Tuesday, July 31, 2018

Capitalism and Friedman's Questions

"The point is, ladies and gentlemen, that greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all its forms: greed for life, for money, for love, knowledge has marked the upward surge of mankind."
--Gordon Gekko (Wall Street)

Although he certainly had his issues, particularly w.r.t. monetary policy, Milton Friedman clearly understood capitalism and its capacity to relieve human suffering. In the 1979 Phil Donahue clip that Rand Paul shares below, Friedman observes that greed, defined as individuals acting in their own self interest, is the driver of prosperity.
Moreover, the questioning approach that Friedman uses is powerful. These are questions people must ask on the road to truth. You can tell by Donahue's and the audience's reaction that he is getting them to think.

When teaching, I hope to employ more of this questioning approach myself.

Monday, July 30, 2018

Fed Independence Redux

Drawn into the stream
Of undefined illusion
Those diamond dreams
They can't disguise the truth
--Level 42

These pages have noted the myth of the Federal Reserve's 'independence' on several occasions (here, here, here). The Fed clearly depends on the government for resources, and it executes policy on behalf of the government.

Calling the Fed 'independent' is the height of folly, or delusion. It is an agency of the federal government.

On the back of President Trump's recent comments aimed at influencing Fed policy, and cries that Trump was trying to influence the 'independent' Fed, Ron Paul reviews examples of presidents doing just that--including LBJ tossing then Fed chair William McChesney Martin against the wall to get his point across.

Trump has a unique opportunity to shape the Fed during his watch as the possibility exists that he could appoint six of the seven Federal Reserve Board members by the end of his first term. Lest you haven't realized it by now, there is nothing 'independent' about presidents placing bankers on the Fed board.

Truly 'draining the swamp' would be to shut down the Fed. Doing so would turn off a primary spigot of resources currently flowing to the welfare-warfare swamp.

Sunday, July 29, 2018

Expert Error

"Just remember, license never replace eye, ear, and brain."
--Miyagi (The Karate Kid)

Prof Williams discusses the predictions of experts, which "have often been wrong beyond imagination." Forecasts of economic disaster under President Trump are but recent examples of how wrong experts can be.

Yale professor Irving Fisher's 1929 assessment that "stock prices have reached what looks like a permanently high plateau" just three days before the stock market crashed has always been one of my favorites.

Politics, war, sports, markets, social trends. No subject has been spared the error of expert prognostication.

Why do experts get it so wrong? Overconfidence. Linear thinking. Public stage. Recency bias. Group affiliation. They all likely play a role.

The lesson: Don't accept predictions from experts without thought. Use your brain. Understand the rationale. Be critical.

And be careful.

Saturday, July 28, 2018

Boycotts and Political Economy

Ali Mills: What's wrong?
Daniel LaRusso: It's coming around!
The Karate Kid

A growing thread of political economy involves pleas to boycott sellers who act in ways deemed politically incorrect. These pleas come from politically active groups almost exclusively from the left.

Because sellers depend on economic resources from buyers in order to flourish, the idea of the political action groups is to starve those sellers into submission--i.e., change behavior to align with politically correct norms or risk going out of business.

As long as they involve no aggression, these boycotts are perfectly legitimate. Buyers should be free to do business with whomever they wish.

But the same holds for sellers. If a seller does not care to do business with a buyer, for whatever reason, then they should be free to do so.

Because leftists overwhelmingly support laws that force sellers into contracts with buyers, I doubt they see the hypocrisy of their boycott strategy.

Friday, July 27, 2018

GDP Print

I know her love is true
But it's so damn easy
Making love to you
--Bryan Adams

Q2 GDP prints 4.1% this am. Many slapping themselves on the back with glee. "Best number in four years..."

The longer monetary policy stays ultra easy in the face of strengthening economic numbers, the greater the chance of an inflationary train wreck ahead.

Thursday, July 26, 2018

Sedition Act of 1918

And in the naked light I saw
Ten thousand people maybe more
People talking without speaking
People hearing without listening
People writing songs that voices never share
No one dared
Disturb the sound of silence
--Simon & Garfunkel

In addition to other activities such as the Committee on Public Information that 'encouraged' domestic support for US involvement in WWI, the Wilson administration orchestrated passage of the Sedition Act of 1918. A year earlier, the Espionage Act had been passed that made it a crime to convey any information deemed to interfere with the prosecution of the war effort.

The Sedition Act broadened the scope of this legislation to to include speech that cast the government or war effort in a negative light. Enforcement of the Act was accomplished not only thru formal legal channels, but also via various patriotic groups that were essentially deputized by the federal government to surveil prospective anti-war activity and, if need be, make citizen arrests of people deemed to be in violation of the Act.

The name of the game, as promoted by President Wilson, was to intimidate people into silence and submission about the war effort.

The law was challenged in court to no avail, as a Wilson-friendly Supreme Court upheld the Sedition Act in Abrams v. United States (1919). Although major portions of the Espionage Act remain law today, the Sedition Act was repealed in 1920 when much Wilsonian wartime legislation was swept away.

Subsequently, the Brandenburg ruling has inspired claims that legislation similar to the Sedition Act would never pass constitutional muster today.  Of course, that is what our founding ancestors surely believed when they inked the Constitution originally.

Wednesday, July 25, 2018

Trade Not Aid

Scarecrow on a wooden cross
Blackbird in the barn
Four hundred empty acres
That used to be my farm
--John Cougar Mellencamp

Yesterday, President Trump announced a $12 billion aid package to farmers who are being hurt by the tariffs that the president himself imposed. Many are noting (ex, ex, ex) the foolishness of trying to fix problems caused by one market intervention with another market intervention.

This administration is not the first to pour bureaucratic gasoline on fires that it or previous administrations created. Many modern welfare programs are designed to 'help' those whose positions worsened after previous government 'help.' Unemployment benefits for those pushed to the sidelines by minimum wage laws is but one example.

During the New Deal countless programs were implemented to quell effects of previous bad policies such as the Smoot Hawley tariffs.
Dagen McDowell's quote above captures the essence: the proper policy is trade, not aid.

Tuesday, July 24, 2018

Employees and Entrepreneurs

Drench yourself in words unspoken
Live your life with arms wide open
Today is where your book begins
The rest is still unwritten
--Natasha Bedingfield

Prof Bylund distinguishes between employees and entrepreneurs. Employees work for existing businesses. Existing businesses have already determined a market position where they think value can be created. Production processes to fill customer needs have been established and centrally coordinated. The role of employees is to carry out specific tasks or produce generally anticipated outcomes that contribute to the production process.

Entrepreneurs, on the other hand, do not work inside a preset framework or existing production process. Entrepreneurs can offer whatever goods and services they like to whatever customers they target. The goal is making those customers happy--to create value. There are no constraints.

Entrepreneurs who view themselves as 'self-employed' may be limiting their potential. They work not for themselves, but for existing institutions.

Monday, July 23, 2018

What's New?

Meet the new boss
Same as the old boss
--The Who

The left is holding up Alexandria Ocasio-Cortez as an up-and-coming face of the Democratic Party after her surprise victory in a recent New York congressional primary. Her self-described program of 'democratic socialism' is all the rage among progressives.

However, as discussed here, the socialist policies described by Ocasio-Cortez are nothing new. They are the same tired authoritarian programs that have impaired prosperity and ruined lives for decades (centuries) in socialist regimes.

What is new is Ocasio-Cortez's youth--which comes in handy when you need to phase out an aging Bernie Sanders as your socialist spokesperson.

It is also noteworthy that the excitement surrounding Ocasio-Cortez and her socialist policies provides more evidence that a large chunk of the Democratic Party appears to be moving further left ideologically. How that plays with voters remains to be seen.

Sunday, July 22, 2018

Neutral Rules

All for freedom and for pleasure
Nothing ever lasts forever
Everybody wants to rule the world
--Tears for Fears

Prof Williams discusses the notion of neutral rules as they pertain to the law. Neutral rules are the kind of rules you would be ok with even if your worst enemy was in charge of enforcing them. As such, neutral rules are agreeable to all. They are known and durable.

Rules that are not neutral are 'living' and can be adjusted on the fly by governing officials. Once the discretionary rule-making power of those officials is recognized, people will concentrate their energy on lobbying, bribing, or other forms of influence to get the officials to tilt the rules in their favor.

Imagine the betterment if we demanded that Supreme Court justices, instead of playing favorites, returned to being arbiters of neutral rules.

Saturday, July 21, 2018

Gold's Summer Doldrums

Strange voices are saying
What did they say?
Things I can't understand
It's too close for comfort
This heat has got right out of hand

Jason Goepfert observes that money managers that trade gold futures have rarely been less bullish on gold over the past 12 years. This has been a decent contrarian indicator in the past.

Have also been hearing anecdotal accounts from multiple channels (i.e., bullion, collectables) of tough to find physical gold.

Is the end to gold's summer doldrums near?

position in gold

Friday, July 20, 2018

Hammering the Fed

You could have a big dipper
Going up and down, around the bends
You could have a bumper car, bumping
This amusement never ends
--Peter Gabriel

In an interview with CNBC yesterday, President Trump said that he was unhappy that the Fed is raising interest rates. The Fed has raised its overnight Fed Funds rate seven times since the end of 2015 in response to a strengthening economy. Of course, despite these increases, monetary policy remains extremely accommodating.

This morning the president added some tweets to the mix:

A completely predictable response altho a bit earlier in the process than I would have expected. Going back to at least Reagan, presidents have balked when their easy money punch bowl is being drained.

Trump's protests here are just opening salvos. Once economic performance starts to roll over, he'll really start to howl as he hammers away at a noncompliant Fed seeking to get his way.

Thursday, July 19, 2018

Poverty Measures

Well, they passed a law in '64
To give to those who ain't got, a little more
--Bruce Hornsby & The Range

Dan Mitchell's analysis reinforces a lesson that I learned some time ago. Measures of 'poverty' are often not what you think. Rather than reflecting the level of resources available to a person to sustain a barely functional life, modern poverty measures tend to reflect income or wealth disparty--the difference between, say, the bottom 20% and the top 20% w.r.t. annual income.

Such differences do not measure poverty. They merely provide a basis for some to argue that resources need to be taken from some and given to others in the name of 'fairness.'

They measure the potential for wealth redistribution.

Wednesday, July 18, 2018

Perpetual TDR

 "It does seem morbid doesn't it. I can't help it, though. Somebody ought to put me away."
--Louden Swain (Vision Quest)

New rounds of Trump Derangement Syndrome keep on coming from the left, neocons, and their media lackeys. The president's summit with Russian head Vladimir Putin has spawned but the latest version.

I used to wonder when TDR would wear itself out. Now I wonder if it will end.

This psychosis may be perpetual.

Tuesday, July 17, 2018

Combating Discrimination Peacefully

 There seemed no way to make up
'Cause it seemed your mind was set
--Phil Collins

God has blessed us with a tool to combat unjust discrimination in a peaceful manner: the market. If someone discriminates against another, the discriminator loses resources (material and/or psychic) as the target of discrimination takes his/her business elsewhere and trades with someone else.

If needs of the target are not served well, then entrepreneurs take advantage of the opportunity by adding capacity to better serve the target. If the labor of the target has been erroneously shunned by the discriminator, then others hire the target to gain productivity.

No government force, no earthly laws are necessary. God has provided a non-violent system that sanctions those who violate His law.

Monday, July 16, 2018

Trump Tax Increase

Take that look of worry
I'm an ordinary man
They don't tell me nothing
So I find out what I can
--Phil Collins

Current economic strength is being associated with the so-called 'Trump tax cuts.' But there is also a pending 'Trump tax increase' in the form of tariffs.

A tariff is a tax on imports. US consumers will shoulder this tax by paying higher prices for goods and services.

The net effect remains to be seen. Depending on the intensity and nature of tariffs imposed, Americans could wind up with a net tax increase.

What is certain is that tariffs tariffs will reduce the economic benefit afforded by decreased income tax payments.

Sunday, July 15, 2018

Committee on Public Information

I want to know
What you're thinking
There are some things you can't hide
--Information Society

Nazi Germany's Ministry of Public Enlightenment and Propaganda headed by Joseph Goebbels is often held as the benchmark of state sponsored information production and manipulation. However, it is a good bet that Goebbels learned much from a previous propaganda machine commissioned by the US government during WWI.

In April, 1917, President Woodrow Wilson signed Executive Order 2594. The order established the Committee on Public Information (CPI) to be headed by journalist and politician George Creel. Because America was deeply divided over the prospect of going to war in Europe, an engagement that Wilson was seeking, the CPI was created to influence public opinion and to create 'enthusiasm' for the war effort.

The CPI engaged in multimedia campaigns to disseminate patriotic information and info about how citizens could contribute to the war effort. Millions of posters, pamphlets, newspaper releases, films, and magazine advertisements were created. The CPI also trained 75,000 volunteers to deliver short patriotic speeches in theaters, churches, town halls, et al. These people became known as the 'Four Minute Men.'

The CPI also worked with government agencies such as the post office to censor what was viewed as seditious anti-war counter propaganda. It sought to pressure people into supporting the war effort and expose those who resisted. For instance, the CPI worked with local newspapers to publish names of people and families who bought war bonds and participated in rationing programs. Lists of those who did not engage in such programs were also published. Patriotic organizations such as the National Security League used these lists to strong arm holdouts into supporting the war effort.

State-sponsored speech is never free speech because resources to fund it are taken under conditions of force. Moreover, state speech crowds out speech that is legitimately free. And, as demonstrated by the Committee on Public Information, entities that act as agencies of state information are prone to engage in more overt acts of suppression as well.

Saturday, July 14, 2018

Opt Out Wish

"You can have my college money, and my Social Security checks."
--Wyatt Donnelly (Weird Science)

Another report finding that Americans would be better off keeping their payroll tax contributions currently going to Social Security and saving for retirement themselves.

Other studies indicate that many Americans do not expect Social Security to still be around when they retire. However, many of these same people want to keep the system going because they have been forced to pay into Social Security in the past and they hope to get out what they put in.

It is likely, of course, that these people will actually receive far more than they put in, thereby bankrupting the system.

Personally, if there was an opportunity to opt out of the Social Security system by letting the Feds keep all of my past 'contributions', then I would do it in a heartbeat.

Friday, July 13, 2018

Confidence Game

Chuck Scarett: How you feelin' today?
Joe Scheffer: Confident. Very confident.
--Joe Somebody

Pundits are claiming that current high measured levels of consumer confidence are good for the economy and, by extension, stocks. What does the historical evidence suggest?

At least when it comes to its relationship with GDP growth, consumer confidence seems to be a lagging indicator or perhaps even a contrarian indicator.

Thursday, July 12, 2018

Tariffs Are Inflationary

Hundred dollar car note
Two hundred rent
I get a check on Friday
But it's already spent
--Huey Lewis & The News

Several factors have kept measured price inflation, as manipulated as it is, at bay even though central banks have been on a decades-long money printing campaign. Much of the new money has been confined to the financial system which, while predictably driving financial security prices higher, has had limited effect on consumer prices to this point.

Technological advancements, particularly those related to info tech, have positively affected productivity. Higher productivity drives prices lower over time.

Greater global trade has also tempered domestic prices. When producers from various countries around the world trade with each other, then the gains from specialization, including price lowering efficiency improvements, are distributed widely. Trading with efficient producers located in China and elsewhere has permitted the US to, in effect, import lower prices.

As measured price inflation continues to perk up, rest assured that more attention will be paid to the negative effects of tariffs and other trade barriers currently being considered under the auspices of 'fair trade' and 'protecting jobs' in the US. Less trade with producers elsewhere is inherently inflationary as gains from specialization are lost in the name of becoming more self-sufficient.

The less we trade with others, the more we pay for goods and services at home.

Wednesday, July 11, 2018

Immigration and the Trustee State

Let me in
Immigration man
Can I cross the line and pray
I can stay another day
--Crosby & Nash

Several interesting points on the immigration issue made here by Hans-Hermann Hoppe. Leftists generally advocate unrestricted, 'free' immigration as a right. But on what grounds should there be such a right?

No one has a legitimate right to move onto someone else's property unless invited. If all places are already owned, then migration is by invitation only. Unrestricted immigration only holds for virgin land and the open frontier--of which little exists today.

Leftists sometimes counter that occupation of global real estate often took place through previous acts of force rather than through voluntary exchange. While certainly true, aggressive acts of previous generations do not give migrants license to tread uninvited on someone else's ground today.

Another common counter is that so-called 'public property' under the control of local, state, or federal government is akin to open frontier and thus available to migrants for open, unrestricted access. But this assertion is false as well. Just because government has illegitimately expropriated property from others does not mean that government property is unowned and available to all. Because it has been funded by tax payments, the payers of these taxes are the rightful owners of public property.

Hoppe is obviously correct. His conclusion suggests that the proper role of the State under such circumstances is one of trustee of tax-payer funded property. What should the shape of immigration look like if the State properly executed its trustee role like the manager of jointly owned community property funded by a housing association or gated community?

The answer in principle is straightforward. The trustee's guideline regarding immigration would be the 'full cost' principle. The immigrant (or inviting resident) should pay the full cost of the immigrant's use of public goods and services. The cost of community property funded by taxpayers should not rise due to the presence of immigrants. On the contrary, the presence of immigrants should ideally yield residents a profit--perhaps in the form of lower tax burdens or higher property values.

Under conditions of high immigration pressure, then the trustee's role is to secure the border to control admission to ensure that the full cost principle will be upheld.

This is not what the State generally does, of course. Rather than enforcing a full cost principle that keeps residents whole or makes them richer, the State subsidizes immigration, thereby making taxpaying residents poorer.

ECON 101 tells us that when behavior is subsidized, more of it should be expected. As they flock to countries where their behavior is subsidized, immigrants increasingly stress economic systems toward the point of collapse. Hoppe speculates that this result is precisely the goal of some groups, including the cultural Marxists.

Tuesday, July 10, 2018

Oath to Nothing

"When a man takes an oath, he's holding his own self in his own hands like water, and if he opens his fingers then, he needn't hope to find himself again."
--Sir Thomas More (A Man For All Seasons)

If the supreme law of the land, the Constitution, is subject to myriad interpretations, then it is not law at all. Instead, it becomes a tool of discretionary rule, a tool of positivism.

Acting with pure pretense, people swear an oath to uphold and protect the Constitution, and then subsequently excuse seemingly illegal behavior by claiming, "Well, that is how I interpret the Constitution."

It is an oath to nothing.

To be effective, law must have only one meaning. That meaning must be durable. And that must be understood and acknowledged upfront by those interpreting the law in advance.

Monday, July 9, 2018

Runoff to Turn Off?

Relax said the night man
We are programmed to receive
You can check out any time you like
But you can never leave

When the Fed began unwinding its $4 trillion bond book last year, these pages observed that it would take years to get strip those assets from its balance sheet at its meager monthly sales rate. Now there is chatter that the Fed may back off on its 'runoff' program or perhaps cease it altogether.

The Fed knows what the market knows.

The only way that this stock market party has a chance of continuing is if central banks keep their extraordinary stimulus in the system. If they remove the punch bowl even one little bit, then the party's over.

position in SPX

Sunday, July 8, 2018

Ideas by Force

So glad we've almost made it
So sad they had to fade it
Everybody wants to rule the world
--Tears for Fears

In a free society, there is a market for ideas. Those wishing to 'sell' their ideas to others must persuade others to 'buy' them.

In a statist society, there is no market for ideas. Instead, ideas are forced on others using the strong arm of government.

If ideas must be implemented by coercion, then how good can they be?

Saturday, July 7, 2018

Judge Made Law

Sir Thomas More: You threaten like a dockside bully.
Cromwell: How should I threaten?
Sir Thomas More: Like a minster of justice. With justice.
Cromwell: Oh, justice is what you're threatened with.
Sir Thomas More: Then I am not threatened.
--A Man For All Seasons

Since the 1960s, modern progressivism has increasingly relied on the courts to issue orders on policies that could not pass muster in the legislative branch. The result has been judge-made law, with Roe v. Wade serving as poster child for the movement.

As President Trump prepares to nominate a new justice for the Supreme Court, hysteria is building on the left. If the new judge is not sympathetic to legislating progressive matters from the bench, then the aggregate ideological makeup of the new court could close off the judiciary as a policy tool.

The progressive era of judge-made law could be over.

Friday, July 6, 2018

All That Matters

Drawn into the stream
Of undefined illusion
Those diamond dreams
They can't disguise the truth
--Level 42

Markets understand this relationship.

The thinking goes like this: Until worldwide QE dies, buy stocks.

This is all that matters.

position in SPX

Thursday, July 5, 2018

Consent and Contract

"Should the American colonies government themselves independently? I believe that they can, and they should."
--Benjamin Martin (The Patriot)

Judge Nap notes that one of the radical ideas underpinning the Declaration of Independence is that no government is valid if it does not enjoy consent of the governed. This concept was unheard of in 1776. No prior ruler claimed consent of the governed as a basis for legitimacy. Instead, as in England, rulers were often promoted as devine and perfect. Governments served at the pleasure of the king--which inevitably meant shaking down the king's 'subjects' to support the throne's pleasures.

But, as the judge asks, what does 'consent of the governed' mean? Do you consent to a particular government by the act of voting in a democratic election? What if the government is run by someone who you voted against? Do you consent to a government that enacts policies that you disagree with? Can a person avoid government by not giving consent?

Consent implies a contract--a contract between those who govern and those who are governed. Valid contracts require explicit, voluntary approval of those involved--either thru direct participation in hammering out and agreeing to the contract's terms or by indirect involvement thru agents explicitly designated by the contract's principals.

But those conditions are rarely in place between governments and the governed. Most policies enacted by governments have not been legitimately contracted--implying that the governments themselves are illegitimate.

Does this mean that 'consent of the governed' is an impossible dream? How is it possible to retain a government from one generation to the next under conditions of valid contract?

It seems to me that the only practical way that people can legitimately be governed on an ongoing basis is if the terms of the contract are so basic and obvious that no one would reasonably disagree with them. No theft. No fraud. No slavery. No murder.

Stated differently, no aggression.

Living in accordance with a higher, natural law is what our founding ancestors envisioned all would be willing to consent to.

Wednesday, July 4, 2018

Mayhew's Discourse and Higher Law

"So, here's to the men who did what was considered wrong, in order to do what they knew was right...what they KNEW was right."
--Benjamin Franklin Gates (National Treasure)

Jonathan Mayhew was a Congregationalist minister in colonial Boston. He was an outspoken classical liberal who routinely integrated political views into his sermons. In 1750, he delivered a sermon titled A Discourse Concerning Unlimited Submission and Non-Resistance to the Higher Powers. The sermon was widely published in both colonial America and in England.

Mayhew's sermon vigorously espoused American rights. Colonists had a right to liberty, he argued, and a duty to resist and "throw off" (a term later borrowed by Jefferson) tyrannical government.

His argument was grounded in the idea that there was a Higher Law that superseded government law. Higher Law was similar to ancient Common Law. Common Law had evolved from two universal principles: 1) do what you agreed to to do, and 2) do not encroach on other people or their property.

The first principle is the basis of contract law. The second principle is the basis of essential prohibitions against theft, rape, murder, etc.

Mayhew's Higher Law argument resonated with colonial America because many colonists and their ancestors came to America to escape tyranny that had been trampling their Common Law, or natural, rights.

John Adams was among those who felt that the first shot of the American Revolution was not fired at Lexington in 1775, but by Jonathan Mayhew twenty five years prior in his Discourse.

The revolutionaries were doing what Mayhew argued was natural, justified, and predictable. They were enforcing Higher Law.

Tuesday, July 3, 2018

Vetting Judges

"I trust I make myself obscure."
--Sir Thomas More (A Man for All Seasons)

One way to vet candidates for Supreme Court decisions is to interview them. Ask them what they think about various issues. This is what goes on in Congress once candidates are nominated by the president.

Much of this is a waste of time. Beyond the theatrical nature of these hearings, the spoken word itself is imprecise. People often say one thing and do another.

A better way to vet judicial candidates is to study their historical behavior. How have they acted on various issues in the past?
As Judge Nap reports, this is what Donald Trump is doing with candidates for the bench seat opened by President Kennedy's pending retirement. In what, according to Judge Nap, is a first for a president, Trump has outsourced the vetting of candidates to a trusted external group--in this case the Federalist Society. The society's lawyers have read every court opinion, brief, legal paper, et al authored by the candidates that they could get their hands on and are reporting their findings to the president.

Smart. Trump is probably drawing from his experience as a manager. He knows to emphasize what has been done instead of what has been said when evaluating job candidates.

Monday, July 2, 2018

Canaries in the Vault

Tell me what you've got on your mind
'Cause we're running out of time
--Fine Young Cannibals

The banks have been trading conspicuously heavy as of late. The bank index itself has been flirting with its support line in the 102-103 area for months.

If the 'strong economy' headlines were correct, then one would think this sector would be trading much better than it has been.

On the other hand, in a leveraged economy, a good rule of thumb is that the banking sector is one of the canaries in coal mine, er vault, should trouble begin to brew.

position in SPX

Sunday, July 1, 2018

Tariffs and Central Planning

Is so hard to find
Hey baby
Tell me what is on your mind
--New Shooz

What Thomas Massie is saying here is that tariffs are a form of central planning. Whether the purpose is to protect local industry, to fix prices, or to establish production quotas, tariffs are imposed because government officials think they know better than markets.
Donald Trump may be pro-business, but that is not the same as being pro-market.