Tuesday, January 14, 2014

3 Charts to Blow Your Mind -- Budget, Congress, Bonds

Here are three charts that could blow your mind. Read no further unless you want to risk your brain liquifying and oozing out your ears like so much ice cream in the Florida sun.

Chart #1: The Budget Deficit
In what can only be described as a fiendish plot, the budget deficit is shrinking -- RAPIDLY.

On a monthly basis, Uncle Sam is actually running a surplus of $53 billion. But one month is not how you want to measure things. Instead, let's use the rolling 12-month deficit, (above), which eliminates seasonality and most of the noise.

Why is this happening? The "fiscal cliff" budget deal forced a lot of fiscal contraction forward. For example, people who paid capital gains taxes early to avoid higher rates.
We've cut the budget deficit by half since last year. It is shrinking nearly as fast as it grew as crisis broke out in 2008.

So, if people tell you we don't have money for a jobs program to rebuild America's crumbling bridges and roads -- or that the only way to balance America's budget is to squeeze poor families even harder -- well, they're lying.

And evil bastards. But mainly lying.

Chart #2: Net Worth of Congress-Critters

Do you know that the word "senate" comes from the Roman word for millionaire? Basically, in Roman times, the Senate was a rich man's club. Well, history rhymes, because our Senate AND House of Representatives are rich men's (and women's) clubs. Now, you probably knew that. But you didn't know HOW rich ...

Kinda surprising that the House Democrats are richer than the House Republicans, right?  But remember, a bunch of freshman Republicans swept into office on the Tea Party wave. Give them time ... they'll enrich themselves.

Read more HERE.

Chart #3: Long Bond Breaks Out

Check out the 30-Year Treasury ...

 (Updated chart)

You can see that the long bond broke its months-long downtrend.  Momentum, as measured by weekly RSI, had already disconnected and turned higher.  This is not what some might expect. And why? Well, CNBC tells us that "some investors were lured by the current yields on longer-dated issues even as the recent wave of upbeat economic data have signaled yields might climb higher."

Good luck and good trades.

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