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America the not so beautiful December 28, 2018

Posted by hslu in 特朗普, 美國, 美國, Debt and deficit, Politics, Trump, US Government, 川普.
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Just when 2018 is about to turn into 2019, here is a list of things that are happening in the most powerful country on earth: the USA:

  • The federal government is closed for business but all federal employees will get paid even though they don’t have to go to work when the federal government is shut down.
  • Trump is incapable of telling the truth and has made at least 7,546 false or misleading claims while in the White House.
  • The White House has an acting chief of staff, an acting secretary of defense, an acting attorney general, an acting EPA administrator, no interior secretary, and no ambassador to the United Nations.
  • Trump’s former campaign chairman, deputy campaign chairman, national security adviser and personal lawyer have all pleaded guilty to crimes.
  • Trump’s campaign, his transition, his foundation, his business and possibly himself and his family are all under investigation.
  • Democrats in the House will likely impeach Trump.
  • The federal government takes in $657 trillion but spent $5.051 trillion.
  • America will spend $874.4 billion on defense in 2018, about 17.3% of total spending.
  • The federal deficit is $1.4 trillion, ~27.8% of what government spent.
  • The national debt stands at $25.6 trillion or about 109% of the
  • Total personal debt is $23.066 trillion or $67,306 per person which does not include total mortgage debt which is another $17.675 trillion. The student loan debt is $1.950 trillion and credit card debt is $1.579 trillion.
  • Major stock indices are in correction territories from recent highs.
  • Short term interest rates are the highest in 10 years.
  • U6 Unemployment Rate as of November 2018 was 7.6%.
  • The war in Afghanistan is going nowhere after spending $1.07 trillion.
  • America waged trade wars with many countries in the world.
  • The US is losing allies all over the world.
  • America is losing influences on world order which America built over the past 70 years.
  • Trump gets his advices on foreign and domestic policies from Fox News and talk-radio hosts.

Financial data source: The national Debt Clock. http://www.usdebtclock.org/current-rates.html

 

Bankrupted America borrows more to get by March 30, 2018

Posted by hslu in Congress, 美國, Economics, U.S. dollar.
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$294 billion to be exact this week alone.

What happened to the once fiscal conservative, small government Republican Party? The party of Lincoln has lost its minds, morphed into Democracts, sold its soul to Trump and abandoned American people for a temporary sugar high.

Well, it’s not completely Republican’s fault because, America has been on financial steriods since 2009 and it is hard to shake that satisfying feeling just yet.

What’s going happen to this record high auction and future auctions in 2018 and 2019?

Source: U.S. debt clock

What if the promised boost to the economy from the tax cut never materialized?

How high will the yield of Treasury Bonds go before it can attract enough buyers?

What if foreign buyers stop buying American debt?

And how high will the yield on 10 year Treasury go before it tanks the stock markets?

The Fed has stopped buying government bonds and mortgage securities. It will instead sell bonds and MBS on its book to normalize the interest rate structure. The extra supply will for sure put more pressure on the prices of bonds.

Little by little, yield will go up until the economy and financial market can’t take it any more. Economic activities will contract. Stock market will crush and a recession will follow.

That’s just the way it will play out.

公說公有理,婆說婆有理 December 3, 2017

Posted by hslu in Congress, 美國, Economics, Election, Taxes, Trump, US Government.
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This is the oroblem with economics: no one has any clue as to what’s going to happen in ten years with the new tax reform bill.

Democrats say: $500 billion, $1 trillion or $1.5 trillion deficit added to the national debt in 10 years with the rob-the-poor-and-soak-the-rich tax plan.

Republicans say: revenue neutral, beyond revenue neutral or 3+% annual GDP growth from the historical and boldest re-write of the tax code ever.

The schmos: Is there anything we can do?

Trump: Four more years! Four more years!

National Debt:

@ 2017/12/03, 20:10:28

3% vs 2% September 30, 2017

Posted by hslu in 美國, Do you know?, Economics, Health Insurance, Obamacare, Taxes.
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We’re talking about the growth rate of American’s economy in the next 10 years.

Trump, well his underling, said that America’s economy will grow 3% on average for the next 10 years after Republican’s tax reform is enacted as law.

Source: Bloomberg.

You see, Republican and Democrat are ‘兩個烏鴉一般黑’, they are ‘一丘之貉’. They use this kind of financial trick to tell American citizens that even though their program, be it Obamacare in 2009 or tax reform in 2017, will increase deficit, but the resulting higher economic growth will generate enough taxes to make the new program budget neutral: a term you will hear repeatly before the end of this year.

Do you know the impact on American’s national debt if the economy grew 2% instead of 3%? 

About $2 trillion. And that’s assuming the U.S. won’t fall into a recession and no funny accounting gimmicks.

Last year, the U.S. federal deficit was $590 billion but the national debt rose by $1.4 trillion; a whoppying $810 billion difference.

Why? Where did $810 billion go?

Well, check out this link below and read yourself.

https://www.google.com.tw/amp/s/www.forbes.com/sites/johnmauldin/2016/11/02/thanks-to-obamacare-government-debt-is-worse-than-you-think/amp/#ampshare=https://www.forbes.com/sites/johnmauldin/2016/11/02/thanks-to-obamacare-government-debt-is-worse-than-you-think/
Allow me to give you some highlights to get you started:

Do you know that government’s borrowing to make student loans and repairs on highways and bridges aren’t classified as deficit? These items are ‘investments’ so that they don’t count as deficit. In addition, the U.S. government had to borrow some money to pay for social welfare recipiants because the government didn’t collect enough taxes from FICA deductions to pay for social welfare benefits: social security, Medicare and ACA. There are more in the article if your blood pressure is under control.

A warning: as powerful as America is, all bean counters working for the federal government couldn’t figure out where $82 billion went.

This is your America.

New Normal in the U.S. September 28, 2014

Posted by hslu in Economics, Taxes.
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Normal federal funds rate before 2008/2009 financial crisis was 4 to
4.25%.

PIMCO has argued that the ‘new normal’ fed funds rate in 2017 will be 2 to 2.5%.

I don’t know what it will be but I instinctively believed that it will be  a lower number because the U.S. government can’t let it go up too much.

The reason is very simple: America is broke.

Higher interest rate will increase America’s interest payment and the government can’t afford it. 

For every 1 percentage point increase in interest rate, Uncle Sam has to add $160 billion to federal government’s budget just to pay the interests on the loans.

Let’s call they what they really are: IOUs.

Don’t call it Treasury Bonds or Treasury Notes as if the government can keep issuing new ones to pay off the interests and the principles on the old Bonds. They are IOUs and they have to be paid off one day.

Just look at Japan: interest rate has stayed at or near 0% for the past 25 years becsuse of Japan’s massive national debt; now at 250% of Japan’s GDP after recent BoJ QE program. Interest payments on Japanese national debt and redemptions of JGBs by Japanese seniors account for 40+% of annual government budget. 40%.

Yet, BOJ is considering more money printing to jack up inflation which will ultimately push up interest rates and debt payments.

America is heading to that direction now that the Fed has gone through four runs of massive money printing and 8 years of near 0% interest rate policy.

We’ll have to wait and come back in 2 years to see where nrw interest rate is.

What I really like to know in 2017 is what percentage of our taxes goes to pay for the interests on the IOUs.

$230 billion. Hmm…, that’s a lot of money. February 3, 2014

Posted by hslu in Congress, Economics, Global Affair, Taxes.
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That’s the interest payment America has to pay its creditors every year. That number is expected to go up to $650 billion if interest rates were to return to a medium level they were in the 1990’s.

Do you know how much is $230 billion?

it’s more than the U.S. spends at the departments of Commerce, Education, Energy, Homeland Security, Interior, Justice, State and the court system combined.

That’s scary!

What’s even more scarier is that the U.S. is adding nearly a trillion dollars to the national debt every year.

Hmmm…, I wonder who is going to pay the debt off?

Bond Market: 1 Bernanke: 0 August 17, 2013

Posted by hslu in Economics, Global Affair.
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Bernanke lost the first run. He was out-gunned by the Bond traders. In the end, Bernanke will lose the war too.

Haruhiko Kuroda (黒田 東彦) will follow Bernanke’s steps into sunset but Kuroda, along with Shinzō Abe (安倍 晋三,) will be even worse off because of Japan’s national debt currently running at ~215% of Japan’s GDP.

US Interest rates and Yield Curve

US Interest rates and Yield Curve

Obamacare and U.S Federal Deficit July 8, 2013

Posted by hslu in Congress, Economics, Global Affair, Health Insurance, Obama, Politics, Small Business.
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Obamacare, or the government’s takeover of the U.S. health providing system, is messy,unpopular and very expensive. On top of that, the government had four years to get it ready but can’t.

What an incompetent bunch from the White House on down!

No wonder the U.S., under Obama, is sliding down further by the day: first on the foreign policy front; now their crown jewel: Obamacare.

The small business will be glad to take the delay even though the move is purely political.

While White House is at it, Obama should announce the delay of the individual mandate and get it over with.

Republicans are a sorry bunch too! They are not a good opposition party at all! They are all talks and no action: case in point: IRS‘s secret agenda. No one goes to jail for this?

People will remember what Obama and Democrats have done in the past 5 years when they go to the polls in November no matter how much Obama and the Democrats wants to hide it.

One thing is for sure though: the federal deficit will remain at an elevated level for decades to come. The national debt will push up to 120% of the GDP  in no time.

With Uncle Ben trying to get tapering started before he leaves the office by February, 2014, long term rates will rise as many have predicted.

10-year rate will rise to 4%, as suggested by Goldman Sachs, and mortgage rate will push 5% soon putting pressure on the phony housing recovery.

Auto sale will come down too.

Interest payment by the federal government will go up. U.S. Treasury will continue to borrow and the vicious cycle will never stop. U.S. dollar will depreciate further.

In the end, the suckers who end up paying for all these will be the 99%, especially the younger generations.

The old guys and gals will pay for it in the form of less benefits and poorer quality of health care in their remaining life.

More Porks are coming! More Porks are coming! December 10, 2010

Posted by hslu in Uncategorized.
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The Democrats are doing their best to add more Porks to the tax deal in order to buy out those senators and congressmen who are not happy with Obama.

$800 billion?

No way.

How about $1.2 trillion after all the sweet heart deals and behind the door arm twisting buyouts.

No way to pay for it? No problem. We’ll just borrow them from the China, Japan and Germany.

We have the press, don’t we?

Chinese supercomputer the fastest in the world November 29, 2010

Posted by hslu in China, Computer, Economics, Global Affair, Health Insurance, iPhone, Islam, jobs, Military, Obama, Politics.
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Slowly but surely, China is over-taking US in many areas.

There are no plants in the US making socks, shirts or shoes. Toys are mostly made in foreign countries, including China. GM went down the drain but was pulled out by the government using our money. Ford stayed alive but is burdened with a huge pension and health care liabilities.  North Carolina still has a few dying furniture manufactures. Steel mills in the US have gone to foreign countries as well. iPhone and iEverything are almost all made in China.No one makes TV, monitors, DVDs, Blue ray players, etc. in the US.

The US used to have monopoly on supercomputer but it also fell by the way side and the new champion is none other than a Chinese made 天河一号, “Tianhe-1A,” which means “Milky Way” in Mandarin. Petroleum technologies have mostly transferred to China during the past ten years. Tallest buildings are no longer showing up in the America.

http://www.aolnews.com/world/article/china-dethrones-us-with-worlds-fastest-supercomputer/19692996

What’s left in the US that China or India has little hope of catching up in the near future?

  1. Fighter jets, smart bombs, super tanks, and air carriers,
  2. Commercial airplanes,
  3. Number of nuclear missiles,
  4. Innovations on medicine and medical instruments. But these will be put to death by ObamaCare in no time,
  5. Innovations on software
  6. Football teams,
  7. Aerospace technologies but the gap is narrowing,
  8. Wheat, corns, and some ag products,
  9. Muslim haters,
  10. Graduate schools on science, technology and law. The MBAs from the US business schools but they have messed up the entire financial system of the world,
  11. Number of lawyers,
  12. Federal budget deficits and national debt,
  13. Trade deficits,
  14. Barrels of crude oil import from foreign countries,
  15. And I am sure there are others that I didn’t think of right now.

But the point is that it further demonstrate the downhill ride that the United States is enjoying in the past several years.

Is anyone thinking about immigrating to China? Or India, for that matter.

 

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