Tag Archives: Debt and the Fallacies of Paper Money

Intel Employees Get RIF’d Dark storm clouds gather along the economic horizon.  They multiply ominously with each passing day.  The recovery, weak as it has been, has run for nearly seven years.  Now it appears to be sputtering and stalling out. Intel (INTC), monthly. The stock has performed fairly well since 2009 (most stocks have), but has yet to regain its bubble peak made 16 years ago. Its recent earnings report (“beating expectations”, natch) reminded us strongly of the accounting...

  Lost From the Get-Go There must be some dark corner of Hell warming up for modern, mainstream economists. They helped bring on the worst bubble ever… with their theories of efficient markets and modern portfolio management. They failed to see it for what it was. Then, when trouble came, they made it worse. But instead of atoning in a dank cell, these same economists strut onto the stage to congratulate themselves. Keynes, Photo via MIT Press The scalawag himself. Keynes provided...

  Dismal Earnings, Extreme Valuations The current earnings season hasn’t been very good so far. Companies continue to “beat expectations” of course, but this is just a silly game. The stock market’s valuation is already between the highest and third highest in history depending on how it is measured. Photo credit: Kjetil Ree Corporate earnings are clearly weakening, and yet, the market keeps climbing. The rally is a bit of a “all of worry” type of phenomenon actually, since many of...

   “Prepping” for Recession GUALFIN, Argentina – Stocks are going up all over the world. Meanwhile, it appears to us that the U.S. economy is going down. Go figure. For instance, a labor-market index created by Fed economists… and closely watched by Fed chief Janet Yellen… has fallen for three straight months. It’s the first time that’s happened since 2009. In spite of relatively strong payrolls data, the Fed’s labor market conditions index doesn’t look so hot – click to enlarge. And...

The Oppressed U.S. Taxpayer This year, Americans’ day of tribute to their federal overlords falls on April 18.  As calculated by the Tax Foundation, the average American will work from January 1 to April 24 (Tax Freedom Day) to pay his share of taxes to all levels of government with some $3.3 trillion to be forked over to the federal government and $1.6 trillion to state and local jurisdictions. [1] Image via forbes.com While any talk of tax cuts are verboten on the Democratic...

  Business under Pressure A recent post by Mish points to the fact that many of the business-related data that have been released in recent months continue to point to growing weakness in many parts of the business sector. We show a few charts illustrating the situation below: A long term chart of total business sales. The recent decline seems congruent with a recession, but many other indicators are not yet confirming a recession – click to enlarge. Wholesale inventories to sales...

What the Establishment Wants, the Establishment Gets If a person has no philosophical thoughts, certain questions will never cross his mind. As a young man, there were many issues and ideas that never concerned me as they do today. There is one question, however, which has intrigued me for the longest time, and it still fascinates me as intensely as it did back then: Does spirit precede matter or is it the other way around? In other words, does human consciousness create what we perceive...

Wicked Don Giovanni GUALFIN, Argentina – Tuesday evening, we went to the main opera house in Buenos Aires, the Teatro Colón, to see Mozart’s Don Giovanni. On our way over, our taxi driver told us that Luciano Pavarotti rated it as the second best opera house in the world (after La Scala in Milan). The Teatro Colón in Buenos Aires. Sorry, chaps, only second best. Still, that makes it the best this side of the great pond. Photo credit: Arnaldo Colombaroli Your editor’s wife has a tendency...

  Consumer Ambivalence Photo credit: Pixelrobot What’s up with U.S. consumers?  They seem to have come to their senses at the worst possible time.  They can no longer be counted on to push economic growth up and to the right.  Specifically, they’re not spending money on stuff.A little public service on etymology: “Double whammy” was reportedly first used in a 1941 Oakland Tribune article related to boxing. It means a devastating blow, setback or catastrophe. In today’s economy, it often...

Positivist Delusions [ed. note: this article was originally published on March 5 2013 – Bill Bonner was on his way to his ranch in Argentina, so here is a classic from the archives] We’re still thinking about how so many smart people came to believe things that aren’t true. Krugman, Stiglitz, Friedman, Summers, Bernanke, Yellen – all seem to have a simpleton’s view of how the world works. A bunch of famous people with a simpleton view of how the world works…who not only seriously think...