Is President Obama "Peddling Fiction"?
"Anyone claiming that America's economy is in decline is peddling fiction," President Obama said in his final State of the Union address this January. Sadly, it appears, President Obama is peddling his own brand of fiction these days. On Friday, the White House published its "Mid-Session Review," with updated forecasts on the U.S. economy. Not good. The White House now expects GDP will rise 1.9% down from its 2.6% prediction in February.
OUR TAKE: "Ironically, our GDP forecast for Q2 is now higher than both White House and Consensus but lower for Q3," Hedgeye CEO Keith McCullough wrote today.
Brexit = Freedom
"Ministers are aiming to secure ground-breaking free trade deals with zones ten times the size of the EU before Britain leaves in 2019," the Daily Mail reports. Britain is aiming "to secure free trade deals with 12 countries before leaving the EU in 2019 as Australia and the US emerge at the front of the queue for deal worth billions to UK economy."
OUR TAKE: "This is the liberty vote in motion," Hedgeye CEO Keith McCullough writes. Britain might just benefit from Brexit. Time will tell.
This story is An Embarrassment
OUR TAKE: Enough said...
Yikes! A Warning From the BIS
According to a paper written by economists at the central bank watchdog the Bank for International Settlements:
"Unconventional monetary policy measures, in our view, are likely to be subject to diminishing returns. The balance between benefits and costs tends to worsen the longer they stay in place. Exit difficulties and political economy problems loom large. Short-term gain may well give way to longer-term pain.
As the central bank’s policy room for manoeuvre narrows, so does its ability to deal with the next recession, which will inevitably come. The overall pressure to rely on increasingly experimental, at best highly unpredictable, at worst dangerous, measures may at some point become too strong. Ultimately, central banks’ credibility and legitimacy could come into question."
OUR TAKE: Well said...