We shouldn't panic over the delta variant and frankly, I suggest we need not panic over today's correction.
Profits are the mother’s milk of stocks and the lifeblood of the economy. Though the Bidens hate profits, investors love them.
The good news is that profits are plentiful and the economy is relatively strong. It seems to be forging ahead.
Inflation looks way too high and it will probably last another few months. However, I’m still unconvinced it's a long-term problem.
If President Biden’s woke economic plan gets through later this year, then I think inflation will stay high and the economy will go low (more on that in a moment).
Meanwhile, I just want to note that the Fed may not be as easy as most folks think.
As Steve Forbes said on this show last week— while they're still buying too many bonds, they're also taking cash out of the system to the tune of $800 billion daily through something called reverse RPs.
I call it the "Fed's guilt trip" because they know they're too loose and should be tapering down their asset purchases. That's a message likely to come from the central bank sometime this fall.
The biggest obstacle to stocks and the economy is the Biden DC swamp.
President Biden: "The prediction, that is my favorite one I must add, is that if I got elected, I’d bring the end to capitalism. I never understood that one, but we've heard we've heard an awful lot… and six months into my administration, the US economy has experienced the highest economic growth rate in nearly 40 years."
Me thinks he doth protest too much.
In a great WSJ column today, "How to Be an Anticapitalist," my pal Andy Kessler has the story right - despite what Mr. Biden may say.
We are not going to tax our way into prosperity— nor are we going to spend, entitle, and welfare transfer payments without work requirements or employment incentives into prosperity.
Overly generous unemployment and other benefits may have cost 1.8 million jobs, according to one poll. Casey Mulligan, of the University of Chicago, estimates it could be 5 million jobs lost because of overly generous cash benefits.
The employment to population ratio hasn't moved since last October.
The Bidens have proposed massive schemes to regulate every sector of the economy through their left-wing antitrust and Green New Deal policies.
Capital formation will be severely restricted by hiking the corporate tax, capital gains tax, death tax, minimum taxes — even allowing foreign countries to tax our businesses, thereby giving up American sovereignty.
This is not capitalism.
The late Jack Kemp used to say you can't have capitalism without capital. The Bidens don't get that.
They're not interested in growth. They want redistribution, equity not opportunity, to tax the rich, penalize success and undermine free enterprise.
I've been calling it ‘woke economics.'
This morning I emailed Andy Kessler to tell him he wrote a fabulous piece. I mentioned my "woke economics" and he mailed back - go woke, go broke.