So
Who Are the Debt Slaves in this Rich Nation? - (www.wolfstreet.com) We
constantly hear the factoids about “American households” that paint a
picture of immense wealth – and therefore a lack of risk for consumer lenders
during the next downturn. We hear: “This – the thing that happened in 2008
and 2009 – won’t happen again.” For example, total net worth (assets minus
debt) of US households and non-profit organization (they’re lumped together)
rose to an astronomical $92.8 trillion at the end of 2016, according to the
Federal Reserve. This is up by nearly 70% in early 2009 when the Fed started
its QE and zero-interest-rate programs. Inflating household wealth was one of
the big priorities of the Fed during the Financial Crisis. It would crank up
the economy. In an editorial in
2010, Fed Chair Ben Bernanke himself called this the “wealth effect.” So with
this colossal wealth of US households, what could go wrong during the next
downturn?
Is
The Deep State Creating Another "Crash Of 1929"? - (www.zerohedge.com) In
his speech above, future Federal Reserve Chairman Ben Bernanke acknowledged
that, by raising interest rates, the Fed triggered the stock market crash
of 1929, which heralded in the Great Depression. Yet, in her speech above, Fed
Chair Janet Yellen announced that “it makes sense” for the Fed to raise
interest rates “a few times a year.” This is a concern, as economic
conditions are similar to those in 1929, and a rise in interest rates may have
the same effect as it did then. So let’s back up a bit and have a look at what
happened in 1929. In the run-up to the 1929 crash, the Federal Reserve
raised rates to 6%, ostensibly to “limit speculation in securities markets.” As
history shows, this sent economic activity south rather quickly. Countless
investors, large and small, who had bought stocks on margin, would be unable to
pay increased interest rates and would be forced to default. (It’s important to
understand that the actual default was not necessary to crash markets. The knowledge that
investors would be in trouble was sufficient to send the markets into a
tailspin.)
Undaunted
by oil bust, financiers pour billions into U.S. shale - (www.reuters.com) Investors
who took a hit last year when dozens of U.S. shale producers filed for
bankruptcy are already making big new bets on the industry's resurgence. In the
first quarter, private equity funds raised $19.8 billion for energy ventures -
nearly three times the total in the same period last year, according to
financial data provider Preqin. The quickening pace of investments from private
equity, along with hedge funds and investment banks, comes even as the recovery
in oil prices CLc1 from an 8-year low has stalled at just over $50 per barrel
amid a stubborn global supply glut.
Is
American Retail at a Historic Tipping Point? - (www.nytimes.com) Along
the cobblestone streets of SoHo, Chanel handbags and Arc’teryx jackets are
displayed in shops like museum pieces, harking back to the height of the
neighborhood’s trendiness. But rents there are softening, and the number of
vacant storefronts is rising. Today, some of the most sought-after real estate
by retailers is not in SoHo, but five miles away in Red Hook, a gritty Brooklyn
enclave with a shipbuilding past. E-commerce merchants are vying to lease part
of a huge warehouse space, spanning 11 acres, that would allow them to deliver
goods the same day they’re ordered online. The profound reordering of New
York’s shopping scene reflects a broad restructuring in the American retail
industry.
Boeing
To Lay Off "Hundreds" Of Engineers - (www.zerohedge.com) In
a letter to employees, Boeing VP John Hamilton announces that the company will lay
off "hundreds" of engineers as soon as this week, affecting
Washington and "other enterprise locations." The timing is
interesting as the Ex-Im Bank discussions hot up and comes just 2 months after Trump visited Boeing's South Carolina
plant.
Standing in front of a new Boeing 787-10 Dreamliner passenger aircraft made at
in North Charleston, Trump repeated his campaign promises to promote American
production that partly fueled his dizzying path to the White House. He warned
of a "substantial penalty" for companies that move jobs out of the
United States. "We want products made by our workers in our factories
stamped with those four magnificent words — made in the USA," Trump
said.
Asian
economies escape 'manipulator' tag, but expect more pressure on trade - (www.reuters.com)
North Korea displays apparently new missiles as U.S. carrier group approaches - (www.reuters.com)
North Korea Parades New Long-Range ‘Frankenmissile’ - (www.wsj.com)
North Korea displays apparently new missiles as U.S. carrier group approaches - (www.reuters.com)
North Korea Parades New Long-Range ‘Frankenmissile’ - (www.wsj.com)
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