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Wednesday, December 25, 2013

Have A Joyous Christmas

From the Commentary website:  Nobody Should Fear a Merry Christmas

Tuesday, December 24, 2013

Quote Of The Day

From Thoughts from the Frontline - What Has QE Wrought?
By John Mauldin | Dec 21, 2013

And what are they [the Federal Reserve] telling us about the future they have planned? It is going to turn out extremely well, they say. As a group they are forecasting economic Nirvana by at the end of 2016: a 3% GDP growth rate, 2% inflation, and a 5.5% unemployment rate. What would you expect the Fed funds rate to be in such a world? Might you assume that you would at least get some inflation premia?

Think again. They are forecasting a median Fed funds rate for 2016 of 1.75%, which is a 0.25% negative risk-free return!

I have highlighted in the past how truly abysmal the models are that the Fed uses to forecast economic conditions. It is almost statistically impossible, as numerous researchers have documented, to do as badly as Federal Reserve economic forecasts have done, although the Office of Management and Budget and other congressional forecasters give them a run for their money. The latter have the partial excuse of being economists employed by politicians. The Fed has no such excuse. Their models are just plain bad.

Sunday, December 22, 2013

Wall Street Continues Celebrating

The Fed’s recent “tapering” policy does nothing to control or deflate the stock market bubble.  While latest quantitative easing policy will reduce monthly purchases of longer-term Treasuries and mortgage securities from $85 billion per month to $75 billion, the Fed vows to keep short term rates near zero throughout 2014, and possibly longer.

It’s the availability of essentially unlimited amounts of short-term funding for the stock market carry trade that fuels the bull market in stocks, in the face of the highest ratio on record of negative earnings outlooks issued by corporations.  Carry trade, as you may know, means the ability to borrow short-term at very low interest rates and to invest long-term in assets such as stocks listed on the exchanges.  The Fed’s continued “Greenspan Put” emboldens hedge funds and other speculators secure in the knowledge that the Fed won’t pull the punch bowl away and leave them squeezed by higher costs of borrowed funds.

Friday, December 20, 2013

Liberal-Progressives Believe They Are Entitled to Run The Universe And Everyone In It

The evidence fails to support their claim.

Utter Chaos: White House Exempts Millions From Obamacare’s Insurance Mandate, ‘Unaffordable’ Exchanges

Expanding The Oligarchs’ Scope Of Powers

ObamaCare requires medical care insurers to include coverage of addiction (which is not a disease) and mental illness (many categories of which are not diseases).

 

ObamaCare: An Assault By The Left-Wing Minority

The reincarnation of liberal-progressive President Woodrow Wilson (without the political skill).

Wednesday, December 18, 2013

A Longer-Term Perspective On Medical Care Costs

How Government Regulations Made Healthcare So Expensive

Sunday, December 15, 2013

The Road Ahead

The Federal Reserve’s unprecedented loose-money policy, based on Keynesian, socialistic economic theory, failed to jump-start the economy by inflating asset values in the stock and bond markets. 

Indeed, so far as I know,  Keynesian loose-money policy has never worked as expected anywhere, at any time.  Any activation of Keynes’s “animal spirits” translating into business revival has always petered out, or has led to destructive price inflation, rising public and private indebtedness, and gross misallocation of investment.

Because the Fed’s Keynesian policy has not worked, the Fed and Congress are now faced with very unpleasant alternatives.

How the Paper Money Experiment Will End

Monday, December 09, 2013

More Unpleasant Surprises From ObamaCare

No, You Can’t Keep Your Drugs Either Under Obamacare

Perspective On Iranian Aggression

David Goldman argues that, because of its inescapably low birth rate, Iran is a dying civilization.  Its economy is a shambles, and the Ayatollahs see external conquest, or at least regional hegemony, as the only way to prevent the demographic death of Iran.  Hence, catastrophic military conflict may be inevitable, no matter what the Obama administration choses to believe.