Juggling Dynamite

I like wine and appreciate the labor that goes into making it. But years ago, I participated in a blind taste test that confirmed I could not discern a $12 bottle from a $1000 bottle. That revelation was a gift. The characters and behaviors highlighted in this CBC segment are the same in the world of wine as in other areas. Fools and their money are soon parted. Here is a direct audio link.

Danielle was a guest with Jim Goddard on Talk Digital Network, talking about recent developments in the world economy and markets.  You can listen to an audio clip of the segment here.

There is a reason that corporate executives have aggressively lobbied governments and regulators to not implement Section 953(b) of the Dodd-Frank Act, which is to take effect in January requiring firms to disclose the ratio of the CEO’s compensation to the median pay of company employees. Because at 300x the average workers pay (thanks to stock option bonus structures), the stats are grotesque, indefensible and embarrassing for all concerned.  This graph says it all.  That flat line along the bottom is typical worker pay.

Adoration and confidence in central banks, finance and politicians as they enabled and rode the debt bubble up was misplaced and undeserved.  Now buried under the debt weight of our past consumption, rock bottom rates and yields are serving to decrease rather than increase demand.

Monetary planners are at a loss, because they only ever had the one lever–short-term policy rates– and it’s now harming not helping growth.  Moreover, the majority seems to be aware of that now, and confidence is central planners is in secular decline.  Jon Hilsenrath of the Wall Street Journal lays out the demise of Fed-faith today in Years of Fed missteps have fueled disillusion with the economy and Washington.

Since Hilsenrath has, since at least Bernanke days, been considered the Fed’s press mouthpiece, one wonders if this article marks the dawn of a new era:  one where the Fed says they have done all they can and passes the stimulus stick back to governments and business.