Abet Chichi2

[Tuff-Stuff]

AutomaticEarth<>Debt Rattle July 13 2018

Posted by Raúl Ilargi Meijer at 9:20 am Finance


Vincent van Gogh View of Saintes-Maries-de-la-Mer 1888

• Stock Markets See the US Winning the Trade War, Defying Propaganda (WS)

• A Decade On, Pre-Crisis Mortgages Linger For Big Banks, Homeowners (R.)

• Fed’s Escape From Crisis Holdings Could Hit Dead End (R.)

• Social Security, Medicare To Add Another $50 Trillion to Our National Debt (JM)

• China’s Record Trade Surplus With US Further Inflames Trade Tensions (R.)

• Approval Of Brexit Negotiations Lowest On Record (Orb)

• No Brand Of Brexit Can Command A Commons Majority (G.)

• Donald Trump Is Right. NATO Is A Costly White Elephant (G.)

• Trump Ready To Help Some NATO States Buy US Arms (R.)

• Who Wants To Disrupt Strategic Balance In The Black Sea Region? (SCF)

• Germany Puts Last Bailout Tranche to Greece on Hold (GR)

• Europe’s Remarkable Ability To Remain In Denial (Varoufakis)

• US Judge Asked To Create Mental Health Fund For Migrant Children (R.)

• Facebook Users Marked With “Treason” Label (ZH)

“Now they had a fig leaf – the threat of future tariffs – behind which to hide their long-planned offshoring strategies.”

• Stock Markets See the US Winning the Trade War, Defying Propaganda (WS)

The trade war talk has been going on since the presidential campaign but markets just brushed it off and rallied. In 2018, the trade war verbiage moved to the foreground. But until June 14, the administration vacillated between thinking about tariffs and putting the trade war “on hold,” depending on who was doing the talking or tweeting. This vacillation ended on June 14 (Thursday) evening, when it was reported that Trump had approved to hit an initial list of $50 billion in goods (1,300 products) from China with tariffs of 25%. At the time, the administration was also preparing a second list of products, accounting for another $100 billion in imports from China.

On the evening of June 19 (Monday), Trump threatened to hit another $200 billion of imports from China with tariffs of 10%. And on Tuesday, the Shanghai stock market plunged. Markets were taking it seriously. Since then, Corporate America’s propaganda machine – the same that for the past two decades had extolled the unrivalled virtues of offshoring production to cheap countries – fired up the mainstream media, which launched into incessant, deafening, repetitive, and manipulative coverage of how these tariffs would hurt US jobs more than anything.

Two glorious examples are Harley-Davidson and GM, which had been laying off workers and shutting plants in the US for years as they were offshoring production to cheap countries. For example, in July 2017, Harley-Davidson announced layoffs in the US as it was building a factory in Thailand. GM has been laying off workers in the US since 2016, even as it opted to produce more models in Mexico. Now they had a fig leaf – the threat of future tariffs – behind which to hide their long-planned offshoring strategies.

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TBTF banks have no incentive to come clean.

• A Decade On, Pre-Crisis Mortgages Linger For Big Banks, Homeowners (R.)

A decade on big U.S. banks are still running down and selling off crisis-era mortgages, a process executives point to as weighing on loan growth. Eager to see a turning point in loan books, analysts count these portfolios as one factor, along with home equity loan runoff and new mortgage demand, to watch for when deciphering the true loan growth picture as U.S. second-quarter bank earnings start on Friday. Wells Fargo and Bank of America executives have flagged portfolios from prior to the 2008-2009 crisis era where banks are no longer originating similar new products when they are asked to predict a turning point in consumer loans. “These are portfolios of a bygone era that were very, very painful for the banks,” said Gerard Cassidy at RBC Capital Markets.

“They are not plain vanilla portfolios, which means they are more costly to manage. It may just not be worth the headache.” Analysts have said higher loan growth is critical to driving bank’s stock prices, but they anticipate only a modest acceleration year over year, driven primarily by commercial and industrial loans, not residential. “Remember that there’s a portion of that book that, again, is pre-crisis,” Chief Executive Tim Sloan said about Wells Fargo’s mortgage book at a May conference. He added the bank continues to examine the older portfolio’s risk-return tradeoff and sells assets when the opportunity arises, factors “that could have some impact” on growth.

Read more … Briefs or link out for full @
https://www.theautomaticearth.com/2018/07/debt-rattle-july-13-2018/