The New Gangs of New York-Join One

http://www.thereformedbroker.com/2010/06/24/econ-gangs-of-new-york/


Econ Gangs of New York

* *Joshua M Brown
*
* June 24th, 2010

http://www.thereformedbroker.com/wp-content/uploads/2010/06/gangs-1024x373.jpg



The factions that are shaping the economic dialog these days are becoming every bit as colorful and distinct as the proto-gangs that once ruled New York's notorious Five Points area. Their leaders, every bit as bellicose and recognizable.

Here's a quick idea of who's who so you can keep up with the discussion:

*http://www.thereformedbroker.com/wp-content/uploads/2010/06/butcher.jpg* *_The

Austerians_* - These are newly-minted deficit hawks, many of whom voted for tax cuts and massive spending bills under the Bush administration without so much as a peep. Dubbed 'Austerians' by blogger *Mark Thoma (Economist's View)*, this gang has found a sudden (upcoming
election-related) pang of concern over deficits and our ability to finance them. Critics say the Austerians' premature tightness will send the economy off a cliff, a la the 1930's. Their rival gang is the New Jack Keynesians.

*http://www.thereformedbroker.com/wp-content/uploads/2010/06/gangs-2.jpg* *_The

New Jack Keynesians_* - Politically they tend to be from the left and it's been said that they've never met an expenditure they didn't like - unless it was for tax cuts to business owners or something that might actually lead to non-government hiring. The gang's leader is Nobel Prize-winning economist *Paul Krugman*, they can often be found at their stronghold (Krugman's soapbox column in the *New York Times*) chanting 'Spend, Baby, Spend' or 'Deficits Don't Matter'.

*http://www.thereformedbroker.com/wp-content/uploads/2010/06/leo-gangs.jpg*
*_The

V-Shapers_* - A wild-eyed mob of rabble rousers, the V-Shapers may scatter after a particularly messy economic report, but will reappear anytime the S&P 500 closes in the green. The gang is led by *Liz Ann Sonders (Charles Schwab)* with *Larry Kudlow (CNBC)* assuming Sergeant-at-Arms duties during most turf wars. V-Shapers are most powerful during corporate earnings season as manipulated bottom-line profit reports against easy comps are their weapon of choice these days.

*http://www.thereformedbroker.com/wp-content/uploads/2010/06/gangs-1.jpg* *_The

Double Dippers_* - The nomenclature "Double Dipper" can be a bit misleading as many gang members never agreed that the /single/ dip was actually over. Rather, they've insistently maintained that minus the effects of quantitative easing, fiscal stimulus and theater-of-the-absurd monetary policy, there never really was a recovery. *Michael Pento (Greenfaucet)* throws on the leathers and leads this pack, flanked by *David Rosenberg (Gluskin Sheff)* and *Meredith Whitney (eponymous firm)*. It should be remarked that this gang is growing faster than the others as of this guide's creation.

*http://www.thereformedbroker.com/wp-content/uploads/2010/06/gangs-3.jpg* *_The

1 Percenters_* - This syndicate is united around the belief that the Federal Reserve should immediately raise interest rates to 1 percent from their current level, /Eternal Zero/. This move, they argue, will demonstrate confidence, pull hesitant home buyers off the sidelines and jolt the banks off of their government debt-spread binge and back to consumer lending. The ringleader here is Kansas City Federal Reserve honcho *Thomas Hoenig*.

*http://www.thereformedbroker.com/wp-content/uploads/2010/06/hellcat-maggie.jpg*

*_The

Inflationsitas_* - Gang leader *Dr. Allan Meltzer (Carnegie Mellon)* sees the potential for inflation everywhere he looks. Disregarding the actual data, which shows that we are in fact caught in the throes of a deflationary death spiral in many categories, the Inflationistas have instead decided to "look through the valley" to some point in the future in which the dreaded "printing presses" will cause a severe spike in costs. Meltzer is backed up by the likes of *Marc Faber (Gloom, Boom & Doom Report)* and virtually every prominent hedge fund manager in the world.

*http://www.thereformedbroker.com/wp-content/uploads/2010/06/Monk-McGinn.png*

*_The

New Normalers_* - The mantra that we are in a low growth, high tax, heavily regulated investment world originated with gang leader *Bill Gross (Pimco)* and his second-in-command *Mohamed El-Erian*. Many a newsletter writer has flocked to the New Normal standard, most notably *John Mauldin (Thoughts From The Frontline)*. The New Normalers can typically be found casting a wary eye on the European debt turmoil or hard at work at the keyboard, prolifically pecking out multi-thousand word epistles on how things will never be the same again. And they're probably right.

*http://www.thereformedbroker.com/wp-content/uploads/2010/06/gangs-bald.jpg*

*_The

Nihlists_* - Believe in nothing, man. The core belief here is that nothing can be believed in, not government, not capitalism, not paper money, not brick-and-mortar. There is a hopelessness in this crew's rhetoric that is so potent that it frightens off even the Double Dippers when their paths cross. Spiritual and intellectual leadership comes from *Dow Theorist Richard Russell*, who pens such heartwarming chestnuts as "Sell everything you own except your gold" and "Go kiss your relatives goodbye for the last time". Splinter factions within this group worship gold, guns and potable drinking water, they've been stockpiling for nearly 4 years now.

***