Tag: U.S. economy

Trump has one playbook, and very few plays left in it

Washington Post logoAfter a week in which the threat of recession rocked global financial markets, his trade war with China showed no signs of progress and the government of Israel got into a nasty dispute with two members of Congress, President Trump went to bed Thursday night with other weighty issues on his mind.

“Great news,” he tweeted. “Tonight we broke the all-time attendance record previously held by Elton John at #SNHUArena [Southern New Hampshire University] in Manchester!”

This is the frivolous mind-set of the president of the United States. Trump’s statements over the past few days have brought into focus once again something fundamental about him: He has little understanding of what it means to govern. He would rather tweet from the bleachers.

View the complete August 17 article by Dan Balz on The Washington Post website here.

The Memo: Trump pushes back amid signs of economic slowdown

The Hill logoSigns of a slowdown in the economy are spelling danger for President Trump’s chances of reelection.

But he is doing everything he can to push back on the harbingers of gloom — and to shift the blame for any adverse developments.

Trump has lashed out several times at Federal Reserve Chairman Jerome Powell, whom he has accused of not cutting interest rates enough. He has argued that if a Democrat were to beat him next year, the economy would “go down the tubes.” And he has suggested that predictions of an economic downturn are being ginned up by a hostile media.

View the complete August 18 article by Niall Stanage on The Hill website here.

What’s the Deal With That Inverted Yield Curve? A Sports Analogy Might Help

New York Times logoA bet by investors that the future will be worse than the present.

The financial world has been atwitter about the inversion of the yield curve. It is a phenomenon in the bond market in which longer-term interest rates fall below shorter-term interest rates, and has historically been a warning sign that a recession could be on the way.

This all seems obvious to people who are steeped in bond market math and the workings of fixed-income markets, and can be completely perplexing to those who are not.

Maybe a sports gambling analogy will make the intuition clearer.

Any adult can walk into a casino and bet on how an N.F.L. team will do this year. For example, bettors once again expect the New England Patriots to be an excellent team — that they are likely to win 11 or 12 out of their 16 games. Casinos will let you wager on how many games they will win this season.

View the complete August 15 article by Neil Irwin on The New York Times website here.

Wall Street Journal torches top Trump adviser for being the architect behind US economic chaos

AlterNet logoIn a blunt and uncharacteristically sarcastic broadside aimed at Donald Trump’s administration, an obviously furious editorial board of the conservative Wall Street Journal trashed adviser Peter Navarro for being the driving force behind policies that appear to be driving the entire world’s economy into recession.

With the market plummeting and the president trying to blame the Fed for the crashing economy, the editors of the Journal said the source of the economic chaos can be found in the White House.

“After we warned last week that U.S. trade policy was courting recession, White House aide Peter Navarro took to Fox Business to denounce us for sounding like The People’s Daily, the Chinese Communist propaganda arm,” the editorial began before snarling, “That was novel as criticisms of these columns go, but perhaps Mr. Navarro would care to comment again after Wednesday’s recession warning from the bond and equity markets? Are they Commies too?”

View the complete August 15 article by Tom Boggioni from Raw Story on the AlterNet website here.

Even amid recession warning, 2020 will hinge on the culture war

Washington Post logoIt is often argued by those on the left that Democratic candidates are proposing ideas that would actually better serve the working-class and middle-class Americans who are backing President Trump. But this argument assumes that it is the president’s economic policies that draw his supporters to him. Data doesn’t suggest that was the case in 2016. And that idea will be put to the test as Trump heads into 2020 facing uncertainties about the economy.

“It’s the economy, stupid” is a popular saying in political circles, intended to suggest that Americans vote based on how well the economy is doing. And part of the 2016 narrative suggested that was true. Economic anxiety was regularly touted as one of the main reasons Trump supporters chose him over Hillary Clinton.

As a result, Trump regularly points to what many economists have labeled a good economy when trying to convince voters that they are doing much better under his administration than they were before his election.

View the complete August 15 article by Eugene Scott on The Washington Post website here.

‘Raw ignorance and prejudice’: Paul Krugman explains how Trump and the GOP are risking a recession

AlterNet logoAfter rising on Tuesday, stocks tumbled on Wednesday. The Dow Jones Industrial Average fell more than 700 points on news that major European economies might be headed for recession.

At home, American analysts and investors have been spooked by President Donald Trump’s ongoing trade war with China, which has raised uncertainty about future investment and clearly triggered broader fears about macroeconomic stability. Looming over these worries is the fact of the inverted yield curve: 10-year bonds are now offering lower interest rates than 2-year bonds, a sign that investors are scrambling for somewhere safe to keep their money long term.

Economist Paul Krugman argued Wednesday that, while the world doesn’t appear to be facing a repeat of the 2008 financial crisis, the risk of a recession is indeed rising. And despite his boasts about his economic performance, Trump himself appears to be driving at least one major factor in the increased risk, while the GOP blocks potentially countervailing measures.

View the complete August 14 article by Cody Fenwick on the AlterNet website here.

‘It’s All Doom and Gloom.’ A Key Indicator of Recession Just Triggered in Both the U.S. and the U.K.

The stream of investors seeking refuge in the safest parts of the market has triggered yet another recession warning, with yield curves inverting from the U.S. to the U.K.

The gap between two- and 10-year yields dropped below zero on both sides of the Atlantic after a wave of soft economic data globally. Weaker-than-forecast Chinese retail sales and industrial output set the mood for the markets, with data later in the day showing Germany’s economy contracted, adding to the gloom.

“The bond market is saying central banks are behind the curve,” said Marc Ostwald, global strategist at ADM Investor Services in London. “It’s all doom and gloom on the global economy.”

View the complete August 14 article by John Ainger and Greg Ritchie from Bloomberg News on the Time website here.

Stocks fall as bond market signals recession

The Hill logoStocks sank sharply Wednesday morning after the U.S. bond market signaled an impending recession.

The Dow Jones Industrial Average, S&P 500 and the Nasdaq composite all dropped more than 1 percent as trading opened Wednesday, with shares of banks leading the losses.

The sell-off came shortly after the yield on 10-year U.S. Treasury bonds fell below the yield on two-year bonds for the first time since 2007. When 10-year bonds trade cheaper than 2-year bonds, a recession tends to follow within 12 to 18 months.

The Dow dropped more than 700 points, a 2.7-percent decline, shortly after 1 p.m. The S&P had fallen 2.7 percent, while the Nasdaq had lost 3 percent in that time.

View the complete August 14 article by Sylvan Lane on The Hill website here.

Corporate Governance and Workers

Center for American Progress logoWhy Today’s Economy Fails Working Families—and What To Do About It

The economic headlines are chock full of soaring corporate profits, booming CEO pay, and record share buybacks.1 Yet, America’s working families and communities are struggling to get by since wages and family wealth have barely budged after decades of stagnation. This is a dangerous situation, as the deep imbalances in how the U.S. economy works—and whom it fails to work well for—increasingly expose America to social and political division.

This issue brief explores why companies share their benefits overwhelmingly with those at the top, leaving little for working families. It discusses why this is the case and what can be done to shift corporate accountability and governance so that economic growth is genuine, lasting, and more equitably shared with working families.

A shift in corporate governance

The boards and managers running companies, especially public companies, respond to the stakeholders who have the power to make demands of them.2 Stakeholders include the consumers who buy their products and services; workers and suppliers who produce them; investors who provide capital and other know-how; and even communities who provide a clean, safe environment and educated workers.3 However, boards and managers have been implementing corporate governance strategies that prioritize Wall Street and corporate executives, over the rest of the stakeholders. Why are America’s companies so responsive to some stakeholders, to the detriment of others?

View the complete August 14 article by Andy Green, Christian E. Weller and Malkie Wall on the Center for American Progress website here.

Recession warnings pose 2020 threat to Trump

The Hill logoFears that a recession could hit the U.S. next year are growing on Wall Street, creating a potential headache for President Trump as he seeks to highlight the economy in his bid for a second term.

Economists at Bank of America, Goldman Sachs and Moody’s Analytics in the past few days all raised concerns that a recession between now and next year’s elections is becoming more likely. And they all pointed the finger of blame at Trump’s trade policy.

“I think recession is increasingly likely,” Mark Zandi, chief economist at Moody’s Analytics, said on Monday. “I’d put the odds at just over even for a recession between now and the end of 2020, assuming the president follows through on his tariff threats.”

View the complete August 13 article by Niv Ellis on The Hill website here.