Nepheloccoccygia

The weather woman introduced this word, which is new to me, this morning at the end of the weather forecast. She said that one accepted meaning of nephelococcygia is the tendency of people to see familiar objects in the shape of clouds. Googling the word, I found that the original meaning was Cloudcuckooland, the name of the mythical avian city in Aristophanes' The Birds, an imaginary, implausible utopian parody of 5th century B.C. Athens.

Turning this over in my head as I waited for my sister to get ready for me to drive her to the bus station for her return, post Thanksgiving, to Hartford, I came up with a third and new definition: "Nephelococcygia: the tendency to imagine that only good things can result from easy monetary policy." Looking up into the clouds, we discern a land of free money that never loses its value, bringing prosperity and happiness to all. It is a sort of paradise, albeit, I am afraid, only that of a fool.

Driving back from the bus station, NPR reported, since this is the first day of the month, that many people believe that saying "rabbit, rabbit" the first thing upon awakening on the first day of each month brings good luck. (This is also a new one to me.) Franklin D. Roosevelt was reported to have practiced this spiritual exercise throughout his presidency.

So I shall say "rabbit, rabbit" every time I hear or see Bernanke or Yellen on the news. It can't hurt.

Argentinian problem solving

House prices: "It looks like we are off and running again."

So says Robert Shiller.  The Federal Housing Finance Agency (FHFA) reports that September house prices were up 8.5% YOY.  Housing permits were up at a 6.2% annual rate in October, due mainly to apartment building plans, to 1.03 million units, a 5-year high.  Maybe the Fed's QE and ZIRP sparks have finally ignited the dry brush.

"It's just plain sad."

What every American born will need.

Thanks to Global Investors for this interesting drawing

Signs of global economic recovery proliferate

It looks like the world economy is accelerating, except, of course, in the US where health care uncertainties are delaying hiring and investment.  AP Moller-Maersk, which accounts for 15% of global sea freight, has just raised its 2013 profit forecast.  It says global sea freight will increase 2-3% this year and 4-6% in 2014 and 2015.  Meanwhile, the Bank of England says that unemployment is falling faster than expected.

Why is the US slowing down when the rest of the world is speeding up?

Japan grew at an annual rate of 4% in the first half of 2013. The Chinese PMI came in at 51.4, ahead of expectations, and they reported that industrial production showed the best growth in 18 months. Spain reported positive Q3 GDP and Greece as well, exceeding forecasts, due to strong exports. Ireland reported the 16th month of declining unemployment, which is now 13.2%. Important: It should be noted that Ireland's unemployment rate is reported on a U-6 basis, which includes part-time and discouraged workers. Our U-6 rate is 13.6%, so Ireland's unemployment rate is now below that of the US.


In light of the good world news, why is the US slowing down? I suppose it is because of Obamacare. Businesses don't really know the full implications of the law and are holding back on hiring and switching people from full- to part- time. It will take awhile to sort all of this out. I attended a presentation on the implications of Obamacare for Massachusetts organized by the Federation of Small Businesses on Wednesday. The presentation was given by people from MassHealth and an independent benefits specialist. The 37 business represented there were confused, nervous and a little scared. The benefits specialists said that many of his clients in the less-than-50-employee size were opting for salary in lieu of health care. (There is no penalty or fines for small businesses that don't offer health care.) That is, they are increasing salaries by the current cost of health insurance and cancelling their group plans