How was the first day of 2010? Well, most commentators would say it was a good day. The Dow rose 155 points. Oil closed over $81. The dollar fell. And gold shot up $22.
Is that a good day, or what?
‘Or what’ is probably the best answer. Stocks rose. But are they forecasting a booming economy? Or more EZ money from the feds? Are they signaling the end of the slump? Or, no end to the feds’ rescue efforts?
[Read more...]
The Fallacy of the Fallacy of Composition
No unarmed profession has done as much harm as economists.
Recently, Yukio Hatoyama, the new Japanese Prime Minister, proved it again…revealing a budget deficit that must have made Paul Krugman drool. The Japanese government will spend 92.3 trillion yen next year, about 1 trillion dollars. Tax receipts will be enough to cover only half that amount, leaving the nation with the biggest shortfall since WWII.
[Read more...]