Today's Post - https://bahnsen.co/3IgucD9

All eyes were on the White House today as debt ceiling talks continued. The report after talks ended today that “no deal has yet been reached” was, ummm, not a story. I remain skeptical that a real deal gets done before there is a real deadline and moment of hysteria, but I do still believe these talks set the foundation for what that eventual deal will, in fact, be. The word that the White House is willing to accept discretionary spending caps, clawing back unspent COVID dollars, and work requirements for some social safety net programs, if true, does seem to me to mean a deal will likely, in the end, get done. But there is a lot of wood to chop, as the great Rene Aninao likes to say.

As for all that recession talk, estimates are still for a slightly up quarter in terms of real GDP growth for Q2, but with Q3 and Q4 being the likely entry period for GDP contraction.

Chapter 11 bankruptcies were up +43% in Q1 versus Q1 of last year. Now, bankruptcies a year ago were down -32% from the year prior, so there was clearly a low base effect going on. But overall, I do believe we are seeing increasing problems surface in small businesses where access to funding is becoming an issue.

With all the talk about the U.S. dollar year-to-date, I thought it worth pointing out that while the Euro is up a whopping +1.8% YTD to the dollar on the year, and the sterling pound is up +4% to the dollar, the U.S. dollar is actually up versus Chinese renminbi, Yen, South Korean Won, South African Rand, and Australian dollar. In other words, people have no idea what they are talking about.

Links mentioned in this episode: