Cross Road Blues in the Time of Biden

Posted on March 3, 2023 by MN Gordon

I went to the crossroad, fell down on my knees
I went to the crossroad, fell down on my knees
Asked the Lord above “have mercy, now save poor Bob, if you please”

– Robert Johnson, Cross Road Blues

Unelected Bureaucrat

Federal Reserve Chair Jerome Powell has a dreadful job.  He lords over tens of trillions of dollars.  Yet he only pockets $190,000 a year – a fraction of what most CEOs make.  Still, he calls it fair.

Powell’s primary duty is setting the price of credit.  This is an important job in a centrally planned economy.  Nonetheless, in an open economy, where interest rates are determined by willing borrowers and lenders, the job wouldn’t exist.

There are worse jobs out there, however.  Just ask Lael Brainard.  On February 18, she resigned as Fed vice chair after less than nine months on the job.  Now she’s Director of the National Economic Council.  Another worthless position.

With Brainard out as vice chair, a simple question arises.  Who will be the next sucker to fill this role?  As the National Enquirer would put it, “Enquiring minds want to know.” Continue reading →

Posted in MN Gordon, Politics | Tagged , , , , , | 5 Comments

Fear and Greed with a Roll of the Dice

Posted on February 24, 2023 by MN Gordon

Bear markets take time.  They also provide countless occasions to lose money.  With each bounce comes an opportunity for investors to buy higher so they can later sell lower.

Major U.S. stock market indexes hit what is likely an interim bottom in the fall of 2022.  Since then, they’ve bounced with incredible vitality.  The bounce has brought new confidence to investors at what may end up being the worst possible time.

Many smart people have misconstrued the bear market rally – a sucker’s rally – as the origins of a new bull market.  After January’s stellar performance to start the New Year, calls of a bull market have come far and wide.

Maybe these bull market calls are right.  Maybe the stock market’s selloff this week was merely a consolidation period.  And the major stock market indexes will soon charge past their all-time highs from over a year ago.  We’re not so sure.

Billionaire investor Jeremy Grantham, and co-founder of the Boston-based money manager GMO, recently provided a well-reasoned assessment of where the stock market, as measured by the S&P 500, is headed. Continue reading →

Posted in MN Gordon, Stock Market | Tagged , , , , | 18 Comments

Do Techno Posers Have the Skills to Pay the Bills?

Posted on February 17, 2023 by MN Gordon

Sometimes things must get worse before they get better.  To completely remodel a kitchen, for instance, you must first demo and gut the old one.  These initial steps backward can be demoralizing.

But there’s no way around it.  And with perseverance and an ample budget, the ultimate result is usually a big improvement.

Similarly, remodeling a tired company requires making short term sacrifices for long term gains.  The initial efforts can produce ugliness.  And with the lives and livelihoods of employees on the line, the decisions can be emotional.  Yet sometimes it must be done.

Meta CEO Mark Zuckerberg recently told investors that 2023 will be the “year of efficiency.”  If you recall, the company RIFed 11,000 workers in November 2022.  The scuttlebutt is that more layoffs are coming.

Currently, the prospect of imminent layoffs is triggering uncertainty about what projects will go forward, what will be cancelled, and who will be working on them.  This has created an interim situation where some Meta employees are getting paid to do zero work.  Strangely, for Meta to become more efficient, it must first be less efficient. Continue reading →

Posted in Business, MN Gordon | Tagged , , , , | 22 Comments

Living the Lie

Posted on February 10, 2023 by MN Gordon

“It is significant that the nationalization of thought has proceeded everywhere pari passu with the nationalization of industry.” – EH Carr

Denying the Truth

Central planners face an impossible task.  They must compel people to behave in ways that go contrary to freedom of choice.  Only those full of conceit and having an outsized ego would make a career out of this line of work.  You know the types…

Thou shalt only take public transportation.  Thou shalt pay income taxes.  Thou shalt consume bugs.  Thou shalt use electric leaf blowers.  Thou shalt own nothing and be happy.  Thou shalt have a permit to sell lemonade.  Thou shalt do as I say not as I do.

Yet, even when the plebs go along, the plans of central planners never work out as intended.  They’re costly.  They create unnecessary work.  They can also be extraordinarily destructive.

Rather than accepting their limitations, however, central planners redouble their efforts.  They create complicated incentive programs.  They reward one industry at the expense of another. Continue reading →

Posted in Economy, MN Gordon | Tagged , , , , | 21 Comments