Thinking Things Over February 19, 2012 Volume II, Number 7: F.A. Seiberling, Goodyear, and How the Federal Reserve Can Wreak Havoc in Life By John L. Chapman, Ph.D. Washington, D.C. I am the last of the old men of rubber ....rich and poor again by turns.....I have seen life from the mountaintops and the valleys. I fear there will be hard [...]
The financial world is meant to be directly linked to the real economic world. In the purist, philosophical sense, finance is supposed to not only reflect economic reality, but to foster productivity within the real world by productively allocating what should be scarce capital through price discovery and signaling. Six years of zero interest rates is not only a mistake, [...]
ZeroHedge’s post on the apparent breakdown of Okun’s “Law” (http://www.zerohedge.com/news/okuns-law-latest-casualty-central-planning...) highlights the ongoing tragicomedy of how the science of central economic planning eventually confounds, and then consumes itself. Economics is, after all, a social “science”, an elaborate study of human beings and, most importantly, human interactions. Robert Okun, for his part, merely observed in 1962 that when “output” (whatever statistical [...]
Thinking Things Over February 12, 2012 Volume II, Number 6: Is Inflation, a Stagnant Economy, and Lower Standard of Living in Our Future?? By John L. Chapman, Ph.D. Washington, D.C. Despots and democratic majorities are drunk with power. They must reluctantly admit that they are subject to the laws of nature. But they reject the very notion of economic law . [...]
The S&P 500, despite its worst day in a few months, was slightly down for the week. It's right at its short-term uptrend line, so this coming week could be pivotal. The Nasdaq Composite is still overbought and has a short-term gap to fill in the charts. But it held its uptrend line on Friday, so once again, tomorrow may be [...]
Joseph Gomez, Sr. Investment Advisor and Portfolio Manager With a gain of 6.8% six weeks into the year, the S&P 500 is currently off to its best start to the year since 1990. The S&P 500 is currently 21 points away from taking out its prior bull market closing high of 1,363.61 made on April 29th of last year. Surprisingly, if you want [...]
Last week's payroll report had me thinking of Alexander Pope's 1733 "Essay on Man", particularly the well-known line of "Hope springs eternal in the human breast." Pope's book was a critique of science, particularly the hubris that was seeping into it as it unlocked knowledge of the governing dynamics of the world and universe (those bristling days of Enlightenment). For [...]
What is “capital”? This term is oft-used but little understood in the investing and broader business worlds – indeed, even in the economics profession itself, there is confusion about its precise meaning. But it is a categorical magnitude of immense importance not only for investment decisions but also for the betterment of human life and indeed, the advancement of civilization [...]
The economic statistics continue to point to growth in the US economy. Last week's employment report showed solid, if not spectacular, job growth with gains in manufacturing, construction, professional and business services, leisure and hospitality and health care. In other words, it showed gains in an ever widening range of industries. Jobless claims are still trending lower, down again last [...]
Thinking Things Over February 5, 2012 Volume II, Number 5: On the Markets and the Economy, Who Is Right, the Bulls or the Bears? By John L. Chapman, Ph.D. Washington, D.C. Last week this column noted a disconnect between the words of President Obama in his State of the Union Address and those of Chairman Bernanke and the Federal Reserve the very next day [...]
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