Friday Charts: The Most Baffling Government Chart Ever
When Friday rolls around, we roll out the charts in the Wall Street Daily Nation.
After all, a picture is supposed to be worth a thousand words. So we figure, why not embrace it?
This week, we’re serving up a timely snapshot on the unhealthiest balance sheets in the world.
We’re sharing the most mind-boggling government streak ever. It’s up to 88 days (and counting). Quick, somebody call the Guinness Book of World Records!
And last, but not least, we’re providing another dollop of evidence why one internet stock should be avoided at all costs. That is, if you’re investing for the long term.
Take a look and be sure to let us know what you think!
Everything’s Bigger in Texas China?
China boasts the world’s largest population. It ranks as the world’s number one air polluter. And – surprise, surprise – it also tops the list for the largest balance sheet expansion by a central bank over the last decade.
As Richard Bernstein (of Richard Bernstein Advisors) says, “China’s lending policies have been so out of control that the balance sheet of the People’s Bank of China is now roughly 50% bigger than the Fed’s.”
So now we know why Fed Chairman Ben Bernanke has embarked on a historic asset-purchase program. He’s a fierce competitor and simply wants to make sure we keep up with China. It’s the only logical explanation for QE Infinity, right?
Look Who’s Cooking the Books Now!
When you see the next chart, you’re going to wonder how this is even possible…
The Treasury Department’s Financial Management Service reports that – for 88 days in a row – the federal government’s debt remained at exactly $16.699396 trillion. That’s just $25 million shy of the official debt ceiling limit set in May 2013.
Yet, in the month of July alone, the government ran a $98-billion deficit.
How exactly did the government fund operations if it didn’t take on a single new penny in debt?
Turns out, the answer to the mystery is contained in this letter from the Treasury Secretary, Jacob Lew.
Ever since May 17, he’s been using “the standard set of extraordinary measures” to prevent the Treasury from exceeding the legal limit. Or, more plainly, he’s essentially been cooking the government books.
So when the politicians start ramping up the rhetoric about the debilitating impact of hitting the debt ceiling limit, ignore them. We already did. Even if the Treasury Department keeps publishing daily reports here to try to convince us otherwise.
To Yahoo or Not to Yahoo
I know, I know. Not the best call, considering that the stock is on a tear – up almost 40% this year already.
The company can’t fight gravity, though. Or, more specifically, it can’t indefinitely overcome the undeniably bearish fundamentals working against it.
Like the company’s all-time low (and still shrinking) share of web search traffic. Or its lack of quarterly sales growth since late 2009.
And now this: the ever-dwindling amount of time people spend on Yahoo’s site.
As the company becomes increasingly irrelevant, it’s only a matter of time before the stock does, too.
After all, as the famed value investor, Benjamin Graham, observed, “In the short run the market is a voting machine, but in the long run it’s a weighing machine.”
Now, if you think Graham doesn’t have a clue what he’s talking about, go ahead and bet on Yahoo. I won’t.
That’s it for this week. Before you go, though, let us know what you think of this weekly column – or any of our recent work at Wall Street Daily – by going here.
Ahead of the tape,