Housing Wreck

The hype machine continues, this time in the analysis(?) of Diane Swonk. Reader NII sends his comments and Ms. Swonk’s (his comments italicized). I guess I can’t imagine what weak housing would look like if this is supposed to be strong: NII: It does not seem to dawn on Swonk/Yellen that the overbuilding in housing and owner’s over- indebtness will [...]

Star Parker is Not An Economist

Star Parker is a remarkable person, but she is not an economist. Perhaps that is a key reason she sees the obvious while “real” economists don’t. The so-called professionals need to be blinded by data, trends, regression analyses and differential equations. Common sense is displaced by form and technique. It is as if so-called economists want to make things more [...]

Investing In A Pretend Economy

We live in a pretend economy. It is important to recognize this condition, especially if you are an investor. Current market behavior is concerning.  Bonds and stocks remain volatile and near record levels. Markets ignore the continuing stagnation in the pretend economy, buoyed apparently by government liquidity injections. To justify investing today in these markets, one must anticipate one or [...]

Hume, Keynes, Mises, Kuhn and Mankiw

Regular readers know that I am fond of using quotes to emphasize issues or make points. These quotes, especially when they are old, show how there is very little new in the world and that our ancestors, in many respects, were as wise or wiser than we. Too often knowledge is lost or ignored simply on the basis of its [...]

Uncle Sam Is Long In The Tooth

The US has become mostly bluster. Uncle Sam is long in the tooth. Its misuse of the country’s treasure on bread and circuses has aged it prematurely. Simon Black likens the US to the aging Muhammed Ali when he took on the younger Larry Holmes. It wasn’t pretty then and what the US is going through won’t be pretty either. [...]

Government Data — Follow Up

Yesterday’s post entitled Government Data provided a case for government figures being untrue. That article was about government changing definitions or actually manipulating data to make outcomes appear better than they actually are (were). Victor Davis Hanson provides a marvelous discussion of this topic: There is a pattern here. Changes in data collection seem to have a predictable result: Inflation [...]

Government Data

Government data should not be accepted at face value. Individuals and governments like to be seen in favorable light. When they control the data, the data becomes fudged. The more powerful the entity, the less it can be questioned. As government grows in force and strength, government data deteriorates. James Quinn, utilizing the work done by John Williams of, [...]

Caught Between A Rock and A Hard Place

“Caught between a rock and a hard place” is a colloquialism meant to convey that there are either no options or at least no good options left. That describes quite nicely the position that Janet Yellen has been put into. The US (and world) economy are not growing. Ben Bernanke and his counterparts in other countries pumped like mad to [...]

The Janet Yellen Era

As we move into the Janet Yellen  era at the Federal Reserve, it is useful to learn her views on the Fed, what role is appropriate for it in managing the economy and the current condition of the economy. For an institution that is not a government agency, by law as opposed to reality, it has enormous power and little [...]

Reality Can Be Deferred But Not Avoided

Reality is a relentless force. It can be ignored, even hidden for a while. However, it is a force that cannot be contained forever. As the myth of government deteriorates, it becomes necessary for government to support the belief that it is in control and making things better. Things are not improving and cannot improve given the economic distortions in [...]

The Taper Caper

These are uncertain and unsustainable times. There is no economic recovery and the Fed seems insistent upon continuing to taper. At a minimum, the Fed seems intent on making you believe that it intends to continue. These signals create serious potential problems for the economy and financial markets. Human beings act based on expectations. If someone issues a bomb threat, [...]

Restoring Economic Growth

The issue of restoring economic growth to the US and world economies continues to be a problem. Nothing that is currently being done is going to solve that problem. It will worsen the situation. It is unclear whether government is merely confused or believes it cannot afford the costs of returning economic growth to a floundering economy. These costs are [...]