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Interesting Times Arrive

“Things sure are getting exciting again, ain’t they?”  The remark was made by a colleague on Tuesday morning, as we stepped off the elevator to grab a cup of coffee.

 

Ancient Chinese curse alert… [PT]

 

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A Great Big Dud

Many of today’s economic troubles are due to a fantastic guess.  That the wealth effect of inflated asset prices would stimulate demand in the economy.

The premise, as we understand it, was that as stock portfolios bubbled up investors would feel better about their lot in life.  Some of them would feel so doggone good they’d go out and buy 72-inch flat screen televisions and brand-new electric cars with computerized dashboards on credit.

 

The Wilshire 5000 total market index vs. federal debt and real GDP (indexed, 1990=100) – mainly there is an ever wider gap between asset prices and the underlying economic output, and although federal debt has grown by leaps and bounds in the Bush-Obama era, it can’t hold a candle to asset price inflation either. If asset prices were an indication of how an economy is doing, we would have arrived in Utopia by now. Unfortunately that is not the case, as asset prices primarily reflect monetary inflation. Just consider the extreme example of Venezuela’s IBC General Index, which went from 40,000 to 120,000 points, while the economy contracted by 21% in real terms (officially, that is. If one were to apply private sector estimates of inflation, it would look a lot worse). It is certainly true that economic aggregates are benefiting from bubble conditions to some extent, but that is essentially phantom prosperity. If you burn all your furniture, your home will be warm – that this might be problematic only becomes glaringly obvious once all the furniture is gone, because then it will not only be cold, but there will be nothing left to sit on either. When the red line on this chart reverts to the mean (or the “other extreme”), there will be a lot of gnashing of teeth, as many of the mistakes made during the bubble era will be unmasked. [PT] – click to enlarge.

 

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Presidential Duties

Our editor recently stumbled upon an image in one of the more obscure corners of the intertubes which we felt we had to share with our readers. It provides us with a nice metaphor for the meaningfulness of government activity. First, here is a look at the picture – just quietly contemplate it for while and let it work its magic on you:

 

fir wateringYes, these two gentlemen are actually watering a tree in the middle of a downpour…

Photo via president.gov.by

 

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Political Correctness Comedy

We have recently come across a video that is simply too funny not be shared. It also happens to dovetail nicely with our friend Claudio’s recent essay on political correctness and cultural Marxism. Since this is generally a rather depressing topic, we have concluded that having a good laugh at it might not be the worst idea.

 

safe spaceHow to most effectively create a “safe space” on campus

Cartoon by Nate Beeler

 

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Odd Couple

While checking on the US primaries a few days ago, we came across a piece of news informing us that pretend candle-swallower Ted Cruz had picked Carly Fiorina as his “vice-presidential running mate”. Our first thought upon hearing this was “WTF”?

 

CruzinaThe match made in heaven… two loooosers find each other.

Photo credit: AP

 

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Experts Agree: It Is Not 2008

If someone were to ask us what year it was, we would probably politely answer that it was 2016, curious to find out whether the inquirer was a) very confused, b) had only recently awoken from a coma and was still unsure of his when-abouts, or c) was a time traveler who got temporarily lost.

In the unlikely case that we should find ourselves unable to remember the year with sufficient precision to ensure a reliable answer, we’d probably consult a calendar. We recently found out that a great many people actually seem to be uncertain about what year it is. Or at least many mainstream media appear to think so, as they have launched an intense awareness campaign.

Specifically, numerous people seem to think it is still 2008. Wish that it were so – we’d be eight years younger. It all started on 24 August 2015, when two publications apparently discovered independently of each other that is was no longer 2008 and decided that this information should be urgently imparted to the rest of humanity. It all started with marketplace.org admonishing its readers to engage in mnemonic exercises so as not to forget:

 

1-Marketplace-dot-org-Aug-24-2015If you repeat it often enough, remembering it will eventually become second nature…

Photo via marketplace.org

 

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Up and Down

MUMBAI, India – The Dow dropped 208 points on Monday – or about 1.3%. After last week’s pause, it will be interesting to see if the sell-off resumes.

“Global equities in turmoil,” reads a CNBC headline.

“A month after raising rates, Fed faces darker global economy,” suggests an AP newswire report. Neither of these is true. The world has not changed significantly in the last month.

 

Trader Gregory Rowe works on the floor of the New York Stock Exchange, Wednesday, Jan. 6, 2016. Stocks are opening lower as investors fret about signs of belligerence in North Korea and more weakening of China's economy.

What has changed? The squiggly lines are going down instead of up….

Photo credit: Richard Drew / AP Photo

 

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Dead Letter Syndrome: Equality Before the Law

Former Italian prime minister Silvio Berlusconi – the cavaliere – has been successful in fighting off legal challenges ranging from sex with minors to alleged tax fraud involving humungous amounts for well over a decade. On a number of occasions, the Italian State even created new laws specifically designed to keep the cavaliere out of jail.

 

berlusconi sbFormer Italian emperor, the irrepressible and highly entertaining cavaliere.

Image by Steve Bell

 

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The Digital Commissar Beats Even Erdogan …

Austria boasts of a state-owned TV broadcasting company (the ORF), that similar to a handful of other European relics from the era when only governments were allowed to broadcast exists not on the commercial merits of its programming, but on the basis of coercion. Every owner of a device in the country that could conceivably receive broadcasts from a state-owned TV or radio station is forced to pay a monthly fee to the company, which not surprisingly pays some of the heftiest salaries available in the country (we have been told that it is also nigh impossible to get a job there unless one “knows someone”).

 

gis-gebhr_1439303526864465Austria’s state-owned broadcaster even has a special subsidiary (GIS Ltd.), whose sole task consists of ensuring that all device owners are paying up!

Photo credit: Die Presse/Clemens Fabry

 

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The Man They Hate with a Passion

Euro area politicians and IMF bureaucrats really hate Yanis Varoufakis’ guts with a passion. The media are full with denunciations of the man as “unprofessional”, negotiators of the euro-group let it be known (anonymously, natch) that “it got to the point where eyes roll”, that they were “sick and tired of being lectured about austerity and the effects of the crisis”, in short, it was “impossible to do business with him”.

Why do they hate him so much? Allegedly, “any sympathy for Greece was eroded by his failure to draft concrete proposals.” Typical Mediterranean lazy bum is the message, in other words. Big on vacuous emoting, but doesn’t want to waste time on doing his homework (plus, he wears no tie … you have to be clad in the technocratic uniform if you want to be taken seriously).

 

varoubikeThe eurocrats really hate this one. They’re probably all trying to channel Tony G when they meet Varoufakis.

Photo credit: Alkis Konstantinidis / Reuters

 

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The Flip Side of Technological Progress …

One of our e-mail correspondents sent us the cartoons depicted below, a humorous look on a subject public awareness of which has grown quite a bit in recent years. Modern electronic communication is great, and it is amazing that the market economy has made advanced devices such as smart phones accessible to the masses, but sometimes one cannot shake the impression that people have become enslaved by all the gadgets that have become indispensable accoutrements of modern-day existence. In fact, you will learn below who’s really in charge…:)

We do sometimes wonder how people would react if the power were to go out one day …

 

image001Important fairy tale questions have to be rephrased …

Cartoon by Stahler

 

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Japan’s Ministry of Defense Not Letting its Guard Down

Back in 2007, Japanese politicians were beginning to ponder how to defend the country against invading green men from neighboring star systems within the framework of the country’s pacifist constitution. Apparently a thorny issue, but at least the ministry of defense was on the case.

 

space-aliens-clip-art-24117

Hi there! (artist impression of a space alien from the Rigel II system)

 

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