Guest post via Marc to Market.
Two German illustrators have visualized the most important facts about the US presidential election using burgers and fries, the stereotypical American meal. The playful images are packed with both calories and information. They also betray a few differences in how fast food is eaten in Europe.
All pictures click here.
Guest post by Doug Short.
In last weekend’s update, I characterized the collective trend for my featured world markets as a roller-coaster ride moving wildly between weekly losses and gains. Over the past week the roller coaster headed up, with the average of the gang of eight at an even 1.50%. China was the big winner with the Hang Seng edging out the Shanghai Composite for the top spot, up 2.63% and 2.60%. Germany’s DAXK and France’s CAC 40 finished third and fourth at 1.83% and 1.67% respectively. The S&P 500, shut down by Sandy for two days, finished last with a fractional gain of 0.16%.
The four-week table below documents the roller-coaster pattern I mentioned at the outset. Let’s add two weeks to the front end for a snapshot of the weekly average for the past six weeks: -1.31%, 1.36%, -1.42%, 2.02%, -1.38% and 1.50%. Quite a ride!
Guest post by Azizonomics.
Britain has returned to growth:
But compared even to the USA — which has huge problems of its own — Britain is still mired in the depths of a depression:
An Olympic bounce does not constitute a recovery. As I noted in March, in every respect Britain is under-performing the United States — in GDP and in unemployment. Although Cameron and Osborne keep claiming that they are deficit hawks who want to cut the government deficit, the deficit keeps climbing, at an even faster pace than the United States.
Defenders of Cameron’s policies might claim that we are going through a necessary structural adjustment, and that lowered GDP and elevated unemployment is necessary for a time. I agree that a structural adjustment was necessary after the financial crisis of 2008, but I see little evidence of such a thing. The over-leveraged and corrupt financial sector is still dominated by the same large players as it was before. True, many unsustainable high street firms have gone out of business, but the most unsustainable firms that had to be bailed out — the banks and financial firms who have caused the financial crisis — have avoided liquidation. The real story here is not a structural adjustment but the slow bleeding out of the welfare state via deep and reaching cuts.
We won’t bother you with explaining how good they are.
Below is a simply must watch video with Hugh Hendry and Einhorn from the Buttonwood Conference.
Guest post by Azizonomics.
The waistline bubble began to expand at just about the same time as the debt bubble:
First, it’s important emphasise that correlation is not causation — more than 99% of murderers have consumed water in the twenty four hour period preceding a murder. But it is clear that the effects of globalisation are at play in both cases (simply because globalisation has transformed the American economy) – far fewer Americans have to do physically demanding manufacturing work, and thanks to the mechanisation of agriculture and food production there are far more calories-per-American available to consume.
The interesting difference between debt and obesity is that while it is possible from historical evidence to construct a fairly coherent model linking excess outgrowth in debt with recession and depression — for example, I conjecture that a depression becomes inevitable when debt service cost growth consistently outpaces income growth — there is no such historical evidence available for obesity, because there has never in known world history been an obesity epidemic of such proportion. To what extent do the healthcare overheads of an obesity epidemic act as a drag on economic growth?According to an estimate by the CDC, $147 billion.
Guest post by Azizonomics.
Here in the West, we have lived through a striking period of peace, prosperity and growth. Since the end of the Second World War, the major powers of the world have lived in relative peace.While there have been wars and conflicts — Vietnam, Afghanistan (twice), Iraq (twice), the Congo, Rwanda, Israel and Palestine, the Iran-Iraq war, the Mexican and Colombian drug wars, the Lebanese civil war — these have been localised and at a much smaller scale than the violence that ripped the world apart during the Second World War.
The recent downward trend is clear:
Many thinkers believe that this trend of pacification is unstoppable. Steven Pinker, for example, claims:
Violence has been in decline for thousands of years, and today we may be living in the most peaceable era in the existence of our species.
The decline, to be sure, has not been smooth. It has not brought violence down to zero, and it is not guaranteed to continue. But it is a persistent historical development, visible on scales from millennia to years, from the waging of wars to the spanking of children.
While the relative decline of violence and the growth of global commerce is a cause for celebration, those who want to proclaim that the dawn of the 21st Century is the dawn of a new long-lasting era of global peace may be overly optimistic. It is possible that we are on the edge of a precipice and that this era of relative peace is merely a calm before a new global storm. Militarism and the military-industrial complex never really went away — the military of the United States is deployed in more than 150 countries around the world. Weapons contractors are still gorging on multi-trillion dollar military spending.
Let’s consider another Great Moderation — the moderation of the financial system previous to the bursting of the bubble in 2008.
One of the most striking features of the economic landscape over the past twenty years or so has been a substantial decline in macroeconomic volatility.
Ben Bernanke (2004)