Category: US Economy
The analysis published under this category are as follows.
Sunday, May 18, 2008
The Fed at Interest Rate Crossroads Between Inflation and Economic Growth / Economics / US Economy
By: John_Mauldin
Retail Sales Take a Dive - Accounting for Inflation
- The Fed at the Crossroads
- Sell in May and Go Away
Is the economy poised for a recovery, as the stock market seems to expect? Or are we in for another few more quarters of recession and/or slow growth? In this week's letter we take a look at consumer spending, inflation, and other data to see if we can find a clue or two to give us an idea of the direction of the economy. There is a lot of data, so let's jump right in.
Read full article... Read full article...
Sunday, May 18, 2008
Unemployment Rate: What Is The Real Story? / Economics / US Economy
By: Ronald_R_Cooke
If you have been reading my essays, you know I firmly believe the United States Department of Labor (DOL), Bureau Of Labor Statistics (BLS) understates the rate of inflation (see: CPI: Sophisticated Economic Theory, Terrible Ethics). You also know that a low Rate Of Inflation means that the Department of Commerce (DOC), Bureau Of Economic Analysis (BEA) overstates “Real” Gross Domestic product (see: “American GDP: Can We Trust The BEA Data?” and: “Yes Virginia. This Is A Recession.”). Read full article... Read full article...
Monday, May 05, 2008
US Economic Stimulus Not a Silver Bullet / Economics / US Economy
By: Mike_Shedlock
While pondering whether there is going to be a second half recovery on the basis of stimulus checks, let's first take a look at the possible repercussions of Cash-Out Refis Lowest in Four Years . Fifty-six percent of Freddie Mac-owned loans were cash-out refinances in the first quarter of 2008, the smallest percentage since Q2 in 2004, the GSE said Friday. First quarter's share compares starkly to the 77 percent share of refinancing posted just one quarter earlier, and underscores the new reality for most homeowners.Read full article... Read full article...
Friday, May 02, 2008
Debt the Price for Economic Growth / Economics / US Economy
By: Andy_Sutton
Our call from last week is playing out exactly as we forecasted. The Fed cut interest rates, signaled a willingness to pause, and the Dollar has begun another dead cat bounce. Included below is a chart that shows other dead cat bounces that have occurred during the past year. Note the end result of each of the prior bounces: an ultimately lower Dollar. There is no reason to believe this time will be any different. We outlined the reasons for this assumption in last week's piece.Read full article... Read full article...
Wednesday, April 30, 2008
Sharp Fall in Consumer Spending / Economics / US Economy
By: Mick_Phoenix
Does the consumer truly believe?The past three Occasional Letters have been quite an in-depth discussion about the path taken by the Federal Reserve and recently by the Bank of England in their attempts to deal with the deflationary forces unleashed by the credit crash. Since those discussions we have seen evidence that supports my view as seen recently in the Weekly Reports.
Read full article... Read full article...
Friday, April 25, 2008
For the Real Forces Behind US Economic Growth Look at the Nasdaq / Economics / US Economy
By: Brian_Bloom
Think about this- One of the most interesting economists of the early 20 th Century was Joseph Schumpeter.Here is a quote from the Wikipedia article: “Schumpeter's theory is that the success of capitalism will lead to a form of corporatism and a fostering of values hostile to capitalism, especially among intellectuals. The intellectual and social climate needed to allow entrepreneurship to thrive will not exist in advanced capitalism; it will be replaced by socialism in some form.
Read full article... Read full article...
Thursday, April 24, 2008
Teachers Strike as Real Inflation is Far Higher than the CPI / Politics / US Economy
By: Nadeem_Walayat
Today saw the biggest teachers strike in 20 years as the Government tried to force teachers to accept a pay deal of 2.45% linked to the Consumer Price index (CPI) (2.5%) instead of the more recognised Retail Price Index (RPI) (4.1%). The CPI is the internationally standardised inflation measure that is designed so as to under report inflation and thus make the jobs of politicians and finance ministers easier when it comes to public sector pay deals.Read full article... Read full article...
Wednesday, April 23, 2008
US Social Security Budget Deficit: False Alarm Or False Hope? / Politics / US Economy
By: Ronald_R_Cooke
A recent Wall Street Journal MarketWatch column by Dr. Irwin Kellner entitled “False Alarm” concludes Social Security is not likely to run out of money any time soon.Read full article... Read full article...
Tuesday, April 22, 2008
US Economic Quarterly Review and Outlook for 2008 / Economics / US Economy
By: John_Mauldin
This week's Outside the Box is from my friends at Hoisington Management. While somewhat technical, they make the case that a slowdown in consumer spending is inevitable. This is worth taking some time and thinking about. Quoting: "This means that consumer spending increases should be approximately zero for the next three years. Further exacerbating the problem is the personal saving rate which declined from 5.2% in the decade of the 1990s to average 1.3% in the last seven years, and now stands at 0.3%. Should declining wealth, rising unemployment and poor economic conditions cause consumers to begin to save and lift the rate back to the 1.3% average of the past seven years, real consumer spending would experience a multi-year contraction." Read full article... Read full article...
Tuesday, April 22, 2008
The US Needs a Good Dose of Supply-side Economics Instead of Interest Rate Cuts / Economics / US Economy
By: Gerard_Jackson
Since last September the Fed has slashed the fed funds rate by 300 basis points to 2.25 per cent. Will there be anymore cuts? Not if Martin Feldstein, former chairman of President Reagan's Council of Economic Advisors, has anything to do with it. Feldstein, now a Harvard economics professor, argues that further cuts would promote commodity prices and inflation without solving the economy's woes. What he didn't say is that what the US economy needs is more production — not more monetary manipulation — if genuine demand is to expand.Read full article... Read full article...
Saturday, April 19, 2008
Will Fed Actions and American Culture Prevent a Soft Depression? / Economics / US Economy
By: John_Mauldin
- The Muddle Through Question
- Clowns to the Left of Me, Jokers to the Right of Me, Here I am Stuck in the Muddle Through Middle With You!
- A Soft Depression? Not.
- South Africa and Swiss Mountains
A few weeks ago I asked for readers to send me questions and said I would try and answer them while I was in Switzerland. Some of them were quite good and have given me ideas for whole newsletters but will require a lot of research. But a lot of them fell into two basic camps. This week we look at a number of questions from readers about my thoughts on the Muddle Through Economy.
Read full article... Read full article...
Friday, April 18, 2008
The Collapse of the US Economy / Economics / US Economy
By: Peter_Schiff
Recent high profile bankruptcies of mainstay American retailers, such as The Sharper Image and Linens ‘n Things, as well as the proposed mergers between Blockbuster/Circuit City and Delta/Northwest, and the admissions from the nation's leading student lenders that their business models are no longer viable, mark the beginning of a long overdue overhaul of the American economy. In short, the economy will be getting smaller and more expensive. Read full article... Read full article...
Monday, April 14, 2008
The Problems Spread as US Recession Takes Hold / Economics / US Economy
By: John_Browne
Last week, General Electric one of the finest companies in the world and an American icon, announced a major fall in earnings. Amazingly, the bad news surprised Wall Street, and GE shares fell 13 percent in a single day. Some surprise!
GE is one of the best-diversified and well managed companies on earth, and is seen as a barometer of both the US and the world economies. Its latest earnings report was impacted by the expected fall in financial services and a continued strength in overseas earnings. However, it also showed a largely unexpected fall in the sales of US medical devises as public and not-for-profit hospitals, suffering massive increases in their borrowing costs, cut back on spending.
Read full article... Read full article...
Friday, April 11, 2008
Falling US Dollar and Trouble with the Trade Deficit / Economics / US Economy
By: Andy_Sutton
Ever since the falling dollar really hit the radar screen of the mainstream media, one predictable, knee-jerk response was that this would be a miracle elixir for our ailing export economy. Further, they asserted, the weak dollar would cure the trade deficit. This is a prime example of what happens when textbook logic is used in place of reality. I dedicated the second edition of Economic Myth Busters back in September 2007 to the absurd notion that the weak dollar was good for the American economy. In the 6 months since the article some notable trends have developed.Read full article... Read full article...
Wednesday, April 09, 2008
Deficits Never Drove the US Economy / Economics / US Economy
By: Gerard_Jackson
The myth that President Bush's deficits rescued the American economy from recession has taken root among some conservative economic commentators. (Of course, if you are a hardcore Democrat then Republican economic policies are always awful). This is a typical Keynesian response by people who should damn well know better.Read full article... Read full article...
Tuesday, April 08, 2008
US Job Less Report- Surprise!, Surprise!, Surprise! / Economics / US Economy
By: Paul_J_Nolte
Market analysts are sounding like Gomer Pyle upon the release of the employment report – surprise, surprise, surprise! Not only did the headline job loss come in worse than expected, but also the revisions to past months shaved enough from the initial estimates to put the first three months of the year into negative territory. Investor's will need to get used to being disappointed, as a recessionary environment tends to bring out the worst in economic data. Dead ahead is first quarter earnings, with Alcoa stepping off first. Already earnings have declined by more than 10% from the peak last year and expectations are actually high (if excluding the financial sector) for a decent earnings season. While the large multi-national firms should do just fine (as exports are doing very well), we don't believe the current economic environment supports a generally strong earnings season.Read full article... Read full article...
Tuesday, April 08, 2008
Interest Rates and the Keynesian Myth / Interest-Rates / US Economy
By: Gerard_Jackson
Still lurking in the Keynesian woodshed is the myth that interest is a monetary phenomenon that is artificially keeping capital scarce. Eliminate interest and presto! Capital will become superabundant. Keynes repeated this preposterous fallacy in the Paper of the British Experts , 8 April 1943, in which he asserted that "Credit expansion performs the miracle . . . of turning stone into bread".Read full article... Read full article...
Monday, April 07, 2008
US Economy, Commodity Prices and the Trade Cycle / Economics / US Economy
By: Gerard_Jackson
The current economic situation brings to mind 1999 when worries about the state of the US economy were piling up faster than rationalisations about the country's alleged growth rate. There was less talk of a "new era" economy and more about a "correction". What was it that brought about a more subdued assessment in so many quarters? Commodity prices are the answer.Read full article... Read full article...
Sunday, April 06, 2008
Is the US Fed Inflating or Deflating? / Economics / US Economy
By: Mick_Phoenix
Welcome to the Weekly Report. This week, I stick my nose in where it ain't wanted. (again)We get down in the dirt about deflation and we look at some stocks and wonder why and I show you my long term indicators.
Now, I'm not one to boast, really I'm not. No one enjoys the likes of me stuffing “I told you so” remarks down reader's throats. There comes a time when it does become slightly unavoidable. Is it ego, a demand of recognition? Is it a desire to be kingpin, the ultra guru? Frankly my dear, I don't give a damn, as long as my readers get something that helps make life as an investor /trader easier then my attitude is “so what?”
Read full article... Read full article...
Saturday, April 05, 2008
Ring-Fence the Bad Assets- Re-Arranging the Deck Chairs on the Titanic? / Economics / US Economy
By: Paul_L_Kasriel
Yesterday I expressed my opinion on the lack of economic substance of allowing financial institutions to value the assets on their books at historical cost or whatever they so desire ( Mark It as You Choose, but Is Enough Cash Coming In? ). Today, yet another "costless" solution to the bad-asset problem is being put forth in the Financial Times - quarantine the bad apples from the good ( Wall St banks seek to ring-fence bad assets ). ,br> Read full article... Read full article...