Tuesday, September 27, 2016

Hillary Clinton wins in historical debate with Donald Trump

Looking both resplendent, and presidential, in her trademark pantsuit, Hillary Clinton took on Republican rival Donald Trump in the first debate before the November election. And by all accounts she won the first debate as the first woman nominated for president by a mainstream political party. In both content, and style, she set out to do what she, and many of her supporters, said she would: show the American electorate that she had the mettle to tangle with the irascible businessman as a skilled debater, something she fine tuned in high school.


Trump on the other hand, without the aid of a teleprompter, managed to falter and stumble, on a number of occasions, but perhaps, most noticeably when he was asked about racism, specifically, police interactions, in a number of high profile cases in the country. Falling back on the now discredited “stop and frisk” tactics used in New York, and later declared unconstitutional, due to bias towards African Americans and Latinos, he declared that it worked, even as moderator, Lester Holt, said that it did not, often talking over him.


Clinton meanwhile hit a fly ball with his “birther” attacks on President Obama, and that he would not disavow them until just before the debate; even trying, and failing, to lay the blame on her. With a series of hard hitting attacks, Clinton, a former prosecutor, used that style to force him to defend the assertions, which he stumbled over, and which, deftly, she called a “racist lie.”  She also added, "He has a long record of engaging in racist behavior," Clinton said, as Trump shook his head.


In an attempt to defend himself, somewhat disingenuously, he declared Clinton’s treatment in 2008 when they were competing for the nomination, as roughshod:  "You treated him with terrible disrespect and I watch the way you talk now about how lovely everything is ... it doesn't work that way," he said. "When you try to act holier than thou, it really doesn't work.”


The sense that he was on the skids gave way to a moment of weakness, and Clinton closed in on that moment to illustrate the disparaging remarks that he had made about women. As CNN reported, "This is a man who has called women pigs, slobs and dogs," Clinton said. She accused Trump of calling a Latina contestant in a beauty contest "Miss Piggy" and a housekeeper because of her ethnicity, seemingly throwing Trump off as he twice asked "Where did you find this?"


Triumphant that she had scored a hit, Clinton eased back with an air of satisfaction, that was part of a courtroom demeanor, and watched the reaction as Trump, visibly ruffled, tried to recover.


Next up was his refusal to release his tax returns, as she said, "Why won't he release his tax returns?"  and without missing a beat, said "Maybe he is not as rich as he says he is," she went on. "Maybe he is not as charitable as he claims to be," "Maybe he doesn't want the American people to know that he has paid nothing in federal taxes."


The latter played a death blow to his base of non-college educated working class people, who pay more than their fair share of taxes. His response? “That makes me smart.” And, this will surely become part of the Clinton juggernaut of emails and ads as she heads into contested areas such as Colorado, or even North Carolina.


While few of Clinton’s supporters were surprised at her performance, the evening at Hofstra University, weakened Trump, for the undecided voter, as he stumbled, faded,  and fell back on his usual jingoisms and adjectives such as “amazing”, “bad people”, and “a total mess”.


She, on the other hand was tight, poised, and on message, from beginning to end, and for the first time showed some of the humor that her friends say she possesses, and will be remembered for her best line, when Trump criticized her for staying off the campaign trail: "I think Donald just criticized me for preparing for this debate," she said. "And yes, I did. And you know what else I prepared for? I prepared to be President. And that is a good thing."


Another weak moment for Trump came when he characterized black neighborhoods as being not only virtual gun zones, but also for inserting immigrants in the discussion, as he envisioned them as coming in droves and brandishing weapons, against the residents. Not only was the scenario inaccurate, it also said little for the millions of black families across the nations raising families and doing good, which Clinton, playing to her strong support among African Americans, chastised him.


With more to go in the 43 days before the election, Trump who “came out swinging at the beginning of the debate, and made some effective points on the economy and jobs -- some of the aspects of his outsider presidential campaign that have struck a chord with many Americans. But the debate highlighted Trump's tendency to make false claims as he made inaccurate statements on everything from laws regarding policing, his support for the Iraq War and his contention that Clinton was behind the so-called birther conspiracy.”


On Tuesday, Trump sounded petulant, when he complained about his microphone being deficient, and the tough questions from Holt and as the New York Times said, “defying conventions of civility and political common sense,” defended his remarks about the former Miss Universe contestant’s weight, sounding more and more like the loose cannon his critics claim him to be.


Trump vowing to “hit harder” at the next debate and promising to go after Bill Clinton for his marital infidelities, Ms. Clinton told The Washington Post, in response that “He can run his campaign however he chooses,” she said. “I will continue to talk about what I want to do for the American people.”


Perhaps as Clinton Vice-Presidential running mate, Tim Kaine, suggested, if he is this rattled by a debate,  how could he be expected to serve as president?

Thursday, September 8, 2016

Federal Reserve Beige Book shows only modest gains in US economy

Janet Yellen
In less than two weeks the Federal Open Market Committee will meet to discuss and examine the American economy, in both its current state and also its future - especially those who are considering a rate hike. And, coming on the cusp of the November presidential elections, many observers, both in and outside of the government will be looking to see what, gains, if any, can predict the economic health of the country.
Wednesday’s release of the Beige Book, the anecdotal collection of information, released every eight months, from the 12 regional officers showed a modest increase, overall during July and August, with decreased wage pressure, with concern over depressed wages; but also, in most areas, a real concern over finding qualified workers to fill certain jobs. Especially, those in high technology, corporate law, information technology, and the building trades. The latter was especially seen in the Chicago report. One key indicator, for many analysts, is construction, but most regions reported little change from before; and for those angling for a rate change, inflation was still below 2 percent in most area, thus indicating that there was unlikely to be a September rate change.  Most financial analysts and bankers are predicting the earliest possible time, to be in December of this year, a date almost to the year with the last increase, after nearly a decade without one.
“In sum, the beige book does not show any evidence that the Fed is going to have to act quickly to raise interest rates, but it is consistent with the continuation of a slow and gradual policy normalization process,” said Tom Simons, an economist at Jefferies.
Manufacturing and the service sector, generally indicators that would predict a rate change, were “flat to slightly up” as were a soft jobs report, which showed only modest growth. Added to this, is that the August report is generally revised downward, which does not bode well for those that are looking for a rate hike. The underestimation  by the Labor Department, over the past five years, is on an average of 62,000; especially seen in an analysis by High Frequency Economics.
With no second half surge, the national economy seems unlikely to show significant growth, but Marketwatch also reported some highs and lows when they noted that “Some districts had pressing local concerns to contend with. For instance, in Atlanta, officials were concerned that the outbreak of the Zika virus in Miami might be hurting tourism. In Dallas, contacts said they believed the worst of the “oil bust slump” had passed but that economic growth had not yet returned to normal levels. And in Chicago, forecasts for a record harvest pushed down crop prices.”
Chicago, despite its egregious problems with pension payment deficits and high crime showed an economy that grew a bit, in most areas. They had moderate growth in July and August, but there is room for slight improvement.
Federal Reserve Chair, Janet Yellen, in a speech at the end of August said, “In light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal-funds rate has strengthened in recent months.” But, ever so cautiously, she also said, said that any decision on interest rates “always depends on the degree to which incoming data continues to confirm the Fed policy committee’s outlook.”  And, now, that data looks weak for any change this month.
One key economic driver - consumer spending  -- remained mostly unchanged. Again, there was a mixed bag: “Respondents in Boston reported a pickup in retail sales due in part to increased customer traffic, while contacts in the Philadelphia District reported that decreased foot traffic did not reduce sales volumes. Retail sales declined in the Dallas and Kansas City Districts, and Chicago reported that consumer spending "slowed notably,” reported Business Insider.
Auto sales, another indicator, were generally up, yet “The pace of auto sales declined somewhat but remained at high levels in general. The Atlanta, Chicago, New York, Cleveland, and San Francisco Districts all noted a slowdown or reduction in sales, with New York pointing to a reduction in dealer incentives as a factor. Only Dallas reported strong growth in auto sales.”  Correspondingly, there was a slight increase in car loans, with a continued demand for these loans. But, some auto observers caution that these highs may not be sustainable.
Tourism was a mixed bag with demand for hotel rooms down in New York, but overall showed a high relative to last year. Chicago reported favorable increases in their tourism, but the high dollar did show lows in some destinations, such as Atlanta, Minneapolis and San Francisco.
It seems that Brexit had no effect on the American market because most European travellers pay and plan their trips months in advance
Another traditional area, to be watched, is real estate and construction, which showed growth in most residential markets, and expansion in most Reserve districts. Residential construction showed moderate activity, but was most robust in San Francisco, “where contacts reported that contractors are bumping up against capacity constraints for new projects,” and “Dallas reported that demand for low- to mid-priced homes remained strong, while demand for higher priced homes softened in Dallas and New York, and was flat in Chicago.”
Labor continued, especially after the release of the August Jobs Report, was tight with some areas showing highs, namely Boston, while Cleveland only showed modest growth, with Philadelphia showing  an increase in part-time jobs, but wages for most ran the gamut from flat to strong, but most showing only a modest increase.
As previously noted, In many districts, “businesses reported trouble filling job vacancies for high-skilled positions, especially those aimed at technology specialists, engineers, and selected construction workers,” a situation that seems unlikely to change in the immediate future. Overall, the concern about wage pressure remains steadfast with wage pressure being given favor in highly skilled areas.For exampleSan Francisco reported continued strong wage growth for technology specialists.”
The August report showed that the private sector increased jobs to 177,000, an increase from an expected 175,000. Additionally, there was 63,000 in the small business category, and  50,000 in the medium sized range.
While this seems like a good report, in July there were 194,000, according to a Bloomberg survey. The unemployment rate remained unchanged at 4.9 perecent, but the August news had many looking for signs of a rate increase, and some analysts had predicted that 200,00 would make it possible; still others said 250,00 were needed to convince the ever cautious Fed.
As Yellen noted the Fed moves are data dependent, and these numbers show that the pressure is off for “any immediate need to hike interest rates,” Chris Williamson, chief business economist at IHS Marki, said in a client note.
Overall the labor market has improved, and sanguine about the mixed report was U.S. Secretary of Labor Thomas Perez who labelled it as “a solid report,” and saying that it gave nearly double the job gains needed to keep the unemployment rate from rising, said USA Today. He maybe deriving this, in part, from Yellen’s own statement that 100,000 jobs were needed to keep pace with population growth.
One continuing cause of concern is the labor force participation rate which remained unchanged at 62.8 percent, a position that it has held for more than two years.
"This was another strong report that checked most, if not all of the significant boxes," said Curt Long, chief economist at the National Association of Federal Credit Unions. "The labor market should remain strong as long as consumers maintain their robust spending pace."
The year’s average was 181,000 this year, but below previous year’s averages of 229,000  and 251,000 in 2014, but Perez like others says that this is a natural byproduct because the low unemployment rate gives employers a smaller pool of available workers.
In contrast to July, when there were 126,000 jobs added, with June and July revised downwards, as we have seen; future predictions should vary. What the numbers will show for September is, predicted, at most, to continue to be modest. Following that consumer spending will be watched to see if there is a discernible increase, beyond the holidays.