Wednesday, August 27, 2025

The Morning Call---The one-handed economist

 

The Morning Call

 

8/27/25

 

I am taking the rest of the week off to enjoy an extended Labor Day weekend. Unless something unusual happens, I will be back 9/2. Have a great holiday.

 

The Market

         

    Technical

 

            Tuesday in the charts.

            https://www.zerohedge.com/market-recaps/bonds-bullion-bid-amid-cook-chaos-stocks-steady-nvda-looms

 

                Tuesday in the technical stats.

            https://www.barchart.com/stocks/momentum

            https://www.barchart.com/stocks/sectors/rankings

 

            The latest from Goldman’s trading desk.

            https://www.zerohedge.com/markets/seasonality-gets-ugly-here-top-goldman-trader-fears-liquidity-headwinds-amid-late-summer

 

            Gold---tic, tic, boom.

            https://www.zerohedge.com/the-market-ear/gold-tic-tic-boom

 

            VIX shorts at extremes; crash risk rising.

            https://www.zerohedge.com/the-market-ear/vix-shorts-extremes-crash-risk-rising

 

    Fundamental

 

       Headlines

 

              The Economy

 

                        US

 

Weekly mortgage applications fell 0.5% while purchase applications were up 2.2%.

                       

                          Month to date retail chain store sales grew faster than in the prior week.

 

The June Case Shiller home price index was up 2.1% versus consensus of +2.7%.

https://www.advisorperspectives.com/dshort/updates/2025/08/26/s-p-cotality-case-shiller-index-home-prices-fall-for-fourth-straight-month

 

The August consumer confidence index came in at 97.4 versus predictions of 96.0.

https://www.advisorperspectives.com/dshort/updates/2025/08/26/consumer-confidence-dips-slightly-in-august

 

The August Richmond Fed manufacturing index was -7 versus estimates of -19.

https://www.advisorperspectives.com/dshort/updates/2025/08/26/richmond-fed-manufacturing-activity-remained-soft-august-2025

 

                        International

 

July Chinese (YTD) YoY industrial profits were down 1.7% versus forecasts of -1.8%.

 

The September German consumer confidence index was reported at -23.6 versus expectations of -21.3.

 

                        Other

 

                          Results of the latest TIPP poll.

                          https://issuesinsights.com/2025/08/25/despite-recent-good-news-the-public-remains-sour-on-the-economy-ii-tipp-poll-finds/

 

                          Discretionary spending and the business cycle.

                              https://econbrowser.com/archives/2025/08/non-essentials-and-the-business-cycle

 

                         The economy is growing; the employment numbers look solid.

                          Economy Is Growing, While Job Indicators Remain Solid

 

            Monetary Policy

 

              The one handed economist.

              https://alhambrapartners.com/weekly-market-pulse-a-one-handed-economist/?src=news

 

              The Fed still evading key issues.

              https://www.advisorperspectives.com/commentaries/2025/08/26/fed-evading-key-issues

 

The notion of influencing Fed policy by the executive branch is a tricky subject. First, let me posit that the Fed policy has a long and undistinguished history of being consistently wrong. So, the idea of altering the Fed policy making machinery has a lot of merit (in my opinion). That said, it seems to me that altering it by allowing the executive branch (politics) to influence (have a say) on said policy would only make matters worse---which says nothing about the constitutional issues such a development would raise.    

 

 Uncharted waters.

              https://www.wsj.com/economy/central-banking/uncharted-waters-trumps-attempt-to-take-charge-of-the-fed-a2548461?mod=economy_lead_pos1

 

              Long bonds fall over Cook firing.

              https://www.bloomberg.com/news/articles/2025-08-26/dollar-falls-with-treasuries-as-trump-seeks-to-oust-fed-s-cook?srnd=homepage-americas&sref=loFkkPMQ

 

            Fiscal Policy

 

              The left is applauding the government’s stake in Intel.

              https://www.forbes.com/sites/waynecrews/2025/08/25/when-washington-buys-intel-it-owns-you-too/

           

              What are the limits of Trumpian state capitalism?

              https://fasterplease.substack.com/p/what-are-the-limits-to-trumpian-state

 

              Counterpoint.

              https://wolfstreet.com/2025/08/25/big-fuss-in-the-media-about-the-governments-10-stake-in-intel-but-just-giving-this-cash-to-intel-under-the-chips-act-was-fine/

 

              Trump policies are testing the limits of the economy’s resilience.

              https://www.capitalspectator.com/trump-policies-will-test-limits-of-us-economic-resilience/

 

            Inflation

 

              Housing market in deflation.

              https://talkmarkets.com/content/us-markets/repeat-home-sales-indexes-provide-final-confirmation-that-the-housing-market-is-in-deflation?post=518143

 

            Recession

 

              US consumers with prime credit ratings are starting to slip payments.

              https://www.reuters.com/business/finance/us-consumers-with-prime-credit-are-starting-slip-payments-2025-08-25/

 

            Tariffs

 

              Quote of the day.

              https://cafehayek.com/2025/08/quotation-of-the-day-5114.html

 

     Investing

 

              Bearish on stocks.

              https://ofdollarsanddata.com/why-im-bearish-on-us-stocks-for-the-second-time-since-2017/

 

              Investing in the long bond is risky.

              https://www.zerohedge.com/markets/black-mirror-economics-turn-bonds-risky-play

 

              Gold benefits from risk aversion, Fed expectations and technical compression.

              https://talkmarkets.com/content/commodities/gold-benefits-from-risk-aversion-fed-expectations-and-technical-compression?post=518124

 

              ETH and ETH treasury stocks are cheap.

              https://www.zerohedge.com/crypto/eth-ethereum-treasury-companies-are-cheap-stanchart

 

    News on Stocks in Our Portfolios

 

 

 

What I am reading today

 

            Wild theories about a giant space rock careening through our universe.

            https://www.zerohedge.com/technology/wild-theories-abound-over-gigantic-comet-careening-through-our-solar-system-fall

 

            Brain food.

            https://www.forkingpaths.co/p/brain-food-18a

 

            Managing your income to avoid higher taxes.

            https://politicalcalculations.blogspot.com/2025/08/managing-your-income-to-avoid-higher.html

 

 

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