This article appeared online at TheNewAmerican.com on Wednesday, September 30, 2015:
Investors in the stock of Glencore, the giant commodities mining and trading company founded by Marc Rich (disgraced friend of Bill Clinton), lost almost a third of their portfolios’ value on Monday, only to see the company’s stock price rebound strongly the next two days. The company’s statement seemed reassuring to those unwilling to dig deeper:
This article was published by The McAlvany Intelligence Advisor on Monday, September 14, 2015:
Collection of Chinese renminbi yuan banknotes.
In his 2001 paper “Building Better Global Economic BRICs,” chairman of Goldman Sachs Asset Management Jim O’Neill developed the acronym for Brazil, Russia, India and China. He made the case that the BRICs symbolized the shift of global economic power away from developed nations, estimating that they might overtake the G7 nations – Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States – as early as 2027.
Modifications were necessary to dampen O’Neill’s enthusiasm, with GS recalculating that it wouldn’t happen before 2050. By December 2012 the Council on Foreign Relations, in itsForeign Affairs publication, was forced to refute even that modest projection:
This article appeared online at TheNewAmerican.com on Friday, September 11, 2015:
Coming in just hours apart on Friday, two reports confirm that oil prices are likely to resume their decline and stay low well into 2016. In a note to its clients, Goldman Sachs said that supplies remained robust despite the decline in rig count, while demand increases failed to materialize as expected:
This article appeared online at TheNewAmerican.com on Wednesday, June 24, 2015:
The OECD — the Organization for Economic Cooperation and Development — put the best face possible on France’s declining economy in its just-released forecast. The report was full of optimism about the future but admitted that the present reality is discouraging. Note the use of words “projected” and “should” in its opening paragraph:
Economic growth is projected to gain momentum in 2015 and 2016. Lower energy prices, improving financial conditions, slowing fiscal consolidation, strengthening external demand and a pro-competitive reform agenda should underpin an increase in consumption and export volumes.
But the reality is far different, said the OECD:
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,
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
This article first appeared online at TheNewAmerican.com on Saturday, March 7, 2015:
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,
This article first appeared at The McAlvany Intelligence Advisor on Monday, February 9, 2015:
Yogi Berra
Nearly everyone has an opinion about forecasting and its dangers. Some, like Yogi Berra, will tell you, “It’s tough to make predictions, especially about the future.” Others, like John Kenneth Galbraith, will say, “The only function of economic forecasting is to make astrology look respectable.” Still others will warn about setting either the exact event, or its timing. Do either one, they say, but not both.
Apparently the forecasters enlisted by the Wall Street Journal last week to give their best estimates of growth in China weren’t listening, or didn’t care. Or perhaps they believe in Keynesian miracles alongside those of the Tooth Fairy.
Nevertheless, when asked about import and export growth in China for the month of January, they missed reality by a country mile. The Journal tallied up the results and their seers and prognosticators concluded that
This was the theme of a long article I wrote which was published by The New American magazine back in April: The Modern German Economic Model is a Myth. In it I made the point that Germany, all by itself, couldn’t keep the EU economy going for very much longer. Here was my conclusion:
When the Japanese stock market lost more than 6 percent of its value on Wednesday in a massive selloff, pundits jumped on the move to try to explain what happened, and what it all means. Evan Lucas, a market strategist at IG Markets, wrote:
The report from Automatic Data Processing (ADP) on Wednesday morning surprised economists once again by coming in substantially below their expectations. The 135,000 new private sector jobs created in May were way below the
There’s an old saw about the purpose of economists is to make weather forecasting look good. The Commerce Department just reported this morning that in the first quarter the gross domestic product (GDP) of the country grew at an annualized rate of 2.5%, substantially below economists’ estimates of 3.2%. And looking past the headlines,
And it’s about time, too! The Journal is just a little late to notice what’s happening, and has been happening, over there for at least the last two years.
Let’s put things into perspective.
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