Tim Duy, economics professor at the University of Oregon, posts from time to time on Mark Thoma’s blog, Economist’s View, and Fed watching is one of his favorite topics. His latest, “The Fed’s Next Move,” is particularly thorough and cogent. He goes through the case for further rate cuts and finds the consensus view, that […]
Read more...As the housing numbers come in, they keep getting worse and worse. From Bloomberg: Sales of new homes in the U.S. dropped more than forecast in August and prices plunged by the most since 1970, underscoring the Federal Reserve’s concern about the broader economy. Purchases declined 8.3 percent to an annual pace of 795,000, the […]
Read more...The president of the Philadelphia Fed, Charles Plosser, is tough on inflation. He is not a member of the FOMC until 2008, and is breaking rank with the official Fed view in expressing his worries about the risks of permissive monetary policy. Plosser argued prior to the Fed rate cut that a reduction wasn’t necessary; […]
Read more...You know things are bad when famed permabear Nouriel Roubini’s forecasts turn out to have been cheery. In today’s post, he reviews his calls on housing starts and home price declines and finds them to have been too rosy. From RGE Monitor: This author is well known as one of the biggest bears about the […]
Read more...Like our own Fed governors in the run up to the FOMC meeting that produced a 50 basis point Fed funds rate cut, so too have European Central Bank been sending mixed signals on domestic versus international priorities in their interest rate policies. But their actions are the mirror image of ours. For them, member […]
Read more...In an interesting Brookings Institution paper (hat tip Greg Ip at the WSJ Economics Blog), former Federal Reserve economist Douglas Elmendorf looks at the question of whether monetary policy in the run-up to the credit contraction was too loose. However, he argues that the impact wasn’t great enough to have caused the housing bubble: Let […]
Read more...Economists Barry Cynamon and Steven Fazzari argue that much of the growth in the US over the past 25 years has been fueled by consumer debt. Their research indicates that the consumers will cut spending as a result of the housing recession, which they believe will trigger the worst contraction since the 1980s, and possibly […]
Read more...Bloomberg tells us that foreclosure notices increased more than 100% in August from the year prior level, rising from 1 108,716 to 42,144. These figures greatly exceed the number of homes sold at foreclosure auction. RealtyTrac, the source of the data, counts every court filing in the foreclosure process as a “foreclosure,” which results both […]
Read more...If one didn’t know better, it might be possible to think that a page one story today, “Too Much Hope May Be Pinned On Rate Cut.,” was a decent piece of journalism. But to reach that conclusion, you need to overlook a few things. First, the story is late. Those who were early to recognize […]
Read more...Faithful readers, I have looked around quite a bit tonight, but I am not coming up with much grist for blogging. Yes, there is a Wall Street Journal front page story that tells us that homebuilders are putting up smaller houses. And there is some chat everywhere about OPEC’s small production increase, one that the […]
Read more...Given that it is now September, and in most communities, the residential selling season is March to October, the forecast by the National Association of Realtors, that the housing recession will continue into 2008, hardly merits the term “forecast.” It’s closer to being facts on the ground. NAR is optimistically calling for a bottom in […]
Read more...Robert Reich’s latest post, “The Way to Prevent the Looming Recession.” argues that monetary policy won’t prevent the coming recession and therefore policy makers need to consider tax cuts: With the economy heading for recession, all eyes are on Ben Bernanke and the Fed, and the question everyone is asking is how much the Fed […]
Read more...In a new report on the homebuilding industry , Moody’s noted that it now expects the housing recession to extend into 2009 (hat tip to Housing Wire). According to its press release: “Our current thinking is that the downturn, currently two years in the making, will last until 2009, with any sector recovery likely to […]
Read more...Some may have already seen Nouriel Roubini’s latest piece, “The Coming U.S. Hard Landing.” He goes through an exhaustive and exhausting litany of what ails the US economy (short answer: pretty much everything, although he did spare weak-kneed readers the role of global imbalances). His article is worth reading, and the extracts that relate to […]
Read more...Those who have been following the job creation story weren’t surprised at the weak BLS employment (the so-called “non-farm payroll”) report today, or by the fact that it revised the results for the last three months downward by 81,000. Various commentators (see here, here, and here) have observed that the rises reported in recent months […]
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