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Columnists get complaints. After my last column (which argued that maybe the economy is better than we say), I got one from Alice Lang of Spartanburg, South Carolina. She accused me (politely) of ignoring the long-term unemployed, of which she is one.
After our conversation, I asked her to put her thoughts in an email. Here’s what she wrote, slightly edited. It’s a powerful counterpoint for me and, I think, for readers. (Note: Lang, an advocate for the long-term unemployed, made similar complaints to a Forbes columnist in 2015.)
Dear Mr. Samuelson,
I don’t think you fully understand what it…

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According to statewide unemployment and GDP statistics, California is doing okay. Unemployment is below 6% and year-over-year real GDP growth was 4% between 2014 and 2015. At the same time, however, the Tax Foundation rated it as having the 2nd worst state business tax climate and CEO Magazine consistently names California the worst state to do business.
Both sets of data points are used in Sacramento’s age-old debate: is California a good or bad state to do business? But neither tells the whole story. Businesses take a lot into consideration when deciding where to start, expand, or relocate….

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The Federal Reserve met market expectations fully. It upgraded its assessment of the economy, recognized that the near-term risks had diminished, and remained committed to normalizing monetary policy. There was one dissent from the steady stance, and KC Fed President George had already tipped her hand.
There was little direct guidance about the September meeting or whether most Fed officials still saw two hikes this year, as they seemed to last month. This is not particularly surprising, and reading between the lines, a single hike this year is the most likely scenario.
Besides upgrading…

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“Beware of false prophets, who come to you in sheep’s clothing but inwardly are ravenous wolves.”
– Matthew 7:15
I try to exclude personal experiences from my diary and only include observations related to the markets. But I have to start the morning by saying that the past few days have been moving ones of monumental importance on multiple fronts for myself and my family. Let’s just leave it at that.
As for Wall Street this morning, aggressive liquidity continues to buoy stocks. The money is coming from a combination of the world’s central banks and historically large share buybacks,…

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The Federal Reserve’s two-day meeting concludes tomorrow. There is little doubt that it will stand pat. There is not press conference afterward, so the statement is the only thing investors will get.
The statement is important. We argue that the FOMC statement is the clearest expression of the views of the Fed’s leadership. The minutes are more comprehensive they dilute the signal from the Fed’s leadership, and it conflates the difference between voters and non-voters and between the Governors and regional Presidents.
The Federal Reserve was designed to concentrate power with the…

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The government’s pension insurance company, the Pension Benefit Guaranty Corporation (PBGC), is broke. Because its creditors can’t demand their money immediately, it won’t have spent
its last dollar for “a significant number of years” yet (maybe ten) — but its liabilities of $164 billion are nearly twice its assets of $88 billion: there is no way it can honor all its obligations.
The PBGC has two programs, one insures single employer pensions and the other multiemployer, union-sponsored pensions. Both are insolvent, but the multiemployer program is in far worse shape: it is well and…

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It’s the revolution of rising expectations again.
Watching Donald Trump last week, I thought of Alexis de Tocqueville, the French political philosopher whose “Democracy in America,” published circa the 1830s, remains the most insightful study of our national character. But it was Tocqueville’s other masterpiece, “The Old Regime and the Revolution” (1856), that came foremost to mind. In it, he outlined what we now call the “revolution of rising expectations” - a concept highly relevant to today’s presidential campaign.
The French Revolution presented a paradox, Tocqueville wrote. Before the…

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Alert voters realize the economy is neither as strong as claimed by the party in power nor the disaster described by the opposition. The election season will bring many passionate but dubious claims about economic trends. People running for office know that voters rank the economy near the top of their concerns. Of course, perceptions of the economy differ from one voter to the next. A few of us are soaring, more are treading water, and too many are struggling just to keep afloat. Both parties have seized on the idea that the rich are flying high and have recovered nicely from the Great…

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Today’s unprecedented level of partisanship and division between Democrats and Republicans will likely set the stage for more market volatility ahead.
We’re already seeing this division and vitriol at this week’s Republican National Convention, and we’ll probably see it at next week’s Democratic convention as well.
In its extreme, this animus could continue to exert a headwind and stasis in fixed business investment, which is already weak. A consumer-spending slowdown could also develop — in fact, we’re already seeing one in high-end homes and expensive art.
I’ve written about the dangers…

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Ted Cruz essentially gave a career-ending speech at the GOP convention on Wednesday night.
Cruz’s speech was a slap in the face to GOP nominee Donald Trump. This whole business about “vote your conscience” - that’s a wonderful-sounding phrase. But we all know what he meant: Don’t vote for Donald Trump.
I was in the convention hall and the crowd’s reaction was unbelievable. It started out as a few hands waving in the air and some booing and then it just grew and grew throughout the entire convention hall. And then boom! It was absolute bedlam.
I’ve been to most of the GOP conventions since…

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On November 26, 1934, the Secretary General of the League of Nations, Joseph Avenol of France, delivered to the Romanian delegation a “note” to be considered under the “procedure in force in the matter of the protection of minorities.” The end of World War I had led to confusion, to put it mildly, as borders were changed all throughout Europe and elsewhere. The cause of the petition was that of Dr. Meer (Mayer) Wilderman. The unfortunate industrialist had built and owned factories in Germany starting in 1912. But because he was born in Bessarabia, then part of Russia, at the outbreak of…

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The weighted average of the Fed funds rate has edged higher. Following the Fed hike in December 2015, the Fed funds average around 36 bp in January before moving into a 37-38 bp range. However, since the UK referendum it has been trading consistently around 40 bp.
The Fed fund futures contract settles at the average effective Fed funds rate for a given month, not at the policy rate. Ahead of next week’s FOMC meeting where practically no one expects a change in policy, implied yield of the July Fed funds futures contract is 40.25 bp.
Some dealers think that one of the factors that are…

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Now that Donald Trump has secured the Republican nomination, he must refocus his campaign on the economy to beat Hillary Clinton.
Both candidates have negatives that are not easily overcome - for example, Mr. Trump’s statements about women and minorities, and Mrs. Clinton’s assorted family foundation and email woes - but those largely cancel out.
On the economy, however, Mrs. Clinton may be more vulnerable if Mr. Trump gets more specific about how he intends to fix it.
The presumptive Democratic nominee has a fresh list of free stuff - all to be financed by raising taxes on corporations and…

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The air is getting thinner on Wall Street as stocks rise ever higher, with the S&P 500 trading at more than 25x GAAP earnings and investors rationalizing the irrational.
It’s also my view that politics will weigh heavily on markets over the next several months — at times even more than the business and profits cycles will. So, smart players should prepare to factor presidential politics into their trading and investment decisions regardless of their personal political views.
What we saw in last night’s opening of the Republic National Convention in Cleveland (and will no doubt see as well at…

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It’s almost as if nothing is predictable any more — in life, in the economy or in the markets.
Consider the fact that:
* Desperate violence and terrorist attacks are melding together to create a disturbing overlay to our everyday lives.
* Both the Democratic and Republican presidential nominees’ flaws are driving this year’s election campaign, causing a disconnect between politics and the reality of our everyday lives.
* The widening gap in incomes and net worth is sparking a rejection of the status quo, both here and abroad.
* Global economic growth’s weak trajectory and…

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