Category: Economics

Grim Enjoyment

Bad News, Economics

We all know that the economy sucks — well, all except the White House and other socialists:

The United States economy contracted in the second quarter of 2022, marking the second consecutive quarter registering no growth. Economists expected the economy to grow by 0.3 percent, but the GDP shrank by 0.9 percent in the second quarter.

It is commonly considered a recession after two straight quarters of negative growth, although the Biden administration is now in the business of challenging the definition.

White House press secretary Karine Jean-Pierre, for example, overtly denied that definition, as did White House economic adviser Brian Deese.

Of course they would.

One just wonders how they’re going to spin the Chip Diller routine when consecutive quarters #3, #4, #5 and #6 all show negative growth.

Useless socialist bastards.

When The Economy Falls Into The Ditch

Bad News, Economics

How Sri Lanka fell into the pit.

Executive Summary:  Debt.

An object lesson for all governments, not the least ours.  The only good thing about this debacle is that the ChiComs are going to take it between the cheeks.

Footnote:  the World Bank gave all sorts of accolades to Sri Lanka for its economic growth, even though the economy was built on foreign loans which the country had no chance of ever repaying.  So much for the banking system…

Further:

Fancy That

Economics, Marxists

Sometimes, the news is just priceless.

Why are people across China refusing to pay housing loans?

A wave of disgruntled homebuyers are refusing to pay mortgages for unfinished or stalled housing projects, as debt-strapped property developers run out of cash. Payments have stopped on at least 100 projects in more than 50 cities, according to researcher China Real Estate Information Corp. Analysts believe that a drop in home values may be another driver for the refusal to meet payments. Until recently, China’s mortgages have been considered among the safest banking assets because of high down payments and collateral value.

So let me see:  you take on debt to purchase a product, and when the product fails to be delivered, you refuse to pay for it.  Only in a world of banker-thought can you be the bad guy.

As to why all this is happening, see here.  (Executive summary:  it was all built on debt.)

And it couldn’t happen to a nicer bunch of Commie assholes.

The Three Things

Economics, Politics

Back when I was a retail marketing analyst, I used to make formal presentations to my clients about every month or so, each aimed at different audiences within the company — buyers / merchandisers, operations, marketing / advertising and senior management (the last being more of an annual high-altitude presentation, of course).

Because of the volume of data I had on hand it was almost impossible to show all of it, so I would provide summaries, but with all the data on hand in case there were any questions requiring a deep dive into the supporting numbers.

I would then make a summary of the summary, and give each executive an action plan consisting of three, and only three things that had the highest priority with the greatest impact, with the suggestion that they tackle those three items immediately after the meeting.  (Their bosses, of course, got the list of all the departments’ action items so that they could follow up to make sure that they’d been addressed.)

That habit has stayed with me ever since, especially when, as today, I see an enormous problem that needs fixing.  What spurs me on to even greater efforts is when I see that the people who are supposed to be fixing the problem either not doing anything (a massive clue that they don’t know what to do), or are timidly tinkering around the edges of the problem when in fact, the remedies are quite simple, but usually radical.

Here’s what I’m looking at right now.  Read this article first, please, and then come back below the fold.

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Tectonic Shift

Economics

ZMan has a typically-mordant look at the global economy:

The Global American Empire has been supported for the past half century by a novel form of seigniorage. This is the difference between the value of money and the cost to produce and distribute it. In the old days, the king would make a profit from the minting of coins used in his kingdom. This was usually a tax added to the total cost of a coin on top of the cost of production. This was the king’s profit from coinage.

Since the Louvre accords in the 1980s, Washington has been able to swap securities for newly printed banknotes by the Federal Reserve. This would normally impose an inflation tax on the public, but the dollar being the reserve currency of the world spread this tax over the global economy. Inflation rates in the United States remained low, as long as global growth remained high and the world was willing to tolerate this system.

The bigger issue is that the rest of the world is losing interest in the system that profits Washington at their expense. China has been manipulating its currency for a few years as a way to prevent Washington from exporting inflation to Beijing. She has also been quietly building parallel financial structures, along with Russia and India, in order to escape the perfidious rules imposed by Washington.

Which means that if the $US is replaced by some other form of currency, we’re fucked.  The only bright side of that scenario is that other currencies are even more shaky than ours (yuan coff coff)  and a commodity-based system such as gold is impossible because quite frankly, there is no commodity on Earth large enough to replace the dollar without a radical devaluation of, well, everything.

Sobering stuff, all the same.  Read all of it.