Is “Italeave” Greece 2.0?

May 30, 2018

First, there was “Grexit,” which was the name given to the possibility that Greece would leave the eurozone. Then, there was “Brexit,” the plan for the U.K.’s exit from the European Union, which is actually happening (at least potentially). Now, we have “Italeave,” which I think sounds better than the other contender, “Italexit.” So what’s going on with Italy?

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Waiting for the Government Shutdown (Again)

January 19, 2018

As I have been saying, things are pretty good, economically speaking, as we move into the new year. But there is one significant risk that we need to watch. I’m speaking of the pending deadline (midnight today) when funding for the government runs out. At that time, the U.S. debt ceiling extension ends, the government cannot borrow any more money, and—if Congress (including both Republicans and Democrats) can’t come to some sort of an agreement—the government shuts down.

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What Does the Alabama Election Mean for the Markets?

December 13, 2017

Yesterday’s news that the Democrats won the Alabama special Senate election, for the first time in 25 years, rattled U.S. politics. By taking the Republican majority in the Senate from 52 to 51, it reduces an already tight margin for difficult votes. By signaling that even the reddest states are now potentially in play for the Democrats, it could be a bellwether for the 2018 midterms. But what does the Alabama election mean for the markets?

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Watch Out for the Risks in Washington

November 29, 2017

As I have been saying, things are pretty good, economically speaking, as we approach the end of the year. At the same time, there are some significant risks in the next couple of weeks that we need to keep an eye on.

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The Dog That Did Not Bark: Why Isn’t the Market Reacting to Drama?

August 18, 2017

In thinking about the market over the past week or two, what has really struck me is how truly remarkable the market’s behavior has been. After the U.S. president implicitly threatened nuclear war, the market dropped, of course—but by less than 2 percent—and then it bounced back. Today, after CEOs from big-time companies essentially abandoned the White House, the market is down—but by less than 1 percent. We’ve seen more political drama in the past couple of weeks than we saw in years under some administrations—and the market is just sitting there. What’s going on?

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The Good News (and Bad News) About Politics and the Markets

July 28, 2017

Once more we have news from Washington that suggests the Republicans will not be able to move forward on a core priority—health care reform. You might expect political dysfunction at this level to disrupt the markets, but apparently you would be wrong. The markets are down a bit, but not much, and remain within 1 percent of the all-time high. What’s going on here?

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Here Comes Another Bus: The Debt Ceiling

July 20, 2017

There’s an important—and potentially very disruptive—issue that has been largely ignored during coverage of the health care debate. The U.S. government hit its borrowing limit on March 16, 2017. Yes, that’s right—the U.S. borrowed as much as it legally can four months ago. Since then, the Treasury has been using the usual “extraordinary measures” to fund the government, including “borrowing” from government pension funds, diverting various funds tasked to other purposes, and looking for spare change in the laundry and the washer to pay the bills.

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