Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Saturday, October 29, 2011
U.S. Consumer Spending is Likely to Show Tepid Growth Once Again / Economics / US Economy
By: Asha_Bangalore
Real consumer spending increased 0.5% in September after a steady reading in August. In the third quarter, consumer spending increased at an annual rate of 2.4% vs. 0.7% in the second quarter. At first blush this is impressive, but digging further leads to a different story. The saving rate of households fell to 3.6% in September, putting the quarterly average at 4.1% vs. 5.0% in the first-half of the year.
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Friday, October 28, 2011
U.S. Real GDP Momentum Pickup Buys Time Before Fed Acts Again / Economics / US Economy
By: Asha_Bangalore
Real gross domestic product (GDP) of the U.S. economy grew at an annual rate of 2.5% in the third quarter after registering an abysmally slow performance in the first-half of the year (+0.9%). The headline and details of the third quarter GDP report are both encouraging given that considerations of a double dip surfaced in recent weeks.
Wednesday, October 26, 2011
U.S. Consumer Confidence Index Near Recession Low in October / Economics / US Economy
By: Asha_Bangalore
The Conference Board’s Consumer Confidence Index dropped 6.6 points to 39.8 in October. This reading is approaching the recession low of 25.3 recorded in February 2009. The Present Situation Index fell 7.0 points to 26.3, while the Expectations Index dropped to 48.7 from 55.1 in September. Essentially, the latest consumer confidence numbers are raising a red flag in an already weak economic environment.
Tuesday, October 25, 2011
The Real Debt Crisis Contagion Risk / Economics / Global Debt Crisis
By: Dr_Martenson
Around here we like to track things from the outside in, as the initial movements at the periphery tend to give us an early warning of when things might go wrong at the center. It is always the marginal country, weakest stock in a sector, or fringe population that gives us the early warning that trouble is afoot. For example, rising food stamp utilization and poverty levels in the US indicate that economic hardship is progressing from the lower socioeconomic levels up towards the center -- that is, from the outside in.
Monday, October 24, 2011
Savings, The Paradox of Thrift Debunked / Economics / Economic Theory
By: Colin_Twiggs
Ever since John Maynard Keynes popularized the Paradox of Thrift, economists, central bankers and politicians have labored under the misapprehension that high levels of savings are bad for the economy and inhibit growth. The Paradox of Thrift simply states: Increased savings means there are less buyers for goods produced, so the nation as a whole will tend to produce less.
Monday, October 24, 2011
The Great Depression 80 Years Later, Same Culprits, Same Rage / Economics / Economic Depression
By: James_Quinn
The young man stands on the edge of his porch
The days were short and the father was gone
There was no one in the town and no one in the field
This dusty barren land had given all it could yield
I've been kicked off my land at the age of sixteen
And I have no idea where else my heart could have been
I placed all my trust at the foot of this hill
And now I am sure my heart can never be still
So collect your courage and collect your horse
And pray you never feel this same kind of remorse
Dust Bowl Dance - Mumford & Sons
Sunday, October 23, 2011
Economic Growth Is Obsolete / Economics / Economic Theory
By: Andrew_McKillop
The last 'classic economic growth interval' can be almost exactly defined as the years 2004-2007.
After that, we enter a zone of permanent disaster for the late, unlamented by myself, Growth Economy which can only and does only operate in a series of boom-slump cycles. What we have now, since 2008 is however different: this slump is vastly greater than the nicely doctored official economic numbers can show. True numbers would not only be terrifying, but also hard to believe.
Saturday, October 22, 2011
Revisionist History and the Great Depression / Economics / Economic Depression
By: Andy_Sutton
Over the past several years, the term ‘Great Depression’ has made a grand re-entry into the American mainstream and has as a consequence become perhaps one of the most misunderstood terms. We are told it was everything that it wasn’t and that it wasn’t everything that it was. Like many important historical events, there is a good bit of revisionist history at work with regards to those dark 12 years in American history when it seemed as though there was nothing but despair and governments tripping over themselves to fix something they didn’t have the tools or the business monkeying with in the first place. Think of it like a butcher going to work on the engine of a ’57 Chevy with baseball bat. The results are predictable.
Saturday, October 22, 2011
Why the U.S. Recession Forecasters Are Wrong (For Now) / Economics / Economic Recovery
By: Clif_Droke
Speculation over the direction of the economy continues to take center stage. With the presidential election coming up in 2012, the economy will undoubtedly be the central issue on the campaign trail and will receive even more attention than it has up until now. Many analysts have made waves lately in forecasting a "double dip" recession, with at least a couple of high profile analysts claiming the recession has already arrived.
Friday, October 21, 2011
U.S. Initial Jobless Claims, Index of Leading Indicators, Small But Noteworthy Positive Signals / Economics / Economic Recovery
By: Asha_Bangalore
Initial jobless claims dropped 6,000 to 403,000 during the week ended October 15. The 4-week moving average of initial jobless claims (403,000) is the lowest since the week ended April 23, 2011. That said, initial jobless claims are still holding at a worrisome level. In other words, a large drop in initial jobless claims is necessary to say that the worst is behind us. Continuing claims, which lag initial claims by one week, rose 25,000 to 3.719 million.Read full article... Read full article...
Thursday, October 20, 2011
Does The Economy Need a Referee? / Economics / Economic Theory
By: Jeff_Berwick
I recently appeared on Max Keiser’s "On The Edge" program. Unbeknownst to the viewer, we were having major communication problems. Max only could hear a small portion of what I said and I, likewise. But, right at the very end of the interview the communications worked again… that’s when the interview finally got interesting. Max stated that we “need a referee” in the economy. I replied, “I disagree. We don’t need a referee, I’m an anarchist…”
Thursday, October 20, 2011
U.S. Inflation Shows Signs of Moderation in September / Economics / Inflation
By: Asha_Bangalore
The Consumer Price Index (CPI) moved up 0.3% in September, following gains of 0.5% and 0.5% in July and August, respectively. The core CPI, which excludes food and energy, rose only 0.05% in September after a 0.24% increase in August. The September increase is the smallest gain since March 2011 (see Chart 1). These signs of moderation in inflation are noteworthy because they allow the Fed to focus on growth in the inflation-growth debate.
Thursday, October 20, 2011
Murder of the Savers, Killed by Inflation / Economics / Inflation
By: Adrian_Ash
Savers and pensioners! Your murderers need no revolution to storm your stately homes and palaces...
IT'S NOW 100 years since Great Britain established its welfare state. Shortly after, and as the First World War kicked off, it abandoned the free exchange of bullion for notes under the classical Gold Standard.
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Thursday, October 20, 2011
Nouriel Roubini's Global Research Brand vs. His Prescription for the Economy / Economics / Economic Theory
By: Mike_Shedlock
Nouriel Roubini has called the economic crisis rather well. He gas gone on to turn success at RGE into an "economic brand". The Institutional Investor has an 8-page article on How Nouriel Roubini Became a Research Brand.
The article also notes that Roubini has been in the inner economic circles at the World Economic Forum at Davos, the Council on Foreign Relations, and the U.S. Congress.
Thursday, October 20, 2011
Fed’s Dual Mandate Not Workin, Inflation and Unemployment Are Rising / Economics / Inflation
By: Michael_Pento
We are all aware that the Fed has a dual mandate of stable prices and maximum employment. But what may come as a surprise to most is that they have a distinct preference in their mandates. The Federal Reserve under Ben Bernanke has a clear bias towards fulfilling the goal of maximum employment. Given the situation where unemployment is high and prices are relatively stable, the Fed has opted to pursue a policy of pursuing higher inflation in the hopes of engendering lower unemployment rates.
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Tuesday, October 18, 2011
U.S. Economy Operating in Midst of a Long-term Slump, Depression / Economics / Great Depression II
By: John_Mauldin
Dr. Lacy Hunt and Van Hoisington of Hoisington Investment Management write a "Quarterly Review and Outlook" that is a must-read for me. This quarter they focus on US monetary policy, noting that "After peaking at 1.69 in the second quarter of 2010, M2 velocity declined for four consecutive quarters, and we estimate that a major contraction in velocity to 1.59 is likely for the third quarter." (I mentioned the importance of the velocity of money in judging inflation vs. deflation prospects in this week's e-letter, too.)
Tuesday, October 18, 2011
UK Inflation Accelerates to CPI 5.2%, Bankrupt Britain's Stealth Debt Default Continues / Economics / Inflation
By: Nadeem_Walayat
UK CPI Inflation smashed through the 5% barrier by rising to 5.2% for September (4.5%), which is now approaching near triple the Bank of England's 2% target that continues to make a mockery of the central bank whose primary remit is supposedly price stability, where 3% was supposed to have been the maximum level a break above which was supposedly to trigger a series of panic measures to bring inflation under control, instead of which the Bank of England has instead opted to print money as it recently announced another £75 billion of electronic money printing that the fractional reserve banking system would eventually leverage to over £1 trillion, for the primary objective for the monetization of government debt, i.e. the same policy that the Weimar republic had been engaged in on its path towards hyperinflation. UK public debt is probably being monetized at the rate of 15% per annum with approx 30% monetized to date, only the deflation fools and the vested interest academic economists cannot or choose not to realise the highly inflationary consequences of governments monetizing their debt.
Monday, October 17, 2011
Bursting of the Debt Bubble, Evaporation of Wealth on a Vast Scale / Economics / Deflation
By: EWI
The bursting of the "debt bubble" which started in 2008 is far from over. It's the financial story of our age and it's happening before our eyes. The full scope is hard to keep up with because it's unfolding at various levels. The top level is the sovereign debt crisis:
Sunday, October 16, 2011
The Pitfall Of Rock Star Economists / Economics / Economic Theory
By: EconMatters
The whole idea of going to University and studying Economics, replete with a thorough understanding of the importance of analyzing economic data points seems to be lost on these Rock Star Economists who dominate the financial media landscape these days. The only barometer these so called economists utilize is: “Oh, the stock market has been selling off hard for two weeks we must be in a recession”!
Sunday, October 16, 2011
Hyperinflation, Can It Happen Here? / Economics / HyperInflation
By: John_Mauldin
"Bankruptcies of governments have, on the whole, done less harm to mankind than their ability to raise loans." - R.H. Tawney, Religion and the Rise of Capitalism, 1926
"By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens. - John Maynard Keynes, Economic Consequences of Peace
"Unemployed men took one or two rucksacks and went from peasant to peasant. They even took the train to favorable locations to get foodstuffs illegally which they sold afterwards in the town at three or fourfold the prices they had paid themselves. First the peasants were happy about the great amount of paper money which rained into their houses for their eggs and butter… However, when they came to town with their full briefcases to buy goods, they discovered to their chagrin that, whereas they had only asked for a fivefold price for their produce, the prices for scythe, hammer and cauldron, which they wanted to buy, had risen by a factor of 50." - Stefan Zweig, The World of Yesterday, 1944.
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