RealClearMarkets Articles

Congratulations taxpayer! You just bought a trucking company. Well, not an entire trucking company but you did get 30% of the equity in a trucking company. Via the WSJ: U.S. Treasury to Lend $700 Million to Trucking Firm YRC Worldwide Government will take a 29.6% equity stake in the company, Treasury says WASHINGTON—The U.S. government plans to lend $700 million in coronavirus stimulus funds to trucking firmYRC Worldwide Inc.,in exchange for a 29.6% equity stake in the company, the Treasury Department said Wednesday. The Treasury said publicly traded YRC qualified for the loan under a...

If I tried to burn some railroad tracks in Canada, my fate would be clear and immediate. As soon as information about my despicable act was known to the authorities, I would be summarily arrested. The same would occur were I to try to prevent pipeline construction by blockading a highway. The Canadian courts might go easy on me, since this would be my first offense, but, then again, they might not, in these troubled times. No one would “negotiate” with me. Any negotiation I would be involved in would occur between my lawyer and the prosecutor. If I demanded to deal directly with...

Chesapeake Energy is the latest oil company to file for bankruptcy. With oil in the high thirties per barrel, the corporation has lost the ability to service its debt. Notable here is that lending to oil companies has tightened quite a bit in 2020 with the previously mentioned price of crude plainly a major factor. The Wall Street Journal reports that compared to 2016 when U.S. oil producers raised $57 billion in debt, in the past year the number has fallen to $23 billion. That credit has tightened for oil producers is a statement of the obvious. Lenders aren’t in the business of losing...

As a boy with his family in 1968, this author visited Virginia from the north and had to ask his parents why flags weren’t at half-staff following Martin Luther King’s assassination.  Today, anyone with memories of the 1950’s and 60’s recognizes race relations have come a long way, as has The Old Dominion, yet a distance to go remains. In their own way, racial income statistics, covering a broad national cross section, can be more wrenching than George Floyd footage, an isolated although for many blacks representative incident. In 2018, over half a century since...

In the months before the coronavirus pandemic, sustainability had become a lightning rod for lawmakers in Washington and New York. But with businesses reeling, we cannot afford to return to the same costly, job-killing environmental policies of the past. Even with 47 million Americans unemployed, some politicians appear ready to continue doubling down on a sustainability approach built around regulating businesses and entire industries to the point of extinction. Democratic presidential nominee Joe Biden recently tapped Sen. Bernie Sanders and Rep. Alexandria Ocasio-Cortez...

The very excellent Donald Boudreaux of AIER wrote an article recently, Ignore the Cooing of the Deficit Doves, in which he deplored the dangers of the deficit. He classifies the anti-taxers or those undisturbed by deficits into two categories. First are those who see no danger and great benefits from deficit expenditures, commonly known as Keynesians. Separate are those who see taxes as a greater peril than the accumulation of public debt. I find myself in the latter group, plus I embrace the extreme element of it which seeks the replacement of taxation with borrowing so that every government...

“Our tenuous capital was the hours in the day, less the few we slept, and we spent that capital at a frenzied pace. I’d drop everything to get you the right cardiac surgeon, the right car, a place for your kid at John Thomas Dye or Harvard-Westlake schools – whatever you needed. I was everyone’s chief psychiatrist, legal adviser, financial adviser, fixer, cultural translator, and shoulder to cry on. With so many clients’ very lives seemingly our responsibility, I obsessed about what might go wrong for them – and for the agency.” Those are the words of...

Are you interested in growing your investments while preserving capital and avoiding market volatility? Of course! Some investment professionals make this pitch: “Grow your investments safely with no risk!” Or “Beat the stock market with no downside!” These seem appealing. After all, everyone wants to see their investments grow while taking little or no risk. But that’s a little like a “no calorie pizza.” It’s not possible! Here’s why. Consider the two fundamental characteristics of any investment: risk and return. Modern finance theory...

The website Medicare.gov. suggests enrolling in Medicare online is easy (“It takes less than 10 minutes,” the site claims). But my recent experience attempting to sign up for Medicare demonstrates otherwise. Delays in action and confusing correspondence – just flat-out mistakes amounting to all-around incompetence – wound up costing me $661.84. So Medicare owes me $661.84. Here’s why. I went online to register for Medicare, including Part B, last November 6, shortly after leaving my last job. The website assured me I would receive a letter in the mail confirming...

Everyone knows that competition at the top is always the hardest. The world leaders in entrepreneurship rankings now have a new competitor:  Kazakhstan, as the World Bank announced that Kazakhstan now ranks #25 on its highly-regarded Doing Business report. While free-market champion Georgia and the three Baltic states: Estonia, Latvia and Lithuania are ahead, Iceland, Russia, and Austria are behind the Eurasian emerging leader. Kazakhstan performed particularly well in the categories of “starting a business,” “protecting minority investors,” and...

For most people, I suspect, they’d be unaware of what has been lurking in the shadows for so long, for the better part of a decade, that today the purported wisdom of it is simply taken for granted by a sizable portion of the population. While recent protests and autonomous zones may have come as something of a shock, there’s been an ideological movement all the while hardened by events that refuse to refute it. The term late-stage – or even end-stage – capitalism is ubiquitous in these rather large circles; accepted as if already a proved fact. To give you one...

When it comes to a once-in-a-century pandemic and the recession caused by lockdown efforts, not all policy responses are created equal. And unfortunately, while some good ideas have been put forward for transitioning to economic recovery mode, many bad ones have gained traction as well. First and foremost, policymakers must be aware that attempting to enforce a lockdown while simultaneously pursuing economic recovery is quixotic. While lockdowns are in place, the priority from an economic perspective is to keep businesses and workers afloat through the provision of relief from taxes and...

After months of sheltering in place, Americans are finally returning to their favorite restaurants, stores, and barbershops. As of June 1, all 50 states have started to reopen.We may not know what life after the coronavirus looks like, but one thing is certain. As life returns to normal, millions of Americans will rely on natural gas to refuel their cars and reopen their businesses.Fortunately, America's energy sector was well prepared to survive the coronavirus outbreak. Having weathered the storm, natural gas producers will help get the...

Lawmakers are weighing the contents and timeline of a future COVID-19 response package, with many expecting the Senate debating a bill in July.  While it remains to be seen whether Congress even needs another bill, it is imperative that lawmakers reject any effort to extend the $600 per week supplemental pandemic unemployment assistance. This program has subsidized welfare over work and threatens our economy’s ability to recover by incentivizing workers to remain on the sidelines. As a condition of supporting the Coronavirus Aid, Recovery, and Economic Security (CARES)...

With €1.9 billion ($2.1bn) in cash missing, it appears that Wirecard may join an illustrious lineup of large cap stock frauds in Europe and China. It is notable that the U.S. market has not experienced, as far as we all know, any large cap frauds in nearly 20 years since the failure of Enron and Worldcom. China and Europe remain the hotbeds of stock frauds in large companies. China is a special case. Its legal system can effectively give fraudsters immunity from prosecution because it does make stock fraud against foreigners a crime. Moreover, defrauded investors who obtain judgments in...

In a recent Statement distributed to the membership of the American Economic Association, the Executive Committee led by AEA President Janet Yellen condemned killings of black people by police, violent racism, and such manifestations of inequality as the disproportionate COVID-19 death toll and unemployment experienced by black people. Whether or not such sentiments are noble is beside the point. Instead, it is not quite clear why a professional organization should take an official position on controversial topics of the day. Is the AEA going to issue a statement on the quality of...

Legendary 19th century financier JP Morgan said, “A man generally has two good reasons for doing a thing—one that sounds good, and a real one.” Pundits cite loads of seemingly smart reasons you should dismiss global stocks’ rally since March. But their real reason? Admitting the upturn is real also admits they were wrong. Tough for most of us! So instead, they grasp for anything supporting their prior negativity. Behavioral psychologists see this as a subset of “confirmation bias.” It drives the “Pessimism of Disbelief”—the foundation of...

The jury is still out on whether their policy was better than ours. But we need different “laboratories” trying different techniques if we are to maximize our chances of quelling this pandemic. It is black letter law in economics that competition brings about a better product, at a lower cost, than monopoly. Indeed, our anti-trust laws are predicated on little else. But this insight is not limited to the dismal science narrowly construed. It also has relevance to our present attempts to wrestle Covid 19 to the ground, and pin its shoulders to the mat. In what dimensions, then,...

Going back many, many centuries to China’s Song dynasty (960-1279), the Confucians supported private money over what government-issued currency because "the market would compel private issuers of money to maintain its value." Think about this historical anecdote for a bit. It has modern relevance. It’s first a reminder that the notion of market-based money is hardly a modern, libertarian concept. It’s long been understood that politicians have a tendency to clip the proverbial monetary coin, thus robbing the citizenry. More broadly, it’s a reminder that the central...