"Heli-Ben" Cash: A sad day for Japan, and for Capitalism...

I am finally getting time here to circle back and re-read the joint statement made by the consortium of central bankers who dropped cash from “Heli-Ben” choppers this morning...

Repeating what they did is not the point of this note. Reminding you what Japan COULD NOT do is, however.

The Japanese central bankers "welcomed changes, but kept rates unchanged."

I bet they “welcomed change”. The Japanese are in a politicized box of negative real rates and have zero flexibility to do anything else. This is the central problem associated with the market’s respective US Fed and global central banking manias altogether. Market participants do not respect history. Cutting interest rates to zero (or negative) on a real basis ends up putting your country in a sad sad place.

I don't have to have my office across the street from the Yale Economics department to remind you of Economics 101 here. If you are Japan, you are the equivalent of a man standing on the shore waiving aimlessly at capitalist boats as they engage in free market trade warfare. No one is going to come to your shores and invest if you don’t issue them some positive rate of return.

Having a compromised and constrained country balance sheet is the result of this manic behavior. That's why the USA needs to wake up and smell the coffee here and raise interest rates, or else our Titanic lender (China) is going to be leaving Americas shores for good.

The current Bush administration clearly doesn’t get this. They are too busy reacting to economic scenarios that they didn’t proactively prepare for. Obama is going to have to bring in Volcker and get all hands on the USS Capitalism’s deck again.
KM

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more