Empiricism is the name philosophers give to theories of knowledge (viz, epistemologies) that look to actual facts from senses and the world to access what one knows. When examined deeper, this concept can get complex, but for the use I intend to give it, that definition is good enough.
Viewers and readers of the financial press probably have never heard of this nor seen it in use. That media always seems to rely on mere theories and / or seers to tell us what is happening. Good past performance is not necessary as no one ever checks on whether a theory or a seer was wrong.
Today's FT has a good data point for us. "Germany and France on Thursday delivered a boost to hopes that the eurozone is clawing its way back from recession as the region’s largest members said their economies grew in the second quarter after shrinking for a year.
Robust consumer and public spending - buoyed by large government stimulus programmes - helped both economies grow 0.3 per cent in April, May and June, according to data released by both countries’ statistical offices. "
"The trends surprised economists, who had been expecting both economies to contract again – by 0.3 per cent - after German gross domestic product plummeted 3.5 per cent and French GDP shrank by 1.3 per cent in the first quarter. “The recession has ended. Not just in Germany,” said Jörg Krämer, an economist at Commerzbank in Frankfurt, adding that the “post-Lehman global confidence shock” had receded and companies appeared to be investing again." [my emphasis]
What does this tell us ?
1. All bearish seers and economic theorists prognosticating more pain and serious declines ahead were wrong.
2. Decoupling is partly happening now. Ten years ago the coupling between other regions and the US was very strong. Now it's much less. Soon it may be nil. It's not a binary, static concept.
3. This blog has prominent readers worldwide [that's a joke!].
Rambo said, "I always believed the mind was the best weapon." This is true. One must hold the financial press and seers to a higher epistemological standard. Empiricism has seen use for about 500 years, perhaps beginning with Galileo. Let's use it. Don't believe anything on the financial press unless they provide some facts and proofs.
Doing nothing. I'm just riding this bull elephant to the next waterhole. Fido Fund and Krypto Fund have plenty of longs. Of course I wish I had more longs [arghh that July blunder due to distractions and taking counsel of my fears], but I don't and accept that. I do not like to be leveraged or too long when the market has broken out to new intermediate highs. I just like parity then and ride along. On rips up, I'll sell some. On big drops, I'll buy the dips unless circumstances change.
I do not trust Obama and fear that he will not re-appoint Ben. If he replaces Ben with the wrong person, risks of inflation and / or stagnation rise considerably.
Word of the Day
"Vicissitude" - noun [$10]
Vicissitude means 1. the quality of being changeable; mutability; 2. sudden changes or alterations.
Sentence: Economic outlooks over time must endure vicissitudes as people and data are not fixed physical constants. Human economics do change and one must accept that as an axiom. Pundits often can't make two good forecasts in a row as they ignore this simple epistemological truth.