Ford's CEO does not agree with Trump's tariff policies, because he believes it is going to have a huge affect on the U.S. economy, which will not be for the better. Rebecca Linland is a senior analyst for Kelly Blue Book, and she believes putting a 35% tariff on Mexican made vehicles will wreck havoc, because it is going to be very costly to both consumers and businesses. Ford's CEO said they are going to engage with Trump and his administration positively, to help ensure the right policies are implemented, so the United States can grow.
This article was an interesting read, as I did not know how much Trumps tariff policies could affect the automobile industry. If Trump does implement a 35% tariff and costs increase significantly for both consumers and businesses, I believe we could see the unemployment rate increase in this industry, as well as see a couple automobile companies go out of business completely. It will be interesting to see what the future hold for the automobile industry.
Link: http://www.msn.com/en-us/money/companies/ford-ceo-warns-of-huge-impact-from-trumps-proposed-tariff/ar-AAkkCBc?li=BBnbfcN
Wednesday, November 16, 2016
Monday, November 14, 2016
Mortgage Rates get Trumped Up
In the wake of a Trump victory and a looming celebrity spearheaded administration, there is a lot of talk about the markets and the elections impact on the economy. Much of the dominant news right after the election was called early last Wednesday was centered around the significant drop experienced by DOW futures. Much of the initial loss was recovered by later in the day on Wednesday as the market adjusted to this shock. As the news cycle continued over the week, talk shifted from the stock market to speculation on Trump's policies, which aren't as fleshed out or as consistent as previous president-elects. However, unless you work in the housing market or are looking for a new home, you might have missed the fact that mortgage rates have jumped up to 4%.
This may not sound like a big jump, but a similar jump only recently occurred in the 2013 taper tantrum (where U.S. treasury yields, and thus mortgage rates, surged due to the announcement that the FED would begin shrinking its magnitude of monetary expansionary policy). Other than that 2013 event, the most recent similar jump occurred in 1987. Often times, market shocks that bring about uncertainty (like Brexit) will drive mortgage rates down as investors flock from equity markets to bond markets in a "flight to safety" that drives prices down. When we do see shocks that provide upward pressure in the form of a knee-jerk market reaction, the market typically adjusts back down within a week or so. However, as we sit almost a week after the Trump election, rates are still trending upwards and we could be ending our low-rate era. For a graduating senior who will be looking to buy a home in the next decade, and who is looking for work in the mortgage industry, this uncertainty is unsettling.
http://www.mortgagenewsdaily.com/consumer_rates/678888.aspx
GDP, Inflation and Interest Rates Forecast to Rise Under Trump Presidency
Following Last Tuesday's election, economists are having a field day with forecasts and predictions. There is a "cautious optimism" among economists that Trump's snatching of the presidency will "knock the U.S. economy out of its low-altitude, low-growth orbit". Fear still remains that missteps in the White House will bring “us down into the atmosphere [in] a fiery re-entry”.
So what do 4 years of Trump mean for the U.S. economy?
Under republican executive and legislative branches, huge tax cuts and increased government spending on infrastructure will greatly boost GDP. Cutting taxes will increase consumption by the product of the change in tax and tax multiplier. The increase in government spending will result in a further increase in GDP by the product of the change in government spending and the government spending multiplier. All this is forecast to expand the economy by 2.2% in 2017 and 2.3% in 2018. "Inflation is seen at 2.2% next year and 2.4% in 2018", which "would be the first stretch of sustained inflation above 2% since before the recession of 2007 to 2009". This fits economic models, as the supply of money would increase from the fiscal stimulus.
The outlook of economists is still cautious, as there is still worry over "eliminating or significantly altering the Affordable Care Act", Potential for trade wars, and uncertainty in markets. 43% percent of economists cited a global trade war as the greatest risk to the U.S. Economy. Trump's plan to declare China a currency manipulator day 1, while potential for tariff implementation leaves economists cautious. Firms, in particular, continue to refrain from investing due to the uncertainty. Should interests rise under trump without positive sentiment affecting the market, investment, the most volatile variable in the GDP equation could continue to decrease.
It will be interesting to see what the trump presidency brings to our economy. One certainty is that there is no longer risk for stalling of our government with a unity between the senate, the house, and the presidency.
http://www.wsj.com/articles/gdp-inflation-and-interest-rates-forecast-to-rise-under-trump-presidency-1479054608
So what do 4 years of Trump mean for the U.S. economy?
Under republican executive and legislative branches, huge tax cuts and increased government spending on infrastructure will greatly boost GDP. Cutting taxes will increase consumption by the product of the change in tax and tax multiplier. The increase in government spending will result in a further increase in GDP by the product of the change in government spending and the government spending multiplier. All this is forecast to expand the economy by 2.2% in 2017 and 2.3% in 2018. "Inflation is seen at 2.2% next year and 2.4% in 2018", which "would be the first stretch of sustained inflation above 2% since before the recession of 2007 to 2009". This fits economic models, as the supply of money would increase from the fiscal stimulus.
The outlook of economists is still cautious, as there is still worry over "eliminating or significantly altering the Affordable Care Act", Potential for trade wars, and uncertainty in markets. 43% percent of economists cited a global trade war as the greatest risk to the U.S. Economy. Trump's plan to declare China a currency manipulator day 1, while potential for tariff implementation leaves economists cautious. Firms, in particular, continue to refrain from investing due to the uncertainty. Should interests rise under trump without positive sentiment affecting the market, investment, the most volatile variable in the GDP equation could continue to decrease.
It will be interesting to see what the trump presidency brings to our economy. One certainty is that there is no longer risk for stalling of our government with a unity between the senate, the house, and the presidency.
http://www.wsj.com/articles/gdp-inflation-and-interest-rates-forecast-to-rise-under-trump-presidency-1479054608
Before the U.S. election was even finished, the markets began to react to the possible results. As the idea of president Trump became more and more likely the markets became more and more uncertain. The price of Dow futures dropped during this time of uncertainty, as well as a number of international stocks. Many people were freaking out, saying that the markets were going to crash but by the same time the next day stock prices were back to where they were. Historically elections have tanked the price of stocks just because of the level of uncertainty there is for a close race. Investors like to know that their isn't going to be any major shift in policy that might effect their strategy.
Now that the world knows the outcome of the election, international markets are expecting rising inflation in the U.S. Donald Trump has talked extensively about trying to balance trade, and it will be difficult for him to achieve without inflating U.S. currency. CNBC reports: "In Europe, the pan-European index was around 1.27 percent higher on Monday morning. In Asia, the Shanghai composite in China closed 0.44 percent higher, while the Nikkei in Japan closed 1.71 percent higher." This all supports the narrative that there is expected inflation in the U.S.
http://www.cnbc.com/2016/11/14/dow-set-for-triple-digit-gains-as-trump-trade-continues.html
U.S. Consumer Sentiment Hit Five-Month High Before Election
Consumer Sentiment is an economic measurement of the health of the economy based on consumer opinion. The University of Michigan publishes monthly reports relating to the statistic of consumer sentiment. Prior to the election, within the October report, the consumer sentiment numbers hit a 5-month high. "The University of Michigan said Friday that its preliminary index of
sentiment for the month climbed to 91.6 from 87.2 in October. The median
projection in a Bloomberg survey called for 87.9. The report also
showed year-ahead inflation expectations rose the most since early 2015."
It is incredibly interesting to see why these numbers peaked. It is stated within' the article from Bloomberg that the main reasons for this peak were because, "Job and income gains helped to boost assessments of their finances, underscoring forecasts of sustained consumer spending approaching the holiday-shopping season. At the same time, the survey reflects responses on or before Tuesday’s presidential election, and a “large majority” of respondents based their outlooks for the economy on expectations of a win by Hillary Clinton." Looking ahead to the November survey from the University of Michigan, it will be interesting to see how consumer sentiment will either rise or fall. On one hand, I would like to think the election wouldn't dramatically effect consumer sentiment, but on the other hand it should be interesting to see the response with an unexpected Trump victory.
http://www.bloomberg.com/news/articles/2016-11-11/u-s-consumer-sentiment-hits-five-month-high-before-election
It is incredibly interesting to see why these numbers peaked. It is stated within' the article from Bloomberg that the main reasons for this peak were because, "Job and income gains helped to boost assessments of their finances, underscoring forecasts of sustained consumer spending approaching the holiday-shopping season. At the same time, the survey reflects responses on or before Tuesday’s presidential election, and a “large majority” of respondents based their outlooks for the economy on expectations of a win by Hillary Clinton." Looking ahead to the November survey from the University of Michigan, it will be interesting to see how consumer sentiment will either rise or fall. On one hand, I would like to think the election wouldn't dramatically effect consumer sentiment, but on the other hand it should be interesting to see the response with an unexpected Trump victory.
http://www.bloomberg.com/news/articles/2016-11-11/u-s-consumer-sentiment-hits-five-month-high-before-election
With Trump in Power, the Fed Gets Ready for a Reckoning
In this article they are basically talking about what is going to be the impact that Donald Trump is going to have in the economy now that he is president. This are just predictions about the future and what might happen with the Fed. It talks about the economic ideas that Trump has and how in some cases are different with the ones that the Fed and the chairwoman Jannet Yellen have. They talk about interest rates, before the elections the Fed was talking about raising them in december and they still have that same idea, but Trump has said before that he likes having the interest rates low, so we will see how politics affect in this case the decision the Fed is going to take.
The article also talks about how much is Trump actually going to influence the Fed and how he might change a lot of thing inside it. Since he is going to give a candidate for the next chairman or chairwoman for the Fed at the beginning of the year this might help him a lot to being able to have more control and be able to influence more the decisions that the Fed takes. This would be the case where he want to manage somehow what the Fed is doing to being able to control monetary policy. In the other hand there is people that is saying that since he is more in favor for the use of fiscal policy instead of monetary policy he is not going to affect what is happening with the Fed that much and he is not going to be as involved as some people think he will. They also talk about the fiscal policies he wants to make like for example tax cuts and increase government spending in the military, and how the Fed might react to these changes to stabilize the economy since Trump wants to grow the economy really fast and the Fed might be against this since this could cause a bad slow down in the economy in the long run.
Link: http://www.nytimes.com/2016/11/13/business/economy/trump-the-fed-yellen-gets-ready-for-reckoning.html?_r=0
The article also talks about how much is Trump actually going to influence the Fed and how he might change a lot of thing inside it. Since he is going to give a candidate for the next chairman or chairwoman for the Fed at the beginning of the year this might help him a lot to being able to have more control and be able to influence more the decisions that the Fed takes. This would be the case where he want to manage somehow what the Fed is doing to being able to control monetary policy. In the other hand there is people that is saying that since he is more in favor for the use of fiscal policy instead of monetary policy he is not going to affect what is happening with the Fed that much and he is not going to be as involved as some people think he will. They also talk about the fiscal policies he wants to make like for example tax cuts and increase government spending in the military, and how the Fed might react to these changes to stabilize the economy since Trump wants to grow the economy really fast and the Fed might be against this since this could cause a bad slow down in the economy in the long run.
Link: http://www.nytimes.com/2016/11/13/business/economy/trump-the-fed-yellen-gets-ready-for-reckoning.html?_r=0
India Abolishes 500 and 1,000 Rupee Notes to Fight Corruption
The government of India decided to ban the Indian rupees notes of rupees 500 and 1000 on Wednesday to combat corruption and shrink the "black money."
The old notes will now be out of circulation but they can be exchanged at the banks by the end of December. Black money is the illegal money which needs to be reduced from the economy in order to promote growth and reduce unemployment rate.
According to Nirmal Jain, "It will have a deflationary impact in general and more specifically on real estate prices and make homes affordable.” The prices of real estate in India have sky-rocketed over a past few years and deflation can help to bring the prices down.
The article also stated how "banks are set to see a jump in deposits, boosting liquidity in the financial system even as cash in circulation sees an immediate contraction, economists said. " It is expected that the ban on the notes will reduce the cash flow in the short run but in the long run liquidity will increase and the economy will benefit from the decision of putting a ban on the notes.
Source : http://www.bloomberg.com/news/articles/2016-11-08/india-abolishes-inr500-1-000-rupee-notes-to-fight-corruption
The old notes will now be out of circulation but they can be exchanged at the banks by the end of December. Black money is the illegal money which needs to be reduced from the economy in order to promote growth and reduce unemployment rate.
According to Nirmal Jain, "It will have a deflationary impact in general and more specifically on real estate prices and make homes affordable.” The prices of real estate in India have sky-rocketed over a past few years and deflation can help to bring the prices down.
The article also stated how "banks are set to see a jump in deposits, boosting liquidity in the financial system even as cash in circulation sees an immediate contraction, economists said. " It is expected that the ban on the notes will reduce the cash flow in the short run but in the long run liquidity will increase and the economy will benefit from the decision of putting a ban on the notes.
Source : http://www.bloomberg.com/news/articles/2016-11-08/india-abolishes-inr500-1-000-rupee-notes-to-fight-corruption
Are Low Oil Prices Good for the Economy?
The price of oil has always and will always be a hot topic in terms of the Economy. It has been a surprise to many how the price of oil continues to remain low, and this is predicted to remain the case moving forward. Most recently oil prices have ranged between $80 and $110 a barrel. They dropped to as low as $26 per barrel and are expected to remain between $40 and $50 a barrel. The major reason for such a drastic decrease is the recent influx in shale oil. The main question that needs to be answered is how these low prices are going to effect the economy. Stephen Moore, an economist at Freedom Works is among one of the people who believes that this is a good thing for our economy. With the oil prices down around 60%, Moore notes that for every one-penny reduction in gas prices, that is over a billion dollars for consumers to spend the money on other things, and that savings and investment are the keys to an economy if consumers decide not to spend the money they save. He also makes a solid point that American companies benefit greatly from lower oil prices because they are able to produce at a much cheaper rate. With consumers being able to have more money in their pockets to spend elsewhere, along with being able to save this money, and/or invest it, it seems to me that the lower oil prices certainly can be a good thing for our economy. More consumer consumption, saving, and investment are all outcomes that positively benefit us, and so do our companies being able to produce more for less, allowing for a competitive advantage over countries where the oil prices might not be as low. In my opinion, at least for now, it seems that the low oil prices are a good for US consumers and producers, and our economy as a whole.
http://www.wsj.com/articles/are-low-oil-prices-good-for-the-economy-1479092581
http://www.wsj.com/articles/are-low-oil-prices-good-for-the-economy-1479092581
Gone for good: Why Trump’s jobs promise will fall flat
The article builds on a voting trend in the recent Presidential elections and shows how the American industry has moved past a certain point of no return. The area under discussion is the Rust Belt, which involves regions in the northeast and midwest of the US - major cities in states including Ohio and Pennsylvania among others - that once had a powerful economy owing to their industrial sector. The auto, steel and coal industries have declined in recent years and Yakabuski believes that this may be the cause of Trump's triumph in the Rust Belt states which include Michigan, a state that has not voted for a Republican for over 25 years. His working-class supporters in those states may have been convinced by his opposition to NAFTA, the bill that he believes to have caused the downfall of the industrial sectors in the Rust Belt.
Yakabuski further attempts to explain how Trump's efforts in this regard will turn out to be insufficient. Free trade, he argues, is the least of the problems of the Rust Belt. Automation causes the loss of much more jobs while on the other hand, free trade generates jobs in the export-competitive sectors. Trump would attempt to renegotiate or dissolve NAFTA and then attach 35% tariffs on Mexican goods and 45% tariffs on Chinese goods. The former tariff would end up damaging the American exports as well while the latter would harm low-income Americans.
The President-Elect can attempt to increase the life of some coal-plants but that would be the only effective measure, and a temporary one at that. Therefore, it is difficult to see the Rust Belt rising again industry-wise as, despite what the voters in those states believe, there is little the new President can do to cater to the needs of the old economy.
Article link: http://www.theglobeandmail.com/report-on-business/rob-commentary/trump-cant-resuscitate-the-rust-belt-and-his-voters-may-well-know-it/article32801941/
Yakabuski further attempts to explain how Trump's efforts in this regard will turn out to be insufficient. Free trade, he argues, is the least of the problems of the Rust Belt. Automation causes the loss of much more jobs while on the other hand, free trade generates jobs in the export-competitive sectors. Trump would attempt to renegotiate or dissolve NAFTA and then attach 35% tariffs on Mexican goods and 45% tariffs on Chinese goods. The former tariff would end up damaging the American exports as well while the latter would harm low-income Americans.
The President-Elect can attempt to increase the life of some coal-plants but that would be the only effective measure, and a temporary one at that. Therefore, it is difficult to see the Rust Belt rising again industry-wise as, despite what the voters in those states believe, there is little the new President can do to cater to the needs of the old economy.
Article link: http://www.theglobeandmail.com/report-on-business/rob-commentary/trump-cant-resuscitate-the-rust-belt-and-his-voters-may-well-know-it/article32801941/
Sunday, November 13, 2016
Fed is nerdy, geeky, and politically neutral: Policymaker
Leading up to the election President-Elect Donald Trump repeatedly bashed the Federal Reserve and its members. He acused them holding interest rates low for political reasons, and he [Trump] said that Janet Yellen would be replaced upon his arrival in office. Recently after the election San Francisco Federal Reserve Bank President John Williams responded with nuetrality. He said, "We are focused on the economy, focused on achieving our goals; it is not a partisan activity." Williams added that unemployment is staying low and interest rates are slightly rises to the Federal Reserve's goal of 2%.
http://www.cnbc.com/2016/11/10/fed-is-nerdy-geeky-and-politically-neutral-policymaker.html
Brexit to blame for over $81 billion worth of missed investment opportunities: Report
A recent report published this past week surveyed over 1,000 businesses in the U.K. This study was commissioned by Hitachi Capital and they found that 42% of large companies disclosed that they have either stalled or backed out of investment deals due to Brexit factors. This amounts to $81 billion in cancelled business investments since the referendum and many of them are concerned over rising inflation.
Since last June, the Sterling has lost 15% of its value against the dollar. Additionally, it has lost value against the Euro and many experts are predicting inflation rates to peak at 2.7% by the beginning of 2018.
Investment is more volatile than other components of GDP and is usually an early indicator for estimated GDP. It will be interesting to see how the government and central bank respond to this survey and other indicators.
http://www.cnbc.com/2016/11/11/brexit-to-blame-for-over-81-billion-worth-of-missed-investment-opportunities-report.html?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=104101347&yptr=yahoo
Since last June, the Sterling has lost 15% of its value against the dollar. Additionally, it has lost value against the Euro and many experts are predicting inflation rates to peak at 2.7% by the beginning of 2018.
Investment is more volatile than other components of GDP and is usually an early indicator for estimated GDP. It will be interesting to see how the government and central bank respond to this survey and other indicators.
http://www.cnbc.com/2016/11/11/brexit-to-blame-for-over-81-billion-worth-of-missed-investment-opportunities-report.html?__source=yahoo%7Cfinance%7Cheadline%7Cheadline%7Cstory&par=yahoo&doc=104101347&yptr=yahoo
The Trump Indicators
Since the election of Donald Trump, the economy has responded significantly. Of these responses, three were discussed in the most recent episode of the Planet Money podcast. The first indicator is the S&P 500. The futures trading of this market tanked over night. The first reason that this occurred was that the markets usually do not like something unexpected happens which happened with Trump's victory. The second indicator is the exchange rate of the Peso to the US dollar which is 20. Throughout the course of Trump's campaign the peso had been tracking the polls of the US election. As Trump began to do well in the polls the Peso became weaker, and when Clinton did well, the Peso became stronger. This was a response toward Trump's stance on NAFTA, which is something he has constantly denounced. The night that Trump was elected president, the value of the Peso fell by 10 percent overnight, the biggest decrease in 22 years. If Trump is to follow through with his policies, Mexico could go into a recession in the next year. Another indicator is $1.5 trillion over 10 years. This number represents an ongoing mystery about Trump's tax plans that nobody has been able to solve. The number represents the amount of money it will cost the government in the next ten years with Trump's tax cuts. In order to pay for a $12 trillion tax cut, you would have to borrow a lot of money, increase the national debt. Or you would have to cut government spending, something close to a quarter of the federal budget.
http://www.npr.org/sections/money/2016/11/09/501458860/episode-734-the-trump-indicators
http://www.npr.org/sections/money/2016/11/09/501458860/episode-734-the-trump-indicators
Trump's Presidency and Foreign Economies
The news of Trump becoming President made many people discouraged. However, Russia is not among those people because it's economy would be one of the few to be positively affected by his presidency. According to the IMF, last year, Russia's GDP fell by 3.7% and is going to fall even more this year. "Mr Trump’s victory raises the chances that economic sanctions imposed by the West, following Russian interference in Ukraine, will be lifted. That will give the economy an extra fillip."
Trump's presidency may also benefit other damaged economies that are able to rebound such as Egypt, Argentina, and Pakistan. Similarly, with China, "...If the wave of populism that spawned Brexit and now elected Mr Trump engulfs the euro area, China might even begin to look like a refuge for rich-world investors."
http://www.economist.com/news/finance-and-economics/21709983-some-unlikely-economies-are-poised-do-well-coming-up-trumps
Donald Trump Can Be good for our Economy
Donald Trump could have a positive outlook on the economy now that he has been elected president. Lets review his plan
Trumps Plan:
Trumps Plan:
- Building Infrastructure: This is what he mentioned in his acceptance speech: ""We are going to fix our inner cities, and rebuild our highways, bridges, tunnels, airports, schools, hospitals," he said. "We're going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it." His plan is to create millions of jobs in construction, steel manufacturing, and other sectors as well.
- Across-the-board tax cuts for individuals and a slashing of corporate taxes down to 15 percent from 35 percent.
- Repeal and Replace Obamacare: Economists generally have feared that Trump's spending stimulus and tax cuts would increase the national debt by $5 trillion or more. They also believe his fiery rhetoric about currency manipulation and tariffs could spark a trade war. But Trump has maintained that economic growth would more than compensate and not necessitate tax hikes to pay for the infrastructure spending in particular.
http://www.cnbc.com/2016/11/09/donald-trumps-impact-on-the-economy.html
-Anthony Crow
Dodd-Frank a 'disastrous mistake' according to Alan Greenspan
Our newly elected president Donald Trump may have a friend in Alan Greenspan, who agrees with Trump in the idea that the Dodd-Frank Act, which was created after the financial crisis in 2008 is not a good thing for the American economy. This act requires banks to hold extra cash in their reserves in case of an emergency, they also have to go through "stress tests" to see how they would perform in time of a crisis. Advocates of this act like former FED Chair's Ben Bernanke and Janet Yellen believe it has made banking safer where at the same time critics believe it limits business and hurts the bank's profits by raising legal costs. One of the first things Trump wants to do as president is get rid of the Dodd-Frank Act and help stimulate the economy once again. With getting rid of the act he also wants to replace Janet Yellen as the chair of the FED because he does not think she performed well during her tenure in charge. Overall the Dodd-Frank act does seem to make banking secure but definitely restricts a lot of things that could be done with banking and in our economy.
Trump probably can’t jump-start U.S. economy in his first 100 days
http://www.msn.com/en-us/money/markets/trump-probably-can%E2%80%99t-jump-start-us-economy-in-his-first-100-days/ar-AAkfjPl?li=BBmkt5R&ocid=spartanntp
For billionaire real estate tycoon Donald J. Trump, the US economy may be too volatile for him to control. As someone who is accustomed to his style of "winning" he may find the challenges of his new office to be comparable to biting off more than he can chew. Granted, President Trump has built an empire by creating a company that has had a 4,500x return on his original loan of $1 million, but can it translate to his presidential term? Although he may not be the most popular president elect there ever has been it is not surprising to see that people are upset that an outsider that has had a controversial past with social issues has been elected, he very well may be just what our economy needs. The first year in office for Donald Trump will be what either makes or breaks his presidency and possibly our economy.
For billionaire real estate tycoon Donald J. Trump, the US economy may be too volatile for him to control. As someone who is accustomed to his style of "winning" he may find the challenges of his new office to be comparable to biting off more than he can chew. Granted, President Trump has built an empire by creating a company that has had a 4,500x return on his original loan of $1 million, but can it translate to his presidential term? Although he may not be the most popular president elect there ever has been it is not surprising to see that people are upset that an outsider that has had a controversial past with social issues has been elected, he very well may be just what our economy needs. The first year in office for Donald Trump will be what either makes or breaks his presidency and possibly our economy.
http://www.nytimes.com/reuters/2016/11/09/world/europe/09reuters-usa-election-greece-farright.html
This article on the New York Times, talks about the way Donald Trumps is seen by a far right political party in Greece. The representatives of Golden Dawn, a Neo Nazi party that was third in votes in the previous elections and has been in the parliament for the last 5 years, saw Trumps win as a victory for clean States. The rise of a party like Golden Dawn is a result of poverty and illegal immigration and as the article says, many other European countries might follow that example. Far right parties of Europe seem to be satisfied with the results of the 2016 american national elections.
Trump Vs. ObamaCare
Our new president Donald Trump since he began running for the 2016 election continuously stated that he was against Obamacare and that he was going to delete and make a healthcare plan of his own. The day after the election the president seemed to feel differently about what he reiterated multiple times before and he has indicated that he may keep two of the laws most popular provisions. One being straightforward, and that was children up to age 26 being allowed to stay on their parents healthcare plan. The other that Trump indicated that he may keep was preventing insurance companies from denying coverage because of preexisting conditions this offers a perfect illustration of why Trump nor does any of his supporters understand what exactly Obama did with Obamacare and the change to healthcare that he's established being one of the biggest things he is known for in his eight years in office. Though Trump has addressed that he may keep Obamacare a lot of his supporters have raised eyebrows because they're looking at is as him already changing what he stated was bad for our economy by not giving every one the same rates. "Every American deserves access to high quality, affordable health care, not just insurance. Obamacare has failed on cost and quality of healthcare. It must be repealed. America needs a patient centered health care system, allowing families and their doctors to be primary decision makers. Provide for the sale of health insurance state lines. Obviously depending on what side you are on you will have a different opinion of what's transpiring in front of us. Democrats feel that the Affordable Care Act - Obamacare was huge for their party, and helped a lot of poor people and old people to have a way out and not just left out to die because they cant afford health insurance. Republicans feel its a huge burden not only to our economy, but a head ache for the actually healthcare agencies themselves. Runaway cost, websites that don't work, greater rationing of care, higher premiums, less competition and ultimately fewer choices. The way I see it from our economy there is less competition and fewer choices since Obamacare, but Obamacare gave a lot of people a way out and demonstrated that all of our people meant something to our country and that they deserved healthcare as well. By Trump stating that he may keep a couple of things shows that he also may have some of the same Democratic views. As our new President he has every right to make decisions and seems like he is leveling the playing field by making negotiations. But this choice will be looked at differently by each party.
@CNNpolitics
- TraVon
@CNNpolitics
- TraVon
Cloudy Economic Outlook for Japan
Economists may have to lower their expected GDP growth of Japan for the rest of the year as a result of their core machinery orders taking a deeper plunge than expected. Despite a 7.3% rise in the July-September period, the core machinery orders, which is used as an indicator of capital spending six to nine months ahead, saw a 3.3% fall in September, which greatly exceeds the expected 0.8% decline set by economists. What adds even more gloom to Japan’s GDP outlook is the fact that the decrease in September follows a 2.2% decrease that came in August and companies surveyed by the Cabinet Office predicted that core orders will continue to fall another 5.9% in the October-December quarter. One would not want capital expenditure to have a negative impact on GDP of the world’s third biggest economy. Takeshi Minami, who's a chief economist at Norinchukin Research Institute sees these discouraging numbers as temporary and not as big an issue as others stating, “The negative 5.9% outlook (for Oct-Dec) isn’t as big a decline as the number makes it seem.” Given the decrease in demand both domestically and internationally as well as a postponement of reaching its 2% inflation rate, Takeshi may have to carry a sense of worry and lower his outlook like most other economist.
How president Trump will affect your wallet
This article talks about the economic policies of Donald Trump
relating to federal income taxes, corporate taxes, childcare, health insurance
and national debt.
Federal income taxes will decrease substantially, but instead of
taxing 7 different income groups, he will bring it down to 3 income bracket
groups. For people earning below $75,000, the income tax rate is 12%; for
people earning between $75,000 and $225,000, the income tax rate is 25% and for
those earning more than $225,000, the income tax rate is 33%. Initially, those
earning below $75000 had an income tax rate of 10%, but his policy will affect
the lowest income bracket, with a 2% increase from the initial rate. Therefore, an individual who earns $76,000 and an individual who earns $224,000 will be taxed at the same rate. Trump's
economic policy will negatively affect hedge fund managers since carried
interest would be taxed as ordinary income. Itemized deduction that would be limited at $200,000 ($100,000 for single filers) would benefit the working class
population, while increasing taxes of the wealthy (higher income bracket).
Under trump, the corporate tax rate would decrease from 35% to
15%. He would tax repatriated income held overseas at 10%, which would encourage
corporations held overseas to bring finance back into the United States (2.5 billion).
Economists debate over the effectiveness of his policy where the
likely outcome might lead to greater capital investments, increased job hiring,
and more capital returned to investors.
Trump has proposed an above the line deduction of up to $5000
for childcare of children under 13, thereby reducing the cost of childcare for
working class Americans. These deductions reduce adjusted gross income. For
families making $62,400 ($31,200 for single filers), Trump would offer a
childcare rebate through the Earned Income Tax Credit.
Trumps policy on healthcare:
- · Allow health insurance to be sold across state lines;
- · Allow individuals to fully deduct health insurance premiums;
- · Allow individuals to use Health Savings Accounts.
The impact of repealing the affordable care act and these
additional reforms will increase the cost of health insurance for some, and
decrease it for others.
Those that currently receive the affordable care act subsidies
are likely pay more.
For younger, healthy individuals, the cost of insurance will
decrease, and for older individuals who are not yet eligible for Medicare, the
cost of insurance will certainly increase.
Estimates mention that the national debt will rise by $11.5
trillion over next the ten years.
Therefore, it is really interesting to see the impact of trumps
economic policies on the employment rate, the labor force participation rate,
wages, the trade balance, per capita GDP, national saving and interest rates in
the distant future. It is futile to predict the efficiency of his policies in
the short run since most of his policies will positively/negatively impact the
economy in the long run.
Warren Buffett says economy is weaker than people think
"The Forbes 400 had $93 billion in 1982, and
they got $2.4 trillion now. And that's 25 times as much," Buffett told
CNN's Poppy Harlow in an exclusive interview in Omaha on Thursday. Later in the
interview, when Harlow asked him who was winning in this economy, Buffett was
blunt. "The rich. Guys like me," he said. But even though Buffett is
doing well, he admitted the economy isn't in fantastic shape. And that probably
helped fuel the rise of Trump, as well as Bernie Sanders, the Democratic
senator from Vermont who challenged Clinton for the nomination. "Bernie
Sanders said to a good bit of American people, 'You're getting the short end of
the stick. And it isn't your fault,'" Buffett said. But he added that he
did not think Sanders would have a better shot of beating Trump than Clinton
did. He even cast doubt on recent numbers showing that the U.S. economy grew at
a nearly 3% annualized pace in the third quarter. "It's softer than I
think people think it is," Buffett said about the economy. "I don't
mean it's weak, but it's softer than people think." The GDP, you know,
comes out of the third quarter 2.9%. I don't think it was a 2.9% quarter,"
he added with a chuckle. "If I had to bet, if they end up revising the
third quarter, you know, it'll get revised downward. Still, Buffett remained
optimistic that things will change for the better. He said the focus needs to
be on improving incomes for average, working class Americans. "Capitalism,
the market system works," he said. "You want to keep a system where the
goose lays more golden eggs every year. We've got that. Now, the question is:
How do those eggs get distributed? And that is where the system needs some
adjusting." But Buffett, as he has said in the past, does not think
raising the minimum wage is the answer. He continued to stress that an earned
income tax credit would do more to boost income than a minimum wage increase. And
Buffett continued to be hopeful that economic conditions will improve for all
Americans -- and not just the wealthy.
http://money.cnn.com/2016/11/11/news/economy/warren-buffett-economy-income-inequality/index.html?iid=Lead
GDP, Inflation and Interest Rates Forecast to Rise Under Trump Presidency
The presidency of Donald Trump is poised to usher in a new era for the U.S. economy that forecasters say could boost economic growth, bring higher interest rates and inflation, and a new set of potential risks including international trade wars. The economy could expand 2.2% in 2017 and 2.3% in 2018, as a fiscal stimulus kicks into gear, up from about 1.5% over the past 12 months. Inflation is seen at 2.2% next year and 2.4% in 2018. If correct, it would be the first stretch of sustained inflation above 2% since before the recession of 2007 to 2009.
Trump and GOP congressional leaders share goals of cutting taxes and reducing regulations. Most economists believe tax cuts, especially if not accompanied by spending reductions, would produce a short-term boost to economic growth. His proposals to increase infrastructure spending, if successful, could lead to a large boost in construction employment, with spillover effects for other industries.
Over the past year, forecasters consistently fretted that a severe slowdown in international growth was the biggest risk to the U.S. but in the post-election survey, 65% of economists said the factors likeliest to knock the economy off course were potential White House missteps and a potential trade war topped the list. It was cited as the biggest risk to the economy by 43% of economists. A move from the U.S. to impose tariffs on foreign nations could lead to a spiral of rising trade barriers, higher import prices, and shrinking markets for U.S. exporters.
“Everyone will lose if there is a global trade war,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
http://www.wsj.com/articles/gdp-inflation-and-interest-rates-forecast-to-rise-under-trump-presidency-1479054608
Trump and GOP congressional leaders share goals of cutting taxes and reducing regulations. Most economists believe tax cuts, especially if not accompanied by spending reductions, would produce a short-term boost to economic growth. His proposals to increase infrastructure spending, if successful, could lead to a large boost in construction employment, with spillover effects for other industries.
Over the past year, forecasters consistently fretted that a severe slowdown in international growth was the biggest risk to the U.S. but in the post-election survey, 65% of economists said the factors likeliest to knock the economy off course were potential White House missteps and a potential trade war topped the list. It was cited as the biggest risk to the economy by 43% of economists. A move from the U.S. to impose tariffs on foreign nations could lead to a spiral of rising trade barriers, higher import prices, and shrinking markets for U.S. exporters.
“Everyone will lose if there is a global trade war,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
http://www.wsj.com/articles/gdp-inflation-and-interest-rates-forecast-to-rise-under-trump-presidency-1479054608
The jaw-dropping numbers behind China's Singles Day
China's Singles Day has smashed records yet again.
The total value of orders reported by e-commerce giant Alibaba during this year's online shopping bonanza hit $17.8 billion, easily topping the previous record of $14.3 billion set in 2015. That's more than Black Friday and Cyber Monday combined.
Singles Day is an entertaining festival widespread among young Chinese people, to celebrate the fact that they are proud of being single. The date, November 11th (11/11), is chosen because the number "1" resembles an individual that is alone. This festival has gradually become one of the largest online shopping days in the world, with sales in Alibaba's sites Tmall and Taobao at US$5.8 billion in 2013, US$9.3 billion in 2014, and over US$14.3 billion in 2015.
Whole Article:The jaw-dropping numbers behind China's Singles Day
Consumer Pessimism Evident in Home Purchases
According to the Fannie Mae Home Purchase Sentiment Index (HPSI), consumers are becoming less optimistic about buy homes. The HPSI reports results from the National Housing Survey, and then foretastes a monthly indicator. The point of the HPSI is to illustrate signals of the housing market and help people in the industry make informed decisions. The six components that make up the HPSI are whether consumers think it is a good or bad time to buy or sell a house, the direction they expect home prices and mortgage interest rates to move, how concerned they are with losing their job, and whether their incomes are higher than they were a year ago.
The HPSI has consistently decreased over the past three months, finishing with a drop of 1.1 points in October. This decrease is caused, in part, by a large drop or people reporting an increase in income from the past year. Another reason for the decline is the anticipated increase in interest and mortgage rates of homes. People are also expecting the value of their homes to decrease. The one bright spot in the HPSI is that more people believe that now is good time to buy a house.
It is important to note that the HPSI is a very volatile index from month to month. The increasing wage and employment reported for October could have a very strong impact on the HPSI. Of course, if these increases are sustained. With the recent results of the presidential election, the stability of everything is a little uncertain. The article attached below has a very interactive graph in which you can assess each aspect of the HPSI and see the trends.
http://fanniemae.com/portal/research-and-analysis/housing-survey.html
The HPSI has consistently decreased over the past three months, finishing with a drop of 1.1 points in October. This decrease is caused, in part, by a large drop or people reporting an increase in income from the past year. Another reason for the decline is the anticipated increase in interest and mortgage rates of homes. People are also expecting the value of their homes to decrease. The one bright spot in the HPSI is that more people believe that now is good time to buy a house.
It is important to note that the HPSI is a very volatile index from month to month. The increasing wage and employment reported for October could have a very strong impact on the HPSI. Of course, if these increases are sustained. With the recent results of the presidential election, the stability of everything is a little uncertain. The article attached below has a very interactive graph in which you can assess each aspect of the HPSI and see the trends.
http://fanniemae.com/portal/research-and-analysis/housing-survey.html
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