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  • Roberts, Obamacare & Our "Stall-Speed" Economy

    I thought long and hard about whether I would write about the Supreme Court's historic and surprising decision to uphold Obamacare last Thursday in today's E-Letter. Initially, I decided to keep my mouth shut and pick another topic for today. But that was before some so-called "conservative columnists" morphed into apologists for the Supreme Court and Chief Justice John Roberts. That made my blood boil!

    So today, I will give you my thoughts on the Supreme Court's ruling on Obamacare. The Supreme Court apologists, including George Will (ABC News), would have us believe that the High Court ruling on Obamacare was a "victory" for conservatives. Say what? They argue that we should be happy that the Commerce Clause was shot down in this case, and because the Court ruled that the federal government can't deny Medicaid funds to states that elect to opt out of Obamacare. What I will point out today is that both of these rulings can be circumvented in the future.

    The other point I will make is that Obamacare should have been ruled unconstitutional on the basis of fraud. President Obama and congressional Democrats promised the American people that Obamacare was NOT a tax. They knew it would never pass if Americans believed it was a tax. The Supreme Court ruled that Obamacare is not a "mandate" and that it is indeed a "tax." The point is, the American people were intentionally misled. In my business and most others, we call that FRAUD!

    Following that discussion, we will review the latest economic reports, and I will tell you about our upcoming WEBINAR on July 12.

  • Fed Extends Operation Twist – Europe at the Brink

    For the last several months I have argued that the most likely time for the Fed to enact another round of stimulus would be at the June 19-20 FOMC meeting. I first suggested this in my March 13 E-Letter. My main reasoning was that Bernanke would not want to do it after June 19-20 for fear that it would be seen as a political move ahead of the November elections.

    As I’m sure you know by now, the Fed elected to extend “Operation Twist” last Wednesday, June 20. Operation Twist is the action whereby the Fed uses cash from the sale or maturity of short-dated Treasuries to buy longer-dated securities, in an effort to bring down long-term rates. The Fed says it will make $267 billion in such purchases and the Twist will continue until the end of this year.

    The Fed also revised its economic forecasts downward, suggesting even slower GDP growth in 2012 and 2013 than they predicted back in April. They estimate that the unemployment rate will remain at or above 8% all this year, and then be 7.8% - 8% in 2013. Not a very rosy outlook.

    The financial crisis in Europe is back on the front pages. Moody's downgraded 28 Spanish banks on Monday, and stocks cratered around the world. There is a major European summit this Thursday and Friday in Brussels, and this may be the last chance for a solution to the crisis before the Eurozone begins to break apart.

    Finally, I end with some thoughts regarding the Thursday's Supreme Court decision on ObamaCare. If the healthcare law is struck down by the High Court, I expect all hell to break loose! The mainstream media and those on the left will have a conniption. No doubt the Obama administration will weigh in on the bashing of the Supreme Court. If the healthcare law or the individual mandate are struck down, it will get very ugly!