Stockman Warns "Mind The Junk" - This Ain't Your Grandfather's Capitalism - More>
"To the contrary, capital is being artificially diverted into unprodutive speculative arenas. Central bank yield suppression has spurred massive amounts of financial engineering in the C-suites in response to the demand for never ending appreciation of secondary assets in the casino. As we indicated yesterday:
..... the growth and jobs problem in America originates in the Fed, not the IRS code; and that by focusing on the latter----even as it punts on the former---- the GOP is truly earning its moniker as the Stupid Party.
That is, Trump and the GOP Senate potentially have five seats to fill on the Fed and could therefore end the current baleful regime of massive, fraudulent money printing and the destructive falsification of financial asset prices which inherently results therefrom.
So doing, they could bring honest price discovery, risk exposure, financial discipline and efficient two-way markets back into the Wall Street casino. Allowing free markets to clear the price of money, debt and stocks, in turn, would quickly shut down the financial engineering mania that now obsesses the corporate C-suites and which has caused trillions of corporate cash flow and balance sheet capacity to be diverted to stock buybacks, M&A deals and LBOs.
Needless to say, restoration of honest price discovery on Wall Street is not going to happen any time soon with a "low interest guy" in the Oval Office and another one soon to take the helm at the Fed. Indeed, Jerome Powell voted for the destructive financial repression described above 44 consecutive times during his tenure on the Fed since early 2012. |
