Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Wednesday, May 07, 2008
The Bernanke Monetary Policy Conundrum Heading for a Crash / Economics / Economic Depression
By: Mick_Phoenix
The Bernanke Monetary Policy Conundrum Heading for a Crash
With the US Federal Reserve cutting its Fed Fund Rate to 2%, presumably to aid the cost of borrowing and allow an expansion of lending that will lift the US economy from the doldrums you would expect to see an expansion of bank business. Not so according to the latest Fed's Senior Loan Officer Opinion Survey which shows that banks are now actively avoiding the expansion of credit and it can be shown are deliberately causing a credit contraction.
This has profound meaning for the US and the wider global economy.
Wednesday, May 07, 2008
The Great Consumer Shutdown of 2008- Wages Squeezed by Inflation / Economics / Credit Crisis 2008
By: Adrian_Ash
"...Now that cheap money's vanished, where will consumers find enough cash to pay the bills...?"
THE CHEAP MONEY BUBBLE might have gone pop. But everywhere we look, the mischief of cheap money continues to cause mayhem for investors, savers, retirees, even school children.
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Tuesday, May 06, 2008
US Government Facing Fiscal Armageddon- US Dollar in Deep Trouble / Economics / US Dollar
By: Money_and_Markets
When a president tells you the economy's OK and wannabe presidents tell you it's a disaster ... or when Wall Street pundits change their story almost daily ... I can understand how it may be tough to know what to believe ... and even tougher to decide what to do.
But when three respected government agencies put out reports and data that unanimously lead to the same conclusion about the most important factor in your financial future, there's no room for disbelief, no excuse for inaction.
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Tuesday, May 06, 2008
Fixing The Credit Markets to Avoid Another Credit Crisis / Economics / Credit Crisis 2008
By: John_Mauldin
This week in Outside the Box we take up a topic that should be on the top of the agenda of every regulatory authority, executives at financial services firms of all types, and average investors: How do we fix the credit markets to make sure we do not have such a crisis again? Good friend Michael Lewitt of Hegemony Capital Management gives us his observations, some of which go further than I would personally like to see us go. But this is the conversation that must happen if we are to steer clear of future crises. It is clear to me now that a laissez faire approach to regulating certain financial instruments exposes the entire economy to risks much larger than the loss of a business here or there. While better disclosure is certainly appropriate, it is not enough. Read full article... Read full article...
Tuesday, May 06, 2008
Yes Virginia. This Is A Recession / Economics / Recession
By: Ronald_R_Cooke
A preliminary report from the United States Department of Commerce, Bureau of Economic Analysis (BEA), claims American Current-dollar GDP -- the market value of the nation's output of goods and services – increased 3.15 percent or $111.0 billion in the first quarter of 2008 (versus the last quarter of 2007), to a level of $14,185.2 billion. That economic performance equates to an average annual year over year increase of 4.67% against Q1 2007. Read full article... Read full article...
Tuesday, May 06, 2008
US Fed Monetary Policy- Bernanke Gets It Wrong / Economics / Recession
By: Gerard_Jackson
Since the 2000 election America's leftwing mainstream media has tried to pump out a stream of bad economic news. According to this mob of political bigots recessions only happen under Republican presidents, completely ignoring the easily researched fact that the 2000 recession began under President Clinton. Now that so many indicators have turned negative the media are having a collective orgasm. Read full article... Read full article...
Monday, May 05, 2008
Money Supply, Inflation, Deflation and Gold / Economics / Money Supply
By: John_Lee
Money serves as a medium of exchange and store of value. Price provides an important clearing mechanism in a society. Here we are going to explore the interesting dynamics between money and price. In a free market, when the quantity of money is fixed, the fact that the price of an apple is $1 and that of a Parker pen is $2 has tremendous implications. It takes knowledge, ingredients and time to grow an apple while it involves branding, material, and capital to produce a Parker pen. Read full article... Read full article...
Monday, May 05, 2008
US Economic Stimulus Not a Silver Bullet / Economics / US Economy
By: Mike_Shedlock
While pondering whether there is going to be a second half recovery on the basis of stimulus checks, let's first take a look at the possible repercussions of Cash-Out Refis Lowest in Four Years . Fifty-six percent of Freddie Mac-owned loans were cash-out refinances in the first quarter of 2008, the smallest percentage since Q2 in 2004, the GSE said Friday. First quarter's share compares starkly to the 77 percent share of refinancing posted just one quarter earlier, and underscores the new reality for most homeowners.Read full article... Read full article...
Monday, May 05, 2008
The Great Depression of the 2010s / Economics / Economic Depression
By: Darryl_R_Schoon
Economics is not rocket science. Neither is power.Depressions are monetary phenomena caused by central bank issuance of excessive credit. In 1913, the newly created US central bank, the Federal Reserve, began issuing credit-based money in the US . Within ten years, the central bank flow of credit ignited the 1920s US stock market bubble; and shortly thereafter, following the collapse of the bubble in 1929, the world entered its first Great Depression in 1933.
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Saturday, May 03, 2008
US in Recession Despite Manipulated Employment and Inflation Statistics / Economics / Recession
By: John_Mauldin
- Lies, Damn Lies, and Statistics
- Who Is Inflating the Numbers?
- Honey, I Blew up the Employment Numbers
- A Black Swan in Food
- Housing Numbers Are Better Than I Wrote
"There are three kinds of lies: lies, damn lies, and statistics." – commonly attributed to Benjamin Disraeli
If we are to believe the government statistics, the GDP of the US grew by 0.6% in the first quarter of this year. And unemployment actually fell. And there were only 20,000 job losses. This week we do a quick review of why the statistics can be so misleading. We also look at why I was wrong about the housing number last week, and I highlight what could be a very serious Black Swan lurking in the agricultural bushes. It should make for an interesting letter. It's hard to know where to begin, there are just so many tempting targets; so let's take the statistical aberrations in the order they came out this week.
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Friday, May 02, 2008
Debt the Price for Economic Growth / Economics / US Economy
By: Andy_Sutton
Our call from last week is playing out exactly as we forecasted. The Fed cut interest rates, signaled a willingness to pause, and the Dollar has begun another dead cat bounce. Included below is a chart that shows other dead cat bounces that have occurred during the past year. Note the end result of each of the prior bounces: an ultimately lower Dollar. There is no reason to believe this time will be any different. We outlined the reasons for this assumption in last week's piece.Read full article... Read full article...
Friday, May 02, 2008
Inflation v. Unemployment / Economics / Inflation
By: Gerard_Jackson
It says much about the lousy state of economic debate that the 1993 study The Costs of Unemployment in Australia , produced by the Economic Planning and Advisory Council and co-authored by Raja Junankar and Cezary Kapuscinski, is still being touted as a piece of sound economics. At the heart of this study is the grave economic error a "fight inflation first" policy generally incurs more costs than benefits.Read full article... Read full article...
Wednesday, April 30, 2008
Sharp Fall in Consumer Spending / Economics / US Economy
By: Mick_Phoenix
Does the consumer truly believe?The past three Occasional Letters have been quite an in-depth discussion about the path taken by the Federal Reserve and recently by the Bank of England in their attempts to deal with the deflationary forces unleashed by the credit crash. Since those discussions we have seen evidence that supports my view as seen recently in the Weekly Reports.
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Wednesday, April 30, 2008
$536 Billion Worth of Household Assets Evaporated in February? / Economics / US Housing
By: Paul_L_Kasriel
It sure is a good thing that $150 billion of checks from the IRS are in the mail to U.S. households because these same households experienced an evaporation in paper wealth in February to the tune of about $544 billion according to my admittedly back-of-the-envelope arithmetic. It was reported today that the Case-Shiller house price index for 20 major metropolitan areas fell 2.66% month-to-month in February. Applying that percentage decline in house prices to the fourthquarter value of $20,154.7 billion for household residential real estate from the Fed’s flow-offunds data yields a decline of $536 billion. Now, this is a very rough approximation for at least two reasons.Read full article... Read full article...
Wednesday, April 30, 2008
US Federal Reserve Wants Inflation to Avoid Deflation / Economics / Inflation
By: Axel_Merk
We are now importing inflation. This does not only apply to the cost of commodities, such as oil, but also to consumer goods imported from Asia. This is a newer trend as, in our analysis, Asia had been exporting deflation until the summer of 2006; since then, we have seen increased pricing power by Asian exporters. Read full article... Read full article...
Monday, April 28, 2008
Borrowed Consumption: Opium of the Masses / Economics / Debt & Loans
By: Kurt_Kasun
My last commentary touched off a mini-debate between myself and Michael Pento, a proponent of Austrian Economics who gallantly defends his principles against the Keynesian economists and supply-side monetarists when he makes his appearances on CNBC's Kudlow & Company. I too attempt to follow the Austrian economic precepts laid out by Ludwig von Mises and I think that the bone of contention between us, in the "posted comment section" after my initial commentary, boils down to the following von Mises' quote: Read full article... Read full article...
Monday, April 28, 2008
Warnings of US Heading for Depression Plague US Economy / Economics / Economic Depression
By: Gerard_Jackson
The cause of the current economic problems is very simple: Bad economics. Instead of closely examining the monetary theory that got us into this mess economists have started playing the blame game. Alan Greenspan blamed Wall Street irrational for making irrational economic decisions the appear to have brought the US economy to the brink of disaster.
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Sunday, April 27, 2008
GOTTERDÄMMERUNG- The Twilight of Irredeemable Debt / Economics / US Debt
By: Professor_Emeritus
Wagner's opera Gotterdämmerung is about the twighlight of pagan gods. The most powerful of the latter-day pagan gods that has been guiding the destinies of humanity for the past two-score of years is Irredeemable Debt. Before August 14, 1971 , debts were obligations, and the word “bond” was to mean literally what it said: the opposite of freedom. The privilege of issuing debt had a countervailing responsibility: that of repayment. Read full article... Read full article...
Sunday, April 27, 2008
Alan Greenspan: The Age of Hubris (and the long road back) / Economics / Money Supply
By: Clif_Droke
Hubris is an amazing thing. It causes those infected by it to justify actions that would normally be indefensible.
Take Alan Greenspan, for instance. He recently penned an editorial in the Financial Times claiming that under his leadership, the Federal Reserve is blameless on the property bubble. No way could the Greenspan Fed have foreseen the devastation its money policy of 2001-2006 would inflict on the housing market and the larger economy. “It wasn't my fault. Don't blame me,” claims Alan.
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Saturday, April 26, 2008
How the Economy Really Works- Inflation, Money Supply and the Velocity of Money / Economics / Money Supply
By: John_Mauldin
- The Velocity Of Money
- Is the Money Supply Growing or Not?
- P=MV
- A Slowdown in Velocity
- If You Are in a Hole, Stop Digging
- And More Write-offs to Come
The late and great Milton Friedman told us that inflation is always and everywhere a monetary phenomenon. But there is an asterisk to his equation that we need to examine, namely, the velocity of money. Sometimes a fast-growing money supply is not as inflationary as you might think. Then we will take quick looks at why the banking sector is in for more and larger rounds of write-offs, as well as note that the housing industry is in a hole but is gamely digging itself deeper. This week's letter will require you to put your thinking cap on as we travel to a mythical island to get an understanding of how the economy really works. There are a lot of charts, so the letter may again print long, but the word length is normal. And with no "but first," we jump right in.
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