iftttwall

Who could have possibly thought that a soaring dollar would have an adverse impact on the US trade deficit, and thus, the US economy. Well, not the Fed, if only for now, because just as the Fed hiked rates only for the second time in a decade, the US advance goods trade deficit soared from $61.9 billion to $65.3 billion, far higher than the consensus print of $61.6 billion. This was the highest advance trade gap since March of 2015 when the dollar was likewise soaring.

The reason for the far greater than expected deficit: exports of goods fell 1.0%, while imports of goods rose 1.2%.

Exports of Goods were down 0.99% in November, according to the advance estimate. Most of this $1.2 billion decline came from a $1.8 billion drop in exports of capital goods, which was offset by a $1.2 billion rise in exports of industrial supplies.

Imports of Goods were up 1.19% in November, according to the advance estimate. This $2.2 billion rise was largely a result of a $2.0 billion rise in industrial supplies imports.

All else, equal, this means that Q4 GDP is about to be revised between 0.2% and 0.4% lower, from its current perch, which according to the Atlanta Fed is currently at 2.5%.

via http://ift.tt/2hz7wDG Tyler Durden

Submitted by Leonard Hyman & William Tilles via OilPrice.com,

Donald Trump in the White House and Theresa May in 10 Downing Street. They will open the door to more nuclear spending, no doubt. Prime minister May has already given a green light to Britain’s most expensive energy project, a heavily subsidized nuclear power station at Hinkley Point. Based on the most recent federal budgeting approvals, we expect that no U.S. nuclear weapons programs will want for funds. But, despite all the post-election industry euphoria, should we anticipate a full renaissance for U.S. commercial nuclear power? Is that just a bridge too far, so to speak? Let's look at the what will go into some of these decisions.

1.Need for the product. With no growth in the market for electricity, the industry needs new power plants only to replace old ones and to decarbonize output in order to mitigate global warming. The Trump administration has declared an end to the so-called war on coal, which makes it less likely that the electric industry will have to close old coal fired generating stations soon and it has categorized global warming as a hoax, which removes an excuse to build non-carbon producing nuclear units. The nuclear industry will need another rationalization for expansion.

2.Economics. Nuclear power looks like an expensive means of producing base load electricity with significant known risks and ongoing waste storage/disposal issues. A new 1,000 MW nuclear plant ordered today for 2025 in service would cost about $10 billion. New renewables can produce power at no higher a cost per kwh, without the same long construction schedule and need to build so large a unit. A new base load gas fired unit of the same size capacity could be completed in a few years and cost one fifth as much per MW and produce at a lower cost per kwh. Producing a commodity like electricity at a relatively high price in a competitive market is not a winning business strategy. Nuclear has to offer something else.

3. Base load generation. Nuclear plants run as base load units, something renewables cannot do — at least not until economical energy storage comes into the picture– because of the intermittency of their output. Still, renewables, particularly wind in the U.S. midwest and Texas, will temporarily displace more large central station power generation, forcing more units to “cycle”. Nuclear plants are less well suited for this duty. Flexibility and load following may become more highly valued than base load. This also reflects a change in the electric industry itself. The former command and control or paternalistic relationship between utility and consumer is changing. At a minimum consumers are dictating how their energy is produced, agreeing for example to pay premiums for “greener” forms of electricity. In other words, nuclear has something to sell in the base load market, but that market may be in decline. Related: Are Abandonded Mines A Solution For This Energy Dilemma?

4. Power markets. Neither U.S. nor UK power markets will support unsubsidized or non-mandated new generation. To the extent that the U.S. wholesale power markets remain both deregulated and regulated in parts, this is also a negative for new nuclear capacity. Deregulated power markets, both here and in the UK, aren’t permitting wholesale prices high enough to finance new gas fired capacity much less new nukes. Regulators will want a cost benefit analysis before approving a new nuclear facility. Basically, this means that a new nuclear project in order to proceed will need a subsidy of one sort or another. A carbon tax would do the job even better. But what GOP politician would vote for that tax, especially if some of their constituents view the issue of global warning as a hoax?

5. Nuclear as infrastructure. As currently built, nuclear projects require a large contingent of well paid labor and massive amounts of steel and concrete. A handful of qualified engineering firms, the usual suspects, also build other infrastructure and one can only think that these politically connected firms can lobby for nuclear projects as hard as they lobby for new bridges or highways. Nuclear construction then could play a role as a component of the as part of the infrastructure program needed to boost the economy. The problem, however, is that nuclear infrastructure has some drawbacks.

6. Resilience needed. Infrastructure should be resilient and anti-fragile. In battle, would we rather attack our enemy in a swarm formation as part of a horde of thousands or ponderously approach the fields of honor as a monolithic “death star”. The former is anti-fragile. The latter, as we all know from the movies (no spoiler intended), is powerful but most definitely fragile. The “enemy” here approaches from two sides: technological obsolescence (which is slowly confronting all central station power generators) and simple obsolescence from a harsher operating environment. In plain terms, stuff just wears out faster. It’s a riskier business that’s for sure.

7. Investor-owned operators needed. The two major U.S. electric utilities with an outsized presence in nuclear power, Entergy and Exelon, could be characterized as the Dogs of the UTY, thanks to their less than stellar stock performances. EDF, the builder of the new British station, almost didn’t get to a positive decision on the new plant due to a revolt on the part of concerned directors. Do investors want more nuclear power? Probably not without subsidies or guarantees.

8. Coastal locations needed. One problem with commercial nuclear power is not that it produces expensive electricity via fission, but that its voracious need for cooling water requires mostly coastal or riparian sites. Ignore the technology for a moment. Rising seas, hurricanes, storm surges and the like could render an ever broader swath of coastline unsuitable for infrastructure of any sort. Even if the Trump administration sees no issues, property and casualty insurors as well as and bond investors might.

9. Using nuclear subsidies as corporate welfare. New York and Illinois both launched programs best described as Welfare for the Nuclear Elderly. It’s heart-warming to see such generosity just prior to the holiday season aimed at aging, uneconomic nuclear plants. This sounds to us like a job creation/preservation program for rural areas (where high paying jobs are scarce) masquerading as an environmentally beneficial, carbon mitigating proposal. There is nothing inherently evil about subsidizing private sector jobs in the electric utility industry. We just wish they’d drop the low carbon fig leaf as a rationale or change the market so it pays for the supposed virtues of nuclearinstead of making this a political handout. But note that handouts to old nukes do not encourage the building of new ones.

10. Nuclear for defense. Defense spending may crowd out civilian needs.Themilitary already plans to modernize its nuclear warfare capability over comingdecades. In fact, if we think about where nuclear power as an energy source has worked best, it is in military-maritime applications, things like submarines and arctic icebreakers. If a nuclear accident on a naval vessel at sea occurs resulting in all hands lost–that is clearly a tragedy. If Indian Point goes full metal Fukushima, rendering significant parts of Westchester County, NY uninhabitable, we don’t even have the adjectives much less the liability coverage. We also doubt that military applications will take a back seat in the new administration. Beyond that, there are two big nuclear related projects in the U.S.: completion of the Yucca Mountain nuclear waste repository in Nevada and construction of a vitrification facility at the Hanford, WA site now holding significant amounts of highly radioactive materials in less than perfect circumstances. More than likely, the military, Yucca and Hanford will absorb the lion’s share of new nuclear-related infrastructure monies.

Without a rationale rooted in decarbonization or in shortage of alternative fuels or energy sources, the new administration in the U.S. can only make a weak case for commercial nuclear power. If it will not embrace direct subsidies (which the incoming Congress may be reluctant to do as a matter of principle), the administration may have a hard time finding private partners for nuclear projects. But it can, and probably will, make a strong case for completing the huge nuclear tasks already on the government’s plate. That spending could boost the economy just as much as putting up new nuclear power stations.

via http://ift.tt/2hQBYoN Tyler Durden

This does not fit with the narrative. Continuing Jobless Claims are up over 6% in the weeks following Donald Trump’s election…

This is the biggest surge since May 2009…

Finally, while Jeffrey Gundlach’s “granddaddy of recession indicators” is based on the unemployment rate, we not that initial jobless claims are rapidly approaching their 2-year average – which in the past has probabilstically been followed by a recession…

Still stocks are at record highs so what could possibly go wrong?

via http://ift.tt/2iIzEV0 Tyler Durden

As noted previously, at some point today the White House is set to unveil new sanction, and other retaliatory “measures” against Russia and specifically the Kremlin, in retaliation for what according to a constantly repetitive narrative has been Russian hacking of the US election. Obama will do so by using a 2015 executive order that would allow the president to freeze the US assets of Russians overseas who have engaged in cyber acts, even though such order only applies to actions that have threatened U.S. national security or financial stability, neither of which have yet been invoked in the current “hacking” scandal.  Further, per a “senior administration official,” use of the existing law would require (1) actual election infrastructure to be designated as ‘critical infrastructure’ and (2) the administration to prove that such infrastructure was actually “harmed,” conditions which the National Security Council say have not been met.

The problem is that if the administration relies on the 2015 Executive Order to launch this latest round of diplomatic “retaliation”, it will also have to demonstrate some proof that the individuals or entities it names were involved in the scheme, and until now, the White House has provided no documentation to back up its official October assessment that the Russian government was attempting to “interfere” in the U.S. election besides just repeating the allegation over and over and over, as if that somehow makes it true.

Which perhaps is why this morning The Hill writes that the Obama administration is “under intense pressure to release evidence confirming Russian interference in the presidential election before leaving office.”

As the website correctly note, “the administration up until now has provided little documentation to back up its official October assessment that the Russian government was attempting to “interfere” in the U.S. election.” Actually, it has provided exactly zero documentation, but that has not stopped the media machine from parroting the claims and repeating it ad nauseam, in hopes the emotional appeals through repetition will make it factual.

Just as bad, the Hill also writes that nor has Obama “corroborated subsequent leaks from anonymous officials contending that the CIA believes the campaign was an attempt by Russian President Vladimir Putin to ensure Donald Trump’s victory.”

So where are we in the process of producing evidence? Apparently nowhere:

President Obama has ordered the intelligence community to produce a complete review of its findings before Trump takes office on Jan. 20. The White House has said it will make as much of the report public as it can. But officials have warned that the document will contain “highly sensitive and classified information” and it is unclear how much concrete evidence it will be able to release.

 

Releasing any documentation of Russian interference would be a slap in the face to Trump, who has rejected assertions that the Kremlin was involved in the hacks on the Democratic National Committee (DNC) and Hillary Clinton campaign chairman John Podesta. The president-elect and his team have treated any suggestion of Russian involvement as an attack on the legitimacy of his election win, and Republican leaders in Congress have treaded carefully on the issue.

Well, let Obama released the proof first, then we’ll worry about “slaps in faces.” For now, all we have are ever louder, if unbacked allegations by the CIA:

The firestorm ignited by the CIA’s assessment has spurred calls from both parties for the administration to provide proof of Russian meddling. In late November, seven Democrats on the Senate Intelligence Committee urged the White House to declassify “additional information concerning the Russian Government and the U.S. election.”

 

As of last week, they had not yet received a response.

 

The House Intelligence Committee earlier this month demanded a briefing on the subject, but was rebuffed intelligence leaders, which said that they will not brief Congress again until the completion of the report for the White House.

 

Journalists have also pushed for more documentation. VICE journalist Jason Leopold and Ryan Shapiro, a Ph.D. candidate at the Massachusetts Institute of Technology (MIT), filed a Freedom of Information Act (FOIA) lawsuit against the CIA, the FBI, the Department of Homeland Security and the Office of the Director of National Intelligence seeking records pertaining to Russian interference. 

 

And even Trump’s transition team has said the White House should provide definitive proof to back up its claims. “If the CIA Director [John] Brennan and others at the top are serious about turning over evidence … they should do that,” Trump aide Kellyanne Conway said earlier this month. “They should not be leaking to the media. If there’s evidence, let’s see it.”

Meanwhile, Obama has asked the public to take the assessment of Russian interference largely on faith, suggesting that the American people already know everything they need to know to accept the conclusions of the CIA report.  Just like they knew all about Iraq’s “Weapons of Mass Destruction.”

“There are still a whole range of assessments taking place among the [intelligence] agencies,” Obama told NPR earlier this month, referring to the report. “But that does not in any way, I think, detract from the basic point that everyone during the election perceived accurately — that in fact what the Russian hack had done was create more problems for the Clinton campaign than it had for the Trump campaign.”

 

Private security firms have provided more detailed forensic analysis linking two well-known Russian intelligence groups to the data breach at the DNC. Beyond that, the evidence of Russian interference is compelling, though circumstantial.

 

Russia has a long history of trying to influence elections across Europe, and intelligence experts say it’s plausible that Putin would see an upside to a Trump White House, given his expressed desire to “get along” with the Kremlin.  He hinted in the fall that he might refuse help to some NATO allies should they be attacked by Russia. The statement sent shock waves through the foreign policy community, as the alliance’s chief purpose has long been to serve as a check on Russian aggression.

 

Although there is disagreement among lawmakers about whether Russia intended to help Trump, few disagree that the DNC and Podesta hacks were in some way an attempt to meddle in the election. Public reporting and previous briefings by intelligence agencies appear to have convinced them of that.

To be sure, the neocons in the Senate are getting restless and are desperate to damage relations with Russia even more:

“There are 100 United States senators. … I would say that 99 percent of us believe that the Russians did this, and we’re going to do something about it,” Sen. Lindsey Graham (R-S.C.) told CNN’s Jim Sciutto on “The Situation Room” on Tuesday.  Lawmakers have vowed to hold hearings on the matter when Congress returns in January.

Obama, meanwhile, has promised to deliver his report to Congress and release what he can as soon as the intelligence community completes it. “I’m sure what is happening right now is they are going through the calculus of, ‘How much intelligence, how many sources and methods are we willing to burn to make our point?’” said one former White House official.  

“My guess is they will have information that indicates course of conduct and links to activities that suggest motivation,” but no smoking gun that will convince those who aren’t already convinced, he said.

“I think the link between what [the public] gets to see and whatever retaliatory action [Obama takes] is going to be very, very tight,” the former official said.  “Showing information is a necessary precondition for most of the public types of retaliation that have been contemplated.”

Except, apparently, in this case, in which Obama is again set to launch a cyberwar shot across the Russian bow with the US public once again expected to believe that its administration would never lie to it.

And with that we await for Obama to disclose just which Russians it has decided to put on the latest sanctions list, and whose assets Washington believes it can confiscate without suffering the consequences of Russian fury. And, of course, we will eagerly look forward to the Russian counter-retaliation.

via http://ift.tt/2ihjq2i Tyler Durden

Submitted by Mike Krieger via Liberty Blitzkrieg blog,

Here’s your “it’s hard to believe, but true” article of the day.

Reason reports:

Lawmakers in Montreal have moved to crack down on new restaurants, in an odious attempt to protect existing ones.

 

“Montreal has one of the highest restaurant per-capita ratios in North America and the amount of places to eat is worrying local politicians,” reads a Canadian Press piece from earlier this week.

 

If that sounds awful and weird, that’s because it is. Studies of the best places to eat often conclude that the more restaurants a city has per-capita, the better its restaurant scene. It’s no surprise that the more choices a consumer has, the better off that consumer is.

 

Montreal does have an impressive number of restaurants. Data shows Montreal trails only New York City in terms of restaurants per capita in North America. As in New York City, that competition is great for Montreal’s consumers. But it puts pressure on incumbent restaurateurs. So lawmakers have decided to side with the latter.

 

The worry expressed by lawmakers has turned into a ban on new restaurants from opening within 25 meters of an existing one along the city’s Rue Notre Dame, the street the now-shuttered Sans Menu once called home. Notably, the action comes as “a number of commercial and retail properties remain empty” in this same part of Montreal.

 

The law “risk[s] turning the city’s restaurant scene into a heavily bureaucratized nightmare like the province’s construction industry,” says the head of Quebec’s restaurant association, who notes that real threats to the industry come from “road construction, high property and licensing taxes, as well as the potential for a $15 hourly minimum wage.”

It’s not just brick and mortar restaurants though. Montreal’s increasingly absurd stance when it comes to food, also applies to food trucks.

Speaking of food trucks, Montreal recently ended its decades-long ban on food trucks, with a twist. Food trucks can’t park within 60 meters of a brick-and-mortar restaurant. Also: “For food safety,” reports a Canadian news service, “the trucks chosen will have to be associated with an already established restaurant.”

You can’t make this up.

via http://ift.tt/2ibnaEf Tyler Durden

With the Obama administration set to unveil a fresh round of sanctions against Russia as soon as today, allegedly in retaliation for the Kremlin’s “hacking” of the US elections, President-elect Trump had a few words of his own what he thinks the best steps for the US are: move on.

“I think we ought to get on with our lives,” Trump told reporters Wednesday night outside of Mar-A-Lago, his Florida resort, also casting doubt on the government’s assessment that Russia hacked U.S. political organizations.

As has been extensively reported over the past 6 weeks, U.S. intelligence agencies have “concluded”, without providing one piece of evidence, that the Russian government orchestrated cyber attacks against the Democratic National Committee and other American political groups and then leaked information to interfere in the Nov. 8 elections. Russia has denied the accusations. Trump has said he wants to improve relations with Russia and has praised its president, Vladimir Putin.

“I think we ought to get on with our lives,” Trump told reporters in Florida, with boxing promoter Don King standing by his side. “I think that computers have complicated lives very greatly. The whole age of computer has made it where nobody knows exactly what is going on.” Hillary Clinton would certainly agree with that.

Before leaving for his last Hawaiian vacation, Obama said on Dec. 16 that the U.S. will retaliate against Russia at an unspecified time, in a “thoughtful, methodical way.” The response may be covert, public or both, he said. Ironically, overnight it was leaked to every press outlet, that the retaliation would take place at a very specific time: today.

Earlier Wednesday, Bloomberg reported that Senator Lindsey Graham, a Republican from South Carolina, said during a trip to the Latvian capital that Russia and Putin should expect new sanctions for meddling in the election.

In Florida, Trump was asked by reporters about efforts to disclose intelligence about Russian interference in the election. “They should do the best they can, figure it all out,” he said.

Trump said he hasn’t spoken to Lindsey Graham. “I don’t know what he’s doing. I haven’t spoken to Sen. Graham,” Trump said. “As you know, he ran against me.”

via http://ift.tt/2hQpkpW Tyler Durden