Posted on 02 July 2020
by Philip Pilkington

Article of the Week from Fixing the EconomistsPaul Krugman wrote a column for the New York Times (20 June 2013) in which he argued that profitability in contemporary capitalist firms in the US is presently coming from monopoly rent rather than from production. Krugman points to the growth of finance and also to the growth of industries, like Apple, that rely on their brand names to earn their rather large crust. He then contrasts this situation with that of General Motors in the 1950s and 1960s who he paints as old school producers.Please share this article – Go to very top of page, right hand side, for social media buttons.Krugman’s story sounds nice but it is unclear what exactly he is referring to in theoretical terms. In neoclassical

Posted on 01 July 2020
by UPFINA

Article of the Week from UPFINAThe final June University of Michigan consumer sentiment report showed the overall confidence index fell from the preliminary reading of 78.9 to 78.1. It was still up from 72.3 in May, but investors want to see continued increases. Investors follow the rate of change which means whenever anything falls back, it’s cause for concern. The economy can’t afford to slip backwards because the recovery up until this point has only gotten the data from depressionary to recessionary.Please share this article – Go to very top of page, right hand side, for social media buttons.The economy is still very weak. Stalling out now would be a disaster. In early June, euphoric investors started to think we would see a quick V shaped

Posted on 28 June 2020
by John Mauldin, Thoughts from the Frontline

We just spent the better part of a decade wondering when the next recession would strike. The last two months we stopped wondering. It’s here and a grand council of esteemed economists has confirmed it.Please share this article – Go to very top of page, right hand side, for social media buttons.On June 8, the Business Cycle Dating Committee of the National Bureau of Economic Research found monthly economic activity had peaked in February 2020. On a quarterly basis, the peak was in Q4 2019, but in either case, a recession is now underway.It’s important to recognize how they define “recession."A recession is a significant decline in economic activity spread across the economy, normally visible in production,

Posted on 25 June 2020
by Philip Pilkington

In the first two parts of this series we saw first of all how Germany after the Second World War needed a reconstruction myth to sweep away the horrors of the Nazi past and yet, at the same time, avoid completely the reason for the Nazi’s rise to power. We saw how in order to do this two intellectual groups – the Western Marxists and the ordoliberals – came up with the idea that the true problem of Nazism had to with it being a state ideology.Please share this article – Go to very top of page, right hand side, for social media buttons.We then showed that this was not, in actual fact, the case at all and that Nazism was, if not an anti-state ideology, at the very least one which aimed at a weak subordinated state. Now let us turn to

You can probably guess what it is.It’s baldly obvious.Please share this article – Go to very top of page, right hand side, for social media buttons.Bank deposits have surged as the Fed has pumped trillions into the system. This should be self-evident as there’s a direct and clear cause and effect. The Fed pumps money into the system via its Primary Dealer strawmen, and deposits go up.Lately I’ve seen breathless articles in mainstream media about the surge in deposits as if it somehow shows that individuals and businesses are hoarding cash. And as if somehow that money didn’t enter the system via the financial markets and doesn’t circulate. To these morons the money is just a big blog of cash sitting in the banks.My friends – and you are my friends, really – if you understand nothing

Posted on 21 June 2020
by John Mauldin, Thoughts from the Frontline

Predictions are difficult, especially those about the future. That old proverb (often attributed to Yogi Berra) is right but you can’t live without making certain presumptions. You presume your car will start, your refrigerator will stay cold, the lights will turn on when you flip the switch.Please share this article – Go to very top of page, right hand side, for social media buttons.In fact, you could argue this “predictability" separates advanced economies from primitive ones. Most of us don’t have to worry about being attacked in our sleep or having food tomorrow. That security frees us to do other things.Right now, some basic assumptions are no longer safe. The economy will keep suffering until they are

Posted on 20 June 2020
by Constantin Gurdgiev, TrueEconomics.Blogspot.in

Weekly data for initial unemployment claims for the week ending June 13, 2020 was released Thursday June 18, so here are the updated ‘America’s Scariest Charts’:Please share this article – Go to very top of page, right hand side, for social media buttons.Index of employment, benchmarked to the pre-recession peak employment: Estimated total non-farm payrolls: And initial unemployment claims, half-year running sum: Today’s initial unemployment claims came in at 1,561,267 for the week ending June 6, 2020 (final estimate), slightly up on previous preliminary estimate. For the week ending June 13, 2020, non-seasonally adjusted initial unemployment claims came in at a preliminary estimate of 1,433,027. A summary

Posted on 18 June 2020
by Philip Pilkington

In the first part of this series (German Reconstruction As State-Phobia) we laid out how those who wanted political power in post-war Western Germany sought out a myth with which they could at once wipe of the Nazi past and push their ideological line.Please share this article – Go to very top of page, right hand side, for social media buttons.As we saw the ordoliberals were the ones who were successful in gaining power over the German myth-machine. They claimed that Nazism was simply the natural outgrowth of rampant statism gone wild – a mythic interpretation shared by their ideological cousins and fellow Mont Pelerin Society members, the Austrian school. We now examine in detail the relationship between Nazism and the state.Nazism as

Posted on 16 June 2020
by Lee Adler, Wall Street Examiner

These charts show it will kill the economyThe COVID 19 pandemic is, predictably, worsening again in much of the US. Only the Northeast, and to a lesser extent some Midwestern states, have been consistently improving. And that trend could also reverse as those states fully reopen.Please share this article – Go to very top of page, right hand side, for social media buttons.The problem in the US seems to be widespread public resistance to recommended practices of social distancing and mask wearing. In countries where these practices have been practiced universally, they have shown to halt the progression of the disease.The US doesn’t have the ability to do that. Each of the 50 states had and has different rules. They instituted

Posted on 13 June 2020

by Constantin Gurdgiev, TrueEconomics.Blogspot.in

This post updates comparatives between the U.S. and the EU27 in terms of case counts, deaths, and death rates.

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Here is a summary graphic for comparing the U.S. and the EU27:

The above shows overall data for cases and deaths counts. The U.S. is showing no moderation in trend and new cases and deaths reported, despite the country being hell-bent on exiting COVID19 pandemic restrictions. The data is yet to show any significant impacts of the ongoing social protests and unrest, which are coming down the line.

Next up, a different view of U.S. comparatives to the EU27:

Adjusting for the differences in the

Posted on 11 June 2020
by Philip Pilkington

Article of the Week from Fixing the EconomistsIn a previous series of pieces about the origins of neoliberalism (available here: Part I, Part II, Part III and an interview) I put forward the idea that neoliberalism – and its extremist offshoot, libertarianism as represented by the Austrian School – was founded on a very specific myth. This myth I called “Hayek’s delusion" and it holds that any sort of economic planning will inevitably lead to totalitarianism. Thus even well-intentioned Keynesian policies of economic planning contain within them the seeds of the next Third Reich.Please share this article – Go to very top of page, right hand side, for social media buttons.In the first part of that series I tried to show that this myth

Posted on 10 June 2020
by UPFINA

Article of the Week from UPFINAThere were 2.509 million jobs created in May which was above the 20.687 million jobs lost in April and dramatically above expectations for 7.725 million in losses. Similarly, there were 3.094 million private sector jobs added which beat estimates for 6.5 million in losses and April’s reading of 19.724 million in losses.Please share this article – Go to very top of page, right hand side, for social media buttons.The S&P 500 rallied 2.62% on this news on Friday. While that seems like a very large rally, it’s actually small when you consider the scale of this beat. That rally is the type of response you’d get from a normal better than expected number. This was several times the size of the largest beat ever.Stocks didn’t

Posted on 07 June 2020

by John Mauldin, Thoughts from the Frontline

— this post coauthored by Dr. Michael Roizen, MD

Should you wear a mask in public? This seemingly simple question immediately generates emotional, political, and social anxiety.

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It is just one of many provocative questions COVID-19 is forcing upon us. They should be simple, data-driven policy issues but many are not.

Today’s article is in a different format from the usual Thoughts from the Frontline. As long-time readers know, I am in frequent (and lately almost daily) contact with Dr. Mike Roizen, emeritus head of wellness at the famous Cleveland Clinic, member of the Cleveland Clinic’s leadership team, and

Posted on 04 June 2020
by Philip Pilkington

Article of the Week from Fixing the EconomistsIf you read Feyerabend’s Against Method closely and you take the argument seriously a rather unnerving fact comes to light: namely, that the argument contained therein lends full intellectual support to mainstream marginalist economics. While the theories of philosophers like, say, Popper or Lakatos can easily be applied to refute marginalist economics by showing either that is inconsistent with the facts or is a ‘degenerating research program’, Feyerabend’s approach actually lends it weight.Please share this article – Go to very top of page, right hand side, for social media buttons.Feyerabend’s argument is that a theory cannot be judged simply based on the facts that supposedly refute it or

Posted on 30 May 2020
by UPFINA

Weekend Reading from UPFINAThe jobless claims report in the week of May 23rd improved from the prior week as there were 2.123 million initial claims which fell from 2.446 million. As you can see from the chart below, that was a 13% decline which was an improvement from the prior week where there only was a 9% decline.Please share this article – Go to very top of page, right hand side, for social media buttons.PUA or pandemic unemployment assistance claims, which are claims from self-employed people, totaled 1.2 million on a non-seasonally adjusted basis. You can’t seasonally adjust for a new program. Initial claims have fallen for 8 straight weeks which is the longest streak on record. Initial claims are highly correlated with stock prices which

Posted on 31 May 2020
by John Mauldin, Thoughts from the Frontline

The history of humanity, at least as taught in most schools, is really about two seemingly opposite forces: human innovation and human conflict. The same intelligence that lets us accomplish great things also sets us against each other. But sometimes, we rise above it.Please share this article – Go to very top of page, right hand side, for social media buttons.Last week I saw on Twitter (where you should follow me, by the way. Seriously. I am really getting into late night Twitter as my relaxing/learning/commenting time, something I never expected), someone saying the COVID-19 pandemic may be the single most “global" event in human history. It’s happening almost everywhere, to almost everyone, at about the same

Posted on 28 May 2020
by Philip Pilkington

Article of the Week from Fixing the Economists “Ask and it will be given to you; seek and you will find; knock and the door will be opened to you." – Matthew 7:7Michael Emmett Brady’s paper Keynes, Mathematics and Probability: A Reappraisal is a bizarre piece of work. In it he reads things into Keynes work on economics in a manner that is not dissimilar to someone reading another person’s fortune into tea leaves.Please share this article – Go to very top of page, right hand side, for social media buttons.In the paper Brady claims that in Keynes’ Treatise on Probability the author stopped trying to make ‘point estimates’ of probabilities – that is, estimates that crunch out a single number – and instead moved toward trying to make

Posted on 27 May 2020

Written by Steve Keen, Patreon.com/Steve Keen

This is a talk I’ve prepared for the University of Basel, which has established an online plural economics lecture series as part of the official curriculum–a move for which I congratulate the University.

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I give a very brief overview of the content and history of Post Keynesian economics, and then focus on Hyman Minsky’s Financial Instability Hypothesis, and my work on both modelling Minsky and explaining the role of credit in aggregate demand and income. This includes a very brief introduction to complex systems and system dynamics, using the Open Source software I designed called Minsky.

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Posted on 23 May 2020
by Lance Roberts, Clarity Financial

Currently, the Fed is injecting liquidity into the markets and economy at a record pace. While liquidity does have positive short-term benefits, is the Fed walking into a trap?Please share this article – Go to very top of page, right hand side, for social media buttons.The UnseenOver the last decade, the Federal Reserve, and Central Banks globally, have engaged in never-ending “emergency measures" to support asset markets. While the stated goal was that such actions were to foster full employment and price stability, there has been little evidence of success.The chart below shows the expansion of the Fed’s balance sheet and its effective “return on investment" on various aspects of the economy. No matter how you analyze it,

Posted on 24 May 2020
by John Mauldin, Thoughts from the Frontline

We finished the Virtual Strategic Investment Conference yesterday. I can honestly say it was simply the best conference I have ever attended or been privileged to host.Please share this article – Go to very top of page, right hand side, for social media buttons.The ability to bring together so many exciting speakers, something schedules would not have allowed if we were holding a physical conference, offered a constant stream of thought-provoking, investment-enhancing, and useful information.I shared some highlights in last week’s article, will tell you more today, and probably yet more next week. But you really need to experience it yourself, and you still can with our Virtual Pass package that includes video,

Posted on 21 May 2020
by Constantin Gurdgiev, TrueEconomics.Blogspot.in

Fading into Economic AbsurdityThe G7 is a rather exclusive club of the 7 ‘largest’ and, according to their own aspirations, most important – economically and geopolitically – economies. Except, of course, it isn’t. The latest IMF data (through 2019) and forecasts (for 2020-2021) published last month show just how bizarre the geopolitical influencer game got over the recent years and just how more bizarre it is likely to get over the next two.Please share this article – Go to very top of page, right hand side, for social media buttons.Below are the actual ranks of the countries based on their GDP, taking into account exchange rates and price levels differences (the PPP adjustment). And before you jump at

Posted on 21 May 2020
by Philip Pilkington

JW Mason has an interesting post on the interest rate over at his Slackwire blog. In it he basically tries to resuscitate Keynes’ theory of liquidity preference as that which determines the interest rate on various assets. I think that he does rather a good job given that this is his goal but from the moment I looked into this debate over a year ago I was always bothered by what was going on.Please share this article – Go to very top of page, right hand side, for social media buttons.First let us start with the conclusion that Mason comes to when considering the theory of the interest rate that Keynes lays out in the General Theory,If we take a more realistic view of credit markets, we come to the same conclusion: the yield on a credit

Posted on 17 May 2020
by John Mauldin, Thoughts from the Frontline

I knew this article’s topic months ago. It was going to be a review of the Strategic Investment Conference, which would have just concluded fabulously in sunny Scottsdale.Please share this article – Go to very top of page, right hand side, for social media buttons.Well, something intervened. Coronavirus precautions kept us from having an in-person conference. No one was more disappointed than me. I often say SIC is the highlight of my year, and I’m not kidding. Being around so many brilliant minds, soaking up their knowledge, and all the while meeting and talking with so many loyal readers and close friends – it’s just an amazing experience.Yet I have to say, the Virtual SIC we are now halfway through is amazing,

Posted on 14 May 2020

by Philip Pilkington

Misreading of George Berkeley’s Philosophy

I recently picked up Bertrand Russell’s History of Western Philosophy to have a look at the argument he makes against the philosophy of George Berkeley. Frankly, I have never liked Russell. He is a clear writer – and a convincing one – but a poor scholar. He also has a tendency to read his own biases into the works of others as being ‘mistakes’.

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Most of what Russell does is that he assumes that his own Rationalist worldview is the correct one and then shows how other worldviews are ‘incorrect’ by the standards of his own worldview. I do not want to be misread here because I am the first person to

Posted on 13 May 2020

by Lance Roberts, Clarity Financial

The fiscal and monetary responses to the "coronavirus" created a surge in savings. While many hope those savings will go back to work, the "savings mirage" won’t save the economy.

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In recent weeks, there has been a good bit of chatter about the surge in the "savings rate." The rate has now jumped to the highest levels seen in the last couple of decades, suggesting the consumer is now "well-positioned" for a "consumption comeback."

As Bank of America’s Michael Hartnett suggests, the consumer has the "ability" to finance the recovery.

The hope is that these "cash hoards" will eventually begin to flow back into the economy

Posted on 10 May 2020
by John Mauldin, Thoughts from the Frontline

We live in truly historic times. “There are decades when nothing happens, and weeks when decades happen," says a quote usually attributed to Vladimir Lenin. It certainly fits now.For thousands of years, people who lived through what we call “history" didn’t realize it. We are the exceptions. We’re seeing history and we know it. The Vietnam War was certainly historic, but the coronavirus killed more Americans in the last two months than died in that long conflict. The Great Depression was historic but by some indicators we are well on the way to matching it. The Manhattan Project and the Apollo missions were historic, but right now even more massive, world-changing technology and biotechnology are being hastily

Posted on 09 May 2020
by UPFINA

Weekend Reading From UPFINAWe received some criticism for saying initial jobless claims had peaked in late March. Now that’s virtually assured as they fell for the 5th week in a row. In the week of May 2nd, initial claims fell from 3.846 million to 3.169 million. This is all about the situation getting worse at a lower rate. The labor market is still worsening, but it’s not worsening at as rapid a rate as it was in late March.Please share this article – Go to very top of page, right hand side, for social media buttons.Furthermore, as we will get to later, many of these claims are from the backlog, meaning these aren’t newly unemployed people. As you can see from the chart below, initial claims are expected to fall to 2.48 million in the next report.

Posted on 07 May 2020
by Philip Pilkington

Comments on Feyerabend’s ‘Against Method’, Part 2In my previous commentary on Feyerabend’s book Against Method I criticised him for being incoherent in his understanding of the relationship between the philosophy of science that he is actually expounding and his own philosophy which he thinks to be materialist but which is quite evidently not. In this commentary I seek to clarify what is actually taking place in the conceptual revolutions that Feyerabend documents in the book. He argues that these are revolutions in ‘language’ and ‘concepts’ but I think when they are examined closely it is obvious that they are rather revolutions in subjectivity.Please share this article – Go to very top of page, right hand side, for social media

Posted on 06 May 2020
by UPFINA

Article of the Week from UPFINAMillennials have less wealth than previous generations did at the same age and now they are getting hit with the deepest decline in economic growth and the biggest spike in unemployment since the Great Depression. As you can see from the chart below, net household wealth per generation member 21 years or older in 2019 dollars was the lowest for millennials. Millennials had 30% less wealth than generation X did at the same age.Please share this article – Go to very top of page, right hand side, for social media buttons.Source: Twitter @graykimbroughWe don’t have data on this recession’s impact on millennials, but we do know the last recession left a permanent mark on career earnings. Young people’s net worth comes from

Posted on 05 May 2020
by Constantin Gurdgiev, TrueEconomics.Blogspot.in

The global comparatives on incidence rates and death rates show lack of convincing decline in the rate of detected new cases and deaths worldwide. In the last three days, global case numbers posted another ‘local peak’ reading of 93.328 cases on May 2, which marks a fifth ‘local peak’ in the overall time series.Please share this article – Go to very top of page, right hand side, for social media buttons. ‘Local trough’ of 65,944 cases on April 28 – much touted in the media as the evidence of the pandemic moderating – has now been followed by four consecutive days of increases through May 2, and the usual declines in cases on May 3 and 4th. May 4th counts were 78,657, which ranks 18th most severe increase in