It all seems so systematic, arranged, and orderly. Almost a direct proof of deism. Sixty seconds make a minute, 60 minutes make an hour, 24 hours make a day, and one day equals one complete rotation of the planet earth.
Roughly every 30 days the moon orbits the earth – which is one month. Then every 12 months the earth orbits the sun – which is one year.
So far so good, right?
But here’s where the nice and neat order of it all breaks down. Because if you try to measure one of earth’s orbits of the sun in days it’s not so divinely tidy. For it takes 365 days plus an inconvenient 6 hours to fully complete the cycle.
But we don’t let these inconvenient 6 hours hamper our perfection. We’re humans, after all. We innovate, invent, and make the world in our image. So when the numbers don’t jive, we do what must be done. We fudge them.
We create an off balance account. We concoct modern monetary theory. We contrive negative interest rate policy. And we invent leap year. Continue reading
The economic consequences of coronavirus are quickly piling up like garbage along the streets of Los Angeles. Breaking supply chains, closed Chinese factories, iPhone disruptions, and massive shortages of Chinese made products. These developments will most definitely get worse before they get better.
The economic impacts will be devastating. As China flatlines, and first quarter GDP growth approaches zero, the global economy, including the U.S., will also be greatly disrupted. Perhaps many low-cost, Made in China products will go on indefinite hiatus. What then?
Quite frankly, the global economy’s overdue for a synchronized downturn. Coronavirus may mark the turning point. But it would have arrived sooner or later, with or without the threat of a burgeoning pandemic.
Still, the prospect of a great plague makes people all the more excitable. A run-of-the-mill recession and bear market is one thing. But add the rapid spread of a hyper contagious virus to the mix, and the human animal is inclined to go mad in unison. Continue reading
On Tuesday, at the precise moment Federal Reserve Chairman Jay Powell commenced delivering his semiannual monetary policy report to the House Financial Services Committee, something unpleasant happened. The Dow Jones Industrial Average (DJIA) didn’t go up. Rather, it went down.
Were the DJIA operating within the framework of a free capital market it would be normal for the index to go both up and down. But remember, the U.S. stock market is hardly a free market. Not when it’s under the influence of extreme Fed intervention.
When the Fed speaks, the DJIA should go up. At least, that’s the opinion of President Trump. And as Powell spoke, the Real Donald Trump took to Twitter, and delivered his play-by-play assessment:
“When Jerome Powell started his testimony today, the Dow was up 125, & heading higher. As he spoke it drifted steadily downward, as usual, and is now at -15 […]”
President Trump, no doubt, was falling for the post hoc fallacy by linking correlation with causation. Was this intentional? Was this ignorance? You can decide. Continue reading
Viewing the past through the lens of history is unfair to the participants. Missteps are too obvious. Failures are too abundant. Vanities are too absurd. The benefit of hindsight often renders the participants mere imbeciles on parade.
Was George Armstrong Custer really just an arrogant Lieutenant Colonel who led his men to massacre at Little Bighorn? Maybe. Especially when Sitting Bull, Crazy Horse, and numbers estimated to be over ten times his cavalry appeared across the river.
Were George Donner and his brother Jacob naïve fools when they led their traveling party into the Sierra Nevada in late fall? Perhaps. Particularly when they resorted to munching on each other to survive the relentless blizzard.
Certainly, Custer and the Donner brothers were doing the best they could with the information available to them. The decisions they made must have seemed reasoned and calculated at the time. But what they couldn’t see – until it was too late to turn back – was that with each decision, they unwittingly took another step closer to their ultimate demise. Continue reading