jump to navigation

Structural Shift February 10, 2018

Posted by hslu in Congress, 特朗普, 石油, 美國, Debt and deficit, Economics, Election, Energy, Stocks, Taxes, Trump, U.S. dollar, 川普.
Tags: , ,
add a comment

What structural shift are we talking about?

The “structural” part of the shift is the fundamental change of the economy bought to you by none other than Trump and the Republicans. While we are at it, let’s add the inept Democrats to that bunch too because they are equally guilty for acting like a whole bunch of chickens without heads.

In a growing U.S. economy and the synchronized recovery of the world economies, as well as almost full employment of around 4% in the U.S., Trump and the Republicans passed “the biggest tax reforms in American history according to Trump ” without finding a way to pay for the massive tax cut for the riches. It simply is insane because of significant damages it will eventually bring to the masses.

Why did they do it?

Because the mid-term election is coming in 11 months. They congressional Republicans are fearful of losing their congressional seats and the majority of both houses.

The structural change is what the financial market is reacting to this week when the Dow took a fast elevator down to the basement of the correction territory: the dreaded inflation is just around the corner as indicated by the chart below.

Source: Federal Reserve

The tax cut at full employment doesn’t make economic sense because it clearly is inflationary. The bond market knows it because a massive amount of federal government borrowing in the amount of additional $500 billion a year will hit the Bond market soon.

The stock market is equally uncomfortable with the higher rate environment and crumbles under the weight of extended valuation.

The structural shift is important for the financial market at this juncture because a re-pricing of all financial instruments will take place in the months and quarters ahead.

Treasury and corporate bonds will drop. Stock market will correct to bring its valuation to a reasonable level. High yield bonds will tank. Housing prices will drop as mortgage loans demands wane. Commodity prices will decrease as US dollar strengthens. Interest payments on US national debt will rise as deficit grows to ~$1 trillion annually, or about 5% of the US GDP.

In short, the structural shift will shrink personal wealth as inflation bites.

Advertisements

Republican Party: shame on you January 1, 2018

Posted by hslu in Congress, 美國, Debt and deficit, Politics, Taxes, Trump, 川普.
Tags: , ,
add a comment

When Republicans in the Congress gave the top 1%, Trump, Trump’s rich friends and corporate interests one of the largest tax cuts in the history at the expenses of the common people, they said nothing about the $1.5 trillion debt they have created in the process.

Now, with 2018 comes along, Republicans all the sudden flip sides and become fisical conservatives when it comes to the 2018 federal budgets.

What a bunch of hyprocrites!

Didn’t some general said that WWIII is coming a few weeks ago?

Hmmm, that means more money for the military to buy more guns, fighter jets, missiles and aircraft carriers.

And The Wall. The beautiful $40 billion Wall.

From this

To this:

Well, time to cut social security benefits, Medicare, Medicaid, food stamps and education. Again.

Well, politicians are nothings but jokes no matter they come in red or blue. They are all liars.

Americans (voters) are so gullible and stupid that they keep sending these same red and blue flip-floppers back to Washington D.C. year after year while giving their kids and grandkids a bigger and bigger debt year after year.

腦殘。白痴。

Medicare is under the knife. Again! October 5, 2017

Posted by hslu in Congress, Debt and deficit, Democracy, Obamacare, Politics, Taxes, Trump.
Tags: , ,
add a comment

Reid, Pelosi and Obama took $716 billion from Medicare in 2012 to pay for Obamacare. AARP did very little to prevent it becoming the law of the land. Now, the program is blowing up in the market place and is adding trillions to the national debt.

This time around, it’s Republican’s turn to make a deep cut, about $500 billions, to the Medicare budgets because the Republican controls all three branches of the American government. 

Source: Vox

Source: Flipboard

In addition to Medicare, Medicaid is on the chopping blocks too. Budgets for Medicaid will be cut by roughly $1 trillion. 

Source: Flipboard

To get money to pay for Republican’s tax cut, it means that something else from the federal government’s budget has to be slashed to make the tax cut legislature revenue neutral. Budgets for Medicare and Medicaid are just two of the tens, if not hundreds, of federal programs to be cut by the Republican’s tax reform.

Well, more details of the tax reform plan will come out in the next few weeks. No matter what kind of bill the House ends up with, it is a done deal because Democrat is totally out-numbered and out-maneuvered. Democrat in the Senate is hopeless to prevent this from becoming law in the Senate but several Republican senators may be able to make the damage to Medicare budget as little as possible.

We’ll just have to wait to see what happens next in the Congress. Not much we the tax payers can do now because it’s democracy.

Making sense March 22, 2017

Posted by hslu in Debt and deficit, Taxes, Trump, US Government.
Tags: ,
add a comment

http://www.foxnews.com/opinion/2017/03/22/john-stossel-is-trumps-budget-draconian-careless-and-counterproductive.html

I enjoy reading John Stossel’s comments and watching his TV shows.

該來的總會來 March 19, 2017

Posted by hslu in Debt and deficit, Economics, Trump.
Tags: , , ,
add a comment

如果這個報導如期發生,那就糟糕了。如果你想買房子或,賣房子,趁早。

不過,這是 Goldman Sachs 的推測,不一定會實現。我倒覺得 Yellen 大媽不會貿然行事,最多她也不過是做個樣子,賣個幾十億,開個頭,讓後來的人收拾這個爛攤子。反正 The Fed 欠這麽多錢,也不是她的錯,她勇敢的開始減少QE的行動,也可以沾點光。
再說, Trump 是絕對不會把她留下來的。她明年年初是一定會收到 “You are fired” 的粉紅小單。反正她也風光夠了,下台收政府的退休金,日子好過的很。她在位的這幾年,兢兢業業,守著她從教科書上學到的理論,一步一步慢慢的走,蕭規曹隨,錯不到那裏。黑暗隧道的那一邊已經有光亮出來了。只要熬過這幾個月,成功身退,歷史留名,有什麽不好。搞個大動作,不是 Yellen 大媽的作風。

套一句 Yellen 大媽和 Bernanke 大叔最喜歡說的話來結尾吧:”預知後事如何,請聽下回分解。”

The U.S. national debt limit March 19, 2017

Posted by hslu in Debt and deficit, Economics, Taxes, US Government.
Tags:
add a comment

March 16, 2017 is an important date for U.S. federal government because it can no longer borrow from the public as it has been in the past to fund its operations.

The American national debt will be frozen at its current level: about $20.1 trillion because the mandatory debt level has been reached.

But, that doesn’t mean America is out of cash to pay its bills: principal and interest on the debt, social security benefits, Medicare and Medicaid payments, salary to government workers and soldiers and payments to government contractors for F-35 stealth fighter jets, new Ford class aircraft carrier, M-4 assault rifles and M1 A3 Abrams tanks. 

However, there will be no infrastructure projects. No Trump border wall. no  tax cuts for American citizens and no tax relief for American corporates until the debt limit is raised by the Congress.

As of now, the Treasury Dept has to use extraordinary measures to keep the federal government from shutting down until about October or November 2017. By then, Congress has to raise the debt limit or the U.S. government will be in bankruptcy.

Assuming the debt limit is lifted in time, when will this borrowing end? 

Maybe America can use the threat of bankruptcy to re-negotiate with its creditors. Several optionsare available such as forcing creditors to take 60% haircut on all outstanding loans, change the term of existing loans to 100 years and modify interest rates on all loans to negative.

Alternatively, American federal government, maybe all Americans should consider this option too, should cut up every credit card it uses and start living within its means.

Is this likely in the next two decades? Not a chance unless pink pig flies.

Do you know what these federal agencies do March 17, 2017

Posted by hslu in 美國, Debt and deficit, Trump, US Government.
Tags: ,
add a comment

If Trump gets what he wants, these 19 federal agencies will be eliminated in 2018. Have you heard of them and do you know what they do?

Here is the list of agencies which are on the chopping block and how much each of them costs American tax payers in 2017.

Source: Yahoo news.

http://finance.yahoo.com/news/trump-budget-eliminates-19-federal-220948174.html

  1. African Development Foundation; $28.2 million
  2. Appalachian Regional Commission; $120 million
  3. Chemical Safety Board; $12.4 million
  4. Corporation for National and Community Service; $1.1 billion
  5. Corporation for Public Broadcasting; $445 million
  6. Delta Regional Authority; $15.9 million
  7. Denali Commission; $19 million
  8. Institute of Museum and Library Services; $230 million
  9. Inter-American Foundation; $22.2 million
  10. U.S. Trade and Development Agency; $80.7 million
  11. Legal Services Corporation; $502.7 million
  12. National Endowment for the Arts; $149.8 million
  13. National Endowment for the Humanities; $149.8 million
  14. Neighborhood Reinvestment Corporation; $140 million
  15. Northern Border Regional Commission; $5 million
  16. Overseas Private Investment Corporation; Self-sustaining
  17. U.S. Institute of Peace; $37.9 million
  18. U.S. Interagency Council on Homelessness; $3.6 million
  19. Woodrow Wilson International Center for Scholars; $10.4 million

Total amount eliminated: $3.07 billion.

Is it enough? Hmm…. It’s less than 0.6% of the estimated federal deficit for FY 2018.

Looks like that we need to get rid of a lot more than 19.

  • FY 2016 Federal deficit: $587 billion (actual)
  • FY 2017 Federal deficit: 504 billion (estimate)
  • National debt: $19.9 trillion (estimate)

That will be the biggest deal for sure March 8, 2017

Posted by hslu in Debt and deficit, Economics, jobs.
Tags: , ,
add a comment

Higher interest rates are coming thanks to a tighter Fed.

Prime rate will be higher, mortgage interest rate will rise, U.S. dollar will strengthen and interest payment on national debt will gradually take up more of federal government’s tax revenue after FOMC’s highly anticipated move next week.

If the U.S. economy continue to pick up strength and labor force begin to tighten in the coming months, pretty soon we will see 4% handle on the long bonds. But the biggest deal will happen when the Fed begins to shrink its huge fixed income assets on its balance sheet, currently at $4,458,018 million as of March 1, 2017.

You want to buy or sell your houses before it hits the market. Otherwise, you will see a bear market on housing for as long as eye can see into the future.

Believe me, that will be no fun at all if you are facing a market with 6% to 7% mortgage interest rate.

 

若要人不知 February 15, 2017

Posted by hslu in Cold War, Debt and deficit, Economics, Election, Global Affair, Globlization, Islam, Muslim, Obama, Obamacare, Putin, Russia.
Tags:
add a comment

非常簡單:除非己莫為。

Politicians always blame others first for their own mistakes which was what Trump did in this case. The way it goes around Trump these days, more leaks will definitely come out of Trump’s White House whether Trump likes them or not. 

Every reporter in Washington DC dreams of getting a “Watergate” moment in his or her reporting life. They are waiting. They have time. And they have patience.

Watch out! American government wants your money January 31, 2017

Posted by hslu in Congress, Debt and deficit, US Government.
Tags:
add a comment

http://www.foxnews.com/opinion/2017/01/30/david-asman-your-social-security-checks-arent-safe-from-prying-hands-big-government.html

The big brother is doing everything they can to grab your money when you are most vulnerable and least prepared.

%d bloggers like this: