The Beat Goes On

Janet has burned through the April tax receipts and Federal debt has, as of last Friday, resumed its climb at a new high, 34.667 $trillion.

History Rhymes

From my 2020 post on inflation: William Greider, in his book, Secrets of the Temple: How the Federal Reserve Runs The Country, reports Nixon (’69-’74) as saying: “We’ll take inflation if necessary, but we can’t take unemployment.” Of course he got both.

Team Biden has apparently given Powell the same instruction. The same result will ensue.

Debt Watch

April ended up essentially unchanged from the prior peak on April 1st. as $34.616 trillion. This due to tax collections, especially an unexpected $150 billion in capital gains taxes. This reduced the linear FY24 forecast to $2.5 trillion increase in debt.

Fed Up

Powell’s presser was shameful. He rejected even the concerns in the official statement, dismissed all talk of stagflation and spouted the party line from Team Biden. Nothing but green fields and blue skies. He is no more independent and honest than Adam Schiff.

Naturally this resulted in a substantial rally in stocks (BTFD, FOMO, whatever). In all fairness, the market generally rallies when the Fed speaks, simply because it gets the pre-meeting uncertainty off the table. But this time, somewhere along the line the BS-O-Meter must have blown up in a shower of sparks. When the 3pm bar failed to realize any more gains, there ensued the most spectacular roundtrip I think I have ever seen. In 45 minutes, the boyz took the QQQs from 429 to 421 and the SPX from 5079 to 5017, both more than a roundtrip. And a sound repudiation of Powell’s pander.

Both Sides Now

Here’s the epitome of the two economies. You are either on the receiving end of the government money hose or not.

Fiscal Madness

Santa Monica is now beating LA. At $837,000, Los Angeles has been the leader in homeless housing spending per unit. But now Santa Monica has stepped up its game, spending a million dollars per unit.

No doubt there will be pressure to spend more than that for migrants, since they are more important than Americans.

A Tale Of Two Economies

Charles Dickens’ classic novel, “A Tale Of Two Cities” opens:

It was the best of times, it was the worst of times, it was the age of
wisdom, it was the age of foolishness, it was the epoch of belief, it was
the epoch of incredulity, it was the season of Light, it was the season of
Darkness, it was the spring of hope, it was the winter of despair, we had
everything before us, we had nothing before us, we were all going direct
to Heaven, we were all going direct the other way

On the one hand, we have a government desperate to stay in office, fearing an inquisition that would result from a lost election. On the other hand, we have a confused mass of citizenry, upset and distressed by inflated prices for nearly everything and social upheaval wherever it looks, riven by tribal politics and government assaults. The government is trying a “best of times” by massive government spending, funded by debt that is running at pace for a near $3 trillion in new debt this financial year. This new debt is effectively money printing, as when the government spends the proceeds the net result is added to M2. The well-off – especially government employees and stock investors – party on.

The worst of times is heartless inflation as the rest of us, especially young people, find housing, recreation and even food out of reach. The American Dream is forgotten. We are assaulted on so many fronts – Antifa, racism, DEI, climate change, transgender privileges, migrants, defunded police, rampant crime, futile foreign wars, anti-semitism…. Foolishness, incredulity, darkness and despair reign. There is a hand behind this. And money. For example, the pro-Hamas riots crippling universities are clearly organized and funded – tents, food and drink magically appear. Many participants appear to be non-students. In what America do savage terrorists deserve sympathy?

I continue to expect a deep and brutal economic depression. I hope it will purge some of the poison out of the system.

 

Halfway

FY24 was halfway over last Friday, with Federal debt at $34.6 trillion, up $1.4 trillion so far this year. This projects to $36 trillion at the end of the year.

Retail

Walmart is closing 23 stores in 8 states (all blue).

Target is closing 9 stores in 4 states (all blue).

Walgreens is closing 900 stores (mostly blue)

Bed Bath and Beyond is closing its remaining 360 stores.

Lowes has closed 50 stores.

Macy’s is closing 150 stores (mainly blue)

Starbucks has closed 61 stores (mainly blue)

Home Depot is closing 15 stores

Dollar Tree is closing 1,000 stores

Foot Locker is closing 400 stores

Gap is closing 350 stores

Party City is closing 24 stores (mainly blue)

Big Lots is closing stores in Cali and Colorado

Burger King is closing 400 stores

Best Buy is closing 20 stores

Boston Market is closing 27 stores

Kmart only has 2 stores left

Sears closed all but 22 stores

Regal Cinemas has closed 429 movie theaters

Kroger grocery chain has closed 413 stores

US Bank is closing 23 branches

Wells Fargo is closing over 60 branches

Capital One is closing 50 branches

Bank of America is closing 20 branches

Two Weeks To Halfway

With two weeks to the March 31 midpoint of FY24, the 3/15/24 Federal debt is up 1.376 trillion. Will Janet push it past the $1.5 trillion to be on track for a solid $3 trillion increase for FY24? Powell tomorrow. He may say that the deficit is none of his business (true) but he cannot ignore the inflationary push from  a government that is spending more than twice its revenue.