A partial digest

All assets reacted to the jobs data at the end of the week and what it says about economic support and any recovery. The health of the labor market, as discussed here week after week, is central to all else. Weakness there implies more need for support, which fuels various bets.

On the back of a 3.6% rise in YoY PCE for the month of April, the jobs report released Friday for May once again disappointed. …

A partial digest

Quick wrap for the week ending May 28:

  • Yields finished slightly down after a volatile week.
  • The DXY was flat.
  • Oil rose.
CALL: No change; near to semi-intermediate term, prices could rise further given supply shocks, OPEC+ micromanagement, inflation expectations, "recovery," and more fiscal spending, among other things. Longer term, it's a dying industry.[tracking: XLE, GGN]
  • The S&P Global Clean Energy index finished up for the week.
[tracking: TAN]
  • Gold breached $1,900 before finishing below that level.
CALL: In the very near term, it must be acknowledged that gold has the uncertain potential to rise further as traders who…

A partial digest

The crypto market imploded, then imploded again in spectacular fashion. At one point, more than $1 trillion market cap had vaporized. The hits just kept on coming. If buying the dips, extreme caution is advised.

The space is facing multiple headwinds, including the investigation of the Binance exchange (one of the largest); what the IRS and Treasury want; concerns with the Tether stablecoin’s reserves; China’s unforgiving stance on crypto; good old-fashioned forced liquidations of highly leveraged positions; and Elon Musk’s market manipulating statements. The latter party may draw some regulatory scrutiny, himself.

A very clear issue that will remain and…

A partial digest

There is a simple factor contributing majorly to the steep inflation number of 4.2% for the 12 months (UA) ending April 2021; oil prices were negative one year ago April, and the industry was cratering. The energy category, along with its subcategories, had the highest numbers in the BLS’s latest report. Gasoline alone for the 12 months ending April 2021 saw a nearly 50% rise.

The Fed and others should know this; and the jump in official inflation figures will prove fleeting.

By May 2020, crude oil was recovering, though gasoline took longer. …

A partial digest

The current US administration is entering a predicament phase, facing the conundrum of seeking to spend more without the comfort of knowing that it can easily borrow more to do so. Apparently Treasury has been doing things in a certain way to avoid hitting the debt ceiling, but it’s capacity to do that may be coming to an end in the summer timeframe, says Yellen.

Earlier in the week, Yellen walked back remarks about an impending recovery and rates rising accordingly. For their part, PIMCO and Goldman Sachs think the recovery and inflation, or reflation, trade, and any subsequent raising…

A partial digest

A partial digest:

Thursday was day 100 of the Biden-Harris administration. Meanwhile, another stimulus package is being floated.

US GDP grew at an annualized rate of 6.4%. PCE was high at 10.7%, while the PCE price index came in at 3.5%. One should remember that these figures were facilitated by stimulus checks, and those are fleeting. In quarters where little to no fiscal aid was provided to the general population in 2020 or prior years, PCE was predictably much lower.

What this signifies, in part, is that we still have no reason to expect sustained systemic inflation, yet.

Quick wrap:

  • Yields rose to…

A partial digest

Friday was day 94 of the Biden-Harris administration. There is a proposal to raise capital gains taxes a significant amount to the highest the rate has been post WWII, but only for a very small percent of wealthier individuals. Raising the top marginal income tax rate is being floated, as well. Traditional financial markets didn’t take long to shake it off, though. Crypto has been another story, which may say something about who owns a good chunk of it.

While on the topic, a brief review of the history of capital gains taxes is in order. The record reveals that…

A partial digest

Friday was day 87 of the Biden-Harris administration. Russia shall be blocked.

Inflation as measured by CPI went up, yields went down, gold lagged, crypto went up. Yes, yields declined in the face of real inflation data after all the superficial connections that were drawn between them rising, and incoming inflation and “recovery,” i.e. the so-called “reflation trade.” Then gold, the incessantly touted but totally unreliable inflation asset, barely responded (at first). In the case of crypto, so much is going on all the time that it’s impossible to say that hedging inflation is what drove it to new heights.

A partial digest

Friday was day 80 of the Biden-Harris administration. Among the executive orders is one to establish a presidential commission examining SCOTUS. The commission will, along with other things, provide the following:

(i) An account of the contemporary commentary and debate about the role and operation of the Supreme Court in our constitutional system and about the functioning of the constitutional process by which the President nominates and, by and with the advice and consent of the Senate, appoints Justices to the Supreme Court;
(ii) The historical background of other periods in the Nation’s history when the Supreme Court’s role and…

A partial digest

Friday was day 73 of the Biden-Harris administration. Among other things, April 2021 was declared National Financial Capability Month.

April is recognized as National Financial Capability Month to highlight the value of high-quality financial education to improving Americans’ financial capability…

The Financial Literacy and Education Commission, a 23-member body of Federal agencies, chaired by the Secretary of the Treasury, was created to coordinate and improve financial education for all Americans. Its members are helping address the financial challenges our country faces as a result of the COVID-19 pandemic…

High-quality financial education should build on and respond to people’s individual strengths…

Philip Valenta, MSF

Intersectionist :: https://philipvalenta.com

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