Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Sunday, June 01, 2014
China Debt - Looking at the Middle Kingdom with Fresh Eyes / Economics / China Economy
By: John_Mauldin
I am writing this introductory note from London during a layover on my way to Rome, and I’ll append a personal ending tonight after I finally make my way back from dinner to the hotel.
One of the few consensus ideas that I took away from the Strategic Investment Conference is that China has the potential to become a real problem. It seemed to me that almost everyone who addressed the topic was either seriously alarmed at the extent of China’s troubles or merely very worried. Perhaps it was the particular group of speakers we had, but no one was sanguine. If you recall, a few weeks back I introduced my young colleague and protégé Worth Wray to you; and his inaugural Thoughts from the Frontline focused on China, a topic on which he is well-versed, having lived and studied there. Our conversations often center on China and emerging markets (and we tend to talk and write to each other a lot). While I’m on the road, Worth is once again visiting China in this week’s letter, summing up our research and contributing his own unique style and passion. I think regular TFTF readers are going to enjoy Worth’s occasional missives and will want to see more of them over time. Now, let’s turn it over to my able young Cajun friend.
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Sunday, June 01, 2014
Decline And The Art Of No Economic Growth / Economics / Economic Theory
By: Andrew_McKillop
The Oxymoron of Permanent Growth
One of the starkest non-surprises is that economic growth declines as well as advances. Why this should be “extraordinary” and a shock to civilization is hard to understand – for normal persons. Taking the case of Japan and the Asian Tigers, their miracle growth epochs or eras lasted about 30 – 40 years and then it was over. Taking the case of China and India, their period of extreme high annual growth lasted less than 20 years. In the case of the US and western European economies, high growth was commonplace for about 25 years.
Saturday, May 31, 2014
What To Expect From June's Major Economic & Central Bank Events / Economics / Central Banks
By: EconMatters
Since the last Employment report things have been relatively quiet on the economic and Central Bank front but all that is set to change over the next three weeks. Volatility should pick up and many of these events could be potentially market moving for certain asset classes.
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Saturday, May 31, 2014
How Inflation Helps Keep the Rich Up and the Poor Down / Economics / Inflation
By: MISES
Jörg Guido Hülsmann writes: The production of money in a free society is a matter of free association. Everybody from the miners to the owners of the mines, to the minters, and up to the customers who buy the minted coins — all benefit from the production of money. None of them violates the property rights of anybody else, because everybody is free to enter the mining and minting business, and nobody is obliged to buy the product.
Saturday, May 31, 2014
The High Cost of Minimum Wages / Economics / Wages
By: MISES
In Switzerland on May 18 there was a vote to establish a minimum wage rate at a world record $25 an hour: the vote was rejected overwhelmingly as an estimated 76 percent voted against it.
As USA Today reported, there have been strong opinions in both directions. Luisa Almeida, a Portuguese immigrant working in Switzerland, said that she’s against the increase because according to her,“if my employer had to pay me more money, he wouldn’t be able to keep me on and I’d lose the job.” Furthermore, even though Switzerland does not currently have any laws regarding minimum wage rates, Luisa said she already makes more than she would at home in Portugal (where minimum wage is $4.19 per hour).
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Friday, May 30, 2014
The Pretty Girl and the US Economy / Economics / US Economy
By: Raul_I_Meijer
There’s a persistent story that says (though I don’t think I can confirm it) that a pretty girl prefers to surround herself with less pretty girls – all in the eye of the beholder – in order to look prettier. After seeing yesterday’s -1% (-2% if you include Obamacare) US GDP ungrowth number, a fair segment of the financial press and punditry took a page out of the pretty girl playbook and ran with it. What should really be a deeply disturbing number in a 5 year old recovery (which is about 100 years in human terms) that has cost Americans trillions upon trillions in stimulus measures, is easily turned, without batting an eye, into a solid positive. The awful Q1 print, we are now told, serves to make Q2 look that much better.
Friday, May 30, 2014
Crony Capitalism - Crony Economic Growth / Economics / Economic Theory
By: Andrew_McKillop
Tuesday Markets and IMF Forecasts
Almost any Tuesday, financial markets are up. Yes it happens but no, the “Tuesday blip” is pure market manipulation and nothing whatsoever to do with the real economy. Likewise any IMF forecast of economic growth, for any country in the world is always revised down from the previous forecast, but always shows a magnificent recovery “coming soon”.
Friday, May 30, 2014
US Economy GDP Even Worse Than It Looks, Again / Economics / US Economy
By: John_Rubino
As expected, the US revised the most recent quarter’s GDP from barely positive to sharply negative today. But once again the true extent of the problem was hidden by some statistical sleight of hand, in this case wildly-optimistic inflation assumptions.
Here’s an excerpt from the Consumer Metrics Institute’s just-published analysis:
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Friday, May 30, 2014
The U.S. Jobs Market is Gaining Traction / Economics / Employment
By: EconMatters
Claims Data
The Jobless claims data came out on Thursday and the trend is still in place and bodes well for the May Employment Report coming out next Friday as jobless claims fell sharply in the May 24 week, down 27,000 to 300,000. The 4-week average is down a significant 11,250 to a new recovery low of 311,500. Continuing claims are also down, falling 17,000 in data for the May 17 week to a new recovery low of 2.631 million. The 4-week average is down 33,000 to 2.655 million, also a recovery low. The unemployment rate for insured workers, also at a recovery low, came in at 2.0 percent. Notice a pattern here, new recovery low, new recovery low, and new recovery low.
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Friday, May 30, 2014
Fed's Lacker Warns U.S. Inflation Is Accelerating / Economics / Inflation
By: Bloomberg
Federal Reserve Bank of Richmond President Jeffrey Lacker told Bloomberg Radio host Kathleen Hays on "The Hays Advantage" today that inflation may not need to be too fast before the Fed raises the main interest rate. Lacker said, "I don't see us having to wait until inflation is actually getting to a place we don't like."
Lacker said, "We've seen inflation bottom out; I think it's pretty conclusive it's bottomed out in the last couple of quarters. And there's some tentative signs that a move back towards, a gradual move back towards 2 percent is in train, and I'm hopeful that that will play out over the year."
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Thursday, May 29, 2014
U.S. Economic Growth BEA Revised GDP Sharply Lower to -1% / Economics / US Economy
By: CMI
BEA Revises 1st Quarter 2014 GDP Sharply Downward to Outright Contraction at Nearly a 1% Annual Rate: In their second estimate of the US GDP for the first quarter of 2014, the Bureau of Economic Analysis (BEA) reported that the economy was contracting at a -0.99% annualized rate. When compared to prior quarters, the new measurement is down over 3.6% from the 2.64% growth rate reported for the 4th quarter of 2013, and it is now more than 5% lower than the 4.19% reported for the 3rd quarter of 2013.
Thursday, May 29, 2014
Impending Economic Downturns and the New Skyscraper Curse / Economics / Economic Theory
By: Mark_Thornton
From CNN to Barron’s to Le Monde, Mark Thornton has been featured as an authority on how record-setting skyscrapers signal impending economic downturns. Last month, Dr. Thornton spoke with us about the Skyscraper Index and the Skyscraper Curse.
Mises Institute: The Skyscraper Index, which shows a correlation between the construction of the world’s tallest buildings and economic busts, was created by economist Andrew Lawrence in 1999. In 2007, you used the index with Austrian business cycle theory to identify the economic downturn that followed. How does Austrian business cycle theory explain the index?
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Thursday, May 29, 2014
Iran Economy Stable but Miserable / Economics / Iran
By: Steve_H_Hanke
Since Hassan Rouhani assumed the presidency of the Islamic Republic of Iran in August of last year, the economic outlook for Iran has improved. When Rouhani took office, he promised three things: to curb the inflation which had become rampant under Mahmoud Ahmadinejad, to stabilize Iran's currency (the Rial), and to start talks to potentially try and end the sanctions which have battered Iran since 2010. Rouhani has delivered on each of these promises. From this, one might assume that the Iranian economy, and the Iranian people, are headed towards better times.
Thursday, May 29, 2014
Piketty's 'Capital in the 21st Century' Book Envy Problem / Economics / Economic Theory
By: Peter_Schiff
There can be little doubt that Thomas Piketty's new book Capital in the 21st Century has struck a nerve globally. In fact, the Piketty phenomenon (the economic equivalent to Beatlemania) has in some ways become a bigger story than the ideas themselves. However, the book's popularity is not at all surprising when you consider that its central premise: how radical wealth redistribution will create a better society, has always had its enthusiastic champions (many of whom instigated revolts and revolutions). What is surprising, however, is that the absurd ideas contained in the book could captivate so many supposedly intelligent people.
Thursday, May 29, 2014
Why Keynesians Should Not be so Careless with Terminology / Economics / Economic Theory
By: Frank_Hollenbeck
Should we print, not print? Stimulate, not stimulate? Is austerity the right or wrong policy? Is government spending or printing effective? If we ask two economists these questions, we will likely get three opinions for each question. Economists seem confused, yet these questions are more important today than ever. Where does this confusion come from? Doesn’t economic theory give us clear cut answers? It does, but poor terminology and a lack of focus have muddied the waters. Many macroeconomic disagreements can be elucidated with a better understanding of the role played by holding cash, or hoarding, in economics.
Wednesday, May 28, 2014
The Cost of Government Is Higher Than You Think / Economics / Government Spending
By: MISES
Gary M. Galles writes: “Look what I did for you!” When our children were small, my wife and I got many gifts from them accompanied with those words (including most of our refrigerator art and many things that still adorn our Christmas trees), in search of approval and encouragement.
While that process was an endearing part of parenting, I have been struck by a far less endearing parallel to public servants. In a similar way, they are always rolling out some new plan or program “for you,” in search of accolades and votes. However, unlike our children, what they claim to have created is frequently misleading to the point of rank dishonesty, because they present the benefits of their panaceas as far greater than they really are and the costs as far less than they really are. And a substantial part of that political overselling involves overlooked crowding-out effects.
Tuesday, May 27, 2014
In a Flash, China Economy Looks Strong / Economics / China Economy
By: Frank_Holmes
If you want to know where the world economy is headed, there is one number that I believe investors should focus on: the HSBC China Manufacturing Purchasing Managers’ Index (PMI).
Last week, the preliminary flash PMI for May came in at 49.7, beating Bloomberg’s consensus of 48.3.
Tuesday, May 27, 2014
Just How Weak is the U.S. Economy? / Economics / US Economy
By: Michael_Pento
The Bureau of Economic Analysis (BEA) recently reported that Q1 GDP was only 0.1% in the United States. Most of that anemic number was blamed on worse-than-usual weather. But it should be noted that if our government accurately accounted for inflation, it would be clear to all that economic growth didn't just stall at the start of 2014; but rather it contracted sharply. And if our economy can be thrown into a tailspin by a few snow storms, it is an economy that simply has not recovered from the Great Recession--which supposedly ended five years ago.
Tuesday, May 27, 2014
Natural Disasters Don’t Increase Economic Growth / Economics / Economic Theory
By: Frank_Hollenbeck
Hurricane season is nearly upon us, and every time a hurricane strikes, television and radio commentators and would-be economists are quick to proclaim the growth-boosting consequences of the vicissitudes of nature. Of course, if this were true, why wait for the next calamity? Let’s create one by bulldozing New York City and marvel at the growth-boosting activity engendered. Destroying homes, buildings, and capital equipment will undoubtedly help parts of the construction industry and possibly regional economies, but it is a mistake to conclude it will boost overall growth.
Monday, May 26, 2014
U.S. Retail Economic Death Rattle Grows Louder / Economics / US Economy
By: James_Quinn
The definition of death rattle is a sound often produced by someone who is near death when fluids such as saliva and bronchial secretions accumulate in the throat and upper chest. The person can’t swallow and emits a deepening wheezing sound as they gasp for breath. This can go on for two or three days before death relieves them of their misery. The American retail industry is emitting an unmistakable wheezing sound as a long slow painful death approaches.