Archive for the “RealClearMarkets” Category

Articles from RealClearMarkets.

The Puerto Rican $70 billion dollar debt crisis is tragic, has led to massive levels of unemployment (almost half of the population of the island), it’s nearly decimated the public health sector, and it continues to create a series of only bad choices for nearly everyone involved, including policymakers. One current matter that has become a point of hot debate is whether or not Puerto Rico’s governor should reject a previously agreed upon restructuring plan with the commonwealths power company: Puerto Rico Electric Power Authority, generally known as PREPA.
Newly elected Puerto Rican…

More…

Comments No Comments »

Donald Trump swept into office on a populist wave. His promise of greater growth for the United States economy resonated with a large part of those disappointed with stagnant wages and a lack of opportunity. He said he would bring manufacturing jobs back and provide better healthcare coverage at a lower cost. All politicians know that they can make promises during a campaign that voters will not remember or that they will understand an administration not being able to accomplish, but the new team in Washington has an ambitious agenda and is off to a slow start. Trump has said that he expects…

More…

Comments No Comments »

“Aye! Aye!Teach me how to dougie (aye! )
They be like smoove (what?)Can u teach me how to dougie?You know why?’Cause all da girls love me (aye! )All I need is a beat that’s super bumpin’And for you, you, you to back it up and dump it!Put your arms out front, lean side to sideThey gon’ be on you when they see you hit dat dougie right?”
–Cali Swag District, “Teach Me How to Dougie”
“Teach Me How To Dougie” was a song released in 2010 that refers to the Dougie dance, which originated in Dallas, Texas, with similar moves by 1980s rapper Doug E. Fresh. Originally gaining popularity by Lil’…

More…

Comments No Comments »

The Republicans failure to repeal Obamacare puts pressure on them to win the next big policy battle, on taxes. But the inherent political and economic trade-offs are likely to deter anything resembling a sweeping tax reform effort. The Republicans will likely have to define a win as a revenue-losing tax cut.
Distance is a tax reforms best friend. Many proposals look good at an abstract level, only to be done in by the details. As with health care, agreement on the repeal part is not sufficient to generate agreement on the replace part.
As a result, theres been…

More…

Comments No Comments »

In a recent column Daily Wire editor Ben Shapiro lamented a central conflict that he contends defines democratic politics: the conflict between truth and desire. Shapiros view is that conservatives arent wrong when they say they cant compete with Santa Claus its far harder to draw voters to your side by telling them they wont get something than by telling them theyll get real estate on the moon.
Though he may have mis-written, Shapiros analysis explains why conservatives havent consistently controlled the House, Senate, White House, and everything…

More…

Comments No Comments »

Risk happens fast and the Trump trade may be over The administration’s first initiatives have been ineffective A potential stock market top may now be in place
A Less Effective White House: After Friday’s failed health care bill, President Trump’s future tax, regulatory and fiscal initiatives will be more difficult to accomplish. I have expected this outcome for several months; others may soon come to the same conclusion.
We soon may learn that:
The president has and will continue to be educated that there is a fundamental difference between the art of the…

More…

Comments No Comments »

There was bound to be a political commotion when the Trump administration released its 2018 budget. After all, it isn’t every day that the White House proposes deep cuts in agency spending: for 2018, the Environmental Protection Agency would be down 31%; the State Department, 29%; the Department of Education, 14%; and the Department of Transportation, 13%.
Outrageous, screamed critics. Good programs are being gutted. Surely true. But some ineffective or unimportant programs would also be gutted. The reflexive horror from Congress and (yes) the media to spending cuts reveals a central cause of…

More…

Comments No Comments »

Sage words indeed, and likely true.
After all, Herbert Hoover had the biggest honeymoon of all and look what happened down the pike.
The markets tripled under two socialist presidents (Bill Clinton and Barack Obama) and slid 35% under the pro-business George W. Bush administration.
Even Ronald Reagans first two years in office were rocked by a 25% plunge in the stock market after a brief, though powerful, bounce following the November 1980 election.
What you see isnt always what you get, and it is likely a mistake to extrapolate todays market performance into the…

More…

Comments No Comments »

During the middle 2000’s when Alan Greenspan’s Fed endeavored to change the outward monetary policy stance to “tightening”, it was not unusual for some divergences to have emerged. One of those was between the federal funds rates, either target or effective, and Treasury bill equivalent yields. Under a hierarchical system, this was not unexpected or alarming except as when the distance between them became unusually large (2006). Federal funds are unsecured interbank transactions whereas Treasury bills are near equivalent to them except secured by lending cash to the federal…

More…

Comments No Comments »

“What Washington needs is adult supervision.” –Barack Obama Yesterday’s opening missive, ” Wall Street Blues,” depicted an overvalued market, moderating U.S. economic prospects, elevated investor optimism and a new Administration that, arguably, appears to be doing nearly everything it can do to jeopardize its legislative agenda (which, despite protestations in some parts, has been crucial to the S&P index’s impressive run since the November election). The latter is an important point, though Jim “El Capitan” Cramer, and some others, have disputed President Trump’s prospective market…

More…

Comments No Comments »

The American Health Care Act (AHCA) has been proposed by House Republican leaders as a way to repeal and replace the Affordable Care Act (Obamacare). The plan was met with derision on the left and from much of the right. Liberals simply want to preserve Obamacare or expand it, so a plan to repeal and replace it with anything short of universal, single-payer nationalized healthcare will fail to gain support from Democrats. Conservative Republicans dislike the plan because it replaces Obamacare subsidies with refundable tax credits and leaves too many federal regulations in place. They believe…

More…

Comments No Comments »

While helping my daughter run her first lemonade stand, a nice neighbor approached and asked what charity we were raising money for. But, we werent raising money for anything. My daughter had just started her first business, and I was proud of her for that. So, I looked at the neighbor and said that we were working for profit, not charity. Given the recent controversies surrounding Unilevers CEO, Paul Polman, maybe they should consider consulting my daughter about the value of profit seeking as the company conducts its comprehensive review.
The value of profit is often overlooked by the…

More…

Comments No Comments »

There is no market sector that has been as embraced as heartily as financials
But, the domestic economy is slowing, the Trump regulatory and fiscal policy put may be waning, the yield curve is flattening, interest rates are contained, protectionism is rising around the world and bank valuations are back to pre-crisis levels. Sell financial stocks.
“Skepticism is the chastity of the intellect; do not surrender it lightly.”
–Richard Fisher’s mother (Richard is the former president of the Federal Reserve Bank of Dallas)
Group stink has never been more conspicuous…

More…

Comments No Comments »

Todays regulators must react to fast-paced technological change like ridesharing services offered by Uber and Lyft. These regulators are making decisions that will likely have a big impact on the pace and direction of innovation. If they are not careful, their policy interventions could hurt both the economy and consumers.
For example, earlier this month, Uber lost a court battle in the UK that would require London cabbies to pass an English test. Lawyers for Uber argued the language requirement would cause 33,000 existing drivers to lose their livelihoods, and that the rule is excessive….

More…

Comments No Comments »

With Janet Yellen expected to depart after her first term, interviewers frequently ask me whom I would choose as her replacement as Chairman of the Federal Reserve. My answer is always the same: David Malpass.
While the Federal Reserve presently serves no useful purpose such that its shuttering would affect a tiny percentage of the U.S. whole, the reality is that it still exists. And its going to exist for a long time.
The Fed will always be with us simply because politicians will never abolish what is a convenient whipping boy every time the U.S. economy slows. Even though the…

More…

Comments No Comments »