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Caleb Lawrence – KPIG-KPYG Radio – Share the Wealth – March 14, 2017

 

The major averages struggled in early trade on little real domestic news. The
February Producer Price Index or PPI gained .3% for the month and 2.2% from a year
ago, both figures higher than expectations. Rising prices has been fingered as one
of the primary reasons for the Fed to raise interest rates of late. Given the sharp
decline in oil prices during March I would expect the various price metrics to ease
significantly starting next month.

The proposed modification of the ACA or Affordable Care Act seems to be as much of a
train wreck as the two executive orders trying to restrict immigration with the CBO
or Congressional Budget Office weighing in and figuring Trumpcare would be more or
less a disaster for everyone but the rich. Cost control is a feature but it is
achieved through elimination of participants not fair and competitive pricing.

The British officially kicked of the Brexit process following last nights vote as
they look to take their Tea Set and go home. In addition the French election is
rapidly deteriorating and looks to produce a nationalist anti Euro Zone party. Same
for the Dutch as their tit-for-tat with Turkey escalates dramatically. Italy won’t
be far behind as this summer will likely prove the beginning of the end for the
European Union

John Hussmann’s latest missive reports that the major averages are painfully
overvalued as market internals have deteriorated markedly of late. He isn’t the only
one to point this out as have I.

Last but not least, David Stockman notes that with tomorrows Federal Debt ceiling
limit the latest Treasury data shows that cash on hand is down to some 66 billion,
far less than previously expected leaving the Trump administration with little budget
wriggle room and no standing authority to borrow more.

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