high demand. But land use restrictions have prevented growth. “In a region with some of the most expensive real estate in the world, surface parking lots, 1-story buildings and underutilized pieces of land are still remarkably common due to land use restrictions,” write the authors.

That lack of housing has effectively placed a stranglehold on the growth of these three cities—which, though they’ve exploded as high value areas, could have contributed much, much more to the health of the US economy if they had more housing.

How much more? The study actually does the math, setting up a scenario where strict land-use regulations were relaxed to the level similar to those in the rest of the country. Such a change would boost growth in the US by a staggering _9.7 percent_. We’d all be making more money.

“In levels, U.S. GDP in 2009 would be 13.5% or $1.95 trillion higher. This amounts to an annual wage increase of $8775 for the average worker,” the authors write.

*So Should We Just Go Wild?*

Such huge numbers lead us to wonder why on Earth these cities haven’t eased up on their land-use laws. On New York Mag, Annie Lowrey aptly describes the adorable townhouses and low-rise architecture of desirable neighborhoods like Park Slope as a “total economic disaster,” which is tough to argue with given the evidence presented in the study.

It’s still worth pointing out that easing up on land-use laws could have multiple unintended consequences for our cities, though. The debate over how deregulation would affect New York’s housing market, for example, has raged since the 1980s. Some critics argue that getting rid of land use regulation would be negative for the poor who benefit from low-income housing in cities and create pockets of extremely poor-quality housing, even if it is more dense. Others say that land-use regulation in the city would actually make housing _more _fair.

In short, it’s a way, way more complex issue than the binary “build nothing or build anything” argument the study tempts us to set up. Cities are complex organisms, and in the end, studying their evolution in retrospect is far easier than predicting it in advance.

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## Transhumanist

*The U.S. Is About to Change the Way It Calculates GDP*

The way some parts of U.S. gross domestic product are calculated are about to change in the wake of the debate over persistently depressed first-quarter growth.

In a blog post published Friday, the Bureau of Economic Analysis listed a series of alterations it will make in seasonally adjusting data used to calculate economic growth. The changes will be implemented with the release of the initial second-quarter GDP estimate on July 30, the BEA said.

Although the agency adjusts its figures for seasonal variations, growth in any given first quarter still tends to be weaker than in the remaining three, economists have found, a sign there may be some bias in the data. It’s a phenomenon economists call “residual seasonality.”

“BEA is aware of the potential for residual seasonality in GDP and its components, and the agency is looking for ways to minimize this phenomenon,” the division said in the post. More information will be available in a BEA Survey of Current Business report scheduled for mid-June publication.

The agency is exploring ways to address possible issues in measures of federal government defense spending, where research has shown that first- and fourth-quarter growth rates are lower on average, the BEA said, reiterating a statement given to Bloomberg published May 18.

It will also start seasonally adjusting some inventory components that currently aren’t, and also some data from the U.S. Census Bureau’s quarterly services survey, it said. The latter should boost the accuracy of consumer spending estimates, it said. The changes to the calculations will cover the period from 2012 to the present.

Additionally, the BEA is reviewing all series that figure into the GDP calculations to find and fix any leftover biases that exist within its current methodology.

From The U.S. Is About to Change the Way It Calculates GDP - Bloomberg Business

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## Transhumanist

I hate to be the bearer of bad news, but a balanced perspective is important.

Persistent first quarter weakness seems to be a new trend for the US economy, fortunately it rarely lingers into the next three, though this year a strong Dollar is exacerbating the problems. Still, growth is expected to pickup.

*Economy in U.S. Shrinks for Third Time Since Expansion Began*

For the third time since the expansion began in June 2009, the U.S. economy suffered a setback.

Gross domestic product shrank at a 0.7 percent annualized rate in the first quarter, revised from a previously reported 0.2 percent gain, according to Commerce Department figures issued Friday in Washington. That’s the weakest reading since frigid winter temperatures derailed growth at the start of 2014.






While bad weather once again probably contributed to last quarter’s slump, other impediments were also at work -- including a swelling trade deficit caused by a strong dollar and plunging investment in oil exploration following the drop in fuel prices. Federal Reserve officials are among those who believe the slowdown will be temporary, helping explain why they are considering raising interest rates later this year.


“The economy slowed in the first quarter but we’ll see an acceleration in the second quarter,” said Michael Gapen, New York-based chief U.S. economist for Barclays Plc. “It keeps the Fed in line for a rate hike in September.”

Other reports Friday showed consumer sentiment fell less than previously estimated this month, while manufacturing in the Chicago region unexpectedly slumped.

Stocks fell as major indexes pared gains for the month. The Standard & Poor’s 500 declined 0.3 percent to 2,114.98 at 12:43 p.m. in New York.

*Survey Results*
The median forecast of 84 economists surveyed by Bloomberg projected GDP would drop at a 0.9 percent rate. Estimates ranged from a decline of 1.2 percent to an increase of 0.2 percent. The economy grew at a 2.2 percent pace from October through December.

Last quarter’s contraction was smaller than the 2.1 percent fall at the start of 2014, when a prolonged patch of bitterly cold temperatures held back the economy. GDP also shrank at a 1.5 percent pace in the first three months of 2011 during the early stages of the recovery from the worst recession since the Great Depression.

Such declines in GDP are rare in economic expansions, pointing to the fragile nature of the current rebound. The economy hasn’t contracted in three different quarters during good times since the 1950s.

The tendency of the first quarter to be persistently weak in recent years has sparked a debate in the economic profession, with the Fed and its regional banks, including San Francisco, jumping into the fray.

*GDP Controversy*
The various research results indicate first-quarter growth has underperformed the rest of the year by about 1.6 percentage points to 1.7 percentage points on average. To some, that suggests there is a statistical bias at work. The Bureau of Economic Analysis this month said it’ll make changes to try to minimize the issue, and take this into account when reporting annual benchmark revisions in July.

The contrast to gains in earnings is only adding fuel to the controversy. Gross domestic income, which shows the money earned by the people, businesses and government agencies whose purchases go into calculating growth, expanded at a 1.4 percent annualized rate in the first quarter, Friday’s report showed.

GDI is seen by some researchers, including a few at the Fed, as a better gauge of the strength of the economy. While income and GDP should theoretically match, the different methods used in calculating the numbers cause them to diverge occasionally.

*GDI, GDP*
“The increase in GDI is pretty consistent with an economy that’s better than the GDP side,” said Aneta Markowska, New York-based chief U.S. economist at Societe Generale, who correctly projected the first-quarter contraction in GDP. “We expect to see a pretty significant bounce-back in the second quarter.”

As part of the benchmark revisions in July, the BEA will issue an additional growth measure taking the average of GDP and GDI.

The revisions to first-quarter GDP issued Friday showed the trade gap widened more than previously estimated, while inventories and consumer spending climbed at a slower pace. That was partly offset by a bigger gain in home building.

While poor weather and merchandise delays due to a labor dispute at West Coast ports were temporary restraints, the damage caused by the plunge in fuel prices and stronger dollar may be longer-lasting.

*Trade Gap*
A widening trade deficit subtracted 1.9 percentage points from growth, the most since 1985, compared with the previously estimated drag of 1.25 points, according to the Commerce Department’s data.

Business investment on wells and mines slumped at a 48.6 percent annualized rate last quarter, the biggest decrease since 2009.

A regional reading on manufacturing Friday raises concern that those headwinds remain. The Institute for Supply Management-Chicago Inc.’s business barometer fell to 46.2 in May from 52.3 the prior month. Readings lower than 50 indicate contraction.

The Commerce Department’s report showed consumer spending was also a little slower than initially calculated, growing at a 1.8 percent annualized rate compared with an initial estimate of 1.9 percent. That followed a 4.4 percent jump in the fourth quarter.

Revisions to incomes showed wages and salaries rose even more than last reported and the saving rate was the highest since the end of 2012, indicating households can unleash some pent-up demand.

*Consumer Sentiment*
Consumer confidence firmed at the end of May, another report showed Friday. The University of Michigan’s final sentiment index for the month came in at 90.7 compared with a preliminary reading of 88.6. Still, it marked the weakest reading in six months.

“The index is still quite high,” Richard Curtin, director of the Michigan Survey of Consumers, said on a conference call after the figures were released. During the latter half of the month, “I expected confidence to inch upward and I still think that is likely over the months ahead.”

The economy is poised to pick up this quarter. A Bloomberg survey of economists in May predicted growth will accelerate to a 2.7 percent pace in April through June, with household consumption expanding 3.2 percent.

*Job Market*
An improving labor market is among reasons consumers may be more willing to spend. Payrolls rebounded in April, as employers added 223,000 jobs after an 85,000 gain in March. The unemployment rate fell to 5.4 percent, the lowest since May 2008. Weekly applications for jobless benefits are hovering just above a 15-year low reached at the end of April.

“The U.S. economy seems well-positioned for continued growth,” Fed Chair Janet Yellen said in a May 22 speech in Providence, Rhode Island. “Households are seeing the benefits of the improving jobs situation.”

If the economy continues to improve as she expects, “it will be appropriate at some point this year” to start raising rates, Yellen said.

The GDP estimate is the second of three for the quarter, with the third release scheduled for June, when more information becomes available.

From Economy in U.S. Shrinks for Third Time Since Expansion Began - Bloomberg Business

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## Transhumanist

*The May Jobs Report in Six Charts*

The economy got some good news today, with a strong Nonfarm Payrolls report for the month of May. Here's a quick rundown of the most important numbers from Bureau of Labor Statistics.

The U.S. economy added 280,000 jobs last month, beating forecasts with a big improvement over April.






However, the unemployment rate did tick back up to 5.5 percent.

(My speculation: Perhaps an increase in the number of recent grads entering the labor force? That would show a confidence in the US economy, and would be reflect on the higher unemployment rate, which counts people who are looking for work but not yet employed.)






But the Labor Force Participation Rate also ticked up, so that's good news.






Average hourly earnings also saw a slight gain. They were up 0.3 percent, another improvement over April's 0.1 percent.






And in yet another slice of good news, the number of long-term unemployed people dipped once gain, down to 28.6 from 29.0 percent.






Finally, here's another break down of the NFP number by industry, since the start of 2008.






From The May Jobs Report in Six Charts - Bloomberg Business

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## Transhumanist

*The Do-It-Yourself Economy Just Hired 1 Million American Entrepreneurs*

Animal spirits are returning to the American workforce.

The number of self-employed workers surged by 370,000 in May, according to the U.S. Labor Department's survey of households released Friday. And nearly 1 million workers have gone to work for themselves since just February.






The report is the latest sign that entrepreneurial activity is on the rise. The number of business startups rose in 32 of the 50 U.S. states last year, the Kansas City, Missouri-based Kauffman Foundation reported Thursday. The Kauffman Index of Startup Activity, which is an indicator of new business creation, had the biggest increase in the past two decades.


"It is evidence of a growing do-it-yourself economy," said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ. "The market for self-employed workers is booming and this is a sign of a pickup in entrepreneurial activity."

Most big companies are focused on cost cutting to lift profits, even in good economic times, so many workers are choosing to go out on their own, Rupkey said.

Every month, the Labor Department puts out two surveys: the establishment survey, which gets most of the attention including the headline number of jobs created, and the household survey, from which the unemployment rate is derived.

Self-employment can mean lots of things: someone who works as a consultant while looking for more stable employment, or a freelance writer, or someone who starts a business with hopes of creating the next Facebook.

The more widely followed establishment survey could be "understating things because new business formation is rising" and some new firms aren't included, said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York.

There is reason for some caution in interpreting the data.

"That is a very volatile series," noted Daniel Silver, a JPMorgan Chase & Co. economist in New York.

And some of the strength could be a reversal from losses during a cold winter, said Jesse Rothstein, a former Labor Department chief economist now at the University of California at Berkeley.

Still, "if it reflects a resurgence in U.S. entrepreneurship, that would be terrific," said Gary Burtless, a Brookings Institution economist in Washington who previously was with the Labor Department. "That is one thing that has been conspicuously missing not only in the current recession, but for even a bit longer."

From The Do-It-Yourself Economy Just Hired 1 Million American Entrepreneurs - Bloomberg Business

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## Echo_419

Transhumanist said:


> I hate to be the bearer of bad news, but a balanced perspective is important.
> 
> Persistent first quarter weakness seems to be a new trend for the US economy, fortunately it rarely lingers into the next three, though this year a strong Dollar is exacerbating the problems. Still, growth is expected to pickup.
> 
> *Economy in U.S. Shrinks for Third Time Since Expansion Began*
> 
> For the third time since the expansion began in June 2009, the U.S. economy suffered a setback.
> 
> Gross domestic product shrank at a 0.7 percent annualized rate in the first quarter, revised from a previously reported 0.2 percent gain, according to Commerce Department figures issued Friday in Washington. That’s the weakest reading since frigid winter temperatures derailed growth at the start of 2014.
> 
> 
> 
> 
> 
> 
> While bad weather once again probably contributed to last quarter’s slump, other impediments were also at work -- including a swelling trade deficit caused by a strong dollar and plunging investment in oil exploration following the drop in fuel prices. Federal Reserve officials are among those who believe the slowdown will be temporary, helping explain why they are considering raising interest rates later this year.
> 
> 
> “The economy slowed in the first quarter but we’ll see an acceleration in the second quarter,” said Michael Gapen, New York-based chief U.S. economist for Barclays Plc. “It keeps the Fed in line for a rate hike in September.”
> 
> Other reports Friday showed consumer sentiment fell less than previously estimated this month, while manufacturing in the Chicago region unexpectedly slumped.
> 
> Stocks fell as major indexes pared gains for the month. The Standard & Poor’s 500 declined 0.3 percent to 2,114.98 at 12:43 p.m. in New York.
> 
> *Survey Results*
> The median forecast of 84 economists surveyed by Bloomberg projected GDP would drop at a 0.9 percent rate. Estimates ranged from a decline of 1.2 percent to an increase of 0.2 percent. The economy grew at a 2.2 percent pace from October through December.
> 
> Last quarter’s contraction was smaller than the 2.1 percent fall at the start of 2014, when a prolonged patch of bitterly cold temperatures held back the economy. GDP also shrank at a 1.5 percent pace in the first three months of 2011 during the early stages of the recovery from the worst recession since the Great Depression.
> 
> Such declines in GDP are rare in economic expansions, pointing to the fragile nature of the current rebound. The economy hasn’t contracted in three different quarters during good times since the 1950s.
> 
> The tendency of the first quarter to be persistently weak in recent years has sparked a debate in the economic profession, with the Fed and its regional banks, including San Francisco, jumping into the fray.
> 
> *GDP Controversy*
> The various research results indicate first-quarter growth has underperformed the rest of the year by about 1.6 percentage points to 1.7 percentage points on average. To some, that suggests there is a statistical bias at work. The Bureau of Economic Analysis this month said it’ll make changes to try to minimize the issue, and take this into account when reporting annual benchmark revisions in July.
> 
> The contrast to gains in earnings is only adding fuel to the controversy. Gross domestic income, which shows the money earned by the people, businesses and government agencies whose purchases go into calculating growth, expanded at a 1.4 percent annualized rate in the first quarter, Friday’s report showed.
> 
> GDI is seen by some researchers, including a few at the Fed, as a better gauge of the strength of the economy. While income and GDP should theoretically match, the different methods used in calculating the numbers cause them to diverge occasionally.
> 
> *GDI, GDP*
> “The increase in GDI is pretty consistent with an economy that’s better than the GDP side,” said Aneta Markowska, New York-based chief U.S. economist at Societe Generale, who correctly projected the first-quarter contraction in GDP. “We expect to see a pretty significant bounce-back in the second quarter.”
> 
> As part of the benchmark revisions in July, the BEA will issue an additional growth measure taking the average of GDP and GDI.
> 
> The revisions to first-quarter GDP issued Friday showed the trade gap widened more than previously estimated, while inventories and consumer spending climbed at a slower pace. That was partly offset by a bigger gain in home building.
> 
> While poor weather and merchandise delays due to a labor dispute at West Coast ports were temporary restraints, the damage caused by the plunge in fuel prices and stronger dollar may be longer-lasting.
> 
> *Trade Gap*
> A widening trade deficit subtracted 1.9 percentage points from growth, the most since 1985, compared with the previously estimated drag of 1.25 points, according to the Commerce Department’s data.
> 
> Business investment on wells and mines slumped at a 48.6 percent annualized rate last quarter, the biggest decrease since 2009.
> 
> A regional reading on manufacturing Friday raises concern that those headwinds remain. The Institute for Supply Management-Chicago Inc.’s business barometer fell to 46.2 in May from 52.3 the prior month. Readings lower than 50 indicate contraction.
> 
> The Commerce Department’s report showed consumer spending was also a little slower than initially calculated, growing at a 1.8 percent annualized rate compared with an initial estimate of 1.9 percent. That followed a 4.4 percent jump in the fourth quarter.
> 
> Revisions to incomes showed wages and salaries rose even more than last reported and the saving rate was the highest since the end of 2012, indicating households can unleash some pent-up demand.
> 
> *Consumer Sentiment*
> Consumer confidence firmed at the end of May, another report showed Friday. The University of Michigan’s final sentiment index for the month came in at 90.7 compared with a preliminary reading of 88.6. Still, it marked the weakest reading in six months.
> 
> “The index is still quite high,” Richard Curtin, director of the Michigan Survey of Consumers, said on a conference call after the figures were released. During the latter half of the month, “I expected confidence to inch upward and I still think that is likely over the months ahead.”
> 
> The economy is poised to pick up this quarter. A Bloomberg survey of economists in May predicted growth will accelerate to a 2.7 percent pace in April through June, with household consumption expanding 3.2 percent.
> 
> *Job Market*
> An improving labor market is among reasons consumers may be more willing to spend. Payrolls rebounded in April, as employers added 223,000 jobs after an 85,000 gain in March. The unemployment rate fell to 5.4 percent, the lowest since May 2008. Weekly applications for jobless benefits are hovering just above a 15-year low reached at the end of April.
> 
> “The U.S. economy seems well-positioned for continued growth,” Fed Chair Janet Yellen said in a May 22 speech in Providence, Rhode Island. “Households are seeing the benefits of the improving jobs situation.”
> 
> If the economy continues to improve as she expects, “it will be appropriate at some point this year” to start raising rates, Yellen said.
> 
> The GDP estimate is the second of three for the quarter, with the third release scheduled for June, when more information becomes available.
> 
> From Economy in U.S. Shrinks for Third Time Since Expansion Began - Bloomberg Business



Sad


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## AMDR

*Housing boomlet furnishes U.S. economy with fresh source of growth*
Housing boomlet furnishes U.S. economy with fresh source of growth - MarketWatch

WASHINGTON (MarketWatch)—The U.S. economy has reached halftime in 2015 and it’s been a low-scoring affair. But the second half of the year could show more razzle-dazzle.

After contracting 0.2% in the first three months of 2015, the economy is on track to grow a solid 2.5% or a bit higher in the second quarter stretching from April to June. And economists polled by MarketWatch predict comfortable 3% growth in the remaining two quarters of the year.

If that’s going to happen, the U.S. housing market probably has to keep setting postrecession highs. Construction of new homes in June was almost 27% higher compared with a year earlier and permits to build additional properties hit an eight-year peak.

“The housing market rebound is showing no signs of slowing down,” said Scott Anderson, chief economist of Bank of the West. “Home builders are in the catbird seat right now.”

Fresh sales figures this week on new and previously owned homes in June will shed more light on the health of the housing industry. The market continues to recover from its worse bust in modern times, with sales still far below their prerecession high.

The current mini-boomlet, if you can call it that, has been driven by a combination of rising urban demand for rental units such as townhouses and apartments and as well as a drop in national vacancy rates to a two-decade low.

Younger millennials have gravitated toward cities and many prefer to rent instead of owning their own homes, a trend hastened in part by tighter mortgage-lending standards. They are also forming more families to create additional demand for housing.

At the same time, strong job creation over the past few years that has shrunk the unemployment rate has allowed more people to set out on their own. Many young people, for example, were forced by financial circumstances to move back in with their parents after the Great Recession. Only recently has the so-called boomerang trend started to reverse.

The benefits of a robust housing market are widespread. Home buyers and renters have to furnish their new living spaces with couches, TVs, beds and the like. Suppliers of building materials such as brick, wood and tiles see an uptick in demand. And home builders, lured by the prospect of higher profits, have to hire more workers. It’s a virtuous cycle.

“Residential construction will provide a big boost to GDP growth in the second quarter, and through the rest of 2015,” said Stuart Hoffman, chief economist at PNC Financial Services.

One obstacle to an improving housing market, surprisingly enough, is a shortage of skilled labor. Many people who used to work in housing industry moved on to other lines of work during the long lean years following the 2006 housing bust. Nor can builders rely as much on immigration given tighter rules and a drop-off in the number of foreigners with construction skills entering the country.

If home builders can’t find enough good help, that will curb construction and create bottlenecks in the busiest areas. Such an outcome could also force prices for available properties high enough to choke off demand. Rental prices have climbed 3.5% over the past year to match the highest rate since late 2008.

For now that’s a more distant worry.

“Housing activity looks set to advance at a stronger pace in the coming quarters, underpinned by stronger wage growth, slowing housing price inflation, and mortgage rates that should remain near their historic lows,” wrote Gregory Daco, head of U.S. economics at Oxford Economics.

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## AMDR

*U.S. leading economic indicator increases solidly*
U.S. leading economic indicator increases solidly| Reuters

A gauge of future U.S. economic activity increased more than expected in June, boosted by a strengthening housing market, suggesting growth will continue to gain momentum for the remainder of the year .

The Conference Board said on Thursday that its Leading Economic Index rose 0.6 percent after an upwardly revised 0.8 percent increase in May.

Economists polled by Reuters had forecast the index rising 0.2 percent last month after May's previously reported 0.7 percent increase.

"The upward trend in the U.S. LEI seems to be gaining more momentum with another large increase in June pointing to continued strength in the economic outlook for the remainder of the year," said Ataman Ozyildirim, director of business cycles and growth research at The Conference Board.

"Housing permits and the interest rate spread drove the latest gain in the LEI, while labor market indicators such as average workweek and initial claims remained unchanged."

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## VCheng

Over $600 million for creating cutting edge photonics devices is just the start:

Biden to announce photonics center in Greece

VP Biden announced the details in town a short while ago. Yeah!

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## AMDR

*US economy posts solid 2.3 percent growth rate in Q2*
US economy posts solid 2.3 percent growth rate in Q2 - Yahoo Finance

WASHINGTON (AP) -- After a harsh winter, the U.S. economy posted a solid rebound in the April-June quarter, led by a surge in consumer spending and a recovery in foreign trade.

The Commerce Department said Thursday that the gross domestic product, the economy's total output of goods and services, expanded at a 2.3 percent annual rate in the second quarter. Moreover, the economy didn't actually contract in the first quarter. The government now says GDP grew 0.6 percent in the first three months of the year instead of shrinking at a 0.2 percent pace.

The healthy spring rebound reflected a big jump in consumer spending and a swing in trade from a significant drag to a small positive for growth.

Economists are looking for growth to strengthen more in the second half of this year to around 3 percent as consumer spending is bolstered by sizable employment gains.

The signs of a strengthening job market and expectations of faster growth ahead help explain why the Federal Reserve appears on track to start raising interest rates this year. On Wednesday, the Fed ended its latest policy meeting by keeping a key rate at a record low near zero, where it's remained since 2008.

The Fed said it still needs to see further gains in the job market and feel reasonably confident that low inflation will move back to its 2 percent target rate.

Many economists think the first rate hike will occur in September. Others think it may take the Fed until the end of the year to conclude that the time is right to increase rates for the first time in nearly a decade.

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## AMDR

*Solid and steady: U.S. economy gains 215,000 jobs in July*
U.S. economy gains 215,000 jobs in July - Aug. 7, 2015
August 07
NEW YORK

America's economy is in good but not great shape this year.

The U.S. economy added 215,000 jobs in July. Economists surveyed by CNNMoney predicted the economy would add 216,000 jobs. Anything above 200,000 is considered very solid.

The unemployment rate stayed the same at 5.3%, which is its lowest point since April 2008, according to the Labor Department. That's considered near full employment.

"Job growth is quite strong," says Jim O'Sullivan, chief economist at High Frequency Economics, a research firm in New York. "This pace of employment growth is clearly strong enough to keep the unemployment rate trending down.

Wage growth -- the missing piece to America's economic progress -- remained sluggish in July. Average hourly earnings only rose 2.1% compared to the prior year. Wage growth is the reason many Americans haven't felt the benefits of the economy's recovery. The Federal Reserve wants to see annual wage growth closer to 3.5%.

"Wage growth numbers are still tame," says O'Sullivan.

*What will the Fed do?* The jobs report is extra important now because the Fed is close to raising its key interest rate for the first time in over nine years. The Fed has said it will only hike rates if it believe the economy is healthy enough, especially for workers. A rate increase would be a good sign for the economy's health, and how far it's come since the recession ended.

Many experts believe this jobs report was strong enough to justify the Fed's first rate hike taking place in September.

"It's good enough to allow the Fed to begin tightening policy," says Jeremy Lawson, senior economist at Standard Life Investments.

Although the Fed wants to see better wage growth before raising rates, wage growth isn't a requirement. The Fed raised its key interest rate in June 2004 when average weekly earnings were 1.7% compared to the prior year, according to the Labor Department. Average weekly earnings in July were 2.4%.

*The takeaway:* Economic growth has been okay this year -- solid but nothing to get excited about. Last year, the economy added 240,000 jobs a month on average between January and July. This year that figure is 178,000 -- a sign that job growth in isn't as stellar.

However, there were some encouraging employment signs in July. The number workers who have part-time jobs but want full-time jobs fell to 6.3 million workers. A drop in the number of these so-called involuntary part-time workersmeans more people are finding full-time (and better paying) jobs.

The black unemployment rate moved down too. It fell to 9.1%, its lowest mark since April 2008. As recently as May, the rate was over 10%. Blacks have suffered from the highest rates of unemployment. More job growth for blacks bodes well for the rest of the job market.

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## anon45

> *Dollar Shakes Off Yuan Shock With Bullish Bets at Six-Month High*
> Kevin Buckland
> August 16, 2015 — 5:10 PM PDTUpdated on August 16, 2015 — 9:19 PM PDT
> 
> The surge in bullish dollar bets to a six-month high has helped the currency as it shakes off declines following China’s shock yuan devaluation.
> 
> The dollar rose against all but one of its major peers Monday, rebounding from its worst week since June, after speculators added to net long positions for an eighth week through Aug. 11, the longest stretch in five years. The move by the People’s Bank of China weighed on the greenback amid speculation the Federal Reserve will delay its first interest-rate increase since 2006.
> 
> “With a September Fed hike priced around a 50 percent probability, any developments that suggest a change in timing are being acted upon,” said Sam Tuck, a senior currency strategist at ANZ Bank New Zealand Ltd. in Auckland. “We still expect the U.S. dollar to continue to appreciate, and are expecting a September hike.”
> 
> 
> The Bloomberg Dollar Spot Index rose 0.1 percent to 1,209.98 at 1:17 p.m. in Tokyo, after falling 0.3 percent last week, the worst performance since the five days ended June 19. It touched an almost five-month high of 1,220.25 on Aug. 7.
> 
> The dollar added 0.2 percent to $1.1090 per euro, and strengthened to 124.39 yen from 124.31.
> 
> Australia’s dollar and New Zealand’s kiwi pared losses Monday after the PBOC set the yuan’s reference rate little changed from Friday. Australia’s currency was at 73.76 U.S. cents from 73.79, while the kiwi fetched 65.38 cents from 65.47.
> 
> National Australia Bank Ltd. cut forecasts for the Aussie for the end of September to 72 U.S. cents from 74 cents, and predicted a bottom of 68 cents at the end of March.
> 
> *Odds Cut*
> Futures traders reduced the odds that the Fed will raise rates in September to as low as 40 percent last week from as high as 54 percent on Aug. 7, based on the assumption that the effective fed funds rate will average 0.375 percent after the first increase. As of Friday, the probability was 48 percent.
> 
> Relative to economist estimates, the U.S. is showing its best performance since February, according to a Bloomberg gauge.
> 
> “September remains our base case for the first rate hike,” RBC Capital Markets LLC analysts, including New York-based chief U.S. economist Tom Porcelli, wrote in a client note dated Aug. 17. “Purely from a fundamental U.S. economic perspective, the events in China are unlikely to impact the U.S. economic data in a significant adverse way. But it should not be lost on anyone that the calculus for the Fed is not that simple.”



Dollar Shakes Off Yuan Shock With Bullish Bets at Six-Month High - Bloomberg Business


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## anon45

Technogaianist said:


> About that stock market correction:
> 
> ...
> 
> *This is the most important chart about the stock market crash*
> 
> This is the most important chart about the stock market crash
> 
> It's easy to freak out over the US stock market crash when you see a CNN front page like this:
> 
> 
> 
> 
> 
> 
> 
> And it is true that global stock markets have had a rough morning. The Dow fell 1,000 points in its first four minutes of trading Monday morning (although it has recovered a good deal since). Still, when you put that drop into context — as economist Justin Wolfers does — you realize that the drop pales in comparison to all the gains the market has made over the past decade.
> 
> 
> 
> 
> 
> 
> So, as the CNN homepage warns (in tiny font that you probably missed the first time): Don't panic. Definitely don't sell off your stocks. Perhaps visit this website. And remember that markets go up and down, and that in the decade-long scheme of things the market still has seen relatively robust growth.
> 
> ...
> 
> My, my, well that sure does make it seem a lot less bad.


Agreed. Unless you have absolutely no choice and will have to declare bankruptcy or you are not confident in the solvency of your investments, it is always a bad idea to sell during a downturn.


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## anon45

Fed weighs global gloom vs. brighter U.S economy as key rate decision looms - MarketWatch

basically a choice between following the market, or following the data.


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## AMDR

*The U.S. Economy Is Just Starting to Tap Into a Big Source of Dry Powder*
The U.S. Economy Is Just Starting to Tap Into a Big Source of Dry Powder - Bloomberg Business

There's a big reason to believe that the U.S. economy will be able to withstand the start of the Fed tightening cycle: There's still plenty of pent up activity in the housing sector. And it's hard to see the U.S. economy running out of steam with this much upside left in residential investment, according to some economists and analysts. 

Going back to the 1940s, the U.S. central bank has never embarked upon a tightening phase with housing having so much room to run to the upside.





Macquarie, Bloomberg
This chart shows residential investment's share of nominal gross domestic product, with the start of the previous six rate hike cycles denoted with a circle.


The severity of the housing bust prompted activity in this sector to stay at depressed levels, even with the Great Recession getting farther away in the rear view mirror.

Residential investment accounts for 3.34 percent of nominal gross domestic product, as of Q2 2015, well below its long-run average of 4.56 percent, as Macquarie analyst David Doyle has observed. The Fed has not initiated a series of rate hikes at a time when residential investment's share of gross domestic product is more than one standard deviation below its long-run average since at least 1970.

"Business cycle expansions are likely when residential investment is low as a share of GDP," wrote Doyle. "Recessions typically only transpire when residential investment becomes elevated as a share of GDP."

While there is plenty of upside for construction activity, the availability of workers to carry this out is more suspect.


Neil Dutta, head of U.S. economics at Renaissance Macro Research in New York, noted that the relative strength of the labor and housing market makes for quite an abnormal dynamic.

"What is interesting about this is that the housing market is accelerating at a time when the labor market is near full employment," he said.

He suggested that any shortage of construction workers could be remedied by displaced mining employees and higher wages to attract additional labor.

The unemployment rate, which dipped to 5.1 percent in August, has rapidly converged upon the Federal Reserve's estimates for the non-accelerating inflation rate of unemployment, which is a range of 5 percent to 5.2 percent. That is, monetary policymakers think that 5 percent is the lowest the unemployment rate can get before inflationary pressures start to arise.

Labor slack has been eliminated at a rapid pace, though broader measures of the health of the jobs market suggest work remains to be done.





Bloomberg
On a recent interview on _BloombergTV_, New River Investment portfolio manager Conor Sen indicated that the U.S. single-family housing market would enjoy a strong secular tailwind over the next 10 to 15 years as millennials formed households and shifted from renting to owning homes.

Sen separately observed that single-family housing starts, as a share of the prime age population (25 to 54 years old), remain at very subdued levels. If single-family starts normalize to 1.25 million, more than 250,000 workers would be needed to erect them, assuming that the ratio between starts and residential construction jobs reverts to what it has averaged since the start of 1985.

Dutta concurred with the demographic support for construction activity, pointing out that children born in the 1980s, when the birth rate was climbing, will make up the next batch of first-time homebuyers. He also noted that cyclical forces, such as easing lending standards and rising homebuilder confidence, buoy the outlook for the sector.

"Bad things do not happen to America when housing is moving up and to the right while Americans are finding jobs," said Dutta.

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## AMDR

*US final Q2 gross domestic product 3.9% vs 3.7% expected*
US final Q2 gross domestic product 3.9% vs 3.7% expected

The U.S. economy expanded more than previously estimated in the second quarter on stronger consumer spending and construction, the second upward revision in a row.

The Commerce Department said on Friday gross domestic productrose at a 3.9 percent annual pace in the April-June quarter, up from the 3.7 percent pace reported last month.

The rise, which beat expectations in a Reuters poll for the third reading of Q2 economic growth to be unchanged at 3.7 percent, was driven by growth in consumer spending, mainly on services like health care and transport.

Consumer spending, which accounts for more than two thirds of U.S. economic activity, was revised up to a 3.6 percent growth pace from the 3.1 percent rate reported in August, helped by cheap gasoline prices and relatively higher house prices boosting household wealth.

Revised construction spending data helped to push up the headline figure, with non-residential fixed investment expanding 4.1 percent in the quarter.

The revisions to second-quarter growth also reflected a smaller accumulation of inventories than earlier estimated, with inventories contributing just 0.02 percentage point to growth rather than adding 0.22 percentage point.

After-tax corporate profits were also stronger in the second quarter than previously thought. Profits after tax with inventory valuation and capital consumption adjustments showed a 2.6 percent rebound from a slump in late 2014 and early 2015, instead of the 1.3 percent increase reported last month.

The data supports the case that the U.S. economy may be gaining enough strength to withstand an increase in benchmark interest rates from record low levels.

The U.S. Federal Reserve last week held off on hiking rates, but Fed Chair Janet Yellen kept the door open to an increase this year in a speech on Thursday night, as long as inflation remains stable and growth is strong enough to boost employment.

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## AMDR

*Trade deal to lift the economy, consumers*
Trade deal to lift the economy, consumers

The sweeping trade deal between the U.S. and 11Pacific Rim nations announced Monday, should boost the U.S. economy and lower consumer prices on some imports, experts say.

The Trans-Pacific partnership, which still faces a long, tough battle in Congress, covers countries that make up 40% of the global economy.

"This agreement is unlikely to be a game changer for the U.S. economy in the short run," says Eswar Pradad, a professor of trade policy at Cornell University. "But it could have significant net positive effects in the long run."

That's because the U.S. currently imposes far fewer trade barriers, such as tariffs, than the other participating nations, providing the nation a bigger upside as those taxes are lowered or eliminated, Prasad says.

For example, the agreement does away with tariffs as high as 59% on U.S. machinery, up to 70% on automotive products and up to 40% on agricultural products such as poultry and fruit, according to the White House.

The deal "will strengthen America's standing in the world and help our industry maintain leadership in the global market," says John Neuffer, head of theSemiconductor Industry Association.

And it would force the participating countries to comply with the same labor and environmental laws that bind the U.S., Prasad says, erasing a key cost advantage those nations currently enjoy. "It certainly levels the playing field."

The agreement also would lower regulatory barriers for U. S. services firms, such as financial and express delivery companies, says C. Fred Bergsten, a senior fellow at thePeterson Institute for International Economics. That's a huge market in which the U.S. has a large trade surplus, in contrast to its yawning deficit in traded goods.

Consumers should gain as well. Reduced tariffs on imports should cut prices by 5% to 10% for some electronics, clothing and auto-parts, Bergsten says. And an agreement to reduce the 12 years of U.S. patent protection for so-called biologic drugs will make cheaper generics available to consumers sooner.

On the other side, the pact would cut or eliminate U.S. tariffs on products such as steel, sugar and textiles for the Pacific Rim countries, which include Japan, Chile, Vietnam,Malaysia and New Zealand, Bergsten says. That would increase competition for domestic companies and could encourage more offshoring of U.S. jobs.

And some U.S. automakers worry that Japan will be motivated to manipulate its currency to lower the costs of Japanese auto imports.

But the U.S. stands to gain far more than it will lose, he says. In a decade, he estimates, the deal will increase the nation's annual exports by $100 billion to $125 billion and its gross domestic product by about $75 billion, adding about half a percentage point to economic growth.

Peterson economists estimate it would add about 650,000 jobs in export-related industries while cutting a similar number of positions in domestic industries that would face more competition from imports. Bergsten says it will result in a net addition of jobs, though he could not be more specific.

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## RabzonKhan

*Strong Growth in Jobs May Encourage Fed to Raise Rates

By NELSON D. SCHWARTZ
NOV. 6, 2015

The American economy added 271,000 jobs in October, the government reported Friday, a very strong showing that makes an interest-rate increase by the Federal Reserve much more likely when policy makers meet next month.

The unemployment rate dipped to 5 percent, from 5.1 percent in September. Average hourly earnings also bounced back, rising 0.4 percent in October after showing no increase in September; that lifted the gain to 2.5 percent over the last 12 months, the healthiest since 2009.

The combination of the surge in job creation, rising wages and the falling unemployment rate all increase the pressure on the Fed to finally move on rates after months of debate and uncertainty amid economic turmoil overseas. It also largely puts to rest any lingering fears of a new recession and suggests that the economy is likely to continue to improve as the nation heads into an election year.
*
“At last, a payroll report which makes sense,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics. After two relatively weak reports that were hard to explain, given other, healthier economic data, he said, “this is consistent with all the advance indicators.”

“Barring a disaster in November,” Mr. Shepherdson said, “rates are going to rise in December.”

*At 5 percent, the unemployment rate is very close to what would normally be considered the threshold for full employment by the Fed and many private economists.*

The slack that built up in the labor market after the recession, however, has altered traditional calculations of how far unemployment can fall before the job market tightens and the risk of inflation rises.

The proportion of Americans who are in the labor force, which fell to a 38-year low of 62.4 percent for September, was unchanged last month.

This week, Janet L. Yellen, the chairwoman of the Fed, told a panel on Capitol Hill that an increase in December was a “live possibility” if the economy continued to perform well.

Ms. Yellen left herself and the rest of the Open Market Committee of the Fed plenty of wiggle room, emphasizing that no decision had been made on whether to raise rates for the first time in nearly a decade. They will have an additional jobs report for November in hand by the time they gather for their last meeting of the year, on Dec. 15 and 16.

But the surprising strength of the economy in October puts the Fed on track to finally bring to an end an eight-year period of near-zero interest rates. Although the initial interest rate increase would be small, most likely a quarter of a percentage point, any increase would represent a new era for investors and borrowers here and abroad.

The Labor Department’s broadest measure of unemployment, which includes workers forced to take part-time jobs because full-time work is unavailable, fell to 9.8 percent in October from 10 percent in September. A year ago, it was over 11 percent.

With the strong October data, economists are already beginning to look beyond the first move to the question of how fast the Fed will have to make subsequent rate increases if the labor market continues to tighten.

“Regardless of the exact timing of the first rate hike, we still believe that the big story next year will be an unexpectedly strong pickup in wage growth and price inflation,” said Paul Ashworth, chief United States economist at Capital Economics. This trend, he said, “will force the Fed into a much more aggressive policy-tightening cycle than the Fed’s projections currently suggest.”

Before the report on Friday, economists had been anticipating a payroll increase of about 180,000 jobs, with the unemployment rate remaining unchanged from September’s level. The Labor Department revised upward the total number of jobs created in August and September by 12,000.

The picture of labor market strength evident in the data sent bond yields surging in the minutes after the release of the report, as traders rapidly adjusted for the likelihood of a December move.

Although a small proportion of total employment, manufacturing has been one source of weakness, losing more than 25,000 jobs over the summer amid softening demand from Asia and other export markets. The mining and logging sector has also been shedding jobs, cutting more than 100,000 positions this year as prices of oil, iron and other commodities have plunged.

Still, many other areas of the economy — like professional and business services, health care, and leisure and hospitality — have been very strong, with employment in each of those three sectors increasing by more than 30,000 jobs in September.

The pattern persisted in October: Factory jobs were unchanged, while mining and logging lost 4,000 positions. Professional and business services, meanwhile, recorded a huge 78,000 increase in jobs. Health care hiring was also robust, with a 56,700 increase.

White-collar employers like Ernst & Young, the accounting and consulting giant, have been on something of a hiring binge. Over the course of the company’s 2016 fiscal year, which began in July, Ernst & Young plans to hire just over 17,000 new employees in the United States, with roughly 10,000 joining straight out of college.

In July, August, and September, the firm added 2,500 more experienced accountants and consultants, said Dan Black, director of recruiting for the Americas.

“Whether it’s dealing with taxes, regulations or technology, our clients want help,” Mr. Black said.

Nearly all the positions, whether entry-level or for more experienced workers, require at least a bachelor’s degree, underscoring how crucial credentials and specialized skills have become in today’s job market.

Starting salaries for holders of newly minted degrees in fields like accounting, finance and computer sciences frequently range above $50,000 or $60,000, Mr. Black said. Veteran workers in hot fields like cloud computing and cybersecurity can command much more.

“For experienced talent, it’s a dogfight,” he said. “In 2008 and 2009, as companies cut back, we had our pick of the litter. Now it’s much more competitive.”

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## RabzonKhan

*U.S. adds 2.65 million jobs in 2015 for 2nd best year since 1999

by Patrick Gillespie*
January 8, 2016

*In the face of global fears, the U.S. economy is still gaining speed.*

American employers added 292,000 jobs in December. Economists surveyed by CNNMoney predicted 211,000 jobs would be added.

For all of 2015, the economy added 2.65 million jobs, the second best year of jobs gains since 1999.

The unemployment rate stayed at 5% for the third straight month. That's near what most economists consider "full employment." Unemployment is down by half from its peak of 10% in 2009.

*Americans saw their paychecks go up too. Wages grew 2.5% in December from a year ago, matching the annual gains in October, which were the best in six years. However, compared to November, wages fell a penny.*






Wages have been one of the last indicators to turn the corner in the U.S. recovery and they're finally gaining momentum. Growth in November was solid too.

"There are a lot of indicators that show the economy continues to move in the right direction," U.S. Secretary of Labor Tom Perez told CNNMoney.

Most business areas added jobs, but the big winners in December were construction, health care and business services. Those three industries accounted for half of December's job gains.

Energy jobs, however, continued to fall as the collapse in oil prices kept up pressure on the industry. The industry cut back 8,000 jobs in December for a total of 130,000 jobs lost for all of 2015.

December's job gains are a reassuring sign that the U.S. economy has shown resiliency in the face of a slowdown in the global economy. Just this week, stock markets around the world panicked on fears that the global slowdown -- led China and falling oil prices -- is worsening.

Despite those headwinds -- which appeared to hold back job growth this summer -- America's economy keeps picking up momentum.

"After slowing in late summer, job growth has reaccelerated," says Sal Guatieri, senior economist at BMO Capital Markets.

The Federal Reserve sees the economy continuing to grow in 2016. In December, it gave its vote of confidence by raising its key interest rate for the first time in nearly a decade. The decision was mainly driven by the job market's progress.

America's economy made major progress on a number of measures last year. More people found full time jobs. The number of people who want a full-time job but can only find a part-time job -- called involuntary part-time workers -- fell by 760,000 workers over the year to 6 million in December. It's down from a peak of 9.2 million workers in 2010.

The number of people unemployed for six months or longer fell by over 600,000 last year too. High levels of long-term unemployed workers and part-time workers in recent years are partially why wage growth has been so sluggish.

Another bright spot was that black workers had an impressive month and year of jobs gains after suffering the most during the recession and recovery. The black unemployment rate fell to 8.3% in December from 9.4% in November. That's still much higher than other demographics but a year ago the black unemployment rate was at 10.4%.

All those signs of progress are reassuring at a time when there's renewed fears about the global economy. When jobs are added, people have more money in the wallets to spend, and American consumers are the major engine behind U.S. economic growth.

This year's gains "should keep the U.S. expansion on track despite downside risks from abroad," says Jesse Hurwtiz, senior U.S. economist at Barclays. On December: "Overall, it was a very strong report."

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## RabzonKhan

*Freight Rail: A (surprisingly) high-tech industry

By Edward R. Hamberger, President and CEO of the Association of American Railroads
02/02/16

When you think of sophisticated ultrasonic detection analysis, Big Data or drones, America’s freight railroads might not spring to mind. But they should. These technologies are just a few of the innovative tools freight railroads are deploying to make America’s freight railroad system safer than ever.*

The freight rail industry knows from experience how innovation cultivates a safer system. Rail accidents and injuries over the past several decades have plummeted as a result of railroads’ sustained and hefty annual private investment in new rail infrastructure, safety research, training and technology.

*All told, the industry has spent approximately $600 billion upgrading, modernizing and maintaining its infrastructure and equipment since 1980. And through 2014, the train accident rate fell 79 percent, and the rail employee injury rate fell 83 percent. *Improvements and enhancements to the overall network create a safer, more efficient railroad, with the benefits reaching customers who rely on freight rail to move their businesses forward.






*Over the last five years, freight railroads have spent about $25 billion annually on the nation’s freight rail network, and these investments will continue so that the network’s infrastructure and technology are second to none. A few examples illustrate how one of America’s most storied modes of transportation is writing new chapters every day:*

*Ultrasound for Rails:* Railroads have long performed safety inspections on track using ultrasound technology similar to what doctors use to see inside the body and diagnose ailments in patients. To speed up the inspection of rails and achieve more precise results, railroads are improving this ultrasound technology with “phased array” detectors. Soon, rail inspectors will be able to look inside a piece of steel from hundreds of angles in a matter of minutes and produce images with a level of microscopic detail that was never before possible. If an otherwise invisible crack is detected, the repair can be proactively scheduled before a problem occurs. Read more.

*Tapping Big Data*: Anticipating problems before they arise is critically important to a safe and efficient rail network and railroads are using Big Data to do just that. Through the Asset Health Strategic Initiative (AHSI), railroads are collaborating in an unprecedented way to identify equipment problems before they occur. Managed by Railinc—a trusted third party in the freight rail industry—AHSI allows railroads and railcar owners to share rail equipment performance information gathered as equipment travels across the entirety of the 140,000-mile rail network, not just on their own individual networks, thereby providing a more holistic view of equipment performance and quicker identification of problems. The ultimate goal, of course, is improving railroad safety and efficiency, and this nascent program is already helping to achieve that, preventing an estimated 1,000-plus service interruptions in 2015. And this is just the beginning; as railroads gather and analyze more and different kinds of data, they will be able to predict and prevent equipment failure in ways never before possible. Read more.

*Safety Drones: Unmanned aerial technology, also known as drones, has the potential to help railroads further monitor the network and its surroundings and keep it safe in new ways. Several Class I freight railroads are exploring the use of drones, including Burlington Northern Sante Fe Railway (BNSF), which is studying the long-range use of drones to monitor hundreds of miles of rail at a time.* The company’s effort is part of an innovative public-private partnership with the Federal Aviation Administration designed to help various industries research the safe use of drones in crowded cities or wide-open spaces. If successful, drones could give railroads a bird’s-eye view to better inspect their lines—particularly when employee safety is at risk. For example, when record flooding hit Texas and Oklahoma in 2015, the waters washed away homes, businesses and infrastructure—including freight railroad tracks. During this time, BNSF flew drones mounted with high-definition video cameras over areas of the flood zone to inspect parts of the rail network that were difficult—or dangerous—to access from the ground. With information about the flood’s effects in hand, BNSF deployed employees where they were needed most to quickly return the rail line to safe operation. Read more.

Of course, technology evolves swiftly these days. This year drones, next year—who knows? That’s why the freight rail industry continues to innovate and invest in technology. Doing so ensures that the United States has the safest and most reliable rail network in the world—one that is always positioned to bring value to freight rail customers while keeping America’s economy moving.


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## RabzonKhan

*How Does the U.S. Economy Compare to the World’s?

Nicholas Vardy| Feb 19, 2016

In the 1970s, Americans grew up with two myths.

The first myth was that the Soviet Union would dominate the U.S. militarily. The second myth was that the Japanese would dominate the U.S. economically.*

With the Soviet Union erased from the present-day map of the world and the Japanese stock market falling to below levels it last traded at in May of 1986, both fears seem almost quaint today.

Yet, until a year ago, the conventional wisdom that Brazil, Russia, India and China — the BRIC countries — were set to dominate the United States was just as compelling.

The U.S. Economic Map: Size Matters

With the U.S. political scene dominated by partisan vitriol, soaring taxes and health care costs and small businesses being crushed by suffocating regulations, it’s worth reminding ourselves where the U.S. economy stands in comparison to the rest of the world today.

Despite the high economic growth rates of developing nations, the United States is by far the world’s wealthiest nation, as measured by gross domestic product (GDP) — the broadest measure of economic wealth.

*The rest of the world doesn’t even come close.

This year, U.S. GDP should hit $18 trillion.*

That means that the U.S. economy is about as large as the next three-largest economies in the world — China, Japan and Germany — combined.

Since 2003, Earl Fry, a professor of Political Science at Brigham Young University, has been producing U.S. maps on a regular basis where the states are renamed with countries that have similar GDP levels.

The 2014 version of the map — puts the size of the United States’ global rivals in perspective.






On the map, the name of each state is replaced by a country whose GDP equals approximately that state’s gross state product (GSP).

A quick glance at the map leads to some fascinating — and unexpected — comparisons.

*If it were a stand-alone country, California would be the eighth-largest economy in the world and approximately the size of Brazil’s economy. Texas’ economy is half the size of California’s and its GSP is comparable to that of Canada. Florida’s GSP is approximately the size of the Netherlands’ economy. Illinois’ economy is approximately the size of Saudi Arabia’s. Pennsylvania’s economy is roughly the size of Switzerland’s. New York’s GSP is the size of Spain’s economy, and Georgia’s economy is the size of Norway’s. Bill Clinton’s home state of Arkansas, one of the poorest states in the United States, is approximately the size of Ireland’s rebounding economy.*

The U.S. Economic Map: Three Caveats

Looking at the United States versus the world this way comes with several important caveats.

First, the map is based on nominal GDP — how much wealth is generated in dollar terms — and not how many goods and services those dollars buy.

Economists and the media often prefer to use “purchasing power parity” (PPP) when comparing the size of global economies. Think of PPP as similar to a “cost of living adjustment” on a country level. Within the United States, $50,000 in Kansas buys you a lot more than it does in Manhattan. That’s why on a purchasing power basis, China’s economy has already surpassed the United States, while in absolute terms it’s only about 60% of the size of the United States.

Second, the map does not adjust for population. This has huge implications for what economic wealth means to citizens. California and Texas have a combined population of 66 million, while China’s population is 1.36 billion. Let’s say China does become the largest economy in the world in 20 years. Yet, because of its large population, even if it continues growing at its current pace (a huge assumption), by 2050 it will only be as wealthy as former Communist bloc countries in Eastern Europe are today.

Finally, a look at the map frozen in time, while reassuring, also hides some dynamic changes. When I first looked at this map in 2007, Germany and China — at the time #3 and #4 on the list of the world’s largest economies — were both smaller than the economies of Texas and California combined.

Today, the comparison with Germany still stands. But China is now more than twice as big as the two largest U.S. states together. In 2007, India’s $800 billion economy was on par with Florida. Today, India’s economy is 2.4 times larger than the Sunshine State.

China and India have clearly made great leaps forward in both absolute and relative terms.

The U.S. Economic Map: The Past… and the Future

*In 1790, the United States was a new, tiny nation of 4 million, about the size of Ireland today. Europe’s population was 180 million, while India’s was 190 million and China’s was 320 million. Only seven cities had a population of 5,000 or more; just 12 had a population greater than 2,500. The United States had an agricultural economy with practically no factories.*

Fast forward to 1885, the United States was the world’s #1 manufacturer, producing almost 30% of the world’s manufactured goods to outpace both the British Empire and Germany. Today’s leading cutting-edge global industries — whether taking root in Silicon Valley, in Hollywood or on Wall Street — are still products of the U.S. economic experiment.

*Despite its challenges, in 2014, the United States produced 22.5% of the world’s GDP with only about 4.6% of the world’s population. Although the U.S. economy was not as dominant as it was directly after World War II, the rest of the world (outside of China and India) has hardly fared better since the 1980s. The Japanese economy has not matched U.S. growth rates for the last two decades. Europe barely ekes out an economic growth rate of 1%. And how sustainable and real the Chinese economic expansion of the past two decades is remains to be seen.*

The world has been counting out the United States’ contribution as far back as I can remember.

That U.S. economic map though provides a vivid reminder of just where the United States stands in the bigger picture.


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## SvenSvensonov

California has overtaken France as the world's sixth largest economy. It alone contributes $2.5 Trillion to the US economy's GDP.






California grew by 4.1 percent in 2015, compared with a 2.4 percent increase for the U.S. and 1.1 percent for France.

.
...

Still wouldn't want to live there.

Reactions: Like Like:
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## Hamartia Antidote

http://www.bbc.com/news/business-37934203



Image copyrightREUTERS

US financial markets appear be embracing Donald Trump's election with the Dow Jones closing at an all-time high and the S&P500 also edging up.

Hopes that Mr Trump will introduce a pro-business agenda have blunted earlier concerns about his win.

Stock traders sought out firms standing to gain from his presidency, with American banks among the winners.

But shares in some of the biggest tech firms took a hit, pulling the Nasdaq index into negative territory. 

The Dow Jones ended the day 1.17% higher at 18,807.88 points, while the S&P 500 index rose 0.2% to 2,167.48 points. 

Investors have shifted to a focus on Mr Trump's priorities, including tax cuts, an increase in defence and infrastructure spending, and bank deregulation. 

Bank shares, buoyed by hopes that Mr Trump will relax financial regulation, were among the biggest Wall Street gainers.

But the Nasdaq index, which has a large number of technology stocks, finished down 0.81% at 5,208.80. Apple, Amazon, Google and Facebook shares all took a hit. 

Analysts said tech companies would be hurt by any trade barriers brought in by Mr Trump, and would not benefit as much from his plans for lower taxes and higher infrastructure spending.

"Tech has the most important export exposure of any sector, so there are some fears of rising trade barriers that would hit tech pretty meaningfully," said Mike Bailey, director of research at FBB Capital Partners.

*'Markets volatility'*
In Europe, the FTSE 100 closed lower after a rally which took it near the 7,000 level ran out of steam. The UK index finished down 1.2% at 6,823 points. 

Germany's Dax and France's Cac indexes, which had earlier been more than 1% ahead, each closed about 0.2% lower.

Mark Dampier, analyst at Hargreaves Lansdown, told the BBC that some investors were taking profits. He forecast continued volatility as the markets digested what a Donald Trump presidency would mean.

But Lee Wild, head of equity strategy at stockbroker Interactive Investor, said: "Perception now is that the controversial multi-billionaire TV presenter and property mogul could be good for business; and talk of tax cuts and heavy spending on infrastructure would certainly be good for growth."

CMC Markets strategist Michael McCarthy said it appeared a consensus was building that much of Mr Trump's rhetoric during the campaign "was a sales pitch rather than a commitment to act".




Image copyrightGETTY IMAGES
Earlier, Asia's markets had continued the stock market rally that gathered pace on Wednesday. Japan's Nikkei index closed up 6.7%, more than recovering losses from the previous session. Hong Kong's Hang Seng closed 1.9% higher.

On the currency markets, sterling rose 0.8% against the dollar to $1.2514, and was up 1.2% against the euro at €1.1507.

Traders had expected Hillary Clinton to beat Mr Trump to become the next US president. His victory initially sent money flowing into stocks that were deemed to be safer, as well as traditional haven assets such as gold and currencies including the yen. 

"Investors were risk averse yesterday, then after seeing that Americans were optimistic and chasing the market higher, they wasted no time reversing their positions," said Takuya Takahashi, a strategist at Daiwa Securities in Tokyo.

And Nariman Behravesh, chief economist at IHS Markit, said that "after the initial shock, investors seem to feel that a Trump administration could be good news for US businesses, with lower taxes and a reduced regulatory burden". 

He added that while Mr Trump had set out several broad economic policies, including corporate tax breaks and the renegotiating or scrapping of trade deals, there was no certainty these would go ahead.

"As in the past, it is unclear how much of the campaign bluster will translate into actual policy initiatives."


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## C130

if you didn't buy the dead cat bounce I feel bad for you son. 

i am sure a lot of billionaires made a lot of money.


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## Hamartia Antidote

http://www.rttnews.com/2714865/u-s-dollar-rallies-on-trump-stimulus-hopes.aspx?type=cm

The U.S. dollar was higher against its key counterparts in the European session on Thursday, as investors cheered the President-elect Donald Trump's fiscal stimulus plan, promising tax cuts and raising spending on defense and infrastructure to spur American economy.

Market participants are speculating that Trump's prospect of tax reforms and higher government spending would boost growth and inflation.

Global stocks rallied on hopes that Trump push for infrastructure spending and other initiatives would be a boon for businesses.

The U.S. treasury yields rallied, with the benchmark yield on 10-year note rising 2.10 percent, while that 2-year equivalent was up by 0.93 percent. Yields move inversely to bond prices.

The Fed is expected to raise rates at next month's meeting after holding it steady since December 2015.

S&P Global Ratings retained sovereign ratings of the U.S., after Donald Trump won the U.S. presidential election.

The rating was affirmed at 'AA+' with stable outlook. The ratings reflect the expected smooth transition of power, a hallmark of U.S. democracy, and the strength of its institutions.

The greenback was trading mixed in the Asian session. While the greenback rose against the yen, it held steady against the rest of major counterparts.

The greenback appreciated to 106.94 against the Japanese yen, a level not seen since July 21. The greenback is likely to challenge resistance around the 108.00 mark.

Data from the Bank of Japan showed that Japan's M2 money stock rose 3.7 percent on year in October, coming in at 945.1 trillion yen.

That exceeded forecasts for 3.6 percent following the downwardly revised 3.5 percent increase in September.

The greenback spiked up to a 9-day high of 0.9890 against the Swiss franc, up from Wednesday's closing value of 0.9844. Continuation of the greenback's uptrend may see it challenging resistance near the 1.00 region.

The greenback climbed to near a 2-week high of 1.0870 against the euro from yesterday's closing value of 1.0909. Further gains may take the greenback to a resistance around the 1.07 zone.

The greenback edged up to 1.2378 against the pound, from an early low of 1.2456, and held steady thereafter. If the greenback extends rally, 1.22 is possibly seen as its next resistance level.

The latest survey from the Royal Institution of Chartered Surveyors showed that the U.K. house price balance jumped 23.0 percent in October.

That beat forecasts for an increase of 18.0 percent, which would have been unchanged from the previous month following an upward revision from 17.0 percent.

Extending early rally, the greenback climbed to an 8-day high of 0.7204 against the NZ dollar. This is up by 1.4 percent from a low of 0.7307 hit at 3:30 am ET. The greenback is seen finding resistance around the 0.70 region.

The greenback advanced to 0.7648 against the aussie and 1.3498 against the loonie, from its previous lows of 0.7742 and 1.3387, respectively. The greenback is poised to challenge resistance around 0.75 against the aussie and 1.36 against the loonie.

Looking ahead, Canada housing price index for September and U.S. weekly jobless claims for the week ended November 5 are due to be released in the New York session.

At 9:15 am ET, Federal Reserve Bank of St. Louis President James Bullard is expected to speak about the US economic outlook at the Commerce Bank conference in St. Louis.

At 9:50 am ET, European Central Bank Vice President Vitor Constancio at the annual Swedish Banker's Association meeting in Stockholm.


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## xyxmt

alawys happens day after election no matter who wins

Reactions: Like Like:
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## خره مينه لګته وي

*GM plans to bring thousands of information technology jobs back to the U.S. from overseas, creating a total of 7,000 new jobs in the U.S. when the IT jobs and new manufacturing jobs are combined*

General Motors said today it will invest an additional $1 billion at several plants in the U.S., a move that comes just a week after President-elect Donald Trump's latest tweet critical of the automaker's Mexican car production.

The automaker also said it plans to bring thousands of information technology jobs back to the U.S. from overseas, creating a total of 7,000 new jobs in the U.S. when the IT jobs and new manufacturing jobs are combined.

The company said the investments had been in the planning stages for some time — denying it was in response to pressure from Trump — while also saying "this was good timing" to make the announcement.

The automaker said the $1-billion investment, along with the 1,500 new jobs that will be created or retained in the U.S., are in addition to $2.9 billion announced in 2016 and more than $21 billion GM has invested in its U.S. operations since 2009.

*Related:*
GM to cut 2,000 jobs in Lansing, Lordstown, Ohio, amid dropping car sales
Hyundai highlights $3.1B U.S. spending plan before Trump inaugurated


GM also said it will begin work on bringing axle production for its next-generation full-size pickup trucks in the U.S., including work previously done in Mexico, to plants in Michigan, creating 450 U.S. jobs.

“All of the decisions behind today’s announcement are good business decisions and they have been in the works for some time," said GM spokesman Pat Morrissey. “There’s no question there is an emphasis on job creation in the U.S. right now. This was good timing for us to share what we are doing, including our ongoing commitment and track record for U.S. investment over the last several years.”

Trump moved quickly, in two tweets, to take credit for the investment.

"With all of the jobs I am bringing back into the U.S. (even before taking office), with all of the new auto plants coming back into our....country and with the massive cost reductions I have negotiated on military purchases and more, I believe the people are seeing "big stuff."


__ https://twitter.com/i/web/status/821364027506966532

__ https://twitter.com/i/web/status/821365569366671360
The automaker declined to say directly if it briefed Trump on the investment decisions and also declined to identify the individual plants that will gain work, saying details will be announced throughout the year.

“As the U.S. manufacturing base increases its competitiveness, we are able to further increase our investment, resulting in more jobs for America and better results for our owners,” GM CEO Mary Barra said in a statement. “The U.S. is our home market, and we are committed to growth that is good for our employees, dealers, and suppliers and supports our continued effort to drive shareholder value.”

GM said it has been shrinking its presence outside of the U.S. in recent years as it has striven to improve efficiency. On Tuesday, GM said it plans to insource more than 6,000 IT jobs that were formerly outside the U.S. — a move that will create more than 5,000 new jobs in the U.S. over the next few years.

The 7,000 figure includes the 1,500 manufacturing jobs, the 1,500 jobs from Mexico and the 5,000 information technology jobs.

GM employs 56,000 hourly workers in the U.S., up from 51,000 at the end of 2009 after it emerged from bankruptcy.

In 2015, GM announced plans to invest $8.3 billion in the U.S. over a four-year period while adding 3,300 jobs as it negotiated a new four-year contract with the UAW.

“Today’s announcement continues GM investments that have emerged as a result of the 2015 national bargaining agreement," UAW Vice President Cindy Estrada said in a statement. "We are pleased that there will be over $1 billion in new investment for current and future UAW GM members."

GM also has been aggressively investing in Mexico and has had to lay off employees at plants in the U.S. as car sales have declined. Since late 2014 GM has announced more than $10 billion of investments and more than 5,000 new jobs in Mexico.

In November, GM said it would lay off 2,000 workers because of slowing car sales at its Lansing Grand River Assembly Plant and at the Lordstown Assembly Plant. That announcement came on the same day GM said it would invest $900 million at three U.S. plants.

- Donald Trump victory takes car stocks on a ride
- GM posts strong December finish with 10% sales increase
- Your comprehensive guide to the 2017 Detroit auto show


What started in 2015 with Trump frequently criticizing Ford for expanding its presence in Mexico has morphed into something much larger. Trump, in recent weeks, has turned his attention on GM, Fiat Chrysler Automobiles, Toyota and even German automakers.

Trump first slammed GM on Twitter during the first week of January for "sending Mexican-made model of Chevy Cruze to U.S. car dealers-tax free across border." Last week, Trump praised both Ford and Fiat Chrysler for announcing plans to invest in the U.S. and suggested that GM should follow.

“I hope that General Motors will be following,” Trump said last week during his first press conference as president-elect. “I think they will be.”

What remains difficult to determine is how much of an impact Trump truly is having on the automotive industry. In each case, the automakers have said their new investments were either in the works for months or have said changing market conditions are the primary reason for the investments even while citing an expected pro-business environment under Trump as a factor.

“As with Ford, Fiat Chrysler, Hyundai and Toyota before, General Motors announcement today is mostly theater to play in the news cycle created by President-Elect Trump’s tweets," said Michelle Krebs, senior analyst for Autotrader.com. "These investments and hiring plans have long been in the works and are a continuation of what the company has been doing in recent years — trying to run a successful, profitable business. The only thing 'new' here is GM’s aggressiveness in announcing its plans.”

Fiat Chrysler said Jan. 8 it would invest $1 billion in the U.S. to make the Jeep Wagoneer, Jeep Grand Wagoneer and a Jeep pickup in the U.S., but CEO Sergio Marchionne had made references to all of those vehicles nearly a year ago.

Ford, on Jan. 3, canceled plans to build a new $1.6-billion plant in San Luis Potosí, Mexico, and and simultaneously announced it would invest $700 million at its plant in Flat Rock and create 700 jobs there. However, the automaker still plans to move production of the Ford Focus from its plant in Wayne to its plant in Hermosillo, Mexico.

"We look at all the factors, and our view is we see a more positive U.S. manufacturing business environment under President-elect Trump and the pro-growth policies and proposals that he is talking about, so this is a vote of confidence for President-elect Trump and some of the policies that they may be pursuing," Fields said earlier this month when the automaker canceled its plant in Mexico.

Every automaker has been trying to figure out what to expect from the incoming Trump administration. Trump has frequently threatened to slap a 35% border tax on products imported from Mexico and to pull out of the North American Free Trade Agreement.

Such a move would likely create a trade war with Mexico and would severely harm automakers that have spent billions building new plants and an supplier infrastructure in Mexico over the past 25 years.

Fiat Chrysler CEO Sergio Marchionne said he needs to know what U.S. automotive regulations will be as the automaker develops new cars and trucks and makes investment decisions.

“I need clarity. I think we all need clarity,” Marchionne said. “And we are not the only ones that need clarity.”

On the other hand, auto executives expect Trump will cut corporate taxes and could pull back on greenhouse gas and fuel economy standards that could save the automakers money.

“The reality is, we have a president that hasn’t gone through an inauguration yet. Everything truly is speculation,” said Jeffrey Conrad, Honda senior vice president and general manager. "We are going to look, wait and see, and we will react accordingly.”

GM appears to be in a better position than most automakers to have Trump's ear. A month ago GM CEO Mary Barra agreed to join a panel of CEOs who will advise Trump on economic policy.


_*Contact Brent Snavely: 313-222-6512 or bsnavely@freepress.com. Follow him on Twitter @BrentSnavely. *_

http://www.usatoday.com


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## terranMarine

http://freebeacon.com/politics/obama-leaves-office-debt/

Former President Obama left office having added $9.3 trillion to the national debt, according to numbers from the Treasury Department.

When Obama took office on Jan. 20, 2009, the outstanding public debt totaled $10,626,877,048,913. On Jan. 20, 2017, when Obama left office, outstanding public debt totaled $19,944,429,217,106, an increase of roughly $9.3 trillion.

Comparatively, former President George W. Bush contributed far less to the debt. When Bush took office in January 2001, the debt was roughly $5.7 trillion. That figure had swollen to $10.6 trillion by the time he left office, an increase of about $4.9 trillion.

“Federal debt is made up of debt held by the public and debt held by government accounts,” stated a recent report by the Government Accountability Office. “Total debt rose to $19.7 trillion during fiscal year 2016, an increase of $1.4 trillion from fiscal year 2015.”

The annual deficit grew in 2016 due to increased spending on Social Security, Medicare and Medicaid, and interest on the debt. These factors increased the 2016 deficit to $587 billion, up from $439 billion in 2015.

Spending on these programs is set to increase more rapidly than gross domestic product growth in the coming decades.

“Spending for the major health and retirement programs will increase more rapidly than GDP in coming decades as more members of the baby-boom generation become eligible for benefits,” the report stated.

As such, debt is expected to rise as a share of GDP, from 74 percent in 2015 to 77 percent at the end of fiscal 2016. This is much higher than the average rate of 44 percent of GDP seen since 1946.

“Absent policy changes, the federal government’s fiscal path is unsustainable and that the debt-to-GDP ratio would surpass its historical high of 106 percent within 15 to 25 years,” the Government Accountability Office states.


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## Michael Corleone

because blame trump after 4 years yeah? so why not?


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## Hindustani78

http://aa.com.tr/en/americas/trump-plans-to-add-25m-jobs-reach-4-percent-growth/731796

President Donald Trump on Friday revealed his plan to create 25 million new jobs in the next decade and return the American economy to 4 percent annual growth, according to a White House statement.

The plan seeks to lower rates for every tax bracket, simplify the tax code, reduce corporate taxes and repeal regulations.

Trump promised in his campaign to reduce the number of tax brackets from seven to three, and cut the corporate tax rate to 35 percent from 15 percent.

"In 2015 alone, federal regulations cost the American economy more than $2 trillion," according an online White House statement.

The plan also aims to renegotiate trade deals with other countries that "engage in illegal or unfair trade practices that hurt American workers," the statement said.

Trump has threatened to withdraw the U.S. from the the North American Free Trade Agreement with Mexico and Canada, and the Trans Pacific Partnership, another multinational trade deal.

Also Friday, the Trump White House uncovered plan for American energy security, aiming to eliminate the Waters of the U.S. rule that defines what lakes, streams rivers are under federal jurisdiction, and “restrictons” imposed by former President Barack Obama's Climate Action Plan that tried to reduce carbon dioxide emissions.

"Lifting these restrictions will greatly help American workers, increasing wages by more than $30 billion over the next 7 years," according to a separate.

At noon (1700GMT) Friday, the moment Trump became president by law, all White House pages with reference to climate change under the Obama administration were removed from the website.

With a promise to "unleash an energy revolution" during his campaign, Trump wants to increase domestic shale oil, gas and coal production, including from federal lands, in order to achieve "energy independence from the OPEC cartel," and to generate revenue for Trump's $1 trillion infrastructure spending plan.

"We must take advantage of the estimated $50 trillion in untapped shale, oil, and natural gas reserves," the statement read. 

The U.S. has almost doubled domestic oil output since 2008, from 5 million barrels per day to 9.6 million last April, and has managed to significantly loosen its dependence on foreign oil supply, according to the Energy Information Administration. 

Despite planning to increase hydrocarbon production, Trump said he would preserve clean air and water by making the Environmental Protection Agency refocus on protecting those resources.


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## TooRave

US President Donald Trump formally withdrew the United States from the Trans-Pacific Partnership trade deal on Monday, distancing America from its Asian allies as China’s influence in the region rises. Fulfilling a campaign pledge to end American involvement in the 2015 pact, Trump signed an executive order in the Oval Office pulling the United States from the 12-nation TPP.

“Great thing for the American worker,” Trump said as he signed the order on his third full day in office. The Republican says the trade deal would have damaged US manufacturing.

The accord, backed heavily by US business, was negotiated by former President Barack Obama’s administration but never approved by Congress. It had been the main economic pillar of the Obama administration’s “pivot” to the Asia-Pacific region to counter China.

Trump has sparked worries in Japan and elsewhere in the Asia-Pacific with his opposition to the TPP and his campaign demands for US allies to pay more for their security.

Harry Kazianis, Director of Defense Studies at the Center for the National Interest think tank in Washington, said Trump must now find an alternative way to reassure allies in Asia.

“This could include multiple bilateral trade agreements. Japan, Taiwan and Vietnam should be approached first as they are key to any new Asia strategy that President Trump will enact,” he said.

US BUSINESS LEADERS

The new president also met with a dozen American manufacturers at the White House on Monday, pledging to slash regulations and cut corporate taxes, but warning them he would take action on trade deals he felt were unfair.

Trump, who took office on Friday, has promised to bring manufacturing plants back to the United States – an issue he said helped him win the November 8 election. He has not hesitated to call out by name companies that he thinks should bring outsourced production back home.

He said those businesses that choose to move factories outside the country would pay a price. “We are going to be imposing a very major border tax on the product when it comes in,” Trump said.

Trump asked the group of chief executives from companies including Ford, Dell Technologies, Tesla and others to make recommendations in 30 days to stimulate manufacturing, Dow Chemical CEO Andrew Liveris told reporters.

Liveris said the CEOs discussed the border tax “quite a bit” with Trump, explaining “the sorts of industry that might be helped or hurt by that.”

“Look: I would take the president at his word here. He’s not going to do anything to harm competitiveness. He’s going to actually make us all more competitive,” Liveris said.

At a portion of the meeting observed by reporters, Trump provided no details on how the border tax would work. The US dollar fell to a seven-week low against a basket of key world currencies on Monday and global stock markets declined amid investor concerns about Trump’s protectionist rhetoric.

“A company that wants to fire all of its people in the United States, and build some factory someplace else, and then thinks that that product is going to just flow across the border into the United States – that’s not going to happen,” he said.

CUT TAXES AND REGULATIONS

The president told the CEOs he would like to cut corporate taxes to the 15 percent to 20 percent range, down from current statutory levels of 35 percent – a pledge that will require cooperation from the Republican-led US Congress.
But he said business leaders have told him that reducing regulations is even more important.

“We think we can cut regulations by 75 percent. Maybe more,” Trump told business leaders.

“When you want to expand your plant, or when Mark wants to come in and build a big massive plant, or when Dell wants to come in and do something monstrous and special – you’re going to have your approvals really fast,” Trump said, referring to Mark Fields, CEO of Ford, who sat around the boardroom-style table in the Roosevelt Room.

Fields said he was encouraged by the tone of the meeting.

“I know I come out with a lot of confidence that the president is very, very serious on making sure that the United States economy is going to be strong and have policies – tax, regulatory or trade – to drive that,” he said.

Trump told the executives that companies were welcome to negotiate with governors to move production between states, but Trump was scheduled to hold a meeting later on Monday with labor leaders and US workers, the White House said.

Between winning the presidential election in November and taking office, Trump hosted a number of US CEOs in meetings in New York, including business leaders from defense, technology and other sectors. He also met with leaders of several labor unions, including the AFL-CIO.

http://indianexpress.com/article/world/trump-pulls-us-out-from-trans-pacific-partnership-deal/


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## Devil Soul

*Trump orders withdrawal of US from TPP trade pact*
AFP — UPDATED 9 minutes ago
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United States (US) President Donald Trump moved Monday to pull the US out of the Trans-Pacific Partnership (TPP), making good on a pledge to scrap a deal he denounced as a “job killer” and a “rape” of US interests.

Embarking on his first full week in office, the 45th US president began rolling out his policy agenda after a tumultuous first weekend for his administration by signing a series of executive orders.

Among the first was a memo on withdrawing from the vast TPP trade pact, which aimed to set trade rules for the 21st century and bind US allies against growing Chinese economic clout.

“We've been talking about this for a long time,” Trump said as he signed the executive order in the Oval Office.

ADVERTISEMENT
“Great thing for the American worker what we just did.”

Promoted by Washington and signed by 12 countries in 2015, the TPP had yet to go into effect and US withdrawal is likely to sound its death knell.

Its signatories — Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Brunei — together represent 40 per cent of the world economy.

The real estate mogul's White House bid was fuelled in part by a pledge to overturn trade deals — such as TPP and the North American Free Trade Agreement — that he says have drained US jobs and destroyed its industrial heartlands.

Trump also signed two other orders, on freezing the hiring of federal workers and hitting foreign NGOs that help with abortion.

*White House pilloried*
The Republican leader is looking to shift attention firmly back onto his policy agenda after a first few days that put his incoming administration on the back foot.

“Busy week planned with a heavy focus on jobs and national security,” he tweeted early Monday.

Since he was sworn in on Friday, Trump's White House has been pilloried for lying to the public about inaugural crowds and over a campaign-style speech by the president before a memorial to fallen CIA officers.

On Saturday several million Americans poured onto the streets for women-led demonstrations against Trump, the scale of which were unseen in a generation, in a potent rebuke to the president.

Trump has upbraided top aides over unfavourable media coverage on everything from crowd sizes to suggestions he has ruled out releasing his taxes. He is the first presidential candidate in recent memory not to do so.

On Sunday the president vowed to swiftly start renegotiating NAFTA in upcoming talks with the leaders of Canada and Mexico.

Trump has already moved to curb Obama's health care reforms and more quick legal tweaks — in the form of executive orders — are expected on immigration and limiting environmental legislation.

But more substantive changes will need buy-in from the Republican controlled Congress.

*'Massive' tax cuts?*
On Monday, Trump was hosting separate meetings with business leaders, unions and members of both houses of Congress.

He will also meet the speaker of the House of Representatives, Paul Ryan. Tax reform is likely to be high on the agenda.

“What we're doing is we are going to be cutting taxes massively for both the middle class and for companies, and that's massively,” he said.

“A bigger thing, and that surprised me, is the fact that we're going to be cutting regulation massively.”

Reform of Obama's health care laws is also likely to be on the menu. Trump has publicly promised that none of the tens of millions of Americans who obtained health insurance under Obama will lose it.

That makes any meaningful changes difficult to pay for. But the more urgent task for Trump may be to keep always skeptical establishment Republicans on board the “Trump train.”

*Dissent in check*
Trump's approval rating is around 40 percent, according to the RealClearPolitics average, low for a president just starting out. That could make legislators think twice about toeing the line with an unpopular leader.

But Trump's bare-knuckle style has also kept dissent in check, with some terrified they will become the object of a presidential tweet that sets off a world of political pain.

Senator Ben Sasse was among the few who had mild criticism for Trump's decision on the trans-Pacific trade deal.

“It's clear that those of us who believe trade is good for American families have done a terrible job defending trade's historic successes and celebrating its future potential,” he said.

“We have to make the arguments and we have to start now.”

On Thursday, Trump will travel to a Republican Congressional retreat in Philadelphia to further build ties.

The following day, he will host British Prime Minister Theresa May — the first White House visit of a foreign leader under the new administration.


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## Dil Pakistan

He has created another opportunity for China

Reactions: Like Like:
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## YeBeWarned

Dil Pakistan said:


> He has created another opportunity for China



No .. He is minding his own Business , he said America First and America spend trillions of Dollars in over-seas Bases and Wars . Its time to bring back all US troops back home .


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## Dil Pakistan

Starlord said:


> No .. He is minding his own Business , he said America First and America spend trillions of Dollars in over-seas Bases and Wars . Its time to bring back all US troops back home .



I meant that by withdrawing from TPP he has created space for China to step in (which China would love to do).

By the way, he has also announced that he will increase armed personnel in Afghanistan by 1500 - not an example of minding his own business.


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## YeBeWarned

Dil Pakistan said:


> I meant that by withdrawing from TPP he has created space for China to step in (which China would love to do).
> 
> By the way, he has also announced that he will increase armed personnel in Afghanistan by 1500 - not an example of minding his own business.



Lets wait until he do that, and i doubt 1500 US soldiers will make a Difference , under their Nose ISIS has dig their feet in Afghanistan ..


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## Hamartia Antidote

http://www.wsj.com/articles/consumer-sentiment-notches-new-decade-long-high-1485530316

*Consumer Sentiment Notches New Decade-Long High*
*The postelection confidence surge was driven by optimistic economic and job outlook for the coming year*







A gauge of consumer sentiment grew in January, again setting a new 13-year high, a sign of continued confidence in the economy after the election of Donald Trump.

The University of Michigan said Friday that its final reading of consumer sentiment was 98.5 in January, up from its preliminary reading of 98.1 earlier this month and up from December’s final reading of 98.2. It is up 7.1% from January 2016.

Economists surveyed by The Wall Street Journal had expected a final January reading of 98.0.


The recent rise in optimism reflects a dramatic turnaround from consumers’ attitudes in October, when sentiment had matched a two-year low.

The postelection confidence surge was driven by optimistic economic and job outlook for the coming year. Consumers also reported a more positive assessments of their own financial situation amid income and household wealth gains.

The forward-looking index of consumer expectations is up 9.2% from January a year ago, and the index reflecting sentiment on current economic conditions rose 4.6% from January last year.

Friday’s survey also showed that consumers increased their inflation expectations, after the Federal Reserve increased its benchmark interest rate in December, only the second increase after years of near-zero rates.

Survey Chief Economist Richard Curtin said consumers think the Federal Reserve will increase interest rates at a faster pace. One of out of five consumers now favor borrowing ahead of anticipated mortgage rates increases, the highest level in more than 20 years.

Consumers said in January’s final reading they expected inflation of 2.6% in the coming 12 months, up from their December expectation of 2.2% and matching the preliminary survey. Longer-term inflation also grew, with consumers expecting 2.6% inflation over the next five years, up from their prior-month estimate of 2.3% and the first reading of 2.5%.


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## ultron

*Job creation posts blowout month in February, ADP says*

Jeff Cox | @JeffCoxCNBCcom
4 Hours AgoCNBC.com






ADP reports largest payroll increase since December 2015 4 Hours Ago | 04:06

Companies added jobs at a blistering pace in February, with a notable shift away from the service-sector positions that have dominated hiring for years, according to a report Wednesday.

Employment in the private sector surged by 298,000 for the month, with goods producers adding 106,000, ADP and Moody's Analytics said. Construction jobs swelled by 66,000 and manufacturing added 32,000.

The total shattered market expectations of 190,000, according to economists surveyed by ADP. The blockbuster report also solidified market expectations for the Fed to hike interest rates next week. Probability for an increase jumped to 91 percent after the release, according to the CME.

The report encompassed the first full month under President Donald Trump, who has pledged to rebuild the nation's aging infrastructure system.


"February proved to be an incredibly strong month for employment with increases we have not seen in years," Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement.

In addition to the construction and manufacturing positions, mining and natural resources also contributed 8,000 to the total. Trump has promised to restore mining jobs as well.

The year is off to a sizzling start for job creation, according to the ADP counts. January added 261,000 positions, a number that was revised upward from the originally reported 246,000.

"Confidence is playing a large role," Mark Zandi, chief economist of Moody's Analytics, told CNBC. "Businesses are anticipating a lot of good stuff — tax cuts, less regulation. They are hiring more aggressively."

Services led the way with 193,000 new jobs, with 66,000 coming from professional and business services. Health care added 38,000 while information-related jobs came to 25,000.

Job creation was fairly evenly distributed across business size. Companies with 50 to 499 employees added the most with 122,000, while small firms added 104,000 and large contributed 72,000.

In addition to generally positive sentiment expressed through business surveys, the job climate also got a boost from weather.

The big number could cause economists to adjust their expectations for Friday's key nonfarm payrolls number from the Labor Department. The market currently expects the report to show growth of about 185,000 jobs.

http://www.cnbc.com/2017/03/08/private-sector-jobs-february-2017-adp.html


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## RabzonKhan

*Massive oil discovery in Alaska is biggest onshore find in 30 years*
by Matt Egan 3/10/2017

*Some 1.2 billion barrels of oil have been discovered in Alaska, marking the biggest onshore discovery in the U.S. in three decades.*
The massive find of conventional oil on state land could bring relief to budget pains in Alaska brought on by slumping production in the state and the crash in oil prices.


The new discovery was made in just the past few days in Alaska's North Slope, which was previously viewed as an aging oil basin.

Spanish oil giant Repsol (REPYY) and its privately-held U.S. partner Armstrong Energy announced the find on Thursday, predicting production could begin as soon as 2021 and lead to as much as 120,000 barrels of output per day.

The oil resources lie in a well, called Horseshoe, that's 75% owned by Denver-based Armstrong. Repsol owns the rest of this well.

The discovery is 20 miles south of where the two companies have already found oil in a project known as Pikka. That northern project is already in early development and is 51% owned by Armstrong, which is the operator on both developments.

"The interesting thing about this discovery is the North Slope was previously thought to be on its last legs. But this is a significant emerging find," Repsol spokesman Kristian Rix told CNNMoney.

Of course, this news won't ease rising concern among investors about the stubborn glut of oil in the U.S. There are increasing signs that shale oil producers are preparing to ramp up output after surviving a two-year price war with OPEC.





Repsol, which is based in Madrid, is shown here drilling for oil in Alaska.

Repsol has been actively exploring in Alaska since 2008 and has an additional presence in the Gulf of Mexico. Shares of the oil and gas company jumped nearly 3% in Madrid trading on Friday.

The North Slope find comes less than six months after Caelus Energy and private-equity giant Apollo Global Management announced a massive Alaska oil discovery in the waters of Smith Bay.

All of this is a big win for Alaska, which last year had to freeze hiring and limit state employee travel due to trouble in the oil industry. Alaska, which relies on oil and gas taxes for the vast majority of its state revenue, has been hit by the one-two punch of shrinking production from its mature fields and the fact that oil prices have been cut in half in recent years.

Things have gotten so bad that the Trans-Alaska Pipeline System is barely being used these days.

"This is also great news for the State of Alaska," Alaska Governor Bill Walker said in a statement. "We must all pull together to fill an oil pipeline that's three-quarters empty." *Link*






ultron said:


> *Job creation posts blowout month in February, ADP says*
> 
> Jeff Cox | @JeffCoxCNBCcom
> 4 Hours AgoCNBC.com
> 
> 
> 
> 
> 
> 
> ADP reports largest payroll increase since December 2015 4 Hours Ago | 04:06
> 
> Companies added jobs at a blistering pace in February, with a notable shift away from the service-sector positions that have dominated hiring for years, according to a report Wednesday.
> 
> Employment in the private sector surged by 298,000 for the month, with goods producers adding 106,000, ADP and Moody's Analytics said. Construction jobs swelled by 66,000 and manufacturing added 32,000.
> 
> The total shattered market expectations of 190,000, according to economists surveyed by ADP. The blockbuster report also solidified market expectations for the Fed to hike interest rates next week. Probability for an increase jumped to 91 percent after the release, according to the CME.
> 
> The report encompassed the first full month under President Donald Trump, who has pledged to rebuild the nation's aging infrastructure system.
> 
> 
> "February proved to be an incredibly strong month for employment with increases we have not seen in years," Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement.
> 
> In addition to the construction and manufacturing positions, mining and natural resources also contributed 8,000 to the total. Trump has promised to restore mining jobs as well.
> 
> The year is off to a sizzling start for job creation, according to the ADP counts. January added 261,000 positions, a number that was revised upward from the originally reported 246,000.
> 
> "Confidence is playing a large role," Mark Zandi, chief economist of Moody's Analytics, told CNBC. "Businesses are anticipating a lot of good stuff — tax cuts, less regulation. They are hiring more aggressively."
> 
> Services led the way with 193,000 new jobs, with 66,000 coming from professional and business services. Health care added 38,000 while information-related jobs came to 25,000.
> 
> Job creation was fairly evenly distributed across business size. Companies with 50 to 499 employees added the most with 122,000, while small firms added 104,000 and large contributed 72,000.
> 
> In addition to generally positive sentiment expressed through business surveys, the job climate also got a boost from weather.
> 
> The big number could cause economists to adjust their expectations for Friday's key nonfarm payrolls number from the Labor Department. The market currently expects the report to show growth of about 185,000 jobs.
> 
> http://www.cnbc.com/2017/03/08/private-sector-jobs-february-2017-adp.html


The US economy added 235,000 jobs in February, and Trump is taking credit for that, what a joke, the fact is, strong hiring started under Pres. Obama’s presidency, Trump actually is on record, for calling the job reports “phony statistics”.

The credit, without any doubt, goes to Pres. Obama's economic policies.


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## RabzonKhan

While, clean energy jobs are growing much faster than the rest of the economy, on the other hand, to boost the profits of fossil fuel billionaires and to get few thousand coalminer's votes, Trump ignores the reality of a changing energy industry, the fact is, State of California alone employs far more in clean energy than the number of coal mining jobs that exist in the entire country, his budget proposal for fiscal year 2018 will gut government supported energy research efforts for clean energy.

Oh yeah, “America first”, my foot, totally pathetic!










*Top 10 States Leading the Renewable Energy Revolution*

By Ralph Cavanagh

California continues to lead the way on clean energy, but energy efficiency and renewables are gaining major ground across the country, a new ranking of states and cities shows. Six states now get at least a fifth of their power from non-hydro renewable sources such as wind and solar—further confirmation that regardless of the Trump administration's efforts to promote fossil-fuel interests, clean energy is making undeniable inroads.

he Golden State and Massachusetts lead the eighth annual U.S. Clean Tech Leadership Index from the research firm Clean Edge for a fifth year in a row, the latter bolstered by its strong record of energy efficiency and private investment in clean tech. Vermont, Oregon and New York round out the top five.

The ranking scores each state on the policies, capital (both financial and human), and technology each has deployed to scale up clean energy. California, of course, has long been a leader in all three areas, with more solar energy generation than any other state, 1.2 million electric and hybrid cars on the road and $9.5 billion in clean-tech venture capital funding over the past three years.

he Golden State and Massachusetts lead the eighth annual U.S. Clean Tech Leadership Index from the research firm Clean Edge for a fifth year in a row, the latter bolstered by its strong record of energy efficiency and private investment in clean tech. Vermont, Oregon and New York round out the top five.

The ranking scores each state on the policies, capital (both financial and human), and technology each has deployed to scale up clean energy. California, of course, has long been a leader in all three areas, with more solar energy generation than any other state, 1.2 million electric and hybrid cars on the road and $9.5 billion in clean-tech venture capital funding over the past three years.






San Francisco, San Jose, Washington, DC, San Diego and Portland, Oregon, top the cities ranking, based on criteria including green buildings and transportation. "There are no weak spots in the City by the Bay's performance," the report said, highlighting San Francisco's strong adoption of clean vehicles and an increased commitment to measuring, reporting and reducing greenhouse gas emissions. Washington rose two spots in the ranking this year in part on the strength of its building stock and public transit ridership.

The adoption of clean energy across the U.S. is a trend that supersedes politics. The top 10 list for renewable electricity generation as a share of the total is split evenly between red states and blue states, with Iowa showing large gains in wind since 2009 and Nevada adding geothermal power.

Overall, wind and solar accounted for 61 percent of the new electric capacity added in 2016, the report said. And while the clean energy sector helps the nation cut planet-warming carbon emissions and clear the air, it is also creating jobs, an indicator that Clean Edge added to its analysis this year for the first time.

In Vermont, which fell to third in the rankings overall, clean energy jobs accounted for the largest share of total jobs (four percent) compared to other states. As the group Environmental Entrepreneurs (E2) has noted, the clean energy sector supports three million jobs nationwide, from wind turbine technicians to installers of energy-efficient appliances.






Falling costs for wind and solar, combined with state and local policies that promote renewable energy, are driving the shift to renewables, Clean Edge said, noting that five states increased their clean energy targets to 25 percent or more in 2016, while five more states are aiming for at least 50 percent. Cities, too, are setting ambitious goals, with Portland, Salt Lake City, San Francisco, San Diego, Atlanta and San Jose all planning to be entirely powered by renewables within the next few decades.

Seventeen states now get at least 10 percent of electricity from non-hydro, utility-scale renewables, a more than fivefold increase from when the index debuted in 2010. Clean energy growth was under way long before Trump's ascendance, and will continue long afterward.


*Top 10 Rankings by State:*

*Top 10 Rankings by Metro Area:*

1. California

1. San Francisco, CA

2. Massachusetts

2. San Jose, CA

3. Vermont

3. Washington, DC

4. Oregon

4. San Diego, CA

5. New York

5. Portland, OR

6. Connecticut

6. Los Angeles, CA

7. Colorado

7. Boston, MA

8. Washington

8. Seattle, WA

9. Minnesota

9. Salt Lake City, UT

10. Hawaii

10. Austin, TX

*Link*

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## RabzonKhan

*A group representing $6.2 trillion of the US economy says they're 'still in' the Paris climate agreement*

A coalition of US economic, education, and local government leaders announced on Monday they will continue to abide by the Paris agreement regardless of America's withdrawal, forming the We Are Still In movement. The coalition represents 120 million Americans and $6.2 trillion of the US economy. 

*In total, the group includes 125 cities, 9 states, 902 businesses and investors, and 183 colleges and universities. Over 20 of the businesses who signed on are Fortune 500 companies.* 

The group penned an open letter on Monday, stating, "The Trump administration's announcement undermines a key pillar in the fight against climate change and damages the world's ability to avoid the most dangerous and costly effects of climate change. Importantly, it is also out of step with what is happening in the United States."

The group declared it will pursue climate goals, "in the absence of leadership by Washington," adding "it is local and state governments, along with businesses, that are primarily responsible for the dramatic decrease in greenhouse gas emissions in recent years. Actions by each group will multiply and accelerate in the years ahead, no matter what policies Washington may adopt."

*The list of signatories includes familiar names like Apple, Google, Tesla, Target, eBay, Lyft, Adidas, Facebook, Nike, and other business giants. Participating states include California, Connecticut, North Carolina, Oregon, New York, Rhode Island, Virginia, Washington and Hawaii. *

Governor Terry McAuliffe of Virginia commented on his state's participation in a press release, saying: "President Trump's announcement to withdraw the United States from the Paris Climate Agreement does not speak for the states and cities that are committed to fighting climate change and paving the way for a new energy economy. If the federal government insists on abdicating leadership on this issue, it will be up to the American people to step forward -- and in Virginia we are doing just that."

Lyft CEO John Zimmer commented in a press release: "Collective action is a powerful force that will ensure the U.S. remains on track to meet and hopefully exceed the goals of the Paris Agreement. Lyft is proud to be part of this coalition and will be taking additional actions in the months and years ahead to ensure we do our part in addressing one of the greatest challenges of our time."

Companies, investors, mayors and governors, and colleges and universities can sign up to join the movement on the website. A full list of signatories is available on the website as well.

Since President Trump's announcement on June 1st that he plans to remove the US from the Paris agreement, 211 mayors have adopted the Paris Agreement goals for their cities, 13 Governors have joined to create the bipartisan U.S. Climate Alliance, and 17 governors have released statements standing by Paris, according to a press release from We Are Still In.

Trump said on June 1st that he would try to renegotiate a new Paris agreement deal for the US, something that European leaders — like France, Germany, and Italy — have been adamant will not happen. "We will see if we can make a deal that's fair," Trump said in his speech. "If we can, that's great. And if we can't, that's fine."

*Read the full letter below:*

We, the undersigned mayors, governors, college and university leaders, businesses, and investors are joining forces for the first time to declare that we will continue to support climate action to meet the Paris Agreement.

In December 2015 in Paris, world leaders signed the first global commitment to fight climate change. The landmark agreement succeeded where past attempts failed because it allowed each country to set its own emission reduction targets and adopt its own strategies for reaching them. In addition, nations - inspired by the actions of local and regional governments, along with businesses - came to recognize that fighting climate change brings significant economic and public health benefits.

The Trump administration's announcement undermines a key pillar in the fight against climate change and damages the world's ability to avoid the most dangerous and costly effects of climate change. Importantly, it is also out of step with what is happening in the United States.

In the U.S., it is local and state governments, along with businesses, that are primarily responsible for the dramatic decrease in greenhouse gas emissions in recent years. Actions by each group will multiply and accelerate in the years ahead, no matter what policies Washington may adopt.

In the absence of leadership from Washington, states, cities, colleges and universities, businesses and investors, representing a sizeable percentage of the U.S. economy will pursue ambitious climate goals, working together to take forceful action and to ensure that the U.S. remains a global leader in reducing emissions.

It is imperative that the world know that in the U.S., the actors that will provide the leadership necessary to meet our Paris commitment are found in city halls, state capitals, colleges and universities, investors and businesses. Together, we will remain actively engaged with the international community as part of the global effort to hold warming to well below 2°C and to accelerate the transition to a clean energy economy that will benefit our security, prosperity, and health. *Link*

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## ultron

US second quarter economy up by 2.6%.

http://money.cnn.com/2017/07/28/news/economy/gdp-second-quarter-trump-economy/index.html

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## ultron

unemployment rate down to 4.3%


__ https://twitter.com/i/web/status/893450999624384512


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## RISING SUN

*Toyota, Mazda plan $1.6 billion U.S. plant, to partner in electric vehicles*
Japanese automakers Toyota Motor Corp. and Mazda Motor Corp. plan to spend $1.6 billion to build a joint-venture auto manufacturing plant in the U.S. — a move that will create up to 4,000 jobs, both sides said Friday.

The plant will have an annual production capacity of about 300,000 vehicles, and will produce Toyota Corollas for the North American market. Mazda will make cross-over models there that it plans to introduce to that market, the companies said.

Toyota and Mazda are forming a capital alliance and splitting the cost for the plant equally. It is due to begin operations by 2021.

After reassessing the market, Toyota has changed its plan to make Corollas at a plant in Guanajuato, Mexico, now under construction, and instead will produce Tacoma pickups there, Toyota President Akio Toyoda said.

President Donald Trump had criticized Toyota for taking auto production and jobs to Mexico. With the investment, both automakers can hope to prove their good American corporate citizenship and appease the Trump administration's concerns about jobs moving overseas.

Toyoda denied that Trump's views influenced his decision.

"We have been reviewing the best production strategy for our business," he told reporters at a Tokyo hotel, after shaking hands with Mazda's president.

Trump welcomed the announcement in a Tweet: "Toyota & Mazda to build a new $1.6B plant here in the U.S.A. and create 4K new American jobs. A great investment in American manufacturing!"





Toyota wouldn't say where the plant would be built, but it's likely to be in the South, near the rest of the company's U.S. factories. Also, since this plant will build the Corolla, it likely will be near Toyota's current Corolla plant in Mississippi to be close to parts supply companies.

The companies also plan to work together on various advanced auto technology, such as electric vehicles, safety features and connected cars, as well as products that they could supply each other, they said.

Toyota plans to acquire 31,928,500 shares of common stock newly issued by Mazda through a third-party allotment, which will amount to a 5.05 percent stake in Mazda, valued at 50 billion yen ($455 million).

Mazda, which makes the Miata roadster, will acquire 50 billion yen worth of Toyota shares, the equivalent of a 0.25 percent stake. The investment deal is expected to be final by October, the companies said.





Toyoda noted the growing competition from newcomers in the auto industry like Google, Apple and Amazon, stressing he was worried about autos turning into commodities. He praised Mazda as a great partner in that effort.

"It has also sparked Toyota's competitive spirit, increasing our sense of not wanting to be bested by Mazda. This is a partnership in which those who are passionate about cars will work together to make ever-better cars," he said.

The companies said their collaboration will respect their mutual independence and equality. Toyota, which makes the Prius hybrid, Camry sedan and Lexus luxury models, already provides hybrid technology to Mazda, which makes compact cars for Toyota at its Mexico plant.

The sheer cost of the plant also makes a partnership logical, as it boosts cost-efficiency and economies of scale. Working together on green and other auto technology also makes sense as the segment becomes increasingly competitive due to concerns about global warming, the environment and safety.

"Given the massive level of competition in the industry, partnerships are no longer a surprise," said Akshay Anand, an executive analyst at Kelley Blue Book.

Politics are another incentive.

"The new presidential administration has made it clear investments in the U.S. are a top priority, and this plant may be another nod to that mindset," Anand said.

Mazda President Masamichi Kogai said he hoped that the partnership will help energize the industry.

Toyota is vying for the spot of No. 1 automaker in global vehicle sales against Nissan-Renault and Volkswagen AG of Germany, as the industry gradually consolidates.
Japanese rival Nissan Motor Co. is allied with Renault SA of France and Mitsubishi Motors Corp., and is the global leader in electric vehicles. Their alliance led world vehicles sales for the first time in the first half of this year.

The limited tie-up with Mazda marks the latest addition to Toyota's sprawling empire, which includes Japanese truck maker Hino Motors and minicar maker Daihatsu Motor Co. Toyota also is the top shareholder in Fuji Heavy Industries, the maker of Subaru cars.

In the past, Toyota was not overly bullish on electric vehicles, which have a limited cruise range. But recent breakthroughs in batteries allow for longer travel per charge.

Mazda, based in Hiroshima, Japan, used to have a powerful partner in Dearborn-based Ford Motor Co., which bought 25 percent of Mazda in 1979, and raised it to 33.4 percent in 1996. But Ford began cutting ties in 2008, and has shed its stake in Mazda.
Also Friday, Toyota reported its April-June profit was 613.0 billion yen ($5.6 billion), up 11 percent from 552.4 billion yen a year earlier. Quarterly sales rose 7 percent to 7.05 trillion yen ($64 billion), as vehicle sales improved around the world, including in the U.S., Europe and Japan.

Toyota stuck to its earlier projection for global vehicle sales for the fiscal year, ending in March 2018, at 10.25 million vehicles. It raised its fiscal full year profit forecast to 1.75 trillion yen ($16 billion) from the earlier forecast of 1.5 trillion yen ($14 billion). It earned 1.8 trillion yen in the previous fiscal year.

http://www.chicagotribune.com/business/ct-toyota-mazda-us-plants-20170804-story.html

Japanese automakers Toyota Motor Corp. and Mazda Motor Corp. plan to spend $1.6 billion (U.S.) to build a joint-venture auto manufacturing plant in the U.S. — a move that will create up to 4,000 jobs, both sides said Friday.

The plant will have an annual production capacity of about 300,000 vehicles, and will produce Toyota Corollas as well as a new Mazda crossover vehicle for the North American market.

Toyota and Mazda are forming a capital alliance and splitting the cost for the plant equally. Toyota wouldn’t say where the plant would be built, but because the new plant will build the Corolla, chances are it will be located near Toyota’s current Corolla plant in Mississippi to be close to parts supply companies. The companies expect the plant to begin operations by 2021.

After reassessing the market, Toyota has changed its plan to make Corollas at a plant in Guanajuato, Mexico, now under construction, and instead will produce Tacoma pickups there, Toyota President Akio Toyoda said.

President Donald Trump had criticized Toyota for taking auto production and jobs to Mexico. With the investment, both automakers can hope to prove their good American corporate citizenship and appease the Trump administration’s concerns about jobs moving overseas.

Toyoda denied that Trump’s views influenced his decision.

“We have been reviewing the best production strategy for our business,” he told reporters at a Tokyo hotel, after shaking hands with Mazda’s president.

Trump welcomed the announcement in a tweet: “Toyota & Mazda to build a new $1.6B plant here in the U.S.A. and create 4K new American jobs. A great investment in American manufacturing!”

Sales of small cars have slumped in the U.S. amid steadily low gas prices. Corolla sales fell 10 per cent through July. But Toyota hopes the market will have shifted by 2021. If not, the plant will have the flexibility to shift to another model, according to spokesman Scott Vazin.

Toyota plans to acquire a 5.05 per cent stake in Mazda, valued at 50 billion yen ($455 million U.S.). Mazda, which makes the Miata roadster, will acquire 50 billion yen worth of Toyota shares, the equivalent of a 0.25 per cent stake. The investment deal is expected to be final by October.

The companies also plan to work together on various advanced auto technology, such as electric vehicles, safety features and connected cars, as well as products that they could supply each other.

In the past, Toyota was not overly bullish on electric vehicles, which have a limited cruise range. But recent breakthroughs in batteries allow for longer travel per charge. Japanese rival Nissan Motor Co. is allied with Renault SA of France and Mitsubishi Motors Corp., and is the global leader in electric vehicles. Their alliance led world vehicles sales for the first time in the first half of this year.

Toyoda also noted the growing competition from newcomers in the auto industry like Google, Apple and Amazon, stressing he was worried about autos turning into commodities. He praised Mazda as a great partner in that effort.

“It has also sparked Toyota’s competitive spirit, increasing our sense of not wanting to be bested by Mazda. This is a partnership in which those who are passionate about cars will work together to make ever-better cars,” he said.

The companies said their collaboration will respect their mutual independence and equality. Toyota, which makes the Prius hybrid, Camry sedan and Lexus luxury models, already provides hybrid technology to Mazda, which makes compact cars for Toyota at its Mexico plant.

The sheer cost of the plant also makes a partnership logical, as it boosts cost-efficiency and economies of scale. Working together on green and other auto technology also makes sense as the segment becomes increasingly competitive due to concerns about global warming, the environment and safety.

“Given the massive level of competition in the industry, partnerships are no longer a surprise,” said Akshay Anand, an executive analyst at Kelley Blue Book.

Politics are another incentive.

“The new presidential administration has made it clear investments in the U.S. are a top priority, and this plant may be another nod to that mindset,” Anand said.

Mazda President Masamichi Kogai said he hoped that the partnership will help energize the industry.

Toyota is vying for the spot of No. 1 automaker in global vehicle sales against Nissan-Renault and Volkswagen AG of Germany, as the industry gradually consolidates.

Japanese rival Nissan Motor Co. is allied with Renault SA of France and Mitsubishi Motors Corp., and is the global leader in electric vehicles. Their alliance led world vehicles sales for the first time in the first half of this year.

The limited tie-up with Mazda marks the latest addition to Toyota’s sprawling empire, which includes Japanese truck maker Hino Motors and minicar maker Daihatsu Motor Co. Toyota also is the top shareholder in Fuji Heavy Industries, the maker of Subaru cars.

In the past, Toyota was not overly bullish on electric vehicles, which have a limited cruise range. But recent breakthroughs in batteries allow for longer travel per charge.

Mazda, based in Hiroshima, Japan, used to have a powerful partner in Dearborn-based Ford Motor Co., which bought 25 per cent of Mazda in 1979, and raised it to 33.4 per cent in 1996. But Ford began cutting ties in 2008, and has shed its stake in Mazda.

Also Friday, Toyota reported its April-June profit was 613.0 billion yen ($5.6 billion U.S.), up 11 per cent from 552.4 billion yen a year earlier. Quarterly sales rose 7 per cent to 7.05 trillion yen ($64 billion U.S.), as vehicle sales improved around the world, including in the U.S., Europe and Japan.

Toyota stuck to its earlier projection for global vehicle sales for the fiscal year, ending in March 2018, at 10.25 million vehicles. It raised its fiscal full year profit forecast to 1.75 trillion yen ($16 billion U.S.) from the earlier forecast of 1.5 trillion yen ($14 billion U.S.). It earned 1.8 trillion yen in the previous fiscal year.
https://www.thestar.com/business/20...l-partner-on-electric-vehicle-technology.html

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## ultron

http://money.cnn.com/2017/08/30/news/economy/gdp-second-quarter-economy-3-percent/index.html


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## ultron

https://www.cnbc.com/2017/08/31/us-personal-income-july-2017.html


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## RISING SUN

*US begins premium processing of H-1B visas*
Indian techies and industry can breathe a sigh of relief as the US has resumed premium, or expedited, processing of H-1B visas in all categories. The service was suspended five months ago as officials struggled to handle a huge rush of applicants. 

The suspension had been seen as an example of US President Donald Trump's election campaign remarks seeking to stop foreign tech workers from coming to the US being translated into action. 

The US Citizenship and Immigration Services (USCIS) resumed premium processing on Monday for all H-1B visa petitions subject to the US fiscal year 2018 cap, a media release said. The Congress-mandated cap is of 65,000 H-1B visas with an extra 20,000 visas for those who have gone through a US college system. H-1B visas are popular with Indian tech professionals who account for almost 70% of the issuances every year. 

Premium processing is a "fast" processing service of pending applications, something like a "tatkal" service, for a fee of $1,225. When a petitioner requests for the agency's premium processing service, USCIS guarantees a 15-day processing time. This is a much-needed luxury for applicants and employers because normal processing takes anything between 3-6 months. 

New applications, however, have to go through the normal process. In April, USCIS had said they would take up to six months to process the existing applications and temporarily suspended the programme. Premium processing is necessary for companies which have to urgently move professionals to new projects or for other business requirements in the US. 

Indian companies have used this time to do a revaluation of their personnel and project requirements, with many technology companies paring down their necessity for H-1B visas. The restoration of the premium processing system is a sign that the Trump administration is getting into the rhythm of things, although the six-month shutdown was an important rethink moment for the Indian tech industry which relies a lot on access to the US. 

In the interim, Indian companies have even looked at Europe and other parts of the world for newer markets, an unintended consequence of the processing pause in the US.
http://timesofindia.indiatimes.com/...essing-of-h-1b-visas/articleshow/60757708.cms


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## RabzonKhan

*The US is the second-most competitive economy in the world, according to the World Economic Forum






*
WRITTEN BY Eshe Nelson

*Donald Trump has spent the past two years—on the campaign trail and in office—railing about how the US has lost its competitive edge and how corporate-tax reform must be one of the pillars of his presidency. The latest Global Competitiveness Report from the World Economic Forum tells a slightly different story.*

*After three years in third place, the US has climbed up one spot to be the second-most competitive country in the world, after Switzerland—its highest ranking in eight years. The US edged out Singapore, which slipped to third.*

The WEF measures competitiveness by considering 12 factors that would determine the level of productivity in a country, including institutions, infrastructure, macroeconomic environment, health, education, financial-market development, technological readiness, market size, and innovation. It also takes into account a survey of nearly 13,000 business executives from 133 countries. While the survey took place between February and June 2017, when markets and businesses were feeling particularly optimistic about Trump’s promises for deregulation and tax reform, many of the other measures reflect longer-term changes, with up to a two-year lag.

Despite the US’s high overall ranking, there is plenty of room for improvement. The world’s largest economy ranks 25th for “basic requirements,” with particularly low scores for its macroeconomic environment, which considers national debt and the government’s budget balance. It also scores relatively low for primary education and health. Still, the US has top scores in areas the WEF call “efficiency enhancers,” such as financial-market development, market size, higher education and training, and innovation.

While Trump’s claim that the US has the highest corporate tax rate in the world can be debated (yes, the statutory rate is very high at 39% but once deductions and claims are taken into account it falls to about 18%) there is support among the executives surveyed by the WEF to do something about taxes. When asked to pick the most problematic factors for doing business in their country, the top two issues cited in the US were tax rates and tax regulations.

Meanwhile, Switzerland retains the top spot it has held for at least the past six years. In particular, the Swiss labor market is ranked as the best-functioning globally, while the country earns second place worldwide for adopting technology to increase productivity. *Read more*


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## F-22Raptor

US Q2 GDP grew slightly higher to 3.1% after the 2nd GDP revision. Overall US GDP now stands at $19,250 trillion.

https://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm


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## Yongpeng Sun-Tastaufen

US unemployment rate down to 4.2%, lowest since 2000.


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## Yongpeng Sun-Tastaufen

https://www.wsj.com/articles/hiring-rebounds-in-october-unemployment-rate-falls-to-4-1-1509712307


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## RabzonKhan

*U.S. to Dominate Oil Markets After Biggest Boom in World History*
By Grant Smith
November 13, 2017, 4:00 PM PST Updated on November 14, 2017,

The U.S. will be a dominant force in global oil and gas markets for many years to come as the shale boom becomes the biggest supply surge in history, the International Energy Agency predicted.

*By 2025, the growth in American oil production will equal that achieved by Saudi Arabia at the height of its expansion, and increases in natural gas will surpass those of the former Soviet Union, the agency said in its annual World Energy Outlook. The boom will turn the U.S., still among the biggest oil importers, into a net exporter of fossil fuels.*






The United States will be the undisputed leader of global oil and gas markets for decades to come,” IEA Executive Director Fatih Birol said Tuesday in an interview with Bloomberg television. “There’s big growth coming from shale oil, and as such there’ll be a big difference between the U.S. and other producers.”


The agency raised estimates for the amount of shale oil that can be technically recovered by about 30 percent to 105 billion barrels. Forecasts for shale-oil output in 2025 were bolstered by 34 percent to 9 million barrels a day.


The U.S. industry “has emerged from its trial-by-fire as a leaner and hungrier version of its former self, remarkably resilient and reacting to any sign of higher prices caused by OPEC’s return to active market management,” the IEA said.

While oil prices have recovered to a two-year high above $60 a barrel, they’re still about half the level traded earlier this decade, as the global market struggles to absorb the scale of the U.S. bonanza. It’s taken the Organization of Petroleum Exporting Countries and Russia almost 11 months of production cuts to clear up some of the oversupply. *Read more*


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## katsung47

It’s Over for Sears Canada
by Wolf Richter • Oct 10, 2017 • 

Liquidation too for Toys “R” Us? The company filed for bankruptcy in the US and Canada to restructure, but it can’t solve what’s killing it.

/2017/10/10/sears-canada-to-liquidate-close-all-stores-lay-off-12000/

GOP Tax Bill Mostly Benefits The Wealthy, Tax Policy Center Finds

Arthur Delaney,HuffPost• November 6, 2017

WASHINGTON ? The richest 1 percent of Americans would reap 48 percent of the benefits of Republican tax reform legislation, according to a new analysis by the nonpartisan Tax Policy Center.

/news/gop-tax-bill-mostly-benefits-203734303.html


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## katsung47

A New Challenge to the Dollar


By: John Browne Thursday, September 28, 2017


In a move that was little noticed outside of the financial world, China announced the creation of an oil futures contract (open to international traders) that will be denominated in Yuan and convertible into gold. This move provides the first official linkage of oil to gold, and more importantly a linkage between the Chinese currency and gold. While the contract volumes that will be traded on this new platform will certainly be minuscule in comparison to those in the dominant markets of New York and London (at least initially), I believe the move is the latest, and perhaps most significant, step that China has taken down the path that could lead to a global economic system that is not fully dependent on the U.S. dollar. The move amounts to a direct challenge to the dollar’s privileged reserve status and could threaten U.S. dollar price erosion.

commentaries/new_challenge_dollar


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## katsung47

katsung47 said:


> A New Challenge to the Dollar
> 
> 
> By: John Browne Thursday, September 28, 2017
> 
> 
> In a move that was little noticed outside of the financial world, China announced the creation of an oil futures contract (open to international traders) that will be denominated in Yuan and convertible into gold. This move provides the first official linkage of oil to gold, and more importantly a linkage between the Chinese currency and gold. While the contract volumes that will be traded on this new platform will certainly be minuscule in comparison to those in the dominant markets of New York and London (at least initially), I believe the move is the latest, and perhaps most significant, step that China has taken down the path that could lead to a global economic system that is not fully dependent on the U.S. dollar. The move amounts to a direct challenge to the dollar’s privileged reserve status and could threaten U.S. dollar price erosion.
> 
> commentaries/new_challenge_dollar



CBO: the Senate Republican tax bill takes billions from the poor
Updated by Dylan Matthews Nov 27, 2017, 

From the perspective of rich people benefiting from slashing the corporate tax rate, the bill the Senate is currently considering — and could vote on this week — is a tax cut bill. But from the perspective of America’s poor, the bill looks more like a health care cut.


/policy-and-politics/2017/11/27/16704664/senate-republican-tax-bill-health-cut-poor

--------------


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## Yongpeng Sun-Tastaufen

*Job Growth Signals Robust Economy, With Gain of 228,000*

https://www.nytimes.com/2017/12/08/business/economy/jobs-report.html


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## katsung47

"This Is Most Worrying": In One Year, Central Bank Liquidity Will Collapse From $2 Trillion To Zero Today at 12:25 10/11/2017 


Is it complacency, or simply trader paralysis?

A question we first asked three months ago is getting a second wind this morning, when in a report by Deutsche Bank's Alan Ruskin - "Vol: freeze or flight?" - the macro strategist points out that "the new 2017 Nobel laureate for Economics is not the only one at a loss to explain low stock market volatility, and thinks investors are in ‘freeze mode’ in the midst of global uncertainties."
According to Ruskin, however, it's all about to change.

But why? And what is "the most likely causes of a shift to ‘flight mode’ and a rise in volatility? Here’s one possibility: by the end of next year, the combined expansion of all the major Central Bank balance sheets will have collapsed from a 12 month growth rate of $2 trillion per annum to zero."

news/2017-10-11/most-worrying-one-year-central-bank-liquidity-will-collapse-2-trillion-zero


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## Hamartia Antidote

katsung47 said:


> Gold Will Soar... As China Kneecaps The Dollar
> 
> by Tyler Durden Dec 13, 2017
> 
> Chris Lowe: To catch up real quick, why is the petrodollar at risk?
> 
> Nick Giambruno: Under the current petrodollar system, all global oil sales are made in dollars. However, the Chinese government recently announced a new mechanism that will allow oil producers anywhere in the world to trade oil for gold.
> 
> China’s new mechanism will totally bypass the US dollar and the US financial system… along with any restrictions, regulations, or sanctions from Washington. So for many oil producers, it will be much more attractive than the petrodollar system.
> 
> I call it China’s “golden alternative” to the petrodollar. Whatever you call it, though, it will allow for the large-scale trade of oil for gold, instead of dollars.
> 
> Here’s how it will work. The Shanghai International Energy Exchange is launching a crude-oil futures contract denominated in yuan, China’s currency. This will allow oil producers around the world to sell their oil for yuan.
> 
> Of course, the yuan is a fiat currency, just like the dollar. And most oil producers don’t want large stashes of yuan. The Chinese government knows this. That’s why it’s linked the crude-oil futures contract with the option to efficiently convert yuan into physical gold through gold exchanges in Shanghai and Hong Kong.
> 
> Chris Lowe: How soon will this new system be up and running?
> 
> Nick Giambruno: I spoke with officials at the Shanghai International Energy Exchange. They told me they plan to go live with it before the end of the year, or shortly thereafter.
> 
> Chris Lowe: But isn’t that a good thing? Isn’t gold, as a currency, more reliable than the dollar?
> 
> Nick Giambruno: I think it’s high time gold played a more central role in the global monetary system. The problem is ditching the petrodollar would negatively affect the US economy.
> 
> Think about it. If Italy wants to buy oil from Kuwait… or Argentina wants to buy oil from Brazil… they have to buy dollars on the foreign exchange market first.
> 
> This creates a huge artificial market for dollars.
> 
> It means the US can simply print dollars and exchange them for real things like French wine, Italian cars, Korean electronics, or Chinese manufactured goods.
> 
> It also helps create a deeper, more liquid market for US Treasury bonds. This pushes up prices… and pushes down yields… which allows the US federal government to finance enormous and permanent deficits.
> 
> The petrodollar has allowed Washington to spend astronomical amounts of money on welfare and other benefits for over half the population. This gives Americans a much higher standard of living than they would have otherwise. Most of them don’t know this or understand how it affects their everyday lives.
> 
> 
> 
> /news/2017-12-13/gold-will-soar-china-kneecaps-dollar
> ---------------------




@The Eagle 

Can we do something about this new person who if you look at their post history ALWAYS truncates their attached links to hide their nutty website origins. He is just posting conspiracy sites for the sake of trolling. He just posted a truncated link from a Russian site in Bulgaria authored by 'Tyler Durden' the made up character in the movie "Fight Club".

examples of truncation:
https://defence.pk/pdf/threads/las-...than-500-injured.521089/page-12#post-10102921

https://defence.pk/pdf/threads/las-...than-500-injured.521089/page-12#post-10073545

https://defence.pk/pdf/threads/us-politics-2016-2020.374363/page-304#post-10087858
https://defence.pk/pdf/threads/us-politics-2016-2020.374363/page-303#post-10073535

https://defence.pk/pdf/threads/american-economy-news-updates.322211/page-14#post-10102928


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## katsung47

The reason I truncate the links is because I'm a new member. The regulation rules that new member can't post links so I truncate it to let people know it's origin. 
As for *Hamartia Antidote, a probably internet shill, follow other's trace and make recording. 
My opinion is to introduce interesting articles. Let readers judge its value. *


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## katsung47

AT&T workforce stricken with over 2000 layoffs U.S-wide days after $1000 tax reform bonus check
By Mike Wuerthele 
Tuesday, December 26, 2017, 02:34 pm PT (05:34 pm ET)

In the days before Christmas, AT&T and DirecTV gave layoff notices to a large number of landline, legacy service, and home installers spanning the country —and more are coming.

/articles/17/12/26/att-workforce-stricken-with-over-2000-layoffs-us-wide-days-after-1000-tax-reform-bonus-check


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## Hamartia Antidote

katsung47 said:


> The reason I truncate the links is because I'm a new member. The regulation rules that new member can't post links so I truncate it to let people know it's origin.
> As for *Hamartia Antidote, a probably internet shill, follow other's trace and make recording.
> My opinion is to introduce interesting articles. Let readers judge its value. *



Dude, you are in this thread posting negative news stories from weird conspiracy sites and you call me the shill.

Seems you are *notorious* for spamming various websites by doing exactly what I said you were doing about posting stuff from conspiracy sites;
http://forums.sandiegouniontribune.com/showthread.php?t=122947






https://www.debatepolitics.com/conspiracy-theories/246462-katsung47-gone-missing.html





http://www.theworldforgotten.com/showthread.php?t=4480





http://www.speedzilla.com/forums/speedzilla-site-issue-forum/74793-please-ban-katsung47.html





http://forum.opencarry.org/forums/showthread.php?117172-Katsung47-a-mobile-internet-troll





https://www.therealconspiracyforum.com/index.php?/profile/1317-katsung47/





Spare us your fake sob story. I'm going to be asking the mods to keep an eye on your posts. You seem to have a history of being a troublemaker by intentionally ruining threads.

@waz

Reactions: Like Like:
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## Hamartia Antidote

https://www.credit-suisse.com/corpo...pertise/global-wealth-report-2017-201711.html

*Global Wealth Report 2017: Where Are We Ten Years after the Crisis?*

As shown in the latest edition of the Global Wealth Report by the Credit Suisse Research Institute (CSRI), total global wealth has now reached USD 280 trillion and is 27 percent higher than a decade ago at the onset of the financial crisis.

*US Gains Account for Half of Global Wealth Increase*
In the past 12 months, total global wealth grew by 6.4 percent. It is the fastest pace of wealth creation since 2012 and one of the best results since the financial crisis. Moreover, as wealth increased faster than the population, global mean wealth per adult reached a new record high of USD 56,540






Comparing wealth gains across countries, the United States is an unquestionable leader. The country continued its remarkable unbroken spell of gains after the financial crisis and added USD 8.5 trillion to the stock of global wealth.* In other words, the US generated more than half of the total global wealth aggregation of USD 16.7 trillion of the past 12 months.*

"So far, the Trump Presidency has seen businesses flourish and employment grow, though the ongoing supportive role played by the Federal Reserve has undoubtedly played a part here as well, and wealth inequality remains a prominent issue," commented Michael O'Sullivan, CIO for International Wealth Management at Credit Suisse. "Looking ahead, however, high market valuations and property prices may curb the pace of growth in future years."

*....*


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## katsung47

Hamartia Antidote said:


> Dude, you are in this thread posting negative news stories from weird conspiracy sites and you call me the shill.
> 
> Spare us your fake sob story. I'm going to be asking the mods to keep an eye on your posts. You seem to have a history of being a troublemaker by intentionally ruining threads.
> 
> @waz



You work hard to collect all these "evidence". It may only prove what I said are truth, you are afraid of it and don't want others to know.

Trump's "tax reform" is a project to borrow 1.5 trillion, issue it in form of treasury bond or other debit note, then distribute it to rich people in the form of cash, bonus, profit. On the whole, in 10 years, you saw the debt of American people will add to a new high while the cash it borrows goes to Rich people's pocket.


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## katsung47

Pakistan central bank allows yuan-based trade with China

The adoption of yuan means that Pakistan and China would be able to replace the US dollar for transactions in the USD 50 billion China Pakistan Economic Corridor (CPEC) projects.

04 Jan , 2018



.newsnation.in/world-news/pakistan-central-bank-allows-yuan-based-trade-with-china-article-189756.html


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## katsung47

Bankruptcy fallout: Toys R Us closing up to 182 stores
Joan Verdon, The (Bergen County, N.J.) Jan. 24, 2018 

Toys R Us late Tuesday filed court documents outlining plans to close up to 182 stores as part of its bankruptcy reorganization plans.

https://www.usatoday.com/story/mone...ys-r-us-plans-close-up-182-stores/1060674001/


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## katsung47

katsung47 said:


> Pakistan central bank allows yuan-based trade with China
> 
> The adoption of yuan means that Pakistan and China would be able to replace the US dollar for transactions in the USD 50 billion China Pakistan Economic Corridor (CPEC) projects.
> 
> 04 Jan , 2018
> 
> 
> 
> .newsnation.in/world-news/pakistan-central-bank-allows-yuan-based-trade-with-china-article-189756.html



GE is cutting 12,000 jobs
by Chris Isidore @CNNMoney
December 7, 2017:

The company says the job cuts will mostly be outside the United States. The power division's headcount will be reduced about 18%. About 295,000 people worked for GE overall at the end of last year, but the company has cut jobs and costs throughout this year. 

http://money.cnn.com/2017/12/07/news/companies/ge-job-cuts/index.html

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## RabzonKhan

Very interesting stats, just shows how huge the U.S. economy is compared to the rest of the world.





*AEI GRAPHIC: DATA FROM BUREAU OF ECONOMIC ANALYSIS AND INTERNATIONAL MONETARY FUND*

The map above was created (with assistance from AEI’s graphic design director Olivier Ballou) by matching the economic output (GDP) in each U.S. state (and the District of Columbia) in 2015 to foreign countries with comparable nominal GDP last year, using data from the BEA for GDP by U.S. state and data for GDP by country from the International Monetary Fund.

For each U.S. state (and the District of Columbia), I identified the country closest in economic size in 2015 (measured by nominal GDP), and for each state there was a country with a pretty close match—those countries are displayed in the map above and in the table below. Obviously, in some cases the closest match was a country that produced slightly more, or slightly less, economic output in 2015 than a given U.S. state.

1. *America’s largest state economy is California*, which produced $2.44 trillion of economic output in 2015, just slightly above the GDP of France during the same period of $2.42 trillion.

Consider this: California has a workforce of about 19 million compared to an employment level in France of slightly more than 25 million workers. Amazingly, it required 56 percent (and 9 million) more workers in France to produce the same economic output last year as California! That’s a testament to the superior, world-class productivity of the American worker.

Further, California as a separate country would have been the sixth largest economy in the world last year, ahead of France ($2.42 trillion) and India ($2.09 trillion) and not too far behind No. 5 U.K. at $2.85 trillion.

2. *America’s second largest state economy—Texas—produced $1.64 trillion of economic output in 2015*, which would have ranked the Lone Star State as the world’s 10th largest economy last year, behind No. 9 Brazil with $1.77 trillion of economic output.

Although Brazil out-produced Texas last year by almost 8 percent, the workforce of Brazil is around 91 million employees compared to payroll employment in Texas of only about 12 million. So to produce just slightly more economic output last year, Brazil’s workforce is larger by almost 80 million workers compared to the U.S.!

3. Even with all of its oil wealth, *Saudi Arabia’s GDP in 2015 at $653 billion was below the GDP of U.S. states like Pennsylvania* ($680 billion) and Illinois ($768 billion).

4. *America’s third largest state economy—New York with a GDP in 2015 of $1.45 trillion—produced nearly the same amount of economic output last year as Canada* ($1.55 trillion) and would have ranked as the world’s 11th largest economy last year as a separate country, ahead of both South Korea ($1.38 trillion) *and Russia ($1.32 trillion).*

Amazingly, even though Canada produced about 7 percent more economic output last year than the state of New York, there are almost twice as many Canadian workers (about 18 million) as the number of workers employed in New York (9.2 million). Another example of the world-class productivity of the American workforce.

5. *Other comparisons*: Florida ($888 billion) produced about the same amount of GDP in 2015 as Indonesia ($858 billion), even though Florida’s workforce of 9.3 million is about 8 percent of Indonesia’s workforce of 115 million employees. GDP in Illinois last year of $768 billion was just slightly higher than economic output in the Netherlands ($738 billion), even though employment in Illinois (6.2 million workers) is about 25 percent below the employment level in the Netherlands (8.34 million workers).

Overall, the U.S. produced 24.5 percent of world GDP in 2015, with only about 4.5 percent of the world’s population. Three of America’s states (California, Texas and New York)—as separate countries—would have ranked in the world’s top 11 largest economies last year.

Together, those three US states produced $5.5 trillion in economic output last year, and as a separate country would have ranked as the world’s third largest economy and ahead of No. 3 Japan ($4.1 trillion) by almost $1.5 trillion.

And one of those states—California—produced more than $2 trillion in economic output in 2015—and the other two (Texas and New York) produced more than $1.6 trillion and $1.4 trillion of GDP in 2015 respectively.

Adjusted for the size of the workforce, there might not be any country in the world that produces as much output per worker as the US, thanks to the world-class productivity of the American workforce.

*The map above and the statistics summarized here help remind us of the enormity of the economic powerhouse we live and work in. So let’s not lose sight of how ridiculously large and powerful the US economy is, and how much wealth, output and prosperity is being created every day in the largest economic engine ever in human history. 
Source*

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## Ahmet Pasha

Stock market took a deep plunge a few hours ago. Has it recovered??? Is there gonna be another recession??


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## katsung47

944. See how big the bubble is (1/25/2017)

17 years ago, I found the Feds moved the area residents away and bought in houses in large scale. (see #733, 734, 736. CASH FOR HOUSE). As early as 2003, I warned of a housing bubble. (see #180. Beware of housing bubble (11/16/03))That bubble keeps growing up until now. I think that's because They failed to eliminate Kat Sung. The result is: San Jose becomes No.1 highest median house price city (where I live) and San Franciso is the No.2. (Where my mother and sisters live). 

Here is a chart of median home sale prices of San Francisco. The curve is accordant to the persecution course the Feds apply on me. The unusual upward price started from 1993. Though the chart author thought there were two bubbles, it is still a big one in fact. The bubble stopped growing up in 2008 due to financial tsunami but the Feds managed to prevent it from breaking. The down turn was mild. Even in lowest point of 2011, it's 695,000. Double the amount of starting price. 







From steep curve you may see how big this bubble is. 




> Report: San Jose, Not San Francisco, Has Highest Median Home Price In Country
> BY JACK MORSE IN NEWS ON AUG 12, 2016
> 
> San Jose, with a median home price of $1,085,000, currently ranks as the most expensive metropolitan area for would-be home owners. The second most expensive? That would be San Francisco coming in at $885,600.
> 
> http://sfist.com/2016/08/12/san_jose_not_san_francisco_has_high.php


----------



## Yongpeng Sun-Tastaufen

https://www.cnbc.com/2018/03/07/us-trade-deficit-jumps-to-more-than-9-year-high.html


----------



## Yongpeng Sun-Tastaufen

https://www.reuters.com/article/us-...s-in-february-wage-growth-slows-idUSKCN1GL0IZ


----------



## katsung47

The US Economy is only Growing Because of Deficit Spending 

This study shows that since 2008 and the great Recession the economy didn't grow at all if you deduct the injection of debt financed deficit spending. Here is a chart of GDP minus deficit spending:









This is sort of like a homeowner borrowing a lot of money on his house. It seems he's richer and can afford more purchases, but it only depletes his net worth. In the future, if a recession arises, much more debt will have to be created. It's true that there is no limit on how much money can be created by the Federal Reserve, but diluting the dollar could cause it to collapse like Venezuela.



https://www.zerohedge.com/news/2018-03-16/us-economy-really-growing

http://lunaticoutpost.com/thread-17473.html


----------



## Solomon2

*GOOD TRUMP: Jobless Claims Hit 49-Year Low*




The Washington Post / Contributor / Getty Images
By JOSEPH CURL @JOSEPHCURL
September 20, 2018

The number of Americans who applied for unemployment benefits fell to just 201,000, a number not seen since shortly after man first walked on the moon.

Known as initial jobless claims, the number roughly equates to layoffs. For the week ending Sept. 15, such claims dropped by 3,000 to the lowest level since Nov. 12, 1969. The monthly average dropped to 205,750, the lowest since December 1969, the Labor Department reported on Thursday.

"The labor market is viewed as being near or at full employment. It continues to strengthen, with nonfarm payrolls increasing by 201,000 jobs in August and annual wage growth notching its biggest gain in more than nine years. Job openings hit an all-time high of 6.9 million in July," CNBC reported.

There was more good economic news. "Thursday's claims report also showed the number of people receiving benefits after an initial week of aid fell 55,000 to 1.645 million for the week ended Sept. 8, the lowest level since August 1973. The four-week moving average of the so-called continuing claims fell 20,750 to 1.691 million, the lowest level since November 1973," CNBC said.

President Trump applauded the news.


__ https://twitter.com/i/web/status/1042731410858168320

"Financial and jobs numbers are fantastic. There are plenty of new, high paying jobs available in our great and very vibrant economy. If you are not happy where you are, start looking - but also remember, our economy is only getting better. Vote in Midterms!" he wrote Thursday on Twitter.

See the full report here.


----------



## Solomon2

*Florida and Texas Post Record Sept.-to-Sept. Job Gains; Ohio Has Largest Gain in 21 Years*
By Terence P. Jeffrey | October 19, 2018 | 5:21 PM EDT






President Donald Trump and First Lady Melania Trump in Texas (Screen Capture)

(CNSNews.com) - Florida and Texas, according to data released today by the Bureau of Labor Statistics, not only led the nation in the number of nonfarm jobs they added in the year running from September 2017 to September 2018 but also added the greatest number of jobs to their states in any September-to-September period on record.

Ohio and Pennsylvania—sometimes considered part of the nation’s “Rust Belt”—also saw significant job gains from September 2017 to September 2018, with Ohio showing the largest increase for its state in 21 years and Pennsylvania showing the largest increase in 18 years.

“Thirty-seven states had over-the-year increases in nonfarm payroll employment in September,” BLS said in its state employment report. “The largest job gains occurred in Florida (+407,300), Texas (+406,400), and California (+339,600). The largest percentage gain occurred in Florida (+4.8 percent), followed by Utah (+3.6 percent) and Texas (+3.3 percent).

The unemployment rate in Florida was 3.5 percent. In Texas, it was 3.8 percent. In California, it was 4.1 percent.

While California ranked third among all states for the number of job gained during the period from September 2017 to September 2018, its statewide jobs growth numbers during that period were actually smaller than they were in two of the previous three September-to-September periods. (From September 2014 to September 2015, California added 493,000 jobs; from 2015 to 2016, it added 393,800 jobs; and from 2016 to 2017, it added 307,500 jobs)

Florida’s jobs grew 4.8 percent during the latest September-to-September period. Texas’s jobs grew 3.3 percent. California’s jobs grew 2.0 percent.

In Florida, the number of nonfarm jobs rose from 8,435,100 in September 2017 to 8,842,400 in September 2018—accounting for the record 407,300 increase.





From September 2016 to September 2017, the number of jobs in Florida actually declined by 19,100, according to BLS, which has posted historical employment data for Florida going back to 1990. Prior to fiscal 2018, the largest September-to-September jobs increase on record in Florida took place in 2005, when the state added 389,000 jobs.

In Texas, the number of jobs rose from 12,232,100 in September 2017 to 12,638,500 in September 2018—accounting for the record 406,400 increase.





Prior to fiscal 2018, the largest September-to-September jobs increase in Texas (in the years since 1990) took place in 1997, when the state added 399,900 jobs.

The 37 states that BLS said had statistically significant jobs increases from September to September included Pennsylvania (which added 78,700 jobs) and most of the states in the northern Midwest.

Ohio, for example, added 104,600 jobs during the September-to-September period; Michigan added 63,300; Illinois added 50,300; Wisconsin added 41,700; Minnesota added 38,200; and Iowa added 17,600.

The 104,600 jobs that Ohio added was the most it has added in any September-to-September period since 21 years ago in 1997. That year, Ohio added 107,700 jobs.





The 78,700 jobs that Pennsylvania added was the most it has added in any September-to-September period since 18 years ago in 2000. That year, Pennsylvania added 117,700 jobs.







[Above is Table D from the Bureau of Labor Statistics' "State Employment and Unemployment Summary," published Oct. 19, 2018.]

_Please support CNSNews today! [a 501(c)(3) non-profit production of the Media Research Center]_


----------



## RabzonKhan

*"When you hear all this talk about economic miracles right now, remember who started it," 
*

__ https://twitter.com/i/web/status/1054476057619894273
Former President Obama on Monday urged a crowd in Las Vegas to "remember who started" the current economic boom, reminding them that the country recovered from the Great Recession during his presidency.

Obama echoed language from President Trump, who in July claimed his administration unleashed an "economic miracle" with tax cuts legislation.

"When I walked into office ten years ago, we were in the middle of the worst economic crisis of our lifetimes," Obama said at a rally for Nevada Democrats. "By the time I left office, wages were rising, uninsurance rate was falling, poverty was falling, and that's what I handed off to the next guy."

"So when you hear all this talk about economic miracles right now, remember who started it," he said to thunderous applause and a standing ovation.

The former president in recent weeks has criticized Trump's tendency to take full credit for healthy state of the U.S. economy.

"Six months ago, we unleashed an economic miracle by signing the biggest tax cuts and reforms ... the biggest tax cuts in American history," Trump said at an event in July.

The Associated Press fact-checker called this statement an "exaggeration," pointing out the economy has been expanding for the past ten years.

The tax cuts are also not the largest in U.S. history.

Obama during the Monday rally said economic growth during his presidency could partially be attributed to his administration "making sure the wealthiest Americans, folks like me, paid their fair share of taxes." *Read more*


----------



## katsung47

Verizon Lays Off 44,000, Transfers 2,500 More IT Jobs To Indian Outsourcer Infosys
Jean Baptiste Su Oct 5, 2018,

https://www.forbes.com/sites/jeanba...bs-to-indian-outsourcer-infosys/#7334b58946f5


----------



## RabzonKhan

*"When you hear all this talk about economic miracles right now, remember who started it," Obama*
*

 https://twitter.com/i/web/status/1058535914656407552*


----------



## katsung47

Trump's trade war with China is starting to get nasty for US companies
Bob Bryan Oct. 25, 2018,

President Donald Trump's trade war with China has dragged on for nearly four months, and American businesses are starting to feel the pain.

Surveys from Markit and the Federal Reserve found that businesses face increasing costs that are in some cases being passed on to consumers because of Trump's tariffs.

Additionally, major companies like Tesla, 3M, Ford, and Harley-Davidson have said they're feeling the burn and expecting millions of dollars in costs from the tariffs.

https://www.businessinsider.com/trump-tariffs-china-trade-war-us-companies-prices-2018-10


----------



## Yongpeng Sun-Tastaufen

*U.S. economy adds 155,000 jobs in November, below expectations. Unemployment rate was 3.7 percent.*

https://www.washingtonpost.com/busi...60ce2a8148f_story.html?utm_term=.153ea56828f4


----------



## RabzonKhan

*Why Burger King Is No Longer McDonald’s Biggest Competitor*
*
Emily DiNuzzo





*
Everyone has a favorite fast-food place and a go-to order. But which chain is the best overall restaurant? For many years it came down to McDonald’s vs. Burger King, and that was that—until now.
*
Who is McDonald’s biggest competitor?
*
These days, the Golden Arches faces a new competitor: Chick-fil-A. The chicken sandwich chain is expected to beat both Burger King and Wendy’s in sales this year, and is shaping up to become the third-largest restaurant chain in America, according to some food-industry reports, with more outlets than even Subway—the fast-food chain closing more locations than any other restaurant. In fact, Chick-fil-A is already beating McDonald’s by one key criteria, bringing in more money per store.

McDonald’s is still a fast-food giant and Chick-fil-A a relative newcomer, but the chicken joint is catching up. Though the Atlanta-based chain’s sales and traffic have increased last year by 15.5 percent and 10 percent, respectively, according to Restaurant Business, it will take another 21 years to catch up to the Golden Arches. And this will only happen if McDonald’s stops growing. McDonald’s would be tough to beat, but Chick-fil-A is shaping up as a worthy opponent. Voted America’s favorite restaurant for the third year in a row, as well as best in customer service, Chick-fil-A also ranks as one of the cleanest restaurants in America. Has McDonald’s taken note? They’ve recently stepped up their chicken offering, with the likes of the new Buttermilk Crispy Chicken Sandwich and a tenders version, whereas most Chick-fil-A restaurants serve exclusively chicken (a handful of select locations offer beef, Business Insider reports). It appears the race is on!

*Both restaurants have had some drama*

It seems every year or so some major fast-food scandal rocks the industry. McDonald’s and Chick-fil-A both have had their fair share of bad press. McDonald’s came under fire for using a type of “lean, finely textured beef,” that ABC News referred to as “pink slime.” Then, who can forget the film _Super Size Me, _which documented the negative health effects of eating McDonald’s 24/7 and resulted in the chain removing their super-size option from the menu. Chick-fil-A continues to face criticism for their stance on social issues, specifically financial support of organizations that oppose same-sex marriage, whereas McDonald’s continues to rank among the world’s most admired companies, thanks to their innovation, social responsibility, competitiveness, and people management. Social pressure doesn’t seem to have held Chick-fil-A back: While other chains have shuttered franchises, they’ve been opening about 100 new restaurants a year, according to Vox. It looks like fans will be able to have both their McDonald’s and their Chick-fil-A for the foreseeable future. Before paying either a next visit, you might want to know these 33 secrets that your fast-food worker probably wouldn’t tell you. *Source*




*
https://www.bing.com/aclick?ld=e3zQ...pZCU3ZA&rlid=09d628d5004514b2b2e0746657b01d8e*


----------



## Galactic Penguin SST

*Donald Trump explains his distinctive orange hue: it’s the light bulbs*


• In rambling speech to Republican lawmakers, US president takes aim at energy-efficient bulbs, saying ‘the light is the worst’
• Trump has recently been criticised for plans to weaken regulation against environmentally friendly light bulbs

Published: 1:12am, 14 Sep, 2019

It has been the subject of intense debate among late-night comedians and Donald Trump’s many online critics: why, under certain circumstances, does the president of the United States sometimes appear … orange?

Now Trump himself has come up with an answer – and it is not one anyone was expecting. The problem, apparently, is energy-efficient light bulbs.

Talking before an audience of Republican legislators in Baltimore on Thursday night, Trump gave a rambling speech in which he tackled criticism of his recent plans to weaken regulations on environmentally friendly bulbs.

“The light bulb,” the president began. “People said: what’s with the light bulb? I said: here’s the story. And I looked at it. The bulb that we’re being forced to use! No 1, to me, most importantly, the light’s no good. I always look orange. And so do you! The light is the worst.”

But that was not the end of it. Trump complained that the energy-efficient bulb is many times more expensive than its incandescent predecessor and, he claimed, needs to be treated as “hazardous waste” if it breaks.

Energy-efficient bulbs such as halogen incandescents, compact fluorescent lamps (CFLs), and light-emitting diodes (LEDs) typically use about 25 to 80 per cent less energy than traditional incandescents, and can last up to 25 times longer.

But that wasn’t good enough for Trump.

He continued: “What are we doing? It’s considered hazardous waste, but it’s many times more expensive and frankly the light is not as good. So we’re going to sell them, but we’re also going to sell incandescent bulbs. People are very happy about it. It’s amazing.”

https://www.scmp.com/news/world/uni...ald-trump-explains-his-distinctive-orange-hue


----------



## RabzonKhan

*There are 618,000 millennial millionaires in the US—and 44% of them live in 1 state*

*CNBC*
Kathleen Elkins

There are approximately 618,000 “millennial millionaires” — those with a net worth of over $1 million — in the United States, according to a 2019 report from Coldwell Banker Global Luxury and WealthEngine, which defines millennials as those born between 1982 and 1996, or ages 23 to 37 in 2019.

*The population of wealthy young people is growing, the report finds. And they’re getting richer: “By 2030, millennials will hold five times as much wealth as they have today, and are expected to inherit over $68 trillion from their predecessors in the Great Transfer of Wealth.”*


*The “Great Wealth Transfer” refers to the trillions of dollars that will be passed down to millennials from their baby boomer parents, who are considered the wealthiest generation in history.*

*Almost half, 44%, of the millennial millionaires are concentrated in California. That’s “consistent with the general millionaire population,” the report says, adding that “the Golden State also has the highest percentage of business owners (23%) and the highest percentage of real estate investors.”*

*New York ranks No. 2. It’s home to 14% of the millennial millionaire population.*

The top ZIP code for young millionaires, though, is in neither CA or NY: It’s in Traverse City, Michigan (49685).

Historically a tourist destination, the Lake Michigan beach town has “a robust second-home market where luxury homes generally start at $500,000 — a far cry from many Silicon Valley ZIP codes, where luxury home prices generally start at about $2 million,” Coldwell Banker reports.

That’s consistent with another finding from the report: “In terms of locations, millennials tend to prefer markets that are more affordable — often in suburbs or second-tier cities, where their dollar will carry them further.”

Here are the other popular states for millennial millionaires:







*Source*


----------



## RabzonKhan




----------



## RabzonKhan

*The Rise and Rise of New York's Billionaire's Row*


----------



## RabzonKhan

*One of America's most notorious airports is getting a multi-billion dollar upgrade. Discover how the team at LAX are succeeding with Autodesk BIM 360*


----------



## RabzonKhan

*Amazon's Jeff Bezos backs Biden's infrastructure plan, supports 'a rise in the corporate tax rate'*

Jordan Mendoza
USA TODAY






Amazon founder and CEO Jeff Bezos released a statement Tuesday in support of President Joe Biden's infrastructure plan, dubbed the American Jobs Plan.

Months before he steps down as the company's CEO, Bezos said Democrats and Republicans have supported infrastructure plans and now is the right time to get something "that maintains or enhances U.S. competitiveness."

*"We support the Biden Administration’s focus on making bold investments in American infrastructure," Bezos said in the statement posted on Amazon's website. "We look forward to Congress and the Administration coming together to find the right, balanced solution."*

Biden said last week that the infrastructure plan, "are investments we have to make." 

*The $2 trillion plan aims to not only rebuild the nation's aging roads, bridges, transit and rail service, but support electric vehicles, clean energy and building more than 2 million affordable homes. White House press secretary Jen Psaki said the administration would like to see the plan approved by Congress in the summer.

Bezos added that the company is supportive of a rise in corporate tax rates, which the plan would do in order to pay for the eight-year spending package. It would raise the corporate tax rate to 28%, eliminating the tax cuts made in 2017 made by President Donald Trump.*

Biden singled out Amazon last week during address in Pittsburgh, Pennsylvania, for not playing federal taxes, saying the corporate giant is one of many companies that "use various loopholes where they pay not a single solitary penny in federal income tax."

This is not the first time Amazon has offered support to the Biden administration. Amazon Worldwide Consumer CEO Dave Clark wrote a letter to Biden in January that the company would help with COVID-19 vaccine rollouts.


----------



## RabzonKhan

*The US economy is growing at its fastest pace since 1984*

By Charles Riley, CNN Business
April 6, 2021


* (CNN Business) **President Joe Biden's $1.9 trillion stimulus package will boost the US economy and drive faster global growth this year, the International Monetary Fund said Tuesday, though it warned that many countries continue to suffer from the pandemic and are at risk of being left behind.
*
*The US economy will surpass its pre-pandemic size as growth reaches 6.4% this year, the IMF said, up 1.3 percentage points from the group's forecast in January. The rebound will help the global economy expand 6% in 2021, an upgrade of 0.5 percentage points from the IMF's previous outlook. The estimates are broadly in line with Wall Street's expectations.*

"At $1.9 trillion, the Biden administration's new fiscal package is expected to deliver a strong boost to growth in the United States in 2021 and provide sizable positive spillovers to trading partners," the IMF said in a report. Other governments and central banks around the world have also pumped trillions into the global economy.

*The IMF said the "unprecedented policy response" to the pandemic means the "recession is likely to leave smaller scars than the 2008 global financial crisis." The group estimates global output dropped 3.3% in 2020, while the US economy shrunk 3.5%.*

*There are already signs the US recovery is gaining speed. American employers added 916,000 jobs in March, the biggest gain since August. The US manufacturing sector is also roaring ahead, with the ISM Manufacturing Index recently posting its best reading since 1983.

The IMF expects that the coronavirus vaccine rollout and massive government stimulus will combine this year to produce the fastest annual growth rate in the United States since 1984 under President Ronald Reagan. But many other countries will have to wait until 2022 or 2023 to recover all the output lost during the pandemic. Global output growth will slow to 4.4% next year, according to the IMF.*

"Multispeed recoveries are under way in all regions and across income groups, linked to stark differences in the pace of vaccine rollout, the extent of economic policy support, and structural factors such as reliance on tourism," said Gita Gopinath, director of research at the IMF. "The divergent recovery paths are likely to create significantly wider gaps in living standards between developing countries and others."

*The upgraded US forecast means the world's biggest economy is on track to grow more quickly than many other developed nations this year. The IMF expects growth of 4.4% in the 19 countries that use the euro as Europe battles another wave of coronavirus that has forced Germany, France and Italy to tighten restrictions. Output is expected to expand 3.3% in Japan.*

But some nations in Asia will still outpace the United States. The IMF expects China, which was the only major economy to avoid recession last year, to grow 8.4% in 2021 — much stronger than the country's official forecast of more than 6%. Output in India will expand 12.5% in the fiscal year to March 2022.
The IMF credited continued government stimulus and vaccine rollouts for stronger growth projections. It said that consumer prices could be volatile, but it does not expect high levels of inflation to take root because of weak wage growth and unemployment.

Still, the IMF cautioned that a "high degree of uncertainty surrounds" its projections, reflecting the wide range of potential coronavirus developments. "Greater progress with vaccinations can uplift the forecast, while new virus variants that evade vaccines can lead to a sharp downgrade," the group said in its report.
While advanced economies were hit harder than developing nations by fallout from the 2008 global financial crisis, the IMF expects the opposite to be true in the pandemic. The group also said that young people, women and lower-skilled workers have been more likely to lose their jobs due to coronavirus.
"Once the health crisis is over, policy efforts can focus more on building resilient, inclusive, and greener economies, both to bolster the recovery and to raise potential output," said Gopinath.

While stimulus has helped protect the economy and financial system, it has also encouraged investors to take excessive risks and driven up asset prices, the IMF warned in a separate report. If interest rates rise sharply in response to inflation, that could lead to tighter financing conditions.
The fallout would hit developing markets and poorer countries hardest.
"There is a risk that financial conditions in emerging market economies may tighten markedly, especially if policymakers in advanced economies take steps toward policy normalization," said the IMF.


----------



## Yongpeng Sun-Tastaufen

US economy is on fire. It's going to triple just this year alone.


----------



## RabzonKhan

*Two Companies Will Reach $2 Trillion Next (Tesla Isn't One)*

*S&P 500 companies' race to a $2 trillion market value is about to get more exciting — and lots of money is being made on the way.*

Analysts are already calling for two S&P 500 companies, technology giant Microsoft (MSFT) and consumer discretionary Amazon.com (AMZN), to be the next to reach a market value of $2 trillion or more, says an Investor's Business Daily analysis of data from S&P Global Market Intelligence and MarketSmith.

The race to $2 trillion got all the more real Monday. Shares of Microsoft leapt nearly 3% t0 249.07 a share. That's a new all-time high for the stock, taking out the previous high of 246.10 and topping even its value at the height of the 2000s dot-com boom. It also lifts the company's value to $1.88 trillion.

Following a 12% rally this year, Microsoft is now the S&P 500's second-most valuable member. Next up? Two trillion.

*S&P 500's Race To $2 Trillion*

The fact two S&P 500 companies are sprinting to a $2 trillion valuation speaks volumes of how technology is driving the market again. And the stakes are huge as the market value of mega technology firms determines the composition of the world's most popular index: The S&P 500.

*Apple (AAPL) reached the $2 trillion market value threshold first, less than a year ago, on Aug. 26, 2020, says S&P Global data. That means it took about two years for Apple to hit $2 trillion in market value after reaching a $1 trillion value on Aug. 3, 2018. It took Apple roughly 40 years to reach a trillion in market value.*

And now it's Microsoft's turn. Analysts think shares of the company behind Microsoft 365 productivity software like Word, and cloud computing, will worth 275.97 in 12 months. If they're right, that implies a market value of $2.08 trillion in a year's time or less. It's also an implied gain of 10.8% from here.

It's not just wild speculation, either. Analysts think Microsoft will earn $7.37 a share in fiscal 2021 ended in June. That's nearly 28% higher than in the same period in 2020. Do you know what to look at before you buy Microsoft stock?

*Amazon: Close On Microsoft's Heels To $2 Trillion*

*Hot on Microsoft's heels, though, on the way to $2 trillion is Amazon. It's only a matter of time for it, too, analysts say.*

*S&P 500 analysts are calling for Amazon stock to surge more than 25% in the next 12 months to 4,043.50 a share. It closed Monday up 2% to 3,226.73. If analysts are right, that would put Amazon's value at $2.04 trillion in less than a year.*

And that would be a welcome change for Amazon investors. Shares have lagged so far this year, tumbling 1% even as the S&P 500 rose 8.6%. That's serious underperformance for a stock that's been a leader for so long. Even so, Amazon's stock is outperforming Apple's, which is still down more than 5% this year so far.

Analysts are still much more cautious on shares of electric-car maker *Tesla* (TSLA), despite strong shipment data. The stock, now trading at 691 a share, is expected to fall more than 10% until sinking to analysts' 12-month price target of 617.50. And at that price, Tesla would only be worth $592.7 billion. Tesla stock is down 2% this year so far.

In fact, Tesla is expected to only be the seventh most valuable in the S&P 500 in 12 months. *Alphabet* (GOOGL), *Facebook* (FB) and *Berkshire Hathaway* (BRKB) are all seen having higher market values than Tesla by then.

But the race to $2 trillion is likely to hold plenty of surprises.

*S&P 500 On Race To $2 Trillion*
_Market valuation now, and based on analysts' 12-month price targets_


CompanySymbolMarket Value Now ($ Trillions)Analysts' Market Value Target ($ Trillions)Stock YTD % Ch.SectorComposite RatingApple(AAPL)$2.1$2.5-5.1%Information Technology67Microsoft(MSFT)$1.88$2.112.0%Information Technology82Amazon.com(AMZN)$1.62$2.0-0.9%Consumer Discretionary75Alphabet(GOOGL)$1.5$1.626.6%Communication Services96Facebook(FB)$0.88$0.9613.1%Communication Services94Berkshire Hathaway(BRKA)$0.61$0.6613.7%Financials57Tesla(TSLA)$0.66$0.59-2.1%Consumer Discretionary94Visa(V)$0.47$0.520.1%Information Technology44JPMorgan Chase(JPM)$0.47$0.4820.9%Financials79Johnson & Johnson(JNJ)$0.43$0.483.8%Health Care40


----------



## RabzonKhan

*'Total nightmare.' Fast food struggles to hire as demand soars, U.S. economy roars*

By Hilary Russ Reuters
20 hrs ago








*NEW YORK — Taco Bell restaurants, struggling to hire enough workers to keep up with a surge in sales as the U.S. economy recovers, is pitching a huge April job fair to hire at least 5,000 employees in one day. And it’s adding benefits for some general managers to sweeten the pot.*

Taco Bell, part of Yum Brands Inc., will hold spot interviews on April 21 in parking lots at nearly 2,000 Taco Bell locations, where some candidates won’t even have to leave their cars to apply. It has also added four weeks of annual vacation, eight weeks of paid maternity leave, and four weeks of new parent and guardian “baby bonding” time for general managers at company-owned locations.

Taco Bell has used such hiring events before, but never at so many locations at once. “It is no secret that the labor market is tight,” Kelly McCulloch, Taco Bell’s chief people officer, said in a statement.

“Total nightmare” is the way FAT Brands Inc. CEO Andy Wiederhorn describes the staffing situation for franchisees of his company’s restaurants, which include Johnny Rockets and Fatburger.

“The most recent stimulus check and unemployment benefits have been a catalyst for people to stay at home” instead of looking for work, he said.

U.S. job openings in the accommodation and food service industry increased by 104,000 to reach 761,000 on the last day of February from the prior month, according to federal data released last week.


Fast-food companies and some other restaurant chains did well through the coronavirus pandemic as their customers turned to drive-thru, carry-out and delivery. But they are seeing greater sales now that the weather is warmer, many limits on dining room capacities are lifted, and more people are eating out.

A measure of U.S. services industry activity surged to a record high on Monday amid robust growth in new orders, the latest indication of a roaring economy boosted by increased vaccinations.


*Hiring cannot keep pace. The U.S. restaurant industry in March was still about 1.2 million employees short from the same month in 2020, according to U.S. Bureau of Labor Statistics data.*

The gap is hardly limited to hospitality. High jobless rates have not translated into a flurry of applications for open positions in manufacturing, either.

*The Labor Department said 916,000 jobs were created last month, the most since last August, including 53,000 manufacturing positions. That was the highest number of new factory jobs in six months.*


*Hawking cars or cocktails*

One McDonald’s Corp. franchisee said sales have soared as consumers spend their stimulus checks. Yet some McDonald’s dining rooms may not reopen until the second half of 2021 because of labor shortages, the franchisee said.

McDonald’s franchisees are aiming to hire 5,000 employees just in the state of Ohio, according to local media reports in late March.
Restaurants are competing not just with each other for employees but with other industries, as some hospitality workers who were laid off found other kinds of work — construction or real estate, for instance — and are not coming back, FAT Brands’ Wiederhorn said.

“That waiter or waitress can sell a car just as well as they can sell a cocktail,” Wiederhorn said.
In Las Vegas, which has about 16 Johnny Rockets and Fatburger locations, employees are working double shifts. “It’s just hard, it gets old and tiring,” Wiederhorn said. “You can only do it for so long.”


----------



## RabzonKhan

*JPMorgan pledges $2.5 trillion over the next decade toward climate change

APR 15 2021*
*Pippa Stevens*


JPMorgan Chase said Thursday it will commit more than $2.5 trillion over the next decade toward long-term solutions that tackle climate action and contribute to sustainable development.

*Within the initiative, $1 trillion is earmarked for green projects, including renewable energy and clean technologies that are focused on speeding the transition to a low-carbon economy.*

The $2.5 trillion target, which begins this year and runs through the end of 2030, will also finance and facilitate transactions that support socioeconomic progress in developing countries, as well as economic inclusion in developed markets.

The latter effort will focus on small business financing, home lending and affordable housing, education and health care. Included within this category is the $30 billion JPMorgan committed last October to closing the racial wealth gap in the U.S.

*“Climate change and inequality are two of the critical issues of our time, and these new efforts will help create sustainable economic development that leads to a greener planet and critical investments in underserved communities,” CEO Jamie Dimon said.


“Business, government and policy leaders must work together to support long-term solutions that advance economic inclusion, bolster sustainable development and further the transition to a low-carbon economy. We are committed to doing our part,” he said.*

Thursday’s announcement comes after JPMorgan said last fall it will establish emission targets for its financing portfolio. The firm said targets would be set on a sector-by-sector basis, and will first focus on the oil and gas, electric power, and automotive manufacturing sectors.

The targets, which the firm said it would begin setting in 2021, will be within the parameters outlined by the 2015 Paris Agreement.

*Dimon also addressed the enormous opportunity created by the energy transition in his 2020 annual letter to shareholders.*
*
“There’s huge opportunity in sustainable and low-carbon technologies and businesses,” he said.
*
*“While many of these technologies and companies are mature, many more are just getting started—and more will need to be created in the coming decades. In addition, all companies will need capital and advice to help them innovate, evolve and become more efficient while staying competitive in a changing world,” Dimon said in the letter. **Read more*


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## RabzonKhan

*Wisk Aero and Blade Urban Air Mobility partner to bring electric air taxi services to the skies*
May 5, 2021





*Image Credits: *Wisk Aero 


Once the design, manufacturing and certification of electric aircraft is complete, urban air mobility companies face a cascade of logistical issues, including building an app that can connect customers to rides and finding dedicated take-off and landing areas.

A new partnership between autonomous air taxi developer Wisk Aero and air mobility ride platform Blade Urban Air Mobility aims to provide a solution.

Under the terms of the agreement, Wisk will own and operate up to 30 aircraft on Blade’s network of dedicated air terminals along short-distance routes. Wisk will be compensated based on flight time, along anticipated minimum flight-hour guarantees, the companies said in a news release Wednesday.

It’s a smart move for both companies. Blade does not own aircraft itself, but instead brokers private air travel service through a digital platform. However, the craft they offer are conventional rotorcraft, such as helicopters and seaplanes. The partnership will help “accelerate Blade’s transition from conventional rotorcraft to safe, quiet, emission-free Electric Vertical Aircraft,” Rob Wiesenthal, CEO of Blade, said in a statement.

Wisk, born out of a joint venture between Kitty Hawk and Boeing, will be able to benefit from Blade’s experience as an air mobility service provider. Once Wisk achieves certification from the U.S. Federal Aviation Administration, it will be able to immediately ramp up via Blade’s network.

The companies say they are committed to an “open-network” approach to Urban Air Mobility, with Wisk providing aircraft to multiple customer platforms and likewise Blade using many different electric aircraft developers for its ride services. Not all electric vertical take-off and landing companies will likely take the partnership route. Joby Aviation CEO JoeBen Bevirt has stated publicly that the company intends to be vertically integrated between its vehicle development and air taxi operations.

Blade is one of a suite of air mobility companies, including Joby, that have announced its intention to go public via a merger with a special purpose acquisition company. In December 2020 Blade said it would merge with SPAC Experience Investment Corp. at a valuation of $825 million. The deal includes $400 million in gross proceeds and $125 million in private investment in public equity (PIPE).


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## RabzonKhan

*Meet The 37-Year-Old CEO Who Turned Vimeo Into A Billion-Dollar Company | Forbes*






Vimeo was always YouTube's weird, flailing, artsy cousin — until a thirty-something CEO stepped in and figured out how to make it a cash cow. CEO Anjali Sud has transformed the near-forgotten Vimeo into a $6 billion blockbuster business that lets both mom-and-pop shops and giant corporations shoot, edit and post millions of videos across the internet’s most influential sites. 

Seven years ago, Vimeo had Hollywood dreams. The internet video outfit—owned by Barry Diller’s IAC—had found a niche hosting flicks for artsy filmmakers who didn’t want their works to be tossed into YouTube’s unruly, ad-driven stew. But it was a tiny, money-losing business with annual revenue under $40 million. Vimeo was pinning its hopes on the booming streaming business, betting it could leverage its relationship with creatives to build a subscription service to rival Netflix, Amazon Prime and HBO. 

It hired studio execs from Paramount and Hulu and signed distribution deals with Lionsgate, CBS Interactive and Spike Lee for content to stock the new service. But Anjali Sud, then Vimeo’s 31-year-old director of marketing, had a hunch the company’s future was not in Hollywood hits but Silicon Valley plumbing. Her plan: shift its focus from entertainment to entrepreneurs. “Vimeo had long been a software company for filmmakers, but the market was too small,” says Sud, now 37. “There was another, much bigger market—businesses. What Squarespace and GoDaddy did for websites, we could do with video.” Sud was soon transforming Vimeo from a dusty web relic into the showstopper of IAC’s tech portfolio. 

A one-stop shop to shoot, edit, store and distribute video, Vimeo posted sales of $84 million during the fourth quarter of 2020, a 54% jump from the same period the previous year. Last quarter, net subscribers increased by 300,000, to a total of 1.5 million—a gain of nearly 25%. Annual revenue is on track to top $300 million. IAC shut down the streaming division in 2017 and made Sud the CEO. Vimeo should be another star spin-off. In the current frothy cloud software market, Bank of America predicts Vimeo (which IAC tried to unload to Kodak for around $10 million more than a decade ago) could hit a valuation of $10 billion—about 50% of IAC’s current market cap. 

Read the full profile on Forbes: https://www.forbes.com/sites/stevenbe...


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## RabzonKhan

*The Dow Jones Industrial Average Turned 125 Today. It’s Not Time to Retire It Just Yet.*

By Jacob Sonenshine May 26, 2021 

The Dow Jones Industrial Average is celebrating its125th birthday Wednesday. The index hasn’t been the best performer in recent years, but it’s not time to relegate it to the dustbin of history, as some have argued.

Yes, recent performance hasn’t been all that good. The Dow has underperformed the S&P 500 in recent years, with the blue-chip benchmark 10.7% annual return over the past decade lagging behind the S&P 500’s 12.1%, according to FactSet data. That isn’t a surprise, as growth stocks, which have a much larger representation on the S&P 500, have taken center stage, with the emergence of companies like Apple (AAPL), Facebook (FB), and Alphabet (GOOGL), and the Dow contains few of those.

*Longer term, however, its returns aren’t so bad. Details on how the Dow has done since its founding are sketchy. Since its inception, the index has returned 5.5% annually, according to Barron’s data, but that doesn’t include dividends because the data isn’t available that far back. Since 1989, the Dow has returned 11.6% annualized including reinvested dividends, to the S&P 500’s 11.1%.*

The way the Dow is constructed has also been a problem. Its share-price—not market-capitalization—weighted. Share price weighting means the stocks with a higher share price get bigger positions and, therefore, have an outsize impact on the index’s movements. These days, market-cap is the most typical weighting, and companies with large market capitalizations have more influence on the S&P 500’s movements. Apple and Microsoft (MSFT), for example, are worth $2.1 trillion and $1.9 trillion, respectively, but they have a limited impact on the Dow’s movements. Their share prices are both below $300, whereas UnitedHealth Group (UNH), with a $390 billion market cap, has the heaviest weighting on the Dow with an above $400 share price.

This distorts the way the index behaves. If the most economically sensitive stocks are largely the best performers on a given day and United Health shares pop for a business-specific reason, the Dow’s movement will over-reflect the health giant’s movement, a dynamic that makes equity managers hesitant to trust the Dow’s movement. “I personally probably wouldn’t use the Dow because it’s price-weighted and that’s perhaps why managers move away from it,” said Ian Gendler, executive director at Value Line. 

*But the Dow is arguably still a good proxy for value stocks. The majority of its 30 components are in the value camp and valuations of the constituents point to as much; the average earnings multiple on expected 2021 earnings per share estimates for the SPDR Dow Jones Industrial Average ETF Trust (DIA) is about 20 times, below the S&P 500’s just over 21 times. Usually, value stocks trade at discounts to growth and other stocks.* Plus, the Dow’s performance looks a lot like value performance. Both the benchmark and the Vanguard S&P 500 Value ETF (VOOV) have outperformed growth names this year. The Dow and the value fund are up 12% and 17% year-to-date, respectively, both outpacing the 8% gain on the Vanguard S&P 500 Growth ETF (VOOG). “The Dow is still very relevant,” Gendler said. 

Remember that the next time you hear someone say it doesn’t matter anymore.


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## RabzonKhan

*US economy poised to grow at fastest pace since 1984, OECD says*

*OECD lifts US economic growth outlook on increased vaccinations, government stimulus*

The U.S. economy is on track to grow at the fastest pace in nearly four decades this year thanks to unprecedented levels of government stimulus and increased vaccination rates, the Organization of Economic Cooperation and Development said Monday. 

*The Paris-based organization forecast that U.S. gross domestic product – the broadest measure of goods and services produced by a nation – would grow 6.9% in 2021, the biggest increase since 1984.* By comparison, GDP contracted at a 3.5% annualized rate in 2020, when the economy came to a near standstill to slow the spread of COVID-19, which has infected more than 33 million Americans and killed over 594,000. 

*The new projections mark a more optimistic outlook from earlier this year: In March, the OECD predicted the U.S. would grow by 6.5%, an increase from its December forecast of 3.5%.* 

*That uptick represents the faster-than-expected distribution of the vaccine – at least 50% of the population has received one dose so far – and the $1.9 trillion relief plan passed by Democrats in March. That measure, known as the American Rescue Plan, sent a $1,400 stimulus check to most adults, expanded unemployment benefits by $300 a week and allocated $350 billion to state and local governments.

"Substantial additional fiscal stimulus and a rapid vaccination campaign have given a boost to the economic recovery," the OECD said in the report. * 

The group, which represents 38 countries, also predicted the global economy would grow 5.8% in 2021. But it warned the recovery would be uneven; in many OECD nations, living standards are expected to remain well below pre-crisis levels, even by the end of 2022. 

"It is very disturbing that not enough vaccines are reaching emerging and low-income economies," Laurence Boone, chief OECD economist, said in a statement. "This is exposing these economies to a fundamental threat because they have less policy capacity to support activity than advanced economies."

The possibility of a renewed coronavirus threat could result in increases in "acute poverty" and the possibility of "sovereign funding issues," Boone said, if financial markets become concerned. 

"More broadly, as long as the vast majority of the global population is not vaccinated, all of us remain vulnerable to the emergence of new variants," he wrote. "Confidence could be seriously eroded by further lockdowns, and a stop-and-go of economic activities."


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## RabzonKhan

*Toyota North America executive on the company's new electric vehicle game plan*


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## RabzonKhan

*United Airlines will buy 15 ultrafast airplanes from start-up Boom Supersonic*
JUN 3 2021
Phil LeBeau 

United Airlines is planning to turn the friendly skies into the ultrafast skies with the addition of supersonic jets.

The carrier announced Thursday it’s buying 15 planes from Boom Supersonic with the option to purchase 35 more at some point. 






Boom’s first commercial supersonic jet, the Overture, has not been built or certified yet. It is targeting the start of passenger service in 2029 with a plane that could fly at Mach 1.7 and cut some flight times in half. That means a flight from New York to London that typically lasts seven hours would only take 3½ hours.

“Boom’s vision for the future of commercial aviation, combined with the industry’s most robust network in the world, will give business and leisure travelers access to a stellar flight experience,” United CEO Scott Kirby said in a release announcing the deal.

While the terms of the sale were not disclosed, the companies believe the deal will generate immediate benefits.

Since it was founded in 2014, Denver-based Boom Supersonic has raised $270 million in capital and has grown to 150 employees. For founder and CEO Blake Scholl, landing a firm order with a legacy airline validates his vision of bringing back supersonic flights.

The supersonic Concorde flew commercial flights from 1976 until October 2003.

“The world’s first purchase agreement for net-zero carbon supersonic aircraft marks a significant step toward our mission to create a more accessible world,” Scholl said in a statement.

For United, ordering Boom supersonic jets fits with the strategy Kirby has outlined since becoming CEO a year ago. 

Kirby is aggressively trying to develop opportunities for the airline. Earlier this year, United took a stake in eVTOL start-up Archer Aviation while partnering with Mesa Airlines to order 200 electric aircrafts being designed to fly short distances. That came after United announced a multimillion dollar investment in a carbon capture start-up and committed to be carbon-neutral by 2050. 

Part of what made buying supersonic jets appealing to United is Boom’s plan to power the planes with engines that will run on sustainable aviation fuel.

Still, it remains to be seen whether Boom’s plan to bring back supersonic commercial airplanes will get off the ground.

The company plans to make its first flight later this year with a demonstrator jet called the XB-1. If it goes as planned, Boom will begin production of the Overture in 2023 and conduct its first flight in 2026. The ultimate hurdle will be winning certification by regulators, including the Federal Aviation Administration.

When that happens, United expects to target long-haul international flights between key large cities around the world, like San Francisco to Tokyo and New York to Paris.

United vice president of corporate development Mike Leskinen said the Overture could dramatically alter some of the airline’s busiest international routes. “If we can cut the time to fly from the East Coast of the U.S. to certain cities in Europe and do it with lower emissions, we think that’s very attractive,” he said.


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## RabzonKhan

*Powell: Dollar is the world's reserve currency, nothing else is close*

Federal Reserve Chairman Jerome Powell takes questions from the U.S. House of Representatives Select Subcommittee on the Coronavirus Crisis regarding the capital gains tax and the U.S. dollar.


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## RabzonKhan

*130 nations agree to support U.S. proposal for global minimum tax on corporations*

Christina Wilkie JUL 1 2021

*A group of 130 nations has agreed to a global minimum tax on corporations, Treasury Secretary Janet Yellen announced Thursday, part of a broader agreement to overhaul international tax rules.*
*
Yellen did not announce the actual rate at which the GMT would be set, but the Biden administration has pushed for at least 15%.
*
*The GMT would effectively end the practice of global corporations seeking out low-tax jurisdictions to move their headquarters.*






U.S. Treasury Secretary Janet Yellen speaks during a news conference, after attending the G7 finance ministers meeting, at Winfield House in London, Britain June 5, 2021.
Justin Tallis | Reuters


WASHINGTON - Treasury Secretary Janet Yellen announced Thursday that a group of 130 nations has agreed to a global minimum tax on corporations, part of a broader agreement to overhaul international tax rules.

If widely enacted, the GMT would effectively end the practice of global corporations seeking out low-tax jurisdictions like Ireland and the British Virgin Islands to move their headquarters to, even though their customers, operations and executives are located elsewhere.

“For decades, the United States has participated in a self-defeating international tax competition, lowering our corporate tax rates only to watch other nations lower theirs in response. The result was a global race to the bottom: Who could lower their corporate rate further and faster? No nation has won this race,” said Yellen in a statement on the accord. 

“Today’s agreement by 130 countries representing more than 90 percent of global GDP is a clear sign: the race to the bottom is one step closer to coming to an end,” Yellen said.

The deal also reportedly includes a framework to eliminate digital services taxes, which targeted the biggest American tech companies.

In their place, officials agreed to a new tax plan that would be linked to the places where multinationals are actually doing business, rather than where they are headquartered.

Much of the groundwork for adopting a GMT has already been laid by the Organization for Economic Cooperation and Development, which released a blueprint last fall outlining a two-pillar approach to international taxation.

The OECD Inclusive Framework on Base Erosion and Profit Shifting, known as BEPS, is the product of negotiations with 137 member countries and jurisdictions.

Yellen’s announcement did not include the actual rate at which the GMT would be set, but the Biden administration has pushed for at least 15%.

G-20 finance ministers and central bank governors are scheduled to meet in Venice, Italy, later this month, and the international tax plan is expected to be high on the agenda. 

The GMT agreement represents a key part of what President Joe Biden has called “a foreign policy for the middle class.”

The strategy, devised in part by Biden’s national security adviser Jake Sullivan, emphasizes how foreign policy and domestic policy can be integrated into a new middle ground between the traditional conservative and liberal approaches to global affairs.

“Foreign policy for the middle class” aims to ensure that globalization, trade, human rights and military might are all harnessed for the benefit of working Americans, not solely for billionaires and multinational corporations, but not for abstract ideological reasons either.


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## RabzonKhan

*How the U.S. became the world’s new bitcoin mining hub*

JUL 17 2021
MacKenzie 

Well before China decided to kick out all of its bitcoin miners, they were already leaving in droves, and new data from Cambridge University shows they were likely headed to the United States.

*The U.S. has fast become the new darling of the bitcoin mining world. It is the second-biggest mining destination on the planet, accounting for nearly 17% of all the world’s bitcoin miners as of April 2021. That’s a 151% increase from September 2020. 

“For the last 18 months, we’ve had a serious growth of mining infrastructure in the U.S.,” said Darin Feinstein, founder of Blockcap and Core Scientific. “We’ve noticed a massive uptick in mining operations looking to relocate to North America, mostly in the U.S.”*

This dataset doesn’t include the mass mining exodus out of China, which led to half the world’s miners dropping offline, and experts tell CNBC that the U.S. share of the mining market is likely even bigger than the numbers indicate.

According to the newly-released Cambridge data, just before the Chinese mining ban began, the country accounted for 46% of the world’s total hashrate, an industry term used to describe the collective computing power of the bitcoin network. That’s a sharp decline from 75.5% in September 2019, and the percentage is likely much lower given the exodus underway now. 

*“500,000 formerly Chinese miner rigs are looking for homes in the U.S,” said Marathon Digital’s Fred Thiel. “If they are deployed, it would mean North America would have closer to 40% of global hashrate by the end of 2022.”*

*The new mining mecca*
America’s rising dominance is a simple case of luck meeting preparation. The U.S. has quietly been building up its hosting capacity for years.

Before bitcoin miners actually started coming to America, companies across the country made a gamble that eventually, if adequate infrastructure were in place, they would set up shop in the U.S. 
That gamble appears to be paying off.

When bitcoin crashed in late 2017 and the wider market entered a multi-year crypto winter, there wasn’t much demand for big bitcoin farms. U.S. mining operators saw their opening and jumped at the chance to deploy cheap money to build up the mining ecosystem in the States. 

“The large, publicly traded miners were able to raise capital to go make big purchases,” said Mike Colyer, CEO of digital currency company Foundry, which helped bring over $300 million of mining equipment into North America.

Companies like North American crypto mining operator Core Scientific kept building out hosting space all through the crypto winter, so that they had the capacity to plug in new gear, according to Colyer. 

“A majority of the new equipment manufactured from May 2020 through December 2020 was shipped to the U.S. and Canada,” he said.

Alex Brammer of Luxor Mining, a cryptocurrency pool built for advanced miners, points out that maturing capital markets and financial instruments around the mining industry also played a big role in the industry’s quick ascent in the U.S. Brammer says that many of these American operators were able to start rapidly expanding once they secured financing by leveraging a multi-year track record of profitability and existing capital as collateral.
Covid also played a role.

Though the global pandemic shut down large swaths of the economy, the ensuing stimulus payments that proved a boon for U.S. mining companies.
“All the money printing during the pandemic meant that more capital needed to be deployed,” explained bitcoin mining engineer Brandon Arvanaghi. 
“People were looking for places to park their cash. The appetite for large-scale investments had never been bigger. A lot of that likely found its way into bitcoin mining operations in places outside of China,” continued Arvanaghi.

*Making it in America*
The seeds of the U.S. migration started back in early 2020, according to Colyer. Prior to Beijing’s sudden crackdown, China’s mining dominance had already begun to slip. 

*Part of the appeal is that the U.S. ticks a lot of the boxes for these migrant miners.

“If you’re looking to relocate hundreds of millions of dollars of miners out of China, you want to make sure you have geographic, political, and jurisdictional stability. You also want to make sure there are private property right protections for the assets that you are relocating,” said Feinstein.

It also helps that the U.S. is also home to some of the cheapest sources of energy on the planet, many of which tend to be renewable.* Because miners at scale compete in a low-margin industry, where their only variable cost is typically energy, they are incentivized to migrate to the world’s cheapest sources of power.

Thiel expects most new miners relocating to North America to be powered by renewables, or gas that is offset by renewable energy credits.

While Castle Island Ventures founding partner, Nic Carter, points out that U.S. mining isn’t wholly renewable, he does say that miners here are much better about selecting renewables and buying offsets. 

“The migration is definitely a net positive overall,” he said. “Hashrate moving to the U.S., Canada, and Russia will mean much lower carbon intensity.”


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