19 December 2016

MacroView: OECD & Trump: Fiscal Initiatives to Escape Low-growth Trap

MacroView |  ©2016 DomainMondo.com
Domain Mondo's weekly review of  macro economic and investing news: 1. OECD & Trump; 2. Confidence higher since Trump election; 3. FOMC rate increase; 4. Dollar strengthens, gold falls; 5. Trump talked, Fed listened; 6. Caveat from Jeff Gundlach; 7. Trump Summit with Tech Leaders; 8. Did Russia Hack the DNC and Clinton campaign? Who cares? 9. Student loans, which lie did they believe? 10. Good investing is boring.
 
MacroView Feature •  OECD and Trump Agree: Use Fiscal Initiatives to Escape Low-growth Trap

Jamie Dimon: Blame Bad Public Policy for Slow Growth

Video above published Dec. 15, 2016: JPMorgan Chief Executive Officer Jamie Dimon discussed Detroit’s economic recovery and whether the techniques they are using could be replicated elsewhere with Bloomberg’s Megan Murphy.

Make better use of fiscal initiatives to escape low-growth trap, OECD says in latest Global Economic Outlook (OECD.org Nov 28, 2016):
"Among the major advanced economies, activity is expected to accelerate in the United States, due to an assumed easing of fiscal policy, with the economy projected to grow by 2.3% in 2017 and 3% in 2018. The euro area will grow at a 1.6% rate in 2017 and by 1.7% in 2018. In Japan, growth is projected at 1% in 2017 and 0.8% in 2018. The 35-country OECD area is projected to grow by 2% in 2017 and 2.3% in 2018, according to the Outlook.
"With rebalancing continuing in China, growth is expected to continue drifting lower, to 6.4% in 2017 and 6.1% in 2018. India’s growth rates are expected to hover above 7.5% over the 2017-18 period, but many emerging market economies will continue to grow at a more sluggish pace. The deep recession in Brazil is expected to end in 2017, after which the economy will grow at a 1.2% rate in 2018.
"The Outlook draws attention to conditions that create a “window of opportunity” for new fiscal initiatives, as extraordinarily accommodative monetary policy has led to very low interest rates and created fiscal space. A targeted annual increase in public spending of ½ percent of GDP could be financed for several years in most countries without increasing the debt-to-GDP ratio in the medium term. Combining this initiative with structural reforms, and acting collectively across countries, would boost the impact, according to the Outlook.
"“This is not a blank cheque for governments,” Mr Gurría said. “The OECD is calling for fiscal policy to be used more wisely, with spending targeted at areas that boost growth, like high-quality infrastructure investment, innovation, education and skills, which also make growth more inclusive.” Read the full speech.
The mission of the Organisation for Economic Co-operation and Development (OECD), Paris, France, is to promote policies that will improve the economic and social well-being of people around the world. The OECD's goal is "to build a stronger, cleaner and fairer world." Members and partners of the OECDFor more see:

2.  Consumer, business, CEO confidence higher since Trump election"Americans from all corners of the economy seem to be enjoying the conditions a lot more since the election of Donald Trump. Nearly every measure of consumer, business, or executive confidence has gained in the month since the election, according to Michelle Meyer, chief US economist at Bank of America Merrill Lynch."--BusinessInsider.com (P.S. Someone ought to tell Michelle Obama.)

3.  U.S. Federal Reserve FOMC Press Conference LIVE Video Replay 12/14/16The end of a flatline monetary policy?
source: Statista
4.  Dollar Climbs to Strongest Since 2003 on Fed Path; Bonds Drop | Bloomberg.com Dec 15, 2016: "The dollar climbed to the highest level since 2003 against the euro and gold plunged as the prospect of a steeper path for U.S. interest rates filtered through markets."

5. Trump Talked, the Fed Listened: Let’s Shrink the Balance Sheet, Bullard Says | WolfStreet.com

6. Caveat from Jeff Gundlach, December 13, 2016, webcast"... stocks typically rise in the days after an election, just as they have. But they drop after the president is sworn in, as investors realize that he does not have a magic wand to implement everything they are hopeful for ..."

7. Trump Summit with Tech LeadersTechReview: Silicon Valley's Pilgrimage to Trump Tower to Meet Trump.

8. Did Russia Hack the DNC and Clinton campaign? Who cares? If so, was it a good thing Wikileaks.org exposed Clinton & DNC corruption and collusion, including collusion with so-called mainstream media (MSM), the "rigged" Democratic primary against Bernie Sanders, all the conflicts of interest and "pay-to-play" schemes, and foreign government funding of the Clinton Foundation while Hillary was Secretary of State, $200-800,000 per speech fees, and all the other things the Clintons, the Clinton campaign, the Washington establishment, and mainstream media did not want us to know? I think you know the answer.
"Here are two of political history’s great constants: first, countries meddling in the internal affairs of others (both enemies and “friends”); and, second, bogus charges from a faction in one country that foreigners are meddling in its internal affairs to help another faction. Both are poison for any country that wishes to rule itself."--Jeremy Scahill, Jon Schwarz, TheIntercept.com
The WaPo-NYTimes-MSM narrative of Russian election hacking has become so incessant and emphatic that it’s easy to forget that no one has proven the claim. TheIntercept.com's Sam Biddle "sifted the public evidence, most of which comes from private security firms with a vested interest in the outcome, and found questionable assumptions, guesswork, and speculation." See Here’s the Public Evidence Russia Hacked the DNC — It’s Not Enough | TheIntercept.com December 14, 2016:
"It’s very hard to buy the argument that the Democrats were hacked by one of the most sophisticated, diabolical foreign intelligence services in history, and that we know this because they screwed up over and over again."
On the other hand, if you truly want to understand how and why Hillary Clinton lost the 2016 election, read How Clinton lost Michigan — and blew the election | POLITICO.com.

"People believe the news they want to ... The establishment is up for grabs."
--Lefsetz.com

9.  Which lie did they believe?--"Free government money, just sign here" or "With all the money you'll be making after college, the student loans won't be a problem"--Home ownership for those under 30 shrinks while student debt keeps growing:
Millennial (under age of 30) Home Ownership Shrinks as Student Loan Debt Grows

•  One More Thing: Good investing is boring
"If investing is entertaining, if you're having fun, you're probably not making any money. Good investing is boring."--George Soros
“Good investing is usually quite boring.”--Adam Nash, CEO of Wealthfront

-- John Poole, Editor, Domain Mondo  

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