Jack Delano Military sentry at bridge over Colorado River, Topock, Arizona March 1943 With consensus building, after new health care data were released, that Q1 US GDP contracted by -2%, which is even worse than the latest -1% estimate, you’d think a bit of realism would pervade news reports. Think again. The ‘make it up as you go along’ factor only increases as numbers get worse. And, naive as I am, I can’t help wondering what the reason is for
Read More...
Jack Delano Dear Folks … Greenville, SC. Air Service Command July 1943 I’ve done it before, but I’ll gladly revisit Yeats’ prophetic Second Coming written 95 years ago, because it contains truths about mankind that we will see emerge as we move forward. The line “Things fall apart; The centre cannot hold” will illustrate, and become, one of the leading drivers in the world as we used to know it. This is as true for, to pick an example, the
Read More...
Detroit Publishing Co. Japanese Rolling Balls, Coney Island, Cincinnati 1910 We’ve carried a lot of news on Japan’s deteriorating economic and financial situation so far this year (and before), but perhaps it’s now time to wonder how much longer until the rising sun comes apart at the seams. To date, the worst fears over a trend of deflationary pressures, diminishing wages and enormously bloated government debt were somewhat cooled by the assumption that the Japanese people were still avid savers,
Read More...
Arthur Rothstein Drought refugees from Glendive, MT, leaving for WA July 1936 It’s common knowledge at this point, even if there’s never a shortage of voices who will insist on denying it, that many of the numbers we see allegedly describing our economic realities, are not real at all. Unemployment, GDP, the issue is familiar. And if the US government, or any government for that matter, thinks it’s such a great idea to “massage” their numbers, then to quite an
Read More...
Howard Hollem Times Square and vicinity on D-Day June 6, 1944 When I see a headline like this one at Bloomberg today, World Needs Record Saudi Oil Supply as OPEC Convenes, there’s just one thought that pops into my head: what the world needs is for us to stop doing this thing we’re doing. Even apart from peak oil concerns, it’s obvious we’re going to run out at some point or another, and it doesn’t matter whether that’s tomorrow or
Read More...
Office of War Information Watching D Day news line on New York Times building June 6, 1944 Much ado about nothing. That about sums up the real story behind the heated headlines on the “historic” decision by the ECB to lower its deposit rate into negative territory, from 0% to -0.1%. Because without any actual deposits, the move is empty, meaningless, showmanship, sleight of hand. There was a time when it made sense for banks to park reserves at the
Read More...
Arthur Rothstein Drought refugees; North Dakota farm family moving to Idaho July 1936 At the Automatic Earth, the phrase ‘Multiple Claims To Underlying Real Wealth’ has been a staple through the years. It must have been part of just about every single presentation Nicole Foss has prepared. It’s no exception for people to have some trouble understanding what exactly we mean by it; after all, how can multiple parties claim ownership of the same asset? In the Chinese port city
Read More...
Detroit Publishing Co. Excursion steamers Tashmoo and Idlewild at wharf, Detroit 1901 This is one of those days where I wonder what I’m going to say about this one. It’s all too convoluted six ways to Sunday. Yeah, Mario Draghi delivered for markets and investors, and stocks rise a bit more. Like they’re not high enough yet, setting records in . One thing he didn’t do is commit to asset backed securities purchases, and so that is now what markets
Read More...
Barbara Wright Damaged Lives, Knoxville, Tenn., 1941 The Fed itself has stated many times over the past years that it intends to keep interest rates low. And now it starts complaining about low volatility. It looks like Yellen et al want to have their cake and eat it too. Perhaps they should have paid a little more attention to Hyman Minsky. Who long ago wrote – paraphrased – that if and when markets are perceived as being stable, it’s that
Read More...
Arthur Rothstein General store closed on account of the drought, Grassy Butte, ND July 1936 Everyone expects Mario Draghi’s ECB to announce stimulus measures on Thursday. If the forward guidance, if we can call it that, which was ‘leaked’ by Draghi and his minions is accurate, we’ll see the bank’s main refinancing rate lowered, and the deposit rate perhaps even turned negative, with a less obvious set of measures that may include asset purchases also in the offing. The main
Read More...