LOONY TUNES no. 147

1

Kevin Wheeler, chaplain, posts (1 July) on WMI Central

HERE

Dear GG:

“I heard this on the radio the other day and it so represents me: “I feel powerless. I have to stop the invisible hand; but I’m anonymous.” That is me! That is precisely how I feel. There is so much bad news everyday. The shootings ... the fire ... sadness all around, and it seems that there is nothing I can do about it. — Anonymous & Powerless 2

Dear A&P2,

Amazingly, there is something you and others can do. However, first of all, allow me to say that I really believe the invisible hand that you feel so desperate to stop is the hand of complacency or maybe just the lack of brotherly love (old school manners) which permeates our new America.”

2

Leonid Bershidsky posts on Bloomberg Opinion  HERE 

Oil Traders' Invisible Hand”

“Perceptions matter much more to the price of of oil than supply and demand”

“Bank analysts are predicting the oil rally of recent weeks isn't going to last. It's important, though, to reflect on why the rally happened in the first place. It was never about supply and demand as such, but about the market's perception of where they were going. If oil prices head south again, that, too, will be a result of guesswork. Traders should know there is an element of self-fulfilling prophecy -- for the long term, as well as the short term -- in their pronouncements about today's oil market.

Crude oil prices started falling last September. Brent oil crashed by almost 55 percent by mid-January, but it's up about 32 percent since …

… But the price of oil is another matter. That's going to depend on the headlines that reflect those national interests and technological advances -- or perhaps some new short term factors of the day. Traders rarely lack explanations for the numbers that skip across their screens.”

3

Eric Akobeng posts in South African Journal of Ecoomics HERE 

“The Invisible Hand of Rain in Spending: Effect of Rainfall-Driven Agricultural Income on Per Capita Expenditure in Ghana”

Abstract

“This paper uses a nationally representative household pseudo-panel dataset for Ghana, a rain-fed agriculture economy, to investigate whether there is a positive relationship between rainfall-driven agricultural income and household per capita expenditure. By using the Two Stage Least Squares Instrumental Variable (2SLS-IV) estimator, it is found that a fall in rainfall-driven agricultural income leads to a decrease in per capita expenditure. The results show that the gender and the locality of the household head matter in the response of per capita expenditures to rainfall-driven agricultural income. Female-headed and rural households are more vulnerable to rainfall-driven agricultural income changes. The expenditure disaggregation indicates that female-headed households significantly reduce per capita non-food expenditure in times of rainfall-induced agricultural income decrease whilst the response of male-headed households focuses more on reducing per capita food and remittance expenditures.”

4

Lila Wallrich posts (1 July) on Comstocks (business insight for the capital region) HERE 

“Why Crowdsourced Branding is a Bad Idea”

“Do you really want to weed through dozens of mediocre designs?

“The wisdom of crowds can be a remarkably potent thing. For example, Adam Smith’s famous phrase “invisible hand” identifies the phenomenon in which buyers and sellers collectively determine value better than any one person can.”

Comment

Prices cannot be determined by one person because there are at least two persons in every price decision: a buyer and a seller. 

As for Adam Smith ‘identifying the phenomenon” of collective price decisions as the “invisible hand”, that too is absolute nonsense. 

His use of the “invisible hand “metaphor in economics had nothing to with pricing. 

Lila should check Smith’s Wealth of Nations [$10 gets you $100, she has never read it]. His reference was about investing locaqlly rather than abroad because the merchant concerned was averse to his perceived risks of investing abroad. Lila, turn to Smith’s Wealth of Nations, 1776: Book 4: IV.ii.paragrahs 4 to, page 454).