Clever. Try your hand at reducing the deficit with this Wall Street Journal interactive.
Unless lawmakers can agree on measures to reduce the
deficit, standing legislation will do it for them. Under the "Fiscal
Cliff" scenario, the Congressional Budget Officeprojects
a deficit of $142 billion by 2020, or a $1.102 trillion deficit if some tax cuts are extended and other policies remain in effect.
Student loans may be a liability on the consumer balance sheet, but they constitute an asset for Uncle Sam. Just how big? Nearly 35% of the total federal assets, over four times the 8.6% percent for the total mortgages outstanding.
The nation's total student debt load is growing at a terrifying $2,853 per second.
Creating the illusion of economic growth is easy if you can print money. It’s a prank you can play on an entire country. Cut the value of the currency in half and the economy’s size will appear to double. If it doesn’t, you’re in recession (whether you know it or not).
Cavemen probably understood this concept better than America’s best economic minds.
The only way to accurately measure changes in a nation’s economy is to do so relative to the world. According to the World Bank, the U.S. represented 31.8% of the world’s economic activity in 2001. By the end of 2011, that share had dropped to 21.6%, meaning America’s slice of the world economy is 32% smaller than it was a decade ago, and getting smaller every day. Note that America’s housing bubble did nothing to boost the U.S. on the global stage.
As horrific as these results are, they’re better than Japan’s, whose “lost decade” proved only to be prologue for its “lost-er decade.” Japan’s share of the world economy fell more than 35% from 2001 to 2011 (literally worse than Zimbabwe) and has now shriveled 54% from its peak. But Japan’s real collapse did not coincide with the bursting of its stock and real estate bubbles in 1990 and 1991 respectively. The decline actually began in 1995 when policymakers allowed government debt to exceed 90% of GDP (a milestone the U.S. quietly passed in 2010).
As you'd expect in a Colbert segment, there is lot's of 'truthiness' mixed in with the humor.
For example:
Some say all this computer trading is dangerous, but I say it's actually safer. Because if the stock market ever crashes again, instead of brokers jumping out of windows in a panic they'll simply turn on their computer and see the soothing message, 'error 404, economy not found.' What's the worst that could happen?
There
we were at the Cowboys game. It was a beautiful day. I was feeling
terrific because I was with my two sons. The crowd was cheering … and I
had a great thought: 'Let's get a picture of this'.
Perfect … a random series of events had led to a satisfying crescendo … and I captured the moment.
It wasn't so random. Despite a difference of four years and two stadiums – the result was similar (if not predictable).
History doesn't necessarily repeat itself. But it often rhymes.
It Is True In Trading As Well.
The Hype Curve is an interesting map of human emotion. Below is an idealized version.
Here is a chart of Apple going back to 2004. Note the similarities.
Classic economic theory dissects the economic cycle into four distinct stages: expansion, trough, decline and recovery. A stock is no different, and proceeds through the following cycle:
Stage 1 – After a period of decline a stock consolidates at a contracted price range as buyers step into the market and fight for control over the exhausted sellers. Price action is neutral as sellers exit their positions and buyers begin to accumulate the stock.
Stage 2 – Upon gaining control of price movement, buyers overwhelm sellers and a stock enters a period of higher highs and higher lows. A bull market begins and the path of least resistance is higher. Traders should aggressively trade the long side, taking advantage of any pullback or dips in the stock's price.
Stage 3 – After a prolonged increase in share price the buyers now become exhausted and the sellers again move in. This period of consolidation and distribution produces neutral price action and precedes a decline in the stock's price.
Stage 4 – When the lows of Stage 3 are breached a stock enters a decline as sellers overwhelm buyers. A pattern of lower highs and lower lows emerges as a stock enters into a bear market. A well-positioned trader would be aggressively trading the short side and taking advantage of the often quick declines in the stock's price. More times than not all of stage 2 gains are given back in a short period of time.
While these stages are historically defined over long time periods they actually exists in all time frames, allowing traders to take advantage of a cycle regardless of their trading time frame. Fortunately this phenomenon, known as a "fractal", exists within all security markets. A fractal is simply a rough geometric shape that can be subdivided into smaller parts that have the same properties; a smaller version of the whole.
This is important to understand because through technical analysis as we are often analyzing multiple time frames. In the short term, the four stage model may repeat itself many times. The combination of these short term cycles form a medium term cycle, and the combination of multiple medium term cycles form a long term cycle.
You know the economy is tough when a company like Hostess
Brands, the maker Twinkies and Wonder Bread, announces plans to close its plants and fire 18,000 employees as it moves to
liquidate.
