Wednesday, December 11, 2013
Isn't "easing spending cuts", as shown in this Bloomberg headline this morning, just another way of saying that they are going to spend MORE? Why the parsing of words? Why the games of semantics, just to tell us that they're kicking the can down the road again?
They restore $65 billion in spending cuts NOW!
They cut spending by $23 billion over ten YEARS!
Meanwhile, the US Treasury issued $409 billion of new debt in October alone -- in ONE MONTH!
Are these people insane? What kind of "grand deal" is that? It sounds like more of the same insane to me!
Tuesday, December 10, 2013
Is this the reason stocks are showing weakness again, just two days after a 200-point Dow rally? There are more and more voices, even on Wall St, calling for the Fed to begin tapering it's debt monetization scheme at the Fed's meeting next week.
came to within a hair's breadth of another new all-time record high
yesterday and throughout the night, but what Wall St seems to be
shrugging off is that the recent stronger-than-expected GDP contains a
real devil in the details. The recent GDP growth has been based all on
"...of the $534 billion rise in nominal GDP in the past year, a whopping 56% of this is due to nothing else but inventory hoarding.
"The problem with inventory hoarding, however, is that at some point it will have to be "unhoarded." Which is why expect many downward revisions to future GDP as this inventory overhang has to be destocked."
And when that "destocking" takes place in future quarters, it must be accomplished with REDUCED profit margins and REDUCED payroll. This means that we are robbing the future's GDP Peter, to pay today's GDP Paul. In other words, unless the American people suddenly find a strong and compelling urge to buy, buy, BUY, future quarters will be weak and there will be lay-offs in jobs.
So that dirty little devil in those GDP details forebodes disappointment ahead.
What's worse, economists over the past few days have now assessed that last Friday's surge in consumer confidence wasn't really an IMPROVEMENT at all. It was just a return to a more normal level following the the temporary shutting down of part of the government in October. It wasn't a surge in sentiment. It was just a return to the same level of malaise that has dominated for the past few years.
And there is a growing cacophony of voices -- even on Wall St -- calling for the Fed to begin tapering its debt monetization scheme NOW! The Fed board meets next Tues and Wed, and will release a policy statement at the end of their Wed meeting.