Friday, August 18, 2017

Friday noos


QQQ is threatening to break its SMA(50). That'd be a big plummet if it came. Wonder if the American Republican investor has panicked enough?

Anyway, some reading:


NY Times - Fed officials confront new reality: low inflation and low unemployment. Quote:

Most Fed officials subscribe to a view of inflation in which prices rise more quickly as unemployment declines. The basic idea is that companies must offer higher and higher wages to keep their workers.

Now, the Fed is confronting “the coexistence of low inflation and low unemployment,” a phenomenon that inverts the “stagflation” experience of the 1970s, when both inflation and unemployment climbed.

The meeting account said most officials continued to regard low unemployment as the most important factor. They said inflation was rising slowly because of temporary factors, like a decline in cellphone service prices. And they remain inclined to raise the Fed’s benchmark rate later this year.

Blaming it on cellphones just shows how utterly ignorant they are. What'll be the next transitory effect keeping down inflation in the $18 TRILLION dollar US economy, hm? Declining pork prices? Framing lumber? An aggressive Piggly Wiggly coupon program?

There are people on the FOMC who believe in hard data and empirics. They are what the press calls "the doves", because they believe in empirical verification, and reality trumping fantasy.

Then there are people on the FOMC who still are wedded to the nonsense bullshit taught in academia based on a homogeneous consumer who can buy a continuous spectrum of consumption, and sell a continuous spectrum of labour, dependent on his utility function which he knows and which satisfies Inada conditions, trading with a homogeneous firm who uses homogeneous priceable capital and homogeneous labour to produce a homogeneous consumption good according to a declining-returns function, that is then sold in perfect competition at breakeven prices, and whatever the hell you do don't mention Sonnenschein Mantel Debreu! These people are living in a fantasy world, and anything they say about economics should be recognized as applying only to the stripped-down fantasy world of their model - not to reality.


Ritholtz - the imaginary debt crisis is here to stay. Quote:

Have a look at the chart below. The total amount of revolving credit outstanding, much of it reflecting credit-card borrowing, peaked in 2008 and then collapsed during the financial crisis. After bottoming in 2011, it slowly began to rise, and almost nine years after the peak has finally reached new highs. There also were new records for the size of the U.S. population, gross domestic product, total household income, net worth and, perhaps most important of all, disposable personal income. This is what tends to happen in an economic expansion.

Go look at the chart.

Or, just realize that the anti-debt narrative originates with 19th-century anti-Semitism, and therefore it's always ever just a right-wing canard, and nothing from the right wing has ever made sense, so you can just ignore the whining from now on.

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