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REMINDER: All investment, economics, and finance related material now appears at the new IaconoResearch.com. For the time being at least, this has become a personal blog covering a variety of mostly unrelated topics.

Have You Seen M3 Lately?

On August 1, 2011, in Currencies, Economy, by Tim

Ambrose Evans-Pritchard mentioned the remarkable resurrection of the M3 monetary aggregate in this story at the Telegraph today, hopeful that the rising number of dollars will help resurrect the U.S. economy. Since I’d not seen it in some time, it seemed like a good idea to look up nowandfutures for the latest chart.

I’m not sure this is good or bad – Ambrose seems to think quite bullish for us Americans. But, anytime you get the money supply growing at a high multiple of the growth in the population, you’re asking trouble, and that’s what we got in 2008.  I wouldn’t be surprised if this generates a little inflation trouble here in the West in the not-too-distant future.

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Debt Crisis Over, Economic Crisis Returns

On August 1, 2011, in Economy, by Tim

I’m starting to think that the whole reason the debt ceiling debate was extended to consume most of the media’s airtime last weekend was to divert attention from the dismal report on Q2 economic growth on Friday and the horrendous effects of data revisions going back three years, the most important having to do with the economy’s current trajectory.

There’s more on this subject in Tales from the GDP Revisions at EconBrowser, a post that also includes a comprehensive set of related links. In summary, the recession was much deeper than previously believed, the recovery a bit weaker, and the most recent trend shows a fairly disturbing deterioration in that recovery.

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GDP Report Stinks Up the Place

On July 29, 2011, in Economy, by Tim

In the “advance” estimate for the second quarter, the Commerce Department reported that real economic growth in the U.S. increased at an annual rate of 1.3 percent, far below consensus estimates of a two percent rate, and, as part of the annual data revisions, growth in the first quarter was revised downward, from a 1.8 percent rate to just 0.4 percent.

If not for the massive downward revision to Q1, analysts would be talking about Q2 being the worst quarter for growth in the U.S. since the recovery began two years ago, but, on a relative basis, now economic activity in Q2 doesn’t look so bad.

Personal consumption grew at just a 0.1 percent rate, the slowest since early-2009 when consumer spending fell at an annual rate of 1.9 percent, and government spending contracted at a 1.1 percent rate, its third straight quarter of  declines.

The biggest positive contributions came from private domestic investment and net exports, the former contributing 0.87 percentage points to the growth rate and the latter contributing 0.58 percentage points, in what can only be described as an absolutely dismal account of the U.S. economy during the first half of the year.

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Is it a Great Recession or a Little Depression?

On June 30, 2011, in Our Culture, by Tim

Unfortunately, there is far more of this going on these days than many people would like to believe – a cartoon like this unheard of  a decade or two ago – as the Great Recession looks more and more like a Little Depression everyday, taking a toll on every living generation.

From the Drew Sheneman archive at Tribune Media Services.

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“Wealthy” Americans Less Optimistic

On June 29, 2011, in Consumerism, Housing, Our Culture, by Tim

What’s not surprising about this CNBC poll is that more Americans are more pessimistic about the U.S. economy, but, what is surprising is how they’ve defined “wealthy”.

Nearly two-thirds of the nation (63 percent) is pessimistic about the current state of the economy and its future, with just 6 percent optimistic about both. The attitudes of wealthier Americans—those with incomes greater than $75,000 or more than $50,000 invested in the stock market—are now in line or even more downbeat than the nation as a whole.

Just 26 percent of Americans with incomes above $75,000 believe the economy will get better in the next year, four points below the national average. In December, it was five points above. For the first time in the survey’s five-year history less than half of those with $50,000 or more in stocks think it’s a good time to invest in the market.

Over the next year, most Americans think home prices will fall and wages will drop as they spend less, save less, and drive less while the number of these “wealthy” individuals using credit cards to help make ends meet almost doubled from 12 percent to 20 percent.

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U.S. Economy Grows at 1.8% Pace in Q1

On April 28, 2011, in Economy, by Tim

The Commerce Department reported that increasing consumer spending and rising inventories more than offset reduced spending by state and local governments and for national defense as the U.S. economy expanded at a seasonally adjusted annualized rate of just 1.8 percent, the weakest growth rate since the second quarter of 2010.

This was the “advance” estimate for economic activity from January to March, the first of three estimates for the period, to be followed by the “preliminary” estimate in late-May and the “final” reading a month later.

(more…)

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