Today's Quote: "There is ample reason to believe that the charges of Russian interference have been made up out of whole cloth. The aim here is not only to further the electoral strategy of Hillary Clinton, who is seeking to win the election by attacking Trump from the right and locking in the support of both the Republican Party establishment and Washington’s immense military-intelligence complex. It is also to further the anti-Russia agenda that is today the focal point of US imperialist global strategy, while preparing public opinion for the prospect of war." Bill van Auken, WSWS
...Not surprisingly, the decline in profit growth has occurred alongside a deceleration in domestic demand. The year-over-year growth rate of real final sales to private domestic purchasers peaked at 3.9% in Q1 2015 and has since slowed to 2.3% as of last quarter. So why are margins important? Because as we noted in our June note, margins always lead an economic contraction and always peak in advance of a recession: there has not been one business cycle in the post-WWII era where this has not been the case.
The reason margins are a leading indicator is simple: When corporate profitability declines, a pullback in spending and hiring eventually ensues. Thus far, firms have reacted to declining profit growth by cutting back on capital spending and inventory accumulation and have kept layoffs to a minimum. For example, real non-residential fixed investment has declined -0.2% annualized over the last six quarters. However, this has done little to stem the tide of margin compression because unfortunately productivity growth has been just 0.1% annualized over the same period, while unit labor costs are up 2.4%. This highlights a major risk that we see to the labor market at present: Nominal income growth continues to outpace nominal GDP, a terrible situation for corporate profitability.
In light of collapsing productivity, declining domestic demand, and sliding growth of real final sales, how has the US corporate sector avoided a full-blown recession so far? Simple: it has been loading up on debt to mask the income statement effects of declining demand. As DB calculates, the corporate sector has taken on a substantial amount of debt in the current business cycle. Nonfinancial corporate debt has increased by $4.5 trillion from its trough in Q4 2009 (the latest corporate debt data correspond to Q1 2016). As illustrated in the chart below, the ratio of nonfinancial corporate debt to nominal GDP is at its highest level since Q1 2009, when the economy was still in recession and nominal output was substantially depressed.
Clinton also modified her statement during the forum ruling out any return of US ground troops to Iraq or any dispatch of such forces to Syria. She told the press that she was opposed to putting a “big contingent” of American troops in the two countries, rendering her pledge meaningless and suggesting that an open-ended intervention by significant numbers of US ground troops was entirely possible...
These rhetorical appeals to Republicans were followed by a meeting Friday between Clinton and top former officials in the state and military-intelligence apparatus. Participants included two former secretaries of Homeland Security who have endorsed Clinton, Republican Michael Chertoff, from the Bush administration, and Democrat Janet Napolitano, from the Obama administration. Also participating was General David Petraeus, the former head of the CIA; Richard Fontaine, former foreign policy advisor for Senator John McCain; and Michael Morell, former acting director for the CIA.
Clinton said that one of her priorities on national security was to “hunt down” Islamic State leader Abu Bakr al-Baghdadi. His assassination, like the killing of Osama bin Laden in 2011 at Obama’s orders, would “send a resounding message that nobody directs or inspires attacks against the US and gets away with it.”.....
The campaign also publicized a tally of all cabinet-level officials in the administration of George W. Bush, conducted by Huffington Post, which found nine supporting Trump and seven declaring they will not support him, with another 18 who have not publicly declared a position, including former Secretary of State Condoleezza Rice and former National Security Adviser Stephen Hadley.
There is ample reason to believe that the charges of Russian interference have been made up out of whole cloth. The aim here is not only to further the electoral strategy of Hillary Clinton, who is seeking to win the election by attacking Trump from the right and locking in the support of both the Republican Party establishment and Washington’s immense military-intelligence complex. It is also to further the anti-Russia agenda that is today the focal point of US imperialist global strategy, while preparing public opinion for the prospect of war.