Tuesday, January 31, 2017

Today's Links

1--     Dow Companies Report Worst Revenues since 2010, Dow Rises to 20,000


2--President Backstabber Returns


President Obama is heartened by the level of engagement taking place in communities around the country. In his final official speech as President, he spoke about the important role of citizen and how all Americans have a responsibility to be the guardians of our democracy--not just during an election but every day.

Citizens exercising their Constitutional right to assemble, organize and have their voices heard by their elected officials is exactly what we expect to see when American values are at stake.

With regard to comparisons to President Obama's foreign policy decisions, as we've heard before, the President fundamentally disagrees with the notion of discriminating against individuals because of their faith or religion.


3--Today's 'must read" Lessons for “The Resistance” from the Bush Resistance


So Obama got in power, he bailed out the banks, he fucked over ordinary home-owners, he increased deportations and ramped up drone assassinations. He was far harsher on whistleblowers than Bush had been and he re-signed all the bad bills when the time came, like the Patriot Act and the AUMF, which had given Bush massive executive power and carte-blanche to spy, and assassinate, and go to war.
Obama institutionalized Bush. Oh, he drew back on some things, but he advanced others, and he left the basic power structure in place and the legal structure. Then he went to war with Libya, which while it killed less people than the Iraq war, was the exact same type of war crime as Bush had committed: aggressive war on a non-threatening country. This is what the Nazis were hung for in Nuremburg....

Six years, later Trump won the election. The apparatus put in place by Bush to allow him to commit his crimes and over-reach was not just still there, it had been extended significantly in terms of whistleblower prosecution, drone assassination, spying on journalists, immigrant incarceration, and surveillance state powers and capabilities.

Trump inherited a more powerfully oppressive system than Obama did, even if Obama had not always used it as oppressively as Bush (though in some cases he had been worse).
There are a couple lessons to learn from this.

The first is that while partisan Democrats may be one’s allies when opposing a Republic president, their opposition is opportunistic and not principled. The second they are in charge, they will support or wave aside the same actions they condemned coming from a Republican...

Obama and Bill Clinton contributed massively to the ills which lead to Trump. That needs to stop. There needs to be a Democratic President who rolls back what has been done, and then moves strongly to the left. Who dismantles the legal, regulatory, and institutional framework for tyranny, and who actually reduces inequality and increases prosperity for all Americans in a clear way they can feel.
Failure to achieve that, and, in tandem, to achieve a Congress which would work with such a president and oppose the inevitable future Republican presidents, will equal failure for the Resistance, no matter how many small successes they have, or even if they are able to remove Trump through impeachment or loss in 2020.
Slowing the rate of the downward spiral the US is on is good. Stopping it from getting worse is better. Reversing it and making it better is best and is necessary for long-term success and long-term security against leaders like Trump.

4--Secret Docs Reveal: President Trump Has Inherited an FBI With Vast Hidden Powers


5--U.S. Economy Returns to Lackluster Growth-- President Trump has set goal of generating 4% annual growth by overhauling tax code and rolling back regulations, among other measures


The U.S. ended 2016 on a familiar trajectory of roughly 2% economic growth, the lackluster trend that has prevailed through most of the current expansion and which President Donald Trump is seeking to double in the face of stubborn long-term headwinds.
Gross domestic product, a broad measure of the goods and services produced across the economy, expanded at an inflation and seasonally adjusted annual rate of 1.9% in the fourth quarter from the previous three months, the Commerce Department said Friday. That exceeded the pace of growth in a weak first half of 2016 but marked a slowdown from a fleeting third-quarter 3.5% growth spurt.

The economy similarly grew 1.9% in the fourth quarter compared with a year earlier, matching 2015’s annual growth and in line with the 2.1% average since the recession ended in mid-2009. That has made this the slowest expansion since World War II, though also one of the longest.

The final three months of 2016 saw solid consumer spending, a pickup in business investment, a rebound for home construction and stronger spending by state and local governments. A widening in the foreign-trade deficit weighed on growth, offset in part by a buildup in business inventories

The latest data underscored the obstacles to stronger growth facing Mr. Trump, who has said he will raise the pace of expansion to 4% a year. Friday’s report also provided fodder for Republicans arguing that stronger growth is needed and possible. “Americans spoke loudly and clearly in November telling the world that President [Barack] Obama’s ‘new normal’ was unacceptable,” said Rep. Pat Tiberi (R., Ohio), chairman of Congress’s Joint Economic Committee. “That’s why Republicans are ready to unleash America’s economic potential.”
Mr. Trump has argued the U.S. can achieve stronger growth by overhauling the tax code, boosting infrastructure spending, rolling back federal regulations and cutting new trade deals that narrow the foreign-trade deficit.
Economic forecasters are predicting slightly stronger growth in the next few years compared with pre-election estimates. But many remain skeptical of the potential for a significant shift in the long-term growth picture.

Federal Reserve Chairwoman Janet Yellen last week pointed to “a variety of forces depressing both supply and demand,” including slow growth in the size of the labor force and sluggish worker productivity. She said she expected they would continue to restrain growth for years to come. The nonpartisan Congressional Budget Office this week reiterated that it thinks U.S. economic growth will remain modest over the coming decade due to long-term forces, namely the slower workforce growth produced by baby-boomer retirements.

6--About That Obama ‘Boom’-- The economy averaged 1.8% annual growth, 2.1% after the recession


So much for that economic “boom” that President Obama was supposed to have left his successor. That has been the spin among Democrats and progressive economists, but Friday’s GDP report for the fourth quarter provided another in eight years of reality checks on the Obama economic record.
The Commerce Department said growth clocked in at 1.9% for the last quarter of 2016, which was a major deceleration from 3.5% in the third quarter after three previous quarters of about 1.1%. The spin had been that a strong end of the year would leave President Trump with economic momentum, which after eight years of slow growth is like a runner who takes six hours to finish a marathon but sprints the last 25 yards.

Yet even this supposed last Obama sprint was oversold, as consumer spending slowed and net exports were a drag after two quarters of contributing to higher GDP. One good sign was a modest increase in business investment after several dreadful quarters and historically weak capital investment throughout the Obama expansion.

Speaking of weak, growth for all of 2016 clocked in at 1.6%, the slowest since 2011 and down from 2.6% in 2015. That marks the 11th consecutive year that GDP growth failed to reach 3%, the longest period since the Bureau of Economic Analysis began reporting the figure. The fourth quarter also rings out the Obama era with an average annual growth rate of 1.8%, which is right down there with George W. Bush for the lowest among modern Presidents.

Mr. Obama inherited a deep recession, but that makes the 2.1% growth average since the recession ended all the more dismaying. You have to work hard to suppress growth after a deep downturn, and Mr. Obama did that by putting income redistribution ahead of growth as a policy priority. He achieved the remarkable feat of slower growth and more inequality.
Mr. Trump now has the chance to improve on this record, and the key this long (seven and a half years) into an expansion is business investment. Consumers can’t do much more than they have and the labor market is tight in much of the country.

This means faster growth will have to come from liberating the trillions of dollars in capital that have been waiting for the political and regulatory climate to change. The promise of the GOP-Trump proposals on tax reform and deregulation have already stirred the stock market, and if they are implemented they could unlock a burst of capital spending and risk-taking.

A closing word to Trumpians who will point to the fourth-quarter decline in net exports that subtracted 1.7% from GDP. Part of the explanation is that a bumper crop of soybean exports boosted growth in the third quarter and then dropped off at the end of the year. This is not an argument for starting a trade war with China or Mexico, which could harm U.S. exports.

7--Trump Signs Agreement with Saudi Terror Masters


The pledge to work together to fight “the spread of radical Islamic terrorism” is particularly odd considering Saudi Arabia is responsible (along with other Wahhabi Gulf States) for the spread of Salafist terror.

During the campaign, Trump said he would fight against radical Islam, but now he has teamed up with the so-called Custodian of the Two Holy Mosques and head of the House of Saud to fight terror.
The statement singles out Iran as the perpetrator of terror. This is in keeping with Trump’s promise to shut down the nuclear deal reached with Tehran, an agreement rejected by Republicans.
Folks who voted for Trump are under they impression he will stamp out radical Islam. If he doesn’t shut down the Wahhabi terror machine, however, nothing will change.

Indeed, we are living in Bizarro world. Either Trump is completely clueless about the source of terrorism—a distinct possibility—or he is simply following the script followed by Bush and Obama.
It should be remembered Trump is a real estate and business magnate. He owns a posh golf course in Dubai, a stake in Qatar airlines, and plans a line of luxury hotels in Abu Dhabi, Qatar, and Saudi Arabia.


8--The Markets Don’t Believe in Trump for the Long Term -- The yield curve tells a story of Trumpflation, a boost to both growth and inflation lasting a few years, with little long-term impact on the real economy


The hope of a cyclical boom is reflected across equity markets, although the details of the new administration’s policies create more noise at a stock level. Cyclical companies such as car makers and airlines have easily beaten the S&P 500 since the election, while defensive companies—those better able to ride out a recession—have lagged behind, and, in the case of utilities, lost money.
The yield curve may be one of the most important measures in finance, but even the question of what the market expects is open to interpretation....

If Mr. Trump’s stimulus plans are implemented by Congress—a big if—they might end up boosting inflation more than real growth. That is reflected in the rise in the bond market’s implied inflation expectations, known as break-even inflation. It is back above 2% for the next 10 years for the first time since 2014.
A proxy for expected real growth, the after-inflation yield on 10-year Treasury inflation-protected securities, rose fast after the election before giving back some of its gains following the Federal Reserve’s December rate increase. Yet even at its December peak of 0.74% plus inflation, it wasn’t quite back to where it stood a year earlier, and was nowhere near the pre-2008 norms....

One interpretation: Investors think the downward pressures on growth and inflation from the aging population are greater than any likely productivity gains from cutting red tape or improving infrastructure. The most Mr. Trump can do is make America a little bit greater than it otherwise would be, not the catchiest of campaign slogans.
Some critics argue that the 30-year Treasury is a flawed measure of hopes for growth. It isn’t very heavily traded, and government decisions on issuance, plus price-insensitive demand linked to pension obligations, can be as important as beliefs about long-run growth. This may be true, but it’s also obvious that if investors truly believed Mr. Trump would deliver a big and permanent boost to growth or inflation, few would want 30-year bonds at a yield of just over 3%. It may not be perfect, but it’s a good enough measure.
Knowing what the market as a whole is pricing in creates opportunities for investors who have a strong view of what Mr. Trump will achieve. More growth, more inflation or more policy chaos all have scope to move the market by a lot. The problem is for those who have little idea what the man in the White House represents; the usual diversification between shares and bonds offers little protection against the risk of a trade war, when both could suffer as inflation rises and profits fall


9--Syrian rebels claim Trump administration sending them armored vehicles



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