Hello... Good Morning Vietnam...
That was from a great one-liner
from a Robin Williams movie. Sadly,
Vietnam is not a happy place this morning.
That is all I will say about that; except Russia and China are flexing
their political and military muscles.
The US under the current regime seems to stutter and dither at every
step in foreign affairs. However, it
could be that I'm just not in the know.
I read a lot every evening and morning. Let me say, that there are so many opinions
on the markets out there, that I have no idea if I'm smarter or dumber before
or after reading them. I just scratch
this old bald head, and wonder...
There was a new poll out by the government. We are told that most Americans think they
are smart. Yup... we are losing our jobs
to immigrants and outsourcing from
industries we created. We have
overwhelming debt (Federal, State, Local, and consumer debt) that is beyond anyone's but Obama and Dr. Krugman's
imagination how to pay it off. Our foreign
affairs are a disaster after Hillary Clinton, and we are getting ready to elect
her as President? Labor Participation
rate is disastrous after all the QE, low interest rates and so-on. Our schools continue to turn out students
that do not compete for the better jobs available - meaning the engineering, doctors and so-on are going to
immigrants. We gave up our freedoms for
security. We decimated the Constitution
and the Bill of Rights is now worthless if the Government deems some "new
rule" is better for us than the Bill of Rights (and the Supreme Court is
worthless in protecting the Bill of Rights.)
Data Points
·
NY Times - At Last, Recovery Heads Where the
Feds Wants It. The point of the article
was that we are seeing a modestly higher inflation and the labor market is
improving. Specifically CPI (consumer
price index) suggest a broader economic improvement is coming. PPI (producer price index) rose
year-over-year. May I suggest that one
month does not mean the economy has turned the corner as the NY Times reporter
is hinting.
·
Looking at the other side, the NY Times reporter
chose to ignore.
o
April Retail Sales badly disappointed. It printed at .1% (not 1%) growth.
o
Industrial Production for April fell -.6%.
o
Capacity Utilization fell 60 78.6% from 79.3% in
March.
·
All this suggests a mixed bag, and Dr. Yellen
last night in her speech is telling everyone that listens, that the economy is
not looking as good as one hears about from the numbers alone.
·
Yes, NY Times, the economy is moving in fits and
sputters and angst. We seem to move in
one area, then we move backward in another.
·
This statement is so important that while it is not
a data point - I think worth a bullet point. As
long as the TBTF banks (and other banks) can deposit their money with the
Federal Reserve without any risk whatsoever, they are very unlikely to put the
money to work in an economy where the risks of never getting the money back is
very high indeed. Dear reader (I know I
don't have any readers, but just in case every one who might read this is dear
to me.) Dear Reader, if you were a bank,
would you invest where your return is 100% guaranteed along with your principle
in a low inflation environment or would you invest in risky businesses?
·
So, until the
Federal Reserve stops (or makes negative) deposit rates for the banks, the USA
Economy is going nowhere.
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