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Journalism and other myths.
When will the Fed raise interest rates? If you ask investors, the answer is “Not this year”. Bets have been placed on bond futures which imply that the Fed Funds Rate will be no higher than a quarter of a percent at the end of the year – hardly any rise at all.
But if you ask the Fed, it’s going to come soon. Why doesn’t anyone believe them?
Last week the Bureau of Labor Statistics (BLS) announced labor productivity declined for the second straight quarter. It’s a worrisome figure for many reasons, the most important being that this is usually the signal of an upcoming recession. Headlines in the financial world were quick to fret that this is the first back-to-back decline since 2006, a strong signal in advance of the big recession in 2007.
Should we be worried? This is never a good sign, but the situation is very different. There are very good reasons why there is a decline in productivity and they all have the potential for signaling a recession ahead. But it also may be the last gasp of the bizarro economy where good news comes to us in the form of bad news, at least at first.
The election is coming up, and boy is it getting crazy. Not the US election – there’s still a year and a half of nonsense to endure before that. I’m talking about the UK House of Commons election on 7 May. It will certainly test the limits of their parliamentary system, probably moving it into a more funkadelic system in the process.
I had to, I love that joke. Somebody’s gotta bring da funk.
The problem is the UK is more divided along fundamental lines than it has been in a very long time. Given the large number of parties that are likely to achieve seats (12) the election will almost certainly solve nothing, only marking the start of tortured negotiations that will last for three weeks. They’d like to have a government by the annual Queen’s Speech on 27 May, so there is a deadline, but it will be hard to meet.
It’s worth watching in the US if for no other reason than the turmoil they are experiencing is similar to ours, expressed very differently in a different system.
Happy Tax Day! If it doesn’t feel like a holiday, consider this – you are obliged to count up all your blessings from the previous year and spend time doing something you don’t entirely understand or enjoy all that much. If you’ve really procrastinated, like me, you may have to take off work. But if you haven’t filed yet, here is your last minute advice from Barataria: stop screwing around on the internet and file already!
This is an even more special day than your typical holiday because Tax Day means one thing to Americans everywhere – we all get to complain. Bitterly and constantly. Rather than whine about the amount of taxes, however, it seems more appropriate to take note of the incredibly complicated and expensive way we go about collecting the money that is necessary to run a government. It costs between $160 and $234 billion just to prepare the paperwork, or about as much as the feds collect in corporate taxes.
It became official on Sunday. The 2016 Presidential election cycle is fully underway now that there are candidates in both parties. We have 19 months of this to look forward to, so if you are underwhelmed now it might be best to find a cave to live in. As the sometimes hilarious satire site “The Borowitz Report” put it, “The two major political parties’ unconscionable waste of money officially commences this weekend, as Democrats and Republicans will soon begin spending an estimated five billion dollars of their corporate puppet masters’ assets in an unquenchable pursuit of power.”
Why care? If not for the spectacle, you might want to care for the simple reason that whoever becomes the next President may become an American icon through the blessing of really good timing as this depression winds down into a potential new golden era. It’s all about managing inevitability for Clinton, something that she appears to be doing a much better job of all around.
Barataria - The work of Erik Hare 