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My favorite party boy economist, Nouriel Roubini, just came out with his analysis for the second half and he notes that wemay be heading toward a double-dip recession. Too much negative news, he frets. I have been saying this for some time. The difference between me and Roubini is that he believes in the necessity [...] March 1 (Bloomberg) — The U.S. Transportation Department will lay off 2,000 employees today, halting construction projects, reimbursements to state governments and highway safety programs, according to a statement. Employees will be furloughed without pay because a funding measure stalled in Congress, the department said in a statement today. The affected workers are in the Federal [...] Somehow Comptroller of the Currency John Dugan didn’t get the message from Team Obama about encouraging consumers to spend. As you know the Administration’s economic advisers see vigorous consumer spending as the solution for overcoming our recession. Consumer spending formerly represented 70% of the economy. Apparently the consumers are getting the message without Mr. Dugan’s help since personal savings [...] This was a big day for economic reports and the Case Shiller Q4 report, the Consumer Confidence Index, and the FDIC Q4 report came out with not-so-surprising results. Since I am occasionally accused of cherry-picking negative data, I wish to point out that the following is a report and analysis of the data as it [...] The core Consumer Price Index fell for the first time since 1982–0.1%–in January. Economists are lauding this deflation as a good thing on the theory that it gives the Fed more flexibility: in keeping interest rates low, as they have been doing, they don’t have to worry about inflation. I’m not sure what they mean [...] Today the Fed announced that they are raising the discount rate, the rate at which banks can borrow emergency funds from the Fed, by 25 basis points, from 0.50% to 0.75%. They also raised the bid for the Term Auction Facility (TAF) loans, another emergency measure, from 0.25% to 0.50%. Also the term of primary [...] The word is out that the Fed will rely on money market funds to help sop up the “excess” liquidity created by the Fed’s record shattering explosion of credit. The Fed has been discussing it’s “exit strategy” ever since they pumped huge amounts of credit into the markets since mid-2008. The dilemma, in Ben Bernanke’s mind, [...]
I read where the government claims that because Washington D.C. was practically shut down by Snowmageddon we taxpayers were losing $100 million per day from lost productivity of federal employees. Then in an unrelated matter I see where Evan Bayh announced he will not run for re-election as senator from Indiana because the [...] This is Part III of my three part series on the state of the economy going into 2010. Part II appeared yesterday, and Part I appeared on Tuesday. This weekend I will combine the three parts into one downloadable PDF. The Consequences The Impact of Deleveraging The economy is still a mess [...] This is Part II of my three part series on the state of the economy going into 2010. Part I appeared yesterday, and Part III will appear tomorrow. This weekend I will combine the three parts into one downloadable PDF. The Importance of Debt The Fed, the Obama Administration, and a [...] This is the first report of a series of 3 reports on the state of the economy as we enter 2010. Part II will appear Wednesday, and Part III will be posted on Thursday. I have been poring over current economic data, year-end reports from various sources, and current or proposed legislation. [...] The employment numbers for January 2010 came out today and the headline was that unemployment dropped from 10% to 9.7%. This is a significant event because we all want to see employment grow. My conclusion from reading the report from the Bureau of Labor Statistics is that it’s very hard to tell if this increase [...] This is yet another very clever, funny, and well done music video. You’ll enjoy it. Hat tip to Dano. It all depends on how you wish to spin the numbers. Q4 2009 GDP increased 5.7% of which 3.4% was inventory reduction. Overall for 2009 GDP went down 2.4%. My guess is that the 5.7% number will be readjusted downward when the revised numbers come out in late March (26th). What does this mean? Inventory reduction is [...] I predicted that we would have a Q4 09 “bump.” But so did everyone else. I think we’ll have a positive Q1 10 also. The latest report from Goldman Sachs reveals that they have upped their Q4 estimate to 5.8%: We have boosted our estimate for fourth quarter growth to 5.8% from 4.0% (annual rate). However, [...] Comments on President Obama’s State of the Union Speech
I will say that President Obama is pretty good at this speech stuff. Remember last year when Professor Obama said that the adults are now in charge and we’re going to clean up the mess the kids made? This year had a much different tone. At [...] Even the Congressional Budget Office is conceding that things aren’t turning out as expected: The Congressional Budget Office hiked its forecast Tuesday for how much the stimulus bill will add to the nation’s deficit, raising its estimate by $75 billion to $862 billion. The American Recovery and Reinvestment Act, passed in February 2009, was initially believed to [...] More from Cato’s Dan Mitchell on Keynesian stimulus. It is an excellent recap of the promises and failures of the current economy. I disagree with his conclusion that we are almost certain to recover in 2010. I have previously written about the phenomenon that regardless of what the Obama Administration does, economies tend to repair themselves. Evidence [...] President Obama used his bully pulpit on Thursday to chastise banks and bankers while announcing a punitive tax on them to assuage an angry populace. Is his rage against the big paydays justified? Not for the reasons he [...] |
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