January 31, 2010|Posted By Adam Sharp
Haver Analytics gives us this chart/data:
Military should be the first in line for budget slashing, but the opposite is taking place. While “defense” spending does boost GDP, and preserve (politically important) jobs, it’s still a huge drag on the real economy.
America’s military is bloated, and much like the FIRE sector, it needs shrinking. Both are incredibly inefficient ways to grow/stimulate an economy. In their current state, both are a drain on American resources. And with their armies of lobbyists, this isn’t likely to change soon.
America faces a funding crisis like we have never seen. The U.S. remains the world’s lone superpower. That would still be the case if we cut military spending 30%. Reducing the budget and shifting those jobs to more productive areas, like energy and manufacturing, would have immensely positive effects on the economy.
The question is – do our political leaders have the courage to cut spending before things get out of control? Based on what we’ve seen so far – the answer is clearly no.
January 25, 2010|Posted By Adam Sharp
Home sales often dip in December, but 2009’s finish was especially nasty. The first-time homebuyer credit was scheduled to expire at the end of November (almost nobody believed that was gonna happen). That explains some of the drop — as demand was pulled forward — but 16% is ugly no matter how you spin it.
Here’s the NAR’s spin-job for any who are interested. I honestly feel for them, tasked with finding the silver lining in this dismal RE market.
Chart via Rolfe Winkler.
January 19, 2010|Posted By Adam Sharp
Palladium vs. platinum, gold, and silver. 200 day chart via stockcharts.com.
My bet on palladium at $250 paying off nicely so far, hit $460 today. Sorry, couldn’t resist a little horn-tooting.
January 12, 2010|Posted By Adam Sharp
After a short dip, this ratio is on the rise again. So while there may have been less firing in December, the hiring hasn’t materialized yet. Via Econompic.
January 9, 2010|Posted By Adam Sharp
Looks like the goods-govt job ratio peaked around 3:1 in the 30’s-40’s. Now there are far more government jobs than goods-producing ones. Pretty damn shocking.
It should be obvious to anyone with a pulse that an economy based on government jobs, deficit spending, zombie banks, moral hazard, and cheap imports is not sustainable.
I had a friend who worked at the Dept of Labor. The agency’s ironic name was a running joke. Apparently people spent most of their time surfing the net, even running Ebay businesses out of their cubes. That’s what happens in low-accountability work environments. And it’s why government spending is always less efficient than the private sector.
These low or zero-accountability jobs are taking over our economy, and it’s not just government. We’re removing accountability and responsibility from all sorts of industries — especially banks, autos, and real estate.
But this support really only goes to the politically connected. Businesses who don’t donate generously to their local reps can drop dead. Welcome to the Kleptocracy.
I’m taking advantage of this “recovery” to prepare for the inevitable funding crisis ahead.
Chart via Tim Iacono, who runs a great blog.
January 4, 2010|Posted By Adam Sharp
Telling chart by Jesse, showing the returns of various asset classes, 01/01/2000 – 12/31/2009. Note – If you factored in the 25% price inflation since 2000, it’d be even uglier (official CPI inflation # via BLS’ CPI tool).
How bout that Nasdaq 100? Kinda shocking from this vantage point. Down 49% in 10 years (excluding dividends, which wouldn’t improve the situation much for these low-yielders. Especially if you take inflation into account). Ugly all around, minus hard assets.
It’d be interesting to see an energy/oil stocks index included in the mix. I’ll put it on the to-do list.
In another 10 years, I suspect we’ll all be looking back on this period with 2020 hindsight. Har har… ha. Saw that on Reddit today, couldn’t resist.
