Morning Note: Too Much Prevention??

I ran across the following Robert Oppenheimer quote while listening to a recorded lecture yesterday and got to thinking about how the desperation of policymakers, elected and appointed, to circumvent the painful (yet essential) stages of cyclical economic and market phenomena grows — as do the tools they bring to bear — with each cycle:

“It is perfectly obvious that the whole world is going to hell. The only possible chance that it might not is that we do not attempt to prevent it from doing so.”


We’ll jump straight to the stats this morning. I’ll circle back later today with our more meaty weekly message:

Asian equities mostly sold off overnight, with 10 of the 16 markets we track closing lower.

Europe’s a mess this morning, with all 19 bourses we follow in the red as I type; several in excess of 1%.

U.S. stocks are mostly red as well to start the session: Dow down 11 points (0.02%), SP500 down 0.06%, SP500 Equal Weight up 0.02%, Nasdaq 100 down 0.18%, Nasdaq Comp down 0.26%, Russell 2000 down 0.51%.

Oil futures are up 1.32%, gold’s down 0.18%, silver’s down 0.98%, copper futures are down 0.97% and the ag complex is up 0.24%.

The 10-yeat treasury is up (yield down) and the dollar is up 0.25%.

Led by utilities stocks, AT&T, energy stocks, base metals futures and ag futures — but dragged by MP (rare earth miner), Latin American equities, uranium miners, AMD and emerging market equities — our core portfolio is off 0.26% to start the day.

The following from Stephanie Kelton’s The Deficit Myth highlights the Federal Reserve/interest rate dynamic that we believe makes the 1940s the best analog for what we’ll see going forward:

“…the government can always strip markets of any influence over the interest rate on government bonds. Indeed, that’s exactly what the Federal Reserve did during and immediately after World War II, and it’s what the Bank of Japan is doing today.”

Have a great day!



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