Econophile's blog

I am tired of the cheerleading by the mainstream press where they see every positive sign as a sure sign of recovery and every negative sign as "unexpected." Every article I read on new data from the Wall Street Journal or Bloomberg is the same--with mind numbing regularity.

Geithner and the Obama Administration are rolling the dice with its China policy in a very high stakes game. They are trying to force China to revalue the yuan. If we crap out, we face the possibility of trade wars and a collapse of international trade. I believe they don't understand what they are doing. This is big. Don't count on politicians to do the right thing.

How to read the unemployment numbers in a world where the major media are cheerleading their coverage.

I ran this bit on The Daily Capitalist last year, same time, and got nothing but grief. What do you think?

Today we will be getting the BLS numbers on jobs which everyone says will be great. Will it be good or bad news? The problem is that many of these "jobs" aren't jobs. The needle isn't budging.

The headline should have been "Consumers had to dip into savings to buy the necessities of life: food and clothing." Instead we are given the cheery headline that consumer spending rose for a fifth month. Check out the real story.

What an idiot. It's like saying greed caused the crisis. Ack! Where do they get these people.

Housing is still in trouble, CRE is in worse shape, low inflation is the result of deflationary factors, and at the ground level where most loans are made, credit is still stuck. It's pretty hard to spin the data into a positive.

The Fed's affirmation that it still needs to keep the fed funds rate low is an admission that things aren't working and they don't know what to do. Ben maybe a bit premature with his talk about an exit strategy.

The credit rating agencies have given both China and the U.S. credit warnings. How can the U.S. prevent a downgrading? Hint: it won't be from a reduction in spending.

Paul Krugman now wants to start the economic equivalent of World War III. The man is dangerous.

China: When you build roads so fast, sometimes you never know what you may run into at the end of the road. A very short story for your Sunday reading.

As promised, here is the complete article, "China's Fragile Economy, Its Housing Bubble, and What It Means To Us," in a downloadable PDF. You can download it, print it out, and read the entire piece at your leisure. The conclusions aren't encouraging, for them or us.

The fact that Google will not kowtow to Bejing and will walk away from the market of greatest potential is to me a commendable act. This is a companion piece to my series, "China's Fragile Economy, Its Housing Bubble, and What It Means To Us." China is not a liberal country, by far.

We think that China is an indestructible economic juggernaut but its economy is very fragile and it is sitting on a property bubble which will burst. What China does in response has major implications for their economy and the rest of the world. This is the third part of a three-part series on this topic: The Consequences.