Saturday , February 22 2020
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Tag Archives: Debt

#MacroView: Japan, The Fed, & The Limits Of QE

This past week saw a couple of interesting developments. On Wednesday, the Fed released the minutes from their January meeting with comments which largely bypassed overly bullish investors. “… several participants observed that equity, corporate debt, and CRE valuations were elevated and drew attention to  high levels of corporate indebtedness and weak underwriting standards in leveraged loan markets. Some participants expressed the concern that financial imbalances-including overvaluation...

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Gone Fishing Newsletter: The Inflation Edition

We are thrilled to present a recent article from Samantha LaDuc, the Founder of LaDucTrading.com and the CIO at LaDuc Capital LLC.  Samantha LaDuc is known for timing major inflection points in equities, commodities, bonds/rates, currencies and volatility. As a Macro-to-Micro strategic technical analyst, educator and trader, she makes her insights available to active traders and investors who want to minimize risk while seizing year-making opportunities.   Spoiler Alert: We have no inflation...

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#MacroView: Debt, Deficits & The Path To MMT.

In September 2017, when the Trump Administration began promoting the idea of tax cut legislation, I wrote a series of articles discussing the fallacy that tax cuts would lead to higher tax collections, and a reduction in the deficit. To wit: “Given today’s record-high levels of debt, the country cannot afford a deficit-financed tax cut. Tax reform that adds to the debt is likely to slow, rather than improve, long-term economic growth. The problem with the claims that tax cuts reduce the...

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SOTM 2020: State Of The Markets

“I am thrilled to report to you tonight that our economy is the best it has ever been.” – President Trump, SOTU In the President’s “State of the Union Address” on Tuesday, he used the podium to talk up the achievements in the economy and the markets. Low unemployment rates Tax cuts Job creation Economic growth, and, of course, Record high stock markets. While it certainly is a laundry list of items he can claim credit for, it is the claim of record-high stock prices that undermines the rest...

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Jerome Powell & The Fed’s Great Betrayal

“Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”John Maynard Keynes – The Economic Consequences of Peace 1920 “And when we see that we’ve reached that level we’ll begin to gradually reduce our asset purchases to the level of the...

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Retired Or Retiring Soon? Yes, Worry About A Correction

When I was growing up, my father used to tell me I should “never take advice from anyone who hasn’t succeeded at what they are advising.”  The most truth of that statement is found in the financial press, which consists mostly of people writing articles and giving advice on topics where they have little experience, and in general, have achieved no success. The best example came last week in an email quoting: “You recently suggested that you took profits from your portfolios; however, I read...

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7-Difficult Trading Rules To Follow In Bull Markets

As we wrap up the last two-trading days of the decade, I am wrapping up the recent series on “investing rules” (see here and here). The purpose of this series is to remind investors of the importance of having an investment discipline to protect investment capital when market volatility eventually comes. I know…I know…volatility seems to be a thing of the past, particularly given the amount of exuberance currently embedded in the markets. This was a point I made in the most recent...

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It’s Always About The Treasury Flows

We have looked at the central bank holdings — both the Fed and foreign central banks — of marketable Treasury bills, notes, and bonds over the past twenty years and were quite surprised by our findings.   Our analysis may also help explain the mess now taking place in the money markets, which is taking massive Fed intervention to stabilize. The above table of data illustrate the Fed and foreign central banks held almost 50 percent of the Treasury bills outstanding up until the Great...

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Democrats Stop Worrying & Learn To Love Deficits

I was stunned by a recent article from Marshall Auerback via The Nation entitled “Why Democrats Need To Stop Worrying And Love The Deficit.” “Delivering on big progressive ideas like Medicare for All and the Green New Deal will never happen until Democrats get over their fear of red ink.” While the article is long, winding, and a convoluted mess of ideas, the following is the all you really need to read: The perceived problem: “In an environment increasingly characterized by slowing global...

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“The Art Of The Deal” & How To Lose A “Trade War.”

This past Monday, on the #RealInvestmentShow, I discussed that it was exceedingly likely that Trump would delay, or remove, the tariffs which were slated to go into effect this Sunday, On Thursday, that is exactly what happened. Not only did the tariffs get delayed, but on Friday, it was reported that China and the U.S. reached “Phase One” of the trade deal, which included “some” tariff relief and agricultural purchases. To wit: “The U.S. plans to scrap tariffs on Chinese goods in phases, a...

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