June 12, 2009

Wrong economics teachings

Finance/Investment,The World

The mainstream of economic teachings in highschools and universities is Keynesian economics.  Unfortunately, the Keynesian school of economics has gotten everything wrong and has driven our economy towards total collapse.   When a economic bubble burst, the excesses from the boom period must be allowed to be liquidated so the profitable and efficient businesses can absorb the resources tied up by unprofitable and inefficient businesses. Government bailouts, stimulus spending, injection to money supply would only increase the inefficiencies in the […]

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April 15, 2009

Some thoughts on the Current Economy

Business/Management,Finance/Investment,The World

I’ve been following Peter Schiff, Jim Rogers, George Soros, Warren Buffett and Marc Faber lately.  I’ve also been watching Obama and Bernanke’s speeches.   And here are some thoughts about current state of the economy and where it is going: The recession is deflationary because the current price levels are the results of the excesses of the consumption and credit bubble.   After the bubble busted, there are an over-supply and over-capacity of everything:  oil, houses, cars, cloths, over-paid employees.  Deflation […]

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January 30, 2009

Employement Trends

Business/Management,Finance/Investment,The World

During economic recessions, employment data has become a very important economic indicator. Increasing unemployment is a sign of decreasing consumer spending and economic slow down. Here are some employment related indicators that are useful in assessing economic conditions: 1. Unemployment Rate (See Graph of Unemployment Rate) Unemployment Rate leads economic downturn and lags economic recovery. 2. Weekly Earnings (See Graph of Weekly Earnings) Higher Weekly Earnings bodes well for the economy. 3.  Total Layoffs (See Graph of Total Layoffs) Layoffs […]

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December 30, 2008

Lifecycle of a Financial Bubble – Minsky

Finance/Investment,Psychology,The World

Today I read the book Manias, Panics and Crashes.  And I think the following outline of a financial bubble is very insightful to understand the past and the future. Rise of the Bubble     1. An outside shock to the macroeconomic system. A displacement is an outside event or shock that changes horizons, expectations, anticipated profit opportunities, behavior—‘some sudden advice many times unexpected’     2. The economic outlook and the anticipated profit opportunities would improve in at least one important […]

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August 19, 2008

What are we? Monkeys

Fun,The World

As humans, we always think we are very special. We want to believe there are some divine meaning behind our existence. Unfortunately, we are just another specie that happens to evolve a bigger brain. If an alien is to study the earth, it would be find us very amusing indeed.

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