The DogeFather in Exile

Posted on June 6, 2025 by MN Gordon

We wanted Elon Musk to succeed. We were pulling for his full triumph. He’s blasted countless satellites into orbit. He put EVs on the road. He saved free speech on social media. If anyone could cut $2 trillion in annual waste, he’s the guy.

The task for DOGE was simple enough. Musk would apply the disruptive magic of Silicon Valley to the grim halls of Washington. He’d shutter all the useless agencies that specialize in pointless minutia and archaic laws and regulations. He’d eliminate waste and make the government more efficient. Why not?

All in all, from our observations and experiences, ambition and reality generally do not line up. What little boy doesn’t dream of being an astronaut or a starting pitcher for the Los Angeles Dodgers when he grows up? How many live this out?

Nonetheless, we believe the best personal and professional endeavors are those that are nearly impossible to attain. There are others, however, that are absolutely futile. Sending people to Mars, for example, is on the spectrum of nearly impossible. Making the federal government efficient is absolutely futile. Continue reading →

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Going Full OBBBA

Posted on May 30, 2025 by MN Gordon

President Donald Trump campaigned on promises of economic nirvana…

He vowed to slay the dragon of inflation. He pledged to turn the tables on our trading partners and bring manufacturing back to American shores. He promised to shower tax cuts upon the populace and put fresh cash in the pockets of consumers so they could spend it.

Now, just four months into Trump 2.0, our blustering 47th President is aiming to close the deal on what he says will be the “largest tax cuts in American history.” His legislative masterpiece, the One Big Beautiful Bill Act (OBBBA), throws in everything and the kitchen sink of economic pledges.

There’s the glorious extension of his 2017 tax cuts, which reduced individual income and estate taxes. There’s a tax break for tips, overtime pay, and even interest on auto loans. There are incentives for domestic research and development expenses.

Also, because it’s never too early to start speculating on the U.S. stock index, the OBBBA includes ‘Trump Accounts’ for children, which come with a $1,000 deposit from the federal government. This is in addition to the $500 in child tax credits. To top off the economic spread, there’s a $46.5 billion package to restart immigration action. Continue reading →

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Warming Up the Printing Presses

Posted on May 23, 2025 by MN Gordon

The Federal Reserve is up to its old money printing games once again…

Earlier this month it quietly purchased a cool $43.6 billion in U.S. Treasuries. This included $8.8 billion in 30-year Treasury bonds on May 8. Several days before that, it bought $20.4 billion in 3-year Treasury notes and $14.8 billion in 10-year Treasury notes.

What’s going on? Isn’t the Fed supposed to be tightening – not easing – its balance sheet?

If you recall, after creating roughly $5 trillion in credit out of thin air to paper over the coronavirus fiasco, the Fed’s balance sheet peaked at over $8.9 trillion in April 2022. Since then, through quantitative tightening, the Fed slowly reduced its balance sheet to $6.709 trillion on April 28. But so far in May, the Fed’s balance sheet has ever so slightly increased to over $6.713 trillion.

According to the May 7 Federal Open Market Committee statement, “The Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage?backed securities.”

However, if the Fed’s balance sheet is increasing – not decreasing – isn’t the Fed acting in conflict with its policy statement? Continue reading →

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From Strategic Retreat to Full Retreat

Posted on May 16, 2025 by MN Gordon

The Great Trade Tariff Saga of 2025 continues…

On Monday, in a joint statement from Geneva, it was announced that the United States and?China had agreed to a 90-day pause on the?tariffs they had put in place over the last month. In the interim, they are, “Moving forward in the spirit of mutual opening, continued communication, cooperation, and mutual respect.”

What exactly this means, no one knows. But it sounded good. And it gave investors a ‘warm and fuzzy,’ which is exactly what they needed.

For practical purposes, U.S. tariffs on Chinese imports will be cut to 30 percent from 145 percent, and China’s tariffs on U.S. imports will be cut to 10 percent from 125 percent.

Wall Street celebrated the news with concerted buying. On Monday, the S&P 500 closed the day with a 3.26 percent gain and the NASDAQ finished with a 4.35 percent gain.

How pleasant. The Liberation Day dip has been vanquished. The S&P 500 and the NASDAQ are both back to where they started the year. Continue reading →

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