Author: David Stockman

Late Friday night a solid blow was struck for sound money, free markets and limited government by a most unlikely force. Namely, the hard core statist and crypto-Marxist prime minister of Greece, Alexis Tsipras. He has now set in motion a cascade of disruption that will shake the corrupt status quo to its very foundations. And just in the nick of time, too. After 15 years of rampant money printing, falsification of financial market prices and usurpation of democratic rule, his antagonists—–the ECB, the EU superstate and the IMF—-have become a terminal threat to the very survival of the kind of liberal society of which these values are part and parcel. In fact, the … Continue reading →

It is not surprising that in a few short months Yanis Varoufakis has proven himself to be a thoroughgoing Keynesian statist. After all, what would you expect from an economics PhD who co-authored books with Jamie Galbraith? The latter never saw an economic malady that could not be cured with bigger deficits, prodigious printing press “stimulus” and ever more intrusive state intervention and redistribution. In what is apparently a last desperate game theory ploy, however, Varoufakis has done his countrymen, Europe and the world a favor. By informing his Brussels paymasters that they must continue to subsidize his bankrupt Greek state because it … Continue reading →

If any evidence was needed that the market is dying at the zero bound, it came in yesterday’s violent 15-minute rip when the algos read the Fed’s release to mean there will be no rate hike in June. It put you in mind of monetary rigor mortis——the last spasm of something that’s already dead but doesn’t known it. Certainly the sell-side talking heads are clueless in their utterly mendacious patter that there is no bubble in stocks. Why, valuations are are in-line with historic multiples, we are told, and, besides, the Fed will keep interest rates low for long. That kind of assurance is at once … Continue reading →

There are powerful domestic and international economic forces and welfare state policy impacts—-such as the huge increase in Social Security disability and food stamp recipients—– that are roiling labor force participation rates and weakening labor hours utilized and labor productivity. Yet the Fed is led by a clueless, paint-by-the-numbers Keynesian “conomist” who is trapped in a 1960s “full-employment” time warp. Did she notice this over the last several decades? Reprinted with permission from David Stockman’s Corner.

The tragic accident in Philadelphia should be a reminder. The real train wreck is Amtrak itself—–a colossal waste of taxpayer money and the very embodiment of what is wrong with state intervention in the free market economy. Worse still, the pork barrel politics which drive its handouts from Uncle Sam virtually guarantee that as time goes on it will become an increasing hazard to public safety, as well. It seems like only yesterday, but one of my first assignments as a junior staffer on Capitol Hill was to analyze the enabling legislation that created Amtrak in the early 1970s. I was working … Continue reading →

The robo-traders——both the silicon and carbon based varieties—–were raging again today in celebration of a “goldilocks” jobs report. That is, the headline number for April was purportedly strong enough to sustain the “all is awesome” meme, while the sharp downward revision for March to only 85,000 new jobs will allegedly enable the Fed to kick-the-can yet again—-this time until its September meeting. As one Cool-Aid drinker put it, “Probably best scenario in which the market was hoping for growth but not (so strong) that the Fed needs to hike in June,” said Ryan Larson, head of U.S. equity management at RBC Global Asset Management (U.S.). … Continue reading →

Ben Bernanke’s skin is as thin, apparently, as is his comprehension of honest economics. The emphasis is on the “honest” part because he is a fount of the kind of Keynesian drivel that passes for economics in the financially deformed world that the Bernank did so much to bring about. Just recall that he first joined the Fed way back on 2002 after an academic career of scribbling historically superficial and blatantly misleading monographs about the 1930s. These were essentially zeroxed from Milton Friedman’s monumental error about the cause of the Great Depression. In a word, Friedman and Bernanke pilloried the Fed for not going on … Continue reading →

Just before noon today stocks went vertical, but why not. The HFT machines were trawling for all time highs and, in fact, hit the ultimate jackpot. Namely, they finally pushed the NASDAQ above the vertiginous heights (5132) it achieved back in March 2000 at the peak of the dotcom frenzy: By contrast, a few hours earlier Caterpillar—-a true bell weather of the global economic predicament—-posted results which were most definitely horizontal. Notwithstanding the usual “beat” on its manipulated ex-items profit number, the results were miserable. Total industrial sales were down by three-quarters of a billion dollars or 6% from prior year and the internals were worse. To wit, sales in the … Continue reading →

Hillary Clinton has always been at the head of her class. That includes being among the leading edge of the 80-million strong baby boom generation that first started arriving in 1946-1947. She did everything they did: Got out for Barry Goldwater in high school; got upwardly mobile to Wellesley and social liberation during college; got “Clean for Gene” and manned the anti-war barricades in the late 1960s; got to Washington to uplift the world in the 1970s; got down to the pursuit of power and position in the 1980s; joined the ruling class in the 1990’s; and has helped make a stupendous mess of things ever since. … Continue reading →

We are now in the month of April—–so the Wall Street Keynesians are back on their spring “escape velocity” offensive. Normally they accept the government’s seasonal adjustments in stride, but since Q1 is again hugging the flat line or worse, it seems that “bad seasonals” owing to an incrementally winterish winter explain it all away once again. Even today’s punk jobs number purportedly reflects god’s snow job, not theirs. What’s really happening, they aver, is that jobs are booming, wages are lifting, housing prices are rising, consumer confidence is buoyant, car sales are strong and business is starting to borrow for growth. In fact, everything is so awesome that one … Continue reading →

If you need evidence that we are in the midst of a lunatic financial mania, just consider this summary from a Marketwatch commentator as to why markets are ripping higher this morning: “The dovish comments from both Fed Chairwoman Janet Yellen and People’s Bank of China Governor Zhou Xiaochuan are giving markets a big lift, and in the absence of negative data or news, I imagine this will continue to buoy the markets throughout the session,” Erlam said in emailed comments. Yellen said gradual hikes are likely this year, but that the central bank will move cautiously……. the PBOC governor said he saw “more room” … Continue reading →

Janet’s Yellen’s pettifogging today about her patient lack of impatience was downright pathetic. Her verbal hair-splitting is starting to make medieval ritual incantations sound coherent by comparison. But unlike the financial media’s dopey dithering about “dot plots”, Yellen at least has something to hide behind all the gibberish.  Namely, she and her merry band of money printers are becoming more petrified each month that they will trigger a thundering Wall Street hissy fit if they move to “normalize” interest rates—-even as they are slowly beginning to realize that continuance of ZIRP much longer will only intensify the market’s addiction to rampant … Continue reading →

Contra Corner is not about investment advice, but its unstinting critique of the current malignant monetary regime does not merely imply that the Wall Street casino is a dangerous place for your money. No, it screams get out of harms’ way. Now! Yet I am constantly braced with questions about the US dollar and its impending demise. The reasoning seems to be that if America is a debt addicted dystopia—-and it surely is—- won’t the US dollar sooner or later go down in flames as the day of reckoning materializes? Won’t you make money shorting the doomed dollar? Heavens no!  At least … Continue reading →

The trouble with the money printing madness in the Eccles Building is that it generates huge deformations, misallocations and speculative excesses in the financial markets. Eventually these bubbles splatter, as they have twice this century.  The resulting carnage, needless to say, is not small. Combined financial and real estate asset markdowns totaled about $7 trillion after the dotcom bust and $15 trillion during the 2008-2009 financial crisis. Yes, the Fed has managed to reflate this cheap money bubble for the third time now, but the certainty that it will splatter once again is not the issue at hand. What gets lost in the … Continue reading →

The global financial system desperately needs a big, bloody sovereign default—-a profoundly disruptive financial event capable of shattering the current rotten regime of bank bailouts and central bank financial repression. Needless to say, Greece is just the ticket: A default on its crushing debt and exit from the Euro would stick a fork in it like no other. But don’t count on the Greeks. Yes, their new government does have a strong mandate to throw off the yoke of its Brussels imposed bailout and associated debt servitude. Were the Syriza government to remain faithful to the raison d’etre of its wholly accidental rise to power, the task of busting the misbegotten euro project … Continue reading →