Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Monday, June 23, 2008
Central Banks Will Be Printing Money Like There's No Tomorrow / Economics / Money Supply
By: Captain_Hook
That's what master planners will be doing in continuing efforts to offset a collapsing credit cycle. And we are just a few short weeks away from when this should begin in earnest. Why not right now? Why will this likely take until July to begin in earnest? Well, for one thing master planners (heavy on the sarcasm) have it their minds they need to talk the dollar ($) up right now, at least until things start falling apart again. This is official Fed policy at present, and orthodox hedge fund managers are supporting it, along with selling commodities and precious metals. And the other thing is the stock market. As mention many times this year, hedge funds are locked into a sell commodities / precious metals and buy the $ / stocks trade for the present quarter that will be pushed aggressively right until the end of June. Read full article... Read full article...
Monday, June 23, 2008
Inflation and Wages- Another Dangerous Economic Fallacy / Economics / Inflation
By: Gerard_Jackson
Economic fallacies are like dormant microbes, sooner or later they once again become active. However, the view that wages can cause inflation is one fallacy that never seems to go away. There are economists in the US, the UK and Australia warning that wage rises could trigger an inflationary surge. Nothing new here. In early 2005 Mark Whitehouse and Kemba Dunham of the Wall Street Journal complained that too much job growth generated inflation. In their view good job numbers would probably "fuel fears of higher inflation and cause bond prices to fall and interest rates to rise".Read full article... Read full article...
Monday, June 23, 2008
US Economy to be Hit by Many Credit Crisis Hurricanes with Many Eyes / Economics / Credit Crisis 2008
By: Mike_Shedlock
Often times it is not the leading front of the hurricane that does the most damage, it is the backside. Here is the three stage pattern of hurricane damage.
- Winds from the front side weaken but do not destroy structures
- The eye of the hurricane brings a foreboding sense of unnatural calm
- Wind comes slamming from the opposite direction as the eye passes over, shearing structures from the opposite direction
Sunday, June 22, 2008
Inflation Hitting Emerging Markets / Economics / Emerging Markets
By: Prieur_du_Plessis
Financial Times: Goldman close to $7 billion SIV bail-out
“Goldman Sachs is close to finalising a plan to restructure a $7 billion investment vehicle formerly run by London-based hedge fund Cheyne Capital, in a move that could potentially usher in a crucial new phase in the credit turmoil.
“The US bank's proposed reorganisation of the so-called structured investment vehicle is set to be just the first of a number of deals that could see about $18 billion worth of SIV assets restructured in the coming months.
Read full article... Read full article...
Friday, June 20, 2008
US Recession Masked by the Fed Dumping Treasuries to Support Banking System / Economics / US Economy
By: Paul_L_Kasriel
For the second month in a row, the Conference Board's index of Leading Economic Indicators (LEI) increased by 0.1% in May. And for the second month in a row, the interest spread between the yield on the 10-year Treasury security and the fed funds rate made a large positive contribution to the change in the LEI, 0.14 in April and 0.19 in May. All else the same, had it not been for the positive contributions from the interest spread component, the LEI would have contracted in April and May. Is there any reason to hypothesize that the spread component is biased upwards? Read full article... Read full article...
Thursday, June 19, 2008
UK Retail Sales High Street Boom- The Truth Behind the Headlines / Economics / UK Economy
By: Nadeem_Walayat
In the midst of the worst economic conditions in nearly 20 years, May saw retail sales soar by a surprising annualised rate of 8.1%, the highest rate in 20 years, up 3.4% for the month. The surge is more akin to that expected during boom times rather than the bust that the UK is fast heading towards. The mainstream media immediately seized on the headline rate to announce Britain is experiencing a mini high street spending boom. However looking behind the headline figures tells a different story.Read full article... Read full article...
Thursday, June 19, 2008
Inflation Will Inevitably Surge Even Higher! / Economics / HyperInflation
By: Money_and_Markets
Larry Edelson writes: I first met Martin about 14 years ago, at the Weiss School in Palm Beach Gardens, Florida, where I had enrolled my three young children.
Martin was running his research and ratings company on the east side of the building, while his wife, Elisabeth, was running the school, on the west side of the building.
Read full article... Read full article...
Thursday, June 19, 2008
Wage Price Inflation Spiral Plus House Price Deflation Equals Stagflation / Economics / Stagflation
By: Nadeem_Walayat
Warnings of a further 40% hike in energy costs this year puts the Bank of England on high alert for a wage price spiral kicking in which will lead to much higher and prolonged inflation. The first signs of this are in the 14% pay hike agreed with the Shell subcontracted tanker haulers over 2 years at 7% per year which is more than double the current CPI inflation rate of 3.3%. The public sector unions are seizing this event to warn that recent pay agreements that cover the next 2 years will have to be negotiated in line with the rising cost of living signaling a 'Winter of Discontent' for Gordon Browns Labour government.Read full article... Read full article...
Wednesday, June 18, 2008
G8 Fail to Address Growing Global Instability / Economics / Global Financial System
By: John_Browne
With market watchers the world over feeling increasingly alarmed by spreading economic problems, much hope and attention was focused on Japan last weekend as finance ministers and central bankers of the G-8 (Group of Eight) nations gathered to apparently map out a coordinated global response. In particular, all hoped that the delegates would conjure a plan to save the dollar from the dustbin and stop the price of oil and food from pushing the world into crisis.Read full article... Read full article...
Tuesday, June 17, 2008
US Economy Hits the Canvas, Fed Expected to Keep Rates on Hold at 2% / Economics / US Economy
By: Mike_Whitney
The economy is in tatters. Consumer confidence has plummeted, food and energy prices are soaring, and the housing market is experiencing its biggest crash since the Great Depression. Manufacturing is down, unemployment is up, gasoline is topping $4 per gallon, and tent cities are sprouting up throughout the Southwest. If there's a silver lining to this mess; it's not visible from planet earth. Read full article... Read full article...
Tuesday, June 17, 2008
UK CPI Inflation Breaks Above Bank of England's Upper 3% Limit / Economics / Inflation
By: Nadeem_Walayat
The UK Consumer Price Index rose to 3.3% for May 08 above the consensus forecasts of 3.2% pushing inflation to a 11 year high on the back of a surge in import and producer prices. Surging inflation not only puts a hold on further UK interest rate cuts but opens the door to what can only be construed as panic rate hikes later in the year to prevent a wage price spiral from taking hold and pushing the UK economy into stagflation.Read full article... Read full article...
Tuesday, June 17, 2008
Lousy Monetary Policy and Economic Commentary Due to Ignorance / Economics / Liquidity Bubble
By: Gerard_Jackson
Some readers think I'm exaggerating the dismal state of economic debate in Australia. Alas, if that were only true. Last April The Australian referred to P. D. Johnson, aka Henry Thornton, as opining that current economic policy with respect to inflation could cause a recession. He went on to argue that we could be seeing the return of 'Goodhart's law'. ( The Australian , Is he on the right track? , Graham Lloyd, 26 April 2008). Johnson defines this law as "Any statistical relationship that is relied upon will cause changes of behaviour that?changes the?relationship". ( The Return of the Check List ). This is really bad stuff.Read full article... Read full article...
Monday, June 16, 2008
Emerging Markets Infrastructure Boom Opportunities / Economics / Emerging Markets
By: Frank_Holmes
The investment opportunity in infrastructure seems to be getting bigger and better all the time, especially in emerging markets.
Merrill Lynch came out with a new research report that raises the expected spending on emerging-markets infrastructure to $2.25 trillion over the next three years, nearly double its earlier estimate.
Read full article... Read full article...
Monday, June 16, 2008
Fed Failure has Put United States on the Path to Hyper-inflation / Economics / Stagflation
By: Captain_Hook
Man is his own worst enemy – this truism has proven itself over and over in history – and is doing so once again in our handling of economy. As you undoubtedly know the consumer is on the ropes and in need of relief due to excessive credit. True to form however, and consistent with our title today, just when this is happening, commodity prices have lit-up, and are showing no signs of retreat, especially energy prices. This has created a very big problem for central planners they can actually identify within their incompetence, that being, in order to tackle the effects of inflation, they will genuinely (a few choice words in the Fed Minutes won't do the trick) need to show fiscal restraint, or crude oil will go to $200, the dollar will break 70, and it's hyperinflation here we come. Read full article... Read full article...
Monday, June 16, 2008
Economic Calendar Forecasts and Analysis: Week Ahead In US Financial Markets (June 16-20 2008) / Economics / US Economy
By: Joseph_Brusuelas
The market will observe a healthy amount of macroeconomic data to be released during the upcoming five trading days. The major data that have the capacity to move the market will be the release of the PPI and housing starts data for May, both of which will be released on Tuesday. Fed talk for the week will be light and Fed Chair Ben Bernanke will speak before a Senate committee on healthcare and US competitiveness on Monday. Read full article... Read full article...
Sunday, June 15, 2008
INFLATION Means the Choice Between Stagflation and Recession- Part 2 / Economics / Inflation
By: Prieur_du_Plessis
Click here for Part 1 - Jim Sinclair (Mineset): Bernanke has painted himself into a corner
“The euro is down hard today on the premise that this is the start of increased interest rates in the US, a statement that is totally ludicrous.
“There are two possibilities here:
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Sunday, June 15, 2008
INFLATION Means the Choice Between Stagflation or Recession / Economics / Inflation
By: Prieur_du_Plessis
The Electric Light Orchestra lyrics “… you took me ohh, higher and higher baby, it's a living thing, it's a terrible thing …” have been mulling through my head over the past week as central bankers' inflation-fighting rhetoric moved to centre stage.
A succession of hawkish comments from US policymakers persuaded pundits that the US rate-cutting cycle was over, resulting in a stronger US dollar, plummeting government bonds, predominantly lower global stock markets (with Asia seeing the most red), and non-agricultural commodities coming off the boil.
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Saturday, June 14, 2008
Recession Required to Defeat Inflation? / Economics / Inflation
By: John_Mauldin
- Whip Inflation Now
- Where Can We Get Help on Inflation?
- The Patient Died Anyway
- Inflation in Asia and Europe
- There Are No Good Solutions
President Nixon instated price controls on the 15th of August, 1971. Inflation was a little over 4% at the time. Price controls manifestly did not work (resulting in shortages of all sorts and a deep recession) and were rescinded a few years later. President Ford went to Congress with programs to fight inflation that was running closer to 10% in October of 1974, with a speech entitled "Whip Inflation Now" (WIN). He famously urged Americans to wear "WIN" buttons. That policy too was less than effective, and the buttons, in a history replete with silly gestures by governments, should stand on anyone's top ten list of such silly gestures.
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Friday, June 13, 2008
The Consumer Price Index: Inflating the Money Supply / Economics / Inflation
By: Adrian_Ash
"...With the cost of living always rising, not falling, it's a good job there's so much more money around to help pay for things. Right...?"
SURELY the 20th CENTURY'S greatest marketing coup – besides making cigarettes taste of freedom and youth rather than the Sandakan death-march – was kidding the world that "inflation" meant rising prices.
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Friday, June 13, 2008
Bernanke's Open Mouth Operations Attempt at Halting Inflationary Dollar Slide / Economics / Inflation
By: Joseph_Brusuelas
Over the past fortnight Fed Chairman Ben Bernanke has engaged in “open mouth operations” to shape market expectations regarding future monetary policy out of the US Federal Reserve. Mr. Bernanke rhetorically intervened in the global currency markets to prop up a beleaguered dollar, explicitly expressed unease over the current course of inflation and signaled that the Fed would not tolerate a breakout of inflation expectations. Not bad, for a Fed Chairman fighting multiple crisis on multiple fronts. Read full article... Read full article...