Month: July 2019

Authored by Chris Whalen via TheInstitutionalRiskAnalayst.com,

With the end of Q2 2019 earnings in sight, there is good news and bad news.  The good news is that the rate of change in US bank funding costs is slowing, from 50-60% year-over-year rates of increase to 30-40% or so this past quarter.  Indeed, even though the middle of the Treasury yield curve has essentially collapsed, there is no indication that funding costs are following suit. Interest rates in the US remain buoyant outside of the government bond market.

Across the Atlantic, the European Central Bank is preparing to make another futile round of asset purchase operations as Britain prepares to crash out of the European Union.  For those of you who missed the spectacle, former Goldman Sachs banker Mario “Whatever it Takes” Draghi, who is leaving the ECB in October, wants to provide more stimulus to Europe’s flagging economy.

“The European Central Bank on Thursday made clear it stands ready to cut rates and deliver “highly accommodative” monetary policy,” reports Market Watch, “including additional asset purchases, in its effort to push stubbornly low inflation back toward its target amid signs of deteriorating economic conditions in the eurozone.”

Despite growing evidence that negative interest rates are injurious to economic growth, housing affordability and employment, among other things, economists at the various central banks persist in calling for more of the same bad medicine.  How many times must we hear central bankers express “surprise” that inflation remains low when they are busily transferring resources from private savers to public sector debtors? 

The only people who seem to be in favor of a resumption of asset purchases (aka quantitative easing or “QE”) are increasingly worried equity managers.  Writing in the Financial Times over the weekend, Merryn Somerset Webb, editor in chief of MoneyWeek, boldly chastises BlackRock (BLK) executives for suggesting that the ECB should start to buy equities.  She writes:

“Our senses have been dulled by increasingly extreme monetary policy over the past decade, so we must try to look afresh.  What is being suggested here is that the ECB, a publicly owned institution, prints money and uses it to buy equity stakes in private companies.  In other words, the only way to save capitalism is to begin to nationalize it.”

Well, yes.  The global equity manager community is positively soiling its nappies at the thought that the central banks will stop buying assets.  An end to QE means an end to constantly rising asset prices.  Once asset prices start to fall, as is the case with the top half of the real estate market in the US, credit will return as an issue.  But can we actually deflate the various asset bubbles including global equities without causing an equally global liquidity crisis?

We tend to think that the cheering for rate cuts and resumption of asset purchases is a function of the Buy Side managers talking their shrinking liquidity book.  The suggestion of equity market purchases is apparently to prevent a larger, nastier repeat of the H2O investor run.  But isn’t that the point?  Now that the FOMC has set up the global equity markets for a sharp come down, does not that imply a whole series of new Maiden Lane type vehicles to buy illiquid crap and thereby provide ready cash to investors?

Short-term market liquidity aside, we suspect that the true motive of central bankers with respect to negative rates has nothing to do with growth or jobs and everything to do with the imminent insolvency of large industrial nations.  Italy, Japan and even that darling of the Buy Side equity manager, mainland China, belong on this list.

Only the fact of $14 trillion in government debt trading at negative yields keeps the grim reaper of sovereign debt restructuring from its work.  Yet even with negative rates, so much of the debt markets is visibly mispriced, to us begging the question as to when the great reset will commence.

CLO: Falling Volumes and Loan Quality

Speaking of falling liquidity and bad ratings, ponder the world of leverage loans and collateralized debt obligations (CLOs).  Since the start of the year, the performance of CLOs and leveraged loans has been stellar, but on falling volumes of new issuance.  Investors are quietly running away from the once popular asset class.

Two interesting trends have appeared in recent weeks, according to the astute folks at TCW: Increased dispersion in terms of the spreads among different sectors of issuers and a flow of decidedly lower rated assets into new deals.  This situation reminds us of 2007, when the Street tried to issue just a few more private mortgage securities deals containing the worst production from the subprime sausage factory.

Funny thing about CLOs is that they tend to trade way below the prices suggested by the usual suspects in the rating agency world.  Just for a bit of context, let’s have a look at the old corporate ratings scale from S&P which is shown below:

AAA:  1 bp

AA:  4 bp

A:  12 bp

BBB:  50 bp

BB:  300 bp

B:  1,100 bp

CCC:  2,800 bp

Default:  10,000 bp

So a “AAA” corporate rating is about 1bp of default risk or 1/100th of 1% of probability of default P(D).  An actual default is 10,000bp or 100%.  This is an interesting point because if you look at the yield spreads for CLOs, the “AAA” rated paper trades about 100-130bp over the Treasury yield curve or the spread for a “BBB” rating. The “BBB” paper trades about 300-400bp over the curve, which maps to a “B” rating.  And the “B” paper trades about 1,000bp over or about the same spread as the corporate ratings breakpoints above.  So why the discount on the investment grade rated CLO tranches? 

Could it be that investors don’t believe those “AAA” CLO ratings from Moody’s, S&P et al, this even though the CLO market has rallied since January?  Maybe that’s why investors continue to flee the sector.  TCW notes that asset under management (AUM) dedicated to CLOs among mutual funds have been cut by a third since the FOMC’s December’s massacre.  Yet loan fund outflows have apparently been offset by high-yield investors grazing on new, lower rated CLO issuance, albeit at greatly reduced volumes vs a year ago.  Maybe a new asset class? “Junk CLOs.”

As we told our friends at CNBC last week, the biggest risk in the market today is not credit – that comes later – but rather liquidity risk. When investors head for the exits after an extended, central bank fueled asset bubble, bad things happen. When you see BLK executives openly asking the ECB to come to the rescue, sure makes you wonder.  Truth is that all of the Buy Side managers want and need to be “too big to fail” since nobody can surf the waves of volatility being created by the lunatics on the FOMC.

Ditech, Bank America and the NY AG

To that point about central bank induced volatility, do make sure that you listen to the earnings call for the Fortress Investment (FIG) managed REIT, New Residential Investment Corp (NRZ) on Tuesday before the open.  Pay attention to the negative mark on the mortgage servicing assets.  The chart below from Mountain View Financial gives a frightening example of how higher coupon asset values have collapsed since Chairman Jay Powell changed the FOMC’s posture on interest rates last December. Caution: Mortgage bankers may feel an involuntary sense of nausea upon viewing the chart below.

Source: MountainView Financial

As we noted in the column for National Mortgage News referenced last week, the Fed has wreaked havoc on the world of mortgage finance since 2008.  Positive duration loans and securities have soared since December, but negative duration assets like mortgage servicing rights have fallen sharply from record multiples. Meanwhile lenders are barely making money and lending volumes are falling again after a spurt of refinance activity in Q2 2019.

From December 2018 through June, we saw the 4.75% coupons in conventional mortgage servicing  fall from 3.8x annual cash flow to 2.3x annual cash flow.  So as you listen to the NRZ earnings call early Tuesday morning, pay close attention to the markdown on servicing.  And also ponder the fact that the State of New York has decided to get involved with the bankruptcy of Dietech, a troubled residential loan servicer with close ties to NRZ.

You see, NRZ was the only viable bidder for the Ditech forward loan book, in part because the giant residential mortgage REIT had acquired servicing assets from Ditech over a year ago.  But these sale transactions have not yet closed, owing to the years of delay sometimes required by risk-averse trustees and the highly politicized state regulators that now control servicing transfers.

Did we mention that Ditech’s predecessor, Walter Investment Management Corp., in 2013 bought a fetid Bank of America (BAC) portfolio of more than 650,000 loans? A decade later, the cleanup of BAC continues and still consumes value.  Now you know why we waned to put BAC through bankruptcy a decade ago. Finality.

The State of New York and, ironically, Bank of America, have objected to the sale of Ditech’s reverse mortgage book to an affiliate of another REIT manager, Waterfall Asset Management LLC, according to Josh Saul and Jeremy Hill of Bloomberg News.  They write:

“The objection from BofA comes on top of separate complaints and objections from borrowers who oppose the bankruptcy plan; they say Ditech is trying to sell its business to a new owner free-and-clear of their claims against the company for mishandling their mortgages. The U.S. Trustee this week voiced similar concerns.”

Will the State of New York put the kibosh on the entire Ditech sale transaction?  If the Ditech sale transaction pending in the Bankruptcy Court is delayed, will the New York AG attack the earlier, as yet unperfected sales of servicing from Ditech to NRZ? One wonders if the State of New York AGs office understands just how little it would take to make this entire situation go sideways.  It’s all about liquidity.

via ZeroHedge News https://ift.tt/2LPdGyl Tyler Durden

Britain this week has rejected an Iranian offer to swap each other’s captured tankers, as the crisis involving the British-flagged Stena Impero and the Iranian oil filled Grace 1 previously captured by Royal Marines off Gibraltar on July 4 has remained deadlocked. 

Most observers agree it’s virtually a “foregone conclusion” that the tankers will ultimately be traded for one another, however, UK officials are still stalling over what they say are the norms of international law.  

“There is no quid pro quo,” Foreign Secretary Dominic Raab asserted on BBC radio. “This is not about some kind of barter. This is about the international law and the rules of the international legal system being upheld and that is what we will insist on.”

In boarding the Grace 1 on July 4 just as it sought to enter the Mediterranean, British authorities claimed to have thwarted illegal EU sanctions busting related to Syria, as the Grace 1 was reportedly bound for the Syrian port of Baniyas to offload some 2 million barrels of oil to the fuel-starved, war-torn country. Leaders in Tehran accused the UK of simply doing America’s bidding, however. 

Last Wednesday Iran’s president initially suggested an equal good faith swap of sorts. He proposed that should the UK release the Grace 1, Iran would do likewise and immediately release the Stena Impero. 

“If Britain steps away from the wrong actions in Gibraltar, they will receive an appropriate response from Iran,” Rouhani said Wednesday addressing a weekly cabinet meeting. The words came the same day Britain had reportedly sent a mediator to Iran seeking to negotiate the ship’s return and its 23 detained crew members. 

Meanwhile, the longer the standoff over the captured tankers ensues, the greater potential for military conflict amid an increased build-up of US and UK forces in the Gulf, with Britain’s second major warship arriving this week to escort British-flagged tankers through the Strait of Hormuz. 

via ZeroHedge News https://ift.tt/2LQlYGb Tyler Durden

Authored by Michael Snyder via The End of The American Dream blog,

An absolutely massive hole has formed in the upper atmosphere of the Sun, and our planet will align with that hole later this week.  Once the alignment happens, Earth will be bombarded by a “solar storm”, and nobody is quite sure yet how bad it will be.  If the storm is relatively minor, we could just experience a few disruptions to satellite communications and see some pretty lights in the sky. 

But if the storm is really severe, our electrical grid could be fried and we could experience widespread power outages.  According to the Express, “the solar storm will hit Earth on July 31 or August 1″…

Earth’s orbit around the Sun will soon align with a coronal hole – a hole in the Sun’s upper atmosphere – and solar particles will subsequently bombard the planet after they have made their way through space. Experts predict that the solar storm will hit Earth on July 31 or August 1. People in the northern hemisphere are likely to be treated to northern lights – or aurora borealis – as the solar winds bombard the upper reaches of the planet.

Of course North America is in the northern hemisphere, and so we could be in for a direct hit.

Since our satellites are outside our atmosphere, they are the most vulnerable during a solar storm.  If some of our satellites get fried, that could affect GPS navigation, cell phone communication, and satellite television services…

For the most part, the Earth’s magnetic field protects humans from the barrage of radiation, but solar storms can affect satellite-based technology.

Solar winds can heat the Earth’s outer atmosphere, causing it to expand.

This can affect satellites in orbit, potentially leading to a lack of GPS navigation, mobile phone signal and satellite TV such as Sky.

But if the storm is powerful enough, electronic devices all over the country could be damaged and our power grid could potentially be disabled.  According to astrophysicist Scott McIntosh, a really bad solar storm could potentially even cause some of our major cities to be without power for months…

McIntosh winces at the thought of what a massive storm might do: “Could you imagine DC or New York City being without power for six months, or eight months a year because of a solar event that they didn’t forecast well?”

So let us hope that this solar storm turns out to be relatively minor, because the potential for a catastrophic event is certainly there.

And our planet has definitely experienced very serious solar storms in recent history.  For example, just check out what happened in August 1972…

On August 4, an aurora shone so luminously that shadows were cast was seen from the southern coast of the United Kingdom[1] and shortly later as far south as Bilbao, Spain at magnetic latitude 46°.[38] Extending to August 5, intense geomagnetic storming continued with bright red (a relatively rare color associated with extreme events) and fast-moving aurora visible at midday from dark regions of the Southern Hemisphere.[39]

Radio frequency (RF) effects were rapid and intense. Blackouts commenced nearly instantaneously on the sunlit side of Earth on HF and other vulnerable bands. A nighttime mid-latitude E layer developed.[40]

Geomagnetically induced currents (GICs) were generated and produced significant electrical grid disturbances throughout Canada and across much of eastern and central United States, with strong anomalies reported as far south as Maryland and Ohio, moderate anomalies in Tennessee, and weak anomalies in Alabama and north Texas. The voltagecollapse of 64% on the North Dakota to Manitobainterconnection would have been sufficient to cause a system breakup if occurring during high export conditions on the line, which would have precipitated a large power outage.

If such an event happens this time, there will almost certainly be significant power outages.

In 1859, a much more serious solar storm hit our planet, and it fried telegraph systems all across North America…

On September 1–2, 1859, one of the largest recorded geomagnetic storms (as recorded by ground-based magnetometers) occurred. Auroras were seen around the world, those in the northern hemisphere as far south as the Caribbean; those over the Rocky Mountains in the U.S. were so bright that the glow woke gold miners, who began preparing breakfast because they thought it was morning.[6]People in the northeastern United States could read a newspaper by the aurora’s light.[11] The aurora was visible from the poles to the low latitude area[12], such as south-central Mexico[13], Queensland, Cuba, Hawaii,[14] southern Japan and China,[15] and even at lower latitudes very close to the equator, such as in Colombia.[16] Estimates of the storm strength range from −800 nT to −1750 nT.[17]

Telegraph systems all over Europe and North America failed, in some cases giving telegraph operators electric shocks.[18]Telegraph pylons threw sparks.[19] Some telegraph operators could continue to send and receive messages despite having disconnected their power supplies.[20]

At that time, we hardly possessed any technology that was capable of being affected by a solar storm.

If a similar event happens this week, the damage will be absolutely cataclysmic.

As I was researching this article, I also discovered that this solar storm will hit us at the time of the “Black Supermoon”…

According to Farmer’s Almanac, some people call the second moon in a single month a Black Moon—this is the definition that’s used most often, and the one that applies to the full moon happening on July 31st. The term has also been used where no new moon occurs in a month, which only happens every 5 to 10 years in the month of February.

This particular moon on July 31st is called a Black Supermoon because it will be near its closest point to Earth.

I don’t know if the fact that these two events are happening so close to one another has any significance, but I did find it to be interesting.

We live in very unusual times, and our world is getting stranger every day.  Global events are beginning to accelerate, and many of us feel like all sorts of craziness could start breaking loose at any moment.

Scientists tell us that it is just a matter of time before another solar storm of the magnitude that North America experienced in 1859 hits our planet again.

At this point we are completely and totally unprepared for such a storm, and so let us hope that the solar storm that will hit us this week is not of that variety.

via ZeroHedge News https://ift.tt/2KhlUfv Tyler Durden

Paige Thompson, the 33 year old former Amazon employee who was been charged with stealing sensitive data belonging to 100 million Capital One credit card applicants, is a transgender woman who has shown signs of erratic behavior on line, including sharing about the depression she felt after having to recently euthanize a pet, according to the Daily Mail.

Using the online handle “erratic”, Thompson was active on hacker Twitter. It’s not clear why Thompson stole the data, but according to Bloomberg, the breach ranks as one of the largest-ever involving a US bank – though the data apparently wasn’t distributed to other criminals to use in identity theft schemes or other fraud. Thompson was arrested by federal prosecutors in Seattle.

Paige Thompson

Thompson is believed to have stolen the data from an AWS data-storage system that had an improperly configured firewall that Thompson was able to breach. Though Amazon insists the hack wasn’t its fault, and that Thompson infiltrated Capital One’s system to access the data.

After allegedly stealing the data, Thompson made no efforts to conceal her involvement – in fact, she posted about it publicly on forums to the point where other hackers warned her that she could be facing jail time for posting some of the information in the hack.

It’s estimated that she accessed more than 140,000 credit cad numbers and more than 100 million names.

Capital One only learned of the hack, according to BBG, when an anonymous tipster emailed them on July 17 to report the breach after seeing some of the data Thompson had posted to her Github.

So far, nobody’s money has been taken, and no sensitive data stolen has been used for nefarious purposes. Most of the data was taken from consumer and small-business credit-card applications.

“This information included personal information Capital One routinely collects at the time it receives credit card applications, including names, addresses, zip codes/postal codes, phone numbers, email addresses, dates of birth, and self-reported income.”

Thompson’s defense lawyers might have a hard time coming up with a defense because Thompson is alleged to have posted messages on social media admitting to the hacks while knowing that what she was doing was illegal.

She was charged with computer fraud and abuse.

via ZeroHedge News https://ift.tt/332cnkH Tyler Durden

Authored by Michael Snyder via The Economic Collapse blog,

So there is a lot of buzz that the Federal Reserve is about to cut interest rates – and it might actually happen.  We’ll see.  But if it does happen, it will directly contradict the carefully crafted narrative about the economy that the Federal Reserve has been perpetuating all this time. 

Fed Chair Jerome Powell has repeatedly insisted that the U.S. economy is in great shape even when there has been a tremendous amount of evidence indicating otherwise.  And of course President Trump has been repeatedly telling us that this is “the greatest economy in the history of our country”, but now he is loudly calling for the Federal Reserve to cut interest rates as well.  Something doesn’t seem to add up here.  If the U.S. economy really was “booming”, there is no way that the Fed should cut interest rates.  Right now interest rates are already low by historical standards, and theoretically it is during the “boom” times that interest rates should be normalized.  But if the U.S. economy is actually slowing down and heading into a recession, then a rate cut would make perfect sense.  And if that is the reality of what we are facing, then the economic optimists have been proven dead wrong, and people like me that have been warning of an economic slowdown have been proven right.

If the talking heads on television are correct, we’ll probably see a rate cut.  In fact, apparently there are some people that are even pushing “for a 50 basis point cut”…

Most Fed watchers believe that the central bank will cut its funds rate, now hovering between 2.25% and 2.5%, by a quarter point, also known as 25 basis points. A small group — including President Donald Trump’s latest nominee for Fed governor — are pounding the table for a 50 basis point cut, which would take the rate below 2%. A rate cut of any size would be the first since the 2008 financial crisis.

A 50 basis point cut is something that would normally only be done during an economic emergency.

Have we already reached such a point?

That wouldn’t seem to be the case.  Stock prices are still at record highs, and at least according to the government’s highly manipulated figures, U.S. GDP is still growing…

The nation’s gross domestic product – the value of all goods and services produced in the U.S. – increased at a seasonally adjusted annual rate of 2.1% in the April-June period, following a 3.1% gain in the first quarter, the Commerce Department said Friday. Economists expected a 1.8% increase in output.

The report comes amid mounting worries that the sluggish global economy and President Trump’s trade war with China could lead to a recession by next year.

Yes, there are tons of other indicators that are clearly telling us that an economic slowdown has already begun, and I am not going to repeat everything that I have been saying for the past 6 months in this article.

But even though things are definitely moving in the wrong direction, I would definitely not call what we are currently experiencing “an economic emergency” just yet.

After all, things can’t be too bad if a 16-year-old kid just won 3 million dollars playing video games…

A teenager from Pennsylvania won $3 million and took home the top prize at the 2019 Fortnite World Cup on Sunday. Kyle “Bugha” Giersdorf scored 26 more points than runner-up “psalm” to win the eSports tournament held at Arthur Ashe Stadium in Queens.

“Words can’t even explain it. I’m just so happy,” the 16-year-old said in an interview posted to Twitter by organizers. “Everything I’ve done, the grind, it’s all paid off. It’s just insane.”

Good for that kid.  I wish that I was talented enough to be a world champion at something.

Unfortunately, when things get really bad in this country money is going to start getting really tight, and we simply are not there yet.

So could it be possible that there is another reason for the sudden push to get the Fed to reduce rates?

Well, CNBC’s Steve Liesman seems to think that there could be a political motivation…

“Think about what happens when a person gets up at a rally and starts railing against The Federal Reserve, and starts to create what could lead to Congressional pressure on The Fed, then you could imagine that their could be support for a different system.”

“I think they think there’s a lot of political downside risk to getting this wrong.”

If the Federal Reserve doesn’t cut rates and the U.S. economy really starts going off the rails, they will be President Trump’s number one economic target during the 2020 campaign.

And it has already gotten to the point where Trump is regularly attacking them on social media.  For example, he posted the following just a little while ago…

The Fed “raised” way too early and way too much. Their quantitative tightening was another big mistake. While our Country is doing very well, the potential wealth creation that was missed, especially when measured against our debt, is staggering.

If a wave of anti-Fed sentiment helps get Trump re-elected, that could potentially be a nightmare scenario for the folks over at the Federal Reserve.  With a full second term and a Republican majority in Congress, President Trump could decide to dramatically reform or completely get rid of the Federal Reserve system altogether.  Of course those that follow my work regularly know that I would be thrilled by this, because I have been advocating for the elimination of the Federal Reserve system for many years.

The sort of political scenario that I just outlined probably won’t happen, but even if there is a small chance that it could happen the people running the Federal Reserve have got to account for that possibility.

So cutting rates would be a way to “play it safe” by appeasing President Trump and his supporters.  If President Trump senses that the Fed is on his team, then he probably won’t be inclined to make a big move against them.

In any event, a small rate cut is definitely not going to do much to alter our overall economic trajectory.

Because the truth is that an economic slowdown has already begun, and many experts are anticipating that it will greatly accelerate during the second half of this year.

via ZeroHedge News https://ift.tt/2YqqHQI Tyler Durden

After mixed home sales data (new higher and existing lower), pending home sales were expected to increase by 0.5% MoM but beat handily, rising 2.8% MoM.

As Bloomberg notes, contract signings to purchase previously owned U.S. homes rose in June by the most in three months, indicating demand may pick up with the help of lower mortgage rates and steady job growth.

“Job growth is doing well, the stock market is near an all-time high and home values are consistently increasing,” NAR Chief Economist Lawrence Yun said in a statement.

“When you combine that with the incredibly low mortgage rates, it is not surprising to now see two straight months of increases.”

Pending home sales broke a 17 month losing streak, rising 1.6% YoY – the most since Feb 2017…

Contract signings increased 5.4% from the prior month in the West, the most in three months; rose for a fourth month in the Midwest; and advanced in the South and Northeast.

Pending home sales are often looked to as a leading indicator of existing-home purchases and a measure of the health of the housing market in the coming months.

via ZeroHedge News https://ift.tt/2Yyy8VP Tyler Durden

Authored by Paul Joseph Watson via Summit.news,

A lawyer for one of Jeffrey Epstein’s victims fears that a “hit” has been put out on Epstein’s life that will prevent him from implicating powerful people who are complicit in the sex trafficking of girls and young women.

Spencer Kuvin doubts that Epstein’s recently sustained jail injuries were a suicide attempt, telling the Sun:

“I question whether or not it was a true suicide attempt that Mr Epstein was involved in in jail or whether or not there may be some powerful people who just don’t want him to talk.”

Kuvin questioned how Epstein could have choked himself, adding, “There’s no doubt in my mind that no jail will protect you when there’s powerful people that want to reach you – wherever you are.”

Even if Epstein is kept away from the general prison population, “there are still people who can get to him, ultimately,” warned Kuvin.

Kuvin speculated whether Epstein would “survive” to make his upcoming trial, comparing the situation to the 1959 Profumo affair, where socialite Stephen Ward was put on trial for procuring young women for the British elite but killed himself before the verdict was announced.

“We know that Mr Ward, who was involved in that affair and the procurement of women for some notable people, was given bail and committed suicide while out on bail – so it’ll be interesting to see whether or not Mr Epstein attempts again to get out on bail and if he does whether he survives between now and the date of his trial,” said Kuvin.

The lawyer also noted that Eyes Wide Shut-style sex parties attended by masked men had been taking place for over 50 years.

*  *  *

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via ZeroHedge News https://ift.tt/2KihMf9 Tyler Durden

The headline Conference Board Consumer Confidence data exploded higher, jumping from an upwardly revised 124.3 to 135.7 – just short of its highest since the year 2000.

• Present situation confidence rose to 170.9 vs 164.3 last month

• Consumer confidence expectations rose to 112.2 vs 97.6 last month

Those claiming business conditions are “good” increased from 37.5 percent to 40.1 percent, however, those saying business conditions are “bad” also increased slightly, from 10.6 percent to 11.2 percent. Consumers’ appraisal of the job market was also more favorable. Those saying jobs are “plentiful” increased from 44.0 percent to 46.2 percent, while those claiming jobs are “hard to get” declined from 15.8 percent to 12.8 percent.

“After a sharp decline in June, driven by an escalation in trade and tariff tensions, Consumer Confidence rebounded in July to its highest level this year,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

“Consumers are once again optimistic about current and prospective business and labor market conditions. In addition, their expectations regarding their financial outlook also improved. These high levels of confidence should continue to support robust spending in the near-term despite slower growth in GDP.“

Consumers were more optimistic about the short-term outlook in July. The percentage of consumers expecting business conditions will be better six months from now increased from 19.1 percent to 24.0 percent, while those expecting business conditions will worsen declined from 12.6 percent to 8.7 percent.

 

via ZeroHedge News https://ift.tt/333wPC6 Tyler Durden