Congressional Budget Office

Health Care Costs Are Rising Sharply, And It Will Get Much Worse

Thanks to Obamacare, it is frequently better for a middle class family to get no raise than even a decent sized raise. The wage point varies, but many will say “Dear employer, please don’t pay me more. It will cost me a lot of money”.

That Didn't Take Long: Fed's Brainard Goes Full Dove One Week After Yellen's Hawkstravaganza

Last Friday, stocks soared as Yellen dropped hawkish hints that The Fed would raise rates "because it was appropriate" implying everything is awesome. One week later - following a terrible Fed-narrative-imploding jobs print - Hillary Clinton-donor and Fed member Lael Brainard goes back to full dove-tard: BRAINARD: U.S. JOBS IN MAY REPORT SUGGESTS LABOR MKT HAS SLOWED, SEES BENEFITS TO FED WAITING FOR ADDITIONAL DATA. Nothing would surprise us less to see stock go green today on this dovish news - just as they did last Friday on hawkish sentiment. If (Fed speaks) THEN (Buy).

Federal Reserve Accidentally Admits It Is Causing Inequality

"As stock prices rise, the gains are disproportionately distributed to the wealthy. Lower- and middle-income families who are also wealth-poor are less likely to expose their savings to the higher risks of equity markets.... gains in the stock market tend to benefit those in the wealthiest portion of the income distribution, who have better access to and higher participation in these asset markets."

Trumped! Washington's Fiscal Hypocrisy Is Too Rich For Words

You have to love it when one of Donald Trump’s wild pitches sends the beltway hypocrites into high dudgeon. But his rumination about negotiating a discount on the Federal debt was priceless. No sooner did the 'unschooled' Trump mention out loud what is already the official policy of the US government than a beltway chorus of fiscal house wreckers commenced screaming like banshees about the sanctity of Uncle Sam’s credit promises.

'Public Servants' - Who Is Serving Whom?

For the sake of argument, let’s just say we need government employees for maintenance of fisheries, mail delivery, and invading Middle Eastern countries. Fine. Can we at least dispense with the misnomer public servant? A servant who makes more money than those “served” (by threat of force), provides subpar service, takes away jobs, and is immune to firing cannot be accurately titled servant.

Jim Grant Asks When The World Will Realize "That Central Bankers Have Lost Their Marbles"

Does the deployment of helicopter money not entail some meaningful risk of the loss of confidence in a currency that is, after all, undefined, uncollateralized and infinitely replicable at exactly zero cost? Might trust be shattered by the visible act of infusing the government with invisible monetary pixels and by the subsequent exchange of those images for real goods and services? To us, it is the great question. Pondering it, as we say, we are bearish on the money of overextended governments. We are bullish on the alternatives enumerated in the Periodic table. It would be nice to know when the rest of the world will come around to the gold-friendly view that central bankers have lost their marbles. We have no such timetable. The road to confetti is long and winding.

Obamacare To Unveil "Price Shock" One Week Before The Elections

The last thing Democrats want to contend with just a week before the 2016 presidential election is an outcry over double-digit insurance hikes as millions of Americans begin signing up for Obamacare. But that looks increasingly likely as health plans socked by Obamacare losses look to regain their financial footing by raising rates.

Still Looks Like A Trap

“If the weather forecast suggests it might rain, wouldn’t you carry an umbrella?

Why The US Output Gap Means The 10 Year Is Going Below 1%

In an asset management context, US Treasury interest rates tend to trend lower when there is an output gap and trend higher when there is an output surplus. This simple, yet overlooked rule has helped to guide us to stay correctly long US Treasuries over the last several years while the Wall Street community came up with any reason why they were a losing asset class. We continue to think that US Treasury interest rates have significant appreciation ahead of them. As we have stated before, we think the 10yr US Treasury yield will fall to 1.00% or below.

America's New Impossible Trinity: You Can't Have Higher Wages, Steady Inflation And High Profits At The Same Time

America’s ongoing labour productivity slump has created a new impossible trinity – policymakers can only choose two of the following three desirable outcomes: higher nominal wage growth, steady inflation and high corporate profits. The theory behind this new ‘impossible trinity’ is intuitively simple. If workers’ wages rise faster than their productivity, the companies paying those higher wages face two choices. They can either pass on the extra costs to customers, thereby leading to higher overall prices and rising inflation, or they can absorb the extra costs resulting in lower profit margins.