Fake News and Real Numbers
Rodney Johnson | March 28, 2019 | Last weekend wasn't exactly sunny on the Texas coast, but it was the closest we've gotten in two months. Early on Saturday, I started work in the yard. 96 bags of mulch later, I took a much-needed rest and made my way through the day's news. It was all Mueller, which is unfortunate because there are many other things to discuss. Here's the breakdown: Special Counsel Robert Mueller issued 2,800 subpoenas, interviewed 500 witnesses, executed hundreds of search warrants, employed 19 lawyers, and was assisted by a team of 40 FBI agents, intelligence analysts, forensic accountants, and other professional staff... According to Attorney General William Barr, Mueller reports that neither Trump nor anyone on his team conspired or colluded with Russians trying to influence the 2016 presidential election. Did Trump obstruct justice? Maybe, maybe not. Does any of it matter?
Without a bona fide crime, not one bit. Republicans claim victory. Democrats claim they know Trump colluded, even though a zillion man hours and millions of dollars wasted on the special counsel says otherwise. It's the same schtick. Both sides are shocked, shocked!, at whatever outcome they didn't like, and then pledge to keep fighting for the truth. How about fighting for something else, like progress in the U.S.? How about moving the country forward instead of posturing over the latest fake outrage? They're all Nero, and Rome is burning. Trouble at the Fed The Fed told the world last week that they probably went too far raising rates in 2018… and compounded the mistake by squeezing liquidity as they shrank their balance sheet. They're too modest. The Fed's recent string of mistakes goes back a decade as the self-enlightened group took on the role of economic arbiter, deciding who lived and who perished, using funds scraped from savers through record-low interest rates. Instead of buying bonds to prop up certain markets while gifting billions of dollars to banks and the U.S. Treasury (which will continue, now that the Fed has called a hiatus on letting bonds roll off), the central bank should've stuck to its knitting, lending against good assets in stressful times, charging a painful interest rate. Good companies would've survived. Bad companies would've died, but now they're still with us, paying their executives millions and claiming success. Now that the initial rush from tax reform is wearing off, we're back to modest growth, but with a kicker... We've turbo-charged our deficits for good measure. Instead of going backward by a mere half a trillion dollars each year, we're making great strides toward adding a full trillion dollars in debt every 12 months. There's something to be proud of. But don't worry, those deficits will fall over the next decade… as long as we hike taxes on individuals and claw back the money we doled out last year. No Virginia, there is no economic Santa Claus. We're still in the Economic Winter Season, marked by low productivity and weak growth, no matter what the government tries to do. Boom & Bust All of this stress is taking a toll on the markets, which caused the Dow to puke up more than 400 points on Friday. That's OK with me. In our Boom & Bust portfolio, we added white-hot companies in the chip sector at the start of the year, and then more conservative plays after the initial run up. The goal is to form a barbell, seeking high growth on one end and steady-paying investments on the other. There's no sure thing, but the approach is working out. Further from the mainstream, we've also put a stake in the ground in the cannabis industry. I've been researching that market for years, and personally investing in it for a while. While I don't partake of the product, I'm a big fan of the market gains. One of our current plays is up almost 100% since December, and the company has a not-so-secret secret… it makes a profit. Those are the kinds of numbers I like.  Rodney View Article on Economy & Markets » | Rodney Johnson, Senior Editor, Economy & Markets For more than 20 years, Rodney has studied how people spend their money as they go through predictable stages of life and how that spending drives our economy. READ MORE » | |
Trending Stories... In the last week, there have been a slew of articles warning that we're on the verge of a recession. The most prominent is talk about the yield curve – the 10-year versus the three-month Treasurys – finally inverting. That has led every recession since 1955, and only gave one false signal in the 1960s.... I live 200 feet from open water, facing Clear Lake, Texas. It's not a lake, it's a bay off of Galveston Bay, and it's definitely not clear. But other than that, the description is perfect. My downstairs area is 9.2 feet above sea level and consists of garage space and a storage area. The first... People don't understand gold. They don't understand the U.S. dollar either. Mostly, it's the same people. Gold bugs thought we were debasing the dollar by printing our way out of the 2008/9 financial crisis. Ha! Actually, the dollar has been rising since the start of that recession. The dollar, not gold, is actually the safe... Every six weeks the Federal Open Market Committee (FOMC) meets to decide whether a change in policy is needed to coax our economy in the right direction. They wrapped up their latest meeting on Wednesday. When Fed Chair Jerome Powell delivered his policy statement, stocks bounced and Treasury yields fell sharply. (Keep in mind the... The admissions scandal is starting to fade; I saw only three articles on it in the past couple of days. Now, according to The New York Times, universities are starting to consider if they should de-enroll (not expel) students who matriculated through fraud, whether the students were aware of it or not. As the paper... | 
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