Martin Wolf, the Financial Times’ lead economics commentator, in today’s piece, “Risks and rewards of the world economy’s golden era,” ponders our current prosperity and what might upset it. He highlights the risks of unforeseen shocks and backlash against globalization. The comments about shocks are somewhat novel; the ones on political backlash are more familiar. […]
Read more...The main prop under this long-in-the-tooth bull market has been consumer spending. Despite higher oil prices, rising interest rates, burgeoning unsecured debt and non-existent savings, consumption has continued at a robust pace. Relentless spending may finally be coming to an end. Nouriel Roubini focuses on falling retail sales: Last week it was pointed out here […]
Read more...Paul Krugman’s Monday op-ed piece, “Another Economic Disconnect,” attracted the normal amount of attention in the blogsphere (which is to say quite a bit) with less enthusiasm than usual. And I must say I understand why. This piece was a little flat, and managed to miss some key issues. Disclosure: I am a fan of […]
Read more...The reliable Barry Ritholtz of The Big Picture provides his take (and note he expects a downward revision, as with the fourth quarter): GDP came in way below consensus. Given recent revision history, its very likely this will not be the final number. The economy slowed to its weakest pace of gains in 4 years, […]
Read more...The cliche is that the market climbs a wall of worries, but the specter of the Dow breaking 13,000 was accompanied by a chorus of arguments from informed observers that the enthusiasm was overdone. Roughly six weeks ago, in “How long will the markets be able to defy gravity?,” the Financial Times’ Martin Wolf looked […]
Read more...Yesterday, there was widespread commentary on the 8.4% fall in existing home sales in March. Some other factoids have gone comparatively underreported. From Nouriel Roubini’s RGE Monitor: [T]he Case-Shiller home price indices for February showing continued fall in home prices. The 10-city index fell 1.5% y-o-y; this is the lowest level since October 1993. The […]
Read more...This post comes from a Frank de Libero, reader at Angry Bear. By way of background, not only are some of the main writers at Angry Bear pretty serious statisticians, but they attract them as readers, and Libero appears to be one. Libero does a quick and dirty analysis of employment versus various ways to […]
Read more...Both Bloomberg and the Financial Times have prominent stories on the truly terrible existing home sales results for March. The National Association of Realtors announced that sales fell 8.4% in March, following a 3.7% rise in February. Price declines also worsened in 20 major cities. Some of the fall can be attributed to crappy weather, […]
Read more...For some time, we have argued that the subprime meltdown in and of itself would not lead to a recession, but would put a crimp in growth (the estimate we find most credible is a 1% reduction in GDP growth for the year starting last September). In addition, we saw the subprime crisis as the […]
Read more...Barry Ritholtz has a good post today on how the inflation stats are being presented in a particularly misleading fashion. We already have the proud history of CPI being redefined in the 1990s to lower the published inflation rate. As an economist buddy explained: There was a big fuss over the CPI some years ago. […]
Read more...Brad Setser, who is normally an upbeat counterpoint to permabear Nouriel Roubini at RGE Monitor has an unusually worried post on what the end game might look like for foreign purchases of the US dollar (the central element of the oft-discussed global imbalances). We found this post courtesy Brad DeLong. Setser focuses in on a […]
Read more...The always-informative Barry Ritholtz has long been of the school that the economy is in worse shape than most prognosticators admit, and the downside risk in the market is correspondingly greater. Below is his latest take on historical analogies for our current situation, and they aren’t pretty: To me, the popular 1995 soft landing scenario […]
Read more...Dean Baker of the Center for Economic Policy and Progress has focused on the issue of productivity, both in the current business cycle (he sees its decline as an underreported negative indicator) and longer term. A post on his blog Beat the Press points to a recent paper of his on productivity and reaches some […]
Read more...The Wall Street Journal reports that the National Association of Realtors has cut its forecast for 2007, from a fall in median sale price of 0.7%. The IMF also issued a report cutting its growth estimate for the US from 2.9% to 2.2%, based on the detrioration of the housing market. This is bigger news […]
Read more...The ever-informative John Dizard of the Financial Times inspects the theory that the US economy will be shored up by the spending of LBO proceeds and finds it wanting: There’s a thought in the market that while the Wal-Mart consumer has been hit by the weaker housing market, the economy will be bailed out by […]
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