Tuesday, March 19, 2013

What is Wrong With Pub Leadership?

The Republicans have seemingly given up on any kind of leadership on the US economy. Brian Wesbury puts this in perfect perspective. Wesbury is very much sympathetic to policies that promote smaller government and that will reign in spending on entitlement programs. Yet, he argues that the Pubs keep trying to bash the current economy and that jumping on every little negative economic number and ignoring that the US has been in a steady recovery going on now for about four years is hurting their credibility with voters as seen in the last election. The Dems have certainly shown that they are not going to lead on reducing the size of government and it is something that needs to be done. Unless the Pubs are willing to embark on a true strategy of leadership that acknowledges where the economy is at, the US is going to continue to see the discussion dominated by Krugman and his type of economic theory.

Hopefully, the Pub leadership like McConnel and Boehner will listen to this advice and start to act like statesman and not Fox News pundits who are looking for a sound bite to get a headline in next day's news. We need credible leadership on economic issues. That is going to take leadership being truthful in order to establish trust with voters. Today, the lies and half-truths have so alienated most voters that the average person does not believe a word almost any politician utters.

Monday, March 18, 2013

Asset Bubble, Bond Bubble, Is the Fed OOC?

Interesting discussion on Bloomberg. Check out this short video if you can stand watching these guys interrupt each other, especially Pento.

Wesbury makes the point no one on this panel disputes that PE ratios are not in the stratosphere. Pento does not think current market strength supports forward PE's (what I got trying to follow the conversation with all the interruptions) and that market conditions are going to finally cut into profits. Other analysts not on this panel (Hussman, for example) say the Shiller PE ratio is too high. With everyone believing treasury bonds are in a bubble does that mean they are the best contrary play right now?