Econophile's blog

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We Warned You It Was Coming





We warned you.

 
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Budget Debate Fraud Part 2





This is the fun stuff about politics. Basically our politicians are being forced to do something they don’t want to do and our job is to cut through the obfuscation to see how they are doing exactly the opposite of what they say they are doing. It is fairly obvious that despite what they are saying publicly, they aren’t making significant cuts to the budget.

 
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Q2 GDP Reveals Continued Stagnation





The economy has been stagnating as we had forecast early last year. In our opinion this stagnation is not a "soft patch." The debt from the huge malinvestment in real estate during the boom cycle is resolved, we believe the economy will continue to stagnate, despite whatever steps the Fed or the government take.

 

 
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The Budget Debate Fraud





Everything about the budget debate is a fraud. The drop dead date is a fraud. The "cuts" are a fraud. The threat of economic collapse is a fraud. Forget all the "can't we just get along" rhetoric. US sovereign debt ratings will be cut sooner or later. The only way we will get a balanced budget amendment is to shut it down.

 
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The Small Bank Problem: Why We Are 40,000 Properties Away From Recovery





Buried under the hysteria of a potential US default is the fact that we are stagnating but no one seems to grasp why that is. One of the reasons, a very important one, is that local and regional banks and their small business borrowers are bogged down with bad commercial real estate. In this article we discuss bank credit, banks and their real estate loans, the so-called "liquidity trap," and why the economy is not growing. It attempts to quantify the problem that local and regional banks have with their commercial real estate loans. We also explain how, why, and when the economy may grow again. 

 
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Inflationistas vs. Deflationistas: What Does CPI and PPI Tell Us?





If we are in a deflation, why are we having inflation? But, if we are having inflation why haven’t we seen prices go crazy? I explain why inflation is just starting.

 
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The Euro 1999 - 2012 R.I.P.





Why would anyone think that a monetary system whereby poor states spend and get bailed out by rich (i.e., successful) states would ever work? The euro is a failed concept and will tear Europe's monetary system apart.

 
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Unemployment: It's More Than A "Soft Patch"





As long as unemployment remains high and economic activity remains no better than flat there will be pressure on the Fed to meet its full employment mandate. QE is the only trick left in their bag. That will lead to further price inflation, a shot in the arm for the financial markets, but it will not lead to a boom in industrial activity or the estimated 250,000 new jobs a month that must be created over the next five years to create "full employment."

 
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Manufacturing Growth Is An Illusion Of Monetary Stimulus





Manufacturing is stagnating because of a lack of "real" investment. Which means manufacturing growth is not so organic as it is export related, which is entirely based on the "advantage" of a cheap dollar. This would help explain why industrial production is declining.

 
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John Paulson Needs To Go Austrian





The famed hedge funder's latest investment mistake has to raise the question: is he smart, or just lucky?

 
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Why GDP Is Useless and Deceptive: There Was No Recovery





We have not recovered from the Great Recession and thus our current economic stagnation is less a new event than a continuation of the original collapse. The basis for the so-called “recovery” was a rise in GDP, that measure of what we have spent in the economy. It’s a fairly useless bit of data.

 
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Greece Is Europe: The Failure Of The Euro





The eurozone is in serious trouble and Greece is just a symptom. Whether or not they default on their debt may not matter as similar problems plague Spain, Ireland, Portugal, and even Italy. The European Monetary Union is built on a house of cards and they don't have the time for needed radical reforms. Like all sovereigns who owe more than they can pay, they will resort to monetary inflation to bail themselves out. This article explains how the EMU works, why it is failing, and why they will resort to fiat money printing to solve it.

 
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The Great Stagnation of 2011





With industrial production falling, the likelihood of an economic recovery seems farther and farther away for Messrs. Bernanke and Obama. The way I look at the data, the US economy continues its slide into stagnation. This isn't a "double-dip" -- we never did recover from the '08 Crash -- but a consequence of monetary and fiscal stimulus.

 
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Too Big To Fail Banks Will Kill All Reforms





By the time the "too big to fail" banks and their lobbyists get through with the rules, banks will be relatively free to pursue lending practices that existed before the crash.

 
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Sinking Manufacturing Is A Stagflationary Trend





The downturn in the economy caught most economists by surprise. They have yet to realize that we are now in a stagflationary economy. All the signs are there, yet they have no explanation for it. QE3 anyone?

 
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