“Black Friday” Woes
As has become customary, US shoppers have been engaged in lively skirmishes in shopping malls across the country last week, fighting it out over assorted deeply discounted “must have” gadgetry.
Here is a video showing a selection of 2015 Black Friday brawls (even small kids are getting robbed of their merchandise):
A selection of 2015 Black Friday brawls
Corporate Profits Decline
The Department of Commerce reported last week that U.S. gross domestic product grew at a 2.1 percent annual rate during the third quarter, not the 1.5 percent rate previously stated. Apparently, private inventory investment was greater than initially estimated. Nonetheless, GDP is significantly down from the 3.9 percent growth during the second quarter.
From the “things you definitely need to buy with money you don’t have” department:
Now new, with better! Light-up plastic antlers made in China!
Photo via bongoflashers.com
Trading Tentative Data
At the Cato Monetary Conference this week, Scott Sumner said he had a “modest” proposal, that there should be a highly liquid futures market in Nominal Gross Domestic Product (NGDP). This caught my attention, as the futures market is a topic near and dear to my heart (I write about it every week).
Scott Sumner has a plan (as he sees it, a better one than that pursued by the planners who are currently in charge). As far as we understand it, the Fed is supposed to pump and pump until NGDP (which is just as nonsensical a number as other versions of GDP) yields and increases due to the pressure of all that monetary inflation. How this is supposed to improve our prosperity isn’t quite clear, since not one iota of real capital can be created by the printing press. Assorted bien pensants are brimming with ideas though, all of which seem to involve central planning in some shape or form.
Screenshot via RT
A Dying Paradigm
One popular delusion that won’t seem to go away is the notion that policy makers can stimulate robust economic growth by setting interest rates artificially low. The general theory is that cheap credit compels individuals and businesses to borrow more and consume more. Before you know it, the good times are here again.
San Joaquin Valley view at sunset – plenty of agriculture in a place that seemed not exactly ideal for the purpose.
Photo credit: WRIR4 Photo Gallery
A “Major Concern”
The European Banking Authority EBA, which (we guess) is fighting for its survival after the ECB has become the sole supervisor of Europe’s “systemically relevant” banks, has recently issued a comprehensive report on the European banking system (this included the unintended revelation that its employees have yet to master the intricacies of Exel).
As an aside, we have little doubt that this bureaucracy will survive. Has there ever been a case of an EU bureaucracy not surviving and thriving? We don’t recall one off the cuff, but perhaps we are mistaken. We’re sure some reason will be found to preserve this particular zombie sinecure as well.
Hey guys! We’re still issuing reports! See how important it is to keep us well-funded?
“Muslims Are Evil”
BALTIMORE – Manuel Valls, the prime minister of France, says the risk of terrorism will hang over the country for many years. Whether this is prophecy or wishful thinking, we don’t know.
But it seems at odds with the recent promise to “annihilate” ISIS made by French president François Hollande. But the fight against terrorism is full of contradictions and paradoxes.
Cartoon via spectator.co.uk
$29 billion Vaporized
As is well-known, Spain is one of the countries in the euro area’s periphery that has been thoroughly bankrupted by its decision to join the euro area and enjoy an artificial credit expansion-induced boom as its interest rates initially collapsed. This was aided and abetted by the ECB, which sat idly by as the euro area’s true money supply exploded into the blue yonder with annualized growth rates ranging from 6% to 18% during the boom years.
Tower at Abengoa solar plant in Sanlúcar la Mayor, near Seville in Spain.
Photo credit: Marcelo Del Pozo / Reuters
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