Happy Monday and welcome back to. The crisp morning air of a spring not quite ripe welcomed those of us in Michigan; our early treatment to hot weather broke abruptly on Friday night to yield cool weather over the weekend. That has held into the start of this week so far.
Growth reports have yielded steady disappointment. Each time we get hit with a lackluster outcome, since late last year, we shrug it off like high times are just on the horizon. What if they aren’t?
There is an old economic theory that maximum production is ultimately bounded above at any given point in time. A society overproducing for the benefit of one generation necessarily creates low demand for the next, ushering in economic hardships, under this treaty of thought. If we think of the 90’s and early 00’s as such a point in time of overproduction (<5% unemployment in the 90's?), then that could maybe explain the ever present weakness in the face of effervescent punditry which we have been subjected to.
This line of thought led to the infamous "smashing windows" comments that are so well known in Keynesianism. Maybe we just need to blow up some more Middle East pipelines…?
I cannot condone shorting assets though. It's just too stupid of a strategy. If this economic idea is behind our weakness, then it follows that the Central Banks are directly at fault (and also directly to be commended for preventing the collapse of civilization 5 years ago, all sort of murkily at the same time). But weak growth will also provide justification for more intervention on the part of the same, the gross irony there barely coming under scrutiny.
So yes the people who sort of set us up for this in the '90's and '00's will almost assuredly break things more, while blaring the catch phrase "WE'RE HELPING!". Which sort of sets us up for more QE and longer periods of lower interest rates and maybe other even more stupid policies we haven't even thought up yet.
If you enjoy the content at iBankCoin, please follow us on Twitter
My most important indicator has been job growth. Since I don’t short ,when
I have less confidence I build cash and
vise- versa.I find that charts are not as
reliable due to all the fuckery of central
banks and the ongoing corruption by our
regular bank and some institutions.
But if the central bank wanted some
flexibility they could raise rates by .10
basis point instead of .25. The market
would be neutral and they could take
many years to get back to normal
giving all of us time to adjust. More
importantly they would get control
of the pedal should they need it.
It’s worth pointing out that Greenspan tried exactly that the last time the Fed “smoothed the business cycle”, and it blew up in our faces.
The Fed actions are tantamount to losing credibility and control. Regaining control will cost energy, and I don’t see where that is coming from.
http://www.nbcnews.com/id/11104282/ns/business-eye_on_the_economy/t/fed-hikes-rates-again-greenspan-wraps-term/#.VW0IHEZUV6I
thanks for the input . would love
to find a solution for them
Mr Cain. Do you really believe any of the data? Serious question, no nonsense intended. When did they first start making up data, anyway? There must be a date. There always is.
Yeah I believe the data as much as data that’s acquired through statistical processes can be believed.
They’re not out there actually counting all these transactions, it’s a negative binomial estimator. It’s subject to trickery but I do genuinely believe some portion of the people running the process intend for it to work honestly.