Put my dusty morals on the dusty moral shelf
Try to do for others but I care more for myself
My life is like a desert, just a lot of sand and rocks
Try to buy some peace of mind, but the store is locked
You can’t get water from a bone dry wishing well
– Bone Dry, by the Cadillac Tramps
Letters of Concern
Treasury Secretary Janet Yellen is known for her eloquence in written communication, a quality we appreciate. In an era dominated by brief messages, tweets, and animated gifs, she values the civility of traditional letters.
With her academic background guiding her thoughts, Yellen carefully types messages to Congress, forewarning them of potential crises.
Her most recent letter, dated May 1st, was addressed to The Honorable Kevin McCarthy. The primary goal was to rectify serious inaccuracies from a previous communication.
On January 13th, Yellen alerted Congress that the statutory debt limit of approximately $31.381 trillion would be reached on January 19. She noted that the Treasury would have to implement extraordinary measures—financial maneuvers—to prevent a U.S. government default. Continue reading
According to the latest report from the Commerce Department, U.S. GDP grew at an annualized rate of 1.1 percent in the first quarter of 2023, falling short of the 2 percent growth that experts forecasted.
It is possible, by now, that GDP has already begun a downward trend, but we won’t know for certain until the Commerce Department releases the Q2 report in late July. Meanwhile, an essential question arises:
Is a recession advantageous or detrimental for stocks?
Next week, after the Federal Open Market Committee (FOMC) meeting on May 2 and 3, the Federal Reserve is expected to raise interest rates by 25 basis points, bringing the federal funds rate to a range of 5.00 to 5.25 percent.
It is also anticipated that this will be the final rate hike in this cycle, with the Fed then holding rates steady before potentially cutting them later in the year to counter a recession.
Generally, interest rate cuts are viewed favorably for stocks and are believed to stimulate the economy. However, here at the Economic Prism, we hold some reservations. Continue reading
Over the past two decades, I have worked sporadically in Downtown Los Angeles, serving a client situated at 555 West 5th Street, right at the base of Bunker Hill. We would meet several times each week, always in the morning.
Occasionally, this client would boast about his property in Coeur d’Alene, Idaho, dreaming of leaving Los Angeles one day. Other times, he would express his frustrations at circumstances beyond our control. On one notable occasion, he falsely accused us of employing ‘smash and grab’ tactics merely for requesting payment on a past due invoice for services rendered.
After these encounters, I would walk past a group of individuals struggling with homelessness and substance abuse outside the Central Library, making my way back to my office at the Wedbush Center on Wilshire Boulevard, near Figueroa Street.
One day, a clown appeared at the corner by the 7-Eleven. Clad in oversized shoes, a rainbow wig, and face paint, he spent his days there, dancing and waving to passing cars. After about nine months, however, he vanished without a trace, leaving behind only memories. Continue reading
“History is a record of ‘effects’ the vast majority of which nobody intended to produce.”
– Joseph Schumpeter
Unintended Consequences
About a year ago, IMF Director Kristalina Georgieva participated in a panel discussion hosted by CNBC, an occasion that might have seemed routine. Yet, the conversation was anything but ordinary.
Central bankers typically communicate in vague terms, dodging words like recession and never mentioning the dreaded D-word—depression. They often avoid taking responsibility for their decisions, framing failures as successes instead.
Take, for example, Ben Bernanke’s so-called ‘courage to act.’ This portrayal seems rather far-fetched.
Deep down, it’s likely that central bankers recognize the folly of attempting to control an economy by manipulating the money supply. Yet, they strive to uphold an image of omniscience, believing themselves more astute than the public. Continue reading
In summary, these articles tackle various pressing issues, from economic policy to personal anecdotes, shedding light on the complex interplay between government actions and their repercussions. Engaging with these topics can help us understand the current landscape and prepare for the challenges ahead.
