New residential construction, hew homes, housing starts, building permits, depicted on blueprints. (Photo: AdobeStock)
The U.S. Census Bureau said new home sales in November 2018 came in at a seasonally adjusted annual rate of 657,000, crushing the 560,000 consensus forecast.
The forecasts ranged from a low of 535,000 to a high of 581,000, with the actual number coming in way above the high end.
The figure for November is 16.9% higher than the revised October rate of 562,000, but 7.7% below the November 2017 estimate of 712,000.
The median sales price of new houses sold in November 2018 was $302,400. The average sales price was $362,400.
The seasonally‐adjusted estimate of new houses for sale at the end of November was 330,000, representing a supply of 6.0 months at the current sales rate.
New York Legalizing 9-Month Abortions Proved Fact-Checkers Wrong on Exchange During Final Debate
New York passing the Reproductive Health Act, which legalizes abortion by non-doctors up until the point of birth, has once again brought the decades-old divisive issue into the national discourse.
On October 19, 2016, during the final debate in Las Vegas, then-Republican nominee Donald Trump and Democratic nominee Hillary Clinton sparred over the issue of abortion, specifically the latter’s support for late-term and partial-birth abortions.
Here is how Corporate Big Media reacted.
‘Rip the baby out of the womb’: What Donald Trump got wrong about abortion in America, the headline declared in the “Economic Policy” Wonk section of The Washington Post.
NPR’s “fact check” of the exchange during the debate linked to another NPR story dating back to 2006, which stated partial-birth abortion was performed “only” about 2,200 times a year before it was banned.
What that has anything to do with what Mr. Trump said would be the end result of the position Mrs. Clinton and other Democrats hold, or the cringe-worthy reality of it in practice, is not made clear.
At least Vogue was somewhat honest, at least about their position. They ran the cheerleading headline, Hillary Clinton Awesomely Defended Abortion Rights at the Debate.
Under the headline Fact check: Trump accuses Clinton of supporting abortion at 9 months, USAToday took a cute dig at Mr. Trump “for proposing to defund Planned Parenthood” before declaring “PolitiFact’s analysis of Clinton’s remarks on the topic don’t support that claim.”
Let’s focus in on the validity of that fact-check.
Mr. Trump, as you can hear from the video clip above, was merely bringing up the possibility of killing “the baby on the ninth month on the final day.” That has always been the logic behind the abortion-on-demand position, and that logic has always been the focus of conservative and pro-life critics.
Rather than address that logic, the fact-checkers simply claimed it doesn’t happen and, naturally, Mr. Trump was lying.
But what did Mr. Trump actually say? He said the following:
“If you go with what Hillary is saying in the ninth month you can take the baby and rip the baby out of the womb of the mother just prior to the birth of the baby.”
In 2016, Corporate Big Media rushed to cover for Mrs. Clinton and the Democratic Party holding a very unpopular position on abortion. But as with so many other issues, it was just a deceitful act.
Now, what was portrayed as conspiratorial is not only a reality in the state of New York, but met with standing ovations and cheers.
A similar bill in Virginia was supported by Democratic Governor Ralph Northam, though it was defeated in the Republican-controlled state legislature.
Markets concept depicting the American flag draped over the New York Stock Exchange (NYSE) at Wall Street. (Photo: AdobeStock)
Stocks closed on Wednesday at their best levels since early December, powered by strong corporate earnings and an accommodative policy statement from the Federal Open Markets Committee (FOMC) that was even more dovish than many had hoped for.
The Dow Jones Industrial Average (^DJI) hit its high for the year and closed up 434.90 points, or 1.77% to 25,014.86. It’s the first time the Dow climbed above 25,000 in 2019.
Corporate Earnings Front
Apple Inc. (AAPL) rallied over +5%, despite declining revenue, and while we are on the topic of tech titans, Facebook (FB) is +10% in very early pre-opening trading. They easily beat consensus in their earnings report after the close Tuesday, as they delivered their best quarterly earnings to date.
Even if you don’t care about AAPL or FB, every growth manager on the planet does. These are two of the charter members of FANG that helped drive stock market gains; outsized at times, for much if the last 3 to 5 years.
While both have been hit with declines of better than -30% during the last 6 months, it’s a certainty that Growth Managers have been focused on earnings and guidance from these 2 bellwethers to see is momentum in FANG world can change in 2019.
In the Industrial Space
Boeing Company (BA) rallied +6% in the wake of strong earnings to close within a whisker of its all time high four months ago.
Yes, BA is very exposed to the Global economy. Yes, BA does tremendous business with China. But unlike AAPL, whose revenues in China were -25%, BA does not make a product that Chinese “entrepreneurs” can easily replicate, and sell in the local market at close to a 75% discount.
Overlay this with BA having rallied +150% from the beginning of 2017 to its early October 2018, and the stock chart could be easily mistaken for a Social Media Unicorn. Having recently survived a 25% correction to $294 during the fear mongered panic selloff in December, BA has now rallied back to within 1.25% of making a fresh all time high.
It’s been just over a week since International Business Machines (IBM) reported. That’s nearly ancient history in a world of full throttled earnings, economic data, and multifaceted news. But their fourth-quarter (Q4) report cannot be overlooked.
Sparing the details and positive guidance, the only thing that really matters is the stock rallied +8% on last Wednesday following the late Tuesday earnings report, and has added a +2% since then. The price move is significant because IBM stock has been a serial disappointer following earnings THE LAST 5 years.
Coming into this report, the stock had declined 16 of the last 20 quarters following earnings. This time, a week later it’s +10%.
Stay tuned.
The FED Hits a Double
Look for a more in depth write up on the FED and why it matters so much in the next day or 2.
The highly anticipated January FOMC was loudly cheered by financial markets as their policy statement hit a market friendly dovish tone that went well beyond the expectations of most professional FED watchers.
Not only did the FED signal that they are unlikely to raise rates more than once, and very possibly not at all, more significantly they highlighted a flexibility toward their balance sheet reduction schedule that was clearly a market friendly positive shift from their policy statement 6 weeks ago.that contributed to December debacle for stocks.
Basically, and in the interest of brevity, Financial markets could not have asked for more from the FED. Even Goldilocks was impressed.
On this episode of Liberty Never Sleeps, host Tom Purcell discusses the role and place of valuing human life, and why government should not be its arbiter.
*Eugenic Murder *The Worth of a Man *The Importance of Humility *Working Your Way Up? *Extreme Cold
Bumper Music:
Creep- PostModern Jukebox I Dreamed a Dream- Anne Hathaway Loser- Beck Take Me To Church- Hozier Angle of the Morning- Juice Newton
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Graphic concept for the Department of Justice (DOJ) and the Federal Bureau of Investigations (FBI). (Photo: AdobeStock)
The Department of Justice (DOJ) Office of the Inspector General (OIG) announced “findings of misconduct” against two current senior officials at the Federal Bureau of Investigation (FBI). The OIG also uncovered misconduct on the part of a third and now retired FBI official.
The OIG headed up by Michael Horowitz initiated an investigation after receiving information from the FBI itself concerning multiple allegations involving an FBI contractor and the three bureau officials.
“The OIG found that as a result of conduct by two current senior FBI officials, and one retired FBI official, the FBI contractor engaged in certain inherent governmental activities in contravention of Federal Acquisition Regulations (FAR),” the investigative summary states.
“Additionally, the OIG found that these three FBI officials did not adhere to Office of Management and Budget policy while managing the contractor.”
The Federal Acquisition Regulation (FAR) is the set of rules in the Federal Acquisition Regulations System pertaining to government procurement contracts.
The FAR System is codified via Chapter 1 of Title 48 of the Code of Federal Regulations, 48 C.F.R. 1, and governs the “acquisition process” by which executive agencies of the federal government acquire (i.e., purchase or lease) goods and services by contract with appropriated funds.
“Further, the OIG found that the FBI contractor failed to adhere to personal conflict of interest rules under the FAR,” the findings added. “The OIG has completed its investigation and provided its report to the FBI for appropriate action.”
The names of the two current senior officials and one former official were not provided.
Pie chart depicting total federal spending, or government expenditure categories. (Photo: AdobeStock/GKSD/PPD)
The Congressional Budget Office (CBO) released its annual Budget and Economic Outlook — viewable below — and that means I’m going to do something that I first did in 2010, and most recently last year.
I’m going to show that it’s actually rather simple to balance the budget with modest spending restraint.
This statement shocks many people because they’ve read about out-of-control entitlement spending, pork-filled appropriations bills, big tax cuts, and trillion-dollar deficits.
But the first thing to understand when contemplating how to fix America’s fiscal problems is that tax revenues, according to the new CBO numbers, are going to increase by an average of nearly 5 percent annually over the next 10 years. And that means receipts will be more than $2.1 trillion higher in 2029 than they are in 2019.
Source: Congressional Budget Office (CBO)
And since this year’s deficit is projected to be “only” $897 billion, that presumably means that it shouldn’t be that difficult to balance the budget.
By the way, I don’t even think balance should be the goal. It’s far more important to focus on reducing the burden of government spending. After all, the economy is adversely affected if wasteful outlays are financed by taxes, just as the economy is hurt when wasteful outlays are financed by borrowing.
In other words, too much government spending is the disease. Deficits are best understood as a symptom of the disease.
But I’m digressing. The point for today is simply that the symptom of borrowing can be addressed if a good chunk of that additional $2.1 trillion of new revenue is used to get rid of the $897 billion of red ink.
Unfortunately, the CBO report projects that the burden of government spending also is on an upward trajectory. As you can see from our next chart, outlays will jump by about $2.6 trillion by 2029 if the budget is left on autopilot.
Source: Congressional Budget Office (CBO)
The solution to this problem is very straightforward.
All that’s needed is a bit of spending restraint to put the budget on a glide path to balance.
I’m a big fan of spending caps, so this next chart shows the 10-year fiscal outlook if annual spending increases are limited to 1% growth, 2% growth, or 2.5% growth.
Source: Congressional Budget Office (CBO)
As you can see, modest spending discipline is a very good recipe for fiscal balance.
Our final chart adds a bit of commentary to illustrate how quickly we could move from deficit to surplus based on different spending trajectories.
Source: Congressional Budget Office (CBO)
I’ll close with a video from 2010 that explains why spending restraint is the best way to achieve fiscal balance. Especially when compared to tax increases.
The numbers are different today, but the analysis hasn’t changed.
Carbon tax trading emission global market graphic concept. (Photo: AdobeStock)
Maybe I’m just old-fashioned, but I don’t believe in using dodgy numbers or nonsensical analysis – even if that would help my side in a policy debate.
And it goes without saying that I also don’t like when the other side is dishonest. But I’m not talking about my left-leaning friends who have genuine (albeit misguided) views on things such as Keynesian economics or the minimum wage.
I’m talking about people who deliberately dissemble and prevaricate in hopes of advancing their policy agenda.
Consider, for instance, the new carbon tax that has been introduced by Congressmen Ted Deutch (D-FL) and Patrick Rooney (R-FL). The core features of the bill are:
A $15-per-ton carbon tax that increases $10 each subsequent year until it reaches $100.
A new entitlement program giving money to all legal American residents, including children.
A new tax on consumers who buy imports from nations without similar taxes on energy usage.
A supposed adjustment and easing of existing regulations governing carbon emissions.
There’s obviously a serious policy debate to have about both the general concept as well of the individual components of this type of legislation, and I’ve periodically added my two cents to the discussion.
But what irks me is that the sponsoring lawmakers are openly and deliberately lying about a key part of their plan. Here’s the relevant section from their talking points.
The claim about “revenue neutrality” is a stunning level of dishonesty, even by Washington standards.
At the risk of stating the obvious, if the government imposes a tax and then also creates a program to give money to people, that’s not revenue neutrality.
And a new carbon tax doesn’t magically become “revenue neutral” because new revenues are matched by new spending.
To be sure, supporters can argue that their plan is “deficit neutral,” and that would be legitimate, even though I would argue that this wouldn’t be the case in the long run because of the adverse economic impact of new taxes and new spending.
But “revenue neutral” is a bald-faced lie.
The Daily Callerreported on this amazing example of deceptive advertising, citing the good work of Paul Blair of Americans for Tax Reform.
The bipartisan House Climate Solutions Caucus claims it is pushing a “revenue-neutral” carbon tax, but legislation proposed Thursday would hike taxes by at least $1 trillion over the next decade… Florida Reps. Ted Deutch, a Democrat, and Francis Rooney, a Republican, reintroduced a bill Thursday that would place a $15-per-ton tax on carbon emissions in 2019. The tax would rise by $10-a-year increments until it hits nearly $100 per ton. …Though Rooney claims the tax is “revenue-neutral,” the plain text of the bill does not include any reciprocal tax cuts to balance out the burden of the added tax on emissions… “Historically and for anyone engaged in tax policy, the definition of ‘revenue-neutral’ is and always has been if you increase a tax, the amount of revenue it generates must be offset by an equal tax cut elsewhere,” Blair said. …Blair said…that the “apology checks” sent as carbon dividends will be treated as new spending and do not negate a new tax burden.
By the way, just in case anyone thinks I’m imposing some weird, libertarian-ish, meaning to “revenue neutral,” you may want to look at how the left-leaning Tax Policy Center defines the term.
Revenue-neutral. A term applied to tax proposals in which provisions that raise revenues offset provisions that lose revenues so the proposal in total has no net revenue cost or increase.
I often disagree with the folks at the Tax Policy Center, but I’ve never questioned their honesty.
So when we both agree on the definition of ‘revenue neutral,” this is slam-dunk confirmation that it’s preposterously dishonest to count new spending as an offset to a tax increase.
P.S. Some of my friends and allies who supported the Fair Tax sometimes played fast and loose with the truth. That plan would have required the government to send “prebate” checks to households to partly compensate people for the new tax, yet supporters would argue that this expenditure shouldn’t count as a new entitlement program.
While my first choice for tax reform is the flat tax, I certainly think a national sales tax would be a far better way to tax than the mess we have today, but that did not justify mischaracterizing the plan.
On this episode of Liberty Never Sleeps, Tom talks discusses negativity, and why it’s important to prepare for the eventual Democratic takeover of government.
*The Cure for Cancer? *No Freedoms For All *Implications on the Economy *No Motive in Vegas *Super Bowl Sunday
The money pledged thru Patreon.com will go toward show costs such as advertising, server time, and broadcasting equipment. If we can get enough listeners, we will expand the show to two hours and hire additional staff.
All bumper music and sound clips are not owned by the show, are commentary, and of educational purposes, or de minimus effect, and not for monetary gain.
No copyright is claimed in any use of such materials and to the extent that material may appear to be infringed, I assert that such alleged infringement is permissible under fair use principles in U.S. copyright laws. If you believe material has been used in an unauthorized manner, please contact the poster.
ADP Research Head Ahu Yildirmaz: Labor Market Showing “Strong Growth With Little Sign of a Slowdown in Sight”
Man reading newspaper with the headline Job Market. (Photo: AdobeStock)
The ADP National Employment Report finds U.S. private sector employment rose by 213,000 jobs from December to January, easily beating the forecast.
The forecasts had ranged from 150,000 to 220,000, with the consensus coming in at 174,000. It follows a 271,000 gain for December’s report and more than 300 in the government jobs report on the Employment Situation.
“The labor market has continued its pattern of strong growth with little sign of a slowdown in sight,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “We saw significant growth in nearly all industries, with manufacturing adding the most jobs in more than four years.”
“Midsized businesses continue to lead job creation, however the share of jobs was spread a bit more evenly across all company sizes this month.”
In a good sign for wages, small-sized businesses with 1 to 49 employees added a total 63,000 jobs for the month, while mid-sized businesses with 50 to 499 employees added another 84,000.
Large-sized businesses with 500 employees or more added 66,000.
“The job market weathered the government shutdown well. Despite the severe disruptions, businesses continued to add aggressively to their payrolls,” Mark Zandi, chief economist of Moody’s Analytics, said. “As long as businesses hire strongly the economic expansion will continue on.”
The goods-producing sector added a total 68,000 private sector jobs, including 35,000 in construction and 33,000 in manufacturing. Natural resources and mining was negative at -1,000.
The matched sample for the ADP National Employment Report represents 411,000 U.S. clients employing nearly 24 million workers in the U.S. The December total of jobs added was revised down from 271,000 to 263,000.
About the ADP National Employment Report
The ADP National Employment Report is a monthly measure of the change in total U.S. nonfarm private employment.
Unlike the Employment Situation, more commonly referred to as the monthly government jobs report, ADP is sourced by actual, anonymous payroll data of client companies served by ADP.
The data for this report is collected for pay periods that can be interpolated to include the week of the 12th of each month. It processed with statistical methodologies similar to those used by the U.S. Bureau of Labor Statistics (BLS) for its monthly survey.
The February 2019ADP National Employment Report will be released at 8:15 a.m. ET on March 6, 2019.
Flags of United Kingdom (UK) and European Union (EU) combined over British icons of London, for a Brexit concept. (Photo: AdobeStock)
A series of key votes in the British Parliament on Tuesday were meant to signal the beginning of the end to the impasse on Brexit negotiations.
With the clock ticking and only 60 days remaining before the United Kingdom (UK) is due to leave the European Union (EU), the terms of the break remain uncertain.
In June 2016, the British people voted in a shocking upset to leave the then- 28-nation bloc. Article 50 was triggered on March 29, 2017, giving them until March 29, 2019, to agree on a deal.
British Prime Minister Theresa May said before the vote a majority would support a proposed revision to her draft agreement, which was soundly defeated earlier in January.
“The world knows what this House does not want,” Prime Minister May told members of the raucous chamber before the voting began. “Today we need to send an emphatic message about what we do want.”
On Tuesday, Member of Parliament (MPs) were given their first chance to propose solutions after rejecting the prime minister’s path forward. John Bercow, the powerful and flamboyant Speaker of the House of Commons, was tasked with choosing 4 of the 19 proposals that had been submitted by Monday.
Rather than submitting a new proposal, Prime Minister May instead chose to build support for a revised version.
The main hurdle to the initial framework was the so-called “Irish backstop,” a proposal unsupported and downright despised by members of her own Conservative Party.
It would prevent a customs border between Northern Ireland and the Republic of Ireland if the UK doesn’t agree on a future trade deal with the EU.
Sir Graham Brady, the influential head of the Conservative Party’s 1922 Committee, proposed to overcome the hurdle by replacing the Irish backstop.
He argued it would give Prime Minister May “enormous firepower” when demanding concessions from Brussels, adding it could easily be appended to her withdrawal agreement.
It was approved 317 to 301.
Yvette Cooper, Labour chair of the Home Affairs Select Committee, proposed a second amendment seeking to prevent a “no-deal” Brexit by extending the deadline if there is no agreement by February 26.
It was defeated 321 to 298.
A third amendment, which enjoyed cross-party support, was drafted by Conservative Caroline Spelman and Labour’s Jack Dromey. It would’ve simply blocked Britain from leaving the EU without a deal.
It, too, was defeated.
“The House also has affirmed its view that it does not want to leave the EU without a deal and a future framework,” Prime Minister May said after the passage of the Brady amendment. “I agree we should not leave without a deal, but simply opposing an amendment to the deal is not enough to stop it.”
Conservatives now argue Prime Minister May can return to Brussels with a mandate, though the EU doesn’t appear to agree.
“We’re not going to reopen the agreement,” Sabine Weyand, the deputy negotiator for the EU, said at a European Policy Center event on Monday.
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