Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.Thursday, December 18, 2008
UK Real Retail Sales Deflation Continues as Woolworths Goes Bust / Economics / UK Economy
The latest retail sales data released by the ONS shows UK retail sales showing a surprise rose of 0.4 for November and up 1.7% on a year earlier, however a deeper analysis of the data reveals that the data for October was revised lower on the retail sales indices from 140 down to 139.7, and therefore the index of 140.1 for November is just 0.1 higher on the original data rather than that which the mainstream press is running with as positive sign as the below graph illustrates.Read full article... Read full article...
Thursday, December 18, 2008
Norway's Central Bank Slashes Rates, Warns of Recession / Economics / Euro-Zone
Norway's central bank today slashed its sight deposit rate by a record 175 bps, taking it to 3.0%. Stating that the risk of a "pronounced downturn" in the economy has increased, Norges Bank warned that real GDP is likely to contract in Q4 2008 and again in Q1 2009 - a marked contrast to its forecast of continued growth made just two months ago.Read full article... Read full article...
Thursday, December 18, 2008
UK Economy Nosedives Pointing to Much Lower Sterling and Interest Rates / Economics / UK Economy
The economic news out of the UK is ever more grim. Today was the turn of employment and retail sales. Claimant count unemployment surged by 75,700 last month, taking the number of unemployed by this measure past the psychologically-important one million mark for the first time since 2001. The broader ILO-basis jobless rate rose from 5.8% in the three months to September, to 6.0% in August-October. As unemployment is usually a lagging indicator, the fact that jobs are being shed at this fast a pace this early in the economic downturn points to a harsh year ahead for employment.Read full article... Read full article...
Wednesday, December 17, 2008
Financial World Turned Upside Down– A Changing of the Guard? / Economics / Credit Crisis 2008
Revolutionary war history buffs may recall that as Lord Cornwallis surrendered to George Washington at the Battle of Yorktown in 1781 his band – the Buckinghamshire Light Infantry - played “The world turned upside down”. Nothing could be a more apt metaphor for the global financial markets in the latter half of 2008. The established economic orthodoxies have been progressively jettisoned as the global markets entered an unprecedented phase of meltdown and fear drove out greed as the overriding driving force.Read full article... Read full article...
Tuesday, December 16, 2008
Deflation and the Destruction of America's Wealth / Economics / Deflation
Martin Weiss writes: The deflation we've been warning you about is here, and it's striking hard. Last week, the Fed released a report that sent chills down the spine of economists all over the world, revealing a sweeping destruction of wealth in America.
Just in the third quarter alone, U.S. households lost $647 billion in real estate; $922 billion in stocks; $523 billion in mutual funds; $653 billion in life insurance and pension fund reserves; plus $128 billion in private business interests.
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Tuesday, December 16, 2008
Expect Smaller If Any Pay Increases During 2009 / Economics / Recession 2008 - 2010
The latest business survey from Hewitt Associates Inc. suggests that Pay Raises Will Take A Hit
Employers, who as recently as October said they were barely modifying their salary budgets for 2009, have changed their tune in December, this time bringing some workers' projected annual pay raises to a low not seen in three decades.
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Monday, December 15, 2008
Deflation 2009 as Central Bank Credit Creation Loses to Derivatives Deleveraging / Economics / Deflation
This week I am really delighted to be able to give you a condensed version of Gary Shilling's latest INSIGHT newsletter for your Outside the Box. Each month I really look forward to getting Gary's latest thoughts on the economy and investing. Last year in his forecast issue he suggested 13 investment ideas, all of which were profitable by the end of the year. It is not unusual for Gary to give us over 75 charts and tables in his monthly letters along with his commentary, which makes his thinking unusually clear and accessible.Read full article... Read full article...
Monday, December 15, 2008
U.S. Federal Reserve Sets Stage for Weimar Style Hyper-inflation / Economics / HyperInflation
The Federal Reserve has bluntly refused a request by a major US financial news service to disclose the recipients of more than $2 trillion of emergency loans from US taxpayers and to reveal the assets the central bank is accepting as collateral. Their lawyers resorted to the bizarre argument that they did so to protect ‘trade secrets.' Is the secret that the US financial system is de facto bankrupt? The latest Fed move is further indication of the degree of panic and lack of clear strategy within the highest ranks of the US financial institutions. Unprecedented Federal Reserve expansion of the Monetary Base in recent weeks sets the stage for a future Weimar-style hyperinflation perhaps before 2010.Read full article... Read full article...
Monday, December 15, 2008
How Deflation Creates Hyper-inflation / Economics / HyperInflation
I keep reading about the dollar being a "new multi-year bull market" and that the US is headed for "Japan style deflation". Frankly, it is a little tiring. The people making these arguments should know better.Read full article... Read full article...
Monday, December 15, 2008
The Financial Bomb in your Christmas Stockings / Economics / Credit Crisis 2008
Misplaced fears are the most dangerous of all - The Muslim terrorists of Mumbai are not our greatest threat nor will they cause the greatest suffering in the days ahead. That which will cause the greatest grief is the banker's system of credit-based paper money, a house of cards now in flames and about to burn all inside who still believe it to be shelter instead of a charnel house.
Those who have attended Professor Antal E. Fekete's Gold Standard University Live (GSUL) are not found around corporate watering holes discussing stock tips. Although aware of the markets, those in attendance have their focus on the system itself, on what caused its problems and what can be done to correct it.
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Sunday, December 14, 2008
Excess Debt and Deflation = Depression / Economics / Economic Depression
Irving Fisher (1867 - 1947) was perhaps the most noted economist of his day. The Concise Encyclopedia of Economics calls him "one of America's greatest mathematical economists and one of" its clearest writers. He earned special acclaim for his work on monetary and statistical theory, policy, index numbers, econometrics, and the distinction between real and nominal interest rates.Read full article... Read full article...
Sunday, December 14, 2008
Imploding Overly Leveraged Private Equity Deals Deepen Recession / Economics / Recession 2008 - 2010
Shah Gilani writes: The once booming business of private equity faces an uncertain future. What's not uncertain, however, is that many private equity deals are imploding from the weight of leveraged debt and greed. Inevitable bankruptcies will result in higher unemployment and a deeper recession.Read full article... Read full article...
Sunday, December 14, 2008
China to Print Money, Devalue Currency to Combat Deep Slowdown / Economics / China Economy
Deflation talk is surfacing in China as Chairman Liu Mingkang says China December Producer Price Index to Drop .
China's producer price index is expected to drop "sharply" in December, China Banking Regulatory Commission Chairman Liu Mingkang said. The world's fourth-biggest economy is shifting toward deflation, Liu told a financial forum in Beijing today. Capital inflows may shift to outflows, with gross domestic product projected around 8 percent next year, he said.
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Sunday, December 14, 2008
How to Prepare for the Deflationary Market Crash / Economics / Deflation
Editor's Note: The following article is adapted from Robert Prechter's best-selling book, Conquer the Crash – You Can Survive and Prosper in a Deflationary Depression . In addition to this article, visit Elliott Wave International to download the free 15-page report about how to protect yourself, you wealth and your family in this environment. It contains details about what you should do with your pension plan, valuable tips for business owners, insights on handling loans and debt and important warnings against trusting the government to protect you.Read full article... Read full article...
Friday, December 12, 2008
Our Asset Value Trend Dependent Economy / Economics / US Economy
The Federal Reserve's latest Flow of Funds Report contains some painful news about how our asset-dependent economy is faring in what is now an increasingly asset-averse world. This time around we have double the trouble as prices for both stocks and housing are declining.Read full article... Read full article...
Friday, December 12, 2008
Fed Policy Makers Wasting $10 Trillion on Bailout Liabilities / Economics / Credit Crisis Bailouts
What These Dangerous Clowns Don’t Understand - I had the unnerving experience last night of staying up late watching C-Span as U.S. Senators hammered and then shot down the bailout bill for the Detroit“Big 3″ (a misnomer?) automakers. I must admit, there was a great deal of heart-felt passion in the words of the representatives who were courageous enough to speak out and it was this rare display of authenticity and, dare-I-say, credibility that kept me watching.Read full article... Read full article...
Thursday, December 11, 2008
Forget Inflation Instead Focus on How Long Deflation Will Last / Economics / Deflation
Humpty Dumpty On Inflation - There is an excellent article by Axel Merk on Market Oracle called Monetizing the Debt . The article discusses the Fed's growing balance sheet and whether or not it represents inflation. The aspect that I want to highlight is in regards to bank lending.Here are a couple of charts from the article along with commentary by Merk.
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Wednesday, December 10, 2008
The Global Economic Crisis- Bad and Worsening / Economics / Recession 2008 - 2010
In a new article, economics professor Richard Wolff explains the current crisis in Marxian terms. It "emerged from the workings of the capitalist class structure. Capitalism's history displays repeated boom-bust cycles punctuated by bubbles. They range unpredictably from local, shallow and short to global, deep and long." Clearly we're now in one of the latter and potentially the worst ever.Read full article... Read full article...
Wednesday, December 10, 2008
Inflation or Deflation? / Economics / Deflation
Explanation of the Price Effects of Inflation and Deflation - The U.S. Labor Department reported a 1 percent drop in the consumer price index for October 2008. The drop marked the largest decline in 61 years, and it was the first decline in that measure in nearly a quarter of a century. The 1 percent drop was twice as large as many mainstream analysts had forecast. Such a large decline in consumer prices is forcing U.S. policymakers to rethink the possibility of deflation in America. For more on deflation, we turn to Robert Prechter, the man who literally wrote a book on how to survive it.Read full article... Read full article...
Tuesday, December 09, 2008
Economic Depression, Deflation and Your Financial Survival / Economics / Recession 2008 - 2010
Martin Weiss writes: If you're still skeptical that we're sinking into America's Second Great Depression, you don't have to believe Alan Greenspan, who says we're already experiencing the worst financial crisis in a hundred years. Nor need you heed the news that the economy just lost a half-million more jobs or that retail sales have just suffered their worst plunge in 35 years. All you have to do is get up from your chair, open the door and take a walk outside.Read full article... Read full article...