By Monty Pelerin, on January 7th, 2010 December tax results disappoint. This from the Wall Street Examiner:
Month to date tax receipts are now in for the entire month of December. They’re down 7.7% from December 2008, which is exactly the same rate of decline as November’s. We know that the TBAC and Treasury officials were not anticipating that in their debt sales forecast for the first quarter. They had assumed that a recovery was taking root and would continue to do so. That spells trouble for both bonds and stocks.
In the same article they refer to the NAR’s data on pending home sales as “terrifying.”
I do not trust government numbers, other than tax collections. That includes employment, CPI, GDP, etc. If you want to know what is happening, and long before the government publishes most of its numbers, look at trucking stats, freight-car loadings, shipping, etc. Part of the problem arises from “seasonal adjustments.” When you are in a recession/depression, it is unlikely that normal seasonal adjustments are valid. A bigger problem is the cheerleading that appears to be this Administration’s last hope. When desperation sets in, adjustments in numbers tend to be in the favorable direction.
Folks, this is not getting any better and cannot get any better. As I stated in another post, before 2010 is over the term “Depression” will be in common usage. The list of items mentioned in 2010 Will Be Worse ensures this. The fact that economic policy is harmful rather than helpful is another
Continue reading The Bad Results Continue
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By Monty Pelerin, on November 5th, 2009
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Good job numbers today — NOT!
Once again we have the headlines and reality diverging. Karl Denninger provides an analysis of why the job situation is worsening rather than the “improvements” that are being heralded.
Watch The Distortions (UIC Data)
The Market Ticker
Thursday, November 5. 2009
Posted by Karl Denninger in Macro Economics at 09:13
Watch The Distortions (UIC Data)
The unemployment claim release looked good. Here’s the headline:
In the week ending Oct. 31, the advance figure for seasonally adjusted initial claims was 512,000, a decrease of 20,000 from the previous week’s revised figure of 532,000.
Sounds good, right? So does this:
The advance number for seasonally adjusted insured unemployment during the week ending Oct. 24 was 5,749,000, a decrease of 68,000 from the preceding week’s revised level of 5,817,000.
Now let’s talk truth:
The advance number of actual initial claims under state programs, unadjusted, totaled 480,178 in the week ending Oct. 31, a decrease of 14,216 from the previous week. There were 466,341 initial claims in the comparable week in 2008.
The rate of firing is higher than it was this week last year – a really, really bad time, if you remember. This was immediately post-Lehman and AIG, when firms were shedding employees like water off a
Continue reading Employment Worsens Despite Headlines
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By Monty Pelerin, on October 31st, 2009
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Is there any doubt why the major media audience is dropping like a rock? This headline suggests that 96% of the sample believes they are better informed than reporters. If so, why waste time with newspapers or TV? It is a scary number. I am not sure whether it says more about our failing institutions or the IQ of the public.
Just 4% Trust Reporters More Than Themselves on What’s Good for America
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Decline In US Newspaper Readership Accelerates (news.slashdot.org)
Canwest says it could shut down the National Post (ctv.ca)
Newspapers, the mass-less mass medium (newsosaur.blogspot.com)
Off A Cliff, Ctd (andrewsullivan.theatlantic.com)
Newspaper circulation over last 20 years: the great swandive (boingboing.net)
The Flow Of Information To The Home (stoweboyd.com)
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By Monty Pelerin, on October 28th, 2009
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The piece below by Peter Boettke summarizes what I think about current economics. The Keynesian model or paradigm is wrong and always has been. Two primary reasons it was adopted were 1) the crisis of the 1930s was misunderstood but demanded “action” of some kind and 2) it gave the politicians a license to steal power and money from the citizens. If economics were a physical science where data could refute false hypotheses, it is doubtful that the paradigm would still exist today. Because it isn’t, reason number two became paramount. Most economists initially objected to the theory, gradually agreeing with it over time. After all, it also provided lucrative rewards for them in terms of higher paying jobs in government and eventually a route to tenure after it dominated university economics departments.
The books referenced below in the fifth paragraph are excellent reads for anyone interested in the flaws and inconsistencies in the so-called General Theory. “The Critics of Keynesian Economics” book is especially insightful because it is a collection of great economists (authors include Jacob Viner, Frank Knight, Garet Garrett, Jacques Rueff, Benjamin Anderson, Frederick Hayek, Ludwig von Mises, and others) contemporaneously passing judgment on the then “New Economics.” Most of the essays were written in the 1930s or early 1940s and accurately saw the inconsistencies in Keynesian
Continue reading Keynes is The One
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By Monty Pelerin, on October 26th, 2009
Image by cjzurcher via Flickr
Paulson, Bernanke and Geithner have horrible forecasting records. Anyone forecasting, leaves himself open for a certain amount of embarrassment. Yet these people persist in pretending that they are capable of managing the economic condition of the country. That is truly scary!
Now we have the latest bit of evidence of their prowess. Look at this statement (one of many in a detailed report) made by Frederick Mishkin when he was on the Federal Reserve Board: “… they clearly illustrate that Iceland is a well run, advanced Nordic country that has little in common with emerging market countries, a fact important to recognize when we start discussing financial stability in the next section.” Shortly thereafter, Iceland inconveniently and totally collapsed into financial rubble.
Perhaps it isn’t Bernanke; perhaps it is his aides that are so wrong. Actually it is neither. No one can accurately forecast such things. That they are wrong is not surprising; that they have the hubris to pretend to know these things is what is amazing. Frederick Hayek’s Nobel acceptance speech entitled The Pretence of Knowledge has much to say both about the problem and professional hubris. Perhaps this speech should be required reading by all Washington economic and other policy dunderheads.
To read the full report by Mishkin, see the post by Zerohedge here Or read the pdf here but Zerohedge commentary is worthwhile.
The Fed Can’t Forecast
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Friedrich von Hayek
Friedrich von Hayek founded the Mont Pelerin Society.
“Monty Pelerin” is a pseudonym chosen by this blogger to convey general agreement with the philosophy, goals and spirit of the Mont Pelerin Society. No other connection exists between the blogger and the Society.
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