Core pce inflation in May 2026 came in at 3.41% year over year

 What in the Sam Hell is golden about this age?

Absolutely nothing. 

There's nothing Greenspan about it either. 

Alan Greenspan's core pce inflation averaged 2.46% year over year 1987-2006.

 

 

 

 

The homeownership rate soared to 68.8% in 2006 after nearly twenty years of Alan Greenspan at the Fed

 The rate when he began as Fed chairman was 64% in 1987, and again in 1990 and 1994, before taking off during the Clinton-Gingrich era.

Supporting the high homeownership rate was full time employment on an average annual basis north of 50% of population for twenty-three consecutive years 1986-2008. 

We call it The Lost World. 

 

Core pce inflation remained high but falling during Greenspan's first seven years, but stayed below the trend he helped to create for the remaining thirteen

PCEPILFE fell to 2.23% yoy in 1994 and as low as 1.27% by 1998 even as the Fed Funds Effective Rate (DFF) averaged 5.49% for four years 1995-1998.

Greenspan's observed "irrational exuberance" in stocks certainly wasn't caused by low interest rate policy. By today's standards his policy was hawkish even as the market formed a bubble.

His career core pce inflation performance averaged 2.46% yoy.  

It is difficult to imagine today's world being at all patient enough to tolerate Alan Greenspan, especially the Alan Greenspan of 1987-1990 when DFF averaged 7.89%.

He would be run out of town like Ben Bernanke and Jerome Powell, neither of whom arguably were in office long enough to really judge fairly by comparison with Alan Greenspan and both of whom were shabbily treated by Obama and Trump.

 

 

The Maestro is dead, long live The Maestro

 

 Greenspan had the main ideas right:

Low inflation over full employment, because inflation is the worst tax on the people;

And broad property ownership as the foundation supporting the American economy and securing the consent of the governed.

During his nearly 20-year tenure, the Federal Funds Effective Rate averaged 4.87%. 

This is a really good look at Greenspan's career from Marty Steinberg at CNBC. It is one of the best reads I've had at CNBC in a long time. 

 Alan Greenspan, former chairman of the Fed, dies at age 100

... Throughout, he focused on fighting inflation over promoting full employment. His supporters say he presided over the longest economic expansion in U.S. history, but critics said Greenspan’s low interest rate policies set the stage for the housing bubble that burst into the Great Recession a year after his successor, Ben Bernanke, took the Fed helm.

... in his best-selling memoir “The Age of Turbulence,” he defended the low-rate policy, which encouraged people to buy homes: “I believed then, as now, that the benefits of broadened homeownership are worth the risk. Protection of property rights, so critical to a market economy, requires a critical mass of owners to sustain political support.” ... 

Larry Kudlow has really devolved, falsely calling Fed Chair Powell the Fed’s first forever board member

Larry knows that's a lie.

He knows it's Senator Thom Tillis who is stopping Kevin Warsh from getting a Fed chair confirmation hearing, not Jerome Powell.

But he never mentions that.

Truly disgraceful.

I guess Larry wants no one in charge at the Fed when Powell's term expires on May 15. 

Meanwhile Alan Greenspan remained as Fed chair in 1996 pending confirmation for his next term, which took almost four months, and Marriner Eccles stayed on as Fed chair for over two months after his term expired, and on the board of governors after that from 1948-1951. G. William Miller stayed on as Fed chair for over a month in 1978 after his term expired, and Chair Powell himself had to wait over three months in 2022 for confirmation to his second term.

But Larry doesn't mention any of that either, because he's a liar.  

Powell is doing his duty while Mad King Ludwig tries to wreck everything he touches, and Larry Kudlow has become nothing but Trump's partisan hack.

The New York Sun and Real Clear Politics should be ashamed of themselves for circulating this trash.  

Powell's Bizarre Plan To Stay On at the Fed

Larry Kudlow, New York Sun

Former Fed Chairs finally stand up for Powell in public

 Greenspan, Bernanke, and Yellen say Trump using ‘prosecutorial attacks’ to undermine Fed

... “The reported criminal inquiry into Federal Reserve Chair Jay Powell is an unprecedented attempt to use prosecutorial attacks to undermine that independence,” a statement backed by more than a dozen signatories said.

“This is how monetary policy is made in emerging markets with weak institutions, with highly negative consequences for inflation and the functioning of their economies more broadly,” it continued. “It has no place in the United States whose greatest strength is the rule of law, which is at the foundation of our economic success.” ... 

“The Federal Reserve’s independence and the public’s perception of that independence are critical for economic performance, including achieving the goals Congress has set for the Federal Reserve of stable prices, maximum employment, and moderate long-term interest rates,” the statement said. ...

Irrational exuberance produces flatulence, recently floated meme coin $FARTCOIN lingers in the air at $1.8 billion market capitalization

Something smelly this way comes.

David Einhorn says we have reached the ‘Fartcoin’ stage of the market cycle

“Other than trading and speculation, it serves no other obvious purpose and fulfills no need that is not served elsewhere.”

A crypto token called “fartcoin” exploded in popularity as the re-election of Donald Trump unleashed a storm of animal spirits on Main Street. The meme coin is now edging towards a $2 billion market value, surpassing many U.S.-listed companies.

More meme coins have emerged since the inception of fartcoin. President Donald Trump launched $TRUMP, a meme coin built on the Solana platform. Its market cap over the weekend climbed past $14 billion. The coin at one point was down more than 20% over the past 24 hours, but it has since cut its losses to around 3%. Trump’s wife Melania also unveiled a coin.

 

 

Surprise, surprise, right on schedule progressive Robert Kuttner attacks the 2 percent inflation target in favor of 4 percent

 It all sounds very persuasive, as long as you forget how inflation impoverishes the lower classes and keeps them down so that the elites can continue to milk them like slaves year after year. 4% just does it twice as fast as 2%.

The little people are an afterthought to the left.

This is the "inflation is actually good" talk you hear from lefties from time to time.

Story here.

Adam Tooze: Central bankers' hands were forced in 2010, the poor dears, they aren't the lords of easy money, no, they're its slaves, just like us

 Here, for The New York Times:

If you are worried about wealth inequality in the United States, then the solution is not to tighten monetary policy but to make structural changes to the country’s financial system, starting with the undergrowth of shadow banking. Serious taxation of wealth and capital gains would also push in the right direction.

It would no doubt help if onetime central bankers, rather than cycling in and out of private finance, spoke out seriously in favor of reform. They would be doing the public a service if they spelled out the way that their hands were forced by the current incestuous intertwining of public debt markets with hedge funds and the like. Ultimately, however, it is politics that must grasp the nettle of change.

In the current dispensation, it may be flattering for central bankers to be cast as maestros, but in practice they are less the lords of easy money than its functionaries.     

 

 

Central bankers cycle in and out of private finance raking in millions, Adam.

 

If anyone were serious about restructuring the country's financial system, the place to start would be by restoring the key missing feature of capitalism without which it doesn't really exist. It's called bankruptcy. 

Good a day as any to remember that Alan Greenspan in 2007 explicitly advocated for immigration to suppress the wages of skilled laborers

Greenspan: Let more skilled immigrants in :

"Our skilled wages are higher than anywhere in the world," he said. "If we open up a significant window for skilled workers, that would suppress the skilled-wage level and end the concentration of income."

Yeah, the problem isn't millionaires and billionaires concentrating wealth in their hands, it's the goddamn skilled laborers who must be stopped, the engineers, scientists, doctors and teachers, the crane operators, CDL truck drivers, machinists, drafters, plumbers, craftsmen, cooks and accountants.

 

Alan Greenspan's tight labor market is fake news: Unemployment is really 8.4%

In September 2018, the civilian labor force was just 62.7% of the civilian noninstitutional population (161.958 million X 100 / 258.290 million = 62.7).

Not seasonally adjusted, this yielded an unemployment rate of 3.6% (5.766 million unemployed X 100 / 161.958 million = 3.56, before rounding up).

Unfortunately that's only because the labor force shrank by 8.5 million since 2008. The labor force then averaged 66% of the civilian noninstitutional population, not today's 62.7%.

Taking 66% of September 2018's civilian noninstitutional population means a labor force of 170.5 million instead of the not quite 162 million we've actually got. Where'd all those 8.5 million go? New Zealand?

Add 'em back in on both sides of the equation, both to the size of the labor force and to the unemployed, because they are obviously not working, and unemployment soars to . . . 8.4% (14.266 million unemployed X 100 / 170.458 million = 8.36).

All this labor slack is the reason wages fail to go up at rates of 3-4% as in previous recoveries.

It's not a tight labor market.

Alan Greenspan is expecting mediocre GDP in 4Q, says housing and investment must recover to fix it

Quoted here at Bloomberg:

Greenspan said the economy won’t fully recover until American companies invest more in productive assets and the housing market bounces back.

“Almost all of the weakness in the last four, five, six years has been in long-lived investments” in capital goods and real estate, Greenspan said. “Until these pick up, we’re not going to get the kind of vibrant growth that everyone is hoping for.”

Greenspan, who retired from the Fed’s helm in January 2006, said he expects growth to dip below a 3 percent annual rate in the fourth quarter of this year. His forecast is in line with the estimate of 2.5 percent in a Bloomberg survey of economists.

Libertarian free-trade presidents named BUSH get the most blame for lost manufacturing jobs

Since Jimmy Carter took office in January 1977, during whose term manufacturing jobs reached their zenith of 19.5 million, 5.6 million net manufacturing jobs have disappeared, and with them the middle class lives to which they gave birth and from which other good-paying, middle class service jobs had been spawned.

Manufacturing jobs had risen steadily from their post-war low in February 1946 at 11.9 million to their 1979 height, just before Ronald Reagan brought us the Libertarian Revolution in the guise of conservative Republicanism. He gave us both Alan Greenspan in 1987, Fed Chairman and disciple of Ayn Rand, who steered the country right up to the rocks before jumping ship in 2006, and a quixotic message of freedom and free-trade which has made the investor class rich while middle class families have seen their lives wrecked under Reagan's libertarian successors who presided over the export of their good jobs to foreign countries. 

The two Bush presidents in particular, George Herbert Walker and his son George W., get the blame for most manufacturing jobs lost since the 1970s peaks. And George W. far and away gets more blame than anyone else, exporting fully 80% of the net jobs lost:

Carter +0.8 million

Reagan -0.6 million

Bush I -1.3 million

Clinton +0.3 million

Bush II -4.5 million

Obama -0.3 million.

The last thing this country needs in 2016 is a BUSH named Jeb, or a PAUL named Rand.

Stupid things heard on the Steve Gruber Show radio program last week

Both the AM drive-time host, Steve Gruber, a libertarian for whom every opponent is taken as a challenge to his manhood, and his weekly punching bag guest, Liberal Lee, last Tuesday agreed that the middle class in America is basically . . .  intact!

Which just proves that ideologues are impervious to the destruction which has been all around them and that libertarians and liberals drink from the same cup. Both camps are too heavily invested in the political gangs they support to say otherwise, for if the one did it would mean George Bush and Alan Greenspan would have to be blamed, and if the other, Barack Obama, Larry Summers and the rest of the Clinton re-treads which steered the economy through the latest depression to give you . . . nearly $90 billion in costs for over 500 failed banks, over 5 million homes lost to foreclosure, full-time jobs still 4 million below the 2007 peak seven years ago, ObamaCare's lies, higher costs, poorer coverage and limited networks, the deaths of Americans at Benghazi, IRS targeting of conservatives, the most imperial presidency in our history, 30 million prime working age people not working, a lawless executive, and 1.8% GDP, the worst in the post-war.

For his part, Gruber basically gave over a segment on his show every week this fall to the reelection campaign of Congressman Tim Walberg, a conventional Republican who normally votes with the majority of his caucus, but who did vote against making the Bush tax cuts permanent for the vast majority of Americans. Walberg notably just rewarded his radio benefactor who opposed Cromnibus with a vote for it, in keeping with his past voting record for sweeping spending bills which avoid the traditional appropriations process in order to take the politics out of spending the people's money. Hey, thanks Gruber.

The Steve Gruber Show is unfortunately heard on many small market radio stations during morning drive throughout Michigan, which through August 2014 was the top state for completed foreclosures among non-judicial states for the prior twelve month period. But the show's best rank is only #3 in the Lansing market according to dar.fm, and #31 in the mornings overall, here. The best thing that can be said for it is that the stations it is on are typically low-power, like its commentary. 

The Ayn Rand worshipper wearing the glasses went on to ruin the country in 2008, nobody else

And Michigan's 3rd Congressional District, once represented by Gerald Ford and now by Justin Amash, still reeks with the putrid smell of libertarianism's incoherent ideology.

The S&P500 ends the week just 0.7% below the all-time inflation-adjusted high in August 2000

The current real price of the S&P500 is 2031.92, an all-time high in the nominal sense.

This level is just 0.7% off the all-time inflation-adjusted high, which was 2046.21 and occurred in August 2000.

Valuation is rich at 26.61 for the Shiller p/e, but well-off the December 1999 peak of 44.19. However, the market crash of 2008-09 was preceded by the Shiller p/e peaking at 27.55 during 2007.

The Shiller p/e has been in a never-never land of high valuation above 26 for extended periods since October 1996, coinciding with the famous onset of "irrational exuberance". You have to go back before that all the way to 1929 to find valuation at 27 and above.

Gold miners dive: VGPMX plunged to 8.91 yesterday, hasn't been that cheap since January 2002

The historical low for VGPMX was 5.05 on 8/31/98. The historical high was 40.02 on 5/19/08. The maximum NAV gain was 692.47%.

Alan Greenspan gave gold the kiss of death on Wednesday, suggesting it was a good investment idea going forward. Gold promptly fell out of bed, dropping $21.50 on Thursday and today is down about another $35 so far. Miners say they cannot remain profitable if gold departs much from the $1,200 range. Meanwhile the dollar is soaring toward 87 as the Fed has ended QE.

The maximum NAV gain for VTSMX, by the way, has been 414.31%.

Average Effective Federal Funds Rate by chairman of the Fed in the post-war

William McChesney Martin (15 years)  3.62%
Arthur F. Burns (8)        6.49%
G. William Miller (2)    9.56%
Paul Volcker (9)           10.45%
Alan Greenspan (19)     4.86%
Ben Bernanke (8)          1.58%
Janet Yellin (less than 1) .09%

Don't blame QE for the decline of the dollar, blame Bush or Greenspan or global warming or war

The decline of the dollar under QE has been nothing when compared with its decline from 2002 to 2008.

Between high water marks in early 2002 and a low beneath 70 in March 2008 the trade weighted dollar sank a whopping 36% in just six short years, 6 times more than the 6% it fell since TARP passed on October 3, 2008 and QE began in late November 2008 until now.

Say what you will about QE, but it's just dumb to blame it for a decline of the dollar.

The dollar was already dead! The dollar declined 36% during the wars in Iraq and Afghanistan. Overall the dollar is down 6% since the emergency measures of 2008, but is recovering somewhat.

Godless Libertarian Triumph In MI-3: Justin Amash Is Pro-Gay All The Way, Just Like Brian Ellis His Challenger

There really is no choice for social conservatives between the two Republicans in the MI-3 primary in 2014.

Neither candidate can bring himself to support Republican Committeeman Dave Agema's lonely stand against moral and spiritual decadence in our society. In fact, both candidates attack Dave Agema. The only reason to vote for Ellis in the primary is to spoil the reelection of Amash who is a complete traitor to conservatism and never was a conservative to begin with. Of course this means a Democrat has a winning chance in MI-3. But arguably Republicans should vote for the Democrat in the general that the full measure of God's wrath may be felt here.

Michigan's 3rd Congressional District is hopelessly lost from the Judeo-Christian point of view in any case, for reasons which prevailed long before Brian Ellis and Justin Amash existed. Whatever power traditional Calvinism may have possessed in the area in the past is long since transmuted. At least Vern Ehlers gave the appearance of a Christian. This place is cursed, and deserves everything that's come to it, and is coming.

Justin Amash, Antiochian Orthodox, quoted here in January:

“Defending civil liberties is at the heart of the Republican Party and our Constitution. As I've demonstrated with my words and record, I am trying to grow a new generation of Republicans that includes more gays and lesbians, racial-ethnic minorities, women and young people," Amash said.

And Brian Ellis, an Episcopalian, in the same story:

"Dave Agema’s discriminatory rhetoric gets in the way of sharing our Republican solutions," Ellis said in his statement.

Well, look at it this way. If you are looking for a church to join, you now have two more to cross off your list.