Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Monday, August 01, 2011
The Great Correction: 4 Years…and Counting…Still No Economic Recovery in Sight / Economics / Great Depression II
By: Bill_Bonner
I’m glad to be the last speaker. Nobody can come after me and tell you why I’m wrong about everything. Instead, I get to tell you why the other speakers were numbskulls. Besides, we all have a tendency to be most influenced by the last person we talk to. Or at least I do.
Monday, August 01, 2011
How Deep is the Global Economic Rabbit Hole? / Economics / Global Debt Crisis
By: Greg_Tomlinson
Quite simply, the world’s debt hole is deeper than any reasonable person can comprehend. It is difficult to define, and it is not terribly easy to write about - really it’s more of a concept than something that you can actually sink your teeth into. You won’t see an abundance of stories or editorials on this topic; in fact the financial media avoids the global debt situation like the plague for good reason. Sure, they talk about chunks of it, but almost never in total. However, with your indulgence, it is the purpose of this piece to bring us all a bit closer to not just understanding how dangerous things have become to all of us personally, but more importantly to frame the problem in terms of history and scale.
Monday, August 01, 2011
The Vices of the Modern Monetary Theory / Economics / Economic Theory
By: Aftab_Singh
A few months back, I wrote about a virtue of the MMT; namely, the way it focuses on sectoral balances. I think that this view is both interesting and useful for the contrarian investor. However, I do have some misgivings with the convictions of the typical Modern Monetary theorist. Here, I discuss some of the problems with the MMT frame of mind.
Sunday, July 31, 2011
Canada Surprise GDP Economic Contraction, Largest Drop in Two Years, It's Not Temporary / Economics / Canada
By: Mike_Shedlock
Lost in the US deficit battles and the pathetic US GDP statistics comes yet another surprise: Canada’s Economy Shrank 0.3% in May Posting the Largest Drop in Two Years
Read full article... Read full article...Canada’s gross domestic product fell in May by the most in two years due to temporary disruptions in the mining and oil and gas sector, government data showed.
Sunday, July 31, 2011
U.S. Economy Operating at Stall Speed, Recession in Our Future? / Economics / Double Dip Recession
By: John_Mauldin
The GDP numbers for the second quarter came in, and there is no way to spin them as anything but ugly. And the revisions were worse. We simply have to take a few pages to look at them. And, as I noted last Monday in the Outside the Box, I met with some ten Senators Monday afternoon (as well as Congressmen in the morning), plus a lot of staff. Getting ten Senators in a room for 90-plus minutes is not so often done. I will report in this week's letter about our conversation and my impressions.
Sunday, July 31, 2011
U.S. Q2 GDP The Numbers Don't Add Up / Economics / Economic Statistics
By: Tony_Pallotta
Q1 2011 GDP was revised one final time from 1.9% to 0.4% and Q2 2011 GDP the first estimate was 1.3%. Before analyzing the data I have one very simple question.
Economic growth slowed during Q2 as acknowledged by the Fed and indicated by regional Fed surveys, ISM, durable goods, etc so how could Q2 GDP be higher than Q1 GDP? That would imply the economy accelerated and clearly that has not happened. In other words just as Q1 2008 was eventually shown as the start of the great recession so will Q2 2011 in subsequent revisions.
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Sunday, July 31, 2011
U.S. Real GDP Revisions Indicate Economy Still in Recovery Phase / Economics / US Economy
By: Asha_Bangalore
The U.S. economy grew at an annual rate of 1.3% in the second quarter after a downwardly revised 0.4% increase in the first quarter (previously estimated to have increased 1.9%). From a year ago, real GDP advanced only 1.6%, the smallest increase in the current recovery.
Friday, July 29, 2011
U.S. Debt Default or Credit Ratings Downgrade Could Crush the Global Economy / Economics / Global Debt Crisis
By: Money_Morning
Shah Gilani writes:
If there's a "worst-case scenario" for this whole debt-ceiling debacle, this is it.
After studying everything that could happen due to a downgrade of the United States' top-tier AAA credit rating, and the potential default on its debt, we found a scenario that would result in forced asset sales that are so widespread that global stock-and-bond markets would plunge - and economies around the world would crash.
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Friday, July 29, 2011
U.S. Debt Ceiling Consquences, If Cooler Heads Do Not Prevail / Economics / US Debt
By: Paul_L_Kasriel
Our working assumption is that legislation authorizing an increase on the ceiling on federal debt will be enacted in time for the U.S. Treasury to make all of its previously-authorized expenditures. If, however, this legislation is not passed, then the U.S. federal budget will move into balance. In the 12 months ended June 2011, the Treasury had run a cumulative budget deficit of $1.26 trillion. For the sake of argument, let's assume that the August 2011 budget deficit at an annual rate also is $1.26 trillion. At an annual rate, this is the amount that federal outlays would immediately decline. $1.26 trillion is about 8.4% of what U.S. nominal GDP was running at an annualized pace in the first quarter.
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Thursday, July 28, 2011
U.S. Businesses Appear to Have Selective Uncertainty / Economics / US Economy
By: Paul_L_Kasriel
I keep hearing that what is holding U.S. businesses back from expanding and hiring is “uncertainty.” Exactly what new types of uncertainty businesses face in the current environment vs. past environments is rarely spelled out. But if, in fact, businesses are paralyzed due to uncertainty, I would not expect them to be stepping up their purchases of capital equipment. After all, capital equipment has a relatively long life. If businesses were unusually uncertain about the long-term outlook, they would be more reluctant to make longer-term commitments, which the purchase of capital equipment is. Rather, if businesses were unusually uncertain about the future, they might be more inclined to hire workers, who, after all, can be dismissed on short notice if conditions were to change suddenly.
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Thursday, July 28, 2011
U.S. Debt Limit Debate Sign of Deeper Economic Dysfunction / Economics / US Debt
By: The_Gold_Report
ShadowStats Editor John Williams advises legislators to stop fooling around with the country's credit rating. Regardless of the deal reached, he predicts that the Treasury and Fed will continue to print money to meet obligations and add liquidity to the economy. In this exclusive interview with The Gold Report, he explains how that will have the effect of pushing the price of gold and other commodities even higher.
Wednesday, July 27, 2011
Washington Had a Spending Problem / Economics / Government Spending
By: Paul_L_Kasriel
But does it have one now and through 2017? In an historical context, no. Consider Chart 1, which shows the rate of growth in the 12-month cumulative amount of total federal outlays from year-ago month. In the 12 months ended June 2011, total federal outlays are up 3.28% from 12 months ended June 2010 -well below the 6.64% median growth in this 12-month cumulative total from December 1955 through June 2011. So, Washington hardly has a spending problem now vs. history.
Monday, July 25, 2011
The Economics of Big Cities / Economics / Social Issues
By: Robert_Murphy
Large, densely populated urban areas put economic principles in a pressure cooker, as it were. The extremes of urban life make things evident that would not be as obvious in a small town. With the right combination of entrepreneurial drive and the rule of law, metropolitan areas are economic powerhouses.
Saturday, July 23, 2011
European Leaders Kicking the Debt Crisis Can Down the Road / Economics / Global Debt Crisis
By: John_Mauldin
This week we start with the latest version of the solution to the European Crisis, the details of which are now coming out. Then we look at the global economy, and some signs that seem to point to a softening. And then there's some data on US employment from a friend who has some thoughts about what we really need to do to get unemployment to come down. There is a lot to cover.
Saturday, July 23, 2011
Outcome of Tax Cuts Following the 2001 Recession - Noteworthy Facts / Economics / US Economy
By: Asha_Bangalore
The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) and Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA) lowered taxes on personal income, dividends and capital gains. Personal income tax rate for the highest bracket was reduced in steps from 39.6% (tax rate prior to EGTRRA) to 35% (after the JGTRRA legislation). These changes of income tax rates had sunset provisions and were set to expire in 2010; but they were extended under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (TRUIRJCA). Read full article... Read full article...
Saturday, July 23, 2011
U.S. Real GDP in the Economic Current Recovery, How Does it Compare? / Economics / Economic Recovery
By: Asha_Bangalore
The current economic recovery is eight quarters old. The first estimate of real GDP growth for the second quarter will be published on July 29. Chart 1 is an index chart where real GDP data are set equal to 100 at the trough of each recession and real GDP for subsequent quarters are computed accordingly to enable comparisons of real GDP growth across recoveries. For example, a reading of 104 would mean that real GDP increased 4.0% from the trough. In 2011:Q1, the seventh quarter of economic recovery, real GDP rose 4.95% from the trough of the current recovery. At a similar stage of economic recovery after the 2001 recession, real GDP recorded a 4.88% gain.
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Friday, July 22, 2011
Who's Afraid of Deflation? / Economics / Deflation
By: Philipp_Bagus
When it comes to deflation, even Austrian economists disagree. In contrast to those who favor a 100 percent–reserve system and the effect such a system would have on prices, Austrian defenders of a fractional-reserve, free-banking (FRFB) system still seem to harbor a fear of price deflation.[1] Examples of this group include Steven Horwitz, George Selgin, and Lawrence H. White, who support a banking system or monetary policy that stabilizes nominal income (MV).[2] Broadly speaking, they favor an increase in the money supply if the demand to hold money (i.e., hoarding) increases. Without a corresponding increase in the money supply, an increase in the demand to hold money would cause a general fall in prices (i.e., price deflation).
Friday, July 22, 2011
The Never-Ending Economic Depression , Recovery Only If We Repudiate the Debt / Economics / Great Depression II
By: Washingtons_Blog
Economics Professor: "[We’ll Have] a Never-Ending Depression Unless We Repudiate the Debt, Which Never Should Have Been Extended In The First Place" Economists: The Economy Can Only Recover If We Repudiate the Debt
Leading Austrian-school economist Murray Rothbard - an American - wrote in 1992:
Read full article... Read full article...I propose ... out-right debt repudiation. Consider this question: why should the poor, battered citizens of Russia or Poland or the other ex-Communist countries be bound by the debts contracted by their former Communist masters? In the Communist situation, the injustice is clear: that citizens struggling for freedom and for a free-market economy should be taxed to pay for debts contracted by the monstrous former ruling class. But this injustice only differs by degree from "normal" public debt. For, conversely, why should the Communist government of the Soviet Union have been bound by debts contracted by the Czarist government they hated and overthrew? And why should we, struggling American citizens of today, be bound by debts created by a ... ruling elite who contracted these debts at our expense?
Thursday, July 21, 2011
Continued Sluggish U.S. Economic Growth Expected Through 2012 / Economics / US Economy
By: Paul_L_Kasriel
With this commentary, we unveil our first formal forecast of U.S. economic activity and interest rates for 2012. The forecast for real GDP growth is only marginally better in 2012 vs. the forecast for 2011 - on a Q4/Q4 basis, 2.45% in 2012 vs. 2.20% in 2011. We do expect some forward momentum to build in the second half of 2012 with respect to real GDP growth and for this momentum to intensify in 2013. The reason for this building momentum is an expectation of a resumption of Federal Reserve quantitative easing (QE) early in 2012 and/or a pick-up in bank credit creation. Because our forecast is for below-potential real economic growth, our view is that the unemployment rate will creep up from its Q2:2011 average of 9.1%, peaking at 9.5% in Q3:2012. It will not be until 2013, that any sustained meaningful decline in the unemployment rate sets in.
Thursday, July 21, 2011
Society Lacks Purchasing Power, Robots Don’t Buy Cars / Economics / Economic Theory
By: Christopher_Quigley
Our world lurches from financial crisis to financial crisis yet very few academics, reporters or commentators point out the fatal flaw in current orthodox economic theory which is the central force behind these crises. The flaw relates to the general LACK OF PURCHASING POWER in contemporary society. This weakness in classical economic theory is not new and many scholars have explained the problem however, increasingly, the issue is being conditioned out of people’s consciousness. The collapse of the international banking system, as a result of the Sub-Prime; “Originate to Distribute” catastrophe, has brought this Achilles heel of Keynesian economics into sharp focus.