Ladies and Gentlemen: Gridlock Is Good

George Yacik - INO.com Contributor - Fed & Interest Rates


One of the marvels of the continued bull market in stocks this year – and to a much lesser extent in bonds, too – is that it’s taking place in spite of what appears to be a tremendous amount of dysfunction and conflict within the federal government. But it’s perhaps more accurate to say that the bull market continues to motor on because of, rather than in spite of, the gridlock.

Leave it to the Republican Party to create government gridlock single-handedly – without any assistance from the opposition party. Here is a party that controls both houses of Congress and the presidency and yet still manages to screw things up.

Then again, maybe it’s wrong to think of Donald Trump as a Republican president. Rather, perhaps the correct way to think of Trump is as America’s first Third Party President, who just happened to use the machinery of the Republican Party to get elected, but is no more a Republican than Ross Perot was.

Quite clearly there are three active parties, or factions, in Washington, and all of them are aligned against each other – the Republicans, the Democrats, and the White House. Continue reading "Ladies and Gentlemen: Gridlock Is Good"

The Kangaroo Economy

George Yacik - INO.com Contributor - Fed & Interest Rates


One of my favorite Abbott & Costello gags was when Bud cheated Lou out of a winning poker hand by claiming he had a rare "kangaroo straight," meaning he had a 2-4-6-8-10 run, all different suits, while gullible Lou "only" had two pair (watch it on YouTube).

On Wednesday we got another chapter in the "kangaroo economy." The Commerce Department reported that U.S. GDP grew only 0.2% at an annualized rate in the first quarter of the year. That was down from 2.2% in the previous quarter and well off the 5.0% and 4.6% paces, respectively, of the two quarters before that. But it was in line with the first quarter of 2014's drop of 2.1%. Continue reading "The Kangaroo Economy"