Steve Bull's Blog, page 1272
October 28, 2017
How Much Illusion in GDP? What You See Is Not What You Get
Oh, the revisions.
The US economy, as measured by “real” GDP (adjusted for a version of inflation) grew 0.74% in the third quarter, compared to the prior quarter. That was a tad slower than the 0.76% growth in Q2, but up from the 0.31% growth in Q1.
GDP was up 2.3% from a year ago.
To confuse things further, in the US, we cling to the somewhat perplexing habit of expressing GDP as an “annualized” rate, which takes the quarterly growth rate (0.74%) and projects it over four quarters. This produced the annualized rate of 2.99%, or as we read this morning all over the media, “3.0%.”
This was the “advance estimate” by the Bureau of Economic Analysis. The BEA emphasizes that the advance estimate is based on source data that are “incomplete or subject to further revision by the source agency.” These revisions can be big, up or down, as we’ll see in a moment.
The BEA will release the “second estimate” for Q3 on November 28 and the “third estimate” on December 21. More revisions are scheduled over the next few years.
So 2.99% GDP growth annualized, or 0.74% GDP growth not annualized, or 2.3% growth from a year ago… is pretty good for our slow-growth, post-Financial-Crisis, experimental-monetary-policy era, but well within the range of that era, that goes from 5.2% annualized growth in Q3 2014 to a decline of 1.5% in Q1 2011. So nothing special here:
I circled Q1 2014 and Q1 2011 in blue to show how much GDP estimates can get revised as time passes: both of these decliners showed growth in the “advance estimate.”
The “advance estimate” of GDP in Q1 2014, released on April 30, 2014, showed a growth rate of +0.1% annualized. That was a measly growth rate. It was terrible. It caused a lot of hand-wringing. But it was growth.
…click on the above link to read the rest of the article…
Museletter #305: Puerto Rico is our Future
Download printable PDF version here (PDF, 93KB)
My hometown of Santa Rosa, California, and surrounding communities were decimated by wildfires during the week of October 9, with entire neighborhoods completely erased. If you want a sense of how bad the fires were, watch this 11-minute video clip put together by three Berkeley firefighters. For a more personal view of the consequences of the fires, check out this webcomic accountby the husband of the Sonoma County Director of Human Services (the couple lost their home). My wife Janet and I voluntarily evacuated our house at 4am on October 10 (we were just outside a mandatory evacuation zone), after bundling our four sleepy chickens into the back of our car. We were among the fortunate ones: we were able to return home late that same day. Meanwhile 19 residents of Santa Rosa had lost their lives (the death toll throughout the region stands at over 40) and hundreds—including many of our friends as well as a former Post Carbon Institute employee and her family—had lost homes and belongings. We’re glad to be spared, and wish the best for those not so fortunate.
Richard
Puerto Rico is our Future
News reports tell of the devastation left by a direct hit from Category 4 Hurricane Maria. Puerto Ricans already coping with damage from Hurricane Irma, which grazed the island just days before, were slammed with an even stronger storm on September 20, bringing more than a foot of rain and maximum sustained winds of at least 140 miles per hour. There is still no electricity—and likely won’t be for weeks or months—in this U.S. territory of 3.4 million people, many of whom also lack running water. Phone and internet service is likewise gone. Nearly all of Puerto Rico’s greenery has been blown away, including trees and food crops.
…click on the above link to read the rest of the article…
What Could Pop The Everything Bubble?
A crisis that can’t be solved by just printing more dollars
I’ve long held that if a problem can be solved by creating $1 trillion out of thin air and buying a raft of assets with that $1 trillion, then central banks will solve the problem by creating the $1 trillion out of thin air—nothing could be easier.
This is the lesson of the past eight years: if a problem can be solved by creating new money and buying assets, then central banks will solve that problem.
Problem: stock market is declining. Solution: create new money and buy, buy, buy stock index funds. Problem solved! Market stops falling and quickly rebounds as “central banks have our backs.”
Problem: interest rates are inhibiting lending and growth. Solution: create a few trillion units of currency and buy enough sovereign bonds to drop interest rates to near-zero.
Problem: nobody’s left who can afford to buy the new nosebleed-priced flats that underpin China’s miracle-grow economy. Solution: create new currency, lend it to local government agencies who then buy the empty flats.
Problem: stagnant employment and deflation. Solution: create a trillion in new currency, buy a trillion in new government bonds that then fund infrastructure projects, i.e. bridges to nowhere.
And so on. Any problem that can be solved by creating a few trillion out of thin air and buying assets will be solved. The mechanism to solve these problems—creating currency out of nothing—is like a perpetual motion machine: there are no intrinsic limits on the amount of new money that can created at near-zero interest, as the interest payments can be funded by new money.
Even better, the central bank (the Federal Reserve) buys Treasury bonds with the new currency that generate income, which is then returned to the Treasury: a perpetual-motion money machine!
…click on the above link to read the rest of the article…
U.S. Oil & Gas Rig Count Falls As Brent Breaks $60
As Saudi’s comments regarding the OPEC extension send the Brent Crude benchmark over $60 in mid-day trading for the first time in more than two years, oil and gas rigs in the United States fell for yet another week, according to Baker Hughes, dipping 4 rigs.
The total oil and gas rig count in the United States now stands at 909 rigs, up 352 rigs from the year prior, with the number of oil rigs in the United States increasing by 1 this week and the number of natural gas rigs decreasing by 5. Canada saw a decline of 11 in the number of active oil and gas rigs. The US oil rig count now stands at 737.
The spot price for WTI is also trading up to its highest level in six months, up 2.07% on the day at $53.73 at 12:30pm EST. Brent crude was trading up 1.61% at $59.99 at that time—more than $2 over last week’s close.
The price increase is largely thanks to Saudi Crown Prince Mohammed bin Salman’s non-specific backing of an extended OPEC deal, reassurances that the Aramco IPO is still on track, and his commitment to move the country beyond fossil fuels. Fears that the Iraqi vs. Kurd conflict may not find a quick end also lent support to prices.
US crude oil production was up for the week ending October 20, after falling by almost a million barrels daily for the week prior. Oil production for the week ending October 20 was 9.507 million barrels per day, as things return to normal post-hurricane.
At 20 minutes after the hour, WTI was trading at $53.77, with Brent crude trading at $60.02.
…click on the above link to read the rest of the article…
October 27, 2017
The One Paragraph You Need To Read From The JFK Assassination Files That May Change Everything
TruePundit.com warns that one haunting paragraph unearthed from 3,000 never-before-seen documents will shake Patriots to their core about the assassination of President John F. Kennedy.
Or perhaps worse. Make that haunting three paragraphs.
This is not pretty.
But it is likely President Donald Trump understands what Kennedy comprehended, which now appears to have led to his murder:
The out-of-control shadow government in this country threatens the fabric and the future of the United States.
See for yourself.
As a reminder, here is the position of the alleged shooter explained…
So how do ‘they’ explain this…
For clarity…
…the “Surgeon General’s Report” on the assassination stated that the first bullet entered the President’s throat below the adams apple, clearly showing that two persons were involved with the first shot being fired from the bridge across the park way in front of the car.
To further substantiate this, POTITO said there was a bullet hole in the wind shield of the President’s car…
Not exactly the narrative that was sold to the world – and certainly not the narrative that J. Edgar Hoover proclaimed must be defended to the world.
…click on the above link to read the rest of the article…
How The Elite Dominate The World – Part 5: The Endgame Is Complete And Utter Global Domination
Do you want your children and grandchildren to grow up in a global socialist “utopia” in which everything about their lives is micromanaged by bureaucrats working for a worldwide system of government instituted by the elite? To many of you this may sound like something out of a futuristic science fiction novel, but the truth is that this is exactly where the elite want to take us. This is their endgame. Their agenda has been quietly moving forward for decades, and if we don’t take a stand now, future generations of Americans could very well end up living in a dystopian nightmare with none of the liberties or freedoms that we enjoy today.
Bill Clinton’s mentor at Georgetown University, Dr. Carroll Quigley, wrote about this network of elitists in a book entitled Tragedy and Hope…
In fact, this network, which we may identify as the Round Table Groups, has no aversion to cooperating with the Communists, or any other groups, and frequently does so. I know of the operations of this network because I have studied it for twenty years and was permitted for two years, in the early 1960’s, to examine its papers and secret records. I have no aversion to it or to most of its aims and have, for much of my life, been close to it and to many of its instruments…my chief difference of opinion is that it wishes to remain unknown, and I believe its role in history is significant enough to be known…because the American branch of this organisation (sometimes called the “Eastern Establishment”) has played a very significant role in the history of the United States in the last generation.
…click on the above link to read the rest of the article…
Alberta Approves Suncor Tailings Plan Despite Reliance on ‘Unproven Technology’
The Alberta Energy Regulator (AER) has approved a tailings management plan from oilsands giant Suncor, despite the plan relying on “newly patented, unproven technology” that will require decades of monitoring.
Wednesday’s decision came only six months after the AER rejected Suncor’s proposed plan for the same project because it relied on unproven technology and a 70-year timeline for reclamation. The regulator only later agreed to re-review the plan.
So what changed? Uh, nothing.
“Suncor really hasn’t budged an inch in terms of actually changing anything,” said Jodi McNeill, policy analyst at the Pembina Institute, in an interview with DeSmog Canada.
Critics are also concerned that the approval will set the tone for the remaining seven tailings management plans: all of which depend on unproven technologies in some capacity.
“Suncor has been operating for 50 years: they shouldn’t be given another 15 years to monitor and confirm tailings treatments that may or may not work,” said Tzeporah Berman, former co-chair of the Alberta Oil Sands Advisory Group, in an interview with DeSmog Canada.
“It is not a matter of the AER asking for more details. It’s that oilsands companies should not continue to operate if they once again have shown they don’t know how to clean up the mess they make. They have other technologies they can use. They just don’t want to pay for them.”
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Alberta Approves Suncor #Tailings Plan Despite Reliance on ‘Unproven Technology’ https://www.desmog.ca/2017/10/27/alberta-approves-suncor-tailings-plan-despite-reliance-unproven-technology …#oilsands@james_m_wilt
12:42 PM – Oct 27, 2017
Industry Has ‘Taken Advantage of Flexibility’ of Regulator
It’s been a long and windy road to get to this point.
Directive 085 was introduced by the AER in mid-2016 to replace the failed Directive 074, which was implemented in 2009 and saw every way company overshoot its respective tailing target without any consequence.
…click on the above link to read the rest of the article…
US Tries to Stir Up Trouble for Iran
As President Trump’s foreign policy falls deeply under the Israeli-Saudi spell, his Mideast diplomats are stirring up conflict against Iran and drawing a rebuke from Iraq, as ex-CIA analyst Paul R. Pillar explains.
In Iraq, as in Syria, the imminent extinguishing of the mini-state of the so-called Islamic State (ISIS) is raising the question of whether U.S. objectives in Iraq really are focused on countering ISIS or will balloon into some other reason to keep American forces there indefinitely.
Iranian women attending a speech by Iran’s Supreme Leader Ali Khamenei. (Iranian government photo)
The most common rationale voiced by those arguing for an indefinite stay is to counter Iranian influence. The rationale echoes larger alarms, being sounded by the Trump administration as well as others, about an Iran that supposedly is on the march and threatening to bring most of the Middle East under its sway. The alarms are filled with unsupported zero-sum assumptions about what any Iranian action or influence means for U.S. interests.
Those tempted to succumb to the alarms as they apply to Iraq should bear in mind two important realities about the Iraqi-Iranian relationship.
The first is that the biggest boost to Iranian influence in Iraq was the U.S. invasion of March 2003. The net effect of the whole costly, unpleasant history of the United States in Iraq — including the initial conquest, later surge, and all the ups and downs of occupation — as far as Iranian influence is concerned is to have made that influence much greater than it ever was while Saddam Hussein was still ruling Iraq.
If Iranian influence were the overriding worry about the Middle East that the rhetoric of the Trump administration makes it out to be, this record strongly suggests that an unending U.S. military expedition would not be a smart way to assuage that worry.
…click on the above link to read the rest of the article…
Volatility on Steroids
Salvador Dalí White calm 1936It’s been a while since we last heard from longtime friend of the Automatic Earth Dr. Nelson Lebo III, New Englander living in Wanganui, New Zealand. Nelson has written a fine collection of articles on this site through the years.
Of course I thought, when I first saw this piece in my mailbox, that he would have written about New Zealand’s new prime minister, Labour’s 37-year-young Jacinda Ardern, whose first action in her new job will be to prevent foreigners from buying existing homes in her country. It’ll be interesting to see how she intends to do so while remaining inside the Trans Pacific Partnership -TPP- agreement.
Radio New Zealand has a portrait in which she says ‘I Want The Government … To Bring Kindness Back’. And obviously my first thought was: wait till you meet Donald Trump. But it would be misleading to put the lack of kindness in politics on his shoulders. There’s too much blood on too many hands.
But Nelson didn’t address her this time. I hope he will soon. Instead, and I should have known, he writes about Koyaanisqatsi, life out of balance. When I wrote The Koyaanisqatsi Economya month ago, he said he had been thinking of the same theme.
Nelson named his article “Pura Vida trumps Koyaanisqatsi”, but I thought his emphasis on volatility is too important to not be the headline. Especially given that volatility in financial markets is at a -near- record low, while it appears blatantly obvious that this not reflect the ‘real world’ at all.
Nelson’s summary of the real world: “..hurricanes, mass shootings, hurricanes, opioid epidemics, hurricanes, people sleeping in cars, hurricanes, rising suicide rates, hurricanes, and children dying from cold damp homes..”
If that doesn’t spell volatility, what does? Forget about financial markets reflecting anything real anymore. Thanks to central banks, markets are fiddling while Rome burns.
…click on the above link to read the rest of the article…
The Downright Sinister Rearrangement of Riches
Simple Classifications
Let’s begin with facts. Cold hard unadorned facts. Water boils at 212 degrees Fahrenheit at standard atmospheric pressure. Squaring the circle using a compass and straightedge is impossible. The sun is a star.
The sun is not just a star, it is a benevolent star. Look, it is smiling… sort of. [PT]
Facts, of course, must not be confused with opinions, which are based upon observations. Barack Obama throws like a girl. The Federal Register is for idiots. Two slices of chocolate cake are one too many. Are these opinions right or wrong?
The answer depends on who you ask. What’s certain about opinions, however, is that like bellybuttons, everybody has one. Moreover, unlike free drugs from the government, everyone is in fact entitled to their own opinion.
Moving on from facts and opinions, the next classification we encounter is the wholly asinine. This broadly contains the absurd and ridiculous. Take most university teachers, barring natural science professors, for instance. They’re wholly asinine. The wholly asinine also extends to editors at the New York Times, Washington Post, circus hunchbacks, and the like.
Lastly, we want to mention the downright sinister. This includes sociopaths like Hillary Rodham Clinton, John McCain, nearly all of Congress, the Federal Reserve, fractional reserve banking, Washington lobbyists, a good part of Wall Street, and much, much more. Clearly, such people and professions don’t represent honest work. Rather, they epitomize less than honest work that’s performed by less than honest people.
Sinister mafia boss from Arkansas, possibly checking classified material on private phone… [PT] Photo credit: AP
Nixon Casts the Die
…click on the above link to read the rest of the article…
