I can, at times, choose particularly good inflammatory phrases that overshadow their core point. It must be my flair for the dramatic. Well. One of those phrases came to mind this morning as I was looking for the stock market to have its long awaited 20% correction in a day. “It takes one woman 9 months to make a baby. You can’t have 9 women make a baby in a month.”
It speaks to resource allocation at work. It speaks to changing your lifestyle to be healthy and losing weight. It speaks to getting promoted. And very directly speaks having kids. Things take time and no matter our inclinations to make things happen faster, sometimes, they just don’t.
The jobs report this morning showed the economy in the US gained 303,000 jobs. It even came with a 4.8 magnitude earthquake that hit New York this morning to herald in the news! Yes, many were part time. Yes, many workers are disillusioned and still not in the work force. But inflation is stubbornly high and fiscal policy is incredibly accommodative overall to risk assets. Gold, above $2300/oz is screaming a warning. Oil above $85 is screaming a warning inflation isn’t under control. So, in my view, unpopular though it is, the Federal Reserve should not be cutting rates this year. I would argue, it shouldn’t be cutting rates next year. In fact, until we get prices back on trend to 2019, I’d support not cutting rates for 3-5 years, balancing the federal budget and cutting many of the government jobs that keep getting created (71,000 last month…. Again!).
Sadly, the national debt is accruing over $1 trillion of interest every year and at the present deficit, could reach $50 trillion by 2030. The numbers are staggering. The decisions are stupid. And only RFK Jr. Is even talking about it. But, like pregnancy, this fiscal demon baby isn’t ready yet. And so, we wait. And rally. And everyday I look at my allocation to T bills and away from Nvidia and I question my sanity. But like SMOG and the oil and gas picks I got made fun of for in October 2019, they outperformed XOP and in the long run, I was right. So. I remain patient.
Well sure Biden wants to increase taxes because he also wants to increase spending by far more than he wants to increase taxes. AND he needs more money to keep giving to illegal migrants. Additionally Biden is a huge part of the problem with Student Loan forgiveness and free handouts to migrants who cross the border illegally.
The reason only RFK Jr is talking about it is because the other 2 have a track record otherwise. Biden at least is willing to look at tax changes to help close the gap. Trump is going old school tax cut and spend. And as long as entitlements and military are off the board, there isn't enough of a budget left to make a meaningful difference. The rest of the cuts become more symbolic as an attempt to control policy as it does to actually balance the budget. Meanwhile the demographics of SSI and Medicare are such that we are going to hit a crossroads in the next decade. And the longer we wait, the more jarring any solution will be.