Economic Outlook

Jim Rogers On Why TPP Is So Secret

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Posted by Jim Rogers

on Thursday, 28 May 2015 08:26

Unknown-1The biggest trade deal in a decade is on its way to being fast-tracked through the U.S. Congress, which if happens means no debate, no amendments. What makes TPP or Trans Pacific Partnership different? It stands out in size as 40% of world trade will be involved. But it’s surrounded in secrecy. Singapore-based investor Jim Rogers explains that some industries are going to boom and some are going to collapse with the passage of this bill in this 3.41 minute interview.

The Trans-Pacific Partnership (TPP) is a proposed regional regulatory and investment treaty involving twelve countries throughout the Asia Pacific region.




Economic Outlook

See No Evil: What We Chose to Ignore in the April Jobs Report

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Posted by Peter Schiff - Euro Pacific Capital

on Wednesday, 13 May 2015 19:27

We live in an age where bad economic news is not only unwelcome, but it is routinely overlooked or excused. On the other hand, good news is spotted and trumpeted even when it doesn't exist. An ideal illustration of this dangerous tendency towards collective selectivity came last week when the markets and the media somehow turned an awful employment report into an ideal data set that confirmed all optimism and contained nothing but good news for investors. In truth, it was anything but.

The stakes were high with this year's April non-farm payroll report. It was the first major employment report of the Second Quarter and it was hoped that it would show an economy bouncing back from a sluggish winter. But there was cause for concern. The March report had been an unmitigated disaster. Only 126,000 jobs were created when 247,000 were expected. Then, two lesser April employment reports had been released, the ADP private payroll data and the Challenger jobs cuts report that came in far below expectations (Challenger showed the biggest month over month increase in layoffs in three years). Even more harrowing was the recently released .2% annualized GDP in the First Quarter, a dismal April trade deficit, and the worst back to back monthly productivity reports in almost a decade. We needed good news, and we needed it bad.


The April report's headline was all most people needed to see before breathing a collective sigh of relief.



Economic Outlook

There Will Be No 25-Year Depression

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Posted by Bill Bonner & Chris Hunter - Diary of a Rogue Economist

on Tuesday, 05 May 2015 13:49

0204 BW Depression 630x420Today, we have bad news and good news. 

The good news is that there will be no 25-year recession. Nor will there be a depression that will last the rest of our lifetimes. 

The bad news: It will be much worse than that. 

Yesterday, the Dow rose another 43 points. Gold seems to be working its way back to the $1,200 level, where it feels most comfortable. 

“A long depression” has been much discussed in the financial press. Several economists are predicting many years of sluggish or negative growth. It is the obvious consequence of several overlapping trends and existing conditions.

Old People Are Dead Wood

First, people are getting older. Especially in Europe and Japan, but also in China, Russia and the US. 



Economic Outlook

16 Signs That The Economy Has Stalled Out And The Next Economic Downturn Is Here

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Posted by Michael Snyder via ZeroHedge

on Friday, 01 May 2015 09:54

makwIf U.S. economic growth falls any lower, we are officially going to be in recession territory.  On Wednesday, we learned that U.S. GDP grew at a 0.2 percent annual rate in the first quarter of 2015.  That was much lower than all of the “experts” were projecting.  And of course there are all sorts of questions whether the GDP numbers the government feeds us are legitimate anyway.  According to John Williams of shadowstats.com, if honest numbers were used they would show that U.S. GDP growth has been continuously negative since 2005.  But even if we consider the number that the government has given us to be the “real” number, it still shows that the U.S. economy has stalled out.  It is almost as if we have hit a “turning point”, and there are many out there (including myself) that believe that the next major economic downturn is dead ahead.  As you will see in this article, a whole bunch of things are happening right now that we would expect to see if a recession was beginning.  The following are 16 signs that the economy has stalled out and the next economic downturn is here…

#1 We just learned that U.S. GDP grew at an anemic 0.2 percent annual rateduring the first quarter of 2015…

The gross domestic product grew between January and March at an annualized rate of 0.2 percent, the U.S. Commerce Department said, adding to the picture of an economy braking sharply after accelerating for much of last year. The pace fell well shy of the 1 percent mark anticipated by analysts and marked the weakest quarter in a year.

....#2 - 16 HERE




Economic Outlook

Get ready for a huge day for the US economy

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Posted by Business Insider

on Wednesday, 29 April 2015 06:52

It's a huge morning for the US economy.

At 8:30 a.m. ET, the Bureau of Economic Analysis will release its first reading on first-quarter gross domestic product, which is expected to show the economy grew at just a 1% pace in the first quarter.

This announcement will be followed at 2 p.m. ET by the Federal Reserve's latest monetary policy announcement.

In March at its most recent meeting, the Fed said it would not look to raise interest rates at the April meeting.

Moreover, Federal Reserve Chair Janet Yellen will not speak with reporters after the statement is released Wednesday afternoon, and so all the market will have to digest is the statement itself.

But the market will be looking for the Fed's assessment of one thing in the statement: its outlook for the economy.

In a note to clients over the weekend, Bank of America's Michael Hanson wrote that the Fed would most likely have a more "somber" outlook on the economy after a first quarter that saw economic data widely disappoint.

Hanson wrote:

At the March FOMC meeting, the Fed took any policy changes in April off the table. We don't expect similar language about June policy at the April meeting. We do expect a more somber description of recent activity. This dovish shift in the nearterm view should translate into significantly lower odds of a June rate hike in our view. But any market participants who seek an explicit signal that June also is off the table are likely to be disappointed: the FOMC will want to maintain as much policy flexibility as possible.

During the quarter, first-quarter GDP growth was consistently revised down, and some measures like the Atlanta Fed's GDP tracker indicates the economy may not have grown at all during the first quarter of 2015.

In a note to clients ahead of the GDP report, Joe LaVorgna at Deutsche Bank wrote: "It is possible that GDP growth (specifically productivity) is being understated, because the income side of the economy has not experienced the same degree of weakness evident in the output figures."

Before the Fed gives its latest statement, however, it will have an answer.

Given that the Fed ruled out a rate hike in April and that Yellen will not speak with the news media after the announcement, markets have more or less been looking past the Fed meeting, or at least expecting to take it in stride with the week's news flow. Treasury bonds, however, were selling off a bit ahead of Wednesday's announcement, with the 10-year note rising above 2% for the first time in over a month.

Also, in addition to the big GDP number set for release Wednesday morning, the big data point for Fed policy is probably coming up Thursday with the release of the employment cost index. This report, which captures factors like employee benefits in addition to wages, is expected to show employer costs rose 0.6% in the first quarter, or 2.6% over the prior year.

Anecdotal evidence from the labor market, like the wage increases announced at Wal-Mart and Target in addition to commentary from economic surveys like the Beige Book and Monday's Dallas Fed report, have hinted that wage pressures might be working their way through the economy. Thursday's report will be a big test for this growing theme.

In a post ahead of Wednesday's Fed announcement, Pimco's Tony Crescenzi wrote that the firm still expected economic conditions would warrant a rate hike in September.

And in a chart circulated earlier this week, Deutsche Bank economist Torsten Sløk said most everyone in the market expected a rate hike by December.

fed hikes slok

SEE ALSO: Morgan Stanley's chief US equity strategist: 'We find bond guys to be statistically significantly more negative human beings than average.'



Economic Outlook

Consumer Credit Trouble Looms

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Posted by Jon Markman - Commodities, Stocks, Technical Analysis

on Tuesday, 28 April 2015 06:24

The slowdown in retail sales growth has been a big surprise this spring, as lower gasoline pump prices were expected to boost spending. What’s going on?

Analysts at TIS Group have a fascinating if scary answer: The consumer credit cycle is breaking down as families sense the economy is slipping a gear and don’t want to over-leverage themselves. This is happening even as corporate credit continues to boom.

It’s the old story, right? If you don’t need credit, you can get it — and if you do need it, you can’t.

This distinction is important because the world is not on a typical boom-and-bust business cycle. With central banks driving much of the action, the world is instead on a credit cycle, which according to TIS means that everything depends on the availability and price of credit.

With the Fed threatening to raise rates despite a disinflationary environment, credit conditions are changing in the United States as well as in other developed countries.


The chart above, provided by TIS, shows that according to Federal Reserve data, Consumer Credit Revolving fell



Economic Outlook

This Trend is NOT Your Friend

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Posted by Mike Burnick - Money & Markets

on Thursday, 23 April 2015 07:34

Two months ago in Money and Markets, I alerted you to a troubling trend when U.S. economic reports started taking a turn for the worse, with more negative than positive surprises in the data.

Fast forward eight weeks and the downtrend in our economic data has deteriorated even further, telling me an inflection point for the stock market may be close at hand. Let me explain …

The graph below plots the Bloomberg Economic Surprise Index (ESI: blue line, middle panel), which measures the degree to which recent data has been beating economic forecasts (positive surprises), or falling short (negative). Citigroup produces a similar indicator, which I highlighted in my February article, but both tell the same sad story about the U.S. economy; it’s quickly losing momentum.


Just to recap; the line rises when economic reports are exceeding forecasts, like yesterday’s housing data — a rare positive



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