Since 2000 Real GDP Grew 31.6%, But Wages Are Flat?

Platinum Wealth Partners

 Comments

Markets were momentary inspired by Buffet’s latest blockbuster deal  and shenanigans that turned over the downward sentiment of the past seven trading-sessions. But the old guy in Omaha is not the world, and the real world could actually care less about what Berkshire did, does, or doesn’t do. Markets, however, being collectively neurotic by nature, care for short time spurts -   that is until the next trendy thought or event captures its child-like focus and limited imagination – thus the game goes on..   

A brief review of the real world concludes that there is little to be exuberant about. In addition to Greece,Spain, Italy and perhaps the rest of the Eurozone, along with other nations, all account for many top Western economies who are  in critical distress. Some are near terminal. Meanwhile, bad debt at Chinese banks continues to accelerate, as expected, Resource economies are seeing exports drop for commodities. Australia’s  coal industry is now on the watch list ; so is Norway’s oil industry.  Bonds for the Eurozone are now paying negative returns, indicating that there are no “Real Economy “investments for notional capital. Japan’s consumer confidence is dropping faster than a hockey’s player’s gloves in a big-game  fight , each month. Russia’s GDP fell sharply, by 4.5%; it is getting hammered by both sanctions and resource issues. Taiwan too is lowering market yields. Brazil, Venezuela, Mexico, and no doubt many more South and Central American countries, are basket-cases. Then there is the Ukraineand its Slovak and Eastern European neighbours, who are all experiencing hardships.

 Still, an even  bigger concern are countries in the Middle East, South Asia and Africa, where the economic optics are limited, distorted or non- existent, but one may conclude with confidence that given  the extent of wars, starvation, medical deprivation and extra-ordinary waves of migration to less-marginal neighbouring countries, that most of these economies are also terminal cases with little hope of recovery to  sustainable levels for their indigenous populations. Overpopulation is thus rampant everywhere.

In the meantime, most folks in North America are getting poorer, since 2000,  as “The Tale Of Two Charts” ndicates below - and more importantly, they do not participate at all in the real GDP growth. It looks  much worse too, as per capita incomes are going backwards while  drowning in the temporary relief from more debt at all levels, to keep a broken  consumer  consumption system hobbling along. Pensions and medical services are also in peril in both  developing and developed countries.

So indeed, markets may be neurotically happy for a brief moment enjoying  the usual relief reactions, despite what is plain and clear to object analysis and evaluation. Meaning, the iceberg’s damage has but one inescapable conclusion – so what the heck, why not rearrange the deck chairs with Uncle Warren, while having the ship’s band play merrily along - once more?

Knowing that in the end, reality is a cruel mistress - who promises wide-spread currency wars (devaluations –  already China, Japan, Australia are suspects…), and trade protectionism with its consequential and expanding global conflicts!

Good Luck; Be Careful Out There!

Where Did the GDP "Growth" Go? Not into Wages

How can the economy grow by roughly one-third in real dollars while real median household income drops like a rock?

Based on gross domestic product (GDP), the U.S. economy has grown smartly since 2000: GDP rose from 10,031 in 2000 to 17,840 in mid-2015. That's an increase of 77.8%.

A Tale of Two Charts

Ironically - the same old French story - Storm the Bastille?

This Week In Energy: Depressed Oil 

Market Still Sees Production Gains

The Permian Basin in West Texas remains one of the few bright spots compared to other shale basins in North America. Drilling there is still profitable, with low costs and existing infrastructure. A series of pipelines have come online in West Texas over the past year, eliminating the discount that Permian oil traded at compared to the WTI benchmark. The Wall Street Journal notes that RSP Permian (NYSE: RSPP), a Permian driller, successfully sold new equity, a sign that investors are still keen on drillers in the basin. RSP sought to raise funds to complete acquisitions and the company raised $157.5 million by selling new stock this week. There is a lot of speculation about when and to what extent lenders and equity investors will pull out of the shale sector, but RSP’s successful offering demonstrates that there is still an appetite for shale companies among investors.

Tesla lost money on every Model S sold in the last quarter 

  With just one model on sale to support all its R&D, it's understandable why a share sale might be on the horizon. When you look at Tesla's finances the same way that GM and Ford report theirs (generally accepted accounting principles, or GAAP), the company lost nearly $15,000 per car this last quarter. Although Tesla says this number is more than covered by income from EVs it leases direct to customers, designing and developing cars is neither cheap nor simple, and the company will need cash to grow into a multiple-model lineup.

Turning cow poo into power is

 profitable for US farm

The Environmental Protection Agency estimates that more than three million tons of greenhouse gas emissions were eliminated last year by Homestead and the 246 other US livestock farms which have installed biogas recovery systems.

That's equivalent to taking more than 630,000 cars off the road.

For Norway, Oil at $50 Is Worse Than the Global Financial Crisis 

Oil is losing value just as investments in the petroleum industry are heading for the biggest drop since 2000. To cope with the shift, companies such as Statoil ASA started restraining spending more than six months before Brent crude started to tumble.

As Economic Malaise Grows, Brazil 

Budget Deficit Hits All Time Record

June’s result means that the government's budget deficit reached a record breaking 8.1% of GDP -- one of the highest across emerging and developed economies and the highest in Brazil since the beginning of current data in 1995.

Learning Success: 

APPLY Tips From The Best

 

Indra Nooyi,  PepsiCo , another of  100 Most Powerful Women - Forbes, has not only led her company to record financial results but is making strides to move PepsiCo in a healthier direction, leading the courageous charge to shed traditional fast food properties and to replace them with initiatives to supply healthier foods. She is deeply caring and committed as a senior executive. She is a fun-loving executive as well—she played lead guitar for an all-woman rock band in college, loved to play cricket, and is known to sing karaoke and perform at corporate gatherings to this day. Yes, I have been known to relate to her fun-loving spirit as a senior executive as well.



Originally Published

Platinum Wealth Partners

http://pwa2000.blogspot.ca/2015/08/since-2000-real-gdp-grew-316-but-wages.html

現實檢查 - 石油和能源短缺環球金融愁楚的背後，及更多

What Greece, Cyprus, and Puerto Rico Have in Common

We all know one thing that Greece, Cyprus, and Puerto Rico have in common–severe financial problems. There is something else that they have in common–a high proportion of their energy use is from oil. Figure 1 shows the ratio of oil use to energy use for selected European countries in 2006.

Greece and Cyprus are at the bottom of this chart. The other “PIIGS” countries (Ireland, Spain, Italy, and Portugal) are immediately above Greece. Puerto Rico is not European so is not on Figure 1, but it if were shown on this chart, it would appear between Greece and Cyprus–its oil as a percentage of its energy consumption was 98.4% in 2006. The year 2006 was chosen because it was before the big crash of 2008. The percentages are bit lower now, but the relationship is very similar now.

Why The 'Smart Money' Was Right About Crude Oil Again

In my last several crude oil updates, I showed that the “smart money” was betting against crude oil’s rebound that started in March, while the “dumb money” was the main driving force behind it. I have been skeptical of oil’s rebound due to persistently high inventories and the still-sizable long position held by speculators even after last year’s oil crash. Light sweet crude oil sank 7.6 percent during last week’s China-induced commodities rout and because active oil rigs rose for a second straight week after months of declines.

West Texas Intermediate (WTI) crude oil broke down from its wedge patternthat I showed in late-June, and is now sitting just above its key $50 per barrel support level. If WTI crude breaks decisively below its $50 support level, a resumption of the 2014 oil bear market is quite possible. WTI crude may be forming a flag pattern that could indicate further declines if broken to the downside.

Oil Imports Have Energy Poor Greece In A Stranglehold

After several years, several months, several weeks and several days of crisis, it looks like things are about to come to a head for Greece and its banks. It becomes easier to understand exactly what GREXIT may mean for the Greek people. What happens when the banks and the government completely run out of money?

Greece has some indigenous coal production (lignite) but no oil or gas to speak of which means that all oil and gas are imported (Figure 1). This is linked to a structural trade deficit that contributes to the country’s dependency on debt. If Greece runs out of Euros, will it be able to buy oil and gas on the international markets? Greece held 90 days of oil stocks in 2010 [2]. Once that is gone then the tourist industry may collapse?

Carl Icahn Believes “There Really Is A Bubble Brewing”

Billionaire investor Carl Icahn spoke with FOX Business Network’s (FBN) Neil Cavuto and Trish Regan about the economy, saying “I believe that there really is a bubble brewing.” He went on to say that we are in “unchartered territory,” with historically low interest rates, and “a market that’s going up artificially,” which “could be very destructive to our markets and our economy.” When asked about what the Federal Reserve should do, Icahn said, “stop worrying what the markets will do,” and “start raising rates right now.” He went on to say that the “Fed is really pandering to a lot of these guys on Wall Street that they really shouldn’t be pandering to.” Regarding whether he’d take the role of Treasury Secretary, as Donald Trump suggested,” Icahn said, “I guess I would not. I sleep too late.”

Greek crisis: surrender fiscal sovereignty in return 
for bailout, Merkel tells Tsipras 

Two days of high-stakes negotiations between the finance ministers of the currency bloc resulted in a four-page document that included controversial German elements leaked on Saturday. Those measures included Greece leaving the euro temporarily by taking a “time-out” from the currency bloc if it refuses terms for talks on the new bailout or, in the event of agreement, that Greece sets aside €50bn worth of assets as collateral for new loans and for eventual privatisation. Both passages, however, did not enjoy a consensus among eurozone leaders.

Policy Extremes Maintain Illusion of Stability: Charles Hugh Smith 

What is not an illusion is the extreme trouble many EU countries are in. Besides Greece, Spain and Italy are deep in debt. Smith contends, “Spain’s debt is a trillion euros. Italy is over a trillion euros in debt. We are talking fairly serious money here.”

China’s Incendiary Market Is Fanned by Borrowers and Manipulation 

China’s market is also shaped by the heavy hand of the government, which makes decisions about what companies can list shares, when to promote stock rallies and, now, how to intervene when prices plummet. The government, in other words, views the market as a policy instrument, a mechanism to fulfill its political and economic goals. The result can be a volatile market that swings from boom to bust.

America At The Brink - Free Trade Archaic Policy Relic

TRADING AWAY OUR SOVEREIGNTY

Capital Institute

John Fullerton

This post was previously published on the Huffington Post’s Business page.

“Free Trade” was in the news this Memorial Day weekend. President Obama is pushing hard for “fast track” approval of his Trans-Pacific Partnership (“TPP”) Agreement, calling for a simple up or down vote without the possibility of amendments or floor debate.

The New York Times reported that Senate Majority Leader Mitch McConnell has forged a “rare alliance” with the president to push the trade legislation. Senate Finance Committee Chairman Orin Hatch has been quoted as saying, “it shows that when the president is right, we will support him.” (Never mind that Hatch has also been quoted as saying: “I don’t know fully what’s in TPP myself.”)

Dear Mr. President: With all due respect, how do you spell RED FLAG!      Read  More.

Our Comments : 

 Capital Institute Blog - June 14, 2015 

Just another BIG step backwards for America and more importantly its people, as at mere face value there are numerous serious and extremely negative consequences to this policy action and content.

Obvious points and concerns -


Exacerbation of the erosion of American jobs, indigenous industrial base and middle class.. With this, erosion of national competitive advantage resulting in increasing national, state and individual security risks. plus deep economic plight.

Continued dilution of democracy, constitutional powers and rights including those embedded in state and local authorities.

Excessive immigration and population leakage , putting increased pressure on social structures, wages, pensions and healthcare system creating more massive debt financing plus extreme social tensions, Then of course there are those fiscal budgets for states and cities.

Increased concentration of power with international oligarchs, banks and related military industrial complex whose goals and objectives are oriented solely towards self-interest; with no concern whatsoever for  enlarging greater national principles of , by, for and with the people.

More erosion and diversion in the physical and conceptual resources needed to resolve imminent key pending issues that could be catastrophic to the country, economy and world-wide survival interests -  including but not limited to ; climate change, resource depletion, degradation of bio-sphere and its diversity, wildlife extinction, toxoplasmosis containment, carbon exponents, ocean acidification and on...

Importation of disease, crime, extreme social and civil unrest from politically. socially ,culturally and economically destabilized regions and countries - who will be attracted to move their  worst or best? These also create great excessive  hidden and future costs for federal, state and local fiscal budgets

All of this, is just for starters off the top - there is just no way in the universe that you could "realistically" dream up positive reasons and rhetoric that creates a subjective benefit that  outweighs the long list of object negative consequences associated with expanding free-trade agreements to the southern hemisphere . THEY ARE ALL LIES!!!  Probably they are based on plans with immediate geopolitical or geoeconomic self-interests in mind. Not the people's long term goals.    

To say the least; in my opinion, the world has changed dramatically over the past fifty years , and such economic free trade policies are not only intellectually deprived  (no clear and valid metric), but they are foolhardy and archaic approaches that place longer-term national and individual security and economic interests in unprecedented jeopardy. 

So sad, and this is just the "very short and prompt story "on this extremely misguided and incoherent legislation

Very Best to Everyone, 

T McNeil

First Financial Insights Inc.
http://firstfinancialinsights.blogspot.ca/2015/06/realeconomik-existential-insights.html

http://firstfinancialinsights.blogspot.ca/2015/05/humanitys-insanity-impossible-growth.html

http://pwa2100.blogspot.ca/

http://pwa2000.blogspot.ca/2015/06/stop-trade-immigration-flood-deal.htm