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Disasters Can Happen

An Abundance of Idle Trucks

by MN Gordon

Economic Prism

An Abundance of Idle Trucks

The popular economic theme being reported by the popular press still remains.  That the economy is grinding higher.  That growth is improving, albeit slowly.  That blue skies are just over the horizon.

Naturally we have some misgivings.  As far as we can tell, business is not humming along.  Earnings are stagnant.  Profits are slim.  Moreover, corporate reductions in force (RIFs) are being executed with the imprecise targeting of a sledge hammer.  Even Google’s laying off staff.

Most notably, if the economy were (Read More....)

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Prepare for the Unthinkable

by MN Gordon

Economic Prism

Red Ink

Growth and profits mask a variety of problems.  They hide business inefficiencies and the money suck of corporate administrivia.  They also conceal unproductive staff.

But most of all growth and profits obscure the extreme value subtracting forces of bloated management teams.  During good times it is unclear what these smug fellows do.  During bad times it is lucidly clear that most of them ain’t worth a darn.

When the profits inevitably recede, the senior executives, with their silly 24 point project reviews and cumbersome project execution requirements, appear lost.  They’re left exposed, with their pants down, and without a clue in the world as to what business it is they’re actually in.  What the heck have they been doing all this time?

Where does the money come from?  How is it spent?  Over (Read More....)

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Why the Fed Destroyed the Market Economy

coins-912718_960_720Why the Fed Destroyed the Market Economy

by MN Gordon

Economic Prism

What Have You Done for Me Lately?

Swing voters are a fickle bunch.  One election they vote Democrat.  The next they vote Republican.

For they have no particular ideology or political philosophy to base their judgement upon.  They don’t give a rip about questions of small government or big government.  Nor do they have any druthers about the welfare or warfare state.

In effect, they really don’t care.  What’s important to the swing voter is much simpler.  In fact, it can be boiled down to the following essential question.  What have you done for me lately?

The answer to this question, of course, comes back to money.  As far as the swing voter’s concerned, if their brokerage account’s growing they vote the incumbent (Read More....)

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Shrewd Financial Analysis in the Year 2016

financial_1473809905-250x250Shrewd Financial Analysis in the Year 2016

by MN Gordon

Economic Prism

How to Decipher the News

“Markets make opinions,” says the old Wall Street adage.  Perhaps what this means is that when stocks are going up, many consider the economy to be going great.  Conversely, when stocks tank it must be because the economic sky is falling.

For both scenarios the opinions range far and wide.  A rising NASDAQ may compel a tech aficionado to proclaim we’re on the cusp of a new digital revolution.  Falling manufacturing stocks may compel a protectionist to proclaim it (Read More....)

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Alan Greenspan’s Pickled Economy

Economyby MN Gordon

Economic Prism

Former Federal Reserve Chairman Alan Greenspan resurfaced this week.  We couldn’t recall the last time we’d heard from him.  But, alas, the old fellow’s in desolate despair.

On Tuesday, for instance, he told Bloomberg he hasn’t been optimistic for “quite a while.”  Obviously, this is in contrast to the perennial Goldilocks attitude he had during the 1990s.  So what is it that has the Maestro playing a low dirge?

China, the dollar, Dodd-Frank, and associated unknowns are all part of his negative outlook.  But the long winter of his discontent is something else.  Greenspan said he “won’t be [optimistic] until we can resolve entitlement programs.”

“Nobody wants to touch [entitlements].  But it is gradually crowding out capital investment and that is crowding out productivity and that is crowding out the standards of living,” said Greenspan.

Indeed, funding (Read More....)

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Black Swan Fledgling – The Debt Crisis Takes Flight

Bankers, Elite, Federal Reserve - Picture Credit Pixabayby MN Gordon

Economic Prism

The debt based money system plods along according to plan.  The Fed offers unlimited credit.  Public and private entities borrow and spend it.

One of the more popular delusions of contemporary culture is disbelieving the money will ever have to be repaid.  There’s no logical thesis that we are aware of to support this misconception.  But it prevails across the general populace all the same.

Day by day, however, the bills come due.  They pile up like wrecked autos on the 405 freeway.  Over the last 30 years or so they’ve stacked up beyond what the economy can possibly support.

The breaking point was reached in 2008.  We are currently living through the interim period of suspended disbelief.  Many aren’t quite ready to accept their new fate.  This wasn’t what they’d bargained for.

Scientific management of the economy, as executed by the Federal Reserve System, was supposed to perpetually inflate away each generation’s debts.  Not too (Read More....)

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Amplified Losses

Ben Bernanke,Fed’s balance sheet,economic implosion,Bernanke, Obama, Congress, recession,Marxism-LeninismAmplified Losses

by MN Gordon

Economic Prism

Federal Open Market Committee meetings are always a spectacle.  The forthcoming FOMC meeting, scheduled for September 16 and 17, should be particularly endearing.  For despite the Fed’s claim to provide transparency the upcoming policy announcement is cloudier than pollywog stew.

All year the Fed has hinted they’d finally lift the federal funds rate from near zero.  Yet with each FOMC meeting the Fed has pushed back the decision.  Until three weeks ago, the September FOMC meeting was to be the historic date of a small, incremental rate increase.

But that was before the stock market shuttered and rapidly dropped 12 percent.  In late August, at the moment of maximum (Read More....)

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