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The Black Elephant in the Room
The Black Elephant in the Room ALMOST EVERYONE KNOWS WHAT YOU MEAN NOW WHEN YOU TALK ABOUT BLACK SWANS That unexpected event, which upends all the plans you had and turns your life – or everyone’s – upside down. An apparent surprise, but which, once the event has happened, is rationalized, making it seem predictable and giving […]
Things Are Only Going To Get Weirder
Things Are Only Going To Get Weirder Things are getting stranger and stranger. If you would have told someone ten years ago that Dennis Rodman would one day be helping to negotiate peace between North Korea and President Donald Trump, they would have assumed you were describing some weird movie cooked up in the mind […]
Can Expectations Undo the Validity of the Mises’s Business Cycle Theory?
CAN EXPECTATIONS UNDO THE VALIDITY OF THE MISES’S BUSINESS CYCLE THEORY? According to Ludwig von Mises’s Austrian Business Cycle Theory (ABCT), the artificial lowering of interest rates by the central bank leads to a misallocation of resources due to the fact that businesses undertake various capital projects that prior to the lowering of interest rates […]
Unrealistically Great Expectations
Unrealistically Great Expectations Our expectations have continued ever higher even as the pie is shrinking.. Let’s see if we can tie together four social dynamics: the elite college admissions scandal, the decline in social mobility, the rising sense of entitlement and the unrealistically ‘great expectations’ of many Americans. As many have noted, the nation’s financial and […]
Expectations and the Austrian Business Cycle Theory
EXPECTATIONS AND THE AUSTRIAN BUSINESS CYCLE THEORY According to the Austrian Business Cycle Theory (ABCT) the artificial lowering of interest rates by the central bank leads to a misallocation of resources because businesses undertake various capital projects that prior to the lowering of interest rates weren’t considered as viable. This misallocation of resources is commonly […]
Are Inflationary Expectations the Heart of Inflation?
ARE INFLATIONARY EXPECTATIONS THE HEART OF INFLATION? For most economic commentators the underlying driving force of inflation is inflationary expectations[1]. For instance, if there is a sharp increase in the price of oil, individuals may form higher inflationary expectations that could set in motion spiraling price inflation, or so it is held. If somehow expectations […]
Dear Janet, Seriously!!
Dear Janet, Seriously!! The Fed’s confidence trick this week was, once again, the Keyser Soze gambit (via Beaudelaire)- “convincing the world of Yellen’s hawkishness, when no such character trait exists.” However, unlike the movies, stocks and FX markets have already seen through the con, leaving Fed Funds futures alone to believe the hype. As we noted previously, “The Fed Can’t Raise […]
The Fatal Blindness of Unrealistic Expectations
The Fatal Blindness of Unrealistic Expectations We are damned to fail when we avoid hard truths My old employer, Yahoo!, has been in the news again of late. Its latest CEO (and former Googler), Marissa Meyer, is currently at the World Economic Forum in Davos, Switzerland, where she has just given her first televised interview detailing her strategy […]
