tag:blogger.com,1999:blog-23948557480223118822024-03-15T10:24:39.500-04:00Dr. Goose's Economical LimericksHumorous Poems on the Dismal Science of Economics and the Dismaler Art of PoliticsDr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.comBlogger792125tag:blogger.com,1999:blog-2394855748022311882.post-29099275425763974722016-01-13T06:00:00.000-05:002016-01-13T06:22:42.558-05:00Powerball<metaname="description" content="Economic Limerick poem on Powerball, lotto, lottery, behavioral economics."><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">I'm buying a Powerball ticket<br>
(Or several, or even a thicket),<br>
In hopes I may win<br>
A billion bucks in<br>
The unlikely case that they pick it.<br>
<br>
The money on tickets I spent<br>
Undoubtedly wastefully went,<br>
As the odds it's apropos <br>
Work out to point oh-oh-<br>
Oh oh-oh-oh three-four percent. <br>
<br>
The lotteries have their detractors,<br>
Who point out, among other factors:<br>
They regressively tax<br>
The shirts from the backs<br>
Of poor and irrational actors.<br>
<br>
But what should one say in regards<br>
To those who've considered the odds?<br>
The learned and lettered<br>
Who ought to know better<br>
But still end up wagering wads?<br>
<br>
We're not quite as dumb as we seem<br>
To fall for the lottery scheme;<br>
Though remote is the chance,<br>There's still the romance<br>
That our dollar may buy us a dream.</span></metaname="description"><div><metaname="description" content="Economic Limerick poem on Powerball, lotto, lottery, behavioral economics."><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br></span></metaname="description"></div><div><metaname="description" content="Economic Limerick poem on Powerball, lotto, lottery, behavioral economics."><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"> **********************<br>
<a name="more"></a><br>
First of all: happy New Year!<br>
Greetings dear readers, and especially (and apologetically) to those of you who have enquired as to when Dr. Goose would break his long blogging silence. Happy to be back though, things being as they are, I make no promises or predictions as to the length of the next hiatus.<br>
<br>
Now to the topic at hand: it has long been accepted that participation in a lottery is economically irrational because the expected payout is so small and remote. However, in the realm of behavioral economics - i.e., the psychology of the economic choices that people make - such participation follows predictable patterns. For example, in economic hard times, lottery sales increase somewhat; not because the jackpot is any likelier, but just because the <a href="http://www.nytimes.com/2008/09/13/us/13lottery.html">dream is that much sweeter</a>. Behavioralists would also warn us that <a href="http://www.theatlantic.com/business/archive/2012/11/the-economic-case-against-winning-a-500-million-lottery-seriously/265709/">we should not really want to win</a>, lest the subsequent let-down rob us of the enjoyment in everyday things.<br>
<br>
Of course, you and I have virtually no chance of winning. As disclosed by the Powerball organizers, the <a href="http://www.powerball.com/powerball/pb_prizes.asp">odds</a> are just 1 / 292,201,338, or 0.00000034%. We are literally (or statistically) <a href="http://time.com/4171474/powerball-lottery-more-likely-win/">more likely to die in an asteroid strike</a>.<br>
<br>
Bottom line: winning is bad, the odds are effectively nil, but the game is cheap and the dream is sweet. So, "play on, America" - I, too, will join the queue of hopefuls.<br>
</span></metaname="description"></div>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com15tag:blogger.com,1999:blog-2394855748022311882.post-79374426708097801932015-03-17T13:30:00.001-04:002015-03-17T13:34:19.072-04:00Piqued by Oil<div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">The price of petroleum's slacking</span></div>
<div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">With all of that pumping and fracking</span></div>
<div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">Maintaining supply</span></div>
<div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">At a level so high,</span></div>
<div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">While demand, at the same time, is lacking. </span></div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;"></span><div><span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;"><span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;"><br></span></span></div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">One would think, from the low price of crude,</span><br>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">That the future has been misconstrued,</span><br>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">But there's finite supply</span><br>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">In the ground, which is why</span><br>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">When it's emptied, it can't be renewed.</span><br>
<div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;"><br></span></div>
<div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">The price of oil <a href="http://www.bloomberg.com/news/articles/2015-03-17/oil-is-tumbling-again" target="_blank">continues to fall</a></span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); color: black;"> </span><span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">as, in the face of weak demand, producers from the Arabian peninsula to the tar sands of North Dakota keep pumping it out. </span><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"> </span><span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">Like the protagonists</span><span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;"> in the famous Prisoners' Dilemma, exploration & production companies know that they would collectively benefit by slowing the pace of production, but individually they are motivated to cover as much of their costs as possible. </span></div>
<div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;"><br></span></div>
<div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">In the short run, this development benefits consumers around the world, especially where the cost of driving is a major factor. At the same time, the oil exploration & production companies and their lenders are reeling from prices far below those they assumed when budgeting for the costs of extraction. </span></div>
<div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;"><br></span></div>
<div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;">In such times it is helpful to take the long view, which is that we are headed toward an eventual fall from the "net energy cliff," in the words of oil analyst <a href="http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/13/peak-oil-isnt-dead-an-interview-with-chris-nelder/" target="_blank">Chris Nelder</a>. This is the point at which it takes so much energy to extract the petroleum that it's no longer worth it. Notwithstanding today's bargain prices, that point may be closer than you think. </span></div>
<div>
<span style="-webkit-composition-fill-color: rgba(130, 98, 83, 0.0980392); color: rgba(0, 0, 0, 0.701961); font-family: UICTFontTextStyleBody; text-decoration: -webkit-letterpress;"><br></span></div>
<div>
<br></div>
Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com9tag:blogger.com,1999:blog-2394855748022311882.post-48461252676377694042015-02-01T15:51:00.000-05:002015-02-01T15:51:48.119-05:00The Real Deflategate<metaname="description" content="Economic Limerick poem on deflation, balls, Brady, Patriots, Hawks, unemployment, Doves, inflation.">
<span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">
The Fed has intensely debated<br />
When interest-rate hikes should be slated. <br />
Like a team I won't name,<br />
They're playing the game<br />
With balls that are underinflated. <br />
<br />
With a mandate to find the right measure<br />
Of balancing jobs versus treasure,<br />
They're Patriots all,<br />
But the Hawks want the ball<br />
To be at the usual pressure.<br />
<br />
The rate of the jobholding share<br />
Is less than appears to be there,<br />
As if it were tested<br />
And then one suggested<br />
To secretly let out some air.<br />
<br />
In spite of the fear of inflation,<br />
Wages display moderation,<br />
Since it's hard to inflate<br />
With a tumbling rate<br />
Of labor force participation.<br />
<br />
Says Yellen: "It starts to annoy,<br />
In discussing the rate of employ,<br />
The analogy calls<br />
For playing with balls;<br />
Is it something the fellows enjoy?"<br />
<br />
"It seems to me, based on my role,<br />
The economy's just like the Bowl:<br />
The material might<br />
Be flaccid or tight,<br />
But the point is to get to the goal."<br /><br />
</span>
<a name='more'></a><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;">Deflation is an urgent subject in sports and the economy; while the American athletic world was roiled by the news that the New England Patriots may have won the AFC championship with <a href="http://abcnews.go.com/Entertainment/deflate-gate-matt-damon-ben-affleck-responsibility-defend/story?id=28599396">unfairly deflated balls</a>, the economic world is riveted by signs of deflation on many fronts. Oil and other commodities are seemingly in free fall; Germany reported headline deflation in the latest month; and in the USA, wages continue to lag the apparent improvement in employment rates. In spite of all this, at least some Fed officials want to begin <a href="http://www.wsj.com/articles/BL-REB-30485">raising interest rates</a>; not because they see inflation in the present, but because they feel they can "see where the ball is going to be." In the view of the Hawks, inflation is always the greater danger.
<br /><br />
The (Sea)hawks, meanwhile, are taking on the Patriots in today's Super Bowl contest, no doubt with properly inflated balls. With his well-known avian bias, Dr. Goose wishes them victory today, though when it comes to the economy we are all Patriots.<br />
</span>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com6tag:blogger.com,1999:blog-2394855748022311882.post-82249391263907363792014-12-31T08:26:00.001-05:002014-12-31T15:33:35.348-05:00A Wall Street New Year's Greeting<span style="font-family: Georgia, Times New Roman, serif;">In the bustling New York metropolis </span><br>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">Of moguls, tycoons and monopolists</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">At the end of the year</span></div><div><span style="font-family: Georgia, 'Times New Roman', serif;">The moment is here</span></div><div><span style="font-family: Georgia, 'Times New Roman', serif;">For cynics to turn into optimists. </span></div><div><span style="font-family: Georgia, 'Times New Roman', serif;"><br></span></div><div><font face="Georgia, Times New Roman, serif">It's time for us all to examine</font></div><div><font face="Georgia, Times New Roman, serif">The balance of love and of Mammon, </font></div><div><font face="Georgia, Times New Roman, serif">The better before</font></div><div><font face="Georgia, Times New Roman, serif">We pass through the door</font></div><div><font face="Georgia, Times New Roman, serif">Which after us soon will be slammin'.</font></div><div><br></div><div><font face="Georgia, Times New Roman, serif">This year, may you find a new mission</font></div><div><font face="Georgia, Times New Roman, serif">To better the human condition,</font></div><div><font face="Georgia, Times New Roman, serif">And your stock market plays</font></div><div><font face="Georgia, Times New Roman, serif">Be so good as to raise</font></div><div><font face="Georgia, Times New Roman, serif">Unwarranted federal suspicion. </font></div><div><font face="Georgia, Times New Roman, serif"><br></font></div><div><font face="Georgia, Times New Roman, serif">*******************************</font></div><div><font face="Georgia, Times New Roman, serif"><br></font></div><div><font face="Georgia, Times New Roman, serif">As a New Year's bonus, I have included a link to yesterday's Marketplace explainer on the concept of "fiscal year," to which I contributed a limerick verse. </font></div><div><font face="Georgia, Times New Roman, serif"><br></font></div><div><font face="Georgia, Times New Roman, serif">Happy New Year to all,</font></div><div><font face="Georgia, Times New Roman, serif"><br></font></div><div><font face="Georgia, Times New Roman, serif">Dr. Goose</font></div>
<div>
<br></div>
<iframe frameborder="0" height="240px" scrolling="no" src="http://www.marketplace.org/node/149332/player/storyplayer" width="100%"></iframe>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-16397238808112481082014-12-15T13:17:00.001-05:002014-12-15T13:19:29.870-05:00A Bad Trade<font size="3" face="Georgia">The economy once ago sank<br> From abuses at many a bank,<br> Which Congress attacked<br> In a really big act<br> That went by the name of Dodd-Frank.<br> <br> As Wall Street perceived a montrosity<br> Of Congressional excess verbosity<br> That was bound to constrain <br> Their potential for gain,<br> They resisted with extra ferocity. <br> <br> An especially prominent section<br> That met with the bankers' objection<br> Expressly forbade<br> The derivatives trade<br> From counting on federal protection.<br> <br> It's a problem the banks have endured <br> Since young J.P. Morgan matured:<br> How to keep the return<br> The good bets may earn,<br> While the bad are by others insured.<br> <br> To safeguard their profits from harm<br> They launched an offensive of charm;<br> Contributions were made,<br> And lobbyists paid<br> To dazzle, dissuade and disarm. <br> <br> But none of those flacks could compare<br> To the JPMorgan Chase chair;<br> His pockets well-lined,<br> His manner refined<br> And silver his tongue and his hair. <br> <br> Mr. Dimon instinctively knows<br> How to lobby his friends and his foes<br> To attach what he will <br> To an omnibus bill<br> That few can afford to oppose. <br> <br> A bill to keep government funded<br> Not many would like to see undid,<br> So you plant your revision <br> Where few can envision,<br> While quietly hoping that none did. <br> <br> But for some, there was just no ignorin':<br> Moral hazard, once out, was once more in,<br> A setback so bitter<br> That Sen. Vitter<br> Admitted he felt just like Warrin'.<br> <br> So once again Congress was played<br> To help the derivative trade;<br> The hazard is moral,<br> But no one would quarrel <br> That that's how the sausage is made.<br> <br> ***********</font><font size="2" face="Georgia"><br> <br> Wall Street has been trying to roll back provisions of the Dodd-Frank Act ever since it was passed in 2010. Now it has partially succeeded with the help of the sausage-making process in our dysfunctional Congress.<br> <br> Buried in the $1.1 trillion omnibus spending bill passed by the House is a </font><a href="http://dealbook.nytimes.com/2014/12/12/wall-st-wins-a-round-in-a-dodd-frank-fight/"><font size="2" color="blue" face="Georgia">repeal of the “push-out” regulation</font></a><font size="2" face="Georgia"> — a measure to ensure that banks trade their riskiest financial instruments without the protection of the Federal Deposit Insurance Corporation or backing of the Federal Reserve. Such a repeal brings back some of the financial moral hazard that was removed - or at least reduced - by Dodd-Frank. In other words, if financial enterprises make risky trades within the insured banking institutions that are part of their corporate groups, they get to keep all of the gains, but taxpayers could be on the hook for losses that exceed the banks' capacity to absorb.</font> <br> <br><font size="2" face="Georgia">As Senator</font><a href="http://talkingpointsmemo.com/dc/elizabeth-warren-lindsey-graham-citigroup-funding-bill"><font size="2" color="blue" face="Georgia"> Elizabeth Warren</font></a><font size="2" face="Georgia"> put it, though neither Democrats nor Republicans like bailouts, "here we are five years after Dodd-Frank with Congress on the verge of ramming through a provision that would do nothing... but raise the risk that taxpayers will have to bail out the biggest banks once again." Sen. Warren pointed to the revolving door between Citigroup and the Obama Administration as one culprit. The Guardian's finance and economics editor Heidi Moore asks a more personal question: "Why does </font><a href="http://www.theguardian.com/commentisfree/2014/dec/13/playing-with-other-peoples-money-will-jamie-dimon-get-his-way-again"><font size="2" color="blue" face="Georgia">Jamie Dimon</font></a><font size="2" face="Georgia"> always get his way?" The well-connected JPMorgan Chase CEO made direct calls to key lawmakers to assure their support. Mr. Dimon, whose way with Congress has </font><a href="http://www.limericksecon.com/2012/06/dimons-congressional-testimony.html"><font size="2" color="blue" face="Georgia">previously been noted on this site</font></a><font size="2" face="Georgia">, has the unique talent of persuading legislators that, as Ms. Moore puts it, "bank profits are something every American should fervently hope for." </font> <br> <br><font size="2" face="Georgia">Perhaps that is because members of Congress have developed the talent of persuading Americans that more political contributions are something that every American should fervently hope for.</font> <div><font size="2" face="Georgia"><br></font></div>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-35494844273093711042014-09-23T16:50:00.001-04:002014-09-24T08:54:09.758-04:00Consumption Be Done About It?<span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"><div class="separator" style="clear: both;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJSzNpncZwLj_r0oOKqHxktG0Q_3DEp4ibo9gffr_z1XPARBFVhu4JCN9JKr8H05yqnCEaiQ8cNbWqpvbE6SBPc8M4PHwc5rwZPBFBAh5OpRYl2yBCwCfm-QXQDqkJyicdU8px8In-OPw/s640/blogger-image-1118721615.jpg" imageanchor="1" style="margin-left: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgJSzNpncZwLj_r0oOKqHxktG0Q_3DEp4ibo9gffr_z1XPARBFVhu4JCN9JKr8H05yqnCEaiQ8cNbWqpvbE6SBPc8M4PHwc5rwZPBFBAh5OpRYl2yBCwCfm-QXQDqkJyicdU8px8In-OPw/s640/blogger-image-1118721615.jpg"></a></div>The US has always depended</span><div>On a rate of consumption that's splendid,</div><div>By consumers for whom</div><div>The means to consume </div><div>May soon have them overextended. </div><div><br></div><div>It's best if our various strata</div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">Could recover their income pro rata</span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">To grow GDP,</span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">But as you can see,</span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">It isn't borne out by the data. </span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"><br></span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">If there's anything that we have learned,</span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">It's consumption that cannot be earned </span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">Will grow if we let it </span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">Be funded by credit,</span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">A fact that should have us concerned. </span></div><div><br></div><div>One may imagine that "the 1%" do not care about stagnating prospects of the other 99, but the Journal's Pedro da Costa has found a notable exception. In his Real-Time Economics blog post, da Costa says that <font color="#000000"><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"><font><a href="http://blogs.wsj.com/economics/2014/09/22/why-wall-street-cares-about-inequality/">Wall Street Cares About Inequality</a>. Of course, it's because the U.S. economy depends heavily on the rising tide of consumption to lift all the boats. If an economic recovery does not feature broadly shared rising personal income, then there is no sound basis for greater personal spending. </font><br></span></font><br>Unfortunately, the data show that this sound basis is precisely lacking. As depicted in the accompanying chart, wages for the average worker (a non-management employee in the private sector), which fell in the recession, have not quite gotten back up. </div><div><br></div><div><p style="margin: 0px 0px 0.75rem; padding: 0px; border: 0px; outline: 0px; vertical-align: baseline;"><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">In a report entitled “Inequality and Consumption," Morgan Stanley</span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"> economists Ellen Zentner and Paula Campbell note: </span><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif; -webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">“It has taken more than five years for U.S. households to ‘feel’ like they are in recovery. </span><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">Before the recession, the expansion of credit simply delayed the day of reckoning from declining incomes and rising inequality.”</span></p> The economists go on to say that stronger wage growth would lift spending across the economic spectrum, and the lack of such a broad-based recovery means the Fed will continue its easy-money policies for the foreseeable future. But, is monetary stimulus the best we can do? </div><div> </div>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-4534163028939287412014-07-23T09:27:00.000-04:002014-07-23T09:33:23.645-04:00Fed's Letter to Deutsche Bank<font size="3" face="Georgia">"In reviewing your earnings per annum,</font> <br><font size="3" face="Georgia">We're less than impressed, and we pan 'em.</font> <br><font size="3" face="Georgia">The bank may have gains,</font><br><font size="3" face="Georgia">But this letter pertains</font> <br><font size="3" face="Georgia">To the haphazard way that you ran 'em."</font> <br> <br><font size="2" face="Georgia">The </font><a href="http://online.wsj.com/articles/deutsche-bank-suffers-from-litany-of-reporting-problems-regulators-said-1406058151"><font size="2" color="blue" face="Georgia">Wall Street Journal</font></a><font size="2" face="Georgia"> reports that the Federal Reserve Bank of New York has vented its frustration with the sloppy reporting of Deutsche Bank's US branches and subsidiaries. In a December 2013 letter to the bank, senior Fed supervisor Daniel Muccia complained that the bank's reports "are of low quality, inaccurate and unreliable. The size and breadth of errors strongly suggest that the firm's entire U.S. regulatory reporting structure requires wide-ranging remedial action." It's a problem long in the making, wrote Mr. Muccia: "Since 2002, the FRBNY has highlighted significant weaknesses in the firm's regulatory reporting framework that have remained outstanding for a decade."</font> <br> <br><font size="2" face="Georgia">Of course, it's not only the Fed that should be concerned. Investors too rely on firms' financial reports to value their securities and decide when to buy, sell or hold. Lest we forget, the feeling that "you can't trust the numbers" was a factor in the global financial meltdown of not so long ago.</font> Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com2tag:blogger.com,1999:blog-2394855748022311882.post-66362722730669985102014-07-18T06:00:00.000-04:002014-07-18T06:00:02.667-04:00New Home Starts and Stops<metaname="description" content="Economic Limerick poem on housing starts, multigenerational households."><div>
Housing construction has had</div>
<div>
A month that's exceedingly bad</div>
<div>
And the drop may be due</div>
<div>
To Millenials who</div>
<div>
Live at home with their Mother and Dad. </div>
<div>
<br /></div>
<div>
The trouble of this generation<br />
Finding jobs after their graduation<br />
Has certainly stalled </div>
<div>
The stat that is called</div>
<div>
The rate of new household formation. </div>
<div>
<br /></div>
<div>
It's up to America's young</div>
<div>
To climb on the opening rung;</div>
<div>
From the nest you must fly</div>
<div>
So the housing supply</div>
<div>
Will not be so much overhung. </div>
<div>
<br /></div>
<div>
Two loosely related statistics came out on Thursday: first, that the number of US <a href="http://blogs.wsj.com/economics/2014/07/17/all-in-the-family-home-record-57-million-americans-living-in-multi-generational-households/">multigenerational households</a> had climbed to a new high; and second, that the number of <a href="http://online.wsj.com/articles/housing-starts-sank-9-3-in-june-1405600397">housing starts had fallen off dramatically</a> in June. The first datapoint indicates less demand for homes and the second, less supply. <br />
<br />
The Pew Research Center, in an analysis of US census data, determined that 57 million Americans, or 18.1% of the population, are living in households that combine young adults and their parents or even grandparents. This is the largest proportion of such households since the '50s. Pew sees the trend thusly: "The declining employment and wages of less-educated young adults may be undercutting their capacity to live independently of their parents." While such arrangements may serve a few purposes, they do directly reduce the demand for housing.<br />
<br />
Meanwhile, the Commerce Department announced that housing starts across the USA had fallen by 9.3% in June; in the South, they fell by 30%. In spite of my poetic license above, most industry people interview by the Wall Street Journal did not blame stay-at-home Millenials for this development, which actually flies in the face of a more broadly upward trend over the last few years. Many factors were cited, including the lingering effects of wet winter and spring weather; lack of skilled construction labor in some markets; and persistently weak consumer confidence. <br />
<br />
However, the multigenerational household trend is not a flash in the pan; it has been building since the '80s, and over the long term it must impact the housing market in a fundamental way.</div>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-64899366767963470322014-06-23T23:59:00.001-04:002014-06-24T13:39:07.133-04:00High-Frequency Trade-OffAn HFT trader named Cunningham<div>Remarked on the skeptics confron'ing 'im:</div><div>"The spreads I've compressed</div><div>Make it cheap to invest,</div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">So it's okay that I am front-running 'em."</span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"><br></span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">The issue of high-frequency trading won't go away, and positions are hardening like the western front in the 1st World War. On the one side are journalists and many investment managers who say that these ultra-fast trades simply skim income off the top of the market; on the other, HFT firms and other market participants who say that such lightning-fast activity is benign and makes markets cheaper and more liquid. Sure, says the first group; HFTs supply all the liquidity you want until you actually need it. </span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"><br></span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">In the latest salvo, The New York Times and the Guardian's Heidi Moore editorialized yesterday that HFTs have rigged the market, as the exchanges and policy makers have allowed them to do over the last several years. This provoked a furious counterattack, adding a number of industry participants to Ms. Moore's already-formidable list of blocked Twitterers. </span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"><br></span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">Meanwhile, the US Senate has held inconclusive hearings on the issue, evidently deciding to leave it to the SEC. The Commission, for its part, is looking into the issue but playing its cards close to the vest. One can only hope that the commissioners keep investor protection uppermost in their minds, even if the harm to investors from HFT is not blindingly obvious. </span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"><br></span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">***********************</span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">Here is the link to Heidi Moore's column: </span><a href="http://www.theguardian.com/commentisfree/2014/jun/22/wall-street-washington-stock-market-rigged-investors" style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">http://www.theguardian.com/commentisfree/2014/jun/22/wall-street-washington-stock-market-rigged-investors</a></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">Here is the link to the Times editorial: </span><a href="http://mobile.nytimes.com/2014/06/23/opinion/best-execution-and-rebates-for-brokers.html?referrer=" style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">http://mobile.nytimes.com/2014/06/23/opinion/best-execution-and-rebates-for-brokers.html</a></div><div>Here is a typical response: <a href="http://www.forbes.com/sites/timworstall/2014/06/23/heidi-moore-doesnt-seem-to-understand-high-frequency-trading/" style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">http://www.forbes.com/sites/timworstall/2014/06/23/heidi-moore-doesnt-seem-to-understand-high-frequency-trading/</a></div>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-31745230407961655992014-06-12T07:49:00.001-04:002014-06-12T13:44:27.203-04:00A Cupful of TroublesAs the World Cup begins there are millions<br>Of poor and disgruntled Brazilians,<br>Whose new soccer venues<div>Have certainly been used</div><div>In misallocation of billions. </div><div><br></div><div>It's not that there is any shame</div><div>In hosting The Beautiful Game,</div><div>But if chances were lost</div><div>To gain from the cost,</div><div>The political class is to blame. </div><div><br></div><div>For fans there is some consolation,</div><div>Amidst economic frustration,</div><div>That statistics predict -</div><div>When the last ball is kicked - </div><div>A victory for the host nation. </div><div><br></div><div>What's more, you should not find it strange</div><div>How the World Cup makes sentiment change,</div><div>That a home-country win</div><div>Makes an up-trend begin</div><div>On the <i>Bolsa,</i> the <i>Bourse</i> or Exchange. </div><div><br></div><div>But investors more seasoned than callow</div><div>In London, New York or São Paulo </div><div>Never try to fill up</div><div>All their hopes in a Cup;</div><div>For that, it's a little too shallow. </div><div><br></div><div>Every four years, I join with most of the world in a bout of football fever. Even the hard-working economists at Goldman Sachs get the bug, and publish their statistical analysis predicting the outcome of the World Cup. As you probably know, Goldman predicts a home-country win this year. They also show how World Cup victory is also correlated with positive investor sentiment and a bullish stock market in the winning country, at least for a few weeks. After that, it's back to the grind. </div><div><br></div><div>Unfortunately, the hosting experience this year is marred by the disappointment felt by many Brazilians that the billions of <i>reais</i> spent on new stadiums and related World Cup infrastructure are over budget, overly late and under-delivering on promised general economic benefits. </div><div><br></div><div>Oh, well. Good luck to the Seleção today in their home opener against Croatia!</div><div><br></div><div>[Here is the link to the Goldman Sachs economic report on the 2014 World Cup: <a href="http://www.goldmansachs.com/our-thinking/outlook/world-cup-and-economics-2014-folder/world-cup-economics-report.pdf" style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">http://www.goldmansachs.com/our-thinking/outlook/world-cup-and-economics-2014-folder/world-cup-economics-report.pdf</a><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"> ]</span></div>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-23716604777207074332014-05-29T09:13:00.000-04:002014-05-29T09:18:32.888-04:00Dreaming of Streaming<font size="3" face="Georgia">Said Timmy to Jimmy & Dre:<br> "Whether Apples keep Dr.s away,<br> It sweetens the tones<br> On iPods & -Phones<br> If revenue streams when they play."<br> <br> Said the Dr. & Jimmy to Tim,<br> On the music they're making with him:<br> "Without some new Beats,<br> One's coolness depletes<br> And the revenue outlook is dim."<br> <br> Said Timmy: "A streaming solution<br> May not be the next evolution,<br> But it's better I blew<br> 3 billion on you<br> Than a shareholder cash distribution."</font> <br> <br><font size="2" face="Georgia">In a move that was so long anticipated, many investors forgot about Dre, Apple yesterday </font><a href="http://online.wsj.com/articles/apple-to-buy-beats-1401308971"><font size="2" color="blue" face="Georgia">confirmed its intention</font></a><font size="2" face="Georgia"> to buy Beats Electronics LLC. The $3 billion acquisition brings with it Beats co-founders Dr. Dre and Jimmy Iovine. Though best known for its high-end, sexy headphones, Beats is thought to be more valuable to the provider of iTunes, the leading online music store, for its nascent music streaming service. As </font><a href="http://www.theguardian.com/technology/2014/may/28/apple-buys-beats-dr-dre-music-streaming"><font size="2" color="blue" face="Georgia">Heidi Moore</font></a><font size="2" face="Georgia"> reports in the Guardian, music downloads have peaked, and actually declined 2% to $3.9 billion last year, while subscription-based revenues rocketed up by 50% to $1.1 billion.</font> <br> <br><font size="2" face="Georgia">Mr. Iovine, a long-time record industry leader, "was one of the first industry executives to anticipate the download business's decline and advocate for subscription and streaming services as music's future," according to one analyst. Mr. Iovine has also maintained a long and friendly relationship with Apple and iTunes, going back to the origins of online music sales under Steve Jobs.</font> <br> <br><font size="2" face="Georgia">Apple CEO Tim Cook must certainly hope that the combination with Beats will once again put the company in the position of knowing what the consumer wants before the consumers themselves do.</font> Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-37592841475725667342014-05-13T12:59:00.001-04:002014-05-13T13:16:09.332-04:00Central Bankers Respond to the Employment Crisis<font size="3" face="Georgia">"Our house is foreclosed on in days,</font> <br><font size="3" face="Georgia">And we can't find employment that pays;</font> <br><font size="3" face="Georgia">Pray what can you do</font> <br><font size="3" face="Georgia">To carry us through</font> <br><font size="3" face="Georgia">Our long economic malaise?"</font> <br> <br><font size="3" face="Georgia">"Central bankers are touched by your trouble,</font> <br><font size="3" face="Georgia">So our efforts we'll boldly redouble</font> <br><font size="3" face="Georgia">To keep money soft</font> <br><font size="3" face="Georgia">And hold you aloft</font> <br><font size="3" face="Georgia">On a frothier stock-market bubble."</font> <br> <br><font size="2" face="Georgia">These were my thoughts on reading </font><a href="http://online.wsj.com/news/articles/SB10001424052702303627504579559310643593806"><font size="2" color="blue" face="Georgia">yet another article</font></a><font size="2" face="Georgia"> on the likelihood of more ECB stimulus to address that continent's deflationary dangers. Not that I have anything against ECB (or Fed) stimulus per se; it's just that I'm skeptical that the management of inflation and deflation will do very much to address the serious long-term unemployment problems in the Old World and the New, and I'm not sure that the risk of frothier markets is worth it.</font><div><font size="2" face="Georgia"><br></font></div>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-11166382118494231722014-05-01T05:00:00.000-04:002014-05-01T05:00:01.428-04:00Nothing Is Better Than Something<metaname="description" content="Economic Limerick poem on the stock market's new high, the Fed, FOMC, Federal Reserve, zero lower bound, ZIRP, Yellen.">
<span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">
The Fed stirred up market festivity,<br>
In spite of low business activity,<br>
From the joy that relates <br>
To their keeping the rates<br>
At zero, as is their proclivity.<br><br>
With rates so depressingly low,<br>
Fixed income has nowhere to go<br>
So the stock market beckons<br>
To each one who reckons<br>
The chance that their nest egg may grow. <br>
<br>
It highlights how hard to discern it is<br>
To know when the bond market's turn it is,<br>
But with rates to be found<br>
At the null lower bound,<br>
The Dow lacks investment alternatives.<br>
</span>
<a name='more'></a><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;"><br>
Three seemingly contradictory things happened on Wednesday:
<ul>
<li>1st quarter GDP came in at 0.1% growth, <a href="http://stockmarketeconomist.blogspot.com/2014/04/u.html">far less than anyone expected</a>;</li>
<li>The Fed Open Market Committee did as <a href="http://online.wsj.com/news/articles/SB10001424052702304178104579533861135944336?mg=reno64-wsj">everyone expected</a>;</li>
<li>The stock market went to <a href="http://online.wsj.com/news/articles/SB10001424052702304677904579534082906725744?mg=reno64-wsj">unexpected new highs</a>.</li>
</ul>
As the Muppets used to sing on Sesame Street: "One of these things is not like the other." If economic growth looks bad, and the Fed tapers QE (to a mere $45 billion a month), why does the Dow take heart? "People have been more confused this year, and during periods of confusion people sometimes flock into names that are a little bit more secure and a little safer," explained one portfolio manager to the Journal.
<br><br>
Honestly, I'm confused myself, and I don't have to figure it out for a living, but I wonder if the Fed's actions effectively force investors to remain in stocks. After all, if Yellen & Co. are pulling back on their bond buys, one would expect long-term rates to rise, handing capital losses to bond portfolios. On the other hand, the FOMC continues its commitment to maintaining the lowest possible short-term rates, so you can't earn anything on your cash. Of course, everyone knew this already, but perhaps the Fed's restatement of the obvious helped to inject a little more certainly amidst the confusion, enhancing the bias toward equities.
<br><br>
So, while for investors, something (stock gains) is better than nothing (bond yields), for the stock market nothing (Fed policy) is better than something (low economic growth).
<br>
</span>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-86008007546301832172014-04-22T06:00:00.000-04:002014-04-22T06:00:03.092-04:00Recovery?<metaname="description" content="Economic Limerick poem on recovery, recession and the NBER, National Bureau of Economic Research.">
<div class="separator" style="clear: both; text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0pZ7DKz1cX4GQpzcGg2840i97y0DirQsEvv0HB9tbtbHy7O9Y6Oy-kpUURQ8F1ZfP_7qQErK1prHcxqxl5FPA6duV-d-9RPqVtz6oBTrpyTmlifxpgdbqgjk9X1vktIW3NQ49obEICW8/s1600/BN-CL631_booms0_G_20140421100549.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEj0pZ7DKz1cX4GQpzcGg2840i97y0DirQsEvv0HB9tbtbHy7O9Y6Oy-kpUURQ8F1ZfP_7qQErK1prHcxqxl5FPA6duV-d-9RPqVtz6oBTrpyTmlifxpgdbqgjk9X1vktIW3NQ49obEICW8/s200/BN-CL631_booms0_G_20140421100549.jpg" /></a></div>
<span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif;">
Fed Chairmen (paternal or motherly)<br />
Have made a depressing discovery:<br />
If demand isn't great,<br />
You can lower the rate<br />
But you can't cut your way to recovery. <br />
<a name='more'></a><br />Capturing our conflicted economic <i>zeitgeist</i>, the Wall Street Journal came out with two conflicting headlines on the same day: while one gave faint encouragement that <a href="http://online.wsj.com/news/articles/SB10001424052702304626304579510070088630140">The Sluggish Economic Recovery Proves Resilient</a>,
the other countered incredulously: <a href="http://blogs.wsj.com/economics/2014/04/21/wait-what-recovery-how-the-nber-determines-when-recessions-end/">Wait, What Recovery?</a>
<br /><br />
According to the National Bureau of Economic Research, the arbiter of when the US economy enters recession and recovery, we've been in the latter since June 2009. This means that, at 58 months, this lackluster recovery is passing the median age for all post-World-War-II up-cycles. Not that it feels like a recovery: as seen in the Journal graphic above right, the unemployment rate is quite above average for a recovery at this stage in the cycle. Moreover, much of the drop in the jobless rate has been a counterintuitive effect of the withdrawal of unemployed workers from the labor force, which reduces the denominator on which the unemployment rate is calculated.
<br /><br />
Many doubt that there is even a recovery at all, since it certainly does not feel like one. Although the Journal's <a href="http://blogs.wsj.com/economics/2014/04/21/wait-what-recovery-how-the-nber-determines-when-recessions-end/?KEYWORDS=recovery">Real-Time Economics</a> blog patiently explains that, yes, according to the way such things are determined, we really have been recovering, it went on to acknowledge another way of measuring the question of whether all of the jobs lost in recession been regained; the answer is a resounding No. By this measure, the recovery is at least incomplete.
<br /><br />
Why haven't things gone better? Well, government austerity is partly to blame. <a href="http://economix.blogs.nytimes.com/2014/04/04/after-six-years-a-full-private-sector-recovery/">Private-sector jobs have at least made up for all their losses since 2008</a>, but government employment lags badly, leaving the overall total quite insufficient. Much longer in the making is the problem of <a href="http://www.theamericanconservative.com/articles/raising-american-wages-by-raising-american-wages/">low and declining wages</a> for the average American worker, which the recovery has done nothing to improve.
<br /><br />
In the face of all this, the Fed has undertaken extraordinary measures to cut short- and long-term interest rates, in the hope that cheap money on Wall Street would lead to more economic activity on Main Street. However, the Fed can't spur a vigorous economic snapback because short-term interest rates are already near zero, says Robert Hall, a Stanford economist with the NBER. To do that takes actual demand, and that's outside the realm of central banking.
</span>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-44311274190066031122014-04-03T06:00:00.000-04:002014-04-03T06:00:07.484-04:00ABCs of HFTs<span style="font-family: Georgia, "Times New Roman", serif;">Of late we have heard much verbosity</span><br />
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">Expressing the Street's animosity</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">Toward traders who trade</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">With programs they made</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">To profit by rapid velocity. </span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;"></span><br /></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">Indignant stock-pickers confront one</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">With evidence (and it's a blunt one)</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">That HFTs aim</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">To rig the whole game</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">By trading so fast they can front-run. </span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;"></span><br /></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">HFTs claim, in defense,</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">Their volume may lower expense </span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">And help to enrich</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">The others from which</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">They're skimming off fractions of cents. </span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;"></span><br /></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">My view may be non-analytical</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">But in <em>this</em> matter tends toward the critical,</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">For it's hard to ascribe</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">A positive vibe</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">To a practice at heart parasitical. </span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;"></span><br /></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">*************************************************</span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">High-frequency trading represents a sort of "rise of the machines" over Wall Street, in which powerful computer algorithms are dedicated to exploiting market information almost literally at the speed of light. The practice has long been controversial among market professionals, where opinions differ as to whether such machines personify R2D2 or the Terminator. </span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;"></span><br /></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">Michael Lewis, author of Moneyball and Liar's Poker, has written a new book called Flash Boys, which comes down on the side of "hasta la vista, baby." In an interview on 60 Minutes, Mr. Lewis brought this Wall Street issue on a perp-walk down Main Street. </span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;"></span><br /></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">"The stock market is rigged," declares Mr. Lewis, by a combination of HFTs, big banks and the exchanges themselves. The HFTs are allowed to see everyone else's trades a split second before the general market does, giving their lightning-fast algorithms time to get out in front of market-moving order flows. This amounts to small-scale theft, repeated so often and so quickly that it becomes large-scale. </span></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;"></span><br /></div>
<div>
<span style="font-family: Georgia, "Times New Roman", serif;">However, some knowledgeable insiders disagree, and say that HFTs have been good for the small investor. Their big volume of small trades has lowered the bid-ask spread, reducing everyone's cost of execution. Much of the complaining, says <a href="http://m.us.wsj.com/articles/SB10001424052702303978304579475102237652362">Cliff Asness of AQR Capital Management</a>, comes from money managers who can no longer place large orders without moving the market. "<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Well, sorry," counters Mr. Asness, "but prices responding quickly—and traders not being able to buy or sell a ton without the market moving—is what is supposed to happen in a well-functioning market."</span></span></div>
<div>
<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"><br /><span style="font-family: Georgia, "Times New Roman", serif;"></span></span></div>
<div>
<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: Georgia, "Times New Roman", serif;">A compelling counterpoint to be sure, but the fact remains that some firms trade with high frequency while losing with rarity, or not at all. "How is it possible that one of the largest high-frequency trading firms executes millions and millions of orders for four years without ever having a down day?" asks <a href="http://www.bloombergview.com/articles/2014-03-31/speed-trading-in-a-rigged-market">Barry Ritholtz</a>. "The short answer is what they do is not trading -- it is skimming. I call it legalized theft. High-frequency trading is a tax on investors, encouraged by the exchanges, allowed by the SEC."</span></div>
<div>
<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"><br /><span style="font-family: Georgia, "Times New Roman", serif;"></span></span></div>
<div>
<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0); font-family: Georgia, "Times New Roman", serif;">Are we ready to prosecute the Terminator for algorithmic inside trading?</span></div>
Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-1705595700052527552014-03-21T06:00:00.000-04:002014-03-21T06:00:06.647-04:00March Productivity Madness<span style="font-family: Georgia, Times New Roman, serif;">Economists show the proclivity</span><br />
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgsUTse0ZrCxLzEraucZ79OP69NAiBWzVXG32oHSJscu5gJP0yW0Gfq7lAtKVheOh4LRoW-zgFJtOoVWyQ0T2L0roblc1Zg8OrMw0sKvQTtmRg-WwFREEhDC_ZZMw4kt9lVhnd_tXQ04Fs/s1600/DrGooseBracket.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img alt="NCAA March Madness Bracket Dr. Goose" border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgsUTse0ZrCxLzEraucZ79OP69NAiBWzVXG32oHSJscu5gJP0yW0Gfq7lAtKVheOh4LRoW-zgFJtOoVWyQ0T2L0roblc1Zg8OrMw0sKvQTtmRg-WwFREEhDC_ZZMw4kt9lVhnd_tXQ04Fs/s1600/DrGooseBracket.jpg" height="141" title="" width="200" /></a><span style="font-family: Georgia, Times New Roman, serif;">Toward lamenting the lost productivity</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">When Americans cling,</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">From the first day of Spring,</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">To basketball bracket activity. </span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span>
<span style="font-family: Georgia, Times New Roman, serif;">At work we may go to extremes</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">Of collegiate basketball dreams,</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">And glance in our laps </span><br />
<span style="font-family: Georgia, Times New Roman, serif;">At websites and apps</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">With brackets and video streams. </span><br />
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span>
<span style="font-family: Georgia, Times New Roman, serif;">Consultants engaged by the boss</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">To reckon the March Madness cost</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">Deduce from the gauges</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">Of hours and wages</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">That 1.2 billion are lost.</span><br />
<br />
But a national payroll statistic<br />
As a measure is much too simplistic,<br />
As workers are apt<br />
In March to adapt<br />
In a manner that's deft and holistic.<br />
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span>
<span style="font-family: Georgia, Times New Roman, serif;">Despite how the experts may warn</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">That brackets are worthy of scorn,</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">It's easy to see</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">For office <i>esprit,</i></span><br />
<span style="font-family: Georgia, Times New Roman, serif;">They're better than downloading porn. </span><br />
<div>
<br /></div>
<a name='more'></a><span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;">"March Madness" - the NCAA College Basketball Tournement - is upon us. Millions of Americans, having filled out their "brackets", now seize moments throughout the day and night to see how their picks are faring. (My own bracket - pictured above - is off to a good start, having correctly predicted 12 of the first 14 contests.) Of course, one's bracketology is now a hot topic of workplace discussion, even for those who normally pay scarce attention to college hoops.
</span><br />
<span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><br /></span>
<span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;">Naturally, the productivity scolds over at Challenger, Gray & Christmas want to throw a wet blanket over all the bracketology banter. They calculate that <a href="http://www.challengergray.com/press/press-releases/march-madness-could-cost-employers-12b" target="_blank">March Madness could cost employers $1.2 billion </a>in lost production, as workers weigh the merits of Duke vs. Michigan and organize office pools. This is based on 50 million Americans each wasting an hour on bracket-building, betting and boasting, at an average hourly wage of $24.31.</span><br />
<span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><br /></span>
<span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;"><a href="http://www.washingtonpost.com/blogs/on-leadership/wp/2014/03/17/dont-worry-about-the-march-madness-productivity-loss-too-much/" target="_blank">Not to worry</a>, counters Jena McGregor in the Washington Post; the estimated productivity effects are overblown. She quotes Duke's Prof. Charles Clotfelter, who studied the March Madness phenomenon and concluded:</span><br />
<blockquote>
<span style="font-size: x-small;">"Besides the possible boost in morale associated with this annual ritual, common sense suggests that those who follow successful teams will come to anticipate success and simply learn to budget their time, making sure to leave enough time to watch their team play. For those who expect their team to lose, the opposite occurs: They can plan to work after their cherished team goes down in defeat."</span></blockquote>
<span class="Apple-style-span" style="font-family: Georgia, 'Times New Roman', serif; font-size: x-small;">So, how's your bracket doing?</span>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com2tag:blogger.com,1999:blog-2394855748022311882.post-30073929473768231692014-03-17T08:06:00.001-04:002014-03-17T08:56:37.000-04:00Guinness Taps OutGuinness could not find a way<div>Of sponsoring St. Patrick's Day,</div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">Having failed to have swayed</span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">Those who run the parade</span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">To authorize floats that are gay. </span></div><div><br></div><div>It's a green of a diff'rent complexion</div><div>That causes the brewer's objection,</div><div>As the times, they have changed</div><div>And hence rearranged</div><div>The sponsorship fiscal projection. </div><div><br></div><div>It's not that they don't see the profit</div><div>In St. Paddy's, and what they make off it;</div><div>It's how they appraise</div><div>The changing mores</div><div>Of the many straight drinkers who quaff it. </div><div><br></div><div>Happy St. Patrick's Day to those who wear the green, as well as all the other colors of the rainbow. </div>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-20010464458319120462014-03-05T00:20:00.001-05:002014-03-05T08:26:26.810-05:00Financial Fraud Trilogy<div>There once was a fellow named Chubley</div><div>Who mortgaged collateral doubly.</div><div>"It's a trick," he confessed,</div><div>"I effectuate best</div><div>When markets are frothy and bubbly."</div><div>_____________</div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"><br></span></div><div>It's fruitless to place one's<span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"> reliance</span></div><div>On oneself in defrauding one's clients;</div><div>Much better to work</div><div>With the back-office clerk</div><div>And ideally, the head of compliance. </div><div>_______________________</div><div><br></div><div>A credit swap trader named Moore</div><div>Keeps tickets of trades in his drawer.</div><div>Though transactions all post</div><div>By an e-trading host,</div><div>It's a throwback to dealing room lore. </div><div><br></div><div>________________________________</div><div><br></div><div>Today's idle limerick musings, unlike most of the verses in this space, do not describe any particular incident or people. However, I was prompted to reflect on financial fraud by events at the Citigroup subsidiary Banamex, which has just suffered a $400 million loss from nefarious goings-on at one of its customers. The Mexican oil field services company Oceanografía, a supplier to the national oil company Pemex, had been selling their Pemex receivables to Banamex to raise funds - a routine trade finance transaction - and apparently were so pleased at their funding success that they decided to sell another $400 million of receivables that they didn't have. </div><div><br></div><div>It's another reminder that financial fraud may be detectable and even, in our too-big-to-jail era, punishable; in the hands of a determined practitioner, however, it is rarely preventable. </div><div><br></div><div>Here is a link to the latest background on this case from the Wall Street Journal:</div><div><br></div><div><a href="http://m.us.wsj.com/articles/SB10001424052702304585004579419371032316620">http://m.us.wsj.com/articles/SB10001424052702304585004579419371032316620</a></div>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-25732069694426182122014-03-01T17:03:00.001-05:002014-03-01T17:03:38.371-05:00Ukraine & Putin's Reign, Explained<div style="text-align: right;">
</div>
<span style="font-family: Georgia, Times New Roman, serif;">Said Putin, regarding Crimea:
<br />"Don't get the mistaken idea.
<br />I may not contain
<br />The western Ukraine,
<br />But the east is a part of my spheah."</span><br />
<br />
<a name='more'></a><br /><br />
I don't want to hold myself out as an expert on Russia and the Ukraine, but I did spend a few years doing business with both countries and got to know them from the safe distance of New York. I am therefore surprised by some of what I read and hear from my fellow citizens about this situation. Much of it seems rooted in anachronistic Cold War thinking - a misunderstanding of the relationship between the Ukraine and Russia, and an overestimation of America's ability to do anything about it.<br />
<br />
For a <a href="http://www.newrepublic.com/article/116810/putin-declares-war-ukraine-why-and-what-next">dose of reality rendered in soulful journalism</a>, turn to The New Republic's <a href="https://twitter.com/juliaioffe">Julia Ioffe</a>, a former Moscow correspondent who recently reported from the Maidan in Kiev. Vladimir Putin, says Ioffe feels that -
<br />
<blockquote>
it is better to be feared than loved, it is better to be overly strong than to risk appearing weak, and Russia was, is, and will be an empire with an eternal appetite for expansion. And it will gather whatever spurious reasons it needs to insulate itself territorially from what it still perceives to be a large and growing NATO threat. Trying to harness Russia with our own logic just makes us miss Putin's next steps.</blockquote>
I highly recommend reading the complete article to grasp this chaotic, fast-moving situation.Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-87045392027828138652014-02-26T00:02:00.001-05:002014-02-28T00:40:34.650-05:00On the Rocks of Mt. Gox<div>
<span style="font-family: Georgia, Times New Roman, serif;">A guy takes it into his head</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">To eschew dollar bills and the Fed,</span><br />
<span style="font-family: Georgia, Times New Roman, serif;">And throws in his lot</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">With a currency wrought </span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">By anonymous hackers instead. </span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<span style="font-family: Georgia, Times New Roman, serif;">Though treasured by crooks and by cranks,</span><br />
<div>
<span style="font-family: Georgia, Times New Roman, serif;">It constantly surges & tanks,</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">While hackers purloin</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">The internet coin</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">That's issued without central banks.</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">While enjoying the untraceability</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">And capital gain volatility</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">Our guy never saw</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">A programming flaw<br />Referred to as "malleability."</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">It's a ruse by the hackers that blocks</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">The appearance of trades on Mt. Gox,</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">So it's not noticed when</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">They "spend" it again,</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">Invisibly fleecing the flocks. </span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">So our bitcoin investor's been lacquered</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">By a shadowy internet blackguard. </span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">With no restitution,</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">The only solution's</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">A sad, little protesting placard. </span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">*****************************</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">The world of virtual currency was dealt a blow this week, when it came out that the Tokyo-based bitcoin exchange known as Mt. Gox had a technical flaw that had enabled hackers to steal bitcoins for months without anyone realizing it. Missing were 750,000 virtual coins worth about $400 million at the time of the revelation. </span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">My. Gox then shut down in both the physical and online worlds, with no apparent recourse for those who held bitcoins through the exchange. If that was you, you're out of luck. </span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">However, as Heidi Moore opines in the Guardian, this scandal may be a blessing in disguise, by shaking the amateurish players out of the nascent virtual currency business. The link to her column is below. </span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><a href="http://www.theguardian.com/money/us-money-blog/2014/feb/25/bitcoin-mt-gox-scandal-reputation-crime">http://www.theguardian.com/money/us-money-blog/2014/feb/25/bitcoin-mt-gox-scandal-reputation-crime</a></span><br />
<br />
(Thanks to my friend Art Dawson for the inspiration!)</div>
<div>
<span style="font-family: Helvetica Neue Light, HelveticaNeue-Light, helvetica, arial, sans-serif;"><br /></span></div>
Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-26890465104714067812014-02-12T21:55:00.001-05:002014-02-14T08:46:08.591-05:00#FedValentine<div>Dear Janet, this valentine's for you,</div><div>We economists simply adore you;</div><div>If to growth you respond </div><div>By tap'ring our bond,</div><div>Please measure your steps, we implore you. </div><div><br></div>There are blogs which the Hawks are condemnin' in,<div>As sour as a mouth with a lemon in,</div><div>'Cause they've had enough of</div><div>The Sign of the Dove</div><div>From the Head of the Fed, who is feminine. </div><div><br></div><div>But we hope that the Fed's intervenin'</div><div>May get more employers to lean in,</div><div>So the new Madam Chair,</div><div>(The dovish one there)</div><div>May proceed with the stimulus weanin'. </div><div><br></div><div>Until the economy's hot,</div><div>You're bound to hear Yellen a lot,</div><div>As it falls to the Fed</div><div>To goose it instead,</div><div>As the GOP Congress is not. </div><div><br></div><div>We hope in your heart there is room</div><div>To let the economy bloom,</div><div>And kindly deplete </div><div>The Fed's balance sheet</div><div>To let normal markets resume. </div>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-37712183292603977382014-02-06T07:55:00.001-05:002014-02-06T08:13:04.133-05:00Nothing to Tweet About<div>The outlook for Twitter is blah;</div><div>Is it having its final hurrah?</div><div>They're losing morale</div><div>With a growth rationale</div><div>That is premised on <i>je ne sais quoi</i>.</div><div><br></div><div>The secret to growing more revenue</div><div>Is something the company never knew,</div><div>But it's more of a feat</div><div>Getting newbies to tweet</div><div>Than skeptical analysts ever knew. </div><div>*******************</div><div>Twitter (NASDAQ: $TWTR) held its first earnings call as a public company, and investor reaction showed just how high the expectations are for this company. Although quarterly revenues of $243 million exceeded the $218 million consensus forecast, participants in the call were spooked at how few new users had signed up to send their first tweets. The 241 million users in December were only 4% more than those in the previous quarter. Apparently, the new-user experience is not as friendly as it ought to be. </div><div><br></div><div>This perhaps explains the lackluster growth in the number of followers for @DrGooseEcon?</div><div><br></div><div><br></div>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-2975691337102813442014-02-01T00:18:00.001-05:002014-02-28T00:43:20.508-05:00Bowled in the Cold<span style="font-family: Georgia, Times New Roman, serif;">By now everyone and his mother heard </span><br />
<div>
<span style="font-family: Georgia, Times New Roman, serif;">All the hype, and will not want another word</span><br />
<div>
<span style="font-family: Georgia, Times New Roman, serif;">Of the Super Bowl game</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">And the way that it came</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">To be played in a swamp in East Rutherford. </span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">If a Wall Streeter gets in his Maybach,</span><br />
<div>
<span style="font-family: Georgia, Times New Roman, serif;">To drive to the game it's a way back</span></div>
<div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">Through traffic so bad,</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">You'd think that it had</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">To do with political payback. </span></div>
</div>
</div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">We wanted a "cold-weather Bowl"</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">- If we're honest - to further the goal</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">That the Jets or the Giants</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">Could have more reliance</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">To play in a championship role. </span></div>
<div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;"><br /></span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">But the outcome of all of our schemes</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">Was not the result of our dreams;</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">Though the Bowl's in our venue,</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">It's not as fun when you</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">Are watching two out-of-town teams. </span></div>
</div>
</div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">*************</span></div>
<div>
<span style="font-family: Georgia, Times New Roman, serif;">Regardless, good luck to the Denver Broncos and Seattle Seahawks today, and may the better team win!</span></div>
Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-73796659127613018282014-01-30T08:50:00.001-05:002014-01-30T15:01:47.903-05:00Expert Opinion<div><div>The experts' opinions diverge</div><div>On whether to taper or surge;</div><div>You may go to your death</div><div>While holding your breath</div><div>For consensus to fin'lly emerge. </div></div><div><br></div><div>*****************</div><div>Over the last day I read a couple of thought-provoking essays on the nature of economic expertise, and how to take the expert opinions we are constantly reading. The Guardian's US finance & economics editor Heidi Moore reminds us that it's as much of an art as a science. Says Ms. Moore: "<span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Here's the problem: Even the experts don't agree on where the economy has gone. Some believe it's improving. Some believe the evidence is thin." Of course, "the economy" is big and complex, so it's no wonder. </span></div><div><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"><br></span></div><div><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Economist Chris House, in his Order Statistics blog, points out that even Nobel laureates may have true expertise in only a narrow field, so one must keep that in mind when listening to an international trade expert expounding on, say, behavioral finance. </span></div><div><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"><br></span></div><div><span style="-webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">Let the reader beware!</span></div><div><br></div><div>Heidi Moore (The Guardian): Rumors, the US Economy & 2014: What You Need to Know <a href="http://www.theguardian.com/money/us-money-blog/2014/jan/29/us-economy-state-rumors-federal-reserve">http://www.theguardian.com/money/us-money-blog/2014/jan/29/us-economy-state-rumors-federal-reserve</a></div><div><br></div><div>Chris House (Order Statistic blog): The Wisdom of Laureates <a href="http://orderstatistic.wordpress.com/2014/01/30/the-wisdom-of-laureates/?utm_content=buffer82a4d&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer" style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">http://orderstatistic.wordpress.com/2014/01/30/the-wisdom-of-laureates/?utm_content=buffer82a4d&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer</a></div>Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0tag:blogger.com,1999:blog-2394855748022311882.post-39188608715208913942014-01-28T11:54:00.000-05:002014-01-28T12:32:29.334-05:00Paranoid Plutocrats<div>
At times one encounters the views</div>
<div>
Of a few with a billion to lose,</div>
<div>
Who imagine a threat </div>
<div>
From the left-leaning set</div>
<div>
Like the Nazi pursuit of the Jews. </div>
<div>
<br></div>
<div>
Despite holding fast to the reins<br>
Of the Congress and capital gains,</div>
<div>
"Our wealth," they will say,<br>
"May be taken away,"<br>
Which reality scarcely explains.</div>
<div>
<br></div>
<div>
The proportion of income that went</div>
<div>
To the point oh oh oh one percent</div>
<div>
Has been higher in fact</div>
<div>
In the age of Barack </div>
<div>
Than the last GOP president. </div>
<div>
<br></div>
If you're rich and you fear persecution<br>
To compare to the Final Solution,<br>
A more accurate view<br>
<div>
May classify you</div>
<div>
As a bag that is suited for douchin'.</div>
<div>
<br></div>
<div>
****************</div>
<div>
<br></div>
<div>
Retired billionaire venture capitalist Tom Perkins provoked scorn and derision this week with his comments that the rich in this country face a potential wave of persecution comparable to the Nazi Kristallnacht. This was the opening act of the Holocaust in 1938, when uniformed thugs smashed, burned and looted Jewish businesses and institutions in Germany. </div>
<div>
<br></div>
<div>
In a <span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">letter to the Wall Street Journal, Mr. Perkins sought to "</span><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif; -webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);">call attention to the parallels of fascist Nazi Germany's war on its 'one percent,' namely its Jews, to the progressive war on the American one percent, namely the 'rich.'"</span></div>
<div>
<br></div>
<div>
Many institutions of capitalist success rushed to distance themselves from Mr. Perkins, including his old venture capital firm Kleiner Perkins Caufield & Byers, which appeared <span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">ready to excise the name of one of its founders. </span></div>
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<br></div>
<div>
However, before dismissing Perkins' words as the rant of some crank, it may be appropriate to recall some of the <span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">almost-as-paranoid remarks</span><font color="#000000" style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif; -webkit-text-size-adjust: auto; background-color: rgba(255, 255, 255, 0);"> </font><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">made by American billionaires before and during the 2012 election. For more perspective on the persecution complex of the plutocracy, see the thoughtful </span><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">essay by Josh Marshall in Talking Points Memo. </span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"><br></span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">******************</span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">Here, until I learn how to embed links in the mobile version of Blogger, are the links referenced above:</span></div><div><span style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;"><br></span></div>
<div>
Steven Schwartzman's comparison of higher taxes on private equity with Hitler's invasion of Poland: <a href="http://www.businessinsider.com/steve-schwarzman-taxes-hitler-invaded-poland-2010-8" style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">http://www.businessinsider.com/steve-schwarzman-taxes-hitler-invaded-poland-2010-8</a></div>
<div>
<br></div>
<div style="direction: ltr;">Josh Marshall's attempt to explain Tom Perkins' paranoia: <a href="http://talkingpointsmemo.com/edblog/the-brittle-grip-part-2" style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">http://talkingpointsmemo.com/edblog/the-brittle-grip-part-2</a></div>
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<br></div>
<div style="direction: ltr;">Mr. Perkins' letter: <a href="http://m.us.wsj.com/articles/SB10001424052702304549504579316913982034286?mobile=y" style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">http://m.us.wsj.com/articles/SB10001424052702304549504579316913982034286?mobile=y</a></div>
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<br></div>
<div style="direction: ltr;">
Tweet from Kleiner Perkins in response: <a href="https://twitter.com/kpcb/status/427185213261623297" style="font-family: 'Helvetica Neue Light', HelveticaNeue-Light, helvetica, arial, sans-serif;">https://twitter.com/kpcb/status/427185213261623297</a></div>
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<br></div>
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<br></div>
Dr. Goosehttp://www.blogger.com/profile/18301105891892298426noreply@blogger.com0