… new empirical findings support a much older body of theory that argues that credit markets, left to their own devices, will not optimize the allocation of resources. Instead, following Joseph Schumpeter’s, Keynes’s and Hyman Minsky’s arguments, they will tend to shift financial resources away from real-sector investment and innovation and towards asset markets and speculation; away from equitable income growth and towards capital gains that polarizes wealth and income; and away from a robust, stable growth path and towards fragile boom-busts cycles with frequent crises.
This means, we argue, that there is a strong case for regulation ….
Debunking Deregulation: Bank Credit Guidance and Productive Investment
Video: BC One – Climate Change -The Facts
After one of the hottest years on record, Sir David Attenborough looks at the science of climate change and potential solutions to this global threat. Interviews with some of the world’s leading climate scientists explore recent extreme weather conditions such as unprecedented storms and catastrophic wildfires. They also reveal what dangerous levels of climate change could mean for both human populations and the natural world in the future.
Spain’s unemployment rate ticked up by a quarter percentage point to 14.7% in the first quarter of 2019, when economists had expected a down tick, as the number of people claiming unemployment benefits increased by 50,000 to 3.35 million, according to data released by the National Statistics Institute (INE). Although it’s not unusual for unemployment in Spain to tick up during the first quarter, this is the biggest quarter-on-quarter increase in six years and it highlights a persistent weak link in an economy that has done nothing but grow since late 2013.
The biggest job losses were registered in the services sector (69,000), followed by industry (8,600) and construction (2.500), raising concerns that the generalized economic slowdown affecting the European economy has spread to one of the region’s fastest growth engines.
“The worst labor market” on the planet: unemployment exceeded 20% in three downturns over the past 35 years.
How to create an eco-friendly office: Many UK businesses are trying to reduce plastic waste and enhance energy efficiency in sustainable workplaces, but change is more difficult in a shared office space
Q1 GDP surprised with a gain of 3.2% versus expectations of 1.9% and last P of 2.2%. News shows and political leaders celebrated the headline number (NYT), but markets were fussier. Chief among these was the increase in inventory accumulation (contributing over one percent) and reduced imports (which were affected by potential tariff timing). Without these effects economic growth was only 1.5%. (Barron’s). Despite the news stories, stocks did not rally on the news and interest rates actually moved lower. I enjoyed lunch with Bob Dieli on Thursday, and this scenario was just as he predicted. His subscribers can see the details. This left me well-prepared for an early analysis at FATrader. The story was pretty well reported on Twitter and financial media.
New Deal Democrat had a slightly different negative take, emphasizing his long-leading indicators in the report.
“Davidson” (via Todd Sullivan) suggests looking at trends in Real Private GDP. This takes out some artificial government accounting and provides a measure on private activity. He concludes:
But, the data reveals that an expansion in the Private economic activity the past 18mos has definitely accelerated. The Real Trailing Twelve Mos Private GDP is definitely significantly higher than the trend of 3.00% since early 2009. Today’s report of 3.51% confirms all other economic trends I monitor and is something expected in GDP data.
The development of Real Private GDP is to remove the skewed perception many derive from the widely reported and in my view misinformed GDP data. GDP includes discretionary govt spending which comes from taxation and govt borrowings based on the Private economy. It is a form of double counting the underlying strength or weakness when govt spending tends to rise and fall somewhat along economic trends. Total Govt Expenditure&Inv does not include the mandatory payments from Social Security or Medicare and etc.
This chart shows the significance.
And by the way, the Chemical activity barometer increased again in April (Calculated Risk).
I am scoring GDP as “good,” but it is really more of a neutral call by my rules.
And last but not least is this comment from Robert Dieli’s special GDP report (subscribers only).
All of the remarks you are seeing about whether this report indicates the start of a recession are a waste of your time. For two reasons. The first, and the most important, is that GDP in not used to in the establishment of business cycle peaks and troughs. The second, is you will find positive growth quarters in recessions. So, folks who try to date recessions with GDP don’t know the first thing about dating recessions.
Recent worries have been resolved or reduced.
Recession fears have abated after a spate of stories sparked by “yield curve rookies.” Fed expert Tim Duy’s most recent comment calls it the “non-recession watch.”
Landslides and floods triggered by torrential rain have killed at least 29 people in Indonesia, the disaster agency said on Monday, with thousands taking shelter in evacuation centers amid fears of disease.
A 44-page, draft “Summary for Policy Makers” obtained by AFP catalogues the 1001 ways in which our species has plundered the planet and damaged its capacity to renew the resources upon which we depend, starting with breathable air, drinkable water and productive soil.
The impact of humanity’s expanding footprint and appetites has been devastating.