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Disasters Can Happen

Cynics and the Big Fat Greek Default

Greek Defaultby MN Gordon

Economic Prism

“Crito, we owe a rooster to Asclepius. Please don’t forget to pay the debt,” were the final words of Socrates. He uttered them shortly after downing poison hemlock in 399 BC, in fulfillment of his death sentence for corrupting the youth.

Asclepius was the Greek god for curing illness. One interpretation of Socrates’ last words is that death is the cure – or freedom – of the soul from the body. Another is that Socrates viewed his death as a cure for Athens’ ailments…including its decline from the height of hegemony and defeat by Sparta in the Peloponnesian War.

By all accounts, Socrates’ followers were left searching for direction following the death of this profound gadfly. Plato, for example, went on to explore, broaden, and clarify Socrates ideas, making them lasting contributions to the world. However, many of Socrates’ other followers dissolved into various factions, and became nothing more than historical footnotes.

The Cynics, for instance, took Socrates’ teachings of the (Read More....)

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Monkey Economics

Moneyby MN Gordon

Economic Prism

Despite the advent of the tablet phone and microwave kettle corn, there are still rudimentary evolutionary responses hardwired into the core of the human psyche. During moments of failing they take over and suppress clear thinking. How else can one explain modern man’s continued imbecilities?

Perhaps at another time and another place this animal instinct served a valuable purpose. The luxury of thoughtful contemplation wasn’t always an option. When backed into a corner just a moment of hesitation could mean the difference between life and death.

These days this archaic trait can become a great liability when put to the test. For instance, rather than slamming on the brakes to prevent a bus from driving off the cliff, a driver will often do the opposite…they’ll accelerate.

Several months ago the European Central Bank (ECB) initiated a new mass money debasement scheme. It involved buying €60 billion ($66 billion) a month of European government bonds. Somehow this was supposed to improve the economy.

No one, as far as we (Read More....)

. . . → Read More: Monkey Economics

The Lie That White Racism is Responsible For Minority Crime and Violence in Western European Societies

Hate RacismGuest Post Peter Wood

We have reached a point in Western societies where the truth cannot be acknowledged if it does not conform with a left-wing ideological narrative, and that narrative is a lie. The complicity of journalists and politicians of all parties in the narrative gives credence to the lie that minorities are only the victims and not perpetrators of racism. You will probably never hear the statistics quoted in this article in the Left controlled visual media nor read of them in the mainly Left written media. Personally, I have never seen a program which didn’t adhere to the socialist narrative of oppressed and dispossessed minorities and a racist white majority. Journalists in the visual media are past-masters in purveying misinformation, half-truths and myths. For German television journalists Hanni Huesch and Stefan Niemann it’s a very simple, one might say, black and white world: Democrats good; Republicans bad. Labour Party good; Conservative Party bad. I never heard Hanni Huesch say anything positive about the Republicans nor anything negative about Obama in her reports as head (Read More....)

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Pinching the Losers in Congress

How To Avoid Debt, Pixabay Graphicby MN Gordon

Economic Prism

Financial markets are remarkably confounding. If you’ve ever speculated on stock price movements, you know what we mean. Predicting where the market will go is hard enough. But knowing exactly when…that’s nearly impossible.

Looking back, assigning causation, and projecting forward, doesn’t do the trick. Neither does charting out wave patterns and drawing trend lines. For eventually trend lines are broken. Then what?

The point is, stocks go up and then they go down. So, too, they go down and then they go up. But sometimes times they go down and then they go down some more. For what’s absolutely the right time to buy at one time is spectacularly wrong at another. And what’s spectacularly the wrong time to buy at one time is absolutely right at another.

Take Southwest Airlines, for instance. It was last year’s top performing S&P 500 stock…returning 124.63 percent. This year, however, as of May 14, it was down 0.47 percent.

Make of it what you will. But, by shrewd (Read More....)

. . . → Read More: Pinching the Losers in Congress

Get Paid by Politicians

Obamaby MN Gordon

Economic Prism

“I’m out here studying what appears to be an epidemic of arrested development in the American Dream,” wrote Hunter S. Thompson from San Francisco to a New York Editor in the mid-1960s.

Fifty years later the effects of this epidemic have spread their ails across the entire American landscape. You can hardly peer about without evidence of the rampant degeneration – be it lack of manners or people too large for their sweat pants – lacerating your eyeballs.

There’s not much you can do to stop it. But you don’t have to be part of it. What’s more, there are ways you can make the best of it.

Today’s insights are for the patient and shrewd individual. If you are one among these few and far between fellows you’ll delight – and prosper – from what follows. And even if you can’t hold on to a buck, for fear it’ll burn your fingers, you may somehow find it within yourself to exploit this clever and elegant opportunity.

You only live once. Why not dare to do something that’s both fun and (Read More....)

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Bear Witness to the Madness

Honest Banking Practicesby MN Gordon

Economic Prism

Second-rate economic data is first-rate news for Wall Street these days. We don’t quite comprehend the logic. But the popular reasoning goes something like this…

Good economic data is bad for stocks. For it means the Fed will begin increasing rates sooner rather than later. Higher rates are bad for the stock market because of increased borrowing costs.

Nonetheless, bad economic data is also bad for stocks. For it means the economy could be slowing into recession. Declining corporate earnings and contracting growth should push stock prices down.

The sweet spot, however, is in the middling. Moderate growth means corporate earnings should hold. It also means the Fed will delay raising rates…which furthers Wall Street’s glee.

This is simply absurd, we know. But just because it is absurd doesn’t mean we should deny it. We may not understand it, we may not agree with it. Yet it is happening all the same. Who are we to resist it?

Six (Read More....)

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Sell the Rally


Economic Prism

Do you have the feeling something just ain’t right? If so, we suggest trusting your gut on this one. The financial system’s running head long for a bleak implosion…followed by years of economic hardship.

Certainly, this is only our opinion. One we’ve advanced over years of self-edification. But what do we know? We could be wrong…again.

We thought the DOW had peaked at about 13,000 and that the declining labor participation rate was indicative of a weakening economy…not a strengthening one. Thus far these notions haven’t played out as we’d anticipated. Perhaps we’ve been missing something all along.

Somehow, we can’t get past the fact that the economy’s flat yet stocks have gone vertical. Nor can we comprehend the fiscal and monetary gimmicks that have been (Read More....)

. . . → Read More: Sell the Rally

Connecting the Dots on Employment and Inflation

Unemploymentby MN Gordon

Economic Prism

One principal conundrum of the extreme monetary policies of the last eight years is on the subject of consumer price inflation. Expansion of the money supply is, by definition, inflation. Yet how come, following a quadrupling of the monetary base, consumer prices are flat?

The last we checked the CPI weighed in at just 0.2 percent in March. This certainly doesn’t seem like the great currency devaluation is under weigh. In fact, the dollar index is up 20 percent over the last year.

Obviously, there’s been massive asset price inflation. Since the market bottom on March 9, 2009, the S&P 500 is up over 217 percent. In other words, the market price of the primary index costs more than triple what it did just 6-years ago.

Similarly, treasury yields stumble along at historic lows. The 10 year note’s yielding just 2 percent. The risk premium for dollar based government debt’s practically nonexistent.

Anecdotally, certain prices are off (Read More....)

. . . → Read More: Connecting the Dots on Employment and Inflation

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