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Tag Archives: consumption
Screwing the American Economy by Screwing Its Young
Written by Steven Hansen The inordinate growth of student loans – and its effect on the economy – is killing consumption (autos) and the housing sector. This is no short term dynamic, but will effect the economy for decades. [click … Continue reading
Posted in Consumer Credit, Weekly Economic Summary, aa syndication
Tagged auto, consumer credit, consumption, Economy, education, GDP, housing, loans, recovery, retail, Steven Hansen, unemployment, weekly review
1 Comment
What Would It Take to Ignite Inflation?
Written by Gene Balas We see a few signs of budding inflation. But will it bloom? Survey data point to businesses’ higher costs in recent months. The key question is whether those cost increases are temporary or persistent, and whether … Continue reading
Who is Confused: Consumers or Consumer Observers?
Written by Gene Balas Most of the time, consumers of economic data look at broad indicators to determine a basic question: “is economy activity growing or contracting?” Based on the answer to this question, investors may alter their asset allocation … Continue reading
Cliffs, Nightmares, and Hidden Consumer Taxes
Written by Steven Hansen While watching Chairman Bernanke weave and bob in front of Congress this past week, I started to ponder what he said: The U.S. economy has continued to recover, but economic activity appears to have decelerated somewhat … Continue reading
Are Price Increases Killing Consumption?
Written by Steven Hansen Based on comments on my last post, that there are misconceptions about consumer spending patterns and the effects of price increases. Consider several potential effects caused by price increases: A consumer can do without. No vacation, … Continue reading
Joe Sixpack May Be Returning to Consumption Trough
Written by John Lounsbury and Steven Hansen The New York Times this week posted Consumers Unlikely to Rekindle the Recovery. To “prove” their point they presented three nasty but unfortunately correct graphics.
Real Estate: Not the Big Overinvestment Problem in China
by Michael Pettis Before starting on the subject of debt I wanted to make a quick reference to something sent to me by Charles Horner, a senior fellow at the Hudson Institute. I am glad to say that the overinvestment … Continue reading
Posted in China, macroeconomics
Tagged consumption, crash, debt, infrastructure, malinvestment, michael pettis, overinvestment, real estate
4 Comments
GDP Improves – But Does it Have Legs?
by Rick Davis The Bureau of Economic Analysis’s (BEA) first (“Advance”) estimate of third quarter 2011 U.S. Gross Domestic Product (GDP) was reported to be 2.46%, nearly twice the rate reported for the second quarter. The improvements were broadly spread … Continue reading
Posted in Consumer Metrics Institute, GDP
Tagged consumers, consumption, GDP, Rick Davis
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Interest Rates, Consumption and Savings Rates
Over the past 10 years Chinese consumption has declined, investment increased and real interest rates have declined. And interest rate increases have pushed inflation inflation higher. Continue reading
Posted in China, macroeconomics
Tagged China, consumption, inflation, interest rates, investment, michael pettis, savings
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China: Small Company Crack in the High Growth Armor
Small and medium enterprises (SMEs) are by far the most efficient part of the Chinese economy and the only part creating real value. My experience in other developing countries suggest that SME owners tend to be the most sensitive to and aware of changes in risk, and if we start to see rising bankruptcies among SMEs, coupled with disinvestment and increasing capital outflows, that is almost always a very worrying sign. When SME owners start to worry, so should we. Continue reading
Posted in China
Tagged China, consumer, consumption, credit, enterprises, medium companies, small companies, SME, wages
1 Comment
Money and Trading 101
When we tighten our belts, it means that we are trying to build up our savings. We do this by spending less. But spending drives our economy. Sales create jobs. So unless Obama has a secret plan to reverse three decades of current account deficits, the Government needs to loosen its belt when we tighten ours. If it doesn’t, then millions of us will lose our shirts. Continue reading
Savings Rate Disparities
If high-consumers (low savers) become as virtuous as low-consumers (high savers), that just means that global demand will decline, and with it, global unemployment will rise. In that case global savings won’t go up. They will go down, since rising unemployment causes income to decline faster than consumption.
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Posted in Uncategorized
Tagged consumption, employment, infrastructure, investment, personal income, savings, trade balance
1 Comment
Did the USA Trade Balance Deficit Increase in December 2010?
With crude oil increases, it should come as no surprise that the trade balance should have grown in December 2010. But some aspects are also trending lower. Continue reading
Posted in Trade Data
Tagged BEA, bureau of economic analysis, Census Bureau, consumption, crude oil price, department of commerce, trade balance
4 Comments
Chicago Fed Activity Index Improves In December
The Chicago Fed National Activity Index (CFNAI) was up slightly in December; However December releases are usually revised significantly in subsequent months. We will not be sure of the reading until perhaps March. Continue reading
The Puzzle of China’s Rising Household Savings Rate
Efforts of China to increase domestic consumption are thwarted by a very high household savings rate. Continue reading
Posted in China
Tagged China, consumption, Eswar Prasad, global economy, global economy inbalances, Marcos Chamon, savings rate, trade balance, trade imbalance
2 Comments
Will the US Consumer Come Back in 2011?
The U.S. consumer is still far overleveraged compared to history. This must improve for a strong consumer comeback. Continue reading
Savings, Work, Keynes and Policy Realism
Some things are truths, supported by facts. When facts and beliefs are in conflict, which should win? The answer is at the heart of our inability to solve problems. Continue reading
China: Continued Attempts to Grow through Investment Likely
China’s GDP growth rates in 2011 will be likely continue to be strong as high investment continues. By the end of the year there will be much more concern about rebalancing processes. Continue reading
Personal Income Declines in September
Personal income appears is nearly flat over the past four months but personal consumption has continued to rise. Transfer payments have declined for the first time in a year. Continue reading
