The Morning Call
1/20/21
The
Market
Technical
Tuesday
in the charts.
Signs
of exuberance.
https://www.zerohedge.com/markets/signs-exuberance-warn-correction
Madness
of the crowds.
https://www.zerohedge.com/the-market-ear/c0k5-m8yah
Fundamental
Headlines
The
Economy
US
Weekly mortgage
applications fell 1.9% while purchase applications were up 7.2%.
International
December German PPI
was +0.8% versus estimates of +0.3%; UK CPI was +0.3% versus +0.2%, core CPI
was +0.3% versus +0.2%; EU CPI was +0.3%, in line.
Other
The economy’s growth obsession.
https://americanconsequences.com/the-economys-growth-obsession-kim-iskyan/
Consistency about elasticities.
https://marginalrevolution.com/marginalrevolution/2021/01/consistency-about-elasticities.html
Fiscal Policy
Yellen
to congress: go big. As you know, one of
my thesis for lo these many years is that passed a certain level (Rogoff and Reinhart
says 90%) the national debt/GDP ratio has proven to inhibit economic
growth. The reason is simple---we have
to spend so much money servicing the debt that it limits the amount that can be
used to invest in increased productivity (i.e., economic growth). Well, the US is will beyond the 90% level and
it appears that with the ‘go big’ agenda it is only going to get higher; and,
therefore, pose an even greater burden on the economy. To be fair, whatever portion of the new ‘go
big’ program is for infrastructure (productivity enhancing projects) that is a
positive for growth. But as I read the
list of proposed expenditures, productivity enhancing projects are in woefully
short supply. The bottom line being
while a new infusion of cash into the economy may get investors jiggy in the
short term, longer term it just provides further support for the thesis of higher
debt = lower growth.
Problems
with the pandemic relief bill.
https://www.nationalreview.com/2021/01/joe-bidens-pandemic-relief-bill-is-a-mess/
Increasing
income tax progressivity may increase growth.
Bottom line. Be cautious with small cap stocks.
An
actual bubble is unmissable.
https://mylesudland.substack.com/p/spac-ev-bubble-2021
Where Wall Street thinks the biggest bubbles are.
https://www.zerohedge.com/markets/where-wall-street-thinks-biggest-bubble
Know your risk management.
https://www.zerohedge.com/the-market-ear/c0zgvnno0j
News on Stocks in Our Portfolios
Fastenal (NASDAQ:FAST) declares
$0.28/share quarterly dividend, 12% increase from prior dividend of $0.25.
What
I am reading today
Deconstructing
bitcoin.
https://integratinginvestor.com/deconstructing-bitcoins-zeal-into-investible-theses/
The
monopoly power of Facebook and Google.
https://promarket.org/2021/01/18/facebook-whatsapp-terms-of-service-ads-data-privacy/
Wednesday morning humor.
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