Global Market Commentary, Analysis and Investments
The stock market is rolling over. The Dow went down 133 points yesterday. Gold gained $4.
Stocks went down early in the summer. We thought that was the beginning of the big “second shock� we’ve been waiting for. But we were wrong. The stock market rebounded.
But now it is back at its July lows…and appears ready to keep going down.
[Read more...]Indeed, even with the government’s report declaring the cleanup 75% complete, the Gulf of Mexico recovery will be slow and laborious. And expensive…
As of a few hours ago, there’s enough fresh cement in the Macondo oil well to hold down the “mud� that’s keeping the oil beneath the seafloor. It’s not the final step in plugging the hole, but it’s a big one. Now the tallying begins.
[Read more...]“You can take your loans and shove them,� the Hungarian economic minister, György Matolcsy, did not say. But that’s what he was thinking. Watch out. The Hungarians are trendsetters. They ran a budget deficit of 9% of GDP back in 2006. They got a $20 billion bailout in 2008 and have been living with austerity measures ever since. The current budget is only in deficit by 3.8% of GDP – barely a third of the US level.
[Read more...]You say yes, I say no
You say stop and I say go, go, go
Oh, no
– The Beatles
We keep saying the same thing here at The Daily Reckoning. Not because we lack imagination… It’s because things are still the same.
“Outlook for home prices grows darker,� says The Wall Street Journal.
[Read more...]The leaders of the European Union huddled together over the weekend to devise a dramatic rescue plan for the euro. When they broke from their huddle they announced a $645 billion war chest (of borrowed money) with which to defend their 11-year old currency.
The massive rescue plans seems nearly certain to work…for a day or two…and maybe even for an entire week. But trying to combat debt fears with a great big pile of additional debt hardly seems like a winning formula. Rescue plans rarely rescue much of anything.
[Read more...]Part II of our speech in Las Vegas, in which we explain why the US will go broke:
What does it mean when the financial intelligentsia seems to have no idea what is going on? It means they’ve got the wrong idea about the way things work…and probably no incentive to have the right one.
[Read more...]Government’s role in an economy has never been properly explained. We will have a go at it ourselves. In a word, government betrays the future.
Government is a profoundly reactionary institution. It always favors its current clients – the present generation of taxpayers – over its clients of the future (who don’t pay taxes and don’t lobby). It provides protection against foreign invaders and domestic troublemakers. It also attempts to give its clients protection against the future.
[Read more...]Happy inauguration day! Today we begin with this little known factoid: For the first 143 years of the American Republic, presidents were inaugurated on March 4, the only day of the year that is also a command.
The date was moved up to Jan. 20 in 1932 when the activist president Franklin Delano Roosevelt couldn’t wait to wring his hands around the neck of the US economy. Roosevelt set in motion 78 years of what the economist Friedrich von Hayek called the “fatal conceit” – the arrogant belief that anyone could know enough at any one time to plan an economy.
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Fed Vows to Maintain Public Financial Health
Extend and pretend…
That’s the government’s way of handling the crisis. Extend credit and cash to those who don’t deserve it. Then, pretend that everything is okay…
But the problems don’t go away. They just get stretched into the future…
[Read more...]