Big govt, Economy & Investments, Politics

Thiessen: AOC is an Economic Illiterate

Socialist Representative Alexandria Ocasio-Cortez (D-NY) didn’t just torpedo Amazon’s New York headquarters. She did it on an economically illiterate basis that even her own party is calling out. NYC Mayor Bill de Blasio-favorite of the Left-explained that the Amazon deal tanked by AOC would have produced “$27 billion in new tax revenue to fuel priorities from transit to affordable housing-a nine-fold return on the taxes the city and state were prepared to forgo to win the headquarters.” AOC argued that the $3 billion incentive should otherwise be used for more teachers, subways, and jobs. Memo to AOC: 27 is greater than 3.

Here’s more from Fox News…

The left complains that conservatives are “obsessing” over Alexandria Ocasio-Cortez. Well, there is a reason for that: Ocasio-Cortez is driving the agenda of today’s Democratic Party — and her economic illiteracy is dangerous.

Case in point: Last week, Ocasio-Cortez celebrated the tanking of a deal negotiated by her fellow Democrats in which Amazon promised to build a new headquarters in Long Island City, New York, right next to her congressional district. Amazon’s departure cost the city between 25,000 and 40,000 new jobs. Forget the tech workers whom Amazon would have employed. Gone are all the unionized construction jobs to build the headquarters, as well as thousands of jobs created by all the small businesses — restaurants, bodegas, dry cleaners and food carts — that were preparing to open or expand to serve Amazon employees. They are devastated by Amazon’s withdrawal.

Ocasio-Cortez was not disturbed at all. “We were subsidizing those jobs,” she said. “Frankly, if we were willing to give away $3 billion for this deal, we could invest those $3 billion in our district, ourselves, if we wanted to. We could hire out more teachers. We can fix our subways. We can put a lot of people to work for that amount of money if we wanted to.”

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Big govt, Economy & Investments, Politics

AOC Upset Amazon is Bringing 25,000 Jobs to NYC

Socialist U.S. Representative-elect Alexandria Ocasio-Cortez is “outraged” that Amazon is going to invest billions of dollars and bring 25,000 jobs to New York City after the company announced Tuesday a new headquarters location. “Amazon is a billion-dollar company,” Ocasio-Cortez tweeted. “The idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning to residents here.” Earth to AOC: jobs mean higher tax revenue, which means more money for socialists to redistribute. AOC is so anticapitalism that she can’t see when it is obviously working in her favor.

Here’s more from The Daily Wire…

Socialist Alexandria Ocasio-Cortez is not happy that Amazon, the world’s most valuable company, has decided to invest billions of dollars and bring approximately 25,000 jobs to New York City.

The 28-year-old bartender turned politician responded to the news that Amazon is bringing a second headquarters to NYC by claiming, without evidence, that her community is “outraged.”

The Wall Street Journal reported Monday:

New York City and Northern Virginia will be the homes for Amazon.com Inc.’s second and third headquarters, according to people familiar with the matter, ending a more than yearlong public contest that started with 238 candidates and ended with a surprise split of its so-called HQ2.

Amazon is dividing the second headquarters evenly between New York’s Long Island City and Arlington County’s Crystal City neighborhoods, which are both located directly across from the major city centers.

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Economy & Investments, News

Bigger Checks for Social Security Recipients

Social Security payments are going up by 2.8 percent starting in 2019, the biggest increase in seven years since an increase of 3.6 percent in 2012 according to a MarketWatch report. A report by the U.S. Bureau of Labor Statistics (BLS) reveals the increases are due to a 0.1 percent rise in the Consumer Price Index (CPI) last month. The 2.8 percent increase means an additional $472 annually or $39 per month. It’s a small number individually but translates to a massive increase in consumer spending that should further boost the economy next year. More good news for President Trump.

Here’s more from Breitbart…

Retired Americans collecting Social Security payments will get their biggest payout in seven years starting in 2019.

Social Security benefits are slated to go up by 2.8 percent in 2019, making it the biggest gain for Social Security beneficiaries since payouts rose by 3.6 percent in 2012, MarketWatch reported Thursday.

The government released the figures after the U.S. Bureau of Labor Statistics (BLS) published its Consumer Price Index (CPI) Summary on Thursday. All increases in Social Security benefits are determined by the CPI, which rose by 0.1 percent in September.

The average recipient in 2018 got an estimated $1,405 per month in benefits. The 2.8 percent increase would tack on an additional $472 a year, or $39 per month, to those benefits.

The increase in benefits would be a welcome income boost to the 60 million retirees receiving them. Benefits rose just two percent in 2018 and 0.3 percent the year before.

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Economy & Investments, Politics

Jobs Report: US Economy Booms Again

Democrats can’t win for losing as summer comes to a close, and the final sprint to the November elections is upon us. On Friday, the U.S. Labor Department revised the jobs and unemployment numbers once again to show an additional 35,000 jobs and another drop in unemployment below 4%. In the history of presidential midterms, it’s very rare for a peacetime president with a booming economy to lose his party’s grip on Congress. It’s more bad news for Democrats, who can’t seem to catch a good break.

Here’s more from Breitbart…

The U.S. economy added another 157,000 jobs in July and the unemployment rate fell to 3.9 percent, according to a Labor Department report Friday.

Economists had expected a nonfarm payrolls gain of 190,000 and the jobless rate to tick down to 3.9 percent.

Nonfarm payroll growth for June was revised up to 248,000 from 213,000. May’s jobs were revised to 268,000 from 244,000. So what seems to have happened is that many of the jobs that were expected in July were actually created in prior months.

Manufacturing added 37,000 jobs, with most of the gain in the durable goods component.  Over the past 12 months, manufacturing has added 327,000 jobs.  Construction added 19,000 jobs and has increased by 308,000 over the year.

One reason job creation may have slower: the closing of Toys R Us. The category for toy and hobby stores fell by 32,000 workers.

 

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Economy & Investments, Politics

Trump Gives Thumbs Up on Economic Boom

President Trump took to the South Lawn at the week’s end to sing praises for revised economic numbers that showed a revision of more than 2% to the original projections of GDP growth. The U.S. economy crossed the 4% mark in the second quarter of the year, continuing the acceleration on the heels of the GOP tax reform bill coupled with the administration’s slicing and dicing of federal regulations. Of course, none of this should come as a surprise to us; businesses generally like investing in expansion when they know the government isn’t going to penalize them for creating jobs.

Here’s more from The Daily Wire…

The U.S. economy exploded in the second quarter of 2018, with the gross domestic product (GDP) climbing 4.1% — nearly doubling the first quarter, which was revised up to 2.2%.

The booming rate is the highest since the third quarter of 2014 and just the third-highest since the Great Recession began in 2008. The running four-quarter average is 3.1%, considered by economists to be a very strong number.

In Q2 of 2018, consumer spending grew 4%, while nonresidential business investment jumped 7.3%, both also considered strong numbers.

Trump took a victory lap on the White House’s South Lawn, telling reporters that the high numbers are “sustainable.”

“We’re going to go a lot higher,” Trump said. “As the trade deals come in one by one, we’re going to go a lot higher than these numbers, and these are great numbers. …

“We’ve accomplished an economic turnaround of historic proportions,” Trump said. “Once again, we are the economic envy of the entire world.”

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Economy & Investments, States

Winning: TX Is World’s 3rd Biggest Oil Producer

According to a report this week, Texas is on pace soon to become the world’s third largest oil producer, edging out all other countries except Russia and Saudi Arabia. It’s a massive endorsement for free market principles. Especially given that it marks an historic turnaround from the oil glut and resultant plunge in prices just a few years ago. It’s also a reminder of what can be accomplished when the federal government gets out of the way of private industry.

Here’s more from Hot Air…

America is a powerhouse and I mean that literally as well as figuratively. CNN Money reported Wednesday that Texas is set to become the world’s number three oil producer thanks to a boom in production:

Plunging drilling costs have sparked an explosion of production out of the Permian Basin of West Texas. In fact, Texas is pumping so much oil that it will surpass OPEC members Iran and Iraq next year, HSBC predicted in a recent report.

If it were a country, Texas would be the world’s No. 3 oil producer, behind only Russia and Saudi Arabia, the investment bank said.

“It’s remarkable. The Permian is nothing less than a blessing for the global economy,” said Bob McNally, president of Rapidan Energy Group, a consulting firm…

“The industry cracked the code on fracking,” said McNally.

Texas is producing so much oil that it will soon be bumping up against pipeline capacity. Some producers are already selling at a discount because of the limitations. Another problem is a shortage of labor, though that will likely be good news for the state and for people moving to Texas to find work.

The boom in Texas is one reason the U.S. is set to become the world’s number one oil producer. Last week, U.S. production reached an all-time high of 11 million barrels per day.

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Economy & Investments, International

Art of the Deal: China Flinches First in Trade War

Last week President Trump made good on promises to force the Chinese into a position of better trade balance after years of currency manipulation and tariffs on US exports.

But the Dow dropped like a rock after fears that US exporters would be hit hard with the negative effects of a trade war with China.

Then came Monday and China flinched. Rather than responding with reciprocal import tariffs on US products, Chinese leaders offered to negotiate better trade deals to avoid a massive fight.

That was likely the entire motive behind Trump’s announcement in the first place.

And the Chinese bit hard.

Here’s more from Newsmax…

Following Friday’s massive losses on Wall Street amid reports of a trade war between the United States and China, the market bounced back Monday after China signaled it is willing to negotiate better trade deals with the Trump administration.

The Dow’s point increase was the largest single-day gain since 2008. The Financial Times reported early Monday morning that China is offering to buy more U.S.-made semiconductors to help reduce the $375 billion merchandise trade surplus it has with America.

Gordon Chang, an expert on North Korea and China, told Newsmax TV Americans shouldn’t worry about a trade war anyway because it would be a one-sided affair.

“Everyone has been worried about a trade war, but we shouldn’t because we hold most of the high cards,” Chang said. “And the Chinese really have no way to win a trade war with the United States if they face a determined American president.”

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Economy & Investments

Winning: Unemployment Lowest Level Since 1973

There’s a curious phrase we’re not hearing much at all now that the Campaigner-in-Chief is playing golf full-time: ‘jobs saved’.

That faux statistic from the Obama administration was part of the so-called ‘shovel-ready’ stimulus that never really stimulated much of anything.

But with a pro-growth, pro-free market administration in place, Wall Street is responding and salaries, investments and jobs are on the rise…actually.

In the midst of the longest growth trend in a generation, jobless claims are now lower than they’ve been since before the Carter administration.

That means more than half of all Americans haven’t seen economic growth like this in their lifetimes.

That’s not fake news.

Here’s more from Washington Examiner…

New applications for unemployment insurance benefits plunged by 41,000 to 220,000 in the second week of 2018, the Labor Department reported Thursday, the lowest level in nearly 45 years.

The report easily beat forecasters expectations for new jobless claims to drift down to around 250,000.

Low jobless claims are a good sign because they suggest that layoffs are relatively scarce. Federal Reserve officials and investors watch the numbers because they come out weekly, providing an early warning sign of any trouble.

New claims, which are adjusted for seasonal variations, are well below the mark that would suggest that unemployment is going to rise. Over the past year, new claims have scraped multi-decade lows as the jobs recovery has steadily reduced the number of unemployed workers.

The total number of people receiving unemployment benefits, which are available for up to 26 weeks in most states, stayed below 2 million, also near the lowest levels since the 1970s.

And at 4.1 percent in December, unemployment is as low as it has been since the dot-com bubble.

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Economy & Investments, Politics

Yuge: Trump Opens Up Offshore Waters to Drilling

Even before Obama’s war on fossil fuels, offshore drilling has been severely curtailed for decades.

That is until this week after the Trump administration announced authorization of new offshore drilling, including a billion acres in the Arctic.

What’s most significant about this is that the oil bust from a few years ago forced efficiencies among American exploration companies that has them now running lean and efficiently.

And it’s on that premise that many analysts expect American shale to destroy OPEC finally.

That’s BEFORE the offshore drilling option which, when added to the existing shale plays, represents an American energy independence explosion.

Winning.

Here’s more from Hotair…

“Energy superpower” is the same term an S&P analyst used today to describe America’s exploding shale industry, predicting that the U.S. will be a top-10 global oil exporter by the end of Trump’s term. Today’s decision makes that even more likely. The catch: Although righties love the idea of more drilling, voters in coastal states like North Carolina and Florida tend not to because it poses environmental risks (right, BP?) and damages tourism.

A 2016 poll of Florida found support for offshore drilling at 32/47, a steep decline from the 44/39 split of two years earlier. Rick Scott, normally a Trump ally, put out a statement today noting that “I have asked to immediately meet with Secretary Zinke to discuss the concerns I have with this plan and the crucial need to remove Florida from consideration.”

North Carolina and Florida are both crucially important to Trump in 2020 and he has no margin for error in the latter given the influx of Democratic-leaning Puerto Ricans after Hurricane Maria. Maybe it won’t matter, as the new drilling policy is still 18 months away from being finalized and many years away from drilling actually beginning in the new waters given the lack of infrastructure out there right now. But it’s a risk politically.

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Economy & Investments

Mike Galiga: Black Monday Cometh Again

One crucial task of the agile trader is keeping up with market-moving news. One little event anywhere in the world can throw gasoline on the hottest bullish fire OR send it plunging like a barrel over Niagara. In fact, in this ever-more-connected world, hot news- good or bad- may be the biggest catalyst for short-term gains or losses- bigger than traditional fuel like earnings reports, new product announcements and perhaps even FED decisions. Every day I’m consuming headlines like most people consume air. It’s a relentless global hunt for new, short-term profit opportunities that (sometimes distant) world events are presenting to stock & options traders.

To these well-seasoned, “been there and done that” eyes, the pile of evidence in support of the forecasts I’ve been sharing with you keeps building. And note: I work d*mn hard to keep subjectivity & bias out of such reviews, striving very hard to avoid the terrible amateur trap of seeing only what I want to see. I know compromising one’s objectivity is a massive killer of any good trading discipline, so I probably look for counterpoint harder than I look for point.

Nevertheless, I see it unfolding more & more… like the old tv shows & movie prop crystal balls going from smoky & foggy to an ever-clearer picture. Markets are predictable. Markets repeat events again and again and are driven by the same catalysts again and again. The trick to convert market smoke & fog to clarity or even near-certainty is knowing where to look, recognizing the patterns of the past and weaving that with the group sentiment of the present. Big volatility is coming… probably more than we’ve ever seen before. It’s going to be a wildly exciting ride to my medium-term forecast target of DOW 30K. Knowing when to profit on the big bull plays AND, perhaps more importantly, when to profit (not run & hide) on the big bear slides and you can make a fortune… FAST.

Haven’t we seen this movie before?

Yes! Yes we have. During the 1980s, we saw a similar boom in stock values with investors getting hyped up on the apparent record growth rally in the markets. And it was welcomed news after a dismal environment of stagflation with mortgage interest rates in the stratosphere.

But what happened toward the end of that movie? We experienced one of the worst stock market corrections in our nation’s history, second only to the crash that preceded the Great Depression. We remember that day as Black Monday when the Dow Jones dropped nearly 25% in a single day. That crash was precipitated by some market trends that are eerily similar to what we’re seeing today. You might be thinking, “Such as?..”

The Dow’s explosive growth had risen to over 2,700 that summer (remember when DOW 2,700 was a sky high measure of market success?), having closed at its height to a gain of 44% over the previous year. Similarly, we saw the crash presiged by unrest in OPEC with a bust in the oil markets of 50% the previous year. And of course there was unrest in the Middle East and elsewhere, which made market prices highly volatile.

Looking back at those events today, it’s a classic version needing to see the (catalyst) news in all of the right places… and separating noise from the news that would make- or shake- the markets. Does any of that sound familiar? It should because we have much the same conditions setting up here- in late 2017. And that’s why I perked up to the headline that trumpeted David Stockman’s criticism of President Trump’s new tax reform package.

Stockman was the Director of the Office of Management and Budget under the Reagan administration. So he knows what a Black Monday scenario looks like… because HE WAS THERE. And he’s doing the craziest of crazy things in modern politics: he’s calling a spade a spade. That’s something almost no other public figure dares to do: say what he REALLY foresees instead of spinning some almost canned PR message hoping the herd will keep right on ignoring reality. Just ignore that spade. Just keep throwing your money into the same pot. Just keep kicking that can a little further down the road. Oh boy! Haven’t we all seen this movie too many times before?

In a recent CNBC piece, Stockman is quoted with a prediction of as much as a 70% drop in stock prices. SEVENTY PERCENT! If that actually plays out, the DOW would be much closer to that record back in 1987 than the record in 2017. Take a moment and do the math yourself. Where is the DOW today? Multiple that by 0.3. Look at that result. Think about that result. Impossible? Where was it just about 10 years ago when we had the last market meltdown? Is the result and that reality really so far apart one could see it as an impossibility now?

Stockman explained that the economy sees a major correction around every eight years, give or take. It’s been more than that since the Great Recession. He detailed, “There is a correction every seven to eight years, and they tend to be anywhere from 40 to 70 percent. If you have to work for a living, get out of the casino because it’s a dangerous place.”

In the interview he explained the factors that might be creating an inevitable drop in the market. He goes on, “This is a bubble created by the Fed. We’re heading for higher yields. We are heading for a huge reset of pricing in the risk markets that’s been based on ultra-cheap yields that the central banks of the world created that are now going to go away because they’re telling you that they’re done.”

Perhaps worse than that is this other somewhat quiet discussion about unwinding the FED balance sheet. While that could mean a lot of things, I suspect a massive big buyer- perhaps the default buyer that has thrown much of the money at this market to drive it up to these incredible records is now wanting to STOP BUYING and start selling. What happens to any market when enthusiastic buyers become sellers? Only one thing happens there. You can count on it.

If that sounds familiar, it should. It’s essentially what I’ve been saying for months now. The prices of major stocks are hitting records every week which is creating artificial paper wealth that isn’t backed up by anything tangible. I really don’t think it’s the traditional buyers doing all this buying to push the markets higher & higher. I increasingly think it’s mostly ONE buyer- a holy mother of all buyers if you will- and even “she” has now formally communicated that “she” wants to wind down “her” purchasing and flip into selling off some of “her” holdings. Where does that go? Where is the only place that can go?

Yet market records are being realized almost on a weekly basis… and touted hard in every way they can be heard. The herd doesn’t (maybe can’t) listen that attentively… or doesn’t remember the past or recognize how the past repeats again and again… until… in hindsight, the “shoulda, coulda, wish I hads” are flying near the tail end of a swift crunch… or crash. The herd may hear a little bit of such warnings before the event… but fall prey to the much louder allure of “another record day…” perhaps throwing even more money into the pot to try to capitalize on the endless record days that are certainly going to come after this one. How often has ANY stock market gone up and up and up indefinitely? Exactly. “But it’s different this time.” Watch out!

Many people may discount this warning as just another conspiracy theory. Others will freak out and start pulling their investment dollars from the market. But the smart money sees such scenarios as opportunities. Agile investors will make the most of bull & bear by taking advantage of the tools that make money on BOTH. A great tool is also a dirt-cheap one: options. A call option buyer is making a relatively cheap, leveraged bet on a rising stock or market. A put option buyer is making a comparably cheap, leveraged bet on a falling stock or market. A shrewd & agile investor will buy & close call & put options interchangeably… like one is just as good as the other (and it is when used at the right time and in the right way).

Most investors & traders only see the markets through a singular (always bullish) lens. In other words, the only way they see to make money is on the rising side: buy a stock, stock moves bullishly, sell the stock & book a profit. There’s almost a dependency on a perpetual bull market for most people. However, the few that make the MOST money investing & trading work the other side too. They are not OUT doing nothing when the bull cedes the stage. A roaring bear is just as lucrative- often even more in many cases- when one is positioned to make money on such a move.

Do you know how? Do you have a good feel for vehicles like call & put options and how to use them to make money as this market rises AND when it’s falling too? Maybe you think you know a little but are not confident you know enough to actually put such knowledge to good- and profitable- use? If any of that resonates for you, speak up… right now. Email me at Mike@MikeGaliga.com. My team & I are hard at work developing some major new goodies to help individual investors just like you take full advantage of the wild volatility rapidly approaching all of us. Email me letting me know you want to learn and you’ll be the first I alert when our work is ready to be utilized. Don’t be a “shoulda, coulda, wish I had” ever again. My team & I are here to help. Let us.

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