Tag Archives: The Forecaster

May 9 2019

GM Negotiating Sale of Lordstown Plant to Workhorse Group – Additional $400 Million Investment in Ohio…


Re-Posted from The Conservative Tree House on May 8, 2019 by 

In the aftermath of GM’s announcement to close the Lordstown, Ohio, auto assembly facility, President Trump worked earnestly to get GM to sell the facility and save jobs for the region.  Today President Trump and GM CEO Mary Barra announce the likely sale to Workhorse Group pending UAW union approval.

Washington (AFP) – General Motors Wednesday announced plans to invest $700 million in Ohio and to sell a shuttered plant to a company that makes electric trucks, drawing cheers from President Donald Trump who has assailed the US automaker for cutting American jobs.

“GREAT NEWS FOR OHIO!” Trump tweeted, revealing the details ahead of the company’s official announcement.

Shortly after Trump’s tweet, GM confirmed it is in discussions with Workhorse, a Cincinnati-based company that focuses on producing electric delivery vehicles, to sell its plant in Lordstown, Ohio. The factory employed about 1,400 workers prior to ceasing production in March.

CEO Mary Barra said in a statement GM will “remain committed to growing manufacturing jobs in the US, including in Ohio, and we see this development as a potential win-win for everyone.” (read more)

In March President Trump was putting pressure on Mary Barra to find a buyer or allow a long-term lease to another company:

It’s likely Barra reached out to POTUS today to help make the pre-announcement public because she needs to put pressure on the intransigent local UAW to agree to the sale terms.

Tim O’Hara, vice president of the United Auto Workers union at the Lordstown plant, said“the announcement dashes any hopes that workers had about staying in the area and continuing careers with GM. Many will be forced to transfer in order to preserve seniority and pension eligibility,” O’Hara said.

The Workhorse Group has been developing electric trucks, vans and drones.  With a purchase of the Lordstown plant, Workhorse would be moving forward with plans to have a facility for the production of electric-powered vans later this year.

Jobs, jobs, jobs….

May 9 2019

NYT Trump Taxes Story is Funniest News of Year (so far)….


Re-Posted from The Conservative Tree House on May 8, 2019 by 

I can just picture the The New York Timesgathering a team of actuaries, legal accountants, tax historians, advisers and financial consultants around a big executive office table, piled high with reams of papers and spent coffee cups, saying:

“We’ve got him now…. as soon as people understand: fixed asset depreciation schedules; and if the assets were depreciated legally using straight line or diminishing balance; then we move to whole-value equity pick-up, or minority interest accounting; before digging into section 1031 ‘like-kind’ asset exchanges; partnerships (limited or writ large), carried interest loopholes, pass-throughs, net capital losses/gains, seven-year income averaging and the difference between long-term and short-term capital gains”…

…or something.

Seriously, the ‘Trump-taxes’ story has to be the biggest, funniest, most well documented, and most absurd, ongoing snipe hunt in history.  “I was going to support President Trump’s re-election until I saw his depreciated amortization schedule from 1989″… said no-one, like, ever.

Could it be possible John Barron is still pulling this hilarious trick twenty-five years after the New York Times called Donald Trump “The Comeback King“?…

October 25th 1995 New York Times – Crowning the Comeback King – Though there are still four years to go in the 90’s, business and government leaders in New York honored Donald J. Trump yesterday for pulling off what they called “the comeback of the decade.”

Mr. Trump, the developer who came to epitomize opulent wealth during the 80’s before tumbling into deep financial trouble, has managed to erase much of his debt and is moving ahead with major projects at a time other developers are idling.

Judging from the attention showered on him yesterday at the Union League Club, some of New York’s civic and business leaders are quite captivated by Mr. Trump, despite the financial uncertainties that still surround some of his properties.

But the operative word at the luncheon was comeback, though Mr. Trump might dispute that he ever went far away. William D. Fugazy, the limousine magnate and chairman of the Forum Club, the group of business and civic leaders that sponsored the luncheon, presented Mr. Trump with a boomerang encased in glass. “You throw it and it always comes back,” he said as he handed it over. (read more)

 

May 9 2019

ETF v Mutual Fund


Armstrong Economics Blog/Basic Concepts

Re-Posted May 9, 2019 by Martin Armstrong

QUESTION: Are ETFs really better than a mutual fund for tax purposes?

HS

ANSWER: The primary difference between mutual funds and ETFs (exchange-traded funds) is that while an open-end mutual fund is priced once based upon the market closing, ETFs as well as a closed-end mutual funds trade all day. This actually goes back to the Panic of 1966 when mutual funds were open-ended but traded on the exchange and were bid up and down based on emotion rather than net asset value. The crash took place because mutual funds were at times selling well above net asset value.

If we look at the reforms post-1966, investors in mutual funds buy or sell them directly from the mutual-fund companies themselves. That creates a different tax structure than an ETF in which purchases go to the market and the ETF is simply created by purchasing the underlying basket.

Mutual funds and most ETFs are governed by the Investment Company Act of 1940. Therefore, this legislation treats them like a pass-through company. When a mutual-fund investor wants to sell, the fund sells shares of appreciated stock to generate cash which creates a taxable capital gain. Since most funds operate as simple pass-through vehicles, those tax liabilities from the gains accrue to all investors in the fund including those who have not sold any holding.

ETFs actually do avoid that type of tax issue. ETFs are not direct buyers or sellers of shares as a mutual fund. The ETF is created by a market maker with a special contract with the ETF provider. The investor has the newly created ETF share which is created by purchasing all of the holdings in the underlying ETF. This basket of shares is given to the ETF issuer thereby creating the ETF shares.

Because an ETF is not a direct buyer of the underlying shares as in a mutual fund, the ETF itself is not a buyer or seller. The basket of shares are swapped and are therefore in-kind transactions, thus there is no pass-through capital-gains tax bill. This is the tax advantage of an ETF over a mutual fund.

Cate
May 8 2019

Ninth Circuit Appellate Court Allows ‘Return to Mexico’ Policy to Remain In Force…


Re-Posted from The Conservative Tree House on May 7, 2019 by 

A win for the Trump administration in the ongoing effort to stem the influx of migrants crossing the U.S-Mexico border seeking asylum.  The ninth circuit federal appeals court ruled (full pdf below) that the Trump administration can continue returning Central American migrants to Mexico while their requests for asylum in the U.S. are adjudicated.

The Ninth Circuit decision is a victory for the administration.  The ruling stays the effect of a decision last month by a judge who blocked the policy while it was being challenged.

(WSJ) […] The policy, officially named the Migrant Protection Protocols, is more commonly known as “Back to Mexico” or “Remain in Mexico.”

While Tuesday’s court action isn’t a final decision on the merits of the case, the appeals court held that several legal factors favored allowing the Trump administration to administer the policy while the litigation continues.

A three-judge panel of the Ninth Circuit, in an unsigned opinion, said the administration likely had a legal basis for the policy. The court also said the Department of Homeland Security would be irreparably harmed if the court “takes off the table one of the few congressionally authorized measures available to process the approximately 2,000 migrants who are currently arriving at the nation’s southern border on a daily basis.”  (more)

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Here’s the full ruling:

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May 8 2019

China Confirms Ideological Disposition: “no matter what Americans do, the negative impact on us would be manageable and foreseeable.”…


Re-Posted from The Conservative Tree House on May 7, 2019 by 

We have discussed the Chinese outlook toward trade and negotiations at great length.  One of the overriding issues has always been the zero-sum disposition of China as it relates to any engagement. To wit: if it does not benefit China, it simply is not done.

Peace or war. Win or lose. Yin and Yang. Culturally there is no middle position in dealings with China; they are not constitutionally capable of understanding or valuing the western philosophy of mutual benefit where concession of terms gains a larger outcome.  If it does not benefit China, it is not done. The outlook is simply, a polarity of peace or war.  In politics or economics the same perspective is true.  It is a zero-sum outlook. (link)

Against the collapse of trade negotiations, the ideology of Chairman Xi Jinping is showcased today in the first official responses from the Chinese government toward the U.S. initiating tariffs due to Beijing’s duplicitous reversal on prior commitments.

(SCMP) Beijing will not make concessions in trade talks in response to Donald Trump’s latest tariff threats, Chinese state media said in a commentary published a day after the US president announced increases in duties on Chinese goods.

“Things we think are advantageous for us, we will do it even without anyone asking,” People’s Daily reported on its WeChat account on Tuesday.

“Things that are unfavourable to us, no matter how you ask, we will not take any step back. Do not even think about it.”

[…] The piece was the first official Chinese opinion piece since Trump went on Twitter and announced plans to more than double the tariffs on US$200 billion worth of Chinese goods because trade talks were going on “too slowly” for his liking.

[…] “According to the [relative economic strengthens] of China and the US and the trend of development, as long as we can focus on developing our country, no matter what Americans do, the negative impact on us would be manageable and foreseeable.”  (more)

Well, that’s that then…  Time to unleash the Wilburine!

 

May 8 2019

Macrone orders that Italian is no longer to be Taught in France


Armstrong Economics Blog/Uncategorized

Re-Posted May 7, 2019 by Martin Armstrong

Macrone just signed a law where Italian will no longer be taught in France. The idea that Europe is one big happy family is so far from the reality that this is part of the backdrop behind the bearishness of the Euro. The old resentments remain. There has always been a strong resentment between the Italians and the French and this latest change by Macrone only fuels these old resentments that prevail within the Eurozone. What should have remained as a simple trade union has attempted to federalize Europe which is only increasing the tensions throughout the continent.

May 8 2019

Creating the Euro & Germany Was Denied the Right to Ever Vote to join the Euro


Armstrong Economics Blog/Germany

Re-Posted May 8, 2019 by Martin Armstrong

COMMENT: Marty; I just wanted to say that this WEC in Rome was one of your best, NOt that Nigel Farage was there calling you the alternative to Davos, but you really do your research and your contacts behind the curtain become self-evident. Nobody in the audience every knew that the German people were denied the right to vote on joining the euro. The most important economy was denied any democratic process.

See you in Orlando

PG

ANSWER: Yes, I was amazed at how even the central bankers who attended were unaware of that fact. This is part of the reason for the rise in the AfD in Germany. From the outset, the theory has been to federalize Europe to prevent a world war. They assumed the people would never vote for it so they hide the real agenda. The people are not those who create wars – it is always those in power.

What they have done is to fuel the flames of history that remind people of the differences that are culturally embodied within the languages.

May 8 2019

Trump’s China Tweet


Armstrong Economics Blog/China

Re-Posted May 7, 2019 by Martin Armstrong

Trump wrote on Twitter over the weekend that tariffs on $200 billion in Chinese goods could rise to 25%. He said that a 25% tariff will soon be assigned to a selection of $325 billion in presently untaxed goods.

The tweet sent the Dow Jones Industrial Average down sharply while the yield on the 10-year Treasury note dropped to 2.48% as investors flocked to the government-backed safe-haven. The 30-year Treasury yield — which mortgage rates are often pegged to — dropped to about 2.9%.

This was the classic flight to quality showing that the marketplace is still unsettled and remains brainwashed over trade and interest rates as factors that are important within the US share market. We are still in a consolidation pattern and that is not likely to come to an end until the ECM turns in 2020.

May 7 2019

$2 Trillion of ‘Goodwill’: Did Pelosi and Schumer Just Play Trump?


Published on May 2, 2019

SUBSCRIBED 126K

President Trump meets privately with House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer, who emerge announcing “goodwill” and a common commitment to spend $2 trillion on infrastructure spending. Did Trump get played? Will Democrat insistence on environmental regulations drag out projects and jack up their price? If you enjoy reason, thought, civil dialogue and just plain fun, you’ll find your people at our new, Member-exclusive, website. You’ll join the team that produces and enjoys some 44 new shows each month, a rich video archive, and a dynamic Member-written blog. Find your people today at https://BillWhittle.com/register/
May 7 2019

“Democracy Dollars” to Make Everyone a Campaign Donor, Cut Power of Wealthy


Published on May 2, 2019

SUBSCRIBED 126K
New York Sen. Kirsten Gillibrand wants to reduce the influence of wealthy white men, and make every voter a campaign donor by giving us all vouchers — drawn on the federal treasury — so we can contribute to candidates of our choosing. Candidates would agree to refuse contributions above $200 in order to receive these “Democracy dollars.” What’s the harm in that? Bill Whittle explains. Lively discussion grounded in conservative principles comes not just in our 44 video new videos each month, and our deep archive, but in our exclusive Member-written blog, threaded discussions, and private message power. Come home to your people now at https://BillWhittle.com/register/