What is the likelihood that Federal Reserve Chairman Jerome Powell might be mistaken? How confident can we be regarding his predictions on economic growth, the trajectory of the federal funds rate, and inflation? Our assessment indicates that his chances of being incorrect are rather substantial.
What you’re witnessing is a remarkable exercise in futility. The Federal Reserve claims dominion over this enterprise, focusing on the federal funds rate, its balance sheet, economic stagnation, enormous asset bubbles, and the inherent limitations faced by central planners. Where to begin?
Powell’s path into central banking is anything but conventional. Credit where it’s due; he isn’t an economist. This presents a significant contrast to former Fed Chair Janet Yellen, whose intellectual ramblings often frustrated many, including President Trump.
In contrast, Powell is a lawyer turned investment banker. Continue reading
“God gave me my money.” – John D. Rockefeller
One and the Same
Today, we divert our attention from the economy and markets to explore a less trodden path. In a lighthearted endeavor, we venture into a murky peat bog, scratching away at the surface muck to unveil what lies beneath.
The catalyst for this journey is none other than former Goldman Sachs CEO, Lloyd Blankfein. Rumor has it he plans to step down by the end of the year. Such transitions prompt a time for reflection and perhaps a celebration of sorts.
Rewind to fall 2009, shortly after the sun began to shine on the rebounding bull market. During this period, Blankfein famously declared to The Times of London that he was simply a banker engaged in doing “God’s work.” At the time, many were left puzzled by his statement. Were you?
Perhaps he positioned himself, and his firm’s mission, as serving a higher purpose: the noble task of efficiently allocating capital to its most valuable applications. Continue reading
Just a month ago, we posed an intriguing question: What kind of stock market purge is this? In the past 30 days, the stock market has provided a plethora of misleading responses, yet we’re still anticipating a clear answer.
The stock market, much like the President, excels in the art of showboating. Each day, stocks exhibit shocking and unpredictable behavior, oscillating with the capriciousness akin to a President Trump tweet.
Wild fluctuations on the Dow Jones Industrial Average (DJIA) have become commonplace, swinging up 300 points one day and down again by the same margin the next. Are you picking up on this?
All we seem to hear from the stock market is a cacophony. While the noise level rises, it lacks any substantive content to back it up.
After an extensive nine-year bull market, the risk of a significant sell-off is glaringly evident. This is undeniable. We could see a downturn similar to the catastrophic 50 percent drop experienced in 2008-09. The pressing question remains: when will the next major panic strike? Continue reading
Consumer debt, corporate debt, and government debt are all on the rise. But that’s not all. Margin debt—which refers to loans taken by investors against their portfolios to purchase more stocks—has reached a staggering $642.8 billion. What could people possibly be thinking?
Clearly, they aren’t engaging in much thoughtful consideration since real thought requires effort, and many prefer to merely pretend to work rather than actually engage.
People may express concern about debt, but their actions betray a different story. When it comes to national debt, the prevailing sentiment seems to be that it doesn’t matter.
Congress demonstrates that government debt is of no concern. The President mirrors this indifference in their actions, seemingly advocating for more debt.
Major corporations that rely on hefty government contracts also welcome increased government debt. The business models of these companies depend on the uninterrupted flow of resources provided by governmental borrowing.
Similarly, the higher education sector is built on a precarious foundation of debt, often encouraging naive 18-year-olds to take on significant government-backed student loans. Continue reading
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