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Yearly Archives: 2013

Yes, Not Again – Again

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Ahead of both the 6th Anniversary of Barataria and my preparations for a book on the economy today, I have been re-reading old posts.  This one is from 26 March 2008, before the collapse of Lehman and before many people worried about the economy.  It’s important to revisit this point because it explains why many of us were worried back about the last time the DJIA was up where it is now.

This goes to the heart of what makes this a Depression, and why the effects are very long term and big.  I hope you enjoy this little trip through history.  Thanks for reading!

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Revisiting Job Dynamics

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While waiting for new information, it’s always good to go over the old stuff and see how we’ve done so far.  Barataria used to use the weekly unemployment initial claims as an instant guide to how the Depression has been running, but stopped a year ago.  The rationale at the time was that we were close to equilibrium at about 360k jobs lost every week.   There wasn’t much reason to expect a change.

How did that assumption fare?  And was this really proof, along with job growth leading GDP growth, that we are in an unusual economic event?  Let’s go back over some old ground and see how the old predictions went.   Some of this went well and some not so well.

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The Cyprus Disaster

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I have been slow to write about the Eurozone crisis of the moment, Cyprus, for one important reason – I didn’t understand it.  I read about how the big banks became under-capitalized and as the central government contemplated default like so many other European nations and thought it was about the same as we’ve seen repeated in far too many nations.  Then, it got weird.  What was so hard to understand?  It was the way the European Central Bank (ECB) put the hammer down that pretty much forced a run on Cypriot banks and guaranteed a major depression.  Was there something in this that I missed?  Or was the ECB really that unbelievably stupid?

After looking this over for a while, I have come to a very frightening conclusion – the ECB really was that stupid, and more.  This isn’t about Cyprus anymore, it’s about how the ECB is unworthy of any faith at all.  If that scares the Hell out of you, welcome to the club.  I certainly didn’t want to come to this conclusion, but here it is. It all starts, like everything Euro, with Greece …

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Pope Francis, the Passionate

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Just under 2,000 years ago, almost three quarters of a million sunsets ago, a Jew named Jesus started the Passover Seder by washing the feet of his followers in an act of humility and passion.  To mark this event, the newly installed Pope Francis repeated the ceremony with a group of young prisoners at a juvenile detention center in Rome – two of whom were women.  It may seem like a stunning sign of contrition from this new Pope, except that this is what we have come to expect from the Argentine Jesuit who has insisted that priests should be “shepherds who have the smell of their sheep.”

Who is Francis?  Why does it matter?  As we learned from the last two Popes, these two questions are closely intertwined because the office is made by the man who holds it – for better or worse.  As we head into Easter it is good to have a closer understanding of this man and why he might make a big difference in faith – both personally and for the institution we know as the Catholic Church.

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In Praise of Junk

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When is junk a good thing?  When you can’t afford a new car, a rusty old one might do just as well, at least for a little while (even if it is purple, like mine).  And if bond rates are so low that you might as well put your money in the mattress, you might also develop a taste for junk – junk bonds, that is, or more politely known as “high yield bonds”.  It’s been the latest trend in the bond market and, strangely, it might be proof that things are getting better.  It’s not the quality of the debt that really counts, it’s what they do with it.

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