Category Archives: Economic fundamentals

Wolf Richter: Strung-Out Consumers, Desperate Retailers, Crummy Sales

During this festive time of the year, the whole world is intensely focused on American consumers, watching their every move under a digital microscope to parse if the universe is going to live or die. Retailers and the media joined forces to create hoopla and excitement and frenzy and the perception of once-in-a-lifetime deals. Stores opened on Thanksgiving, stayed open late at night, and opened early in the morning. And consumers dove right into this extravaganza.

Read more...

The European Balanced Budget Disaster

In the immediate aftermath of the financial crisis, most European governments allowed the automatic stabilisers to kick in and implemented some mild discretionary measures, despite the strictures of the Stability and Growth Pact (SGP). But it was not long before the siren calls for “fiscal consolidation” arose…

Read more...

Michael Hoexter: Loathsome Wall Street Deficit Hysterics: ‘Blame the Old and Sick, Not Us’ – Part 2

While Pete Peterson and Bob Rubin have couched their campaign against Social Security and Medicare in the moral vestments of “fiscal responsibility”, they gloss over the macroeconomic financial reality of government and the requirement for deficit spending to maintain growth of the national and world economies.  The moral fervor that they apply is inapplicable to government programs: while it may seem real to them or the gullible politicians they influence, the moral outrage they hope to play on is based on false and inhumane premises.

Read more...

Krugman, Following Summers, Endorses Asset Bubbles

We have now passed the event horizon into a world run by Dr. Pangloss. In a Sunday afternoon post, Paul Krugman enthusiastically endorses an IMF presentation by Larry Summers which depicts asset bubbles as necessary and desirable. And that means they both agree they should not only continue, they should be encouraged.

Read more...

Wolf Richter: The Day The Bubble Became Official, And Everyone Was Happy (Except Twitter Casualties)

A new era has dawned: there is now a consensus that this is a stock market bubble. We’re back where we were during the last bubble, or the one before it, though the jury is still out if this is February 2000 or October 1999 or sometime in 2007.

Read more...

Richard Alford: On Grading the Bernanke Fed

We are certain to hear more and more appraisals of Bernake’s tenure as Fed chairman as he approaches the end of his term. But will they use good benchmarks? We suggest measuring his performance against his claims for the Fed’s objectives and what he said the central bank could accomplish. Not surprisingly, we find that he came up short.

Read more...