Sunday, May 26, 2013
Thursday, May 23, 2013
Estimated Prophet (2013.)
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Informally: It is entirely possible the latest rebound in the stock market was foreseen by the leaders of most Western Countries since some time ago, maybe since some years ago when the politics of people like the U.S. President Obama allowed for an increase in our domestic economic growth indicators, including relative GDP growth, and others. It might even be possible there is a newspaper or magazine article out there from “Time Magazine,” for example, an ordinary news publication – not “Financial Times,” or “The Economist,” nor any of the high – flying, heavyweight publications, but just something like “Time” – that if you read or followed such a publication, the current economic climes in the U.S. and its neighbors and in Europe would not be a mystery, at least in terms of growth rates and growth, however limited for the time being, in the U.S. stock market, interest rates and the related decrease in U.S. Treasury yields. Forget taxes and the cost of labor, for instance, in the U.S. at this point: If you are running a business and even a very small business, the current signal sent by the stock market given the timing of the rebound in stocks today, is absolutely to hang in there even despite there being fewer manufacturing jobs in the U.S. today than before. There is a common economic identity that manufacturing jobs in any particular country, no matter the commercial activity, do at least somewhat pave the road to wealth, help to balance the current account, drive growth rates and equities in the region and keep bond rates low in addition to keeping inflation and currency values within optimal expectations and the like. It is important to note the soviets realized this in the 1970’s, given one or two bad assumptions, and did in fact start to seek better business and economic ties with the West, especially the U.S. with respect to grain and other importations to allow economic comparative advantage to work to their benefit. The incorrect assumptions they made, among other things, were among their ability to take things out of western economies who supplied them at the time (including knowledgeable people, some capital and other trial balloons at the time) with the idea eventually of having some influence in import – export markets and being able to dictate to Western suppliers. What they did not really count on, and did not know at the time was with the proper processes said imports were not needed, and with the importation of any goods from Western countries at the time they began to corrupt their home economies with the introduction of hard currency into affairs at home. Another example of this type of effect has been the acceptance of foreign aid over time by African countries and the way in which they have doled out even earmarked funds to the consternation of their own people and the aggrandizement of their leaders’ personal lives – though today the nature of foreign currency in African countries is the same, more or less probably, there have been steps to deal with a. The open largesse of ‘pedlars’ of foreign aid including the Russians and Chinese, and b. The actual use of the funds sent to Africa as currency values and amounts have become less tolerant of the way in which funds were spent in the day.
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These examples aside and given the possibilities of the record numbers in the U.S. stock market that
make most business people rest easier during their sleeping hours, at least those in Western countries, it is entirely possible that interest rates will remain low and inflation will remain low for some time. The explanation for this might just be, and this in view of the commercials and television programs touting U.S. beer manufacturers that are more and more profitable these days, that U.S. equities and corporate debt have been bid up over time, and this might make sense to some, as a proxy for stability and dependability ordinarily found in Treasuries. One might, indeed, take an asset position in U.S. Treasuries or U.S. currency over one including the Thai bhat given the comparative story behind those two investment choices, and even with the knowledge that U.S. government securities are better managed. Then one can by extension understand the U.S. economy as a service – based economy even, as a relatively safe haven including U.S. Treasuries and then U.S. corporate debt, then U.S. equities given the tolerance primarily for market risk by your own relatively large investment moneys pool wherever that might originate from, and then various U.S. government and corporate, even small business and private equities positions given the basic asset allocation rules and the risks involved. This would really only work until your investor neighbors found out as it is a bid strategy aimed eventually at profit – taking, essentially a trading strategy, even with respect to government securities – it is also a poor strategy as good investors know most trading, even by computers in arbitrage situations and the like and despite the sometimes big numbers involved and the speed with which trades are executed these days, is a waste. One redeeming feature to this bid strategy is it takes place outside the strictly speculative IPO and other auctions markets, it’s inconspicuous and relates to normal trading operations even in government securities outside what “new” offerings will do, and it might tend to assuage market volatility and other disruptive and wasteful effects that hold back prices for everyone. The kind of bid – up strategy that might appear to be driving U.S. equities and related securities at this point is highly constructive for stakeholder economies while factoring in the role of things like offshore manufacturing and the price of oil. How this is done specifically should be left to quants who are good at real – time computing power and data analysis, including that especially of the effect of economic indicators and trading information and its proxies. One might propose here in any event the U.S. is fortunate to have leadership under President Obama who appears to understand things like macroeconomics, competitive advantage, securities in the stock market and the role of government securities, different types of risk, resolving the issue of valuation of the Ren min bi and the role of P.R.C. in the currency markets, and other things – enough to know how even to counsel the Federal Reserve Chairman a little at this point. The U.S. President is like a lot of lawyers in America at this point who do not necessarily know where every nickel and dime they own is or ought to be, but who comprehend and use their knowledge of finances public and private. Some of them understand it quite well and he does appear to (ssshhh!) The secrets to this no longer include things like “options” or “leverage,” once in the past hot buttons among others, nor does the President’s strategy have anything to do with “pounding down” currencies and accounts and / nor goods values and commodities prices, for instance. One’s local university economist could easily venture the basics of the economics policy of the U.S. President, which does include ‘tax and spend’ (a given) though it is much more intricate and formulated than just that. That he grew up abroad for some time probably allows for the way the U.S. President has chosen to resolve domestic and related economics dilemmas for the time being; and that might be for some time to come, and this shows as well he has his own quite effective so far apparently, of turnaround economics right now, probably invented at some place like MIT or Harvard (or even Berkeley or UCLA) by very gifted and hard – working people.
In the news this morning again are the stories about U.S. beer manufacturers and their great – tasting brews that outdo others, though seriously one should heed the stories around the state of business and commerce in places like Japan and China. In Japan despite Fukishima and some other recent bad news that should not affect their economy overall, there is little obvious explanation for the declines as publicized of late other than the Japanese obviously making attempts to manage the value of their domestic currency, and related items that drive Japanese exports. There are probably other factors that are driving the news from Japan at this point, though this is lost in the opaqueness of the policies of the securities houses that make up and influence investment policy there. In P.R.C., a growing economy with many paradoxes including that Chinese capitalists are apparently as aggressive and hard – charging as their former communist counterparts years ago (see the history of the “Cultural Revolution,” the politics of Zhou En – lai right down through those of Hua Guo – feng, Jiang Zemin, and Xi Jin ping, … ,) business people appear to have seen the limitations of their own growth models. In view yet of P.R.C.’s economic growth and growth predictions for the next few years, and given the role of competing interests, especially regional ones, it should become clear to consumers everywhere that Chinese retail products continue to be of exceptional quality and continue to be saleable and the domestic economy in P.R.C. especially and probably that in the Southern part of the country, will begin its role as more important policy – wise in addition to values around the export of products from everywhere in China. The actual value of these products, as they become more normalized and the Chinese begin to spend their currency reserves on (even yet politically motivated) different types of projects, national and international with respect to business and commerce, and as the P.R.C. economy continues to grow and predictably, should the current regime there continue to seek international legitimacy, it will probably have to become more cooperative with international rules and guidelines that reduce economic fluff and puffing in order to begin to authenticate the routine practices of its enterprises as people like me know them to be. Same is true with respect to many P.R.C. regional trading partners including Russia proper. The success of this interpretation of “Obamanomics” and the like, does depend upon things like the long – term value of the dollar and other western currencies including the Pound and the Euro, inflation in major western countries, the interpretation of administrative and trade account statistics everywhere, and even things like the U.S. Budget debate. The current news about U.S. equities and other securities, and even commodities prices at this point, does indicate our leader, and the leaders of the G20 have taken this and other items into consideration in their latest talks and will continue managing in good continuation ‘the forest for the trees and not the weeds’ that will be well for us here in America as well – something we can all put our hopes into not with our cross to bear or with the promise of a ‘radiant future’ as some might say at this point, but with some confidence and ability to take economic and business risks with the idea of greater values and payoffs in the future.
See also: When Money Runs Out, by Stephen King; testimonial record by U.S. Federal Reserve Chairman Benjamin Bernanke before the U.S. Senate and the House of Representatives on economic outlook and monetary policy - May 22, 2013.
Monday, May 6, 2013
John Hersey - "Hiroshima."
Hyperlink to book review / summary: Click here.
Link to obituary (1993): Click here.
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