Consumers, whose spending had been THE driver of this economy, shut their wallets in August. From Reuters (hat tip reader Brian): Consumers facing rising unemployment kept their spending unchanged in August even though incomes rose, according to a government report Monday that showed optimism about the economy’s direction was fading. The Commerce Department said consumer […]
Read more...The Baltic Dry Index, which measures international shipping rates, is seen as a rough proxy for global growth. But like a negative yield curve, falls in the Baltic Dry Index have as often as not proven to be false positives. However, the BDI has taken a dramatic turn south, and in combination with weakening economic […]
Read more...The IMF just released a study that analyzed 124 banking crises, and I wish everyone in Congress (well, at least their staffers), the Treasury, and the Fed read the paper. It provides insight into what worked and didn’t work in past banking crises, and gives an idea of what we might expect from various policy […]
Read more...Swiss investor Marc Faber, known for a long track record of good calls (he was a commodities bull until late this spring, for instance, when he reversed his view) and a fine grasp of financial markets history, confirms the estimate earlier in the week by Ken Ohmae that the US needs a salvage operation much […]
Read more...Tim Duy at Economist’s View tells us that the economy is slowing down markedly, and that that will lead to a lot of false causality. Whether the bailout plan gets done in some reasonable form or not, the slowdown will be blamed on its failure, or the fact that the rush to get it done […]
Read more...From Bloomberg (hat tip reader Lewis B. Sckolnick); Responding to questions from lawmakers, Bernanke said that should the rescue succeed and spur an economic recovery, that may lead the Fed to raise interest rates sooner than it otherwise would. For the plan itself, “I don’t expect any effect on inflation,” Bernanke said. The first trading […]
Read more...Notice how the articles focuses on CPI, which is the more favorable measure, rather than core CPI, which was highlighted when prices were rising at worrying rates and provided the less troubling picture. From the Wall Street Journal: U.S. consumer prices fell last month for the first time in nearly two years reflecting a rapid […]
Read more...Reader Vijay pointed us to an op-ed today in the Washington Post by Don Luskin, “Quit Doling Out That Bad-Economy Line.” Some of its priceless wisdom: Things today just aren’t that bad. Sure, there are trouble spots in the economy, as the government takeover of mortgage giants Fannie Mae and Freddie Mac, and jitters about […]
Read more...Note the not-pretty pattern. The flow of funds out of emerging markets has reached the high-water mark of the period leading into the Asian, then Russian financial crises of 1997-1998. However, after recovering from the damage of this period, emerging markets as a whole enjoyed a period of strong growth. In theory, their economies are […]
Read more...Wow. And remember, the prior release’s ncrease, to 5.7%, was hoped to be due to anomalies. There was discussion at that time that it might fall back with the next month’s announcement. This may put a nail in the coffin as far as rate increase talk at the Fed is concerned. From the Wall Street […]
Read more...Macro investor Marc Faber, a commodities bull until the spring of this year, says that commodities have further to fall. From Bloomberg: Oil will likely drop further in the next three to six months, according to investor Marc Faber, who reiterated his forecast that the second half of 2008 won’t be “favorable” for commodities. The […]
Read more...The Independent reports that consumers have slammed on the brakes as far as shopping is concerned. The story draws on survey data, and contradicts official retail sales, which showed a modest gain. However, the aggregate data includes petrol and food vendors, so the real change was probably negative. From the Independent: Retailers delivered their worst […]
Read more...Last year, we put America on Banana Republic watch, and sadly, things appear to be playing out as we feared: I’m certain you’re familiar with the expression “death wish.” I am beginning to wonder whether America has a banana republic wish. The country has been taking steps towards being a small-minded, elite-dominated, sham democracy. Mind […]
Read more...Anyone who has ever worked in a large organization knows that the underlings are frequently overruled by the higher-ups. The Federal Reserve is apparently no different. A piece in today’s Financial Times, “Fed minutes bearish on growth,” reports that Fed staffers foresee continuing economic weakness, which in turn made them more sanguine about inflation than […]
Read more...Forgive me tonight for relying more heavily on other people’s material than usual, but 1) it’s good stuff, 2) it’s an end of summer weekend, and I’m suffering from diminished productivity (the Olympics haven’t helped), 3) I foolishly wasted a lot of time and energy corresponding with a reader who was mightily unhappy with my […]
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