We saw a much bigger surge into bonds in March, but yields persisted.
With inflation, employment, and nominal GDP all still strong, Treasury tricks are unlikely to unravel this.
Cash such as VMFXX at 4.21% ytd and total stock market such as VTSAX at 13.92% ytd continue to trounce bonds ytd. VBTLX is still down 0.39% ytd. AGG is down 3.46% ytd.
Bureau of Economic Analysis this morning here:
- Ebenezer Elliott (1781-1849)
… it’s back, says Rudd, and Xi’s Marxist vision means greater control over the private sector, an expanding role for state-owned enterprises and industrial policy, and the quest for “common prosperity” through redistribution — all of which is likely to shrink economic growth, he concludes. Rudd is the current Australian ambassador to the United States. …
Stevenson-Yang is … one of the few who isn’t puzzled by what’s happening in China, after living there for more than 20 years. The CCP “was always going to decouple. Once the party had acquired enough power, enough resources, enough money, it was always going to decouple,” she told CNBC.
The reforms that began in 1979, she says, “were always meant to be temporary, in order to bring in more resources.”
More.
UST yields rose a net 1.31% in the aggregate week over week on 7/28.
DFF rises to 5.33% after the latest FOMC rate hike.
Year to date Treasury, Total Bond, Cash, and Total Stock performance using popular Vanguard funds:
VFISX +0.75% VFITX 0.90% VUSTX 1.58% VBTLX 2.05% VMFXX 2.75% lol VTSAX 19.99%!
Stocks have been the place to be, and cash has beaten even the total bond market.
Meanwhile stocks are obscenely overvalued at 169 using the latest report of GDP out Thursday:
Something about some guy abandoning free market principles in order to save the free market system.
Scott Sumner, here:
The consequence of the reckless fiscal policy will not be a financial crisis. Nor will it be a default. Even the permanent monetization of the debt is unlikely, in my view. The most likely consequence will be higher future taxes and slower economic growth. This will lead to reduced living standards. It might also push politics in a more “populist” direction, with consequences that are difficult to predict (but unlikely to be desirable.)
Gold is at least 167% overvalued relative to inflation since 1913. $600ish gold makes sense. $1600 gold does not, let alone $2067, the 2020 high.
Meanwhile stocks are off-the-charts overvalued, about 93% relative to the post-Great Depression median valuation of 81 through 2019, as of the latest GDP figures from late May.
Speculation in both gold and stocks, not to mention a host of other things, has been driven by Federal Reserve interest rate suppression since 2001.
How long elevated gold and stock prices can persist in the new higher interest rate environment is anyone's guess.
The Fed Funds rate still averaged a low 1.69% in 2022, so it's still early innings.
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| May 25, 2023 |
WHO declares end to Covid-19 global public health emergency
The spread of Covid-19 is no longer a global public health emergency, the World Health Organization declared Friday.
“For more than a year, the pandemic has been on a downward trend with population immunity increasing from vaccination and infection, mortality decreasing, and the pressure on health systems easing,” WHO Director-General Tedros Adhanom Ghebreyesus said at a news conference in Geneva.
“This trend has allowed most countries to return to life as we knew it before Covid-19,” Tedros said. “It’s therefore with great hope that I declared Covid-19 over as a global health emergency.”
Nearly 7 million people have died from the virus worldwide since the WHO first declared the emergency on Jan. 30, 2020, according to the U.N. organization’s official data. Tedros said the true death toll is at least 20 million.
The WHO’s decision comes as the U.S. is set to end its national public health emergency on Thursday.
Tedros said there is still a risk that new variant could emerge and cause another surge in cases. He warned national governments against dismantling the systems they have built to fight the virus.
“This virus is here to stay. It’s still killing and it’s still changing,” he said.
But the WHO chief said the time has come for countries to transition from an emergency response to managing Covid like other infectious diseases. ...
“Covid-19 has been so much more than health crisis,” Tedros said. “It has caused severe economic upheaval, erasing trillions from GDP, disrupting travel and trade, shattering businesses and plunging millions into poverty,” he said.
“It has caused severe social upheaval with borders closed, movement restricted, schools shut and millions of people experiencing loneliness, isolation, anxiety and depression,” Tedros said.
More.
Caused by deficit spending.
In other words, required spending by legislated programs is not being matched by required tax increases to fund that spending. The gap produces the deficits naturally year after year.
Eventually it goes to the moon.
Here.
