http://globaleconomicanalysis.blogspot.com/I get my daily does of economic news from Mish Shedlock at his blog.  Today he is covering the mortgage mess.  He is a photographer who got all licensed-up to do securities business and uses Austrian economic theory to guide his analysis.  This young Turk has moved up to where he takes on Peter Schiff and the venerable Dr. Gary North, on their own turf.  The conflict with Dr. North seems mostly on Dr. Norths side, to miind thinking, in their debate regarding whether we are in inflation or deflation, they are both right.  The differences are in the assets being discussed and the timing.

Today Shedlock is also covering market signals, and takes the time to explain "sideline cash."

It gets tiring pointing this out, but the only time money can move into the equity market is at IPO time or other offerings. Otherwise it is impossible for sideline cash to move into equities. For every buyer there is a seller. At the end of any normal equity transaction, there is as much cash on the sidelines as before.

So many misunderstand the simple mathematical function of buying and selling, that I feel obliged to make corrections.

Now I am glad he took the time.  It may be simple to him, but unless he had pointed out the error (apparently again) I would have accepted the analysis.  I ythink it was Orwell who said something like  the first job of intelligent people is to restate the obvious.

Shedlock is getting quite powerful, and I am afraid it may be causing him some disequilibrium.  He has been attacking public union workers.  Having been both a B Longshoreman and busted a ILWU house, I know well the system and consider myself sympathetic to unions.  But worse than scabs in the union universe are the house unions.  A house union is formed to protect a business from a real union.  Public employee unions, such as the NEA and AFSCME are in effect house unions.  Their loyalty is to the people they bargain against, not the members themselves.  The "house" for public employees is of course the politicians, who can count on votes for the union workers (and also their tremendous assistance during election cycles) if the politicians deliver all the union members desires.

It a bad bad system, but Shedlock is calling these people termites and parasites.  This is not good.  As easily as the politicians gave these people, just as easily they will take away.   If you want to see the future of public employee pensioners, just look to Russia, and see the street sweepers and and lobby guards, old, cold, hungry, miserable.

As they say in union negotiations, what goes around comes around.  These people fell into a good thing, and exploited it.  So what is new.  Shedlock has done as well himself.  Shedlock ought to argue facts, and skip the name calling.

Bookmark this post --- Email this post