You may have heard recently about the Transportation Safety Administration’s record for safety measures in airline transportation. The task with which the government agency is charged has become a bit of a joke, with public perception almost of a gang of thieves running a sanctioned-criminal enterprise. The groping and stealing are held back, with apathy and inertia on its side, [...]
The unifying element of the prospect for recession in 2015 is how it will reveal the hugely mistaken assumptions that were taken on faith alone. Entering 2008, for example, the FOMC kept some plausibility because of the housing debacle. A convenient scapegoat, the Fed proclaimed that recession was a danger on housing alone, and so its mistakes were met as [...]
The main thing about “tail events” is how unconventional they can be, a tautology that somehow is necessary. When taking account of financial risks in 2015 it is almost convention that there are bubbles, with rather unnerving complacency about it all. That suggests in some ways the whole idea of bubbles has changed since the first one under eurodollars showed [...]
If there is some small gain to be had from current economic circumstances, it might be a lesson in what the dollar is and what it is not. Just a few months ago the idea of the “strong dollar” was almost ubiquitous, scarcely any shaky economic commentary could be found without mentioning that as the trump to the upside. It [...]
When the BLS models payroll expansion they don’t actually count payroll expansion. In the 1960’s, economic accounting shifted to mostly stochastic processes which changed the way mainstream economic statistics were calculated and kept. We all know, particularly recently, about how these data series are constantly revised, and often by more than minor adjustments, but that in some ways obscures the [...]
Personal spending fell slightly in April, making three of the last five months for declines. Such a sustained slump is actually quite rare, and you have to go back to the Great Recession to find anything like it in recent history. There are a few reasons for this now-accumulated downtrend, but it always starts with income. While personal income has [...]
Revisions to Q1 GDP were actually a little better than expected, as the new estimates show a -0.7% drop instead of what might have been as bad as -1.5% (with one more “regular” revision to come). Record inventory remained a record, revised from $122 billion to merely $106 billion, but PCE growth came down to just 1.8% - a far [...]
At some point in the middle of the last century, economics of money shifted to economics of psychology. When Milton Friedman wrote his 1963 book, A Monetary History, it was an effort that uncovered the role of money in the collapse of the Great Depression as he and his co-author, Anna Schwartz, saw it. Whether or not it was a [...]
In its 84th Annual Report released last June, the Bank for International Settlements departed from usual central bankish conventions and decried the growing departure from market discipline and even reality. The BIS even used the loaded term “euphoric” to describe what it saw as risk market prices no longer affected by fundamental economic conditions. As the Financial Times noted then, [...]
When looking toward what might be coming next from the FOMC, the reigning theme remains “they don’t know what they are doing.” That sentiment applies, of course, retroactively to all the QE’s, Twists and badly implemented emergency measures on the way down, but attention is rightfully focused now on how to get to C. Going from A to B already, [...]
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