Amidst all the pearls of wisdom unleashed in mainstream economics over the past unbelievable eight years or so, it was one paragraph of common sense that had it been written and appreciated at the start of this period might have saved us all the inordinate and totally unwarranted trouble. But borrowers will only demand more credit if they have optimistic [...]
As the major stock indices overtake or threaten psychological round numbers again (S&P 500 2,100; DJIA 18,000), they have done so with the same problem as occurred in 2015. Stocks have been overvalued for some time in historical comparison especially after QE3 and QE4, but it was supposed to be in anticipation of the full recovery that QE would make. [...]
The IMF released the first 2016 edition of its World Economic Outlook (WEO). Titled Too Slow For Too Long, it seems as if the institution has finally caught on to the fact that the global recovery never really was a recovery. Throughout the report you get the sense that they are starting to figure out what is going wrong but [...]
The stock market is still viewed as if it were a discounting mechanism, a system where information is processed and priced to deliver insight about the fundamental state of liquidity, markets, and the economy. That view has always been debatable, but never more so than the whole of this century so far. What were share prices suggesting, fundamentally, in March [...]
The old adage is that strong and sustained economic growth cures many ills, if not all of them, so it is unsurprising that so many central banks would be so determined to create it. They are, surprisingly, limited in that endeavor as they always stop one step short of recognizing the shortfall. In other words, they will do everything (as [...]
The only common factor on the economy viewed from the mainstream in the past few years is the shrinking standards by which it is judged. Janet Yellen can somehow suggest erratic 2% GDP growth is “overheating” or close to it only because that is the reduction of the “new normal.” Because that has been so declared by the very same [...]
Following the explicit path of orthodox monetary and economic theory delves into something very much like Lewis Carroll’s monstrous rabbit hole he devised for Alice all the way back in 1865. Like the story’s Wonderland, the other side of the hole leads to some version of nonsense that seems to project, in the book’s case, the reader’s own senses. In [...]
Calculated “inflation” in Europe disappointed again in March, as for the second month in a row the HICP rate was below zero. There had been some hope after the German version turned just slightly positive that it would herald a different sign for the rest of Europe. Instead, inflation rates in other places were mostly the same; Spain stuck at [...]
Household spending in February 2016 in Japan rose year-over-year for the first time in six months. That was the sum total of any good economic news for the monetary-stricken economy, and it doesn’t really survive closer inspection. The rise in spending was due largely to “other” activities you don’t associate with strong economic rebounds. The overall figure was just +1.6% [...]
The “final” estimate for Q4 GDP was uninteresting save the update to corporate profits and cash flow. The upward revision to 1.4% wasn’t really any different than the preliminary or advance estimates, and since 12% of it was simply a guess by the BEA it doesn’t amount to a whole lot of solid analysis especially when in conflict with so [...]
Stay In Touch