Downward Revision

Posted on 24 August 2011 by Erik Hare | 18 Comments

How are things going? Without useful data, it’s nearly impossible to make good decisions and adjust accordingly. The most surprising thing about the decade-long downturn in the US economy is that the bottom line data, real (inflation adjusted) Gross Domestic Product, has been a moving target. Data has been constantly revised downward for as far back as 2003 through last month.

With the first revision to the second quarter 2011 GDP figure due on Friday, we can only expect the very worst. But that’s not all there is to this problem. A look back at how far it has all been revised down shows just how bad things have been for the last decade – and how policy makers never saw it happening.

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Hobbyists

Posted on 22 August 2011 by Erik Hare | 16 Comments

The most innocent remarks often hide profound truths. One of the regular commenters of Barataria recently confessed that trying to make sense of the world was a “major hobby” – a statement similar to what many of you have said over the years. Barataria itself is a hobby dedicated to the same basic principle – the world we live in takes some effort to make sense of. Unsaid is the implication that the professionals that are supposed to be helping us in the process aren’t all that helpful.

As hobbies go, it might seem a bit strange. Yet it’s easy to argue the flip side, namely that this should be the duty of every citizen of a Democratic Republic. Certainly, there was a time not all that long ago when everyone who hoped to be called a Gentleman spent a lot of time connecting with people and connecting the dots of their world.

What is the role of hobbyists in an integrated world once defined by experts who may be falling down horribly? The new world beyond this Depression might well be defined by hobbyists like us. That’s where it gets interesting.

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Stock Pigeons

Posted on 19 August 2011 by Erik Hare | 10 Comments

Stock markets around the world react to every news report like pigeons in a park. Huddled together in one strutting mass they move slowly around, clockwise, until the smallest cue strikes them. Suddenly, there is a small panic and the flock races counter-clockwise in a feathered flurry. They stop, and then the heads all bob clockwise again for a moment. After a few scratching moments a blind panic sets in and boom! Counter-clockwise with a few desperate flaps of wings.

You may think that pigeons are not rational enough to run a financial system. But if you want to find something in the news to explain the market’s behavior, you might as well consult the mooching birds at the nearest park. Everything that stock markets are reacting to has been in the news for a very long time – they suddenly decided, for their own reasons, to start taking it seriously.

As today starts, the movement is staying very counter-clockwise. The pigeons seem to have a purpose.

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People’s Voice

Posted on 17 August 2011 by Erik Hare | 17 Comments

What makes a successful blog? As a place where reader and writer come together and a connection sparks, interaction between people generally defines success for a blog. When a stable community forms there’s definitely blogging gold.

Conventional wisdom insists there are only certain ways to achieve this. Short snippets of text, lots of photos, links, techno talk, and highly personal content are supposed to be How It’s Done™. But a quick glance at Minnesota based blogs shows that these “rules” are consistently broken among those with the highest interaction. Somewhere in here is a definition of quality – or at least relevance to reader’s lives – that is not exactly what many blogging mavens would have you believe.

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Fear the Dragon?

Posted on 15 August 2011 by Erik Hare | 26 Comments

The casual joke turns on China knocking on our door in the middle of the night on a repo call. Like a lot of jokes it’s a way of laughing off a genuine fear – that they US is slowly being owned by a nation that isn’t exactly friendly and we have no reason to trust. Paranoia sometimes sets in when people wonder why China would loan us all this money in the first place – has this been a plot all along?

A hard look at the Chinese Dragon shows that not only is there little to fear from them, they have far more reason to be afraid of us. And they’re pretty open about it, too.

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