Trump's trade war is economic suicide

[Theseus]

Why Ford Is Making This Huge Strategy Shift

By BILL SELESKY and JIM KELLEHER 

May 21, 2017

Ford recently announced plans to cut jobs and shift production away from sedans and toward sport utility vehicles and crossovers. The company’s commitment to the working truck, or pickup, market is unwavering. But de-emphasizing sedans—where Ford has had great success with models from Taurus to Fusion to Focus—is a noteworthy shift in strategy.

First and foremost, Ford is responding to evolving consumer tastes and uses. The “family” vehicle needs to fill multiple roles, from commuting to ferrying soccer players to delivering a night on the town. Crossovers and SUVs are better suited to this multi-tasking, with their roomy interiors and flexible seating and storage options.

Ford realizes that the sedan market is flooded with inexpensive imports from Hyundai, Kia, Nissan, and others. European automakers have a lock on the high-end sedan market, and—with the exception of a few vehicles such as the Lincoln MKS—Ford has limited investment in this area. For Ford to compete in the popularly priced sedan space, it needs to produce basic cars that eschew the sophisticated electronic systems that increasingly define the modern driving experience.

It’s chosen to instead include these enhancements in SUVS and crossovers—where consumer demand has been rising. These new vehicles are more fun to drive and in particular safer because of advances in vehicle technology. These enhancements span relatively mature categories such as anti-lock brakes and upgraded on-board computers and navigation systems to advanced driver assist systems, which provide everything from lane warnings to automated braking. New infotainment options turn the vehicle into an Internet hub.

The driver of this trend has been an increase in average sticker price. The average U.S. new vehicle price rose from around $31,000 in 2013 to around $35,000 in 2017, according to our propriety research. Growth in the dollar value of vehicle sales amid declining unit sales signals that consumers are willing to pay up for enhanced safety and a better driving experience.

 

http://fortune.com/2017/05/21/ford-motor-company-layoffs-job-salary-cuts-2017/

 

NOTE: Yes, they announced this before the Tariffs went into effect. So pluhlease  find something better.

Edited October 9, 2018 by Theseus

[Theseus]

Job cuts loom over Ford's mysterious 'fitness' plan

 

Phoebe Wall Howard, Detroit Free PressPublished 6:00 a.m. ET Sept. 6, 2018 | Updated 12:11 p.m. ET Sept. 6, 2018

 

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What’s next?

After a year of delays and missteps, Ford Motor Co. employees are warily awaiting details of CEO Jim Hackett’s promised “fitness” plan and whether it means job losses — as investors look for signs of hope.

Does $11 billion planned in "restructuring charges" over three to five years mean thousands of worker buyouts, as suggested by market analysts?

Will the money-losing European division face thousands of job cuts as the Sunday Times of London just reported?

Is default a real risk, after Moody’s Investment Services downgraded the Ford rating to just above junk status last week?

And what about Ford’s continuing struggle in China, the world's largest auto market? Can it ever gain traction?

“The problems for Ford now aren’t financial, they’re strategic,” said Marick Masters, a business professor at Wayne State University.

“The company needs to adjust to an industry changing rapidly, and no one knows where it’s going to end up in 10 to 15 years and who the major players will be. There is concern about whether or not it is being led in the right direction.”

No one knows what to expect from the Dearborn automaker — except its promise of more trucks and SUVs and the probability of significant job cuts with its restructuring. 

Jon Gabrielsen, a market economist who advises automakers and auto suppliers, said Ford simply can’t achieve its goals without cutting salaried jobs “quite significantly.”

In recent weeks, Morgan Stanley analyst Adam Jonas projected a 12 percent cut in Ford staff worldwide. 

“Ford’s operations need restructuring. We do not see restructuring at Ford as a ‘nice to have’ … but as a crucial step to set the global business on a more balanced footing,” Jonas wrote on Aug. 20.

 

Bob Shanks, chief financial officer at Ford, declined during an interview Wednesday to comment on the job cuts forecast. He acknowledged that the term restructuring, generally, suggests "workforce reduction and closures." 

"We do understand the concerns that they have and that they're expressing. We're not deaf or blind," he told the Free Press. "This is a company that's been successful for quite a long time."

He continued, "A year ago, we started a journey that's going to be a very fundamental redesign of our traditional auto business. It's a huge, huge transformation."

More: Ford recalls 2 million F-150 pickup trucks to fix seat belt defect causing fires

'Isn't what it needs to be'

"We're looking at a major redesign in our business, particularly overseas markets. That performance is not good. After years of hard work, restructuring, new products and changes, it just isn't what it needs to be. Parts of the business are very attractive and profitable, but too much are not. The bottom line is unacceptable."

He acknowledged "frustration" and promised to announce things "along the way."

"We have done enough work that we know the redesign will result in what we call restructuring," Shanks said. "We clearly have not been forthcoming in terms of any specific actions. But we have a very clear idea of where we're heading."

Bob Shanks, executive vice president and chief financial officer, Ford Motor Co. (Photo: Ford, Wieck)

 

Market analysts are openly annoyed.

“It’s all very vague,” said Ivan Drury, senior analyst for Edmunds. “I mean, last Friday, with no notice, they changed their plans again and just killed the Ford Focus Active. Even if it’s made in China, people want to buy the same car over and over again. Now they can’t.”

He added, “What is the actual path for Ford? It’s hard to see. There are a lot of trees and weeds and they need to take a machete and really clear that path for consumers and investors.”   

Read more:

Ford nixes import from China, blames trade war

 

Does Ford's SUV gamble signal trouble ahead?

 

Jonas has been harsh with Hackett publicly, pressing him for details, openly criticizing him for canceling an investor briefing and asking him directly in August whether he would be around to explain details.

Hackett, whom Ford declined to make available for this article, emphatically replied to Jonas that he has no plans to leave. 

No one can be sure whether Ford is strong or weak at this point, said Stephanie Brinley, a senior analyst at London-based IHS Markit.

“All the changes with the restructuring aren’t yet clear,” she said. “Some of the changes they’re waiting to implement, others (they) have already done. Volkswagen and General Motors are on their way, and to a lesser degree Toyota. In some respects, Ford is just cleaning up.

“It doesn’t seem like Jim Hackett has been embraced by the community at large as quickly as others," Brinley said. "The jury's still out."

Bet on this management?

Jonas emphasized that Ford’s $11-billion cost projection is “materially larger” than the previous $8.5 billion that analysts expected, and the lack of an investor update “contributed to investor anxiety.”

“Investors need to weigh the risk of betting on management delivering on an unknown plan that may take three to five years to play out … opening up to a range of potentially adverse economic and credit scenarios that could impede execution,” Jonas wrote.

“At this stage, we have assumed a global head-count reduction of approximately 12 percent. Such a magnitude of reduction is not without precedent in the auto industry and is coincidentally in line with market reports in 2017.”

Ford employs about 202,000 people worldwide. Analysts estimate separation costs, also called buyouts, to be roughly $120,000 per employee for Ford. Volkswagen announced its restructure plan two years ago and targeted 30,000 job cuts over five years at about $135,000 per employee, Jonas said.

“Decisive strategic actions and a cessation of negative revisions can improve investor confidence in management,” Jonas wrote in his forecast.

While Fiat Chrysler presented a five-year plan, Ford has been mum.

General Motors has already pulled out of Europe, earning praise for CEO Mary Barra.

About 300 of its top executives gathered last week in Dearborn for a global leadership meeting. The company declined a Free Press request to attend, as the meeting involved proprietary information. Company officials point to their ability to avoid the bankruptcy that befell GM and what then was Chrysler and build a $25-billion cash reserve.

To be sure, Ford is making money, having an earned adjusted pretax profit in 2017 of $8.4 billion. But second quarter 2018 profits were off 50 percent from the year before, and the stock price has been on a downward trend for four years.

Concern is abundant.

“Everybody was shocked when Ford said it was going to spend $11 billion to restructure,” said John McElroy, a longtime observer of the auto industry and host of "Autoline This Week" whose father retired from Ford.

“I think it caught Wall Street by surprise," he said. "Ford previously announced it would go through restructuring as it improves the fitness of the company, but I don’t think anybody expected it was going to cost so much to do it. Those numbers come from having to close down plants and get rid of people. This will be done through buyouts."

Treading water globally

Ford’s problems appear to be growing in Europe, South America and Asia.

“Look, Ford is treading water right now,” McElroy said.

Shanks said Ford will, "at the appropriate time, provide an overall narrative" and offer "proof points" to explain actions designed to improve the company. "It's not all doom and gloom. We're actually making a lot of progress in many parts of the business."

In fact, the company's August 2018 sales were up 4 percent from a year before and the profit-driving F-Series truck line is selling at a record pace for the year. 

Academics and industry analysts said that Ford has a reputation for cyclical bad strategy and eventual recovery, but it’s painful to watch.

“Ford goes through these transitions over time. They run into problems and then figure a way out of it, more than other auto companies,” said Robert Wiseman, senior associate dean at the Eli Broad College of Business at Michigan State University. “Will analysts be patient? I’m not sure.”

He bristled when asked whether Ford might cut dividend payments to stockholders, a mechanism that provides a nice return despite a chronically low stock price that pales when compared with General Motors.

“That’s one of the reasons the stock has been worth investing in,” Wiseman said. “I still own General Motors and Ford. GM has done well and Ford is taking a beating. I hope the restructuring will produce savings in the long run.”

The shift from sedan production to trucks is going to cost money, analysts agreed.

“Product is key,” said Dave Sullivan, manager of product analysis at AutoPacific Inc.

“Ford can't cut their products in hopes things will turn around. They have to either have a profitable lineup or pull out. This is especially true in South America. GM couldn't find the magic formula with Opel and made a very bold move. The glory days of diesel in Europe are gone and now Ford looks to be behind on the electrification front in Europe. Ford has gotten rid of Volvo, Jaguar, Land Rover, Mazda and Aston Martin. Is Ford looking to mirror their lineup after Jeep and Ram? Europe is really a tough place ... with some very attractive products with outstanding value.”

While the F-Series truck franchise is a cash cow in North America, Ford lacks any comparable product overseas. 

“It's hard to imagine Ford swallowing a pill like pulling out of South America or Europe but, at some point, the question is going to come up," Sullivan said. "Is Ford positioned for the next downturn in these markets?

"I do have hope that Ford and VW will quickly be able to pull something together to share developments costs (as is under discussion), but even then, it's going to be years to see substantial fruit from that. Maybe Ford could help VW with commercial vehicles in the U.S. and VW could help Ford with cars and electrification in Europe. It's not the first time Ford and VW have worked together, but it's something that should have happened eight years ago.”

Read more:

Ford investment rating cut to one notch above junk

Bill Ford on CEO Hackett: 'I love having him here'

International media coverage of Ford’s purchase of the Michigan Central Station has been positive, spotlighting the site as a recruitment tool for top talent in the industry. But observers worry about cash flow.

After nearly a year of waiting for Ford to speak up, one analyst said, “Wall Street patience is hanging by a thread.”

Ford pins all its hopes and dreams to the multibillion-dollar profits of its F-Series pickups.

“But North America can’t hold the water forever,” Sullivan. “The next economic downturn or supplier fire or global incident or trade meltdown could cause something tragic to happen because of the importance of the F-Series. They can’t sell those in Europe, South America or China. So what do you have that makes money in those markets? You can’t just continue in markets for the heck of it.”

Ford lost $73 million in Europe between April and June 2018.

And the sunny forecast for North America is expected to dim.

“Competitors will chip away,” Drury said. “FCA has had production issues with Ram, getting all the engine types available for consumers. But we’re seen on our website that the F-150 consumers are looking at the redesigned 2019 Ram 1500. There’s interest among consumers. In the large truck segment, loyalty is king. And the Chevrolet Silverado is coming, too.”             

As the 115-year-old company focuses on electrification and connectivity, it faces uncertain outcomes, said Kristin Dziczek, vice president of the Industry, Labor & Economics Group at the Center for Automotive Research in Ann Arbor. She worried that layoffs could cut too deeply.

“Ford has a lot of bets they’re making,” Dziczek said. “Everyone knows an economic slowdown is coming. A lot of companies are making preparations. I just don’t know how you gut everybody and still get the job done.”

Contact Phoebe Wall Howard: phoward@freepress.com or 313-222-6512. Follow her on Twitter @phoebesaid
This story has been modified to reflect that analyst Adam Jonas projects the bulk of 24,000 Ford global job cuts to be in Europe, not all of them.

 

[Theseus]

@bostonangler you need to find new sources man. The ones I posted undermine your theory Trump Tariffs are the reason for the job cuts. Bzzzzt! Wrong Answer.

Edited October 9, 2018 by Theseus

[bostonangler]

Every investor should take notice of PPG's warning

 

Third quarter earnings season is going to ramp up in the weeks ahead. And some of the most closely-watched comments out of U.S. corporate will be any color on how inflation, a strong dollar, and President Donald Trump’s trade war with China are impacting the business outlook for the rest of this year.

On Monday, Pittsburgh-based coatings giant PPG (PPG) threw out the book on what it says will be a poor third quarter, citing virtually every concern investors have about the macro environment while cutting its earnings forecast for the third and fourth quarters of this year.

In a press release published after the market close, PPG provided earnings guidance for the third and fourth quarters that was well below Wall Street expectations. The market’s reaction was swift and decisive — in early trading on Tuesday, shares were down as much as 8.7%.

“In the third quarter, we continued to experience significant raw material and elevating logistics cost inflation, including the effects from higher epoxy resin and increasing oil prices,” Michael McGarry, PPG chairman and CEO said in a statement on Monday.

“These inflationary impacts increased during the quarter and, as a result, we experienced the highest level of cost inflation since the cycle began two years ago. Also, during the quarter, we saw overall demand in China soften, and we experienced weaker automotive refinish sales as several of our U.S. and European customers are carrying high inventory levels due to lower end-use market demand. 

“Finally, the impact from weakening foreign currencies, primarily in emerging regions, has resulted in a year-over-year decrease in income of about $15 million. This lower demand, coupled with the currency effects, was impactful to our year-over-year earnings and is expected to continue for the balance of the year.”

So there it is: commodities are up, Chinese demand is softening, auto inventories are on the rise, and a strong dollar is eating away at foreign sales. Sometimes companies will flag one or two or these as weighing on business, but PPG’s third quarter was hampered by all four. One expects it isn’t the only company dealing with these stresses.

 

Shares of PPG were sharply lower on Tuesday after the company said its third quarter earnings would miss expectations, citing a number of key macro factors for the poor performance.

In the third quarter, PPG now expects to earn $1.47-$1.51 per share on an adjusted basis, below the Street’s forecast for earnings per share of $1.59. In the second quarter, PPG reported adjusted earnings per share of $1.90.

Net sales in the third quarter are forecast to be $3.8 billion, the same as a year ago and down from $4.1 billion in the second quarter.

Fourth quarter earnings are also now forecast to be $1.03-$1.13 per share on an adjusted basis, below estimates for earnings of $1.32.

“We are disappointed with the third quarter earnings results,” McGarry said.

“We continue to work proactively with our customers on higher selling prices to reflect the value of the products we sell and recover margins which have been negatively impacted by the raw material inflationary environment in all of our businesses. We will continue to aggressively manage our costs including accelerating restructuring activities wherever possible.”

And so while the U.S. economy continues to be defined by strong employment and modest inflation, a company “working proactively with its customers on higher selling prices” to recover margins does not sound like an environment where inflationary pressures are remaining at bay.

The market’s reaction to this news should also not be ignored. Last week, we noted that the trickle of S&P 500 companies reporting results over the last few weeks have seen investors punish poor quarters, with the average one-day stock reaction to results coming in at -1.2%. For companies that miss expectations, the average reaction in the second half of September was a drop of 3.5%. This trend appears to be holding.

And while PPG’s pre-announcement of a bad quarter isn’t on its own unique or out of the ordinary, as companies miss expectations all the time, the factors the PPG cites behind its current miss should grab the attention of every investor ahead of earnings season. These are all the risks that are out there, all in one place.

https://finance.yahoo.com/news/every-investor-take-notice-ppgs-warning-135846924.html

 

B/A

[bostonangler]

10 minutes ago, Theseus said:

@bostonangler you need to find new sources man. The ones I posted undermine your theory Trump Tariffs are the reason for the job cuts. Bzzzzt! Wrong Answer.

 

We shall see.... The economy is turning and who will people blame? Obama? The Deep State?

 

B/A

[Theseus]

One other thing, @bostonangler the chart you showed, how convenient that it shows Ford trading higher than January's high and still far above where they were five years ago. 

Edited October 9, 2018 by Theseus

[Theseus]

3 minutes ago, bostonangler said:

 

We shall see.... The economy is turning and who will people blame? Obama? The Deep State?

 

B/A

Yeah they will blame zero for a stagnant economy and Trump for growth and a vibrant economy where all-time job rates are at an all time low and income is rising for the middle class.

[bostonangler]

1 minute ago, Theseus said:

One other thing, @bostonangler the chart you showed, how convenient that it shows Ford trading higher than January's high and still far above where they were five years ago. 

 

Sure and it's trading much higher than it was after the Bush experience and his failed fiscal policies. Let's see where it's trading in a year... Trends don't happen in a day... The trends are obvious.

 

B/A

[Theseus]

1 minute ago, bostonangler said:

 

Sure and it's trading much higher than it was after the Bush experience and his failed fiscal policies. Let's see where it's trading in a year... Trends don't happen in a day... The trends are obvious.

 

B/A

You just don't get it, do you?, Obummer sucked worst recovery of a prez ever. Trump is winning. Enjoy the ride. The next demoRat prez will come in and be worse than Obummer. The recession of 2000's started with Clinton. Oops did I say that out loud. Yeah Clinton used Social Security funds to drum up phony numbers which Bush Jr. found out by August of his first year. Attention was taken away from that when 9/11 happened. Revisionist history will do you no good. 

[bigwave]

Trump Economic Director Kudlow on China – “You’ve Gotta Protect Our Technology Family Jewels… President Trump is Doing Just That” 

Larry Kudlow was on Sunday Morning Futures with Maria Bartiromo this past Sunday and he shared what President Trump is doing that prior Presidents only talked about.

Larry Kudlow this past weekend touted the explosive Trump economy on Sunday Morning Futures with Maria Bartiromo. The stock markets are up. Unemployment is down. Americans are making more money.

 

Then Kudlow mentioned one of the most courageous and stategic moves made by President Trump – to address the trade and information theft issues. Kudlow said –

 

Well look, this whole story on trade is coming together nicely. The President’s strategy appears to be working. we’ve seen this with USMCA [the new US, Mexico and Canada trade agreement]. Now, we’re holding trade negotiations with Europe.

 

We’re holding trade negotiations with Japan. We issued a tri-part letter, the three companies basically saying non-market economies, read China on that, have got to shape up. China is probably the biggest culprit as you know.  So look the key issues here [are] high tariffs, high non-tariff barriers, technology theft, intellectual property theft.

There’s a story in the paper yesterday, in the Wall Street Journal, “China expands its cyber security rule book, heightening foreign corporate concern”.  This is brand new.  They’re putting in new rules that will permit Chinese officials to inspect US companies and all foreign companies  information tech and access proprietary information.

This is exactly a step in the wrong direction.  This is forced technology transfer.  This is IP theft.  This is exactly what we’ve been warning about.  We’ve tried to communicate these concerns to China.  So far we’ve not had luck.  Look, we’ll talk to them.  Serious and significant talks any time but it looks to me like they’re moving in the wrong direction.  Right now, I think this is most unfortunate.

 

You know, you talk about national security issues, I can talk about economic security issues.  Why should we allow the Chinese to own American companies in China and moreover force us to lay out all of our technology blue prints in the name of cyber security, which by the way, they way they cyber hack us constantly.  Why should we give them new advantages in the race for technology.  That’s a big problem going forward.

https://www.thegatewaypundit.com/2018/10/trump-economic-director-kudlow-on-china-youve-gotta-protect-our-technology-family-jewels-president-trump-is-doing-just-that-video/

[bostonangler]

Just now, Theseus said:

You just don't get it, do you?, Obummer sucked worst recovery of a prez ever. Trump is winning. Enjoy the ride. The next demoRat prez will come in and be worse than Obummer. The recession of 2000's started with Clinton. Oops did I say that out loud. Yeah Clinton used Social Security funds to drum up phony numbers which Bush Jr. found out by August of his first year. Attention was taken away from that when 9/11 happened. Revisionist history will do you no good. 

 

I think you need to check your charts... The economic collapse followed Bush, and he and Chaney handed the next administration the biggest pile of crap in U.S. history. Yes it took a lot to turn things around from the deregulated "Banksters" and Bush's bailouts, but where we are now headed promises to be grim... 

 

B/A

[bostonangler]

1 minute ago, bigwave said:

Larry Kudlow

 

Worst record of economic predictions in CNBC history... 

 

B/A

[bostonangler]

 

The rich-poor gap is getting worse under Trump

 

Middle-class families are doing a little bit better under President Trump. Jobs are plentiful in many places and incomes are finally starting to rise by more than inflation.

But income inequality in the United States is getting worse, and Trump’s policies have something to do with it, according to new research from Moody’s Investors Service, the bond-rating agency. While middle-income earners got a modest tax cut from last year’s Tax Cuts and Jobs Act, higher earners got a much larger windfall. And that comes as other forces have been widening the gap between the rich and the rest.

The result could be even more political upheaval than we’ve seen during the Trump reign, beginning, perhaps, with the midterm elections next month. “Should inequality go unaddressed,” the Moody’s report asserts, “social tensions will continue to rise, leading to a more fractious political landscape that increases political risk, and with it a less predictable policy environment.”

 

Top earners have been seeing the biggest income gains. Source: Moody’s

More

Income inequality became a hot topic following the Great Recession, starting with the Occupy Wall Street protests that spread nationwide in 2011. Thomas Piketty’s 2013 book, “Capital in the Twenty-First Century,” contained convincing quantitative evidence that the top 1% of earners — and above them, the 0.1% – have gained an ever-larger share of wealth in the western world during the last quarter-century.

Trump’s election in 2016 was itself an expression of frustration with stalled middle-class living standards, with Trump promising to “make America great again” for workers whose better days seemed behind them. About 40% of Trump voters were anti-elites or America-firsters, according to one detailed study, way more than enough to put him over the top.

But Trump’s policies seem more likely to widen the rich-poor gap than reduce it. Trump is trying to bring back manufacturing jobs, through tariffs on imports and other protectionist measures. But there’s no evidence yet that it’s happening, and economists are skeptical. Production may simply shift from tariffed countries, such as China, to un-tariffed ones, such as Vietnam. In the meanwhile, Trump’s tariffs threaten to raise prices on thousands of industrial and consumer products.

The tax cuts gave some relief to the middle class, and more is supposed to trickle down from the business sector as corporate tax cuts boost profits and leave more money for investing. But Moody’s doesn’t see that happening, because tax cuts were bigger for higher earners, who also benefit disproportionately from a reduction in the corporate tax rate from 35% to 21%.

 

As tax cuts boost stock prices, the wealthy benefit the most. Source: Moody’s

More

“The Tax Cuts and Jobs Act will contribute to the widening of the U.S.’s inequality by exacerbating income and wealth concentration,” Moody’s concludes. “Overall, the tax reform disproportionately benefits households with high incomes and very high levels of wealth.”

Income inequality is worse in the United States than in most other developed nations, for a variety of reasons. Americans pay far more for education and health care, for instance, leaving less disposable income for middle earners. That’s because the government bears a larger share of such services in Europe and other places. The cost of a 4-year college degree is about 120% of average household income in the United States, for example. In Germany, it’s just 6%, because the government subsidizes post-secondary education.

 

Another factor enlarging the rich-poor gap is technological change, which benefits those with the resources to stay educated and learn new things, while punishing those dependent upon a fixed skill set. While Trump wants to bring back more lower-skill assembly-line jobs, he doesn’t have a policy for drawing more workers into the technology economy, which many labor advocates say is the best way to help raise living standards.

 

The more you earn, the more you’ll benefit from the Trump tax cuts. Source: Moody’s

 

 

Republicans seem surprised by the unpopularity of their tax cuts, which were designed in part to win votes by putting more money in people’s pockets. A middle-income taxpayer will save about $780 per year from the tax cuts, on average, according to the Tax Policy Center. But the average 1-percenter will save nearly $33,000, which helps explain why roughly 46% of Americans disapprove of the tax cuts. Just 41% approve.

Moody’s cares about income inequality because it factors into the creditworthiness of U.S. government bonds, which Moody’s currently rates Aaa, its highest level. But the rating agency sees risks. “Rising inequality will exacerbate pressures on the U.S.’s fiscal strength,” the agency says. The reasons: As lower-income households fall further behind, they’ll need more government support, straining federal budgets. Research also shows that higher income inequality tends to be associated with lower economic growth, which limits prosperity and depresses government tax revenue.

The federal deficit was $898 billion through the first 11 months of fiscal 2018, which ended in September. The deficit could easily top $1 trillion for the year, once the final tally is in. Last year, before the Trump tax cuts, the deficit was $667 billion. Overall, the national debt is about $21.6 trillion, which is more than the entire annual output of the U.S. economy.

That’s okay, for now, but Moody’s sees interest payments on U.S. debt rising from 8% of the federal budget now to 15% in a decade, which means there will be less money for government benefits. If current trends continue, a crunch is coming, with Uncle Sam either forced to slash benefits such as Social Security and Medicare, or raise taxes on the wealthy. As fractious as the Trump years have been so far, they might seem pleasant compared with what’s coming.

https://finance.yahoo.com/news/rich-poor-gap-getting-worse-trump-193238702.html

 

 

 

Trickle down economics.... Where have I heard that before?

B/A

[coorslite21]

Just wait BA......this whole thing is going to implode soon......stocks down 90%....riots......starvation..........really.....I read it on the internet!!!!!!!

[caz1104]

1 hour ago, bostonangler said:

 

I think you need to check your charts... The economic collapse followed Bush, and he and Chaney handed the next administration the biggest pile of crap in U.S. history. Yes it took a lot to turn things around from the deregulated "Banksters" and Bush's bailouts, but where we are now headed promises to be grim... 

 

B/A

But of course your not a LIB......just another example of middle of the road....NOT

[caz1104]

1 hour ago, bostonangler said:

 

Worst record of economic predictions in CNBC history... 

 

B/A

Using a FARRRRRRR left leaning media outlet....boy that's middle of the road....I bet your remote only goes to NBC, CBS, ABC, PBS, CNBC, & CNN.....whoa that's how folks get both sides of an issue.....listening to one side

[bostonangler]

I'm sorry you guys can't deal with the reality of basic economics. Multi-Nationals are not just simply going to give their tax cut profits to American workers. I bring story after story of giant corporations and economic experts telling us the market bubble is just that a bubble, but some people refuse to see the light. Markets go up and markets go down. I only hope you take your profits from the last 10 years and put them on the sidelines so when this bubble does burst you will have cash to buy in low and ride the next wave. That's how investing works, not just sitting there thinking it will go up forever because of our government.... Wall Street is based on greed not party affiliation... JMHO

 

B/A

[caz1104]

BS....if its anti right u either respond in like or you bring hatch piece over....if it quacks like a duck....it's BA. Real men/women own it....for some reason u hide behind urs

[coorslite21]

15 minutes ago, bostonangler said:

I'm sorry you guys can't deal with the reality of basic economics. Multi-Nationals are not just simply going to give their tax cut profits to American workers. I bring story after story of giant corporations and economic experts telling us the market bubble is just that a bubble, but some people refuse to see the light. Markets go up and markets go down. I only hope you take your profits from the last 10 years and put them on the sidelines so when this bubble does burst you will have cash to buy in low and ride the next wave. That's how investing works, not just sitting there thinking it will go up forever because of our government.... Wall Street is based on greed not party affiliation... JMHO

 

B/A

Hey.....I tried to throw some support your way....and you redified me......darn!!!

[caz1104]

Of course markets swing....JUST NOT ONLY UNDER CONSERVATIVE ADMIN

Edited October 9, 2018 by caz1104

[pokerplayer]

8 minutes ago, coorslite21 said:

Hey.....I tried to throw some support system" rel="">support your way....and you redified me......darn!!!

 

Got your 6 CL

 

   pp

[bostonangler]

1 hour ago, coorslite21 said:

Hey.....I tried to throw some support system" rel="">support your way....and you redified me......darn!!!

 

Thanks CL... I didn't mean to offend... I just try to point out to people that we have had a great run, our investments have grown immensely and there comes a time to book some profits. This market isn't based on any U.S. president and people shouldn't believe that is the engine pulling this train. Markets work in cycles and this cycle is coming to an end. Cutting income and raising debt along with higher interest rates points to a slow down. The big money will take their cash and the small investor will be standing there thinking "what just happened". 

 

Based on the last cycle people saw their retirement savings go down very quickly. Yes, they have come back and most accounts are worth more than they were. But if people had booked their profits when the last crash started and then took their profits and bought back in after things bottomed out, their accounts would be about 3 times what they are now.

 

If people do nothing now before this next crash comes, they will eventually get their money back, but it may take 10 years and personally, I don't have that time to wait. I'm not getting any younger, and the money I've made over the last 10 years is sitting on the sidelines waiting for the next buying opportunity. If I was in my 30's I might be less proactive, but at my age I can't lose half my savings and then wait 10 years for the market to cycle back around.

 

If anyone thinks the markets are going to go up without a correction because Trump or anyone else is in office, they need to go do a little research on how the markets work.

 

B/A

[Theseus]

6 hours ago, bostonangler said:

 

Worst record of economic predictions in CNBC history... 

 

B/A

CNBC? Okay, say no more. The parrot is only sleeping. Say no more. 

[bostonangler]

Trump's New Chinese Tariffs Are Hitting Dollar Tree Stores

 

President Donald Trump’s new 10% tariff on Chinese imports is impacting low- and middle-income customers somewhere you might not expect: Dollar Tree.

Unlike previous tariffs that targeted industrial goods, the new duty enacted last month hits consumer items, many of which are sold at Dollar Tree and Family Dollar’s 15,000 locations across the country. The increased cost is forcing the company to reconsider carrying some items, which now have a significantly smaller margin. Over time it may also impact the chain’s ability to hire new employees or open new locations.

Dollar Tree imports 42% of its products, most of which are from China. The new tariffs impact 10% of the store’s inventory, which adds up to several thousand items spanning hardware, electronics, food, household, and health and beauty products, USA Today reports.

And it’s only just the beginning. The tariff is expected to rise from 10 to 25% on Jan. 1. Ultimately that could lead to the stores offering fewer items on their shelves, or offering smaller packages of the same items for the same price.

 

https://www.yahoo.com/finance/news/trump-apos-chinese-tariffs-hitting-185227380.html

 

 

B/A

 

[bostonangler]

Just now, Theseus said:

CNBC? Okay, say no more. The parrot is only sleeping. Say no more. 

 

Yup, that's where our president found his economic advisor... Sad isn't it?

 

B/A