The Watchdog on Wallstreet Weekly Recap for 4/10/2023
The Fed is FAILING America
Send the Fed on a long cruise. It’s similar to The Sopranos. Do you remember The Sopranos’ first season? Uncle Junior wishes to assault someone at Artie Bucco’s restaurant. And Tony says, “No way.” Tony’s solution is to send Artie and his wife on a long cruise to get him out of Dodge so he doesn’t run into any problems. In any case, it’s neither here nor there. We need to get the Fed out of here.
Andy Kessler wrote a great piece about the Fed in the Wall Street Journal today, comparing it to Lawrence Welk’s bubble machine. Remember the bubble machine from your childhood? That is exactly what the Fed does- keeps rates at absurdly low levels. Politicians say, “Oh, I’ve got to boost the economy.” Again, treating the economy as if it were a bloody engine that needed to be primed or choked. No, we don’t need that. We need money to be priced appropriately. Let the chips fall where they may, and we’ll be fine.
California to subsidize home buying
The Wizards of Smart Out in California are now going to subsidize families making less than $211,000 per year. They’re going to put up the money- a down payment of 20% plus closing costs. People may think, “They’re so thoughtful. It’s a great government program. It will help people get into homes.”
What happens when something is subsidized? The government pays for healthcare. The government subsidizes, well, they subsidize homes as well through Fannie and Freddie, but they also increase student loan interest rates. With government assistance, the price rises. All of this will do is raise the cost of housing. Why would you do that? Again, I’m sure it’ll make headlines: “Look at these lovely politicians looking out for the little guy.” They are not doing anything of the sort.
CPI Numbers are down
All eyes are on the CPI numbers. Oh, look, it’s gone down a notch. yippee ki-yay!. Listen, the things we need to live on—food, housing, you name it—are still elevated, as they have been for a very long time. We’ve described our government’s, the Federal Reserve’s, method of tracking inflation as simply dumb. The most important things are the things they need to live and survive every day. And the cost of these items has been rising for several decades. You want to aggravate matters once more? Do you want to make things worse? You had the Biden administration and the EPA imposing some of the most stringent standards on automobile tailpipe emissions. What good is that? Well, it raises the cost of cars. Again, the Fed has no control over this type of inflation. This is done by the government.
Another Recession is looming
We could have a little recession this year. That is what they are currently predicting. Were we not technically in a recession last year when the economy contracted for two consecutive quarters? Anyway, back to the recession monster. Yeah, this reminded me of one of my favorite 1970s shows, Leonard Nimoy’s In Search of… Recession, because that’s all anyone is doing. Where is the mythical beast known as the recession? When will it show its ugly face? Oh no, we’re all going to die. No, we aren’t. And, in fact, if you use your head and look at when the economy goes into a recession, which we shouldn’t have to deal with because of the Fed’s bubble-making nonsense, the markets outperform. The markets are predicting the end of a recession. Don’t fear things, and don’t act out of fear.
Biden & Trump Agree on Social Security
Hey, we found something Joe Biden and Donald Trump agree on: they’re not going to do anything about social security. That’s correct. “Oh, everything is fantastic.” Joe declares, ” I’m not going to touch it.” Mr. Donald Trump: “No, we’re not going to touch social security.” His ridiculous MAGA pack, in fact, is running advertisements. Ron DeSantis wants to take away our social security benefits. He wishes to increase the retirement age. It’s almost as if Democrats ran the commercial with Paul Ryan pushing Grandma off a cliff. Let me explain something to you. Okay. Ignoring a problem is not a sign of leadership. Ignoring a problem or pretending it does not exist is not a sign of leadership. Let me tell you what it is: cowardly malpractice. That’s what you get from both Joe Biden and Donald Trump.
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