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…

A partial digest

It’s day 66 of the Biden-Harris administration.

Two weeks have passed of volatile and/or lukewarm market activity since passage of the last stimulus act, seemingly in spite of moments of falling yields. Additionally, more stimulus 3.0 checks went to those in need, and the wealthiest Americans didn’t get any. Hence, it’s not totally surprising that it wasn’t much of a boon for stocks. It’s worth reiterating, then, that perhaps markets are finally needing fundamentals for fuel, not government checks and empty words. Massive infrastructure spending could help.

Quick wrap:

  • Yields tightened heading into Yellen/Powell congressional testimony in the first half…

A partial digest

Friday was day 59 of the Biden-Harris administration. Stimulus checks are quickly making their way to recipients. CNBC reports that roughly 90 million checks landed in bank accounts as of March 17.

Make no mistake, SARS-CoV-2 is still spreading, vaccinations or no.

Quick wrap:

  • Oil volatility has returned.
  • Gold has bounced back somewhat, though it’s still splashing about in the shallow end of the $1,700s.
  • Crypto keeps bouncing and retracing, bouncing and retracing. Total market cap is $1.74+ trillion as of publication.
  • Yields climbed quite a bit, finishing at 1.72. There does appear to be concern over borrowing costs, evidenced…

A partial digest

Friday was day 52 of the Biden-Harris administration. The $1.9 trillion H.R. 1319, the American Rescue Plan Act of 2021, was signed by Biden into law Thursday, after quickly clearing the House again following Senate action last weekend. According to a Tax Policy Center analysis being widely circulated, the lowest quintile of income earners in the nation is set to receive the lion’s share of the package’s after tax income benefits.

This brings us to one of the more significant trading developments from this past week, which is that in spite of stimulus passage, markets reacted weakly on Friday, the…

A partial digest

It’s day 45 of the Biden-Harris administration.

The $1.9 trillion stimulus package is being put through the paces. Wrangling in the Senate continues, with a vote nigh. As expected, a $15 minimum wage raise didn’t make the cut.

H.R. 1319, the American Rescue Plan Act of 2021, will be passed by Senate Democrats over the objections of Republicans, it’s believed. Then, a variation of it will be sent back to the House for another vote before making it to Biden’s desk. Democrats are working against a March 14 deadline, when existing UI benefits expire.

Members of Congress on both sides…

Philip Valenta, MSF

Intersectionist :: https://philipvalenta.com

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