In this week’s Off the Cuff with Mish & Chris podcast, Chris and Mish zero in on:
Fuzzy Math
- Why are we hearing a steady drumbeat of upbeat economic news, when looking beneath the surface into the hard data shows exactly the opposite?
- Malincentives
- The US is embracing policies that favor corporations over individuals and encourages them to send their jobs and cash overseas. How did we get here?
- Greek drama
- The increasingly farcical steps being taken to avoid calling this obvious default for what it is are turning the Greece rescue efforts into Kabuki theatre
Chris and Mish take out their calculators this week and try to make sense of increasingly nonsensical behavior by our governments. Warning: Regardless whether or not you’re a math person, this week’s podcast is sure to raise your blood pressure. So take an aspirin before listening.
Fuzzy Math
The State of the Union speech and recent headlines have been touting a parade of positive statistics suggesting that the economy is on an accelerating upturn. Stock market prices certainly seem to agree with that outlook. But where’s the proof?
While there is some optimism to be found, the latest ISM data aside, there is a glut of concerning new data across many key indicators that suggests the economy is further slowing down. If you look at declines in the Baltic Dry Index (down 33 days in a row to an all-time low), federal income tax receipts, gasoline usage, internodal traffic, all of these represent hard data that doesn’t square with a decreasing unemployment rate and economic ‘recovery’. Even Ben Bernanke himself says 8.3% employment understates the true level of weakness in the country’s job market.
We’re in a Twilight Zone where indicators of economic weakness (lower gas prices, increase in refined petroleum exports, increased consumer borrowing) are being touted as signs of economic robustness. Expect this to intensify as we move further into this Presidential election year. But buy into this ‘smoke & mirrors’ snow job at your peril.
Malincentives
There is momentum building with the introduction of new global regulations to reduce off-shore tax sheltering for US citizens.
by xkguy