Thursday February 16 2017 Housing and Economic stories

TOP STORIES:            

"Brace Yourself" For The Looming Collision Between Trump And Yellen - (www.zerohedge.com) The FOMC recently held its first meeting since Trump took office. But before I get to that, I want to talk about the backdrop to the meeting… Trump’s relationship with Yellen and Yellen’s relationship with Trump. I have to give the Federal Reserve credit—they take their jobs very seriously. It is not a “hack” institution. These are smart people who dedicate their lives to maintaining the purchasing power of the currency. We can say that they are misguided from time to time, but they are not malicious, and they are not hacks. But you also have to remember that these are human beings, and human beings have emotions. So if Trump has made it very clear that he wants a weaker dollar—as he did Jan. 31—then you can bet that Yellen probably wants a stronger dollar, at least on a subconscious level.

 

Kamikaze Economics with Slow-Motion Debt Crash - (www.wolfstreet.com) “An impending train crash.” Those are the words increasingly being used to describe Madrid’s seemingly intractable conflict with Spain’s separatist north-eastern region of Catalonia. The latest flashpoint in tensions is the political show trial of Catalonia’s former president, Artur Mas, and two other Catalan politicians for their role in organizing a purely symbolic, non-binding referendum on national independence in November, 2014. Mas has been charged with serious disobedience and other crimes for ignoring a court injunction against the unofficial vote, which the central government in Madrid considered illegal. If found guilty he could be barred from public office for up to ten years.

Greek Central Bank Chief Warns Bailout Delay Risks Rerun of 2015 - (www.bloomberg.com) Greece must immediately reach an agreement with creditors on the release of bailout funds or risk another recession and even more austerity measures, the country’s central bank chief said. “Any further delay in completion beyond this month will feed a new circle of uncertainty,” Bank of Greece Governor Yannis Stournaras told lawmakers in Athens on Monday, saying this could make reaching a deal harder. “Such a vicious cycle could return the economy to recession and a rerun of the negative developments that took place in the first half of 2015.”

A Tax Overhaul Would Be Great in Theory. Here’s Why It’s So Hard in Practice. - (www.nytimes.com) House Republicans have an ambitious plan for overhauling the way American businesses are taxed. A short list of the plan’s potential benefits looks awesome: It would give companies more incentive to keep jobs in the United States, less to overextend themselves on borrowed money and provide vast savings by reducing what companies spend on tax lawyers, who help them game the current system. Yet these changes could also set off a cascade of more harmful effects. The plan could shift trillions of dollars of wealth from Americans to foreigners; set off an emerging markets financial crisis; wreak havoc in global oil markets; and cause sustained harm to the American higher education and tourism industries (including, as it happens, luxury hotels with President Trump’s name on them).

A failure to tell the truth imperils Greece and Europe - (www.ft.com) If the IMF pulls out, Europe will be free to mismanage the crisis on its own. You notice it particularly at those moments when others speak the truth, as the staff of the International Monetary Fund have done recently. In its latest survey of the Greek economy it states that “public debt has reached 179 per cent [of gross domestic product] at end-2015, and is unsustainable”. Europeans are not used to such bluntness. The Germans protested. The European Commission protested. So did the Greeks. They all want to keep up the fairy tale of Greek debt sustainability for a little while longer.

OTHER STORIES:

Vanguard Reaches $4 Trillion for First Time - (www.wsj.com)
China gets an early win off Trump, but many battles remain - (www.reuters.com)

S&P tops $20 trillion as 'Trump trade' fires up - (www.reuters.com)
U.S. Consumer Inflation Expectations at 19-Month High, Fed Says - (www.bloomberg.com)

Investors Have Second Thoughts About Trump Trade - (www.wsj.com)

IMF’s Stand on Greek Bailout Unnerves Europe - (www.wsj.com)
China upset at disputed islands mention in Japan-U.S. meeting - (www.reuters.com)