© 2019 by Henry Thornton. 

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Tuesday Sanity Break, 2 July 2019 – Questions to be answered

July 2, 2019

Greetings, gentle readers.  After 48 gruelling hours I am safely home again. Ithaca by car, JFK by plane, LA by plane to Sydney, via a 2 hour wait on tarmac in Brisbane, then 1.5 hours circling within sight of Sydney airport, several more hours in the lounge waiting for a connection to Melbourne. I’ve slept like a baby for the past three nights and am still tired.

 

The good news is that the Workshop at Cornell went well and members are determined to rescue Macroeconomics from the slough of despond it has fallen into. ‘Why did they not see what was coming?’ asked Queen Elizabeth. ‘It’s the Great Moderation chirped Ben Bernanke, patting himself on the back just before the s**h hit the fan. No answers to simple questions like:

  • Why is goods and service inflation so low?

  • Why is asset inflation so high?

  • Since ‘inflation’ is always and everywhere  monetary phenomonen’ (Friedman) what determines whether monetary policy influences asset or goods and services inflation?

  • Why do nations have very strong jobs growth coupled with weak wages growth?

  • When will the jobs boom end, and if there is a jobs bust there will there be room for fiscal and monetary ease?

  • ‘Gor blimey, governor, nothing makes sense’. This is how the head of forecasting at any given central bank answers his boss when the numbers still won’t add up.

 

My ‘liason’ man, the bloke who frames paintings for a living, says finished work is piling up in this factory. ‘People just can’t pay to get their paintings back’ says the framer. ‘People are terrified that they might lose their jobs’. He adds. (There is a hint about the global state of Animal Spirits here, gentle readers.)

 

We shall advise or speculate about these various questions in coming week. Stay tuned.

 

Sporting life.

 

Caaaaaalton! So far this year has been flogged only four times – 21/4, 5/5, 19/5 and 2/6.

 

Caaarlton!  has now won three times, beating by a narrow margin the Bullies, Brisbane and Freo.  The latest win was especially meritorious as Captain Cripps and Harry McKay were out injured,  and key forward Charlie Curnout was off the field injured within 15 minutes of the start.  And the Blues had travelled from Melbourne to Perth, usually a source of bad karma.

 

Most of the rest were near misses.  Near misses, with points loss in brackets, were: Port Adelaide (16); Gold Coast (2); Hawthorn (5); St Kilda (5); and Bullies (3).

 

Clearly the team had promise, but until the new interim coach was appointed did not know how to win.  Its win over Freo last Sunday overcome this structural fault. In the dying moments Daisy Thomas ran in to kick a big goal off the ground, which if I recall properly put us in front.  Then with about a minute to play, one of the Freo stars kicked a goal to put the sandgropers back in front. 

 

In earlier near miss games the Blues would have given up.  Instead former captain Mark Murphy dummied one way in a frantic pack scramble and switched sides to kick truly to put the Blues in front with about 30 seconds to go.  Freo took the ball towards its forward line and it was intercepted by the Caaaarlton! backs, who played tickety boo with the ball until the siren blew.

 

Finally the pain of recent years, and this year especially, is over.  Well done Interim coach Teague, interim captain Ed Curnout and good luck for the rest of the year.

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