From the Trenches World Report
Enforce our Bill of Rights
One of the kookiest moments last month came when Fed Chairwoman Yellen spoke about seeing no financial collapse in sight during our lifetimes
“Would I say there will never ever be another financial crisis? No. Probably that would be going a little too far, but I do think that we’re much safer, and I hope that it will not be in our lifetimes, and I don’t believe it will be.” (CNBC Play video for quote on next crisis.)
Continue reading “US Economy Keeps Moving Into Summer Storm”
For the first time in US history a handful of US states is teetering on the edge of bankruptcy. Illinois is about to be downgraded to junk bond status, which will turn its financial problems catastrophic overnight. Illinois cannot possibly pay its accumulated debt, its unpaid medicaid expenses and its future retirement obligations, so bankruptcy most certainly will be its only way out.
Main, Connecticut, Kentucky and California are also caught in chronic budget deadlocks that may lead to bankruptcy as a solution for dodging their entitlement obligations. Bear in mind they’re called “entitlements” because it’s money promised to you that you already put in the work to earn. It’s your retirement. Illinois, for example, has over $200 billion in pension obligations that will never be paid … or that will only be paid at a greatly diminished level worked out in bankruptcy court. Continue reading “The Broken States of the Union”
What could be smellier and more tempting bait to get ISIS to launch a chemical-weapon attack than a US guarantee that “any” chemical weapon attack in Syria will be automatically blamed on Assad’s regime and will automatically result in the US attacking Assad and all of ISIS’s other enemies?
Today the White House offered ISIS that ironclad guarantee. Continue reading “US Baits ISIS to Stage False-Flag Chemical Attack to Justify Greater US Attack against Syria”
Central banks buying stocks are effectively nationalizing US corporations just to maintain the illusion that their “recovery” plan is working because they have become the banks that are too big to fail. At first, their novel entry into the stock market was only intended to rescue imperiled corporations, such as General Motors during the first plunge into the Great Recession, but recently their efforts have shifted to propping up the entire stock market via major purchases of the most healthy companies on the market.
Brian Rich, writing for Forbes, describes the economic illusion created by central banks buying stocks during a time of presidential prosecution: Continue reading “Central Banks Buying Stocks Have Rigged US Stock Market Beyond Recovery”
You may not see it yet, but the scale of the retail apocalypse is so massive that it is about to engulf the US economy. As when a flood tide has crept around you on all sides while you were standing on a high spot out on the flats, not paying attention, you can look up now and see it all around you, and it is coming in rapidly. You can now feel the current under your toes.
Since the final quarter of 2015, I have been writing about what I call “the Epocalypse,” by which I mean an economic collapse that will prove to be apocalyptic in scale — something that is both epic (Herculean) in scale and epoch in the literal sense that it will dramatically bring the modern world into a new economic era. I might better, then, call this the “retail epocalypse” because it has insidiously turned into a significant part of that greater event and because it is partly due to e-trade. Continue reading “Retail Apocalypse Engulfs US Economy”
Carmageddon, as Wolf Richter has called it, is hitting the US economy exactly as I said a year and a half ago would start to happen at the very end of 2016 or the start of 2017. Measured year-on-year, auto sales have declined every month of 2017, and are now starting to cause the financial wreckage that I said we would experience in what will become a demolition derby for US auto manufacturers.
“A stretched auto consumer, falling used [vehicle] prices, and technological obsolescence of current cars are ingredients for an unprecedented buyer’s strike,” wrote Morgan Stanley’s auto analyst Adam Jonas in a note to clients. (Wolf Street)
We just saw a major rift open in the US stock market that we haven’t seen since the dot-com bust in 1999. While the Dow rose by almost half a percent to a new all-time high, the NASDAQ, because it is heavier tech stocks, plunged almost 2%. Tech stocks nosedived while others rose to create new highs. Is this a one-off, or has a purge begun for the tech stocks that have driven the nation’s third-longest bull market? Continue reading “Is the Central Bank’s Rigged Stock Market Ready to Crash on Schedule?”
These updates to my list of “Seven Troubles Assailing the US Economy” are far too important to remain buried at the end of that article since many readers may not return to the article to check for updates. The summer economic crisis I’ve been predicting is building even more rapidly than when I reported a week ago. It’s almost here:
Total household debt now exceeds the peek it hit just before the economic collapse into the Great Recession. While the number of households is also up, wages are correspondingly down, so households have maxed out … again: Continue reading “Summer Storm Keeps Building as Second Dip of Great Recession Approaches”
If I can show you that economists, central bankers and stock analysts are blind in the area of their expertise to the most obvious setup for disaster ever, then you’ll realize we are perfectly poised for potentially the greatest stock market crash in history. Many times in the past few months, I’ve heard these people say that the present bull market cannot crash spectacularly yet because we have not seen the kind of irrational exuberance that is required to set things up for such a crash. I shake my head in amazed disbelief as I listen to the most irrational nonsense about a stock market rally that was by far the most exuberant we have ever seen! Continue reading “We’re sailing into a massive stock-market crash”
The following is not simply a list of negative risks to the economy but a list of of serious economic conditions that are already placing drought-like pressures on the overall economy. This list doesn’t include the long-term structural problems with the economy, such as its high debt burden, but just the forces that have risen against it this year. Continue reading “List of Seven Troubles Assailing the US Economy as We Head into Summer”
The Wannacry malware that hit like a global mega-bomb, showed everyone how vulnerable we are to a global cyber attack. Billed as “one of the largest global ransomware attacks the cyber community has ever seen,” the infection started in London and then emerged almost instantly in Seattle, New York, and Tokyo. Within ten minutes, the coordinated attack became epidemic throughout the world, covering the better part of every continent but Antarctica. By the end of one day, the malware had infected over 200,000 computers in 150 nations, encrypting all their data and locking the users out. Continue reading “If Wannacry cyber attack didn’t make you wannacry, the next one will!”
I know I said I’d stay closer to economics in my commentary and not so much pure politics, but today became so surreal, I couldn’t resist. I couldn’t make stuff up this rich if I were drinking electric Kool-Aid while mainlining acid here in the whacky world of President Donard Trixon and the Republicrats.
First, the basic situation: President Trump fires FBI Director James Comey who is hated by Democrats for the bungling manner in which he handled the scandalous Clinton emails that were allegedly obtained and made public by Russia in collusion with Donald Trump. During the campaign, Candidate Trump praised Comey’s breach of every known protocol on how the FBI handles sensitive information, especially politically charged information, and his move outside the chain of command. (Deciding not to prosecute Clinton was never properly Comey’s decision or announcement to make, but rests fully in the attorney general.) Continue reading “The Trump-Putin-Nixon Water-Tower Coverup Scandal”
Trump’s supporters are increasingly alarmed, outspoken and feeling betrayed as their champion rolls over and plays lap dog for the political establishment. Even Rush Limbaugh, Trump’s golfing buddy and longtime advocate, said this week that what is happening with Trump and the Republicans is a “sellout” and “betrayal.”
With the US economy sinking in the first quarter toward the netherlands of recession (GDP growth of 0.7%), my prediction that the the economy will really start to fall apart in the early summer — in spite of Trump’s victory and the Trump Rally in stocks — looks increasingly likely with each passing week. Meanwhile my warning last year that Trump would likely prove to be a Trojan horse for the establishment is, as of this week, finally proven. Consider the following analysis of Trump’s acquiescence to every failure of his purported agenda: Continue reading “Did Trump Get Thumped … or Supporters Get Dumped?”
Maybe Trump didn’t realize that all of his supporters actually expected him to deliver on all of his hard-edged statements. Or maybe he was Trojan Trump from the get go, just as I postulated many months ago to the outrage of many of my fellow anti-establishment readers who wanted to believe Trump was their champion. (I sympathize with them and understand their hopes, but have never seen such a self-aggrandizing narcissist as likely to fulfill that role.) The Trump election upset is turning out to be more upsetting to his supporters than to his critics. As Michael Savage says below, their world has turned upside down. Continue reading “You Got Trumped! Trump rapidly losing strongest supporters”
President Trump, how’s that swamp drainage project going?
Another big move in the last couple of weeks has been the sidelining of Trump’s chief strategist Steve Bannon as the Goldman-Sachs group wins more influence in the White House. Bannon has been the guardian of the anti-establishment hopes that put Candidate Trump in office. Continue reading “You Got Trumped: Bannon banned and Cohn-Kushner establishment advanced”
The big announcement of the really, really big Trump Tax Plan with the “biggest tax cuts in history” came out bigly on Wednesday, as Trump promised. Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, Trump’s latest tax team, beamed proudly as they presented their baby. The stock market took a deep breath, then looked at their brainchild and completely petered out.
First, let me say, I clearly have nothing to recant from my earlier predictions about Trump’s tax plan. The plan that came out looks almost exactly as I thought it would — the only difference being that it is far more pathetic. Continue reading “Tiny Trump Hands Deliver Teeny Tiny Tax Plan, US Stocks Collapse in Despair”
Is coming up with a Trump tax plan overtaxing the maestro of negotiation as he tries to conduct his way through congress? An initial clue can be found in his tax-related repeal of Obamacare. The all-important Obamacare repeal got repealed by Paul Ryan — the very person who proposed it — in a matter of days. Who could have guessed reforming healthcare could be so hard? (Everyone but Trump?) Continue reading “You Got Trumped! Trump tax plan taxing for the maestro of negotiation?”
Having castigated Janet Yellen for keeping interest rates artificially low in order to help the Obama Administration keep a Democrat in the White House, Trump now likes Janet Yellen and likes low interest rates, too — so much so that he decided this week that it is finally time to get honest with America about his latest flip-flop. Continue reading “You Got Trumped! Trump not yellin’ about Yellen anymore!”
Nowhere has Donald Trump matched up with the original story of the Trojan horse more than in his overtures of peace, instead of military conflict. Nowhere has Trump changed more than in these same issues. Candidate Trump frequently persuaded his supporters to believe he would build more peaceful and cooperative relations with Russia and ridiculed the regime-change efforts of Hillary’s warmongering ways. After he was wheeled inside the Washington city gates, however, he opened up with overnight military attacks around the world and, in the same week, declared in the solitary point of harmony he could find with Putin that Russian relations had become worse during his first hundred days than they have ever been. Continue reading “You Got Trumped! The Donald’s personal military revolution is just Trump change”
As president Trump relishes telling the story, he was sitting with President Xi of China, who was enjoying a beautiful, huge slice of chocolate cake — the best chocolate cake you ever saw, which can be enjoyed only at Mar-A-Lago — when Trump decided it was time to launch 59 cruise missiles at the Assad government.
As the Chinese president dabbed the chocolate decadence from his lips, Trump informed him that he’d just given the order to launch missiles at Assad’s air fare. The Chinese president paused for about ten seconds and then said, “Well, he did use gasses on children.” Continue reading “Getting Trumped and Thumped in Syria”