Category: US Economy
The analysis published under this category are as follows.
Monday, November 05, 2007
How Long Can The US Economy Defy Economic Gravity? / Economics / US Economy
By: Gerard_Jackson
Some readers (judging by their tone, I think they are Democrats) took issue with my view that there was still steam in the US economy and that the subprime fiasco would not sink it (It's not the housing market that threatens the US economy). I also pointed out more than once that readers should not be surprised if the Fed cuts rates. Well, the jury has passed its verdict: real gross domestic product came in at an annual rate of 3.9 per cent for the third quarter. This was on top of the 3.8 per cent growth rate for the second quarter. Taken at face value one would have to say that the US economy is accelerating.Read full article... Read full article...
Monday, November 05, 2007
U.S. Economy: Some Cracks Showing / Economics / US Economy
By: Donald_W_Dony
Speculation continues about the U.S. economy. Is it going into a recession or not? There are numerous reports from analysts and economists on credible news outlets like Bloomberg and CNBC about the state of affairs of the American nation. All market pundits seem to provide good evidence in support of their opinions, but I have not seen or heard a commentary on one of the most reliable leading indicators of the economy; the stock market. Read full article... Read full article...
Tuesday, October 30, 2007
The Growth Recession and Early Stages of a Housing Depression / Economics / US Economy
By: John_Mauldin
This week in Outside the Box, Van Hoisington and Dr. Lacy Hunt of Hoisington Management undertake an assiduous analysis of the economy, specifically quantifying the underlying impact of the real estate market on GDP growth through the follow-on adverse effects on consumer spending.
As outlined in previous publications, the housing debacle has not by any stretch of the imagination reached bottom, having an estimated $800 billion of adjustable rate mortgages reset between October 2007, and December 2008. These resets Hoisington indicates are the home buyers who bought at the top of the 2006 housing market, many of whom paid zero down and received mortgage rates of 0%.
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Monday, October 29, 2007
US Economy: The Subprime Market, Depreciation and the Exchange Rate / Economics / US Economy
By: Gerard_Jackson
Current economic commentary is misleading a great number of people. The problem is — as always — bad economics. We can all recall that it was not long ago when we were told by a horde of financial and economic advisers that the subprime market would sink the American economy. What this lot overlooked was the important fact that only about 14 per cent of mortgages are subprime. Moreover, less than 2 per cent of these are in trouble.Read full article... Read full article...
Friday, October 26, 2007
US Administrations Economic Gang - Send in the Clowns / Economics / US Economy
By: Peter_Schiff
Four leading members of the Bush administration's economic team, including Ed Lazear, Chairman of the Council of Economic Advisors, Commerce Secretary Carlos Gutierrez, Al Hubbard, director of the National Economic Council, and Jim Nussle, director of the Office of Management and Budget, convened on a CNBC panel earlier this week and confidently forecast that the economy would avoid a recession. As they uttered their platitudes, we learned that housing sales plunged again, with national inventories of unsold homes hitting a new record high, and that Merrill Lynch disclosed nearly $8 billion in losses. Set against this backdrop of deteriorating economic news, it would have been more honest, and perhaps more effective, if the Administration team came on stage in clown makeup and oversize shoes.Read full article... Read full article...
Friday, October 26, 2007
A Different Kind of US Recession - Nominal Vs Real Decline in GDP / Economics / US Economy
By: Andy_Sutton
In a recent interview with Britain's Telegraph newspaper, Jim Rogers, the world-renowned investor declared the United States to be in recession. He didn't stop there. He has taken the next step and rid himself of the downtrodden US Dollar in favor of Chinese Yuan, Japanese Yen and the Swiss Franc. A bold move? A lone voice in a sea of complacency? Not so; Rogers is just the latest in a growing line of credible voices to abandon the US and its struggling currency. Read full article... Read full article...
Tuesday, October 23, 2007
US Economy Gradually Sliding Into Recession / Economics / US Economy
By: Ned_W_Schmidt
This week's chart shows U.S. economy gradually sliding into recession. This indicator is the average year-to-year change of about twenty measures. Many are real measures, like tons or units, so some of false impressions created by incorrect price calculations are avoided. Only recently has the collapse of the housing sector been acknowledged as a serious negative on U.S. economy. Many have mistakenly believed Wall Street could “feed” the nation.Read full article... Read full article...
Tuesday, October 23, 2007
US Economy in Meltdown? / Economics / US Economy
By: Gerard_Jackson
On Friday the 19 October the Dow Jones industrial average plummeted by over 360 points. This immediately sent alarm bells ringing throughout the financial community ? along with nightmares of October 1929 when the Dow Jones dropped from 400 to 145 in November. This dramatic fall in share prices was not confined to America. From March 1929 to June 1931 the prices of Dutch shares dived by 60 per cent; for Germany it was 61.7 per cent from April 1927 to June 1931, and French share prices dropped by 55.7 per cent from February to June 1931. (Wilhem Röpke, Crises & Cycles , William Hodge and Company Limited, 1936, p. 57 )Read full article... Read full article...
Friday, October 19, 2007
Consumer Inflation – Likely to Trend Higher in the Months Ahead and Multi-Family Housing Starts Plunge / Economics / US Economy
By: Paul_L_Kasriel
After being relatively benign in the previous four months, the increase in the CPI flared up in September, increasing 0.3% month-to-month and 2.8% year-over-year. In August, the year-over-year increase was only 2.0%. After having fallen for three consecutive months, the energy component of the CPI increased 0.3% in September. Food prices continued their steady monthly increases, rising 0.5% in September. Unless there is a sharp drop in energy prices, year-over-year increases in the CPI are likely to climb even higher as energy prices now are considerably higher than they were in the fourth quarter of last year.Read full article... Read full article...
Thursday, October 18, 2007
Housing Market Down, Inflation Up / Economics / US Economy
By: Tim_Iacono
Two important economic reports were released just a short time ago. Housing starts and permits for new constuction are way down and inflation is on the rise. Surprise!Read full article... Read full article...
Wednesday, October 17, 2007
U.S. Economy Ends Third Quarter with a Whimper As Housing Slump Continues / Economics / US Economy
By: Paul_L_Kasriel
The Federal Reserve reported today that industrial production (IP) in September increased by only 0.1% after being flat in August. The 3.9% annualized growth in Q3 IP (versus 3.6% in Q2) was "front-loaded" with the 0.6% month-to-month increase in July. Capacity utilization (CAPU) was unchanged in September from August at 82.1%. In this cycle, the peak CAPU occurred in July and August 2006 at 82.1%.Read full article... Read full article...
Monday, October 15, 2007
The State of US economy: Greenspan and Bernanke Have A Lot To Answer For / Economics / US Economy
By: Gerard_Jackson
Because I haven't read Greenspan's book The Age of Turbulence: Adventures in a New World I'll have to confine myself to those parts that some commentators have fastened on to and hope they are accurate. It has been reported that Greenspan believes that the collapse of the Soviet Union made the job of fighting inflation much easier because the output of millions of workers who had been freed from communism exerted a downward pressure on the prices.Read full article... Read full article...
Sunday, October 14, 2007
US in a Slow Motion Recession But May Avoid a Technical Recession / Economics / US Economy
By: John_Mauldin
In this issue:
The GDP Equation
How Low Can You Go?
The Key Variable Problem
The Importance of Fiscal Policy
The Slow Motion Recession
New Orleans and More Birthdays
A recession is technically defined as two consecutive quarters of negative growth in the Gross Domestic Product (GDP). This week we look at how the GDP is actually calculated to give us an idea as to the potential for a recession. We re-visit my concepts of a Slow Motion Recession and a Muddle Through Economy. We briefly look at the sliding dollar and housing, and see how it all adds up. You'll need to put your thinking caps on, but it should be interesting.
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Friday, October 12, 2007
Why a Weak US Dollar Hurts U.S. Manufacturers / Currencies / US Economy
By: Peter_Schiff
The vast majority of economists are currently hailing the freefall of the dollar as a windfall for American business. While some domestic manufacturers may enjoy some initial benefits from a weaker dollar, they will ultimately suffer many adverse consequences as well. More importantly, the dollar's demise is a disaster for American consumers.Read full article... Read full article...
Monday, October 08, 2007
US Economy’s Bubble: Casting the Recession Runes / Economics / US Economy
By: Gerard_Jackson
That the US economy is running into problems is becoming clearer by the day. It is equally clear that America’s economic commentariat is still wedded to the fallacy that consumption drives economies. Time after time I keep reading that consumer spending is more than 70 per cent of GDP which means that if consumer spending falls the economy will slide into recession. What matters, however, is total spending, of which business spending is the most important component. The problem here is that the commentariat has unthinkingly swallowed the fallacy that including spending between stages of production would be a case of double-counting.Read full article... Read full article...
Saturday, October 06, 2007
The Prevent A US Recession At All costs Defense / Economics / US Economy
By: Andy_Sutton
Undoubtedly, I am not alone in my amazement how time and time again, in the waning moments of the big game, defenses give up wins by using the 'prevent defense'. In football, it involves backing up your defense on its heels and allowing itself to be nickeled and dimed to death by any quarterback who can throw a spiral. The idea is not to give up the big play. Despite the best of intentions, however, the results are generally the same: a big loss.Read full article... Read full article...
Saturday, October 06, 2007
US In a Slow Motion Recession Due to Housing Market Bubble Bust / Economics / US Economy
By: John_Mauldin
In this issue:
Why 110,000 Jobs Is Not Enough
GDP Is Set to Be Lower
The Slow Motion Recession
The Texas Chainsaw Massacre
One (Cut) and Done?
Republicans for Protectionism?
A New Chair for an Old Back
Austin and The Ten Tenors
The market certainly seemed pleased with the new jobs number. The glass is more than half full - or is it? Fed Vice-chairman seemed to suggest that the economy was getting better and the Fed might not need to make any further rate cuts. Is it now "One (Cut) and Done?" This week we look at what employment growth tells us about the growth of the US economy, spend some more time looking at how a fall in home prices will affect consumer spending, and muse on whether the Fed is indeed done cutting. We look at the scariest headline I have read in the Wall Street Journal in years, and I tell you about a chair that has done wonders for my back. It's a lot to cover, so let's jump right in.
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Friday, October 05, 2007
The Big Picture - 2008 Economic Contraction to Hit US Economy Due to Dollar Stagflation / Economics / US Economy
By: Brian_Bloom
There is an anomaly in the equity markets which seems not to be drawing enough attention.
This anomaly can be seen by comparing the following two monthly charts (courtesy Decisionpoint.com).
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Wednesday, October 03, 2007
US Economy Sliding towards Stagflation - Global Bond Vigilantes Hooked on Gold / Economics / US Economy
By: Gary_Dorsch
Nowadays, traders of all different stripes are betting on more rate cuts by the Federal Reserve in the months ahead. Since mid-July, the odds of a US economic recession have been mounting, led by sliding home prices and the first loss of US jobs in four years in August. Sales of new single-family homes fell 8.3% in August to a 795,000 annual sales pace, to stand 21.3% lower from a year ago, and the glut of unsold existing US homes has swelled to the highest in 18-years. Read full article... Read full article...
Wednesday, October 03, 2007
Greenspan's Dark Legacy Unmasked / Economics / US Economy
By: Stephen_Lendman
After retiring as the Federal Reserve's second longest ever serving chairman, Alan Greenspan is now cashing in big late in life at age 81. He chaired the Fed's Board of Governors from the time he was appointed in August, 1987 to when he stepped down January 31, 2006 amidst a hail of ill-deserved praise for his stewardship during good and perilous times. USA Today noted "the onetime jazz band musician went out on a high note." The Wall Street Journal said "his economic legacy (rests on results) and seems secure." The Washington Post cited his "nearly mythical status." Read full article... Read full article...