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from Asad Zaman Before Keynes, Classical Economic Theory (CET) was based on three principles. The First Principle is that Unemployment is automatically eliminated by the free market. The Second Principle is the Quantity Theory of Money, which states that money supply makes no difference to real economic outcomes. The Third Principle is that private investors automatically find the right investment opportunities to create the best economic outcomes for future. The realities of the Great...

Mohammed Ali – ‘The Greatest’ – died today, at the age of 74. With his loss, the world is deprived of the terrific energy of a principled, devout and committed man. A boxer, a philosopher and a poet. But for those of us who worked hard to achieve the cancellation of about $100 billion of debt for thirty five of the poorest countries, Ali occupies a special place in our hearts. This great man, celebrated around the world, took time out to join us in London in 1999, and to give his backing to...

Continuing to decelerate. As previously discussed, I see no chance of a reversal until deficit spending- public or private- picks up to offset the unspent income/savings desires: Employment SituationHighlightsThe assessment of the labor market, not to mention the outlook for consumer spending, just came down as nonfarm payrolls proved much weaker than expected in May, up only 38,000 with the two prior months revised a total of 59,000 lower. The Verizon strike is a negative in the data but...

from Peter Radford I try to take my own advice: when you have nothing to say, don’t say anything. Thus, for the best part of a month I have busied myself doing other things and staying away from here. It’s been a nice break, and here I am still convinced that there’s not much to say. The economy is where it was. Economics is where it was. Politics is where it was. The three intermingle, mix, merge, separate and go their different ways in the same manner as before. The same complaints and...

Big, listed banks, darlings of the neoliberal establishment, brought Ireland to its knees. Small Irish community banks (credit unions, a volunteer led movement with over 3 million members), while severely affected by the financial crisis, did not only not contribute to the financial crisis but also weathered it, retaining the trust of their members. Mind: ‘members’, not ‘clients’. Via the website of the Irish Central Bank some excerpts of a speech by Registrar Anne Marie McKiernan to Irish...

Seems the corporate profits report includes the Fed’s profits, all of which get turned over to the Treasury, of course… How the Fed Stopped the “Corporate Profit Recession” (and the Media Fell for it) By Wolf TichterThe end of the corporate “profit recession” has been declared last week. It was based on data by the Bureau of Economic Analysis, released on May 27. Corporate profits, after declining with some zigs and zags since their peak in the third quarter 2014, suddenly ticked up in the...

A forecast for tomorrow’s employment report: ADP Employment ReportHighlightsThe May employment report isn’t expected to be very strong but it may not prove, in contrast to expectations, to be any weaker than April, at least based on ADP’s estimate for private payrolls which comes in at 173,000 vs ADP’s revised 166,000 for April. The Econoday consensus for private payrolls in tomorrow’s government report is noticeably lower, at 150,000 vs May’s 171,000. ADP has been very accurate so far this...

From climate change to resource overconsumption to pollution, the engine that has powered three centuries of accelerating economic development revolutionizing technology, science, culture, and human life itself is, today, a roaring out-of-control locomotive mowing down continents of forests, sweeping oceans of life, clawing out mountains of minerals, drilling, pumping out lakes of fuels, devouring the planet’s last accessible resources to turn them all into “product” while destroying...

The higher prices likely indicate a change in policy from that of putting downward pressure on prices to a more neutral stance. Might have something to due with the last change in oil ministers. We will know more when this latest chart of the history of discounts/premiums is updated: Saudi Aramco Seen Increasing July Oil Premium for Asia CustomersBy Serene Cheong and Sharon Cho(Bloomberg) — Saudi Aramco may widen Arab Light premium by 40c/bbl for July sales to Asia, accord. to median est....

Is total German consumption really growing that slowly? In a tweet, Erwan Mahé (@ThalersCorner) expressed his surprise and confusion about the slow increase of private consumer expenditure in Germany, despite robust job growth and relatively low unemployment (and sizeable increases of real wages!). I do share his surprise and confusion, but the world starts to make more sense when we do not just look at household expenditure but at ‘Actual Individual Consumption’ (AIC). This broader...