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[Emil’s Summary] American books and films published in 1925 will be entering the public domain next year. Included among them will be The Great Gatsby by F. Scott Fitzgerald. Upon its release the book was met with popular indifference. And no wonder. A cautionary tale about indulgence, extravagance and social upheaval? Right into the racing heart of the Roaring Twenties and its cloche hat wearing flappers, smoking Lucky Strikes and listening to jazz? No thanks. When Fitzgerald asked his editor about the book’s reception he was told, “Sales situation doubtful, but excellent reviews.” The author, in response, closed with, “Yours in great depression.” It wasn’t until the consequences of the Great Depression that the book achieved the acclaim it holds today. Only in retrospect did perception resonate with plot. Only in retrospect did the era seem an empty phantasm.

Our own ‘Roaring Twenty’ has no such excuse. Unlike 1925 when economic depression was five years in front of those enormous yellow spectacles, our economy is 13 years in Daisy’s rear-view mirror — run over, killed. But you wouldn’t know it if your radio was tuned to the business network. When it was reported in early June that the US economy unexpectedly added 2.5 million jobs for the month of May it set off an orgy of dip buying, lest there be no dip left to buy. David Portnoy, the Gatsby of our day and host of this stock market party leaves the invitation open to all via livestream and will tell you stocks only go, “Up! Up! Up! Up! Up!”

In this episode we discuss how even establishment-economist forecasts — forecasts in which the economy runs pure — implicitly anticipate a worse experience than 2008. An experience from which the world never recovered; not really. In this episode we emerge from sheltering in place and survey the landscape. We see the Great Portnoy, hosting an elaborate party, in the Valley of Ashes.

 

00:32 US Employment | Establishment / Household Survey
02:52 US Employment | Initial & Continuing Jobless Benefit Claims
04:59 US Employment | Economically Unemployed vs. Exogenous Shock Unemployment
12:51 World Economy | Consensus Two-Year Outlook for GDP
16:38 World Economy | The OECD W-Shaped Recovery Doesn’t Factor in a Second Economic Wave
19:04 World Economy | World Bank Forecast as Warning that V is very L
22:09 US Consumers  | Revolving Consumer Credit Being Extinguished by Consumers
27:22 US Yield Caps | Talk of Yield Curve Caps and What About Yield Curve Control in Japan
32:01 US Yield Caps | World War II Experience with Yield Curve Ceilings
35:31 World Economy | The Worst is Behind Us Now We Survey the Damage