The ECB's stance against lowering benchmark rates to stimulate a flagging economy is founded in some pretty decent thought. Further justifying that stance is the inflation data out today, as reported in FT (another damn fine publication).
Bernanke et. al. (save the Dallas Fed president... the lone dissenting voice in yesterday's rate drop decision) are pandering tools. If not that, then they are growth obsessed reactionaries who would rather hope the economy sorts itself out (better growth and lower inflation) through market forces and, um, acts of God I guess, than fix it with policy decisions. Like, you know, their job and shit.
A weak dollar is a complicated animal, but another issue entirely. Our flagging GDP performance in the face of the weak dollar, combined with ever upwards-inching inflation shows us that the economic contributions of U.S. exports (made cheap by the weak dollar) are vastly outstripped by domestic consumer spending. With the economy on an--at this point--lazy downward spiral, domestic spending is going to go down and the economy will continue to shrink.
So what then? More rate cuts? Are the Fed going to swoop in and save the day again? Are they going to make a sacrifice at the altar of Wall Street so as to avoid more 100+ single-day-point -drops?
Sometimes shit is just broke. It's complicated and it's broke. Sometimes you don't have enough data. Sometimes it's out of your hands. Sometimes some bad has to come before some good. I don't know where I learned this--maybe in kindergarten, maybe from Robert Fulghum. It doesn't matter. What matters is that the Fed learns this, and that they stop putting all of their giant dam-ned spoons in the pot that just needs to sit for a bit.
To be fair, they have access to data that I couldn't dream of having. Maybe inflationary pressures aren't as bad as I think they are, both here and abroad.
Then again, maybe I'm right.
-S.W. America
PS - The Economist (Best Damn Magazine Ever) talks about Bernanke and the economy here. READ IT NOW!
31 January 2008
28 January 2008
State of the Union
I've got a State of the Union for you: it's headed by a dumbass. My nausea today is brought about courtesy of the WSJ, which is still a fine paper despite being owned by NewsCorp. Our witless leader, the Idiot Boy King (C), says he wants to get spending under control... Congress is evil... yak, yak, yak. I have not been living in a cave for the past seven years. I remember the Republican Congress, a.k.a. the Congress of Earmarks.
To the President:
WHO THE F*** ARE YOU? DO YOU NOT REMEMBER WHAT YOU HAVE SPENT YOUR ENTIRE ADMINISTRATION DOING? WHO THE HELL ARE YOU TO BE TELLING ME WHAT MY DULY ELECTED REPRESENTATIVES SHOULD BE DOING WITH MY MONEY? Now go play with the dog in the rose garden. And thorns are candy. Eat a lot of them.
Oh this is about the preview of the SOTU address. I don't think I have the health to watch it. Maybe I'll just go to the emergency room and watch it there, that way when I have a heart attack and massive cerebral hemorrhaging due to the words spewing forth from the IBK's mouth and their total disconnect with reality, I'll already be in the hands of the pros.
God help us all.
-S.W. America
PS - Romney is still a panderer. I think I'm getting numb to it, but the idea of him getting nominated still makes me vomitous. Yeah, I said it.
Today it's the Cubans.
To the President:
WHO THE F*** ARE YOU? DO YOU NOT REMEMBER WHAT YOU HAVE SPENT YOUR ENTIRE ADMINISTRATION DOING? WHO THE HELL ARE YOU TO BE TELLING ME WHAT MY DULY ELECTED REPRESENTATIVES SHOULD BE DOING WITH MY MONEY? Now go play with the dog in the rose garden. And thorns are candy. Eat a lot of them.
Oh this is about the preview of the SOTU address. I don't think I have the health to watch it. Maybe I'll just go to the emergency room and watch it there, that way when I have a heart attack and massive cerebral hemorrhaging due to the words spewing forth from the IBK's mouth and their total disconnect with reality, I'll already be in the hands of the pros.
God help us all.
-S.W. America
PS - Romney is still a panderer. I think I'm getting numb to it, but the idea of him getting nominated still makes me vomitous. Yeah, I said it.
Today it's the Cubans.
23 January 2008
"It's the economy stupid."
No, dufus, it's BEEN the economy.
Let me explain. Wait, no I won't explain--I'll rant.
Subprime mortgage crisis. Who knows what the hell that means? I'll tell you what it means: a lot of shit. Some economics, some finance, some politics... and A LOT of psychology. Personally, I like the economics wedge of the pie the best, but that's because it's my hobby-of-sorts. The part that has played out most prominently in America is the psychology part. Oh, that voodoo science is back at it again, dancing merrily down the path to destruction with the God of War, Presidential Election '08. The two really don't have anything, but in combination they have given me a deep and resounding sense of ennui. Or something like that.
Yes, there are a lot of smart and (more importantly) highly paid people out there telling you how it is and how it's going to be. Let this ignorant and unpaid brute of a pundit tell you how it really is. Consumer confidence is going down. Home prices are falling. This is the 'A' and the 'B' that add up to the 'C' that is a recession. Maybe a Recession, you know, with a capital 'R'. Consumer spending was floating the economy. The good old tradition of buying shit we don't need was keeping the machine running. Well, we don't have as much money anymore. That stems from jobless rates, a decline in the real wage, and tight credit worldwide. That leads to everybody tightening their belts. Less money flowing around-->less shit bought-->less output-->decline in jobs and GDP-->recession. Seriously, it's not that difficult.
Central banks and companies that slosh money around have an effect. Of course they do: they have the money. The thing is, goods and services are bought by people. (Companies too, but we've been through that little procession, now haven't we?) The shit that people are buying less and less of is those very same goods and services. No mani/pedi for Toodles, the family poodle and LaTonya down at the pet salon gets laid off. Despite what many might like to think, the economy does have a trickle-down nature to it. (Don't infer any condoning of Reaganomics on my part, there happy-intellectual-trigger-finger person.)
There is a recession on the way. And that's it.
I'm not the only one who thinks so, b.t.w.. For corroborating opinion and other interesting information on the coming economic plague, visit Robert Reich's commentary for NPR's Marketplace.
-S.W. America
Let me explain. Wait, no I won't explain--I'll rant.
Subprime mortgage crisis. Who knows what the hell that means? I'll tell you what it means: a lot of shit. Some economics, some finance, some politics... and A LOT of psychology. Personally, I like the economics wedge of the pie the best, but that's because it's my hobby-of-sorts. The part that has played out most prominently in America is the psychology part. Oh, that voodoo science is back at it again, dancing merrily down the path to destruction with the God of War, Presidential Election '08. The two really don't have anything, but in combination they have given me a deep and resounding sense of ennui. Or something like that.
Yes, there are a lot of smart and (more importantly) highly paid people out there telling you how it is and how it's going to be. Let this ignorant and unpaid brute of a pundit tell you how it really is. Consumer confidence is going down. Home prices are falling. This is the 'A' and the 'B' that add up to the 'C' that is a recession. Maybe a Recession, you know, with a capital 'R'. Consumer spending was floating the economy. The good old tradition of buying shit we don't need was keeping the machine running. Well, we don't have as much money anymore. That stems from jobless rates, a decline in the real wage, and tight credit worldwide. That leads to everybody tightening their belts. Less money flowing around-->less shit bought-->less output-->decline in jobs and GDP-->recession. Seriously, it's not that difficult.
Central banks and companies that slosh money around have an effect. Of course they do: they have the money. The thing is, goods and services are bought by people. (Companies too, but we've been through that little procession, now haven't we?) The shit that people are buying less and less of is those very same goods and services. No mani/pedi for Toodles, the family poodle and LaTonya down at the pet salon gets laid off. Despite what many might like to think, the economy does have a trickle-down nature to it. (Don't infer any condoning of Reaganomics on my part, there happy-intellectual-trigger-finger person.)
There is a recession on the way. And that's it.
I'm not the only one who thinks so, b.t.w.. For corroborating opinion and other interesting information on the coming economic plague, visit Robert Reich's commentary for NPR's Marketplace.
-S.W. America
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