Monday, December 26, 2016

TRUMPISMS:  The establishment has trillions of dollars at stake in this election. Those who control the levers of power in Washington and the global special interests they partner with, don’t have your good in mind. The political establishment that is trying to stop us is the same group responsible for our disastrous trade deals, massive illegal immigration and economic and foreign policies that have bled our country dry.

“It’s a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities. The only thing that can stop this corrupt machine is you. The only force strong enough to save our country is us. The only people brave enough to vote out this corrupt establishment is you, the American people.”

1--Hope springs eternal--Displaced Syrians Eagerly Return to Aleppo, Hopeful Fighting Is Over

Army Clears Rubble, as Much of the City Remains in Ruins

2--The Corporate Media suffers another humiliating defeat; Just 6 percent of people say they have a great deal of confidence in the press

Confidence in the press is low, and the least confident Americans are the most likely to value balance and transparency

Public confidence in the press by many measures is low. In this survey, for instance, 6 percent of people say they have a great deal of confidence in the press, 52 percent say they have only some confidence, and 41 percent say they hardly any confidence. These findings are similar to the results of other recent studies. For example, a September 2015 Gallup survey found 7 percent of Americans have a great deal of trust and confidence in the mass media, 33 percent have a fair amount, and 60 percent have either not very much or none at all....

Perceived bias and inaccuracies have made many Americans wary of some news sources

A new understanding: What makes people trust and rely on news


This research was conducted by the Media Insight Project — an initiative of the American Press Institute and the Associated Press-NORC Center for Public Affairs Research

3--Hardly Anyone Trusts The Media Anymore --People value accuracy, timeliness and clarity above all else

Only 6 percent of people say they have a great deal of confidence in the press, about the same level of trust Americans have in Congress, according to a new survey released on Sunday....

4--Syria, Russia and American Desperation, Margaret Kimberley

the United States is the principal actor in this drama. None of the other nations involved in this crime would have acted absent American direction. All of the casualties, the sieges, the hunger and the frantic search for refuge can be placed at America’s feet. So too the death of the Russian ambassador. This international tangle is covered with American finger prints.

The Syrian government is determined to take back its country and the Americans and their allies are equally determined to thwart it. The recent successes of the Syrian army explain part of the desperation coming from Obama, the Democratic Party and corporate media. Blaming Russia kills several birds with one stone. It continues the propaganda war against a country that will not knuckle under and accept American hegemony. The hyper Russophobia was also an attempt to make the unpalatable and incompetent Hillary Clinton more appealing. And its continuation is being used by Democrats and Republicans to stop the incoming president from having any chance to improve relations with that country or curtail the regime change doctrine. The war party never sleeps

5--Poll Finds More Americans Now View Donald Trump Positively -- Measure rises to 41% from 29% in October; latest survey also finds nation more divided than usual after a presidential election

Mr. Trump, who had been the most unpopular presidential candidate in modern political history, is now viewed positively by 41% of voters, up from 29% in mid-October and higher than at any point in the campaign. The poll also found a marked upswing in optimism about the economy and the direction of the country....

When asked about the direction of the country, the share of registered voters saying it is on the wrong track dropped to 54% from 65% in mid-October.
But there was a big disparity between the parties’ postelection moods: 75% of Democrats saw the country on the wrong track, compared with 37% of Republicans...

The poll found that the year as a whole has been a troubling one for many Americans. More than half of Americans—55%—said 2016 was one of the worst years ever or was below average, while just 15% said it was one of the best or above average.

6--Something Wicked This Way Comes

Something is not making sense. During the debates, Trump declared on more than one occasion the stock market was in a bubble. It is now 2,000 points higher and he is proclaiming its advancement as an endorsement of his plan to drastically cut taxes, spend trillions, and Make America Great Again. The financial media, which despised Trump six weeks ago, is now peddling an economic recovery, soaring future corporate profits, and a stock market poised to blast through 20,000 to higher and higher all-time highs. I think that would swell, but let’s examine a few facts before putting our life savings in Twitter and Fakebook stock...

No matter how long Obama’s nose grows trying to convince the ignorant masses he has presided over the best economy in decades, inconvenient facts keep getting in the way. When real median household income is lower than it was in 2000, and not materially higher than it was in 1989, you might have economic stagnation. When you take into consideration the systematic under-reporting of inflation over this time frame, the real numbers are far worse than those portrayed in the chart....

Obama hoots about all the jobs added during his reign of error but fails to mention that 94% of all jobs added since 2004 were either temporary or independent contractor jobs. Low-wage, part-time, no benefits, Obama jobs don’t pay the bills. That’s why a record number of Americans have to work multiple jobs to survive.
The narrative about an improving economy, thriving jobs market, and glorious future is bullshit. I know it. You know it. And your establishment puppeteers know it. But only “fake news” sites would dare reveal these inconvenient truths. The willfully ignorant public doesn’t want to know the truth because that would require critical thinking and making tough choices.

7--Never trust the word of a terrorist -- or the mainstream media either.

Of course all that official hard-line balderdash -- claiming that the US never armed al Qaeda and ISIS -- is always out there floating around somewhere. But, sorry, guys. It ain't necessarily so. According to Global Research, "The respected military journal Jane’s Defence Weekly in its article 'US arms shipment to Syrian rebels detailed' stated that the US supplies the 'Syrian opposition' [aka ISIS] with weapons and ammunition from Eastern Europe, and noted that these facts were almost officially recognized by the US Senate." Make no mistake. There are no "moderate rebels" in Syria, only al Qaeda and ISIS. And US taxpayers arm and fund them.

And here's a few more exposed lies discovered by a Syrian friend of mine too:
"Day after day, they are discovering piles and piles of food, heating gasoline, medical equipment, and weapons in east Aleppo that are enough for hundreds of thousands to stay alive for years, all of it coming from Turkey, Qatar, the US, and Saudi. Yet, they were stocking them and leave the civilians to starve, to keep the lies on the Syrian government and blame it for all the starving of the people.
"These piles of wheat might be enough to feed all Syria! And this is a short clip from Reuters, however I didn't find the original source."

8--Editor driven news--The bigger shock came on being told, at least twice, by NY Times editors who were describing the paper’s daily Page One meeting: “We set the agenda for the country in that room.”

9--Rates Are Rising Because Of China, Not Inflation

While the bump in rates has been fastened to the recent election of Donald Trump, due to hopes of a deficit expansion program (read: more debt) and infrastructure spending which should foster economic growth and inflation, it doesn’t explain the global selling of U.S. Treasuries.
For that answer, we only need to look at one country – China.It is important to understand that foreign countries “sanitize” transactions with the U.S. by buying treasuries to keep currency exchange rates stable. As of late, China has been dumping U.S Treasuries and converting the proceeds back into yuan in an attempt to stop the current decline. The stronger dollar and weaker yuan increase the costs of imports into China from the U.S. which negatively impacts their economy. This relationship between the currency exchange rate and U.S. Treasuries is shown below. (The exchange rate is inverted for illustrative purposes.)

the selling of Treasuries by China has been the primary culprit in the spike in interest rates in recent months and is likely quickly

approaching its nadir. As I will discuss in a moment with respect to the trade deficit, there is little evidence of a sustainable rise in inflationary pressures. The current push has come from a temporary restocking cycle following a very weak first half of the year economically speaking, and pressures from higher oil, health care and rental prices.

10--Rule of the Ultra-Elite

We already live in the most unjust and unequal economy in modern American history. A new report from Deutsche Bank shows that the top 0.1 percent of Americans now holds as much wealth as the bottom 90 percent. In other words, if the United States were 1,000 people in a room, just one of them would be as wealthy as 900 of the others.
That particular statistic hasn’t been this bad since the 1930s.
Trump’s administration is already the wealthiest in history. Its members are heavily drawn from the tiny group of 16,000 people in this country who own as much wealth as 80 percent of the population — some 256,000,000 Americans. His cabinet picks include two confirmed billionaires (so far – he’s not done yet). They come from an even more elite group: the 536 Americans whose combined wealth exceeds $2.6 trillion.
For context, the median wealth of an American adult is roughly $34,316....

Goldman Sachs Bait-and-Switch
Here’s Trump last February, speaking about his primary opponent Ted Cruz:
“I know the guys at Goldman Sachs. They have total, total control over (Cruz). Just like they have total control over Hillary Clinton.”
Here’s a Trump campaign ad showing images of Goldman Sachs CEO Lloyd Blankfein, as the narrator speaks of
“a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities.”

11--Taming Trump, Rasmus

$1 trillion and $100 billion a year over ten years, Trump’s campaign proposal, might have some effect on US GDP. But GDP growth does not necessarily mean benefits in income to all—as the last eight years has clearly shown as 97% of all GDP-income gains under Obama have gone to the wealthiest 1% households. Nor will infrastructure spending likely translate much into job creation—and could especially result in little positive impact on jobs if infrastructure spending is composed mostly of tax cuts, business subsidies, and high capital-intensive projects that may take years to realize....

Trump has proposed to cut corporate taxes even more than the Ryan-Republican Party faction in Congress. From the current 35% corporate rate, Trump proposed reducing it to 15% while Ryan and friends to 20%. Both are in agreement to reduce the top income tax rate for their wealthy friends, from current 39.6% to 33%. The Capital gains tax, now 23.8%, is scheduled for a cut to 20% by Trump and 16.5% by Congress. Both Trump and Ryan plan to abolish the Estate Tax, reducing taxation on estates worth $7 million (now the threshold) altogether. Both are strong proponents of allowing big US multinational corporations in Tech, Pharma, Banking and others to ‘repatriate’ $2.5 trillion in taxes they have been hoarding in profits offshore to avoid paying the US 35% rate to a low of 10%. The 4.8% surtax on the wealthiest to help fund Obamacare will also certainly disappear. Also notable is that net taxes on the middle class will rise under both plans, and the countless loopholes for investors will continue.

It should be noted that this massive tax cut package amounts to $4.3 trillion, according to Trump. But according to the Tax Policy Center research group, it will reduce federal revenues by $6.2 trillion. The wealthiest 1% would realize a 13.5% cut in their taxes, while the rest of all households would have a 4.1 % rise in their taxes.
This $4.3 or $6.2 trillion follows a $5 trillion tax cut agreed to by Obama, Democrats and Republicans in Congress that took place in early 2013 as part of the then phony ‘fiscal cliff’ crisis. That followed a $800 billion tax cut pushed by Obama at the end of 2010, in which Obama continued the previous Bush tax cuts for another two years and then some. That followed a preceding $300 billion tax cut in Obama’s 2009 initial recovery program. And all that came after George W. Bush’s estimated $3.4 trillion in tax cuts in 2001-04, 80% of which accrued the wealthiest households and businesses. So under Bush-Obama, taxes for the rich and their corporations totaled approximately $9.5 trillion, and now Trump-Ryan propose another $4.3 trillion minimum.

The US elite, in Congress and beyond, will tolerate much of this deregulation, as well as a significant assault on immigration, law and order, policy repression of ethnic communities, deportations, limits on civil liberties, cuts in social programs, and privatization proposals across the board involving education, Medicare, and healthcare. Their priority is passage of policy in the areas of tax cuts, deregulation, and delaying any potential actions that might endanger existing free trade agreements...

What started as a hope of a resurrected left populism quickly and progressively decayed into a comprehensive program that delivered 97% of all income gains to the wealthiest 1% households.
Voters chose a black president in 2008 because they wanted change. They didn’t care about his race. They didn’t get it. In 2016 they now voted again—for change. Those voters did not become racist in the past eight years, even though the candidate they just voted for indicated in many ways he himself was racist and misogynist, to name but a few of his apparent character faults. Those voters who in 2008 chose a ‘left populism’ that turned out to be false, chose in 2016 a ‘right populism’. But what they will get is not populism but another disappointment...

Like the Obama regime, the Trump regime will retreat to a neoliberal US elite regime. It will be a ‘Neoliberalism 2.0’. An evolved new form of Neoliberalism based on the continuation of pro-investor, pro-corporate, pro-wealthy elite economic policies—with an overlay of even more repressive social policies involving immigration, law and order, privatizations, cuts in social programs, more police repressions of ethnic communities, environmental retreat, limits on civil liberties, more insecurity and more fear. This is the new form of Neoliberalism, necessary to continue its economic dimensions by intensifying its forms of social repression and control.

is yellen trying to crash the market for Trump

Sunday, December 25, 2016

Today's Links

1--CIA chief admits Agency's role in Syria

"I think we always like to say that we wish that we would have been able to make a difference, in a way that would have prevented the slide and the situation there," Director of John Brennan said in an interview with National Public Radio (NPR).
"There's no way you can divorce yourself, emotionally or mentally, from these situations that you play a role in," Brennan said, adding that he “felt some responsibility for the horrific bloodshed” in the Syria war.

He then went onto predict that the terrorist forces loss in Aleppo will not end the war in Syria.
"This insurgency is not going to go away until there is some type of viable and genuine political process that will bring to power in Damascus a government that is representative of the Syrian people,” he further stated.
He then went onto admit that the USA has had little influence in being able to shape events in Syria.
"As great a country — as powerful a country — as the United States is, we have, in many areas, limited ability to influence the course of events," Brennan said

2--Americans are now in more debt than they were before the financial crisis

Total debt (including mortgages, auto loans and student loans) is expected to surpass the amounts owed at the beginning of the Great Recession by the end of 2016, NerdWallet found, mostly due to mortgages and student loans. Mortgage debt jumped from $159,020 per household in 2010 to $172,806 in 2016, and debt from auto loans grew from $20,032 in 2010 to $28,535 in 2016.

Nationwide, total household debt (including mortgages, auto loans and student loans) now equals almost $12.4 trillion, up from about $11.7 trillion in 2010

3--Global Domination Star Wars II’ Obama signs defence bill calling for space-based missile systems

The race for space?  A  related provision calls for the Pentagon to start “research, development, test and evaluation” of space-based systems for missile defence.

4--Central banks have cut interest rates 690 times since Lehman Brothers

5--The Markets Say Inflation Is Coming. The Data Show It Isn’t True-- Investors wonder how much further the ‘reflation trade’ can go

"Anyone who thinks one man can reverse on his own the structural forces that led to the multiyear disinflation trend—and I’m talking about excessive debt, globalization, aging demographics and technology—needs to go back to economics school right away,” he said.....

Traders are at odds with consumers when it comes to the inflation outlook, a divergence that some investors are betting will lead to a sharp market reversal.
A University of Michigan survey of consumer expectations for annual inflation over the next five to 10 years hit 2.3% for December, data showed Friday. That is down from 2.6% in June and the lowest reading in records that go back to the late 1970s...

investors have been betting that prices will pick up when President-elect Donald Trump takes office next month, reflecting administration plans to cut taxes, roll back regulations and spend on infrastructure. That outlook has pushed benchmark Treasury yields to multiyear highs, indicating lower prices, while underlying a run to records in major U.S. stock indexes.

But some worry that the vulnerability of this so-called reflation trade is exposed by the latest sign consumers don’t share that outlook.
“The markets have the wrong narrative” on inflation, said David Rosenberg, chief investment strategist at Gluskin Sheff & Associates Inc., a vocal proponent of the lower-for-longer camp on interest rates when many others on Wall Street have deserted.

Mr. Rosenberg said the base effects from higher energy prices would give inflation a short-term boost during early 2017, but that inflation is likely to slow again later in the year....

The inflation outlook carries implications for monetary policy as well, because the Federal Reserve wants to see stable, rising prices before it lifts rates much higher. Climbing prices are thought to be one hallmark of a healthy economy.
The Fed has had trouble getting inflation to its 2% annual target in recent years. The central bank’s preferred gauge of inflation, the personal-consumption expenditures price index, was up 1.4% in November from a year earlier, data showed Thursday. Another measure, the consumer-price index, was up 1.7% from a year earlier in November....

Fed Chairwoman Janet Yellen said this month that there are signs wage inflation is picking up. Yet the nonfarm jobs report this month showed average hourly earnings for private-sector workers declined 0.1% in November. Earnings were up 2.5% from a year earlier, down from October’s 2.8%, which was the strongest annual wage growth since June 2009.
One other factor that may contain the risk of inflation is the U.S. dollar, which rose to a 14-year high against a basket of its main rivals earlier this week. A higher dollar reduces the cost of imported goods that may keep a lid on inflation, potentially delaying the Fed’s goal to push up inflation to its 2% target.

6--The U.S. Interfered in Foreign Presidential Elections 81 Times from 1946-2000

7--The Fed, Money Expansion, and Inflation

Inflation 101
There are two ways to view inflation. One is that inflation exists when the cost of goods and services rises. While this is true, the second view explains “why” prices rise. It states that inflation exists when the value of the dollar declines.

To understand why inflation has been low, we must consider the following points:
1) Most of the new money has not entered the economy
2) The global economy is weak
3) The price of crude oil has collapsed

The New Money
Prior to the 2008 crisis, the Fed’s balance sheet was around $850 billion. As of December 23, 2015, it was over $4.54 trillion. If most of the new money did not enter the economy, where is it?...

The U.S. and Global Economy
Inflation is highly correlated to the condition of the economy. When the economy is strong, demand rises, and prices tend to increase. Currently, the global economy is weak. In addition, global GDP is expected to grow at 2.8% in 2016. Because the global economy is weak, demand is muted, which places downward pressure on inflation.

Saturday, December 24, 2016

1--U.S. Economy Approaches Year’s End on Lackluster Note   Income growth, consumer spending and inflation weakened in November

Stock prices may have soared since the November election, but the U.S. economy is ending 2016 on an anemic note. Measures of economic vitality including income growth, consumer spending and inflation weakened last month following a short-lived spurt.

Household spending rose just 0.2% in November from the month before, a slowdown in growth from the previous two months, while incomes flatlined, the Commerce Department said Thursday. Inflation readings, which had perked up, didn’t budge last month, and demand for factory-made goods remained soft.

For now, that leaves the U.S. economy in the middling trajectory that has marked the seven-year expansion.

“Underlying support for the consumer sector remains fragile at best,” said Lindsey Piegza, economist at Stifel Nicolaus & Co. “The reality the consumer is facing at this point is still modest wage gains and a continued loss of momentum in income growth.”

Forecasting firm Macroeconomic Advisers estimates the economy is growing at a 1.7% rate in the final three months of 2016. Federal Reserve policy makers expect the economy to grow 1.9% this year and 2.1% next year, a forecast the central bank has barely changed since the election of Donald Trump.

About two-thirds of total U.S. output goes toward domestic consumer spending. Solid household outlays during the summer helped propel economic growth to a 3.5% annual pace in the third quarter, the best quarterly increase in two years, according to revised data released Thursday. But income growth has softened: Wage and salary income rose 3.5% in November from a year earlier, the slowest year-over-year gain since December 2013.

Without stronger support from consumers and more investment by businesses, third-quarter growth momentum could wane.

"Clearly, our consumers’ budgets are pinched,” Dollar General Corp. Chief Executive Todd Vasos told investors earlier this month. The combined effects of a smaller share of adults holding jobs and increased housing and health-care expenses “appear to have taken a noticeable toll on their spending,” he said.

Donald Trump’s election raised hopes of tax cuts and deregulation, measures that could boost businesses, consumers and economic growth. But how those promises will be implemented—and how businesses and households respond—remain uncertain.

“There is some optimism that is beginning to develop,” said Stephen Stanley, chief economist at Amherst Pierpont Securities. “Though if I were a business and I had major projects in the planning stages, I wouldn’t pull the trigger until I knew the new corporate tax structure.”...

The U.S. dollar, which has continued to strengthened since the election, poses a challenge to manufacturers seeking to sell products into foreign markets. Orders for long-lasting durable goods are down slightly in 2016 compared with last year, despite overall economic growth....

Price inflation remains another puzzle for businesses and central bankers alike.

The personal-consumption expenditures price index, the Fed’s preferred inflation measure, was unchanged in November and up 1.4% from a year earlier. The measure had risen at a modest pace each month since March, reflecting stabilizing energy prices and somewhat firmer consumer demand allowing businesses to pass along price increases.

That firming helped support the Fed’s move this month to raise its benchmark interest rate for the first time in a year. Officials indicated the pace of rate increases could quicken in 2017. But inflation readings for now are holding well below the central bank’s 2% target.

November’s softer inflation reading could be temporary. Gasoline and oil costs slumped in November from the prior month, but rebounded in December after oil-producing countries agreed to cut production.

2--Part-time work: The new normal? Welcome to Obama's "gig economy"--No job security, no benefits, no retirement, no health care, no vacation, no nothing

Dan Kopf at Quartz highlights some updated research from economists Alan Krueger and Lawrence Katz (whose work we’ve looked at before) finding that from 2005 to 2015, almost all of the new jobs created in the US economy were not traditional full-time jobs but rather temporary, contract, or “gig economy” work:

“We find that 94% of net job growth in the past decade was in the alternative work category,” said Krueger. “And over 60% was due to the [the rise] of independent contractors, freelancers and contract company workers.” In other words, nearly all of the 10 million jobs created between 2005 and 2015 were not traditional nine-to-five employment. …


Katz and Krueger found that each of the common types of alternative work increased from 2005 to 2015—with the largest changes in the number of independent contractors and workers provided by contract firms, such as janitors that work full-time at a particular office, but are paid by a janitorial services firm.


The decline of conventional full-time work has impacted every demographic. Whether this change is good or bad depends on what kinds of jobs people want. “Workers seeking full-time, steady work have lost,” said Krueger. “While many of those who value flexibility and have a spouse with a steady job have probably gained.”

3--Slow-to-No Business Investment Growth Seen

Business investment is slowing down dramatically amid a sputtering global economy, heightened political uncertainty, a contraction in trade, and low commodity prices, according to the Equipment Leasing & Finance Foundation...

Sluggish growth in equipment and software investment projected over the short term by this latest analysis is indicative of the slowdown in business fixed-investment reported by federal government data over the past several quarters,” said Ralph Petta, foundation president and CEO of the Equipment Leasing and Finance Association. “This slow-growth scenario, in all likelihood, will continue for the rest of the year as many ELFA members report soft business conditions.”

4--Corporate America Is Drowning in Debt  Lethal incentives? Low rates create an incentive for Corporate bosses to put their company's future at risk

Studying S&P's universe of more than 2,000 nonfinancial corporations, S&P's researchers found that corporate issuers of debt had on hand a record $1.84 trillion in cash. But that statistic doesn't tell us very much about the health of individual companies, because it appears cash is more concentrated at the top than ever. The top 1% of corporate cash holders, which translates in to 25 large companies—a group dominated by big tech companies like Apple (aapl, +0.18%), Microsoft (msft, -0.49%), and Google-owner Alphabet (googl, -0.23%)—have slightly more than half of the total cash pile of Corporate America. That's up from 38% just five years ago.
If you remove the top 25 cash holders, you'll find that for most of Corporate America, cash on hand is declining even as these companies rack up more and more debt at historic rates. The bottom 99% of corporate borrowers have just $900 billion in cash on hand to back up $6 trillion in debt. "This resulted in a cash-to-debt ratio of 12%—the lowest recorded over the past decade, including the years preceding the Great Recession," the report reads.

One obvious reason for Corporate America's debt binge is low interest rates. With investors willing to lend companies money for so little in return, it makes sense that firms would turn to debt to finance things like share repurchases rather than, for instance, bringing cash earned from overseas, which would then be taxed at a high rate.
But investors should be cautious all the same. "Given the record levels of speculative-grade debt issuance in recent years," the report reads, "we believe corporate default rates could increase over the next few years, especially given diminished growth prospects in China, weak commodity and energy prices globally, and the sizable universe of lower-quality nonfinancial corporate debt outstanding."

5--Wall Street likes Trump's repatriation holiday idea

Big bonus for tax dodgers

6--Stocks That Ignore Defaults Are Cruising for a Bruising

A worrying trend is developing in the corporate bond market: Even with borrowing costs at or near their lowest ever, companies are increasingly unable to pay their debts. There have already been enough defaults around the world this year to suggest that the record set in 2009 might be beaten. And that should ring alarm bells for traders and investors who continue to push benchmark equity indexes to record highs....

But here's the worrying thing: That 2009 default record was set at a time when borrowing costs were much, much higher than they are now. Yields on the debt of investment-grade U.S. companies in the first half of 2009, for example, were twice as high as they are today:

I really don't think that the stock market is looking at the credit markets in the last few months as they did at the beginning of the year when things really looked grim and I think that's a mistake because the credit markets are still not strong with respect to the outlook.

7--Business investment is in a slump and its hurting the economy Big Biz is not recycling earnings into future production

Capital spending fell 6.2% at an annual rate in the first quarter following a 2.1% drop late last year, its worst such stretch since 2009 and a big reason the economy nearly stalled in that period, Commerce Department data shows. Recent reports augur little relief in the short term, with orders for capital goods excluding aircraft and defense — a proxy for business investment — declining 0.8% in April.

Business outlays were sluggish throughout 2015, rising 2.8% compared to an average 4.5% clip during the seven-year-old recovery. That, however, was largely chalked up to a pullback by energy companies amid the plunge in oil prices and, to a lesser extent, by manufacturers and other multinationals hammered by a weak global economy and strong dollar.

But the investment slump has widened in recent months across a diverse array of U.S. companies and sectors, according to Howard Silverblatt..

Business spending typically makes up 12.5% of economic activity but has an outsized impact on the economy and stock market. Purchases of equipment and software, and the construction and renovation of buildings, create thousands of jobs for manufacturers. And such investment makes up nearly 30% of the sales of Standard & Poor’s 500 companies, says David Bianco, Deutsche Bank’s chief U.S. equity strategist. He expects revenue of S&P 500 firms to increase 3% to 4% this year and in 2017. Healthy business investment typically would mean at least 6% sales growth for the S&P 500, he says.

Instead, public companies are plowing their large cash reserves into stock buybacks and dividends despite low borrowing costs.

8--U.S. Economic Confidence Inches Up to New High

Americans' confidence in the economy continues to gradually strengthen after last month's post-election surge....

Americans' assessments of current conditions and their outlook for the economy are the most positive they have been in nine years. Thirty-one percent of Americans rated the economy as "excellent" or "good" last week, while 22% said it was "poor," resulting in a current conditions score of +9.

The latest economic outlook score of +11 is the result of 53% of Americans saying economic conditions in the country are "getting better," and 42% saying they are "getting worse."...

The new political course for the U.S. has spurred public confidence in the economy

9--US Army document on urban warfare advances strategy for “contemporary Stalingrads”

10--Trump names billionaire corporate raider Icahn to slash regulations on business

11--Berlin terror suspect was well known to security forces

12--Growing signs of state foreknowledge of attack on Berlin Christmas market

13--No “Peace on Earth” in 2016

14--Brookings lays out the path to escalation in Syria

Collaborating with Russia to defeat terrorist groups can only work if the U.S. has a vision for what comes afterward. This plan must also be acceptable to Sunni Muslims, Kurds and countries like Turkey, Jordan, Lebanon, Israel, Iraq and the Gulf states. The vision needs to be explained publicly at the same time that any new U.S.-Russian military collaboration is announced. Specifically, Sunni Arabs and Kurds must be promised an alternative to living under the murderous Assad regime. Never again should they have to salute a leader who has committed genocidal acts against their families and neighbors.

To achieve peace, Syria will need self-governance within a number of autonomous zones. One option is a confederal system by which the whole country is divided into such zones. A less desirable but minimally acceptable alternative could be several autonomous zones within an otherwise still-centralized state—similar to how Iraqi Kurdistan has functioned for a quarter-century.

Ideally, Mr. Assad would go. But the prospect of his ouster is not realistic now, given recent battlefield trends and Russia’s role. More plausibly, he could rule an autonomous zone in a new confederation. Less desirably, he could remain president of the country for a time, provided that Sunni and Kurd areas did not have to suffer his direct rule or the presence of his security forces again.

Yet the fall of Aleppo has complicated the situation. Mr. Assad effectively controls the country’s big cities, and he is unlikely to relinquish this power voluntarily. There are two potential paths forward. First, the moderate opposition could be militarily strengthened and assisted to the point where battlefield dynamics shift, and some of the main cities again become contested. But Mr. Trump seems uninterested in such an approach.

A second option is to propose only limited security assistance to moderate groups while literally rebuilding some of the ravaged cities in new locations—the way China has created major metropolitan areas out of nothing—largely for Sunnis and Kurds. Mr. Assad and Russia would be enticed to support this approach with the prospect of an end to the war combined with reconstruction aid. The embattled president would keep the cities he now controls but could be persuaded not to seek to extend his rule further.

This arrangement should be codified by negotiation and upheld in part by international peacekeepers. That force could include Russians in the country’s west, Turks in the north where they are now. Arab, South Asian and European infantry could also contribute. Americans could help with overall command and control, as well as logistics and ongoing counterterrorism operations.

Security in the Sunni Arab and Kurdish autonomous zones would be provided by local police and perhaps paramilitary forces raised, trained and equipped with the direct support of the international community. They would need only limited amounts of heavier arms, making the concept more negotiable with Mr. Assad. Outside powers would agree to stop giving insurgent groups the capacity to attack Damascus or other government-held centers, and would instead channel their security-related aid only to the official and well-supervised local police or constabulary forces.

Foreign assistance for this reconfigured Syrian state should be provided primarily to the autonomous regions themselves. That would enhance the international community’s leverage with the new, regional governments. For Mr. Assad to see any such aid from European, American, and Gulf states flow to the regions that he or his associates controlled, they would not only have to accept autonomy for Sunni Arab and Kurdish zones, but commit to a plan to quickly reduce Mr. Assad’s future role in country’s central governance.

Many Syrians will not like the idea of a confederal nation, or even of a central government controlling half the country with the other half divided into three or four autonomous zones. But such arrangements need not be permanent. The deal could include a provision that calls for a constitutional convention in 10 years to consider whether a stronger central government should be restored.
Many details, such as the borders of future autonomous zones, could be dealt with during a future peace process. But the broad vision should be developed soon. If Mr. Trump joins his plans for Russian collaboration with the creation of a new Syria, he could be the president who finally brought this tragic conflict to an end.

Thursday, December 22, 2016

Today's links

1--Wall Street's 2017 Forecasts Are Doomed If Trump Doesn't Follow Through On Campaign Promises

Trump's presidency thru rose colored glasses

Bank of America Merrill Lynch: "The U.S. election was a game-changing development for markets, with single-party rule likely leading to significant fiscal stimulus. We look for a stronger U.S. dollar and higher U.S. yields in 2017," the analysts write, adding that they are targeting a U.S. 10-year rate of 2.65 percent for the end of next year...

Deutsche Bank: "If the corporate tax rate is cut to 25 percent, all else the same, it would boost S&P earnings by $10 and support an S&P rally to 2,300 and 2,400 by 2017 end."
  • JPMorgan Chase & Co.: "We estimate that Trump’s corporate tax plan, which incorporates a 15 percent statutory federal tax rate, would add roughly $15 to S&P 500 earnings.
  • 2--Wall Street likes Trump's repatriation holiday idea

    (Special one-time 10% rate for tax dodgers)
    Levkovich said there is approximately $1.2 trillion held overseas that can't be brought back to the U.S. without getting hit with the 35 percent corporate tax rate. Democrats are fine with taxing it at a lower rate, but the funds must be used for infrastructure spending, according to the strategist

    3--U.S. Economy: No Recovery

    4--Spike in consumer confidence

    The Thomson Reuters/Ipsos Primary Consumer Sentiment Index (PCSI) hit a new post-recession high point. The holiday shopping season is in full swing, and consumers are feeling upbeat about their future economic situation.

    5--The  $29 Trillion Corporate Debt Hangover That Could Spark a Recession

    Strains are emerging in just about every corner of the global credit market. Credit-rating downgrades account for the biggest chunk of ratings actions since 2009; corporate leverage is at a 12-year high; and perhaps most worrisome, growing numbers of companies -- one third globally -- are failing to generate high enough returns on investments to cover their cost of funding. Pooled together into a single snapshot, the data points show how the seven-year-old global growth model based on cheap credit from central banks is running out of steam.

    6--Corporate debt since the recession; Corporate America Is Drowning in Debt

    7--Stock Buybacks Are Driving Companies Into Debt--Corporate debt is now near record levels, due in part to borrowing to buy back stock. It isn’t a situation that can last

    The bond market should be concerned about stock buybacks, but not because of their bullish effect on share prices. Instead, bondholders should be anxious about where the cash to pay for them comes from. It isn’t widely appreciated that the money has been borrowed in the credit markets, and that the borrowers have taken on a large amount of debt to support the buybacks. That’s cause for worry on several fronts.

    The first is simply that outstanding corporate debt is now at a record high. Many pooh-pooh this, arguing that the debt was issued when rates were low and corporate borrowing was cheaper than usual relative to government borrowing, which carries less credit risk. That’s fair.

    But what happens in a recession or a recession for earnings? Those tight spreads between corporate and government rates will widen and, given the level of corporate indebtedness, could cause credit downgrades. That will put further pressure on the debtors. According to the Federal Reserve’s flow of funds data, outstanding nonfinancial corporate debt is 45.3% of GDP. That nearly matches the level seen in the first quarter of 2009 (45.4%) and exceeds the prior peak of 44.9% achieved in the third quarter of 2001

    The result of the buybacks is that net equity issuance has been negative for the last several years and bears a striking resemblance to the period leading up to the 2008 financial crisis. The sheer level of buybacks is staggering. A Deutsche Bank report notes that Standard & Poor’s 500 companies pay out two-thirds of their earnings through buybacks and dividends. FactSet further notes that those same companies spent $166.3 billion on share buybacks in the first quarter, a post-recession high and one only surpassed by $178.5 billion in the third quarter of 2007. Keep the latter date in mind.

    Buyback activity correlates well with the performance of the S&P 500, which shouldn’t be surprising; we’ve seen it in the run-up to the last two recessions. But what has been overlooked is that this activity was financed and shows a strong inverse correlation with nonfinancial corporate borrowing. In other words, companies are issuing massive amounts of debt to buy stocks in a market whose outstanding supply of shares is shrinking. This can’t last.

    In the first quarter, nonfinancial corporate borrowing hit $724 billion. That’s the second-highest on record and is surpassed only by, again, the third quarter of 2007 with $807 billion. The similarities should give pause.

    Managers of big bond portfolios have taken on added credit risk in the last few years to gain incremental yield. Now these investors are overweight corporate bonds and concerned about performance. As long as the rate differential between creditworthy and less-creditworthy borrowers remains tight, all is well. But if the Fed tightens, or if a slowdown in earnings or the economy unfolds, a lot of investors will rush to rebalance.
    Closely related to our worry about borrowing to buy back stock is concern about what it isn’t being used for, with rates so low. The latest report on gross domestic product provides insight. There we see that total private domestic investment fell for the third quarter in a row, and it was soft in the preceding three quarters. Contrast that with the low unemployment and recent acceleration in the Employment Cost Index, and you have a recipe for softening productivity gains.

    We should be paying more attention; if Corporate America doesn’t have confidence in growth and isn’t investing to improve productivity (with repercussions for profits and hiring), then those overly invested for current credit conditions should consider shifting to higher-rated corporate bonds with short durations or to Treasury bonds of like durations

    8--Russia, Iran and Turkey issue joint declaration on Syrian settlement

    9--U.S. Economic Confidence Inches Up to New High

    Wednesday, December 21, 2016

    Today's Links

    Isn't that the point?  "The weak labor market of the Great Recession resulted in a large redistribution from wages to profits. The tightening of the labor market in the last two years has reversed part of this shift. If the Fed raises interest rates enough to prevent further tightening, then it will be locking in place this redistribution to profits." Dean Baker, Inflation and the upward distribution of wealth

    1--More backtracking; Trump's commitment to infrastructure vow is being questioned

    Trump or his campaign also mentioned schools, hospitals, pipelines, water treatment plants and the electrical grid as part of a job-creation strategy that would make the U.S. "second to none." It was a rare area in which House Minority Leader Nancy Pelosi and other Democrats hoped for common ground with the president-elect. The possibility of a major infrastructure spending plan is one of several factors that have fueled the recent run-up in stock prices.

    But did he mean it?...

    Senate Majority Leader Mitch McConnell tried to tamp down expectations last week, telling reporters he wants to avoid "a $1 trillion stimulus." And Reince Priebus, who will be Trump's chief of staff, said in a radio interview that the new administration will focus in its first nine months with other issues like health care and rewriting tax laws. He sidestepped questions about the infrastructure plan.

    In a post-election interview with The New York Times, Trump himself seemed to back away, saying infrastructure won't be a "core" part of the first few years of his administration. But he said there will still be "a very large-scale infrastructure bill."

    He acknowledged that he didn't realize during the campaign that New Deal-style proposals to put people to work building infrastructure might conflict with his party's small-government philosophy.

    "That's not a very Republican thing - I didn't even know that, frankly," he said.

    Since the election, Trump has backed away - or at least suggested flexibility - on a range of issues that energized his supporters during the campaign, including his promises to prosecute Hillary Clinton, pull out of the Paris climate change accord and reinstitute waterboarding for detainees.

    2--Christmas on Wall Street: The Dow closes in on 20,000

    The American oligarchy is celebrating a dream-come-true Christmas. It anticipates, with good reason, that Trump’s administration will be a government of, for and directly by the financial oligarchy. The collection of billionaires, bankers, CEOs, generals and social arch-reactionaries that will comprise his cabinet and White House inner circle is pledged to remove all constraints on the ability of the rich to plunder American society for their own personal gain and profit.

    The bankers stand to get the removal of the minor limitations on quasi-legal speculative practices written into the 2010 Dodd-Frank bank regulation act, plus higher interest rates. This is guaranteed by the presence of three Goldman Sachs alumni in the Trump administration: the fascistic Stephen Bannon (chief White House strategist), Steven Mnuchin (Treasury Department chief) and Goldman Sachs President and Chief Operating Officer Gary Cohn (chairman of Trump’s National Economic Council).

    Little wonder that bank stocks have led the postelection surge, and Goldman shares have risen by more than 33 percent, accounting for a quarter of the rise in the Dow. JPMorgan Chase has not done badly either, gaining 22 percent

    3--Will the Trump Era Bring Higher Interest Rates? Don’t Count On It

    (Not as much growth as expected) Economists at JPMorgan Chase, for example, are forecasting economic growth of just under 2 percent for both 2017 and 2018 — about the same as the pace of the last six years.

    And that’s before you factor in the risk that some elements of Trump economic policy could end up being a drag on growth. Think of a trade war with China or Mexico, immigration restrictions that limit the supply of labor or geopolitical disputes.

    4--Trump Talked, the Fed Listened: Let’s Shrink the Balance Sheet, Bullard Says

    5--What the Heck’s Happening to Our Share Buyback Boom?

    Companies in the S&P 500 spent about $3 trillion since 2011 to buy back their own shares, often with borrowed money. It’s part of a noble magic called financial engineering, the simplest way to goose the all-important metric of earnings per share (by lowering the number of shares outstanding). And it creates buying pressure in the stock market that drives up share prices.

    With buybacks, you don’t need to sell one extra iPhone to boost your earnings per share. So the amounts have grown and grown. With ultra-cheap money available to borrow endlessly, companies take on debt and hollow out shareholder equity. It has worked like a charm. Stock prices have soared. Declining revenues and earnings, no problem. But something is happening that hasn’t happened since the Financial Crisis.

    Share buybacks in the third quarter plunged 28% year-over-year, to $115.6 billion, the biggest year-over-year dive since Q3 2009, according to FactSet. It was the second quarter in a row of declines, from the glorious Q1 this year, when buybacks had reached $168 billion, behind only Q3 2007 before it all came apart....

    Despite the decline, buybacks remained a huge buying force in the market. At the end of Q3, trailing 12-month buybacks ate up 66% of net income, about the same as a year ago, with 119 companies in the S&P 500 blowing more on buybacks than they generated in earnings. And 109 companies blew more on buybacks than they generated in free cash flow. As ludicrously high as this sounds, it’s the lowest count since Q2 2013.

    And much of it is funded with debt. Over the past three years, aggregate debt of the S&P 500 companies has grown 1.7 times faster than aggregate cash and short-term investments, according to FactSet.

    6--Inflation is not a problem. Inequality is.

    We have numerous pieces raising serious questions about whether the labor market is really at full employment, noting for example the sharp drop in employment rates (for all groups) from pre-recession levels and the high rate of involuntary part-time employment. But the story of accelerating inflation is also not right...

    A close look at the data does not provide much evidence of accelerating inflation. The core PCE deflator, the Fed's main measure of inflation, has risen 1.7 percent over the last year, which is still under the 2.0 percent target. This target is an average, which means that the Fed should be prepared to allow the inflation rate to rise somewhat above 2.0 percent, with the idea that inflation will drop in the next recession.

    Anyhow, the 1.7 percent rate is slightly higher than a low of 1.3 percent reached in the third quarter of 2015, but it is exactly the same as the rate we saw in the third quarter of 2014. In other words, there has been zero acceleration in the rate of inflation over the last two years.

    Furthermore, even this modest acceleration has been entirely due to the more rapid increase in rent over the last two years. The inflation rate in the core consumer price index, stripped of its shelter component, actually has been falling slightly over the last year. It now stands at 1.1 percent over the last year.

    The weak labor market of the Great Recession resulted in a large redistribution from wages to profits. The tightening of the labor market in the last two years has reversed part of this shift. If the Fed raises interest rates enough to prevent further tightening, then it will be locking in place this redistribution to profits. That would be bad news for tens of millions of workers, especially if the decision was based on a misreading of inflation data.

    7--Population growth stalls in US

    An uptick in deaths, a slowdown in births and a slight drop in immigration all damped American population growth for the year ended July 1. The 0.7% increase, to 323.1 million, was the smallest on record since 1936-37, according to William Frey, a demographer at the Brookings Institution....

    “There is a new economy being created out of the carnage of the Great Recession, and in a lot of those new growth areas, Utah seems to be at the forefront,” Ms. Perlich said. “You roll back 40 years ago, and we were really pretty isolated and much more parochial here.”

    Monday, December 19, 2016

    Today's links

    Today's quote: "Senator John McCain, in an appearance on CNN, cited the intervention of Russia in Syria as “a sign of a possible unraveling of the world order that was established after World War II,” in other words, an end of the dominant position of the United States." Patrick Martin, WSWS

    1--U.S. Addicted to Stock Buybacks

    American manufacturers have chosen a different path. Their CEOs grow wealthy by financially strip-mining their own companies, aided and abetted by elite financiers who have only one goal: extracting as much wealth as possible from the company while putting back as little as possible into production and workers.

    The heroin driving their addiction is stock buybacks—a company using its own profits (or borrowed money) to buy back the company’s own shares. This directly adds more wealth to the super-rich because stock buybacks inevitably increase the value of the shares owned by top executives and rich investors. Since top executives receive the vast majority of their income (often up to 95%) through stock incentives, stock buybacks are pure gold. The stock price goes up and the CEOs get richer. In this they are in harmony with top Wall Street private equity/hedge fund investors who incessantly clamor for more stock buybacks, impatient for their next fix.

    For the few, this addiction is the path to vast riches. It also is the path to annihilating the manufacturing sector. (For a definitive yet accessible account see “Profits without Prosperity” by William Lazonick in the Harvard Business Review.)

    Wait, wait, isn’t this stock manipulation? Well, before the Reagan administration deregulated them in 1982, stock buybacks indeed were considered stock manipulation and one of the causes of the 1929 crash. Now they are so ubiquitous that upwards of 75% of all corporate profits go to stock buybacks. Over the last year, 37 companies in the S&P 500 actually spent more on buybacks than they generated in profits, according to Buyback Quarterly.

    Little wonder that stock buybacks are a major driver of runaway inequality. In 1980 before the stock buyback era, the ratio of compensation between the top 100 CEOs and the average worker was 45 to 1. Today it is a whopping 844 to 1. (The German CEO gap is closer to 150 to 1.)

    Germany holds down its wage gap, in part, by discouraging stock buybacks. Through its system of co-determination, workers and their unions have seats on the boards of directors and make sure profits are used to invest in productive employment. As a result, in Germany stock buybacks account for a much smaller percentage of corporate profits.

    Between 2000 and 2015, 419 U.S. companies (on the S&P 500 index) spent a total of $4.7 trillion on stock buybacks (annual average of $701 million per firm). During the same period, only 33 German firms in the S&P350 Europe index conducted buybacks for a total of $111 billion (annual average of $211 million per firm). (Many thanks to Mustafa Erdem Sakinç from the Academic-Industry Research Network for providing this excellent data.)

    Let’s do the math: U.S. firms as a whole spent 42 times more on stock buybacks than German firms!
    Little wonder that our manufacturing sector is a withering appendage of Wall Street, while German manufacturing leads the global economy.

    2--Trump’s Coming Confrontation with Yellen and the Federal Reserve

    Trump has a big stimulus plan. It’s a bad plan, but it’ll still create some jobs, and Yellen has said:
    “I would say at this point that fiscal policy is not obviously needed to provide stimulus to help us get back to full employment,” Yellen said.
    That’s Fed speak for “spend the money if you want, but we’ll neutralize every dollar you spend.” Which, by the way, has been orthodox Fed policy since Greenspan and arguably Volcker–almost 40 years.
    So, Trump (and Bannon) if they want a good economy and their stimulus to work, have a problem: Yellen and the Federal Reserve Board. And Yellen has stated she won’t step down till her term ends, in 2024....

    Don’t defend the Federal Reserve if you claim to care about workers, the middle class, or anyone under the top 10 percent or so. They have acted unutterably evil for decades, and if it takes another evil person to destroy their power, I’m fine with it. Frankly, the Federal Reserve should be placed under direct control of Congress with four year terms at most, and every central bank in the world should lose its “independence.” They have misused that independence to do little more than make the rich richer for decades and they are profoundly anti-democratic.

    3--False optimism?  Rates Are Rising Because Of China, Not Inflation

    4--A Bearish David Rosenberg Re-Emerges: "Fade This Rally" As "Trump Will Engineer A Return To Deflation

    5--Uh oh!   Let’s Shrink the Balance Sheet, Bullard Says

    6--The biggest obstacles to Trumponomics: Janet Yellen and the dollar

    7--CPI: The dog that didn't bark

    Fed still failing to hit its 2% target after years of trying, and after years of forecasting that it would hit its 2% target:

    8--Infinite poverty and immiseration for the masses; Brazilian President Temer Signs Constitutional Amendment Imposing 20 Years of Austerity

    9--Foreigners are Dumping US Treasurys as Never Before

    10--China dumps record U.S. securities in Oct

    11--McConnell, Warning of ‘Dangerous’ Debt, Wants Tax Cut Offsets

    President-elect Donald Trump’s race to enact the biggest tax cuts since the 1980s went under a caution flag Monday as Senate Majority Leader Mitch McConnell warned he considers current levels of U.S. debt “dangerous” and said he wants any tax overhaul to avoid adding to the deficit.

    “I think this level of national debt is dangerous and unacceptable,” McConnell said, adding he hopes Congress doesn’t lose sight of that when it acts next year. “My preference on tax reform is that it be revenue neutral,” he said.
    During a news conference, McConnell also poured cold water on the idea of a massive stimulus package, effectively laying out markers on taxes and spending that that could cramp Trump’s ambitions.

    The Committee for a Responsible Federal Budget, a nonpartisan think tank, has projected that Trump’s plans would increase the debt by $5.3 trillion over a decade, with deficits already over $600 billion a year and rising on autopilot....

    What I hope we will clearly avoid, and I’m confident we will, is a trillion-dollar stimulus,” he said. “Take you back to 2009. We borrowed $1 trillion and nobody could find that it did much of anything. So we need to do this carefully and correctly and the issue of how to pay for it needs to be dealt with responsibly.”...

    The debt limit will need to rise next year to avoid defaulting on government obligations; McConnell said he wasn’t sure if that would be paired with any deficit-reduction measures next year as it was in 2011, when Republicans held the debt limit hostage and extracted more than $2 trillion in deficit cuts over a decade from President Barack Obama.
    House Speaker Paul Ryan has also said he wants tax changes to be deficit-neutral, indicating that Republicans will assume positive macroeconomic benefits from tax cuts to ease the projected budgetary hit -- a process known as dynamic scoring that is popular on the right.

    12--Will the Trump Era Bring Higher Interest Rates? Don’t Count On It

    As my colleague Binyamin Appelbaum writes, any stimulative fiscal policy from the Trump administration could well face an equal and opposite tightening of monetary policy by a Fed that raises interest rates.

    The central bank will seek to prevent too much inflation from breaking out in an economy it believes is getting close to operating at its full potential, which means Mr. Trump’s stimulus might run up against the Fed chair Janet Yellen’s (and perhaps her successor’s) counter-stimulus....

    the Trump agenda might pack less of a growth punch than some have imagined. If so, you would expect the same cautious approach to rate increases from the Fed....

    it’s worth diving into the details of the Trump policies that led to the postelection-day market rally in stocks and the sell-off in bonds.
    He wants to enact major tax cuts, for one, which all else being equal, would tend to create a short-term boost in economic growth and higher interest rates. But there are some early signals that the Republican lawmakers who actually have to pass any changes to tax law, especially those in the Senate, are wary of tax cuts that would increase the budget deficit as much as Mr. Trump’s campaign plan would.

    “My preference on tax reform is that it be revenue neutral,” the Senate majority leader Mitch McConnell told reporters this week.
    Another big plank underneath the idea that Mr. Trump’s economic policy will be stimulative is an expectation that he will embrace a large-scale infrastructure spending package.
    But while the president-elect mentioned that idea in his election victory speech, he hasn’t put much meat on the bones of the plan since. The details matter a great deal for how much an infrastructure plan could lift growth. For example, tax credits that make the finances of building toll roads more favorable are less likely to create a huge boost in activity than spending on upgrading physical infrastructure outright...

    So on both tax cuts and infrastructure, there’s no guarantee that the actual scale of stimulus will match some of the early postelection talk. Economists at JPMorgan Chase, for example, are forecasting economic growth of just under 2 percent for both 2017 and 2018 — about the same as the pace of the last six years....

    There are two vacancies on the Fed’s seven-member board of governors already, and Ms. Yellen’s term as chairwoman expires in February 2018; the vice-chairman Stanley Fischer’s term is up in June of that year. Add it up, and within 18 months of taking office, Mr. Trump could have appointed a majority of the Fed’s board, including its chair and vice chair.