Category: US Economy
The analysis published under this category are as follows.
Sunday, December 16, 2007
Fed Fumbling in The Dark; Investors Hold Anti-Recession Stocks In Uncertain Times / Stock-Markets / US Economy
By: Money_and_Markets
Mike Larson writes: I don't know if you're a fan of the Benny Hill Show or if you've ever watched those old Keystone Cops films, but they both featured madcap comedy skits, with a bunch of people running around, often at cross-purposes, and ultimately accomplishing nothing.
And I was reminded of them this week by the Federal Reserve's latest actions. To recap:
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Saturday, December 15, 2007
Academics at the Fed Have No Real Money Markets Experience - US In Stagflation / Economics / US Economy
By: John_Mauldin
In this issue:
Things That Go Bump in the Night - Foolish Investor of the Year?Really?
- Breaking the Buck at Bank of America
- Inflation Rears it Ugly Head
- Academics at the Fed
- 1% Growth plus 4.3% Inflation = Stagflation
- London, Switzerland, and Barcelona
From ghoulies and ghosties,
And long-leggedy beasties,
And things that go bump in the night,
Good Lord, deliver us!
-Traditional Scottish Prayer
It's been a long time since we have looked in my worry closet, but there are definitely bumping sounds coming from behind the door. While largely over-looked, Bank of America closed down an "enhanced cash" fund and did the unthinkable and broke the buck. But the real story is even worse. I make the suggestion that you look at your cash funds and see what is in its portfolio. You may want to redeem ahead of the crowd.
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Tuesday, December 11, 2007
US Interest Rate Cuts and Mortgage Bailout Will Avert US Recession in 2008 / Interest-Rates / US Economy
By: Nadeem_Walayat
The US Fed's reaction to date to the housing bust and US subprime mortgage credit crisis is by making deep cuts in US interest rates that today will see at least a further 0.25% cut bringing the rate down to 4.25%, off 1% from the 5.25% high just 3 months ago.
The US Fed is clearly in full blown panic mode, with the aim of the cuts to avert a potentially deep US recession.
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Wednesday, December 05, 2007
US Consumer Confidence Heads South Signaling Recession / Economics / US Economy
By: John_Mauldin
In the second installment of our special two day Outside the Box letter, we have good friend Greg Weldon's giving us his thoughts in his regular "Weldon's Money Monitor." Consumer expenditures account for approximately 2/3rds of
U.S. GDP. A precursor to any underlying changes in consumer expenditures is consumer sentiment. Greg explains to us the state of the American consumer and how current federal and institutional initiatives will not help thwart the looming recession. You can read his work at www.weldononline.com . Read full article... Read full article...
Tuesday, December 04, 2007
Is the Fed Too Late to Head Off a US Recession? / Economics / US Economy
By: Donald_W_Dony
With the ongoing weakness of many of the key leading indicators spurred on by the subprime mortgage debacle, has the U.S. already started to slip into a recession? We know the housing and banking sectors remain in a free fall with no apparent evidence of a bottom and that consumer confidence has dramatically declined in recent months. But is that the signal of the start? And what is the definition of a recession? Read full article... Read full article...
Monday, December 03, 2007
US Interest Rate Cuts To Not Show In Economic Data Until Late 2008 / Interest-Rates / US Economy
By: Paul_J_Nolte
The last three weeks really just didn't count as far as the markets were concerned. Never mind the multiple 200+ down days for the Dow, the multiple 200+ up days or the many “key” 9 to 1 volume days on both up and down days, as the markets are right where they were on November 7 th , before all the bad (and good) stuff happened. The housing and sub-prime issues continue to pervade trader's thoughts and actions and until an infusion of cash to Citigroup, investors felt we were on the cusp of a financial meltdown. Comments from Fed officials in advance of their meeting on the 11 th also indicated they stood at the ready to cut rates further to avoid further erosion in the economy.Read full article... Read full article...
Sunday, December 02, 2007
The Grand Sale of American Assets Such as 5% of Citicorp to Abdu Dhabi / Economics / US Economy
By: Andy_Sutton
Turn on the evening news in most cities recently and you will see images of rows of homes, many for sale, many with foreclosure signs in the front yards. On weekends the tables come out and are strategically placed in the driveway heavily laden with the possessions of the soon-to-be-prior occupants of the home. These are selling off anything they can muster to scrape together rent for the next roof over their heads, the next car payment, or the next VISA bill. Most observers look at this and have at least a pang of pity or perhaps take a moment to be thankful for their good fortune.Read full article... Read full article...
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...
Friday, November 30, 2007
The Bernanke Interest Rate Cycle, Age of Turbulence and Pavlov's Dog / Interest-Rates / US Economy
By: Tim_Iacono
Well, the big news yesterday was that Federal Reserve Vice Chairman Donald Kohn "opened the door" to more interest rate cuts by the Fed and, as a result, equities rallied.
Like Pavlov's dogs it seems.
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Thursday, November 29, 2007
The Fed Fails to Comprehend the Problems Facing US Economy and Dollar / Interest-Rates / US Economy
By: Alex_Wallenwein
US Fed vice-chairman Donald Kohn is in a quandary.
I'm sure he's not alone. It's just that he happened to be tasked with making a set of statements that would have been far too embarrassing for Bernanke to make. That is especially so after Ron Paul publicly slapped him with his own ledger book, so to speak.
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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...
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!"
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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...
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...
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
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...
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...
Monday, November 12, 2007
The Depreciating US Dollar and the US Economy / Economics / US Economy
By: Gerard_Jackson
Well, we are certainly living in interesting times, bearing in mind that this is said to be a Chinese curse. Consumer confidence is down even though consumer spending seems to be holding up month after month. The Dow Jones Industrial Average drops by 223.55, sending out panic signals to numerous investors. Yet this fall amounted to only 1.69 per cent. We then get the news that productivity leapt to an annualised rate of 4.9 per cent in the July-September quarter while unit labour costs eased.Read full article... Read full article...
Friday, November 09, 2007
Deteriorating Economic Conditions From Main Street to Wall Street / Economics / US Economy
By: Peter_Schiff
Recent reports of better than expected job growth and a 3.9% gain in 3rd quarter GDP have spawned much talk about how the resilience of the American consumer is enabling the country to weather the subprime storm. In reality, the unfolding financial crisis on Wall Street is in fact a direct result of the deteriorating economic conditions on Main Street . Read full article... Read full article...