Independent Ideas on the Economy, Financial Markets, and Investing

Confronting the Dragon with Peter Navarro

Posted on June 29, 2018 by MN Gordon

A young man might go to business school believing he’s obtaining some sort of academic training that will enable him to make a comfortable living. His degree may gain him entry into a large corporation, where he can work his way up to a good income. This may even put him on the fast track to what he envisions as success.

But his academic training won’t likely be of any real use. He won’t be prepared to create new products or deliver new services or technologies. He won’t possess a special knowledge that will improve the wellbeing or satisfaction of others. He won’t have the skills to bring in new business or grow the bottom line.

Rather, his academic training will have prepared him to use spreadsheet entries to forecast quarterly revenue and margin targets. What’s more, if the numbers show a disagreeable trajectory, he won’t have the skills or slightest inkling as to what to do about it. He’ll merely ride the wave down until it crashes on the rocky reef.

But if he’s in a position of leadership, he’ll likely panic. Out of his element, he’ll chase one idiotic solution after another. He’ll package up and sell off a segment of the business. He’ll invest in a new company branding initiative or fancy computer based system tools. Continue reading →

Posted in MN Gordon, Politics | Tagged china, collapse, government meddling, peter navarro, trade war | 1 Comment

A Walk on the Wild Side

Posted on June 22, 2018 by MN Gordon

“Never play cards with a man called Doc. Never eat at a place called Mom’s. Never sleep with a woman whose troubles are worse than your own.” – Nelson Algren, A Walk on the Wild Side

Fresh Fruit or Rotting Vegetables?

A subtle gas seems to always be vented into the atmosphere at the sunset of an extended bull market. As the light fades, an odor that’s indiscernible from that of fresh fruit or rotting vegetables wafts down Wall Street. You can almost smell it. But what it is you smell is too faint to accurately characterize.

The Dow Jones Industrial Average (DJIA) closed at a record high of 26,616 on January 26 – nearly five months ago. Since then it has swooned and spiked with uncertain direction. Buying the dip at this juncture may not work out in your favor.

When the stock market peaked out in mid-2007, in the early days leading up to the 2008-09 crash, some of Wall Street’s best and brightest mistook the smell of the moderate initial decline for that of fresh fruit. They bought the dip. At the time, however, it was still unclear what the source of the subtle odor was. Was it really fresh fruit? Or was it actually rotting vegetables? Continue reading →

Posted in Economy, MN Gordon | Tagged business cycle, collapse, great depression, nelson algren, paul tudor jones | 1 Comment

Chasing the Wind

Posted on June 15, 2018 by MN Gordon

Plebeians generally ignore the tact of their economic central planners. They care more that their meatloaf is hot and their suds are cold, than about any plans being hatched in the capital city. Nonetheless, the central planners know an angry mob, with torches and pitchforks, are only a few empty bellies away. Hence, they must always stay on point.

One of the central aims of central planners is to achieve effective public exhortation. While they pursue futility, in practice. They must do so with focus and purpose.

For example, economic reports with impressive tables and charts, including pie graphs, are important to maintaining the requisite public perception. Central planners know that financial scientism must always be employed as early and often as possible.

Statistics, with per annum projections, particularly those that show increasing exports and decreasing imports, are critical to maintaining the proper narrative. The USA’s embarrassing deficit in the balance of international payments will certainly diminish if it’s sketched accordingly in an “official” report…right? Continue reading →