We recently  the unsustainable debt our nation faces. Government debt has nearly doubled since 2018, topping $36 trillion.Old guard politicos spent trillions, leaving future generations to foot the bill. For decades, irresponsible politicians borrowed and spent, kicking the can down the road. Soon interest expense will eat up the entire federal budget.Like it or not, a major reset is coming. It makes little difference who won the election, the incoming administration must fix the sins of the past caused by the entire political class.Government debt is a paper promise backed “by the full faith and credit of former politicians!” That does not create confidence….Who holds this debt?Wolf Street : “The US national debt keeps ballooning at an amazing rate and has now reached $36.16 trillion.” He estimates: “US Government entities: $7.16 trillion. This …. consists of Treasury securities held by various federal civilian and military pension funds, the Social Security Trust Fund the Disability Insurance Trust Fund, the Medicare Trust Funds, and other funds. US State and local governments, including in their pension funds: About $1.8 trillion US Private Pension funds: $1.1 trillion US Insurance companies: $0.63 trillion US mutual funds About $5.0 trillion US Individuals: About $3.1 trillion Nonmarketable Securities Held by the Public: $0.59 trillion ‘Other’: $0.4 trillion” Government “Trust Fund” is an oxymoron. They took our “premiums,” spent the money, slipping paper IOUs in the drawer. It’s a politician with his fingers crossed behind his back saying “trust me.” Scary, isn’t it?Around $19.78 trillion in US government political promises is held in government and private pension funds. Much […]

Image Source:   FTSE 100 rises to record levels ahead of the BoE rate decision BoE expected to cut rates by 25 bps to 4.5% Economic projections & Bailey’s statement will be key FTSE trades t record levels below 8700 He fits the 100 is opened almost 1% higher amid improving market sentiment across Europe and the US on eating trade tensions with President Trump and the head of the Bank of England interest rate decision later today.The central bank is expected to cut interest rates by 25 basis points to 4.5%, marking the third rate cut this easing cycle. In the December decision, three policymakers voted to cut rates. This time, the vote split will likely be 7-2 or 8-1.Given that the right parts are expected, the market will pay close attention to Bank of England governor Andrew Bailey’s statement for further clues about the outlook for interest rates. Update growth and inflation forecasts will also be in focus.Whilst UK headline inflation is 2.5%, it is still above target. Service sector inflation also cooled to 4.4%, down from 5%. While my office is a step in the right direction, it still may be too sticky for policymakers to adopt a dovish pivot. Meanwhile, growth in the UK is stagnant, and the outlook is deteriorating ahead of the start of the increased tax burden on firms following October’s budget.Markets are pricing in three interest rate cuts from the Bank of England this year.A dovish-sounding Bank of England could pull the pound […]

The latest trade report will give Trump something more to howl about.(Click on image to enlarge)Monthly balance of trade data from Census Department, chart by MishOn February 5, the Census Department issued a report on the  for December 2024.  Exports, Imports, and Balance December exports were $266.5 billion, $7.1 billion less than November exports. December imports were $364.9 billion, $12.4 billion more than November imports. The December increase in the goods and services deficit reflected an increase in the goods deficit of $18.9 billion to $123.0 billion and a decrease in the services surplus of $0.6 billion to $24.5 billion. For 2024, the goods and services deficit increased $133.5 billion, or 17.0 percent, from 2023. Exports increased $119.8 billion or 3.9 percent. Imports increased $253.3 billion or 6.6 percent.  Real Goods in 2017 Dollars – Census Basis The real (inflation-adjusted) goods deficit increased $14.9 billion, or 15.4 percent, to $111.9 billion in December, compared to a 17.3 percent increase in the nominal deficit. Real exports of goods decreased $5.4 billion, or 3.7 percent, to $141.9 billion, compared to a 3.8 percent decrease in nominal exports. Real imports of goods increased $9.5 billion, or 3.9 percent, to $253.8 billion, compared to a 4.0 percent increase in nominal imports.  Annual Goods and Services Balance of Trade(Click on image to enlarge)Annual balance of trade data from Census Department, chart by Mish Two Important Points Biden kept intact all of Trump’s tariffs and added more Trade Wars are Good and Easy to Win I am sure glad […]

Thursday marked the final day for federal employees to accept the Trump administration’s offer of eight months of pay and benefits in exchange for voluntarily stepping down. According to the latest figures from , at least 40,000 government workers—about 2% of the federal civilian workforce—have opted into the resignation program. An official from the Office of Personnel Management told Bloomberg that deferred retirement applications have been steadily increasing and are expected to surge by the end of Thursday, the deadline to apply. Employees can submit their resignations by sending the word “resign” to their government email accounts. “While a few agencies and even branches of the military are likely to see increases in the size of their workforce, the majority of federal agencies are likely to be downsized through restructurings, realignments, and reductions in force,” OPM recently told federal workers in an email. OPM added: “These actions are likely to include the use of furloughs and the reclassification to at-will status for a substantial number of federal employees.” The agency also told workers that “consolidation and divestitures” could lead to changes in “physical office” locations.  Reuters noted that federal worker unions have told members not to take the deal. The unions sued to block the offer, with a court hearing scheduled for 1300 ET. Also, Redditors on the “fednews” forum on the Reddit social media platform told other fed workers to “hold the line.” President Donald Trump and Elon Musk, a special government employee leading the Department of Government Efficiency, have been on a crusade to provide the American people with transparency regarding […]

Image Source:   Eli Lilly and Company (NYSE: )  its financial results for the fourth quarter of 2024, showcasing robust growth in both revenue and net income. The company’s revenue for Q4 2024 reached $13.53 billion, marking a significant 45% increase compared to the same period in 2023. This growth was primarily driven by a 48% rise in volume, with Mounjaro and Zepbound being key contributors.However, this was slightly offset by a 4% decline due to lower realized prices. The non-incretin revenue also experienced a 20% growth over the previous year, highlighting the company’s diverse product portfolio. In terms of profitability, Eli Lilly reported a remarkable 102% increase in earnings per share () on a reported basis, reaching $4.88. On a non-GAAP basis, EPS surged by 114% to $5.32.This impressive performance included $0.19 of acquired in-process research and development charges. The company’s gross margin for the quarter expanded by 47% to $11.13 billion, with a gross margin percentage of 82.2%, reflecting a favorable product mix despite the pressure from lower prices. The company’s research and development expenses rose by 18% to $3.02 billion, accounting for 22.3% of the revenue. This increase was driven by continued investments in its early and late-stage portfolio.Additionally, marketing, selling, and administrative expenses saw a 26% rise to $2.42 billion, primarily due to promotional efforts for ongoing and future product launches. These investments underscore Eli Lilly’s commitment to maintaining its growth trajectory through innovation and market expansion.  Eli Lilly Reports 45% y/y Revenue Growth, Driven by Key ProductsWhen […]