Share the Wealth – March 5, 2018
Registered Investment Adviser Caleb Lawrence
The major averages opened lower to begin the week as fears of a trade war grew but recovered late entering the final hour with large gains.
JP Morgan Chase does Goldman Sachs one better predicting that 2018 will see a record 800 billion in corporate share buybacks spurred on by Trumps tax plan for the rich and infamous. The report went on to note that corporations are running a gross payout ratio of just 83% and that 100% plus is achievable, through the addition of debt of course. Regardless the tax package will serve to exacerbate economic inequality.
The Institute for Supply Management or ISM February nonmanufacturing or services index gained 1/2 point to 59.5 even with a notable slip in employment. Prices paid remained high at 61 despite a small decline.
Deregulation, often the mantra of Republicans and the frequent cause of financial and other crisis took an interesting turn lately when the White House Office of Management and Budget or OMB released its annual draft report to Congress on the costs and benefits of regulations showing that while regulations do in deed cost money they actually pay for themselves over time because an ounce of prevention is worth a pound of cure. Something the 2007-2009 financial crisis proved the hard way as it was the culmination of the abject failure of the largely Ayn Rand – Alan Greenspan philosophy that corporations should be given a free hand as they will always act in their rational self-interest. The Office of Management and Budget went on to note that for every Dollar in costs additional rules applied they provided between 3.7 and 7.9 dollars in economic benefit.