“Real econ risk is if things go wrong, WH doesn’t have a plan & doesn’t have any competent personnel to come up with one. Trump’s econ brain trust consists of a guy who plays an economist on TV, a nutcase the entire (real) econ profession has disowned, & the producer of Lego Batman.”
— Catherine Rampell, @crampell
Obvious Man, from Wiley Miller’s Non Sequitur comic strip h/t gocomics.com, Andrews McMeel Publishing
“This is the greatest non sequitur in finance.”
— Jim Grant, editor of Grant’s Interest Rate Observer
The venerable Mr. Grant is referring to bonds priced to yield less than zero.
Deutsche Bank data shows negative yielding debt has topped $15 trillion, representing 25% of all outstanding bonds.
Negative interest rates are not good. They reflect and forecast trouble. They have serious consequences for investors and sovereign nations.
Who would buy negative yielding bonds? See the Greater Fool Theory.
Don’t be a fool and don’t be cruel. Spread some kindness today.
“What protectionism teaches us, is to do to ourselves in time of peace what our enemies seek to do to us in time of war.”
— Henry George, American 19th century political economist
Overnight and this morning, markets are exuding a whiff of panic over an escalation of the US/China trade war.
Trump’s tariffs, negative bond yields in Europe, the spreading of deteriorating economic conditions, and geopolitical tensions boiling all add to uncertainty.
With two more senseless US mass shootings and ahead of a likely violent crackdown coming to quell protests in Hong Kong, we hope for a day when sensibility and kindness hold sway on political leadership to get them to stop the madness.
50 years removed from Woodstock, we sure could use some of that Peace and Love.
h/t MarketWatch / Getty Images, iStockphoto
“Raising tariffs to get the Fed to cut rates more is about as dumb a macro strategy as raising rates so you have room to cut them later.”
— Ernie Tedeschi, @ernietedeschi
Trickle by vvvracer h/t Flickr
“American workers are struggling in large part because they are underpaid—and they are underpaid because 40 years of trickle-down policies have rigged the economy in favor of wealthy people like me. Americans are more highly educated than ever before, but despite that, and despite nearly record-low unemployment, most American workers—at all levels of educational attainment—have seen little if any wage growth since 2000.”
— Nick Hanauer
“Everything about recessions are easy to predict except the timing, location, duration, magnitude, and policy response.”
— Morgan Housel, @morganhousel
“Negative interest rates are the primary warning signal of a pending financial calamity. The trend in that direction began with Trump’s election. His response today was to expand the trade war to add more burdens on Mexico.”
— Frederick Feldkamp
“Every day the bucket goes to the well
But one day the bottom will drop out
Yes, one day the bottom will drop out,…”
— Bob Marley, I Shot the Sheriff
h/t Getty Images
“When I was poor and complained about inequality they said I was bitter; now that I’m rich and complain about inequality they say I’m a hypocrite. I’m beginning to think they just don’t want to talk about inequality.”
— Russell Brand
Chaos, h/t thenewstack.io
“Our soul is a vast panorama. There is room for so much in us at the same time: Love and treachery, faith and faithlessness, adoration of one person and longing for another, or for several others. We try to bring order into ourselves as best we can, but this order is, after all, something artificial. Our natural state is chaos.”
— Arthur Schnitzler
This quote can be descriptive of economic data and markets. Grasping their chaotic nature can help in wading through information overflow to get to the heart of the matter.
Enjoy the rest of your weekend!