res ipsa loquitur

Initial Unemployment Claims Filings Fall to Six-Month Low

The reality is the changes are not significant yet. The number for Aug 1st has just been revised upward to 588,000. That sure hurts your downward trend. In an age of bountiful immediate gratification for the need for statistics, statistics are less accurate and are often revised and re-revised. Common sense tells us that weekly unemployment stats must be volatile since companies tend to layoff on a quarterly basis--that's when they close the books on activity and plan Furthermore, the drop on Aug 1st was less than 1 percent--which is seven times smaller than the previous weeks upward revision. In other words, given that the drop is 1/7 of the latest previous revision, the statistic is very likely misleading.

Preparing for Bear Stearns II?

icandoitdon: couldn't have said it better. Those applauding the bailout are doing so because it gives them comfort that they might be bailed out if they, also blinded by short-term greed-based myopia, fall on their swords over imprudent risks. They cheer OPM (other people's money) coming to their rescue--in this case the hapless middle class taxpayer who is already leveraged to the hilt via mortgages, credit cards, home equity loans, and government deficit spending. If the goal is the wipe out the middle class and turn the US into a third-world country with a 1% elite in a walled city with 99% impoverished peasant class, we are well on the way.

Yahoo's 'Poison Pill' Against MSFT Takeover Deemed 'Nuts'

It's not "nuts--it's extreme brinksmanship. Just like in action films when the bad guy grabs the protagonists significant other and puts a gun to their head. They really don't ever intend to pull the trigger as it would be suicide but they are so desperate they make a bold risky move and hope the hero isn't thinking clearly. Yang was willing to kill Yahoo to save it. Microsoft realized the integration and brain drain would make the purchase a nightmare money pit and backed down.

The Contrast Between Blockbuster and Netflix

I wonder if Blockbuster is too beholden-to/cozy-with/... other words here> the MPAA and the content producers to see the trouble they are heading for. Netflix is to SONY Pictures as Apple is to EMI Music: the asteroid of disintermediation looms and is threatening change for narrow minded producer's and middlemen's business models. We'll see who the dinosaurs and mammals are as their cozy ecosystem rings from the impact.

Why Inflation Is Lower Than You Think

Speaking of Barry, he blogged a month or so ago about the significant change to the CPI made during the Clinton Administration which lowered inflation measures. The government likes to keep the CPI low since it keeps their inflation-indexed payouts lower--they are not interested in actually measuring inflation's impact on the economy at all, they are interested in preventing political unrest in an election year and keeping payouts low. They've succeeded at the second goal but can't fool the average American on the first. A decade of declining real wages coupled with accelerating core inflation cannot be 'indexed' away as if it were simple a number trick because the pain is real and growing. No matter how the politicians spin it.

Housing: When Magazine Covers Indicate a Clash

While I think it is a clear indication of wide acknowledgment of a fact when it reaches the cover of of magazines with wide readership, it is non-sensical to imply that is the end of the trend when the trend is not a fad but the state of the economy. Housing prices fell in Japan for 15 years--I am sure that fall hit the covers of magazines within a year or two. So explain the next thirteen by your theory. Or the Great Depression of 1930 as well. Fads decline after reaching zeitgeist status, there is no similar correlation when it comes to economies.

Housing Market Tracker - Are We Suffering From a 'Recession Depression'?

They are about to break they winning streak, embarrassingly so.

"[The report] says the economy does not match the models of previous recessions, when huge factory layoffs led to downturns… [So] the state and nation probably will dodge a recession."

Einstein's theory didn't match previous models, so it has to be wrong eh? What logic. Of course it doesn't match your model. This time is different: there was no time since WW2 that Americans mortgage debt was greater than their equity so you model doesn't account for that factor. Home equity loans are a recent phenomenon. Consumer demand can drop for reasons other than unemployment. With real wages stagnant for a decade, Americans coped in three ways so they could keep spending: 1) two income households, 2) working longer hours, and 3) debt. The first two are at the limit so number 3 has been the spender's choice the last few years. With the housing bubble bursting, that last one has run its course as well and consumers have no more spending support. So consumer demand, 70% or so of GDP, is drying up and lack of demand will cause...you guessed it...a recession.

Central Banks, in Panic Mode, Announce Large Auction

This is stabilizing the dollar because the markets are thinking short term--trade today and let others worry about tomorrow. But eventually, people will start thinking longer term: about the long term inflation implications, that the Fed will do this more and more, whether the soon-to-hyper-inflate dollar is a good investment at current low interest rates, and the impact of hyper-stagflation on the American consumer.