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November 6, 2018

US ECONOMY: COULD RECORD US DEFICIT TRIGGER THE NEXT RECESSION: ? "As U.S. trade gap widens to unimaginable hights."

The U.S. trade deficit rose to a seven-month high in September as imports surged to a record high amid strong domestic demand, offsetting a rebound in exports.

The Commerce Department said on Friday the trade gap increased 1.3 percent to $54.0 billion, widening for a fourth straight month. Data for August was revised to show the trade deficit rising to $53.3 billion instead of the previously reported $53.2 billion.

Could the US Economy collapse?

But here's the bigger question that retail investors and Wall Street are currently asking: Is the current stock market correction over? Given the many headwinds facing stocks and the U.S. and/or global economy, the answer may not be what investors want to hear.

Here are 25 reasons and/or scenarios that could cause the stock market to head substantially lower than where it's currently valued.

1. The ongoing trade war with China escalates, raising material costs, curbing consumer spending, and hurting corporate profits.
2. Corporate share buybacks fail to boost per-share profits as much as expected.
3. Democrats win one or both houses of Congress, hurting the chance of Republicans to pass further fiscal stimulus legislation.
4. The federal budget deficit continues to soar, placing added emphasis on our growing national debt, currently at more than $21 trillion.
5. The U.S. dollar keeps strengthening, placing pressure on exports and worsening the U.S. trade deficit with foreign countries.
6. FANG stocks – that's Facebook, Amazon.com, Netflix, and Google (now Alphabet) -- continue to draw the ire of short-sellers.
7. The Federal Reserve gets overly aggressive with interest rate hikes, sapping lending demand.
8. The yield curve flattens, reducing the desire of banks to lend money.
9. Interest rates rise, providing incentive for investors to ditch volatile equities for the safety of bonds and bank CDs.
10. Britain falls into a "hard Brexit." With few or no trade deals in place, the U.K. falls into recession, taking the U.S. and other developed countries with it.
11. China's economy experiences its slowest growth in decades, placing pressure on its ability to import from the U.S. and other key players.
12. The U.S. housing market shows signs of weakening, with important markets like California seeing a steep drop-off in new home sales.
13. Credit-card delinquencies begin to trickle higher, demonstrating the inability of consumers to meet their payment obligations.
14. The subprime auto loan market bubble bursts.
15. The U.S. goes to war, regardless of the reason or the country in question.
16. An errant tweet from President Trump stirs Wall Street and investors.
17. A flash crash caused by computer algorithms results in substantially reduced liquidity and perpetuates a rapid move lower in the stock market.
18. Investor emotions (especially those of day traders) get out of hand and send traders running for the exit.
19. The unemployment rate, which is at a 49-year low, begins to rise, signaling peak employment and the possibility of a weakening economy.
20. Disruption in important oil-producing countries causes crude prices to skyrocket or plunge. Either way, it could create sticker shock or job losses and adversely impact the U.S. economy.
21. U.S. GDP data shows slowing growth, which, in turn, cools investor expectations for stocks, sending them lower.
22. Inflation comes in far lower than expected, signaling that businesses have little pricing power. The prospect of deflation could wreak havoc on corporate earnings, causing the market to fall.
23. The U.S. debt ceiling is hit (yet again), but the political divide in Congress becomes too great for lawmakers to overcome, allowing the shutdown to perpetuate for months.
24. European debt crisis 2.0 hits, with countries like Italy unable to dig their way out of years of loose borrowing.
25. A widely followed pundit, such as Warren Buffett, sounds the cry of the stock market being overvalued.

In other words, there is no shortage of reasons the stock market could tumble from its recent all-time highs.

Bottom-line, however -it does not look good for the US Economy as the deficit is coming close to a trillion US dollars.Impossible to pay it back, unless by slashing government spending, and increasing taxes.

Unlike the trillion dollar budget deficits that occurred during the Obama administration that were temporary and largely the result of the Great Recession, the Trump deficits that will soon reach and exceed $1 trillion are permanent and will only get worse in the years ahead.
The Trump deficits are the result of changes in federal spending and revenue that will continue to be in place until some president and Congress decide to reverse them, that is, to increase taxes and make cuts to popular programs.

EU-Digest

November 5, 2018

Iran: don!t threaten us, Iranians tell US

Don't threaten us,' Iranians tell US as sanctions set to return -

Read full report at:
http://aje.io/mkcgg

November 4, 2018

US Midterm Elections: A Nation in Turmoil Prepares to Deliver a Verdict on Trump - by Alexander Burns and Jonathan Martin


The tumultuous 2018 midterm campaign, shaped by conflicts over race and identity and punctuated by tragedy, barreled through its final weekend as voters prepared to deliver a verdict on the first half of President Trump’s term, with Republicans bracing for losses in the House and state capitals but hopeful they would prevail in Senate races in areas where Mr. Trump is popular.

The president was set to storm across two states Saturday, two Sunday and three Monday in an effort to pick off Senate seats in Indiana, Florida and a handful of other battlegrounds where Republicans hope to add to their one-seat majority in the chamber. Democrats and liberal activists, galvanized by opposition to Mr. Trump, gathered Saturday to knock on doors and make turnout calls from Pennsylvania to Illinois to Washington to try to erase the G.O.P.’s 23-seat House majority.

The run-up to the election, widely seen as a referendum on Mr. Trump’s divisive persona and hard-line policy agenda, has revealed deep strains in the president’s political coalition and left him confined to campaign in a narrow band of conservative communities. Republicans’ intermittent focus on favorable economic news, such as the Friday report showing strong job growth, has been overwhelmed by Mr. Trump’s message of racially incendiary nationalism.

While Mr. Trump retains a strong grip on many red states and working-class white voters, his jeremiads against immigrants and penchant for ridicule have proved destabilizing, with the party losing more affluent whites and moderates in metropolitan areas key to control of the House.

Note EU-Digest: Amazing, but also very sad, what has happened to the US since January 20, 2017, when Trump became President. Despite claims by the US President (who has been found to have lied by independent research tanks more than 6400 times since his inauguration) and his Republican base, that the economy is doing fantastic, the truth is quite different - see https://www.chicagotribune.com/…/ct-perspec-trump-economy-j…

Basically just about every thing the Trump Administration has been tampering with has been a disaster, starting with the appointment of his dysfunctional scandal ridden Cabinet - Affordable healthcare for everyone including for those with existing preconditions - US Foreign Policy - Clean Air Policies - Gay Rights-Equal Rights - Curbing white supremacy and pro-neo-Nazi groups/hate crimes-Gun Control -migrant and immigration policies - Freedom of Speech and the list can go on and on. 

AMERICAN VOTERS ARE STILL ABLE TO MAKE THE COUNTRY CHANGE COURSE, AWAY FROM TUMBLING DOWN THE CLIFF - BY USING THEIR RIGHT TO VOTE ON TUESDAY NOVEMBER 6.

Read more:: A Nation in Turmoil Prepares to Deliver a Verdict on Trump - The New York Times

November 2, 2018

The Israel - Saudi - US Alliance: Saudi Arabia hosts rare visit of U.S. Evangelical Christian figures - Stephen Kali

 Saudi Arabia's Crown Prince Mohammed bin Salman held a rare meeting with American evangelical Christians on Thursday, as the ultra-conservative Muslim kingdom seeks to open up more to the world and repair an image of religious intolerance.

The delegation was led by communications strategist Joel Rosenberg and included former U.S. congresswoman Michele Bachmann, according to an emailed statement by the group, as well as heads of American evangelical organizations, some with ties to Israel.

"It was a historic moment for the Saudi Crown Prince to openly welcome Evangelical Christian leaders to the Palace. We were encouraged by the candor of the two-hour conversation with him today," the statement said.

A visit by such prominent non-Muslim leaders, who estimate they represent about 60 million people, is a rare act of religious openness for Saudi Arabia, which hosts the holiest sites in Islam and bans the practice of other religions.

Some of the figures' support for Israel, which the kingdom does not recognize, is also striking. For instance, Mike Evans, founder of the Jerusalem Prayer Team, describes himself on his website as "a devout American-Christian Zionist leader".

Saudi Arabia has maintained for years that normalizing relations with Israel hinges on its withdrawal from Arab lands captured in the 1967 Middle East war - territory Palestinians seek for a future state.

But increased tension between Tehran and Riyadh has fueled speculation that shared interests may push Saudi Arabia and Israel to work together against what they regard as a common Iranian threat.

Prince Mohammed, who in recent years has loosened strict social rules and arrested Saudi clerics deemed extremists, said in April that Israelis are entitled to live peacefully on their own land. A month earlier, Saudi Arabia opened its air space for the first time to a commercial flight to Israel.

Several members of the delegation, which met with Abu Dhabi's Crown Prince Mohammed bin Zayed in the United Arab Emirates earlier in the week, have also advised U.S. President Donald Trump on faith issues.

Note EU-Digest: It is amazing to see how American Evangelicals - who are a solid political support group for the US Republicans - have walked into this trap, set-up by the Trump Administration, as they, together with their allies, Israel and Saudi Arabia, seem to be preparing for an attack on Iran.
 
Given the uproar such an attack would cause in America, and around the world, this visit by American Evangelicals to Saudi Arabia can only be described as an effort to appease the Evangelicals as to the "good intentions" of the Saudi's. 
 
Unbelievable, is also the timing of this Evangelical delegation's visit to Saudi Arabia, which coincides with the investigations going on as to the horrendous murder at the Saudi consulate in Istanbul, on the 2nd of October, of the Washington Post Journalist Jamal Khashoggi, and the daily changing and confusing explanations about this murder, given by the Saudi Monarch. 
 
This by itself should have been a major reason for the Evangelicals not to visit Saudi Arabia.
 

October 31, 2018

EU Saudi Relations: Calls for Saudi arms embargo pit EU values against interests

Pressure is growing for the European Union to consider an arms embargo on Saudi Arabia after Germany, Austria and the European Parliament called for an end to weapons sales over the killing of Saudi journalist Jamal Khashoggi.

In the space of a few hours that highlighted tensions over the matter, Germany's Angela Merkel reaffirmed last Friday (Oct 26) that her country would not deliver any arms to Saudi Arabia until Mr Khashoggi's death was explained, while French President Emmanuel Macron said such moves smacked of populist "demagoguery".

EU ambassadors may formally discuss the issue after a rare request to do so by governments, two diplomats said last Friday, and the Netherlands is lobbying for a new EU regime to sanction human rights abuses, regardless of where they happen.

But the debate in Brussels and in EU capitals is also reviving familiar splits in the bloc's foreign policy, with Europe's main powers following their own economic and political interests that tend to undermine any forceful EU foreign policy that aims to be guided by democracy and human rights.

The Belgian region of Wallonia, which owns firearms manufacturer FN Herstal, has said it will examine future requests for arms export licences to its top weapons client with "the greatest circumspection", following Mr Khashoggi's murder.

Austria, which holds the EU's six-month presidency, wants a halt to arms sales, and Germany will stop approving weapons exports until Mr Khashoggi's murder is cleared up. France ignored such calls.

Read more: Calls for Saudi arms embargo pit EU values against interests, Europe News & Top Stories - The Straits Times

October 29, 2018

USA: Jewish leaders tell Trump he's not welcome in Pittsburgh until he denounces white nationalism - by Morgan Gstalter

A group of Jewish leaders told President Trump that he is no longer welcome in Pittsburgh until he denounces white nationalism following the shooting at a synagogue there over the weekend.

Eleven members of the Pittsburgh affiliate of Bend the Arc: A Jewish Partnership for Justice penned a letter to Trump following the Saturday shooting at the Tree of Life Synagogue.

"Our Jewish community is not the only group you have targeted," the group wrote. "You have also deliberately undermined the safety of people of color, Muslims, LGBTQ people, and people with disabilities. Yesterday's massacre is not the first act of terror you incited against a minority group in our country."
Trump was fiercely criticized after he failed to condemn white supremacy and asserted that there is "blame on both sides" after last year's white supremacist rally in Charlottesville, Va.
The group also said Trump is not welcome in the city until he also stops targeting minorities, immigrants and refugees.
The president has "spread lies and sowed fear about migrant families in Central America," the group wrote.
"The Torah teaches that every human being is made b'tzelem Elohim, in the image of God. This means all of us," the leaders wrote. "In our neighbors, Americans, and people worldwide who have reached out to give our community strength, there we find the image of God."

Read more: Jewish leaders tell Trump he's not welcome in Pittsburgh until he denounces white nationalism