An early check this morning and the markets were up 86-Dow points on the Futures.
If you are totally awake, you will be wondering something like “Yeah, but what about that 174 point nose bleed on Thursday?”
Pay it no mind. At least, not yet.
Around here, we look at things on an aggregated basis, so rather than look just at one headline number (like the Dow) we consider how equal dollars in the Dow, the S&P 500, and the NASDAQ Composite do over time. It’s a much more relaxing (and did I mention more profitable?) way to invest.
Therefore, in the event the market drops today, we would need the Dow to drop below the January February levels in order to really raise our concerns. That is 1,500 points lower than here…so pardon me if I sit back and calmly assess Reality with you.
Why You Should Buy Gold
Oh, this is really simple and we’ve been saying it for years.
Now go read this: Auditor: Government Will Owe More Money Than Entire Economy Produces.
This means more paper, the way I have it figured, and that means more paper to the relatively fixed assets floating around the world (like gold and real estate) so even if these prices go up slowly, slow is better than declining purchasing power as money is watered down.
Time To Buy a House: Right Now
If we only had livable wages and not all these damn part-time jobs…things would start to recover. But then the 5% unemployment myth would blow up… just no winning for losing, lately.
William Dudley of the NY Fed out with a speech this morning. Other than Robert Kaplan making some remarks later this morning and the wholesale trade and weekly oil rig counts, this is a fine Friday to plan to take-off early.
William Dudley’s speech is pretty good, so a long snip follows because it is not dissimilar to our own views recently:
In assessing the current state of the U.S. economy, recent news has generated divergent signals. Several sectors have been showing signs of softness. Real consumer spending growth appears to have moderated somewhat from the relatively robust pace of the second half of 2015. Both new and existing home sales have flattened since the middle of last year. Finally, indicators of real business investment spending point to continued softness. In contrast, manufacturing production—which had been a particular weak spot of the U.S. economy in 2015—rose in the first two months of this year. Recent survey data, including our own Empire State Manufacturing Survey, indicate further improvement in conditions for the manufacturing sector in March.
Through it all, the U.S. labor market has remained healthy. Payroll employment increased an average of about 229,000 per month over the course of 2015, and the gains in the first quarter of this year were nearly as high. Even though the unemployment rate ticked up in March to 5 percent, the amount of slack in the labor market still appears to be diminishing. Both the share of the population that is employed and the labor force participation rate have risen a bit over the past several months, with the employment-to-population ratio now at its highest level since the end of the recession. However, measures of aggregate wage growth have remained quite subdued, which suggests there is still some slack in the labor market.
An important question is how to reconcile these cross-currents. I continue to anticipate that consumption and housing activity will expand at a moderate pace this year. Continued job and wage gains, combined with still-low energy prices, should sustain real disposable income growth and support consumer spending. The housing market should remain on a solid trajectory, supported by rising employment and low mortgage rates. In contrast to previous years, fiscal policy should also provide a moderate stimulus this year. I believe that these positive factors will be sufficient to offset weakness in other areas, such as net exports and fixed business investment that will continue to be adversely impacted by the still-strong dollar, weak foreign growth, and low energy and commodity prices.
Putting this all together, I expect real GDP growth of about 2 percent in 2016, slightly below the average pace of growth in this expansion, but a bit above my estimate of the potential growth of the U.S. economy. If this materializes, then we should see some further reduction in the unemployment rate to around 4¾ percent—my estimate of the rate that I view as consistent with stable inflation over the long term.
Turning to the outlook for inflation, on a year-over-year basis, both headline and core inflation have recently risen above the low levels that prevailed through most of 2015. Nevertheless, inflation still remains below the Federal Reserve’s 2 percent objective. As the FOMC noted in its March statement, this continued low inflation is partly due to declines in energy prices and non-energy import prices. Although energy prices have stopped falling and the dollar has stopped appreciating, earlier movements in these factors still appear to be weighing on inflation.
A concern with this long period of low inflation is that it has the potential to reduce inflation expectations, which, in turn, would tend to continue to hold down inflation. As past experience shows, it is difficult to push inflation back up to the central bank’s objective if inflation expectations fall meaningfully below that objective. Japan’s experience is cautionary in this regard.
That is a pretty good perspective on things (the whole speech is here), but the main thought is that although the market seems to be living in “sideways land” along in here, the longer-term picture is not all bad…and living in a world of disinflation means that the compounding problem of the Federal Debt will not blow up as fast, as otherwise could be the case and people will be less frenzied in consumption for a while, as the new lower-interest rate paradigm propagates.
NEVER FIGHT THE FED.
Of course, the open question is whether a left-field event could torpedo the globalism outlook for the future, but I don’t expect that until closer to, or more likely Q2 of 2017 before we get the big answer.
In the meantime, though, my outlook for new highs in the market by May this year isn’t looking too bad. I just hope it gets here before “sell in May” otherwise, we might not get the new ATH’s (all time highs) until August.
But we shall see……
Catholics and Marketing
While we go into a whole-bunch of economics (on gender and LBGT which are turning into “multi-trillion dollar growth models, see our Coping Section this morning) it’s clear to me that someone in the Catholic Church marketing department “got the memo.”
Which, in a nutshell, explains why, as one email sent me this morning put it “
Obviously, the pope has a very good handle on demographic shift and doesn’t want to miss the boat. Nice to know we’re not the only outfit looking at growth in this segment.
Why, next thing you know, religious groups will be setting up booths at Dinah,the 20,000-strong lesbian desert be-in at Palm Springs. Marketing, Marketing…
The “Religion of Peace”
The Two UN-Presidents
I suppose we could start on the non-economic side with the report of Bill Clinton attacking Barrack Obama and defending his own stained record in public office.
Don’t look now, but there is a very important bit of messaging going on here between the Obamanation and the Clintonistas.
Essentially, Bill may be trying to give Obama as taste of what life will be like, if Obama doesn’t sit on the Just Us Department and keep them from taking on Hillary with a potential indictment for the email server abuses.
No one else is putting this in such a simple context for you; perhaps because there is a competing context to mention: Maybe Bill doesn’t like Hil anymore, and by laying the crap on Obama, Bill will be able to goad O into indicting Hil, and she (how to say this politely?) could “go away for a while leaving Bill free to, er, roam.
And in our L.A. legal-beagle’s assessment of the daily insanity:
Here all this time, we thought they were just liberal LEANING. How’s about that.
Of course we also read with interest Why the Panama Papers Are Bad News for David Cameron. Tisk, tisk.
This stuff gets terribly convoluted, as you can see, but if Hil really wants to avoid box-time, she really needs Willy of Dick to STFU.
The Running of Ryan
Across the other side of Obama’s “team” we see how Paul Ryan is trying to sound like a viable candidate with this fine little bit of “I’m too good to mess with the primaries” oration.
Know what an interesting THEORY is? Ryan is not running for President in stealth mode. He’s really a back-up plan of the Republicorps to put a Vice President in (like Nixon) to keep things settled on the back-end…where Ryan does have experience and knows the Hill inside and out.
That’s ONE WAY that the GOP insiders could maintain control even if an “outsider” like Cruz or Trump lands the nomination.
Meantime, off in the background, the Trumpster has troubles like the headline that Corey Lewandowski Called Coworker F**cking B**tch, Yelled at Subordinate for Visiting Dying Grandma.
This is all so stupid, it makes me question by own sanity for even following this crap. Oh, wait, that ship has sailed, already…
One Less Party This Weekend
OK, maybe a couple of parties, then.