After spending decades studying the economy, it is understandable that this blog is usually about the economy, but it hasn’t been that way recently. That’s because all the data has been relentlessly dismal – the worst I have ever seen. What’s the point of elaborating the obvious? The current economy sucks! Here is some of the recent data: Factory output dropped 11.2% in April, the…
Today is May 29th – traditionally financial planners use this date to remind their clients about 529 plans, which are tax-efficient ways to fund education expenses for kids and grand-kids (and other relatives). These plans were initially very popular and still should be. The very wealthy can put $150 thousand in an unlimited number of 529 plans for an unlimited number of kids and grand-kids. …
For some reason, I took a sophomore course entitled “The Philosophy of Logic” and have always been glad I did. The concept of syllogism has been helpful to me over the years. (You’ll remember that as – if A, then B – if B, then C – therefore, if A, then C) Still, it was an offhand remark by the professor that made a deeper…
For some long-forgotten reason, I still have a checking account at Bank of America. With their latest monthly statements, there was an insert suggesting the seven questions you should ask a potential financial advisor, which are: What types of clients do you work with? Okay, that’s a fair question. One example would be increased familiarity by the advisor with the myriad of financial programs for…
In early 1992, I was appointed by the governor to the Texas State Depository Board. It was a four-member board composed of the State Treasurer, State Controller, State Banking Commissioner, and myself. As it was during the Texas Savings and Loan (S&L) scandal, when taxpayer losses would exceed $300 billion, I met a great many executives from those failed and failing institutions. Without exception, I…
Most market watchers are familiar with the old rule-of-thumb that the stock market changes directions about 6 months or so before the overall economy, based on the assumption that investors study the economy more closely than most people. There is a lesser known rule-of-thumb that the art market changes directions about 3 months or so before the stock market, based on the assumption that art…
Ian Bremmer is the founder & CEO of Eurasia Group, an international risk consulting firm. He is also one of the most original thinkers I follow. You know he must be an original thinker, if he sees a silver lining to the current pandemic and economic collapse. Like pain is “good training” in the Army, he sees this viral-collapse is good training for a massive…
Even after all these years, I’m still pretty good with guns and have to roll-my-eyes whenever I see these hot-headed, gun-totting wannabe-protectors demonstrating for the freedom to congregate in churches and bars. Or, maybe it is to strut around with their macho-guns? For years, I have railed about Americans losing their privacy. Where are these “brave” demonstrators on privacy? There is a greater chance we…
My father always cautioned me to never discuss politics, religion, or how to raise children. Unfortunately, I must often discuss politics, as it is scrambled with economics, but I still avoid partisanship. On the other hand, I never discuss child-rearing, because I frankly don’t have a clue. I do take his advice about religion and don’t think I have ever quoted a religious leader before,…
How much fiscal assistance does our economy need? The Democratic programmed response is “more” and the Republican programmed response is “less.” Neither is helpful. Here’s a different way to look at it. Assume our GDP is about $20 trillion per year, and it is. Assume our first and fourth quarters (Q1 and Q4) are about flat, which is reasonable. Now, assume Q2 and Q3 are…
One way to estimate the size of our economy is this: GDP equals the average number of transactions each year times the average price of transactions. (GDP = TP) Another way is this: GDP equals money supply times the velocity of money. (GDP = MV) The velocity of money is the number of times a dollar is spent each year. That means: TP = MV…
First, I have a very intelligent friend, who is susceptible to conspiracy theories. Because of that, I do enjoy debating with him. Although he is not the religious type, he believes that Evil exists, as an actual entity, not a mere characteristic of a demented person. Evil roams the planet, he says. Second, I love my country. I love my family. I love my friends. …
This type of torture is a slow drip of cold water on the face for an extended period, creating such a state of anticipation for the next drop, that the victim eventually becomes insane. That is the experience of most economists during this Great Collapse, anticipating the next piece of bad news. Almost all economic datapoints have been relentlessly negative. Usually, there are good datapoints…
Economists tend to be a smug bunch, comfortable with their ability to see the future. After all, we’ve seen thousands of economic datapoints over many decades and have a good feel for normal limits. Then, the coronavirus changed everything! No economist has ever seen unemployment increase 20.5 million souls in a single month — truly historic. That would have been unimaginable just four short months…
Messianism is the belief in the arrival of a messiah, who will save or liberate people. Understandably, the need for a messiah is increased during times of stress or fear. We can witness the increasing number of messiahs or “strong-man” leaders in the last fifty years, which has been a time of many wars, of vast technological changes, of increasing concentrations of wealth, and puzzling…
Thank you, Mr. President!
For years, I’ve argued that news is addictive. It is just like smoking or drinking or illegal drugs . While there are many non-profit organizations and for-profit companies to treat those traditional addictions, there is nobody to help you with your news addiction. The news organizations will not help you. They are NOT in the business of informing watchers. They are in the business of…
