“I’ve never seen things this bad,” Altom said. “I know several farmers who hired lawyers, to see if they can sue over the [soybean and corn storage] pricing and fees issues.”
That’s from a Reuters article entitled Harvesting in a trade war: U.S. crops rot as storage costs soar published today.
Thanks, Trump. And to all the folks that said the trade war would be resolved before the leaves fall.
Lawyers suing? Is that what CoRev has been doing lately? I can only imagine his legal briefs!
‘The U.S. government rolled out an aid program of around the same size – $12 billion – to help farmers absorb the cost of the trade war. As of mid-November, $837.8 million had been paid out. Some of that money will pass from farmers to grain merchants such as Archer Daniels Midland Co (ADM.N) and Bunge Ltd (BG.N), who are charging farmers more to store crops at elevators where there is limited space. Bunge and ADM did not respond to requests for comment on storage fees.”
Not only are the lawyers winning as the average farmer suffers – the big boys come out ahead! Great article!
Trump took the appropriate step to stop losing, but China wants us to keep losing, our steel and aluminum industries, our R&D, our investment, our high-paying jobs, our tax revenue, etc..
peakloser, trump started the trade war. he wanted a fight. you expected the other side to simply take the beating, sir, may i have another? are trump supporters that stoopid? peak and corev, please own up to the damage you have caused.
I wonder if Trump wants to enter the boxing ring and started it up with Floyd “Money” Mayweather Jr. Now I would pay to watch this fight!
PeakTrader Trump took the “appropriate” steps to stop losing??? Are you kidding? Trump overstimulated aggregate demand with huge deficits when the economy was already at potential GDP and then Trump threw sand in the gears of global trade. And guess what? Higher interest rates and trade tensions are playing hell with global markets. We’ve got both J.P. Morgan and Goldman Sachs warning of global growth stalling out. One of my brothers-in-law is an economist with the OECD in Paris, so this morning I took note of this report:
The Outlook says trade tensions are already harming global GDP and trade, and estimates that if the US hikes tariffs on all Chinese goods to 25%, with retaliatory action being taken by China, world economic activity could be much weaker. By 2021, world GDP would be hit by 0.5%, by an estimated 0.8% in the US and by 1% in China. Greater uncertainty would add to these negative effects and result in weaker investment around the world. The Outlook also shows that annual shipping traffic growth at container ports, which represents around 80% of international merchandise trade, has fallen to below 3% from close to 6% in 2017.
http://www.oecd.org/economy/global-growth-is-slowing-amid-rising-trade-and-financial-risks.htm
2slugbaits, we haven’t yet closed the output gap.
And, you can’t trust Baffling’s communists, and his failed and dumb policies:
China theft of Australian IP surges: Report
NOV 21, 2018
https://www.straitstimes.com/world/china-theft-of-australian-ip-surges-report
I suspect Menzie will have all sorts of REAL WORLD information to challenge you on your unsupported assertions about the output gap. But yea – facts in your world are a Communist plot!
“2slugbaits, we haven’t yet closed the output gap.”
trump has had 2 years to close your output gap. what is the holdup? obama had an legitimate reason, he was cleaning up the depression the republicans left him before getting booted from office. why is trump policy, along with control of congress, so ineffective at closing your output gap? it should be easy, and done by now. why the failure peak?
Baffling, Obama spent eight years restructuring and maintaining the restructured economy, resulting in the most expensive and weakest economic recovery by far in U.S. history, after the massive housing crisis Democrats in Congress created.
Trump inherited a weak economy and a mountain of federal debt, along with a substantially weakened military.
Some of the damage caused by Obama-Pelosi-Reid-Dodd-Frank and other leftists is permanent and Trump is doing his best to reverse what he can.
“Trump inherited a weak economy…Some of the damage caused by Obama-Pelosi-Reid-Dodd-Frank and other leftists is permanent and Trump is doing his best to reverse what he can.”
and i suppose obama inherited a strong economy that was not weakened by financial deregulation?
seriously peakloser, if you do not want to be called a political hack, start accepting reality. your rewriting of history is tantamount to treason.
Baffling, you’re in complete denial.
That’s why you’re ignorant and always wrong.
look peakloser, i am not the failed banker who contributed to the financial crisis and then denies any culpability in the event. talking about being ignorant and always wrong…you are nothing more than a failed hack.
Australia IP theft? WTF? PeakStupidity has no clue what Australia exports to China. Things like iron ore, natural gas, and petroleum. Yea – there is a lot of IP involved in what Australia exports to China.
Bruce Hall’s pandering for Micron Technology had temporarily eclipsed PeakStupidity for the dumbest comments ever but I’m glad to say – Peaky has regained the lead!
PeakTrader we haven’t yet closed the output gap.
I would say that’s a minority opinion. The FED seems to think we’ve closed the output gap. And when I go to FRED and compare potential GDP to actual GDP it sure looks like we’ve closed the output gap.
You and Bruce Hall seem to be a bit confused about the effectiveness of Trump’s policies. On the one hand you give us links to anecdotal stories that claim Chinese piracy is getting worse by the day, but then in almost the next breath you tell us that Trump’s policies are succeeding and he is “protecting intellectual property for our economy.” You need to get your stories straight.
2slugbaits, if the output gap was closed, monetary policy wouldn’t still be accommodative, because of lags in the adjustment process.
And, we’re creating way too many jobs per month to be at full employment.
Is Trump’s policy in the South China Sea a bad policy, because China is trying to ram our ships and planes?
vasja Yes, I am aware of the discrepancy in the two real GDP measures; however, I looked at the nominal GDP, which is okay in this case because it’s not a matter of looking across time, just comparing values at a particular point in time. The one downside is that you have to compare two non-seasonally adjusted nominal GDP values rather than seasonally adjusted; but here again the sin is not too bad because they are consistent. In any event, for fiscal and monetary policy purposes there seems little doubt that we’ve closed the output gap, especially when you consider that monetary policy is forward looking. And the FED seems pretty sure that we’ve closed the gap. I have no idea why PeakTrader seems to think that FED policy is “accommodative” when the FED has had eight target increases in less than two years. Maybe PeakTrader thinks he knows more than the FED.
2slugbaits Thank you for your replay. I agree with you that it is very likely that the gap is closed and on your policy insights. In addition, you are correct; I have not checked the nominal quantities. However, it could be that the same issue is present in the nominal series.
If you calculate output gap from “FYGDP” (nominal GDP, NSA; or instead “GDP”, which is the SA version) and “NGDPPOT” (nominal potential GDP, NSA) it will be negative or at most closed in the period 2000-2017. It should exhibit strong overheating in the pre-crissis period and inspection over longer period reveals that nominal GDP series is not centred with respect to potential GDP (it should cycle around it and cross it on average approx. every 8y). I suspect this is because potential is estimated from a different data vintage compared to the published one. If this truly is the case then they are not comparable due to a possible level shift that was caused by a revision.
I might be wrong or I might be looking at an incorrect nominal GDP series. I really could not find it in the FRED data base. I did write to them and will keep you posted on their reply!
Finally, I like to avoid calculating the output gap from nominal series. It could give a very incorrect signal. For example, if there is a strong temporary increase in prices due to an oil shock nominal GDP might increase whereas real GDP would contract. Output gap inferred from real GDP could be negative whereas the one inferred from nominal GDP could be positive. Admittedly this is an over-exaggerated example, but it does illustrate why it is good practice to exclude inflation cycle from tainting output gap estimates.
We should thank Trump for protecting a core steel and aluminum industry, for national security, and protecting intellectual property, for our economy. And, thank Trump for the tax cuts and deregulation – the tax cuts are many times more than the tariffs. If you want to blame someone for a trade war, see the Chinese.
“We should thank Trump for protecting a core steel and aluminum industry, for national security, and protecting intellectual property, for our economy.”
What a bunch of intellectual garbage. Yes – we should thank Trump for inflating the price of automobiles in the US. But gasoline is still cheap since Trump has decided that MBS can murder at will.
“the tax cuts are many times more than the tariffs”. Well the ultrarich will appreciate this but be careful next time you are in Wal-Mart as their shoppers got screwed.
Peaky – you pretend you are impoverished but we know that the Hampton crowd subsidiizes your life style so you can write this serial nonsense. Of course they are clearly overpaying you.
What a farce. First we were told we would be winning. Now it has turned into stop losing. Lord – you are worse than the former coach of the Cleveland Browns!
My professor at Corinthian Colleges, Professor CoRev, said that as crops rot the price on those crops raises congruently therewith. Strange….. I don’t know what went wrong. Corinthian even had the “Betsy Devos Seal of Institutional Quality”. Now me and PeakIgnorance don’t know how the hell we are ever gonna pay this loan off. PeakIgnorance said his Grandma was going to give him the loan payment money this Thanksgiving holiday, but at the last second this morning Grandma Peak phoned PeakIgnorance to renege on her promise. Her prescription drug costs got jacked up again. According to the Corinthian Colleges’ theory on price shifts, those prescription pills Grandma Peak is getting must have rotted out inside the bottle during transport. Weird……
https://www.politico.com/story/2018/11/16/pfizer-drugs-prices-increase-trump-981010
Maybe this is all made up “fake news” and Politico is part of the “Evil Liberal Conspiracy” And “Tel Aviv Cabal” controlled by George Soros. I’ll have to check in with Professor CoRev and see what he says. Though I heard they cleared his Corinthian office out. I’ll find a way out of this, I still have my red MAGA thinking cap, damn it!!!
something i never thought i would hear. professor corev! well done.
Louisiana Senator John Neely Kennedy apparently is a very popular professor. Yes – he is a right wing lunatic but his students love him. So yea – Professor CoRev!
Dear Menzie,
I hear you on this. But if you are right, why did the North Dakota farmers vote to support Trump and get rid of Heidi Heitkamp?
Julian
Julian Silk: Man does not live by bread alone. Apparently some combination of party affiliation/xenophobia/nativism/anti-incumbency feeling can dominate narrow economic self-interest.
Julian Silk I’m pretty sure the Frankfurt School would have an answer to your question. False consciousness and all that. In fact, the Frankfurt gang could see it coming:
https://www.newyorker.com/culture/cultural-comment/the-frankfurt-school-knew-trump-was-coming
If you’re not familiar with the Frankfurt School, try this. I remember it as an assigned reading back in my undergrad days so I was surprised to see that it’s still in print.
https://www.amazon.com/Dialectical-Imagination-Frankfurt-Institute-1923-1950/dp/0520204239
Heidi Heitkamp had the courage to vote no on Kavanaugh even though this principled vote was not well received in Trump country.
Dear Menzie,
Thank you for your response. But I think it would be good for you and the blog, if you are really worried about it, to try to put your ideas about party affiliation and xenophobia, etc. into some sort of testable form, and we could see if we could get data for it. If the form works for prediction, then it is a useful item for those who wonder about policy.
Julian
Dear Menzie,
I want to add something to my previous comment, because I think it will throw some light on this whole issue of when views override immediate economic self-interest.
Maryland just had a governor’s race, in which Lawrence Hogan, the incumbent, badly defeated Ben Jealous, the Democratic challenger. Hogan has considerably distanced himself from the whole of the Trump administration, so that removed a barrier for a lot of Democrats in voting for him. But I did not vote for either one, and my reasons may be useful items in actually developing a testable form.
1) Not for Hogan – his political staff ignored my letters, and didn’t even respond with a form letter. So counting actual communications from constituents and responses might be useful.
2) Not for Jealous – a) Jealous waffled on BDS – I am very ardently anti-BDS.
3) Not for Jealous – b) The whole Jealous campaign never made any serious effort to reach out to white voters who had previously been involved in political life. They were all about motivating minority voters who had never voted before. Jealous ignored a traditional gathering in Ocean City, and didn’t even make a serious effort to communicate with such white voters.
4) Not for Jealous – c) A lot of the Jealous plans, such as the Medicare for all, never came with a serious analysis of what and how they could be paid for.
5) Not for Jealous – d) This is not so much for me, but given the Jealous strategy of motivating new voters, he had to have an extremely high turnout, and it rained for much of the day.
Jealous is a nice man, and I can just hear people now saying, “It’s all race; you’re just hiding and you really are a racist.” It’s not true in my case. Jealous is a nice man, but he had no traditional campaign worth the name. He also defeated Rushern Baker, an African-American county executive one county over, who had more experience, and whom I would have voted for. (If you have to track this, it might be correlation of voting with experience in office.) So there is some hysteresis effect there.
So I think these sorts of features could go into a usable model to predict electoral outcomes.
Julian
People who have lists of reasons they didn’t vote for anyone aren’t really relevant to electoral outcomes.
2slugbaits I would say that’s a minority opinion. The FED seems to think we’ve closed the output gap. And when I go to FRED and compare potential GDP to actual GDP it sure looks like we’ve closed the output gap.
A word of caution, it might be incorrect to infer output GAP from FRED’s data, this time. The potential output series (GDPPOT) is in Chained 2009 Dollars and not seasonally adjusted. The GDP series is in Chained 2009 Dollars (GDPC96) and seasonally adjusted. Alternative rGDP series, GDPC1, is in Chained 2012 Dollars.
When you use GDPC96 to calculate the gap it is negative or close to zero since mid-y2000. This includes the pre-crisis expansion where it should be positive and large due to a heavy over-heating. Most likely the reason for the discrepancy is a mismatch between the vintage used to estimate potential and the published rGDP vintage. If, for some reason, you use the GDPC1 series the gap is positive most of the last 20 years. I will write to FRED and ask them if they can help me with the issue (point me to the correct rGDP vintage).
It might be better to check other sources. OECD’s (Nov 2018, it is outdated, same as in Nov 2017, is likely to be revised upwards) estimate is at -1.651 (2017) and -0.656 (2018f), the EC’s Autumn 2018 at 0.0 (2017) and 0.7 (2018f) and the IMF’s is at 0.233 (2017) and 1.095 (2018f). Most estimates point toward a closed gap in 2018. So it seems quite reasonable for the FED to normalize the IRs now.
vasja Here’s all I did. I took the non-seasonal nominal GDP for 2018Q3, which is expressed as a quarterly piece of GDP. In this case it was 5192.8T. Since that’s per quarter, I simply multiplied by 4 to express it as an annual number, or 20,771.2T. I then looked at the non-seasonal nominal potential GDP for 2018Q3, which is 20,602.7T. Nothing fancy. The difference of ~170B seems large enough that there’s little doubt that we’re running above potential GDP. Of course, calculating potential GDP is an inexact science at best, but you do the best you can. I don’t know why BEA and FRED discontinued their old series in which they specifically reported the real output gap as a percent of potential GDP.
The rest of PeakTrader’s “analysis” makes no sense to me. The FED is not accommodating fiscal policy. The FED is running a contractionary policy of gradually raising rates while fiscal policy is expansive. Maybe PeakTrader doesn’t know what “accommodative” monetary policy means. And his appeal to continued strong employment numbers as evidence that the output gap has closed doesn’t square with history. It’s not at all unusual to have continued strong employment growth while operating above potential GDP. I guess he’s just desperate to justify tax cuts at the peak of the business cycle.
“The rest of PeakTrader’s “analysis” makes no sense to me. ”
this statement could precede just about any “analysis” peaktrader makes on this site. considering how outdated many of his references are, one has to wonder if he grasps what decade we are even operating in? it is quite possible, most of his “analysis” stems from his favorite st reagan decade-which he never left.
2slugbaits, you’re wrong as usual.
Just because monetary policy is less accommodative than before doesn’t mean it’s restrictive.
The Fed Funds Rate is still below the neutral rate, estimated at 3%.
We’re still below, not above, potential output and full employment, because the “recovery,” since 2009 has been so weak.
Are you pre-progammed to write this incessant gibberish as you just are oblivious to the entire world around you? Take this for example:
“The Fed Funds Rate is still below the neutral rate, estimated at 3%.”
#1 – you have no clue what you mean by the neutral rate. #2 – if this were true, the FED needs to raise interest rates. Which economists like Menzie are arguing but you are saying just the opposite.
OMG – the bot known as PeakTrader is just babbling incoherent, inconsistent gibberish. But then you always do.
An interesting article (11/26) in The Hill: https://thehill.com/policy/finance/418263-farm-bankruptcies-on-the-rise-according-to-new-fed-report
More than 60 percent of the reported bankruptcy filings for the region were in Wisconsin, which could suggest a large number of dairy farm bankruptcies. Wisconsin is the country’s second largest producer of milk.
Although China imports dairy products from the U.S., it’s hard to determine that 1) Wisconsin was the sole/primary source and 2) the exports to China from Wisconsin were of major significance to overall sales. But Wisconsin does sell 90% of its dairy products outside of Wisconsin. 80% goes toward cheese production. It would be interesting to see where those sales go by country. I suspect that the preponderance goes to other states. 75% of farms in Wisconsin have less than 100 cows. Wisconsin has more than 68,000 dairy farms. 50-60 of the bankruptcies last year in The Hill article are attributable to Wisconsin farms. But about 50 or so farms simply close up each month as costs and competitiveness drive out smaller and less efficient operations.
So, for Wisconsin dairy farmers at least, the tariffs may have been a negative, but it seems not a driving force of problems.