Submitted by Edward Harrison of Credit Writedowns. Back in February, I asked you if we were experiencing a recession or depression. A plurality said it was a depression with a small ’d.’ I agreed and went on to explain why. Since then, things have changed and we seem to be on the verge of what […]
Read more...By George Washington of Washington’s Blog. A 2005 letter in premier scientific journal Nature reviews the research on trust and economics: Trust … plays a key role in economic exchange and politics. In the absence of trust among trading partners, market transactions break down. In the absence of trust in a country’s institutions and leaders, […]
Read more...By George Washington of Washington’s Blog. Unemployment is disastrous on both the individual and societal level. Individuals who look for work but can’t find it are miserable. Indeed, most people who lose their job are unprepared for their circumstances.[1] On the national level, high unemployment is both cause and effect concerning other problems with the […]
Read more...Um, this isn’t exactly consistent with the recovery story. From MarketWatch: Employers’ hiring plans for the upcoming fourth quarter dropped to their lowest level in the history of Manpower’s Employment Outlook Survey, which started in 1962. A net -3% of employers said they’ll hire in the fourth quarter, down from -2% in the third quarter, […]
Read more...We’ve commented from time to time on dubious Chinese data releases. But this report from Foreign Policy reports on an interest aspect: that the statistics are not manipulated only in the normal bureaucratic manner (fudging them) but also by getting companies to change behavior so it can be tallied in a more flattering fashion. The […]
Read more...The headline statistic, which comes out of a study by the non-partisan California Budget Project, in isolation sounds worse than it is (which is not to say that this factoid is good, mind you). Labor force participation before the downturn was in the 66%ish range, so this is a meaningful decline (assuming California levels are […]
Read more...Ambrose Evans-Pritchard has not given up on his deflationary views, which until recently were quite an outlier. But some recent data releases give support to his downbeat take. From the Telegraph: CPI inflation has dropped to –2.2pc in Japan (a modern record), -2.1pc in the US, -1.8pc in China, -1.4pc in Spain, -0.7pc in France, […]
Read more...As much as commentators are trying to put a happy face on recent data releases showing that job losses are slowing, it still means that fewer people are working. Moreover, one element of the poor jobs environment that it not getting enough play is the way wages are deteriorating. Some who have full-time work have […]
Read more...Joseph Stiglitz takes issue with the view of economists (well, economists surveyed by Bloomberg and the Wall Street Journal, which not surprisingly have a Pollyannish optimistic streak) that the economy is in or on the verge of a recovery. The real issue is the ongoing con job. Team Obama has made it clear that it […]
Read more...Reader John O pointed us to a very good post from the Economic Policy Institute which gives a thorough analysis of recent unemployment data and puts it in a broader historical context. Bottom line: it is not pretty. The fixation with looking for a turn in initial jobless claims as a sign of recovery seems […]
Read more...Note that while this Bloomberg story discusses that some major hedge funds are skeptical of the theory that the recovery is on, for the most part, it is silent on how they are implementing that view. Recall that even if a trader does make a correct fundamental call, investing successfully on it is another matter. […]
Read more...T. S. Eliot was right. Human beings cannot stand very much reality. As much as I have an appetite for bearish views (I figure the optimist case gets disproportionate air time), the headline of Ambrose Evans-Pritchard’s latest piece, “Our quarter-century penance is just starting,” is grim even by the standards of the bearish faithful. Evans-Pritchard, […]
Read more...By Andrew Kaplan, a hedge fund manager: It has become fashionable among equities managers of the bullish persuasion to argue that a strong recovery in GDP will occur in 2010 because the “structural adjustment period” of moving back to a more normal savings rate has been completed. We’ve gone from a savings rate of barely […]
Read more...It must be lonely being a China bear….particularly for those dubious about its longer term prospects, as opposed to those who might simply think its stock market is a bit ahead of itself even after its recent correction. Vitaliy Katsenelson, in an article at MorningStar, beings almost sounding a tad persecuted before he warms up […]
Read more...Reader John O passed along this Bloomberg chart du jour (click to enlarge) which effectively argues that the consumer has gone down so far she has nowhere to go but up: The related article argues: ….these so-called discretionary goods and services accounted for a smaller percentage of consumer outlays last quarter than at any other […]
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