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HomeGartman: Investment Capital Will Leave US Market
Posted by Larry Doyle on October 18th, 2013 8:36 AM |
After the dysfunctional debacle displayed in Washington over the last few weeks — and potentially repeated in early 2014 — what is that strong symbolic wind now blowing offshore?
Oh, that is the sound of investment capital leaving our nation.
Not that those in Washington have a real appreciation for it but private investment capital is the lifeblood which fuels our economy.
While those in Washington are now sufficiently addicted to our central banking shell game, aka quantitative easing, why would they be concerned about protecting and promoting the formation of private investment capital? Great question. (more…)
Malpass: Bigger Battle Behind the Shutdown
Posted by Larry Doyle on October 17th, 2013 9:55 AM |
Recent polls regarding confidence in our public officials in Washington are at historic lows and with the can having been kicked down the road for only 3 to 4 months, I do not see those polling figures improving anytime soon.
If those in Washington on both sides of the aisle actually care about the public interest and the need for an adult dialogue, they may want to start by addressing the points raised by David Malpass. His recent commentary is overflowing with a host of basic principles of real sense on cents.
At its core, the shutdown is part of a much bigger battle to restrain the federal government. It is spending $3.6 trillion per year without a budget, and its expenditures are expected to increase rapidly in the years ahead.
Meanwhile, the government has piled up $17 trillion in debt and $60 trillion more in unfunded spending promises. The Federal Reserve will borrow $1.1 trillion in 2013 alone to buy bonds—and it reserves the right to borrow unlimited amounts for future bond purchases without congressional or presidential permission. (more…)
Day of Reckoning in De-Americanized World
Posted by Larry Doyle on October 16th, 2013 9:55 AM |
Regardless of where you fall along the political spectrum, you can rest assured we will all pay ever increasing costs for the dysfunction on display in Washington.
Some may discount that reality and think the political power plays properly executed trump the costs incurred. I can assure you they do not.
Who holds the ultimate trump card in the current rendition of Washington’s political game of chicken? The bond market. And who especially within the bond market? Foreign holders of dollar-denominated assets. And who is the biggest holder? The People’s Republic of China. Let’s navigate eastward and get some insights on what folks there think about our dysfunctional government: (more…)
Our Government Remains a Joke!!
Posted by Larry Doyle on October 15th, 2013 8:49 AM |
If our supposed leaders holding public office in Washington were not so pathetic, they may actually be comical.
But there is little to laugh about when we learn just how much the dysfunction in Washington costs our economy. The Financial Times highlights this morning:
Economists are scrambling to assess the damage inflicted on the US recovery by the government shutdown and its second close brush with default in as many years.
But the bigger picture is that the political paralysis surrounding US fiscal policy, with recurring feuds and brinkmanship on Capitol Hill, has already taken a massive toll on the country in the past three years.
In a report released on Monday, Macroeconomic Advisers, the research group, found that America’s budget fights have cost more than 2m jobs and slowed annualised economic growth by 1 percentage point of gross domestic product since 2010. (more…)
Has Uncle Sam Ever Defaulted Before?
Posted by Larry Doyle on October 12th, 2013 9:10 AM |
The thought of Uncle Sam defaulting on his obligations is virtually unfathomable.
I think we can accept as common knowledge that the crowd in Washington is not all that intelligent, especially when it comes to markets, but could they be so stupid as to risk defaulting on our debts?
Why do I sense that many readers paused when thinking about that question?
That fact alone strikes me as an indication of how far we have declined in terms of fiscal prudence and integrity in our nation. But this begs the question, have we ever defaulted on our debts before? (more…)
Inflation: The Real Deal Not Uncle Sam’s Charade
Posted by Larry Doyle on October 11th, 2013 7:14 AM |
One of the main arguments made by the Federal Reserve for continuing to run the printing press via its quantitative easing program is the fact that the reported rate of inflation is running below its long term target of 2%.
Based on that reality (real or perceived?), Ben Bernanke has been very comfortable opening the Fed’s QE-hydrant and letting the dollars flow despite the fact that the Fed’s liquidity does not appear to be gaining meaningful traction in the system and actually stimulating true economic growth.
Some might say that things would be far worse without Ben’s liquidity, but first let’s take a harder look at that reported rate of inflation and focus on that qualifier “reported.” To do so, I welcome navigating into a report recently produced by Deutsche Asset & Wealth Management entitled Is The Inflation Threat Hype — or Real? (I thank the regular reader who highlighted this report.) (more…)
Wall Street Proctology: Morgan Stanley Doctors Are In
Posted by Larry Doyle on October 10th, 2013 9:02 AM |
With interest rates at artificially low levels (thanks to the Fed’s quantitative easing program) and investors increasingly leery of navigating into the shark infested waters of the high-frequency dominated equity markets, what is an investor to do?
More and more investors have been sold on the idea of allocating more capital to alternative investments. One needs to be exceptionally careful when engaging the practitioners engaged in these pursuits. Really? Oh yes.
In what might best be compared to a visit to an unlicensed proctologist, Bloomberg provides a wide angled view into the incredibly expensive and dark world of managed futures as practiced by the “doctors” at Morgan Stanley. (Caution: the mental images here may be upsetting) (more…)
Janet Yellen: The Wrong Choice
Posted by Larry Doyle on October 9th, 2013 9:03 AM |
President Obama is widely expected to announce this afternoon that he is nominating Fed governor Janet Yellen as the next chairman of the Federal Reserve, the most powerful institution in the world.
I am sure Yellen’s nomination will receive the standard praiseworthy platitudes from a wide array of sycophants deeply embedded in the system.
For those pleasantly hoodwinked by the charades masquerading as our current central bank policy, a Yellen-led Federal Reserve should look just divine. Meanwhile those watching closely would call her style of central banking little more than smoke and mirrors.
The WSJ is more deferential and asserts this morning:
Dear President Obama: Do You Care?
Posted by Larry Doyle on October 8th, 2013 8:38 AM |
I am quite pleased when my blog can serve as a vehicle to spread the voice of others. I commend those who are willing to stand up and speak out when it is all too easy to sit down.
But standing up and speaking out are often borne out of frustration with a government, a regulatory system, or a financial industry that pays little heed to those who get up early each and every day to try to make ends meet.
The other day I inquired, How is Obamacare ‘Treating’ You So Far? Many readers had lots to say in response to that question, but nobody spoke out as forcefully as an individual couple who penned the following letter that ran in a local paper this morning.
The Madoff Trial: Conflicts of Interest
Posted by Larry Doyle on October 7th, 2013 10:30 AM |
Close to 5 years after Bernie Madoff turned himself in to authorities for running the largest acknowledged Ponzi scheme on Wall Street, America still knows little as to what truly transpired within those offices in the Lipstick Building on 3rd Avenue in midtown Manhattan.
Do you find it decidedly suspicious that the government has not brought the case against assorted individuals in Madoff’s operation for close to 5 years? I do.
Recall that none other than Harry Markopolos said that it took him little more than 5 minutes to know that Madoff was running a Ponzi scam.
Has the government employed stall tactics in just now bringing this case to trial so as to protect itself and its friends on Wall Street fromg its failures to properly regulate Madoff’s operation and protect investors? How so? (more…)
