In his latest podcast, Peter reports on the week’s economic numbers and takes the popular media to task for helping Hillary Clinton secure the presidency. Biased reports are showing Obama as a “deficit-reducing miracle worker,” while the debt-to-GDP has never been higher under his presidency.
“The media is constantly going to try to redefine a failed presidency as a success. One of the reasons they want to do that right now is they want that ‘success’ to rub off on Hilary Clinton … The media doesn’t even want to talk about the economy any more. If this election was about the economy, Trump would win. The only chance they have is to make the election about something else.”
That “something else,” of course, is Trump’s salacious comments and the sudden sexual harassment accusations that are coming out of the woodwork.
Highlights from the show:
It’s another week where the dollar remained relatively, firmly bid; the dollar index closing just above 98. Gold prices seem to have a lid on them; we closed down today about $7, just above $1,250. Gold’s not really going down, but it’s not really going up either. What are going up are bond yields. Long-term bond yields are rising today to about a four-month high. The 30-year Treasury yield to about 2.55%. The 10-year just below 1.8.
This despite the fact that the economic news during the week, on balance, was generally weaker than expected. You get some numbers that came out better, but then you get the numbers that came out worse. But obviously, on balance, the numbers are worse because the Atlanta Fed reduced again their Q3 GDP estimate down to 1.9%. This is the first time it has been below 2. This is now half of what it was just over a month ago when they were at 3.8 for the third quarter. Now they’re at 1.9, and I still think they’re too high, but they’re getting closer.
I do think that Q3 is going to be a stronger quarter than Q4, which will probably be another 1% or below quarter. The last 3 quarters averaged 1%. This is the weakest 3 consecutive quarters of this entire so-called “recovery.” Yet now the Fed is supposedly raising rates? In fact, we got the JOLTS report on Wednesday. This is supposedly Janet Yellen’s favorite indicator of the labor market. Not only did we have a slight downward revision to the prior month, but we had a 7.3% collapse in August. That was the biggest drop since December of last year. Everything about that report was weak.
If this is Janet Yellen’s favorite number, and if the Fed didn’t raise rates in September because they wanted more data on the job market, and now they just got the JOLTS number, which was much worse than expected. Why is every Fed governor who is interviewed talking about rate hikes? That’s all they’re talking about. Another one was out on CNBC talking about how rate hikes would be “appropriate.” Yes! It would have been appropriate to raise them a long time ago. It would have been appropriate in June, in September, in March, in January, last year, two years ago, three years ago. It would have been appropriate a long time ago to raise rates – they didn’t do it.
You know what was inappropriate? Cutting them to zero. That was not appropriate – they did it anyway. The Fed is not about doing what’s appropriate. It’s about doing what’s expedient. Part of what’s expedient is to continue to pretend that they’re going to raise rates. The consequences of admitting they can’t raise rates is horrific, but the consequences of raising rates is also horrific. They keep pretending they’re going to raise rates, but then they don’t do it.
We got a consumer confidence number today that was extremely weak. I’m reading now that retailers that are coming out with bad sales, they have a new excuse. It’s not the weather anymore; it’s the election. Apparently, Americans are so captivated by this election that they’re staying at home to watch television to find out which woman Donald Trump groped 30 years ago.
One of the reasons we could have seen a big drop in consumer confidence is because it is looking less likely that Trump will win. Think about it. Why would there have been an uptick in confidence? Well, maybe there were a number of people actually thought Trump might win. That might have given them hope that things might change.
I can see somebody who’s been stuck in an economic rut for years having some hope that maybe something will be different if Donald Trump is elected. But now, when you have a lot of people who are thinking Trump won’t win, it makes sense that people are less confident.