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 thesis is much more widely acknowledged today than it was even two or three years …

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 across all sectors of the economy, with consumer goods and services showing the greatest strength. …

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.