Death of the Consumer and Other Miracles

Posted on September 6, 2013 by MN Gordon

Something peculiar is going on.  One data point says the economy’s improving.  Another says it’s floundering.

Nonetheless, we strive to connect the dots and draw inferences as we go.  For example, according to data released Tuesday, manufacturing and construction spending is on the rise…

“Stronger-than-expected data on U.S. manufacturing and construction spending on Tuesday hinted the world’s biggest economy was gaining traction,” reported Reuters.

“The U.S. manufacturing sector grew last month at its fastest pace in more than two years, with the Institute for Supply Management’s (ISM) index of national factory activity rising to 55.7 in August from 55.4 the prior month.

“That comfortably beat expectations for 54, with the index at its highest since June 2011.

“A reading above 50 indicates expansion in the sector.”

What’s not to like about that? Continue reading →

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Secrets of the September Swoon

Posted on September 3, 2013 by MN Gordon

Federal workers, and many other fine folks, celebrated Labor Day yesterday by partaking in lethargy.  Here at the Economic Prism we did nothing of the sort.  Rather, we continued our labors for fun and for free…and always on your behalf.

With August now behind us, and September now in front of us, there’s much to be garnered looking back to the future.  Gazing back through the rear view mirror we see a stock market that appears to have crested.  In fact, both the DOW and the S&P 500 closed out August with their worst months since May 2012.

Is the market just taking a pause, to collect its breath, before its next leg up?  Or is it rolling over for a big bear market slide down?  Only time will tell what to make of it.

In the meantime, your broker may tell you to ‘buy the dip.’  A technical trader will look at his lines of resistance and say the bull market’s still intact.  Permabears will point to the August decline as evidence the market will crash 50 percent – or more – any day now.  Of course, no one really knows for sure. Continue reading →

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Extreme Treasury Corruption

Posted on August 30, 2013 by MN Gordon

What happened to school cafeteria classics like Sloppy Joes and Tater Tots?  That’s what school kids across the nation want to know.

From what we gather, Michelle Obama doesn’t think they’re healthy enough.  Plus she believes too many children are overweight…and that they need to slim down.  So she took it upon herself, as First Lady, to choose what they eat for lunch and how much.

Regrettably, according to students in rural Kentucky, the food served under Michelle Obama’s National School Lunch Program “tastes like vomit.”  But that’s not all.  In addition to tasting like vomit, the food’s “crappy and there isn’t nearly enough of it.”

Somehow the federal government has come to govern what school children eat and portion sizes in many American school districts.  There’s even a calorie cap that school cafeteria’s must adhere to: 850 for high school lunches, 700 for middle schools and just 650 for elementary schools. Continue reading →

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Things Are Getting Better and Other Popular Lies

Posted on August 27, 2013 by MN Gordon

The President says things are getting better.  The economy’s improving.  There will be prosperity for all in our time.  But if you live outside the Washington beltway, and earn your living through honest means, you know this is essentially a delusion, an ignis fatuus.

Certainly there are pockets of real economic growth.  In North Dakota, for instance, fracking technology has tapped into massive oil deposits from the Bakken Shale.  The state’s unemployment rate is the lowest in the nation…just 3 percent.

Yet, by and large, things are still stuck in first gear.  A new study by Sentier Research shows that Americans are worse off today than they were four years ago, at the bottom of the recession.  In fact, by Sentier Research’s estimation, household income is down 4.4 percent.  Here are some of the study’s key findings…

“Based on new estimates derived from the monthly Current Population Survey (CPS), real median annual household income, while recovering somewhat from the low-point reached in August 2011, has fallen by 4.4 percent since the “economic recovery” began in June 2009. Continue reading →

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