Economy | timiacono.com - Part 4

What’s Wrong with Australia?

Via this item at Zero Hedge comes the chart below from Reuters depicting the state of the world, interest rate-wise, strongly suggesting that rate cuts are in the offing down under.

Of course, word came yesterday that the U.S. central bank is desperate to make a token interest rate increase in six weeks and, with everyone else going in the opposite direction, the unintended consequences of this action should be exciting to watch.

Confidence is High

Hoisting up this photo of Federal Reserve Chair Janet Yellen from this Fortune story today about how the central bank is, basically, flying blind when it comes to inflation since the Phillips Curve stopped working … well, it just seemed like a good idea this morning in advance of today’s expected non-action on interest rates from the Fed.

Here’s a simple suggestion – since it is now clear that newly created money from the Fed goes exclusively into financial instruments rather than anything that factors into consumer prices and, certainly, not workers’ wages (and “trickle-down” appears to be broken too), maybe the braintrust in the Eccles building should look more at stock prices (way up), bond prices (way up), home prices (way up), etc. to gauge whether or not they’ve done enough.

There’s also this rather embarrassing graphic via Marketwatch today:

More evidence that the giant student loan bubble will someday wreak havoc on the U.S. economy in one enormous delayed reaction comes from two charts that go a long way in explaining why and how the labor force participation rate is so low.

First, it’s not retirees that are causing more people to not work or look for work – the 16-24 age group accounts for all of the net decline in participation rate per the St. Louis Fed.

What are these 16-24 year-olds doing if they’re not working or looking for work?

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The Myth of Retiring Baby Boomers

Anyone interested in digging deeper into the quandary over what’s responsible for the declining labor force participation rate in the U.S. should have a look at this item from Doug Short over at Advisor Perspectives where the chart below is offered up as evidence that it’s not just demographics since the Baby Boom generation is actually working more.

Those born between 1946 and 1964 (and recall that the boom faded quickly in 1958) fit into the first four groups with only one group showing an increase in those seeing fit to no longer work or look for work – the 50- to 54-year olds. Given the slope of curves for the five older groups, perhaps their decision will prove to be a bit hasty as one thing is clear from the chart above – the older you get, the more likely it is you’ll re-enter the work force.

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I Bet They Didn’t See That Coming

What is it with the French?

Presumably they ask the same questions about us ‘Mericans and our guns, but the bloody French Revolution from about 225 years ago comes to mind watching these Air France executives trying to exit the scene after announcing mass job cuts yesterday.

Details of how the executives were “almost lynched” are found in this story from Agence France-Presse, Whochit News provides this video, and there’s this report at The Guardian.

They’ll probably think a little more about security next time…

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