Posts Tagged ‘deficit-inducing stimulus’

Weakest employment market since the Great Depression

Weakest employment market since the Great Depression

Great Depression comparisonCourtesy of Edward Harrison at Credit Writedowns

Recently Allan Meltzer, a former Vice Chairman of the Federal Reserve wrote a widely noted and provocative article in the Wall Street Journal called “What Happened to the ‘Depression?’” He called for an end to deficit-inducing stimulus because the cries of Depression from noted mainstream economists has been proven false.  His thesis is that these economists, most notably Paul Krugman and IMF Chief Economist Olivier Blanchard, are hyping the downturn to support a specific policy agenda with which he vehemently disagrees.

Conflating issues for ideological purposes

While his opinion piece deserves discussion, I find his argument disingenuous as he too is promoting a specific policy agenda.  The crux of the matter is three-fold:

  1. How severe is this downturn and financial crisis?
  2. How severe would it have been had specific policy measures not been taken?
  3. Irrespective of the severity of the downturn, were these the right steps to have followed?

I delineate the argument as such because Meltzer, I believe purposely and misleadingly, conflates these issues for political purposes.  His goal is to present a narrative in which stimulus, especially deficit-inducing stimulus is seen as wasteful and misguided.  This may be the case (although I do believe certain types of stimulus are purposeful).  I don’t intend to examine that issue because it is as much political and ideological as it is economic.  It distracts from the real question: how severe could this downturn have been?

Nowhere near the Depression

When it comes to this core question, I agree wholeheartedly with Meltzer. This is not the Great Depression II, nor will it be, nor was it likely to have been.  I wrote a fairly personal post on this very point at the height of the panic last year called “Worse than the Great Depression.”  My point was that America, the world really, is much richer than it was in 1929.  The social safety net is much more robust. And policy makers are more knowledgeable than they were eight years ago. Comparisons to the Great Depression are misplaced.

But, Alan Meltzer is incorrect when he compares this downturn to 1973-75.  This downturn is clearly more severe. The financial system has been hit very hard with a number of prominent institutions either dying (Lehman, Bear Stearns, Washington Mutual, Merrill…
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Zero Hedge

Bomb Found In Mailbox At George Soros's Westchester Home

Courtesy of ZeroHedge. View original post here.

An employee of billionaire investor George Soros discovered a bomb placed in a mailbox at Soros’s Westchester County home on Monday. The explosive device was later "protectively detonated" by an FBI bomb squad after the employee moved it to a wooded area. 

According to ...



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Phil's Favorites

The risk of 'cascading' natural disasters is on the rise

 

The risk of 'cascading' natural disasters is on the rise

Deadly debris flows came to Los Angeles after heavy rain pounded wildfire-scarred land. AP Photo/Reed Saxon

Courtesy of Farshid Vahedifard, Mississippi State University and Amir AghaKouchak, University of California, Irvine

In a warming world, the dangers from natural disasters are changing. In a ...



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Chart School

Weekly Market Recap Oct 21, 2018

Courtesy of Blain.

After the heavy selling the week prior there was sure to be an oversold bounce and indeed last Tuesday brought much of that.  It is always interesting to see what happens after that bounce – often in this bull market, once the indexes turn back up they move like a freight train.  This time – thus far at least – the action has been less aggressive.  Selling on Thursday took the S&P 500 right back down to the 200 day moving average and rally attempts Friday were fruitless.  In whole the S&P 500 barely budged for the week.

Yields on the 10 year have thus far held their own “breakout” level:

The Chinese market had an interesting Friday with an “...



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Insider Scoop

Morgan Stanley Downgrades A Fleet Of Freight Stocks

Courtesy of Benzinga.

Related UNP 8 Biggest Price Target Changes For Monday Benzinga's Top Upgrades, Downgrades For October 22, 2018 ...

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Kimble Charting Solutions

Stock Market Crash Deja Vu? Keep An Eye On This Pattern!

Courtesy of Chris Kimble.

Just over 3 weeks ago, I shared a chart looking at the divergence that has been brewing under the surface of the S&P 500 (NYSEARCA:SPY). Since that post, the S&P 500 finds itself in a deep pullback, with other key stock market indices hitting correction territory at their lows.

Today we provide another look at the divergence and highlight why it’s time for investors to pay closer attention. In the chart below, we compare today’s setup to 2000 and 2007 and the market crashes that followed.  Note, though, that we have NOT broken trend support yet.

Similar to today, in 2000 and 2007 the S&P 500 made a...



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Digital Currencies

Grocers: Get ready to join the blockchain party

 

Grocers: Get ready to join the blockchain party

Five people died and more than 200 got sick during a 2018 E. coli outbreak, the largest in more than a decade. The bacteria was traced to contaminated romaine lettuce. (Shutterstock)

Courtesy of Sylvain Charlebois, Dalhousie University

In the wake of this year’s large E. coli outbreak, Walmart notified its leafy green suppliers that they must be using blockchain technology to trace their products before the end of 2019.

Walmart, one of the world’s largest retailers, has be...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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Members' Corner

Why obvious lies still make good propaganda

 

This is very good; it's about "firehosing", a type of propaganda, and how it works.

Why obvious lies still make good propaganda

A 2016 report described Russian propaganda as:
• high in volume
• rapid, continuous and repetitive
• having no commitment to objective reality
• lacking consistency

...

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Biotech

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

 

Gene-editing technique CRISPR identifies dangerous breast cancer mutations

Breast cancer type 1 (BRCA1) is a human tumor suppressor gene, found in all humans. Its protein, also called by the synonym BRCA1, is responsible for repairing DNA. ibreakstock/Shutterstock.com

By Jay Shendure, University of Washington; Greg Findlay, ...



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Mapping The Market

Mistakes were Made. (And, Yes, by Me.)

Via Jean-Luc:

Famed investor reflecting on his mistakes:

Mistakes were Made. (And, Yes, by Me.)

One that stands out for me:

Instead of focusing on how value factors in general did in identifying attractive stocks, I rushed to proclaim price-to-sales the winner. That was, until it wasn’t. I guess there’s a reason for the proclamation “The king is dead, long live the king” when a monarchy changes hands. As we continued to update the book, price-to-sales was no longer the “best” single value factor, replaced by others, depending upon the time frames examined. I had also become a lot more sophisticated in my analysis—thanks to criticism of my earlier work—and realized that everything, including factors, moves in and out of favor, depending upon the market environment. I also realized...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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