"The sense of responsibility in the financial community for the community as a whole is not small. It is nearly nil. Perhaps this is inherent. In a community where the primary concern is making money, one of the necessary rules is to live and let live. To speak out against madness may be to ruin those who have succumbed to it. So the wise in Wall Street are nearly always silent. The foolish thus have the field to themselves. None rebukes them."
John Kenneth Galbraith, The Great Crash of 1929
"Surprising real GDP growth rate of 3.18% is a contrived illusion. - BEA used a unique inflation deflator of 0.64%! More commonly used deflator BLS CPI-U inflation rate 2.27%. If BLS deflator used, GDP growth rate 1.56% (Half BEA #). Setting aside trade and inventory build (goods produced but not bought), BEA says growth rate of real final sales of domestic products was 2.53%, but if BLS CPI-U deflator used real final sales was 1.0%. "Goldilocks" moment was achieved through growing inventories, increased governmental outlays, crashing import values and materially understated inflation.”
Harald Malmgren
Just draining the swamp...
GDP for 1Q 2019 came in quite a bit higher than expected, which caused an immediate reaction in the markets.
And then people had a chance to look behind the headlines, at the drop in consumer spending, the build up in inventories, and the rather lowballed PCE deflator, and they changed their minds.
Gold and silver managed to push higher past some recently stubborn overhead resistance, thanks in part to the weaker Dollar.
And let us not overlook the fact that the important option expiration on the Comex is now past. Not enough analysts are aware of market events such as this.
Stocks managed to push higher, with the SP 500 futures tagging back up to the old high from last year.
There are some important (big, lucrative) IPOs coming to market, and even a direct sale by Slack, sans banker underwriters and road shows.
Since these are hard to price unicorn and gig stocks, the markets will be applying plenty of grease to the skids, along with the lipstick on the pigs, in order to get these valuable items suitably placed with the buy side and institutions.
Next week there will be the Non-Farm Payrolls Report for April.
And the FOMC will grace us with yet another of their rate decisions. Nothing will be done. And if they are wise, they will announce this wearing sackcloth, and covered in ashes, in contrition for willfully igniting yet another financial asset bubble.
Happy Easter to my many Orthodox Christian friends.
Need little, want less, and love more. For those who abide in love abide in God, and God in them.
Have a pleasant weekend.
