If you have a strongly held economic theory, you can always concoct a story ex post to “explain” the data. Rather, what I’m saying is that on the very terms Krugman himself chose to show the virtues of government spending, I can make a much more compelling argument that cutting government spending won’t hurt private sector hiring, and if anything will stimulate it.
If the BOJ’s mad money printers were treated as monetary pariahs by the rest of the world, it would at least imply that a modicum of sanity remains on the planet. But just the opposite is the case. Establishment institutions like the IMF, the US treasury and the other major central banks urge them on, while the Keynesian arson squad led by Professor Krugman actually faults Japan for being too tepid with its “stimulus”. Now comes several new data points that absolutely confirm Japan is a financial mad house...
After two years of economic torture and financial destruction, Abenomics has finally claimed the Keynesian prize: real wages crash 4.3%, the most in the 21st century, and Japan's legendary savings rate, which peaked at 23% in 1975, just turned negative for the first time ever. Game over Japan.
Chinese Stocks Soar To 4 Year High On Stimulus Hopes As Japan's Economy Implodes; US Futures ReboundSubmitted by Tyler Durden on 12/26/2014 07:08 -0500
One group of Federal workers that is definitely not taking the day off, is the trading desk located on the 9th floor of the New York Fed, responsible for such things as preserving the "fair" value of the bond and the stock market and avoiding any sharp downward moves. Because if there is one thing on the "national security" agenda that must be avoided at all costs, it is a drop in the S&P in today's trading session - after all now is when the official Santa rally begins and judging by the futures, which after a steep selloff in the last minute of trading on Wednesday have restored all their losses and then some, we may finally hit Goldman's year end target of 2100, for 2015.
Japanese 10Y Yield Drops To Record Low; 2s Sell Subzero After BOJ Indirectly Buys Record Foreign StocksSubmitted by Tyler Durden on 12/25/2014 15:43 -0500
While the rest of the world was preparing to celebrate Christmas, China was busy easing its economy into growth, and its stock market into low earth orbit, by lowering non-bank deposit reserve rates to zero as reported previously, while Japan was enjoying the consequences of the BOJ monetizing 100% of all gross JGB issuance, when overnight the Japanese Ministry of Finance not only sold $22 billion in 2 Year paper at a negative yield of -0.003%: the first time ever a government note (not bill) has sold at a negative yield, but the Japanese 10 Year yield dropped to 0.31%, declining below the previously all time low hit on April 2013 when the BOJ first announced its unprecedented QE program.
It is truly amazing to see the contortions into which some analysts twist themselves, trying to make the historical facts fit their economic models.
It is a tyranny of the PhDs. It is a group-think mania that has gone global. It’s also only a matter of time before the central bankers’ money printing spree takes down the very bubble-ridden financial system it has so recklessly spawned.
Despite the authorities' best efforts to keep everything orderly, we know how this global Game of Geopolitical Tetris ends: "Players lose a typical game of Tetris when they can no longer keep up with the increasing speed, and the Tetriminos stack up to the top of the playing field. This is commonly referred to as topping out."
"I’m tired of being outraged!"
Every year, David Collum writes a detailed "Year in Review" synopsis full of keen perspective and plenty of wit. This year's is no exception. "I have not seen a year in which so many risks - some truly existential - piled up so quickly. Each risk has its own, often unknown, probability of morphing into a destructive force. It feels like we’re in the final throes of a geopolitical Game of Tetris as financial and political authorities race to place the pieces correctly. But the acceleration is palpable. The proximate trigger for pain and ultimately a collapse can be small, as anyone who’s ever stepped barefoot on a Lego knows..."
After the worst week for stocks in years, and following a significantly oversold condition, it will hardly come as a surprise that the mean reversion algos (if only to the upside), as well as the markets themselves (derivative trading on the NYSE Euronext decided to break early this morning just to give some more comfort that excessive selling would not be tolerated) are doing all they can to ramp equities around the globe, and futures in the US as high as possible on as little as possible volume. And sure enough, having traded with a modestly bullish bias overnight and rising back over 2000, the E-Mini has seen the now traditional low volume spike in the last few minutes, pushing it up over 15 points with the expectation being that the generic algo ramp in USDJPY ahead of the US open should allow futures to begin today's regular session solidly in the green, even if it is unclear if the modest rebound in the dollar and crude will sustain, or - like on every day in the past week - roll over quickly after the open. Also, we hope someone at Liberty 33 tells the 10Y that futures are soaring: at 2.13% the 10Y is pricing in nothing but bad economic news as far as the eye can see.
The New York Times is the paper of Paul Krugman and the Federal Reserve and central banks. It rarely has a critical word to say about central banks and the current fiat monetary system. Conversely, it rarely has a positive word to say about gold. The article suggests a realisation that currency wars are set to intensify with gold again becoming an important monetary and geo-political asset.
One thing is certain about the ensuing “race to the bottom”. Japan’s retirement colony will end up with the hindmost. And they will surely burn professors Krugman and Summers in effigy—-even if driftwood is the only fuel they have left.
HELLO ... MAINSTREAM MEDIA ... ANYONE HOME?
Underneath the Propaganda, the Economy Is In BAD SHAPE …
Here we go again! Mortgage giants Fannie Mae and Freddie Mac have now officially approved 3% down payment mortgages. Having government entities provide low down payment mortgages to people who can’t afford to buy a house is always a good move. Keynesians like Krugman approve wholeheartedly. The housing market will get a nice boost and the working taxpayers will fund the bad debt through Fannie and Freddie. You own Fannie and Freddie. Everyone wins. In case you forgot, the closing costs to sell a house are usually 8% of the home price. So these home buyers are immediately 5% underwater when they move in... "Sometimes I can’t believe I live in a world this f##ked up. And no one notices and no one cares."