By 2 Cents on November 18th, 2011 | Category: Economics |  Editor’s Note: The following is a guest post by John C.K. Daly.
The good news is that on 8 November the International Energy Agency released its 2011 “World Energy Outlook.” While it will cheer nuclear advocates, overall the report makes for grim reading. Pulling no punches, the report states at the outset, “There are few signs that the urgently needed change in direction in global energy trends is underway.”
Stripped of its cautious language, the IEA report essentially noted that should present trends continue, the world’s governments through a lack of progressive initiative embracing alternative energy sources would continue to rely on ‘tried and true” fossil fuels, resulting in increased pollution, more fossil-fuel dependency and increasingly upward energy prices. For environmentalists, this is all good news, but the report contained a caveat virtually anathema to all green movements, that accordingly, governments should reconsider their reluctance to embrace [...]
Read on and enjoy … IEA Report Advises Governments to Embrace Renewables and Nuclear
By 2 Cents on October 21st, 2011 | Category: Economics |  Even nectar is poison if taken to excess.
~Hindu Proverb
If low interest rates are good for the economy, it should be booming by now. After all, rates have basically been falling for 30 years. Over the last 10 years or so, short term rates have been held low by central banks. Just a few weeks ago, the U.S. Federal Reserve announced Operation Twist, which will keep rates at the longer end of the curve low as well.
Yay. Soon we’ll all be basking in the glow of a red hot global economy. So why does it sound like so many governments and pundits are preparing for perdition rather than prosperity? Why isn’t the low interest rate elixir working its magic?
10 Reasons Low Interest Rates Aren’t Helping – And May Be Hurting
Lower rates are supposed to stimulate the economy by encouraging business investment, home [...]
Read on and enjoy … Are Low Interest Rates a Solution or a Problem?
By 2 Cents on October 17th, 2011 | Category: Economics |  If you are neutral in situations of injustice, you have chosen the side of the oppressor. If an elephant has its foot on the tail of a mouse and you say that you are neutral, the mouse will not appreciate your neutrality.
~ Bishop Desmond Tutu
“In the wake of the global financial crisis, politicians and regulators assuaged public outrage by promising reforms that would prevent such a crisis from occurring again. But not much has improved. We haven’t even managed much of a regime change. Many of the bankers, regulators and politicians who drove the policies that led to the crisis are still in their chairs. Many of the big banks are even bigger. Too big to fail is still a major systemic threat.” I made this comment over 8 months ago as the civil unrest in Egypt was boiling over.
At the time, I wondered [...]
Read on and enjoy … Occupy Wall Street: Have We Reached the Tipping Point?
By 2 Cents on September 29th, 2011 | Category: Economics |  Growth for the sake of growth is the ideology of the cancer cell.
~Edward Abbey
Although I visit the grocery store at least once a week, lately I’ve had the feeling that I’m in a different place – and that’s not just because we recently moved. I sometimes can’t believe the prices I’m seeing on staples like milk, cheese, or sugar and I can’t help but notice that my cart doesn’t have to be very full in order to rack up a pretty big bill.
My shopping trips highlight several economic trends I’ve been noticing over the past few years. These trends are having a direct effect on our finances, and I’m curious to know whether others are finding the same thing. Here are 5 of the most salient trends that seem to be affecting our personal finances:
1. Less for More
Not only [...]
Read on and enjoy … 5 Economic Trends Affecting Your Money
By 2 Cents on September 26th, 2011 | Category: Economics |  Wisdom is knowing what to do next; virtue is doing it.
~David Star Jordan
It’s funny how rather complex issues can sometimes become a little more clear by accident. One of the spelling riddles I sometimes come across when I’m writing is the difference between principal and principle. Unlike other words like favourite and favorite, this is not simply a matter of unique international spelling conventions. Principal and principle actually have completely different meanings.
Principal vs. Principle: What’s the Difference?
According to my trusty dictionary, principal can refer to:
a school administrator something or someone of first rank or importance capital bearing interest
Principle, on the other hand, is:
a fundamental truth, or doctrine on which others are based rules of conduct or ethical behaviour Who Cares?
I’m sure some of you can already see where I’m going with this. It’s not about spelling [...]
Read on and enjoy … Too Much Principal and Not Enough Principle
By 2 Cents on July 13th, 2011 | Category: Economics |  I am more afraid of an army of one hundred sheep led by a lion than an army of one hundred lions led by a sheep.
~Charles Maurice, Prince de Talleyrand-Périgord
When the financial crisis erupted in 2008, many questioned the leaders and regulators in place at the time. How could the global financial system be humming along one minute and completely bankrupt the next? Clearly, those in charge either made some very questionable decisions or failed to inform the public of the potential consequences of those decisions. Most likely it was both.
When it came to constructing solutions for the crisis, however, we continued to listen to and implement the ideas of the same people who brought us to the brink. In turn, those people followed policy prescriptions similar to the ones that got us into trouble in the first place. Were there no other options available? [...]
Read on and enjoy … How the Leadership Void Feeds the Financial Crisis
By 2 Cents on July 8th, 2011 | Category: Economics |  Investors have very short memories.
~Roman Abramovich
Today’s U.S. Nonfarm Payroll Report was a huge disappointment by any measure. Paraphrasing some reaction to it (mostly from economists who got it wrong):
catastrophic severely disappointing no redeeming qualities whatsoever Stop looking for the silver lining. There is none.
Now most of you know that I have a fairly bearish view on the economy due to the global debt burden. So I’m doing an I-told-you-so happy dance right now, right? Not so much. While I did add to my tiny HIX position today, I’ll be out of it again quickly if the market changes its mind, as it’s wont to do regularly.
Attention Deficit and Hyperbole
Why so sanguine in the face of data that is, by all accounts, unexpectedly and extremely negative? Because years of following the [...]
Read on and enjoy … Was the U.S. Employment Report Really Catastrophic?
By 2 Cents on June 16th, 2011 | Category: Economics |  Truth is after all a moving target Hairs to split, And pieces that don’t fit How can anybody be enlightened? Truth is after all so poorly lit.
~Neil Peart, Turn the Page
The following is an excerpt of an article that was originally published on Seeking Alpha as premium content. You can read the entire article there.
I read two fascinating articles this week that shed a little light on the opaque workings of our global financial system. One used recently declassified documents to show that foreign banks were the greatest beneficiaries of the Federal Reserve’s efforts to quell the financial crisis. The second elucidated a recent BIS report that revealed the relative exposure of U.S. versus European financial institutions to a PIIGS default. The former article posited that the data provides the grounds for Ben Bernanke’s impeachment. The latter [...]
Read on and enjoy … Overexposed: European Debt, Systemic Risk, and Stealth Bailouts
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