Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Thursday, November 20, 2008
UK Real Retail Sales Deflationary Trend Continues / Economics / UK Economy
By: Nadeem_Walayat
The official monthly retail sales data again demonstrated the inbuilt trend inaccuracy by reporting just a 0.1% drop for October 2008, up 2% on the year and in the face of the UK economy slumping fast into recession. Whilst the mainstream media mistakenly jumps on the smaller than expected decline, I refer readers to the two graphs below, one of the official retail sales data and the second of the inflation indexed and trend adjusted retail sales which more accurately reflects the current true state of distressed retailers than the month to month gyrations of official data that proves so confusing to mainstream market watchers. Read full article... Read full article...
Thursday, November 20, 2008
Hyperinflation to Follow Deflationary Debt Unwind / Economics / Stagflation
By: Eric_deCarbonnel
In the investor community, there currently exists the belief that hyperinflation is impossible because of the deflationary debt unwind now underway. However, this logic is based on the flawed assumption that the money supply is the only important factor when determining inflation or deflation. This ignores the fact that for nations heavily dependent on foreign imports, like the US and Iceland, the purchasing power of the currency is the most important determinant of inflation/deflation. Read full article... Read full article...
Thursday, November 20, 2008
Falling Consumer Prices Good or Bad News for Consumers? / Economics / Inflation
By: Paul_L_Kasriel
Thursday the BLS reported that the Consumer Price Index (CPI) fell by 1.0% both seasonally adjusted as well as unadjusted. On an unadjusted basis, this was the largest monthly decline in the CPI since January 1938 (see Chart 1). Some journalists and some economists are exclaiming that these falling consumer prices are "good" for consumers. Are they? Read full article... Read full article...
Thursday, November 20, 2008
Explanation of the Price Effects of Inflation and Deflation / Economics / Inflation
By: EWI
The U.S. Labor Department reported a 1 percent drop in the consumer price index for October 2008. The drop marked the largest decline in 61 years, and it was the first decline in that measure in nearly a quarter of a century. The 1 percent drop was twice as large as many mainstream analysts had forecast. Such a large decline in consumer prices is forcing U.S. policymakers to rethink the possibility of deflation in America. For more on deflation, we turn to Robert Prechter, the man who literally wrote a book on how to survive it.Read full article... Read full article...
Wednesday, November 19, 2008
China's Stimulus Package Suggests Good Long-term Economic Prospects / Economics / China Economy
By: John_Browne
As Peter Schiff and I have long warned, America's reliance on borrowing and consumption to fuel economic activity would result in the wholesale destruction of national wealth. Until recently, the dissipation was largely invisible to most consumers. However, the ongoing plunge in real estate and equity prices and newly released statistics concerning retail sales, consumer confidence and employment have now made it plain to most Americans that their own wealth has been seriously, and perhaps permanently, degraded. In response, they are now hoarding cash and reevaluating their spending habits. Read full article... Read full article...
Wednesday, November 19, 2008
U.S. Consumer Price Index (CPI) Largest Decline Since 1947 / Economics / Inflation
By: Joseph_Brusuelas
The October estimate of consumer price index declined -1.0% (-0.961%) m/m and was up 3.7% y/y. The core ex-food and energy estimate fell -0.1%(-0.071%) m/m and is up 2.2%. The ex-food estimate saw a sharp drop of -1.2% m/m and the ex-energy component was flat for the month. Energy prices dropped -8.6% and prices in the services sector were also flat for the month.Read full article... Read full article...
Wednesday, November 19, 2008
The Road to Financial Ruin: Unrestrained Government Spending / Economics / US Debt
By: Axel_Merk
When just about all economists agree, should we rejoice or be scared? During the Weimar Republic, economists at the Reichsbank argued that printing money to finance a war was “exogenous” to the economy and thus not inflationary. Hyperinflation in the ensuing years proved them wrong. We tend to think we are so much smarter today. Economists know how to run regression models; in the absence of a historic precedent, some economists know how to draw shifting supply and demand curves. But common sense seems to be missing in the toolbox of all but a few. Read full article... Read full article...
Wednesday, November 19, 2008
Reasons for Economic Optimism Despite G20 Summit Failure / Economics / Global Economy
By: Money_Morning
Martin Hutchinson writes: The gathering of 20 largest industrial countries in Washington this past weekend – billed as a crucial G20 summit – turned out to be a rather dull scrum.
There were promises of a coordinated approach to bank regulation, additional economic stimulus packages, and increased allocations for the International Monetary Fund (IMF) –one of the five “ aftershock-investing ” opportunities Money Morning has counseled readers to watch for. But none of the G20 meeting proposals seemed even remotely likely to make a difference in the here and now.
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Tuesday, November 18, 2008
Spreading Global Recession Signals Caution for Investors / Economics / Recession 2008 - 2010
By: Money_and_Markets
Tony Sagami writes: In 1944, our country had recently emerged from the Great Depression and was in the middle of World War II when 730 delegates from 44 Allied nations met in Bretton Woods, New Hampshire.
Those global leaders had come together to develop a monetary system to govern the financial relationships between the world's largest economies.
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Tuesday, November 18, 2008
G20 Central Banks Unite to Fight Economic Depression / Economics / Economic Depression
By: Gary_Dorsch
Can Central Bankers Prevent the Great Depression?
Amid the worst financial crisis and market meltdowns since the 1930's, the world's top-20 central bankers and finance ministers are busy at work, inflating the world's money supply, slashing lending rates, and crafting stimulus packages, in order to prevent a normal recession from morphing into a Great Depression. The ECB has cut interest rates by 100-basis points to 3.25% since early October, and is telegraphing another 50 basis point cut at the next policy meeting in December.
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Tuesday, November 18, 2008
Producer Price Inflation Biggest Drop On Record / Economics / Inflation
By: Mike_Shedlock
Bloomberg is reporting Producer Prices Fall Most on Record . Yields on 10-year notes touched the lowest in more than three weeks as a slumping economy raised the specter of deflation. Oil reached a 22-month low. China surpassed Japan as the largest foreign holder of Treasuries, easing concern that global investors will stop buying U.S. debt as the government funds a record budget deficit.
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Tuesday, November 18, 2008
UK Inflation CPI Falls Sharply as Economy Heads for Deflation / Economics / US Economy
By: Nadeem_Walayat
UK inflation as measured by the CPI slumped by the largest amount since the series began in 1997, falling from 5.2% to 4.5%. This follows hard on the heels of the Bank of England's panic 1.5% interest rate cut earlier in the month which was accompanied by BOE statements that UK economy would contract by 2% GDP during 2009, that puts the UK on target to experience a worse recession than that of the early 1990's as Gordon Browns boom turns to bust. The RPI measure which the BoE also warned was heading towards deflation i.e. a negative RPI during 2009 fell sharply from 5% to 4.2%.Read full article... Read full article...
Tuesday, November 18, 2008
U.S. Treasury the Final Bailout / Economics / Credit Crisis Bailouts
By: Money_and_Markets
Martin Weiss writes: We have come to a major crossroads in the history of our nation, a time when you must understand all the relevant events in far greater depth, and see the likely future with far greater clarity.
Indeed, I feel this need is so critical and urgent, I am providing you this morning with the most elaborate gala issue in the history of Money and Markets .
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Tuesday, November 18, 2008
Worse than the Great Depression? / Economics / Economic Depression
By: Stephen_Lendman
It's a minority but growing view, including from 86-year old former Goldman Sachs chairman, John Whitehead, at the November 12 Reuters Global Finance Summit in New York. As disturbing evidence mounts, he said: "I think it would be worse than the depression. We're talking about reducing the credit of the United States of America, which is the backbone of the economic system. I see nothing but large increases in the deficit, all of which are serving to decrease the credit standing of America. Read full article... Read full article...
Saturday, November 15, 2008
End of the Era of Big Consumer Spending / Economics / US Economy
By: Michael_J_Panzner
Friday morning, the Commerce Department announced that October retail sales fell 2.8%, the fourth straight drop and the worst one-month decline since records began in 1992. Stripping out sales of autos and gasoline, the year-over-year total rose just 1.5%, less than the rate of inflation and the worst 12-month rate of change since February 2003. Read full article... Read full article...
Saturday, November 15, 2008
Economic Forecasts and Analysis For U.S. Financial Markets (Nov 17-21) / Economics / US Economy
By: Joseph_Brusuelas
The week ahead in financial markets will see a modest quantity of data that will hit the tapes largely on Thursday and Friday. The major market moving events will be the Friday release of the October advance retail sales data and the Thursday release of the US Trade Balance, Jobless Claims and the US Budget Statement. On Friday in Frankfurt Germany, Fed Chair Bernanke and ECB President Trichet will lead a cast of global central banking all-stars that will address monetary policy within the current global financial crisis. Read full article... Read full article...
Friday, November 14, 2008
Goldilocks Economy Turns into the Humpty Dumpty Economy / Economics / Recession 2008 - 2010
By: Peter_Schiff
Before the current economic crisis became apparent to all, the most popular fable used to describe America's uncanny economic resiliency was the story of Goldilocks. It was argued that our economy was skipping down a sunny path of moderate growth, low inflation and rising asset prices. However, a much better parable for our economy over the last decade would have been the story of Humpty Dumpty: a bloated, fragile shell perched on the top of a dangerously high stone wall. Read full article... Read full article...
Friday, November 14, 2008
Consumer Spending Cutbacks Further Erode Retail Payrolls / Economics / Recession 2008 - 2010
By: Ashraf_Laidi
The attached chart shows the deepening implications of falling retail sales on retail sector payrolls, highlighting the deteriorating role of the US consumer, especially as Democrats dampen hopes of any additional stimulus package before year-end.US Retail sales fell 2.8% in October vs expectations of a 2.1% decline, following a revised drop of 1.3%. Read full article... Read full article...
Friday, November 14, 2008
U.S. Retail Sales Hit Record Low as Economy Heads for Sharp Contraction / Economics / Recession 2008 - 2010
By: Joseph_Brusuelas
Advance retail sales for the month of October declined -2.8% m/m and are down -3.3% y/y/. The core ex-autos estimate fell -2.2% m/m and is up 1.7% y/y. On a monthly basis ex-gas was down -1.5%, ex-autos and building materials have fallen -2.4%, ex-autos and gas -0.5% and ex-good service -3.1%. On a three month annualized basis sales in the retail and food service sector have fallen -10.9% with the ex-auto estimate down -7.4%.Read full article... Read full article...
Thursday, November 13, 2008
Baltic Dry Index The Only Economic Indicator Worth Tracking / Economics / Global Economy
By: Investment_U
Louis Basenese writes: Forget unemployment. Inflation. Consumer confidence. Personal Incomes…
You can even ignore the ever-popular gross domestic product (GDP).
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