Analysis Topic: Economic Trends Analysis
The analysis published under this topic are as follows.
Monday, October 18, 2010
Financial Markets Expect QE2 to Result in Higher Inflation / Economics / Inflation
By: Asha_Bangalore
Inflation expectations, measured as the difference between nominal 10-year Treasury note yield and yield on the 10-year inflation protected security, has moved from a low of 1.49% on August 24, just prior to the August 27 Bernanke speech, to 2.09% as of October 15. The upward trend of inflation expectations is a vote of confidence about the success of QE2. Actual inflation, based on personal consumption expenditure price index, the Fed's preferred measure, moved up 1.47% in August on a year-to-year basis (see chart 2).
Monday, October 18, 2010
U.S. Industrial Production Unexpectedly Drops; Where to From Here? / Economics / US Economy
By: Mike_Shedlock
In yet another sign of a weakening economy, Production in U.S. Unexpectedly Dropped in September
Read full article... Read full article...Output at factories, mines and utilities fell 0.2 percent, the first decline since the recession ended in June 2009, figures from the Federal Reserve showed today. Factory production also decreased 0.2 percent, reflecting declines in consumer durable goods, like appliances and furniture.
Monday, October 18, 2010
Putting Austrian Business-Cycle Theory to the Test / Economics / Economic Theory
By: Robert_Murphy
Paul Krugman is despairing of late, because a growing number of mainstream economists are adopting (versions of) Austrian business-cycle theory. The most recent convert is Minneapolis Fed president Narayana Kocherlakota.
Krugman uses the occasion to criticize what he derides as "the hangover theory" of economic slumps, in which high unemployment is necessary after an artificial boom. As happened with his earlier criticism of "the hangover theory," here too Krugman buttresses his Keynesian logic with a misguided appeal to the data.
Monday, October 18, 2010
Cutting the Payroll Tax Will Kick-start the U.S. Economy / Economics / Economic Stimulus
By: Mike_Whitney
On Friday, Fed chairman Ben Bernanke made the case for a second round of quantitative easing (QE) claiming that inflation is presently "too low" to achieve the Fed's dual mandate of price stability and full employment. By purchasing long-term Treasuries, Bernanke hopes to lower bond yields and force investors into riskier assets. That, in turn, will push stocks higher making investors feel wealthier and more apt to boost spending. (re: "trickle down") When investors increase spending, it reduces the slack in the economy and lowers unemployment. Thus, QE is intended to divert investment to where it is needed and to lift the economy out of the doldrums.
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Sunday, October 17, 2010
Quantitative Easing, Inflation, Hyperinflation and Global Deflationary Depression / Economics / Great Depression II
By: Bob_Chapman
Today’s great debate basically between the US and Europe is – should the Fed go full bore by implementing a second quantitative easing? In part it is a moot point, because they have been doing just that in the repo market for four months without letting anyone know what they were up too. Their mandate is to reduce inflation and create full employment. Real inflation is 7% and unemployment is 22-3/4%. The Fed for three years has concentrated on bailing out Wall Street, banking, insurance and transnational conglomerates. Little has been done to fulfill their mandated mission. The main recipients of their largess, of course, are the firms that actually own the privately owned Fed.
Sunday, October 17, 2010
Currency Wars, The Cycle of Deflation and Misguided U.S. Economic Policy / Economics / US Economy
By: Gordon_T_Long
The critical issues in America stem from minimally a blatantly ineffective public policy, but overridingly a failed and destructive Economic Policy. These policy errors are directly responsible for the opening salvos of the Currency War clouds now looming overhead.
Saturday, October 16, 2010
Reflation Trade Is Overdone, No Pickup in Inflation / Economics / Inflation
By: Bryan_Rich
In recent weeks, the dollar has been the centerpiece of speculation surrounding the outlook for global economies, rising protectionist threats and the resurgence of global asset prices. And it all derives from Fed policy.
Bernanke’s speech yesterday and the latest statement by the FOMC clearly confirm that the Fed is DEFINITELY prepared to roll out another wave of its “quantitative easing” program — expanding the money supply with the hope of stimulating demand … igniting inflationary pressures … and ultimately creating incentives for employers to hire and invest, and for consumers to borrow and spend.
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Saturday, October 16, 2010
Fed Chairman Bernanke Presents a Case for QE2, CPI Remains Subdued / Economics / Quantitative Easing
By: Asha_Bangalore
Chairman Bernanke's remarks, Friday morning, have confirmed expectations that a second round of quantitative easing (QE) will be put in place on November 3.
"Given the Committee's objectives, there would appear--all else being equal--to be a case for further action."
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Friday, October 15, 2010
Widening U.S. Trade Deficit Will Trim Q3 Real GDP Growth / Economics / US Economy
By: Asha_Bangalore
The trade deficit widened to $46.3 billion in August, reflecting a small increase in exports and a large jump of imports. The July-August data suggest that the trade deficit will trim the headline real GDP reading in the third quarter. Read full article... Read full article...
Thursday, October 14, 2010
Nobel Committee in Search of Economists / Economics / Economic Theory
By: Robert_Murphy
This year's Nobel Memorial Prize in Economics goes to Peter Diamond, Dale Mortensen, and Christopher Pissarides, for their work on "search theory," especially as applied to labor markets. In the present article I'll explain the basics of their contribution but then point out the crisis in mainstream economics: even though these economists — especially Diamond — are very smart and productive, they and their colleagues have hardly helped the plight of the unemployed, as we stumble ever deeper into depression.
Thursday, October 14, 2010
China Casts Shadow Over Asia, Flawed Conventional Wisdom on the Chinese Economy / Economics / China Economy
By: Vitaliy_Katsenelson
The summer is over in Denver. Of course, in Denver the summer was officially over Labor Day weekend, when the outdoor swimming pools were drained and locked for the winter. For most people summer ended a few weeks later, when the leaves turned bright yellow. But not me, I wanted to hang on to this summer for as long as I could; I really did not want it to go. But my illusions were finally shattered a few days ago by rain, chilly winds, and almost-bare trees. My deliberate (though mostly harmless) failure to recognize the obvious is similar to an investor hanging on to the illusion that Quantitative Easing, the Sequel will change the fundamentals of the economy. It won’t, it will just entrap us in more debt and low interest rates. But that is a subject for a different time.
Wednesday, October 13, 2010
Nobel Award in Darwin Economics, Nominee for 2010 / Economics / Elliott Wave Theory
By: D_Sherman_Okst
Named in honor of Charles Darwin, the Darwin Awards commemorate those who improve our gene pool by accidentally removing themselves from it. I therefore propose the ‘Nobel Award in Darwin Economics’. The recipient of the award would graciously be asked to remove (just) their ‘economic genes’ from our economic gene pool. If they teach economics, they’d be asked to cease and desist, if they were the Secretary of the Treasury, the Chairman of the Federal Reserve, or the President of the United States they’d be asked to resign.
Wednesday, October 13, 2010
Job Creation and Green Energy Sector / Economics / Energy Resources
By: Dian_L_Chu
Even though unemployment claims drop, while job openings rise in September, the U.S. economy still shed 95,000 jobs in September with steep losses in government employment offsetting moderate rise in private sectors, based on the latest Labor Department reports.
Wednesday, October 13, 2010
Bank of England Prepares to Print Money Despite High Inflation at CPI 3.1% / Economics / Inflation
By: Nadeem_Walayat
UK Inflation for September 2010 was unchanged at CPI 3.1%, remaining stubbornly above the Bank of England's upper limit of 3% and target of 2%, despite virtually 10 months of worthless mantra from the BoE Governor that high inflation was ALWAYS just temporary and imminently expected to fall back to below the 2% target. The more recognised RPI (real inflation) measure dipped marginally from 4.7% from 4.6% and which compares against average pay rises of 2% which illustrates the squeeze that ordinary people are experiencing especially as taxes rise and Government spending is cut.
Wednesday, October 13, 2010
Fed Deflation Concerns Trump Inflation Worries / Economics / Deflation
By: Bob_Browne
Sluggish job data released in the United States last week will once again highlight the U.S. Federal Reserve’s primary policy concern: an economic retreat back into a recession followed by years of deflation. We have never been in the double-dip camp, but we have no doubt about the Fed’s priorities, and neither does the global investment community. The president of the Federal Reserve Bank of New York, William Dudley, made it clear that the near-term risk of deflation trumped any long-term concerns about inflation. In fact, the market is now reasonably assuming the Fed is once again committed to asset inflation as a way to re-energize the real economy. The result has been a scramble for risky assets, and “The Bernanke Put” is already joining the popular market lexicon.
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Tuesday, October 12, 2010
Krugman is a Smart Fellow but Obsessed with Government Spending / Economics / Economic Theory
By: MISES
Murray Sabrin writes: Paul Krugman wears many hats — Princeton University professor, New York Times columnist, Nobel Laureate in Economics (2008), prolific author of scholarly books and journal articles, and now president of the Eastern Economic Association. The EEA is a regional scholarly group that publishes a journal and holds an annual academic conference in New York City every other year. The EEA is housed in the Anisfield School of Business, at Ramapo College, where I have taught Corporate Finance, and Financial Markets and Institutions for the past 25 years.
Tuesday, October 12, 2010
The U.S. Fed Wants an Inflation Boom / Economics / Quantitative Easing
By: John_Mauldin
As long time readers know, I am a big fan of Greg Weldon. This week he has very graciously allowed me to reproduce his client letter from last Thursday on some of the issues of Bernanke and Quantitative Easing 2. It prints a little longer than usual because of his format and all the charts, but this is one letter you should take the time to read.
Tuesday, October 12, 2010
Paul Krugman "I Told You So" Keynesian Stimulus Economic Nonsense / Economics / Economic Theory
By: Mike_Shedlock
As predicted on numerous occasions, Paul Krugman is once again pleading for still more Keynesian stimulus. Please consider Hey, Small Spender
Monday, October 11, 2010
Fed Mandates Inflation Creation / Economics / Inflation
By: Peter_Schiff
Much of the content of the latest Fed statement, released on September 21, echoes the central bank's previous post-credit crunch pronouncements: there is still too much slack in the economy, interest rates are still going to be near-zero for an "extended period," and the Fed will continue to use payments from its Treasury purchases to buy yet more Treasuries.
Sunday, October 10, 2010
US Economy Doing a Great Imitation of a Developing Double Dip Recession / Economics / Double Dip Recession
By: Jesse
The September Non-Farm Payrolls report was not good news.
This is a remarkably unnatural US economic recovery, with gold, silver, and other key commodities soaring in price, the near end of the Treasury curve hitting record low interest rates, and stocks steadily rallying as employment slumps and the median wage continues to decline.
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