The ECB and Germany play a confusing blame game

German finance minister Schauble blames the ECB for the rise of populist parties, which he attributes in part to the ECB's easy money policy. He thinks they should tighten up.

In reply, ECB Chairman Draghi mostly blames Germany for Europe's woes and for making the ECB adopt an easy money policy. According to Draghi, Germany's high savings rate compared to its neighbors is somehow forcing the ECB to stimulate because Germans are refusing to go into debt and splurge on consumption items.

Meanwhile, Europe's first quarter economy grew at a 2.4% annual rate (0.6%) with no inflation. This is a great result and the previous quarter was also good. Draghi, however, is unhappy because the inflation rate is too low in relation to the growth rate. (WSJ, A14)

I find this all very Kafkaesque.

1st Q US GDP: Right for the wrong reasons

1st quarter US GDP was reported at +0.5% yesterday, which is weak but still positive. This graphic from the WSJ shows that consumer spending on services, residential investment, and state and local government have accounted for more than all the increase.



Here is are some factoids from the "Contributions to Percent Change" table of the BEA press release:



Without the housing bubble (thanks, Fed), Obamacare, and government spending, 1st Q GDP would have been down .82% This does not seem like a productive economy to me, or am I missing something?

What, after all, is truth?

From today's Wall Street Journal:

Encouraging decline in gun-related deaths in the USA

among suiciders, according to yesterday's Wall Street Journal.

Although the suicide rate among both men and women in the USA is rising rapidly, it is good news that fewer suicides are using guns. (for men from 61.7% in 1999 down to 55.4% in 2014) The big increase in method has been in "suffocation," which I take to mean hanging. (Assuming that the number of serial killer assisted suicides using pillows is not significant)

Should restrictions be placed on the sale of ropes?

The article states: "The report showed a surge in suicides among middle-age men and women, a factor noted in rising death rates among middle-aged people and a decline in white Americans life expectancy in 2014." The writer searches for an explanation but cannot come up with one. (Is Global Warming the cause?)

(Click on the graph to see the full article in the Wall Street Journal.)

Driving Lessons from Greece: The consequences of central bank policy

Central bank policy has evolved from unorthodox to downright strange as politicians have failed to take control of the post-crisis economy. Sooner rather later they will confront a stark choice signposted Greece or Ireland.

Full article: http://www.euromoney.com/Article/3543283/Inside-investment-Driving-lessons-from-Greece.html?printrequest=true&copyrightInfo=true

How investors are playing climate change

From this morning's Boston Globe:

Stairway to heaven: time for another step up?

There's a lady who's sure
All that glitters is gold
And she's buying a stairway to heaven

-- Led Zeppelin