Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Great Recession

Congress Votes to Raid Fed’s Slush Fund to Pay for Highways

This article appeared online at TheNewAmerican.com on Monday, November 23, 2015:  

In its never-ending quest to spend money it doesn’t have, but not wanting to raise taxes, especially during the current election cycle, on Thursday, November 5 Congress passed a $325-billion, six-year transportation bill that is to be financed by selling off some of the country’s strategic petroleum reserves and raiding the Federal Reserve.

In its editorial complaint about the bill, the Washington Post said

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Recession Indicators: Pick one

This article was published by The McAlvany Intelligence Advisor on Wednesday, November 18, 2015:

As a general rule a recession is two quarters of negative growth (aka decline) in the country’s gross domestic product (GDP). GDP, in simplest terms, is a measure of industrial production, employment, real (inflation-adjusted) income, and wholesale and retail trade.

The trick is knowing when a recession is coming. Even trickier is knowing what to do about it beforehand.

The Bureau of Economic Analysis (BEA) said GDP

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More Signs the Economy Is Slowing

This article appeared online at TheNewAmerican.com on Tuesday, November 17, 2015:  

The latest Empire State Manufacturing Survey issued by the New York Federal Reserve Bank on Monday confirms an increasingly ominous economic trend: The fourth consecutive monthly decline in its index is the longest since early 2009.

Its authors didn’t even try to sugarcoat it:

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John B. Taylor: Perfect Example of Hubris-Lathered Economist Who Thinks He Can Steer the Economy

This was article was published by The McAlvany Intelligence Advisor on Wednesday, September 16, 2015:  

John B. Taylor, economics professor at Stanford University (where he got his PhD), thinks the massive, highly complex U.S. economy, generating nearly $20 trillion of goods and services every year, can be fine-tuned with rules and policies. Further, if those rules can be implemented clearly, the economy will do even better. He thinks of the economy as one gigantic organism with a mind and purpose of its own. That’s why he likes Fed Chair Janet Yellen:

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Interest-rate Increase Could Trigger Global Recession

This article appeared online at TheNewAmerican.com on Tuesday, September 15, 2015:  

Series 1934 $5,000 Federal Reserve Note, Obverse

Series 1934 $5,000 Federal Reserve Note, Obverse

With every eye focused on the Board of Governors’ meeting of the Federal Reserve System on Thursday, expecting the earth-shaking announcement that it will, or won’t, raise interest rates for the first time since January of 2008, few are considering the global implications if it does.

Expectations in the very short run are modest. The debate centers on whether rates should be increased by a tenth of a percent, or a quarter of a percent. In the real world it isn’t likely to matter: New car loans will be adjusted upward by a couple of dollars a month and new home loans will increase by perhaps as much as $50 a month, probably less. This is likely to galvanize some fence-sitters into action, drawing future purchases into the present.

The real impact in the long run, however, is several-fold:

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Public Pension Plans Cut Rate of Return Targets; Still Not Enough

This article appeared online at TheNewAmerican.com on Monday, September 7, 2015:  

Twenty million pension plan beneficiaries have just been warned: You won’t be getting what you have been promised when you retire. Part of the reason is that pension managers have been far too optimistic in estimating what they are able to earn on your money. And part of the reason is that they continue to remain so.

In its analysis of 126 public pension plans, the National Association of State Retirement Administrators (NASRA) noted that more than two-thirds of them have reduced their estimates, however slightly, since 2008, while 39 of them are still stuck

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Social Security Disability: Reaching the End of the road?

This article was published by The McAlvany Intelligence Advisor on Friday, July 24, 2015:  

Social Security Poster: old man

Buried in the annual exclamations of urgency by the trustees of the Social Security system issued on Wednesday was this warning: action by Congress will “give the public adequate time to prepare.” In the short run, some 11 million on Social Security Disability will learn that their benefit checks will drop by $200 a month starting next fall, so they need to get used to that. In the long run everyone receiving anything from the celebrated Ponzi scheme will see their checks go to zero:

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“The most Bullish thing the Stock Market can do is go up.”

This article was published by The McAlvany Intelligence Advisor on Wednesday, June 10, 2015: 

Charles Dow -an American journalist who co-fou...

Charles Dow -an American journalist who co-founded Dow Jones & Company with Edward Jones and Charles Bergstresser.


Right up until early April, that is. The Value Line Geometric Index, the unweighted index of approximately 1,700 stocks that fund manager Dana Lyons likes to watch, topped out at 522 and has declined by almost 10 percent since then.

By Monday, June 8 the Dow’s decline had wiped out all of its gains and is now flat for the year. The Dow Transportation Index fell 2 percent that day, its worst day since January 6, wiping out its 11 percent year-to-date gain. The Dow Utilities Index has suffered an even greater decline, erasing all of its 16 percent gain.

The Dow is one of the primary leading indicators used by financial advisors like Bruce Bittles, the chief investment strategist at RW Baird. Bittles manages $100 billion of other peoples’ money, and he’d better be right. Now, he’s getting nervous:

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Stock Market Wipes Out All Gains for the Year

This article first appeared online at TheNewAmerican.com on Tuesday, June 9, 2015:

On Monday, June 8, the Dow Jones Industrial Average (DJIA) declined by enough to wipe out all gains investors thought they had made in stocks since January 1. It was confirmed by action in the Dow Jones Transportation Index (DJTA), which is even older than the Dow and reflects the price performance of the stocks of 20 transportation companies such as Avis, Delta Airlines, and FedEx. On Monday that index fell by two percent, its worst day since January 6, bringing that index to a loss of nearly 11 percent from its high earlier in the year.

The decline in the Dow was further confirmed by

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Driverless Cars to Disrupt Industry, Benefit Consumers

This article first appeared online at TheNewAmerican.com on Thursday, May 21, 2015: 

English: Google driverless car operating on a ...

Google driverless car operating on a testing path


Brian Johnson, in his “Disruptive Mobility” report issued by Barclays Bank on Tuesday, sees that a future with driverless cars will mean far fewer cars on the road, a much smaller GM and Ford, and consumer travel costs cut by two-thirds. A generation from now there will be just 100 million cars on American roads (compared to 250 million today), and new car sales will fall below levels touched at the bottom of the Great Recession: less than 10 million a year.

This means that, unless they adapt and adopt new strategies, and perhaps a new business model, General Motors and Ford will likely be vastly smaller enterprises than they are today. He predicts that

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Mainstream Economists, the Herd Instinct, and GDP

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, May 20, 2015:

It’s no surprise, really. Most mainstream economists look at the world through Keynesian lenses, they attend the same conferences, read the same reports, are employed by companies in the same industry, hold degrees from the same universities, and are rewarded for having a view that doesn’t stray from the norm, even if that view is wrong. It’s a perfect reflection of the herd mentality: the impulse or tendency toward “clustering,” reflecting the need for conformity. It’s how economists make weathermen look good.

If their view turns out to be wrong, they adjust, slowly. If they are challenged or threatened,

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Atlanta Fed Drops GDP Growth Estimate to Under One Percent

This article first appeared online at TheNewAmerican.com on Tuesday, May 19, 2015: 

Whenever new data on the economy is reported, the Atlanta branch of the Federal Reserve System (the Atlanta “Fed”) releases its proprietary “nowcast” on how well the economy is doing. For some time now, that forecast has embarrassed mainstream economists who have subsequently been forced to drop their own forecasts as the economy continues to slow.

In February GDPNow projected that the U.S. economy would grow by 1.9 percent in 2015, far below the rosy estimates by mainstream economists. Two weeks ago GDPNow projected growth at 1.2 percent. On May 13, it dropped further,

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China Export Shipping Declines by Two-thirds

This article first appeared online at TheNewAmerican.com on Thursday, May 7, 2015: 

Two weeks ago the Shanghai Containerized Freight Index (SCFI), which tracks shipping rates from Shanghai to the world, fell off a cliff: down a breath-taking 67 percent from a year ago. Wolf Richter thought it was a statistical fluke.

It was no fluke. In the next two weeks the SCFI for Northern Europe fell another 14 percent, an all-time low. Wrote Richter: “Something big is going on in the China-Europe trade.”

The collapse is being echoed by other indexes reflecting the breathtaking decline in China’s exports. For example

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More Keynesian Insanity: Negative Interest Rates

This article first appeared at The McAlvany Intelligence Advisor on Monday, May 4, 2015:

There’s a corollary to the insanity rule. It’s called the Keynesian Corollary: When something doesn’t work, do more of it. When history is written about the coming Second Great Recession, historians will likely note July 2012 as the turning point. That was when Mario Draghi, head of the European Central Bank (ECB) said during a panel discussion that the ECB “is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.”

Other historians might list that as one of the top ten “famous last words” ever issued by a human being. Since that moment bond yields across the world have dropped, and dropped, and dropped. On Thursday Jeremy Warner, the London Daily Telegraph’s assistant editor, announced that

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First-quarter GDP Report Is Awful

This article first appeared online at TheNewAmereican.com on Wednesday, April 29, 2015: 

Logo of the United States Bureau of Economic A...

The report released Wednesday morning by the Bureau of Economic Analysis (BEA) was stark: The economy stalled in the first quarter in every sector, with overall growth barely positive, and embarrassing once again economists who predicted substantially better results. According to the BEA the economy in the first quarter grew at an annual rate of just 0.2 percent, compared to estimates of between 1.0 and 2.0 percent by the “experts.”

Personal spending dropped by nearly two thirds from the fourth quarter of 2014; durable goods purchases fell by more than 80 percent; and non-durable goods purchases almost disappeared compared to the last quarter, falling by 0.3 percent compared to an increase of more than four percent. The service industry limped along at two-thirds of last quarter’s pace.

Investment in business capital equipment went negative, as did

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Hillary Tells the Truth

This article was first published by The McAlvany Intelligence Advisor on Wednesday, April 22, 2015: 

On certain topics, Hillary Clinton has been forthright. She is a proud collectivist:

We must stop thinking of the individual and start thinking about what is best for society.

And this:

Many of you are well enough off that the tax cuts may have helped you.

We’re saying that for America to get back on track, we’re probably going to cut that short and not give it to you.

We’re going to take things away from you on behalf of the common good.

When it comes to the economy, however, Clinton has either joined the chorus of cheerleaders about its remarkable recovery, or has remained silent in the face of evidence that it hasn’t. On Monday, however,

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Hillary Finally Comes Clean: The Economy Is “Stalled”

This article first appeared online at TheNewAmerican.com on Tuesday, April 21, 2015:

During Hillary Clinton’s road trip to New Hampshire on Monday, something remarkable occurred: She told the truth about the economy, telling her supporters that the economy has “stalled out” and, adding, “It’s not enough to tread water.”

A month ago while she was busy not running for president, Clinton never uttered a word about the weakening economy, giving mute evidence that she was unwilling to risk telling the truth and offending both the president and her Democrat supporters. This despite evidence that Americans have put economic worries at or near the top of their concerns for months on end. This despite the fact that the nation’s GDP fell off a cliff in January and February. This despite the fact that job growth since the start of the Great Recession has been half what it was during the Reagan recovery in the 1980s. This despite evidence that new business startups have continued their decline since 2009, and evidence that business investment in new enterprises has dropped sharply at the same time.

But evidence just released has so overwhelmed the Democrat stance that everything is ducky that it apparently has forced Clinton to admit what is obvious to the voters whose support she is seeking:

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Memphis Police, Firemen Quitting Following Pension Plan Reductions

This article first appeared online at TheNewAmerican.com on Monday, March 16, 2015: 

English: Memphis, Tennessee skyline from the a...

Memphis, Tennessee skyline from the air

Last July more than half of Memphis’ police officers took sick days off to protest the reductions in the city’s contributions to their pension plan and increases in their contributions to the city’s health benefits plan. The national media was sympathetic with cases of “blue flu,” instead of recognizing the new economic reality: Because public pensions are underfunded, everyone expecting benefits from the city will now take a hit, not just new hires.

Some of those who took sick days in July now are quitting altogether, finding other better opportunities elsewhere. In fact, other departments from nearby states are advertising in local papers and setting up job fairs to entice the discontented to new positions.

In a word, those unhappy with the new reality are adjusting.

Most solutions proposed to bring underfunded pension plans back into balance have involved

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Latest Jobs Report Deceptive; Jobs Exported Overseas

This article first appeared online at TheNewAmerican.com on Saturday, March 7, 2015:

English: A North American Free Trade Agreement...

North American Free Trade Agreement logo

The employment report from the Labor Department on Friday was hailed as more evidence that the worst from the Great Recession is now in the rear view mirror, and receding. The unemployment rate in February dropped to 5.5 percent, lower than economists were predicting, while job growth added nearly 300,000 jobs, pushing the streak of gains of 200,000-plus new jobs per month out to a full year, the longest such streak since 1995.

The news caused stocks to lose more than one percent of their value, as Wall Street expected the robust numbers to hasten the day when the Fed would increase interest rates, potentially slowing the sluggish economy even further. Investors needn’t worry: Friday’s report was a head-fake.

If the recovery were real,

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Latest CBO Report shows Deficits Approaching $1 Trillion

This article first appeared at The McAlvany Intelligence Advisor on Wednesday, February 4, 2015: 


When the Congressional Budget Office issued its Budget and Economic Outlook 2015 to 2025 in January, few could be bothered to do a serious review of it as it seemed to contradict the present meme of the Goldilocks economy: job growth accelerating, interest rates low, consumer confidence improving, deficits shrinking, and so forth. Even those taking the time to look at it, scoffed at its conclusions. Said the CBO:

The federal budget deficit, which has fallen sharply during the past few years, is projected to hold steady relative to the size of the economy through 2018.

Beyond that point, however, the gap between spending and revenues is expected to grow, further increasing federal debt … which is already historically high.

The CBO explained why:

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Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.

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