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  • Wall Street Breakfast: Dollar Drifts Ahead Of Consumer Inflation Data [View article]
    Buckoux, you are indeed correct in that the fed is not funneling the money into the real economy with its ZIRP. That is why ZIRP must end and short term rates need to get back to the rate of inflation. Once that happens making loans to the real economy becomes a better risk/reward proposition than it currently is. Right now you can do things with virtually no risk and that is what rich people love to do!
    Apr 17, 2015. 02:04 PM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: Dollar Drifts Ahead Of Consumer Inflation Data [View article]
    The SCOTUS can't shoot down the expansion of medicaid. It also can't change the fact that Medicaid has clawback provisions to get its money back from people who use Medicaid. As more middle class workers use medicaid they are going to eventually find out their medicaid isn't free! All in the master plan by democrats to steal more of our money to give to their friends in the healthscare industry.
    Apr 17, 2015. 01:19 PM | 4 Likes Like |Link to Comment
  • Wall Street Breakfast: Dollar Drifts Ahead Of Consumer Inflation Data [View article]
    midwest and BBB, surprise, we actually no longer import oil for use in North America. We produce enough oil in North America to supply all of the petroleum product needs of North America. Yes the US currently only produced 9.4M bpd and processes just shy of 16M bpd, but that 6.5M bpd difference isn't really a difference. A huge chunk of it comes from oil we import from Canada and Mexico. Then we actually export a huge amount of petroleum products nowadays whose $ value is now roughly half what we export. So in Jan-Feb we imported $35B of product but we exported $17B!

    Then you need to understand that Canada and the US have fairly integrated economies, indeed you could consider them just another state. It isn't quite the same with Mexico but we are also heavily interlinked. That means a $ spent in Canada and Mexico tends to find its way back into the US economy.

    So clearly, the oil be produce here and in Canada seeing a massive price drop leaves a big dent in the US economy. The rest of the oil we import basically balances with our exports so any benefit is offset.
    Apr 17, 2015. 12:59 PM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: Dollar Drifts Ahead Of Consumer Inflation Data [View article]
    I wouldn't say down when it is just not growing as fast. The big brakes on healthcare spending seem to be the out of pocket spending that consumers are now required to make. There is no more free ride on healthcare and this is affecting usage limiting the healthcare industries ability to increase price.
    Apr 17, 2015. 10:20 AM | 2 Likes Like |Link to Comment
  • Wall Street Breakfast: Dollar Drifts Ahead Of Consumer Inflation Data [View article]
    BBB it comes down to the reciruclation effect on the money. So your guess at $136B saved at the pump is reasonable from the consumer end. However, if the consumer doesn't spend the $136 (which he is currently not, only about 25%), that is a $100B hit to the economy directly. Then use a 3-4 recirculation effect and you get back to the $350B I have talked about. As a % of GDP that is sizable, almost 2%. So if 2% of GDP activity doesn't take place that would also likely mean 2% of the workforce isn't necessary and that is where you get the number that could be as high as 3M jobs. In reality the job losses will be lower but the income losses will be that big.
    Apr 17, 2015. 10:18 AM | 1 Like Like |Link to Comment
  • Wall Street Breakfast: Dollar Drifts Ahead Of Consumer Inflation Data [View article]
    jim, but if the reductions help the business stay in business they are indeed a good thing. Many forget that businesses can and do go bankrupt and the impact of that on society is much more severe than these reductions.

    Then there is also the reality that something like 50% of these announced headcount reductions never actually happen (well they fire some but they hire in other areas). Further, most of these people are likely receiving buyouts which is something that is actually quite attractive for older workers as it allows many to retire early.

    So yes, there is a downside to these announcements but it is no were near as dire as some might want to tell you.
    Apr 17, 2015. 08:59 AM | 4 Likes Like |Link to Comment
  • Wall Street Breakfast: Dollar Drifts Ahead Of Consumer Inflation Data [View article]
    100,000 is only in the oil and gas industry. There are going to be many many more. The best way I think to calculate it is to look at the impact this is likely to have on GDP. If consumers really are only spend 25% of the windfall then there is a huge effect as that 75% will be missing from the recirculation

    Given the reality that we have likely seen 1.5-2% of GDP growth over the last few years coming from energy it is not unreasonable that this rate of GDP growth reverses in 2015. That would be a reduction of 3-4% of GDP from our current anemic run rate of 2-2.5%. So given 3M jobs created last year, that could well be 2-3M jobs not created in 2015. The Q1 labor report seems to be showing the initial effects of the energy portion but we have yet to see the reciruclation effect play out and that is much more severe.
    Apr 17, 2015. 08:32 AM | 3 Likes Like |Link to Comment
  • Wall Street Breakfast: Dollar Drifts Ahead Of Consumer Inflation Data [View article]
    The increased healthcare spending will be very interesting. One would think that healthcare spending has a very high % content of spending in the US, though slimey Europeans keep selling us their overpriced crap, even in healthcare. However, if that money is coming from buying crap made in China it could actually have a positive effect on the economy.

    Remember, a healthy economy is one where as much money as possible circulates in the US. How what we spend affects the US economy has changed significantly. For exmaple, we now import almost 6M bpd less oil a day from other countries. That has a huge positive effect on the US economy because those petro-dollars recirculate in our economy, not in someone else. That is also the reason why this sudden decrease in petro-dollar spending will have a bigger impact on the US economy than in the past when we imported so much oil. Yes there are savings at the pump but the key issue is if those savings are NOT spent on something that has as high a US content as oil has now, the economy shrinks. There is no growth benefit anymore because we no longer get the benefit of spending petro-dollars here with a recirculation effect as opposed to that happening in a country we were importing from.

    This is the fundamental falisy of the consumer will save the US economy due to cheaper energy, this is just flat out wrong nowadays.
    Apr 17, 2015. 08:03 AM | 3 Likes Like |Link to Comment
  • Wall Street Breakfast: Dollar Drifts Ahead Of Consumer Inflation Data [View article]
    Maybe they double counted? or fired some people twice.
    Apr 17, 2015. 07:58 AM | 6 Likes Like |Link to Comment
  • Wall Street Breakfast: Dollar Drifts Ahead Of Consumer Inflation Data [View article]
    They will take a cue from Europe. If inflation is low they well talk about the improved GDP outlook eventhough nominal GDP likely is also contracting.

    Obama can't lend Greece a nickel. There is no way the congress is going to let him spend money on Greece.
    Apr 17, 2015. 07:57 AM | 7 Likes Like |Link to Comment
  • Wall Street Breakfast: Netflix Shares Hit All-Time High On Subscriber Growth [View article]
    HB, likely because tourists weren't at the beaches the environment got a break.

    I don't claim there was no damage, just that there should not have been the damage done to the coastal tourist industry that the hysteria released by the media caused. When they started stories about how the oil could follow the gulf stream round the Florida peninsula even the east coast beaches got hit.
    Apr 16, 2015. 03:38 PM | Likes Like |Link to Comment
  • Oil Likely To Signal Next Market Correction, Eventually [View article]
    All of the thinking on how oil affects the US economy are dead wrong, period. We are now a producer of oil, indeed with Canada we now produce all of the oil necessary to fuel the US and Canada. This means the impact of a loss in oil revenue will be significant to the US economy. Unlike in the past where a drop in petro-dollars simply meant that we would send fewer petro dollars abroad and instead keep them here. When we keep them here they get a recirculation effect here which negates the loss of sending them overseas.

    Now we do not get this recirculation effect because the petro dollars we are missing are not ones sent over seas, they are petro dollars that were fueling the US and Canadian economies (which are linked).

    The impact will be sizable at a $50 per barrel decline in price, even with a 1M bpd increase in production over last year we are looking at a hit of about $1B a day to the US economy. Over the course of the year that is right around the 1.5-2.0% boost the US economy has been getting from energy every year since we were growing production by 1M bpd. So instead of continuing to grow in 2015, which would have been necessary to get to our 3% GDP growth, we will contract. That means a recession, though shallow, is likely if oil prices remain depressed through out the year.
    Apr 16, 2015. 10:02 AM | Likes Like |Link to Comment
  • Wall Street Breakfast: Netflix Shares Hit All-Time High On Subscriber Growth [View article]
    Reality is that the US media should have paid for this fund because the damage caused wasn't caused by the oil, it was all caused by the hysteria the US media created around the issue. There was actually very minimal impact from the oil spill. About the only industry that was truely affected was the fishing industry which was forced by the government to stop fishing pretty much everywhere.

    It would have been entirely appropriate for BP to pay for the actual clean up and for all of the lost wages and profits of the fishing industry. That would not have been a very large sum. Everything else is simply media lead hysteria and the damage it can do. Who will ever hold them accountable?
    Apr 16, 2015. 09:55 AM | 8 Likes Like |Link to Comment
  • Wall Street Breakfast: Netflix Shares Hit All-Time High On Subscriber Growth [View article]
    I was gonna warn him to be careful where he sticks that cigar.
    Apr 16, 2015. 09:53 AM | 4 Likes Like |Link to Comment
  • Wall Street Breakfast: Netflix Shares Hit All-Time High On Subscriber Growth [View article]
    Cramer was ranting and raving and explaining yesterday about how stocks can go up and highlighted how he sees evidence that the shorts are capitulating. Given the charts on the Dow, S&P and Nasdunk this is all setting up to be the 3rd attempt at a break out to new highs. Short capitulation should be setting the top, which means we well could be looking at failed breakouts and a correction just around the corner.

    Only the Russell is breaking to new highs as it is likely trading on the US is gonna grow like mad hype.

    So I think there is some serious caution in order right now. Just my 2 cents worth, sorry if you lose a fortune betting on them.
    Apr 16, 2015. 09:50 AM | 1 Like Like |Link to Comment
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