The debt ceiling was put in place by Congress during World War I and its purpose was to shift debt management from Congress to the government. Before, it was Congress who approved all expenditures. But during the War, it became difficult for the government to go to Congress and get approval for increasing war effort costs. So, Congress shifted this manner to the government, but it established a limit after which the government must have sought Congressional approval. If approved, Congress raised the ceiling and within the new limit, the government could do its day-to-day operations. But that’s when the circus started.

Since then, Congressional parties used the debt ceiling for their petty agendas, holding the US economy hostage. When Republicans were in power, none of them had any issues raising the debt ceiling and Democrats opposed it. When Democrats were in power, the tables turned around. They had no issues raising the debt ceiling and Republicans opposed it. When you look at it from this perspective, you will see how petty and stupid these politicians are.

And since then, this debt ceiling limit, which was also designed to curtail the spending, failed to do so. The national debt rose nearly 400% in the last 20 years.

But if you see politicians fighting over the spending, remember, next time when voting, that these politicians are fighting over expenditures such as Social Security, Medicare or Medicaid, Veterans’ programs, higher education, department of health expenditures, education, justice, and veteran affairs (among others). These are the biggest mandatory and discretionary expenditures.

Remember these politicians and in this case Republicans that they are the ones who will be responsible for your social security pay cut, or your Medicare failure. When at the voting booths, vote them out. They do not care about you. They have their retirements and Medicare secured but the government and they and their families will be taken care of no matter what. It is you who will be the useful fool cutting out your own welfare when you reach retirement.
Of course, you may be outraged over the raising expenditure and debt. You may be angry over Biden’s reckless spending, but you should not be supporting anything that cuts your benefits for which you worked hard your entire life and paid (involuntarily) into the system.

Despite all this circus, the markets held well. There were rattles about the debt ceiling, but it seems that the market expects politicians to strike a deal in the end. At least for now. That’s why we are mostly flat with some wobbles around. And tech stocks even exploded upwards last week (mostly on better-than-expected earnings). The FANG index (FGNU) skyrocketed a whopping 16% last week!

It seems that investors are finally waking up and realizing that all the stocks like META, TSLA, NVDA, AMD, NFLX, AAPL, AMZN, SNOW, MSFT, or GOOGL are still the best growth stocks in the market and selling them out is foolish. The investors were selling out of these stocks, and today, they are hastily buying back at higher prices. You may argue that these stocks are overpriced, and they are, but they will perform well better in today’s FED environment than last year’s FED policy. These stocks will outperform the market this year.

The latest market worries are about the debt ceiling and regional banks turmoil. It is my opinion that both will be resolved. The banks had a way better week last week and the debt ceiling is still on the table. Both parties will have to give up some of their agenda and get the things done.
 
 

Once again the market’s participants are freaking out about known issue that is probably no issue at all anymore. No one knows what is going on. The Media are trying to explain to us who pooped first but in the end, they are as clueless as everybody else. And the market circus continues.

In the morning, futures were up and the markets rallied led by tech stocks. Then they turned around and nosedived. Some blame banks, others easing inflation, or coming recession. Yes, it is the recession that has been coming since 2022 but has not arrived yet. And since it is the most anticipated recession in the US history, it will be coming for some time in the near future. And it may even arrive in the end if enough circus makers will feed the hydra of recession fear.

So, what’s the deal here? I think, the problem is that we received consumers’ sentiment report and it showed that people are not as eager to buy crap as they were in 2021. And suddenly, all the naysayers are screaming in unison “We told you so.” They fear that consumer will stop spending his hard earned money, companies will report less profits, and the economy will fall into the recession. Finally.

But the problem with this narrative is that the labor market is still extremely strong. Stronger than what the FED would like to see. And the stronger the labor market is, the more money a consumer makes and he is always ready to buy a new TV. Or go for an expensive vacation. I know it first hand as my family just purchased a vacation in Oregon that would cost arm and leg… you know, the flight, car rental, hotels, food… and new and fancy gifts in the gift shops on the main street in Portland.

My entire portfolio is hopelessly bleeding red, except Google (GOOGL) and Icahn’s IEP. Yes that same IEP that was trashed by Hindenburg not so long ago and crashed 40% is up 6% on shares buyback announcement. MPW crashed over 7% today after the company beat all estimates on their EPS and revenue. I guess they must have said something about their tenants and it was probably something nasty, so investors pooped their trousers.

Other than that, it is a nice, calm and steep rock falling on the floor today. Nothing to be worried about. For sure, the market circus is not over yet. It may end once we find out who the clown is.

Market participants exercise their idiocy once again. Airbnb, Inc. (ABNB) came out with quarterly earnings of $0.18 per share, beating the Zacks Consensus Estimate of $0.10 per share. This compares to a loss of $0.03 per share a year ago. These figures are adjusted for non-recurring items.

This quarterly report represents an earnings surprise of 80%. A quarter ago, it was expected that this company would post earnings of $0.27 per share when it actually produced earnings of $0.48, delivering a surprise of 77.78%.

Yet the idiots out there were disappointed because bookings didn’t meet the arbitrary expectations of Wall Street. The same idiocy we saw recently with many stocks (example given is Netflix and their subscribers, or Apple and the number of sold iPhones, etc.). Generally, this number doesn’t matter. Next quarter, it can be a totally different number and the opposite story. Reacting now to the past numbers that are already history is idiotic. Look ahead. Look to the future. What is the prospect?

But this is a great opportunity to add shares of this company to a portfolio. I ranked this stock as an aggressive buy in my weekly newsletter and this selloff provides an even better opportunity.