Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Tuesday, July 08, 2008
Bursting Bubbles Mean Inflation to Give Way to Deflation / Economics / Deflation
By: John_Mauldin
There is a reason I call this column Outside the Box. I try to get material that forces us to think outside our normal comfort zones and challenges our common assumptions. And this week's letter does just that. I have made the comment more than once that is it unusual for two major bubbles to burst and for the conversation and our experience to be rising inflation and not a serious problem with deflation.
Van Hoisington and Dr. Lacy Hunt give us a seminar on why it will be deflation that will ultimately be the problem and not the current inflation we are dealing with today. This week's letter requires you to think, but it will be worth the effort. Remember our lesson from Economics 101. If you raise the supply of something, in normal markets the price goes down. And if you increase the price, suppliers will respond by producing more.
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Sunday, July 06, 2008
UK Economy Slams Into Reverse as Retailers Experience Sales Hell / Economics / UK Economy
By: Mike_Shedlock
The Independent is reporting Seven days that shook the British high street . It was a week that most retailers would probably prefer to forget – seven days that shook the high street. From the grandest names to the most minor, the news has been uniformly grim. Yesterday, the mighty John Lewis reported that its sales are running 9 per cent down on last year. Marks & Spencer, still Britain's leading clothes retailer, warned on Wednesday of sharply lower sales and profits, and promptly saw a quarter of its stock-market value wiped out.
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Friday, July 04, 2008
US Metalworking Business Index Trends Point to Economic Contraction / Economics / UK Economy
By: Mike_Shedlock
Steve Kline who produces the Metalworking Business Index survey, shared an email with me from a correspondent who wanted to raise capital to expand, but could not get the loan. Let's take a look.
Steve,
Friday, July 04, 2008
Global Inflationary Pressures: No End in Sight / Economics / Inflation
By: Salman_Khan
Inflationary pressures, coming at a time when there are palpable signs of economic slowdown, has been spooking the global Governments, policymakers, financial authorities and marketmen alike. Worldwide, prices of commodities like Crude Oil, Wheat and Rice have skyrocketed in last one year or so. Policymakers have been especially finding themselves helpless in present situation due to the "global" nature of the current inflation. Central Bankers are also in a fix as given the slowdown in economic activity, they won't be able to fight the inflation the way Volcker did by aggressively raising the interest rates back in 1970's. Stagflation is extremely difficult for conventional policy instruments to deal with, since the attempt to deal with any one of the problems tends to exacerbate the other.Read full article... Read full article...
Friday, July 04, 2008
US Jobs Report Less than Expected; Based on BLS Statistical Assumptions / Economics / US Economy
By: Mark_OByrne
Gold was down $12.90 to $931.90 in New York yesterday and silver closed at $18.28, down 5 cents. Gold remained at these levels in Asia but has fallen near to yesterday's lows in early trading in Europe. Oil has fallen marginally < $144.40 down 0.6% - Light Sweet Crude Oil Future - Combined - AUG08> and the dollar is flat after yesterday's strong gains.Read full article... Read full article...
Thursday, July 03, 2008
US Jobs Decline for 6th Consecutive Month Data / Economics / US Economy
By: Mike_Shedlock
Before taking a look at the monthly jobs data, let's take a look at weekly claims. The US Department of Labor is reporting Initial Unemployment Insurance Claims continue to rise.
Seasonally Adjusted
In the week ending June 28, the advance figure for seasonally adjusted initial claims was 404,000, an increase of 16,000 from the previous week's revised figure of 388,000. The 4-week moving average was 390,500, an increase of 11,250 from the previous week's revised average of 379,250.
Thursday, July 03, 2008
US Economy Experiencing Wage Price Deflation Spiral / Economics / US Economy
By: Mike_Shedlock
The deflation train picks up steam as AirTran Asks Employees To Take "Temporary" Pay Cuts . On Wednesday, AirTran Holdings asked for temporary wage concessions from all of its employees, TradeTheNews reported. AirTran will ask all workers to accept pay cuts between 5% and 13%, and officers will take a 15% cut, effective in August, for six months.
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Wednesday, July 02, 2008
GLOBAL INFLATION: The Next Major Obstacle to Economic Growth / Economics / Inflation
By: Aden_Forecast
One thing we find truly amazing about the markets is that they're much more than just investments. Markets provide a way of peeking into the future, if you understand what they're trying to tell you.
These lessons are ongoing but it's fascinating and like a giant puzzle.
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Wednesday, July 02, 2008
Fed Stuck in Neutral on Monitory Policy Response to Stagflation / Economics / Stagflation
By: John_Browne
On June 25th , the Fed made no changes in its key interest rates and issued a statement that underscored how narrow their room for maneuver had become. Caught between the opposing forces of economic contraction and inflation, the Fed revealed that it was locked in neutral. Given that the Fed must use opposite remedies to satisfy the demands of its dual mandate (higher rates to curb inflation and lower rates to stimulate growth), the Fed is stuck firmly in neutral. There appears to be nothing left to do except to talk and hope for the best. Read full article... Read full article...
Wednesday, July 02, 2008
US Downward Economic Spiral in Employment Market / Economics / US Economy
By: Mike_Shedlock
The New York Times is reporting Deepening Cycle of Job Loss Seen Lasting Into '09 .
Plummeting home prices have in recent months eliminated jobs for hundreds of thousands of people, from bankers and real estate agents to construction workers and furniture manufacturers.
“The labor market is clearly deteriorating, and it's highly likely to keep deteriorating,” said Andrew Tilton, an economist at Goldman Sachs. “It's clear that the housing downturn and credit crunch are still very much under way. Clearly, there are more jobs to be lost in housing, finance and construction — hundreds of thousands of more jobs to be lost collectively.”
Wednesday, July 02, 2008
The Deadly Economic Force of Debt Deflation / Economics / Deflation
By: Dr_William_R_Swagell
Crunch Time for Debt - “Consumer boom shows US out of the woods... Despite the jump in energy prices and the related collapse in measures of consumer confidence, retail sales rose by 1.1 per cent on the month, the strongest gain since November...If there were going to be a US recession in response to the credit crisis, it would have started by now. So let me stick my neck out and say without qualification the US is out of the woods.” Anatole Kaletsky , The Times June 18th 2008.
Thank Heaven for the resilient US consumer, soldiering on stoically under an enormous burden of debt.
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Wednesday, July 02, 2008
Global Recession Gathers Pace as Euro zone Manufacturing Contracts / Economics / Euro-Zone
By: Mike_Shedlock
The global recession is picking up steam. The US is in contraction, U.K. Manufacturing Is In Contraction , and now Euro zone manufacturing activity is in contraction .
The euro zone's purchasing managers' index (PMI) for the manufacturing sector, compiled by data and research group Markit, slid to 49.2 points in June, from 50.6 in May, up slightly from an initial estimate of 49.1.
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Tuesday, July 01, 2008
Gold Standard University Live: R.I.P. / Economics / Fiat Currency
By: Professor_Emeritus
Farwell Address: The Inaugural Session of GSUL took place in February, 2007, at the Martineum Academy in Hungary. Subsequent sessions, including one in Dallas, Texas, showed a healthy increase in attendance, on average by fifty percent. Still, I am now forced to announce that Session Four in Hungary in July, and Session Five in Canberra, Australia in November will be the last. GSUL will fold tent as its sponsor, Sprott Asset Management, Inc., has withdrawn its financial support. Mr. Eric Sprott said in his letter that “we weren't attracting enough interest to justify that ongoing expenditure”. Read full article... Read full article...
Tuesday, July 01, 2008
UK Manufacturing Output Contracts Sharply as House Prices Plunge / Economics / UK Economy
By: Mike_Shedlock
Yesterday I reported Deflationary Hurricanes to Hit U.S. and U.K. Confirmation that the U.K. is about to follow the U.S. in recession is at hand.Bloomberg is reporting U.K. Manufacturing Contracts Most Since 2001 .
U.K. manufacturing contracted in June by the most since 2001, a sign higher credit costs and soaring commodity prices are bringing the economy closer to a recession.
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Tuesday, July 01, 2008
Its Inflation NOT Deflation, US Heading for Sharply Higher Interest Rates / Economics / US Interest Rates
By: David_Petch
It is the end of the week and the start of a long weekend up here in the Great White North, so today's commentary will be brief. Oil climbed overnight to peak at $141.71/barrel and this is likely not set to slow down yet until something breaks. Continue to stock up on dry goods such as rice, whole-wheat flour, powdered milk, brown sugar etc. because prices are going much higher. Many of the countries around the globe with currencies pegged to the US dollar have been forced to depreciate them via interest rates and fiat expansion to keep at a preset level. This has caused prices to rise higher than anticipated and many such nations are being forced to raise interest rates. Read full article... Read full article...
Monday, June 30, 2008
Regional Velocity of Inflation a Consequence of US Trade Deficit / Economics / Inflation
By: John_Mauldin
I mentioned in last Saturday's letter a report by Louis Gave of GaveKal fame on whether inflation may be waning and its importance. Louis gave me permission to use it as this week's Outside the Box. It is typical of the thoughtful analytical work they do.
Louis and his partners and associates at GaveKal write some of the more thought-provoking material I read. They really challenge my position on numerous matters, causing me to look at many items from a different view. That of course, makes this particular piece good for Outside the Box. Whether you agree or disagree, you need to know why you hold a position. If you can't articulate the "against," how can you be sure you truly understand the "for"?
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Monday, June 30, 2008
Deflationary Debt Deleveraging Hurricanes to Hit US and UK / Economics / Deflation
By: Mike_Shedlock
Congratulations (of sorts) go to the UK as British household debt is highest in history . British households are now more indebted than those of any other major country in recorded history, it has emerged.
Families in the UK now owe a record 173pc of their incomes in debts, official figures have shown. The ratio of debt to income is higher than any other country in the Group of Seven leading industrialised economies, and is sharply higher than the 129pc of incomes it was five years ago.
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Monday, June 30, 2008
Economic Forecasts and Analysis For US Financial Markets (June 30-July 4) / Economics / US Economy
By: Joseph_Brusuelas
The country may be celebrating its independence, but the markets will see a week of very important data and an address on the financial crises and the economy from the Fed and US Treasury. The major events of the week will be the publication of the June non-farm payrolls report on Thursday. Wednesday will see an address on the economy by US Treasury Secretary Paulson and a talk on the current global financial disruption by FOMC Gov. Mishkin. Read full article... Read full article...
Saturday, June 28, 2008
The Slow Motion Recession, Inflation, Deflation and Stagflation / Economics / Stagflation
By: John_Mauldin
"We appear to be entering a period of serious stagflation with sharply rising expected and actual inflation combined with large downside risks to growth and employment."
"I would argue that what we are seeing is an acceleration of expected consumer price inflation in the context of a sharp expansion in global liquidity. It is hardly surprising that the prices of those commodities, such as oil, for which the short-run price elasticities of supply and demand are low move upwards strongly when there is a rise in expected general inflation.
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Friday, June 27, 2008
World Recession 2009 as a Result of Peak Oil / Economics / Recession
By: Brian_Bloom
Whilst most people are vaguely aware that oil is important to the world economy, few understand the true impact of the recent rise in the oil price.
In 1998 the heads of state of the USA and Australia failed to ratify the Kyoto protocols. They were trying to protect their country's economies. Ironically, they engineered a situation where not only is the US economy under greater threat than it would have been had our leaders ratified the protocols, the entire world economy is now seriously threatened.
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