Wolfgang Munchau of the Financial Times wrote a very important comment piece in today’s Financial Times. In it he said that central banks are targeting asset prices to avoid the brunt of cyclical downturns. This policy is inducing asset bubbles and creating a more volatile real economy with unpredictable negative consequences.
I want to expand [...]

Ireland has made heroic strides in trying to deal with its economic problem after a spectacular property bust. But it is looking increasingly like it will not be enough. According to a senior Irish minister, the next stop for Ireland could be the International Monetary Fund (IMF) for a bailout.
The crisis has been building for [...]

The following post is from Stratfor via John Mauldin, who is a Best-Selling author and recognized financial expert. He is also editor of the free Thoughts From the Frontline that goes to over 1 million readers each week. For more information on John or his FREE weekly economic letter go to: http://www.frontlinethoughts.com/learnmore.

I think you will [...]

For the latest week, U.S. jobless claims hit 514,000, the lowest level since early January. This brings the widely-tracked four-week average down to 531,500, also a 9-month low. In addition, continuing claims fell below 6 million for the first time since March. All of these seasonally-adjusted data points suggest that the unemployment situation is slowly [...]

Last year at this time I posted “The Economy’s Four Horsemen,” which described macro cause and effect leading into and out of recessions.  When looking at income, spending, output and employment, it is income which is the steer variable going into a downturn.  Year-on-year changes in income precede changes in spending, output, employment and recession. [...]

You have probably heard a lot of chatter from the media about a newfound thrift amongst American consumers.
The general take is that Americans, faced with lost incomes and wealth and burdened by record levels of debt, have moved away from the asset-based consumption models of yore. Instead of using the 401(k) or the house to [...]

I tend to think so. Yesterday, Ben Bernanke made what some media outlets are calling hawkish statements.  This, combined with heavy currency intervention by Asian central banks, helped to strengthen the U.S. dollar. However one must ask if there is anything fundamental about these moves.
Just a few days ago, we got a sensational article via [...]

Paul Krugman has noticed that trade has absolutely collapsed with this economic downturn. It is worse than the Great Depression.
Question: is this aiding global re-balancing?
Here are two data points from Europe today which lead to that question.
The BBC reports on Germany:
Germany’s trade surplus fell 43% in August after a drop in exports from Europe’s biggest [...]

I found the recent consumer credit data unsatisfying because the data seemed to point in two directions. The seasonally-adjusted data showed a large $12 billion decrease in consumer credit which received headlines. Meanwhile, the non-seasonally adjusted data showed a large $7 billion increase in consumer credit. I suspect this divergence has a lot to do [...]

But, everywhere I look, everybody is saying it is.
I would like to be true to the data and not just take the government’s seasonally-adjusted numbers at face value.
Judge for yourself. Here’s the data:
This is what everyone is focused on – the seasonally-adjusted data. The part in red shows consumer credit down $12 billion.
 

But, what [...]