| | | | | It looks like Biden finally gets his Build Back Better plan.
For a few hundred billion dollars the semi-conductor industry gets a huge chunk of corporate welfare. The IRS can double its headcount making it much easier to send “hither Swarms of Officers to harass our People and eat out their Substance.” And, provided it does what it says on the tin, they somehow figured out how to spend money and fight inflation at the same time.
Color me skeptical or label me a cynic but we’ve been here once or twice. The handouts in this bill should be an embarrassment to everyone.
Well, except for the corporate lobbyists and politicians that colluded on getting this latest in a long line of prosperity-robbing spending bills through Congress. By their standards, the Inflation Reduction Act was a beautiful symphony of propaganda and pork.
But success or not, it just piles even more uncertainty onto a very uncertain market.
Methinks Thou Protest Too Much
The steeply inverted yield curve and GDP prints say we’re in recession, but the White House begs to differ.
Jobless claims are rising, and all employment surveys, save a wildly positive Establishment Survey published by the BLS, point to a shrinking labor market.
Inflation seems to be driving corporate revenue higher despite declining unit sales.
And productivity is collapsing while it looks like wages may be moving higher on their own accord.
It’s hard to draw conclusions. Though when you see the political propaganda machine protest loudly while working furiously to redefine words, I’d start by rejecting what they’re selling.
It’s a mass of conflicting signals in any case. Which is precisely what the onset of chaos looks like.
The inflationary high front parading around as true growth has come right up against a recessionary low-pressure area. And the only way to reconcile this massive tension of opposites is through economic storms that can pull on stocks from either direction — especially during the summer doldrums.
Now is not the time for taking big swings with your positions as noise currently dominates the signal. But September will reveal the true tone of the market. And I personally think it will reveal a bear market that never left.
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