1) Boy, that was an ugly durable goods figure this morning. We’ve seen one month numbers like that recently so this is nothing to get too worked up over, but let’s hope this doesn’t become a trend. There was also a definite skew in the headline figure due to transportation, but the weakness was broad. Excluding transportation durable goods were down -0.6% which was well below expectations of +0.3%.
The durable goods data has trended nicely with the S&P 500 over the years so a persistent trend here would be worth keeping an eye on.
2) In my opinion, the banking & IS/LM debate I’ve been having with Paul Krugman is one of the most important things being discussed in economics these days. Yes, that’s probably because I am biased, but I truly believe that the endogenous money debate matters more than most people outside of Post-Keynesian circles are willing to admit.
Paul Krugman and many mainstream economists downplay the role of banks and many of them exclude banks from their models entirely. They do so because they see banks as pure middlemen and intermediaries. I’ve discussed how I think this position is wrong, but I fear it’s not sinking in.
3) This Politico piece on football and head trauma really struck a cord with me. As a former player and big time football fan I feel strongly about what I think is a very serious problem in America – we are sending an army of children out every year to bash their brains against one another for no good reason. And yes, that’s precisely what’s going on. American football is an unbelievably violent sport. Studies show that getting hit by the average NFL defensive lineman at full speed is the equivalent of being involved in a small auto collision. And there’s now clear cut evidence that head trauma and concussions lead to Lou Gehrig’s disease (ALS). This is scary stuff. We’re talking about the kind of dementia here that cripples some of the most physically gifted people on the planet. And the worst part about ALS is not that it cripples the body, but that it leaves the mind intact. It is one of the cruelest diseases a human can possibly come face to face with. You wouldn’t wish it on your worst enemy.
I don’t know what the solution to this problem is. But I do think it’s dangerous to downplay the potential risks here based on faulty arguments like the one presented in this WSJ piece a few weeks ago. When you suit your kid up to play football you’re suiting him up to spend half the year bashing his brain against a wall. I am a big time football fan and if someone willingly chooses to go out and play football then I won’t hold that against them. But let’s be more knowledgeable about the risks young kids are facing here. Many of these kids don’t choose to play football or not. They aren’t able to understand or measure the risks involved. And as guardians of their futures I think we have to become informed about the risks we choose for our kids so we can be better risk managers on their behalf. This is a bigger problem than most people think. And as football season rolls around we need to consider not only the entertainment value (and monetary value) of the sport, but also the safety of the guys on stage.