Operating at the Intersection of Technology and the Capital Markets
Tag: fiscal stimulus
Core CPI accelerated month-to-month to 0.5% (from 0.4% in January), as "Shelter" accelerated to 0.8%. Our view is that the Fed will continue to hike rates but may slow the pace of QT, particularly as it relates to Treasuries. The Fed says it will maintain interest rate hikes as the Banking sector stumbles. More importantly, … Continue reading Price Inflation Persists. Now What?
The Atlanta Fed's GDPNow Q2 Real GDP estimate was -2.1% as of July 1st. This marks the second consecutive negative Real GDP quarter which means we are officially in a recession. A recession in 2022 was an easy call for us to make as there was essentially zero probability of the U.S. economy growing in … Continue reading It Is Official. We Are In A Recession.
Shares of junk companies such as American Airlines (AAL) and General Electric (GE) are back where they traded during the COVID doldrums. What was gained by bailing out these shit companies or the thousands of zombie companies that received COVID relief money? All of that wasted capital - trillions of dollars - that was printed … Continue reading Junk Sinks To The Bottom of The River
The CPI data category "Owners' Equivalent Rent" ("OER"), uses data derived from surveys of homeowners in select markets rather than real world data. This technique allows the BLS and the Federal Reserve to understate price inflation. OER understates CPI by 1% or more. September's 5.4% CPI increase was understated by at least 1% per our … Continue reading How The CPI’s Fuzzy Math Understates Inflation
Economists pushing the narrative that Real GDP growth will climb back to mid-single-digit percentages in 2022 have got it wrong. The combination of persistent price inflation and weak labor participation will ensure that Real GDP remains range bound between zero and 2%. The sooner Wall Street pundits learn to say "Stagflation" the more honest conversation … Continue reading Real GDP Growth Will Not Rebound In 2022
The Fed's "Fed Funds Rate" forecast for the next several years is not realistic. Our view is that the Fed will move to raise its Fed Funds Rate more quickly than its published forecast (see page 2 of 17). The Fed anticipates median Fed Funds Rates of 0.3%, 1.0% and 1.8% in 2022, 2023 and … Continue reading Fed Funds Rate Will Increase Faster Than Fed’s Forecast
The Atlanta Fed's real GDP estimate of 3.7% is well below inflation as measured by the Fed (CPI of 5.4%) and well below any real world price inflation measure. We do not subscribe to the Fed's theory that price inflation is transitory. Our view is that price inflation will grow from here. If real GDP … Continue reading It Is Beginning To Look Like Stagflation
Federal Reserve Chairman Jerome Powell has spearheaded the most radical monetary policy in American history. From zero percent interest rates to Quantitative Easing to Corporate Security Asset Purchases to various lending facilities, to subsidizing fiscal spending programs and deficits - The Fed's resume is not one to be proud of. Under Powell the Fed has … Continue reading The Most Radical, Irresponsible Monetary Policy In U.S. History
A byproduct of the Pandemic Emergency Unemployment Compensation (“PEUC”) program is the job interview "no show", which has become all too common across the Retail sector. The "no show" is where a job candidate skips the job interview because the candidate never intended to obtain a job. Rather, the candidate simply needed to show proof … Continue reading The Job Interview “No Show”
The Fed likely won't taper asset purchases this calendar year. It should, but it won't. **Purchase our Amazon Kindle book Stagflation Is Imminent: HERE We previously mentioned mid-term elections as one reason why the Fed won't take away the punch bowl. Second, the Labor Participation rate - a key economic indicator for the Fed - … Continue reading The Fed Will Not Taper In 2021. Inflation Is Not Transitory.
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