Jim Grant was in top form in the above piece. But I’m also impressed with Kelly Evans. First time I came across Evans she was challenging JPM’s chief economist in an online interview for the WSJ, and doing a fine job. I suspected she might be headed for something big. A few years later, and she’s a CNBC talking head, chatting with Jim Grant. Congrats. Keep it up, that unique anti-establishment bug you have.
h/t ZH
I don’t believe GDP is nearly as important as most econ types do, but the chart below is interesting nonetheless.
When measured on a per capita basis, cumulative GDP growth since the start of the recession in ’08 is extremely disappointing. Especially when you consider all the measures which were supposedly designed to boost growth.
QE1, QE2, TARP, ZIRP, stimulus (think Solyndra & Fisker, not roads & bridges). Failure & wealth transfer have resulted.
Perhaps the most economically impactful “stimulus” enacted so far is the payroll tax cut. Social Security payroll tax deductions were temporarily reduced from 6.2% to 4.2% in 2011. Although there will be bickering, for now it seems like the tax cut will be extended indefinitely (ignore the unsustainable long-term nature of it all, if you can).
Some economists venture to guess that the payroll tax cut (2% less taxes on all wages/salaries below a certain threshold) will contribute 1-1.5% to annual GDP as long as it remains in place.
So picture the chart to the left, without a big chunk of the recent upturn. Now picture it if properly adjusted for inflation. It’s not a pretty picture.
Conclusion: any economist that says we’re not currently in a recession/depression is trying to sell you something.
Chart via WSJ’s Jason Lahart.
In this interview via Reuters, Mr. Rogers talks about his desire to short treasuries (eventually), which he says will be “one of the great shorts of our time”. Also discusses why he’s currently long the dollar, and why the world needs a “controlled disaster” before something much more volatile inevitably occurs.
h/t Silver Doctors
Guest post by Jesse of Jesse’s Cafe
Charts courtesy of John Williams at Shadowstats.
The first chart shows US Housing Starts since the year 2000.
The second chart shows US Housing Starts since 1945.
