Author Archives: reality

Inflation?

The increase in average hourly earnings (AHE) was taken as a sign of economic strength. Well, no. AHE is aggregate earnings divided by aggregate hours worked. So if hours worked is declining faster than earnings, AHE goes up. But is a sign of weakness. From ECRI.

In another case of up means down, the NOPE index is signalling trouble.

Economy On Fire?

CNBC says the economy is “on fire” after today’s establishment survey report of an increase of 201,000 jobs.

From the household survey in the same report, the number of people employed fell by 423,000. The labor force shrank by 469,000.

Pretty weird fire, if you ask me. Mostly just reflects the fact the these are random numbers and guesses.

Res Ipsa Loquitur

Those Words Again

Fed Chairman Powell, speaking this morning at the Jackson Hole festival of central banker self-love, promised to do “whatever it takes” to prevent another financial crisis.

Unfortunately, Mr Powell, your predecessors have done everything that it takes to guarantee another crisis, a truly special one this time.

Lost Decade

The last time we were here immediately preceded the S&P500’s first negative decade. Which is exactly what John Hussman is predicting by other means. Then there’s this:

Squeeze?

There are two big speculative shorts out there, just begging for squeezes. One of course is the record short position in Treasuries. Interest rates going up? Must mean short the long end, amirite? Not if recent history is any guide. The other is in volatility, where hedge funds are shorter than they were before the February massacre.

Savings And Confidence – Hmmm

Thanks to Zero Hedge

Blockchain RIP?

The blockchain technology is a partial solution to the Byzantine generals problem. A full solution to the problem has been mathematically shown to be impossible. As a result, blockchain systems are vulnerable to attack by introducing enough fraudulent voting power to improperly modify the blockchain.

Apparently this is now happening to some of the smaller networks.

The potential prizes on the larger ones are rich enough that it is probably just a matter of time until one of them is compromised for serious money. Then we’ll see what happens.

The New Gilded Age

The Gilded Age, roughly 1870-1900, was a period where abject poverty and fabulous wealth coexisted.

Unlike today’s New Gilded Age, the original was a period of rapid economic growth. Today, wealth has been concentrated in the hands of a tiny elite by the actions of the Fed, which have inflated asset prices.

I offer as evidence:

24Karat gilded chicken wings. Serving no purpose whatsoever except ostentation. (The gold is tasteless and passes unchanged through the digestive system).

Nashville Cats

Nashville voters just rejected a $5.2 billion transit spending plan.

Why on earth would you spend that kind of money on transit, which is ill-suited to an urban sprawl like Nashville, when autonomous vehicles are about to drastically change the face of urban travel?

Quite apart from the capital investment, public transit is very expensive to operate because it depends on public employees who are granted an effective monopoly over travel in the city. So they can charge what they like – and they like a lot. Just go look at the pay and benefits for BART employees.

Yes, there are situations like New York, London and other major cities where the city simply could not function without the subway. And that’s because the subway has its own right of way that adds valuable capacity. Buses don’t do a thing except clog up the roads.

Nashville voters had their reasons and I don’t know what they were, but they have dodged a bullet by avoiding investing in yesterday’s technology – that was anyway notoriously ineffective except in providing political contributions.