Neither Keynes, Trump, Pumps Nor Priming

If by 2016 and then 2017 recovery had been thwarted by some powerful stopping force for all that time, resisting several large conventional means (including Obama’s ARRA) all along the way, how would even more standard means successfully answer that same force? It wouldn’t.

It didn’t.

The 2017 “stimulus” hadn’t done much at all. Contrary to accepted dogma, at the same time, The Economist was writing so positively about its prospects the entire global bond market began betting right against it (first higher dollar, then curves twisting, finally proof in 2019). If you have to keep doing this stuff, this stuff doesn’t really work. 

Sour, not soar.

If you have to keep “priming” the “pump” year after year after year, we aren’t talking about Keynes, Trump, pumps nor priming; not really. Chances, most probabilities, simple are not on your side – which means they aren’t on our (the real economy’s) side, either.

But there remain those who can’t believe in such things (conventional Economists, for instance, have instituted a mathematical prohibition on permanent shocks in their statistical models, meaning worldview). Furthermore, they attempt to marry this worldview with actual market outcomes otherwise outright contradictory.

If the 99th prime to the pump hadn’t been enough, surely it will be #100?

Not only this, we are led to interpret interest rates as if this would be the case; that rates rise on the anticipated success for pump-priming but then fall as positive economic outcomes and trends necessarily suggest less need for additional “stimulus” in the future (the so-called “good news is bad news” argument). Seriously, some say that rates go up (reflation) based on expectations this stuff works, but then fall when that stuff appears to start working as if the market becomes disappointed over how success will mean less stimulus – as if stimulus itself is the market’s operating discipling, it’s whole object.

Huh?

Here’s what I mean, a very good recent example attempting to bridge the divide between last week’s “enormous” economic data and the bond market being bid rather than sold by response:

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Disclosure: This material has been distributed for informational purposes only. It is the opinion of the author and should not be considered as investment advice or a recommendation of any ...

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