Typical headline today – “US market worried on signs of slowing global economy.” That may be, but our concern, our purpose is to fetch or discover the US fixed income landscape just ahead. The rest of the world doesn’t count much in that exercise.
Clients and readers have come to understand that the US economic ship is freighted with such a cargo of retardants that what would otherwise have been a sparkling performance has been nothing more than a reefing down, a standing by.
The US does well when she is unhindered. Planners at the Fed and the administration stand in the way. Their retardants are invented, completely discretionary.
As we highlighted in our last sketch there is an awful unpredictability about it all - the lack of an economic rule of law. There is only chaos and madness. Fiscal programs are temporary; no one knows what fate the river may offer up at the next bend, a journey which could easily resemble that of Marlow’s descent into Hell. Reckless gov’t spending calls for out sized future taxes, thus the disincentive, the danger to engage.
More, the economy is phony – a false hope, a house of cards. And that is not limited to rotten institutions judged “too big to fail,” a nonsense birthed from the incestuous joining of the Fed and its flock, and then the ability of Washington to manifest this lie to an unsuspecting and gullible public. There is indeed more – normal, market-driven clearing mechanisms have been replaced by the Fed. Money is either staying idle (reserves at 0.25%) or is directed to targeted activity; that is, the activity the planners have deemed worthy. Thus, individuals are making our choices for us, not normal market forces. None of this can end well; and, it most certainly won’t.
The course-of-least resistance for the US term structure – further contraction.
Robert Craven
Clients and readers have come to understand that the US economic ship is freighted with such a cargo of retardants that what would otherwise have been a sparkling performance has been nothing more than a reefing down, a standing by.
The US does well when she is unhindered. Planners at the Fed and the administration stand in the way. Their retardants are invented, completely discretionary.
As we highlighted in our last sketch there is an awful unpredictability about it all - the lack of an economic rule of law. There is only chaos and madness. Fiscal programs are temporary; no one knows what fate the river may offer up at the next bend, a journey which could easily resemble that of Marlow’s descent into Hell. Reckless gov’t spending calls for out sized future taxes, thus the disincentive, the danger to engage.
More, the economy is phony – a false hope, a house of cards. And that is not limited to rotten institutions judged “too big to fail,” a nonsense birthed from the incestuous joining of the Fed and its flock, and then the ability of Washington to manifest this lie to an unsuspecting and gullible public. There is indeed more – normal, market-driven clearing mechanisms have been replaced by the Fed. Money is either staying idle (reserves at 0.25%) or is directed to targeted activity; that is, the activity the planners have deemed worthy. Thus, individuals are making our choices for us, not normal market forces. None of this can end well; and, it most certainly won’t.
The course-of-least resistance for the US term structure – further contraction.
Robert Craven
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