Tuesday, August 4, 2015

more news


Bespoke - Ford sales have best July since 2006. Panties, quit piddling them.

New Deal Demoncrat - actually, wages grew at 0.6% in Q2. Once you back out incentive pay, that is.

WSJ RTE - black unemployment still twice the rate for whites. Seriously, if Yellen raises rates with the intent of choking off employment and wage growth, it's a declaration of war against black people.

Brad deLong - is secular stagnation a monetary-financial problem or a fundamental-technological problem? Barry Eichengreen is a real economist, and Brad discusses his ideas. I'd like to note deLong's commentary:
Note that in this view secular stagnation can be solved in any of three ways:

  • A higher inflation target that would allow for the possibility of a real safe interest rate of -4%/year would make it straightforward to induce enough finance to fund enough investment in physical, intellectual, and organizational capital to carry the economy to full employment.
  • Better financial regulation to create a financial sector that could actually mobilize the–enormous–risk-bearing capacity of society as a whole would shrink the wedge between safe and risky required rates of return from its current 8%/year or so down to something like 3%/year, or less.
  • Alternatively, a government that took on responsibility through its spending for maintaining full employment could do the job that the private sector’s shortage of risk tolerance is keeping it from doing–and in the process process it could create enough safe assets that the private sector would be eager to finance risky investment in physical, intellectual, and organizational capital as well.
Brad, take a look at that list again. Note how each solution runs contrary to the demands of the Washington Consensus/Republican/conservative economic ideology: a 4% inflation target is socialism, financial regulation is Nazism, and economists assert that government production of capital assets never happens (instead your profession has invented the propaganda term "crowding out") - and what, now you want to finance the construction of these assets with yet more bonds? Gee, let's sacrifice white babies to Satan while we're at it, Brad!

BI - DOJ probe Deutsche for Russian trades. Again, this is just an illustration of how Germany's not less corrupt, just corrupt in a different way. A way that is acceptable to the German people. Because Germans get to make a profit on the corruption.

FT Alphaville - how much gold should you hold in your portfolio? Interesting article, but problems: #1, you don't hold gold in your portfolio, you hold it outside your portfolio as a hedge against existential risk. And #2: when you count the 183,000 tons of gold "out there", are you including all the gold that adorns cathedrals and Buddhist temples? What about wedding rings? King Tut's treasure? A lot of gold isn't "gold", y'know: it's gold. Anyway, the article is great, not in the least for the amount of invective in the comments section.

BI - vaccine offers 100% Ebola protection. Hooray, we've cured Ebola! And by "we" I mean Canada. Well, and also Norway. And the Who, apparently.

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