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. [...]

Marshall Auerback here.  I want to add a few thoughts on the situation in Latvia which Ed has highlighted on several occasions. His allusion to Argentina to describe the situation in the Baltics last July was on the money. I have a solution here out of the Argentine playbook.
In Latvia, the neo-liberal insanity continues.  The [...]

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 [...]

Here’s the joke of the day via Steve Keen:
Ten reasons the economy is so bad (I suggest this as a top ten for David Letterman?):

#10: I got a pre-declined credit card in the mail.
#9: I ordered a burger at McDonalds and the kid behind the counter asked, “Can you afford fries with that?”
#8: CEO’s are [...]

The banks have been the ones benefitting most from free money via the Federal Government and U.S. taxpayers.  Given 9.8% base unemployment and 17.0% comprehensive unemployment, it is a bit galling for ordinary Americans that these same institutions are making record profits and poised to hand out record bonuses. Detroit is one of the hardest [...]

For the last few months I have been casting around looking for bullish data points as counterfactuals to my more bearish long-term outlook. I have found some, but not enough. If you recall, early this year, I stated that we are in depression, making the case for the ongoing downturn as a depression with a [...]

Today, Moody’s warned that Iceland, Latvia and Hungary were stabilizing but that their economies remained fragile. The problem is high debt levels, which is restraining consumer spending. Recovery in the Eurozone has been the main aid to stabilization, the report said. Absent this support, the outlook is considerably worse.
Moody’s re-affirmed Iceland and Hungary’s ratings of [...]

I have been very interested in the concept of legal tender of late because of the revelation this summer that the State of California was issuing I.O.U.’s to honour its debts instead of paying in U.S. Dollars, which are legal tender and I.O.U.’s from the U.S. government (see posts here and here). What I found [...]

via the Hartford Courant (Hat tip Scott).

In 2002, the global economy was weak and equity markets around the world were at multi-year lows following the greatest equity bubble and bust in world history. Many policy makers including Alan Greenspan, chairman of the U.S. Federal Reserve, feared a deflationary spiral of Great Depression proportions resulting from the stock market collapse.
To prevent such [...]