23 February 2017
22 February 2017
There is a theory going about that because of the failure of the EU and alternatively China, the inflows of monies into dollar assets are bound to continue to drive the major stock indices higher, and will prompt the Fed to raise rates higher than many think.
This is a variant of the 'money on the sidelines' theory that, for whatever reasons, will be compelled to toss their wealth into overpriced assets because they have no other choice. For a free people, getting the public to act by coercion seems a familiar resort.
Now of course this is possible. The real question is, 'how probable.' And what sorts of things might we watch to determine if this particular scenario is genuinely falling into place.
Nothing in the markets is one dimensional. A Fed raising rates to try and stem a stock bubble fueled by a flight to safety from Europe or Asia is certainly a scenario, but there are a lot of other things that go along with it.
For example, what happens to the real economy and wage growth in the US as the Fed starts jacking up rates to try and halt an exogenously driven stock bubble? What other steps might the Fed and the regulators take? How does ever increasing inequality affect the mood of the voters?
To what extent will the market ignore expectations for US business performance and just run with the rallies with abandon?
I do not know. But one thing I am almost certain of is that no one else does either. And to the extent that they do know, they certainly are not telling the general public about it, or selling it to retail investors. There is a legitimate market for buying research on specific companies, no doubt. That is different than buying sweeping predictions from gurus.
The SNAP IPO should be coming out around the 2nd of March. As you know I would be waiting for some time around then if I were of a mind to take a bearish stance toward equities, barring any unforeseen events of consequence. But we have to be watchful regardless as the Trump administration is leaning towards rolling back what little protections the Banks had received.
I see some good things and bad things almost everywhere I look. We are seeing a lot of new construction in our corner of the world. Since I think this is one of those 'fortunate' areas of the US, I am not sure how heavily that weighs on my thinking about things overall.
But in addition to all this new, big time construction for commercial square footage, we are also seeing investment money buying up existing properties, and attempting to drive their rents higher.
So we are seeing quite a few long-established businesses folding up and moving along, because the rentiers are driving prices up against the market's ability to pay. And I am not talking about fly by night storefronts, but places that have been around for forty to sixty years, and weathered a lot of business cycles reasonably well. And not retail stores displaced by Amazon either.
Is this a 'creative destruction' or the ongoing malinvestment and distortions fueled by the Fed's top down approach to stimulating an economy caught in a very painful household balance sheet recession?
And of course, the current leadership in Washington is toying very seriously with the 'A' word. They are looking to cut back on 'entitlements' for people to help to finance more tax cuts and favours for the 'jobs creators.'
What happens when few have the surplus income to provide the broad buying demand for these new big jobs black boxes?
Recently the 'liberal establishment' economists, aka the minions of Hillary, have been circling the wagons around those care worn Clinton principles of governance; globalism, financialism, and corporatism, as an agenda taken forward by the combined powers of the military and the Banks.
The Council on Foreign Relations recently promoted an article in their house magazine Foreign Affairs that was subtitled, 'How Dissing the Experts is a Danger to Democracy.'
Yes, shame on you idiots. How dare you lose confidence in the professional class, the 'experts' who have been caught manufacturing conclusions for pay, and presenting unicorn myths as sound economic policy options?
Do you not have more respect for your betters?
Would you believe that a very similar point of view was promulgated by the Clinton Democrat's in the 1990's under the title, Illiberal Democracy? The answer for those foreign countries who embraced their freedoms in the wrong way, regime change and colour revolutions were the prescriptions.
And so we might ask, what about now?
Have a pleasant evening.
Posted by Jesse at 4:47 PM
21 February 2017
'Till human voices wake us, and we drown.'
T. S. Eliot
"Do you think he is so unskillful in his craft, as to ask you openly and plainly to join him in his warfare against the truth? No; he offers you baits to tempt you. He promises you civil liberty; he promises you equality; he promises you trade and wealth; he promises you a remission of taxes; he promises you reform.
This is the way in which he conceals from you the kind of work to which he is putting you; he tempts you to rail against your rulers and superiors; he does so himself, and induces you to imitate him; or he promises you illumination, he offers you knowledge, science, philosophy, enlargement of mind. He scoffs at times gone by; he scoffs at every institution which reveres them.
He prompts you what to say, and then listens to you, and praises you, and encourages you. He bids you mount aloft. He shows you how to become as gods. Then he laughs and jokes with you, and gets intimate with you; he takes your hand, and gets his fingers between yours, and grasps them, and then you are his."
J. H. Newman
Things are getting stretched out quite a bit. We are in what can modestly be called pivotal times.
The market for equities is now pricing in expectations of both a corporate tax cut and a repatriation deal for the transfer priced cash that US corporations have been hoarding in tax havens overseas.
The Deep State, formerly known as the Military/Industrial Complex, is showing more of its ugly face than it has since Vietnam and the untimely death of John F. Kennedy.
What really matters is not what they do— it is whom you choose to serve, and what you do, for that is what you will be asked about, and answered.
No matter how attractive the glamours of the world may seem, there is only one thing in the end that has value, that is worth it all.
In the end, there is only one real tragedy. Keep your eye on the prize.
Have a pleasant evening.
Posted by Jesse at 4:44 PM
20 February 2017
One more time.
My fear is that well-meaning people will focus on 'getting rid of Trump,' without considering what sort of leadership will replace him.
Hillary Part Deux? Or some other corporatist stooge from the GOP who runs a smoother, more polished con on the working class?
Really? How neurotic is that. And yet for the predatory class, such chaos serves their purposes very well. Fear and confusion make people compliant.
The Democrats need to take a hard look at themselves and the reasons for their failures. Not the party faithful so much, but the party leadership. Their failure has been spectacular.
They did not just lose the Presidency. They lost almost everything, and it was theirs to lose. They did it in a way that was amazingly arrogant and out of touch with the public. This was not just a defeat; this was a willful disaster.
They were riding an enormous wave of popular support for meaningful reform in 2008, and they threw it all away. And for what. The Clinton foundation?
They must reform themselves and their organization first, and recommit themselves to the moral high ground and fundamental principles upon which their party had been based during the era of FDR.
They also need a new set of political visionaries and economic thinkers. The current set are dead heads walking, flogging the same old memes and failed policies. Watching Paul Krugman and Larry Summers continue to trot out the same old party line and elitist world view of corporate globalization is almost sad.
And the Democratic must do that before they can begin to offer an attractive alternative to the fanaticism and extremism which in a large part they enabled with their 'lesser of two evils' approach to the very real problems of inequality and imbalances that they had an active hand in enabling.
At the moment their strategy seems to be to let Trump fail, and then come back in to pick up the pieces from people who 'have no other choice.' The foolish arrogance of their strategy is appalling.
Bernie Sanders showed a remarkable ability to energize the people and get them interested in politics. And he and his followers were crushed by the official party machine and the Wall Street Democrats.
This is a complete and total failure in leadership by utterly cynical and self-serving political hacks who unfortunately have risen to positions of power, and are determined to hang on to them until the bitter end.
cf: The Year of the Four Emperors
Posted by Jesse at 1:24 PM
19 February 2017
“Christ has no body now but yours. No hands, no feet on earth but yours.
Yours are the eyes through which he looks with compassion on this world. Yours are the feet with which he walks among His people to do good. Yours are the hands through which he blesses His creation.
Yours are the hands, yours are the feet, yours are the eyes, you are his body. Christ has no body now on earth, but yours.”
Teresa of Ávila
"If I speak in the tongues of men and of angels, but do not have love, I am only a resounding gong or a clanging cymbal. If I have the gift of prophecy, and can fathom all mysteries and all knowledge, and if I have a faith that can move mountains, but do not have love, I am nothing. If I give all that I possess to the poor, and surrender my body over to hardships that I may boast of them, but do not have love, I achieve nothing.
Love is patient, love is kind. It does not envy, it does not boast, it is not proud. It does not dishonor others, it is not self-seeking, it is not easily angered, it keeps no record of wrongs. Love does not delight in evil but rejoices with the truth. Love always protects, always trusts, always hopes, always perseveres. Love never fails"
1 Corinthians 13:1-8