Pessimism Also Rises

                                                           

When we put out the call for pessimists on Monday, we were not really expecting so many of you to show up.   August 18, 2021   Today's Top Stories From the Breitbart News Desk When we put out the call for pessimists on Monday, we were not really expecting so many of you to show up. In fact, our big worry was that the market rising to new highs on the Monday after the Taliban's complete victory in Afghanistan was a sign that optimism had become unstoppable. The last two days have ameliorated that fear. The major indexes fell on each of the days since we sent out our "Calling All Pessimists" newsletter. Not that we're trying to claim any credit. What really has moved the market is the incoming data. Yesterday, we learned that the combination of high prices, delta variant fears, and the return of mask requirements had weighed more heavily on retail sales in July than almost anyone expected. Today brought the news that housing starts sank much more than expected in July and likely for the same reasons—namely, worries about the impact of resurgent coronavirus and inflation proving stronger and more widespread than anticipated. Note that the actual impact of inflation appears to be running in the opposite direction from what the Economics 101 textbooks would tell us. Instead of rising prices luring investment into more production and triggering buy-in-advance behavior in consumers, homebuilders and consumers are pulling back, rejecting high prices and increased costs. That's a recipe for stagflation, rising prices amid sluggish growth. The announcement from the Centers for Disease Control that all double vaccinated Americans will need a third shot eight months after their second is likely to hit consumer confidence hard. Much of this spring's strength was built on the hope that effective vaccines would allow us to move beyond the pandemic and its restrictions. Now it looks like we're in for endless shots and mask requirements extending into infinity. We're not getting back to normal. The minutes of the Federal Reserve's July meeting showed that the central bankers recognize that inflation is running much hotter than they expected. At the time, a consensus of Fed officials appear to have agreed that conditions were likely to be ripe for the Fed to start cutting back on bond purchases this year. The loss of some of the easy Fed money no doubt contributed to the sell-off Wednesday. It's likely that stocks would have gone even lower, however, if not for the nagging notion that this is now a dated outlook on the economy. If data continues to come in weak and consumer sentiment falls further, is the Fed really going to withdraw support? – Alex Marlow & John Carney Breitbart News Network     TOP STORY   Fed Signals Pullback of Monetary Stimulus Likely to Start This Year Federal Reserve officials last month made plans to begin scaling down the central bank's bond purchases later this year, minutes from the Fed's July meeting showed Wednesday. The minutes, which summarize the meeting of the Federal Open Market Committee that took plans on July 27 and 28, indicate a growing consensus among Fed officials that the banks should begin to taper, or reduce, the $120 billion in monthly purchases of Treasury and mortgage bonds this year. There are three remaining meetings. Fed meeting, released Wednesday, shed light on an emerging consensus to begin scaling back their $120 billion in monthly purchases of Treasury and mortgage securities at any of their three remaining policy meetings this year, in September, November, and December. [Click here for more]   IN OTHER STORIES... Nolte: Dangerous Joe Biden Delivers Border, Economic, Coronavirus, Crime, and Overseas Chaos While we're watching all the terrible chaos break out in Afghanistan, His Fraudulency Joe Biden and the Democrats are also serving up plenty of chaos right here at home. That's not to say we shouldn't keep an eye on Afghanistan, not with thousands of American civilians trapped behind enemy lines after a jihadist takeover. But let's do two things at once and remember all the chaos Joe Biden and the Democrat party are wreaking on... [Click here for more]   Bidenflation: Homebuilders Slow Construction as Costs Skyrocket, Exacerbating Shortage of Homes New home construction declined by more than expected in July, underlining how economic activity in the U.S. is being stymied by high prices, persistent shortages of materials, and a lack of willing workers. Residential housing starts fell 7 percent last month to a three-month low 1.53 million annualized rate, data from the... [Click here for more]   CDC Data Shows 'Worrying Drop' in Vaccine Efficacy over Time Data from the Centers for Disease Control and Prevention (CDC) has demonstrated what anonymous administration officials described to Politico as a "worrying drop" in coronavirus vaccine efficacy over time, leading to the Biden administration's conclusion to push vaccine booster shots. "This is what moved the needle," a senior Biden administration official said to Politico of the... [Click here for more] FOLLOW   Did you receive this email from a friend? 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