Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Friday, November 30, 2007
The Era of Credit Driven Consumer Spending Comes to an End / Economics / US Economy
By: Peter_Schiff
In an article this week that examined the troubles brewing in Citigroup's mortgage business, the Wall Street Journal focused on Natalie Brandon, a 51 year old married woman from Granada Hills, CA, who is currently unable to make the payments on her $625,000 adjustable rate home loan from Citigroup, despite the fact that the rate will not even reset higher until June of next year. Amazingly, the Journal reported that Mrs. Brandon bought the house in 1985 for just $105,000, but had chosen to refinance five times over the past seven years, borrowing more than $500,000 and spending every single penny. While this may be an extreme example of American profligacy, it is by no means unique. Unfortunately this type of behavior typifies everything that is wrong with the modern American economy.Read full article... Read full article...
Thursday, November 29, 2007
US Fed Behind the Economic and Housing Curve / Economics / US Economy
By: Jim_Willie_CB
The US Federal Reserve is behind the curve. Great consequences have resulted and are likely to continue to result. Many words can be used to describe this group. What come to mind are inept, compromised, corrupted, distracted, ill-trained, but also clueless, deceptive, myopic, overly cautious, and off the market in their focus. When they remain transfixed on economic growth versus price inflation, they are stuck in the past, in a world that no longer exists. The corrupt spew of fraudulent mortgage bonds disseminated throughout the investment community has both crippled the banking system from profound distrust, and inhibited the USEconomy from credit supply fraught with obstacles. With their irresponsibly slow reaction to significant threats to the entire economic and financial system, the hapless USFed has put several things at grave risk. Since mid-September, the USFed has cut the official rate twice by a total of 75 basis points (0.75%), and reduced the discount rate. Read full article... Read full article...
Wednesday, November 28, 2007
United States Diseased Monetary Bloodstream / Economics / Money Supply
By: Professor_Emeritus
Invited Address Delivered on November 18, 2007, in Torrance, California, to a Joint Session of the Positive Deviant Network and the Flight to Genius movement:
Dear Fellow Deviants, Dear Fellow Travelers standing by for the next flight to Genius, Ladies and Gentlemen: Synergy Be With You!
One of the truly spectacular sights is from the airplane as it makes its approaches to Los Angeles International Airport at dusk. Down below is the illuminated “live” map of Los Angeles with its winding and intersecting freeways, with an endless flow of white headlights and an opposite flow of red tail-lights. It reminds me of the human bloodstream with its flow of white and red blood corpuscles. As I was flying in the other day I could not help but contemplate that possibly just a handful in a million people down there may realize what a fatal year 2007 has been, as the rest are completely oblivious to the great dangers awaiting the world on this Thanksgiving Day.
Read full article... Read full article...
Tuesday, November 27, 2007
Leading Indicators: Part 1- U.S. Economic Health is Weakening / Economics / US Economy
By: Donald_W_Dony
After almost five years of easy continuous expansion, the cracks are beginning to show in the U.S. economy. From a failing U.S. dollar to deep investor fears in the housing market to ever louder concerns over the twin deficits. This article examines three key indicators and their implications in 2008. Read full article... Read full article...
Tuesday, November 27, 2007
The Red Queen US Economy / Economics / US Economy
By: Paul_Petillo
"Well, in our country," said Alice (of Lewis Carroll's "Through the Looking-Glass" fame), still panting a little, "you'd generally get to somewhere else — if you run very fast for a long time, as we've been doing."
"A slow sort of country!" said the Queen. "Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!"
Read full article... Read full article...
Monday, November 26, 2007
US Recession Avoidable - The Falling US Dollar and the US Economy / Economics / US Economy
By: Gerard_Jackson
What a week that was. Australia's conservative government gets thrashed by a bunch of unioncrats, lefty journalists and an economic illiterate with intellectual pretensions while at the same time as the US dollar goes high diving. These are certainly interesting times.Read full article... Read full article...
Monday, November 26, 2007
Market Fundamentalism and the Tyranny of US Monetary System / Economics / Money Supply
By: Richard_C_Cook
Recommendations for Reform of the US Monetary System
We hold these truths to be self-evident, that all men are created equal,
that they are endowed by their Creator with certain unalienable rights,
that among these are life, liberty and the pursuit of happiness.
1. What We Must Do Today
“Life, liberty, and the pursuit of happiness” are, or should be, the fruits of democracy. But the political democracy defined by the Declaration of Independence and the Constitution has not been achieved because economic democracy has not been achieved. The attainment of real economic democracy is the next task for the American people.
Monday, November 26, 2007
UK Inflation Forecast 2008 (RPI and CPI) / Economics / Inflation
By: Nadeem_Walayat
The recent up tick in UK inflation has sparked inflation concerns to continue going into 2008. However the Market Oracle anticipated the recent up tick as a consequence of money supply growth earlier in the year as an indicator of future inflation and that the up tick would prove temporary as many factors converge towards deflationary pressures during 2008 that will allow the Bank of England to start cutting UK interest rates towards a target of 5% before the decline in UK inflation starts and for UK inflation to subsequently fall towards the Market Oracle targets of 3% RPI and 1.8% CPI towards the end of 2008.
The following analysis presents some of the key factors that will result in the fall in UK Inflation during 2008.
Read full article... Read full article...
Tuesday, November 20, 2007
Is the US Economy Facing a Credit Crunch? / Economics / US Economy
By: Gerard_Jackson
Every time an economic crisis seems to be on the horizon you can bet your last dollar that scores of advisers will be warning that a drop in consumer confidence will cause a fall in consumer demand which will drive the economy into recession. For the umpteenth time, business spending drive the economy and not consumption. The Bureau of Economic Analysis now includes intermediate goods in its calculations, producing what it calls “gross output”. This figure shows business spending at about 50 per cent of aggregate spending. My own calculations put total spending at about $30 trillionRead full article... Read full article...
Monday, November 19, 2007
Australia’s Plummeting Unemployment: Miracle or Good Economics? / Economics / Austrailia
By: Gerard_Jackson
Australia’s seems to be facing the happy prospect of unemployment falling to 4 per cent or less. What was once thought to be impossible has become the mundane. How can this be? We have been told year after year that the jobless were doomed to be always with us because it would require a savage cut in real wage rates to restore full employment (Gittins Gregory). Therefore it would not only be heartless to cut real wages but also suicidal. I said at the time that this view was absolute rubbish. Time has once again proved me correct.Read full article... Read full article...
Saturday, November 17, 2007
Real US Inflation is 6% Not 2% Implying Stagflation / Economics / Inflation
By: John_Mauldin
In this issue:
- How do You Spell Stagflation?
- Cooking the Inflation Books
- Gaming the Producer Price Index
- Consumer Spending is Up, but then Again, It May Be Down
- A Two Dimensional Problem
- Saudi Justice
- New York, Toronto, Europe and Thanksgiving
This week we look at inflation. Is it just over 2%, giving the Fed room to cut rates, or will it be closer to 4% by the next FOMC meeting, making a rate cut problematic? How do they get those numbers? When and how can two opposite things be true at the same time? The answer depends on how many dimensions you are living in when you are asking the question. The Fed is going to be faced with a very difficult decision at its next meeting, and there results of there deliberations will be felt by you.
Read full article... Read full article...
Friday, November 16, 2007
US Is a Nation of Subprime Consumers - Foreign Exporters To Reduce US Exposure / Economics / UK Economy
By: Peter_Schiff
When home prices skyrocketed in the early part of this decade, everyone seemed to forget that the subprime borrowers were high risk by definition. Now that losses are snowballing, lenders are belatedly rethinking the “wisdom” of making such loans in the first place. Similar conclusions will soon be reached by foreign nations that have supplied American consumers with goods that they can not afford. In reality, America is a nation of subprime consumers.Read full article... Read full article...
Friday, November 16, 2007
Small Businesses Join Big Businesses and Households In Their US Economic Pessimism / Economics / US Economy
By: Paul_L_Kasriel
The Small Business Optimism Index, which is tallied by the National Federation of Independent Business, dropped 1.1 points in October to a level of 96.2. As shown in Chart 1, this October level is below levels that prevailed just before the past two recessions. Charts 2 and 3 show qualitatively similar results for large corporation CEOs and for the little people – households. It seems as though just about everyone is as or more pessimistic about the economic landscape as they were just prior to the past two recessions. Everyone, that is, except the stock jockeys today. I wonder what Kool-Aid they are drinking.Read full article... Read full article...
Thursday, November 15, 2007
Impact of Immigration on Economic Growth Jobs and Housing / Economics / Immigration
By: Gerard_Jackson
The charge that immigration destroys jobs is a common economic fallacy. On the surface it appears as an obvious truism that if a country has a high level of unemployment then increasing immigration can only cause more unemployment. Obvious but false. This fallacy is based on the lump-of-labour fallacy that assumes a fixed amount of work. The same fallacy lies behind the belief that technology causes unemployment. Read full article... Read full article...
Thursday, November 15, 2007
US October Retail Sales Growth Slows Whilst PPI Inflation Shows Small Rise / Economics / US Economy
By: Paul_L_Kasriel
Retail sales rose 0.2% in October, following a revised 0.7% gain in the prior month. Excluding autos and gasoline , retails sales edged up 0.1% during October after a 0.2% increase in the prior month. The component of retail sales which excludes autos, gas , and building materials, often used to gauge underlying strength of consumer spending, held steady in October following a 0.2% gain in the prior month. The August reading (-0.4% now vs. 0.0 original estimate) of this measure shows a downward revision, which points to a downward revision of consumer spending in the third quarter. Each of these measures sends a convincing message of soft retail sales.Read full article... Read full article...
Thursday, November 15, 2007
China Inflation Problem A Result of Policy of Support for the US Dollar / Economics / China Economy
By: Paul_L_Kasriel
China's inflation problem will continue as long as the U.S. dollar remains under downward pressure and the Chinese policy is to cushion the greenback’s decline. Chart 1 illustrates the result of China’s inflation problem – i.e., rising prices for goods/services, financial assets and real assets. Chart 2 illustrates the reason for China’s inflation problem – i.e., excessive credit creation by the People’s Bank of China (PBoC), the Chinese equivalent of the U.S. Federal Reserve.Read full article... Read full article...
Thursday, November 15, 2007
Bank of England Warning Over UK Economy - Stagflation Risk During 2008 / Economics / UK Economy
By: Nadeem_Walayat
Mervyn King, the Bank of England Governor belatedly recognised that the credit crunch is likely to strongly impact the UK Economy during 2008 resulting in a sharp slowdown accompanied by rising inflation going into 2008.Read full article... Read full article...
Thursday, November 15, 2007
Credit Crisis Meltdown Is a Prelude to Global Economic Depression / Economics / Recession
By: Christopher_Laird
Monster Western credit crisis – prelude to a depression
- The present contraction of credit
- Gold in this situation
Present contraction of credit
The West (US,EU, Canada) is in the midst of a gigantic and spreading credit crisis that may well to lead it into a depression, if it is not fixed soon. So far, Central bank infusions (Over $1trillion worth in a few months since July!) have been the only thing that has stopped a massive bank liquidity crisis from shutting down commerce. But the damage to credit markets thus far is so huge, and worsening rapidly, that a very bad outcome seems assured. Gregory Peters of Morgan Stanley said there is a better than 50% chance of a systemic banking crisis that will hammer credit markets at this time.
Wednesday, November 14, 2007
Inflation Expectations Are Expected To Soar During 2008 / Economics / Inflation
By: Jordan_Roy_Byrne
It has been over month since my last editorial, “2008-2009: Rising Inflation Expectations Amidst an Inflationary Storm.” Since then commodities have continued to soar while the stock market has struggled in the wake of the ongoing credit crisis. It now appears that a decoupling between commodities and stocks is starting to take place. Such a decoupling is a catalyst for rising inflation expectations. Read full article... Read full article...
Wednesday, November 14, 2007
United States Living on Borrowed Time As Housing Bust Could Bankrupt Mortgage Insurers / Economics / US Economy
By: Mike_Whitney
On Monday, Asian stock markets took another drubbing on fears that the credit squeeze which began in the United States would continue to worsen in the months ahead. Every index from Tokyo to Sidney fell sharply continuing the “self-reinforcing” vicious cycle of losses started last week on Wall Street. The Nikkei 225 average fell 3.3%, India's Sensex dropped 2.9%, Taiwan tumbled 3.5%, and Hong Kong's Hang Seng slumped a whopping 4.5%. The subprime tsunami is presently headed towards downtown Manhattan, where nervous traders are already hunkered-down in the trenches---ashen and wide-eyed-- awaiting the opening bell. Local supermarkets reported an unexpected early–morning run on Valium and Tylenol. Good thinking. Read full article... Read full article...