We’ve got to change our ornithological nomenclature. Hawks become doves because they are chickens underneath. Doves became hawks for reasons they don’t really understand. A fingers-crossed policy isn’t a robust one, so there really was no reason to expect the economy to be that way. In January 2019, especially the past few days, there are so many examples of flighty [...]
The secret of health for both mind and body is not to mourn for the past, nor to worry about the future, but to live in the present moment wisely and earnestly. Buddha Review It's that time of year again, time to cast the runes, consult the iChing, shake the Magic Eight Ball and read the tea leaves. What will [...]
We’ve seen all this before, almost exactly the same. Back in the middle of 2011, European officials remained fully confident even though things were already working backward. The ECB had in May 2010 “bailed out” markets as well as PIIGS, or so the media claimed. All that was left was time. On their side was Brent oil. Jean-Claude Trichet, Europe’s [...]
Without crude oil on an upswing, inflation can only be on the downswing. That may seem like a tautology of sorts, but it’s not. In fact, those advocating for the optimistic economic case have been predicting consumer prices being directed by something other than oil. I know it’s a broken record, but here it is again: labor shortage, competition for [...]
How quickly hope can sour. That is, if it is based on suspect assumptions and a misreading of the general situation. It would then be more like irrational pleading than derived from solid analysis. One year ago, thereabouts, President Trump delivered upon one campaign pledge. He pushed a tax reform bill through Congress aiming to offer benefits to both the [...]
I am no fan of John Maynard Keynes. But this isn’t to say that there is nothing worthwhile about Keynes’ work. Indeed, it is a logical fallacy that one can’t object to his conclusions while at the same time admiring some of the ways with which he arrived at them. There is a lot about what Keynes thought, and wrote, [...]
The enormous setback hadn’t yet been fully appreciated in March 2012 when China’s Premiere Wen Jiabao spoke to and on behalf of the country’s Communist governing State Council. Despite it having been four years since Bear Stearns had grabbed the whole world’s attention (for reasons the whole world wouldn’t fully comprehend, specifically as to why the whole world would need [...]
R-star is a fiction which like term premiums for interest rate decomposition allows Economists to skate past reality and onto their econometric blackboards. If there was a neutral rate, which R-star (or R*) proposes to be, why would there be only one and what good would knowing its level today do? In a dynamic world, if you figure out where [...]
Is the media data dependent? Depends, of course, on what you mean by “dependent.” One year ago, as December 2017 dawned, you couldn’t go a day even a few hours without some mainstream outlet publishing an ode to the LABOR SHORTAGE!!! A full part of the hysteria of the time, the idea of globally synchronized growth last year was started [...]
Is the Fed's monetary tightening about over? Maybe, maybe not but there does seem to be some disagreement between Jerome Powell and his Vice Chair, Richard Clarida. Powell said just a little over a month ago that the Fed Funds rate was still "a long way from neutral" and that the Fed may ultimately need to go past neutral. Clarida [...]
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