Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Saturday, July 12, 2008
Credit Crisis Losses Pass $1.6 Trillion as Credit Contraction Ensures Recession / Economics / Credit Crisis 2008
By: John_Mauldin
$1.6 Trillion in Losses and Counting - Banks Start to Reduce Their Lending
- Take Freddie Mac. Please.
- The Ugly Muddle Through
- Once Again, the BLS Numbers Paint a False Picture
It seems that with each passing month the estimates for losses in the international banking system keep rising. This time last summer the largest estimates (from credible sources), if memory serves me correct, were around $400 billion, give or take a few months. By the end of the year it was in the neighborhood of twice that. Then last quarter we saw estimates approaching $1 trillion. Last week, the number being broached was $1.6 trillion, by Bridgewater Associates, one of the top, and more credible, analytical firms in the world.
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Friday, July 11, 2008
US Trade:Deficit Realities and Fallout / Economics / US Economy
By: Andy_Sutton
I want everyone to forget the first sentence of last week's column. Things are not scary; they're bordering on out of control on several fronts. In particular, there are two items which are getting nearly no press that urgently need to be discussed. While the media world continues to focus on whether or not Fannie Mae and Freddie Mac have another 12 hours of solvency left, our trade deficit continues to persist despite continued weakness in the Dollar and out of control import prices. I like to use these two macro measures as a barometer of not only what is going on now, but what is likely to happen down the road.Read full article... Read full article...
Friday, July 11, 2008
Protect Your Wealth from the Coming Hyper-Inflation! / Economics / HyperInflation
By: Money_and_Markets
Larry Edelson writes: The Chairman of the Federal Reserve and a bevy of Wall Street economists want you to believe that the economy is okay.
The Secretary of the Treasury tells us the "economy may avoid a recession." In other words, just pretend that it's never going to happen.
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Thursday, July 10, 2008
Bank of England: Caught Between Inflation and Recession / Economics / UK Economy
By: Victoria_Marklew
As expected, the Bank of England's (BoE) Monetary Policy Committee (MPC) left the repo rate unchanged at 5.0% this morning, despite the fact that May's annual rate of inflation hit 3.3%. This was the highest since the BoE won full independence over monetary policy in 1997, and caused BoE Governor King to have to write an open letter to Chancellor Darling last month explaining why CPI is more than one full percentage point over the Bank's 2.0% target. But, as King pointed out, while inflation is likely to remain above target for some months yet, there is also a downside risk that the economy will slow sharply and pull CPI below target in two years. The past few days have certainly brought mounting evidence of a marked slowdown, with some analysts starting to whisper of the risk of recession. Read full article... Read full article...
Thursday, July 10, 2008
Global Stock Markets Hit by Staglation Fears and Threat of War with Iran / Economics / Stagflation
By: Gary_Dorsch
In today's lightning fast and violent markets, where a constant barrage of news and noise flows into the marketplace each day, it's easy to forget a vital piece of information that was released just a few hours or days earlier. Trader sentiment is often swayed by the price action of the moment, and it's easy to lose sight of the mega-trends and core issues, that move the markets over the longer-term. It was nearly one-year ago, on July 17, 2007, when Bear Stearns BSC said in a letter to investors, that two of its troubled hedge funds that bet heavily on risky sub-prime mortgages had very little value. “The preliminary estimates show there is effectively no value left for the investors in the Enhanced Leverage Fund and very little value left for the investors in the High-Grade Fund, as of June 30, 2007,” BSC said.
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Thursday, July 10, 2008
Economists Continue to Favor Failed Doctrine Against Real Facts / Economics / Credit Crisis 2008
By: Tim_Iacono
What if what they taught you is wrong? - In this Financial Times commentary , Wolfgang Münchau comes ever so close to asking what must be one of the most difficult of all questions for any practicing economist to ask, "What if what they taught you is wrong?"
[Note: This is similar to what some U.S.-based financial advisers might be asking themselves today, eight years into a secular bear market in stocks where "stocks for the long run" may not make a whole lot of sense for someone whose "long run" is only 15 years or so and happened to begin around 2000.]
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Wednesday, July 09, 2008
Soaring Unemployment, Collapsing Credit From Stagflation to Deflation / Economics / Deflation
By: Mike_Shedlock
I recently received an Email from "RS", a long time member of the hyperinflation is coming crowd now but now sees things in a different light. Let's tune in and see what "RS" has to say.
Mish, I was a true believer in the "hyperinflation is coming" theory for quite some time. However, I have since changed my mind. Here's why: I own a computer business and I used to pay techs $15-20/hr. I now have people willing to work for $8-$10/hr. While the nice guy inside is saying “pay people well” the businessman is saying “market conditions demand paying people what the market will support.”
Wednesday, July 09, 2008
Stagflation Sightings Multiplying / Economics / Stagflation
By: John_Browne
We have long warned that stagflation, or economic contraction accompanied by inflation, would become so evident that even the most optimistic observers could not deny its virulence.Read full article... Read full article...
Tuesday, July 08, 2008
Strip Mall Vacancies Spike to Levels Last Seen in 1995 / Economics / US Economy
By: Mike_Shedlock
MoneyNews is reporting Retail Property, Vacancies Q2 Worst in 30 Years .U.S. store closings and cutbacks turned the second quarter into the worst for strip mall owners in 30 years, as budget-conscious consumers flocked to low-cost warehouse-style grocery centers, according to a report by real estate research firm Reis.
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Tuesday, July 08, 2008
Bursting Bubbles Mean Inflation to Give Way to Deflation / Economics / Deflation
By: John_Mauldin
There is a reason I call this column Outside the Box. I try to get material that forces us to think outside our normal comfort zones and challenges our common assumptions. And this week's letter does just that. I have made the comment more than once that is it unusual for two major bubbles to burst and for the conversation and our experience to be rising inflation and not a serious problem with deflation.
Van Hoisington and Dr. Lacy Hunt give us a seminar on why it will be deflation that will ultimately be the problem and not the current inflation we are dealing with today. This week's letter requires you to think, but it will be worth the effort. Remember our lesson from Economics 101. If you raise the supply of something, in normal markets the price goes down. And if you increase the price, suppliers will respond by producing more.
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Sunday, July 06, 2008
UK Economy Slams Into Reverse as Retailers Experience Sales Hell / Economics / UK Economy
By: Mike_Shedlock
The Independent is reporting Seven days that shook the British high street . It was a week that most retailers would probably prefer to forget – seven days that shook the high street. From the grandest names to the most minor, the news has been uniformly grim. Yesterday, the mighty John Lewis reported that its sales are running 9 per cent down on last year. Marks & Spencer, still Britain's leading clothes retailer, warned on Wednesday of sharply lower sales and profits, and promptly saw a quarter of its stock-market value wiped out.
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Friday, July 04, 2008
US Metalworking Business Index Trends Point to Economic Contraction / Economics / UK Economy
By: Mike_Shedlock
Steve Kline who produces the Metalworking Business Index survey, shared an email with me from a correspondent who wanted to raise capital to expand, but could not get the loan. Let's take a look.
Steve,
Friday, July 04, 2008
Global Inflationary Pressures: No End in Sight / Economics / Inflation
By: Salman_Khan
Inflationary pressures, coming at a time when there are palpable signs of economic slowdown, has been spooking the global Governments, policymakers, financial authorities and marketmen alike. Worldwide, prices of commodities like Crude Oil, Wheat and Rice have skyrocketed in last one year or so. Policymakers have been especially finding themselves helpless in present situation due to the "global" nature of the current inflation. Central Bankers are also in a fix as given the slowdown in economic activity, they won't be able to fight the inflation the way Volcker did by aggressively raising the interest rates back in 1970's. Stagflation is extremely difficult for conventional policy instruments to deal with, since the attempt to deal with any one of the problems tends to exacerbate the other.Read full article... Read full article...
Friday, July 04, 2008
US Jobs Report Less than Expected; Based on BLS Statistical Assumptions / Economics / US Economy
By: Mark_OByrne
Gold was down $12.90 to $931.90 in New York yesterday and silver closed at $18.28, down 5 cents. Gold remained at these levels in Asia but has fallen near to yesterday's lows in early trading in Europe. Oil has fallen marginally < $144.40 down 0.6% - Light Sweet Crude Oil Future - Combined - AUG08> and the dollar is flat after yesterday's strong gains.Read full article... Read full article...
Thursday, July 03, 2008
US Jobs Decline for 6th Consecutive Month Data / Economics / US Economy
By: Mike_Shedlock
Before taking a look at the monthly jobs data, let's take a look at weekly claims. The US Department of Labor is reporting Initial Unemployment Insurance Claims continue to rise.
Seasonally Adjusted
In the week ending June 28, the advance figure for seasonally adjusted initial claims was 404,000, an increase of 16,000 from the previous week's revised figure of 388,000. The 4-week moving average was 390,500, an increase of 11,250 from the previous week's revised average of 379,250.
Thursday, July 03, 2008
US Economy Experiencing Wage Price Deflation Spiral / Economics / US Economy
By: Mike_Shedlock
The deflation train picks up steam as AirTran Asks Employees To Take "Temporary" Pay Cuts . On Wednesday, AirTran Holdings asked for temporary wage concessions from all of its employees, TradeTheNews reported. AirTran will ask all workers to accept pay cuts between 5% and 13%, and officers will take a 15% cut, effective in August, for six months.
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Wednesday, July 02, 2008
GLOBAL INFLATION: The Next Major Obstacle to Economic Growth / Economics / Inflation
By: Aden_Forecast
One thing we find truly amazing about the markets is that they're much more than just investments. Markets provide a way of peeking into the future, if you understand what they're trying to tell you.
These lessons are ongoing but it's fascinating and like a giant puzzle.
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Wednesday, July 02, 2008
Fed Stuck in Neutral on Monitory Policy Response to Stagflation / Economics / Stagflation
By: John_Browne
On June 25th , the Fed made no changes in its key interest rates and issued a statement that underscored how narrow their room for maneuver had become. Caught between the opposing forces of economic contraction and inflation, the Fed revealed that it was locked in neutral. Given that the Fed must use opposite remedies to satisfy the demands of its dual mandate (higher rates to curb inflation and lower rates to stimulate growth), the Fed is stuck firmly in neutral. There appears to be nothing left to do except to talk and hope for the best. Read full article... Read full article...
Wednesday, July 02, 2008
US Downward Economic Spiral in Employment Market / Economics / US Economy
By: Mike_Shedlock
The New York Times is reporting Deepening Cycle of Job Loss Seen Lasting Into '09 .
Plummeting home prices have in recent months eliminated jobs for hundreds of thousands of people, from bankers and real estate agents to construction workers and furniture manufacturers.
“The labor market is clearly deteriorating, and it's highly likely to keep deteriorating,” said Andrew Tilton, an economist at Goldman Sachs. “It's clear that the housing downturn and credit crunch are still very much under way. Clearly, there are more jobs to be lost in housing, finance and construction — hundreds of thousands of more jobs to be lost collectively.”
Wednesday, July 02, 2008
The Deadly Economic Force of Debt Deflation / Economics / Deflation
By: Dr_William_R_Swagell
Crunch Time for Debt - “Consumer boom shows US out of the woods... Despite the jump in energy prices and the related collapse in measures of consumer confidence, retail sales rose by 1.1 per cent on the month, the strongest gain since November...If there were going to be a US recession in response to the credit crisis, it would have started by now. So let me stick my neck out and say without qualification the US is out of the woods.” Anatole Kaletsky , The Times June 18th 2008.
Thank Heaven for the resilient US consumer, soldiering on stoically under an enormous burden of debt.
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