The Ugly End of Globalization

Posted on May 31, 2019 by MN Gordon

Sometime in the fall of 2018 a lowly gofer at the New York Stock Exchange was sweating  bullets.  He’d made an honest mistake.  One that could forever tag him a buffoon.

After trading sideways for most of the spring, the Dow Jones Industrial Average was on the move.  When it closed at 26,828 on October 3, it appeared the Dow was but one trading day away from eclipsing 27,000.  Everyone, including Jim Cramer, just knew it was about to happen.

And this was precisely what the NYSE gofer feared most.  For he’d failed to procure Dow 27,000 hats.  What a shame it would be for Wall Street’s most revered index to notch this historic milestone with no commemorative hats for floor traders to put on while they go bananas.

But then a miracle happen.  The Dow didn’t go up; rather, it went down.  A week later, to the gofers relief, the Dow 27,000 hats arrived…in advance of Dow 27,000.

And now, nearly eight months later, Dow 27,000 remains elusive.  After pulling back in October of last year, the Dow made another run at it last month.  But, again, fell short.  Hence, the hats remain stowed away in a box in the back of a broom closet. Continue reading →

Posted in Inflation, MN Gordon | Tagged , , , , | 26 Comments

Workers of the World, Unite!

Posted on May 24, 2019 by MN Gordon

The dawn of war is a time of simple clarity and purpose.  Good guys vs. bad guys.  Cowboys vs. Indians.  Confederates vs. Yankees.  Coppers vs. robbers.  It’s a time when lines are drawn, songs are sang, and drums are beaten with gaiety and confidence.

Indeed, calls for ‘a jolly little war’ are always greeted with merriment and optimism.  This also goes for the dawn of a trade war.  Regardless of whether you’re from Scranton or Suzhou, the escalating  Trump vs. Xi standoff all seems so virtuous.  “We’re right, they’re wrong,” and vice versa.

Here in the USA, the perspective is crystal clear.  America’s rightful bounty is within reach.  After several Presidents that were light in the loafers, there’s finally a leader of the free world with the brass fortitude to reach out and grab it for his fellow countrymen.  And why not?

Several decades of getting spanked by Chinese grunt laborers have American workers longing for reprisal.  This ain’t their granddaddy’s economy.  They’ve been repurposed from well-paying manufacturing jobs to low-level service workers.  The relentless progression has been demoralizing.  Given a fair shake, American workers just know they’ll kick tail and take names. Continue reading →

Posted in Inflation, MN Gordon | Tagged , , , , | 20 Comments

One Heck of a Reality Television Fight

Posted on May 17, 2019 by MN Gordon

The world’s a better and brighter place when your portfolio’s growing like spore bearing mushroom fungus.  Horizons are expanded.  Perceptions are broadened.  And the secrets of the universe are all within reach.

Life takes on new meaning when you’re getting financially loaded.  The decade long bull market in U.S. stocks has brought clarity, purpose, and accomplishment in ways that are both agreeable and reassuring.  Namely, these matters have been delivered in the form of budding portfolio statements.

A simple investment in a low-cost S&P 500 Index fund has delivered 4X returns over the last decade.  John Bogle, no doubt, is smiling from his grave.  He was right.  Your broker at Edward Jones – the one that put you in an actively managed mutual fund with the high fees – was wrong.

Do you think the S&P 500 “might could” quadruple again over the next decade?  Stranger things have happened.  For example, Alan Shepard wet his spacesuit in the Mercury capsule prior to launch without consequences.  Who’d a thunk it?

The more important question, however, is: Would another 4X stock market run from here be a good thing? Continue reading →

Posted in MN Gordon, Politics | Tagged , , , , | 14 Comments

The Three Stages of Modern Monetary Theory

Posted on May 10, 2019 by MN Gordon

Stage One: Yielding to Dreamers

Some ideas are so bad they’re best ignored.  Like resentments – or stray cats – if you don’t feed them, they’ll go away.  Before long, they’re forgotten altogether.

That has been our approach to Modern Monetary Theory (MMT).  The idea’s so obviously foolish, reckless, and outright suicidal.  Why feed this dorkus maximus of economic thought?

Alas, there are times when promises of social utopia prove too intoxicating to pass up.  It doesn’t matter if the promises are absolute fantasy.  When hopes are diminished beyond redemption, any old falsehood will warm the hearts and soften the minds of otherwise intelligent people to ideas of pure madness.

After a decade of increasing wealth inequality, the masses have reached a moment of certain hopelessness.  Maybe the $1.6 trillion student loan crisis has something to do with the despair.  Maybe the 102 million Americans who do not currently have jobs are contributing to the angst. Continue reading →

Posted in Inflation, MN Gordon | Tagged , , , , , | 17 Comments