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At the Break, Hometown Team Leads

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How is that recovery going for you?  Overall, the first quarter of 2013 has been a decent one.  Nothing is moving very quickly, but we are seeing progress.  It’s time to check back on the predictions Barataria made for the year and see how we are doing.

Back at the start of the year, it seemed as if the recovery had something to prove.  2012 was not a bad year, but it was only the foundation of a recovery.  A little bit of faith that things were getting better certainly had  a lot to do with Obama winning re-election, among other things.  But 2013 is indeed shaping up to be the year the recovery starts to seem real.

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Six Years On

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“The ideas of economists, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”
– John Maynard Keynes

Six years ago on Wednesday this humble blog was started.  It’s been here MWF ever since, without a single break.  Typically, the anniversary post is a chance to talk about where Barataria has been over the past so many years and brag up the stats a bit.  But that’s not all that important.  What is important is that this blog has covered a momentous time in the economy and life and general with a singular perspective – there are some really wild things going on that I don’t understand, but we can talk about them and maybe work out something together.  It turns out that this perspective is far closer to what the “experts” have experienced than we thought.  And it’s been one Hell of a ride to hang onto.

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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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DJIA: Yes and/or No

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The Dow Jones Industrial Average (DJIA) keeps setting new record highs.  Does this mean the Managed Depression is over?  The short answer is “yes”, but the long answer is “no”.

The case for a “yes” is that this is based on the solid progress that we have been waiting for, and it’s backed by some strong numbers.  The “no” is that we’re still judging ourselves against either the depths of the worst part of the depression, or in the case of the DJIA a 6-year old record – it should be about 30% higher or more in that time.  But what counts is that this is based on strong corporate profits at least as much as a lack of any other place to put money and the trends should continue – unless the Federal government does something stupid.  Where do you want to put your money on that one?

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With a Moslem Beat?

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Looking back through history may not seem like a good way to determine our future, but it’s all we have.  We can reasonably guess that if all the trends continue the current Depression will run its course by 2017, give or take a few years or a major meltdown. We can also be pretty sure that this current period of evening out between the developed and developing world will be followed by relatively low growth as working age populations flatten across the planet.

Where this gets tricky is the realization that Western finance, including stocks and bonds and constant price inflation, is not remotely set up for a low-growth world.  Something has to change.  The best recommendation any of us can make is what is working in economies built around sustainability and resilience today as well as strategies that functioned well before the great wave of industrialization.  And that’s where I’m going to start with a few suggestions and predictions as to how finance as we know it could change.

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