US consumers confident, growth returns; Canada booms; Spain impresses; Russia threatens; China curbs insurers; ALP tackles trust tax rort; UST 10yr yield at 2.29%; oil and gold up; NZ$1 = 75.1 US¢, TWI-5 = 77.6

~30 years ago in Australia "The Wealthy" or anyone who had a top tier salary, bought up small 'family' farms to take advantage of the generous tax treatment they afforded. That lead to the introduction of Fringe Benefits Tax and the removal of Negative Gearing to try to get ahead of the pack. Small farms ( and investment property in general) hit the auction blocks and Franked Dividends and Family Trusts entered through the side door as an alternative. Both of those 'recent' developments are now under review, and the Aussie Government is going to look at all sorts of tax minimisation schemes, but is now going to introduce one that exempt..... the Family Farm.... as a compromise........ A never ending Circle of Life thing I guess.....

The sanctions against Russia, a major escalation, are for interference in the US election? There hasn't been any concrete evidence of any such thing or of how that interference manifested itself so what is this really about. The Europeans are furious.
US foreign policy seems to be a hell of a mess (who's side are they on in Syria this week) with the war obsessed Neo-cons from both parties in control. It certainly doesn't inspire much confidence that common sense will prevail.
Dwight Eisenhower:
"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together."
https://en.wikipedia.org/wiki/Eisenhower%27s_farewell_address

Across the Atlantic, Spain has reported GDP growth at an impressive +3.1% annual rate. What is notable is that Spain has now finally recovered all it lost during its economic crisis. It was one of the core sufferers in the GFC due to a major housing boom meltdown. [my emphasis]

Hmmmm ... not really.

On July 26, 2012, Draghi put himself in front of the cameras and declared to the world the euro would survive no matter what.

"The ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough".

Was it? As human beings, we like to use the opportunity round numbers afford to take stock of things. And why not? Of big things there needs to be such accounting, and, if need be, reckoning.

On the basis of just peripheral bond spreads, at first glance the promise was a triumph. A more determined view would only give it qualified success. Peripheral spreads have collapsed when compared to the worst of 2011-12, but they have never normalized to pre-crisis conditions. There remains five years later a distinct premium (that rose again, importantly, in the global downturn of 2015-16).

A hundred and fifty basis points is not 600, to be sure, but it’s also not zero and that matters. Whatever it is that drives the differences from among these places remains in effect, if subdued. Because of this, and because of Draghi’s promise, further investigation is required on that narrow basis alone.

In the 21st century we often forget that there is a purpose to money. In many ways that’s understandable given the manner in which these kinds of things are presented for our understanding (especially in the orthodox sense). Money, as finance, has become a thing almost unto itself; a system of inputs dedicated to its own output. It is in that sense where peripheral bond spreads are often measured.

The euro isn’t supposed to be solely a currency for the standard conduct of financial purposes across Europe. Bond spreads do matter but in what they tell us about the primary conditions more necessary to fruitful social circumstances. Money is a derivative tool for economy and therefore overall social stability. Read more

Those measures are a response to their bald interference in the US presidential elections.

Hmmmm....

The rape of Russia–the Russian nation, the Russian state, the Russian people–beginning the end of the 1980’s, was a coup d’état engineered by the US Central Intelligence Agency along with rogue and not so rogue networks directed by former CIA Director, then President, George Herbert Walker Bush and continued by Bush’s successor, Bill Clinton. Western accounts of what took place inside the Russian Federation during the Yeltsin years of the 1990’s speak of “Russian mafia,” or “Russian Organized Crime.” Never do they mention or even hint that those Russians who plundered their own country were organized and paid, made rich by the West, to be more precise, by the Old Boy CIA networks loyal to former CIA Director and then US President, George Herbert Walker Bush.

What took place in the 1990’s under the Russian Presidency of Boris Yeltsin was described by one knowledgeable US insider, Mortimer Zuckerman, a member of the New York Council on Foreign Relations and owner of US News & World Report as, “the largest giveaway of a nation’s wealth in history.” The giveaway or more precisely said, theft, was done through outright theft, currency war and a fraudulent loans-for-company stock shares program that Anatoly Chubais directed. Read more

I would postulate that our entire financial system is out-of -whack and that NZ Banks are finding it hard to get domestic funding deposits at anything like the OCR .

I for example would prefer to have debt than savings right now , especially when some good quality shares on the NZX are returning yields at 7% , why would anyone put money in the bank yielding negative returns after tax and adjusting for inflation .

I am tempted to borrow money to buy more shares .

That would be very courageous ..

US economic growth in the June quarter came in a little higher than the modest levels expected at +2.6%. This is a level it is at about the average for the past five years.

Indeed.

Despite those upward revisions for several years ago, the change in GDP levels didn’t alter the true picture of the overall economic situation. Slightly better in 2014 and early 2015 does not make up for the ongoing non-linear contraction, where had the Great “Recession” been a recession Real GDP in Q2 2017 would have been around $21.7 trillion rather than slightly more than $17 trillion.

That almost $5 trillion difference is everything, an enormous gap in output that explains the lack of demand for labor input. It became years ago, especially after 2011 (“dollar”) and the 2012 slowdown, self-reinforcing upon real economic conditions as well as future expectations. Businesses don’t hire because revenue (and cash flow) has remained subdued, meaning fewer Americans in proportion working (or even looking for work) therefore buying far less goods and services, confirming business expectations for little or no revenue growth.

In that situation, as noted before, liquidity preferences rule all considerations including the over-management of costs. In a normal business cycle/growth period, firms would consider first their ability to meet future growth rather than overemphasizing caution and liquidity.

Translated into GDP, that’s the roller coaster of Non-Residential Fixed Investment shown above. Under prior economic cycles, it tends to grow in steady rather than uneven fashion, reinforcing the overall uneven economy. Read more

Donald Trump will almost certainly kick the can down the road ............. he can refuse to sign the law until the investigations into alleged Russian Involvement have been concluded

Does it really make a diffference if the wealthy distribute their income via trusts as opposed to companies? Constantly increasing the complexity of the taxation system only helps tax lawyers, accountant & those who can afford them while hammering the middle /anyone trying to get ahead.

... I heard it said , after the Orc Land Worriers rugby league team's latest capitulation , that they ought to ditch all the players who won't be there next season .... and treat their last 5 matches as pre-season 2018 warm ups & trials ... bring up some new players , fresh faces from the lower ranks .... the senior team cannot make the NRL finals 8 from here , anyway ...

And I thought to myself , " Gummster , old bean .... what absolutely sublime advice for the NZ Labour party " ...

... they really need to graciously thank Andrew Little , and show him to the door ... then embark upon constructing a fresh , innovative team of younger go-getters ... accept that the 2017 election is probably stuffed anyway .... but use it as a training ground for the new team who will slaughter the Gnats in 2020 ...

The Warriors are so bad this year that a comparison with Labour is actually kind of fair..