Analysis of current economic conditions and policy
Market Expectations on the Shutdown: 65% Ending on 18th or After
as of 10PM Eastern:
Figure 1: Probability of shutdown ending 1/18 or after. Source: PredictIt.
Notice the jump 6 hours ago.
34 thoughts on “Market Expectations on the Shutdown: 65% Ending on 18th or After”
sammy
I’ll take the under. There is no point prolonging this. The Dems ain’t gonna give, a prolonged shutdown probably only hurts Trump, and he has a viable alternative in declaring a National Emergency.
pgl
We almost agree on something. The National Emergency play is going to be challenged in the courts. Of course a court fight will give Anne Coulter an orgasm.
Mike Johnson
Declaring a fake national emergency does seem likely. The good news is that it also means we won’t be wasting any money on that stupid wall. Trump will declare a national emergency, reopen the government, tell his gullible base what a strong leader he is, and then nothing happens. The Pentagon will slow walk this to death waiting for the courts to shoot it down. At this point all Trump cares about is maintaining the illusion that he still has two testicles.
Looking longer term I don’t understand why Trump thinks it’s to his personal advantage to pick a fight with Democrats, unless he’s operating under the delusion that he still has a chance of winning re-election in 2020. A more sober assessment would tell him that his chances of winning re-election are slim to none, so he should be looking to find ways to make friends for life after 2020. At this rate the Democrats in Congress and in New York will be going after him personally as well as his family and family business. Jared and Don Jr are staring at real prison time. Maybe Jared could reserve the family cell his father had while in federal prison. The Trump organization will be gutted. Princess Ivanka will have to set up a Go Fund Me page. The smart play would be to make nice with the Democrats over the next two years and then bow out of any re-election effort. He’d at least have a decent chance of quietly riding off into the sunset. And that leads to the real nightmare scenario; viz., Trump looking at defeat in Nov 2020 and suspending elections because of a “national emergency” that he manufactures. And that’s the nightmare that keeps a lot of high ranking officers asleep at night…or so I’ve been told.
pgl
“The good news is that it also means we won’t be wasting any money on that stupid wall.”
You are likely right here but betcha we will see a lot of money wasted on lawyers.
Steven Kopits
I, too, will take the under, but for a different reason. I think the Congressional Republicans run out of guts before next weekend.
You don’t want to be the Republican Senator running in 2020 whose opponents asserts, “Remember that guy? He’s the one who prevented you from flying, who held up your paycheck, who failed to pay your Social Security, and who left the country unprotected. Yeah, that’s the guy.”
I give them a week until they fold.
ilsm
Pass the popcorn.
We have:
A president suggesting to reverse decades of pentagon mission creep and end a quagmire with no link to the common defense shouted down by the liberal wing of the perpetual party, and the neocon mass media…….. not a politician his mind is not set on the next election above all else. and DS!!
A disloyal opposition of monied liberals cutting off money for a senseless public works project, a huge reversal of the stripes.
As a negotiator Pelosi needs to keep working for her PAC money……. Holding hostage featherbedded, pampered employees, who never felt the downs of the business cycle, who enjoy by far the best retirement system in the US!!!
Oh! The humanity!
pgl
You have won the prize for the most irrelevant babble ever written. Then again I always suspected your Russian bot programming would short circuit. Time for Putin to recall you.
baffling
why the anger towards federal employees? they are typically highly educated and have worked hard to secure a future. every time we replace a federal worker with a government contract position, the amount and quality of work deteriorates, because you have a “number” holding that position simply to bill the government project a certain number of hours. very little accountability. even if you do fire the contract company and bring on a new one, you do understand the lost efficiency in such a move is enormous?
at any rate, not sure why trump needs to hold government workers hostage in order to pay for a wall he promised that mexico would cover. or just like with rick stryker, you are ok with the fact trump lied about mexico paying for the wall as an argument to get elected, when all along he had not plan for mexico to pay for the wall?
pgl
ilsm is angry at everyone. I guess someone kicked his dog as he stole ilsm’s former wife from him. Get used to more of his inane babbling.
ilsm
heh
babbled,
I am retired DoD civilian! Worked as tech manager in weapon system acquisition after being in the field……… How the replacing beltway bandits aka A&AS contractors could be any worse than the modern crop of GS needs to be pondered!
pgl
what about over under did you miss in my observations over the (equally) amoral vacillations of both sides in this circular firing squad going on between 1600 Pa Ave and the “hill”??
pgl
“I am retired DoD civilian!”
That is your excuse for becoming a raving maniac? Sorry dude – but I don’t take bets with insane people.
baffling
“How the replacing beltway bandits aka A&AS contractors could be any worse than the modern crop of GS needs to be pondered!”
just a personal anecdote. i was invited to work at a dod facility for a few months a number of years ago. my experience was that the federal workers i encountered on the site were much more diligent about producing a successful outcome for the project. the contractors, who sat in office right next door and at first never new they were not direct federal workers, had much less loyalty to the location and success of the projects. after a few months, i could typically tell which folks were contractors and which were fed workers. was not impressed with the contractors. have a brother who also worked many years as a contractor, and he finally quit because the name of the game became billing the contract rather than the work. his team was filled with people with absolutely no technical expertise in the field of his projects-hence they never really delivered good product. he and the government would have been better served if he were a fed employee. he took pride in his work.
ilsm, you may have had a different experience, but this is one of mine.
Mike Johnson
ilsmpampered employees, who never felt the downs of the business cycle,
This is simply wrong on the facts. Government employment tends to be counter-cyclical, which is not the same as being immune from the business cycle. During recessions government employment looks relatively attractive and demand for government workers tends to increase. So during recessions private sector workers tend to be envious of government workers. But during economic expansions government employment looks relatively unattractive because real wages of government workers tends to fall. For example, during the Carter years government employees endured wage freezes while inflation was in double digits. That’s when Carter and Reagan thought we needed to balance the budget on the backs of federal workers. During the Clinton years it was very difficult to recruit and keep government employees, which is one reason why there’s this employment problem that RAND describes as a “bow wave”. And Obama kept pay raises under the rate of inflation, which is a real cut. Now it is true that government workers tend to be less exposed to the risk of unemployment, but that doesn’t mean they are immune from the effects of the business cycle.
Also, private sector employees always have the option of quitting. That’s not true of critical government workers. They can be compelled to work and denied permission to quit or retire.
ilsm
Miike J.
The last RIF in DoD was end of Vietnam.
Yeah, there were recruiting stalls/moratoria during the period when Carter was paying down Vietnam Debt. Then also the end strength numbers were declining.
Reagan had a bump on GS hiring, especially after the pentagon got caught buying golden toilet seats and $800 hammers.
Where I was during Clinton, end of cold war, slots going down recruiting not happening………. And a few senior folk decided small GS numbers and lots of A&AS. No RIF’s
pgl
We are talking about employees in sections of the government that are not funded. Which means your latest insane rants are irrelevant as DoD is fully funded right now. Then again – your rants are off topic 100% of the time.
pgl
Trump likely does not have the authority to build his vanity wall after all (his racist base needs to get past this):
most of the president’s emergency power derives from statute — laws enacted by the same Congress that might now oppose his actions. The Brennan Center for Justice has identified 136 statutory powers available to the president upon declaration of a national emergency.
So, then, the source and extent of the president’s emergency power is complicated. His authority to act contrary to the wishes of Congress is also complicated. It’s happened before, and the Supreme Court has weighed in.
In the middle of the Korean War, in 1952, facing a threatened strike by steelworkers and the loss of critical war production, President Harry Truman invoked his emergency powers and directed his secretary of commerce “to take possession of the steel mills, and to keep them operating.”
The steel mill owners immediately filed suit, and, in record time, the case arrived at the Supreme Court, which struck down the executive order. The six justices in the majority each wrote separate opinions, meaning they arrived at this conclusion for different reasons. In this landmark case, Youngstown Sheet & Tube Co. v. Sawyer (Truman’s secretary of commerce), the assertion of emergency power ultimately failed because it lacked authorization “from an act of Congress or from the Constitution itself.”
Mike Johnson
Good to know that Rick Stryker says Trump doesn’t lie:
“When during the campaign, I would say ‘Mexico is going to pay for it,’ obviously, I never said this, and I never meant they’re gonna write out a check, I said they’re going to pay for it. They are,” he said as he prepared to depart the White House for the southern border.
I guess Trump’s first wife was right when she said that his drug abuse during the 1980s affected his brain.
pgl
He expected El Chapo to pay for the wall in stacks of $100 bills!
Julian Silk
It will be after, all right. I would put it at sometime in February.
don
Trump’s visit to the border (and talks with those on the ‘front lines’ of border security) will likely help extend the shutdown, unless the whole show can be held down to a non event.
pgl
I’m more interested in what Michael Cohen is going to tell Congress on February 7!
noneconomist
In related news, there are no doubt quite a few Trumpers excited to hear Trump once again threaten California by cutting off future FEMA funds for disaster victims.
All those billions the government is sending to California will stop if the state doesn’t begin more effective raking, especially in the national forests, which comprise close to 60% of the forested areas in the state. (No mention, of course, of the billions collected in taxes from Californians or of the billions to be spent by the state, which, by the way controls about 2% of forests within the state. Private landowners control the rest)
From a political standpoint, most of the areas/counties–especially in the north–where large wildfires have occurred and are home to numerous national forests–are filled with majorities of Trump voters. Look at any red-blue map of voting patterns and, as you move north of Sacramento- most -counties were all in for Trump. No more obvious than Shasta County and the Shasta-Trinity NF where Trump received over 60% of the vote. (Ironically, this summer’s Carr Fire started on a highway, not in any forested area)
The Republican congressman, whose district includes many NF areas including Paradise, actually mouthed some displeasure at Trump’s comments. (Surprise, since Rep. LaMalfa has been a reliable Trump bootlicker and solid supporter of attempts to shatter health care protections and to punish the 30%+ of his constituents who itemize their income taxes). I don’t expect too much though. As long as his rice subsidies remain in tact and as long as the government pays most of his crop insurance premiums, he’ll be ok.
Not to worry. He’s a wall builder. He’ll lather Glorious Leader’s boots whenever.
sammy
Perhaps wishful thinking over at Breitbart. “Congressional Democrats are ditching House Speaker Nancy Pelosi’s and Senate Minority Leader Chuck Schumer’s ardent opposition to any barrier or wall along the U.S. border with Mexico, as the partial government shutdown continues and President Donald Trump takes his case directly to the border itself.”
““If we have a partial wall, if we have fencing, if we have technology used to keep our border safe, all of that is fine,” Rep. Cheri Bustos (D-IL), the chairwoman of the Democratic Congressional Campaign Committee (DCCC), said on CNN.
“Certainly you need barriers and we support barriers,” Sen. Ben Cardin (D-MD) added.
Sen. Jeff Merkley (D-OR) also backed a barrier along the U.S. border with Mexico.
“Some fencing is useful, some barriers are useful,” Merkley said. “There’s a lot of surveillance technology. I’ve been to some cities on the border that have triple fencing and have more personnel and have the technology to see the people moving in the middle of the night.”
Polling must be going terribly. After all the Dems slogan “Wall don’t work” defies all common sense.
pgl
All of this is supported by Schumer and Pelosi. They oppose the stupid racist wall that Trump wants to put his name on. But do obscure the issue as your fearless leader certainly is doing so.
noneconomist
Sammy, why am I not having trouble seeing you in the audience shouting “Build that wall”, the one Glorious Leader assured you Mexico would pay for?
Oh, not the barriers you just described. The one to be overseen by the master builder himself: 35 feet high, constructed with modular concrete panels that would stretch 2000 miles from the Pacific to the Gulf of Mexico. The one that would easily be built where no current infrastructure even exists.
But if you really believe “walls work” to solve all border and immigration problems, you might want to contact me regarding my ocean front Death Valley property which can be yours for a low down payment as well as low monthly installments. I have a bridge for sale that might interest you too.
pgl
Actually Trump intends to have the Puerto Ricans pay for his stupid wall. National emergency so he can rob FEMA money earmarked for relief efforts in the aftermath of Maria. You and I would call this even more racist garbage but Trump’s base calls it a win, win.
noneconomist
News alert today from McClatchy: “President Donald Trump is reportedly considering raiding disaster recovery funding—including more than $1.7 Billion for Sacramento area flood protection projects—to help pay for his wall on the southern border”
As Rep. Doris Matsui noted, “This allocation…was designated because the Corps of Engineers recognized the severe flood risk Sacramento faces as the second most flood prone city in America.”
And, Yuba County (solid Trump country) “is also worried about losing $13.5 million in funding for a flood control project to protect Marysville.”
(Explainer for non Californians: much of the $1.7 billion would be earmarked to elevate the height of Folsom Dam which provides flood protection–and drinking and irrigation water for Sacramento and the regions below it. Yes, it’s next door to Folsom Prison)
But my stupid wall and I will let you call it peaches.
Lord Trump is really, incredibly STUPID!
Steven Kopits
What is the right analog for today regarding the prospects for recession?
From John Kemp of Reuters this morning:
Middle distillate consumption and prices are therefore more closely tied to the state of the economy than other refined fuels such as gasoline. (https://tmsnrt.rs/2HjMiXV)
For the last 25 years, hedge funds and other speculators, collectively termed “non-commercial traders”, have mostly held a net long or bullish position in distillate futures and options.
The typical net long position reflects the overall expansion of the U.S. and global economies (expansions have been long while recessions have been relatively short).
In most cases, when non-commercial traders have switched to a substantial net short or bearish position the economy has been experiencing a sharp slowdown or is already in recession.
Large net short positions in 1995, 1998, 2002, 2010 and 2015 were all associated with slowdowns or recessions according to contemporary statements or minutes from the U.S. Federal Reserve’s Open Market Committee.
The exception was the net short position at the end of 2004, which came six months after the Fed noted a “soft patch” in the expansion, by which time the economy was improving enough for the Fed to raise interest rates again.
Crucially, not all these episodes ended in a recession; some were transient slowdowns in an uninterrupted expansion.
But given this history, the large liquidation of speculative long positions in diesel futures during the fourth quarter of 2018 was consistent with a substantial deterioration in the economic outlook.
So what’s the right template? It feels like this is a China-driven downturn. Doesn’t that make the default template 1998? Or is the template 2015, when oil price weakness reflected a simple surplus of oil production over consumption?
pgl
Princeton Steven is once again all over the map trying to figure out what drives recessions as if there is only one potential driving force. His last weird suggestion certainly does not cut it:
“Starbucks will be the next US brand to warn of China trouble after Apple, Goldman Sachs says”.
OK – we know Princeton Steven flunked Econ 101 but he does not understand Starbucks or Apple. Chinese consumers buying less of their products has ZERO effect on the employment of people in the U.S. Why? Because final assembly of both types of product is done in China. The components? Well in Apple’s case, Foxconn (the assembler) buys components from other Asian manufacturers. OK Starbucks needs to buy coffee. FYI Steven – we do not export coffee to China as they buy coffee from other nations.
OK – these Chinese subsidiaries do pay royalties but don’t tell PeakTrader that as he thinks China steals our intellectual property. Then again Apple’s case, the royalties end up in Bermuda tax free.
I thought everyone knew this but apparently not Princeton Steven!
pgl
Now if Princeton Steven was serious about this idea that a slowdown in the Chinese economy could hurt U.S. employment, he might try to figure out what we export to China which Census makes easy:
The three items that jump out with exports in 2017 topping $10 billion are soybeans, cars, and airplanes. Our host has discussed soybeans a lot and it will be the stupid trade war Trump started that has really bitten. But at least the Chinese will always buy American made cars and planes – right? Oh wait – the Chinese are figuring out how to make both products at home. Never mind!
Note to Princeton Steven – Census is NOT reporting a lot of coffee exports to China. But you are worried about less Starbucks sales in China leading to a U.S. recession? Seriously?
pgl
Brad Setser has an excellent discussion on what the U.S. exports to China (as well as why our exports have risen by so little):
‘Federal workers who are without pay as the government shutdown drags on actually have it pretty good, according to Kevin Hassett, the chairman of the White House Council of Economic Advisers. He told PBS’ “NewsHour” Thursday that a lot of federal employees were already planning to take time off between Christmas and the New Year — and so the government shutdown essentially gives them a vacation for free.’
I know some people think Kevin DOW 36000 Hassett is a nice guy – just one prone to say a lot of stupid things. But the only free aspect of this is the fact that the U.S. Treasury is not being charged for these alleged vacations. Mocking people who cannot pay the bills right now is just plain cruel. In a normal world Hassett would be forced to resign for such a pathetic statement. But we live in Trump World. Ahem!
pgl
The Usual Suspects here have been calling for that “national emergency”. It seems Trump is not doing this right away:
What’s the matter Donnie – are you too chicken of the lawsuits might be that you cannot even carry out your stupid national emergency threat? Trump is not a deal maker, Trump is not a leader. He is one loud mouth coward.
I’ll take the under. There is no point prolonging this. The Dems ain’t gonna give, a prolonged shutdown probably only hurts Trump, and he has a viable alternative in declaring a National Emergency.
We almost agree on something. The National Emergency play is going to be challenged in the courts. Of course a court fight will give Anne Coulter an orgasm.
Declaring a fake national emergency does seem likely. The good news is that it also means we won’t be wasting any money on that stupid wall. Trump will declare a national emergency, reopen the government, tell his gullible base what a strong leader he is, and then nothing happens. The Pentagon will slow walk this to death waiting for the courts to shoot it down. At this point all Trump cares about is maintaining the illusion that he still has two testicles.
Looking longer term I don’t understand why Trump thinks it’s to his personal advantage to pick a fight with Democrats, unless he’s operating under the delusion that he still has a chance of winning re-election in 2020. A more sober assessment would tell him that his chances of winning re-election are slim to none, so he should be looking to find ways to make friends for life after 2020. At this rate the Democrats in Congress and in New York will be going after him personally as well as his family and family business. Jared and Don Jr are staring at real prison time. Maybe Jared could reserve the family cell his father had while in federal prison. The Trump organization will be gutted. Princess Ivanka will have to set up a Go Fund Me page. The smart play would be to make nice with the Democrats over the next two years and then bow out of any re-election effort. He’d at least have a decent chance of quietly riding off into the sunset. And that leads to the real nightmare scenario; viz., Trump looking at defeat in Nov 2020 and suspending elections because of a “national emergency” that he manufactures. And that’s the nightmare that keeps a lot of high ranking officers asleep at night…or so I’ve been told.
“The good news is that it also means we won’t be wasting any money on that stupid wall.”
You are likely right here but betcha we will see a lot of money wasted on lawyers.
I, too, will take the under, but for a different reason. I think the Congressional Republicans run out of guts before next weekend.
You don’t want to be the Republican Senator running in 2020 whose opponents asserts, “Remember that guy? He’s the one who prevented you from flying, who held up your paycheck, who failed to pay your Social Security, and who left the country unprotected. Yeah, that’s the guy.”
I give them a week until they fold.
Pass the popcorn.
We have:
A president suggesting to reverse decades of pentagon mission creep and end a quagmire with no link to the common defense shouted down by the liberal wing of the perpetual party, and the neocon mass media…….. not a politician his mind is not set on the next election above all else. and DS!!
A disloyal opposition of monied liberals cutting off money for a senseless public works project, a huge reversal of the stripes.
As a negotiator Pelosi needs to keep working for her PAC money……. Holding hostage featherbedded, pampered employees, who never felt the downs of the business cycle, who enjoy by far the best retirement system in the US!!!
Oh! The humanity!
You have won the prize for the most irrelevant babble ever written. Then again I always suspected your Russian bot programming would short circuit. Time for Putin to recall you.
why the anger towards federal employees? they are typically highly educated and have worked hard to secure a future. every time we replace a federal worker with a government contract position, the amount and quality of work deteriorates, because you have a “number” holding that position simply to bill the government project a certain number of hours. very little accountability. even if you do fire the contract company and bring on a new one, you do understand the lost efficiency in such a move is enormous?
at any rate, not sure why trump needs to hold government workers hostage in order to pay for a wall he promised that mexico would cover. or just like with rick stryker, you are ok with the fact trump lied about mexico paying for the wall as an argument to get elected, when all along he had not plan for mexico to pay for the wall?
ilsm is angry at everyone. I guess someone kicked his dog as he stole ilsm’s former wife from him. Get used to more of his inane babbling.
heh
babbled,
I am retired DoD civilian! Worked as tech manager in weapon system acquisition after being in the field……… How the replacing beltway bandits aka A&AS contractors could be any worse than the modern crop of GS needs to be pondered!
pgl
what about over under did you miss in my observations over the (equally) amoral vacillations of both sides in this circular firing squad going on between 1600 Pa Ave and the “hill”??
“I am retired DoD civilian!”
That is your excuse for becoming a raving maniac? Sorry dude – but I don’t take bets with insane people.
“How the replacing beltway bandits aka A&AS contractors could be any worse than the modern crop of GS needs to be pondered!”
just a personal anecdote. i was invited to work at a dod facility for a few months a number of years ago. my experience was that the federal workers i encountered on the site were much more diligent about producing a successful outcome for the project. the contractors, who sat in office right next door and at first never new they were not direct federal workers, had much less loyalty to the location and success of the projects. after a few months, i could typically tell which folks were contractors and which were fed workers. was not impressed with the contractors. have a brother who also worked many years as a contractor, and he finally quit because the name of the game became billing the contract rather than the work. his team was filled with people with absolutely no technical expertise in the field of his projects-hence they never really delivered good product. he and the government would have been better served if he were a fed employee. he took pride in his work.
ilsm, you may have had a different experience, but this is one of mine.
ilsm pampered employees, who never felt the downs of the business cycle,
This is simply wrong on the facts. Government employment tends to be counter-cyclical, which is not the same as being immune from the business cycle. During recessions government employment looks relatively attractive and demand for government workers tends to increase. So during recessions private sector workers tend to be envious of government workers. But during economic expansions government employment looks relatively unattractive because real wages of government workers tends to fall. For example, during the Carter years government employees endured wage freezes while inflation was in double digits. That’s when Carter and Reagan thought we needed to balance the budget on the backs of federal workers. During the Clinton years it was very difficult to recruit and keep government employees, which is one reason why there’s this employment problem that RAND describes as a “bow wave”. And Obama kept pay raises under the rate of inflation, which is a real cut. Now it is true that government workers tend to be less exposed to the risk of unemployment, but that doesn’t mean they are immune from the effects of the business cycle.
Also, private sector employees always have the option of quitting. That’s not true of critical government workers. They can be compelled to work and denied permission to quit or retire.
Miike J.
The last RIF in DoD was end of Vietnam.
Yeah, there were recruiting stalls/moratoria during the period when Carter was paying down Vietnam Debt. Then also the end strength numbers were declining.
Reagan had a bump on GS hiring, especially after the pentagon got caught buying golden toilet seats and $800 hammers.
Where I was during Clinton, end of cold war, slots going down recruiting not happening………. And a few senior folk decided small GS numbers and lots of A&AS. No RIF’s
We are talking about employees in sections of the government that are not funded. Which means your latest insane rants are irrelevant as DoD is fully funded right now. Then again – your rants are off topic 100% of the time.
Trump likely does not have the authority to build his vanity wall after all (his racist base needs to get past this):
https://www.nbcnews.com/politics/donald-trump/national-emergency-there-are-borders-president-s-executive-powers-n956111
most of the president’s emergency power derives from statute — laws enacted by the same Congress that might now oppose his actions. The Brennan Center for Justice has identified 136 statutory powers available to the president upon declaration of a national emergency.
So, then, the source and extent of the president’s emergency power is complicated. His authority to act contrary to the wishes of Congress is also complicated. It’s happened before, and the Supreme Court has weighed in.
In the middle of the Korean War, in 1952, facing a threatened strike by steelworkers and the loss of critical war production, President Harry Truman invoked his emergency powers and directed his secretary of commerce “to take possession of the steel mills, and to keep them operating.”
The steel mill owners immediately filed suit, and, in record time, the case arrived at the Supreme Court, which struck down the executive order. The six justices in the majority each wrote separate opinions, meaning they arrived at this conclusion for different reasons. In this landmark case, Youngstown Sheet & Tube Co. v. Sawyer (Truman’s secretary of commerce), the assertion of emergency power ultimately failed because it lacked authorization “from an act of Congress or from the Constitution itself.”
Good to know that Rick Stryker says Trump doesn’t lie:
“When during the campaign, I would say ‘Mexico is going to pay for it,’ obviously, I never said this, and I never meant they’re gonna write out a check, I said they’re going to pay for it. They are,” he said as he prepared to depart the White House for the southern border.
https://www.cnn.com/2019/01/10/politics/trump-mexico-pay-wall/index.html
I guess Trump’s first wife was right when she said that his drug abuse during the 1980s affected his brain.
He expected El Chapo to pay for the wall in stacks of $100 bills!
It will be after, all right. I would put it at sometime in February.
Trump’s visit to the border (and talks with those on the ‘front lines’ of border security) will likely help extend the shutdown, unless the whole show can be held down to a non event.
I’m more interested in what Michael Cohen is going to tell Congress on February 7!
In related news, there are no doubt quite a few Trumpers excited to hear Trump once again threaten California by cutting off future FEMA funds for disaster victims.
All those billions the government is sending to California will stop if the state doesn’t begin more effective raking, especially in the national forests, which comprise close to 60% of the forested areas in the state. (No mention, of course, of the billions collected in taxes from Californians or of the billions to be spent by the state, which, by the way controls about 2% of forests within the state. Private landowners control the rest)
From a political standpoint, most of the areas/counties–especially in the north–where large wildfires have occurred and are home to numerous national forests–are filled with majorities of Trump voters. Look at any red-blue map of voting patterns and, as you move north of Sacramento- most -counties were all in for Trump. No more obvious than Shasta County and the Shasta-Trinity NF where Trump received over 60% of the vote. (Ironically, this summer’s Carr Fire started on a highway, not in any forested area)
The Republican congressman, whose district includes many NF areas including Paradise, actually mouthed some displeasure at Trump’s comments. (Surprise, since Rep. LaMalfa has been a reliable Trump bootlicker and solid supporter of attempts to shatter health care protections and to punish the 30%+ of his constituents who itemize their income taxes). I don’t expect too much though. As long as his rice subsidies remain in tact and as long as the government pays most of his crop insurance premiums, he’ll be ok.
Not to worry. He’s a wall builder. He’ll lather Glorious Leader’s boots whenever.
Perhaps wishful thinking over at Breitbart. “Congressional Democrats are ditching House Speaker Nancy Pelosi’s and Senate Minority Leader Chuck Schumer’s ardent opposition to any barrier or wall along the U.S. border with Mexico, as the partial government shutdown continues and President Donald Trump takes his case directly to the border itself.”
““If we have a partial wall, if we have fencing, if we have technology used to keep our border safe, all of that is fine,” Rep. Cheri Bustos (D-IL), the chairwoman of the Democratic Congressional Campaign Committee (DCCC), said on CNN.
“Certainly you need barriers and we support barriers,” Sen. Ben Cardin (D-MD) added.
Sen. Jeff Merkley (D-OR) also backed a barrier along the U.S. border with Mexico.
“Some fencing is useful, some barriers are useful,” Merkley said. “There’s a lot of surveillance technology. I’ve been to some cities on the border that have triple fencing and have more personnel and have the technology to see the people moving in the middle of the night.”
https://www.breitbart.com/politics/2019/01/10/democrats-crack-on-the-wall/
Polling must be going terribly. After all the Dems slogan “Wall don’t work” defies all common sense.
All of this is supported by Schumer and Pelosi. They oppose the stupid racist wall that Trump wants to put his name on. But do obscure the issue as your fearless leader certainly is doing so.
Sammy, why am I not having trouble seeing you in the audience shouting “Build that wall”, the one Glorious Leader assured you Mexico would pay for?
Oh, not the barriers you just described. The one to be overseen by the master builder himself: 35 feet high, constructed with modular concrete panels that would stretch 2000 miles from the Pacific to the Gulf of Mexico. The one that would easily be built where no current infrastructure even exists.
But if you really believe “walls work” to solve all border and immigration problems, you might want to contact me regarding my ocean front Death Valley property which can be yours for a low down payment as well as low monthly installments. I have a bridge for sale that might interest you too.
Actually Trump intends to have the Puerto Ricans pay for his stupid wall. National emergency so he can rob FEMA money earmarked for relief efforts in the aftermath of Maria. You and I would call this even more racist garbage but Trump’s base calls it a win, win.
News alert today from McClatchy: “President Donald Trump is reportedly considering raiding disaster recovery funding—including more than $1.7 Billion for Sacramento area flood protection projects—to help pay for his wall on the southern border”
As Rep. Doris Matsui noted, “This allocation…was designated because the Corps of Engineers recognized the severe flood risk Sacramento faces as the second most flood prone city in America.”
And, Yuba County (solid Trump country) “is also worried about losing $13.5 million in funding for a flood control project to protect Marysville.”
(Explainer for non Californians: much of the $1.7 billion would be earmarked to elevate the height of Folsom Dam which provides flood protection–and drinking and irrigation water for Sacramento and the regions below it. Yes, it’s next door to Folsom Prison)
Trump’s idea of a compromise:
https://talkingpointsmemo.com/news/trump-offers-peaches-possible-name-border-wall
But my stupid wall and I will let you call it peaches.
Lord Trump is really, incredibly STUPID!
What is the right analog for today regarding the prospects for recession?
From John Kemp of Reuters this morning:
Middle distillate consumption and prices are therefore more closely tied to the state of the economy than other refined fuels such as gasoline. (https://tmsnrt.rs/2HjMiXV)
For the last 25 years, hedge funds and other speculators, collectively termed “non-commercial traders”, have mostly held a net long or bullish position in distillate futures and options.
The typical net long position reflects the overall expansion of the U.S. and global economies (expansions have been long while recessions have been relatively short).
In most cases, when non-commercial traders have switched to a substantial net short or bearish position the economy has been experiencing a sharp slowdown or is already in recession.
Large net short positions in 1995, 1998, 2002, 2010 and 2015 were all associated with slowdowns or recessions according to contemporary statements or minutes from the U.S. Federal Reserve’s Open Market Committee.
The exception was the net short position at the end of 2004, which came six months after the Fed noted a “soft patch” in the expansion, by which time the economy was improving enough for the Fed to raise interest rates again.
Crucially, not all these episodes ended in a recession; some were transient slowdowns in an uninterrupted expansion.
But given this history, the large liquidation of speculative long positions in diesel futures during the fourth quarter of 2018 was consistent with a substantial deterioration in the economic outlook.
From CNBC:
Starbucks will be the next US brand to warn of China trouble after Apple, Goldman Sachs says
https://www.cnbc.com/2019/01/11/goldman-starbucks-will-be-next-us-brand-to-warn-of-china-trouble.html
So what’s the right template? It feels like this is a China-driven downturn. Doesn’t that make the default template 1998? Or is the template 2015, when oil price weakness reflected a simple surplus of oil production over consumption?
Princeton Steven is once again all over the map trying to figure out what drives recessions as if there is only one potential driving force. His last weird suggestion certainly does not cut it:
“Starbucks will be the next US brand to warn of China trouble after Apple, Goldman Sachs says”.
OK – we know Princeton Steven flunked Econ 101 but he does not understand Starbucks or Apple. Chinese consumers buying less of their products has ZERO effect on the employment of people in the U.S. Why? Because final assembly of both types of product is done in China. The components? Well in Apple’s case, Foxconn (the assembler) buys components from other Asian manufacturers. OK Starbucks needs to buy coffee. FYI Steven – we do not export coffee to China as they buy coffee from other nations.
OK – these Chinese subsidiaries do pay royalties but don’t tell PeakTrader that as he thinks China steals our intellectual property. Then again Apple’s case, the royalties end up in Bermuda tax free.
I thought everyone knew this but apparently not Princeton Steven!
Now if Princeton Steven was serious about this idea that a slowdown in the Chinese economy could hurt U.S. employment, he might try to figure out what we export to China which Census makes easy:
https://www.census.gov/foreign-trade/statistics/product/enduse/exports/c5700.html
The three items that jump out with exports in 2017 topping $10 billion are soybeans, cars, and airplanes. Our host has discussed soybeans a lot and it will be the stupid trade war Trump started that has really bitten. But at least the Chinese will always buy American made cars and planes – right? Oh wait – the Chinese are figuring out how to make both products at home. Never mind!
Note to Princeton Steven – Census is NOT reporting a lot of coffee exports to China. But you are worried about less Starbucks sales in China leading to a U.S. recession? Seriously?
Brad Setser has an excellent discussion on what the U.S. exports to China (as well as why our exports have risen by so little):
https://www.cfr.org/blog/why-havent-us-exports-manufactures-kept-pace-chinas-growth
No mention of Starbucks coffee but lots of discussions re cars and planes.
WH Economist: Fed Workers Actually ‘Better Off’
https://talkingpointsmemo.com/news/kevin-hassett-federal-employees-better-off
‘Federal workers who are without pay as the government shutdown drags on actually have it pretty good, according to Kevin Hassett, the chairman of the White House Council of Economic Advisers. He told PBS’ “NewsHour” Thursday that a lot of federal employees were already planning to take time off between Christmas and the New Year — and so the government shutdown essentially gives them a vacation for free.’
I know some people think Kevin DOW 36000 Hassett is a nice guy – just one prone to say a lot of stupid things. But the only free aspect of this is the fact that the U.S. Treasury is not being charged for these alleged vacations. Mocking people who cannot pay the bills right now is just plain cruel. In a normal world Hassett would be forced to resign for such a pathetic statement. But we live in Trump World. Ahem!
The Usual Suspects here have been calling for that “national emergency”. It seems Trump is not doing this right away:
https://talkingpointsmemo.com/news/trump-backs-off-national-emergency
What’s the matter Donnie – are you too chicken of the lawsuits might be that you cannot even carry out your stupid national emergency threat? Trump is not a deal maker, Trump is not a leader. He is one loud mouth coward.