Stockman’s Corner

When you have dunces sitting atop the financial system, it might be worth considering the possibility that something could go very wrong. And that’s especially the risk given that the relentless financial asset inflation of the past 30 years is neither the natural product of healthy markets nor would it be sustainable much longer even if stable geniuses were […]

Sometimes you need to call out rank stupidity, and yesterday was a red letter opportunity for exactly that. Just as the market was beginning to come off its rate-cut inebriation, one of the most dangerous of all the Fed Fools, New York Fed President John Williams, let loose the insanity quoted below, and the robo-machines were off to the

At the end of the day, rising prosperity depends upon productivity. That’s because GDP growth must come from either the brute force of more bodies and labor hours employed (which, as we showed in Part 2, have dropped to just one-third of the historic rate); or from increased output per worker hour owing to more CapEx, better technology and

You can’t blame the Donald entirely for thinking that the US economy is in a real “good place”, as Pusillanimous Powell put it the other day.

During an impromptu Rose Garden barrage of self-serving bluster today, the Donald reminded once again that these are bizzaro times. What he correctly identified as “one big fat ugly bubble” when the S&P 500 was at 2112 during the campaign has now become, mirabile dictu, a ringing vindication of Trump-O-Nomics at 3012:

Thursday was a Red Letter day for that old “you don’t say!” riposte. We are referring to the obvious response to Powell’s black and white confession to the Senate Banking Committee yesterday that more people working doesn’t cause inflation.

Apparently, things have gotten so abnormal on the monetary policy front that there is no one left in Washington who even remembers what normal is. Anyway, that’s the message you got from Sen. Pat Toomey during the Banking committee hearings this AM as he blew kisses at the Fed Chairman—even as the latter was explaining that, contrary to impression, he is not actually Wall Street’s

Pusillanimous Powell was at it again today on Capitol Hill, pivoting wildly as he took care to signal that a rate cut is still on track for the July meeting—even though by his lights the economy is in a “good place”, the unemployment rate is “close to it’s lowest level in 50 years” and “job openings are plentiful”.

We heard one of America’s worst CEOs, Ginni Rometty, on bubblevision this morning justifying IBM’s insanely over-valued $33.7 billion acquisition of Red Hat on the grounds that it would be “free cash flow accretive” in year one.

In his immortal “Ballad Of A Thin Man” composed way back in 1965, Bob Dylan might well have been channeling the future Chairman of the Fed. After all, substitute the Fed’s massive tech era DSGE model (dynamic stochastic general equilibrium) for the “pencil” of earlier times and you pretty much have Jay Powell’s number: