Author: David Stockman

The Donald’s action to ash-can the Iranian nuclear deal marks the War Party’s complete and baleful triumph. There is now nothing much left of America First. Trump’s reckless, unwarranted and utterly irrational action will pull Washington ever deeper into an incendiary middle eastern vortex of political and religious conflict that has absolutely nothing to do with the safety and security of the America people. To the contrary, picking a fight with Tehran is an exercise in unprovoked Imperial aggression. The Iranian regime has no means to attack America militarily and has never threatened to do so. Nor has it invaded … Continue reading →

The post The Donald’s Done appeared first on LewRockwell.

Perhaps we have missed something: Like the possibility that the canyons of Wall Street are actually located on another planet several light years from earth! Otherwise, how can you explain the equipoise of a stock market sitting at the tippy-top of a nine-year bubble expansion and confronted with the potential outbreak of World War Three? Folks, like some alien abductors, the Deep State has taken the Donald hostage, and with ball-and-chain finality. Whatever pre-election predilection he had to challenge the Warfare State has apparently been completely liquidated. Trump’s early AM tweet today, in fact, embodies the words of a man … Continue reading →

The post The Deep State appeared first on LewRockwell.

The election of 2016 was supposed to be the most disruptive break with the status quo in modern history, if ever. On the single most important decision of his tenure, however, the Donald has lined-up check-by-jowl with Barry and Dubya, too. That is to say, Trump’s new Fed chairman, Jerome Powell, amounts to Janet Yellen in trousers and tie. In fact, you can make it a three-part composite by adding Bernanke with a full head of hair and Greenspan sans the mumble. The overarching point here is that the great problems plaguing American society – scarcity of good jobs, punk … Continue reading →

The post Jerome Is the New Jane appeared first on LewRockwell.

One of Wall Street’s most misbegotten memes is the Goldilocks Economy notion. They invariably trot her out near the end of a business cycle in order to keep the mullets buying stocks and the Fed heads as anesthetized as possible. The theory, of course, is that with the economy in a perfect and endless growth equilibrium, punters should be eager to buy equities and the central bank should be in no rush to remove the punch bowl. So not surprisingly, when the alleged “blow-out” jobs number for February was followed by a purportedly “cooling” CPI print, bubblevision became rife with … Continue reading →

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The Bloomberg news crawler this morning is heralding the heart of our thesis: Namely, that “flush with cash from the tax cut”, US companies are heading for a “stock buyback binge of historic proportions”. This isn’t a “told you so” point. It’s dramatic proof that corporate America has been absolutely corrupted by the Fed’s long-running regime of Bubble Finance. Undoubtedly, the C-suites view the asinine Trump/GOP tax cut not as a green light to invest and build for the long haul, but as manna from heaven to pump their faltering share prices in the here and now. And we do mean a gift just in the nick … Continue reading →

The post The Two Janet’s appeared first on LewRockwell.

The Donald seems to think that the 37% gain in the stock market between election day and the January 26th high was all about him, and in one sense that’s true. Donald Trump is all about delusional and so are the casino punters. They keep buying what the robo-machines are buying, which, in turn, persist in feasting on the dip because it’s there and because it’s worked like a charm for nine years running. So doing, the punters have become downright reckless. After all, the market was already sky high last January—-trading at 23X earnings on the S&P 500 and resting precariously on a record $554 billion of margin debt . Yet in order to load up on … Continue reading →

The post Stock Market Trouble appeared first on LewRockwell.

Here’s why our mountainous $67 trillion of public and private debt matters. To wit, it has caused the historic relationship between trends on main street and Wall Street to go absolutely haywire. A week or so back, they reported January industrial production at 107.24, which was only a tad higher than it had been three years earlier in November 2014 (106.61), and just 1.8% above where it had been at the pre-crisis peak way back in November 2007 (105.33). If you cotton to CAGRs, that’s a microscopic 0.18% per annum growth rate over the course of a full decade, and during the third longest business cycle expansion in history, to boot. By contrast, the … Continue reading →

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In Part 1 we postulated that the chart below embodies nothing less than the nightmare that will be coming to Wall Street right soon. It means, in effect, that you can climb the financial tiger’s back for an extended time, but when you reach the mane its generally impossible to get off alive. Needless to say, we have reached the mane. What drove the US economy for the past three decades was debt expansion—-private and public— at rates far faster than GDP growth. But that entailed a steady ratcheting up of the national leverage ratio until we hit what amounts to the top of the … Continue reading →

The post It’s Around Your Neck appeared first on LewRockwell.

This is getting pretty ridiculous. For old times sake, we recently checked on the Federal debt level during the month we arrived in the Imperial City as a 24-year old eager beaver. That was June 1970 and the Federal debt held by the public was $275 billion. Mind you, while that number wasn’t exactly diminutive, it had taken all of 188 years to accumulate. That is to say, Uncle Sam had borrowed an average of $28,000 per week during the 9,776 weeks since George Washington was sworn in as the nation’s first president. We are ruminating about this seeming historical obscuranta because it just so happens that the US Treasury … Continue reading →

The post The Albatross of Debt appeared first on LewRockwell.

We have always heard that a determined government prosecutor can indict a ham sandwich, and now we know it’s true. After 38 years in the prosecution racket, Robert Mueller just made his biggest score ever—that is, he nailed a great big Nothingburger. But he also did a lot more than that. Mueller’s 37-page comic book indictment actually unmasks—inadvertently to be sure—the distinctly un-terrifying essence of the whole Russian meddling narrative. In fact, the crude social media emissions (ads and posts) of the so-called troll farm were generally lame, often laughable and sometimes downright ludicrous as per this gem cited by Mueller: a. On or about October 16, 2016, Defendants … Continue reading →

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The US economy is threatened by two giant problems which cause all others to pale into insignificance. We are referring to a rogue central bank that has become an absolute enemy of capitalist prosperity and a fiscal doomsday machine that is hostage to the ceaseless budgetary demands of the Warfare State, the Welfare State and the Baby Boom’s demographic imperatives. Needless to say, both ends of the Acela Corridor are completely oblivious to these twin menaces. Indeed, they are the proverbial elephants in the room, thereby giving rise to a considerable irony: To wit, the GOP party of the elephant, which is supposed to be … Continue reading →

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In Part 1 we noted that the real evil of Bubble Finance is not merely that it leads to bubble crashes, of which there is surely a doozy just around the bend; or that speculators get the painful deserts they fully deserve, which is coming big time, too; or even that the retail homegamers are always drawn into the slaughter at the very end, as is playing out in spades once again. Daily. Given enough time, in fact, markets do bounce back because capitalism has a inherent urge to grow, thereby generating higher output, incomes, profits, wealth and stock indices. That means, in turn, investors eventually do recover from bubble crashes—notwithstanding the tendency of homegamers … Continue reading →

The post The Destruction of Honest Price Discovery appeared first on LewRockwell.

You could say thank heavens they have finally stopped buying the “dip”. Then again, there apparently aren’t any left! That’s the case, anyway, even if your notion of a “dip” is any day the market doesn’t go up. So far there has been exactly one such occasion during 2018. Or worse still, if you assume the traditional metric of at least a 5% drop, you have already been out of the dip buying business for a lifetime—- whether measured in market lives or even dog years. That’s right. Heisenberg reminds us this morning that we are in undisputable record territory. It has been fully 395 trading days since the market had a 5% drop, and that’s never happened before in all … Continue reading →

The post Flying Blind appeared first on LewRockwell.

You can call it the bleep-hole moment (per the Fox “family channel”) or the shit-hole moment (per the rest of the MSM), but what you can’t call yesterday’s contretemps in the White House evidence that sentient adults are in charge of the Imperial City. And, no, we are not getting down on the Donald for using a swear word—nor are we trying to out race-card Don Lemon as to the obvious implications of the President’s crude phraseology. Indeed, even prior to yesterday’s outburst it was hard to deny that Trump is a semi-literate bully and that he never got (read) the memo on racial comity and respect. But we actually happen to think that Donald’s … Continue reading →

The post The Real Bleep-Hole Moment appeared first on LewRockwell.

Most of today’s stock speculators don’t remember the bond vigilantes and wouldn’t even recognize one in the flesh. They were just too scary to have been a character on Sesame Street. But last night some strange riders were spotted galloping eastward from China and Japan. While their visage may be somewhat foggy to the uninitiated, the boys and girls on Wall Street are about to discover that it’s not exactly Big Bird swooping onto their playground. And at precisely the worst time. After all, the 150 Dow point melt-up each day since the turn of the year was fueled by pure speculative momentum. As Heisenberg noted this AM, the S&P 500 … Continue reading →

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