Tuesday, August 23, 2016

BOOM, BOOM: Austrian-Lites Nuked

Just a few short months after the December 2015 Federal Reserve rate hike, when Austrian-lites claimed the hike wouldn't hold and that the Fed would have to reverse the hike because it would send the economy into crash mode, the latest numbers out  and stock market  activity show the exact opposite.

All 10 sectors of the S&P 500 were up this morning trading and the NASDAQ hit a new all-time high.

Meanwhile, new home sales climbed to the highest level in nearly nine years.

The Commerce Department said that new home sales surged 12.4 percent to a seasonally adjusted annual rate of 654,000 units last month, the highest level since October 2007.

This is not what a recession looks like.



  1. I understand your perspective. I'm still of the opinion you are ignoring the forest for the trees. In a few short months, the narrow measurements of your boom will be gone.

    1. Based on what? You have no analytic framework. Why a few short months? What is your theory and how does it fit in with Austrian business cycle theory?

    2. Based on present trends of just about every other economic measurement. I could very well be wrong and the economy could lift off again and invalidate the trajectory. The stock market has been manipulated for some time and does not reflect the underlying economy. Corporate earnings have been trending down for quite a while. Labor stats are a lagging indicator and are also manipulated to a significant degree. Mine is a forest for the trees argument. Business inventory to sales high, federal tax receipts slowing, factory orders declining, retail sales sluggish, multiple regional fed surveys poor, and on and on.

    3. With all due respect, you don't know what the hell you are talking about. The business cycle is about a boom and bust in the capital goods sector and a readjustment in employment. Stocks and real estate are soaring that's the capital goods sector. Unemployment has collapsed.

      Charges of "manipulation" are the last refuge of a bad theorist.

      Or are you somehow really buying housing at collapsed 2009 prices?

    4. Many would argue that stocks and real estate are risk assets, subject to easy money and manias, but not reflecting underlying economic activity. How is it that factory orders have declined YoY for 20 months if the economy was still in a boom?

  2. I prefer Austrian-Neophyte. More hope.

  3. I don't see a recession but I also don't see the inflation you have been calling for for the last 3 or 4 years. No one is right all the time.