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Tue, 25th April 2017

Anirudh Sethi Report

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Posts Authored by: “Anirudh Sethi”

Made in China: First Indigenous Aircraft Carrier Set for High Seas

China's Liaoning aircraft carrier with accompanying fleet conducts a drill in an area of South China Sea in this undated photo taken December, 2016The first Chinese made aircraft carrier is 100 percent ready to set sail, local news sources reported.

Once sea conditions reach a point that’s comfortable for admirals, the Chinese-made ship will be on its way to test the waters for the first time, according to the South China Morning Post. The enigmatic ship still has yet to be named. So far, she is only referred to by her technical classification, Type 001A.

She will displace 70,000 tons of water, measuring 315 meters in length and 75 meters in width. “Although the launch has been heralded by some as a sign that China is mastering naval technology, other military observers have noted China still only has about four percent of the United States’ naval capability,” according to a Monday report published in the SCMP.

The ship is being constructed at the Dalian Shipyard, a port in northern China’s Liaoning province that happens to share a border the Democratic People’s Republic of Korea (North Korea). The launch of the aircraft carrier is imminent, since the ship’s hull appears complete and the construction scaffolding draping the ship has been taken down, according to an IHS Jane’s report. 

China’s other aircraft carrier, the Liaoning, conducted live-fire drills for the first time in November of last year. The People’s Liberation Army Navy (PLAN) has been aggressive in pursuing a larger and more assertive fleet. 

The two aircraft carriers could be a small sign of things to come for the ambitious Chinese navy. Some analysts suspect PLAN is pursuing a fleet of more than 500 vessels, including subs, carriers, destroyers, amphibious vehicles, frigates and other naval hardware, Sputnik reported in January. 

Some observers suggest sailing aircraft carriers thousands of miles for long periods of time — most US carriers only need to stop for one refueling during the entire course of the ship’s “shelf-life” — is a way for China to display and reinforce its ascendency to its status as a major global power. 

Obama To Receive $400,000 Speaking Fee At Cantor Fitzgerald Conference

Shortly after Barack Obama delivered his first (free) speech today since leaving the White House in Chicago before an invitation-only crowd of college students, community organizers and other fans, Fox News’ Charlie Gasparino reports that in what may be his first paid speaking arrangement, Obama will be paid $400,000 to speak at Cantor Fitzgerald’s healthcare conference this September, setting the benchmark for how much an hour of the former president’s time will cost going forward.

Obama, who spent years bashing big banks (even if, like Trump, ultimately achieved nothing to halt Wall Street’s dominance) will deliver the keynote address at the organization’s lunch in what will be one of his first paid speeches.

“What sources are telling FOX Business Network is that former President Obama, now less than 100 days out of office, has agreed to a speaking engagement during Cantor Fitzgerald’s healthcare conference in September,” FBN’s Gasparino said. “We understand that he is going to be the keynote speaker for the lunch, and he’s going to receive a fee of $400,000. We should point out that that’s in line with what Hilary Clinton got… we should point out that Cantor will neither confirm or deny.”

Trump To Order Corporate Tax Rate Cut To 15%, Loading Up To $2 Trillion In Extra Debt

Ahead of Trump’s much anticipated tax announcement on Wednesday, the WSJ reports that the president has ordered his (mostly ex-Goldman) White House aides to accelerate efforts to create a tax plan “slashing the corporate rate to 15% and prioritizing cuts in tax rates over an attempt to not increase the deficit” which means that without an offsetting source of revenue, Trump is about to unleash the debt spigots, a proposal which will face fierce pushback from conservatives as it is nothing more than a continuation of the status quo under the Obama administration, and may well be DOA.

The WSJ adds that during an Oval Office meeting last week, “Trump told staff he wants a massive tax cut to sell to the American people” and that it was “less important to him if the plan loses revenue.”

Hoping to add a sense of dramatic urgency – after all his 100 day deadline hits on Saturday – Trump told his team to “get it done,” in time to release a plan by Wednesday.

Translation: Trump’s massive tax cut will be funded by debt, and as a result, will be at best temporary as it will be in breach of the revenue constraints in the reconciliation process; at worst it will never happen as it will now require Democrat votes.

“Top Iron Ore Forecaster Says Prices Will Sink Back Below $50”

Heightened interest in all things related to iron ore

Bloomberg with this from Justin Smirk, senior economist at Westpac (placed first in predicting prices in the first quarter, according to data compiled by Bloomberg):
  • To average $62 in Q3 
  • $59 in Q4
  • And to a low in 2018 of $41
“As supply builds up and prices come off, people will begin to question the wisdom of holding on to inventories,” Smirk said in a phone interview on Friday. “The signs are now pushing in one direction: while we’ll get some volatility, the momentum is just on a downward trend now.”

Overnight US Market :Nasdaq closes at record levels. Major indices end the day with strong gains.

Nasdaq up 1.24%. S&P index up 1.08%. Dow up 1.08%

The Nasdaq composite index is ending the day up 1.23% – a record close for that index.  The S&P rose by 1.08% and the Dow also gained over 1% (up 1.06%).
3M, Home Depot, Microsoft all traded at record highs.
Today is the biggest one day gain since March 1st.
The details:
  • Nasdaq rose by 73.299 points or 1.24% to 5983.82. The high reached 5989.91, less than 11 points from the Nasdaq 6000.  The low was 5970.254.
  • The S&P index rose y 25.45 points or 1.08% to 2374.15. The high reached 2376.98. The low came in at 2369.19. The all time high for the S&P index came in at 2400.98 on March 1.
  • The Dow rose by 216.13 to 20763.89. The high reached 20792.20. The low came in at 20723.59.  The all time high for the Dow came on March 1st at a high price of 21169.11.  Today, the Dow moved back above the 50 day MA at 20717.77. The price has been below that MA since April 12th.

11 Facts That Prove The 2017 US Economy Is In Far Worse Shape Than It Was In 2016

There is much debate about where the U.S. economy is ultimately heading, but what everybody should be able to agree on is that economic conditions are significantly worse this year than they were last year.  It is being projected that U.S. economic growth for the first quarter will be close to zero, thousands of retail stores are closing, factory output is falling, and restaurants and automakers have both fallen on very hard times.  As economic activity has slowed down, commercial and consumer bankruptcies are both rising at rates that we have not seen since the last financial crisis.  Everywhere you look there are echoes of 2008, and yet most people still seem to be in denial about what is happening. 

The following are 11 facts that prove that the U.S. economy in 2017 is in far worse shape than it was in 2016…

#1 It is being projected that there will be more than 8,000 retail store closings in the United States in 2017, and that will far surpass the former peak of 6,163 store closings that we witnessed in 2008.

#2 The number of retailers that have filed for bankruptcy so far in 2017 has already surpassed the total for the entire year of 2016.

#3 So far in 2017, an astounding 49 million square feet of retail space has closed down in the United States.  At this pace, approximately 147 million square feet will be shut down by the end of the year, and that would absolutely shatter the all-time record of 115 million square feet that was shut down in 2001.

#4 The Atlanta Fed’s GDP Now model is projecting that U.S. economic growth for the first quarter of 2017 will come in at just 0.5 percent.  If that pace continues for the rest of the year, it will be the worst year for U.S. economic growth since the last recession.

#5 Restaurants are experiencing their toughest stretch since the last recession, and in March things continued to get even worse…

 Foot traffic at chain restaurants in March dropped 3.4% from a year ago. Menu prices couldn’t be increased enough to make up for it, and same-store sales fell 1.1%. The least bad region was the Western US, where sales inched up 1.2% year-over-year and traffic fell only 1.7%, according to TDn2K’s Restaurant Industry Snapshot. The worst was the NY-NJ Region, where sales plunged 4.6% and foot traffic 6.3%.