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HomeAshoka Mody: “Global Economy’s Groundhog Day”
Posted by Larry Doyle on August 8th, 2014 6:24 AM |
While all too many market prognosticators, political pundits, central bankers, and Wall Street economists work overtime at creating and promoting a narrative to fit an improving global growth story, I have not seen the underlying fundamentals here at home or abroad to support that case.
So while I will quickly peruse the views and opinions of the aforementioned lackeys spinning their yarns, I prefer to look elsewhere to find those pursuing the truth.
This morning, I welcome reading the global perspective provided by Ashoka Mody, “visiting Professor of International Economic Policy at the Woodrow Wilson School of Public and International Affairs at Princeton University and a visiting fellow at Bruegel, the Brussels-based economic think tank. He is a former mission chief for Germany and Ireland at the International Monetary Fund.”
Mody pens a fabulous commentary at Project Syndicate as to what I believe is really transpiring along our global economic landscape. Let’s navigate.
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What Was The ‘Real’ Level of 1st Qtr GDP?
Posted by Larry Doyle on June 26th, 2014 8:37 AM |
Anyone with a modicum of ‘sense on cents’ is well aware of the maxim ‘garbage in, garbage out.’
If we are to believe that the inflation data reported by Uncle Sam does not properly capture the true level of price increases in our economy — did somebody say intentionally misleading — then the immediate question begs, what is the real level of economic activity in the nation?
Recall that real GDP is defined as:
A measure of economic growth from one period to another expressed as a percentage and adjusted for inflation (i.e. expressed in real as opposed to nominal terms). The real economic growth rate is a measure of the rate of change that a nation’s gross domestic product (GDP) experiences from one year to another.
If inflation is under reported, and the rate of change in our economic growth is a known figure, then by definition the output (that is, real GDP) will be overstated. So I repeat my question: What is the real level, that is a more honest and accurate assessment, of our 1st quarter GDP? (more…)
Industry Insiders Provide 2014 Outlook
Posted by Larry Doyle on November 26th, 2013 8:57 AM |
As we navigate even further into uncharted waters, many who visit this site are likely wondering what lurks on the horizon for our markets and economy in 2014.
The markets may be typically quiet today and tomorrow with sloppy weather in many parts of our nation and preparation underway for our traditional feast of Thanksgiving.
Let’s take a little extra time to feast on some widely divergent economic and market viewpoints on display in a recent Research Magazine roundtable discussion with respected industry insiders Rob Arnott, John Buckingham, Ken Fisher, and one of my favorites Bob Rodriguez.
What’s the current state of the economy? (more…)
Gartman: Investment Capital Will Leave US Market
Posted by Larry Doyle on October 18th, 2013 8:36 AM |
After the dysfunctional debacle displayed in Washington over the last few weeks — and potentially repeated in early 2014 — what is that strong symbolic wind now blowing offshore?
Oh, that is the sound of investment capital leaving our nation.
Not that those in Washington have a real appreciation for it but private investment capital is the lifeblood which fuels our economy.
While those in Washington are now sufficiently addicted to our central banking shell game, aka quantitative easing, why would they be concerned about protecting and promoting the formation of private investment capital? Great question. (more…)
What Recovery? Durable-Goods Orders Drop Off Cliff
Posted by Larry Doyle on August 26th, 2013 9:27 AM |
The economy might never look better for those involved in crony, rent-seeking pursuits.
For the rest of us, continued belt tightening is the order of the day.
With wages remaining stagnant, we now get to swallow a heaping of further economic gruel as large-ticket durable goods orders are reported to have taken what might only be compared to a swan dive off a tall cliff.
How long a dive and what is the degree of difficulty connected with this report? “Only” a 7.3 percent decline . . . OUCH. Brace yourself for a large splash and likely bodily injury upon entry.
Let’s review the dive a little closer as the WSJ covers the scene:
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What/Who Is Holding Back Small Business? Washington DC, That’s Who
Posted by Larry Doyle on August 9th, 2013 8:17 AM |
Put aside everything else that streams across the daily news wire, there is no doubt that the prevailing issue that causes the most concern for people in our nation is how they are putting bread on the table.
Yes, we can dispense with all the noise that spews forth from far too many sources, the issue that is most prominent to our economic well being remains JOBS, JOBS, JOBS. So where are the jobs and why aren’t they being created to any meaningfully degree a full five years after the outset of our economic crisis? (more…)
Doubleline/Gundlach: What in the World is Going On?
Posted by Larry Doyle on June 5th, 2013 9:37 AM |
A perennial Sense on Cents All Star and Hall of Fame inductee, Doubleline’s CEO Jeff Gundlach, presented an investment webcast yesterday.
I welcome sharing the slides utilized by the premiere investment manager in the business as he spanned the globe in his presentation dubbed, “What in the World Is Going On?“
Anybody with even a passing interest in understanding what is happening in our global economy will want to take anywhere from 5 minutes to many hours to absorb what can only be described as a treasure trove of invaluable and informative analysis.
Gundlach’s presentation provides an overview of the following and much more:
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Uncle Sam’s Rent-Seeking Economy circa 2013
Posted by Larry Doyle on May 29th, 2013 5:22 AM |
Are we in the midst of the greatest transfer of wealth in modern times?
I will allow others to debate the merits of that question, but I propose it in order to address what I see increasingly as the “new normal” reality of our current economic condition here in the United States. What lies at the core of this new normal dynamic? A rent-seeking economy, defined as:
When a company, organization or individual uses their resources to obtain an economic gain from others without reciprocating any benefits back to society through wealth creation.
An example of rent-seeking is when a company lobbies the government for loan subsidies, grants or tariff protection. These activities don’t create any benefit for society, they just redistribute resources from the taxpayers to the special-interest group. (more…)
CFO Survey: A Time of Extraordinary Risk
Posted by Larry Doyle on February 22nd, 2013 6:53 AM |
Who might that be flashing the warning signals about our markets and our economy?
I am always predisposed to look for risk on the horizon so that we can all navigate accordingly, but the quote referenced in the title of this commentary comes not from me but from professors at Duke University’s Fuqua School of Business.
What prompts them to make such a statement? Only a survey of over a thousand global CFOs that projects economic activity a quarter ahead of most other surveys. Now that is the type of material we like as opposed to the “look in the rear view mirror” provided by many outlets.
Let’s navigate . . .
Chief Financial Officers See More Downside Risk in the Stock Market than Upside (more…)
Stories Deserving More Attention: Did You See This?
Posted by Larry Doyle on April 8th, 2013 8:21 AM |
I will reference these stories now and will certainly come back to many, if not all, of them in the near future. The items include:
1. In what might only be compared to trying to turn around the Titanic on one of your local streets, the Bank of Japan is launching a “quantitative easing on steroids” program. The goal of “all this juice” is to generate a 2% rate of inflation in the next two years from what has been a two-decade deflationary cycle. (more…)
Tags: bank of Japan program to promote inflation, Bank of Japan quantitative easing, Bill Cohan commentary on bank regulators, black swan, decline in the labor participation rate, deflation in Japan, disability claims, Japanese economy in deflation, Japanese equity markets, Joe Sciddurlo FINRA whistleblower, Joe Sciddurlo lawsuit against FINRA, Joe Sciddurlo questions authority at FINRA, lawsuit against FINRA, Nassim Taleb comment on Mary Schapiro, permanent underclass in America, quantitative easing on steroids, rural poverty, support for asset markets, urban graduation, yen carry trade
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