Registered Investment Adviser Caleb Lawrence
The major averages enter the final hour about even on disappointing but not overly significant data. Since Monday the Standard and Poors 500 is up 19 points or .78% while the NASDAQ has gained 51 points or .82%. Durable Goods Orders fell 6.8% in July on weakness in transportation orders. The proxy for business spending non-defense capital goods ex-aircraft advanced .4% for the month.
Fed chairwomen Janet Yellen’s Jackson Hole presentations included a lengthy tome on how much stronger and more resilient the financial system is post great financial crisis compliments of increased capital ratios and more and better regulations. She went on to muse that perhaps regulations were too stringent in the post crisis period and that perhaps they should be loosened in the interest of profits and economic growth. Certainly, there is a lot of truth to the chairwoman’s statements and she makes some good points. However, once again the Federal Reserve demonstrates that it is blind to the risks that come with excessive debt levels. Oblivious to the continued malfeasance of the banksters and their continued prosecution of a business model that is literally based on lie, cheat, and steal, with Wells Fargo acting as the current poster child. Stunningly unaware of the asset bubbles growing all around them and last but not least unconcerned that their polices have fostered gross inequality with respect to income and wealth distribution, reckless speculation and nearly 3 decades of declining real wages. This last point underscored by a recent report from CareerBuilder showing that a stunning 78% of Americans live paycheck to paycheck an increase of 3% from the previous year. Those in debt totaled 71% also up 3% from a year ago. More than half or 56% are in debt over their heads and save less than $100 per month.