U.S. Consumers and their lenders are seeing the world through Trump’s rose colored glasses. So much to buy and not enough time to save for it! Plus, the Fed’s inflation will chip away at their debts.
All in Economics
Musk's Tesla Trump Trick Flops
However, entrepreneurs and business people cannot lie around the market. If they make outlandish promises, the markets punish them. Ask Elon Musk, whose Tesla Trump trick recently flopped.
Tariffs to Socialism
Trade wars create winners and losers, at home and abroad. American consumers lose, as the prices are hiked while capital and labor are misallocated. This makes everyone, over time, poorer--even the tier two real estate developer.
Tariff Destruction Wrapped in the Flag
Actual free trade would be a brash approach, not going full blown Smoot-Hawley. But don’t try to convince the guys on the Banner shop floor of any economics 101 mumbo-jumbo .
Trump Channels Tricky Dick
There’s plenty of blather that Trump is breaking with presidential norms by criticizing Jerome Powell’s rate hikes, but, the Donald is merely channeling Richard Nixon. When Nixon appointed Arthur Burns to be Fed Chair in October of 1969, Burns was soaking up the applause during the announcement of his appointment when Nixon broke in, saying, “You see, Dr. Burns, that is a standing vote of appreciation in advance for lower interest rates and more money.” Later, in private, Nixon told his new Fed Chair, “You see to it: no recession”
Tax Evasion: Goooooaaaallll!
Ronaldo and Messi take elaborate steps to keep money they’ve earned away from the government of Spain. Bagus and his colleagues point out the benefits of their actions. “Lacking a removal or reduction in tax levels, evasion will allow for an at least partial reinstatement of individuals’ rights of association, with resultant improvements in ethical considerations as well as economic efficiency.”
Merger Malinvestment
The primary problem is size itself. Ludwig von Mises explained that socialism doesn’t work because there was no market to determine prices and thus calculate how resources should be used. Behemoth companies are no more immune than government bureaucracies.
Tariffs: Stealing Entrepreneurs' Profits
Consumers decide what they will pay and determine value. Tariffs, the use of political force, determines where the buyer’s proceeds end up. Favored industries receive more and the entrepreneurs receive less, lowering their profits and making them less likely to take future risks in a similar political climate. As a real estate developer, the President should know better.
Trumping to Serfdom
Hayek wrote that psychopaths, er politicians, have to “weld together a closely coherent body of supporters”...appealing “to a common human weakness. It seems to be easier for people to agree on a negative programme – on the hatred of an enemy, on the envy of the better off – than on any positive task.”
Debt Conceit
The markets believe Mr. Powell is cooking his porridge just right--not too hot, not too cold--and, most importantly, not blow up the stove, or the whole house.
The Hits Keep Coming for Deutsche Bank
At the end of last year, Deutsche’s U.S. operations had $7.3 billion of equity supporting $148 billion of assets, or 20 to 1 leverage. Then there is the derivatives exposure of $50 trillion (with a T).
Problem Canary in Bank Coal Mine?
The number of problem banks was only 92 at quarter end, the assets of problem banks more than tripled to more than $60 billion. That means two or three banks of considerable size are now considered “problem” banks. The regulator doesn’t say which banks, so lines don’t form outside.
Trouble in Euroland
Little old Italy, you might ask. While small in land mass, the Italian government has borrowed mightily: the fourth largest bond market in the world, behind, China, Japan and you know who.
Eisman of 'Big Short' Fame Doesn't Believe Cryptocurrencies Have Value
Eisman joins Warren Buffet in dissing cryptos in recent days. The Oracle of Omaha had harsher words for digital currencies, calling them, “probably rat poison squared’ and predicted cryptocurrencies “almost certainly...will come to a bad ending.”
Demand for Gold Coins Crashes
When the public was worried the end of the modern financial world was near, they were stocking up on gold, and presumably canned goods. However, the last few years has proven the coast is clear: paper and computer generated “assets” will do just fine.
Stagflation to take down Keynesians Again
Other than a scattered Austrian here and there, Bernanke and his successor Janet Yellen went about their business unquestioned. Quantitative Easing (QE) was the Keynesian magic wand that kept the ATMs operating on time.
Blockchain-- "crypto-medieval hellhole”
Is blockchain a “futuristic integrity wand”? While it’s hard to tamper with data on the blockchain, the idea that blockchain is a good way to create data that has integrity is false.
Running out of Dr. Copper
Leigh Goehring told Jim Grant copper is headed to $7 a pound, given how many electric vehicles will be built. EVs require three to four times the copper as traditional vehicles. He told Grant it will add 50 percent to the amount of copper demand.
Making America Protectionist Again
So, to use Bannon’s bluster, America innovates, while China’s labor creates the fruit of those innovations cheaper to the benefit of U.S. consumers, including those living in Ohio, Pennsylvania and Michigan.
Central Bank PHDs Will Fail Again
Oliver said the central banks have created such an excess, that when the unwinding occurs and the central banks flood the system with money, it will go into commodities, not securities, “which is exactly where they don’t want it to go.”