"The preservation of freedom is the protective reason for limiting and decentralizing governmental power. But there is also a constructive reason. The great advances of civilization, whether in architecture or painting, in science or in literature, in industry or agriculture, have never come from centralized government." – Milton Friedman

There seems to be something very different about this recession than others. I don’t mean to be alarmist and I’m not suggesting that we are in a depression. I don’t even know what a depression is. Ronald Reagan once said, “a recession is when your neighbor loses his job. A depression is when you lose your job.” In our individualistic society, everything is local, so that description is as good as any.

Since we are a nation of individuals, what’s more disconcerting are the populist attacks on capitalists, and I would argue, freedom itself. Sure, we are used to the rhetoric from the folks, but it is now coming from most of our government figures, and quite disingenuously I might add.

The rise of anti-capitalist sentiment is very evident in the reaction/response to the AIG bonus fiasco. There are many things wrong with this situation, the least of which are the bonuses themselves. Do I think AIG should have given contractual guarantees to incompetent people, some without performance metrics? Of course not. It was stupid and it was done before AIG accepted public funds. However, as soon as the government regulates stupidity, it also takes away the ability to be smart.

Capitalism works because smart people start smart businesses to make money by providing a product or service that someone else determines is worth more than the price. Inversely, Capitalism also works when people make bad decisions and in due course they go away and are replaced by smart people running smart businesses. Besides the likely constitutional issues, the taxing of bonuses at 90% will ensure that few smart people will work for AIG. Good luck in turning that company around.

I’ve always viewed capitalism as a major part of freedom. It’s economic freedom. The other major part of freedom is civil liberty. Is it not a violation of an individual’s civil liberties to be “outed” by Andrew Cuomo and Barney Frank as a recipient of contractual compensation? This situation is fast turning into a populist witch hunt, to quote one of my clients. I’ve been paid most of life through contracts but I am certainly not rich. I couldn’t imagine, in this country, having to be worried about my safety and the safety of my family because every crazy Robin Hood out there knows that I am due a bonus that may be more than they earn. This is not freedom.

Try and stay free out there.

Did the US Economy Just “Collapse”? "Worst Personal Spending Since 2009"?

This is a brief note written by Hedgeye U.S. Macro analyst Christian Drake on 4/28 dispelling media reporting that “US GDP collapses to 0.7%, the lowest number in three years with the worst personal spending since 2009.”

read more

7 Tweets Summing Up What You Need to Know About Today's GDP Report

"There's a tremendous opportunity to educate people in our profession on how GDP is stated and projected," Hedgeye CEO Keith McCullough wrote today. Here's everything you need to know about today's GDP report.

read more

Cartoon of the Day: Crash Test Bear

In the past six months, U.S. stock indices are up between +12% and +18%.

read more

GOLD: A Deep Dive on What’s Next with a Top Commodities Strategist

“If you saved in gold over the past 20 to 25 years rather than any currency anywhere in the world, gold has outperformed all these currencies,” says Stefan Wieler, Vice President of Goldmoney in this edition of Real Conversations.

read more

Exact Sciences Up +24% This Week... What's Next? | $EXAS

We remain long Exact Sciences in the Hedgeye Healthcare Position Monitor.

read more

Inside the Atlanta Fed's Flawed GDP Tracker

"The Atlanta Fed’s GDPNowcast model, while useful at amalgamating investor consensus on one singular GDP estimate for any given quarter, is certainly not the end-all-be-all of forecasting U.S. GDP," writes Hedgeye Senior Macro analyst Darius Dale.

read more

Cartoon of the Day: Acrophobia

"Most people who are making a ton of money right now are focused on growth companies seeing accelerations," Hedgeye CEO Keith McCullough wrote in today's Early Look. "That’s what happens in Quad 1."

read more

People's Bank of China Spins China’s Bad-Loan Data

PBoC Deputy Governor Yi says China's non-performing loan problem has “pretty much stabilized." "Yi is spinning. China’s bad-debt problem remains serious," write Benn Steil and Emma Smith, Council on Foreign Relations.

read more

UnderArmour: 'I Am Much More Bearish Than I Was 3 Hours Ago'

“The consumer has a short memory.” Yes, Plank actually said this," writes Hedgeye Retail analyst Brian McGough. "Last time I heard such arrogance was Ron Johnson."

read more

Buffalo Wild Wings: Complacency & Lack of Leadership (by Howard Penney)

"Buffalo Wild Wings has been plagued by complacency and a continued lack of adequate leadership," writes Hedgeye Restaurants analyst Howard Penney.

read more

Todd Jordan on Las Vegas Sands Earnings

"The quarter actually beat lowered expectations. Overall, the mass segment performed well although base mass lagging is a concern," writes Hedgeye Gaming, Lodging & Leisure analyst Todd Jordan on Las Vegas Sands.

read more

An Update on Defense Spending by Lt. Gen Emo Gardner

"Congress' FY17 omnibus appropriation will fully fund the Pentagon's original budget request plus $15B of its $30B supplemental request," writes Hedgeye Potomac Defense Policy analyst Lt. Gen Emerson "Emo" Gardner USMC Ret.

read more