Category: US Economy
The analysis published under this category are as follows.
Friday, July 12, 2013
U.S. Economic Tide Has Turned, Market Implications / Economics / US Economy
By: Puru_Saxena
The world’s economic landscape is changing and after a disastrous decade, America is once again in the driver’s seat. Contrary to the 2000-2011 time frame (when the developing nations fared a lot better than America), the tide seems to have turned in favour of the world’s largest economy.
As you will recall, at the turn of the millennium, American business was booming and Wall Street was caught up in an epic technology bubble! Back then, American assets were highly sought after and even its currency was extremely strong. Unfortunately, that period of prosperity did not last forever and the bursting of the technology bubble in March 2000 ushered in an era of painful adjustment. Thereafter, in the aftermath of the NASDAQ bust, Mr. Greenspan helped ignite America’s housing boom and we all know how that story ended. To make matters worse, the US Dollar also topped out in 2001 and for almost 10 years, holders of American assets also suffered due to currency devaluation.
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Tuesday, July 02, 2013
Can Bernanke Brake Without Derailing U.S. Economic Recovery? / Economics / US Economy
By: Frank_Shostak
According to most commentators, reducing monetary stimulus and winding down the balance sheet of the Fed without major economic disruptions is going to be a major challenge for US central bank policy makers. On Wednesday, June 19 Fed Chairman Ben Bernanke, said that given an improved outlook on the economy, the US central bank may moderate the pace of monetary pumping. According to Bernanke, by mid-2014 the Fed may even end the purchasing of assets.
Monday, July 01, 2013
Obama Finds A New Way to Strangle US Economy / Politics / US Economy
By: Money_Morning
Martin Hutchinson writes: The scary question is, is he continuing to wound this recovery on purpose or by accident?
And which answer is worse?
Last Tuesday, President Obama announced his "Action Plan on Climate Change."
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Saturday, June 29, 2013
Dismal U.S. Consumer Spending to Drag U.S. Back into Recession / Economics / US Economy
By: Profit_Confidential
Michael Lombardi writes: While the mainstream economists were quick to believe that the U.S. economy is growing as the key stock indices suggest, I stood by my opinion that it isn’t.
After the first estimates of gross domestic product (GDP) for the U.S. economy came out, a wave of optimism struck and stock markets rallied. It seemed as if everything was headed in the right direction.
Thursday, June 27, 2013
Real Disposable Income Collapse at 2008 Crisis Rates / Economics / US Economy
By: Graham_Summers
The biggest single most important item in the GDP report yesterday was the collapse in disposable income for Americans.
Most investors will focus on the drop in GDP growth for 1Q13 and view it as opening the door for the Fed to continue with QE 3 and QE 4 without any tapering in sight.
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Thursday, June 27, 2013
Single Largest Driver of the US Economy is About to Collapse / Economics / US Economy
By: Graham_Summers
The markets continue their dead cat bounce while the economic data worsens.
First quarter US GDP was revised down from an annual rate of 2.4% to 1.8%. The drop was due to lower personal consumption expenditures than initially forecast.
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Thursday, June 13, 2013
S&P Credit Ratings Agency Upgrades U.S. Economic Outlook - Wrong Again! / Economics / US Economy
By: Money_Morning
Martin Hutchinson writes:
If you're not familiar with the term "putting lipstick on a pig," well I think there is an apt example at play again from the people who seem to be experts at applying the lipstick.
Standard and Poor's this week raised the outlook for the U.S. credit rating from "negative" to "stable," citing reduced fiscal risks and policymakers' willingness to sustain growth.
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Wednesday, June 12, 2013
What’s Really Holding Back the U.S. Economy / Economics / US Economy
By: InvestmentContrarian
Sasha Cekerevac writes: There continues to be much speculation over when the Federal Reserve will begin to reduce its asset purchase program and lower the level of monetary stimulus. The biggest concern for both the Federal Reserve and the nation is the level of job creation.
Last week, the Bureau of Labor Statistics (BLS) released its monthly report on the level of non-farm job creation, which was as expected: neither too hot nor too cold, with a total of 175,000 new jobs created for the month of May. (Source: Bureau of Labor Statistics, June 7, 2013.)
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Sunday, May 26, 2013
U.S. Economy Drowning in a Liquidity Trap? / Economics / US Economy
By: Frank_Shostak
Bruce Bartlett recently lamented in The New York Times that given the current state of economic affairs we need more Keynesian medicine to fix the US economy. According to Bartlett, the core insight of Keynesian economics is that there are very special economic circumstances in which the general rules of economics don’t apply and are in fact counterproductive. This happens when interest rates and inflation rates are so low that monetary policy becomes impotent; an increase in the money supply has no boosting effect because it does not lead to additional spending by consumers or businesses. Keynes called this situation a “liquidity trap.” Keynes wrote,
There is the possibility ... that, after the rate of interest has fallen to a certain level, liquidity-preference may become virtually absolute in the sense that almost everyone prefers cash to holding a debt which yields so low a rate of interest. In this event the monetary authority would have lost effective control over the rate of interest.[1]
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Thursday, May 02, 2013
How the U.S. Government Destroyed the American Economy / Politics / US Economy
By: Bill_Bonner
US stocks are turning down this morning, following news that private-sector job growth in the US slowed the most in seven months.
We've already recommended you exit US stocks and buy gold on the dips.
Nothing has changed our view... So we'll get back to where we left off yesterday – making camp for the night after a long horse trek into the distant reaches of our remote Argentine ranch...
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Wednesday, May 01, 2013
Has Sequestration Saved the U.S. Economy? / Economics / US Economy
By: Money_Morning
Martin Hutchinson writes: There's a Jamaican saying, "the higher the monkey climbs up the tree, the more his butt is exposed."
The point being that the more we rise, the more vulnerable we become.
That has truly come to pass for a pair of superstars of the dismal science. And it could have a big impact on how successfully (or unsuccessfully) we can get the U.S. economy back on the rails.
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Tuesday, April 30, 2013
America's Shadow Black Economy Doubles to $2 Trillion / Economics / US Economy
By: Money_Morning
David Zeiler writes: Doing what they can to survive in a dour job market, millions of Americans exist in an underground economy that has ballooned to $2 trillion annually.
By "underground economy," we're talking about all the business activity that is not reported to the government, which includes a growing number of people getting paid for their labor in cash.
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Saturday, April 27, 2013
The Underground Economic Recovery, a Cashless Society? / Economics / US Economy
By: John_Mauldin
But Mousie, thou art [not alone], In proving foresight may be vain: The best-laid schemes o' mice an' men Gang aft agley, An' lea'e us nought but grief an' pain, For promis'd joy! Robert Burns, To a Mouse, on Turning Her Up in Her Nest with the Plough
It is a common trope in science fiction novels. Economic transactions are handled seamlessly with a wave of a card or a physically imbedded chip, and whatever the author imagines money to be is transferred, far removed from the archaic confines of ancient physical monies. If you Google "cashless society" you get about 600,000 references in under a second, and 20 pages into the references there are still articles on a future world where physical cash is no longer needed. Some see it as a sign of the "end times," some as a capitalist plot, some as a frightening vision of socialists and ever-bigger governments, and some as a logical step in the evolution of a technologically driven international commerce.
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Saturday, April 27, 2013
BEA U.S. Economy Grows by 2.5% Annualised in Q1 2013 / Economics / US Economy
By: CMI
In their first estimate of the US GDP for the first quarter of 2013, the Bureau of Economic Analysis (BEA) reported that the economy was growing at a 2.50% annualized rate, some 2.12% better than the 0.38% growth rate for the prior quarter.
Although the headline number itself indicates moderate mid-cycle growth, the details within the BEA's report cast at best a mixed message for the overall health of the economy. For example: although the overall contribution from consumer spending was up, it came mainly from spending on services (boosting the headline number by 1.46%, and principally spent on non-discretionary rents and utilities), with consumer spending for goods contributing to the headline number at a more modest 0.78% (down about -0.24% from the prior quarter). And although fixed investments were still contributing a positive 0.53% to the headline number, that was down over a full percent from the prior quarter. In fact, inventories swinging back to growth (after contracting during the prior quarter) arguably provided all of the quarter-to-quarter improvement in the headline growth rate.
Wednesday, April 24, 2013
The Fed's Money Printing Flaw, Velocity and No Inflation / Economics / US Economy
By: John_Mauldin
Lacy Hunt and Van Hoisington launch into their first-quarter "Review and Outlook," this week's Outside the Box, with a statement that some may find eye-opening: "The Federal Reserve (Fed) is not, and has not been, 'printing money'…" But given the facts of life about how money is really created (and destroyed), they are of course right: it's all about the acceleration – or deceleration – in the M2 money supply.
But there are deeper currents here. For, as Van and Lacy say, "A review of post-war economic history would lead to a logical assumption that the money supply (M2) would respond upward to [the Fed's] massive infusion of reserves into the banking system. And yet, the Fed's 3.5x expansion of the monetary base over the past five years has only grown M2 by 35%, and year-over-year growth through March, 2013, was less than 7%. "In other words," say our authors, "there is no evidence that the massive security purchases by the Fed have resulted in a sustained acceleration in monetary growth; nor is there evidence that economic conditions have improved."
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Tuesday, April 16, 2013
U.S. Economy to Get Jolt from 1.2 Million Homebuilding Jobs / Economics / US Economy
By: Money_Morning
David Zeiler writes: An accelerating rebound in new home construction over the next two years should finally give the U.S. economy the jump-start it needs to progress toward a truly robust recovery.
New home construction continues to bounce back from the lows of 2009, after the housing bubble burst, but still has a long way to go.
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Saturday, April 13, 2013
An Imaginary U.S. Recession? / Economics / US Economy
By: John_Mauldin
An engineer, a chemist, and an economist are stranded on a deserted island. They are starving, when miraculously they find a box filled with canned food. What to do? They consider the problem, bringing their collective lifetimes of study and discipline to the task.
Being the practical, straightforward sort, the engineer suggests that they simply find a rock and hit the cans until they break open. “No, no!” cry the chemist and economist, “we would spill too much food and the birds would get it!”
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Thursday, April 11, 2013
Obama's New Budget is a Stealthy Assault on the Middle Class / Politics / US Economy
By: Money_Morning
With a little sleight of hand in how the government calculates inflation, the Obama budget 2014 released today (Wednesday) proposes to both raise taxes on the middle class and reduce future payments to Social Security recipients.
That's quite a reversal coming from a Democratic president who had promised to protect the American middle class.
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Tuesday, April 09, 2013
Here's Another Troubling Sign America is Circling the Drain / Politics / US Economy
By: Money_Morning
Shah Gilani writes: Don't blame yourself if you missed this tidbit last week...
On Thursday, the Consumer Financial Protection Bureau hit the nation's four largest mortgage insurers with a total of $15.4 million in fines for "allegedly" paying kickbacks to lenders to steer business their way.
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Sunday, April 07, 2013
The Real Reason There Will Be No Economic Recovery in America / Economics / US Economy
By: Bill_Bonner
Nothing much happened on Wall Street yesterday. The Dow rose 56 points. Gold was flat.
From the Daily Mail in London:
Read full article... Read full article...US sees highest poverty spike since the 1960s, leaving 50 million Americans poor...