Sunday, April 2, 2017

Today's Links

1---Why Americans Aren’t Spending Like They Used To     -- Americans remain cautious on spending, and the scars left by the recession may make that persist


The weakness of the spending figures prompted economists to take down their already low gross-domestic-product estimates another notch. Barclays , for example, reckons that GDP will grow at just a 1.4% rate in the first quarter versus its earlier forecast of 1.6%. Surging consumer confidence notwithstanding, anybody who thought that the election of Donald Trump was going to unleash stronger spending has so far been wrong.

The hope is that the combination of a surge in business optimism and a tightening labor market will push wages higher, and that will lead people to spend more. But even if those income gains do, in fact, come, people may be more careful with their spending than investors reckon....

preliminary work by University of California, Berkeley economists Ulrike Malmendier and Leslie Shen finds that households that have lived through a high-unemployment environment spend significantly less over their lifetimes than those that haven’t

2--The bloom is off the rose   These Trump Trades Just Aren’t Working Anymore--Hope has faded that the president can push his policies through


Corporate tax cuts. The hope that a lower tax rate would boost profits put a rocket under share prices, but has now faded entirely.


3--Sentiment vs. Reality: The Economy Is Telling Two Different Stories   The difference between what people say about the economy and actual economic performance is at a record


How is the economy doing?


Based on surveys alone, one would think it is booming. Consumer confidence soared to a 16-year high in a Conference Board poll released this week. Surveys of small-business owners reflected optimism since the election. Chief executives of the largest U.S. companies say they are more optimistic now than at any point in the past seven years, according to a Business Roundtable survey.


But just because people say they are optimistic doesn’t mean everything is great again. What Morgan Stanley economists call the “hard, quantifiable data” tell a much different story.


4--Buying a Home This Spring Will Be Hardest in Years-- With tight inventory and rising prices and mortgage rates, this season will be the toughest for buyers in a decade



5--Federal Reserve Readies Plan for Balance Sheet-- Under emerging strategy, central bank would raise short-term interest rates two more times in 2017 and then potentially pause rate increases


The challenge for the Fed is that there is no playbook for reducing the size of its holdings. Officials want to make changes slowly and with extreme care to avoid roiling markets.

Officials haven’t decided how to manage the runoff of assets, but a gradual path that tapers the pace of reinvestments over several months rather than ceasing them altogether could allow for that least disruptive approach.

The goal is that any policy changes on slowing reinvestments are “just going to be running in the background,” Mr. Dudley said. “We would want to do this in a way that was…not a big deal for the markets.”...


The Fed projects 1.9% inflation by year-end. March inflation data from Europe suggests inflation pressures remain modest. The European Union’s statistics agency said Friday consumer prices were 1.5% higher in March than a year earlier, a fall in the rate of inflation from 2% in February. In Japan, prices firmed in January and February. Prices there fell in 11 out of 12 months in 2016

.

One important wild card is the behavior of U.S. consumers. Inflation-adjusted household spending declined 0.1% in February after falling 0.2% in January, according to the Commerce Department. It was the largest two-month decline since the recession ended, at least partially reflecting unseasonably warm weather depressing spending on utilities.


A slowdown in consumer spending, which accounts for about two-thirds of U.S. economic activity, could prove to be a new headwind to growth which damps inflation once again and derails the Fed’s plans....


The Atlanta Fed’s GDPNow model on Friday lowered its forecast for first-quarter growth to a 0.9% pace.


6--Democrats’ Blind Obsession on Russia-gate


(important details)  The more the Democrats push this latest Washington pseudo-scandal, the more they risk joining the GOP on the political trash heap. Trump could well end up as the last man standing amid the rubble


7--Dennis Kucinich: FBI Director Comey must recuse himself from Trump-Russia probe


Comey’s announcement this week that the FBI was investigating possible collusion between the Trump campaign and the Russian government made national and world headlines and rocked the White House.
But why now? Why not eight months ago? Has new, substantive information been brought forward? Was there even a real investigation in July? Or did an insider leak a story to the FBI back then for political purposes?...

Someone on the House or Senate Judiciary Committee should ask for the FBI agents’ time sheets over the past eight months to see if the Bureau was actually investigating, or whether this is another case of abuse of process — using an alleged investigation to smear a candidate.
A torrent of leaks and partisan charges has been passed off as fact.  But was the Russia investigation, excuse the expression, a red herring?

8--How Obama's White House weaponized media against Trump (one BS story after the other)

Regardless of how the government collected on Flynn, the leak was a felony and a violation of his civil rights.  But it was also a severe breach of the public trust. When I worked as an NSC staffer in the White House, 2005-2007, I read dozens of NSA surveillance reports every day. On the basis of my familiarity with this system, I strongly suspect that someone in the Obama White House blew a hole in the thin wall that prevents the government from using information collected from surveillance to destroy the lives of the citizens whose privacy it is pledged to protect.  

The leaking of Flynn’s name was part of what can only be described as a White House campaign to hype the Russian threat and, at the same time, to depict Trump as Vladimir Putin’s Manchurian candidate On Dec. 29, Obama announced sanctions against Russia as retribution for its hacking activities.  From that date until Trump’s inauguration, the White House aggressively pumped into the media two streams of information: one about Russian hacking; the other about Trump’s Russia connection. In the hands of sympathetic reporters, the two streams blended into one...

On Dec. 29, the DHS and FBI published a report on Russian hacking, which showed the telltale signs of having been rushed to publication.  “At every level this report is a failure,” said cyber security expert Robert M. Lee. “It didn’t do what it set out to do, and it didn’t provide useful data. They’re handing out bad information.”...

With a little help from the Obama White House, the dossier became fair game for reporters.  A government leak let it be known that the intelligence community had briefed Trump on the dossier.  If the president-elect was discussing it with his intelligence briefers, so the reasoning went, perhaps there was something to it after all.
By turning the dossier into hard news, that leak weaponized malicious gossip. The same is true of the Flynn-Kislyak leak.  Ignatius used the leak to deepen speculation about collusion between Putin and Trump: “What did Flynn say (to Kislyak),” Ignatius asked, “and did it undercut the U.S. sanctions?” The mere fact that Flynn’s conversations were being monitored deepened his appearance of guilt.  If he was innocent, why was the government monitoring him?

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