Archive for the “RealClearMarkets” Category

Articles from RealClearMarkets.

At the beginning of the year, most market strategists were in agreement that interest rates were going to rise in 2017. The reasons varied: some saw inflation climbing, pushing yields higher; others worried about bigger budget deficits; a few blamed the Federal Reserve, which was thought to be planning to raise short-term interest rates two or three times and shrink its balance sheet. Whatever the reason, interest rates were expected to head higher, so seeing the 10-year U.S. Treasury yield here at 2.3% is a surprise.
To many pessimists on the economic outlook, the drop in yields on the…

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It was like a scene out of The Art of the Deal. When President Donald Trump threatened to pull out of NAFTA and then agreed only to simple renegotiation, it read like the advice Trump gave in the book he loves to cite. Threaten to walk away, that gives you more leverage. But Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pea Nieto have leverage too, and they shouldnt allow themselves to be bullied, like some land developer or contractor without options. Canada and Mexico have cards to play and they should play them.
The first thing to keep in mind in these…

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In yet another 140-character lesson in economics, President Trump has looked at the trade balance and once again demonstrated a level of understanding of the impact of trade that would earn him an F in any good first-year economics class.
In a tweet Wednesday morning the President directly linked economic growth rates to the trade balance, and lamented: The U.S. recorded its slowest economic growth in five years (2016). GDP up only 1.6%. Trade deficits hurt the economy very badly. President Trump, as he does about so many economic issues, sees the world as divided into…

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Late on the night of July 16, 1897, a reporter for the Post-Intelligencer in Seattle boarded a tug and set out into the Strait of Juan de Fuca to intercept an inbound steamer from Alaska. The Portland had sailed from St. Michael carrying several Washington residents and their wild stories. Beriah Brown Jr., the P-I reporter, had heard the whispers of successful gold hunters making their triumphal return and he wanted to get the scoop before anyone else. At around 3 in the morning on Saturday the 16th, the Sea Lion and Portland met up and Brown began to hastily interview anyone he could…

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After 100 days in office, Donald Trump finally released his plan for Americas tax system. The word plan may be a stretch, though. Despite all of the hoopla, the White House actually only released a one-page list of bullet points on Wednesday. Even so, it is clear that the Administrations approach is flawed.
The main tax cuts in the proposal would: reduce the top rate on business income to 15 percent, from the current 35 percent rate on corporate income and 39.6 percent rate for other businesses; cut individual income tax rates; raise the standard deduction; abolish the alternative…

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In Pasadena, CA in the 1970s, a married mother-of-two in my neighborhood began a daycare service out of her house. Interesting at the time was that not long after starting her business she was visited by local government officials. It seemed she needed a license if she wanted to continue operating.
It didnt register at the time (I was very young), but looking back, this was very odd. Parents are nothing if not overly careful when it comes to their children. Most would never put their child in the care of someone whom they didnt trust, who was irresponsible, incompetent, or all…

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Thirty years ago, when I worked for the Premier of Canadas largest province, one of the biggest issues we had to contend with was U.S. efforts to impose tariffs on Canadian softwood lumber a move that would mostly hurt American consumers. Today that is still an important issue, given the Trump administrations attempt to impose a 20 percent tariff. And the U.S. position doesnt make any more sense for U.S. consumers today that it did then.
Basically, the Department of Commerce is alleging that Canadian softwood lumber is underpriced. Unlike the United States, the forest lands the…

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Tyler Cowens The Complacent Class: The Self-Defeating Quest for the American Dream is a thought-provoking examination of what the American Dream is and how people reach it, using economic and sociological data in an easily-digested manner to back up assertions.
Although The Complacent Class was an enjoyable read as is, Cowen could have used the same data to reach the same conclusions for a differently-titled booka flaw that does not detract from the books merit, however.
Strongly Presented Arguments
Presenting data boosting both sides of an issue and siding with the favored premise…

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Since Chairman Ajit Pai was named as Chairman of the Federal Communications Commission (FCC) in January, I’ve been encouraged by his moves to fix onerous regulations put in place by the Obama Administration and his advocacy for a new culture and procedures that will help the agency understand the impact of its proposed rulemakings on small business. There is still much work to be done, but Chairman Pai is on the smart regulatory path that will encourage more entrepreneurship, small-business growth, innovation, investment, and economic dynamism, both within and from the telecommunications…

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Whether its Wal-Mart, Safeway, CVS, or any other kind of local or national retail chain, the norm nowadays is for customers to swipe loyalty or customer care cards during checkout. Membership is a way for customers to accrue purchasing points, receive e-mail alerts about future buyer discounts, and most often reduced prices on certain goods selected at time of purchase.
Why do retailers offer these deals? Are they feeling extra generous, or are they oblivious to profits? Not a chance.
Retailers reward their loyalty-card swiping clientele simply because knowledge of the buying…

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“The problem with the world is that fools and fanatics are always so certain of themselves, and wiser people so full of doubts.”- Bertrand Russell
As Grandma Koufax taught me, I often live in constant fear that the “Cossacks are Coming.”
This is not an innate condition of fear or a permanent state of investment paralysis. Nor is it, as some have claimed, the status of a Perma Bear — as I actually am long a number of stocks.
Rather, it is a reflection of the realities, concerns and uncertainties that investors face over the next 1-2 years.
Tomorrow’s opening missive will discuss the threat of…

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One reason for growing inequality is high rates of joblessness among those without much education. If you dont have a job, your income plummets. And while unemployment insurance or other benefits can replace some of that income, it cant fill all of the hole. So if we want more broadly shared prosperity, we need to look at whats happening in the labor market.
One problem is that when people look at the labor market, they often come to the wrong conclusion. They see well-paid jobs in manufacturing or elsewhere disappearing. They conclude that there are simply not enough jobs to…

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The last thing President Trump now needs is for the stock market to go south on him. After all, hes got worries aplenty: abroad, North Korea, Syria, Russia and Brexit; at home, the stalled effort to repeal Obamacare and uncertainty surrounding tax reform. Compared with this tapestry of troubles, the stock market has been a splendid blessing.
Its called the Trump Rally or the Trump Trade. By whatever name, it has been impressive. On Election Day, Nov. 8, the Dow Jones Industrial Average closed at 18,332.74, not much different from a year earlier. By March 1, the Dow hit 21,115.55,…

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As a Canadian, I have to admit that President Trump is right when he criticizes a new Canadian policy that gives Canadas producers an incentive to buy domestic supplies of ultra-filtered milk. But the biggest victims of Canadian supply management policies arent American dairy farmers, they are Canadian consumers. Ironically, President Trump uttered his criticism as his office was releasing a memo setting the stage for tariffs on steel imports. Who would be the biggest victims of that? American consumers, and American workers in industries that use steel.
The truth is that protectionism…

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We are all traders now!
“ETF’s are a great innovation, but an over-population of any innovation could cause unintended consequences if left unmonitored. We have seen this in many market cycles, from dot-com to the credit crisis … This time won’t be different.”
–Troy Draizen, head of electronic trading at Convergex Execution Solutions
In Wednesday’s opening missive, “The Bull Won’t Die Easily,” I gave a lengthy explanation why, even though the market’s complexion is clearly changing, I am not short and why I am maintaining a market-neutral position. (The day before, in “Feeling…

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