Debts & Deficits: A Slow Motion Train Wreck

Without much fanfare or public discussion, Congress decided to push the U.S. into deeper fiscal irresponsibility with the passage of another Continuing Resolution (CR)…Without the passage of the C.R. the government was facing a “shut-down” just prior to the mid-term elections. So, rather than doing what is fiscally responsible for the long-term solvency and financial health of the country, not to mention the generations to come, they decided it was far more important to get re-elected into office. Read more

 

California’s Already-High Demand for Tax-Free Debt May Grow More

If you think there’s a fight to score California bonds now, just wait until tax season. Certified public accountants are reporting that the Internal Revenue Service continues to issue rulings “week after week” since the tax overhaul that passed in December, Kim Friedricks, managing director of fixed income at Kayne Anderson Rudnick, said at a Bond Buyer conference in Los Angeles. Read more

 

Don’t Expect Any Spending Cuts Under Trump

Even before Trump was elected it was already clear that no one should expect him to cut spending and rein in annual budget deficits. Trump has always been about buying votes with more and more spending. Moreover, there is no evidence that Republicans are any more fiscally restrained than Democrats when in control of the federal government. After all, when the Republicans controlled both the White House and all of Congress, from 2003 to 2007, government spending grew at one of the fastest rates in decades. Read more

 

Krugman Kontradictions

Besides the fun of catching Krugman in his flip-flops, his record shows just how weak the empirical case for Keynesian fiscal policy is. Read more

 

Stocks Sink As Tech Tumble Trumps Banks Bid, High Yield Bonds Hammered

US equity markets are extending their Powell-plunge losses from after the close last night as FANG stocks (and tech broadly) is tumbling as banks are bid for a change. Almost 70% of S&P stocks are lower…but it’s Nasdaq that is getting hammered…Read more

 

Economic Thought in Ancient Greece

The intellectual odyssey that laid the foundations for Western civilization began in classical Greece. Unfortunately, Greek thinkers failed in their attempt to grasp the essential principles of the spontaneous market order and of the dynamic process of social cooperation which surrounded them. While we must acknowledge the important Greek contributions in the areas of epistemology, logic, ethics, and even the conception of natural law, the Greeks failed miserably to see the need for the development of a discipline, economic science, devoted to the study of the spontaneous processes of social cooperation that comprise the market. Read more

 

Gartman: “A Global Bear Market Of Some Very Real Consequence Is Developing”

In retrospect, the bond rout which sent 10Y Treasury yields to the highest level since 2011 should have been obvious – after all just over a week ago, Dennis Gartman decided to go long “bonds and bond-link funds” in his retirement account, in addition to gold. Alas, as so often happens, it didn’t turn out quite as expected, and as the world-renowned commodity guru writes in his note today, half of his bond holdings are now history” Read more

 

Fed Chairman Powell has cost stock-market investors $1.5 trillion in 2018, say JPMorgan analysts

Federal Reserve Chairman Jerome Powell has exacted a mighty toll from stock market investors this year, according to analysts from JPMorgan Chase & Co. According to researchers led by quantitative analyst Marko Kolanovic, stocks have suffered around $1.5 trillion in losses following speeches from the Fed’s top dog. Read more