A Bridge Loan Too Far Blows Up World Bond Markets

Investors had no place to hide as stock and bond markets tanked simultaneously for the first time since the 1980s, when markets offered no hedges against collapsing values. In 2008, bond prices rose sharply as stock markets crashed. Now bonds … Read More

Fed Cuts Rates By 50 Basis Points, Markets Shrug

The US Federal Reserve reduced its target rate by half a percentage point to a target range of 1% to 1.25%, in response to likely economic weakness arising from the coronavirus outbreak. Goldman Sachs’ GDP tracking model now projects negative … Read More

Weak Consumption, Economy Could Sink Trump Re-Election Bid

US President Donald Trump’s case for re-election in 2020 comes down to his economic record. New forecasts from two Federal Reserve banks, though, warn of near-recession conditions just as the presidential election campaign is getting underway.

Both the New York … Read More

5G Policy ‘Biggest Strategic Disaster In U.S. History’

A prominent Republican who advises President Donald Trump called America’s 5G strategy “the biggest strategic disaster in US history.” US efforts to impede China’s telecom giant Huawei from dominating the global market in fifth-generation mobile broadband have failed, while incompetent … Read More

Can Trump Back Away From Trade War In Time To Avoid Recession?

Collapsing US export orders dragged down the widely-followed National Association of Purchasing Managers’ index for industrial production to the lowest level since 2009. Two days earlier, China’s Caixin manufacturing survey reported a second month of modest improvement. The two surveys … Read More

Donald Trump’s Dance Of Defeat

As the United States and China escalate the past year’s trade dispute into full-scale economic war, the decisive fact in the conflict has gone entirely unmentioned: China has already won the critical engagement in the conflict.

It did so when … Read More

How Not To Restore American Industry

For every complex problem,” H. L. Mencken said, “there is an answer that is clear, simple and wrong.” Then there are answers that aren’t even wrong, but merely irrelevant—for example, the notion that a weaker U.S. dollar exchange rate will … Read More

Deflation, Demand, And The Federal Reserve

Equity investors buy when the Fed is easy and sell when the Fed is tight as surely as Pavlov’s dogs salivated when they heard the dinner bell. The market got a bit ahead of itself with apocalyptic expectations about the … Read More

June Employment Data Show Steady Economic Weakening

The unexpected 224,000 increase in US payroll employment reported last Friday by the Bureau of Labor Statistics stood out against a wave of depressing economic data, and provoked a bounce in US bond yields from a three-year low. Viewed in … Read More

US Fed Decision Keeps Stocks Treading Water

The Federal Reserve left rates unchanged, but indicated that cuts were likely later this year. American stocks barely bounced after the Federal Open Market Committee took a decidedly dovish stance at its Wednesday meeting.

More indicative than the performance of … Read More

How I Nailed The May Payroll Bust

The Labor Department reported this morning that the US economy added just 75,000 nonfarm jobs in May, below the lowest estimate in the Bloomberg consensus survey, which called for an increase of 175,000.

That is, not a single Wall Street … Read More

U.S. Fed Mumbles, Stocks Stumble

U.S. equity markets crashed, giving up earlier gains of more than 1%, after the Federal Reserve took less notice of market risks than investors had hoped.

Investors headed for the doors when Fed Chairman Jerome Powell insisted during his press … Read More

The China Trade Reality Show

For at least a month, there has been no doubt that Presidents Donald Trump and Xi Jinping would agree to agree at the Buenos Aires summit. The threats, remonstrations and hints of high officials were for the most part scripted. … Read More

It’s Time To Sell US Stocks

By two simple valuation measures, the S&P 500 is overvalued by the biggest margin in twenty years.

First, the S&P 500 level has run ahead of earnings per share to an extent not seen since 1999, right before the great … Read More

China Seeks Framework For November Deal With Trump

Ahead of a possible meeting next month between US President Donald Trump and his Chinese counterpart, Xi Jinping, the White House tempered any optimism that a trade truce with Beijing is imminent when top economic advisor Larry Kudlow accused China … Read More

The World Lines Up Against The US

The United States starts a tariff war with China. Japan and Germany jump at the chance to gain market share in China’s booming auto industry and boost their capacity in China, the world’s fastest-growing passenger car market.

The United … Read More

Open Letter To Larry Kudlow: You Need A Different China Strategy

Dear Larry: China threatens American preeminence and President Trump is right to worry about it. But you’re going about it the wrong way, and your approach will produce results very different from what you expect or want.

When you say: … Read More

Consumption Is America’s Achilles’ Heel In A Trade War

US household budgets are so stretched that relatively small price increases cause a reduction in spending. That already is clear from consumer response to rising oil prices.

If the Trump administration’s tariffs on Chinese and other imports turn into noticeable … Read More

The Idiocracy Has Overthrown Us

The Republican Establishment cannot help but err because its intellectual foundations are flawed. There is broad conservative intellectual consensus which harks back to T.S. Eliot and Matthew Arnold (via thinkers as diverse as Russell Kirk and Lionel Trilling). Arnold’s passion … Read More