The Broken Window
July 30th, 2010
A short film made by some Mises University students. See what you think.
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Explore the Theory of the Completely Free Society
July 30th, 2010
The Economics of Private Legal and Defense Services: a 4-week online course with Dr. Robert P. Murphy, starting August 24.
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Raico on the Liberal Tradition’s Religious Roots
July 30th, 2010
Forty years ago, historian Ralph Raico completed his dissertation under the direction of F.A. Hayek at the University of Chicago. Its title masks its power and importance: The Place of Religion in the Liberal Philosophy of Constant, Tocqueville, and Lord Acton. It has been published for the first time by the Mises Institute, and this is not merely to honor a great historian and thinker.
The research contained within it amounts to a major contribution to public intellectual life of the United States at the time. The issue he addresses—the revelation of a different form of early liberalism, one heavily influenced by moral concerns and steeped in an older religious ethos—has major implications in our own time as well.
In response to conservative claims that the liberal tradition is essentially amoral and antinomian, Ralph Raico provides an extended discussion of three massively important figures in the history of liberalism for whom a religious orientation, and an overarching moral framework, was central for their thought: French Protestant Benjamin Constant (1767–1830), French Catholic Alexis de Tocqueville (1805–1859), and Lord Acton (1834–1902).
All three were distinguished for: (1) consistent anti-statism, (2) appreciation for modernity and commerce, (3) love of liberty and its identification with human rights, (4) an conviction in favor of social institutions such as churches and cultural norms, and (5) a belief that liberty is not a moral end in itself but rather a means toward a higher end. What’s more, these thinkers are people whom conservatives have tended to revere if only in passing, but have they really studied their thought to see their radicalism, their deep love of freedom, and their true attachment to the old liberal cause?
Raico provides a detailed reading of their work in all these respects and shows that one need not embrace statism, and that one can be a consistent and full-blown liberal in the classical tradition, and not come anywhere near fulfilling the stereotype that conservatives were then creating of libertarians. Ours is a varied tradition of secularists, yes, but also of deeply pious thinkers, too. What drew them all together was a conviction that liberty is the mother and not the daughter of order.
Forty years later, it is striking how poignant Raico’s treatise remains. And it is fact: conservatives who were blasting away at libertarians at the time never saw this book. It is just now published. It’s this way with great books, classic studies of this depth: it remains as powerful and relevant now as ever.
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The illusion fades
July 30th, 2010
From the WSJ, growth is lower than expected and retroactively revised downward.
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IP Comix
July 30th, 2010
Nina Paley has created a wonderful page of IP-related comics. Here is a sample.
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Bull Trip!: GDP Report Q2 2010 (Advance)
July 30th, 2010
Today, the Bureau of Economic Analysis (BEA) released their first installment of the Q2 2010 GDP report showing that the economy continued to expand with real GDP increasing at an annualized rate of 2.4% from Q1 2010.
On a year-over-year basis real GDP increased 3.17% while the quarter-to-quarter non-annualized percent change was 0.59%.
It’s important to note that with today’s release the BEA has incorporated the annual revision to the national income and product accounts (NIPAs) which updates estimates running all the way back to Q1 2007.
A note of caution as well… as I pointed out last October, the BEA seriously overestimated the rebound in fixed residential investment first estimating that Q3 2009 came in at +23.4%, a faster rate than any during the entirety of the housing bubble.
This “estimate” was more than suspicious, it was just flatly wrong and now, after multiple revisions, reflects a much more tepid Ǫ.6% rate.
And yet now, for Q2 2010 the BEA is again estimating that fixed residential investment expanded at a rate of 27.9%!!
With results like these, it’s safe to say that the BEA is having serious trouble with accuracy, possibly as a result of the severity our current decline, and that these GDP report should be viewed with a high degree of skepticism.
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Know the New Deal Cold
July 30th, 2010
Understanding the true causes of the Depression, as well as the real economic record of the United States in the 1930s, is an essential ingredient in anyone’s economic and historical education. FULL ARTICLE by Thomas Woods
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- The Forgotten Depression of 1920
- Woods Tells the Story of the Meltdown
- Mises Circle event in Colorado Springs
Who Flipped The Switch On The Market?
July 30th, 2010
This is your captain speaking, we’ve turned off the keep your seat belts on sign (for those of you who have short exposure, those who have long exposure? Please fasten your seatbelts). You are now free to move about the cabin. This MAY now conclude our in flight turbulence for the time being.
So what happened to the market Thursday? I mean wow we were up like 80 points on the Dow and the OTC was up nice too so what gives? Simple, it’s all because of this guy!
He flipped the switch! If you’ve ever seen the remake of lost in space you know what we mean.
It’s because we had a brand spanking new EMOTIONAL subscriber (shown below) call us and say we were nuts! Can’t you see this market is flying? Folks haven’t we talked time and time again about being in control of your emotions and managing them? They say the fastest way to find out who you are is to start trading. The markets give INSTANT feedback.
It’s quite obvious to us this investor is finding out who he is right now and what he needs to work on to improve his game.
Of course the captain sees the runway just ahead and that’s why he’s not emotional mind you.
On to the charts
Yesterday we told our subscribers:
“So from here? IF we are at a turning point we should not go over the red line on the two charts below, even if we do though we’ve got 1131 not far away which is another resistance level.”
As you can see we’ve still got the green line to deal with to the downside. Call us pinned between the red line or the 1120 level on the S&P 500 to the upside and the green line to the downside.
From a daily perspective in the charts below look at the Full Stoh’s, still in overbought territory and the Bollinger Bands both still have quite a ways to go.
All we can say at this point is that everything looks encouraging to those that are short this market. We’ve hit resistance/fib levels, indicators flashing overbought and in the zone, a fair amount of go go names staging the makings of “New Highs And Dies” which is what you want to see and a classic pop an drop Thursday. One step at a time folks as we always say.
To learn more, visit our blog site and sign up for our free newsletter to receive our free report — “How To Outperform 90% Of Wall Street With Just $500 A Week.”
A lot of noise Down Under
July 29th, 2010
The Dollars from the antipodes made news over last couple of days. Well, they seem to be getting attention almost every day, but this time it was a little different. Both of the Australian Dollar and the New Zealand Dollar went through some pains, and, at least officially, for apparently unrelated reasons. The Aussie got punished upon the release of CPI numbers for the second quarter. Reaction was immediate, with the AUD falling rather sharply. It has since recovered against some currencies, but remains very sensitive to the slightest bad news. And, frankly, the CPI news release is typically nowhere near as important as rates or employment numbers, yet markets paid attention.
Speaking of interest rates, the Reserve Bank of New Zealand had its policy meeting about 20 hours later. Largely as expected, the board raised its benchmark Official Cash Rate by 0.25% to 3.00%. No surprises there, but the Kiwi fell on the news in a strong move. It has not recovered yet and, as a matter of fact, it is still falling. Positive news- negative response. This could be a beginning of a larger sell off in the NZD, or, for that matter, even all commodity currencies.
This hourly chart of the AUD-NZD pair shows how these two events played out. First the AUD dropped and latter rallied on NZD weakness. Most of other crosses of these currencies were similar, but their interplay is very interesting. I did not trade it then, trying to avoid trading news releases, but have a longer term position now, using daily chart. Never mind the details, there are enough of other trades to discuss here.
Now that the AUD lost some ground, not so much against NZD but other currencies, it could continue lower. On the hourly chart of AUD-JPY the price just dipped under the low of 77.70 and is bouncing right now. I’d like to sell it on the next run at support (IF it happens). The sell order is positioned at 77.60, with a 100 pips objective.
Few posts ago the EUR-CAD was covered. This pair was in fairly wide consolidation zone, which was expected to eventually give way, with a bias to the upside. However, just as mentioned there, some smaller range-bound opportunities were possible. Here is the one I found, using hourly chart. It produced ȓ pips. Nothing grand, but a decent little trade. Now it is time for a breakout, with a larger objective.
Original analysis were made using 4H chart and that’s how it looks now. The resistance was breached earlier in a day, producing entry at 1.3517, with a target of 150 pips. Currently, the price is right back at about the entry level, very typical after breakout. Since this is an intermediate term chart, it could easily take few days for the objective to be reached, but if the position shows decent profit, it will be closed before the weekend, even if short of target.
Mike K.
http://www.fxmadness.com/
“Guerrilla Economics” Coming to Forbes.com
July 29th, 2010
Apropos my post from a few days ago, I’ve been asked to write a weekly column for Forbes.com. My earlier Forbes contributions are here, and the new column–tentatively titled “Guerrilla Economics”–will start running soon. “Guerrilla Economics” is also the working title of a book manuscript I’ve worked on off and on for about a year and a half now; having a column of the same name will, I hope, help me finish it.
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