“Slam” Slammed

I’ve noticed an increasing prevalence of the use of the word “slammed” in news articles.  To illustrate, I did a quick Google news search for the use of the word “slammed” in the last 24 hours, with over 15,000 results.  Below is a quick list of some of these headlines that use the word “slam” inappropriately, with some suggested corrections.

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History (of Money and Banking by Rothbard) Repeating Itself

Decades ago, when discussing the causes of the Great Depression, Murray Rothbard unwittingly wrote an editorial piece fit for today’s newspapers.

Below is an excerpt from Murray Rothbard’s History of Money and Banking from the Colonial Era to World War II.  The book itself was published posthumously by the Mises institute in 2002 after Rothbard’s death in 1995 and is a compilation of various of his available manuscripts.  I have taken the liberty of updating some of the text in red parentheticals where appropriate.

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The Social Security “Trust” Fund

From a New York Times article about how the social security system is running a deficit for the first time:

Mr. Goss, the actuary, emphasized that even the $29 billion shortfall projected for this year was small, relative to the roughly $700 billion that would flow in and out of the system. The system, he added, has a balance of about $2.5 trillion that will take decades to deplete. Mr. Goss said that large cushion could start to grow again if the economy recovers briskly.

http://www.nytimes.com/2010/03/25/business/economy/25social.html?hp
The thing that’s so shocking about this is the concept that Social Security “has a balance of about 2.5 trillion that will take decades to deplete.”  Of course, what they don’t tell you is what the implications are for Social Security holding that balance in U.S. Treasuries.  In other words, if a dollar goes in to the social security trust fund it is immediately used by the government to buy its own debt.   Thank goodness the Social Security trust fund has 2.5 trillion dollars of IOUs it wrote to itself.  I personally owe myself a full 3.7 trillion dollars, so that should likewise take quite a few decades to deplete–glad I saved up.

Elsewhere, the AP has this covered.

 

Stock Valuations 3x Higher than Any Point in Human History

If this headline is not true, it is only because I cannot find data on the S&P index prior to the 1920s.  Behold a scary chart:

S&P PE Ratio v3

A chart of of the S&P index divided by earnings from 1923 to the present.  This chart seems to be a rather good indication that the recent rally in the stock market is the result of people buying a trend rather than anything of underlying value.  Prudence seems to dictate that if you have recouped any losses holding index or Dow-performing equities, it’s time to bank those gains before the bottom drops out.

Perhaps even more obnoxious/comical is the forecasting done by Standard & Poors for the P/E ratio through 2011.  Either earnings need to sextuple in the next two months or the S&P needs to tank for this to come true.  You be the judge:

S&P Forecast