Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Saturday, May 31, 2008
US Economy Stuck in the Purple Haze of Stagflation / Economics / US Economy
By: Joseph_Brusuelas
With the economy caught somewhere in the purple haze between recession and anemic growth, many market prognosticators have been making the case that the worst is behind us.
With respect to the credit crisis, I do think that with the exception of a few nerve-rattling write-offs still to come, that is true. Credit spreads have begun to narrow, volatility measures seem to have settled down in recent weeks and the very unorthodox liquidity measures taken by the Fed appear to have calmed the nerves of market actors and appears to be in the process of pushing the market back towards something approximating normalcy.
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Friday, May 30, 2008
The False Prosperity of Inflationary Booms / Economics / Inflation
By: Adrian_Ash
"...So what's not to love about an inflationary boom...?"
"EVER WONDERED WHY your family budgets never seem to work out as planned?" asked Harry Browne in his 1970 best-seller, How You Can Profit from the Coming Devaluation .
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Friday, May 30, 2008
Indonesia Dumps Corrupt OPEC for the Good Guys and Greater Profits / Economics / Emerging Markets
By: Martin_Hutchinson
At times, you can tell a country by the company it keeps. Indonesia just announced it plans to leave the Organization of the Petroleum Exporting Countries (OPEC), the infamous cartel that tries to push our oil prices through the roof.
That decision may not seem very significant, but consider it this way: If you were Indonesia, which countries would you rather have as your buddies? A bunch of sleazy, corrupt, idle “lottery winners” such as Nigeria, Venezuela and Angola? Or would you prefer a set of hard-working and diligent neighbors such as Singapore, Malaysia and Thailand? Not to mention two of the largest growth economies in the world: India and China?
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Friday, May 30, 2008
CNNMoney.com's ‘Great Depression Comparisons Misguided' Conflicts with Historical Fact / Economics / Economic Depression
By: Paul_Lamont
After reading CNNMoney.com Editor Paul La Monica's piece on the comparisons to the Great Depression , we felt compelled to respond. Unfortunately for Mr. La Monica, the article regurgitates common beliefs about the Depression which conflict with historical fact and basic economics. We hope to set things straight. We begin with Mr. La Monica's words:
“ The unemployment rate skyrocketed during the Depression, peaking at nearly 25% in 1933. The current unemployment rate is just 5%. And that's only up from 4.5% a year ago. Contrast that with the far more explosive spike at the beginning of the Great Depression - from about 3% in 1929 to nearly 8.7% in 1930, according to the U.S. Bureau of the Census.”
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Thursday, May 29, 2008
Latest Banking-Sector Credit Crisis Are Bank Owned Life Insurance Vehicles / Economics / Credit Crisis 2008
By: Keith_Fitz-Gerald
Three major U.S. banks - including Fifth Third Bancorp. ( FITB ) and Wachovia Corp. ( WB ) - got clobbered in recent days on the news that they've lost another $1.6 billion by making investments in the Citigroup Inc. ( C ) Falcon hedge fund that lost 75% of its value earlier this year.
It's just the latest chapter in a continuing credit-crisis saga that's gone on for so long that many investors have become numb to the news: They regard all new developments with a kind of "so what" attitude, or just ignore the news completely.
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Thursday, May 29, 2008
Manipulated Economic Statistics and the Battle for Citizenry Perceptions / Economics / Market Manipulation
By: John_Browne
With consumer confidence now testing generational lows, our politicians are never the less continuously assuring us that the economy is strong, and that there is no cause for worry.
Although it is standard procedure for governments to soothe their citizenry with placebo politics in order to avoid panic and uprising, there is a line after which such a campaign is counterproductive. In fact, misleading statements about financial security are potentially dangerous to the country's long term economic well being, and potentially toxic to investors.
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Wednesday, May 28, 2008
Central Banks Joined in the Inflation Targeting Craze / Economics / Inflation
By: Adrian_Ash
rt = g rt- 1 + (1 -g ) rt* + q [ Et pt+j – p* ]
"If we wait until a price movement is actually afoot before applying remedial measures, we may be too late..." John Maynard Keynes, A Tract on Monetary Reform (1923)
JUST WHAT ARE central banks for exactly?
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Tuesday, May 27, 2008
Higher Prices Here to Stay / Economics / Inflation
By: Paul_J_Nolte
Absent big economic news, a few rumors of buyouts affecting select stocks, the markets were focused on energy prices and their new ascent to dizzying heights. Cuts of SUV production by Ford and reports of sales up over 20% of hybrid vehicles (not to mention articles about motorized scooters) indicate consumers are beginning to seriously look at changing their driving habits. While conservation remains a couple of years away, the fact that much of the discussion has finally hit the table is a good start.Read full article... Read full article...
Tuesday, May 27, 2008
Greenspan's Incessant Contradictory Ramblings / Economics / Liquidity Bubble
By: Brady_Willett
In yet another attempt to defend his legacy, Greenspan resorts to semantics and outrageous contradiction ( FT Article ). On the topic of asset ‘bubbles' – which Greenspan preferred to completely ignore as they acquired air and help reflate after they burst – he asked the following: “Is there a bubble today in food, energy, gold, currencies? If so, what specifically should we do about it?”
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Tuesday, May 27, 2008
The Hyperinflationary Shell Game / Economics / Stagflation
By: Darryl_R_Schoon
Modern economics is not rocket science. In fact, it's not science at all. It's a game, a confidence game. Once paper passed for money, economics became an elaborate shell game designed to hide the fact paper had been substituted for silver and gold. Debt ratings are an attempt to quantify confidence in paper assets and are an essential part of the game. The shell game is called “Where's The Money?” The answer is simple, it's not there. Read full article... Read full article...
Monday, May 26, 2008
Bush Economic and Housing Boom was Fueled by Credit Expansion / Economics / US Economy
By: Gerard_Jackson
America's sluggish economy has the ever-so patriotic Democrats and their media playmates drooling over the prospect of a recession and rising unemployment. Those political activists who have the brazen effrontery to call themselves journalists have been gleefully drawing unfavourable comparisons between the economy under Bush and the Clinton boom, painting the former as a dreadful record of lousy growth, stagnant wages and tax cuts for the rich.
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Monday, May 26, 2008
Inflation accelerates while the Reserve plays guessing games / Economics / Austrailia
By: Gerard_Jackson
The CPI now stands at an annual rate of 4.3 per cent (1.3 per cent over the Reserve's maximum target rate). And what does Governor Glenn Stevens do? He blames the commodity boom and 'excessive' wage rates, warning that they might force him to lift bank rates.Read full article... Read full article...
Sunday, May 25, 2008
The Easy Money Path to Deflation / Economics / Deflation
By: Mick_Phoenix
Welcome to the Weekly Report. Due to family illness, this week's letter will be shorter than usual but all the more powerful. This week we re-visit the scenario used for the Occasional Letter series as another milestone is passed.
The Scenario: bubble, easy money, inflation in fiat money supply, inflation in commodities and hard assets, inflation, fear of inflation, rising rates, YC inverting, flattening, rising and inverting again, tightening, withdrawal of liquidity, corrections, crashes, talk of stagflation, FEAR, withdrawal of speculative funds, further corrections and crashes, demand collapse.....Deflation.
Sunday, May 25, 2008
Global Economic Slowdown in Stagflationary Environment / Economics / Stagflation
By: Prieur_du_Plessis
Asha Bangalore (Northern Trust): Leading indicators – premature to rule out recession “The Index of Leading Economic Indicators (LEI) moved up 0.1% in April, matching the increase seen in March. The two consecutive monthly gains of the index follow five consecutive monthly declines. The spokesperson from the Conference Board indicated that the index is indicative of weak economic conditions but ruled out the possibility of a recession.
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Sunday, May 25, 2008
Economic Statistics Con Game to be Exposed, Bigger Impact than Housing Bust / Economics / Recession
By: Prieur_du_Plessis
Soaring oil prices were mostly to blame for the past week's stock market sell-off, but renewed concerns about US economic growth, corporate earnings and mounting angst about inflation pressures also featured prominently in determining the market's fate.
David Fuller ( Fullermoney ) commented as follows: “As the world's most important commodity by far, this surge in the oil price is bearish for the majority of stock markets. Consequently I would assume that rallies seen since March have either been capped or are unlikely to make much upward progress until investors see evidence that crude oil has commenced a medium-term correction.”
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Friday, May 23, 2008
US Dollar Crisis Not Oil Crisis / Economics / US Dollar
By: Peter_Schiff
It's unfortunate that the Supreme Court, in its ruling this week that U.S. currency is unfair to the blind, did not make the next logical step and declare it unfair to everyone who buys gasoline.
In their search for explanations as to why oil has surged past $130 per barrel, Washington, Wall Street, and the financial media are as clueless as cavemen after a freak summer snow storm.
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Friday, May 23, 2008
Financial Markets Behind the Curve as Consumer Spending Acts as Leading Economic Indicator / Economics / US Economy
By: Joseph_Brusuelas
The past two quarters have seen anemic 0.6% rates of growth and we expect that personal consumption for the advance Q1'08 growth report will advance 1.0%, which would be the weakest three months of personal consumption since the beginning of the 2001 recession.
The primary catalyst behind the subpar performance has been the steep increase in headline costs. The price of domestically produced gasoline has increased 20.7% and the cost of food has risen 5.1% over the past year. This has eroded what little increase in wages that consumers have seen as the business cycle has come to an end.
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Thursday, May 22, 2008
Iceland Facing Meltdown as the Credit Crunch Sinks its Currency / Economics / Credit Crisis 2008
By: Keith_Fitz-Gerald
Despite rising fast financially in the past few years, Iceland is feeling the chilly effects of the global credit crunch - so much so the fiercely independent island nation is considering European Union membership to save its tanking currency. A special report, jointly developed by U.K. affiliate MoneyWeek Magazine and our experts here at Money Morning, explores the pros and cons of Iceland's potential EU membership. For more information on MoneyWeek, please click here . Read full article... Read full article...
Thursday, May 22, 2008
Western Economies Experiencing Early Stages of Stagflation / Economics / Stagflation
By: Mark_OByrne
Gold and silver continued to surge yesterday with gold up nearly 1% (up $8.25 to $927.80) and silver up 2% (up $0.35 to $17.97). Gold continued to rally in Asia but has succumbed to some profit taking in early trade in Europe. Gold has risen on the continuing oil surge with oil reaching new record highs (above $135) again this morning and oil remains near these record levels.Read full article... Read full article...
Wednesday, May 21, 2008
UK Inflation Heading Back to 2%- What's Mervyn King Smoking? / Economics / Inflation
By: Adrian_Ash
"...The fiat-money experiment – along with the financial life-forms and hallucinations it spawned – has broken out of the lab and onto the street..."
WHEN ALBERT HOFMANN – the Swiss chemist who discovered LSD – passed away at the start of this month, newspaper editors the world over reported it as the death of the man "who experienced the first ever bad trip."
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