Sept 14
George Will is right, the optimum political outcome is Harris in the White House and a Republican majority in the Senate.
https://www.washingtonpost.com/opinions/2024/09/12/kamala-harris-presidency-republican-senate/
And I add, a Democratic majority in the House is also preferable to the current CF in that body.
Watch the Montana Senate race where the Democratic incumbent Tester is slightly behind his Republican challenger Tim Sheehy. But reliable polling in Montana is infrequent.
I have been saying this for SIX effing years: @robkhenderson "Cities are safer when two-parent families are dominant and more crime-ridden when family instability is common...Between 1960 and 2019, the percentage of babies in the U.S. born to unwed mothers grew from 5% to almost 50%"
Children must have positive role models. Boys especially need a positive male role model. Giving money to dysfunctional family units will not solve crime or poverty.
Tell me what will happen if the government promises a single woman $6,000 for having a baby? In areas of entrenched poverty, men will procreate with the expectation of taking a significant portion of the $6,000. I know the culture of poverty. I have bunked with these men. It was not pleasant.
Markets and Stocks
The strike at Boeing is bad for the stock and the nation. I am dead wrong on Boeing. If you own it and sell it, I suggest offsetting the loss by top slicing a big winner like Nvidia. I repeat “top slicing” big winners. Let the federal government share in your loss. They sure like their pound of flesh from gains.
I like the market. My end of year target is 6,000. Inflation is falling. The core PCE print which is released at the end of the month should come in at a range of 0.13-0.18%. That would be consistent with 2% inflation. Earnings are growing. The economy is slowing BUT not falling into recession. A long rate cutting cycle begins next Wednesday. A 50 bps cut is possible but not probable. The price earnings multiple for the non mega cap stocks is reasonable at around 17x 2025 estimates.
The Nasdaq Composite and Nvidia both cleared technical hurdles on Thursday.
Meta, Oracle, Broadcom and TSMC also are flashing technical buy signals.
Micron trades at 9x earnings. That is absurd. I see 50% plus upside.
HPE remains a terrific investment.
The Financial Times has a positive story on Rolls Royce. The article is gated.
Mortgage rates in the US dropped to the lowest since February 2023.
The average for a 30-year, fixed loan was 6.2%, down from 6.35% a week earlier, Freddie Mac said in a statement Thursday.
CNBC’s proprietary survey of consumer spending in August is consistent with modest growth in consumer consumption. The economy is slowing but not stalling.
Economics
NBER working paper 32930 makes the obvious point that clear rules and bright lines for laws are positive for economic growth and democracy.
We usually consider it progress when a country begins to shift from an autocratic to a democratic form of government.
However, the introduction of elections and other early trappings of democracy often has the perverse effect of exacerbating political instability.
It also increases the incentives for those in power to manipulate the economy for political ends and thus often negatively affects economic growth.
We argue that the key to getting beyond these pernicious effects—to reconciling democracy and capitalism—is to move to a governance structure based on impersonal rules that apply in the same way to everyone (or at least to broad categories of everyone).
We lay out the theoretical basis for this argument and illustrate it with evidence about how the transformation worked (or not) in the case of the United States, United Kingdom, and Germany.
https://www.nber.org/papers/w32930
Politics
A proposal to prohibit products that are subject to U.S.-China tariffs from being eligible for a special customs exemption is good policy by the Biden Administration.
The de minimis loophole allows packages with a value of less than $800 to enter the United States with relatively little scrutiny. The recent explosion in the number of de minimis shipments is due largely to Chinese-linked online retail giants like Shein and Temu. What took them so long?
China is the enemy of the United States and the U.S. has a consumption problem. The proposal is a crude consumption tax.
In its next term which begins in October the Supreme Court will take up the Non Delegation Doctrine.
For years, conservatives have been trying to revive the nondelegation doctrine, a legal theory the Supreme Court last invoked in 1935 in two rulings that blunted Franklin D. Roosevelt’s New Deal. The core of the argument is that the Constitution assigned the legislative power to Congress and lawmakers can’t simply hand off that authority.
The debate raises a more fundamental issue than Loper Bright v. Raimondo, the June 28 ruling that overturned the so-called Chevron doctrine and said judges should no longer defer to agencies on the meaning of ambiguous laws. While Loper Bright concerned how much power agencies have under statutes enacted by Congress, the nondelegation doctrine questions whether lawmakers had authority to pass many of those measures in the first place.
Loper Bright was “a fight on the margins of the real question,” said John Yoo, a University of California, Berkeley, law professor who clerked for conservative Justice Clarence Thomas. “The question at the heart of it is how far can Congress go in transferring the power to make laws from itself to the executive branch, to the bureaucracy.”
The court has watered down the nondelegation doctrine in recent decades, saying Congress can delegate its powers as long as it lays out an “intelligible principle” for agencies to follow. Scores of statutes have been enacted in reliance on that notion — empowering agencies to set “reasonable rates” or take “necessary or appropriate” actions — and could suddenly become legally vulnerable if the court requires Congress to be more explicit.
Rolling back the administrative state would bring greater certainty and transparency to the “rules of the road” for the economy and society.
If Congress wants to regulate some aspect of the economy, then Congress should be specific and take responsibility.
Mexico is deteriorating into a neo Marxist state.
Mexico’s states swiftly moved to remake the country’s entire judicial system on Thursday, approving an amendment to the Constitution that would be the most far-reaching judicial overhaul ever attempted by a large democracy.
The measure, which would replace the current, appointment-based system with one in which voters elect judges, would put Mexico onto an untested course whose consequences for the courts and the country are nearly impossible to predict.
Proponents of the plan argue it would reduce corruption and give voters a greater role in a justice system widely regarded as broken. Critics of the overhaul accuse the Mexican government, which proposed and pushed for the changes, of endangering the rule of law by politicizing the courts, giving Mexico’s ruling party greater control over judges and eroding the country’s checks and balances.
The overhaul could see thousands of judges removed from their jobs, from those in local courtrooms to the chief justice of the Supreme Court. And it would drastically restructure a major branch of government responsible for meting out justice across the third-most populous country in the Americas.
https://www.nytimes.com/2024/09/12/world/americas/mexico-courts-overhaul-states-approve.html
Sociology
Three weeks ago I wrote about a young man whom I had misjudged. In turns out that my original opinion was correct. The kid is a lost soul who will not take responsibility. He got fired from his wood working job for being unreliable. He gave me all sorts of excuses about why he got fired but the bottom line is that he did not show up for work and did not call ahead. The kid grew up in a very dysfunctional family and now he is lost in the modern world. He has zero grit. I get upset and frustrated when I meet people that havn’t learnt to get the basics right.
If you are about to fuck up, make the call. The discomfort of taking responsibility and making the call can teach us to fuck up less often.