The Mess That Greenspan Made - Part 11

Ron Paul on Donald Trump

Former Texas Representative and three-time presidential candidate Ron Paul is not hopeful about the competition between Hillary Clinton and Donald Trump for the White House.

And some deep thoughts from The Economist:

It is far from clear what Mr Trump believes in; where he has concrete policies, such as on the economy, they are completely implausible. His supporters aren’t interested in the details; it is the broad sweep (anti-immigration, isolationist) that they like along with the impression of decisiveness that he creates. In that sense, his appeal resembles that of a Latin American caudillo, or strongman.

When the ancient Greeks contemplated the idea of full democracy, they worried that emotional appeal, rather than reason, would sway the crowd. Plato wrote that

Popular acclaim will attend on the man who tells the people what they truly want to hear rather than what truly benefits them

Thursday Morning Links

MUST READS
The death of reason – Economist
Jeff Gundlach: Donald Trump will win – CNBC
Why Cruz, and the G.O.P., Lost to Trump – New Yorker
Why the media will lift Trump up and tear Clinton down – Vox
Donald Trump’s Greatest Self-Contradictions – Politico
Trump’s Hard Truth for the GOP: Conservatism Doesn’t Matter – Fiscal Times
The Long, Weird Kasich Campaign Gives In To Reality – Five Thirty Eight
Little Girl Detained By Police After Trying to Buy School Lunch with Real $2 Bill – reason.com
Canada’s Oil Sands Wildfire May Have Been Fueled by Global Warming – Scientific Americana
‘It’s a Fucking Ghost Town’: Inside Canada’s Fort McMurray As It Burns – Vice News
The Circles of American Financial Hell – Atlantic
Zimbabwe to print own version of US dollar – BBC
The €500 banknote is dead – Quartz

MARKETS/INVESTING
Stocks: 5 things to know before the open – CNN/Money
Notes from the 2016 Ira Sohn Conference – Reformed Broker
Oil rallies as Canada fire and Libya violence threaten supply – Reuters
China’s Great Commodity Bubble Loses Air Before It Can Burst – Bloomberg
Is China fueling a new commodities bubble? – CNN/Money
Gold falls for fourth straight session on dollar rebound – Reuters
The surprising force behind gold’s rally – Value Walk
Druckenmiller: Get out of the stock market, own gold – CNBC

ECONOMY/WORLD/HOUSING/BANKING
What’s behind the Recent Uptick in Labor Force Participation? – Atlanta Fed
Runaway inflation is pinching the one group that can least afford it – MarketWatch
Levy Economics: 90% Of Americans Worse Off Today Than In 1970s – Value Walk
UK economy ‘near stalling’ as service sector slows – BBC
Look Out, Loonie, Canada May Have Just Peaked – Bloomberg
Rousseff’s woes mount as Brazilian senator backs impeachment trial – Reuters
‘Crazy’ real estate bidding wars infect Toronto suburbs – CBC
The seeds of the next housing crisis have been planted – MarketWatch
Drain No More: Fed Funds R.I.P – Dimartino Booth
The Fed’s Risky New Mandate – Project Syndicate
The Federal Reserve: CNBC Explains – CNBC

 

GOP R.I.P?

The Republican Party is in for a tough slog (or, perhaps, knocked out) :

The good news is that the November election is only six months away.

Here’s what the Daily News had on its cover after the New Hampshire primary:

This should all be fun to watch…

Wednesday Morning Links

MUST READS
Why Republican Voters Decided On Trump – Five Thirty Eight
Hoosier Judgment Spells End For Cruz, Triumph For Trump – NPR
Sanders scores upset victory in Indiana Democratic primary – Fox News
It’s mathematically impossible for Bernie to win with pledged delegates – Politico
Defense Dept Benghazi Letter Reeks Of Democratic Coordination – Daily Caller
How ‘Stop Trump’ failed to halt the Republican front-runner – Reuters
Why the outcome of the 2016 election is already crystal clear – The Week
Trump’s Indiana win raises unsettling questions for GOP – CSM
Trump’s victory in Indiana is the final KO for Republican Party – NY Daily News
After Trump’s win, an exodus from the Republican Party has begun – Quartz
Elizabeth Warren’s brutal call to action against Donald Trump – Vox
Just When Was America Great? – The Atlantic

MARKETS/INVESTING
Stocks: 5 things to know before the open – CNN/Money
Asia Stocks Fall Sixth Day on Global Growth Concern – Bloomberg
Delamaide: Banks, not Trump, worry Buffett – USA Today
Death By a Thousand Cuts – A Wealth of Common Sense
Bogle: Indexing Will Win Battle Of The Quants – Capital Spectator
Why oil prices have nowhere left to go but down – MarketWatch
Gold slips further from 15-month peak as dollar steadies – Reuters
Gold ETF’s Bullion Holdings Jump Back To ’13 Levels – Barron’s
China scare drops mining stocks – Mining.com

ECONOMY/WORLD/HOUSING/BANKING
Record April Auto Sales Doesn’t Contain Unease – Bloomberg
Why the Gig Economy May Not Put a Dent in Income Inequality – WSJ
China manufacturing activity weakened in April, survey shows – AFP
Euro-Area Economy Starts Quarter in a ‘Low Gear,’ Markit Says – Bloomberg
Canada’s Oil Capital Is Being Evacuated As Wildfires Spread Rapidly – Vice News
China’s Steel Makers Undercut Rivals as Trade Debate Intensifies – NY Times
Brazil’s Crusading Corruption Investigation Is Winding Down – Bloomberg
Goldman Sachs advises cutting exposure to Chinese property sector – CNBC
Why High-End Real Estate Is Now Losing Its Luster – Fiscal Times
Derivatives Losses Are Mushrooming at Freddie Mac – Wall Street On Parade
The Central Bank War On Savers—–The Big Lie Beneath – Contra Corner

 

Draghi on Root Causes

I get a kick out of someone with great authority (especially central bankers these days, given their quickly fading super powers) speaking confidently about the root causes of some problem as if you’re an uninformed ignoramus (i.e., not an economist) if you don’t see what is so obvious to them and people like them. Such is the case with ECB chief Mario Draghi’s explanation to the Germans about why interest rates are freakishly low.

To wit:

They (low interest rates) are the symptom of an underlying problem, which is insufficient investment demand across the world to absorb all the savings available in the economy. And so the right way to address the challenges raised by low rates is not to try and suppress the symptoms, but to address the underlying cause.

Got it?

It’s the ‘ol “lack of aggregate demand” root cause canard (i.e., as opposed to the more sensible reckless, multi-decade expansion of credit and debt that artificially raised aggregate demand) that future historians will someday have fun with, that is, after the current set of top economists and central bankers are completely discredited.

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