Mars

Making 'The Unthinkable' The New Reality - Hogs To Slaughter

America is a third world country, it’s just not ready to accept that reality yet. Politically it is thoroughly corrupted, economically it is too deeply indebted to ever extricate itself, morally it is without direction, rudderless in dangerous seas and heading for the rocks.

Bernanke Blew It Big-Time: He Should Have Raised Rates Three Years Ago

It is now painfully obvious that Ben Bernanke blew it big-time by not raising rates three years ago when the economy and markets enjoyed tailwinds. The former Federal Reserve chairperson, who has claimed the mantle of savior of the global economy, foolishly kept rates at zero until tailwinds turned to headwinds, at which point he handed Janet Yellen the unenviable task of raising rates as the headwinds are strengthening.

Bill Gross Explains Why He Is Now Shorting Credit

"For over 40 years, asset returns and alpha generation from penthouse investment managers have been materially aided by declines in interest rates, trade globalization, and an enormous expansion of credit – that is debt. Those trends are coming to an end.... A repeat performance is not only unlikely, it  is impossible unless you are a friend of Elon Musk and you’ve got the gumption to blast off  for Mars. Planet Earth does not offer such opportunities."

Automating Ourselves To Unemployment

Students of Austrian business cycle theory are familiar with the term malinvestment. A malinvestment is any poor use of resources or capital, commonly made in response to bad policy (usually artificially low interest rates and/or unsustainable increases in the monetary supply). Here, we introduce a related term: malincentive. While not part of the official economic lexicon, I consider a 'malincentive' a useful word to describe any promise of short-term gain whose long-term costs outweigh any immediate benefits enjoyed. Malincetives and malinvestment go hand-in-hand. In my opinion, the former causes the latter. As humans, we respond remarkably well to incentives. And dumb incentives encourage us to make dumb investments.

Frontrunning: February 24

  • Shares fall with oil prices, yen in demand (Reuters)
  • Trump's third straight win has rivals looking for answers (Reuters)
  • How Marco Rubio Blunted Ted Cruz—and Boosted Donald Trump (BBG)
  • Donald Trump Seals GOP Front-Runner Status With Nevada Win (WSJ)
  • Fischer says no Fed plan to move to negative interest rates (Reuters)
  • Lew Says Don't Expect `Crisis Response' From Group of 20 Meeting (BBG)

Why This Slump Has Legs

There may be shallow lulls in the asset markets, nothing ever only falls down in a straight line in the real world, but the debt will and must come down and be deleveraged. The process will in all likelihood lead to warfare, and to refugee movements the likes of which the world has never seen just because of the sheer humbers of people added in the past 50 years. When your children reach your age, they will not live in a world that you ever thought was possible. But they will still have to live in it, and deal with it. They will no longer have the facade you’ve been staring at for so long now, to lull them into a complacent sleep. And the Kardashians will no longer be looking so attractive either.

Techno-Narcissism - Hard Questions & Ignored Answers

We are lost in raptures of techno-narcissism. We’re convinced that all the unanticipated consequences of our brief techno-industrial orgy can be solved by… more and better technology! Notice that this narrative is being served up to a society now held hostage to the images on little screens, by skilled people who, more and more, act as though these screens have become the new dwelling place of reality.

Senate Quietly Passes Bipartisan Bill To Allow Conquest Of Space

In a bipartisan bid to encourage commercial exploitation of outer space, the U.S. Senate this week unanimously passed the Space Act of 2015. The Extraterrestrial ‘Finders Keepers’ law allows US citizens and companies to legally claim ‘abiotic’ natural resources including water and minerals. However, the bill could be a direct affront to an international treaty that bars nations from owning property in space.

Don't Think The Status Quo Will Save You

Don't think the Status Quo will save you, or make good on its vast multitude of promises. Naive faith in promises and fantasies isn't helpful in the real world.

Guest Post: Should Everyone Vote?

It’s election time in Canada, and as usual ad campaigns on TV, radio, print, and even Facebook are urging “everyone” to vote. But is that such a good thing? If politics is serious business, shouldn’t people have more than causal understanding law, economics, and political science before voting? How are people supposed to judge platforms otherwise–by what “feels right”?

Germany Now Faced With Thousands Of Aging Wind Farms

Germany has long been a pioneer in the field of renewable energy, generating a record 78 percent of its power consumption from renewables in July of this year. In fact, Germany is one of the very few countries in the world that is actually struggling with too much renewable energy. The latest testimony to this fact is the new issue of decommissioning its old wind farms... and that is a growing problem (for The US too).