Morning Commentary
Criticism, like rain, should be gentle enough to nourish a man's growth without destroying his roots.
-Frank A. Clark
The Federal Reserve had a special mission this year. They articulated how it would begin to remove accommodation without crushing the economy or the stock market. Yesterday, they may have pulled off the first part, and that was to underscore the gentle process without destroying the root of growth or dislodging the rally. To be sure, it was a heck of a challenge.
Fed Balance Sheet
The Federal Reserve balance sheet was plodding along at less than $900 billion when the world was shaken by the mortgage crisis. From September 2008 to the end of the year, emergency measures swelled the balance sheet to $2.2 trillion. More creative measures (read ways to print money from thin air) eventually lifted the balance sheet to the current level of $4.43 trillion.
Yesterday, the Fed announced intentions to put caps on how much accommodation (read free money) it would allow to run off its balance sheet. Essentially, the way it works is when assets are paid off; the Fed will not automatically reinvest the funds. The Fed has promised to be “gradual and predictable.”
The bottom line is Janet & Co are not going to upset the rally.
P.S. I know you’re worried about light volume, and a sense that the market is spinning its wheels- there’s an old saying about never shorting a dull market. Be ready to add new positions.
CBO Scores AHCA
The House Republican health plan would leave 14 million fewer people insured next year, a new CBO forecast says.
New York Times
23 million more uninsured under GOP health bill, CBO says
The Republicans' revised plan to repeal and replace parts of the Affordable Care Act would also shrink the U.S. budget deficit by $119 billion, according to the nonpartisan Congressional Budget Office.
Washington Post
Forget the Headlines, Game On!
The score means the game is over most of the time. Last night, the Congressional Budget Office (CBO) gave the green light for the Senate to push through with Republican efforts to replace Obamacare.
There is a lot in the 41- page document, but here are the key figures over the next decade:
*This is where the details become murky, and serious assumptions must be made about the states that accept grants to block funding and waivers and the states that continue to cling to the current bargain created by President Obama to get even red states to expand Medicaid.
Will the Senate find a way to get this plan through and what about the House GOP members that were hoping for fewer people losing coverage?
After the Close
Earnings after the close on Wednesday were a mixed bag; for the most part, the initial reaction was great and shares popped for the following names:
Hewlett Packard (HP) +3%
Pure Storage (PSTG) +11%
Guess (GES) +16%
Williams-Sonoma (WSM) +9%
I say great when Williams-Sonoma is doing well because it means rich people are buying things the rest of us couldn’t afford. Espresso, anyone?
Comments |
Three things. First - Thanks as always for excellent info and commentary! Second - Aren't the figure first listed on Fed supposed to be TRILLIONS? Third - The quote above reminds me of a similar one from Andrew Carnegie that goes as follows: Andrew Carnegie was asked how he developed so many millionaires to work for him. Carnegie noted that they weren’t millionaires when they started working for him. He then said, “When you work with people it is a lot like mining for gold … when you mine for gold, you must literally move tons of dirt to find a single ounce of gold. However, you do not look for the dirt — you look for the gold.” Ray Weldon on 5/25/2017 10:01:10 AM |
Most of the "uninsured number" will come from healthy young people who will not be "mandated" to buy coverage. Garro on 5/25/2017 1:18:23 PM |
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3/12/2024 9:25 AM | ROTATION IN FULL SWING |
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