Archive for the “RealClearMarkets” Category

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In September 1938, on the eve of the Second World War, on returning from Munich Prime Minister Neville Chamberlain assured the British public that there was to be peace for our time. This week, some eighty years later, speaking in London Federal Reserve Chair Janet Yellen assured us that in our lifetime we will not experience another financial crisis like the one we experienced in 2008. Ironically, she did so on the very day that the Bank for International Settlements (BIS) issued a stark warning about the dangers of an excessive buildup of debt around the globe.
One has to hope for…

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“Remain calm, all is well.”
–Kevin Bacon, “Animal House”
History is littered with very smart people saying very stupid things.
Here are some examples of quotes that their authors would like to take back:
Irving Fisher (economics professor at Yale University in 1929): ” Stocks have reached what looks like a permanently high plateau.” Albert Einstein: “There is not the slightest indication that nuclear energy will ever be obtainable. It would mean that the atom would have to be shattered at will.” The president of Michigan Savings Bank urging Henry Ford not to invest in The Ford Motor…

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For hundreds of workers at Carriers Indianapolis plant, the bad news is that union officials have received official notice that their jobs are being shipped to Mexico, despite Indianas $7 million grant to the company. For 330 million Americans, the far worse news is the fact that governments across the country spend one thousand times that much trying to lure or keep companies to their jurisdiction amounting to a fiscal murder-suicide pact in which the nations economy is the victim.
States and municipalities spend $70 billion a year to lure companies away from each others…

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Ten years ago this week the Apple iPhone, described by Steve Jobs as a revolutionary product that changes everything, went on sale for the first time. A million flew off the shelves in just ten weeks and a decade laterwith more than a billion sold worldwidethe iPhone has transformed the way we live, work and do business.
But even as the fanboys and girls were camping out to be at the front of the line, harsh critics queued. Columbia law professor Tim Wu denounced the iPhone as anticompetitive. Nested exclusively with AT&T and lurking in a walled garden, the…

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Washington, D.C., is in the midst of a regulatory reform quilting bee. Several different parties are gathering up regulatory reform ideas for potential inclusion in a reworked financial regulatory framework. The end result could be hideous, or it could be an elegant, effective, and efficient amalgamation of these disparate regulatory efforts. The key to getting the latter result is ensuring that each included contribution furthers our collective desire to see a stronger, safer financial system that serves the needs of individuals and businesses.
The Treasury has released the first of its…

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“I’d unravel every riddle for any individ’le,In trouble or in pain.With the thoughts I’d be thinkin’I could be another LincolnIf I only had a brain.”
— “If I Only Had A Brain,” from ” The Wizard of Oz” ( Harold Arlen and E.Y. Harburg)
Like the Scarecrow (Ray Bolger) in ” The Wizard of Oz,” investors and legions of self-confident perma-bullish talking heads need a brain.
For if they don’t acquire a brain shortly, they may shortly lose their asses!
Deteriorating high-frequency economic data in the U.S. and a multimonth low in the Citigroup Surprise Index (U.S.) is being reflected in…

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The mood among investors in Europe is generally positive in spite of mixed cyclical and secular factors influencing the economies and the markets there. The cyclical forces are dominated by a better business tone across the continent. The secular factors are the spread of populism as a result of governments not providing opportunity for the people, and terrorism, which can erupt almost everywhere and cannot be controlled. The secular factors will eventually affect spending and investment, but so far the data are coming in better than expected, and Europe should have real growth of 1.7% this…

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In Rochester, a 58-year-old unemployed former Eastman Kodak employees eyes well with tears as he laments the loss of manufacturing jobs in the United States. Theres nothing made here anymore, he tells USA Today. “People are suffering, and communities are suffering.” It is easy to hear stories like this and believe the economy is losing too many traditional manufacturing jobs. But the truth is, what is needed is not more semi-skill jobs but more highly-skilled workers.
Perhaps our biggest economic problem right now is a mismatch between the skills many people have and the skills…

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Do we have a worker shortage? Maybe.
For months, I’ve planned to write a column on the future of the U.S. labor market. Stacked on my desk are reports on “the gig economy,” “independent workers,” “contingent workers,” “freelancers” and the like. All signify a new, less secure labor market. Workers won’t have long-lasting career jobs, as the old post-World War II employment model promised. Now it’s survival of the fittest. Workers who can adapt to constant change will thrive. As for everyone else, tough luck.
I never wrote that column.
The main reason is that I never felt certain that this…

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Its been said that the Republicans erred in addressing Obamacares myriad shortcomings ahead of tax reform. The thinking is that economic growth wrought by tax cuts would make for an easier legislative climate, including one for eventual healthcare changes. In truth, Republican voters should be glad the Partys legislators didnt lead with taxes, mainly because the GOP is divided on the matter. Worse, each side misses on the kind of tax cuts that would prove most effective.
Consider the unwillingness of Paul Ryan and Kevin Brady to walk away from their…

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Rock and roll performer Chuck Berry won admiration as a songwriter, singer and guitarist before he passed away a little over three months ago earning enormous admiration for such songs as Maybelline and Roll Over Beethoven. Perhaps he should also be admired for his economic insight, once pointing out that he became a musician because I wanted a home of my own. I had a family. I had to raise them. Dont leave out the economics.
But many do leave out the economics, or even turn it on its head. We ignore the fact that no task is valuable to ourselves or others for…

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“For a day where the S&P was essentially flat, there was a lot going on beneath the surface.
Just a few days ago, everyone was so excited about the rally, but I pointed out that the cumulative advance/decline line (breadth) had not made a higher high. You can see the updated chart that shows a retreat back to early June levels.
Here’s what needs to be watched, though: the cumulative volume. It is on the verge of making a new low on the year. So regardless of what the indexes are doing, the majority of the volume this year has been on the downside, not the upside.
I have noted the increasing…

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In the iconic movie Wall Street, filmmaker Oliver Stone presents as his archetype Gordon Gekko, a corporate raider who takes no prisoners. Such were his excesses that he even delivers a speech extolling greed to a fictional gathering of shareholders. Greed will, he says in the movie, not only save Teldar Paper but that other malfunctioning corporation called the USA. Stone presented the moment as a political choice.
It was in many ways a false one. People think of the NYSE when put upon the subject of Wall Street. It makes sense because that is what is actually there in that…

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Across the United States, people are talking about tax reform. Comprehensive overhaul of the federal tax code was a core part of President Trumps campaign platform, and voters on both sides of the aisle share a desire for a more efficient, modern, and competitive tax code that can help our economy grow and correct decades of the current tax codes disadvantages for individuals and businesses.
Tax reform is a very good thing. But the debate underway today in Alaska shows just how important the nuts and bolts of the reform process are, and how vital it is that significant tax policy shifts…

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Among the many things it does, the federal government is one of the nation’s largest lenders. It lends to farmers, homeowners, students, small businesses, exporters and rural electric utilities, among others. Altogether, there are more than 100 loan programs administered by 20 agencies overseeing lending worth $3.4 trillion in fiscal 2015, up from $1.5 trillion in 2007.
These fascinating figures come from a new report on federal credit programs. The report’s verdict is mixed: Many programs are justified to correct failures of private credit markets, but lending standards are often too lax,…

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