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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 [...] 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. [...] This has been a phenomenal year for the economy. There have been major, fundamental changes that will affect our lives for many years to come. I don’t see these changes as a good thing for the short or long term. These changes are generational in that they don’t occur often and they will radically impact the [...] By Jeff Harding.
I’ve been thinking a lot about gold lately. Especially now that Nouriel Roubini has come out and trashed the noble metal (see Tyler Durden’s article). Anyone who tells you they know what’s going to happen with gold is guessing. Roubini is guessing. Roubini also makes some fundamental errors in his analysis, and [...] By Jeff Harding. I have all this vitriol stored up from not being able to publish for two weeks and it needs to be spewed. I just read Foreign Policy magazine’s “The FP Top 100 Global Thinkers,” and it is worthy of my bile. Of all the crap I have to read every day to get [...] By Jeff Harding. In order to understand the present state of the U.S. economy you have to understand that there are two things happening at once. For the most part they are in conflict with each other, in that one track can negatively impact the other. Lest I be accused of putting out conflicting information, there is evidence that [...] By Jeff Harding. The Obama Administration knows it didn’t “create or save” 640,000 jobs but they use the Big Lie to justify the huge waste of taxpayer dollars through the $787 billion American Reinvestment and Recovery Act of 2009. But on Friday the government says that it did: … The new data come from information tens of [...] By Jeff Harding. The Commerce Department announced Thursday that GDP grew 3.5% in Q3 2009. This is the “Third Quarter Bump” I had been expecting. Economists and the news media are jumping on the “It’s Over!” bandwagon. Their conclusion is based on the premise that government spending (“stimulus”) will actually create real economic growth. It won’t and never [...] Japan vs. U.S.: Compare and Contrast By Jeff Harding. Japan has been in decline, or at least stagnation, for 19 years. Their GDP has not grown, unless you consider 0.6% (avg.) robust annual growth. They have experienced a deflationary economy, and now, it’s happening once again. They now [...] By Jeff Harding. My company has been looking for real estate deals and we have been frustrated finding deals we can live with. We have researched the Southern California market with which we are familiar and find either banks are holding on to bad deals or that , once they foreclose, they are asking more than we believe [...] By Jeff Harding. Every commentator is teasing the positives or negatives of recent data to justify his or her prognostications as to whether or not we are in a recovery. I think most forecasts are worthless because economists forecast the future by assuming what happened last week will happen next week, maybe a little better [...] By Jeff Harding. I have been reporting on the Treasury auctions recently and I said that I was surprised that the auctions went so well considering how much new debt they had to finance. I knew they were gaming the market by buying Treasuries on the open market in an attempt to reinforce the market. In [...] By Jeff Harding
The week long Treasury auction of $75 billion of new paper came off pretty well. This is significant because the Treasury needs to finance a record deficit. It’s tricky stuff. The 3 year auction that started on Tuesday went well, as buyers such as the Chinese are shortening [...] By Jeff Harding I got this from Calculated Risk. 30 year mortgage rates are creeping up according to the Mortgage Bankers Association: The average contract interest rate for 30-year fixed-rate mortgages increased to 5.31 percent from 5.05 percent, with points increasing to 1.18 from 1.12 (including the origination fee) for 80 percent loan-to-value (LTV) ratio loans. Also loan applications are [...] By Jeff Harding Janet Yellen, the President of the San Francisco Federal Reserve Bank gave an interesting speech about recovery the other day to the Commonwealth Club in San Francisco. It was about the Fed’s position on the economic crisis and what she believes is a beginning recovery. “The recession will end [...] Interview of Nouriel Roubini. From Bloomberg. He’s always worth listening to. He has that fabulous Bela Lugosi accent. Caveat Emptor. There is a lot I don’t agree with here. I don’t think he gets the implications of increased savings, since he refers to the Keynesian “paradox of savings.” That is, increased savings means less consumer consumption [...] |
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